WASHINGTON - The U.S. government collected less than $300,000 in fines from oil and natural gas companies drilling on federal lands over a 13-year period, presenting less of a deterrent than a minor slap on the wrist of violators, according to a new report from House Democrats.
The report, released by Democrats on the Natural Resources Committee, finds that the U.S. Interior Department issued $274,000 in fines between 1998 and 2011, "nothing more than pocket change for billion-dollar oil and gas companies."
Infractions recorded by the Interior Department during that time related to blowout preventer failures, a factor in the Deepwater Horizon oil spill, and inappropriate well construction.
The report comes as Capitol Hill lawmakers raise concerns over a drilling practice known as hydraulic fracturing, a common method used to extract oil and gas from federal lands. With questions surrounding the impact of fracking on drinking water, the Interior Department is expected to propose regulations that require companies to disclose the ingredients in fracking fluids.
The report released Wednesday faults the Interior Department for being inconsistent in issuing fines. It claims that the department issued fines to some companies, but not to others, for the exact same violation. "There doesn't seem to be a rhyme or reason to it," committee spokesman Eben Burnham-Snyder said.
The Interior Department has previously complained about the maximum fines it can charge to oil and gas companies for offshore infractions, as outlined under the law. Interior officials have urged Congress to raise the fine levels so they serve as a harsh enough deterrent to wealthy companies.
The Interior Department, under the Obama administration, has ramped up the number of well inspections and has levied higher fines than have been issued in the past, department spokesman Adam Fetcher said.
"As we continue to expand domestic natural gas production, it is essential that the public have full confidence that the right safety and environmental protections are in place," he said.
Copyright (c) 2012 Dow Jones & Company, Inc.
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