[Federal Register Volume 86, Number 122 (Tuesday, June 29, 2021)]
[Rules and Regulations]
[Pages 34132-34134]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-13805]



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DEPARTMENT OF THE INTERIOR

Bureau of Safety and Environmental Enforcement

30 CFR Part 250

[Docket ID: BSEE-2021-0002; EEE500000 21XE1700DX EX1SF0000.EAQ000]
RIN 1014-AA43


Oil and Gas and Sulfur Operations on the Outer Continental 
Shelf--Maximum Daily Civil Penalty Amounts for Violations of the 
Federal Oil and Gas Royalty Management Act

AGENCY: Bureau of Safety and Environmental Enforcement, Interior.

ACTION: Final rule.

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SUMMARY: This final rule amends the Bureau of Safety and Environmental 
Enforcement (BSEE) regulations that set Maximum Daily Civil Penalty 
(MDCP) amounts for violations of the Federal Oil and Gas Royalty 
Management Act (FOGRMA). The amended BSEE regulations will cross-
reference regulations of the Office of Natural Resources Revenue (ONRR) 
that also set MDCP amounts for FOGRMA violations. This cross-reference 
will ensure consistency between BSEE's FOGRMA MDCP amounts and ONRR's 
FOGRMA MDCP amounts. It will also ensure consistent compliance with the 
Federal Civil Penalties Inflation Adjustment Act Improvements Act of 
2015 (FCPIAAIA of 2015) and related Office of Management and Budget 
(OMB) guidance, while reducing unnecessary duplication of effort and 
costs to the agency.

DATES: This rule is effective on June 29, 2021.

FOR FURTHER INFORMATION CONTACT: Kirk Malstrom, Bureau of Safety and 
Environmental Enforcement, Office of Offshore Regulatory Programs, 
Regulations and Standards Branch at (202) 258-1518 or by email: 
[email protected].

SUPPLEMENTARY INFORMATION:

