WASHINGTON — Sen. Thad Cochran (R-Miss.) yesterday cosponsored energy policy legislation that would, among other things, allow the State of Mississippi to receive federal revenues from offshore energy production, according to Cochran’s office.
The Oil Spill Response Improvement Act (S.3643) is a comprehensive policy plan to address problems revealed by the Deepwater Horizon explosion and oil spill in the Gulf of Mexico. It also offers proposals to advance energy efficiency and conservation, Cochran said..
“I support this legislation because it represents a balanced proposal that would improve federal energy policies without hamstringing an industry that remains important to our national and economic security,” Cochran said. “The bill offered by Senate Republicans was written to strengthen and improve offshore drilling safety requirements.
“For Mississippians, this measure would offer us assurances that offshore production is being done as safely as possible. It would also give us an opportunity to share in the federal revenues derived from production off our shores.”
Introduced last week by Republican Leader Mitch McConnell, Cochran said S.3643 would stand as an alternative to an energy measure crafted by Majority Leader Harry Reid after the collapse last week of the Democratic cap-and-trade/climate change initiative. Reid could call for debate to begin this week on energy legislation with the intention of trying to pass a bill before the Senate’s August recess.
“I am unsure how serious the Majority Leader is about advancing responsible energy legislation this summer, but I am pleased with the targeted alternative proposals included in Leader McConnell’s bill,” Cochran said.
S.3643 includes: provisions to lift the moratoria on offshore rigs that comply with new safety requirements; increase liability limits on firms that violate rules; support reform of the former Minerals Management Service (MMS); eliminate expenditure caps on the Oil Spill Liability Trust Fund; and, authorize a bipartisan 10-member commission with subpoena power to investigate the April 20 explosion and subsequent oil spill in the Gulf of Mexico.
“Our bill recognizes that the safety and oversight of offshore operations absolutely must be improved, and it outlines steps that can be taken to responsibly achieve those goals. The package sponsored by Senator Reid is, I believe, seriously flawed because it would allow unlimited liability for all offshore production. This would make drilling difficult to insure, resulting in choking off most of the oil production in the Gulf and leading to major layoffs,” Cochran said.
In response to the oil spill, Cochran said S.3643 also enhances research and development on oil spill response technologies. It creates a Maritime Center of Expertise for Oil Spill Response to serve as the primary Coast Guard command center for spill response. It also authorizes training for federal, state and local first responders to assist in the research, development, testing and demonstration of oil spill equipment, technologies and techniques.
The revenue-sharing provision is based on the Gulf of Mexico Energy Security Act of 2006, which authorized a revenue-sharing system for Gulf Coast states, including Mississippi. However, the 2006 law delayed the implementation of the program until 2017. The new proposal moves the effective date up to 2010.
Under S.3643, Gulf Coast states and Alaska would share in 37.5 percent of OCS oil and gas revenues (20 percent to coastal political subdivisions and 12.5 percent to the federal Land and Water Conservation Fund). All other OCS-derived revenue would be sent to the U.S. Treasury to be devoted to deficit reduction.
“This revenue-sharing provision would benefit Mississippi for hosting offshore energy development. Currently all OCS revenues go to the federal government, whereas revenues generated onshore are shared 50-50 with states. This policy is unfair,” Cochran said.
Finally, S.3643 would build on the energy efficiency and conservation programs and projects created in the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007, according to Cochran.