[Federal Register Volume 89, Number 17 (Thursday, January 25, 2024)]
[Rules and Regulations]
[Pages 4815-4818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-01412]


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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management

30 CFR Parts 550 and 553

[Docket ID: BOEM-2024-0002]
RIN 1010-AE19


2024 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 2024 inflation adjustments to 
the maximum daily civil monetary penalties in the Bureau of Ocean 
Energy Management's (BOEM) regulations for violations of the Outer 
Continental Shelf Lands Act (OCSLA) and the Oil Pollution Act of 1990 
(OPA). These inflation adjustments are made pursuant to the Federal 
Civil Penalties Inflation Adjustment Act Improvements Act of 2015 
(Improvements Act) and Office of Management and Budget (OMB)

[[Page 4816]]

memorandum M-24-07. The 2024 adjustment multiplier of 1.03241 accounts 
for 1 year of inflation from October 2022 through October 2023.

DATES: This rule is effective on January 25, 2024.

FOR FURTHER INFORMATION CONTACT: Questions regarding the inflation 
adjustment methodology or amount should be directed to Jayson Pollock, 
Economics Division, BOEM, at [email protected] or at (703) 787-
1537. Questions regarding the timing of this adjustment or the 
applicability of the regulations should be directed to Karen Thundiyil, 
Chief, Office of Regulations, BOEM at [email protected] or at 
(202) 742-0970.

SUPPLEMENTARY INFORMATION:

I. Legal Authority
II. Background and Purpose
III. Calculation of the 2024 Adjustments
IV. Statutory and Executive Order Reviews
    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); Modernizing 
Regulatory Review (E.O. 14094); 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. It also 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, but such 
adjustment is authorized by the Improvements Act. See 28 U.S.C. 2461 
note.
    The 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\ The purposes of 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 Improvements Act amended the Federal Civil Penalties 
Inflation Adjustment Act of 1990. See Public Law 101-410 (codified 
at 28 U.S.C. 2461 note).
    \2\ Under the Improvements Act, Federal agencies were required 
to adjust their civil monetary penalties for inflation with an 
initial ``catch-up'' adjustment through an interim final rulemaking 
in 2016 and must 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 and Purpose

    BOEM implemented the 2023 inflation adjustment for its civil 
monetary penalties through a final rule entitled ``2023 Civil Penalties 
Inflation Adjustments for Oil, Gas, and Sulfur Operations in the Outer 
Continental Shelf,'' which was published in the Federal Register on 
February 15, 2023. 88 FR 9749. That rule accounted for inflation for 
the 12-month period between October 2021 and October 2022.
    OMB memorandum M-24-07 \3\ reiterates agency responsibilities under 
the Improvements Act. Such responsibilities include identifying 
applicable penalties and performing the annual adjustment; publishing 
revisions to regulations to implement the adjustment in the Federal 
Register; applying adjusted penalty dollar amounts; and performing 
agency oversight of inflation adjustments.
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    \3\ OMB Memorandum M-24-07 ``Implementation of Penalty Inflation 
Adjustments for 2024, Pursuant to the Federal Civil Penalties 
Inflation Adjustment Act Improvements Act of 2015'' is available at 
https://www.whitehouse.gov/wp-content/uploads/2023/12/M-24-07-Implementation-of-Penalty-Inflation-Adjustments-for-2024.pdf.
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    Pursuant to the Improvements Act and OMB M-24-07, this final rule 
implements BOEM's 2024 inflation adjustments to OCSLA and OPA maximum 
daily civil monetary penalties. A proposed rule is unnecessary as the 
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. Improvements Act, Public Law 114-74, sec. 701(b)(1)(D); 
APA, 5 U.S.C. 553.\4\
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    \4\ 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. Improvements Act, sec. 
701(b)(1)(D); APA, 5 U.S.C. 553. OMB confirmed this interpretation 
of the Improvements Act. OMB M-24-07 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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    On July 22, 2021, BOEM issued a final rule entitled ``Maximum Daily 
Civil Penalty Amounts for Violations of the Federal Oil and Gas Royalty 
Management Act'' (86 FR 38557). The rule amended BOEM's regulations 
that set maximum daily civil penalty (MDCP) amounts for violations of 
the Federal Oil and Gas Royalty Management Act (FOGRMA). The amendment 
cross-referenced BOEM's regulations to the Office of Natural Resources 
Revenue (ONRR) regulations that also set MDCP amounts for FOGRMA 
violations. This cross-reference ensured consistency between BOEM's 
FOGRMA MDCP amounts and ONRR's FOGRMA MDCP amounts. Because ONRR 
annually adjusts its MDCP for inflation, the cross-referencing rule 
also ensured consistent compliance with the Improvements Act and 
related OMB guidance while reducing possible confusion among regulated 
parties and unnecessary duplication of effort and costs to the Federal 
Government. The cross-reference to ONRR's regulations relieves BOEM of 
the necessity to adjust its FOGRMA MDCP.

