Offshore Oil Gets Billions Back: Lighter Cleanup Cost Rules Proposed
Published Date: 3/9/2026
Proposed Rule
Summary
The Department of the Interior is proposing new rules to make it easier and cheaper for companies drilling for oil, gas, and sulfur on the Outer Continental Shelf to prove they can cover cleanup costs. These changes will lower the extra money companies must set aside, freeing up about $6.2 billion to invest back into energy projects. The updates affect current and future leaseholders and grant holders and aim to boost American energy while keeping the environment safe.
Analyzed Economic Effects
8 provisions identified: 8 benefits, 0 costs, 0 mixed.
Cuts Supplemental Bonding; Frees ~$6.2B
BOEM is proposing rules that would significantly reduce supplemental financial assurance required from oil, gas, and sulfur leaseholders and grant holders on the Outer Continental Shelf, freeing up about $6.2 billion to invest back into energy projects. BOEM's Regulatory Impact Analysis also shows discounted savings of about $7.21 billion (2026–2045 at 3%) or $5.16 billion (discounted at 7%) over that 20-year window.
Lowers Credit Rating Threshold
BOEM proposes changing the credit rating cutoff used to decide who must post supplemental financial assurance from investment grade (S&P BBB- or Moody's Baa3) to a lower threshold (S&P BB- or Moody's Ba3). If a current lessee (or a predecessor) meets the new BB-/Ba3 threshold, they would not be required to provide supplemental financial assurance under the credit-rating test.
Uses P50 Instead of P70 for Decommissioning
BOEM proposes to change which BSEE probabilistic decommissioning estimate it uses to set supplemental financial assurance from P70 (70% likelihood of covering full decommissioning costs) to P50 (50% likelihood). This change would reduce the dollar amount required to cover decommissioning obligations under the probabilistic method.
Counts Predecessors' Financial Strength
The proposal would let BOEM consider the financial strength of jointly and severally liable predecessor lessees or grant holders when deciding whether a current lessee must post supplemental financial assurance. If a current lessee has a creditworthy predecessor in the chain of title, BOEM may not demand supplemental assurance from the current lessee.
Third-Party Contracts Can Replace New Bonds
If decommissioning activities will occur within 1 year of a new supplemental financial assurance demand, the Regional Director may accept third-party decommissioning contracts and schedules instead of requiring new supplemental financial assurance. BOEM's acceptance is limited to using those documents in lieu of posting new assurance and is not BSEE approval of the decommissioning itself.
Resets Phase-In Period for Existing Leaseholders
BOEM proposes to start a new phase-in period for existing leaseholders for any supplemental financial assurance requirements tied to this rule, replacing the prior 3-year phase-in that was in the 2024 Final Rule. The new phase-in would begin on the effective date of the revised supplemental financial assurance requirements.
Allows Dual-Obligee Assurance Instruments
The proposal explicitly adds dual-obligee financial assurance instruments to the list of acceptable supplemental financial assurance for leases. This expands the forms of financial instruments that lessees can use to meet BOEM's assurance demands.
Drops Appeal Bond Requirement for IBLA Challenges
The Department proposes removing the current requirement that a lessee post an appeal bond equal to the supplemental financial assurance demand as a condition to stay that demand while appealing to the Interior Board of Land Appeals (IBLA). This change would eliminate that upfront bonding burden when a lessee appeals BOEM's demand.
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Key Dates
Department and Agencies
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