Melancon CLEAR Act Amendment Passes, But Draws Fire From Louisiana Delegation

This afternoon, as the House began preparations for a vote on the job-killing CLEAR Act, which the Congressional Budget Office incidentally estimates will bring about some $14 billion in litigation costs, dramatics ensued when Louisiana’s lone House Democrat put forth an amendment purporting to lift the deepwater moratorium that the rest of the delegation strenuously rejected as far too weak.

The CLEAR Act passed the House by a 209-193 vote this afternoon.

Rep. Charlie Melancon’s amendment  is described as imposing “certain limits on the federal moratorium on deepwater drilling.  The moratorium would not apply to applications for permits to drill if the applicant has met safety requirements set forth in the National Notice to Leases dated June 8, 2010, and June 18, 2010.   The Secretary of Interior would have to make a decision on whether an applicant has complied within 30 days.”

Melancon’s amendment was panned by the state’s House Republicans. Rep. Bill Cassidy said he’ll vote against the amendment, while Reps. Steve Scalise and Charles Boustany spoke on the floor against it. That led Louisiana Democrat Party spokesman Kevin Franck to put forth the following release:

BREAKING: Louisiana Republican’s Set to Vote AGAINST Melancon Amendment to Lift Moratorium
On the House floor a few minutes ago Reps. Scalise and Boustany spoke in OPPOSITION to Charlie Melancon’s amendment to lift to moratorium on off-shore drilling. Melancon’s amendment is nearly identical to an amendment (S. 3588) introduced in the Senate by David Vitter. Developing…

What Franck didn’t mention is that Melancon’s amendment wasn’t so identical to legislation offered by his opponent in this fall’s Senate race. Vitter’s Senate amendment is S. 3588, which reads:

A BILL

To limit the moratorium on certain permitting and drilling activities issued by the Secretary of the Interior, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. LIMITATION ON MORATORIUM ON CERTAIN PERMITTING AND DRILLING ACTIVITIES.

(a) In General- The moratorium set forth in the decision memorandum of the Secretary of the Interior entitled ‘Decision memorandum regarding the suspension of certain offshore permitting and drilling activities on the Outer Continental Shelf’ and dated July 12, 2010, and any suspension of operations issued in connection with the moratorium, shall not apply to an applicant for a permit to drill if the Secretary determines that the applicant–

(1) has complied with the notice entitled ‘National Notice to Lessees and Operators of Federal Oil and Gas Leases, Outer Continental Shelf (OCS)’ dated June 8, 2010 (NTL No. 2010-N05) and the notice entitled ‘National Notice to Lessees and Operators of Federal Oil and Gas Leases, Outer Continental Shelf (OCS)’ dated June 18, 2010 (NTL No. 2010-N06); and

(2) has completed all required safety inspections.

(b) Determination on Permit- Not later than 30 days after the date on which the Secretary makes a determination that an applicant has complied with paragraphs (1) and (2) of subsection (a), the Secretary shall make a determination on whether to issue the permit.

Franck is correct as to the fact that Vitter’s section A and B are identical. But Melancon’s amendment has a good bit more to it. The amendment doesn’t just have an A and B. It has more sections, including a Section F, which reads:

“Nothing herein affects the Secretary’s authority to suspend offshore drilling permitting and drilling operations based on the threat of signficant, irreparable or immediate harm or damage to life, property, or to the marine, coastal or human environment pursuant to the Outer Continental Shelf Lands Act.”  

Melancon’s release upon his amendment’s passage this afternoon (he declared it a “bi-partisan” vote, but only three Republicans voted for it on a 216-195 tally) said this:

The Melancon amendment would lift the deepwater moratorium on offshore drilling for companies that meet the new safety requirements issued by the Department of the Interior in the wake of the explosion. Specifically, if an application for a permit to drill complies with the “Notice to Lessees” 5 and 6, complies with any further safety measures recommended by the Secretary, and has completed all required safety inspections, the moratorium will not apply to the drilling application.

