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Category Archives: spill

With the Gulf spill as backdrop, new Senate legislation sets out to keep billions of dollars in subsidies from flowing to the oil industry. Bob Menendez (D-NJ) says his new bill would close oil-friendly corporate tax loopholes that add up to $20 billion in ten years. That’s almost as ambitious as what President Barack Obama laid out in his proposed budget for 2011, but is just a fraction (perhaps a tenth) of what taxpayers could save if the government stopped all subsidies, says Doug Koplow of Earth Track, a research group that tracks energy subsidies.

"If those numbers are correct," Koplow said, "that means they’re already doing the political calculations to get supporters of the oil industry on board." And no doubt political calculations will be necessary to pass an anti-oil bill in this Congress. Sen. Menendez knows– his other bill to raise the $65 million liability cap for oil companies has been blocked from twice so far by Senate Republicans, most recently by Senator Inhofe (R-OK), who said he’s concerned about the consequences for small, independent oil companies. Menendez made this appeal to his fellow Senators in a press release: "The flow of revenues to oil companies is like the gusher at the bottom of the Gullf of Mexico: heavy and constant…Unlike the geyser in the Gulf we can shut down these loopholes quickly and permanently when we pass this legislation."

With 70,000 barrels of crude gushing in the Gulf of Mexico daily, what’s a lawmaker to do? Capitol Hill is awash in answers.

Six Western Senators want to stop all new drilling off the Pacific coast with a moratorium to replace the one that expired in 2008. The West Coast isn’t part of the president’s offshore drilling plan, so the move is largely symbolic. But it would make it harder for California’s large offshore reserves from being tapped post-Obama. Click above to listen to excerpts of Senators Barbara Boxer, Dianne Feinstein, Maria Cantwell, and Jeff Merkley (in that order) state their case in a press conference.

Then there’s the "Big Oil Bailout Prevention Act," an effort by angry Senate Democrats Bob Menendez, Frank Lautenberg, and Bill Nelson Senators Menendez to raise the current ceiling on how much oil companies can to pay in liability from $65 million to $10 billion.

BP American president Lamar McKay said in one of three Congressional hearings that BP will pay damages above and beyond the current cap, but whether that will still be BP’s position when the disaster has faded from headlines and the claims keep piling up remains to be seen. (As for Transocean– it’s already asked a federal court to limit its liability to $27 million.) 

Republican Lisa Murkowski blocked consideration of the bailout prevention bill and has been pushing legislation of her own that would raise the federal fund that helps clean up oil spills to $10 billion (paid for through a per barrel fee for oil companies).

Eager Senators will try to squeeze the contents of their offshore drilling legislation into into any energy or climate change bill that’s makes it to the Senate floor. That could mean the American Power Act– Senators John Kerry and Joe Lieberman’s attempt to cap greenhouse gas emissions and please everyone (just a little bit) in the process. Their bill addresses offshore drilling with that compromise spirit– reaching out to the pro-drilling crowd with enticing incentives for states to allow oil and gas off their shores (37.5 percent of royalties directly to them), while acknowledging concerns over the current crisis with a temporary ban on new drilling until what went wrong in the Gulf can be established and remedied, and giving states the right to veto any drilling within 75 miles of their shores. 

Stay connected for more on what action, if any, Congress will take on offshore drilling in coming weeks…

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