Despite anger over BP spill, Washington might not act on it

McClatchy NewspapersJuly 30, 2010 

WASHINGTON — As the Gulf of Mexico focuses on cleaning up the mess left by the BP oil spill, the question facing the nation's capital is: Will Washington clean up its act, too?

Congress is considering stricter regulation of oil exploration, and the Obama administration has pledged to overhaul the disgraced federal agency that oversees oil drilling.

Already, however, some of the toughest proposals are facing stiff opposition from Republicans and some Gulf Coast Democrats whose constituents rely on the oil industry for jobs.

The oil industry also is likely to fight the changes. It contributed more than $35 million to federal political candidates and parties in the 2008 election cycle, according to the Center for Responsive Politics, a nonpartisan watchdog group.

For now, though, public anger over the BP disaster runs so high that lawmakers would skirt the issue at their peril.

"It would be foolish for Congress to think that voters don't care about these issues," said Mandy Smithberger, an investigator with the nonprofit Project on Government Oversight. "They might not care about all the logistics, but it's been made extraordinarily clear that our system for overseeing offshore drilling is broken."

Many environmental activists are skeptical, however, that Congress can reach agreement on legislation before adjournment it adjourns for the November elections.

"The biggest impediment to getting bills passed is time," said Marilyn Heiman, director of Offshore Energy Reform for the Pew Environment Group. "There's so much they have to do before recess."

The House Friday approved legislation that includes many of the Democrats' toughest proposals: raising the liability limits on offshore oil rigs and production facilities, making responsible parties liable for 100 percent of oil spill cleanup costs and damages, requiring all rigs drilling off the U.S. coast to adhere to U.S. safety standards; and giving subpoena power to a bipartisan presidential commission that's investigating the BP disaster.

The 209-193 vote fell sharply along party lines, however, with more than two dozen Democrats voting against the bill, an outcome that foreshadows a difficult road ahead in the Senate, where almost nothing can be accomplished without the support of all Democrats and some Republicans.

Senate Republicans already are blasting a stripped-down energy bill that Majority Leader Harry Reid, D-Nev., unveiled this week. The bill would raise the $1 billion liability cap of the Oil Spill Liability Trust Fund to $5 billion and would eliminate the current $75 million liability cap on economic damages from oil spills.

Sen. John Cornyn, R-Texas, said that unlimited liability would drive smaller oil companies out of business, jeopardizing domestic oil production.

"My colleagues will reconsider this misguided approach that will drive independent oil and gas producers out of the Gulf of Mexico by making it responsibly impossible for them to purchase the insurance they need," Cornyn said on the Senate floor Wednesday.

The House of Representatives bill also would extend federal whistleblower protections to offshore oil and gas workers who report safety violations, fraud, abuse and other problems. The current whistleblower laws don't cover these workers.

In the most visible change so far, the Obama administration has renamed the Minerals Management Service — the Interior Department agency whose oversight of offshore drilling is now largely considered a failure — the Bureau of Ocean Energy Management, Regulation and Enforcement.

The House legislation would split the agency into three bureaus to handle lease sales, royalty collections and safety inspections — tasks that were originally all performed by the MMS under a system in which government investigators found gross corruption and misconduct.

Advocates say that divvying up the MMS's responsibilities won't be enough to ensure better oversight. The culture of an agency that has a reputation for coziness with the industry must change, they say, and Interior Secretary Ken Salazar must find civil servants with enough knowledge to regulate the offshore industry effectively. Many of MMS's offshore drilling regulations were drafted by the American Petroleum Institute, the oil industry's major trade group.

"That's going to be a fundamental concern: how can we expect the new MMS . . . to regulate, do safety inspections, permitting, when it's pretty clear that there's a technical and information asymmetry between the industry and the regulatory agency," said Erich Pica, the president of Friends of the Earth, an environmental group. "That's only going to be solved with time and investment."

Michael R. Bromwich, the new director of the renamed MMS, said he plans to create tighter rules to prevent ex-government workers from lobbying the agencies they leave. Currently, 12 former MMS employees work as oil industry lobbyists, according to Rep. Jackie Speier, D-Calif.

Bromwich also said that he's created a new investigations unit in the agency to probe ethical lapses or misconduct among employees.

Experts also say that lawmakers must ensure that MMS employees are better paid — and that there are more of them. Mary Kendall, the Interior Department's acting inspector general, testified before a House committee in June that about 60 inspectors were responsible for covering 4,000 oil production facilities in the Gulf, compared with 10 inspectors for 23 facilities on the Pacific Coast.

Some of the tougher provisions "will almost certainly face . . . hurdles," said John Wonderlich, the policy director for the Sunlight Foundation, a nonprofit group that advocates for transparency in government. "We'll see a continuing, enormous lobbying effort from the energy industry."

The Center for Responsive Politics said that while BP's political action committee has stopped making political contributions — it didn't give a dime to any federal lawmaker in June — the company continues to spend millions on lobbying, and other oil companies are making political contributions at a normal clip.

"The reality is no matter how imperiled BP and the oil industry is, they have a small army of former government officials to lobby on their behalf," said Dave Levinthal, a spokesman for the center.

Aides to President Barack Obama said he'll wait for recommendations from a bipartisan commission — which is expected to file its final report by January — before deciding on further policy changes.

Obama proposed expanding offshore oil drilling three weeks before the Deepwater Horizon explosion, saying in March that he wanted to allow expanded drilling in parts of the Gulf of Mexico and off the Virginia coast.

After the spill, however, Obama's Interior Department reversed itself, ordering a moratorium on new deepwater drilling. When a federal judge overturned that temporary ban, the Obama administration ordered a new one using different language. The new moratorium hasn't been challenged in court.

The moratorium has created sharp divisions even among Democrats, with some lawmakers, led by Louisiana Sen. Mary Landrieu, arguing that the ban would worsen the economic strains on the Gulf region by eliminating a major source of jobs.

The White House announced last week that Obama and his family would spend the Aug. 14 weekend vacationing on the Gulf Coast. Despite a concerted public relations campaign by the White House, however, a Marist College poll in late June found that 57 percent of registered voters said that Obama's handling of the Gulf oil spill was no better than former President George W. Bush's handling of Hurricane Katrina.

"The appearance was that they were slow on the uptake," said Lee M. Miringoff, the director of the Marist College Institute for Public Opinion.

(Steven Thomma and Andrew Seidman contributed to this report.)

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