[Federal Register Volume 68, Number 209 (Wednesday, October 29, 2003)]
[Rules and Regulations]
[Pages 61622-61624]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-27280]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service

30 CFR Part 250

RIN 1010-AD07


Oil and Gas and Sulphur Operations in the Outer Continental Shelf 
Civil Penalties

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Final rule.

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SUMMARY: The MMS is required to review the maximum daily civil penalty 
assessment allowable under its regulations at least once every 3 years 
for the purpose of adjusting this amount in accordance with the 
Consumer Price Index (CPI), as prepared by the Bureau of Labor 
Statistics, Department of Labor. The intended effect is for punitive 
assessments to keep up with inflation. Thus, MMS is publishing a final 
rule to adjust the civil penalty assessment to comply with the 
Department of Labor's CPI. This final rule informs the public and the 
regulated community of the adjusted civil penalty assessment.

EFFECTIVE DATE: This rule becomes effective on November 28, 2003.

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FOR FURTHER INFORMATION CONTACT: Doug Slitor, Safety and Enforcement 
Branch at (703) 787-1030 or e-mail at [email protected].

SUPPLEMENTARY INFORMATION:

Background

    The Oil Pollution Act of 1990 (OPA 90) (Pub. L. 101-380) expanded 
and strengthened MMS's authority to impose penalties for violating 
regulations promulgated under the Outer Continental Shelf (OCS) Lands 
Act, 43 U.S.C. 1331 et seq. Section 8201 of OPA 90 authorizes the 
Secretary of the Interior (Secretary) to assess a civil penalty without 
providing notice and time for corrective action where a failure to 
comply with applicable regulations results in a threat of serious, 
irreparable, or immediate harm or damage to human life or the 
environment. The goal of the MMS OCS Civil Penalty Program is to ensure 
safe and clean operations on the OCS. By pursuing, assessing, and 
collecting civil penalties, the program is designed to encourage 
compliance with OCS statutes and regulations.
    Not all regulatory violations warrant a review to initiate civil 
penalty proceedings. However, violations that cause injury, death, or 
environmental damage, or pose a threat to human life or the 
environment, will trigger such review.
    In accordance with OPA 90, every 3 years MMS must analyze the civil 
penalty maximum amount in conjunction with the CPI prepared by the U.S. 
Department of Labor. If an adjustment is necessary, MMS informs the 
public through the Federal Register of the new maximum amount. MMS must 
comply with OPA 90 which specifies the CPI as the index and the MMS 
action is not discretionary. Therefore, public comments are unnecessary 
and in accordance with 5 U.S.C. 553(b)(3)(B), MMS is publishing an 
immediately final rule instead of a proposed rule.
    MMS uses Office of Management and Budget (OMB) guidelines for 
determining how penalty amounts should be rounded. In computing this 
new civil penalty maximum amount, MMS divided the August 2002 CPI of 
180.7 by the previously used August 1995 CPI of 152.9. This resulted in 
a multiplying factor of 1.18. The previous maximum amount of $25,000 
per violation per day was multiplied by the 1.18 factor and resulted in 
a new maximum penalty amount of $29,500. This amount was rounded to 
$30,000 as per OMB guidelines. The new civil penalty maximum amount is 
now $30,000 per violation per day. It must be remembered that this is a 
maximum amount and is only used when a non-compliance issue warrants 
it.

Regulatory Planning and Review (Executive Order 12866)

    This final rule is not significant under E.O. 12866 and has not 
been reviewed by the Office of Management and Budget (OMB).

