Interior Dept Asks Congress to Raise Oil-Drilling Violation Fines

WASHINGTON (Dow Jones Newswires), June 29, 2011

The Interior Department is asking Congress to increase fines for oil and natural gas companies that break offshore drilling laws, with one Interior official saying current fines are more of a "trivial nuisance than an effective deterrent."

The department urged Congress to take this step while announcing a modest increase to existing fines to reflect inflation adjustments, as required by law. The department said it is restricted from raising penalty rates beyond inflation rate increases.

The maximum civil penalty rate for violations of the Outer Continental Shelf Lands Act will increase from $35,000 to $40,000 per day, while violations under the Oil Pollution Act go from $25,000 to $30,000 per day.

Michael Bromwich, director of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement, said in a statement Wednesday that Congress should raise the rates "significantly."

"The inadequacy of our civil authority hampers our ability to effectively regulate offshore activities, and renders such fines a trivial nuisance rather than an effective deterrent" he said.

The bureau has undertaken several measures to tighten offshore drilling standards since the Deepwater Horizon oil spill.

Copyright (c) 2011 Dow Jones & Company, Inc.

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