New Act Allows Oil Companies to Leave Offshore Platforms as Reefs, Capping State Liability Funding at 50% of Savings

The newly proposed Marine Fisheries Habitat Protection Act is looking to change how old offshore oil and gas infrastructure gets decommissioned. The bill creates a formal process, dubbed “Reefing in Place,” that allows companies to convert their inactive platforms and pipelines into permanent artificial reefs instead of removing them entirely. This isn’t just about saving money; it’s about creating a defined path for the industry to transition obsolete structures into marine habitats, complete with new rules, deadlines, and a critical liability transfer mechanism.

The Fine Print on Leaving It Behind

This bill formalizes the concept of “Reefing in Place,” which means either tipping the structure over on the seafloor (“Topple in Place”) or cutting off the top half while leaving the base (“Partial Removal”). If an oil company (the “Applicant”) has an “Inactive Structure” (an old platform or pipeline), they can file a “Notice of Intent to Reef.” This kicks off a multi-step process where the Director of the Bureau of Safety and Environmental Enforcement (BSEE) assesses if the structure is “Eligible”—meaning there’s already a reef ecosystem there or one “could easily form” (Sec. 2). This eligibility determination is key, but the criteria for what “easily form” means isn’t exactly spelled out, leaving a lot of discretion to the Director.

The Liability Hand-Off: Who Pays for the Long Haul?

Here’s where it gets interesting for taxpayers and state budgets. If the structure is approved as a reef, the Applicant must ensure all wells are plugged and all hazardous liquids are removed. Then, the long-term liability for the structure—think future maintenance, navigation lights, or removal if it becomes a hazard—is transferred to a State agency. This is a massive shift in responsibility from the private company to the public sector.

To sweeten the deal for the State, the Applicant can pay the State a portion of the money they saved by not having to remove the platform entirely. However, the bill caps this payment at 50% of the Applicant’s cost savings, unless the company agrees to fork over more (Sec. 2). For a company facing a $100 million removal bill, this could mean they save $50 million, and the State gets $50 million to take on potentially indefinite liability. This raises serious questions: Is 50% enough to cover the State’s long-term risk and maintenance costs, especially if the structure degrades decades from now? If the state’s funding runs out, the bill for a future problem could fall directly on the public.

Hitting the Pause Button on Cleanup

One provision that stands out is the temporary freeze on government “Removal Orders.” While the Applicant is going through the multi-year application process—which can take up to three years after eligibility is determined—the government cannot legally order the structure to be removed (Sec. 2). This pause is designed to give the reefing application time to proceed, but it also means that if a structure is deteriorating or causing latent environmental issues that aren't an “immediate danger,” the mandatory cleanup is essentially postponed for years. For environmental groups and maritime safety advocates, this delay could be a significant concern, as it limits the government’s ability to act quickly on structures that are aging out.

In short, the Marine Fisheries Habitat Protection Act offers a clear path for industry cost savings while potentially boosting marine habitat. But it does so by transferring a permanent, long-term fiscal and environmental liability to the states, funded by a formula that might not fully cover the public’s risk. It’s a classic trade-off: immediate habitat gain and industry relief versus long-term public risk management.