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Capital Report


August 2014 Issue

US House Committee Introduces Bill To Promote States’ Control Over Waters
The Waters of the United States Regulatory Overreach Protection Act (H.R. 5078), bipartisan legislation to uphold the federal-state partnership to regulate U.S. waters and prohibit the Environmental Protection Agency (EPA) and the Army Corps of Engineers from implementing a rule that broadens the scope of the Clean Water Act (CWA) and expands the federal government’s regulatory power, was introduced in the U.S. House by Transportation and Infrastructure Committee leaders.

“Regulation of the nation’s waters must be done in a manner that responsibly protects the environment, without an unnecessary and costly expansion of the federal government,” Shuster said. “This bill ensures that we can continue to protect our waters without unreasonable and burdensome regulations on our businesses, farmers, and families.”

H.R. 5078 prohibits the EPA and the Army Corps of Engineers from developing, finalizing, adopting, implementing, applying, administering or enforcing: the proposed rule that would redefine “waters of the United States” under the Clean Water Act (CWA), or using the rule as a basis for future administrative actions that would undermine the federal-state partnership or usurp Congress’s express authority to change the scope of the Clean Water Act through a redefinition of “waters of the United States”; any agency guidance that would expand the scope of waters covered by the CWA, as the Administration’s proposed WOTUS rule and draft guidance would do; and the agencies’ interpretive rule that would broaden regulation of the agricultural community by restricting the exemption from CWA Section 404 permitting certain agricultural conservation practices.

The bill also requires the EPA and the Corps to engage in a federalism consultation with the states and local governments by jointly consulting with relevant state and local officials to formulate recommendations for a consensus regulatory proposal that would identify the scope of waters to be covered under the Clean Water Act, and those waters to be reserved for the states to determine how to regulate.

US House Passes Amendment to Increase Corps Funding to Meet HMT Target
The American Association of Port Authorities (AAPA) lauded passage of the U.S. House floor amendment to the fiscal 2015 Energy and Water Appropriations bill that increases the Corps of Engineers funding to meet the Harbor Maintenance Tax (HMT) funding target included in the recently enacted Water Resources Reform and Development Act (WRRDA).

The amendment, which added $57.6 million and was offset by decreasing funding in the energy side of the bill, was spearheaded by U.S. Rep. Janice Hahn (D-Calif.), co-chair of the Congressional PORTS Caucus, and U.S. Rep. Bill Huizenga (R-Mich.). The amendment passed on a 281-137 vote.

AAPA worked closely with the PORTS Caucus to build support in Congress for meeting the first-year WRRDA HMT funding target.

Scottish Commission Says New Fiscal, Regulatory Regime Needed for UKCS
Scotland’s independent expert oil and gas commission has determined that radical fiscal and regulatory change is necessary to ensure that the remaining hydrocarbons on the U.K. Continental Shelf (UKCS) are fully exploited to deliver the maximum economic contribution to the nation.

The commission, set up by the Scottish government to inform the debate in advance of a referendum, was tasked with exploring how the total value of the whole industry can be maximized with an emphasis on ensuring the sustainable future of the UKCS. The recommendations in the report are intended to provide direction to government in shaping future policy, irrespective of the outcome of the referendum.

The commission’s report warns that the industry has reached a critical crossroads with the current record levels of investment masking the significant decline in investment in both exploration and development activity, which will inevitably result in markedly reduced activity harming both future production levels and total recovery.

It concludes that a step-change in stewardship philosophy, largely through an overhaul of the fiscal and regulatory regimes, is urgently needed to achieve maximum value, recovery and longevity from the remaining life of the UKCS.

The immediate challenge for government, says the report, is to steer a clear path towards a targeted fiscal policy framework which is stable, predictable and internationally competitive. This needs to be aimed less at taxes on production but more at achieving a balanced tax take across the entire industry and maximizing the total value generated into the wider economy by produced hydrocarbons.

The commission concludes that government must recognize that policy must swiftly change from seeking to control access to a sought-after resource to one where investment has to be attracted by positive features. The remaining resources in the UKCS are estimated to be between 10 billion barrels of oil equivalent (bboe) and up to 24 bboe.

US House Passes Bill Supporting Offshore Energy Development
H.R. 4899, the Lowering Gasoline Prices to Fuel an America that Works Act, passed in the U.S. House on a vote of 299-185, with 10 Democrats supporting the bill. House Natural Resources Committee Chairman Doc Hastings (R-Wash.) sponsored the legislation. The bill requires lease sales in new areas, including offshore Virginia, South Carolina, and southern California; provides 37.5 percent revenue sharing to any state with offshore energy development; prevents BOEM & BSEE from implementing coastal and marine spatial planning under the National Ocean Policy; modifies Gulf revenue sharing under GOMESA; and codifies reorganization of the former MMS. The Senate is not expected to consider H.R. 4899, but Senate Energy and Natural Resources Committee Chair Mary Landrieu (D-La.) has stated her intent to focus on oil and gas exploration and development. “Opening up more of our Outer Continental Shelf to energy exploration and development will create thousands of new American jobs and billions of dollars in state and federal revenues, all while decreasing our dependence on foreign oil and increasing our domestic energy security,” said National Ocean Industries Association President Randall Luthi.


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