Attached is the Dept. of the Interior’s Semiannual Regulatory Agenda (9/22/2025). BSEE and BOEM decommissioning rules are excerpted below.
Of particular concern is the revised BOEM regulation (107) that “would reduce the amount of supplemental financial assurance required from oil gas, and sulfur lessees operating on the OCS.” See our previous post on this regulatory action. Note that a proposed rule is expected to be published by year end.
REVISIONS TO DECOMMISSIONING REQUIREMENTS ON THE OCS [1014–AA53] Legal Authority: Outer Continental Shelf Lands Act, 43 U.S.C. 1331 to 1356a Abstract: This proposed rule would address issues relating to (1) idle iron by adding a definition of this term to clarify that it applies to idle wells and structures on active leases; (2) abandonment in place of subsea infrastructure by adding regulations addressing when BSEE may approve decommissioning-in-place instead of removal of certain subsea equipment; and (3) other operational considerations. Timetable: NPRM ……………… 07/00/26 NPRM Comment Period End: 10/00/26
RISK MANAGEMENT AND FINANCIAL ASSURANCE FOR OUTER CONTINENTAL SHELF LEASE AND GRANT OBLIGATIONS [1010–AE26] Legal Authority: 43 U.S.C. 1331, OCS Lands Act; E.O. 14154, Unleashing American Energy Abstract: This proposed rule would rescind BOEM’s final rule ‘‘Risk Management and Financial Assurance for OCS Lease and Grant Obligations.’’ The proposed rule would revise the criteria for determining whether oil, gas, and sulfur lessees, right-of-use and easement grant holders, and pipeline right-of-way grant holders are required to provide financial assurance above the current minimum bonding levels to ensure compliance with their Outer Continental Shelf (OCS) Lands Act obligations. This rule, if finalized, would reduce the amount of supplemental financial assurance required from oil gas, and sulfur lessees operating on the OCS and would support the goals of E.O. 14154; Timetable: NPRM ……………… 01/00/26
The table below captures the shorter public comments and provides links to the longer ones. They are listed in the order they were posted on Regulations.gov.
commenter
summary/link
anonymous
I recommend under no circumstance that we allow the onsite worker to approve the commingling of bore holes because there is extreme significant safety and environmental hazards that exist. The best alternative is to have an environmental engineer and environmental scientist approve any commingling
…your regulatory proposal is inconsistent with the federal law, the best available science on protecting the health and lives of children, and the legal mandate that agency decision-making does not deprive children of their fundamental constitutional rights…
I support updating the regulations to align with the One Big Beautiful Bill Act, but I encourage BSEE to ensure that safety standards and environmental protections remain the highest priority in all commingling approvals. Clear guidance for industry compliance and transparent public reporting would also strengthen confidence in this rule.
Ananda Foster
Regulations need to catch up with technology and we have not had a chance to do that yet. If you allow them on throttle access, they will destroy it. We all rely on the ocean, how can you do this to your own constituents?
Legislatively dictating well construction, completion, or operational approvals is a redline for me, and I continue to strongly believe the downhole commingling rule should be published as a draft for public review and comment.
The only industry comments are from API and bp America. Both support the direct final rule, and I respect their position. My main quarrel is with the legislative action that put us in this position.
I have had many disagreements with API members over the years, but the dialogue has always been professional. Technical and policy disagreements are healthy for the OCS program, and I will continue to raise potential issues and concerns on this blog.
With regard to bp, I have been impressed by their commitment to the Gulf of America, as summarized in this excerpt from their comments:
John Smith shared the attached letter from Senators Adam Schiff and Alex Padilla, and members of the California congressional delegation. The letter questions BSEE’s inexplicable announcement about the resumption of Santa Ynez Unit (SYU) production. That announcement boasted:
“This is a significant achievement for the Interior Department and aligns with the Administration’s Energy Dominance initiative, as it successfully resumed production in just five months.“
BSEE’s announcement, which has not been explained and is still featured on their homepage, served only to further complicate the resumption of production from the SYU, which has reserves in excess of 500 million barrels.
…and should be an integral part of Job Safety Analyses!
According to BSEE, there is a recurring trend of equipment misuse contributing to fire and explosion hazards during offshore oil and gas operations in the Gulf of America.
Workers have used tools not rated for electrical work on live circuits (Figure 1) and mismatched hydraulic or pneumatic tools for high-pressure systems (Figure 2). In several cases, non-intrinsically safe hand tools were used in explosive atmospheres, including mudrooms and drilling floors.
The attached comments were submitted to Regulations.gov on 9/8/2025.
Legislatively dictating downhole commingling approvals, as per Section 50102 of the One Big Beautiful Bill, is a reckless precedent from both technical and regulatory policy standpoints.
This type of legislative maneuver compromises the integrity of the OCS oil and gas program and the companies that participate in it. Shaving the maximum royalty rate was one thing; mandating well completion approvals is quite something else. Disappointing. ☹
See below. BOEM is reconsidering its approval of the Construction and Operations Plan (COP) for New England Wind 1 and 2. The operator, Avangrid (Spain), is also a partner in the troubled Vineyard Wind project.
If you are keeping score, the approval of these COPs is being reconsidered:
Other projects: Work has been stopped on the Revolution Wind project. Work was previously halted on the Vineyard Wind and Empire Wind projects, but has been allowed to resume. BSEE has still not published its report on the Vineyard Wind turbine blade failure that occurred on 7/13/2024. Other projects have been suspended by the owners at their own initiative (e.g. Atlantic Shores South, Gulf of Maine, Starboard Wind, Vineyard Wind 2, Beacon Wind). Meanwhile, litigation abounds!
