In June 2023, the Bureau of Ocean Energy Management proposed a rule that would require stricter financial assurance standards for oil companies operating in the Outer Continental Shelf. This costly rule became final on April 15, 2024, but in the 10 months since its initial proposal, BOEM did nothing to alleviate concerns for smaller companies that comprise of 76 percent of oil and gas operators in the Gulf. As a result, many of these companies could be forced out of business by extreme and unnecessary costs from this rule. The situation threatens an estimated 36,000 jobs, more than $570 million in federal government royalties, and $9.9 billion from our GDP.
Records obtained via the Freedom of Information Act show private meetings between Interior officials and representatives of the major oil companies as they cooperated on this rule. If you think that’s strange, you’re not alone. President Biden made clear in his campaign that he wanted to end oil and gas production on public lands. It’s baffling that Big Oil – among the administration’s most, if not the most, maligned businesses – would stand on the same side with environmental groups such as the Sierra Club who praised the rule. But needless government intervention makes strange bedfellows. Big Oil must think it won’t miss the small competitors the rule will drive from the market.
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