Juneau Empire: US Chamber Official Warns of Overreaction to BP's Gulf Spill
By Pat Forgey | JUNEAU EMPIRE
The U.S. Chamber of Commerce is trying to head off what they fear might be damaging new energy regulations and taxes, but says BP's Gulf oil spill means it is almost certain some new legislation will be passed this year.
"The tendency on really big issues is to try to push them through overnight without time to analyze them," said Karen Harbert, who heads the U.S. Chamber of Commerce's Institute for 21st Century Energy.
Harbert said she feared that the Gulf disaster would result in less oil exploration in the United States, and drive new energy investment overseas.
"Is any of that going to be here or is it going to be in places that are really hostile to our values," Harbert asked, while speaking to the Alaska State Chamber of Commerce in Juneau Tuesday.
She served as assistant secretary with the U.S. Department of Energy during George W. Bush's administration.
The Obama Administration's first reaction to the Gulf spill, a moratorium on deep-water exploratory drilling was already costing jobs and investment. While gasoline prices didn't go up immediately, the lack of exploration will be felt in 3-5 years when those wells aren't producing, she said.
Though the moratorium was blocked by the courts, the administration is trying to impose a new one and the uncertainty is stopping activity in the Gulf, she said.
The Gulf spill may also combine with the federal government's need for more money to raise taxes on industry, driving even more oil production overseas, she said. There are now also moves to end $80 billion worth of tax credits the oil industry gets, and the United States already has the highest corporate tax rates in the developed world.
The federal government is also considering lifting the liability limits on oil companies, which Harbert warned would also limit exploration. Many developments began with those limits and tax credits in place, and now they may be altered.
"We used to criticize Russia and Venezuela for changing contract terms, and we're doing it to our own companies right now," she said.
Holding oil companies liable for damage they do sounds good in principle, Harbert said, but might make it difficult for companies to finance new exploration in the United States, she said.
"They will not be able to get the insurance they need to operate," Harbert said