Both the House and Senate Tuesday rolled out legislation aimed at increasing federal regulation and inspection of oil and natural gas operations in the Outer Continental Shelf (OCS).

The House measure, which is scheduled for debate Friday, combines stand-alone bills adopted by the House Energy and Commerce Committee, House Natural Resources Committee and House Transportation and Infrastructure Committee since the explosion and sinking of the Deepwater Horizon rig off the southern coast of Louisiana in April.

The slimmed-down Senate energy and oil spill legislation, as disclosed last week, will have four principal sections -- BP accountability, rebates to promote natural gas vehicles, $5 billion in incentives for the Home Star energy efficiency program; and a permanent authorization of $900 million annually for the Land and Water Conservation Fund (see Daily GPI, July 23). It also proposes to lift the existing $75 million cap on liability damages related to oil spills; raise the $1 billion liability cap on the Oil Spill Liability Trust Fund to $5 billion; and increase the amount that oil companies are required to pay into the fund to 49 cents/bbl. Climate change is noticeably absent from the measure due to lack of support from Republicans.

Senate Majority Leader Harry Reid (D-NV) said he plans to begin debate Wednesday and will have final votes on Friday. He also signaled that he may pursue a more comprehensive energy bill after the November elections.

After emerging from a bipartisan leadership meeting on Capitol Hill, President Obama said the Senate bill was "an important step in the right direction," but "I want to emphasize it's only the first step. And I intend to keep pushing for broader reform, including climate legislation, because if we've learned anything from the tragedy in the Gulf, it's that our current energy policy is unsustainable."

The 238-page House bill would lift the existing $75 million cap to cover the liability for the BP oil spill and future spills; would bar an operator with a soiled safety record from obtaining leases/permits from the federal government; set minimum requirements for blowout preventers (BOP); require third-party safety certification of BOPs, well designs and cementing programs; and stiffen penalties for violators.

The bill would bar a company from drilling in the federal OCS if it has five times the industry average for willful or repeat worker violations at its oil and gas facilities; has more than 10 fatalities at any facility; or incurs fines of $10 million or more under the Environmental Protection Agency air or water laws within the preceding seven years, according to Roll Call.

Jack Gerard, president of the American Petroleum Institute, complained that Congress was proscribing specifications for BOPs when the investigations into the rig explosion are still ongoing. He also objected to lifting the existing liability cap, saying it would boost insurance rates so high that only the oil and gas giants would be able to operate in the Gulf.

But Transportation Committee Chairman James L. Oberstar (D-MN) said "we've made an adjustment" in the bill so that smaller operators can get insurance.

The former OCS inspection agency, Minerals Management Service, "has been asleep at the switch, spending too much time on the sidelines, and the industry was allowed to write their own rules...We need professional, highly trained safety inspectors who aren't just pushing paper and rubber-stamping what industry is telling them," said Rep. Nick Rahall (D-WV), chairman of the House Natural Resources Committee, at a teleconference Tuesday.

Rahall was one of five chairmen at the briefing, whose committees or subcommittees contributed to the language in the broader House oil spill legislation.

The Deepwater Horizon explosion is a "game changer" in the way the federal government will regulate oil and gas operators in the OCS, he said.

Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, authored the proposal that would prohibit bad actors in federal offshore waters from obtaining future leases. So far this provision would only apply to BP plc, which leased the Deepwater Horizon rig.

He said he also plans to seek "whistle-blower protection" for workers in the OCS as part of the legislation.

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