Chairman Bingaman has introduced two bills to address important areas of our nation’s energy policy: S. 916, the Oil and Gas Facilitation Act of 2011, and S. 917, the Outer Continental Shelf Reform Act of2011. Both are based on bipartisan, largely consensus work in the Committee on Energy and Natural Resources during the last Congress.
S. 916, the Oil and Gas Facilitation Act, is intended to enhance efficient and appropriate domestic production of oil and gas and to limit the dependence of the United States on foreign sources of oil. It addresses production issues in a variety of ways, including requiring a comprehensive inventory of the oil and natural gas under the waters of the Outer Continental Shelf to inform decisions about where leasing is likely to be most productive; and improvement of the coordination and efficiency of the permitting process for development on federal lands and waters.
S. 917, the Outer Continental Shelf Reform Act, is a verbatim reproduction of S.3516, reported unanimously by the Energy Committee in the last Congress. Its goal is to create a culture of excellence within the regulatory agency and the industry that benefits those who work in the oil industry, those who depend on other marine resources, and all Americans who care deeply about our energy resources, our communities and our marine environment.
Because of the widespread support for this bill, it has been reintroduced exactly as reported last year, providing a good place to start work this year. It will need updating to reflect subsequent events and information from the National Oil Spill Commission and various experts about some refinements that should be made. Chairman Bingaman has been working with Senator Murkowski and others who supported last year’s bill, and will be continuing those discussions. Given the importance of the issue, the bipartisanship that animated the Committee’s work on this issue last year during the oil spill is something that we expect to continue.
The Committee’s work on this legislation will begin with a hearing to be scheduled for next week. Chairman Bingaman hopes to be able to move to Committee markup before the Memorial Day recess. Here is his introductory floor speech:
“Mr. President, yesterday I introduced two bills on subjects of great importance to our national energy policy: the Oil and Gas Facilitation Act of 2011 and the Outer Continental Shelf Reform Act of 2011. Both are basedon bipartisan, largely consensus work in the Committee on Energy and Natural Resources during the last Congress.
“I should note that these important issues are being addressed in separate bills consciously and for a reason. In the past we have crafted comprehensive energy bills that attempt to address all the energy policy issues of the day in one vehicle. There are obvious advantages to that, but there are well-documented disadvantages as well, and I would like to avoid those this year in furtherance of completing our important work.
“There is no disagreement in the Senate about the need to have robust and responsible domestic production of oil and gas. At the same time, there is probably considerable disagreement about how best to address that issue. We need to begin work on that.
“However, ensuring the safety and viability of our operations on the Outer Continental Shelf is a separate matter that deserves attention on its own. The question of how we undertake oil and gas exploration and production on the Outer Continental Shelf appropriately stands apart from the question of where we undertake those activities.
“I do not believe that it would make sense to try to trade off safety or environmental protections against the issue of access, for example. I believe that the Congress should set an appropriate level of safety and environmental compliance regardless of where oil and gas exploration and production is occurring.
“I will also observe that there was much greater consensus on the need to reform the rules governing Outer Continental Shelf production in the last Congress than on other issues such as those related to access to particular areas. Conflating these separate issues into one bill is not likely to be the best path to success in enacting a bill into public law.
“That is not to say that we don’t have a responsibility to address both issue areas. We do. But I believe they should be addressed on parallel tracks, and not in combination. I hope to be able to move toward Committee consideration of both of these bills this month.
“The first, the Oil and Gas Facilitation Act, is intended to enhance efficient and appropriate domestic production of oil and gas and to limit the dependence of the United States on foreign sources of oil.
“The last two years have been a time of real success in increasing our domestic production of both oil and gas, and in reducing our reliance on imported oil. We are currently the third largest producer of oil in the world. The percentage of the oil we use that is imported has declined from 60 percent in 2008 to about 51.5 percent in 2009 and to about 49 percent in 2010. We want to be sure that we continue this progress while protecting our other natural resources and our communities’ health and safety.
“This bill addresses production issues in a variety of ways. It requires a comprehensive inventory of the oil and natural gas under the waters of the Outer Continental Shelf to inform decisions about where leasing is likely to be most productive. To improve the efficiency of the permitting process for development on federal lands and waters, permit coordination offices are reauthorized, and a new coordination office is established for the Alaska region of the Outer Continental Shelf.
“Two provisions facilitate the transportation of Alaska’s abundant oil and gas resources. The amount of federal guarantee instruments is increased to support the construction of an Alaska natural gas pipeline; and the Trans-Alaska oil pipeline system is exempted from certain requirements that unnecessarily slow the permitting process.
