Risk Management and Financial Assurance for OCS Lease and Grant Obligations
Revision of a currently approved collection
No
Regular
Approved without change
07/16/2024
04/24/2024
In accordance with 5 CFR 1320.11, the information collection is approved for three years.
table that charts list comparision
Inventory as of this Action
Requested
Previously Approved
07/31/2027
36 Months From Approved
03/31/2026
22,090
0
21,826
22,012
0
21,935
766,053
0
766,053
The Department of the Interior, acting through BOEM, is finalizing new regulations to modify its criteria for determining whether oil, gas, and sulfur lessees, right-of-use and easement grant holders, and pipeline right-of-way grant holders are required to provide bonds or other financial assurance above the regulatorily prescribed base bonds to ensure compliance with their Outer Continental Shelf Lands Act obligations. This final rule will: streamline the criteria used for evaluating the financial health of lessees and grantees; codify the utilization of the Bureau of Safety and Environmental Enforcementâs probabilistic estimates of decommissioning cost for determining the amount of supplemental financial assurance required; remove restrictive provisions for third-party guarantees and decommissioning accounts; add new criteria for which a bond or third-party guarantee that was provided as supplemental financial assurance may be canceled; and clarify bonding requirements for RUEs serving Federal leases.
On June 29, 2023, BOEM published a notice of proposed rulemaking in the Federal Register at 88 FR 42136 which proposed amendments that impact this information collection. BOEM is submitting this information collection clearance package to request OMB approval for revision of OMB control number 1010-0006.
Overall, this rule results in the following adjustments in hour burden, which leads to an overall increase of 77 annual burden hours:
Base Bonds and Supplemental Financial Assurance
The hours per response for all respondents (i.e., a lessee, grant holder, a co-lessee, and a co-grant holder) who show financial worth/ability to carry out present and future financial obligations as demonstrated by an issuer credit rating, or a proxy credit rating determined by BOEM based on audited financial information, remains at 3.5 hours as approved by OMB. The number of responses for the provisions related to §§ 550.160, 550.166, 550.1011, and 556.900-902 decreases to 160 respondents from 166 respondents due to program changes. The related existing and new provisions results in a decrease of 21 burden hours from 581 to 560 annual burden hours (3.5 hours x -6 hours = -21 annual burden hours)
BOEM adds paragraph (h) to § 556.901 to establish the limited opportunity to provide the required supplemental financial assurance demanded during the first 5 years after the effective date of this regulation in three installments. This provision establishes the timing and amounts of staggered supplemental financial assurance that would be demanded. This increases the number of submissions for the 5 payments required for supplemental financial assurance, but only for the first 5 years after the effective date of this regulation. OMB has approved 135 submissions which take 20 minutes per submission (total existing annual burden hours is 45 hours). BOEM estimates the burden hours to be 135 annual burden hours (405 submissions x 20 minutes), which is an increase of 90 hours over existing OMB approval. (+90 hours).
Third-party Guarantees
Section 556.905(b)(2) eliminates the requirement that, when a guarantor becomes unqualified, a lessee must cease production, until supplemental financial assurance coverage requirements are met. The regulatory provision is replaced with a requirement to immediately submit and maintain a substitute surety bond or other security. Both the existing and new provisions require the lessee to provide surety bond coverage; however, BOEMâs current OMB Control Number 1010-0006 does not quantify all of the burdens associated with either situation. Therefore, BOEM adds approximately 8 annual burden hours to OMB Control Number 1010-0006 for any lessee whose guarantor became unqualified (+8 hours).
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
30 CFR Part 556 - Subpart K