NCPA - National Center for Policy Analysis

Oil Spill Panel Calls for Drilling Reform

January 17, 2011

A bipartisan commission appointed by President Obama to investigate last year's Gulf of Mexico oil spill is set to recommend a higher liability level for companies involved in a spill, more time for federal regulators to review drilling permits and a host of other ways to update federal and industry safety and oversight, says Politico.

According to those briefed on the report's recommendations:

  • The commission will say that no new major Arctic drilling should occur until the federal government and industry can prove that drilling can be done in a way that is safe to the ecosystem and that industry can respond quickly to a spill or other accident.
  • It will also recommend an unspecified increase in the $75 million liability limit for oil companies involved in a spill, and ask for the establishment of an independent entity that would come up with industry-wide safety standards and help facilitate best practices among companies.
  • That would be akin to what was established in the nuclear industry following the 1979 near-meltdown at Three Mile Island.

Free-market and industry groups are not likely to react well to calls for additional federal regulations. 

"In the midst of rising gas prices, cutting off other potential areas for drilling will only compound the problem by increasing the price of oil even further," says a spokeswoman with the Heritage Foundation.  "That's something our economy and the American consumer can least afford at this time."

Source: Darren Goode, "Oil Spill Panel Calls for Drilling Reform," Politico, January 10, 2011.

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