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Restructuring of Offshore Oil and Gas Regulation

Guest Kendra Barkoff

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Guest Kendra Barkoff

Michael R. Bromwich, the former Department of Justice Inspector General who now leads Interior Department reform initiatives to strengthen oversight and policing of offshore oil and gas development, today announced that he will establish an investigations and review unit that will help to expedite his oversight, enforcement and re-organization mandates.


“The new unit will provide us the capacity to investigate allegations of misconduct, to provide unified and coordinated monitoring of compliance with laws and regulations, and to respond swiftly to emerging and urgent issues on a Bureau-wide level and in the industry,” said Bromwich, who is the director of the newly established Bureau of Ocean Energy Management, Regulation and Enforcement (Bureau of Ocean Energy or “BOE”). The new Bureau, established by Secretarial Order, replaced the former Minerals Management Service which was responsible for overseeing oil and gas development on the U.S. Outer Continental Shelf.


“In light of the response to the Deepwater Horizon disaster, the impending reorganization of Interior’s offshore oil and gas management and enforcement missions and the new Bureau’s mandate to implement broad reforms, it is critical that we have an internal compliance and investigations team that can act quickly and report directly to me,” Bromwich said.


The unit would have the following functions and capabilities.


Investigation of allegations of misconduct. A key component to reforming the Bureau is establishing the ability to promptly respond to allegations or evidence of misconduct by Bureau employees as well as by members of industry. This will empower the Bureau to deal with some of its internal problems swiftly and effectively.


This capacity is intended, and will be designed, as a complement to the work of the Interior Department Inspector General’s office. The unit will coordinate with the IG’s office on matters it investigates, will pursue investigations with the IG’s consent and knowledge, and will advise the IG of the status and results of its investigations. The new team also will be responsible for overseeing and coordinating the Bureau’s internal auditing, regulatory oversight and enforcement systems.


Response to high priority issues. The compliance and monitoring unit will provide the Bureau with the ability to respond quickly to emerging issues and major events. The unit will be responsible for swiftly responding to and assessing significant incidents, including spills, accidents, and other matters. The unit will have a role in immediately coordinating and managing the Bureau’s response to significant events.


Implementing the re-organization. The planned re-organization will be a major undertaking, conducted under a strict timetable that will involve, among other things, maintaining clear lines of communication among Bureau personnel and outside consultants responsible for implementing the re-organization; coordinating the collection and transfer of significant volumes of data and information; and process management. The team will support project managers in providing centralized planning, coordination, and oversight capacity in connection with the implementation of the re-organization.

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Secretary of the Interior Ken Salazar swore-in former Justice Department Inspector General Michael Bromwich to lead reforms that will strengthen oversight and policing of offshore oil and gas development.


Bromwich will oversee the fundamental restructuring of the former Minerals Management Service, which was responsible for overseeing oil and gas development on the Outer Continental Shelf. A Secretarial Order that Salazar has signed renames the Minerals Management Service the Bureau of Ocean Energy Management, Regulation and Enforcement (“Bureau of Ocean Energy” or “BOE”) as it undergoes reorganization and reform.


“Michael Bromwich has a strong track record of reforming the way organizations work, both in the public and private sectors,” Salazar said. “He will be a key part of our team as we continue to change the way the Department of the Interior does business, help our nation transition to a clean energy future, and lead the reforms that will raise the bar for offshore oil and gas operations.”


“The BP oil spill has underscored the need for stronger oversight of offshore oil and gas operations, more tools and resources for aggressive enforcement, and a more effective structure for the agency that holds companies accountable,” said Bromwich. “We will move quickly and responsibly on our reforms.”


The Secretarial Order renaming MMS as the Bureau of Ocean Energy is one of several organizational reforms that Bromwich will lead. Bromwich is working with Assistant Secretary for Land and Minerals Wilma Lewis; Assistant Secretary for Policy; Management and Budget Rhea Suh; and Senior Advisor Chris Henderson on the implementation program for restructuring of the agency’s oil and gas management missions.


Bromwich served as Inspector General for the Department of Justice from 1994 to 1999 and oversaw numerous high-profile investigations including the misconduct in the FBI laboratory and the FBI’s involvement in the Aldrich Ames case.


He has also served as an assistant U.S. attorney in the U.S. Attorney’s Office for the Southern District of New York from 1983 to 1987 and as an associate counsel in the Office of the Independent Counsel during Iran-Contra investigation from 1987 to 1989.


As a partner with the law firm of Fried, Frank, Harris, Shriver & Jacobson since 1999, Bromwich has specialized in conducting internal investigations for private companies and other organizations; providing monitoring and oversight services in connection with public and private litigation and government enforcement actions; and representing institutions and individuals in white-collar criminal and regulatory matters.


