The Independent Petroleum Association of America (IPAA) has released a statement on the announcement from the United States Department of Interior on the intent to rollback the Biden Administration's offshore rule requiring companies to set aside billions of dollars in supplemental financial assurance.
The proposal would roll back requirements from a 2024 rule that forced companies to set aside about $6.9 billion in supplemental financial assurance. Roughly $6 billion of that burden would have fallen on small businesses, which make up most of the operators on the Outer Continental Shelf. The change is expected to save industry about $484 million each year in compliance costs.
IPAA EVP and Chief Policy Officer Dan Naatz said: "We applaud the Trump Administration for taking steps to roll back the flawed financial assurance rule promulgated during the Biden Administration. Had it been fully implemented, the Biden rule would have disproportionately affected independent offshore oil and gas producers and had them bear most of the associated costs.
“The Biden financial assurance rule was misguided from the start, and we applaud the Trump Administration for acting on this important issue and listening to the concerns of independent producers. We look forward to further reviewing the Notice of Proposed Rulemaking in more detail and plan to provide robust comments to the Bureau of Ocean Energy Management in the coming weeks."
IPAA is a national upstream trade association representing thousands of independent oil and natural gas producers and service companies across the United States. Independent producers operate 95 percent of the nation's oil and natural gas wells and are responsible for 85 percent of US oil production and 90 percent of natural gas production onshore.