| Connect Follow us on Twitter Like us on Facebook
About | Subscribe | Advertise


Download our free ebook on Advances in Corrosion Control Coating Technology

Paint and Coatings Industry News

Main News Page

US Stiffens Oil & Gas Violation Fines

Thursday, June 30, 2011

More items for Health & Safety

Comment | More

Federal fines for corroding pipelines, crumbling offshore structures, and other neglected facilities will soon increase, under new penalties announced this week.

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) said Wednesday (June 29) that it would increase the maximum civil penalty rate for Outer Continental Shelf Lands Act (OCSLA) violations to $40,000 from $35,000 per day and hike the daily fine for violations of the Oil Pollution Act (OPA) to $30,000 from $25,000.

The increases, which take effect Aug. 1, coincide with adjustments in inflation, as required by both laws.

 Workers in Gumby suits await rescue
Offshore workers in “Gumby” suits await rescue after an explosion aboard Mariner Energy’s Vermilion Oil Rig 380 in September. New rules would increase fines for offshore facility violations and pollution.

However, with so many oil and gas pipeline and offshore leaks and fatal accidents in the last year, the Obama administration has also requested that Congress pass legislation to further raise the maximum civil penalty rates beyond the rate of inflation.

Fines Called Inadequate

“Even with the inflation adjustment, which is the limit of our current regulatory authority, our civil fine authority is inadequate,” said BOEMRE Director Michael R. Bromwich.

“That view is shared by energy companies operating on the OCS. The inadequacy of our civil authority hampers our ability to effectively regulate offshore activities, and renders such fines a trivial nuisance rather than an effective deterrent.”

“Our hope is that new legislation will raise this amount significantly, which would enable us to use the threat and reality of civil fines as viable methods to encourage compliance with offshore oil and gas rules and regulations and meaningfully deter violations.”

Civil Penalties

BOEMRE can impose civil penalties when an operator fails to correct a recorded violation or commits a violation that constitutes a threat of serious, irreparable, or immediate harm or damage to life, property, any mineral deposit, or the marine, coastal, or human environment.

The agency also imposes fines if there is evidence that operators do not have adequate financial responsibility to meet maximum liability amounts contained in OPA. Fines are assessed on a maximum per day rate, but can be compounded for multiple infractions.

According to the New Orleans Times-Picayune, BOEMRE issued $785,000 in fines for five violators in the first three months of 2011:

• $70,000 to Merit Energy Co. LLC for violations that included “several severely corroded critical areas on the equipment and platform;”

• $40,000 for Fairways Offshore Exploration Inc. for a leak caused by corrosion;

• $180,000 to W&T Offshore Inc., after inspectors said a lessee failed to comply with company “lock out/tag out procedures”;

• $460,000 to Mariner Energy Inc., after inspectors found casing pressure too high; and

• $35,000 to GOM Shelf LLC for “violations throughout the facility.”

Adjustments Prescribed

The Outer Continental Shelf Lands Act directs the Secretary of the Interior to adjust the maximum civil penalty amount at least once every three years to reflect any increase in the Consumer Price Index. The Bureau of Ocean Energy Management is also authorized to impose civil penalties for failure to comply with financial responsibility regulations that implement the Oil Pollution Act, and those amounts are to be reviewed and adjusted on a four-year cycle.

The notice is available for review in Federal Register. The Bureau is also issuing a notice to offshore oil and gas operators, informing them of the changes and listing infractions and fines.

‘Destroying Good Jobs’

News of the increases drew a stinging response from Sen. David Vitter (R-LA).

“I wouldn’t mind some increases in fines if the regulations themselves were reasonable and clear, and if permits were issued in a timely way,” Vitter told the Times-Picayune. “But Interior isn’t close to achieving those important goals. Maybe (President) Obama and (Interior Secretary Ken) Salazar should be fined for destroying good Louisiana jobs.”


Tagged categories: Corrosion; Health and safety; Offshore; Oil and Gas; Pipeline; Pipelines; Regulations; Violations

Comment Join the Conversation:

Sign in to our community to add your comments.


The Next Generation
of Blasting

• Lightest
• Coolest
• Most Comfortable
• Most Dependable

ABKaelin, LLC
Quality is our bottom line

Services include:
• Environmental, Health &
• Contractor QP Certification
• Quality Assurance Programs
  and Auditing
• SSPC C3/C5 and other
• Coatings
• Design/Construction
See our website at or contact us today

Clemco Industries Corp.
Powerful Protection in a Small Package

Mounts inside blast helmet, alerts operator to dangerous breathing-air condition by audible, visual, and vibratory alarms. Easily calibrated, battery operated.

Midsun Specialty Products
Stopaq 30+ Year Coatings

Use Stopaq corrosion prevention coatings on pipelines, field joints, tank chimes, structural steel and more. Learn more at

LS Industries
LS Blasters: Optimum Steel Cleaning Efficiency

Simplify surface prep with the precise shot control of LS Blasters. Our blast technology delivers optimum coverage and finish. 800-533-8008

Termarust Technologies
Termarust (HR CSA) Chemically Stops
Active Corrosion

Truss bridge treated with Termarust's (HR CSA) in 1995. This highway & rail truss bridge is still stable and there still is no active corrosion.

Novatek Corporation
Dustless Coatings Removal

Strip it, clean it, and profile it,
all dust free! High production
rates and Blast like finishes.
Comply with new lead

U.S. Zinc
Historic Reliability. Innovative Performance.

For 65 years, the success of U.S. Zinc has come from the quality of our people and our products. The protection properties of our zinc dust prolong the life of marine coatings, helping the world work™

Tinker & Rasor
Holiday Detectors Made in the USA

When it comes to coating inspection, get the right instrument for the job. Tinker & Rasor pulse –type DC holiday detectors come standard with the widest voltage range available, 800 volts to 35,000 volts in one instrument.

Technology Publishing

The Technology Publishing Network

The Journal of Protective Coatings & Linings (JPCL) PaintSquare
Durability + Design Paint BidTracker

EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us

© Copyright 2000-2015, Technology Publishing / PaintSquare, All rights reserved
2100 Wharton Street, Suite 310, Pittsburgh PA 15203-1951; Tel 1-412-431-8300; Fax 1-412-431-5428; E-mail