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The Prelude to Cheney’s Katrina

SOURCE: AP/Charles Dharapak

Unabashedly pro-oil policies and permissive regulatory environment created during the Bush administration set the stage for Cheney’s Katrina—the BP oil catastrophe.

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Read also: BP Disaster Is Cheney’s Katrina by Rebecca Lefton

Former Vice President Dick Cheney’s National Energy Policy Task Force concluded in May 2001 that “advanced, more energy efficient drilling and production methods: reduce emissions; practically eliminate spills from offshore platforms; and enhance worker safety, lower risk of blowouts, and provide better protection of groundwater resources.” At that time, with two oilmen in the White House and two more Texans leading an emboldened Republican majority in the House of Representatives, Big Oil had an unprecedented opportunity to set U.S. energy policy.

Big Oil did not miss the opportunity. A deeper look at the energy legislation based on Cheney’s secret energy task force underscores how the unabashedly pro-oil policies and permissive regulatory environment created during the Bush administration set the stage for Cheney’s Katrina—the BP oil catastrophe.

Big Oil-backed Republicans move quickly

The House Republican leadership had extensive ties to Big Oil. Former Rep. Dick Armey (R-TX), the majority leader from 1995 to 2003, received more money from oil and gas interests than he received from any other industry during his nearly two decades in Congress. The oil industry was also the biggest backer of former Rep. Tom DeLay (R-TX), who represented a Houston-area district and served first as majority whip and then majority leader following Armey’s retirement.

After Cheney’s secret energy task force released its National Energy Policy Report in May 2001, House Republicans almost immediately tried to enact much of it into law. House Energy and Commerce Chairman Bill Tauzin (R-LA), another favorite of Big Oil who received nearly $600,000 in campaign cash from the industry, had a bill on the House floor within two and a half months. The so-called SAFE Act revealed exactly what Cheney and his allies meant by a “decent regard” for the environment.

Among the many egregious provisions in the 2001 bill (H.R. 4) were:

  • Taxpayer funds to reimburse oil companies for the costs of complying with the National Environmental Policy Act (Sec. 6234)
  • A suspension of royalties on tens of millions of barrels of oil produced in the Gulf of Mexico—especially from deepwater wells like the one now spewing into the gulf (Sec. 6202)
  • Opening the Arctic National Wildlife Refuge to drilling—with expedited leasing, limited judicial review, and lip service to environmental concerns (Div. F, Title V)

Cheney’s congressional allies find a new low

While disagreements with the Democratically controlled Senate prevented final passage of a bill during the 107th Congress from January 2001 to January 2003, Cheney and his Big Oil-backed allies came back with a vengeance later in 2003 after seizing control of the Senate. The House, with Tom DeLay now serving as majority leader, quickly passed an even more sweeping bill that fulfilled the pro-oil blueprint crafted by Cheney’s secret energy task force. Conference negotiations largely excluded Democrats and added provisions not passed by either chamber. The conference report that emerged “included the worst provisions of both bills,” such as:

  • An exemption for all oil and gas construction activities, including roads, drill pads, pipeline corridors, refineries, and compressor stations from having to obtain a permit controlling polluted stormwater runoff caused by construction activities, as previously required under the Clean Water Act (Sec. 328).
  • Applicants for federal drilling permits could take up to two years to comply with application requirements, but would have given the Bureau of Land Management only 10 days to make decisions on drilling permit applications (Sec. 348).
  • Sweeping new authority for the Department of Interior to permit new energy projects in the Outer Continental Shelf without adequate oversight or standards (Sec. 321).
  • A $2 billion program to encourage already-profitable oil companies to drill in “ultra deepwater” (Title IX, Subtitle E part II).

The House passed the conference report the same day it was filed. Fortunately, one of “the most anti-environment pieces of legislation in recent memory” fell victim to a bipartisan filibuster in the Senate and was never brought to a final vote.

