The Clean Energy Jobs and Oil Company Accountability Act – A Positive Response

If enacted, the Clean Energy Jobs and Oil Company Accountability Act would realistically insure several outcomes: BP would be held accountable in cleaning up the effects of the oil spill; Investment in Home Star, a relatively bi-partisan energy efficiency program projected to lower consumers’ energy costs and create jobs; Environmental protection through investment in the Land and Water Conservation Fund; Reduction of the United States’ dependence on oil by encouraging investments in electrical- and natural gas-powered vehicles; and an increase in the amount of money that oil companies are required to contribute to the Oil Spill Liability Trust Fund.  Let us evaluate the prospective effects of this legislation.

1.  Insurance that BP and other oil companies pay for the economic damage that the current Gulf of Mexico spill, as well as future oil spills, inflict upon coastal businesses, tourism industries and fishermen (Division A; Title I).

This liability provision is designed to protect the taxpayer from having to pay for the economic damages caused by oil spills, including the billions of dollars in estimated damages caused by the Deepwater Horizon spill.

2. Institution of structural reforms within the Department of Interior to assuage historical corruption issues within the Department of Ocean Energy (previously known as the Minerals Management Service) (Division A; Title III).

These reform provisions are proposed due to concerns that the Department of Ocean Energy, which is responsible for managing the taxpayers’ oil and gas resources, has historical corruption issues between its employees and the oil & gas industry. The mismanagement of this agency can result in the loss of billions of dollars owed to the taxpayer  For example, the omission of royalty provisions from oil and gas lease contracts signed in 1998 and 1999, are estimated by the Government Accountability Office to have cost taxpayers as much as $53 billion.

3.  Requirement of oil companies to fund federal inter-agency research and development efforts on technologies designed to prevent and respond to oil spills (Division A; Title II).

Coastal residents would benefit from this provision due to the requirement that oil companies meet their legal obligation in responding to oil spills, and to assist in developing technologies to prevent the types of economic damage caused by the Deepwater Horizon oil spill. This provision is supported by knowledge that the response by BP to the Deepwater Horizon oil spill is based on essentially the same oil spill technologies that Exxon used to respond to the Exxon Valdez spill over twenty years ago.

4. Correction of antiquated maritime and admiralty laws that deny or significantly limit wrongful death claimants, and deny the ability of descendents of family members to recover non-pecuniary losses (Division A; Title V).

In the event of a wrongful death of an employee offshore, the negligent party could no longer deny or significantly limit claimants from recovering non-pecuniary damages and losses, such as loss of care, comfort and companionship.

5.  The Home Star program is projected to provide $5 billion in residential energy and water efficiency improvements (Division C).

Encouraging private investment in residential efficiency would support the construction and manufacturing sectors, and save consumers money on their energy and water bills. Along with private investment, the $5 billion of incentives for the Home Star program is estimated to generate 3 million home retrofits, 168,000 jobs, and reduce individual residential energy and water bills by $200 to $500 annually.

6.  Promotion of the purchase and use of natural gas vehicles (Division B; Sections 2001-2005).

One of the potential effects of this provision is to reduce environmental pollution.  Natural gas combustion has been found to be substantially cleaner than that of gasoline or diesel consumption.  The Environmental Protection Agency has reported that natural gas vehicles, when compared to diesel vehicles, reduce carbon dioxide emissions by up to 25% (depending on the natural gas source), significantly reduce carbon monoxide emissions, and reduce nitrogen oxide & organic hydrocarbon emissions by at least 50%.

The natural gas industry has estimated that savings in oil consumption after the 3rd year of this program would by approximately 1.8 billion gallons of oil annually, and up to 18 billion gallons over 10 years.  It is also estimated that this program could create more than 100,000 direct manufacturing & labor jobs, as well as 450,000 in indirect, related-industry jobs.

7.  Full funding for the Land and Water Conservation Fund (LWCF) over the next 5 fiscal years (Division D).

A more complete funding of the LWCF would assist further outdoor recreation businesses, which currently employ 6.5 million people, generate $88 billion in annual state & national tax revenue, and generate $730 billion a year in revenue.  This permanent funding would give the LWCF the ability to address a backlog of $12 billion in eligible state projects, protect additional acres of land, and leverage billions of dollars in protecting open spaces.

8.  Increasing of the Oil Spill Liability Trust Fund liability cap to $5 billion from its current maximum of $1 billion.  Also increases the required amount that oil companies need contribute to the fund to that of 45 cents per barrel (Division E).

With a current amount of $1.5 billion in the trust fund, the Congressional Research Service has reported that, “a major spill, particularly one in a sensitive environment, could threaten the viability of the fund.”