WASHINGTON, D.C. – Today, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, along with Reps. Pete Stauber (R-MN) and Aaron Bean (R-FL), penned a letter to Director Liz Klein of the Bureau of Ocean Energy Management (BOEM) regarding the new Rice’s Whale rule.

This letter builds on the House Committee on Small Business’ work to ensure federal agencies adhere to the Regulatory Flexibility Act and Small Business Regulatory Enforcement Fairness Act to protect small businesses from burdensome regulations and rulemaking.

Read the full letter here.

Read excerpts from the letter below:

“The House Committee on Small Business (the Committee) writes to inquire about the Bureau Ocean Energy Management’s (BOEM) decision to exclude nearly six million acres from Lease Sale 261 and to create additional requirements for operators and vessels in the Gulf of Mexico. As a part of the settlement the National Oceanic and Atmospheric Administration (NOAA) agreed to with the Sierra Club, BOEM issued a notice to lessees that substantially changed all future lease sales and established additional requirements intended to protect Rice’s Whale. Though the Fifth Circuit Court of Appeals has enjoined BOEM’s decision due to it likely being unlawful, resulting in BOEM announcing updated terms for the sale, the Committee seeks to understand BOEM’s rationale for settling with the Sierra Club and to what extent BOEM considered small business interests in agreeing to this settlement.

“In the notice, BOEM added an additional term to the Gulf of Mexico Oil and Gas Lease Sale No. 261, and all future sales, which reduced the land available for purchase and what that land is permitted to be used for, requires operators and vessels adhere to a 10-knot speed limit during the day, and a prohibits nighttime travel in the Rice’s Whale’s protective area. This removes opportunities for small oil and gas producers to lease land to run and grow their businesses. The 10-knot speed limit restrictions on shipping will increase inefficiencies in the supply chain, which will in turn increase costs for consumers and create logjams at ports. This cost will be felt disproportionately by small oil and gas operators in the Gulf, who are less able to take advantage of economies of scale. Together, these provisions appear to have a substantial impact on a significant number of small businesses.

“This agreement is also alleged to have been made through a practice called “sue and settle,” which is a when agencies work with litigants to create policies through a court settlement. This practice was not permitted until March 2022, due to its ability to be misused, and the lack of transparency in its use. The Committee is concerned that such practices allow agencies to act with the force of law without engaging in the traditional rulemaking process, which is subject to the Regulatory Flexibility Act (RFA). The RFA requires agencies to consider how its rule affects small businesses when its rulemaking would create a significant impact on a substantial number of small businesses. The Committee is concerned that repeated use of sue and settle tactics will move small business interests to the margins, and disadvantage small businesses in a time where they are already fighting inflation and interest rates.”

Background:

Signatories include Chairman Roger Williams (R-TX), Rep. Pete Stauber (R-MN), and Rep. Aaron Bean (R-FL).

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