[Congressional Record Volume 142, Number 51 (Friday, April 19, 1996)]
[Senate]
[Pages S3732-S3733]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAMM (for himself and Mrs. Hutchison):
  S. 1689. A bill to provide regulatory fairness for crude oil 
producers, and to prohibit fee increases under the Hazardous Materials 
Transportation Act without the approval of Congress; to the Committee 
on Commerce, Science, and Transportation.


           the crude oil transportation fairness act of 1996

  Mr. GRAMM. Mr. President, I rise to introduce legislation to remove 
an onerous and, I believe, unintended regulatory burden from 
independent oil and gas producers. The Crude Oil Transportation 
Fairness Act of 1996 would exempt oil and gas producers who do not 
transport crude oil themselves from the registration and fee 
requirements of the Hazardous Materials Transportation Act. Those who 
actually transport crude oil would continue to register and pay fees as 
under current law. Also, the bill removes the Secretary of 
Transportation's unilateral authority under current law to raise these 
fees on transporters. My colleague from Texas, Senator Hutchison, has 
joined me in introducing this legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record, and that letters of support from the Independent Petroleum 
Association of America and the Texas Independent Producers and Royalty 
Owners Association also appear in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1689

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Crude Oil Transportation 
     Fairness Act of 1996''.

     SEC. 2. REGULATORY FAIRNESS FOR CRUDE OIL PRODUCERS.

       Section 5108(a) of title 49, United States Code, is amended 
     by adding at the end the following:
       ``(5)(A) Notwithstanding any other provision of law, a 
     person who offers crude oil or condensates for transport in 
     commerce shall not be required to file a registration 
     statement or pay a fee otherwise required under this 
     section if that person transfers title to the crude oil or 
     condensates to a transporter at the time that the crude 
     oil or condensates are initially transported in commerce 
     from a storage location by the transporter.
       ``(B) Subparagraph (A) does not apply to any person who 
     transports crude oil in commerce in a quantity that is 
     subject to the requirement of this section.''.

     SEC. 3. PROHIBITION OF FEE INCREASES WITHOUT THE APPROVAL OF 
                   CONGRESS

       Section 5108(g)(2)(A) of title 49, United States Code, is 
     amended in the second sentence, by striking ``at least $250 
     but not more than $5,000'' and inserting ``not more than 
     $250''.
                                                                    ____

                                             Independent Petroleum


                                       Association of America,

                                   Washington, DC, March 27, 1996.
     Hon. Phil Gramm,
     U.S. Senate, 370 Senate Russell Office Building, Washington, 
         DC.
     Re Crude Oil Transportation Fairness Act of 1996

       Dear Senator Gramm: The Independent Petroleum Association 
     of America (IPAA) strongly supports The Crude Oil 
     Transportation Fairness Act of 1996 and appreciate your 
     efforts on behalf of independent oil and natural gas 
     producers. As you know, IPAA represents approximately 5,500 
     independent oil and natural gas producers in 33 states. The 
     regulatory problem which is addressed in the proposed 
     legislation has been particularly onerous for our membership 
     as they are primarily small businesses with less than 20 
     employees that can not afford the annual fee assessed under 
     this program.
       The Hazardous Materials Transportation Registration and Fee 
     Assessment Program, which was implemented under the Hazardous 
     Materials Transportation Uniform Safety Act of 1990, requires 
     registration for persons engaged in transporting or offering 
     for transportation certain categories and quantities of 
     hazardous materials in intrastate, interstate, and foreign 
     commerce. Persons subject to the registration program are 
     required to annually file a registration statement with DOT 
     and pay a total annual fee of $300. Last year, DOT 
     unsuccessfully proposed a graduated filing fee that would in 
     many cases raise the registration fee to $5050.
       After a major educational effort led by IPAA, with strong 
     congressional support, the proposal was defeated. However, 
     even at the $300 per year level, IPAA has strongly opposed 
     the inclusion of persons who ``offered for transportation'' 
     in the registration program as both burdensome and 
     unnecessary. Crude oil producers sell their oil to purchasers 
     who take possession of it on the lease directly from the 
     crude oil storage tank. The purchaser owns the crude oil 
     before it ever reaches a public road. While the oil is in the 
     storage tank the facility owner is subject to numerous state 
     and federal safety requirements.
       At a time when our domestic oil production has fallen to 
     its lowest point in 40 years, and over 500,000 jobs in the 
     industry have been lost in the last decade, we cannot 
     continue to penalize domestic producers. The current 
     financial state of the domestic oil and gas industry is 
     illustrated by the following indicators:
       Jobs. Since the early 1980s, oil and gas employment has 
     been cut in half. Employment in the industry through 1996 
     stood at 305,100 employees compared to 332,800 in 1995. There 
     has been a loss of 9500 employees since 1995 and nearly 
     500,000 since 1985.
       Crude Oil Production. Crude oil production in 1995 fell to 
     an estimated 6.5 MMb/d, compared to 6.7 MMb/d during 1994, 
     representing a 200,000 b/d decrease. Crude oil production in 
     the lower 48 states has fallen to 5 MMb/d, the lowest level 
     since 1946.
       Rotary Rig Activity. In 1995, the rotary rig count averaged 
     723 rotary rigs for the United States, a decrease of 52 rigs 
     from 1994. This is the second lowest rig count since World 
     War II. Forty-five percent of the rigs were drilling for oil, 
     53 percent for gas and 2 percent miscellaneous.
       Well Completions. In 1995, total well completions totaled 
     19,756, with 8,114 wells completed for the production of 
     natural gas, 6,917 wells completed for the production of 
     crude oil and 4,725 dry holes. There were 2,037 fewer 
     completions in 1995 than 1994. In 1985, 70,806 wells were 
     completed, a 72% decline in 10 years.
       In conclusion, IPAA strongly supports the Crude Oil 
     Transportation Fairness Act which will have the effect of 
     eliminating the DOT Hazardous Materials Transportation fee 
     for individuals and companies that only offer for sale, but 
     do not transport crude oil or condensates.
       Thank you again for your legislative leadership in this 
     area.
           Sincerely,
                                                   Denise A. Bode,
     President.
                                                                    ____

                                     Texas Independent Producers &


                                   Royalty Owners Association,

                                        Austin TX, March 27, 1996.
     Hon. Phil Gramm,
     U.S. Senate, 370 Russell Building, Washington, DC.
       Dear Senator Gramm: On behalf of Texas independent oil and 
     gas producers, I wish to thank you for introducing the 
     ``Crude Oil Transportation Fairness Act of 1996.'' As you 
     know, this bill is badly needed to ensure that another 
     unnecessary, onerous regulation does not play a role in the 
     demise of the small independent oil and gas producer.
       Your bill will ensure that the regulation is properly 
     applied to those who transport crude and not those who only 
     sell it. Some of our members are also transporters and

[[Page S3733]]

     should be paying this fee, but far more are producers who 
     produce crude and sell it at the lease. Those producers have 
     unfortunately been required to pay this transporter fee 
     needlessly. Soon after the program began, we narrowly 
     defeated an effort by the Department of Transportation to 
     increase the annual fee of $5,050--which in many cases is 
     more than the annual revenue from a single well.
       Your bill appropriately places the responsibility on crude 
     transporters. We appreciate your interest in correcting this 
     regulation.
           Sincerely,
                                                Rex H. White, Jr.,
     President.

                          ____________________