Since May 28, Bureau of Land Management Director Bob Abbey has been serving as Interim Acting Director of the Minerals Management Service. Abbey will return to serving as full-time director of the BLM.


As a lawyer in private practice, Bromwich conducted many major internal investigations for companies, both publicly traded and privately held, in the energy, pharmaceuticals, public accounting, and private security industries, among others; reviewed the compliance programs and policies of major companies in a variety of industries, conducted extensive field reviews of such programs and made recommendations for their improvement; and represented companies and individuals in state and federal criminal investigations.


In 2002 the Department of Justice and the District of Columbia selected Bromwich to serve as the Independent Monitor for the District of Columbia’s Metropolitan Police Department, focusing on use of force, civil rights integrity, internal misconduct, and training issues. He served in that position until 2008 when the department was determined to have achieved substantial compliance.


In 2007, Bromwich was selected by the City of Houston to undertake a comprehensive investigation of the Houston Police Department Crime Lab. The investigation identified serious problems in some of the crime lab’s operations, and Bromwich made recommendations for the lab’s improvement.


A 1976 graduate of Harvard, Bromwich received a JD from Harvard Law School and a Masters degree in public policy from the university’s John F. Kennedy School of Government.


Over the last several weeks, Secretary Salazar has continued his agenda to change how the Department of the Interior does business, including launching several reforms to the management and oversight of offshore energy operations.


Recent reforms include:


· Moving to divide MMS’s three separate and conflicting missions into three separate entities - the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resource Revenue to improve the oversight of offshore energy development;


· Issuing a directive to all oil and gas lessees and operators on the Outer Continental Shelf implementing stronger safety requirements that Salazar recommended in his 30-day safety report to the President;


· Issuing a directive to all oil and gas lessees and operators on the Outer Continental Shelf strengthening blowout prevention requirements; and


· Ordering a six-month moratorium on deepwater drilling in the gulf to give the industry time to implement new safety requirements and to allow the Presidential Commission to complete its work on the Deepwater Horizon spill.

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Guest Common Cause

As the debate over how to best regulate Big Oil and develop a sustainable energy policy intensifies - we need to expose how corporate campaign cash and lobbying can lead to public policy failures.


• Since 2000, Big Energy has given more than $111 million to the members of five congressional panels assigned to oversee the industry.


• For each day that Congress has been in session this year, the energy industry has spent $2.6 million a day on lobbying.


• More than 300 lobbyists now working for oil and gas interests have previously worked for federal agencies or Congress - giving them special access to regulators and lawmakers.

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U.S. Senate Republican Leader Mitch McConnell made the following remarks on the Senate floor Wednesday regarding the proposed energy bill and the gulf oil spill:


"Yesterday, President Obama invited a group of senators down to the White House to talk about the kind of energy bill he’d like Congress to pass sometime this summer.


"The first thing we heard about this meeting is that the President said it was not a meeting about the oil spill. Let me say that again — the President said the purpose of this meeting was not to discuss the ongoing crisis in the Gulf of Mexico, where up to 60,000 barrels of oil are spewing into the Gulf waters each and every day, and which have been for 72 days now.


“Senator Alexander had to raise the issue himself — only to be dismissed by the President. Well, I’m sure that will be of great comfort to the people of the Gulf Coast. When the President called senators to the White House to talk about energy, I’m sure most people in the Gulf thought the crisis down there would at least be a topic of discussion. Evidently, they were wrong.


“The second thing we heard about the meeting is that the President made what was described as a `very passionate’ argument in favor of `putting a price on carbon.’ This, of course, is code for the new national energy tax commonly referred to around here as cap and trade.


“This is what the meeting was really about. And those of us who said that this is also what the President was talking about in his Oval office speech a couple weeks ago were right: when the President urged Americans to view the Gulf oil spill as a reason to embrace his vision of energy consumption in this country, he was talking about giving government vast new powers over industry and over the everyday lives of Americans through a new national energy tax.


“In other words, at a moment when the American people were hoping to hear about what the White House was doing to fix the oil leak in the Gulf, the President was using that moment to prepare the ground for yet another piece of legislation that would expand the reach of government — and which would do absolutely nothing to solve the crisis at hand.


“The leak still isn’t fixed. For more than two months, this pipe has gushed oil into the Gulf, polluting our waters and our beaches, wreaking havoc on the lives and livelihoods of millions along the Gulf. I think it’s most people’s view that the left-wing wish-list can wait. Fixing this immediate problem should be the top priority right now.


“One of the President’s senior advisors said the other day that when the President was elected, he had to deal with problems that had been put off for too long. But the administration needs to solve the most urgent problems first — and the most urgent problem is not a new national energy tax, it’s the crisis in the Gulf.


