2022 Civil Penalties Inflation Adjustments for Oil, Gas, and Sulfur Operations in the Outer Continental Shelf

CourtOcean Energy Management Bureau
Citation87 FR 15333
Published date18 March 2022
Record Number2022-05633
Federal Register, Volume 87 Issue 53 (Friday, March 18, 2022)
[Federal Register Volume 87, Number 53 (Friday, March 18, 2022)]
                [Rules and Regulations]
                [Pages 15333-15335]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-05633]
                [[Page 15333]]
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                DEPARTMENT OF THE INTERIOR
                Bureau of Ocean Energy Management
                30 CFR Parts 550 and 553
                [Docket ID: BOEM-2022-0004]
                RIN 1010-AE10
                2022 Civil Penalties Inflation Adjustments for Oil, Gas, and
                Sulfur Operations in the Outer Continental Shelf
                AGENCY: Bureau of Ocean Energy Management, Interior.
                ACTION: Final rule.
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                SUMMARY: This final rule implements the 2022 inflation adjustments to
                the maximum daily civil monetary penalties contained in the Bureau of
                Ocean Energy Management (BOEM) regulations for violations of the Outer
                Continental Shelf Lands Act (OCSLA) and the Oil Pollution Act of 1990
                (OPA), pursuant to the Federal Civil Penalties Inflation Adjustment Act
                Improvements Act of 2015 (FCPIAA Improvements Act) and relevant Office
                of Management and Budget (OMB) guidance. The 2022 adjustment multiplier
                of 1.06222 accounts for 1 year of inflation from October 2020 through
                October 2021.
                DATES: This rule is effective on March 18, 2022.
                FOR FURTHER INFORMATION CONTACT: Peter Meffert, Chief, Regulations,
                Bureau of Ocean Energy Management, at (703) 787-1610 or by email at
                [email protected].
                SUPPLEMENTARY INFORMATION:
                I. Legal Authority
                II. Background
                III. Calculation of 2022 Adjustments
                IV. Procedural Requirements
                 A. Statutes
                 1. National Environmental Policy Act
                 2. Regulatory Flexibility Act
                 3. Paperwork Reduction Act
                 4. Unfunded Mandates Reform Act
                 5. Small Business Regulatory Enforcement Fairness Act
                 6. Congressional Review Act
                 B. Executive Orders (E.O.)
                 1. Governmental Actions and Interference With Constitutionally
                Protected Property Rights (E.O. 12630)
                 2. Regulatory Planning and Review (E.O. 12866); Improving
                Regulation and Regulatory Review (E.O. 13563)
                 3. Civil Justice Reform (E.O. 12988)
                 4. Federalism (E.O. 13132)
                 5. Consultation and Coordination With Indian Tribal Governments
                (E.O. 13175)
                 6. Actions Concerning Regulations That Significantly Affect
                Energy Supply, Distribution, or Use (E.O. 13211)
                I. Legal Authority
                 OCSLA authorizes the Secretary of the Interior (the Secretary) to
                impose a daily civil monetary penalty for a violation of OCSLA or its
                implementing regulations, leases, permits, or orders and directs the
                Secretary to adjust the maximum penalty at least every 3 years to
                reflect any inflation increase in the Consumer Price Index. 43 U.S.C.
                1350(b)(1). Similarly, OPA authorizes civil monetary penalties for
                failure to comply with OPA's financial responsibility provisions or its
                implementing regulations. 33 U.S.C. 2716a(a). OPA does not include a
                maximum daily civil penalty inflation adjustment provision. Id.
                 The FCPIAA Improvements Act \1\ requires that Federal agencies
                publish inflation adjustments to their civil monetary penalties in the
                Federal Register not later than January 15 annually.\2\ Public Law 114-
                74, sec. 701(b)(1). The purposes behind these inflation adjustments are
                to maintain the deterrent effect of civil penalties and to further the
                policy goals of the underlying statutes. Federal Civil Penalties
                Inflation Adjustment Act of 1990, Public Law 101-410, sec. 2 (codified
                at 28 U.S.C. 2461 note).
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                 \1\ The FCPIAA Improvements Act amended the Federal Civil
                Penalties Inflation Adjustment Act of 1990. Public Law 101-410
                (codified at 28 U.S.C. 2461 note).
                 \2\ Under the FCPIAA Improvements Act, Federal agencies are
                required to adjust their civil monetary penalties for inflation with
                an initial ``catch-up'' adjustment through an interim final
                rulemaking in 2016 and are required to make subsequent inflation
                adjustments not later than January 15 annually, beginning in 2017.
