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K Street Deals With Onslaught of Oil Spill Bills

With the BP spill generating a gush of legislation, lobbyists for the energy industry, trial lawyers and environmental groups are scrambling to tweak bill language and either slow down or nudge forward measures aimed at tightening federal oversight of drilling.

Democratic leaders have instructed committee chairmen to prepare spill-related proposals by the July Fourth recess, and more than half a dozen Senate and House panels have scheduled hearings today to consider bills ranging from lifting liability limits to increasing oil rig inspections.

“It really is an onslaught,” said Dan Naatz, vice president of federal relations for the Independent Petroleum Association of America. His team of four lobbyists has parked on Capitol Hill to field questions from staff and lawmakers.

“It’s been a full-court press,” Naatz said. The group’s membership includes Anadarko, a minority partner in the BP oil well that has since blamed the larger oil company for problems on the project.

As with many in the oil industry, the IPAA opposes legislation that would eliminate the $75 million cap on damages for oil spills included in the 1990 oil pollution act. The Senate Environment and Public Works Committee is expected to consider a proposal today to lift the caps, a measure supported by Chairman Barbara Boxer.

“The law should be clear that the polluter pays for the damage they cause. Period,” the California Democrat said at a recent hearing on the proposal.

But industry officials have argued that such a change would prove financially ruinous.

“Legislation resulting in unlimited liability for offshore accidents will devastate many offshore exploration and production companies,” Burt Adams, chairman of the National Ocean Industries Association, said in a recent statement. NOIA’s membership includes the major companies involved in BP’s Deepwater Horizon project, including Transocean, which owned the rig, Halliburton, which cemented the well, and Cameron, which made the faulted piece of machinery called the blowout preventer that is designed to prevent a well explosion.

The oil industry has taken a more nuanced approach to another measure dealing with federal oversight of drilling that will be considered today by the Senate Energy and Natural Resources Committee.

The bill, co-sponsored by Chairman Jeff Bingaman (D-N.M.) and ranking member Lisa Murkowski (R-Alaska), would increase financial security and safety requirements and penalties for violations as well as lengthen the time for environmental reviews. It would also reorganize the former Minerals Management Service into two entities, separating the royalty collection from leasing responsibilities. Interior Secretary Ken Salazar is already proceeding with a similar restructuring of the agency now renamed the Bureau of Ocean Energy Management.

A spokeswoman for the American Petroleum Institute, which represents large oil companies including BP, said that while the industry supports the intent of the legislation, it has qualms about some of the details.

“Our concern is some of the provisions would create uncertainty in the process,” API’s Cathy Landry said. For example, she said one provision would allow the secretary of the Interior to determine that an offshore area was “too geographically challenging” after it had approved the lease and an oil company had already invested a considerable amount on the project.

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