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Gulf oil spill: Congress moves oil legislation

July 15, 2010 | 10:59 am
Far-reaching legislation that would impose new environmental safeguards on offshore drilling, repeal oil industry-friendly provisions of the 2005 Energy Policy Act and hit producers with a new tax to fund conservation programs gained ground in Congress on Thursday.

Acting on the 86th day of the BP Deepwater Horizon disaster in the Gulf of Mexico, the House Natural Resources Committee approved the measure, which is among a pile of oil-spill-related bills lined up like planes at LAX.

The bill, which passed the Democratic-controlled panel on a largely party-line vote, would strip the oil industry of royalty relief for deep-water drilling. It would repeal a provision of the 2005 energy legislation that exempted projects, including the Deepwater Horizon drilling, from detailed environmental analysis.  It would also bar companies with a poor environmental and safety record from bidding on future offshore oil and gas leases.

The bill would provide $900 million a year -- about triple the amount provided this year – for purchasing land for national parks, forests and wildlife refuges and helping states fund parks and recreation projects. The money would come from a $2-per-barrel "conservation fee" on the domestic production of oil.  Among the parks that could benefit from the increased funding is the Santa Monica Mountains National Recreation Area. 

Rep. Nick J. Rahall ll (D-W.Va.), the committee chairman, called the April 20 Deepwater Horizon drilling rig explosion a "game changer" and "proof positive that broad reforms are needed to ensure that oil and gas development on federal lands and waters is done efficiently while protecting human safety and the environment."

Republicans and the oil industry accused the Democratic majority of acting in haste before the causes of the Deepwater Horizon explosion are known. 

"Reforms are clearly needed, but Congress shouldn’t get ahead of the facts," said the panel’s top Republican, Doc Hastings of Washington state.

The American Petroleum Institute said the bill would "penalize the entire oil industry" for the Deepwater Horizon spill and "threaten American jobs, the nation’s economy and its energy security."

Republicans contended that the legislation would increase U.S. dependence on foreign oil. They also accused Democrats of exploiting a tragedy to promote pet causes, such as advancing the $2-per-barrel tax to triple the funding for conservation projects nationwide.

The committee’s Democratic majority also thwarted a Republican effort to try to overturn the Obama administration’s recently renewed deep-water drilling moratorium in the gulf.

Democratic leaders want to pass a raft of spill-related legislation before the August recess, but their plan to include spill-inspired legislation in a broader energy bill that could include measures to address global-warming emissions could complicate matters.

The provision to bar a company from bidding on offshore leases if it has a history of violating safety and environmental laws was added to the bill at the behest of Rep. George Miller (D-Martinez), a critic of oil giant BP’s safety record.

"Unable to change on its own, my amendment would require BP, and any other company like it, to become a responsible actor or lose access to the valuable offshore assets that belong to the American people,’’ Miller said.

The measure would bar a company if its record indicated five times the industry average for willful or repeat worker-safety violations at its oil and gas facilities, if more than 10 fatalities occurred at any of its facilities, or if it incurred fines of $10 million or more under the Clean Air Act or Clean Water Act within the preceding seven years.

A BP spokesman declined comment.

The $2-per-barrel "conservation fee" drew criticism from Rep. Bill Cassidy (R-La.), who said that it would increase the cost of domestic oil production and jeopardize jobs in his energy-producing state. But the Wilderness Society, which supported the provision, noted in a letter to lawmakers that offshore energy production has "always been predicated on the idea that the depletion of one national, non-renewable natural resource must be balanced by the long-term protection of threatened habitats, beaches, waterways and other special places." 

Republicans cheered committee approval of their proposal for Congress to create its own commission to investigate the gulf disaster. Republicans have complained that a presidential commission lacks drilling experts and includes members tilted against the industry.

The bill would require monthly inspections of offshore drilling rigs and better spill-response plans, and it would increase the maximum fine from $100,000 to $10 million for criminal violations of the Outer Continental Shelf Lands Act.

It also would write into law the Obama administration’s revamping of the agency that regulates drilling. Interior Secretary Ken Salazar dismantled the scandal-plagued Minerals Management Service and replaced it with three offices aimed at reducing the potential for conflict of interest: one to lease federal lands and waters for energy development, one to enforce environmental and safety rules and another to collect royalties.

A summary of the bill is on the committee website.

-- Richard Simon, from Washington