Wirelines

Posted on 30 October 2009

EPA may draft national cbm regulations

The US Environmental Protection Agency indicated it’s on the path to formulating national regulations for coalbed methane (CBM) operations under the Clean Water Act. IPAA and five other major national trade associations, including IADC, joined by 38 state producer trade groups, have vigorously protested this initiative as unwarranted, and reiterated opposition in an 8 August comment to the docket.

Industry cited the fact that EPA has not demonstrated that there is an environmental problem warranting national regulations. Moreover, the long-established National Pollutant Discharge Elimination System (NPDES) provides a reliable and tested framework, structured to delegate the permitting process to state regulatory agencies.

IADC group, Indonesian tax reps meet

An IADC delegation, led by Lane Martin of Transocean, met with representatives from the Badora II office of the Indonesian Tax Administration in Jakarta to share information about offshore operations of drilling contractors and to express IADC’s concerns about backsliding in the application of settled tax agreements between IADC and the Indonesian government. IADC has long-established understandings with the government in the area of “deemed profits,” which have enabled relatively smooth relations between drilling contractors and tax authorities. Recently, however, as Indonesia faces fiscal problems, it has put increased tax pressure on oilfield contractors. An encouraging outcome of this meeting was the number of new faces in the crowd unfamiliar with the drilling business who were genuinely interested in learning about how a rig works and what role drilling contractors play in the overall E&P process. The head of the Badora II office committed to take IADC’s message to his superiors and counterparts about how important a reliable, transparent and simplified tax system is to the drilling industry.

Supreme Court rules on EXXON Valdez spill

In its recent term, the US Supreme Court rendered a milestone decision in the case of the 1989 oil spill in Alaska by the Exxon Valdez oil tanker. IADC submitted an amicus brief in the case as it had implications for the liability of vessel owners for punitive damages in federal cases of crew malfeasance causing injury to persons and the environment.

ExxonMobil, joined by IADC and others, argued that settled maritime law forbids the award of punitive damages against a vessel owner, who nevertheless remains liable for actual compensatory damages. The court didn’t accept that argument but did break ground by limiting punitive damages to no more than compensatory damages. The decision establishes a “bright line” for punitive damages in maritime cases, which now cannot be left to the whim of a jury.

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