No Answers From Interior Department on Number of Foreign Companies Drilling for Oil and Gas in U.S.

November 22, 2011 - 12:35 AM
Rep. David Rivera

Florida Republican Rep. David Rivera. (AP Photo)

(CNSNews.com) – A Florida lawmaker wanting to find out how many foreign-owned companies have leases to drill for oil and natural gas in the U.S. was surprised to learn that the federal department issuing leases does not differentiate in its records between companies owned by foreign governments and others.

Republican Rep. David Rivera has been trying to establish the number of foreign-owned energy companies drilling in the U.S. but has been unable to get that information from the Interior Department, the agency responsible for granting leases for onshore and offshore oil and gas operations.

During a House Committee on Natural Resources hearing on Nov. 16. Rivera asked the department’s top official about getting the data.

First, he asked Interior Secretary Ken Salazar if he knew whether foreign companies “must first be incorporated in the Unites States” to qualify for a lease.

“I don’t know the answer to that question,” Salazar replied.



Rivera then told Salazar that his staff had earlier this month asked officials at two divisions of the Interior Department – the Bureau of Ocean Energy Management (BOEM) and the Bureau of Land Management (BLM) – for a list of foreign-owned companies that own leases in the U.S.

“They were surprised to learn that the government doesn’t keep a database of what companies are foreign government-owned,” Rivera said. “The foreign government-owned companies are just mixed in with the regular privately-owned companies.”

“So I believe it’ll be useful to at least be able to track these companies and what government owns them,” Rivera told Salazar. “Could you help me with that, get that information?”

“We will,” Salazar replied. He then turned to BLM head Robert Abbey and BOEM Director Tommy Beaudreau – both of whom were also participating in the hearing – to clarify the requirements for foreign companies to hold leases in the U.S.

Companies have to be “registered in the United States,” through the State Department, came the reply.

Interior Secretary Ken Salazar

Interior Secretary Ken Salazar. (AP Photo)

Rivera also criticized Salazar over a recent meeting in Spain with officials from the Spanish-owned Repsol oil company about plans for drilling off Cuba, which the lawmaker pointed out is designated as a “state sponsor of terror” by the State Department.

The planned Repsol drilling would take place 60-70 miles off the coast of Florida.  U.S. federal jurisdiction ends halfway between Florida and Cuba, or 45 miles from the U.S. coastline.

“I hope that, in the future, the administration will do everything possible to make sure that companies comply with sanctions that apply to businesses that do cooperate with sponsors of state terrorism, by perhaps, in your – in your agency, withdrawing leases on federal lands and waters,” Rivera told Salazar. “That could be a start to certainly send a signal that that this type of activity is certainly frowned upon, collaborating with terrorist regimes.”

Earlier this month, Rivera introduced legislation to end caps on liability for foreign companies for damages caused to U.S. waters or shores.

Under the Oil Pollution Act of 1990 and the Federal Water Pollution Control Act, clean-up costs are paid for by the Oil Spill Liability Trust Fund. The trust fund cap is limited to $1 billion per incident, with $150 million of that capped for response.

“Foreign oil spills could have a detrimental effect on state and local economies, hurting American businesses and costing American jobs,” Rivera said in a press release announcing the legislation.

The Foreign Oil Spill Liability Act of 2011 would make foreign entities cover the total cost of clean-up and compensation. It also would triple the liability and penalties if the spill emanates from waters of a state sponsor of terrorism, a provision clearly targeting Cuba.

A complete transcript from exchange between Salazar and Rivera follows:

DOC HASTINGS: So the chair recognizes the gentleman from Florida, Mr. Rivera.

RIVERA: Thank you, Mr. Chairman, and thank you, Mr. Secretary for being here. It was great seeing you down South in my district in the Everglades, and thank you for all of your efforts on Everglades restoration.

I'd like to ask you about an issue that I think not only impacts -- certainly impacts the ecosystem in South Florida but perhaps in the Southeast region of the United States, and that is oil drilling off the coast of Cuba. It's my understanding, in order for a foreign government owned company to operate in the U.S. and bid on leases in the U.S., they must first be incorporated in the United States. Is that correct?

SALAZAR: I don't know the answer that question.

