House Democrats face resistance from their own caucus on oil spill bill

House Democratic leaders are facing resistance from within their own ranks over a key provision of an oil spill response plan that will hit the floor Friday, on the eve of the August recess.


 About 30 oil-state Democrats, many of them Blue Dogs, oppose the removal of a liability cap on economic damages for oil and gas producers, not just retroactively for BP, but for all companies involved in future spills.

 

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Echoing the arguments of some of their centrist Democratic colleagues in the Senate, they say that measure would price smaller independent companies — many of which they represent — out of the offshore drilling business.

 Rep. Gene Green (D-Texas) told House Speaker Nancy Pelosi (D-Calif.) on Thursday that he was voting against the bill over the liability cap language and a provision setting federal authority over wastewater from wells that states currently regulate.

“I know a number of members that have said the same thing to her,” he said.

 Green was unsure whether all the oil-state Democrats would vote against the measure if the liability cap language remains unchanged.

“I don’t have a final number, but I would hope to show the leadership that there’s enough concern that we ought to rework it,” Green said.

 Rep. Rick Boucher (D-Va.) said he is also opposing the bill at the moment because of language that “imposes fees and taxes on natural-gas production, which includes production in my district.” He added, “All that is completely unrelated to the spill in the Gulf of Mexico.”

 On the liability issue, one suggested fix is the creation of a fund to which all oil and gas companies would contribute, with the money going toward cleaning up spills. That mirrors how the nuclear industry handles accidents.

 Another idea, Green said, has been to double or triple the existing $75 million liability cap for producers but make it unlimited only if a company is found to have been grossly negligent.

 A deal may be struck at least on the liability issue. At press time, an amendment from Rep. Harry Teague (D-N.M.) to allow small companies to pool resources to meet their minimum insurance obligations was expected to be allowed a vote Friday.

 Rep. Chris Van Hollen (Md.), assistant to Pelosi and fourth on the House Democratic leadership ladder, also predicted Democrats should be able to squeeze out a majority.

“I think we are getting there,” Van Hollen told The Hill. “I am confident we will get there. This always involves a discussion.”

Green is the leader of the oil-patch Democrats, as he was during last year’s House climate and energy debate to establish a first-time greenhouse gas cap-and-trade program.

 In the end, Green voted for the measure, which squeaked by, 219-212, despite opposition from 44 Democrats. That seven-vote margin came after eight Republicans supported it. Republicans may be just as — or more — unified this time.

 Green noted that Sen. Mary Landrieu (D-La.) and others are looking for a compromise on the language, which is also included in a Senate oil spill response bill.

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“Why would the House want to pass unlimited liability when it’s probably not going to get through the Senate?” Green asked. “That’s all part of the mix today.”

 Landrieu’s idea is to retroactively lift the liability cap to ensure that BP pays fully for the Gulf spill, but to leave a cap in place for future spills.

 Damages of between $250 million and $10 billion would be covered by a mutual insurance fund to which all oil-and-gas producers would contribute. Anything above or below those amounts would be covered by the company found responsible for the spill.

 A company’s contribution into the mutual insurance fund would be based on its level of oil-and-gas production in federal waters and the amount the company spends on bonus bids paid for a production lease.

 Rep. Charlie Melancon (D-La.) — who is in a tightening race against Landrieu’s fellow senator, Republican David Vitter — is in favor of the House's unlimited-liability language for the Gulf and future spills.

 But he is still undecided on the overall package. “I want to know exactly what the bill is composed of, and then I will make the decision,” he said Thursday.