[Congressional Record Volume 159, Number 39 (Monday, March 18, 2013)]
[Senate]
[Pages S1907-S1908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. FEINSTEIN (for herself and Mr. Nelson):
  S. 598. A bill to prohibit royalty incentives for deepwater drilling, 
and for other purposes; to the Committee on Energy and Natural 
Resources.
  Mrs. FEINSTEIN. Mr. President, I rise today to introduce, with my 
distinguished colleague, Senator Bill Nelson, the Deepwater Drilling 
Royalty Relief Prohibition Act.
  Specifically, the bill prohibits the Interior Department from waiving 
royalty payments due to American taxpayers as compensation for the oil 
industry's exploitation of Federal oil and gas resources in waters 
exceeding 400 meters of depth.
  It is necessary because Congress has established a number of royalty-
relief programs for oil and gas production in our deepest Federal 
waters.
  However, as the BP Deep water Horizon catastrophe showed, encouraging 
this most dangerous and often dirty form of oil drilling is not in the 
public interest.
  The disastrous impacts of the Deepwater Horizon explosion illustrate 
the enormous environmental and safety risks of offshore drilling--
particularly in deep waters. 11 people died and 17 others were injured 
when the Deepwater Horizon caught fire. 5 million barrels of oil gushed 
into the Gulf of Mexico.
  It took 9,700 vessels, 127 aircraft, 47,829 people, nearly 2 million 
gallons of toxic dispersants, and 89 days to plug the well and stop the 
flow of oil. And the scope of the disaster was tremendous. Oil slicks 
spread across the Gulf of Mexico, forcing the closing of 40 percent of 
Gulf waters to all commercial and recreational fishing. Pelicans and 
other wildlife struggled to free themselves from crude oil. Wildlife 
responders collected 8,183 birds, 1,144 sea turtles, and 109 marine 
mammals killed or negatively affected by the spill. Many more perished 
and sank to the ocean depths without detection.
  More than 650 miles of Gulf coastal habitats--including salt marshes, 
mudflats, mangroves, and sand beaches--were oiled. Tar balls spoiled 
the pristine white sand beaches of Florida, while wetlands were coated 
with toxic sludge. Oyster beds could take years to recover.
  The plumes of underwater oil created zones of toxicity for aquatic 
life. Recent studies have determined the BP spill was ``definitely 
linked'' to ``widespread signs of distress'' and the slow death of 
deepwater coral within seven miles of the blowout site.
  The response techniques, such as the use of dispersants, may have 
their own toxic consequences to both wildlife and the spill response 
workers. A recent report asserts that the mixture of toxic dispersants 
and crude oil has now weathered into tar product, and that the ``unholy 
mix'' is allowing potentially carcinogenic concentrations of organic 
pollutants to remain in the environment.
  The impacts of an oil spill are so dramatic and devastating, it seems 
clear to me that this is not an area in which we should be subsidizing 
development.
  In 1969, off Santa Barbara, California, a natural gas blowout caused 
an unprecedented oil spill.
  The drilling technology 40 years ago was not able to prevent a 
disaster, nor could it stop the flow of oil, which went on for more 
than 11 days. Unfortunately, today's technology also cannot prevent 
well-head blowouts or quickly stop the flow of oil.
  The Deepwater Horizon drill rig was less than 10 years old when it 
caused a devastating blow out. A similar rig that caused the 2009 spill 
in the Montara oil and gas field in the Timor Sea--one of the worst in 
Australia's history--was even newer, designed and built in 2007. That 
spill continued unchecked for 74 days.
  The failures that led to these catastrophes were human and 
technological. But they demonstrate that we are a long way from spill-
free offshore oil and gas production technology.
  In deep waters, the risks are higher and the scope of the damage even 
greater, because drilling in deep water presents even more challenges 
than drilling in shallow water or on shore. This was demonstrated 
during the Deepwater Horizon disaster.
  Methane hydrate crystals form when methane gas mixes with pressurized 
cold ocean waters--and the likelihood

