For our purposes, the most important thing the Outer Continental Shelf Lands Act does is extend the workers’ compensation benefits in the Longshore and Harbor Workers’ Compensation Act to employees who work on the outer continental shelf. Most of these individuals work in energy exploration and production, two of the most hazardous industries in terms of workplace injuries. However, this law has many other functions as well.
In the 1950s, America’s petroleum consumption vastly increased, and officials did not want to be completely dependent on foreign oil. Furthermore, states managed the shelves off their costs in different ways. The OCLSA gave the federal government exclusive jurisdiction over offshore lands and established the legal framework for offshore (between three and two hundred nautical miles from the coast) energy leasing and development.
This uniformity included an injury compensation system, which varied greatly among states. Currently, insurance company interests dominate the OCLSA’s injury compensation procedures. Only an experienced OCLSA lawyer can obtain maximum benefits for victims who sustained trauma injuries or developed occupational diseases while they work offshore.
Offshore Oil and Gas Development Regulation
Under the OCSLA, the Secretary of the Interior has exclusive power over the leasing, exploration, and activities, mostly energy exploration, on the Outer Continental Shelf. Congress created the Bureau of Ocean Energy Management (BOEM), an agency within the Department of the Interior, to oversee these things. A related agency, the Bureau of Safety and Environmental Enforcement (BSEE), ensures compliance with safety and environmental standards, which became particularly important after major incidents, like the Deepwater Horizon oil spill in 2010.
Once the BOEM approves a lease, which is usually for a five-year term, companies must comply with a host of environmental and safety regulations. These requirements include proper waste management, regular environmental impact assessments, and close adherence to regulations designed to prevent oil spills and other environmental hazards.
Environmental Protection and Oversight
While the OCSLA was originally designed to facilitate resource extraction, it also includes provisions that minimize the adverse environmental impacts of offshore activities. Recently, most amendments to the act have emphasized protecting the marine environment, so development activities do not harm wildlife, ecosystems, and local communities.
The OCSLA mandates that oil and gas operations must undergo environmental assessments, including detailed studies to determine the potential impacts of proposed projects on marine life, water quality, and coastal areas. The act also empowers the federal government to establish rules related to offshore pollution and safety, addressing concerns such as oil spills, blowouts, and toxic emissions.
Additionally, after major oil spills, like the 2010 Deepwater Horizon disaster, the OCSLA beefed up oversight, requiring more robust spill response plans. Lawmakers also created the Oil Spill Liability Trust Fund in response to that oil spill, which was designed to provide immediate funds for spill response and cleanup.
Revenue Sharing and Economic Impact
Another key aspect of the OCSLA is its role in generating federal and state revenues from offshore energy development. The government collects royalties from companies engaged in oil and gas production on the Outer Continental Shelf. These royalties are a significant source of revenue for the federal government, with billions of dollars collected annually.
Revenue from offshore leasing is distributed in part to the states that are directly impacted by offshore activities, particularly those along the Gulf of Mexico, Alaska, and California. Under certain circumstances, some of this revenue is used for coastal restoration projects and funding for the protection of marine habitats.
In addition to generating government revenue, the offshore energy sector has a significant economic impact, creating jobs in the energy, construction, shipping, and supply chain industries. This provides substantial economic benefits to coastal states, contributing to local economies, particularly in energy-dependent regions.
Coastal State Involvement
The OCSLA has evolved over the years to allow for more direct input and participation from coastal states. In particular, the act enables state governments to have a role in the planning process for offshore drilling through a provision known as the Coastal Zone Management Act (CZMA). This allows states to review and provide feedback on proposed federal leasing plans that could affect their coastline and coastal resources.
States also have the right to negotiate with the federal government on the terms of offshore leasing in their respective waters. However, while the states have some regulatory authority, the OCSLA ultimately grants the federal government the authority to issue leases and oversee production on the Outer Continental Shelf.
Amendments and Modern Challenges
Since its passage in 1953, the OCSLA has undergone numerous amendments to adapt to changing energy demands, environmental concerns, and technological advancements. The most notable amendments have focused on improving safety standards, environmental protection measures, and revenue-sharing provisions.
Modern challenges, such as the increased focus on renewable energy development, including offshore wind farms, and climate change concerns, are pushing the boundaries of the OCSLA’s original framework. As the United States shifts its energy policy to focus more on sustainability and renewable sources, the OCSLA is likely to play a crucial role in navigating these transitions.
Injury Compensation Provisions
Under LHWCA, qualified maritime workers are entitled to temporary benefits that equal two-thirds of their average weekly wage, as they undergo medical treatment for job-related injuries. Once the treatment is complete, LHWCA can either provide compensation for injured body parts or two-thirds of the injured worker’s lost earning capacity.
In 2012, the Supreme Court significantly expanded these injury compensation provisions. unanimously upheld the Ninth Circuit Court’s decision to overrule the Benefits Review Board’s denial of compensation to the widow of Juan Valladolid, a general manual laborer hired by Pacific Offshore Operators to perform janitorial work on offshore oil rigs, although he was not an “offshore worker” as defined by OCSLA.
The Supreme Court used the same “nexus” analysis it used with Defense Base Act private military contractor injury. Essentially, victims who connect their injuries directly or indirectly with work on an offshore rig are entitled to the aforementioned compensation.
For more information about other similar injury compensation laws, contact Barnett, Lerner, Karsen, Frankel & Castro, P.A.