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Capital Report


August 2012 Issue

RESTORE Act Signed into Law
The Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economies (RESTORE) Act was signed into law in July. The act will require 80 percent of penalties paid by BP plc (London, England) under the Clean Water Act to go to gulf states for ecological and economic restoration after the Deepwater Horizon oil spill.

The Clean Water Act allows EPA to collect $1,100 per barrel of oil spilled, or $4,300 per barrel if there is a finding of gross negligence, from parties found responsible for an oil spill in federal waters. Based on the estimated 4.9 million barrels of oil spilled in the Gulf of Mexico, BP could face fines between $5.4 billion and $21.1 billion.

Under current law, this money would have gone to the U.S. Treasury, and the Gulf Coast states would not receive any funding.

Under the RESTORE Act, 35 percent of the funds will be allocated equally among the five Gulf Coast states, Texas, Alabama, Mississippi, Florida and Louisiana, which was hit hardest by the 2010 oil spill. Another 60 percent of funds will be spent at the approval of the Gulf Coast Ecosystem Restoration Council, which will comprise state and federal representatives—30 percent as determined solely by the council and 30 percent as determined by the states, with the approval of the council.

The remaining 5 percent of funds will go to Gulf Coast research, science and technology, including fisheries management and ecosystem monitoring and the establishment of a Gulf Coast Center of Excellence in each state.

Committee Aims to Rewrite Administration's US Offshore Drilling Plan
The House Natural Resources Committee in July approved legislation to replace the Obama administration's proposed five-year offshore drilling plan in a 24-17 vote. The legislation was introduced in early July by Rep. Doc Hastings (R-Wash.), who chairs the committee.

Under the Outer Continental Shelf Leasing Act, President Obama's proposed plan does not become final and in effect until it undergoes a mandatory 60-day congressional review.

Rep. Hastings criticized the plan for prohibiting offshore drilling in new areas and only allowing lease sales to occur in areas that are already open, as well as canceling and delaying multiple lease sales, such as the Virginia lease sale scheduled for 2011. Under the present plan, the soonest that a lease sale could occur off Virginia would be in 2017.

At the hearing, eight amendments were offered, with one being accepted by the committee. Rep. John Jeff Duncan (R-S.C.) received approval for his amendment to add a lease sale (no. 255) for the South Atlantic-South Carolina Coast in 2015. Amendments that did not pass include Rep. Ed Markey's (D-Mass.) proposal to prohibit new leases until large oil companies relinquish federal tax breaks on production and Rep. Frank Pallone's call for striking Mid-Atlantic Ocean leases from the plan altogether.

The bill is co-sponsored by Rep. Doug Lamborn (R-Colo.) and Rep. Jeff Landry (R-La.).

US Coast Guard MDA Criticized at Hearing
The Subcommittee on Coast Guard and Maritime Transportation held a hearing in July to review the implementation of federal maritime domain awareness (MDA) programs. Vice Adm. Peter V. Neffenger, the U.S. Coast Guard (USCG) deputy commandant for operations, testified.

Vice Adm. Neffenger discussed the development of the USCG's MDA programs and how the USCG leverages and shares MDA in its day-to-day security operations.

Rep. Frank LoBiondo (R-N.J.), chair of the subcommittee, expressed disappointment in the inefficiency and duplicity of information in the USCG's MDA programs. He also pointed to the steep costs programs will require of vessel owners, such as the USCG's proposal that fishing vessels must carry AIS transponders in addition to their already required vessel monitoring systems.

'Each of these requirements and proposed mandates are, and will be, very expensive for vessel owners. Yet it is unclear how they will benefit safety and security in our ports and waterways if the Coast Guard lacks the ability to properly integrate and analyze the data,' LoBiondo said. 'I am concerned that after 10 years and billions of dollars, the Coast Guard still lacks the infrastructure to sufficiently tie these disparate MDA systems into one 'common operating picture.''

Legislators Call for US Government to Examine Greenpeace Protests, Establish a US Arctic Policy
Alaska Sens. Lisa Murkowski and Mark Begich called for the creation of a formal U.S. strategy for the Arctic in a letter sent to President Barack Obama in July. The U.S. is the only Arctic nation lacking such a plan, the senators said.

U.S. Arctic policy was last updated with the finalization of National Security Presidential Directive 66 and Homeland Security Presidential Directive 25 in 2009.

The letter notes that the work done since then by NOAA, the Department of the Interior, the U.S. Navy and U.S. Coast Guard, have broadened this policy, but asks for a cohesive strategy outlining the nation's goals. The senators also requested Alaska and its Arctic Policy Group be a major player in developing this strategy.

In a separate letter, Sen. Murkowski and Rep. Doc Hastings (R-Wash.) in July wrote to NOAA and the Bureau of Safety and Environmental Enforcement (BSEE), asking what measures the agencies have taken in regards to Greenpeace's planned protests of Shell Oil Co.'s (Houston, Texas) activities in the Arctic.

Greenpeace is sending its ships Esperanza and Arctic Sunrise, from which it plans to use submersibles, AUVs and 3D ice-floe profilers. The work will research the environmental effects of Shell's drilling rigs, Greenpeace said.

Citing concerns over the safety of the offshore drilling operations and workers, marine mammals and Native Alaskan subsistence culture, the legislators called for the agencies to provide them with specific steps to address operations by outside parties and asked if an environmental review of Greenpeace's activities had been considered.

When reached for comment, NOAA responded that it had not received an application for an incidental harassment authorization (IHA) from Greenpeace. Parties without an IHA could be liable under the Marine Mammal Protection Act if they end up harassing, hunting, capturing, killing or collecting marine mammals.


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