On July 30, 2010, the U.S. House of Representatives passed two oil spill bills before adjourning for its summer recess: the Consolidated Land, Energy and Aquatic Recourses Act of 2010 (H.R. 3534 or the “CLEAR Act”) and the Offshore Oil and Gas Worker Whistleblower Protection Act of 2010 (H.R. 5851).  The CLEAR Act would eliminate OPA’s $75 million liability cap on economic damages, lift the moratorium on offshore drilling for companies that comply with certain safety standards, create new Department of Interior agencies, and impose an annual conservation fee of $2 per barrel on oil produced from federal leases.  H.R. 5851 seeks to add protections for offshore workers who report safety violations.  

Senate Democrats may consider their companion bill, the Clean Energy Jobs and Oil Company Accountability Act of 2010 (S. 3663), in September when the Senate reconvenes after its August recess.

Yesterday the U.S. House of Representatives passed two bills focusing on oil spill response. The first, H.R. 2693, reinforces current efforts to research methods of mitigating the effects of oil spills and establishing a committee of executive branch officials to direct these research efforts. The second bill, H.R. 5716, focuses on researching safety measures for deepwater oil and gas wells.

Michael Bromwich, Director of the Bureau of Ocean Energy Management, Regulation and Enforcement (“BOEM”) announced yesterday that he will lead a series of public meetings to collect information and views on offshore deepwater drilling safety, well blowout containment, and oil spill response.  The meetings are designed to collect input from industry representatives, environmental organizations, the public, state and local leaders, and experts in an effort to enhance the safety of deepwater drilling.  The meetings are scheduled to occur in August and September in the following cities: New Orleans, LA; Lafayette, LA; Mobile, AL; Pensacola, FL; Santa Barbara, CA; Anchorage, AK; Biloxi, MS; and Houston, TX.  Director Bromwich plans to release dates and specific locations soon.  Written comments will also be accepted at the meetings, online, and by mail.

Revising an earlier offshore drilling moratorium that had been enjoined by a federal court, U.S. Secretary of the Interior Ken Salazar issued a directive yesterday that suspends the drilling of offshore wells that use subsea blowout preventers (BOPs) or employ BOPs on a floating facility.  According to Sec. Salazar, this “pause” in deepwater E&P operations is necessary to allow for the collection of information regarding the ongoing BP oil spill, to assess national resources for wild well interventions, and to provide time for offshore operators to demonstrate that they have the capability to respond to an incident in the U.S. Gulf of Mexico.  Read more in the New York Times.

On June 18, 2010, Secretary of the Interior Ken Salazar issued an order renaming the U.S. Minerals and Management Service to the Bureau of Energy Management, Regulation and Enforcement. The Bureau of Energy Management will eventually be reorganized into three different agencies to oversee royalty collection, energy leasing, and safety enforcement.

Yesterday President Obama announced that Michael R. Bromwich has been selected to lead efforts to reorganize and reform MMS. Bromwich is a former Assistant U.S. Attorney and previously served as Inspector General of the U.S. Department of Justice.

Today President Obama announced the remaining members of the offshore drilling commission to be co-chaired by former Sen. Bob Graham (D-FL) and William Reilly.

In testimony before the U.S. House Natural Resources Committee, Randall Luthi, president of the National Ocean Industries Association (NOIA), said that members of his organization “stand ready to provide information, expertise, and self critique of offshore operations, equipment, procedures and practices.”  Luthi went on to note that the offshore energy industry is assisting the investigations to determine the cause of and respond to potential effects of the BP spill in the Gulf of Mexico.

Sen. Mary Landrieu (D-LA) is urging the Obama administration to end the shallow-water component of the recently issued moratorium on oil drilling in the Gulf of Mexico.  Sen. Landrieu argues that "[t]he inspections and regulations [for shallow-water drilling] need to be different than [for] deep water."  She also introduced a new bill (the RESPOND Act) that would begin revenue sharing with energy-producing Gulf states immediately.  Such revenue sharing, which redirects offshore drilling royalties from the federal treasury to state coffers, has been a hot topic in recent months.  For more information, see yesterday's E&E GreenWire [subscription required].

On May 13, 2010, Senators David Vitter (R-LA) and Jeff Sessions (R-AL) introduced the Oil Spill Response and Assistance Act (S.3375), which seeks to increase the liability cap for economic damages under the federal Oil Pollution Act.  Under this bill, such liability would be capped at either $150 million (double the current cap) or an amount equal to a responsible party's profits over the last four quarters, whichever is greater.  "Under our bill," announced Sen. Vitter, "the bigger companies would be liable for more than the $10 billion cap others propose.”  Senate Democrats attempted a unanimous voice vote to pass their proposal to raise the cap to $10 billion on Thursday, but Sen. Lisa Murkowski (R-AK) objected.

The Center for Biological Diversity (CBD) has filed a formal notice of its intent to sue Secretary of the Interior Ken Salazar for not evaluating the environmental impact that could result from an oil spill off Alaska’s northern coast.  In late 2009, Secretary Salazar approved Shell’s plan to drill in the Beaufort and Chukchi seas.  The CBD argues that the Endangered Species Act requires Secretary Salazar to re-evaluate the validity of Shell’s drilling permits. 

Following his letter to President Obama, Senator Bill Nelson (D-FL) introduced two bills in response to the Gulf of Mexico offshore rig spill incident.  The first bill, S. 3308, seeks to halt the Department of the Interior’s five-year plan to expand offshore drilling.  A companion bill has been introduced in the House by Representative Kendrick B. Meek (D-FL), who also is running for U.S. Senate.  Senator Nelson’s second bill, S. 3305, seeks to retroactively amend the Oil Pollution Act of 1990 to increase the liability limit for economic damages from spills from offshore facilities from $75 million to $10 billion.  Representative Rush Holt (D-NJ) introduced a similar bill in the House.