“Former President Clinton had it right the other day. He said the federal government’s position on this issue ought to be very straightforward — the most important thing, he said, is to fix the leak. The second most important thing is to keep oil away from the shores. The third most important thing is to minimize the damage from the oil that reaches the shores. And the fourth most important thing is to find out who did what wrong — at BP and in the federal government — and to hold them accountable.


“But the first thing is to fix the leak.”

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White House Press Briefing by Press Secretary Robert Gibbs, 6/29/10


Q And on climate change today, after the meeting the statement said that the President was open to other approaches aside from putting a price on carbon to get several different goals like reducing U.S. dependence on foreign oil. What other approaches would he be open to specifically?


MR. GIBBS: Well, look, I don't want to narrow or open up our legislative bidding from up here. The President reiterated his position that putting a price on carbon, he believes, is the right policy. I think science has shown why that's important. I do think that you had a bipartisan group of legislators here who understand the need to move this legislation forward and get something done this year. And I think the President was hopeful after that meeting that we can find common ground on a lot of different subjects.


Q And does he think that the legislation can be passed this year?




Q On energy, can you make an argument that you can price carbon without it looking like -- without it being a tax?


MR. GIBBS: Yes. I mean, obviously there are a number of different ways that you can -- and I’m not an expert on all of the different proposals that are in front of the Senate right now in terms of how -- of how one -- each of the proposals and how they do it. I will say this, Chuck, we understand that -- and the President has met with a countless number of CEOs over the past many months that discussed the need for greater certainty in how they do business that have advocated this type of approach.


So obviously there are a number of different ways to do it. I think the President felt encouraged by the meeting in trying to move all of these proposals forward.


Q Ahead of the energy meeting today, the White House said that the goal was to find -- figure out where the common ground was on energy legislation. Afterwards Senators Lieberman and Kerry said that there was consensus to do a price on carbon, though perhaps not economy-wide, but modified in some version. Is that also the White House view of where the consensus was, and is that where you think this is headed now?


MR. GIBBS: I don’t -- look, obviously Senator Reid is going to figure out the vehicle that moves in the Senate. I wouldn’t disagree, obviously, with what Senators Kerry and Lieberman said as some of their takeaway from that meeting.


Q So, I mean, was that the takeaway from the White House’s point of view that this is where the consensus is?


MR. GIBBS: Again, I think that’s -- look, I think many people can take many different things away. I think one of the things the President took away was the encouraging notion that we can move forward and get something done this year.


Q Thanks. When the senators came out of the energy meeting today, I believe it was Senator Lieberman who talked about the President’s belief that this legislation should be the legislative vehicle for all of the -- for some of the BP stuff or all of the BP stuff. Can you just clarify what oil -- what BP-related stuff would be on the energy bill and what you’re willing to separate?


MR. GIBBS: Let me -- I did not hear that portion of Senator Lieberman’s thing, but let me find out.


Q It’s hard to ask follow-up questions in the atmosphere.


Q Can you at least tell us what the President said in that meeting about BP?


MR. GIBBS: I was not in the meeting, but, again, I will clarify what part of -- whether energy legislation that will move through the Senate, I think you’re asking me is the vehicle for some of the changes that we have sent up and some changes obviously proposed by others in dealing with --


Q Is the effort to link it so that people feel obliged to vote for it, or are there some things you’re willing to separate because they need to be passed --


MR. GIBBS: Well, look, on a number of occasions there have been -- Senator Menendez has on a number of occasions brought up lifting the liability cap, which obviously we’re -- we’ve made significant progress on with the BP escrow account. But there certainly have been attempts at doing this in a standalone way or doing this as an amendment to a piece of legislation that’s being considered.


Q It sounded like he was talking about -- like he knew something. I just wasn’t clear what --


MR. GIBBS: Let me check with those guys.



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The AP is reporting 23,500 oil wells have been permanently abandoned. Another 3,500 are classified by federal regulators as "temporarily abandoned," but some have been left that way since the 1950s, without the full safeguards of permanent abandonment.


Read the Story



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Guest American4Progress

Last month, a proposal by Sen. Bernie Sanders (I-VT) that would have cut $35 billion in taxpayer subsidies to Big Oil companies was soundly defeated in the Senate by a 35-61 vote, with every Republican and 21 Democrats voting against it. "Twenty-two percent of the children in this country live in poverty, we have record-breaking deficits, we have a $13 trillion national debt, and Exxon-Mobil receives $156 million in a tax refund after making $19 billion in profit," Sanders said at the time. Indeed, due to a series of tax expenditures (spending programs that are administered through the tax code) and other favorable tax treatment, billions of taxpayer dollars are transferred to an oil industry that has made record profits in recent years and whose product pollutes the environment and can cause catastrophes like the ongoing spill in the Gulf of Mexico. These subsidies are nothing more than corporate giveaways, and cutting them would have a negligible effect on domestic oil production or the wider economy. "Profitable and powerful oil companies, such as BP and ExxonMobil, pay lobbyists millions of dollars to scare lawmakers into believing that ending subsidies to oil companies will wreak havoc on the American economy," wrote Center for American Progress Senior Policy Analyst Sima Gandhi. "The evidence suggests otherwise."


