MMS: Securing Ocean Energy & Economic Value for America Gulf Coast Environmental Affairs Group...

MMS: Securing Ocean Energy & Economic Value for AmericaMMS: Securing Ocean Energy & Economic Value for America

Gulf Coast Environmental Affairs GroupJanuary 14, 2010Galveston, Texas

Civil Penalty Program


Agenda

• Statistics

• Inspections and Enforcement

• Civil Penalties

• Appeals


GOM Safety Statistics

2003 2004 2005 2006 2007 2008 2009

Fatalities 10 3 5 10 5 11 4

Injuries 39 41 54 275 415 318 213

Blowouts 4 4 4 2 7 8 4

Collisions 14 19 19 27 20 22 23

Fires 104 64 78 132 110 138 129

Pollution >50 bbls 11 22 4 11 2 5 5


Inspection Types

• Primary– Sampling– Production Complete– Production Partial– Drilling– Workover– Pipeline– Accident Investigation– Onshore Meter– Coast Guard

• Secondary– Environmental– Flaring– H2S– Abandonment– Completion– Wireline– Coast Guard


Violations

• Termed as an “Incident of Noncompliance (INC)”– Documented using MMS National Potential

Incidents of Noncompliance (PINC) List and;– MMS Form 1832

• Carries 3 types of enforcement actions based on the severity of the violation.– Warning– Component Shut-in– Facility Shut-in

• May also result in civil penalties against the operator


Enforcement - Warning

• Warnings are issued when the violation poses no immediate danger to personnel, equipment, or the environment


Enforcement – Component Shut-in

• Component Shut-ins are issued for a specific piece of equipment or location when the violation poses an immediate danger to personnel, equipment, or the environment and it can be shut-in w/o affecting the overall safety of the facility.


Enforcement – Facility Shut-in

• Facility Shut-ins are issued when the violation poses an immediate danger to the entire facility, personnel, or the environment and the specific piece of equipment or location cannot be shut-in w/o affecting the overall safety of the facility.


GOM Region Drilling

2005 2006 2007 2008 2009*

Warning INCs 93 124 94 48 58

Component SI INCs 26 80 31 16 34

Facility SI INCs 33 40 30 7 20

Total INCs 152 244 155 71 112

Rig Inspections 1292 1183 999 870 760

INC/Inspection Ratio .12 .21 .16 .08 .15

* As of January 5, 2010


GOM Region Production

2005 2006 2007 2008 2009*

Warning INCs 1268 1126 1149 775 958Component SI

INCs 1030 1155 1040 737 1018

Facility SI INCs 81 95 91 79 97

Total INCs 2379 2376 2280 1591 2073Components

Inspected 54926 47144 46323 51634 54315

INC/Component Ratio .04 .05 .05 .03 .04

* As of January 5, 2010


OCS Civil Penalty History

1978 Lands Act Amendments – Section 24– Created the Civil Penalties Program– Fine $10,000/day/violation

1983 Industry case against civil penalty– Must allow “reasonable time to correct”– MMS no longer pursued civil penalties

1990 Oil Pollution Act– If threat, no time needed to correct– Fine increased to $20,000/day/violation


OCS Civil Penalty History

• 1997 MMS Revised Civil Penalty Regulations– Plain English – streamlined process– Fine increased to $25,000/day/violation

• 2003 Fine increased to $30,000/day/violation

• 2007 Fine increased to $35,000/day/violation


Monetary Adjustment of Civil Penalties

• Public Law 101-380, Section 8201 states:– The Secretary shall, by regulation at least

every 3 years, adjust the penalty specified in this paragraph to reflect any increases in the Consumer Price Index (all items, United States city average) as prepared by the Department of Labor.


Civil Penalty Matrix

• Note: W = Warning, C = Component Shut-in, and S = Facility Shut-in;

* = Starting Point for Assessment

GENERALIZED TABLE FOR CIVIL PENALTYASSESSMENTS IN $/DAY/VIOLATION

EnforcementCode

Category A Category B Category C

W$3,000 – 35,000

($10,000)*$5,000 – 35,000

($15,000)*$10,000 – 35,000

($20,000)*

C$5,000 – 35,000

($15,000)*$10,000 – 35,000

($20,000)*$15,000 – 35,000

($25,000)*

S$10,000 – 35,000

($20,000)*$15,000 – 35,000

($25,000)*$20,000 – 35,000

($30,000)*


Civil/Criminal Penalty Program

• 30 CFR 250.1404 states that MMS will review the following violations for Civil Penalty:– Violations that cause injury, death, or environmental

damage– Violations that pose a threat to human life, property or

the environment– Violations that are not corrected within the time allowed– Violations of the Oil Spill Financial Responsibility

Requirements


Responsibilities

• Districts– Conducts inspections– Issues violations (INCs)– Determines threat associated with violation– Builds civil penalty case– Forwards civil penalty case to regional

coordinator

• Regional CP Coordinator– Reviews cp case– Assigns reviewing officer


Responsibilities

• Reviewing Officer– Reviews case– Reviews merits (violation & threat) of case– Seeks additional information – Issues NPCP– Reviews information submitted from

operator– Makes decision based on the

preponderance of the evidence presented.– Issues final decision


Civil Penalty Time Line



2004 2005 2006 2007* 2008 2009**

Total Cases 32 28 41 45 23 33

Paid 27 20 38 37 21 8

Dismissed 5 8 3 7 2 4

Total INCs 35 25 88 72 36 9

Total Collected

$953,750 $548,000 $2.45MM $3.1MM $1.16MM $210,000

Assessment Amount(Avg$/INC/day)

$11,190 $11,460 $10,710 $20,472 ^ $12,924 $18,888

* One case pending^ CPI adjustment 3/2007** Pending cases = 21


Top Five Civil Penalty INCs

2004 2005 2006 2007 2008 2009

P103 (15) P103 (11) P103 (21) P103 (24) G111 (8) G110 (5)

G110 (3) G110 (5) G110 (10) G112 (14) P103 (6) G112 (2)

G111 (2) G112 (1) P307 (10) G110 (9) G112 (4) E100 (1)

P130 (2) G111 (1) P308 (10) E103 (4) P280 (2) E102 (1)

P283 (2) E102 (1) P301 (6) E100 (4) G110 (1)


Regulations Governing Appeals

• Any MMS decision can be appealed under 30 CFR 290 Subpart A.

• There are 2 types of Appeals:– Informal – An informal appeal may be made to the issuing

officer’s next level supervisor. The informal appeal can also be elevated further up the chain of command if needed.

– Formal – A formal appeal may be made to the Interior Board of Land Appeals (IBLA)


Formal Appeal Process

– A formal appeal may be made to the Interior Board of Land Appeals (IBLA). See NTL 2009-N12

– A formal appeal MUST be filed within 60 days of the INC’s issue date or the receipt of a decision (NO extensions).

– The Operators Statement of Reason must submitted to the IBLA within 30 after filing the Notice of Appeal.


•Additional information: www.mms.gov•Email address: [email protected]

Questions?

Thank youDavid Dykes

[email protected]

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