Home > newsroom > Page
Eliminating Liability Limits Kills Independent Producers Could Cost 300,000 Jobs, $147 Billion in Revenue
Without the ability to insure their operations, the backbone of the offshore oil and gas economy in the Gulf will be forced to shut down

WASHINGTON, D.C., July 29, 2010 - In a move that could further deteriorate the Gulf’s economy, the CLEAR Act would set unlimited liability on offshore operators.  While there is bipartisan agreement on the need for Congress to address and adjust existing liability caps, the unintended consequences of completely eliminating the cap could cost hundreds of thousands of American jobs.

Small, independent oil and gas producers that operate in the Gulf of Mexico and other areas of the Outer Continental Shelf do not have the means to self insure against potentially unlimited liability costs.  Large operators turning billions in profit each year, such as BP, have enough finances and capital to use as collateral against unlimited liability but not small producers.  Without the ability to insure their operations, independents—the backbone of the offshore oil and gas economy in the Gulf—will be forced to shut down.

Currently, independents in the Gulf of Mexico drill the vast majority of wells in shallow watter—122 compared to 8 shallow water wells drilled by major operators.  Independents also have a significant presence in the deepwater where they are drilling 62 out of 143 wells.  The independent producers accounted for $20 billion in tax revenue in 2009.

According to IHS Global Insight, an exclusion of independent energy producers in the Gulf will cost an estimated 300,000 jobs by 2020 and over $147 billion tax revenue.

Actual job and revenue losses will be much greater as independent energy producers around the nation, not just in the Gulf, will also be forced to shutter their operations.

“Without question, taxpayers should never pay for the damage caused by oil spills, it is those responsible and operators who should be held to full account. But Congress should not pass legislation that will automatically put innocent companies out of business and destroy jobs,” said Natural Resources Committee Ranking Member Doc Hastings.  “Small independent operators provide hundreds of thousands of good paying jobs to Americans and provide the country with domestic energy.  The purpose of an oil spill recovery bill should be to make offshore oil and gas production the safest in the world—not inflict greater economic damage.”

# # #

Print version of this document


Contact: Jill Strait or Spencer Pederson (202) 226-2311

Latest News

Bishop Statement on Antiquities Act Executive Order

House Committee on Natural Resources Chairman Rob Bishop (R-UT) issued the following statement in reaction to President Trump’s announcement on national monument designations. “Today’s action sends th...... Read more

Bishop Opening Statement on Markup: Infrastructure Proposals to Advance

Live Webcast: Click HERE. Remarks as prepared for delivery: “Today, the Committee will consider a range of bills to protect and improve our nation’s water and power infrastructure, spur job creation a...... Read more

Bishop Statement on Confirmation of Sonny Perdue as Agriculture Secretary

Today, Chairman Rob Bishop (R-UT) issued the following statement after the U.S. Senate voted to confirm Sonny Perdue as Secretary of the Department of Agriculture: “I congratulate Secretary Perdue on ...... Read more

View All News

Calendar

Full Committee Markup
Full Committee | 1324 Longworth House Office Building Washington D.C. 20515
Oversight Hearing on Examining the Consequences of Executive Overreach of the Antiquities Act
Subcommittee on Federal Lands | 1324 Longworth House Office Building Washington D.C. 20515
Oversight Hearing on The Challenges of Keeping Hydropower Affordable and Opportunities for New Development
Subcommittee on Water, Power and Oceans | 1324 Longworth House Office Building Washington D.C. 20515
View All Events