SAVING TAXPAYER DOLLARS: As the New York Times reported, "an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process." In fact, there are at least nine different subsidies that the U.S. government gives to the oil industry, including refunds for drilling costs and refunds to cover the cost of searching for oil. And this occurs despite the massive profits that oil companies have reaped in recent years, with ExxonMobil breaking and then re-breaking the record for most profitable company in history. Oil companies can even apply one subsidy to the cost of tertiary injectants -- which increase the amount of oil that can be extracted from a well -- essentially "giv[ing] companies government money for acting in ways that will enhance their profits." BP, which is responsible for the spill in the Gulf, was able to write off 70 percent of the rent it paid for the failed Deepwater Horizon rig, saving it hundreds of thousands of dollars per day (while the company that owned the rig, Transocean, was simultaneously using tax havens to avoid U.S. corporate taxes). "The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant," said Sen. Robert Menendez (D-NJ), who has introduced The Close Big Oil Tax Loopholes Act, "which would eliminate nearly $20 billion worth of big oil tax subsidies." If all tax subsidies for the oil industry were discarded, the government would save $45 billion over ten years.


NO DROP IN PRODUCTION: The oil industry often argues that cutting subsidies would result in a drop in domestic oil production, thus raising costs for customers and causing the loss of oil-related jobs. However, according to the Office of Economic Policy at the Department of Treasury, cutting the subsidies would affect domestic production by less than one-half of one percent. In fact, the United States produces about the same amount of oil now that it produced in the 1950s, despite billions in subsidies that were handed out over the past 30 years. As for prices at the pump, the Joint Economic Committee looked at one particular tax subsidy -- which was intended to preserve U.S. manufacturing jobs but is continually claimed by oil and gas companies -- and found that, "In the long run, the removal or modification of the tax deduction is unlikely to have any effect on consumer prices for oil and gas." Job loss from removing the subsidies is also likely to be minimal, since there would be little change in production. Even President George W. Bush, a former oil man himself, noted in 2005 that oil industry profits, not subsidies, drive company behavior and investment. "With $55 oil we don't need incentives to the oil and gas companies to explore. There are plenty of incentives," he said.


BIG OIL'S LOBBYING: Big Oil, of course, is using a phalanx of lobbyists to ensure that its subsidies keeps flowing, with the American Petroleum Institute launching a series of ads portraying the removal of them as increased energy taxes. "What would new taxes on oil and gas mean to to you?" one ad asks, followed by a woman who answers, "Well, I'm against it because it would really hurt our economy." "It's to try to tell a story that energy consumers will be harmed," said Adele Morris, policy director for climate and energy economics at the Brookings Institution. According to the New York Times, the oil industry has spent $340 million over the past two years lobbying against cuts to subsidies. However, as a new report from Citizens for Tax Justice pointed out, Big Oil's tax breaks "serve only to boost profits for their shareholders," and don't go towards lower consumer prices or more investment in energy. "In fact, in the top five oil companies, managers direct most of their excess cash to dividends and stock repurchases, both of which drive up the companies' share prices and the executives' stock option values," the report states. "There is no evidence that the additional profits lead the companies to explore for more oil so that they can increase the supply. Nor does the current tax treatment of oil and gas companies encourage them to develop alternative energy." The Senate can halt these taxpayer handouts to Big Oil by repealing them as part of a comprehensive energy bill, and the savings can fund incentives for clean energy technologies.

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  • 2 weeks later...
Guest Maggie

Senate Must Act Now on Oil and Clean Energy


Washington, DC – In response to an announcement by Majority Leader Harry Reid that the Senate will move a limited package of oil disaster response and energy measures to the floor, the Sierra Club issues the following statement.


Statement of Michael Brune, Sierra Club Executive Director


“Given the unfortunate political reality in Washington today, it is absolutely imperative that the Senate must at least follow through with Majority Leader Reid's proposal to pass a bill that reduces oil dependence and creates clean energy jobs before the August recess.


It's an outrage that corporate polluters can rely on a minority of Senators to block action to put a price on carbon pollution when conservationists, labor, veterans, communities of faith, small businesses and everyday citizens all agree it's the right thing to do. We remain strongly supportive of legislation to reduce global warming pollution and urge the Senate to move on it as quickly as possible, but the Senate must at least pass an oil disaster response and clean energy package now.


