One would think that, when it comes to the Gulf spill, our top priorities would be as follows: plug the leak, mitigate and clean up the environmental damage, and provide help to those affected by it. But as President Obama indicated in his Oval Office address last Tuesday night, he sees things quite differently.
In his address President Obama found occasion to trumpet his radical cap-and-trade agenda for the nation’s energy sector. He referred approvingly to the disastrous Waxman-Markey cap-and-trade bill, which the House narrowly passed last summer. He sent clear signals that he wants the Senate to pass a “strong and comprehensive clean energy and climate bill,” which are Obama code words for cap-and-trade, mandates, taxes, and bureaucracy.
But the Senate will pass no such legislation, because opposition to it runs deep. The vote on June 10 on Sen. Murkowski’s (R-Alaska) resolution to overturn the Obama EPA’s endangerment finding for greenhouse gases is a case in point. Though it failed, 47 to 53, it became clear as the debate progressed that there is a bipartisan majority in the U.S. Senate that either opposes any EPA greenhouse gas regulation, or wants such regulation delayed for two years. That latter option has been proposed by Sen. Jay Rockefeller (D.-W.Va.), who voted for the Murkowski resolution.
Thus far, at least six Democrats have pledged support for Rockefeller’s two-year delay. Those six Democrats stole victory away from Murkowski, but combined with the 47 ‘yes’ votes on the resolution (six of whom were Democrats), there are 53 members of the Senate who want to stand in EPA’s way. What’s more, these same senators want nothing to do with Obama’s radical cap-and-trade agenda.
That agenda is animated by the philosophy that fossil fuels must be eradicated in the U.S., no matter what the cost. The consequences of such a philosophy, of course, are plain to see. Just ask the hard working men and women in the Gulf’s oil and natural gas industry. Many of them are out of work because of President Obama’s six-month moratorium on deepwater drilling. The Louisiana Department of Economic Development estimates that the President’s active drilling suspension alone will destroy 3,000 to 6,000 Louisiana jobs in the next few weeks and over 10,000 Louisiana jobs in the next few months. More than 20,000 jobs are at risk over the next 12 to 18 months.
The employment situation there is about to get much worse. Sen. Robert Menendez (D.-N.J.), has introduced the “Big Oil Bailout Prevention Act,” which would eliminate the liability cap for economic damages in the Oil Pollution Act. I agree that the cap is too low—but we need to be careful in setting the appropriate limit. What’s clear is that if the Menendez legislation becomes law—and the Democrats are moving furiously to make that happen—a significant amount of oil and gas production in the Gulf of Mexico could be shut down. The only companies that could afford to produce in the wake of Menendez would be, ironically enough, BP and state-owned oil companies, such as China’s National Offshore Oil Corporation.
This is the view of Alliant Insurance, which insures offshore oil and gas operations. As the company wrote: "If the liability cap is increased to the levels we understand are under consideration … in our view only major oil companies and NOC’s (National Oil Companies) will be financially strong enough to continue current exploration and development efforts." Bear in mind that "National Oil Companies" means those that are state-owned, such as China’s National Offshore Oil Corporation.
Alliant is not alone in holding this view. Consider INDECS insurance consultancy: "If we have understood the proposals correctly,” the company wrote recently, “then it would appear to us that the proposed bill will not act as ‘Big Oil Bailout Prevention Liability Act of 2010′, rather making it impossible for anyone other than ‘Big Oil’ to operate."
Sen. Menendez has tried four times to unanimously pass his bill on the Senate floor, and each time I have objected—most recently last Thursday. I will continue to object and work with my colleagues to craft a workable solution that holds oil companies accountable without putting jobs and America’s energy security at risk.
I also objected last week when good friend Sen. Bernie Sanders (I.-Vt.) attempted to pass an amendment to increase taxes on domestic oil and gas producers and royalty owners. Sen. Sanders claimed his bill was targeting “Big Oil,” but it would have punished many independent oil and gas producers throughout the country. They would have shouldered a multi-billion dollar tax increase that would have jeopardized the livelihoods of the hardworking men and women who help fuel America. By an overwhelming vote of 35 to 61, the amendment was defeated.
As we head into summer, and as oil continues to flow into the Gulf, there will be more attempts by President Obama and Democratic leaders to exploit this tragedy to achieve their long-sought goal of ending America’s oil and natural gas production. But passing energy taxes and blocking energy production will do nothing to stop the oil and clean up the Gulf. It’s time President Obama showed real leadership and fix the problem in front of him, rather than creating new ones we can’t afford.
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