BOEM isn't going to feel the term “fiscal assurance” is ever applied for a “procedure for furnishing safety” During this rulemaking and, as a substitute, is used to explain any of several differing kinds of securities that BOEM will accept to ensure effectiveness of obligations. As such, BOEM thinks the expression and connected definition is acceptable. BOEM has elected to simplify the rule by consistently using the phrase financial assurance in place of referring to the assorted varieties of financial securities.
BOEM proposed during the preamble for the proposed rule at 88 FR 42156 which the provisions from the rule be severable. No community feedback ended up been given on severability. Need to any court docket maintain illegal and/or set aside parts of the rule, the remaining portions are severable and for that reason really should not be remanded towards the Office.
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Usually, field commenters supported the phased technique and a number of other commenters recommended that it's prolonged to 5 many years to “mitigate opportunity sizeable possibility to businesses and to provide enough time for that bonding industry to regulate.” Response:
Due to the fact 2009, greater than thirty corporate bankruptcies have transpired involving offshore oil and gasoline lessees that didn't have enough economical assurance to include their decommissioning liabilities. These bankruptcies have highlighted a weak point in BOEM's present-day supplemental monetary assurance software. BOEM's present program has, occasionally, been unable to forecast money distress of those lessees and grantees which have not Formerly furnished supplemental financial assurance and, Because of this, BOEM hasn't had adequate time and energy to require and obtain supplemental monetary assurance previous to a declaration of individual bankruptcy.
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BOEM disagrees Along with the commenter's assertion that there “isn't any need for” place-vast financial assurance specifications for RUEs. RUE holders have decommissioning obligation and not simply that of having to pay rentals. Space-huge coverage is not really currently being essential but becoming available in its place to separately bonding Just about every RUE. In response towards the recommendation that BOEM and BSEE need to mandate total ownership filings for ROW and RUEs, we Take note which is outside the scope of this rulemaking. As discussed during the preamble towards the proposed rule at 88 FR 42144, the proposed rule at thirty CFR 550.166(a)(one) would permit any lessee which includes presently posted place-broad lease economical assurance to change that lease surety bond to also cover any RUE(s) in the region owned by the same lessee. The opportunity to use the area-wide lease money assurance to include the RUE foundation economic assurance could well be matter on the requirement that the area-extensive lease monetary assurance might be in an total equal to or increased than the RUE foundation economic assurance need.
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