Senate panels requires strong oil spill response plans, removes limits on liability

Senate panels advance oil spill bill

WASHINGTON — Congress began advancing legislation Wednesday that imposes new safeguards on offshore oil drilling in hopes of preventing a repeat of the devastating spill that has brought environmental and economic havoc to the Gulf coast.

Two Senate committees separately approved bills that would strengthen the government’s regulation of offshore drilling, require oil companies to be better prepared to cope with a spill, and lift federal spill-related economic liability limits.

The bills now advance to the full Senate, where they are likely to be merged into broader legislation.

Meanwhile, several committees in the House discussed legislation in response to the BP oil spill, with committee votes expected in the coming weeks.

While a call to impose greater safeguards in offshore drilling has shown widespread, bipartisan support, some lawmakers — Democrats and Republicans — raised concern that the actions by Congress might stifle offshore oil and gas development. Others say the bills don’t go far enough and should be strengthened.

Congress should “address some of the obvious violations that have occurred” but the key is “striking a balance,” said Sen. Mary Landrieu, D-La., whose state is bearing the brunt of the BP oil spill, but also views offshore oil development an economic necessity.

Landrieu said she voted “reluctantly” for a bill that emerged Wednesday from the Senate Energy and Natural Resources Committee, fearing it might harm oil development.

Sen. Robert Menendez, D-N.J., an opponent to offshore drilling, said he also supported it reluctantly because he believes it’s too weak and expects it to be strengthened.

The bill, approved by the panel in a bipartisan voice vote, would increase the civil and criminal penalties for an oil spill, require greater redundancy in drilling safety equipment, impose more stringent requirements for deep water drilling permits, and calls for more federal inspectors while imposing a fee on industry to pay for them.

The committee also voted to set into law a decision already made by the Obama administration to separate the Interior Department agency responsible for offshore oil drilling into separate entities — one responsible for royalty collection, and another for safety and environmental regulation of offshore drilling.

The bill slows the revolving door between Interior and the oil and gas industry. A recent report by the department’s inspector general said that its drilling regulators have been so close to the industry that they’ve accepted gifts from oil and gas companies and even negotiated to go work for the companies.

Specifically, the measure bans Interior Department employees involved in offshore drilling from going to work for the oil and gas industry for one year. Similarly, former oil and gas employees who join the government could not oversee matters relating to their former employer or client for one year.

Separately, the Senate Environment and Public Works Committee voted Wednesday to remove the current $75 million federal cap on economic liability from an oil spill and to require stronger spill response plans before approval of offshore oil or gas drilling applications.

While the bill advanced by voice vote, it was not without disagreement.

Republican Sens. James Inhofe of Oklahoma and David Vitter of Louisiana, said the more stringent spill response requirements and removal altogether of the economic liability cap would cause all but the largest oil companies to abandon offshore oil drilling.

“It’s going to be a permanent moratorium” on drilling, said Vitter, referring to the tougher response plan requirements.

Lawmakers in the House also were taking up oil spill legislation, with votes planned in the coming weeks.

A House Energy and Commerce subcommittee began debating a bill requiring greater drilling safeguards, including new standards and testing to ensure that a “fail-safe” device that is supposed to prevent a well blowout actually works. The device failed to stop the gushing oil at the BP well.

The House Natural Resources Committee is considering legislation that would reorganize the federal offshore regulatory program and tighten standards and for rig inspections and federal oversight.

In other oil spill developments Wednesday:

— EPA officials announced tests on various chemicals used to break apart spill-related oil are generally equally toxic, but far less so than the oil itself. The agency said none of the chemicals had dangerous effects on the sea life tested.

— The chairman of the Senate Finance Committee has begun an investigation into whether Transocean Ltd., owner of the Deepwater Horizon rig, has improperly exploited U.S. tax laws. The company moved its headquarters to landlocked Switzerland two years ago from the Cayman Islands, another tax haven.

—Two widows of oil workers killed in the Deepwater Horizon accident expressed frustration during a hearing of the Senate Commerce, Science and Transportation Committee that a 1920 law limits compensation for the lives of their husbands to the loss of their paychecks and funeral expenses because they were killed at sea.

“Why would the damages to a family be different if a death occurs on the ocean as opposed to on land?” asked Shelley Anderson, whose husband, Jason, was a tool pusher on destroyed rig.

—Kenneth Feinberg, the administrator of $20 billion fund set up to compensate Gulf oil spill victims, acknowledged that while all legitimate claims must be honored, he has concern about fraudulent claims. Feinberg told the House Small Business Committee that he has asked the Justice Department — and possibly a private vendor — to help ensure claims are legitimate “because fraud could really undercut the credibility of this program.”

— Rep. Darrell Issa, R-Calif., said in a draft report that the Obama administration appears to be more focused on protecting its reputation than responding to the disaster. Issa’s report, to be released Thursday, quotes several frustrated local Gulf Coast officials who say the administration has been misleading about how much equipment it deployed to clean up the spill.

The White House waited until the 69th day of the disaster to accept critical offers of assistance from foreign countries. As of Monday, the government accepted Japanese aid, including two high speed skimmers and fire containment boom, according to an internal government report obtained by The Associated Press. The Japanese made the offer on June 22, according to Izumi Yamanaka, spokeswoman for the Japanese embassy in Washington.

The Coast Guard did not respond to questions about why it took a week to respond to the offer.

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Associated Press writers Ben Evans, Eileen Sullivan, Henry C. Jackson, Joan Lowy and Frederic J. Frommer contributed to this report.

(This version replaces 16th paragraph to correct explanation of Vitter comment.)