http://www.cnn.com/2011/POLITICS/05/17/senate.oil.subsidies/

By Ted Barrett and Rachel Streitfeld, CNN
May 17, 2011 8:39 p.m. EDT

STORY HIGHLIGHTS
The measure fails on a mostly party-line vote
The White House calls the vote disappointing
The Senate will take up a Republican measure to expand drilling Wednesday

Washington (CNN) — On a mostly party-line vote, the Senate on Tuesday defeated a Democratic measure to strip major oil companies of about $20 billion in tax subsidies over the next 10 years and use the savings to pay down the deficit.

Three Democrats and two Republicans crossed sides in the 52-48 vote, preventing the bill from reaching a required 60-vote threshold for passage.

Republicans opposed the measure, arguing the big five oil companies would pass any tax increases to consumers in the form of higher gas prices.

Senate Minority Leader Mitch McConnell, R-Kentucky, said the Democratic bill would “raise the price of gasoline at the pump, export American jobs and make us more dependent on people like (Venezuelan President) Hugo Chavez because the amount of oil we’ll have to import will go up.”

Senate Majority Leader Harry Reid, D-Nevada, accused Republicans of preferring to “continue subsidizing these wealthy oil executives and oil companies” rather than pay for health and education programs and reduce the debt.

A White House statement called Tuesday’s vote “disappointing” and said efforts to end the subsidies would continue.

“The bottom line is that there are more responsible ways to spend tens of billions of federal dollars, including investments that will help protect American consumers from high gas prices,” said the statement by White House Press Secretary Jay Carney. “The vote today — with support from over half the U.S. Senate — is an important step towards repealing these unwarranted subsidies for the oil and gas industry.”

The vote was largely symbolic because Democrats knew they had no chance of passing the measure without support from at least seven Republicans.

In the end, Democrats from oil-producing states, including Sens. Mary Landrieu of Louisiana and Mark Begich of Alaska, opposed the bill, along with Democratic Sen. Ben Nelson of Nebraska.

A handful of Republicans — including conservative Sens. John McCain of Arizona and Mark Kirk of Illinois — previously expressed openness to the bill but ended up opposing it. The two Republicans who supported the measure were Maine’s Olympia Snowe and Susan Collins.

Snowe, who is up for re-election in 2012, said in a statement that it was “difficult to justify oil development incentives given the current level of crude oil prices, and the fact that the U.S. government has to borrow money to pay for these incentives.”

If Snowe had joined most of her GOP colleagues in opposing the measure, Democrats were prepared to accuse her of protecting big oil companies while consumers are feeling pain at the pump.

Collins, who also supported the measure, said she had concerns that Democrats pushed the proposal for political reasons.

“I do think that the Democrats are being disingenuous in implying that this is somehow going to have an impact on prices at the pump, because it won’t,” Collins said. “But it might be good tax policy to reduce the subsidies and use the money for deficit reductions.”
Despite the legislative defeat, Reid vowed Tuesday to get the measure included in any debt reduction package Congress is expected to consider in the weeks ahead.

The Senate will vote Wednesday on a Republican proposal to increase the domestic oil supply through new exploration and drilling. It is not expected to get the 60 votes needed to pass, aides from both parties predicted.

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http://www.washingtonpost.com/blogs/2chambers/post/senate-rejects-measure-to-end-subsidies-for-big-oil-companies/2011/05/17/AF6HI35G_blog.html

Washington Post

Posted at 07:32 PM ET, 05/17/2011
Senate rejects measure to end subsidies for big oil companies
By Felicia Sonmez

((AP))
A Democratic measure that would have repealed tax subsidies for the five biggest oil companies failed to clear the Senate on Tuesday, falling short of the 60-vote threshold needed to advance in a near-party-line vote.

The Senate rejected S.940, or the “Close Big Oil Tax Loopholes Act,” in a 52-to-48 vote. Three Democrats – Sens. Ben Nelson (Neb.), Mary Landrieu (La.) and Mark Begich (Alaska) – joined nearly all Republican in voting against the measure, while two Republicans – Sens. Susan Collins (Maine) and Olympia Snowe (Maine) – voted “yes.”

