DOI Moves to 'Cut Red Tape' for Offshore Oil, Gas

In a statement posted on its website recently, the U.S. Department of the Interior (DOI) announced that it has moved to “cut red tape” for the offshore oil and gas industry.

The DOI noted in the statement that it is proposing updates “to reduce costly regulations on the offshore oil and gas industry, freeing up billions of dollars for investment, exploration, production, and job growth”. 

The proposal would roll back requirements from a 2024 rule that forced companies to set aside about $6.9 billion in supplemental financial assurance, the DOI stated, adding that “roughly $6 billion of that burden would have fallen on small businesses”, which the DOI said 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,” the DOI highlighted.

In the statement, the DOI said the proposal would modernize how the Bureau of Ocean Energy Management (BOEM) evaluates financial risks and lower the amounts companies must set aside for future decommissioning.

“By using updated risk metrics and data from the Bureau of Safety and Environmental Enforcement, BOEM would ensure taxpayer protections remain in place while allowing companies to invest more capital in new projects,” the DOI said.

The DOI stated that the proposal “maintains strong accountability for lessees and grant holders under the Outer Continental Shelf Lands Act but reduces excessive financial barriers that have slowed growth”. It highlighted that BOEM is acting in response to President Trump’s Executive Order 14154 -  Unleashing American Energy.

The proposed changes will be published in the Federal Register with a 60-day public comment period, the DOI noted in the statement.

“For too long, Washington red tape has strangled American energy producers and held back small businesses,” Interior Secretary Doug Burgum said in the statement.

“President Trump is delivering on his promise to put American workers first, cut burdensome regulations, and unleash our vast energy potential,” he added.

“These updates will free up billions of dollars for exploration and development, create good-paying jobs, and unlock domestic energy production so we are never forced to rely on foreign adversaries for the resources that power our economy,” he continued.

Commenting on the DOI’s announcement, Independent Petroleum Association of America (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,” he added.

“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,” he went on to state.

In a statement posted on its website, the Sierra Club criticized the DOI’s move.

The DOI announced its intent to revise BOEM’s 2024 Risk Management and Financial Assurance for OCS Lease and Grant Obligations Rule and proceed with development of a new rule “that is consistent with the Trump administration’s 2020 proposed regulatory framework” in a statement posted on its website on May 2, 2025.

“The revised measure leveraging the 2020 proposed rule will massively cut costs and red tape related to the current Biden process and free up billions of dollars for American producers to use to lease, explore, drill, and produce oil and gas in the Gulf of America while protecting American taxpayers against high-risk decommission liabilities,” that statement noted.

To contact the author, email andreas.exarheas@rigzone.com