“Co-production of geothermal energy by existing oil and gas leaseholders is encouraged by making leases available for that purpose on a non-competitive basis.
“Finally, the bill will potentiallyc ontribute millions to the Federal Treasury by repealing the current law that requires the Secretary of Interior to give relief from royalty payments to certain offshore oil and gas production. The bill would allow the Secretary to provide such relief in appropriate circumstances, but would not require such relief. This avoids inappropriate giveaways of taxpayer-owned oil and gas resources to industry when it is unnecessary for robust domestic production.
“These provisions are drawn almost verbatim from S. 1462, reported by the Committee on a bipartisan basis in the last Congress. The one significant change is that certain funding for the offshore oil and gas inventory provided by S. 1462 was redirected by the Committee in subsequent legislation to be used for research on safety issues related to offshore oil and gas drilling. To avoid spending the same money twice, we have eliminated that funding here so that it could be included in offshore safety legislation. At the same time, the bill retains the authorization of significant appropriations to be used for the oil and gas inventory.
“The Outer Continental Shelf Reform Act, the other bill I am introducing today, is a verbatim reproduction of S. 3516, reported unanimously by the Committee in the last Congress. Because of the widespread support for this bill, I have reintroduced it exactly as reported since I believe this is a good place to begin our work this year. It will need a bit of updating as we move forward. A few of the provisions have largely been overtaken by events, and we have learned from the National Oil Spill Commission and others about some refinements that should be made.
“I have been having discussions with Senator Murkowski and others who supported last year’s bill, and will be continuing those discussions as we move forward. I would hope that we will have the same strong bipartisan support for these efforts as we did last year when we reported this bill during the midst of the worst oil spill in our nation’s history. Our commitment to responsible operations in the Gulf and protection of our citizens and communities should be well understood by all.
“This bill is intended to respect those who lost their lives in the Deepwater Horizon accident and the people of the Gulf who have suffered serious economic and emotional harm by doing what we can to create a better future. It is the particular responsibility of the Committee on Energy and Natural Resources to look to the future of the regulatory agency and the industry. As I said last year when we introduced this bill, our goal must be, of course, to prevent future disasters. But we can and must do more than that.
“Congress should create organizational resources and a set of requirements that will have safety, environmental protection, and innovation at their core. We should require that both industry and agency employees have the expertise, experience, and commitment to quality necessary to handle the complex issues involved. We should set principles in place to create a culture of excellence for the regulatory agency and for the industry that will be a model for the world.
“Thus, this bill reforms the structure of the offices of the Department of the Interior dealing with offshore oil and gas leasing and development to avoid organizational conflicts of interest. It clarifies the breadth of the Department’s responsibilities in managing the resources of the Outer Continental Shelf.
“It increases the safety requirements for exploration, well drilling, and production. It mandates use of best available technology, an evidentiary safety case, and a risk management system that identifies and addresses hazards in advance andmanages for change. It provides for third party review by qualified parties outside the agency of key equipment and well design.
“It addresses the essential need for the Department of the Interior to have in-house research capacity on both the safety and the marine environment issues necessary for the exercise of its regulatory authority. Research departments in these areas will no longer be optional, but are required, and funding is redirected from other areas of research to ensure that this will happen.
“In order to ensure that the rules are enforced, the bill requires collection of fees from industry to fully fund the necessary teams of inspectors. It provides for independent investigations of accidents and the sharing of data so that all can learn from mistakes. It also provides the Department of the Interior with adequate time to carry out necessary reviews and makes the input of other Federal agencies occur in a transparent way. And it increases the civil and criminal penalties applicable to violations of the law and regulations.
“I believe these policies and resources can set us on a new and constructive path toward managing the incredible natural resources of the Outer Continental Shelf. We must recommit ourselves to the goal of excellence in this important endeavor. The fact that oil is no longer gushing into the Gulf of Mexico in no way diminishes the importance of this work.
“Both of these bills address issues of great national importance. We will shortly be scheduling necessary hearings and preparing these bills for Committee consideration — if at all possible before the Memorial Day recess. I look forward to working with my colleagues on the Energy and Natural Resources Committee and in the rest of the Senate on a bipartisan basis – as we have in the past – to address the vital issues presented by both of these bills.
“Mr. President, I ask unanimous consent that the text of both bills be printed in the RECORD.”
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For more information, please contact Bill Wicker at 202.224.5243 orbill_wicker@energy.senate.gov
or Rosemarie Calabro at 202.224.5039 orrosemarie_calabro@energy.senate.gov
Visit our website at http://energy.senate.gov/
Special thanks to Richard Charter