I. Background and Legal Authority

    On November 2, 2015, the FCPIAAIA of 2015, Public Law 114-74, 
section 701 (codified at 28 U.S.C. 2461 note) became law. The FCPIAAIA 
of 2015 required Federal agencies to adjust the level of civil monetary 
penalties imposed under each agency's regulations with an initial 
``catch-up'' adjustment through rulemaking, if warranted, and then to 
make subsequent annual adjustments for inflation. Under the FCPIAAIA of 
2015, agencies were required to publish the initial annual inflation 
adjustments in the Federal Register by no later than January 15, 2017 
and are required to publish annual adjustments by no later than January 
15th of each subsequent year. The purpose of these adjustments is to 
maintain the deterrent effect of civil penalties and to further the 
policy goals of the underlying statutes that authorized the penalties.
    BSEE has authority to impose civil penalties for violations of the 
Outer Continental Shelf Lands Act, 43 U.S.C. 1331-1356a (OCSLA). BSEE 
regulations implementing its authority to impose civil penalties under 
OCSLA are found at 30 CFR 250.1400-250.1409. In addition, BSEE has 
authority to impose civil penalties for violations of FOGRMA, 30 U.S.C. 
1701 et seq., under section 109 of that Act (30 U.S.C. 1719). BSEE's 
regulations implementing its authority to impose penalties under FOGRMA 
are found at 30 CFR 250.1450-250.1456, 250.1460-250.1464, and 250.1470-
250.1477. Specifically, BSEE may impose civil penalties under FOGRMA--
after providing a Notice of Noncompliance (NONC) and an opportunity to 
correct the violation(s)--for noncompliance with any applicable 
statute, regulation, order, or lease term relating to any Federal oil 
or gas lease. See 30 CFR 250.1451. BSEE may also impose penalties under 
FOGRMA, without providing prior notice or an opportunity to correct the 
violation, for certain knowing or willful violations of the substantive 
provisions of FOGRMA (e.g., failure or refusal to permit lawful entry, 
inspection, or audit; knowing or willful submission of false or 
misleading information). See id. at Sec.  250.1460.
    Sections 250.1453 and 250.1460 of BSEE's existing regulations 
specify the MDCP amounts, as prescribed by section 109 of FOGRMA (30 
U.S.C. 1719), for the violations described in sections 250.1451, 
250.1453, and 250.1460.\1\ As required by the FCPIAAIA of 2015, 
however, BSEE's FOGRMA civil penalty amounts must be adjusted annually 
for inflation.
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    \1\ Under existing Sec.  250.1453(a), BSEE may initially impose 
civil penalties of up to $500 per day for each violation of FOGRMA 
that is not corrected within 20 days of receipt of a NONC 
identifying the violation. Under existing Sec.  250.1453(b), BSEE 
may increase the MDCP amount up to $5,000 per day for each violation 
not corrected within 40 days of the NONC. In addition, under 
existing Sec.  250.1460(a) and (b), BSEE may impose penalties, 
without prior notice, of up to $10,000 or $25,000 per day, 
respectively, for the FOGRMA violations specified in those 
provisions.
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    Within the Department of the Interior (the Department), ONRR is the 
agency responsible for collecting revenue from energy leases and 
auditing royalty payments under FOGRMA. Like BSEE, ONRR also has 
authority to impose civil penalties for certain violations of FOGRMA. 
ONRR's civil penalty regulations are found in 30 CFR part 1241. As 
required by the FCPIAAIA of 2015, ONRR also must annually adjust, for 
inflation, the MDCP amounts in its regulations for FOGRMA violations. 
ONRR published such a final rule for calendar year 2017 on April 24, 
2017, adjusting the MDCP amounts in 30 CFR part 1241 for FOGRMA 
violations. See 82 FR 18858. Each year since, ONRR has calculated and 
adjusted the MDCP amounts in 30 CFR part 1241 in accordance with the 
FCPIAAIA of 2015. On February 2, 2021, ONRR published the final rule 
adjusting the MDCP amounts in 30 CFR part 1241 for calendar year 2021. 
See 86 FR 7808.\2\
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    \2\ Specifically, ONRR amended 30 CFR 1241.52(a)(2) to authorize 
civil penalties of up to $1,288 per day for each violation of FOGRMA 
that is not corrected within 20 days of receipt of a NONC 
identifying the violation. See 86 FR 7808, 7810. Under the amended 
30 CFR 1241.52(b), ONRR may impose civil penalties of up to $12,891 
per day for each violation that is not corrected within 40 days of 
receipt of the NONC. Finally, ONNR amended 30 CFR 1241.60(b)(1) and 
(b)(2) to authorize imposition of penalties, without prior notice, 
of up to $25,780 or $64,452 per day, respectively, for certain 
specified violations of FOGRMA. Id.
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    Because FOGRMA sets the MDCP amounts for penalties assessed by BSEE 
and ONRR for violations of FOGRMA, and the FCPIAAIA of 2015 uniformly 
applies to require adjustments to the civil penalties that may be 
assessed by both agencies as calculated from the same base year, BSEE's 
FOGRMA MDCP amounts must be the same as ONRR's FOGRMA MDCP amounts.

II. Changes Made to Existing BSEE Regulations

    BSEE is amending Sec. Sec.  250.1453 and 250.1460 of its FOGRMA 
civil penalty regulations in order to cross-reference the ONRR civil 
penalty regulations in 30 CFR part 1241. By cross-referencing the ONRR 
regulations, BSEE's MDCP amounts for FOGRMA violations will be the same 
as ONRR's MDCP amounts, ensuring ongoing consistency within the 
Department as ONRR adjusts the FOGRMA MDCP amounts annually for 
inflation. In addition, this rule will avoid the duplication of effort 
and unnecessary expenditures within the Department that would occur if 
both BSEE and ONRR were to develop and publish separate final rules 
every year adjusting their corresponding FOGRMA MDCP amounts.

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III. Administrative Procedure Act Requirements

