Senate Committee Approves Unlimited Oil Company LiabilityJune 30, 2010 - by Donny Shaw
Since the Deepwater Horizon exploded and oil began gushing in the Gulf, Senate Democrats have tried repeatedly, under unanimous consent agreements, to move legislation to lift the $75 million cap on oil companies’ liability for economic damages caused by spills and gushers. Each time they tried, they were blocked by Republicans who argue that raising the liability cap would discourage competition in the offshore oil-drilling industry.
So the Democrats are moving forward with plan two — advancing the bill under regular order, through the committee process to the Senate floor. The Senate Environment and Public Works Committee passed the bill today, and they added a major strengthening amendment that will make the Republicans who objected to the original bill like it even less. Business Week reports:
BP Plc would have unlimited financial liability for oil spills under a measure approved today by a Senate panel to scrap a $75 million limit under a 20- year-old law.
The amendment to the Oil Pollution Act of 1990 would force offshore oil drillers responsible for spills to pay “the full cost” of damages. The Senate Environment and Public Works Committee approved the measure by voice vote and sent it to the full Senate.
President Barack Obama supports raising the ceiling and has faulted Republicans for blocking efforts to make BP more fully liable for damages tied to its Gulf of Mexico spill. BP Chief Executive Officer Tony Hayward has said he expects the liability limit to be increased.
London-based BP, Europe’s second-largest oil producer, will honor all “legitimate” claims from those harmed, such as the region’s fishing and tourist industry, Hayward has said.
The committee amended a version of the legislation that had proposed raising the limit to $10 billion from $75 million.
So, they’ve taken a bill that would have raised the $75 million cap to $10 billion and amended it to just remove the cap altogether. This is about more than just ensuring economic justice for people who have been affected by the Deepwater Horizon gusher. It’s also intended to create incentives for oil companies to make sure that their emergency plans and blowout preventers are in good working condition. With unlimited liability, it will be in their financial interest to make sure their drilling activities are safe.