The Biden administration was sued this week by the states of Texas, Louisiana and Mississippi in a move to stop the proposed rule requiring the offshore oil and gas industry to come up with nearly $7 billion to cover costs of removing old infrastructure.
The lawsuit was filed against the U.S. Bureau of Ocean Energy Management and claimed the rule, which will take effect later this year, will affect nearly three quarters of the oil and gas operators in the Gulf of Mexico.
Reuters reported the rule will affect mostly smaller companies that do not have investment grade ratings or sufficient proven oil reserves.
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