Senators warn approval for drilling oversight bill may hinge on changes

Senators in both parties warned Wednesday that final approval for a bill to overhaul regulations on offshore drilling may ride on a series of changes to the legislation.

The Senate Energy and Natural Resources Committee unanimously approved the bill reforming offshore drilling safety and oversight, but senators said changes could be necessary.

The bill gives congressional codification to a number of changes to the Minerals Management Service sought by Interior Secretary Ken Salazar, including breaking up the agency into three bureaus to separate out its safety and environmental enforcement from royalty collection and approval of offshore drilling projects.

It is sponsored by Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) and ranking member Lisa Murkowski (R-Alaska) but Murkowski noted it is still a “work in progress.” Earlier this week, she introduced legislation that includes authorizing the president to set a liability cap for offshore oil-and-gas projects using criteria like a company’s safety record and directing 37.5 percent of the revenue earned by offshore drilling to coastal oil-producing states.

Sen. Mary Landrieu (D-La.) also gave a “reluctant” pass to the bill in the panel despite the lack of revenue-sharing language she has long sought.

More liberal voices on the panel, meanwhile, are seeking to add new ethics provisions. Sen. Robert Menendez (D-N.J.) unsuccessfully tried to make it a felony punishable by up to two years in prison for federal drilling regulators to accept gifts from industry officials. He also wants to double the prison term to 10 years for drilling regulators and industry officials who make false statements. 

"We need to once and for all break up this cozy relationship," Menendez said. "When the American people hear about regulators having sex with industry representatives, they know that by definition that is not an arms-length relationship."

Regulators who accept gifts only lose their jobs under current law, though the panel unanimously agreed to include language from Bingaman making that offense punishable by up to $55,000 in civil fines. Landrieu — in opposing the Menendez amendment — said he had good intentions but went too far. "I think we must be very careful about legislation like this," she said. "Let's do it with care and all the intelligence and wisdom we can bear because this is a very important subject to the American people today." She, Sen. Bernie Sanders (I-Vt.) and others on the panel spoke of possibly working on a broader ethics plan that could be considered in the full Senate.

The panel, by 11-12, narrowly defeated an amendment from Sen. Bob Bennett (R-Utah) that would have removed anyone from the White House-created commission probing the BP oil spill with a legal conflict of interest.

While not mentioning National Resources Defense Council President Frances Beinecke by name, the amendment was intended to kick her off the commission due to NRDC's intervention on the government's side in an industry lawsuit against the administration's six-month ban on deepwater oil-and-gas drilling. NRDC has said there is a robust firewall between Beinecke and the group's legal work.

A federal judge blocked the ban earlier this month, but federal officials are seeking to re-impose the moratorium.

The bill is likely one of the centerpieces of a package of legislative responses to the Gulf spill that Senate Majority Leader Harry Reid (D-Nev.) is planning to bring to the floor in July. The spill-response provisions are intended to be the driver for a broader debate in the full Senate over energy production and carbon pricing proposals that may end up accompanying spill strategies.

Murkowski warned against tying the spill response to broader efforts to combat climate change. Republicans would "protest any attempts to tie these essential elements and actions to other legislative agendas that have proven to have some very bipartisan opposition," she said.

The bipartisanship shown in the Senate energy panel Wednesday stands in stark contrast to much of the congressional debate on how best to address the Gulf spill and future spills.

Democrats on the Senate Environment and Public Works Committee on Wednesday stood united when panel Republicans unsuccessfully pushed a plan giving the president the discretion over whether and by how much to raise an oil company’s liability cap in the event of a major oil spill. Democrats — who outnumber Republicans 12-7 on the left-leaning panel — instead easily adopted a proposal from Menendez that would retroactively remove any liability cap for BP in the Gulf of Mexico spill and for companies involved in future spills. Sen. David Vitter (R-La.) was the lone GOP supporter of the Menendez plan.

Menendez had initially pushed the idea of increasing the current $75 million liability cap to $10 billion, which Republicans have derided as arbitrary.

Republicans did get a sympathetic ear from one centrist Democrat on the panel: Sen. Max Baucus (Mont.). Baucus voted against the Republican substitute from Environment and Public Works ranking member James Inhofe (Okla.) but said he shares some of their concerns about removing the liability cap entirely, and will try to make fixes later.

It was also business as usual a couple of hours after the Senate energy and environment panels wrapped their respective business meetings, with Sen. Jeanne Shaheen (D-N.H.) standing alongside Menendez and Sen. Frank Lautenberg (D-N.J.) in blaming Republicans for objecting to their attempt on the floor today to grant President Barack Obama's oil spill commission subpoena power by unanimous consent.

“I have to conclude Republicans … are standing on the side of the oil companies,” Shaheen told reporters after Sen. Jim DeMint (R-S.C.) blocked the consent request on behalf of other Republicans that he did not name. The House voted overwhelmingly to grant the commission subpoena power last week. Rep. Ron Paul (R-Texas) cast the lone vote against the measure.

— This post was updated at 6:23 p.m.