Following BP CEO Admission of Unpreparedness, Chairman Will Push for 21st Century Safety and Response Technologies in “Oil SOS” Fund
June 3, 2010 – Following BP CEO Tony Hayward’s admission that his company did not have a “tool-kit” for a sizeable spill from a deep-water well, Rep. Edward J. Markey (D-Mass.) announced that he would introduce a bill creating an oil company-funded research and development program to create 21st century oil safety and spill response technologies.
“From junk shots to top hats, this spill shows that BP and the oil industry paid more attention to drilling ultra-deep instead of creating ultra-safe technologies to prevent and respond to a crisis. The oil companies have not developed new solutions to contain their own pollution,” said Rep. Markey, chair of the Select Committee on Energy Independence and Global Warming. “The oil companies have been more focused on paying shareholder dividends than creating safety devices, and it’s now time to force them into creating 21st century safety and response solutions.”
Rep. Markey will introduce a bill — the Oil SOS (Safety for Offshore Spills) Fund — when Congress returns from recess that will seek to recover funds from faulty drilling leases in the Gulf of Mexico that allow oil companies to drill without paying royalties and redirect some of those funds into a safety and response R&D fund. Currently, due to a poorly drafted law passed in 1995 — the Deepwater Royalty Relief Act – and a court challenge from the oil companies, some oil producers that received leases between 1996 and 2000 in the Gulf of Mexico are currently drilling on public land for free.
Even as the spill continues in the Gulf of Mexico, the Interior Department is required to refund or credit $2.1 billion to dozens of companies due to these faulty oil leases, including $240 million to BP. In the future, these companies stand to keep $53 billion dollars in future royalties.
Rep. Markey’s legislation would create a fund to support badly needed investments in developing the technologies to better respond to future oil spills and design safer technologies to prevent spills. A portion of the recovered oil company payments would be directed to the technology fund. Rep. Markey’s bill would also repeal expanded royalty relief that was created under a 2005 energy bill passed by the Republican Congress.
Hayward’s confession today also directly contradicted information BP submitted in their oil response plan to the Interior Department, where the company certified to the government that they could handle a spill of 250,000 barrels a day, or about the size of an Exxon Valdez every day.
“From the Valdez to Santa Barbara to spills around the world, the oil companies know their own potential for disaster. And yet they continue to show themselves to be woefully unprepared,” said Rep. Markey.