The Melancon amendment will also work to prevent another disaster from occurring and ensure companies are better able to respond to oil spills. The Secretary of the Interior will be required to report by October 31st to the House Committee on Natural Resources and the Senate Committee on Energy and Natural Resources on the status of:

(1) the collection and analysis of evidence regarding the potential causes of the explosion on the Deepwater Horizon offshore drilling rig, including information collected by the Presidential Commission and other investigations,

(2) implementation of safety reforms announced by the Department of the Interior on May 27th,

(3) the ability of operators in the Gulf of Mexico to respond effectively to an oil spill in light of the Deepwater Horizon incident; and

(4) industry and government efforts to engineer, design, construct and assemble wild well intervention and blowout containment resources necessary to contain an uncontrolled release of hydrocarbons in deep water, should another blowout occur.

Melancon also gave a floor speech in support of his amendment, which in part read as follows:

The tragedy on Deepwater opened our eyes to the need for tougher safety standards for offshore drilling. For the need to strengthen the enforcement of both new and existing laws. And, for the need to protect workers who report their companies’ dangerous, and even illegal practices, to regulators, so that we can stop another accident before it happens.

But, an indiscriminate, blanket moratorium punishes the innocent along with the guilty for the actions and the poor judgment of one reckless company. If a rig meets all of the tough new safety requirements issued by the Department of the Interior, if it has been fully inspected and deemed safe, why should it sit idle – and the workers of that rig go jobless – until the arbitrary six month period is over?

People in Louisiana understand that this doesn’t make sense. Louisianians want more than anyone to prevent another disaster from happening in our waters. But, the irresponsible decisions and dangerous actions of one company shouldn’t shut down an entire sector of our economy, sending thousands of workers to the unemployment line. We need to fix the problems that led to this disaster in the Gulf, without paralyzing America’s domestic energy industry in the process.

That’s what my amendment does. Instead of a blanket moratorium, my amendment would allow drilling permits to be approved for those rigs that meet the new, tougher safety requirements issued by the Department of the Interior in the wake of the explosion.

Those 31 stalled drilling rigs directly employ some 1,400 workers. Hundreds of small businesses in Louisiana service those rigs, or, are in some way supported by the offshore oil and gas industry. According to research by Dr. Joseph Mason of Louisiana State University, under the current six-month moratorium, the Gulf Coast region will lose more than 8,000 jobs, nearly $500 million in wages, and over $2.1 billion in economic activity, as well as nearly $100 million it state and local tax revenue. And, that’s only if the drilling will start back immediately in 6 months.

But, you don’t need to be an economist to see the impact of the moratorium on south Louisiana. You just need to drive through coastal parishes like Lafourche and Terrebonne or to Grand Isle. Talk to people like Shelly Landry, who owns and operates her family’s grocery store on Grand Isle, who told me with tears in her eyes that the moratorium was shutting down the coast, hurting her business more than the actual oil spill. People like Ms. Landry are still learning to cope with the impact of the oil disaster, and now they feel they are being dealt a second blow – this time by their government.

Louisiana has a working coast, where people make good paychecks producing the domestic energy that drives our nation. They want to get back to work, doing jobs they love, jobs that provide a good life for their families.

But after that speech, Scalise and Boustany both slammed the amendment as insufficient to end the moratorium. Scalise took special exception to Section F, as did Boustany. In fact, after the two Louisiana Republicans expressed objection, Melancon retook the floor and asked for unanimous consent to revise his amendment to satisfy their concerns. Republican Doc Hastings objected, and the amendment was voted on. Melancon appeared visibly shaken while making the request; C-SPAN video of the exchange shows a staffer putting something in front of him. It almost appeared as though he wasn’t aware of what was in his own amendment.

And the amendment’s protections against arbitrary and dishonest action from Interior Secretary Ken Salazar are meager – as we saw above with Section F, they’re nonexistent – which is why the Louisiana Oil and Gas Association isn’t crazy about Melancon’s amendment at all. In fact, LOGA had this to say about it:

The Louisiana Oil & Gas Association strongly opposes this amendment to the CLEAR Act, which is soon to be up for debate. While the title of this amendment perceives to lift the ban on deepwater drilling in the Gulf of Mexico, it in fact will grant overarching authority to the Secretary of the Interior.