Democrats had contended that the bill, which would have repealed $21 billion in tax subsidies for the top five oil companies over the next decade, represented a step toward addressing the country’s soaring deficit and rising gas prices. The White House issued an official statement of administration policy earlier Tuesday saying that it strongly backed the bill.

But even as Democratic leaders had been strongly pushing the measure, it was expected that the bill would fall short. That’s the case, too, with a separate energy-related measure that will be on the Senate floor Wednesday – a Republican-sponsored bill aimed at increasing domestic energy production.

The end result: the congressional debate over addressing rising gas prices will have little changed by week’s end.

Senate Majority Leader Harry Reid (D-Nev.) maintained Tuesday that the subsidy issue will continue to play a role in the debate over raising the debt ceiling. Asked what he expected to come from the vote on the Democratic measure, Reid told reporters that he expected that a final deal on the debt ceiling would include a repeal of tax subsidies for the top five oil companies.

Special thanks to Richard Charter

http://www.nytimes.com/gwire/2011/05/16/16greenwire-oil-spill-panels-chairman-says-his-push-for-cu-50005.html

By KATIE HOWELL of Greenwire
Published: May 16, 2011

The Obama administration is pushing back against plans by its oil spill commission co-chairman to spread his message about offshore drilling reforms to Cuba, the panel leader said today.

William Reilly, the co-chairman of the presidential panel that made a series of recommendations earlier this year to improve offshore drilling safety and regulation after the BP PLC oil spill in the Gulf of Mexico last summer, has already helped convinced Mexican drilling regulators to adopt U.S. regulatory structures.

But he said he has had his “wrist slapped” by the Obama administration for his plans to discuss reform with Cuba, with which the United States has had no diplomatic relations since 1961.

“I have been causing grief to the State Department,” Reilly, a former U.S. EPA chief under President George H.W. Bush, said during an event hosted by Resources for the Future in Washington, D.C.
Cuba is developing plans to drill 16 oil and gas wells in waters 50 miles from Key West, Fla., using Spanish oil and gas giant Repsol YPF and Russian natural gas producer Gazprom.

“That’s something that’s very important to us, I think, given that they’re drilling 50 miles off Key West, so I’ve asked to be invited to Cuba to talk about the report and have had my wrist slapped by the administration for raising the sensitive Cuban issue,” Reilly said. “I had to say, ‘I don’t work for you.'”

Reilly said spreading the message to nations interested in drilling in Gulf waters is constructive and important. And he said if such plans do go forward, it is imperative for a company with an established safety record, like Repsol, to do the work.

“I asked one CEO of a major oil company, ‘What’s Gazprom like?’ And he said, ‘I don’t think they’ve ever drilled an oil well — they’re a gas company,'” Reilly said. “Let’s hope Repsol does all the work.”

Reilly also blasted legislative proposals from Sen. Bill Nelson (D-Fla.) and Rep. Vern Buchanan (R-Fla.) that would penalize international oil companies that operate in Cuban waters, calling it “counterproductive.”

“What you want is a company like Repsol, which has its own interest in the United States, has rigs in the Gulf, applies for permits from the United States government,” Reilly said. “I don’t know who we would get — maybe [Venezuelan President Hugo] Chávez — if it were so limited that we couldn’t have a responsible company doing that drilling.”

Reilly said he is also negotiating a meeting with Russian Prime Minister Vladimir Putin to discuss offshore drilling safety in the Arctic.

Reilly’s international efforts come as talks have come to a virtual standstill on reforming domestic offshore drilling safety. Only a handful of the panel’s extensive recommendations have been implemented. And partisan bickering in the House and Senate could keep any legislative proposals to codify the recommendations from advancing this year.

But Reilly said he is not giving up on seeing some of the panel’s strongest recommendations — to create an independent industry-funded safety watchdog institute and to create a separate regulatory director within the Interior Department — come to fruition.

“Yeah, I’m going to continue to pop up. I mean, I’m trying to go to Cuba,” he said.

Special thanks to Richard Charter

Menendez support group sign-on letter_5.16.11 1

BP Oil Spill Amnesia Bill leg0411_04

By Simon Romero
Published: Tuesday, February 21, 2006

SPANISH LOOKOUT, Belize — Near this small Mennonite town carved out of the thick jungle, a farmer dug a shallow water well a few years ago and found a viscous black liquid seeping into the water.

