Watching Government Good and bad from the 104th

With Patrick Crow from Washington, D.C. [email protected] In its rush to adjourn, the 104th Congress passed several bills the U.S. oil and gas industry has been wanting for years. It amended the 1990 Oil Pollution Act, which had required offshore facilities to carry $150 million of insurance against oil spills. Industry argued that was excessive, and Congress restored the figure to the previous $35 million.

Oct. 7, 1996

3 min read

In its rush to adjourn, the 104th Congress passed several bills the U.S. oil and gas industry has been wanting for years.

Flurry of bills

It amended the 1990 Oil Pollution Act, which had required offshore facilities to carry $150 million of insurance against oil spills. Industry argued that was excessive, and Congress restored the figure to the previous $35 million.

The bill also reasonably defined offshore oil facilities as those seaward of the shoreline. OPA90 had been interpreted to mean oil facilities along the shore and even those on navigable rivers inland.

Congress also reauthorized the Pipeline Safety Act. The bill would require risk assessment and cost/benefit analyses for new pipeline safety rules. It limits Transportation Department fees on pipelines to $27 million in 1997, with increases of 3%/year through 2000. Legislators also passed a bill to authorize an industry-financed program to promote propane safety and R&D.

And Congress voted to sell $220 million worth of crude from the Strategic Petroleum Reserve to pay for fiscal 1997 SPR operations. The Energy Department sold 12 million bbl last summer to raise $227.6 million under a similar congressional directive.

Bids will be accepted Oct. 21 for as much as 15 million bbl of oil stored at the West Hackberry, La., SPR site: 370,000 bbl of light, sweet pipeline fill at the site and about 15 million bbl of light sour stored underground. Biweekly sales will continue until $220 million is raised.

Moratorium persists

And finally, Congress once again continued the annual moratorium that denies federal funds for planning offshore lease sales other than in the Gulf of Mexico and off Alaska.

Before leaving Washington to campaign for reelection-or more accurately, as part of their campaigns-110 members of the House of Representatives petitioned President Clinton to issue an executive order that would make the moratorium permanent during his next administration, should he be reelected.

Rep. Lynn Woolsey (D-Calif.), a key sponsor, said, "The time has come to put this issue to rest," noting the executive order would enable anti-leasing congressmen to focus on passing a permanent legal prohibition.

She said Clinton has supported the yearly moratoriums, and Chief of Staff Leon Panetta worked to enact them when he was a California congressman, so, "We have every reason to believe Clinton will respond favorably."

Although such a move would be a logical political action for a President wanting to win California and Florida in November, the executive order would have no practical effect. The 5 year leasing plan, which will take effect this month, does not propose any sales in the moratorium areas.

And it would not be the first time offshore sales have fallen prey to election year politics. A northern California sale was canceled in 1988 (OGJ, June 13, 1988, p. 25) after presidential candidates George Bush and Michael Dukakis both opposed it.