                Public Law 114-74, sec. 701(b)(1).
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                II. Background
                 BOEM implemented the 2021 inflation adjustment for its civil
                monetary penalties through a final rule, ``2021 Civil Penalties
                Inflation Adjustments for Oil, Gas, and Sulfur Operations in the Outer
                Continental Shelf,'' published in the Federal Register on April 15,
                2021, which accounted for inflation for the 12-month period between
                October 2019 and October 2020. 86 FR 19782 (April 15, 2021).
                 The OMB Memorandum M-22-07 (``Implementation of Penalty Inflation
                Adjustments for 2022, Pursuant to the Federal Civil Penalties Inflation
                Adjustment Act Improvements Act of 2015''; available at https://www.whitehouse.gov/wp-content/uploads/2021/12/M-22-07.pdf) explains
                agency responsibilities under the FCPIAA Improvements Act that include
                identifying applicable penalties and performing the annual adjustment;
                publishing revisions to regulations to implement the adjustment in the
                Federal Register; applying adjusted penalty levels; and performing
                agency oversight of inflation adjustments.
                 Pursuant to the FCPIAA Improvements Act, this final rule implements
                BOEM's 2022 inflation adjustments to OCSLA and OPA maximum daily civil
                monetary penalties. A proposed rule is unnecessary, as the FCPIAA
                Improvements Act expressly exempts annual civil penalty inflation
                adjustments from the Administrative Procedure Act's (APA) notice of
                proposed rulemaking, public comment, and standard effective date
                provisions. FCPIAA Improvements Act, Public Law 114-74, sec.
                701(b)(1)(D); APA, 5 U.S.C. 553.\3\
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                 \3\ Specifically, Congress directed that agencies adjust civil
                monetary penalties ``notwithstanding section 553 of title 5, United
                States Code [Administrative Procedure Act (APA)],'' which generally
                requires prior notice of proposed rulemaking, opportunity for public
                comment on proposed rulemaking, and publication of a final rule at
                least 30 days before its effective date. FCPIAA Improvements Act,
                sec. 701(b)(1)(D); APA, 5 U.S.C. 553. OMB confirmed this
                interpretation of the FCPIAA Improvements Act. OMB M-22-07 at 3-4
                (``This means that the public procedure the APA generally requires--
                notice, an opportunity for comment, and a delay in effective date--
                is not required for agencies to issue regulations implementing the
                annual adjustment.'').
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                III. Calculation of 2022 Adjustments
                 In accordance with the FCPIAA Improvements Act, BOEM determined
                that OCSLA and OPA maximum daily civil monetary penalties require
                annual inflation adjustments and is issuing this final rule adjusting
                those penalty amounts for inflation through October 2021. The annual
                inflation adjustment is based on the percent change between the
                Consumer Price Index for All Urban Consumers (CPI-U) for the October
                preceding the date of the adjustment and the prior year's October CPI-
                U. Consistent with OMB M-22-07, the 2022 inflation adjustment
                multiplier can be calculated by dividing the October 2021 CPI-U by the
                October 2020 CPI-U. In this case, October 2021 CPI-U (276.589)/October
                2020 CPI-U (260.388) = 1.06222.
                 For 2022, BOEM multiplied the current OCSLA maximum daily civil
                monetary penalty of $46,000 by the multiplier 1.06222 to equal
                $48,862.12. The FCPIAA Improvements Act requires that the resulting
                amount then be rounded to the nearest dollar. Accordingly, the 2022
                adjusted OCSLA maximum daily civil monetary penalty is $48,862.
                 For 2022, BOEM multiplied the current OPA maximum daily civil
                monetary penalty amount of $48,762 by the multiplier 1.06222 to equal
                $51,795.97. The FCPIAA Improvements
                [[Page 15334]]
                Act requires that the resulting amount then be rounded to the nearest
                dollar. Accordingly, the 2022 adjusted OPA maximum daily civil monetary
                penalty is $51,796.
                 The adjusted penalty amounts take effect immediately upon
                publication of this rule. Under the FCPIAA Improvements Act, the
                adjusted amounts apply to civil penalties assessed after the date the
                increase takes effect, even if the associated violation predates the
                increase.
                 This table summarizes BOEM's 2022 maximum daily civil monetary
                penalties for each OCSLA and OPA violation:
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                 Current Adjusted
                 CFR citation Description of the maximum Multiplier maximum
                 penalty penalty penalty
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                30 CFR 550.1403 (OCSLA)............... Failure to comply per $46,000 1.06222 $48,862
                 day per violation.
