New House and Senate Bills Create De Facto and Indefinite Moratorium

For Immediate Release:                                            Contact:  Nicolette Nye

Wednesday, July 28, 2010                                           (202) 347-6900          



New House and Senate Bills Create De Facto and Indefinite Moratorium


WASHINGTON, DC – NOIA Chairman Burt Adams issued the following statement in response to the House and Senate oil spill response bills introduced this week:


“The Gulf spill certainly demands that tough questions be asked and new policies and standards be considered, but the bills introduced in the Senate and House go well beyond a reasoned and responsible response to the spill.  In fact, they clear the way for increased energy costs, more reliance on foreign energy sources, and the loss of more American jobs.


“Both bills’ provisions on unlimited economic liability alone and new financial capability provisions, taxes and fees could change the face of oil and gas production in the Gulf forever, by driving independent producers out of the area and even out of business completely. The role of independents in the Gulf of Mexico is huge.  According to a recent IHS Global study, they provide half of the jobs, half of the economic value and half of the federal, state and local revenue generated by the industry in the Gulf.


”The study forecasts that by 2020 an exclusion of  independents from the Gulf of Mexico would eliminate 300,000 jobs and result in a loss, over 10 years, of $147 billion in federal state and local taxes from the Gulf region.  If independents are excluded just from the deepwater, we would lose 265,000 jobs and $106 billion in tax revenues by 2020.


“The increased taxes, fees and regulation on permitting, exploration and production in the House bill combined with replacing the current 30 day approval requirement for exploration plans with an open ended time frame create a de facto moratorium in the Gulf of Mexico.  And the added layers of bureaucracy of regional planning councils in both bills will further erode certainty for the industry and create a planning nightmare.


“One is left asking whether these bills are seeking to address the spill, or are simply a political exercise aimed at punishing domestic energy creation.  Furthermore, a drastic increase in the per barrel tax funding the Oil Spill Liability Trust Fund is used to offset the entirety of the Senate bill’s roughly $15 Billion cost, begging the question of whether the Trust Fund will be available to actually deal with oil spills or simply to pay for the bill’s other programs.  The fact that these bills have been saved for the waning days before a recess only underscores that they are based upon politics not practical solutions.


“Thoughtful legislative responses to the Gulf spill must consider the economic impact of the oil and gas industry in the Gulf and on the national economy as a whole.  This is an industry that provided nearly 400,000 jobs, $70 billion in economic value, and $20 billion in federal, state and local revenue in the Gulf region in 2009 alone.  Energy production from the region provides 30 percent of our domestic oil and 10 percent of our domestic gas.  


All Gulf of Mexico Senators and Representatives should be concerned about the intended and unintended consequences of these energy killing bills.  A better approach is to let these bills sit before Congress and the American people and consider their fate in a non-rushed thoughtful manner when Congress returns in September.  


“Now is the time for pragmatic, calm, rational debate on the best ways to prevent a similar tragedy from ever happening again, while continuing to allow offshore energy development to be a critical component of our national energy portfolio. These bills would stretch the current moratorium out indefinitely, paralyze the oil and gas industry in the gulf, and hobble our economy and energy security. “



NOIA is the only national trade association representing all segments of the offshore industry with an interest in the exploration and production of both traditional and renewable energy resources on the nation’s outer continental shelf.  The NOIA membership comprises more than 250 companies engaged in business activities ranging from producing to drilling, engineering to marine and air transport, offshore construction to equipment manufacture and supply, telecommunications to finance and insurance.


National Ocean Industries Association
1120 G Street, NW • Suite 900
Washington, DC 20005

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