July 2 - A bill that would require floating drilling rigs operating in the US Outer Continental Shelf to be registered in the US, made in the US from American steel and manned by US citizens was expected to be approved by the House Transportation and Infrastructure Committee late July 1.
The bill, which had not passed by press time, has bipartisan support on the committee. It still has to be considered by other committees that share jurisdiction before making its way to the House floor for a vote.
The bill would require that all vessels engaged in oil drilling activities, but especially mobile offshore drilling units, be US flagged and owned by US citizens.
The bill is a direct response to the fact that the Deepwater Horizon drillship, which sunk after the April 20 blowout of BP's Macondo well in the Gulf of Mexico, was owned by Transocean, a Swiss company, and registered as a vessel in the Marshall Islands.
The US Coast Guard, which has broad authority over inspecting US vessels, has more limited authority over foreign-flagged vessels.
"It's a foreign-flag operation operating in the United States with the Coast Guard's hands tied to inspect this vessel," Committee Chairman James Oberstar, Democrat-Minnesota, said of the Deepwater Horizon.
The requirement that only US drilling rigs be used in the OCS would take effect in 2011, if the bill becomes law.
The bill would also greatly expand the jurisdiction of the Coast Guard over offshore drilling, including signing off on oil response plans and inspecting drilling vessels.
"When we are going to have the Coast Guard responsible for overseeing the cleanup of this mess, they need to be involved in the process of developing the emergency plans they will be responsible for," Representative Elijah Cummings, Democrat-Maryland, said.
But that provision brought objections from Representative Nick Rahall, Democrat-West Virginia, who chairs the House Natural Resources Committee.
Rahall, whose committee will have to consider the bill before it heads to the full House, said giving the Coast Guard added authority over offshore drilling conflicts with current law that vests that authority in the Interior Department.
The bill would also eliminate liability limits for economic damages and expand a responsible party's obligations to include reimbursing people whose bodily and mental health were harmed by a spill. Current law caps liability for economic damage at $75 million and does not include claims for diseases or mental health problems linked to the spill.
It would also significantly increase the amount of insurance a company must have before being allowed to drill offshore. Current law requires a minimum amount of financial responsibility, either insurance or self insurance, of $10 million, with a maximum of $150 million for an offshore facility deemed to be of high risk.
The bill would boost the minimum level of financial responsibility to $1.5 billion and would allow the president to increase that amount if he sees fit.
A loophole being used by Transocean to limit its financial liability would also be eliminated by the bill. An 1851 act limits the liability of a shipowner. Transocean has petitioned a court to invoke the act and limit its liability to $27 million. The bill would repeal the limit retroactively.
Requirements that single-hull tankers be converted or replaced with double-hull tankers would be accelerated. Single-hull tankers are still allowed to transport oil to the Louisiana Offshore Oil Port and to lightering areas off the coast until January 1, 2015. The bill would push up the deadline for converting to double-hull tankers operating in the LOOP to January 1, 2011.
The bill would also require the Environmental Protection Agency to rank dispersants used to manage oil spills by toxicity and effectiveness. Republicans on the committee objected to a provision that would require companies that make dispersants to reveal the ingredients publicly.
The bill, which had not passed by press time, has bipartisan support on the committee. It still has to be considered by other committees that share jurisdiction before making its way to the House floor for a vote.
The bill would require that all vessels engaged in oil drilling activities, but especially mobile offshore drilling units, be US flagged and owned by US citizens.
The bill is a direct response to the fact that the Deepwater Horizon drillship, which sunk after the April 20 blowout of BP's Macondo well in the Gulf of Mexico, was owned by Transocean, a Swiss company, and registered as a vessel in the Marshall Islands.
The US Coast Guard, which has broad authority over inspecting US vessels, has more limited authority over foreign-flagged vessels.
"It's a foreign-flag operation operating in the United States with the Coast Guard's hands tied to inspect this vessel," Committee Chairman James Oberstar, Democrat-Minnesota, said of the Deepwater Horizon.
The requirement that only US drilling rigs be used in the OCS would take effect in 2011, if the bill becomes law.
The bill would also greatly expand the jurisdiction of the Coast Guard over offshore drilling, including signing off on oil response plans and inspecting drilling vessels.
"When we are going to have the Coast Guard responsible for overseeing the cleanup of this mess, they need to be involved in the process of developing the emergency plans they will be responsible for," Representative Elijah Cummings, Democrat-Maryland, said.
But that provision brought objections from Representative Nick Rahall, Democrat-West Virginia, who chairs the House Natural Resources Committee.
Rahall, whose committee will have to consider the bill before it heads to the full House, said giving the Coast Guard added authority over offshore drilling conflicts with current law that vests that authority in the Interior Department.
The bill would also eliminate liability limits for economic damages and expand a responsible party's obligations to include reimbursing people whose bodily and mental health were harmed by a spill. Current law caps liability for economic damage at $75 million and does not include claims for diseases or mental health problems linked to the spill.
It would also significantly increase the amount of insurance a company must have before being allowed to drill offshore. Current law requires a minimum amount of financial responsibility, either insurance or self insurance, of $10 million, with a maximum of $150 million for an offshore facility deemed to be of high risk.
The bill would boost the minimum level of financial responsibility to $1.5 billion and would allow the president to increase that amount if he sees fit.
A loophole being used by Transocean to limit its financial liability would also be eliminated by the bill. An 1851 act limits the liability of a shipowner. Transocean has petitioned a court to invoke the act and limit its liability to $27 million. The bill would repeal the limit retroactively.
Requirements that single-hull tankers be converted or replaced with double-hull tankers would be accelerated. Single-hull tankers are still allowed to transport oil to the Louisiana Offshore Oil Port and to lightering areas off the coast until January 1, 2015. The bill would push up the deadline for converting to double-hull tankers operating in the LOOP to January 1, 2011.
The bill would also require the Environmental Protection Agency to rank dispersants used to manage oil spills by toxicity and effectiveness. Republicans on the committee objected to a provision that would require companies that make dispersants to reveal the ingredients publicly.
