Bud's Offshore Energy (BOE)

IG Report

We determined that over approximately 5 years, the energy company’s venting and flaring activities exceeded regulatory limits without the required approvals, resulting in a loss of Federal mineral royalties and resources. More specifically, we identified approximately 229,066 MCF of vented and flared natural gas as suspicious or exceeding the allowable amount across four platforms in the Gulf of Mexico between January 2014 and April 2020. We presented our findings to ONRR, which assisted us in analyzing the energy company’s venting and flaring activities and determining the amount of lost Federal mineral royalties. Based on this analysis, ONRR submitted and secured a proof of claim in the amount of $712,857.82 for unpaid mineral royalties during the energy company’s bankruptcy proceeding.

OIG report 6/13/2022

Comments:

1. The report doesn’t name the company, but one can make an educated guess based on some of the information provided (e.g. number of platforms the company operated, bankruptcy proceedings, etc.)
2. The regulator usually finds out about false or misleading recordkeeping. Reports from employees, anonymous or otherwise, are a common source of such charges, as was the case here. (In my District in California, a toolpusher informed us that BOP pressure test records were being falsified. This led to multiple felony convictions.)
3. The IG’s recommendations to BSEE and ONRR are reasonable and appropriate:
   1. Examine venting and flaring reports for patterns that may reflect violations or amounts that exceed permissible limits.
   2. Develop a process to ensure that royalties are being paid for improperly flared or vented gas.
4. As BOE has previously reported, available public flaring data do not match. These data inconsistencies should be addressed.
5. BSEE/ONRR should make more detailed flaring/venting data publicly available so differences between facilities and sectors (e.g. deepwater vs. shelf) can be assessed. Efforts should also be made to post these data in a more timely manner. Data for 2021 are still not available.