From: Senator Kay Bailey Hutchison [mailto:email@example.com]
Sent: Friday, September 10, 2010 4:11 PM
Subject: Constituent Response From Senator Kay Bailey Hutchison
Thank you for contacting me regarding S. 3663, the Clean Energy Jobs and Oil Accountability Act. I welcome your thoughts and comments.
On July 28, 2010, Senator Harry Reid (D-NV) introduced S. 3663, which is the Majority Leader’s response to the BP oil spill. This 400-page bill was thrown together behind closed doors, with limited amendments and debate. This legislation would have a direct impact on the Gulf Coast region, but none of the Gulf Coast Senators were able to provide input into Senator Reid’s legislation.
According to a recent report by IHS Global Insight, the Gulf of Mexico offshore oil and gas industry employs approximately 400,000 people. The removal of liability caps in our coastal waters has the potential to eliminate thousands of these jobs and result in billions of dollars in lost tax revenues. In fact, many independent producers will no longer be able to operate in American waters and will likely be forced to relocate overseas.
I believe this to be unacceptable, especially because independent oil and gas companies account for nearly half of all oil and gas jobs offshore in the Gulf of Mexico. Independent oil and gas companies were responsible for $10 billion in federal, state and local industry revenue in 2009.
Additionally, this legislation would increase the per barrel tax by nearly 500 percent. Rather than use that additional revenue for its intended purpose of replenishing the Oil Spill Liability Trust Fund, the Majority Leader plans to use the revenues as an offset for other programs. The purpose of the Oil Spill Liability Trust Fund is to provide resources for research and development and response ability. I believe the Majority Leader is robbing this important fund to pay for other unrelated government programs.
This bill falls short of the mark by not removing the administration’s moratorium on new offshore developments. As rigs, production, and well-paying jobs depart our waters for other nations, continuing to implement a drilling moratorium only hurts our economy. Keeping the offshore off limits has increased our need for energy imports and is resulting in a less energy independent United States.
I am a cosponsor of the alternative legislation, S. 3643, the Oil Spill Response Improvement Act, which by contrast, is more responsible and less costly than the Majority Leader’s proposal. S. 3643 starts by addressing the root of the problem: the failures within our offshore regulatory system. The bill increases the strict liability cap for offshore projects through a pragmatic assessment based on risk factors such as water depth and the operator’s safety record. In addition, this proposal strengthens the Coast Guard’s ability to respond to oil spills and establishes a bipartisan approach to preventing a comparable disaster to the Deepwater Horizon disaster. This bill was introduced on July 22, 2010 by Senate Minority Leader Mitch McConnell (R-KY) and has been placed on the Senate Legislative Calendar.
Should the Senate consider this legislation before the 111th Congress adjourns, I will keep your thoughts in mind. I appreciate hearing from you, and I hope that you will not hesitate to contact me on any issue that is important to you.
Kay Bailey Hutchison
United States Senator
284 Russell Senate Office Building
Washington, DC 20510