The Sierra Club will do everything in its power during this fall's elections to make sure that our environmental champions can return to Congress with a demand to finish the job with more legislation to create more jobs, less pollution and greater security. And we will hold accountable those who have blocked efforts to reduce pollution and create clean energy jobs.


The Sierra Club believes an energy package for this July must reduce oil consumption and address the root causes of the BP oil disaster--Senator Merkley's proposal to cut oil consumption by 8 million barrels a day would be a good place to start. In addition, the bill must ensure that BP and future polluters are held fully responsible for the cost of damage and clean up for such disasters. The bill should include a strong Renewable Electricity Standard, and investments in clean energy and efficiency that will create jobs and spur economic growth, as well as measures to significantly reduce carbon pollution.


We remain deeply concerned about efforts by polluters to weaken the Clean Air Act or the EPA's ability to reduce air pollution and protect public health. The Senate’s negotiations with industry must not result in give-aways to dirty energy companies at the expense of communities’ health and well-being.”

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Guest Maggie

In response to the introduction of BP accountability and energy packages in both the House and the Senate today, the Sierra Club issues the following statement.


Statement of Michael Brune, Sierra Club Executive Director


"The Sierra Club supports today's action by Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi to respond to the BP disaster, reduce oil dependence, and create clean energy jobs.


It is imperative that Congress pass the two bills put forth by Majority Leader Reid and Speaker Pelosi before the August recess so we can invest more deeply in energy efficiency and hold BP and future polluters fully responsible for the cost of damage and clean-up of their environmental disasters.


The Sierra Club strongly supports the current legislation's focus on cleaning up and regulating the oil and gas industry through MMS reform and the House Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act. These bills will strengthen industry safety standards and prevent future catastrophes like the BP disaster. We also support provisions to fully fund the Land and Water Conservation Fund and use a small portion of drilling revenues to benefit communities, ecosystems, and economies, and aid in the Gulf recovery.


We remain very supportive of legislation to protect public health and reduce global warming pollution. Though the bills introduced today are not a substitute for a bold and comprehensive plan to increase the supply of clean energy and to break America’s oil addiction - if passed, they will begin reducing oil consumption and carbon pollution through incentives in the Senate bill for natural gas-powered trucks. And the Senate inclusion of the HOME STAR program that rewards homeowners for purchasing energy-saving fittings for their homes will also create tens of thousands of badly needed jobs.


These bills are a small but important down payment to reduce America's oil consumption. And in the wake of the largest environmental disaster in American history and with news of two oil accidents today, it is essential that Congress make further progress this fall with a strong, clear plan to get off oil and scale up clean energy."

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ENERGY AND NATIONAL SECURITY -- (Senate - July 30, 2010)


Mr. VOINOVICH. Mr. President, I come to the floor today to support the Oil Spill Response Improvement Act of 2010. It is a bill that seeks to directly deal with one of the most serious issues facing our country today in the aftermath of the Deepwater Horizon incident and how the Federal Government responds to what will likely turn out to be one of the worst ecological disasters that have taken place off our Nation's shores.


The bill is a targeted piece of legislation that supports jobs in the gulf coast region, prevents our Nation from relying further on foreign nations for our energy needs, and protects the American taxpayer from being placed on the hook should, God forbid, a future incident ever occur. Specifically, the bill gives the President the ability to raise caps on economic damages done by oil companies. It creates a Price-Anderson model where all entities operating in the gulf would share the risk, as we do with the 104 nuclear powerplants. I don't think the public is aware of the fact that they all have the same insurance policy, and if something were to go wrong with one nuclear powerplant, all the others' insurance would be called upon. So there is no question about liability; they just take care of the problem. We need to do the same thing in terms of these oil rigs.


The legislation maintains the integrity of the Oil Spill Liability Trust Fund. It provides States an additional funding system to be used to protect the ecosystem. It accelerates the lifting of the deepwater moratorium in the Gulf of Mexico. It creates a bipartisan spill commission with subpoena power to investigate causes of the Deepwater Horizon explosion. These are good ideas that I think will address the crisis at hand. They are good ideas that will help get people back to work in the gulf.


I know Senator Reid has proposed an alternative piece of legislation. I understand that it maintains the current moratorium on deepwater drilling off the Outer Continental Shelf, creates a liability regime that will likely limit production in the Gulf of Mexico to only the largest of oil companies, and raises the Oil Spill Liability Trust Fund to pay for untested efficiency programs.


I welcome a robust debate, but looking at the schedule next week, my understanding is that the majority leader will likely fill the tree and not allow any amendments. So what we are probably going to see is a Republican-Democratic side-by-side taken care of in 1 day. To be candid, this is a much too serious issue to cram into 1 day with just side-by-side proposals. And I think that gives rise, for those watching what we are doing here in the Senate, to some feeling that what we are doing here is not genuine, is disingenuous and, quite frankly, if we do this next week, I think what it will do is further cause the public to think less of the institution of the Senate.


