Business News

Standing By on the Hill

by Jeremy Alford

Controversial legislation involving standby vessels may be on hold until next term.

The leader of the Louisiana Oil and Gas Association recently took U.S. Rep. Jeff Landry, R-New Iberia, to task over proposed legislation that would require "stand-by vessels to be located within three miles of every manned oil and gas platform facility in the Gulf of Mexico, including mobile offshore drilling units."

By Jeremy Alford

**November 2012
The leader of the Louisiana Oil and Gas Association recently took U.S. Rep. Jeff Landry, R-New Iberia, to task over proposed legislation that would require "stand-by vessels to be located within three miles of every manned oil and gas platform facility in the Gulf of Mexico, including mobile offshore drilling units."

LOGA President Don Briggs, who started making noise on the issue during the primary, says he and his organization were opposed to the legislation, not to Landry's bid against fellow Congressman Charles Boustany, R-Lafayette.

Photo by Peter Piazza

Briggs says Landry's amendment "would increase costs to oil and gas operations in the Gulf of Mexico by hundreds of millions of dollars" and that the industry does not agree with the notion of the "alleged intention" of Landry's amendment that it is necessary to improve worker safety.

Boustany, who serves beside Landry in Congress, also has weighed in against Landry's amendment in an op-ed piece in The Daily Advertiser, writing that the "misguided policy expands the reach of federal bureaucrats and imposes overbearing regulations harming energy producers and families along the Gulf Coast."

Boustany takes credit within that bill for the Notice of Arrival Act, which clarifies that a notice of arrival is not required for certain documented vessels and is an amendment Landry supported as well. The Coast Guard reauthorization bill containing Landry's amendment and several others passed the House on a voice vote, without objection, but the Senate stripped the standby provision out before passing its own version.

Briggs, however, says the issue is far from dead. "The bill can potentially go before a conference committee where the final language would be decided, but this will most likely not happen until after the November elections," he says. "If this standby language were to be added in the conference committee and passed within the reauthorization bill, the outcome would be stifling for the oil and gas industry and its future production and success."

U.S. Rep. Charles Boustany

As such, it's doubtful that Boustany or Landry will be able to gain traction any time soon with the House and Senate slated to adjourn in December and a new Congress being seated in January. Instead, supporters and opponents are already speculating about what will happen to the initiative when and if a conference committee - a panel of lawmakers from both chambers charged with forging a compromise - is seated next year.

On Capitol Hill, Landry's amendment for standby vessels divides oil and gas producers from boat builders, who stand to benefit from it. The latter, including Bollinger Shipyards, at $14,900, and Edison Chouest, at $13,500, are top contributors to Landry this cycle, as well as major employers in the current 3rd Congressional District.

Landry says the Coast Guard and Maritime Transportation Act, which authorizes Coast Guard funding for the next four years "will enhance the safety of our hard-working men and women working off our shores to extract the energy our nation needs." He says he was inspired by the 2010 BP oil spill to file the provision.

"My standby vessel provision applies the lessons of the Deepwater Horizon tragedy and guarantees our offshore workers will have a vessel nearby ready to act if another accident occurs," he adds.

According to the Offshore Marine Service Association, the standby vessel provision would require - one year after enactment - that owners and operators of manned facilities be required to station a vessel within three nautical miles during drilling and certain operations. Additionally, "a standby vessel would have to be on station within 12 nautical miles of manned production facilities."

OMSA's analysis states that the provision would allow the Coast Guard's district commanders to lessen these distances if adverse weather conditions hamper a standby vessel's response time or water temperatures lessen the time before hypothermia sets in. Moreover, district commanders must provide 72 hours notice before reducing the distances, under the current bill.

Briggs, meanwhile, points to a recent report by the Bureau of Safety and Environmental Enforcement, which found that from the period of 1996 to 2009, there were only three fatalities that were related to hypothermia in the Gulf of Mexico.

"During this same time frame, the industry voluntarily reported 1.04 billion man-hours equating to a workforce with an annual average of over 35,000 personnel," Briggs says.

He notes that the industry is projecting an additional 150 to 200 vessels would be needed to meet the standby language requirements. Also, more personnel would be required to operate the additional vessels, according to Briggs.

Briggs says regulations already exist "using the most efficient technology that is designed specifically to protect offshore workers, and the regulations have been deemed adequate by the regulating bodies" and that the timing is simply wrong.

"As the country is already trying to recover from the worst recession since the Great Depression, it is vitally important that the U.S. Congress not create barriers that prevent energy and economic development within the Gulf of Mexico region," he says.

Landry maintains that there's a good deal of merit in the House-passed bill, aside from his standby vessel provision, including the following sections:

The "manager's amendment," which would grant the Coast Guard the authority to allow mariners to continue to work while their medical certificates are being renewed, "ensuring that bureaucratic delays do not prevent a mariner from earning a paycheck."
The Cummings-Landry Amendment, co-sponsored by Congressman Elijah Cummings, a Democrat from Maryland, which would increase the transparency for Jones Act waivers, "thereby helping to ensure U.S. workers do not unfairly lose contracts to foreign mariners."
The Commercial Vessel Discharge Reform, which would ensure that inland vessels have to comply with only one nationwide standard for ballast water discharges, instead of 50 differing standards. It also sets U.S. standards to mirror international standards.

Jeremy Alford can be reached at [email protected].