                30 CFR 553.51(a) (OPA)................ Failure to comply per 48,762 1.06222 51,796
                 day per violation.
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                IV. Procedural Requirement
                A. Statutes
                1. National Environmental Policy Act
                 This rule does not constitute a major Federal action significantly
                affecting the quality of the human environment. A detailed statement
                under the National Environmental Policy Act (NEPA, 42 U.S.C. 4321 et
                seq.) is not required because, as a regulation of an administrative and
                fiscal nature, this rule is covered by a categorical exclusion. See 43
                CFR 46.210(i). BOEM also has determined that the rule does not
                implicate any of the extraordinary circumstances listed in 43 CFR
                46.215 that would require further analysis under NEPA. Therefore, a
                detailed statement under NEPA is not required.
                2. Regulatory Flexibility Act
                 The Regulatory Flexibility Act (RFA, 5 U.S.C. 601 et seq.) requires
                an agency to prepare a regulatory flexibility analysis for all rules
                unless the agency certifies that the rule will not have a significant
                economic impact on a substantial number of small entities. The RFA
                applies only to rules for which an agency is required to first publish
                a proposed rule. See 5 U.S.C. 603(a) and 604(a). The FCPIAA
                Improvements Act expressly exempts these annual inflation adjustments
                from the requirement to publish a proposed rule for notice and comment.
                FCPIAA Improvements Act, Public Law 114-74, sec. 701(b)(1)(D); OMB M-
                22-07 at 3-4. Thus, the RFA does not apply to this rulemaking.
                3. Paperwork Reduction Act
                 This rule does not contain information collection requirements,
                and, therefore, a submission to OMB under the Paperwork Reduction Act
                (44 U.S.C. 3501 et seq.) is not required.
                4. Unfunded Mandates Reform Act
                 This rule does not impose an unfunded mandate on State, local, or
                Tribal governments, or on the private sector, of more than $164 million
                per year. The rule does not have a significant or unique effect on
                State, local, or Tribal governments, or on the private sector.
                Therefore, a statement containing the information required by the
                Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) is not required.
                5. Small Business Regulatory Enforcement Fairness Act
                 This rule is not a major rule under 5 U.S.C. 804(2). This rule:
                 (a) Will not have an annual effect on the economy of $100 million
                or more;
                 (b) will not cause a major increase in costs or prices for
                consumers, individual industries, Federal, State, or local government
                agencies, or geographic regions; and
                 (c) will not have significant adverse effects on competition,
                employment, investment, productivity, innovation, or the ability of
                U.S.-based enterprises to compete with foreign-based enterprises.
                6. Congressional Review Act
                 Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.) and
                OMB guidance,\4\ this rule is not a major rule, as defined by that
                act.\5\
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                 \4\ See Office of Mgmt. & Budget, Exec. Office of the President,
                OMB M-19-14, Guidance on Compliance with the Congressional Review
                Act (2019), available at https://www.whitehouse.gov/wp-content/uploads/2019/04/M-19-14.pdf; OMB Memorandum M-22-07 at 3.
                 \5\ 5 U.S.C. 804(2).
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                B. Executive Orders (E.O.)
                1. Governmental Actions and Interference With Constitutionally
                Protected Property Rights (E.O. 12630)
                 This rule does not effect a taking of private property or otherwise
                have takings implications under E.O. 12630. Therefore, a takings
                implication assessment is not required.
                2. Regulatory Planning and Review (E.O. 12866); Improving Regulation
                and Regulatory Review (E.O. 13563)
                 E.O. 12866 provides that the Office of Information and Regulatory
                Affairs (OIRA) will review all significant rules. OIRA has determined
                that annual civil penalty inflation adjustment rules are not
                significant if they exclusively implement the annual inflation
                adjustment consistent with OMB guidance and have an annual impact of
                less than $100 million.\6\ This rule meets those conditions and, thus,
                is not a significant rule.
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                 \6\ See OMB Memorandum M-22-07 at 3.
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                 E.O. 13563 reaffirms the principles of E.O. 12866, while calling
                for improvements in the Nation's regulatory system to reduce
                uncertainty and to promote predictability and for the use of the best,
                most innovative, and least burdensome tools for achieving regulatory
                ends. E.O. 13563 directs agencies to consider regulatory approaches
                that reduce burdens and maintain flexibility and freedom of choice for
                the public where these approaches are relevant, feasible, and
                consistent with regulatory objectives. E.O. 13563 further emphasizes
                that regulations must be based on the best available science and that
                the rulemaking process must allow for public participation and an open
                exchange of ideas. However, BOEM is not using science in this
                rulemaking, as Congress directed agencies to adjust the maximum daily
                civil monetary penalty amounts using a particular equation, and BOEM
                does not have discretion to use any other factor in the adjustment.
