Lawmakers Gear Up to Drill Commission on Oil Spill Report’s Findings


This week the leaders of the presidential commission that investigated last year’s oil spill in the Gulf of Mexico will take their case for increased funding and offshore drilling safety reform to Capitol Hill, but their specific legislative recommendations may reach deaf ears.

The seven-member commission’s widely anticipated 280-page report and recommendations for offshore drilling reform released to the president earlier this month included several recommendations directed to industry and the Obama administration as well as some that require congressional action.

The panel’s co-chairmen – Bill Reilly, a former U.S. EPA administrator under President George H.W. Bush, and former Sen. Bob Graham (D-Fla.) – Wednesday will make their first formal appearances before Congress to pitch their specific recommendations for regulatory reform and increased funding for the Interior Department agency that oversees offshore drillers.

The duo is slated to testify before the Senate Energy and Natural Resources Committee on Wednesday morning, followed by an appearance that afternoon before the House Natural Resources Committee.

“This has been a long-anticipated report – obviously the American public remembers the spill and its consequences. I just want to hear first-hand from them what their suggestions are, what they feel happened, and then what their remedies are,” Resources Chairman Doc Hastings (R-Wash.) said in a “Platts Energy Week” interview that aired yesterday. “And I think having some interactions rather than reading reports is probably a better way to really find out what went on.”

Among the panel’s dozens of recommendations to shore up offshore drilling safety, the report has a handful that are directed specifically to Congress. The group says its top recommendation to Congress is to provide more funding to Interior to ensure regulators have ample resources to oversee increasingly technical drilling operations.

The panel also wants Congress to direct the majority of the penalty money collected under the Clean Water Act from BP PLC and the other companies involved in the disaster to be returned to the Gulf states to assist in environmental cleanup and wetlands restoration. The panel also recommends that Congress lift the liability cap for oil companies involved in a spill higher than the current $75 million, and it wants lawmakers to enact legislation that would require industry to pay a greater portion of its oversight costs.

But those recommendations – and the others specifically directed to Congress – could be a tough sell on Capitol Hill, where oil spill response legislation stalled last year despite wider partisan margins.

Even the co-chairmen of the presidential panel are skeptical about how lawmakers will receive their recommendations.

Graham last week said the recommendations for beefing up regulations and significantly increasing funding for drilling regulators won’t “square very easily” with anti-regulatory sentiments in the Republican-led House and closely divided Senate.

“We’ll begin to find out a week from today when we begin to testify before Senate and House committees as how persuasive those arguments might be,” Graham said last week during a meeting in Washington (Greenwire, Jan. 19).

Hastings’ views

In his interview with Platts, Hastings said he was open-minded about some of the panel’s recommendations, though he dismissed others immediately.

“No, that’s a bad idea,” Hastings said of the suggestion to raise fees on industry to pay for more oversight. “Listen, the amount of revenue that’s coming in from the [outer continental shelf] far exceeds what it costs to regulate that industry. It seems to me that the easiest place if there’s going to be more costs – and I acknowledged there could be more costs involved – it should come out of existing revenues that are generated with the OCS leasing right now.”

But he said the group’s plan to separate the Interior agency that oversees offshore drilling safety from the rest of the agency “merits at least some discussion.” And he is not fundamentally opposed to the idea of raising the current $75 million liability cap. He applauded the panel’s decision not to recommend a specific value to raise the liability cap, and he said lawmakers would “pursue” the question of whether the current cap is too low.

“There’s got to be an equilibrium … if you go too high, if you discourage people from being in the business, then you don’t want to do that,” Hastings said. “But you want to make sure that you can somehow have enough insurance that could cover a potential disaster in the future.”

Hastings applauded the suggestion that industry create an independent safety watchdog, though he had concerns with how the group suggested implementing that recommendation.

“I think that’s a good idea,” Hastings said. “Because if somebody really knows what goes on within that industry, it’s the industry itself.”

But he thinks the main trade group, the American Petroleum Institute, is the best organization to house that watchdog agency, an idea the oil spill commission is staunchly opposed to.

“Why reinvent the wheel when you have an industry that’s been involved in this for some time? Utilize the expertise that they have,” Hastings said. “All you are is duplicating … and increasing costs. Those two things should be avoided if you can.”

Will it result in legislation?

At least one lawmaker has vowed to take the commission’s recommendations to heart. Rep. Ed Markey (D-Mass.), ranking member of the resources panel, said he would introduce new legislation reflecting the panel’s recommendations for increased oversight and regulation. The legislation will also incorporate language included in the oil spill-response legislation that passed through the House last summer.

“Because systemic safety and oversight issues regarding the offshore oil industry persist, if we do not enact reforms, there will likely be repeats of this disaster,” Markey said (E&ENews PM, Jan. 11).

Hastings said he was not ruling out the prospect of spill-response legislation. “We’ll see what’s coming in,” he said on the Platts interview.

“It may be broader than what we hear, but we’ll see,” he added.

A Senate Homeland Security and Government Affairs subcommittee will take a separate look this week at oil spill claims and social services in the aftermath of last summer’s disaster.

Schedule: The Senate Energy and Natural Resources hearing is Wednesday at 9:30 a.m. in 325 Russell. The House Natural Resources hearing is Wednesday at 2 p.m. in 1324 Longworth. The Senate Homeland Security and Governmental Affairs hearing is Thursday at 1:30 p.m. in 342 Dirksen.

Senate Energy and Natural Resources and House Natural Resources witnesses: Bill Reilly, former administrator of U.S. EPA and co-chairman of National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling; and former Sen. Bob Graham (D-Fla.), co-chairman of National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

Senate Homeland Security and Governmental Affairs witnesses: TBA.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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