As oil continues to leak into the Gulf, President Barack Obama and the Democratic leadership face a critical test: Will they seek prudent measures to directly address the BP disaster or will they exploit the tragedy by advancing extraneous measures that drastically reduce domestic energy production, or even enact new energy taxes on consumers and small businesses?
My sincere hope is that President Obama exhibits the leadership necessary to engage in a reasoned debate — one that produces the same outcome following the Exxon Valdez disaster in 1989. After a year-long debate and bipartisan negotiation, Congress unanimously passed the Oil Pollution Act in 1990. The OPA has largely been untested, and some of my colleagues believe it should be updated to account for new realities produced by the BP spill. I couldn’t agree more.
Yet the leading proposal to amend the OPA could severely curtail domestic energy production in the Gulf. The “Big Oil Bailout Prevention Act,” introduced by Sen. Robert Menendez (D-N.J.), is ostensibly motivated by the desire to make BP, not the taxpayers, pay for the tragedy it unleashed. No one disagrees with that. And no one disagrees that BP must fairly and expeditiously compensate the various business owners now out of work because of BP’s actions. But if the Menendez bill becomes law, more than BP could pay: The estimated 150,000 workers connected to the offshore oil and natural gas industry could pay with their jobs and their livelihoods.
As Federal District Court Judge Martin Feldman wrote in his decision yesterday overturning the Obama administration’s wrong-headed moratorium on deepwater production, “Oil and gas production is quite simply elemental to Gulf communities.” This, and the other elemental fact that Gulf energy production is essential to America’s economy, is the principal reason Congress should deliberate carefully on Gulf spill legislation.
I have objected four times to attempts to circumvent the committee process and pass the Menendez bill in the Senate. Emotions are no doubt running high, but we must resist the urge to let emotion dictate the course of deliberations. The legal and regulatory issues involved in legislating on this issue are intricate and complex and therefore should compel us to think carefully about how to proceed.
I take pause on Menendez because of what the experts are telling us. The bill could make exploration and production so costly that only Big Oil companies such as BP, and state-owned firms, such as China’s National Offshore Oil Corporation, could afford to operate in the Gulf. Consider INDECS insurance, which said of the Menendez bill: “If we have understood the proposals correctly, then it would appear to us that the proposed bill will not act as ‘Big Oil Bailout Prevention Liability Act of 2010’, rather making it impossible for anyone other than ‘Big Oil’ to operate.”
For a time, the Obama administration shared this view. Just after the Menendez bill was introduced, Interior Secretary Ken Salazar told the Senate Energy Committee that, “It is important that we be thoughtful relative to that, what that cap will be, because you don’t want only the BP’s of the world essentially be the ones that are involved in these efforts, that there are companies of lesser economic robustness.” That the view of the administration then rashly changed to endorse Menendez raises a question: what changed?
One can only speculate; I regret that partisanship may have intervened. Whatever the reason, we need a workable solution that balances the important values of energy production, environmental protection, safety and fairness for affected parties. The Senate Committee on Environment and Public Works, on which I serve as Ranking Member, plans to markup the Menendez bill next week. I hope before then the committee, and then the full Senate, can agree to a bipartisan solution that achieves appropriate balance.
That balance certainly won’t be achieved if Democratic leaders insist on attaching energy taxes and other unrelated provisions to the eventual spill bill. And it certainly won’t be achieved if they insist on enacting a political agenda animated by aversion to domestic energy production. Nevertheless, I will continue work with my colleagues to craft legislation that holds oil companies accountable without putting jobs and America’s energy security at risk.
Sen. Inhofe is the ranking member on the Senate Committee on Environment and Public Works.