“Energy” Bills Drop and Big Oil Plays Doctor July 27, 2010Posted by Jamie Friedland in Congress, Offshore Drilling, Politics.
Tags: American Petroleum Institute, API, Big Oil, Blowout Preventer, Congress, Energy Bill, Harry Reid, HomeStar, Jack Gerard, Oil, Oil Spill, Renewable Energy Standard, ThePoliticalClimate, Tom Daschle
Early this week, the House and Senate unveiled their minimalist energy bills.
Both bills are amalgamations of other, smaller oil spill/energy bills that have already passed out of their various committees. The House and Senate bills differ slightly (which was bound to happen even if the House bill wasn’t 238 pages compared to the Senate bill’s 16), but here’s a summary of the Senate bill’s provisions:
- Lift the $75 million oil spill liability cap (retroactively, to apply to BP)
- Increase the per-barrel tax on oil producers that feeds the Oil Spill Liability Trust Fund
- Restructure the Department of the Interior to remove conflicts of interest and increase drilling oversight
- Lopsidedly incentivize electric and natural gas vehicles ($6 billion for natural gas, $400 million for electrification)
- Finally enact the HomeStar home retrofit program
A full 24-page “draft” summary is available here but subject to change, especially as this bill is likely to move quickly ahead of the looming August recess. Debate on this bill is scheduled for Friday.
TNR’s Bradford Plumer described the scope of this Senate legislation:
“All told, it’s a tiny bill—the total cost comes to around $15 billion. And it won’t do all that much for the environment: When one reporter asked committee staffers whether anyone knew how much greenhouse-gas reduction this bill would lead to, several people laughed out loud.”
Notably absent from this energy bill (aside from comprehensive energy policy) is a Renewable Energy Standard (RES): a requirement that America generate a certain amount of its electricity from renewable sources by a given date.
Could an RES pass right now? Renewable energy advocates and former Senate Democratic leader Tom Daschle insist that they have 60+ votes for the popular, no-brainer policy. Curiously, Sen. Reid says he doesn’t have the votes. Someone is misinformed or lying.
Both the House and Senate versions are weak as an energy bill, but the House bill does contain some additional commonsense solutions to protect America from the intrinsic risks of offshore drilling.
For example, the House bill would block oil companies with a “significant history” of violating worker safety of environmental laws from drilling in federal waters. The legislative language, which already passed out of the House Natural Resources Committee, defines that “significant history” as a company having at least one of the following:
- 5x the industry average for willful or repeat worker safety violations at its facilities;
- More than 10 deaths at any facility; or
- $10 million in fines under EPA laws within the preceding seven years.
The package includes further safety provisions that the Natural Resources panel approved unanimously, including new standards for blowout preventers.
It is worth noting that even in the comparatively more aggressive House bill, drilling regulations that were not direct responses to the oil spill were dropped.
So, what does the oil industry have to say about these moderate safety regulations?
The American Petroleum Institute (API) is the oil industry’s main trade association. And they oppose almost all of these regulations, of course. As far as Big Oil is concerned nothing needs to change.
In a call with reporters, API president Jack Gerard took particular umbrage at the blowout preventer regulations. In his eyes, new blowout preventer regulations are premature because we don’t even know what caused the Gulf spill:
“We’re going into surgery without a diagnosis. This is the ultimate in malpractice.” –Jack Gerard, President and CEO of the American Petroleum Institute.
Granted, I have never been pleased by anything these API lobbyists have said, but this is a remarkably bold statement. We know fully well that current blowout preventer regulations and practices are not up to the job.
Hypocrisy is a familiar sight in Washington. In the past, however, you usually had to wait until after an election before side-by-side comparisons of a single person arguing against himself began to show up a la the Daily Show. But not anymore.
Just a few weeks ago, API spokesperson Bill Bush fought against the deepwater drilling moratorium because:
“The 33 now idle deepwater drilling rigs in the Gulf have passed thorough government inspections and are ready to be put back to work.”
Let’s continue the API’s medical metaphor: We can’t operate on (regulate) the deepwater rigs because we don’t know for sure what ails them. But somehow, at the same time, we can pronounce them healthy and let them keep on drilling? That does not compute.
API’s Gerard went on:
“We believe what comes out of the discussions on the oil spill should be directly related to the oil spill.”
That makes sense. The patient was admitted only because of his inability to keep his oil down – why set his broken bones or cure any additional diseases you find during his checkup?
And remember, as I said before, needed but less directly spill-related drilling regulations have already been dropped from these bills in accordance with this oil industry demand. Such is the price of attempting to overcome Republican obstructionism.
A brief New York Times article detailing the roll out of these bills summarized the likely resistance:
“The oil industry is expected to offer stiff opposition to some of the provisions…”
Maybe I’m reading into it too far, but this quote really irks me (because of the content, not the writing):
The oil industry screwed up, big time. The damage to the Gulf of Mexico and its dependent economies is catastrophic. In direct response, Congress is attempting to pass an anemic bill with long overdue and watered down regulations.
The ONLY opposition to this bill is from the very industry that screwed up in the first place and has long enjoyed a political free ride.
Are we really going to let them singlehandedly push back against the regulations they’ve so vividly demonstrated they require? That’s like losing the bedtime argument with your young child. This is pathetic.