Fuel Fix – Tuesday, January 11, 2011
Oil and gas leaders are fighting back against the presidential spill commission’s recommendation for major changes in the way the industry and federal regulators prioritize offshore safety…
…Randall Luthi, the president of the National Ocean Industries Association, said the commission gave short shrift to “industry efforts to correct and improve the system, particularly since April 20, 2010.” He noted the work of joint industry task forces to assess what went wrong and suggest changes to well design standards and safety devices. Luthi also noted the collaboration by some oil companies on a Marine Well Containment Corp., that is developing equipment that could be dispatched immediately to control a runaway well. Luthi added:
“We object to the commission’s insistence on there being a ‘systemic’ problem throughout the industry. This is not supported by the facts. Over 43,000 wells have been drilled in the Gulf of Mexico without a Macondo-like accident. Over 14,000 wells have been drilled in the deep-water Gulf without a Macondo-like accident. This is not because the industry has been lucky. Nor does this disaster-free record show a culture of complacency. The April 20 accident cannot be taken lightly, but it should not be used as a dam to halt efforts for energy security and reliability.”
Bruce Vincent, the president of Houston-based Swift Energy Co., and the head of the Independent Petroleum Association of America, took aim at the commission’s recommendation to boost a current $75 million ceiling on the economic and natural resource damages oil companies can be forced to pay for oil spills. Is that is lifted entirely, it could effectively block smaller and independent operators from drilling offshore.
Proposals for $10 billion, $20 billion and unlimited liability caps “would empower multinational and foreign oil companies while creating an impossible financial challenge to America’s independent producers who compete with these corporations in the offshore,” Vincent said. He added:
“Unrealistic liability proposals would not achieve any of our national security, domestic energy or economic priorities, namely to provide for more American-produced energy, jobs and fewer oil imports. It’s vitally important that such policies must not create an unworkable regulatory framework for our industry, including smaller independent producers, to effectively and safely deliver job-creating, taxpayer-owned energy to American consumers while ensuring environmental safeguards.”
David Holt, the president of the Consumer Energy Alliance, said the commission failed to “move the current energy debate past politics and toward a reasonable consensus on the best and safest way to allow Americans continued access to the energy resources they own offshore.”
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