Regardless of whether you are a Republican or a Democrat, you ought to be concerned about the fact that since polling has been done regarding the approval of the Senate, the numbers today are the worst we have ever seen. So something is going on out there, and they are watching what we are doing and they are saying: These people seem to be more interested in partisan politics or who is going to win the next election in terms of how many new Senators or who is going to control the House of Representatives instead of really looking at the problems confronting our country. They are asking: Can't you people work together on a bipartisan basis to solve the problems we have? There is a fear and uncertainty today in this country that I have never seen anything like, and I think all of us should be concerned about how the people in this country feel about what we are doing here.


Whether you are a Democrat or a Republican, environmental advocate, oil industry employee, I think all should agree that Congress needs to respond intelligently to the situation with action that balances environmental risks with our Nation's energy requirements.


Much of the responsibility for this spill should lie on the shoulders of a few bad actors in the private sector, and they are primarily with BP. I have to say, from my looking at this, there is gross negligence. It is amazing what they knew about and didn't do, and I think that will all come out, although I imagine there is going to be enough blame to go around once we have had a chance to step back and see just what happened.


I must also say that I think the decisions this administration has made, not only in reacting to the spill but also in its general attitude toward domestic oil and gas production, have been disastrous for the gulf region.


Last year, I sat down in my office with Secretary Ken Salazar to talk about domestic oil and gas production and our Nation's energy strategy. In that meeting, I conveyed to him that I have always believed one of the most pressing challenges America faces today is reducing our reliance on foreign sources of energy. I called it the second declaration of independence--finding more oil and using less. I told Secretary Salazar that I was concerned about the administration's actions that were limiting energy production in the United States.


He disagreed with me. Secretary Salazar said the Department was in the process of restructuring and undergoing a thorough review to ensure proper oversight of the oil and gas industry was being provided. He pointed out that the Department was moving forward with lease sales in the Atlantic and that, in his opinion, things were just fine. I took him at his word and waited but didn't see any change in the Department's attitude.


I sent a letter to the Secretary on April 19, 2010--April 19--reiterating my concern that his Department was ignoring its obligations to oversee domestic oil and gas development and focusing too much of its attention and resources on renewed efforts to promote renewable energy projects that make good photo-ops but would have little effect in meeting our Nation's long-term energy needs.


I expressed further concern that efforts to lease areas of the Outer Continental Shelf for oil and gas production were being restricted. For example, in November of 2009, the Department of the Interior acted to shorten the lease terms for a specific sale of leases in the Gulf of Mexico. The shortening of the lease terms will likely do nothing to guarantee more discoveries but, rather, serve to increase risk as companies are rushed to complete production before the expiration of their lease.


Three months later, I have yet to receive an answer to my letter. And this is particularly disappointing to me because I consider Secretary Salazar--a former colleague--a friend, and I have always respected him.


Mr. President, I ask unanimous consent to have printed in the Record the letter I sent to Secretary Salazar.


There being no objection, the material was ordered to be printed in the RECORD, as follows:




Washington, DC, April 29, 2010.


Secretary, U.S. Department of the Interior,

Washington, DC.


DEAR SECRETARY SALAZAR: I believe one of the most pressing challenges America faces today is reducing our reliance on foreign energy sources and crafting a comprehensive national energy policy for the United States that makes use of every energy resource at our disposal. It is critical that we improve our energy security to increase our competitiveness in this growing global marketplace and improve our national security.


As the Secretary of the Interior, you play an instrumental role in implementing energy policy. And your department should be applauded for its work in managing the nearly 8,000 active onshore leases and the over 55,000 active offshore leases, for its successful lease sales in 2009, and for scheduling additional Federal oil and gas lease sales for 2010.


I am concerned however, by your comments that the Department of Interior is moving adequately to promote domestic production of oil and natural gas, and your efforts to ``balance'' the federal government's procedures dealing with the leasing of federal lands for energy production. I know that you are sincere when you say that you are trying to find an approach to managing the nation's natural resources that provides the protection necessary to ensure that we are not sacrificing irreplaceable natural treasures while allowing for the safe and responsible production needed to address future energy needs. But from what I have witnessed and from what I have gathered from accounts conveyed me, I am troubled that DOI is coming across as being more concerned with catering to the political whims of the environmental community.


Some have argued that unlike the attention being paid to renewable energy projects, government action that would promote increased domestic oil and natural gas production is getting neglected. I am of the opinion that there is no silver bullet when it comes to meeting future energy needs. We are going to need a wide portfolio of energy options that include different sets of technologies and solutions. As such, no particular energy option should receive preferential treatment on the basis of its constituencies. But neither should the domestic production of a reliable and abundant energy source, such as oil, natural gas, or coal, be curtailed for the same reasons.


