Senate proposals to place an unattainable level of insurance coverage on domestic energy production from the Outer Continental Shelf will cost the US in terms of job, economic growth, and place our energy security at risk, according to the American Petroleum Institute (API).
‘The accident in the Gulf of Mexico has shown us that we need to focus on safety and environment protection,’ said Jack Gerard, president and CEO of API. ‘But legislative proposals that would make domestic resources unavailable or uneconomic, instead of focusing on improving safety, must be turned aside. Millions of families, thousands of products and hundreds of industries across the country depend on reliable and affordable oil and natural gas every single day.’
The language approved by the Senate Environment and Public Works Committee on 30th June would eliminate the liability limits for economic damages, making insurance on exploration and production activities in the Gulf unavailable, according to Lloyd’s and other large insurance representatives. More than 100 US companies would be forced out of the effort to produce domestic resources, leaving only a few of the very largest multinational corporations and those companies owned by foreign governments.
Even the largest companies, those that could self insure their operations, could see costs skyrocket, making Gulf oil and natural gas subeconomic, adversely impacting domestic production, undercutting US jobs and costing billions in lost federal revenues, according to a recent analysis by Wood Mackenzie.
About 30% of the nation’s total domestic oil production and 13% of the domestic natural gas production comes from the Gulf of Mexico. 80% of the Gulf oil production comes from deepwater areas.
‘Proposals that ignore our energy reality, or remove domestic resources from our energy mix, place our economic recovery and our energy security at risk,’ said Gerard.
Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/01072010/api_on_domestic_energy_sources/