The “One Big Beautiful Bill Act of 2025” (OBBB), Public Law 119-21, which was signed into law on July 4, 2025, includes a significant offshore production directive (section 50102) that has received little public attention:
“The Secretary of the Interior shall approve a request of an operator to commingle oil or gas production from multiple reservoirs within a single wellbore completed on the outer Continental Shelf in the Gulf of America Region unless the Secretary of the Interior determines that conclusive evidence establishes that the commingling—(1) could not be conducted by the operator in a safe manner; or (2) would result in an ultimate recovery from the applicable reservoirs to be reduced in comparison to the expected recovery of those reservoirs if they had not been commingled.”
This is, to the best of my knowledge, the first time in the history of the OCS oil and gas program that Congress has directed the safety regulator to approve well completion practices that could increase safety, environmental, and resource conservation risks.
Rather than calling for the operator to demonstrate that a downhole commingling plan is safe and optimizes resource recovery, the plan must be approved unless BSEE proves conclusively that the operation could not be conducted safely or that resource recovery would be reduced. This is the antithesis of the operator responsibility doctrine, a fundamental principle of the OCS regulatory program, and safety management principles that call for the operator to demonstrate that safety, environmental, and resource conservation risks have been effectively addressed.
Only 40 days after the OBBB was signed, BSEE published a direct final rule implementing the downhole commingling directive. This is warp speed for promulgating a Federal regulation! In keeping with the rush to finalize the rule, the preamble asserts that “notice and comment are unnecessary because this rule is noncontroversial; of a minor, technical nature; and is unlikely to receive any significant adverse comments.”
I intend to submit comments prior to the Sept. 12 deadline. These comments will assert that the rule does not qualify for an exemption from the Administrative Procedures Act’s public review and comment requirement. I will also recommend that BSEE consider hosting a public forum during the comment period to present their research on downhole commingling and discuss the risk mitigations.
Below are some of the issues/questions that should be considered during the public comment period:
BSEE’s own fact sheet acknowledges the well-known pressure differential, crossflow, and fluid compatibility risks associated with downhole commingling. The public should have the opportunity to provide input on the extent to which “intelligent completions” and other production technology are effective in mitigating these risks.
The industry-funded Univ. of Texas (UT) study, which led to a relaxation of downhole commingling restrictions, was specific to the “unique Paleogene Gulf of Mexico fields.” Does BSEE have evidence that supports the applicability of the study to other fields?
The authors of the UT study acknowledged that their findings were based on a “simple but reasonable geological base case model.” They also acknowledged the need for “a more comprehensive study using advanced geological models to explore additional geological features.” What are BSEE’s plans for additional research?
Should an independent assessment of Gulf of America downhole commingling safety and resource recovery risks be conducted before finalizing a rule that essentially mandates approval of all applications?
BSEE’s April 2025 policy change raised the allowable pressure differential for commingling production in Paleogene (Wilcox) reservoirs from 200 psi to 1500 psi. Unlike the policy update, the new rule includes no boundaries whatsoever.
What criteria will BSEE use in determining that there is “conclusive evidence” that a commingling request would be unsafe or would reduce ultimate resource recovery? Will BSEE disapprove any requests outside the parameters in the current policy guidance or subsequent updates?
There are many more issues that remain to be discussed, which is why the downhole commingling rule should be published in draft form, with a comment period of at least 90 days.
JL Daeschler shared a London Sunday Times piece about the Piper Alpha fire that killed 167 workers, the worst tragedy in the history of the offshore industry. We were troubled by the headline, because it seems inconceivable that any UK offshore worker could call July 6, 1988, the best day of their life. However, Punchard helped a number of workers escape the fire, so his mixed message is somewhat understandable.
Lord Cullen’s comprehensive inquiry into the Piper Alphatragedy challenged traditional thinking about regulation and how safety objectives could best be achieved, and was perhaps the most important report in the history of offshore oil and gas operations. That report and the US regulatory response to the tragedy are discussed in this post.
BSEE’s new downhole commingling rule, which responds to a Congressional mandate, is contrary to Cullen’s Safety Case principles in that it puts the burden of proof on the regulator to conclusively demonstrate that a potentially hazardous operation is unsafe.This is exactly the opposite of the approach recommended by Cullen. It’s also the first time in the history of the OCS program that Congress has dictated approval of complex downhole operations. More on this in a later post.
In addition to the Johnson filing, at least 7 other law firms (links below) have announced class action litigation alleging that Sable Offshore made false or misleading statements regarding the restart of Santa Ynez Unit production.
“This is a significant achievement for the Interior Department and aligns with the Administration’s Energy Dominance initiative, as it successfully resumed production in just five months.“
Will the Dept. of Justice intervene on behalf of Sable?
Meanwhile, Sable’s share price rebounded in mid-July and is holding up surprisingly well (see below). Perhaps investors don’t see the class action suits as a significant incremental threat given the risks associated with decisions by 8 California agencies, Santa Barbara County, and various judges, and the persistent challenges by well-organized opponents of offshore production.
BOEM tweet (12/8/2023):Offshore wind is a once-in-a-generation opportunity to build a new clean energy industry, tackle the climate crisis, and create good-paying jobs, while ensuring economic opportunities for all communities.BOEM tweet (7/31/2025): America’s offshore energy resources are powering the nation. In FY2024 that looks like 668M barrels of oil, 700B cubic feet of natural gasBSEE 2023 logoBSEE 2025 logo
BTW, the new BSEE logo appears to have been influenced by the masterpiece Rig at Sunset 👍 😉
Bud's Offshore Energy (BOE) 