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 the Appointment of Brian Steed as Director of the Bureau of Land Management

Chairman Rob Bishop (R-UT) issued the following statement in reaction to the appointment of Brian Steed as Acting Director of the Bureau of Land Management (BLM): “Brian Steed has the expertise to hel...... Read more

Financial Controls Over Federal Assistance Dominates Hearing on Hurricane Recovery in U.S. Territories

Today, the Full Committee held an oversight hearing on “The Need for Transparent Financial Accountability in Territories' Disaster Recovery Efforts." The panel reviewed the financial needs of both Pue...... Read more

Committee Passes Bipartisan SECURE American Energy Act

Today, the House Committee on Natural Resources passed H.R. 4239, the “Strengthening the Economy with Critical Untapped Resources to Expand American Energy Act” or “SECURE American Energy Act.” The bi...... Read more

View All News

Calendar

Oversight Hearing, "Modernizing NEPA for the 21st Century"
Full Committee | 1324 Longworth House Office Building Washington D.C. 20515
Legislative Hearing on Bill Streamlining Water Projects
Water, Power and Oceans | 1324 Longworth House Office Building Washington D.C. 20515
Legislative Hearing on Geothermal Exploration, 3 Other Bills
Energy and Mineral Resources | 1334 Longworth House Office Building Washington D.C. 20515
View All Events