[[Page S1908]]

of these crystals forming increases dramatically at a depth of about 
400 meters. These crystals interfere with response and containment 
technologies. They formed in the cofferdam dome that was lowered onto 
the gushing oil in the Gulf, which failed to stop the oil in the early 
days of the spill.
  When a remotely operated underwater vehicle bumped the valves in the 
``top hat'' device, the containment cap had to be removed and slowly 
replaced to prevent formation of these crystals again.
  In order to drill at deeper depths, many technical difficulties must 
be overcome. The ocean currents on the surface and in the water column 
exert torque pressure on the pipes and cables, which are longer and 
heavier.
  The water temperature decreases closer to the sea floor, but the 
temperature of the ground under the ocean increases the deeper the 
well--sometimes reaching temperatures in excess of 350 degrees 
Fahrenheit.
  The ocean pressure increases dramatically at depth, but the pressure 
in a well can exceed 10,000 pounds per square inch.
  Drills must be able to pass through tar and salts, and the well bores 
must remain intact.
  The volume of drilling mud and fluids is greater, the weight of the 
cables heavier, and many technical procedures can only be accomplished 
with the use of remotely operated vehicles thousands of feet below the 
surface.
  American taxpayers should not forego revenue in order to incentivize 
offshore drilling at these dangerous depths. It is not good 
environmental policy, and it's not good energy policy either. We need 
to move to cleaner renewable fuels.
  I believe that global warming presents a serious environmental and 
economic threat--and scientists agree that the biggest culprit of 
global warming is manmade emissions produced by the combustion of 
fossil fuels like oil and coal.
  Taxpayer-funded incentives should be utilized to develop and deploy 
clean energy technologies that address this crisis, instead of 
encouraging the fossil fuels at the root of the problem through oil and 
gas royalty relief.
  Congress has worked to move in this direction. In 2007, we passed the 
Ten in Ten Fuel Economy Act which will raise fuel economy standards for 
passenger vehicles to 54 miles per gallon by 2025.
  Over the past four years, renewable energy generation in the United 
States has more than doubled--due in large part to Federal tax 
incentives, financing mechanisms, and a vastly improved permitting 
process. In 2012, a whopping 44 percent of new electric generating 
capacity added to the grid was wind power.
  The Federal government is helping the United States adopt a cleaner 
energy future.
  Royalty relief for dangerous oil and gas development, however, is not 
advancing this goal.
  Let me make one final point: oil companies--the primary recipients of 
royalty relief--do not need taxpayer help. They are already reaping 
record profits.
  Higher gasoline prices are causing families pain at the pump, but 
they are a boon to the world's five largest oil companies. BP, Chevron, 
ConocoPhillips, ExxonMobil, and Shell made a combined $118 billion in 
profits in 2012, or an average of almost $500 for each car in America.
  Moreover, the big three publicly owned U.S. oil companies--
ExxonMobil, Chevron, and ConocoPhillips paid effective federal tax 
rates in 2011 of 13 percent; 19 percent; and 18 percent respectively. 
Yet we continue to use taxpayer dollars to add to their bottom line. 
This is unacceptable.
  Oil reserves under Federal waters are a public resource. When a 
private company profits from those public resources, American taxpayers 
should also benefit.
  I urge my colleagues to support this legislation and ensure that 
royalties owed to the taxpayers are not waived to incentivize risky 
off-shore drilling. In these critical economic times, every cent of the 
people's money should be spent wisely.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 598

       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 ``Deepwater Drilling Royalty 
     Relief Prohibition Act''.

     SEC. 2. PROHIBITION ON ROYALTY INCENTIVES FOR DEEPWATER 
                   DRILLING.

       (a) In General.--Notwithstanding any other provision of 
     law, the Secretary of the Interior shall not issue any oil or 
     gas lease sale under the Outer Continental Shelf Lands Act 
     (43 U.S.C. 1331 et seq.) with royalty-based incentives in any 
     tract located in water depths of 400 meters or more on the 
     outer Continental Shelf.
       (b) Royalty Relief for Deep Water Production.--Section 345 
     of the Energy Policy Act of 2005 (42 U.S.C. 15905) is 
     repealed.
       (c) Royalty Relief.--Section 8(a)(3) of the Outer 
     Continental Shelf Lands Act (43 U.S.C. 1337(a)(3)) is amended 
     by adding at the end the following:
       ``(D) Prohibition.--Notwithstanding subparagraphs (A) 
     through (C) or any other provision of law, the Secretary 
     shall not reduce or eliminate any royalty or net profit share 
     for any lease or unit located in water depths of 400 meters 
     or more on the outer Continental Shelf.''.
       (d) Application.--This section and the amendments made by 
     this section--
       (1) apply beginning with the first lease sale held on or 
     after the date of enactment of this Act for which a final 
     notice of sale has not been published as of that date; and
       (2) do not apply to a lease in effect on the date of 
     enactment of this Act.

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