H.R. 9034: Offshore Leasing Standards and Accountability Act of 2026

The Offshore Leasing Standards and Accountability Act of 2026 aims to amend existing laws regarding oil and gas operations on the Outer Continental Shelf (OCS) by establishing new fitness to operate standards for oil and gas operators, and by implementing decommissioning escrow accounts to ensure financial responsibility for decommissioning oil and gas infrastructure. The bill proposes the following key measures:

Fitness to Operate Standards

The bill stipulates that the Secretary of the Interior must certify any party responsible for oil and gas operations as "fit to operate" before granting or extending leases or transfers associated with offshore drilling. To be certified, a party must demonstrate:

• Compliance with environmental and safety laws for the past ten years.
• Financial capability to handle market changes and fulfill estimated decommissioning costs.
• Meet other criteria set by the Secretary.

Specific minimum qualifications for certification include:

• No violations of environmental or safety laws related to oil and gas operations in the past ten years.
• No overdue decommissioning orders.
• Effective handling of previous worker safety incidents or environmental spills.
• Up-to-date collateralization of decommissioning liabilities.
• Possession of an investment grade credit rating.

Escrow Accounts for Decommissioning

The act establishes requirements for oil and gas operators to create interest-bearing escrow accounts to cover decommissioning costs of their infrastructure. Key components include:

• The Secretary will calculate a probabilistic estimate of decommissioning costs for each lease, revised at least every two years.
• Operators must make mandatory payments into these accounts to ensure funds are available for decommissioning particularly before new leases are issued.
• The minimum required payment for new leases will be specified based on the average decommissioning costs relevant to the lease.
• Conditions for extending leases include that operators must not have any outstanding payments to the escrow account.

Regulation and Reporting

The bill mandates the Secretary to issue or revise regulations related to:

• Establishing standards for certification processes.
• Annual assessments of compliance by operators with set standards.
• Reporting to Congress on the state of certifications, costs estimates, and compliance outcomes.

Restriction on Temporary Abandonment of Wells

The legislation limits the temporary abandonment of oil wells to a maximum of three years, unless an extension is granted by the Secretary based on specific economic analyses, and states that such a temporary abandonment must prove operational or environmental benefits.

Funding and Implementation

The act authorizes appropriations of $30 million annually from 2027 to 2031 for the implementation of these measures, ensuring the Secretary has the resources necessary to carry out the requirements of this legislation.

Definitions

The bill clarifies terms such as:

• Recipient Responsible Party: The entity seeking to hold a lease for oil and gas operations.
• Covered Entity: Parent companies, subsidiaries, or contractors associated with the responsible party.
• Decommissioning: The process of ceasing operations and safely dismantling oil and gas infrastructure.

Relevant Companies

• XOM: Exxon Mobil Corporation could be affected due to its extensive operations on the Outer Continental Shelf and the potential increase in financial obligations for decommissioning.
• CVX: Chevron Corporation, another major player in offshore drilling, will need to assess compliance with the new standards and financial requirements.
• RDS.B: Royal Dutch Shell may face similar impacts regarding new obligations for escrow accounts and decommissioning standards.