House passes offshore drilling rules

WASHINGTON -- The House approved a bill Friday to boost safety standards for offshore drilling, remove a federal cap on economic liability for oil spills and impose new fees on oil and gas production.

Democratic leaders hailed the bill as a response to the Gulf of Mexico oil spill and said it would increase drilling safety and crack down on oil companies such as BP. Companies with significant workplace safety or environmental violations over the preceding seven years would be banned from new offshore drilling permits.

Republicans and some oil state Democrats opposed the measure, calling it a federal power grab that would raise energy prices and kill thousands of American jobs because of the new fees and liability provision.

Rep. Nick Rahall, D-W.Va., the bill's main sponsor, said the legislation would be a tribute to the 11 oil rig workers who were killed when the Deepwater Horizon exploded April 20 by creating strong new safety standards for offshore drilling, ending the revolving door between government regulators and industry and holding BP and other oil companies accountable for accidents.

"While we may not know the exact cause of the incident, we clearly know what contributed to it. A culture of cozy relationships that had regulators interviewing for jobs on the same rigs they were supposed to be inspecting," Rahall said.

The legislation, which passed 209-193, has yet to be taken up in the Senate, where partisan disagreements likely will delay final consideration of a joint House-Senate bill until after the August congressional recess.

The House bill includes a provision sponsored by Rep. Charlie Melancon, D-La., that would modify a six-month moratorium on deepwater drilling, so that some drilling permits could be approved on a rig-by-rig basis if the Interior Department determines a rig meets new safety requirements. The drilling moratorium imposed by Interior Secretary Ken Salazar would remain in effect, and he would retain power over whether to approve a permit.

The bill also would remove the current $75 million cap on economic damages to be paid by oil companies after major spills and increases to $300 million the financial responsibility offshore operators must demonstrate in most cases. The bill would also create new "conservation" fees on oil and natural gas extracted from land or water controlled by the federal government.

Those provisions prompted sharp criticism from Republicans.

Earlier Friday, the House approved a separate bill to extend whistleblower protections to oil and gas workers who report hazardous conditions or other problems, which would be added to the oil spill legislation when it is sent to the Senate.