                BOEM has developed this rule in a manner consistent with the
                requirements in E.O. 13563, to the extent relevant and feasible given
                the limited discretion provided agencies under the FCPIAA Improvements
                Act.
                3. Civil Justice Reform (E.O. 12988)
                 This rule complies with the requirements of E.O. 12988.
                Specifically, this rule:
                 (a) Meets the criteria of section 3(a) requiring that all
                regulations be reviewed to eliminate errors and ambiguity and be
                written to minimize litigation; and
                [[Page 15335]]
                 (b) meets the criteria of section 3(b)(2) requiring that all
                regulations be written in clear language and contain clear legal
                standards.
                4. Federalism (E.O. 13132)
                 Under the criteria in section 1 of E.O. 13132, this rule does not
                have sufficient federalism implications to warrant the preparation of a
                federalism summary impact statement. This rule merely adjusts the level
                of civil monetary penalties that BOEM may impose on its lessees and has
                no effects on any action of State or local governments. Therefore, a
                federalism summary impact statement is not required.
                5. Consultation and Coordination With Indian Tribal Governments (E.O.
                13175)
                 The Department of the Interior and BOEM strive to strengthen their
                government-to-government relationships with Indian Tribes through a
                commitment to consultation with Indian Tribes and recognition of their
                right to self-governance and Tribal sovereignty. BOEM has evaluated
                this rule under the Department of the Interior's consultation policy,
                under Departmental Manual part 512 chapters 4 and 5, and under the
                criteria in E.O. 13175 and determined that this rule has no substantial
                direct effects on federally recognized Indian Tribes or Alaska Native
                Claims Settlement Act (ANCSA) Corporations and that consultation under
                the Department of the Interior's and BOEM's Tribal and ANCSA
                consultation policies is not required.
                6. Actions Concerning Regulations That Significantly Affect Energy
                Supply, Distribution, or Use (E.O. 13211)
                 This rule is not a significant energy action under the definition
                in E.O. 13211. Therefore, a statement of energy effects is not
                required.
                 This action by the Principal Deputy Assistant Secretary is taken
                herein pursuant to an existing delegation of authority.
                List of Subjects
                30 CFR Part 550
                 Administrative practice and procedure, Continental shelf,
                Environmental impact statements, Environmental protection, Federal
                lands, Government contracts, Investigations, Mineral resources, Oil and
                gas exploration, Outer continental shelf, Penalties, Pipelines,
                Reporting and recordkeeping requirements, Rights-of-way, Sulfur.
                30 CFR Part 553
                 Administrative practice and procedure, Continental shelf, Financial
                responsibility, Liability, Limit of liability, Oil and gas exploration,
                Oil pollution, Outer continental shelf, Penalties, Pipelines, Reporting
                and recordkeeping requirements, Rights-of-way, Surety bonds, Treasury
                securities.
                Laura Daniel-Davis,
                Principal Deputy Assistant Secretary, Land and Minerals Management.
                 For the reasons stated in the preamble, BOEM amends 30 CFR parts
                550 and 553 as follows:
                PART 550--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER
                CONTINENTAL SHELF
                0
                1. The authority citation for part 550 continues to read as follows:
                 Authority: 30 U.S.C. 1751; 31 U.S.C. 9701; 43 U.S.C. 1334.
                0
                2. Revise Sec. 550.1403 to read as follows:
                Sec. 550.1403 What is the maximum civil penalty?
                 The maximum civil penalty is $48,862 per day per violation.
                PART 553--OIL SPILL FINANCIAL RESPONSIBILITY FOR OFFSHORE
                FACILITIES
                0
                3. The authority citation for part 553 is revised to read as follows:
                 Authority: 33 U.S.C. 2704, 2716, as amended.
                0
                4. Revise Sec. 553.51(a) to read as follows:
                Sec. 553.51 What are the penalties for not complying with this part?
                 (a) If you fail to comply with the financial responsibility
                requirements of OPA at 33 U.S.C. 2716 or with the requirements of this
                part, then you may be liable for a civil penalty of up to $51,796 per
                COF per day of violation (that is, each day a COF is operated without
                acceptable evidence of OSFR).
                * * * * *
                [FR Doc. 2022-05633 Filed 3-17-22; 8:45 am]
                BILLING CODE 4310-MR-P
                

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