House Natural Resources Committee Chairman Nick J. Rahall (D-WV) today heralded passage of House Democrats' landmark comprehensive energy package that will facilitate oil and gas development off America's shorelines, making roughly 85 percent of all oil in the Outer Continental Shelf (OCS) available for production.
The Comprehensive American Energy Security and Consumer Protection Act (H.R 6899) would provide for increased oil and gas development, while protecting the financial interests of American citizens in the leasing of federal resources and safeguarding the environment. Under the measure, the Congressional moratorium that has been in place since 1982 on offshore oil and gas leasing in federal waters, with the exception of portions of the Gulf of Mexico, will be no more.
"The difference is clear between those of us supporting this measure, and some of those on the other side of the aisle who have been trumpeting their bumper sticker drill here, drill now' approach to our serious energy situation," Rahall said. "We, instead, will protect America's interest in American resources, demand that the American taxpayer gets a fair return, and ensure America's transition to a stronger, more reliable domestic energy future."
Among its provisions, H.R. 6899 would open the OCS to drilling from 100 miles out along the Atlantic and Pacific coasts. It also gives states an "opt-in" to allow leasing off their shores between 50 miles and 100 miles out. The Act clarifies that federal oil and gas leases must be diligently developed, subject to the promulgation of regulations by the Secretary of the Interior, and promotes increased domestic oil production in the National Petroleum Reserve in Alaska.
The measure would retain an existing prohibition on drilling in an area of the Eastern Gulf of Mexico until 2022; permanently withdraw all national marine monuments and national marine sanctuaries from leasing; require that leasing activities protect the coastal, marine, and human environment; and protect national defense areas, per an existing Memorandum of Agreement between the Defense Department and the Interior Department. H.R. 6899 also includes requirements that American' made goods are used and that American citizens - rather than foreign nationals and illegal aliens - are employed in OCS development, and encourages the Interior Secretary to promote diversity and equal opportunity in the awarding of contracts in these coastal waters.
"Opponents of this bill would rather sacrifice America's energy security on the altar of Big Oil's profits and its profiteering. Instead, we are opening up to 400 million acres off the Atlantic and Pacific coasts to drilling and expanding the availability of oil by at least 2 billion barrels. And we have done so in a balanced, reasonable, and responsible manner," Rahall said.
In promoting fiscal accountability, the Act would impose a fee on holders of the royalty-free 1998-99 leases unless companies agree to renegotiate those leases to include royalties - a notion long championed by Rahall. In turn, the recapture of those lost revenues - estimated at upwards of $6 billion - would be used to establish a fund, known as the Strategic Energy Efficiency and Renewable Reserve, to promote renewable energy resources and alternative fuels, promote new energy technologies such as carbon capture and sequestration, improve energy efficiency and conservation, and provide home heating assistance to low income families under LIHEAP.
To address startling revelations unveiled this week by government regulators over "a culture of ethical failure" involving Interior Department employees charged with collecting federal oil and gas royalties, the legislation takes aggressive steps to crack down on extreme misconduct at the agency that has undermined its duty to collect royalties owed the American people.
"This legislation contains bold initiatives to crack down on this culture of ethical failure and legacy of abuse that pervades the MMS royalty collection system," Rahall said.
These important provisions would:
* Allow royalties to be taken in kind only if the Interior Secretary determines that doing so is consistent with the fiduciary responsibilities of the federal government on behalf of the American people.
* Advance ethics reform within the office of the Royalty-in-Kind program, including the establishment of fines and penalties for ethical lapses, a permanent ban on gifts, a code of ethics, and random drug testing to employees of the federal royalty program.
* Require that federal oil and gas lessees make prompt, transparent, and accurate royalty payments.
H.R. 6899 was introduced by Rahall, Rep. Gene Green (D-TX), and Rep. George Miller (D-CA).