WOffshore producers and drilling contractors expected members of Congress to offer ideas in response to the Gulf of Mexico well blowout and oil spill. But two provisions that the US House Transportation and Infrastructure Committee included in its oil spill liability bill on July 1 looked way off base.
Both were offered during markup as amendments to the original measure. The first would require that all drilling rigs in US waters be US-flagged and US-owned. The second would impose construction stormwater protection restrictions on independent producers' onshore wellsites.
The first proposal essentially would extend requirements under the 1920 Jones Act to offshore oil and gas drilling vessels operating within 200 miles of US coasts.
Rep. Steve Cohen (D-Tenn.) said he introduced it because the Deepwater Horizon, the rig which exploded Apr. 20 when BP PLC's well blew out, was subject to less-rigorous safety examinations because it was flagged in the Marshall Islands.
If the BP oil spill has taught us anything, it is that we cannot permit companies to cut corners at the expense of safety," Cohen said. My bill would ensure that only American-flagged vessels, all of which meet the highest safety standards in the world, can conduct offshore drilling in US waters."
A bigger impact
Cohen's bill, which the committee adopted as an amendment, would do much more, warned Brian T. Petty, executive vice-president for government affairs at the International Association of Drilling Contractors.
It basically would shut US offshore exploration and production down, especially since the committee added Rep. Gene Taylor's (D-Miss.) provision which would require that only US-manufactured offshore rigs be allowed to operate domestically, he told OGJ.
Petty said most global offshore rigs are flagged outside the US for tax and other economic reasons, and not to evade regulation. He said that in a week where bad congressional ideas seemed to land on the oil and gas industry like an avalanche, this bill was the most egregious—and it passed by a voice vote."
Same requirements
Rep. Michael A. Arcuri (D-NY) offered his amendment to remove the stormwater control exemption for independent producers constructing wellsites to subject them to the same Clean Water Act requirements other industries follow.
By giving them a pass on this important regulation, we're essentially assuming the oil and gas industries will take the necessary environmental precautions on their own," Arcuri said, adding, That's the same sort of fast-track approach that led to the BP oil spill."
Lee O. Fuller, vice-president of government relations at the Independent Petroleum Association of America, told OGJ: This has been a frustrating debate. Everyone has wrapped it around the gulf tragedy, but it's been used to advance issues that have no bearing on the oil spill."
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