July 31, 2010 in Nation/World

Bill targets drilling, spills

House OKs action on safety, liability and increased fees
Matthew Daly Associated Press
 

WASHINGTON – The House approved a bill Friday to boost safety standards for offshore drilling, remove a federal cap on economic liability for oil spills and impose new fees on oil and gas production.

Democratic leaders said it would increase drilling safety and crack down on oil companies such as BP. Companies with significant workplace safety or environmental violations over the preceding seven years would be banned from new offshore drilling permits.

Republicans and some oil-state Democrats opposed the measure, calling it a federal power grab that would raise energy prices and kill thousands of American jobs because of the new fees and liability provision.

Rep. Nick Rahall, D-W.Va., the bill’s main sponsor, said the legislation would be a tribute to the 11 oil rig workers who were killed when the BP well exploded in April, by creating strong new safety standards for offshore drilling, ending the revolving door between government regulators and industry and holding BP and other oil companies accountable for accidents.

“While we may not know the exact cause of the incident, we clearly know what contributed to it. A culture of cozy relationships that had regulators interviewing for jobs on the same rigs they were supposed to be inspecting,” said Rahall, who is chairman of the House Natural Resources Committee.

The legislation, which passed 209-193, has yet to be taken up in the Senate, where partisan disagreements will likely delay final consideration of a joint House-Senate bill until after the August congressional recess.

The House bill includes a provision that would modify a six-month moratorium on deep-water drilling, so that some drilling permits could be approved on a rig-by-rig basis if the Interior Department determines a rig meets new safety requirements.

The bill also would remove the current $75 million cap on economic damages to be paid by oil companies after major spills and increases to $300 million the financial responsibility offshore operators must demonstrate in most cases. And it would create new “conservation” fees on oil and natural gas extracted from land or water controlled by the federal government.

Rep. Doc Hastings of Washington, the top Republican on the House Natural Resources Committee, said removing the liability cap could devastate small and medium-size drillers.

Hastings called the new fees on oil and gas production a “$22 billion energy tax” that would cost jobs and raise energy prices. The Congressional Budget Office estimates that the $2-per-barrel fee on oil and a similar fee on natural gas could bring in $22.5 billion over the next decade.

Rep. Jay Inslee, D-Wash., said the bill was the least Congress could do to respond to such a major catastrophe.

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