I was encouraged by the President's announcement to consider expanding oil and gas production on the U.S. Outer Continental Shelf. This is a good first step, but there are still large areas both in Pacific and Atlantic that would remain off-limits to exploration. Further, much of the Eastern Gulf of Mexico remains under a congressional moratorium until 2022.


While steps are being taken to expand domestic offshore oil and gas production, I must tell you I have concerns that as DOI works to schedule lease sales in the select areas that have been released from moratoria, progress could very easily be stalled completely by external roadblocks such as lawsuits from the environmental community. This is a strategy that groups have successfully utilized to halt the construction of coal fired power plants. I hope the Administration and with your leadership at DOI will follow through with this proposal and expand our domestic oil and gas resources.


Additionally, your department is taking unilateral action that could be construed as making more difficult for oil gas production to take place domestically. For example, last November DOI acted to shorten the lease terms of an upcoming Central Gulf of Mexico lease sale. Industry argues that the shortening of the lease terms does nothing to guarantee more discoveries but rather takes away from companies the flexibility necessary to operate in an extremely challenging and risky environment.


I continue to value our friendship and will work with you as we both seek to achieve energy security, the creation of jobs, and the rebuilding of our economy. I am optimistic that we can bridge any differences as we strive to make the United States more energy independent from oil rich foreign countries who do not share our interests.




George V. Voinovich,

United States Senator.


Mr. VOINOVICH. Meanwhile, the Gulf of Mexico is now under a revised moratorium on deepwater offshore drilling imposed by President Obama and the Department of Interior. This moratorium jeopardizes 30 percent of this Nation's domestic oil production and 13 percent of our natural gas production.


There are 33 drilling platforms currently idle in the Gulf of Mexico. That doesn't sound like a large number, but keep in mind that these rigs are really the size of factories. Each platform supports as many as 1,400 direct and indirect jobs, which means that as many as 46,200 jobs could be lost in the short term because of this moratorium. As these are good-paying jobs, this could amount to as much as $10 million in lost wages per month, per platform.


Further, the moratorium threatens the livelihood of more than 300,000 oil and gas workers in the region. The loss of revenue will be in the billions. A 6-month moratorium could result in a $147 billion loss in local, State, and Federal revenue over the next 10 years. Oil and gas production in the Gulf of Mexico is a significant revenue stream for the Federal Government. A moratorium on production that lasts 6 months could cost the Federal Government between $120 million and $150 million in lost royalties and a $300 million to $500 million decline in government revenue in just 2011. That is next year.


This is sure to have a devastating effect on our Nation's long-term national security. I have said over and over that Americans are hurting from our addiction to oil. I am not sure they fully realize the extent to which our national security, and indeed our very way of life, is threatened--threatened--by our reliance on foreign oil.


Every year, we send billions of dollars overseas for oil and pad the coffers of many nations that do not have our best interests at heart, such as Venezuela, whose leader has threatened to cut off his oil exports. Today, over 80 percent of the world's oil reserves are in the hands of governments and their respective national oil companies, and 16 of the world's 20 largest oil companies are state owned. Russia has proven it has no qualms about using energy as a weapon. In Venezuela, Hugo Chavez has forcefully consolidated the nation's vast oil reserves under the control of their state-owned oil company. He frequently uses the company as political leverage in his region.


With the rise in national oil companies around the world and the apparent weaponization of the globe's energy resources, U.S. domestic oil production has been on a decline. We now import nearly 60 percent of our oil, and as a consequence we are sending billions of dollars overseas and putting our faith in the hands of regimes that do not have our best interests at heart. For example, in 2007, we spent $327 billion to import crude oil and refined petroleum products. In 2008, the amount we shipped overseas spiked to more than $700 billion. In other words, we take American money and send it overseas. And 55 percent of that money, or nearly $400 billion, went to oil-exporting OPEC nations. Today, oil amounts for over half our trade deficit.


Our dependence on foreign oil is even made more troubling when you consider our Nation's financial situation. The national debt stands at $13.3 trillion--more than double the $5.6 trillion that existed when I came to the Senate in 1999. By the end of 2010, the national debt is expected to have grown to over $14 trillion. Last year, we borrowed $1.4 trillion.


The best way I can explain the soup we are in is that last year, for every dollar the Federal Government spent, we borrowed 41 cents. Most people, when I tell them that, just can't believe it. But that is the situation. This year, we are going to borrow $1.5 trillion or another year where we will borrow 41 or 42 cents for every dollar we spend.


Over half the privately owned national debt is being held by foreign creditors, mostly foreign central banks. In fact, foreign creditors have provided more than 60 percent of the private funds the U.S. Treasury has borrowed since 2001, according to the Department of Treasury.