    In general, an agency must first publish a proposed rule, to 
provide prior notice and an opportunity for public comment, before 
adopting a final rule. However, no such proposal is necessary for this 
final rule. Section 4(b)(2) of the FCPIAAIA of 2015 states that 
agencies shall adjust civil monetary penalties ``notwithstanding 
Section 553 of the Administrative Procedure Act.'' In this manner, 
Congress exempted the annual inflation adjustments implemented pursuant 
to the FCPIAAIA of 2015 from the notice and comment requirements of the 
Administrative Procedure Act, 5 U.S.C. 551 et seq. (the APA), allowing 
agencies to publish FCPIAAIA adjustments as final rules without prior 
proposed rules.
    This interpretation of the APA's application to FCPIAAIA of 2015 is 
confirmed by the most recent annual guidance issued by OMB Memorandum 
on December 23, 2020, in Memorandum M-21-10, Implementation of Penalty 
Inflation Adjustments for 2021, Pursuant to the FCPIAAIA of 2015, OMB 
Memorandum M-21-10 (M-21-10), available at https://www.whitehouse.gov/wp-content/uploads/2020/12/M-21-10.pdf). OMB Memorandum M-21-10 
explains the agency responsibilities under the FCPIAAIA of 2015 as: 
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. As stated in that 
Memorandum, ``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.'' OMB M-21-10 at p. 3.
    In addition, section 553(b) of the APA provides that an opportunity 
for notice and comment on a proposed rule is not required when an 
agency finds, for good cause, that prior notice and public procedure 
are impracticable, unnecessary, or contrary to the public interest. 
BSEE finds that it is unnecessary to issue a proposed rule prior to 
this final rule because the FCPIAAIA of 2015 does not leave any 
discretion to BSEE--specifying the adjustments to be made, the 
methodology to be employed, and the index for inflation to be 
utilized--and that BSEE thus cannot choose to take a different course 
in response to comments.
    Section 553(b) also provides that the requirement for notice and 
comment does not apply to ``rules of agency, organization, procedure, 
or practice.'' BSEE's decision to address the civil penalty adjustment 
required by the FCPIAAIA by cross-referencing ONRR regulations, subject 
to the same standards for adjustment, rather than annually amending the 
FOGRMA penalties in each affected BSEE regulation, is an exercise of 
procedural rulemaking, which primarily concerns BSEE's internal 
operations. Here, BSEE is organizing its internal procedures to meet 
its own legal duties. Moreover, while notice and comment is required 
for rules that affect rights or duties of the public, BSEE's reliance 
on cross-referencing does not affect the rights of any regulated 
parties because the civil penalty amount will be the same regardless of 
whether those amounts are cross-referenced to ONRR's regulations. ONRR 
must calculate and adjust the MDCP amounts in 30 CFR part 1241 annually 
in accordance with the FCPIAAIA of 2015 and related OMB guidance, just 
as BSEE must do.

IV. Procedural Requirements

A. Regulatory Planning and Review (E.O. 12866 and 13563)

    Executive Order (E.O.) 12866 provides that the OMB Office of 
Information and Regulatory Affairs (OIRA) will review all significant 
rules. OIRA has determined that this rule is not significant. OMB M-18-
03 at 3.
    E.O. 13563 reaffirms the principles of E.O. 12866 while calling for 
improvements in the nation's regulatory system to promote 
predictability, to reduce uncertainty, and to use 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. We have developed this rule in a manner consistent 
with these requirements, to the extent permitted by statute.

B. Regulatory Flexibility Act

    The Regulatory Flexibility Act (RFA) 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)). For the reasons discussed in part III of 
this notice, BSEE is not required to publish a proposed rule prior to 
this final rule. Thus, the RFA does not apply to this rulemaking.

C. Small Business Regulatory Enforcement Fairness Act

    This rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. This rule:
    (1) Does not have an annual effect on the economy of $100 million 
or more.
    (2) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (3) Does 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.

D. Unfunded Mandates Reform Act

    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 a significant or unique effect on State, 
local, or tribal governments or the private sector. Therefore, a 
statement containing the information required by the Unfunded Mandates 
Reform Act (2 U.S.C. 1531 et seq.) is not required.

E. Takings (E.O. 12630)

    This rule does not affect a taking of private property or otherwise 
have takings implications under E.O. 12630. Therefore, a takings 
implication assessment is not required.

F. 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 will not substantially 
and directly affect the relationship between the Federal and State 
governments. To the extent that State and local governments have a role 
in OCS activities, this rule will not affect that role. Therefore, a 
federalism summary impact statement is not required.

G. Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:

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    (1) 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
    (2) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

H. Consultation With Indian Tribes (E.O. 13175 and Departmental Policy)

    The Department strives to strengthen its government-to-government 
relationship with Indian tribes through a commitment to consultation 
with Indian tribes and recognition of their right to self-governance 
and tribal sovereignty. We evaluated this rule under the Department's 
consultation policy, under Departmental Manual Part 512 Chapters 4 and 
5, and under the criteria in E.O. 13175. We 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's tribal and ANCSA consultation 
policies is not required.