Regulatory Flexibility (RF) Act

    The Department of the Interior (DOI) certifies that this rule will 
not have a significant economic effect on a substantial number of small 
entities under the RF Act (5 U.S.C. 601 et seq.). This rule applies to 
all lessees that operate on the OCS. Generally, lessees that operate 
under this rule would fall under the Small Business Administration's 
(SBA) North American Industry Classification System Codes 211111, Crude 
Petroleum and Natural Gas Extraction and 213111, Drilling Oil and Gas 
Wells. Under these codes, SBA considers all companies with fewer than 
500 employees to be a small business. We estimate that of the 130 
lessees that explore for and produce oil and gas on the OCS, 
approximately 90 are small businesses (70 percent). The primary effect 
of the rule is the increase in civil penalties assessed only for those 
operators that do not comply with Federal OCS regulations.
    This rule will have no impact on the oil and gas industry operators 
that comply with Federal OCS regulations. For those operators whose 
non-compliance results in a civil penalty, the increase resulting from 
the inflation factor of 1.18 amounts to an increase of less than 
$200,000 spread over an average of 37 cases per year or slightly over 
$5,000 additional per case. This is using data over the past 9 years 
and averaging civil penalties paid and number of cases paid per year. 
This dollar amount is very minor considering the considerable sums of 
money operators must have to operate on the OCS. This is true for even 
the smallest of OCS operators.
    Your comments are important. The Small Business and Agriculture 
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were 
established to receive comments from small businesses about Federal 
agency enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to small 
business. If you wish to comment on the actions of MMS, call 1-888-REG-
FAIR (1-888-734-3247). You may comment to the Small Business 
Administration without fear of retaliation. Disciplinary action for 
retaliation by an MMS employee may include suspension or termination 
from employment with the Department of the Interior.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under the SBREFA (5 U.S.C. 804(2)). 
This rule:
    1. Does not have an annual effect on the economy of $100 million or 
more. As described above, we estimate an annual increase of $5,000 per 
civil penalty case.
    2. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions. The minor increase in cost will not 
change the way the oil and gas industry conducts business, nor will it 
affect regional oil and gas prices; therefore, it will not cause major 
cost increases for consumers, the oil and gas industry, or any 
government agencies.
    3. Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or ability of United 
States-based enterprises to compete with foreign-based enterprises. All 
lessees and drilling contractors, regardless of nationality, will have 
to comply with the requirements of this rule. Therefore, the rule will 
not affect competition, employment, investment, productivity, 
innovation, or the ability of United States-based enterprises to 
compete with foreign-based enterprises.

Paperwork Reduction Act (PRA) of 1995

    This regulation does not contain any information collection 
requirements subject to the PRA. We will not submit Form 83-I to OMB 
for review and approval under Section 3507(d) of the PRA.

Federalism (Executive Order 13132)

    According to Executive Order 13132, this rule does not have 
Federalism implications. This rule does not substantially and directly 
affect the relationship between Federal and State governments. This 
final rule only increases the maximum civil penalty amount per day 
allowed. This is outside State jurisdiction. States have no role in 
this activity. The rule does not impose costs on States or localities.

Consultation and Coordination With Indian Tribal Governments (Executive 
Order 13175)

    In accordance with E.O. 13175, this rule does not have tribal 
implications that impose substantial direct

[[Page 61624]]

compliance costs on Indian tribal governments.

Takings Implication Assessment (Executive Order 12630)

    According to Executive Order 12630, the rule does not have 
significant Takings Implications. A Takings Implication Assessment is 
not required. The rulemaking is not a governmental action capable of 
interfering with constitutionally protected property rights.

Civil Justice Reform (Executive Order 12988)

    According to Executive Order 12988, the Office of the Solicitor has 
determined that this rule does not unduly burden the judicial system 
and does meet the requirements of sections 3(a) and 3(b)(2) of the 
Order.

National Environmental Policy Act

    The final rulemaking does not introduce requirements that would 
cause lessees or operators to perform or change any activities on the 
OCS which would result in environmental impacts beyond those addressed 
in the National Environmental Policy Act documents associated with the 
OCS plans.

Unfunded Mandates Reform Act (UMRA) of 1995 (Executive Order 12866)

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments or the private sector of more than $100 million per 
year. The rule does not have any Federal mandates, nor does the rule 
have a significant or unique effect on State, local, or tribal 
governments or the private sector. A statement containing the 
information required by the UMRA (2 U.S.C. 1531 et seq.) is not 
required.

List of Subjects in 30 CFR Part 250

    Continental shelf, Environmental impact statements, Environmental 
protection, Government contracts, Investigations, Mineral royalties, 
Oil and gas development and production, Oil and gas exploration, Oil 
and gas reserves, Penalties, Pipelines, Public lands--mineral 
resources. Public lands--rights-of-way, Reporting and recordkeeping 
requirements, Sulphur development and production, Sulphur exploration, 
Surety bonds.

    Dated: October 20, 2003.
Rebecca W. Watson,
Assistant Secretary--Land and Minerals Management.

0
For the reasons stated in the preamble, MMS amends 30 CFR Part 250 as 
follows:

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

0
1. Authority citation for Part 250 continues to read as follows:

    Authority: 43 U.S.C. 1334.

0
2. Section 250.1403 is revised to read as follows:


Sec.  250.1403  What is the maximum civil penalty?

    The maximum civil penalty is $30,000 per day per violation.

[FR Doc. 03-27280 Filed 10-28-03; 8:45 am]
BILLING CODE 4310-MR-P