WASHINGTON, D.C. – This week, the Bureau of Ocean Energy Management (BOEM) issued a final rule that updates bonding requirements for the oil and gas industry. Bonds help ensure that oil and gas operators are financially accountable for cleanup when offshore wells, platforms, pipelines and other infrastructure reach the end of their useful life. Updated bonding requirements will help protect taxpayers from paying costs that should be borne by oil companies. 

Andrew Hartsig, an expert on offshore oil and gas policy and Senior Director of Ocean Conservancy’s Arctic Program, issued the following statement:

“The oil and gas industry has been running a long con on the U.S. taxpayer for too long, and BOEM’s final rule on supplemental bonding requirements is a move in the right direction. The recent Governmental Accountability Office (GAO) report warned that the federal government–and taxpayers–are exposed to billions of dollars in financial risk if  oil and gas operators do not meet their obligations to properly decommission–or clean up– offshore wells and platforms. In fact, GAO found BOEM only held supplemental bonds for fewer than 9% of estimated decommissioning costs last year. This new rule is a positive step that will help ensure that offshore oil and gas leaseholders meet their financial obligations in decommissioning, so that taxpayers are not left with the bill.

“The GAO’s recent report pointed out many other weaknesses in government oversight and enforcement related to decommissioning end-of-life offshore oil and gas infrastructure. We hope this new rule is just the tip of the iceberg for changes that BOEM and the Bureau of Safety and Environmental Enforcement (BSEE) make to hold the oil and gas industry accountable for cleaning up after itself.” 

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