Fire boat response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon. Credit: US Coast GuardThe House is scheduled to vote Friday on a Democratic bill that would eliminate the current $75 million liability cap on damages oil companies must pay in the case of a spill or other disaster.
The measure would also up the current oil production tax of 8 cents per barrel to as much as 49 cents per barrel, raising energy prices on all Americans by billions of dollars.
Republicans and the oil industry are pushing back hard, saying the provisions go too far for too little effect.
“Unfortunately, this bill isn’t about preventing future oil spills or cleaning up the Gulf and our beaches. Instead, the (Nancy) Pelosi Congress has gone back to the well and brought up another tax on energy," said U.S. Rep. Tom Rooney, R-Tequesta.
"This bill won’t prevent another oil spill, but it will drive up prices at the pump and make it more difficult for families and small businesses to make ends meet."
Democrats say their "spill bill" brings long-overdue reform to the offshore drilling industry, which hasn’t been subject to a major overhaul since 1978.
They say the CLEAR Act (Cutting Loose Energy and American Resources, House Resolution 3534) is good for American business because it requires all rigs to be U.S.-built, owned and operated. And Democratic leaders argue that oil companies should be required to front more capital as insurance before obtaining offshore drilling leases.
But Republicans call the bill a toxic mix of higher taxes and politically charged regulation that would impose a de facto drilling ban costing $147 billion in lost federal, state and local revenues.
“Instead of passing this misguided tax increase, we need to be looking at ways to hold BP accountable and prevent tragedies like the Gulf spill from ever happening again," Rooney said.
According to GOP calculations, the higher petroleum taxes, passed on to consumers, will total $22 billion over 10 years, and eventually climb to $3 billion per year.
"Of course, this new tax only applies to American energy, giving a distinct advantage to foreign oil and gas and jeopardizing American energy jobs," the House Republican Conference stated in an analysis of the bill.
Florida's 10 Democratic members of Congress declined to comment on their position on the pending legislation. U.S. Rep. Debbie Wasserman Schultz's spokesman Jonathan Beeton said only that his boss would "vote for" the bill.
Florida's nine other Democratic congressmen did not respond to Sunshine State News' inquiries.
Republicans weren't so reticent.
"Unfortunately, this new 250-page bill was written behind closed doors in the speaker’s office," said Rep. Bill Posey, R-Rockledge.
"While the bill has a few good provisions, it kills over 300,000 American jobs, makes us even more reliant on Middle East oil, and essentially imposes a permanent moratorium on offshore drilling."
Republicans and the oil industry said they were willing to work toward a compromise on adjusting -- but not abolishing -- liability caps. GOP lawmakers have floated the idea of a $2 billion cap, or a provision to allow the president to set a liability limit, but no agreement has been reached.
Posey accused Democratic leaders of actually diluting regulatory reform with late changes.
“Why would they strip from the bill at the last minute a bipartisan, independent National Commission to review the factors that contributed to the Deepwater Horizon spill and leave intact only a partisan panel that includes no one with technical expertise? They don’t want the facts. They only want to make political statements," Posey said.
The Republican Conference added that the bill raised states' rights concerns, which could blow back on safety.
"The bill would enable the federal government to encroach on states’ offshore leasing programs by taking over permitting and dictating the type of technology to be used on state wells. This would reduce incentives for advances in energy technology and possibly even the development of safer designs and procedures moving forward," the conference stated.
As an alternative to the Democratic plan, Rooney said he is co-sponsoring the “Oil Spill Prevention Act,” H.R. 5572, which would:
- Prevent conflicts of interest at the Minerals Management Service by separating the office responsible for safety and environmental protection from the leasing office, which collects revenues.
- Require random drug testing of MMS employees.
- Close the revolving door between MMS and oil companies by requiring employees to wait at least two years before working for an oil company.
- Strengthen oversight by mandating that missed inspections be rescheduled and eliminating categorical exemptions from environmental requirements.
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Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 559-4719.