Concerns center around “Clause B – Determination of Permit” located on page 2 of the amendment. As it is written, this language would grant the Secretary the authority to “make a determination on whether to issue” a permit. We believe a better structuring of this section should read that if an applicant complies with paragraphs (1), (2) and (3) of subsection (a) the Secretary shall issue the permit.

In addition, we remain concerned regarding “Clause F” within the amendment, the “Savings Clause” located on page 3, lines 12-18 – We have concerns that this may codify the Secretary’s authority to suspend offshore drilling permitting and drilling operations. It is our position that the Secretary does not have the right to do so.

The Administration is taking the position that the moratorium is simply based on safety concerns. It is our position that applicants who apply for a permit and meet the proper safety requirement should be issued a permit. Although this language cannot be changed at this time, it is LOGA’s position that this legislation not pass as an amendment to the CLEAR Act.

The long and short of the passage of both Melancon’s amendment and the CLEAR Act as a whole is that a terrible bill has passed and thanks to Melancon’s amendment, which also passed, the law would now codify Ken Salazar’s ability to turn drilling on and off at will. If nothing else, this is an open invitation to corruption, as companies like BP who have already shown their willingness to buy politicians will be incentivized to bribe their way into the Gulf.

Cassidy wasn’t done making moves in his own right. In fact, the House GOP leadership has put his amendment to unconditionally lift the moratorium – which was beaten in a 26-22 committee vote two weeks ago thanks to the “no” votes of five “non-voting” delegates from Guam, American Samoa, the Virgin Islands, Puerto Rico and the Northern Mariana Islands – forth once again as a Motion To Recommit.

Cassidy’s speech in favor of the motion to recommit was a spirited one…

In the aftermath of today’s debacle, Vitter put out a release trashing Melancon’s amendment:

“This amendment is nothing more than sleight of hand, otherwise it would have never gotten the vote of staunch drilling opponent Nancy Pelosi.  The meat and potatoes of the Melancon amendment keeps all the authority for drilling permits in the hands of the Obama administration who have made clear that they are putting politics ahead of sound policy,” said Vitter.  “I supported the rest of the delegation’s effort to defeat this amendment and wholeheartedly supported the alternative proposal by Rep. Scalise that would have immediately lifted this moratorium that is crushing Louisiana’s economy.”

Vitter’s release brought out more vitriol from Franck, who e-mailed this to Chad Rogers of The Dead Pelican

Haha. Joke’s on you. The LA Oil and Gas Association’s main objection is to language that is identical to Vitter’s moratorium amendment. What’s next? Is Vitter going to run radio ads attacking himself?

As said above, to an extent Franck has a point – LOGA wasn’t crazy about Vitter’s amendment. But Scalise and Boustany both expressed objections to Section F, not Section B, and any reading of the amendment would reveal that the statutory power given Salazar makes everything else in the amendment purporting to end the moratorium meaningless. And that would call into severe question Franck’s credibility.

Meanwhile, another amendment to the CLEAR Act actually did succeed. Rep. John Fleming (R-Shreveport) managed to get some protections against the EPA taking over regulation of hydraulic fracturing in the natural gas industry.
 
“In Committee, the CLEAR Act was decorated like a Christmas tree with various items unrelated to the oil spill, one of which was the effort to require a leaseholder to disclose on a public website, proprietary information about hydraulic fracturing,” said Fleming.  “There is no doubt that this language was the first step in the liberals’ effort to have the natural gas industry fully regulated by the EPA – something that natural gas producing states, such as Louisiana, see as an intrusion into their authority and regulation.”
 
“An EPA takeover of the natural gas industry would stifle development, destroy jobs and reduce our supply of clean, natural gas, all at a time when our country needs more energy and more jobs,” continued Fleming. “I thank my colleagues from both sides of the aisle who supported this important effort.”

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