The big news out of Washington on matters environmental has been a unanimous decision by Senate Democrats to craft an impenetrable package: a legislative strategy "more akin to the financial regulatory legislation than of health care, with Democrats bringing to the floor an impenetrable package that Republicans could not roadblock." Specifically, they "plan to anchor the climate and energy effort to widely popular legislation that would overhaul offshore drilling regulations in the wake of the Gulf spill, and then dare Republicans to vote against it."
The "widely popular" legislation, already fast-tracked for action, is S.3516, the Outer Continental Shelf Reform Act of 2010 drafted by Senator Jeff Bingaman (D-NM). Analysis of that bill below the fold.
- I Read the Bill So You Don't Have To!
-- Instead of the current MMesS, two bureaus will carry out "leasing, permitting, and safety and environmental regulatory functions" and a third bureau will carry out royalty and revenue management functions (i.e., collect money); all directors now will require advice and consent of Senate. Comment: Secretary of the Interior Ken Salazar already broke up the MMesS by administrative order, but he agrees that the breakup should be codified.
-- A 12 member advisory board will "provide independent scientific and technical advice on safe and environmentally energy and mineral resource exploration, development, and production activities."
-- Every few years, safety bonds and revenues are to be reviewed and price-adjusted. Comment: Revenues are a raw deal for taxpayers; thanks to Reagan-era thinking, an average of $2,224 per acre for all federal leases sold between 1954 and 1982 plummeted to $263 per acre for federal leases sold between 1983 and 2008 (before adjusting for inflation). At the same time, they're the federal government's second largest source of revenue. Revenues and royalties desperately need reform.
-- The Secretary of the Interior can disqualify a bidder if three conditions are met: the bidder isn't meeting safety/environmental requirements on other leases, it's been found to be a responsible party under the Oil Pollution Act of 1990, and it hasn't fully paid covered damages under that act. Not that that section is aimed at any particular Bad People.
-- The requirement that exploration plans must be approved within 30 days is repealed. Instead, plans must be approved within 90 days unless the government finds that more time is needed. Comment: This repeals one of the worst ideas of the Energy Policy Act of 2005.
-- Every bid must include a "scenario for the potential blowout of the well involving the highest potential volume of liquid hydrocarbons" and a "complete description of a response plan to control the blowout."
-- For deepwater (over 500 ft deep) drilling, the bid shall not be approved unless its plan has a technical safety analysis of safety, blowout prevention activity, and response plans.
-- A drilling permit may not be granted until a full engineering review of the proposed well, including best available technology for critical safety systems; blowout preventers must include redundancy and remote triggering capability. Comment: Legalnerds will note the difference between "shall not" (above paragraph) and "may not," and I'd like to know the rationale for the difference.
-- Programs for research & development, environmental studies, and technology research and risk assessment are created.
-- The Secretary will require new operations to use best available technology ("best" being updated every three years); existing rigs to use best available technology to the maximum extent practicable. Comment: I'd like to see all rigs be required to use best available technology no matter how old they are, never mind this "maximum extent practicable" stuff.
-- A "safety case" is required for every new permit. "The term ‘safety case’ means a body of evidence that provides a basis for determining whether a system is adequately safe for a given application in a given environment."
-- Currently, a penalty up to $100,000 can be assessed against anyone who knowingly and willfully violates the Outer Continental Shelf Lands Act or makes false statements on an application. S.3516 would change the fine to $10M for anyone who acts with reckless disregard (lower burden of proof than knowingly and willingly).
Anyone who's interested can read Bingaman's press release remarks.
- Politics of the Bill, with a Murky Side Note
The bill was formally introduced on Monday, June 21 with three cosponsors: Byron Dorgan (D-ND), Lisa Murkowski (R-AK), and Debbie Stabenow (D-MI). A hearing was held Thursday, June 24. Salazar testified that it's a very good bill, reports the Houston Chronicle, and a vote is expected Wed., June 30. Meanwhile, Rep. Nick Rahall (D-WV) is working up his own spill bill.
If this bill becomes the foundation for a climate bill, Murkowski has an interesting dilemma. She's facing a primary challenge from a tea party type endorsed by a certain half-term, half-baked Alaskan. She also has a Democratic challenger, Scott McAdams (I hope to hear more from him soon). Will she work with her colleagues and be painted as a RINO compromiser? Or will she bolt from the bill and make it clear to all that she's a member of the GOBP, opposed to reasonable regulation, whose only friend is Big Oil? Her choice will be an interesting side note to the Democrats' Go Big strategy.
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