I. Paperwork Reduction Act

    This rule does not contain information collection requirements, and 
a submission to the OMB under the Paperwork Reduction Act (44 U.S.C. 
3501 et seq.) is not required.

J. 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 of 1969 (NEPA) is not 
required because the rule is covered by a categorical exclusion (see 43 
CFR 46.210(i)). This rule is excluded from the requirement to prepare a 
detailed statement because it is a regulation of an administrative 
nature. BSEE also determined that the rule does not implicate any of 
the extraordinary circumstances listed in 43 CFR 46.215 that would 
require further NEPA analysis.

K. Effects on the Energy Supply (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.

List of Subjects in 30 CFR Part 250

    Administrative practice and procedure, Continental shelf, 
Continental Shelf--mineral resources, Continental Shelf--rights-of-way, 
Environmental impact statements, Environmental protection, Government 
contracts, Investigations, Oil and gas exploration, Penalties, 
Pipelines, Reporting and recordkeeping requirements, Sulfur.

Laura Daniel-Davis,
Principal Deputy Assistant Secretary, Land and Minerals Management.

    For the reasons given in the preamble, the Bureau of Safety and 
Environmental Enforcement amends title 30, chapter II, subchapter B, 
part 250 Code of Federal Regulations as follows.

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

0
1. The authority citation for part 250 continues to read as follows:

    Authority: 30 U.S.C. 1751, 31 U.S.C. 9701, 33 U.S.C. 
1321(j)(1)(C), 43 U.S.C. 1334.


0
2. Revise Sec.  250.1453 to read as follows:


Sec.  250.1453  What if I do not correct the violation?

    (a) We may send you a Notice of Civil Penalty if you do not correct 
all of the violations identified in the Notice of Noncompliance within 
20 days after you receive the Notice of Noncompliance (or within a 
longer time period specified in that Notice). The Notice of Civil 
Penalty will tell you how much penalty you must pay for each day, 
beginning with the date of the Notice of Noncompliance, for each 
violation identified in the Notice of Noncompliance for as long as you 
do not correct the violation. The maximum civil penalty amount for each 
day of such an uncorrected violation is as specified in 30 CFR 
1241.52(a)(2).
    (b) If you do not correct all of the violations identified in the 
Notice of Noncompliance within 40 days after you receive the Notice of 
Noncompliance (or 20 days following the expiration of a longer time 
period specified in that Notice), we may increase the penalty for each 
day, beginning with the date of the Notice of Noncompliance, for each 
violation for as long as you do not correct the violations. The maximum 
civil penalty amount for each day of such an uncorrected violation is 
as specified in 30 CFR 1241.52(b).

0
3. Revise Sec.  250.1460 to read as follows:


Sec.  250.1460  May I be subject to penalties without prior notice and 
an opportunity to correct?

    The Federal Oil and Gas Royalty Management Act sets out several 
specific violations for which penalties accrue without an opportunity 
to first correct the violation.
    (a) Under 30 U.S.C. 1719(c), you may be subject to civil penalties 
up to the maximum amount specified in 30 CFR 1241.60(b)(1) for each 
violation for each day that it continues if you:
    (1) Fail or refuse to permit lawful entry, inspection, or audit; or
    (2) Knowingly or willfully fail or refuse to notify the Secretary, 
within 5 business days after any well begins production on a lease site 
or allocated to a lease site, or resumes production in the case of a 
well which has been off production for more than 90 days, of the date 
on which production has begun or resumed.
    (b) Under 30 U.S.C. 1719(d), you may be subject to civil penalties 
up to the maximum amount specified in 30 CFR 1241.60(b)(2) for each 
violation for each day that it continues if you:
    (1) Knowingly or willfully prepare, maintain, or submit false, 
inaccurate, or misleading reports, notices, affidavits, records, data, 
or other written information;
    (2) Knowingly or willfully take or remove, transport, use or divert 
any oil or gas from any lease site without having valid legal authority 
to do so; or
    (3) Purchase, accept, sell, transport, or convey to another person, 
any oil or gas knowing or having reason to know that such oil or gas 
was stolen or unlawfully removed or diverted.

[FR Doc. 2021-13805 Filed 6-28-21; 8:45 am]
BILLING CODE 4310-VH-P