On May 3, 2010, California Governor Arnold Schwarzenegger (R-CA) withdrew his support for expanding offshore drilling off the coast of California. According to the Governor, "If I have a choice between the $100 million and what I see in the Gulf of Mexico, I'd rather just figure out how to make up for that $100 million." Governor Schwarzenegger previously had supported drilling off Santa Barbara County.

Virginia Governor Bob McDonnell (R-VA) has taken a different stance. According to Gov. McDonnell, "what we do as Americans is we find out what went wrong and how can we do things better." Governor McDonnell is still looking to drill off Virginia’s coast by 2012.

Senator Bill Nelson (D-FL) has sent a letter to President Obama asking for a moratorium on test wells and exploratory operations in coastal waters pending an investigation into the Gulf of Mexico offshore rig spill incident.  "Until we learn what happened," Nelson wrote, "I'm asking that you also call for an immediate halt to test-wells and all other exploratory operations in coastal waters."  Senator Nelson also plans to introduce legislation to prevent the Department of the Interior from promoting offshore drilling.

Senator Nelson's office has published a copy of the letter to the President .

Yesterday, freshman Alaska Senator Mark Begich (D) called for ratification of the Law of the Sea Treaty and introduced a package of seven bills addressing a variety of Arctic policy issues.  The energy and shipping related measures in the package include:
 
Arctic OCS Revenue Sharing Act (S. 1560) - gives Alaska natives the same 37.5% share of royalties from offshore oil and gas production in federal waters that Gulf of Mexico states currently receive.  This is similar to the measure introduced by senior Alaska Sen. Lisa Murkowski (R) last week.
Arctic Climate Change Adaptation Act (S. 1566) - provides funding for Alaskans to adapt to the impacts of climate change, including clean energy development.
Arctic Ambassador Act (S. 1563) - creates a new U.S. Ambassador to the Arctic Council.
Arctic Marine Shipping Assessment Implementation Act (S. 1564) - provides funding to replace the U.S. icebreaker fleet and build new forward operating Coast Guard air bases, as well as other measures to ensure safe and reliable maritime transportation in the Arctic region.
Arctic Oil Spill Research and Recovery Act (S. 1561) - calls for more research to improve oil spill prevention and response in the Arctic.
Arctic Science, Coordination and Integration Act (S. 1562) - requires a new study to create a comprehensive strategy to coordinate Arctic research and make recommendations to Congress. 
 
The bills are available through Thomas.  You can view Sen. Begich's press release here.

The House Natural Resources Committee today convened the second in a series of hearings addressing the nation's policy on offshore drilling.  In his opening statement, Committee Chairman, Nick Rahall (D-WV), noted that he is "not opposed to drilling," but is "aware of the risks" associated with the development of the OCS.  This sentiment was echoed by several of the Committee's members who, while not in favor of reimposing the longstanding congressional drilling moratoria, understand that opening the offshore to greater production will trigger environmental concerns, including the addition of more greenhouse gases to the atmosphere.  On this point, several members asserted that it is not yet clear that such activities have significantly contributed to global warming.  Not surprisingly, there was generally a clear divide between Committee Democrats and Republicans on these issues, although both sides appeared interested in developing a national energy policy.    
 
The first panel included Reps. Sam Farr (D) and Dana Rohrabacher (R), both from California.  Rep. Farr was in favor of reinstating the moratoria, noting that he supports a temporary ban until a more comprehensive approach can be established.  Rep. Farr also advocated for "marine spatial planning," a process that allows the government to "assess and then allocate areas of the OCS" for development in a manner that preserves the oceans and benefits the economy.  He contrasted this method with onshore development, where certain regions hosting critical habitats are restricted from development.  In contrast, Rep. Rohrabacher strongly advocated for OCS drilling while noting that he is an avid surfer and scuba diver.  He cited environmental groups as a key obstacle to expanded exploration and production.  He added that the lack of OCS production requires the United States to import oil and gas by tanker.  Noting that tanker spills cause greater damage than spills from OCS production, he said opponents "ironically make oil spills more likely" by blocking the development of such production.  Rep. Rohrabacher also suggested, somewhat facetiously, that providing pleasant "facades" on offshore platforms (e.g., painting trees on them) may help to win the support of environmental opponents. 
 
After a rousing first session, the atmosphere surrounding the second panel was less colorful.  The lighting rod on the panel, at least for Republicans, was Secretary Mike Chrisman of the California Natural Resources Agency.  Secretary Chrisman was frequently questioned about his state's staunch opposition to offshore drilling.  Committee Ranking Member Doc Hastings (R-WA) also asked why California appears to support the importation of liquefied natural gas (LNG) over offshore production, implying that the nation would be better served by producing natural gas domestically than importing from "Saudi Arabia, Venezuela and Brazil."  Secretary Chrisman noted that the state is evaluating importing LNG from Australia and that LNG is part of a broader energy policy, which includes a heavy renewable energy component.  Virginia State Senator Frank Wagner (R), a longtime supporter of drilling offshore Virginia, noted that he disagrees with Governor's Kaine's support for Interior Secretary Salazar's recent decision to extend the comment period on the 5-year OCS plan by 180 days.   
 
Tomorrow the Committee will host the third hearing in the series, focusing on industrial perspectives.  Based on past hearings, this one promises to be the most contentious. 

The United States Coast Guard issued a final rule amending the Vessel Response Plan salvage and marine firefighting requirements for tank vessels carrying oil. The rule identifies certain salvage and marine firefighting services that must be present in Vessel Response Plans and imposes new response time requirements with the goal of ensuring vessels are appropriately prepared to manage oil spills. The final rule can be found in theFederal Register.