Oil companies dodge removal costs by leaving rigs on seafloor, states inherit liability

What it does

This bill allows oil and gas companies to leave inactive offshore platforms and pipelines in place on the ocean floor and designate them as artificial reefs instead of removing them, provided they meet environmental and safety standards. The company can save money by avoiding full removal costs, and states can take over liability for the structures in exchange for a share of those savings. The bill creates a multi-year approval process and temporarily blocks the federal government from ordering removal while applications are pending.

Why we flagged it

The bill's operative mechanism is a liability transfer: it allows oil and gas operators to avoid full removal costs by leaving structures in place and transferring long-term maintenance liability to state governments. The artificial reef framing is the stated public purpose, but the financial architecture benefits the regulated industry by reducing their decommissioning obligations.

What the text implies

• States assume perpetual liability and maintenance costs for structures they did not create and may lack expertise to manage, potentially straining state budgets and environmental agencies.
• The three-year approval window and multiple appeal periods create extended periods during which the federal government cannot enforce removal orders, potentially allowing hazardous structures to remain indefinitely if applicants delay or withdraw.
• The bill allows applicants to conduct their own environmental assessments or hire third parties, creating potential conflicts of interest in determining whether structures are safe to leave in place.
• Cost-sharing between applicants and states is capped at 50% of cost savings, meaning companies retain the majority of financial benefit from avoiding removal while states bear ongoing liability.
• The definition of 'Inactive Structure' includes platforms abandoned due to 'act of God or event of force majeure,' potentially allowing structures damaged by hurricanes or other disasters to be left in place rather than removed.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill creates a potential public benefit by converting abandoned oil infrastructure into fish habitat and reducing environmental disruption from removal operations. However, it shifts long-term liability and maintenance costs to states and taxpayers, allows companies to avoid full decommissioning costs, and creates extended periods during which the federal government cannot enforce removal orders—potentially leaving hazardous structures in place indefinitely if approval processes stall.

Who stands to gain

• offshore oil and gas operators (reduced decommissioning costs)
• oil and gas leaseholders (liability transfer to states)
• pipeline operators (exemption from additional permitting for in-place abandonment)

Named in the bill

Bureau of Safety and Environmental Enforcement (BSEE), National Oceanic and Atmospheric Administration (NOAA), Department of the Interior, U.S. Coast Guard, State governments, Outer Continental Shelf Lands Act (OCSLA), National Fishing Enhancement Act of 1984

Where it stands

6 cosponsors: 4 Democrats, 2 Republicans.

• Oct 14, 2025 — Introduced · Congress.gov: “Introduced in House”
• Oct 14, 2025 — Referred to House Committee on Natural Resources · Congress.gov: “Referred to the House Committee on Natural Resources”
• Jan 13, 2026 — Hearing held · Congress.gov: “Subcommittee Hearings Held”
• Sep 15, 2026 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Sep 15, 2026 — Reported out of committee · Congress.gov: “Ordered to be Reported in the Nature of a Substitute by the Yeas and Nays: 22 - 16”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $2,170,000 in lobbying spend. A filing names 27 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Mike Ezell, the sponsor, reported $480,431 in PAC receipts in the 2026 cycle.

• Chevron U.S.A. Inc. — $1,670,000 on 1 filing
• Independent Petroleum Association of America — $500,000 on 2 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.