RIVERA: OK. Well, recently, my staff contacted the Bureau of Ocean Energy Management and the Bureau of Land Management to try to get a list of all foreign government-owned companies that have leases in the United States. And they were surprised to learn that the government doesn't keep a database of what companies are foreign government-owned. The foreign government-owned companies are just mixed in with the regular privately owned companies. So I believe it'll be useful to at least be able to track these companies and what government owns them. Could you help me with that, get that information?

SALAZAR: We will. And let me ask, for the record, Abbey or Beaudreau have any information on that question?

(UNKNOWN): It is correct that, in order to obtain a federal OCS lease, a company needs to be registered in the United States through the relevant State Department...

(CROSSTALK)

RIVERA: Perfect. That's -- that's OK. Those -- I just -- I just want to make sure that I can get the information on the foreign government-owned companies. If you could help me with that...

(UNKNOWN): Yes.

RIVERA: ... that would be helpful. Thank you.

A few months ago, I believe in June, you were in Spain and spoke to Repsol officials regarding their proposed drilling plans in Cuban waters. Is that correct, Mr. Secretary?

SALAZAR: That is correct.

RIVERA: And in that meeting or any other meeting you've had with Repsol officials, did you -- a topic come up or reiterate United States policy on doing business with state sponsors of terrorism or have any discussions to discourage their actions in Cuba?

SALAZAR: You know, our focus, Congressman Rivera, has been to make sure that we do everything within the legal boundaries that we can operate in to protect the environment and the people of the United States.

RIVERA: So I would -- I would that to mean more of a cooperative effort to make sure and protect the people of the United States, which is important, to make sure and do every possible measure to do that. But you're telling me nothing was ever done by you to discourage their participation in collaborating with a state sponsor of terrorism in those offshore oil-drilling efforts.

SALAZAR: We do not have authority over other countries on what they do with respect to their...

(CROSSTALK)

RIVERA: I understand. I know you can't stop them, but do you ever try to discourage?

SALAZAR: Our program, Congressman Rivera, has to been to make sure that we do everything we can within our legal power.

RIVERA: OK. Well, let's talk about the...

SALAZAR: ... environment of the United States.

RIVERA: Let's talk about the legal power. In terms of in terms of the -- did you ever up bring up having the Bureau of Industry and Security also be allowed to inspect the rate (ph) to ensure that the Export Administration Act and the Export Administration Regulations 10 percent de minimum U.S. content rule were being respected, speaking of legal authority? Had that issue ever come up?

SALAZAR: You know, Congressman Rivera, this is an issue where the State Department and other agencies have the lead. And we are participating because of our expertise. But I do know whether those conversations took place, and I don't have an answer to your question.

RIVERA: OK, well, recently colleagues of mine here, along with Chairman Ileana Ros-Lehtinen sent a letter to the president regarding this issue.  Mr. Chairman, with your permission, I'd like to ask that that letter be submitted for the record.

HASTINGS: Without objection, it'll be part of the record.

RIVERA: Thank you.

I think it's of great concern by the lack of effort in this administration -- administration-wide, whether it be your agency, State Department or anyone else, that no effort has been made to previous a state sponsor of terrorism to drill approximately 60-70 miles off of Florida's coast and providing economic aid and comfort to the dying Castro dictatorship.

And I hope that, in the future, the administration will do everything to make sure that companies comply with sanctions that apply to businesses that do cooperate with sponsors of state terrorism, by perhaps, in your -- in your agency, withdrawing leases on federal lands and waters.

That could be a start to certainly send a signal that that -- that this type of activity is certainly frowned upon, collaborating with terrorist regimes.

Finally, Mr. Chairman, I'd like to draw attention with my colleagues, to legislation I have introduced with Congresswoman Ros- Lehtinen and Congressman Diaz-Balart and Representative Sires, the Foreign Oil Spill Liability Act, that would apply the same oil pollution act responsibilities and liabilities and Clean Water Act penalties that a domestic responsibility party would face to a foreign responsible party for a spill that pollutes U.S. waters and beaches.

The penalty, the liabilities would be triple. Currently, the burden is much lower on foreign spillers, forcing the American taxpayer to cover the cleanup costs, and members can contact my office if they wish more information on that legislation.

That's all I have. Thank you, Mr. Secretary.