Over the next couple of weeks, the U.S. Senate is expected to take another crack at drafting oil spill legislation.
The U.S. House passed legislation in the last Congress, which expired without action in the Senate. Bogging down the process were issues that included proposed revenue sharing and establishing a new cap on the amount of money responsible parties in spills would have to pay in penalties.
U.S. Sen. Mary Landrieu, D-La., sits on the Senate Energy and Natural Resources Committee that will be drafting legislation. Landrieu has been pushing for allowing coastal states such as Louisiana to have a bigger share of federal royalties from drilling in the Gulf of Mexico.
Landrieu is getting help from the other side of the aisle in U.S. Sen. Lisa Murkowski, of Alaska, the veteran Republican on the committee.
Murkowski has stated that her support for any legislation coming out of the committee could hang on whether drilling is expanded in the nation, and whether federal offshore royalties are increased.
Landrieu has asked that federal revenues to coastal states be increased to match those given to on-shore drilling. All the states that have drilling on land share 50 percent of the royalties for oil extracted within their borders, with the other half going to the federal government.
Additionally, Louisiana and other coastal states receive 37.5 percent of the money obtained from drilling in the Gulf. Louisiana will get half of that money starting in 2017.
One hurdle both Murkowski and Landrieu face is the chairman of the committee, U.S. Sen. Jeff Bingaman, D-N.M.
Bingaman opposes sharing more royalties from the Outer Continental Shelf, contending that the seas are owned by the nation and therefore the federal government should receive the money.
Landrieu said she doesn’t believe legislation can get out of committee without revenue sharing. If it does, the full Senate would likely install it, she said.
US. Sen. David Vitter, R-La., said he isn’t concerned about any new legislation, as he is about getting the U.S. Interior Department to move more quickly on issuing permits.
Vitter and other Louisiana delegation members have complained that the department is intentionally slowing the issuance of permits.
“I strongly favor revenue sharing but if there are few if any permits you can have 100 percent — and 100 percent of zero is zero,” Vitter said.
The other snag in the talks has been how much polluters in the drilling industry must pay in fines.
The BP Deepwater Horizon oil rig exploded last year killing 11 men and resulting in a three-month discharge of oil into the Gulf that amounted to 4.9 million barrels.
Under the Oil Pollution Act drafted 20 years ago in response to the 1989 Exxon Valdez oil spill, responsible parties are required to pay up to $75 million. How much that should be increased has been a contentious point among senators.
Landrieu has expressed concern over how high to raise liability under the act. She worries that raising the cap could force smaller, independent operators out of business. She has proposed creating an insurance pool for smaller operators.
Vitter has proposed that polluters pay based on their profits. Under the Vitter move, responsible parties would pay up to four quarters of profits prior to an incident. In the BP case, that would amount to $20 billion.
In addition to the liability issue is a bill by Landrieu and Vitter that would direct 80 percent of any fines paid by BP and subcontractors to coastal states for restoration efforts.
U.S. Sen. Barbara Boxer, D-Calif., is chairwoman of the Senate Environmental and Public Works Committee. She said that her panel will take up the Landrieu and Vitter legislation. Vitter sits on that committee.
Though some critics have faulted Congress for failing to adopt legislation based on the Deepwater Horizon accident, Landrieu notes that it took 18 months from the Exxon Valdez accident to craft the Oil Pollution Act.
Gerard Shields is chief of The Advocate’s Washington bureau. His email address is GerardShields@aol.com.