Spill report rekindles Democratic push for reform

[January 12, 2011]  WASHINGTON (AP) -- Democrats in Congress pledged Tuesday to push for tougher regulation of offshore drilling and to make oil companies more financially responsible for spills -- steps a presidential panel says are necessary to prevent another catastrophic blowout.

The National Oil Spill Commission unanimously endorsed 15 recommendations to the oil industry, Congress and the Obama administration for preventing another large-scale oil spill. Most require action by Congress, but some could be done independently by the Obama administration, commissioners said.

The 380-page report provides an opening for Democrats to rekindle legislative efforts that failed after last year's oil spill, the largest offshore incident in U.S. history. But they'll face an even tougher road to passage this year, with a Republican majority in the House of Representatives set on cutting spending and reducing the government's regulation of business. Adding to their burden, rising gasoline prices are prompting calls for more domestic energy production.

Congress "must take action this year to prevent another catastrophic spill through smart regulation, and by giving regulators the tools and resources they need to do their jobs effectively," Senate Majority Leader Harry Reid said. He endorsed raising liability caps on oil companies, which BP waived after the Gulf disaster, "to ensure that taxpayers are never again on the hook for the damages caused by BP or any other oil company's missteps."

But Rep. Fred Upton, the Michigan Republican who leads the Energy and Commerce panel, pushed back. While the panel's findings should be considered, "neither this nor any other investigation should be used as political justification.to limit affordable energy options for America," he said.

The report also sparked concern in Gulf states. Lawmakers from the region will be critical to any legislation's passage, and many have resisted calls to remove liability caps.

"I don't want the federal government to overreact and now put additional regulations that cripple the oil industry," said John Young, president of Jefferson Parish in Louisiana.

The Democratic-controlled House approved bills last year to boost safety standards for offshore drilling and remove the liability cap, but the measures were not taken up in the Senate. Those bills included many of the suggestions recommended by the commission Tuesday after a six-month investigation requested by President Barack Obama.

Rep. Edward J. Markey, the top Democrat on the House Natural Resources Committee, said the report should bring Republicans on board for greater regulation.

Rep. Doc Hastings, R-Wash., who leads the natural resources panel, said in an interview that he is open to legislation responding to the oil spill, but said the bill passed by the House last year was overly intrusive. He said he would prefer greater focus on safety, while continuing to drill offshore.

"Jobs are important and in the economy right now we need to make sure we are less dependent on foreign oil," he said.

The report also calls for increasing budgets and training for the federal agency that regulates offshore drilling; dedicating 80 percent of fines and penalties from the BP spill to restoration of the Gulf; and lending more weight to scientific opinions by other federal scientists in drilling decisions. Obama has already endorsed two of the proposals -- raising the liability cap and using water pollution penalties to restore the Gulf.

The panel's co-chair, former Florida Democratic senator Bob Graham, said the magnitude of the disaster "would override an ideological preference for less government, less government intrusion, less government cost," despite strong GOP gains in November's elections.

"This is not a typical example of government regulation of a private enterprise," Graham said. "Drilling offshore is a privilege to be earned, not a right to be exercised by private corporations."

"If the recommendations are not carried out," Graham warned, "the probability of another failure will be dramatically greater."

Interior Secretary Ken Salazar appeared receptive to some of the commission's suggestions. In a statement, he said his department already has adopted several "key reforms" proposed by the report, and that officials would consult its findings to improve oversight further.

The panel also called for an industry-led safety institute, similar to the one created by nuclear power producers after the 1979 Three Mile Island accident.

The American Petroleum Institute, which lobbies on behalf of 400 oil and gas companies, said it is already working on an industry safety program. It also praised the panel's recommendation to increase funding for the Bureau of Ocean Energy Management.

But Erik Milito, the group's director for exploration and production, said the report went too far in casting doubt on the safety culture of the entire industry. It also failed to recognize steps already taken to make drilling safer, he said.

Last week, the commission said that management failures at three companies -- BP, Transocean and Halliburton -- led to the blowout and explosion that killed 11 workers and released more than 200 million gallons of oil from the damaged oil well.

In a statement Tuesday, BP said it would work with government officials, operators and contractors to strengthen industry-wide safety practices, noting that the Deepwater Horizon accident "was the result of multiple causes involving multiple parties."

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Online:

http://www.oilspillcommission.gov/

[Associated Press; By DINA CAPPIELLO and MATTHEW DALY]

Associated Press writers Harry R. Weber and Brian Skoloff contributed reporting from New Orleans.

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