Outer Continental Shelf Lands Act

The Outer Continental Shelf Lands Act (OCSLA) gives the Secretary of the Interior jurisdiction over the areas known as the Outer Continental Shelf (OCS). The Act is found at Title 43, Chapter 29, Subchapter III. The Outer Continental Shelf is underwater land at any point three miles off the coast of any state. The Act gives the Secretary the right to award leases to qualified responsible bidders and to create any regulations necessary for exploration and development programs (see 43 U.S.C. § 1337). Bidding is done via sealed bids the monies are held in an interest-bearing account until the Secretary decides to accept or reject a bid. There are four regions that make up the leasing areas of U.S. Continental Shelf—the Gulf of Mexico, the Atlantic, the Pacific and the Alaskan region.

The Secretary administrates provisions for the OCS including suspension of any activities and prohibiting operations if they might be harmful to the property to fish and wildlife, to mineral deposits, or to the environment (coastal, marine, or human). If the harm is significant enough or the threat of harm will not decrease, any leases granted may be canceled after a period of prohibition or suspension lasting for five continuous years (see 43 U.S.C. § 1334).  He or she also has the right to create regulations for the assignment, continuation or transfer of leases, for drilling agreements and easements, for exploration and development, and for compliance with air quality standards under the Clean Air Act (see 43 U.S.C. § 1334).

When a debate arises between the United States and one of the states about lands that may be subject to the provisions of OCSLA, the Secretary is empowered to negotiate with the state in question or a political subdivision, grantee, or lessee. They must respect existing operations under the current leases. This includes any payments, seizure of rents or royalties, and must respect issuing or not issuing new mineral leases pending the settlement of the issue (see 43 U.S.C. § 1336).

OCSLA Section 1333(b) states that employees who are killed or injured while working on the OCS may be compensated under the Longshore and Harbor Workers’ Compensation Act (LHWCA). To qualify for compensation, the offshore employee cannot be a crewmember of any vessel, a vessel master, or an employee or officer of the United States. The workers that are covered by OCSLA are people employed on temporary or permanent facilities that are either floating on the OCS or fixed to the seafloor. Examples include floating dry docks, natural gas and oil rigs, artificial islands, wind turbines, and floating storage, offloading, and production offloading systems. The employees must have been injured or contract an illness while working to explore, develop, extract, or remove natural resources on the OCS.

The U.S. Supreme Court has held that OCSLA extends coverage to workers on shore who can show a “substantial nexus” between the injury and the employer’s OCS operations. The ruling dealt with the case a worker on an offshore drilling platform who was killed at an oil processing facility onshore. The employer argued OCSLA was not the correct statute for the suit, that the worker should have brought suit under the state’s workers’ compensation law because the injury happened on dry land. The Court ruled that OCSLA can be applied any worker who dies or sustains injury because of an OCS operation even if it occurs onshore. (see Pacific Operators Offshore LLP et al. v. Valladolid et al., 565 U.S.  (2012).

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