The name of the late Venezuelan leader Hugo Chavez crept into Louisiana House debate Tuesday on whether all of the state’s refineries should contribute to oil spill cleanups.
Currently, only refineries that receive crude oil by ship or barge pay a minimum 2 cent-per-barrel fee. The state sets aside the money to mop up oil spills.
State Rep. Mike Danahay, D-Sulphur, filed House Bill 636 to lower the fee and expand it to all 25 active refineries in Louisiana. He said the fee structure unfairly singles out just a few refineries.
“It’s a matter of fairness,” he told the House.
State Rep. Gordon Dove, R-Houma, immediately pressed his button to question Danahay about the bill.
Dove said now might not be the time to lower the fee given that the state still is dealing with the fallout of the 2010 Deepwater Horizon oil rig explosion that killed 11 men and affected businesses along Louisiana’s coast.
He also accused Danahay of trying to save two refineries in his district a lot of money by spreading the fee to the state’s other processing facilities.
Earlier, Danahay had acknowledged that ConocoPhillips and Citgo primarily pay most of the fee under current law.
“Citgo is Venezuelan,” Dove said. “(It’s) ruled by Hugo Chavez.”
Although headquartered in Houston, Citgo has corporate ties to Venezuela’s national oil company. Chavez, the Venezuelan president, died in March of cancer after a lengthy and controversial political career.
Danahay corrected Dove, pointing out that Chavez is dead.
State Rep. Sam Jones, D-Franklin, offered more clarity.
“Is it not true that ConocoPhillips pays the bulk of this and not the dead Chavez guy?” he asked.
Danahay agreed with Jones.
Under HB636, refineries would be defined as Louisiana facilities where crude oil is converted to a finished or higher grade product. A $30 million ceiling on the oil spill response fund would disappear. Refineries would pay a quarter of a cent per barrel. The fee would increase to half a cent per barrel if the fund’s balance dips below $5 million.
The state’s refineries acquired 1.3 million barrels of crude oil in 2012.
“This bill does not seek or result in a fee increase,” Danahay said.
Instead, he said, the fee would be lowered and broadened.
State Rep. Ray Garofalo, R-Meraux, asked if the legislation would result in an increase in the fund’s balance.
“Is this bill revenue neutral?” he asked.
Danahay said the answer depends on the number of barrels of oil delivered to refineries.
Dove urged Danahay to wait until the Deepwater Horizon oil leak is resolved.
“I love cutting fees. Don’t get me wrong. I just wish you’d wait a year on this,” he said.
Danahay rejected the request and pressed for a vote.
Bills involving fees require the support of two-thirds of the House, or 70 votes.
HB636 failed with 65 supporting it and 33 voting against it.
Danahay returned to the bill to the House calendar, creating the possibility of it coming up again for debate.