White House ‘cannot support’ House US-Mexico drilling bill

The White House said Tuesday that it opposes House legislation to implement a 2012 administration pact with Mexico on Gulf of Mexico drilling cooperation, citing “unnecessary, extraneous provisions that seriously detract from the bill.”

The formal statement of administration policy backs the “goal” of the bill that’s coming to the House floor Wednesday to implement the U.S.-Mexico Transboundary Hydrocarbons Agreement.

But it cites provisions in the GOP-crafted bill that exempts oil companies operating under the pact from controversial federal rules that force energy producers to disclose their payments to foreign governments.

“As a practical matter, this provision would waive the requirement for the disclosure of any payments made by resource extraction companies to the United States or foreign governments in accordance with a transboundary hydrocarbon agreement. The provision directly and negatively impacts U.S. efforts to increase transparency and accountability, particularly in the oil, gas, and minerals sectors,” the White House Office of Management and Budget said.

The White House statement, however, stops short of a veto threat despite saying it "cannot support" the measure. It says the administration looks forward to working with Congress on an implementing bill.

Click here for much more on the House bill and its controversial exemption from rules required under the 2010 Dodd-Frank financial overhaul law.

The Senate version of the implementing bill, sponsored by the bipartisan leadership of the Senate’s energy committee, does not include the exemption from the Securities and Exchange Commission payment disclosure rules.

But proponents of the House measure say the carve-out is needed to prevent a collision with confidentiality provisions in the U.S.-Mexico accord.

The underlying 2012 U.S.-Mexico accord, which has support from Republicans and the administration, is designed to enable cooperation in development of oil-and-gas along a maritime boundary in the Gulf of Mexico.

“Implementing this Agreement will offer significant opportunities for responsible and efficient exploration and development of hydrocarbon resources in an expanded area along the U.S.-Mexico maritime boundary as well as significant new opportunities for U.S. companies,” the White House said.

In a separate statement Tuesday, the White House threatened to veto a separate GOP bill coming to the House floor Wednesday that would require a major expansion of offshore oil-and-gas leasing.

The House has passed similar measures in the last Congress but they did not come up in the Senate.

From the White House statement:

This action would be directed without Secretarial discretion to determine whether those areas are appropriate for leasing through balanced consideration of factors such as resource potential, State and local views and concerns, and the maturity of infrastructure needed to support oil and gas development, including response capabilities in the event of an oil spill.  The bill would mandate OCS lease sales along the east and west coast and elsewhere with inadequate consideration of military use conflicts and without regard for significant issues, such as State and local concerns and impacts on important commercial and recreational fisheries.