Begich to Propose Comprehensive Oil Spill Prevention and Response LegislationBills Hold Companies Liable, Increase Research for Arctic Development
To make oil companies legally and financially responsible for oil spills and better prepare the Arctic for future oil and gas development, U.S. Sen. Mark Begich is preparing a package of oil spill legislation for introduction soon.
Begich's bills would make oil companies financially responsible for the cost of oil spills, including the current BP spill in the Gulf of Mexico, would expand scientific research, especially in the Arctic, and provide a steady source of federal funding for additional science and resources needed in the Far North to deal with oil and gas development. His proposals follow a May 18 hearing of the Senate Commerce Committee on the Gulf spill and recommendations from Alaskans.
"As the tragedy in the Gulf continues, it's clear we need to significantly increase our nation's ability to prevent and respond to oil spills," Begich said. "From the testimony in the Commerce Committee, it's sadly apparent the industry was caught flat-footed in their ability to respond to this disaster.
"My legislation takes a comprehensive approach to developing the best oil spill prevention and response capacity in the world," the senator said. "It clearly puts the financial responsibility where it belongs - on the oil companies."
Legislation Begich is finalizing includes:
Hold BP financially responsible for the current Gulf of Mexico spill - The measure would require BP to deposit into an escrow account adequate funds to cover the cost of cleaning up after the current Gulf spill and to compensate those harmed by it. It does so by authorizing the Secretary of the Interior to require companies with outstanding liability from an oil spill to provide an escrow fund which would be tapped to satisfy damage claims resulting from that spill. Companies seeking to develop federal leases or federal contracts in the future would be required to comply.
Increase the financial liability for oil companies - The measure would raise the current $75 million liability for any single spill to a minimum of $200 million. The bill distinguishes between shallow and deepwater wells (more than 500 feet) and would not cap liability for deepwater wells. The measure would also require payment of substantial liability bonds prior to drilling of both exploration and production wells.
Expand oil spill research to support Arctic development - The measure expands a bill Begich introduced last summer (S.1564) to enhance the scientific understanding of the Arctic to ensure safe and responsible development of energy resources there. The bill would authorize up to $50 million a year for Arctic oil spill prevention and response research by federal agencies in cooperation with state, local and private-sector research programs. The research would include a baseline study of existing natural resources and ecologically sensitive areas, research into oil spill response and cleanup needs in Arctic conditions, and a risk assessment to identify existing oil spill prevention and response capabilities.
Dedicate funding for oil spill research and infrastructure - The measure would expand the Oil Spill Liability Trust Fund to raise approximately $75 million annually for oil spill prevention and response research, technology and infrastructure. The funds would come from a modest increase in the per cent levy on each barrel of oil produced in the U.S. and imported to America for domestic consumption. The bill proposes a 1 cent increase in the levy on domestically produced oil and 3 cents on foreign oil imported into and consumed in the U.S. Funds would be used by NOAA, the Coast Guard and states to ensure they have consistent funding to develop and maintain the strongest science and operational capacity to prevent and quickly respond to oil spills.
Provide greater citizen involvement in oil development - The measure would authorize the creation of Regional Citizens Advisory Commissions (RCACs) in areas of offshore oil development modeled on the entities established in Alaska after the Exxon Valdez spill. The commissions, funded by the oil industry, provide a forum for greater citizen involvement in oil development decisions, oversight of spill planning and preparedness, and monitoring of environmental conditions. The Prince William Sound RCAC is an international model for oil spill prevention and oversight that works with industry to ensure the shipment of oil from Alaska is safe and secure.
Begich's office is finalizing the legislation with Senate bill drafters and will be circulating drafts to affected groups and other senators for their review next week.
Posted: June 10, 2010
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