Who are the creditors? According to the Treasury Department, the three largest foreign holders of U.S. debt are China, Japan, and the OPEC nations.


These concerns led me to introduce the National Energy Security Act last year with Senator BYRON DORGAN. The bill expands development of domestic oil and natural gas by streamlining the inventory and permitting of the most promising areas of the Outer Continental Shelf. By the way, the group that is supporting this is a group of former admirals and generals who basically said we have to do something; because of the fact of too much reliance on foreign oil we are in terrible shape. We are on thin ice, in terms of our national security.


In addition, the bill provides $50 billion in Federal loan guarantee authority for low-carbon electricity, including nuclear and advanced coal. It promotes the electrification of the transportation fleet to reduce dependence on foreign oil, supports building the crucial infrastructure necessary to create a robust, reliable national grid, and strengthens electricity transmission, including giving FERC the power to site transmission lines.


Americans today demand action and they demand we come together in a bipartisan fashion to solve not only this crisis in the gulf but our larger energy crisis. For 10 years, I have been a member of the Environment and Public Works Committee and for 10 years I have tried to coax Congress into harmonizing our energy, our economy, and our environment. Congress has refused and now the chickens have come home to roost and we are paying the price because we were not able to get together.


I believe the best message we can send the world is that we get it. We must demonstrate that we can safely and responsibly produce oil off our shores, while also promising ourselves that we are going to use less by undertaking a renewed effort to make the United States of America the most oil-independent nation in the world. I envision an America 10 years from now where we can have enough oil to take care of our needs. I imagine an America that is the least reliant country in the world on oil, an America where our economy is not threatened by our reliance on foreign energy sources. It will be an America that has created hundreds of thousands of jobs through responsible development of our Nation's resources and through the creation of new industries in the field of alternative energy.


Wouldn't it be great for our children and grandchildren to one day celebrate the time America put aside its differences and came together to announce what I refer to as a second ``Declaration of Independence''--to find more and use less? I believe, with this attitude, we can rekindle the American spirit of self-reliance, innovation, and creativity to usher in a new era of prosperity.


The first step is to pass the Oil Spill Improvement Act to get people back to work in the gulf and to give the Department of Interior the tools it needs to provide proper oversight of the oil and gas industry. Second, Congress needs to do its job--make the passing of a comprehensive energy bill a priority and provide certainty as to how our Nation will supply energy to its economy in the future.


I reiterate and call upon my colleagues, the majority leader, the minority leader, for us next week to put out the Republican proposal and the Democratic proposal, and to have back-to-back votes will do nothing but increase the cynicism that is out there among the American people about what we are doing in the Senate. Next week, we should finish the small business bill--get on with that. We ought to get on with consideration of the Kagan nomination by the President and we should come together and say let's get serious, let's work during the August break to see if we cannot come together on a compromise between the two back-to-back bills so maybe when we get back in September we can have something we can all agree on and get passed and reassure the American people we are serious about dealing with their problems and maybe even give consideration--I know this would be difficult--to look at what many of us have suggested, to look at the bill that JEFF BINGAMAN and the Senate Energy and Natural Resources Committee put together on a bipartisan basis.


Perhaps we could look at a bill Senator Rockefeller and I have worked on for over a year that deals with capturing and sequestering carbon; to look at a title that deals with nuclear energy that I worked with with Senator Lieberman and others--and get something done. It may not be satisfactory to a lot of the environmental groups, but at least we would move the ball down the field this year so people know we are serious about becoming less reliant on foreign sources of energy and also that we are genuinely concerned about reducing greenhouse gas emissions.


As I said, I have been around here, this is the 12th year on Environment and Public Works. For years, we wanted to do something about NO




X, and carbon, bring down the caps. The environmental groups said: No, we won't agree with that, we have to include greenhouse gas emissions, so we did nothing.


I will never forget the Secretary of State, when she was a Senator from New York, and she wanted a compromise on emissions because the Adirondack Council and the folks from the Smoky Mountains agreed if we did the Ps, reduce SO




X, and mercury, we could move along, and then the environmental groups came along and they gave her the ``Villain of the Month Award.'' Hillary Clinton gets the ``Villain of the Month Award'' because she is trying to work on a compromise to move us down the road.


We have some time left. I know it is going to be difficult because we have the backdrop of the election facing us. I hope once that is over we have a robust lameduck session so we can deal with some of the things that are on the minds of the American people and, hopefully, perhaps this Commission that you and I wanted to see done on the floor of the Senate, that the President finally had to do through Executive action, could come back here with some positive suggestions on how we can deal with our debt and these budgets that are not going to be balanced as far as the eye can see.


I yield the floor.

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