As the presidential election has come to a close, the United States Congress has now moved forward on many bills. Typically, bills that have any controversial nature to them are delayed beyond an important election for obvious political reasons. This was certainly the case with a specific bill that would negatively affect the Louisiana oil and gas industry: Section 608 of the United States Coast Guard Reauthorization Bill (CGRB), also known as H.R. 2838. Section 608, authored by Congressman Jeff Landry, was language regarding the implementation of Stand-by vessels in the Gulf of Mexico. The amendment demanded that Stand-by vessels be positioned within three miles of every manned oil and gas platform facility in the Gulf of Mexico.
This language has now been stripped from the bill, thanks to the hard work of Congressman Charles Boustany and other House leadership that was against the Stand-by language. Congressman Boustany is encouraging the U.S. Senate to quickly pass this bill in its current form so the President may sign it into law as soon as possible.
Landry’s amendment is not only bad for the industry, but it is unnecessary.
What makes this bill “bad” for the oil and gas industry? The financial impact on the oil and gas industry if this amendment were to pass would be substantial. The oil and gas industry is projecting that an additional 150-200 vessels would be needed to meet the Stand-By language requirements. Also, additional vessels obviously mean additional personnel to operate the boats. According to Obie O’Brien, Vice President of Apache Corporation, this language “would require capital investment of tens of millions of dollars to ensure compliance”. O’Brien continues by saying that this increase in cost would result in a reduction in the number of manned platforms, thus causing operators to be removed and laid off.
What makes this bill unnecessary is the absolute redundancy behind its concept. Safety is the key ingredients behind this bill, according to its author, Congressman Landry. The irony behind adding yet another safety law is the fact that the oil and gas industry considers safety its chief priority. Rather than one industry representative making the argument for the amendment’s redundancy, the Bureau of Safety and Environmental Enforcement (BSEE) has release a recent study that shows the telling evidence. From the period of 1996 – 2009, there were only three fatalities that were related to hypothermia in the Gulf of Mexico. During this same timeframe, the industry voluntarily reported 1.04 billion man-hours equating to a workforce with an annual average of over 35-thousand personnel.
Lawrence Svendson, Operations Manager for Marlin Energy seconded Apaches thoughts on the amendment by stating, “The overall safety record and response statistics in the Gulf of Mexico does not warrant the language of this legislation. The safety response infrastructure is already in place and proving successful.”
Removing jobs from the most productive industry in the state of Louisiana, costing the oil and gas industry millions of unnecessary dollars, and creating a process that is already in place does not seem like the best construct for a piece of legislation. As the country makes an attempt to recover from the worst recession since the Great Depression, oppressive regulations are certainly never the answer.