US Senate Democrats move spill bill debate beyond Labor Day

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Aug. 4 -- US Senate consideration of a broad energy bill that includes offshore oil-spill provisions will not take place until after Labor Day, Democratic leaders announced on Aug. 3. Senate Majority Leader Harry M. Reid (D-Nev.) blamed Republicans, who immediately responded that the bill was temporarily shelved because it could not attract enough support from key Democrats.

“He didn’t pull his bill because of Republican opposition. He pulled it because his fellow Democrats were deserting him, planning to vote against it, and supported the concepts of the Republican bill,” said Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member.

There were indications that support from Reid’s own party eroded not only because of oil spill provisions that producing-state Democrats considered unrealistic, but also because the broader bill did not include requirements for electric utilities to generate more power from renewable sources to address global climate change.

Oil and gas trade association and other business leaders welcomed the delay. “The bill proposed by the Democratic leadership is not an effective or reasoned response to the spill. Instead it will cost American jobs, threaten our fragile economic recovery and jeopardize our energy security,” said American Petroleum Institute Pres. Jack N. Gerard.

Its flaws include elimination of an offshore liability limit, similar to one in the bill which the US House narrowly approved on July 30, and a provision which would require producers to disclose chemical ingredients used in hydraulic fracturing, a crucial process in natural gas production from onshore shale formations, he indicated.

‘Anti-industry momentum’
“This is a good, very important development,” said Independent Petroleum Association of America Pres. Barry Russell. “The delay gives industry and our allies more time to fight these contentious proposals and halts the fast anti-industry momentum sweeping through Washington since the Gulf of Mexico accident.”

Russell noted that provisions in the Senate bill that IPAA opposes, in addition to the two mentioned by API’s Gerard, include proposed amendments to the Outer Continental Shelf Lands Act, which the independent producers’ group thinks would leave any administration decision open to challenge; denial of leases to producers based on safety and while relying on arbitrary and vague requirements that are open to broad interpretation and legal challenges; and increasing the current 30-day review for offshore drilling permit applications to at least 90 days or 180 days at the Interior secretary’s discretion.

Karen A. Harbert, president of the Institute for 21st Century Energy at the US Chamber of Commerce, said that voters who expected Congress to propose proper oversight of offshore exploration and production in the wake of the gulf oil spill got legislation from House and Senate leaders which essentially would shut down industry.

“It is not surprising, then, that ultimately the Senate proposal collapsed and the bill was pulled from consideration,” Harbert said, adding, “Coupled with the administration’s blanket moratorium on oil and gas production, it is clear that America is not getting the leadership it needs on energy.”

Contact Nick Snow at nicks@pennwell.com.

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