Senior Republican rejects call for higher offshore drilling fees

House Natural Resources Committee Chairman Doc Hastings (R-Wash.) is rebuffing the presidential oil spill commission’s call for higher fees on offshore oil-and-gas leases to help fund expanded federal oversight.

“That’s a bad idea,” Hastings said in an interview that aired Sunday. “Listen, the amount of revenue that’s coming in from the OCS [outer continental shelf] far exceeds what it costs to regulate that industry.”

Hastings’ comments in his appearance on Platts Energy Week could preview a clash with the oil spill commission’s co-chairs when they appear before the Natural Resources Committee Wednesday.

The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling called for new fees as part of a broad set of recommendations in its final report released Jan. 11.

“The oil and gas industry . . . should do significantly more and provide the funds necessary for regulation of offshore oil and gas operations and oil spill preparedness planning,” the report states, noting that federal funding needs to “keep pace” as the industry moves into greater depths and oversight challenges increase.

The report lays out several funding ideas, noting Congress could raise existing inspection fees; impose an annual regulatory fee on new and existing leases; or “instruct the Department of the Interior to include lease provisions that require the imposition of regulatory fees.”

The report also notes that Interior has some running room under its existing powers. “Interior already possesses broad authority to include in leases ‘such rental and other provisions as the Secretary may prescribe at the time of offering the area for lease,’” the report states.

While bashing the call for higher fees, Hastings said that overall he’s eager to hear from the commission chairmen directly about their probe and recommendations, only some of which would require Congressional action. Hastings’ committee oversees the Interior Department, which regulates offshore drilling.

“I just want to hear firsthand from them what their suggestions are, what they feel happened and what their remedies are,” he said of the upcoming hearing.

“Having some interaction rather than reading reports is probably a better way to find out what really went on,” Hastings added.

Hastings, in the interview, was friendlier to the commission’s call for a new industry-backed body to ensure best practices. However, he also noted that the American Petroleum Institute has long played a role in this area, and cautioned against “reinventing the wheel.”

The spill commission, for its part, has attacked API’s credibility.

Hastings was noncommittal about whether he would pursue legislation in response to the spill. “We’ll see. I am not ruling that out,” he said.