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For Immediate Release
June 30, 2010

IPAA Statement on Offshore Oil, Natural Gas Production Liability Legislation
Chairman says bill is unreasonable from an economic, business standpoint; results in job losses, increased oil imports

WASHINGTON - Earlier today, the U.S. Senate Environment and Public Works Committee approved legislation that could drastically undercut the ability of America's independent oil and natural gas producers - who hold 90 percent of the nation's offshore leases - to continue operations, threatening thousands of American jobs, the Gulf's economy and our nation's energy security. The House Transportation and Infrastructure Committee is expected to hold a similar vote tomorrow.

Bruce Vincent, chairman of the Independent Petroleum Association of America (IPAA) and president of the Houston-based Swift Energy (NYSE: SFY), issued this statement about the legislation:

"The unintended consequences of this shortsighted legislation will lock-up the majority of new, American offshore oil supplies because producers, as well as insurance companies, will not be able to provide for infinite liability costs. This is unreasonable from an economic and business standpoint and will have a devastating impact on job losses and possible increased reliance on foreign oil. It will be most harmful to America's smaller, independent oil and natural gas producers, who are responsible for producing nearly a third of the Gulf's oil and more than 60 percent of the natural gas.

"Commonsense changes must be made to the Oil Pollution Act, and we'll continue to work with Congress to get this right. However, the legislation passed by this Senate panel today will effectively prevent America's independent producers from securing the insurance needed to operate offshore.

"The winners of this legislation - and similar bills being considered in the U.S. House - are super majors and foreign oil companies. At the same time, this proposal will inevitably result in the loss of thousands of good-paying American jobs, while deepening our dangerous dependence on unstable regions of the world for the energy needed to keep our economy competitive.

"IPAA believes in the following principles:

o Any company operating offshore or onshore should be fully responsible (financial and otherwise) for all clean-up efforts.

o There must be a fund to ensure that those affected by such incidents (i.e., fishermen, etc.) will be able to fairly recoup lost costs without being caught in fierce litigation with large corporations.

o The oil industry, collectively, should contribute to this fund and ensure its long-term viability.

"These principles are already a part of federal law in the Oil Pollution Act of 1990 (OPA 90) and the Oil Spill Liability Trust Fund (OSLTF). Certainly, some changes need to be made to update out-of-date OSLTF limits. However, we hope that Congress will take a methodical approach to address these issues and make changes that are reasonable and economic and promotes energy security in America."