III. Calculation of the 2024 Adjustments

    In accordance with the Improvements Act, BOEM determined that OCSLA 
and OPA maximum daily civil monetary penalties require annual inflation 
adjustments. BOEM issues this final rule adjusting those penalty 
amounts for inflation through October 2023. 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-24-07, the 2024 inflation adjustment multiplier can be 
calculated by dividing the October 2023 CPI-U by the October 2022 CPI-
U. In this case, October 2023 CPI-U (307.671)/October 2022 CPI-U 
(298.012) = 1.03241.

[[Page 4817]]

    For 2024, BOEM multiplied the current OCSLA maximum daily civil 
monetary penalty of $52,646 by the multiplier 1.03241, which equals 
$54,352.26. The Improvements Act requires that the resulting amount 
then be rounded to the nearest dollar. Accordingly, the 2024 adjusted 
OCSLA maximum daily civil monetary penalty is $54,352.
    For 2024, BOEM multiplied the current OPA maximum daily civil 
penalty amount of $55,808 by the multiplier 1.03241, which equals 
$57,616.74. The Improvements Act requires that the resulting amount 
then be rounded to the nearest dollar. Accordingly, the 2024 adjusted 
OPA maximum daily civil monetary penalty is $57,617.
    The adjusted penalty amounts take effect immediately upon 
publication of this rule. Under the 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 2024 maximum daily civil monetary 
penalties for each OCSLA and OPA violation:

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                                                                                Current                   2024
                CFR citation                     Description of the penalty     maximum    Multiplier   Maximum
                                                                                penalty                 penalty
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30 CFR 550.1403 (OCSLA).....................  Failure to comply per day per      $52,646      1.03241    $54,352
                                               violation.
30 CFR 553.51(a) (OPA)......................  Failure to comply per day per       55,808      1.03241     57,617
                                               violation.
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IV. Statutory and Executive Order Reviews

A. Statutes

1. National Environmental Policy Act
    This rule does not constitute a major Federal action under the 
National Environmental Policy Act of 1969 (NEPA, 42 U.S.C. 4321 et 
seq.) because the civil penalty adjustments are required by law (see 40 
CFR 1508.1(q)(1)(ii)). The Improvements Act requires BOEM to annually 
adjust the amounts of its civil penalties to account for inflation as 
measured by the Department of Labor's Consumer Price Index. 
Accordingly, BOEM has no discretion in the execution of the civil 
penalty adjustments reflected in this final rule. Because this rule is 
not a major Federal action, it is therefore not subject to the 
requirements of NEPA. Even if this were a discretionary action subject 
to NEPA, which it is not, a detailed statement under NEPA would not be 
required because, as a regulation of an administrative nature, this 
rule would be covered by a categorical exclusion (see 43 CFR 
46.210(i)). Moreover, BOEM determined that the rule does not implicate 
any of the extraordinary circumstances listed in 43 CFR 46.215 that 
would prevent reliance on the categorical exclusion. 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. However, 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 
Improvements Act expressly exempts these annual inflation adjustments 
from the requirement to publish a proposed rule for notice and comment. 
Improvements Act, Public Law 114-74, sec. 701(b)(1)(D); OMB M-24-07 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, in the aggregate, or to the private sector, of $100 
million or more in any one 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. 1531 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,\5\ this rule is not a major rule, as defined by that act. 
5 U.S.C. 804(2).
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    \5\ 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-24-07 at 3.
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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); Modernizing Regulatory 
Review (E.O. 14094); Improving Regulation and Regulatory Review (E.O. 
13563)
    E.O. 12866, as amended by E.O. 14094, provides that the Office of 
Information and Regulatory Affairs (OIRA) will review all significant 
rules. OIRA 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 $200 million. See OMB Memorandum M-24-07 at 3. This 
rule meets those conditions and, thus, is not a significant rule.
    E.O. 13563 reaffirms the principles of E.O. 12866, as amended by 
E.O. 14094, 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

[[Page 4818]]

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 using neither science nor public participation in this 
rulemaking. Congress directed agencies to adjust the maximum daily 
civil penalty amounts using a particular equation without public 
participation. 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 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
    (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 
dollar amount of civil monetary penalties that BOEM may impose on oil 
and gas lessees, grant holders, and operators on the Outer Continental 
Shelf 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 the 
Tribes' right to self-governance and Tribal sovereignty. BOEM evaluated 
this rule under the Department of the Interior's consultation policy, 
Departmental Manual part 512 chapters 4 and 5, and E.O. 13175. BOEM 
determined that this rule has no substantial direct effects on 
federally recognized Indian Tribes or Alaska Native Claims Settlement 
Act Corporations and that consultation under existing Department and 
BOEM 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 of that term found in E.O. 13211. Therefore, a statement of 
energy effects is not required.

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.

    This action by the Deputy Assistant Secretary is taken pursuant to 
an existing delegation of authority.

Steven H. Feldgus,
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 $54,352 per day per violation.

PART 553--OIL SPILL FINANCIAL RESPONSIBILITY FOR OFFSHORE 
FACILITIES

0
3. The authority citation for part 553 is amended to read as follows:

    Authority: 33 U.S.C. 2704, 2716; 2716a; E.O. 12777, 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 $57,617 per 
COF per day of violation (that is, each day a COF is operated without 
acceptable evidence of OSFR).
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[FR Doc. 2024-01412 Filed 1-24-24; 8:45 am]
BILLING CODE 4340-98-P