Congress Set to Tackle Oil Spill Liability, Drilling Safety

By | July 28, 2010

U.S. Senate Democrats are set to unveil a slimmed-down energy bill Tuesday aimed at reforming offshore drilling, but House lawmakers are taking up a tougher bill on Friday that adds another hurdle to get a bill signed into law this year.

U.S. Senate Majority Leader Harry Reid plans to pass a bill before lawmakers leave for their summer recess next week, focusing on holding BP Plc accountable for its massive oil spill. Debate on the Senate bill could begin as soon as Thursday.

Admitting last week they did not have votes for a broader climate bill, Senate Democrats have opted to concentrate efforts on passing a scaled-back bill for a victory before November elections

But Republicans said they will not rubber stamp the legislation, and are openly doubting a bill can be passed this year with time running out on the legislative calendar.

U.S. President Barack Obama on Tuesday called the Senate energy bill a step in the right direction, but vowed “to keep pushing” for legislation to battle global warming.

“If we’ve learned anything from the tragedy in the Gulf, it’s that our current energy policy is unsustainable,” Obama told reporters after meeting with congressional leaders.

Obama’s comments were likely seen as a nod to the international community and environmentalists, who are counting on U.S. action to help advance U.N. talks to form an international pact to curb greenhouse gas emissions.

The Senate bill will likely include measures forcing oil companies to pay more for losses caused by oil spills. Companies are only responsible now for covering up to $75 million in losses to industries such as tourism and commercial fishing.

In the House on Friday, Democratic leaders are planning to vote on a separate tougher bill focusing on responding to the oil spill that has devastated the U.S. Gulf.

The House bill would completely eliminate the cap on liability for oil companies. It would also impose strict new safety standards on offshore drilling, including independent certifications of critical equipment on rigs and stronger penalties for safety violations.

The bill contains language approved by the U.S. House Natural Resources committee that would bar BP from getting new offshore oil and gas exploration leases for up to seven years.

Rep. George Miller, who crafted the amendment that would ban BP and other companies with poor safety records from obtaining new drilling permits, told reporters on Tuesday BP “brought a record to offshore exploration, drilling, production that is a horror show with respect to their workers and to the environment.”

The oil lobby came out swinging against these new congressional efforts to rein in the oil industry, saying raising the liability caps would make drilling too expensive for small and medium-sized companies.

“The American voters are concerned about jobs and the economy,” Jack Gerard, who heads the American Petroleum Institute, told reporters on Tuesday. “When you impose additional costs and burdens on the industry that competes globally you run the risk you will deter or hurt that underlying economic activity.”

Rep. James Oberstar said House lawmakers addressed these concerns by making an adjustment to the liability measures “that will assure smaller operators they will be able to get the insurance they need to compete for drilling permits.”

The Senate bill, which will also include provisions promoting natural gas vehicles and energy efficiency, is unlikely to contain restrictions on oil companies as severe as those in the the House legislation.

Lawmakers in both chambers will have to work out any differences between the measures in their bills before they can become law.

(Writing by Ayesha Rascoe, additional reporting by Tom Doggett and Jeff Mason; Editing by Russell Blinch and Sofina Mirza-Reid)

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