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Capital Report


August 2016 Issue

US House Committee Passes
Interior-Environment Bill

The U.S. House Appropriations Committee passed the FY17 Interior-Environment Appropriations bill with offshore-related provisions, NOIA reported. The original bill included language to roll back the new drilling margin requirements of BSEE’s recently issued Well Control rule, and an amendment was passed by the committee to address the pending Air Quality Rule proposed by BOEM.

Language included in the base House bill would roll back the 0.5 ppg requirement in the recently finalized Well Control Rule, so regulators have the ability to work with companies to evaluate each offshore well based on its unique characteristics. The language requires the agency to revert back to existing authority and practice with regard to drilling margins.

The amendment dealing with BOEM’s recently proposed Air Quality Rule would prevent BOEM from enforcing the final rule until their own air quality modeling studies have been completed and publicly reviewed and commented on. In addition, the amendment would require the agency to re-propose the rule.

CCFAM Discusses Priorities
And Partnership

The Canadian Council of Fisheries and Aquaculture Ministers (CCFAM) met to discuss a broad range of common priorities, including marine conservation, a process to review the Fisheries Act, market access for Canadian fish and seafood, responsible aquaculture development and aquatic invasive species.

They shared their priorities and discussed ways to partner to advance their goals of economic growth, strengthening global market access for Canadian fish and seafood products, and protecting Canada’s oceans, coasts, waterways and fisheries.

Canada is committed to protecting 5 percent of marine and coastal areas by 2017 and 10 percent by 2020. Canadian fish and seafood exports continue to grow, but aquatic invasive species have significantly reduced certain fish stocks native to Canada.

Ocean Champions Endorses
Florida Politicians

Ocean Champions, which builds political power for the oceans by helping elect pro-ocean candidates to the U.S. Congress, endorsed three candidates from Florida for the U.S. House of Representatives: Reps. Ileana Ros-Lehtinen (R-Fla.-27), Kathy Castor (D-Fla.-14), Debbie Wasserman Schultz (D-Fla.-23), and one candidate running for Senate: Rep. Patrick Murphy (D-Fla.).

Ros-Lehtinen cosponsored H.R. 774 (Illegal, Unreported, and Unregulated Fishing Enforcement Act of 2015) and H.R. 1648 (Foreign Spill Protection Act of 2015). Castor introduced H.R. 1091 (Save Our Shores Act of 2009) to address harmful algal blooms that impact fisheries, recreation and tourism, and human health. Wasserman Schultz co-sponsored bills to prevent oil spills and preserve and restore coral reefs. She has also led efforts to protect Florida’s Everglades. Murphy is a strong supporter of Everglades restoration efforts, beach renourishment projects, and the president’s Climate Change Action Plan.

TransCanada Sues US
For Keystone Rejection

TransCanada officially moved forward with a lawsuit against the U.S. under NAFTA, asking for $15 billion in damages because of President Barack Obama’s rejection of the Keystone XL tar sands pipeline.

Under NAFTA, this suit will be decided by a private tribunal, which critics of the lawsuit argue would be “unaccountable”.

DOT Proposes Grants
For Five Port Authorities

The U.S. Department of Transportation (DOT) announced 18 proposed grant awards for projects under the Nationally Significant Freight and Highway Projects Program.

Five port authorities are included: Georgia Ports Authority, Massachusetts Port Authority, Port of Coos Bay, Port Authority of New York and New Jersey, and Maine Port Authority.

Former NAS Head Discusses
New NAS Leader

Oceanographer Marcia McNutt, who in July assumed the presidency of the U.S. National Academy of Sciences (NAS), will face many challenges, according to her predecessor, Ralph Cicerone, but dismissive or unwelcoming treatment from the science community because she is a woman—the first woman to lead NAS—won’t be one of them, Cicerone told Eos.

Cicerone said McNutt likely will face many of the same challenges that confronted him, including attacks on the scientific evidence of human-induced climate change and a segment of the U.S. population that resents federal authority.

However, “I don’t think there is any resistance amongst the academy membership or larger forces to say, ‘Gee, we don’t want to deal with a woman,’” he said. “I think it is going to be the opposite.”

ONRR Releases Final Regs
On Oil, Gas Market Valuation

The U.S. Department of the Interior released final regulations that will improve valuation and revenue collection for the country’s mineral resources. Developed by Interior’s Office of Natural Resources Revenue (ONRR), the rule also provides the clarity and certainty for industry in determining the market value, for royalty purposes, of federal oil and gas, and federal and American Indian coal.

The final rule updates the regulations to help keep pace with modern technology and practices, reaffirming that valuation, for royalty purposes, is best determined at or near the lease and that gross proceeds from arm’s-length contracts (between independent entities with opposing economic interests) are the best indication of market value.

Eliminating the difficult-to-use benchmarks for non-arm’s-length sales (between affiliated companies), the rule replaces them with a simplified method of valuating production by using gross proceeds from the first arm’s-length-sale with applicable allowances.


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