New US oil rigs face inspections, fines in proposed law

WASHINGTON June 26 (Reuters) -New U.S. oil rigs and wells would face strict new design and inspection rules under a draft law circulated by a key House of Representatives committee on Friday.

The House Energy and Commerce Committee will discuss the draft bill at a June 30 hearing -- one of several congressional initiatives to crack down on the oil industry in the wake of the environmental disaster caused by BP's Deepwater Horizon spill in the Gulf of Mexico.

The 34-page draft “blowout prevention act” outlines the conditions for drilling and operating new “high-risk” wells -- offshore or on land -- and aims to prevent future disasters.Oil companies would not be allowed to drill unless they installed blowout preventers designed to cut off the flow of oil in worst-case scenarios, the bill said.

The bill addresses the design of safe wells, and would require independent technical inspection of new rigs before they begin operating. Third-party inspectors would need to review the rigs at least every six months, and the bill also calls for surprise visits from government inspectors.

Oil companies would need to be able to demonstrate they could control a spill within 90 days of a disaster, the draft said.

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