Congress turns to task of preventing another Gulf oil spill

Members of a House committee on Wednesday began shaping a bill that targets the problems laid bare by the Gulf oil spill, from lax regulation to inadequate accident-response plans.

The first outlines of a new law intended to fix the problems that led to the Gulf oil spill are now taking shape in Congress.

Amid an election-year rush to finalize and vote on major oil spill legislation before the fall elections, the Democratic leadership is pushing hard to get an oil-spill bill out of committees and onto the floor of the House of Representatives for a vote, hopefully before the August recess.

While the bill is far from finished, one thing seems clear: Everyone from oil companies to regulators are going to have to toe a tougher line. For the oil industry, winning the right to drill for oil offshore is going to get a lot tougher, by all appearances. And federal regulators will be subject to new checks and balances to ensure transparency and competence.

The House Natural Resources Committee on Wednesday began weighing as many as 200 amendments to a bill that would reorganize offshore energy leasing on the continental shelf. While still just a draft, the bill reflects the direction of the committee and its chairman, including measures that would:

• Abolish the Minerals Management Service (MMS), dividing its functions among three new entities in order to keep enforcement sharp and prevent the buildup of a "cozy" relationship between regulators and the regulated. One bureau would manage leasing and permitting of offshore and onshore oil and gas and renewable energy-related activities, including environmental studies. A second would conduct all inspections and investigations, and issue health, safety, and environmental regulations. The last would collect energy-related revenues.
• Ensure that only qualified people become oil and gas inspectors, including training them at a federal academy to strict new ethical standards.
• Prevent oil companies from getting the sort of sweeping exemptions from environmental review that past offshore drilling operations won under the now-defunct Minerals Management Service. The bill, for instance, would eliminate the use of "categorical exclusions" from the National Environmental Policy Act that were routinely used by the now-defunct Mineral Management Service.

"The dust is still all up in the air with so many amendments still to be considered," says Chris Mann, director of the Campaign for Healthy Oceans at the Pew Environment Group. "But we think it's clear that there's a lot more enforcement being built into the new law with more consideration of wind power and other offshore resources, not just oil and gas."

For example, the law would require much more detailed consultation between offshore regulators and other agencies including the Fish and Wildlife Service and the National Oceanographic and Atmospheric Agency, Mr. Mann says. If the other agencies' recommendations were overridden by offshore regulators, the regulators would be required to make those reasons public, Mr. Mann says.

The law would require "meaningful blowout and worst-case scenario response plans." Drilling applicants would have to demonstrate that their technology has been shown to actually work in worst-case oil releases in the past.

The law would extend the current 30-day deadline for reviewing exploration plans to 90 days and mandate monthly inspections of all drilling rigs.

In a nod to improving environmental stewardship of coasts, oceans, and the Great Lakes, the new law also envisions putting 10 percent of offshore drilling revenues into a new Ocean Resources Conservation and Assistance Fund.

Among the other amendments considered Wednesday:

• Rep. Ed Markey (D) of Massachusetts argued successfully for an amendment that would close a loophole that has allowed come drillers that won lucrative leasing arrangements in years past to escape having to pay royalties. Under the measure, these drillers would have to either begin paying or be excluded from future leases.
• An amendment by Rep. Bill Cassidy (R) of Louisiana, who expressed skepticism of President Obama's oil spill commission, won creation of a congressional panel to investigate the causes of the spill.
• Another amendment would prohibit any oil industry operator with a willfully negligent track record during a seven-year span from being allowed to bid on leases.

Committee Chairman Nick Rahall (D) of West Virginia said his committee's legislation is expected to be combined with other measures. Earlier this month, the House Transportation and Infrastructure Committee approved legislation to eliminate the current $75 million cap on spill-related damages and expand other liabilities for those responsible for spills. It would raise insurance requirements for drillers from $150 million today to at least $1.5 billion.

Beside giving drilling safety plans a much more thorough review, all oil drilling-related vessels would have to be registered in the United States. (The Deepwater Horizon was registered in the Marshall Islands, ensuring weaker safety inspections.)

That bill also boosts US Coast Guard oversight and addresses cleanup concerns. The US Environmental Protection Agency, for instance, would be required to give dispersants a rigorous testing of toxicity and effectiveness.

Related:

• In offshore drilling freeze, rumblings of a new era for oil industry
• Gulf oil spill: Is MMS so corrupt it must be abolished?
• US rig inspectors received gifts from oil companies, report says