BOEMRE's Final SEMS Rule Substantially Modifies the Original Proposal, Inviting Legal Challenge

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) announced a final Safety and Environmental Management System (SEMS) rule on September 30, 2010.  The Minerals Management Service (MMS) originally proposed a SEMS rule in a Federal Register notice published on June 17, 2009.  The proposal would have required operators to develop SEMS programs for oil and gas activities conducted on the Outer Continental Shelf.  MMS proposed that SEMS programs would need to address four elements:  (i) Hazards Analysis, (ii) Management of Change, (iii) Operating Procedures, and (iv) Mechanical Integrity.  MMS assumed in the proposal that, of the 130 operators to which the rule would apply, the 60 operators that already have SEMS programs would not incur any new costs.

The fact sheet issued by BOEMRE announcing the final SEMS rule indicates that 13 elements of the American Petroleum Institute's Recommended Practice 75 will be mandatory.  These mandatory elements are:

  • General Provisions
  • Safety and Environmental Information
  • Hazards Analysis
  • Management of Change
  • Operating Procedures
  • Safe Work Practices
  • Training
  • Mechanical Integrity
  • Pre-Startup Review
  • Emergency Response and Control
  • Investigation of Incidents
  • Audits
  • Records and Documentation

While the proposal contains the four elements in the original proposal, nine new elements have been added without allowing the public opportunity to comment.  Furthermore, compliance with RP 75 is now mandatory and no longer at the company's discretion.  Compare Workplace Safety Rule Fact Sheet to 74 Fed. Reg. 28,643 (June 17, 2009).

BOEMRE's decision to issue a final SEMS rule may invite legal challenge.  To be clear, the purpose of public notice and comment is to allow the public to influence the final rule.  However, if an agency makes changes to a proposed rule, the resulting final rule must be "in character with the original scheme" and a "logical outgrowth" of the original proposal for which notice and comment was provided.  BASE Wyandotte Corp. v. Costle, 598 F.2d 637, 642 (D.C. Cir. 1979).  Otherwise, the rule must be re-proposed.  A final rule is not appropriate if conducting a new comment period would present the public its "first occasion to offer new and different criticisms which the Agency might find convincing."  Id.

Here, requiring compliance with 13 elements in RP 75 may not constitute the required "logical outgrowth" of the original proposal, leaving the agency open to challenge on procedural grounds.