The chairman of the Senate Energy and Natural Resources Committee Monday urged Senate Majority Leader Harry Reid (D-NV) to use the committee's proposed oil and natural drilling reforms as the basis for his narrower energy bill that is expected to be taken up this week.

In an article in Roll Call, Sen. Jeff Bingaman (D-NM) said a critical part of the legislation "should be reforms to ensure that energy exploration and production on our nation's Outer Continental Shelf is managed to ensure the safety and protection of the environment."

Reid last Thursday said a prominent issue in his legislation would be offshore drilling safety and either the removal or raising of a producer's cap on liability for economic damages from an offshore oil spill, but he did not go into details (see Daily GPI, July 23).

The Senate energy committee's bill, which was co-written with Sen. Lisa Murkowski (R-AK) and adopted in late June, proposes to restructure the Interior Department's inspection and revenue collection agency into three offices, with two focused on leasing and permitting, and environmental and safety regulations, while a third office would oversee royalty and revenue management. The bill also spells out the guidelines for how future lease sales would be conducted, and sets the parameters for permitting (see Daily GPI, June 22).

In addition, it imposes an inspection fee on operators to pay for well trained inspectors, raises civil and criminal penalties for violators, and keeps the bad actors from bidding on new offshore leases, according to Bingaman.

"This legislation takes important steps to reform the organizations and the principles governing offshore energy production. From more stringent safety requirements to more balancing management of ocean resources, to better research and analysis, to an improved system for inspecting offshore rigs, the bill implements the key changes necessary to manage the Outer Continental Shelf in a responsible way," he said.

"A key goal of the bill was...to prevent future disasters. But the committee sought to do more than just that...It is not a matter of just avoiding a future cascade of failures, like those that led to the Deepwater Horizon disaster. The committee wanted energy operations in the Gulf of Mexico to be of the highest caliber."

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