CLEAR Act Provisions that POGO Hopes Will Survive Markup

If there is any good news in this awful Deepwater Horizon disaster, it's that Congress and Interior are implementing long-needed reforms for effective oversight of responsible drilling.

Both of the congressional committees of jurisdiction have legislation that will slow the revolving door between offshore regulators and the industries they oversee—the Senate's passed out of committee last week, and yesterday House Natural Resources Committee Chairman Nick Rahall (D-WV) released the latest version of the Consolidated Land, Energy, and Aquatic Resources (CLEAR) Act of 2009, which incorporates several of POGO's recommendations. Most importantly, it includes a revolving door provision—with civil and criminal penalties—that would change existing law by:

1. Extending revolving door restrictions beyond just the highest GS-levels and including inspection and enforcement officials.


2. Prohibiting new hires at Interior from lobbying, as well as from "advising directly or indirectly" any former employers in industry within the prohibited period of time.


3. Expanding the financial interests, disallowed.


4. Adding civil and criminal penalties to the gift ban.

The House Natural Resources Committee is marking up the bill tomorrow, and we hope that the following provisions will pass out of the committee:

• Statutorily ending the Royalty-In-Kind (RIK) program (Secs. 217, 240)
  The Government Accountability Office (GAO) repeatedly found that Interior could not verify that the industry-created RIK program accurately collected royalties owed to taxpayers. The CLEAR Act would put the final nail in the coffin of this failed program.
  
  
• Ending conflict of mission at Interior (Secs. 101, 102, 103)
  The Minerals Management Service (MMS) was so focused on leasing and production that oversight functions were largely minimized or ignored. By establishing three separate bureaus focused on leasing, auditing, and inspections Interior will be better able to ensure that development is responsible and accountable.
  
  
• Restoring and strengthening the auditing of royalty payments (Secs. 302, 305)
  The CLEAR Act would end Interior’s practice of using compliance reviews instead of government auditing standards to verify that companies accurately pay royalties and get taxpayers their fair share for their natural resources, and would increase the penalties companies must pay when they fail to correctly report or knowingly underpay royalties.
  
  
• Ensuring taxpayers get their fair share in royalties (Sec. 206, 217, 219)
  A review of royalty payment rates is overdue, and POGO is glad to see that the competitive bidding process includes appropriate bid-minimums.
  
  
•  Improving transparency (Secs. 102, 205, 232, 239)
  The CLEAR Act would require information relevant to inspections, failures, or accidents involving equipment and systems used for exploration and production of energy and mineral resources to be publicly available. The Act also would require the Secretary of the Interior to maintain a public electronic database that identifies each federal oil and gas lease, each lessee, and the progress made toward production under each lease. The Secretary would also be required to publish online information relating to oil and gas chemical use for drilling or completing the well.

The CLEAR Act also includes a number of provisions that would require companies to have more comprehensive exploration plans and more preparation (and specifically a safety case) to respond to a disaster. Furthermore, the Secretary would have the authority to cancel leases that don't meet these provisions. There's obviously a lot more to the bill—it's 186 pages—but these are some of the highlights.

POGO Executive Director Danielle Brian will be talking about these reforms and other changes that need to occur next week when she testifies before the House Oversight and Government Reform committee on July 22.

And by the way, if you’re an inspector, auditor, or other employee working at the freshly christened Bureau of Ocean Energy Management, Regulation, and Enforcement, we’d love to hear if you’re seeing real change on the ground.

-- Mandy Smithberger

See also: POGO Recommendations on House Legislation to Reform Oil and Gas Regulator