The U.S. Senate placed a piece of energy legislation on hold until September, much to the consternation of Nevada Senator Harry Reid. The bill (S. 3663 aka The Clean Energy Jobs and Oil Company Accountability Act of 2010) was championed by Reid and seeks to introduce laws raising the $75-million cap on fines for offshore oil spills to an unlimited amount and extend the federal approval process from offshore E&P plans from 30 days to 90 days which can be increased an additional 180 days at the U.S. Interior Secretary's discretion. The bill failed to garner support in the Democratic-controlled Senate, though that didn't prevent Reid from turning his ire to the opposition. ""It's a sad day when you can't find a handful of Republicans to support a bill that would create 70,000 clean-energy jobs, hold BP accountable, and look at a future as it relates to what BP did. It's clear that Republicans remain determined to stand in the way of everything," the four-term legislator said. Perhaps if Mr. Reid hadn't have been in such a rush to throw a poorly conceived bill on the floor, he might have gotten more support from his party. But heck, it's an election year for Reid, we have to say we tried, right? Naturally, opponents of the bill in the energy industry were happy to see Reid's legislation get put on hold. American Petroleum Institute president and chief executive Jack Gerard said, “The bill proposed by the Democratic leadership is not an effective or reasoned response to the spill. Instead it will cost American jobs, threaten our fragile economic recovery and jeopardize our energy security.” The removal of the cap on oil spill liability would, according to Gerard, force most E&Ps out of the Gulf of Mexico because they would be unable to purchase the necessary insurance to operate in the region. The IPAA issued a Washington Report on Aug. 5 praising the Senate bill being placed on hold, while also criticizing the passage of the similar CLEAR Act in the U.S. House of Representatives. The IPAA agree with the API's view on eliminating the cap on spill damage. The report states:

"According to a recent IHS study, independent producers account for more than half of offshore jobs. Removing these caps puts those jobs and a considerable amount of offshore energy production at risk. Passage of this section would ultimately result in only super majors and national oil companies producing America's offshore resources."
Other portions of the bill the IPAA disapproved of include the vague language used to explain the amendments to the National Policy for the Outer Continental Shelf. The IPAA speculates that these statutes in question present opportunities to challenge virtually any administrative decision and opens them to endless litigation and appeal. With the House passing a similar bill and the current one just being put on the back burner for a month, it's clear that Congress is dead set on revising offshore drilling regulation. The Macondo oil spill stirred up the hornets' nest, and to be frank, deservedly so as far as BP's safety record goes, but the problem now is a lot of poorly conceived legislation is in danger of being rushed through Congress in order to (1) give the appearence that Congress is in control of the situation, (2) appeal to wacko anti-business interests who view oil drilling as a sin against the Goddess Gaea (ie, Reid's base) and (3) get PR-building good press for Senators and Congressmen facing the dreaded mid-term election coming up in November. For the time being, we can take some comfort that there are checks to prevent some poorly conceived legislation from just strolling through the vetting process, but come late October and nothing's been signed, you can bet something will be ready to run through Congress, well written or not.