Cheney finally finds success

Republicans retained the White House (with the help of over $2.5 million from the oil and gas industry) and increased their majorities in both houses of Congress following the 2004 election. Rep. Tauzin retired and was replaced as chairman of the House Energy and Commerce Committee by another Cheney ally, the equally pro-oil Joe Barton of Texas—the recipient of more than $1.4 million in campaign cash from the oil and gas industry.

Barton shepherded a bill through the House that included tens of billions in subsidies for Big Oil and other forms of dirty energy and dozens of other provisions to reduce or eliminate royalties paid by Big Oil to taxpayers, waive or eliminate environmental and safety reviews, and otherwise enhance Big Oil’s ability to exploit our natural resources with little or no oversight and with maximum profit.

Lobbying records show that Andrew Lundquist, the executive director of Cheney’s energy task force, left government to become a lobbyist (at a firm later joined by since-jailed Deputy Secretary of the Interior Stephen J. Griles) and was actively lobbying on the legislation on behalf of BP and other energy companies.

One of the worst elements of what has come to be known as the “Dick Cheney energy bill” had a direct role in eliminating the kind of regulatory oversight that may have prevented the blowout of BP’s Mississippi Canyon 252 well on April 20 of this year. Section 390 of the legislation dramatically expanded the circumstance under which drilling operations could forego environmental reviews and be approved almost immediately under so-called “categorical exclusions” from the National Environmental Policy Act.

The use of such exclusions went on to widespread abuse under the Bush administration. BP’s blown-out well did not undergo an environmental review thanks to a categorical exclusion. (BP was lobbying as recently as April to expand the use of such exclusions.)

The expansion of categorical exclusions in the bill is far from the only giveaway to Big Oil at the expense of the environment and taxpayers. Other troubling provisions include:

  • Tens of billions in subsidies for dirty energy, paid for by deficit spending.
  • Exempted hydraulic fracturing, a process invented by Cheney’s former employer Halliburton, from the Safe Drinking Water Act (Sec. 322).
  • Relieved oil companies of paying royalties to the taxpayers for millions of barrels of oil produced from deepwater wells (Sec. 345).
  • Permanently exempted all oil and gas construction activities, including roads, drill pads, pipeline corridors, refineries, and compressor stations from having to obtain a permit controlling polluted stormwater runoff caused by construction activities, as previously required under the Clean Water Act (Sec. 323).
  • Required a study to “identify and explain how legislative, regulatory, and administrative programs or processes restrict or impede the development of identified resources and the extent that they affect domestic supply, such as moratoria, lease terms and conditions, operational stipulations and requirements, approval delays by the federal government and coastal states, and local zoning restrictions for onshore processing facilities and pipeline landings.” Such “impediments” could typically include policies and regulations designed to protect human health, fish and wildlife, wild lands, and valuable cultural and historic sites on public lands (Sec. 357).
  • Weakened states’ ability under the Coastal Zone Management Act to have a say in projects and federal activities that affect their coasts including limiting appeals related to pipeline construction or offshore oil development (Sec. 381-82).
  • Allowed oil companies to have their leases reinstated if they had been terminated because of nonpayment of rental fees during Bush’s first term (Sec. 371).
  • Created a loophole to allow oil companies to drill under a national seashore by transferring the mineral rights to private ownership or ownership by the state of Texas (Sec. 373).

The Energy Policy Act of 2005, signed by President George W. Bush on August 8, 2005, achieved many of the goals set out by Cheney’s secret task force in 2001 and ushered in a new era of deregulation, self-regulation, and utter disregard for environmental and safety laws. It also coincided with a culture of deep and widespread corruption at the Interior Department, including the Minerals Management Service. This era unquestionably set the stage for the BP oil catastrophe—Cheney’s Katrina.

Joshua Dorner is Communications Director for Progressive Media. To read more about the causes and consequences of the BP oil catastrophe, go the Energy and Environment page of the Center for American Progress web site.

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