* Passage would let Democrats claim oversight over Big Oil
* Major element involves raising oil company liability cap
* Safety standards for equipment, workers also in bill
By Richard Cowan
WASHINGTON, July 30 Three months after the
catastrophic oil rig explosion that sent millions of gallons of
crude spewing into the Gulf of Mexico, the U.S. House of of
Representatives was poised on Friday to debate legislation
clamping down on the industry's offshore drilling practices.
The Democratic-led House is expected to pass the
legislation that could have a far-reaching impact on deep-water
drilling in the Gulf, a major supplier of domestic energy.
Passage just before the House is scheduled to begin a
six-week recess would give lawmakers the opportunity to return
home boasting that they had moved to rein in Big Oil and hold
BP (BP.N)(BP.L) financially responsible for the worst offshore
oil disaster in U.S. history.
But the legislation still has a long way to go before it
can become law.
A similar bill is pending in the Senate, but there were
doubts that it would pass before that chamber begins its summer
recess on Aug. 6.
A sticking point in the Senate is opposition from
Republicans and some moderate Democrats to removing all
liability limits oil companies would face for economic damages
stemming from the BP disaster and any future spills.
Current law requires companies to only cover up to $75
million for damages to local economies. The BP spill could end
up costing billions of dollars in lost tourism, fishing and
other Gulf Coast revenues.
BP has said it would pay for all costs related to the
spill, but many lawmakers worry that the company could put
victims through years of litigation.
WHITE HOUSE BACKING
On the eve of the House debate, the White House said in a
statement that it strongly supports passage of the
Besides lifting the liability cap, key provisions of the
-- New safety standards for offshore drilling, such as
independent certifications of equipment and tougher measures to
ensure that oil well blowout preventers operate. Officials
suspect that a failure by BP's Deepwater Horizon blowout
preventer contributed to the Gulf disaster.
-- New worker safety provisions for offshore drilling
projects. Eleven workers were killed in the BP explosion.
-- Granting subpoena power to the independent commission
now investigating the Gulf of Mexico disaster.
-- Instituting reforms already taken by the Obama
administration to break up the Interior Department's Minerals
Management Service with the goal of removing conflicts of
interest that plagued the old agency.
-- Closing royalty loopholes the industry has enjoyed in
federally-controlled drilling areas.
-- Setting new procedures for using chemical dispersants to
break up spilled oil.
-- Barring companies that have poor safety records, like
BP, from getting new leases to drill offshore for up to seven
The Senate energy bill has an added component: new
incentives to encourage more natural gas-powered trucks and
electric vehicles to clean up the environment. It also provides
$5 billion to help improve home energy efficiency.
But Senate Democrats abandoned attempts to attach climate
change provisions that would have set mandatory limits on some
companies' carbon dioxide emissions.
Senate leaders plan to hold a test vote next Wednesday to
gauge support for the bill, according to a Democratic aide. But
Republicans, and possibly some moderate Democrats, might block
a full debate, forcing senators to take up the effort again in
(Editing by Xavier Briand)