Given Belize’s disappointing record of oil exploration, stretching back to its years under British rule, nearly everyone shrugged at the story except a stubborn Denver geologist.

Now Belize is the newest exporter of oil to the United States, a development that is starting to upend this small country of 280,000 people. A roughneck crew, backed by investors from Ireland and Colorado, struck oil in its first drilling attempt last year.

Their wells, dotting the dairy farms of German-speaking Mennonites who moved here a half-century ago from Canada and Mexico, are producing 2,000 barrels a day of oil similar in quality to the prized low-sulfur crude from the oil fields of West Texas.

Much of Belize is on tenterhooks regarding the oil and its ramifications. But the small companies behind the discovery, Belize Natural Energy andCHX Energy, which is based in Denver, are reveling in their good fortune.

Together with other independent companies that have recently struck oil and natural gas in locations once written off, including Paraguay, Syria and Uganda, these entrepreneurs are proving that wildcatting is alive and well.

As in Belize, the quantities of oil discovered in these places are relatively small. But with oil fetching more than $60 a barrel on world markets, smaller companies are willing to risk just about everything these days in hopes of finding even tiny oil fields.

“There were 50 dry wells drilled in Belize over 50 years until we came along,” said Susan Morrice, a geologist from Denver.

She is the wildcatter behind Belize Natural Energy, a venture she formed with the backing of her husband, Alex Cranberg, who is a Colorado oil executive, and more than 70 small investors from Ireland, her native country.

“We simply felt we could not fail in our search for oil in such a promising, if neglected, country.”

Morrice’s company has been remarkably swift in turning the discovery into cash. In January, Belize Natural Energy loaded 40,000 barrels onto a barge destined for a refinery in Houston, netting the company about $2 million.

With other wells planned in Spanish Lookout, it soon expects to be producing 5,000 barrels a day, and some geologists say Belize as a whole may one day produce 50,000 barrels a day. That level is tiny compared with Mexico, where daily output is 3.4 million barrels a day. But it is significant for a small country that has long scrounged for enough hard currency to import all its oil.

Belize imports about 5,000 barrels of oil a day. So the crude in Spanish Lookout has allowed this country to dream of energy independence.

Still, Belize, known as British Honduras until it was granted autonomy from Britain in 1981, faces some serious obstacles before it becomes anything resembling the Kuwait of Central America. It has no refineries or pipelines and, unlike many developing countries, it has no national oil company or oil ministry.

Andre Cho, a civil servant who is Belize’s inspector of petroleum, said the government had recently approved his request to hire more staff geologists, as well as a former United Nations consultant from India who specializes in organizing the petroleum industries of poor nations.

Despite such moves and the formation of a government petroleum advisory board in December, there is considerable skepticism throughout Belize that the country can develop its oil resources without the corruption and environmental damage that afflict other poor oil-producing countries.

Much of the tension around the oil discovery is focused on the 7.5 percent royalty that Belize Natural Energy is required to pay the government, which is much less than in other oil-producing countries. Royalties to Norway for exploration in the North Sea, for instance, are more than 70 percent.

Belize’s prime minister, Said Musa, has said the royalty was kept low to provide a strong incentive for companies to explore in a country where oil had never been found before.

Sheila McCaffrey, a director of Belize Natural Energy, said the government would end up collecting overall taxes of about 30 percent on the oil. That includes royalties and agreements that give the government a minority stake in the company, along with control of 10 percent of production from the oil wells.

The company is also trying to avoid ill will among Belizeans by channeling 1 percent of its revenue to a fund for protecting the country’s fragile environment, which is about 40 percent jungle.

The most acute political risk for Belize’s nascent oil industry may be a territorial dispute with Guatemala.

Representatives of the two countries agreed this month to begin negotiations to resolve territorial claims. But areas of Belize where oil exploration is taking place or planned remain squarely in land still claimed by Guatemala. Spanish Lookout is just a 20-minute drive from the Guatemalan border, where migrants seeking available land, many of them Maya Indians, have settled.

Special thanks to Gene Shinn & the Coral-list