The civil penalties provision in the 1978 OCS Lands Act (OCSLA) Amendments was flawed in that it stipulated that operators must be given time to take corrective action before a civil penalty could be assessed. The “time to take corrective action” requirement was confirmed by a 1983 Federal Court decision in Louisiana:
The Court agrees with Chevron’s construction of Section 24(b) and holds that civil penalties may only be imposed under Section 24(b) for violations which continue after the violator has been notified of the breach and has failed to correct it within a reasonable period allowed. This conclusion is based primarily upon a careful review of the pertinent statute. The first sentence sets forth the conditions of liability:
If any person fails to comply with any [provision of the Act] after notice of such failure and expiration of any reasonable period allowed for corrective action, such person shall be liable for a civil penalty of not more than $10,000 for each day of the continuance of such failure.
The court decision gutted the Minerals Management Service (MMS) civil penalties program. Civil penalties could no longer be assessed until the operators had been given time to correct their violations, even those that endangered workers and the environment.
Ironically, Congressman George Miller (D-CA), an ardent opponent of the offshore oil and gas program, proved to be an important MMS ally by adding language to the Oil Pollution Act of 1990 that amended the OCSLA civil penalties provision. The first draft of that language expanded the civil penalties authority to include violations that may constitute a threat of serious, irreparable, or immediate harm or damage to life, property, or the environment.
We were able to revise that draft by adding the words “or constituted” after “constitute” to cover situations where the threat was no longer present. For example, if an inspector found that a well had been drilled without required elements of the well control system in place, the threat may no longer be present at the time the violation was detected but it certainly was when the well was drilled.
The revived MMS civil penalties program was fair and effective, and BSEE seems to be administering the program in a similar manner. Civil penalties data for the past 4 years will be posted next week.
Bud's Offshore Energy (BOE) 