Oil Spill Liability

By Libby Casey

As the oil spill in the Gulf of Mexico continues to flow and soil Louisiana’s coastline, Washington is asking how oil company B-P should be held accountable – and what should be done in future accidents. 

Republican Senator Lisa Murkowski has introduced a bill to make sure B-P follows through on its pledge to pay claims from the Deepwater Horizon accident.  It would waive the liability cap.  Democrats have proposed their own solutions, but so far none on either side have gained enough momentum to move forward.

There’s been a lot of talk about just how much money in liability costs companies like B-P should pay.  One proposal would dramatically raise the cap from $75-million to $10-Billion.  When Murkowski expressed skepticism recently and said the number seemed arbitrary, the backlash was intense.  The Senator says she does think the ceiling should be raised – she just wants to do it with intention.

If Congress decides to impose a strict and direct liability of 10 billion dollars on top of the unlimited cleanup and unlimited lawsuits that can be brought against parties in state court, we have to consider what the potential consequences may be.  Will there be jobs lost, particularly in the Gulf Coast.

Murkowski called for a hearing, held today, to discuss the liability limits.  She says while they figure out what to do in the future, B-P should indeed be on the hook now, agreeing with the Obama Administration.  The company has pledged repeatedly to pay all reasonable claims.

I think there has been some mischaracterization out there that BP is only going to be responsible for $75-million of the spill.  Mr Chairman, if I really thought the federal government protect companies that have billions of dollars in assets, then only require they pay only $75-million in costs for damages to the spill, with taxpayers and spill victims that could possibly be hung out to dry, I would be the absolute first to introduce legislation to correct a flawed system.

The Obama Administration says it’s focused on future disasters – and wants to get rid of any liability cap so that companies would have to fully pay.  However White House lawyers say they don’t see a need to make it retroactive, since B-P has already pledged the money.  That drew an irate response from Vermont Independent Senator Bernie Sanders.

What BP has said doesn’t mean much.  You may be the last person in America who trusts or believes what BP says, it doesn’t matter.  A year from now the TV cameras won’t be there, and some fisherman will have to get damages from BP, a multi-billion corporation, this guy doesn’t stand a chance.  Now is the moment, do we lift the cap or not?

New Jersey Democratic Senator Robert Menendez is leading the charge to raise or throw out the liability cap.  He asked Obama Administration attorney Tom Perrelli, about whether B-P had made more than verbal promises.

MENENDEZ:  Have they given any written assurances they’ll be liable above the $75-million  cap?

PERELLI:  I believe they’re provided written assurances to Secys Napolitano and Salazar. And as you know at least the chairman made such statements to some congressional committees.

MENENDEZ:  I’d like to see if the department has copies, or if not Mr. Hayes I’d like to see what was written, what’s the nature of the language of BP’s commitment.  Because Exxon said many of these things during the Exxon Valdez and then they litigated all the way to the Supreme Court for it took 20 years, and individuals fell off along the way who were damaged simply because they could not sustain it.

Senator Murkowski maintains there should be different liability requirements for companies doing deepwater drilling, versus shallow drilling, like in Alaska… and for big or small companies.  But she talked to reporters Tuesday afternoon about a trip she took to the Gulf Coast, and says she understands the strong criticism being lobbed at B-P.

We flew over the spill yesterday, anybody who flies over that and sees the devastation out there in the gulf and doesn’t get angry and what happened has no emotion.

Murkowski went on to say if she felt like B-P was “back-peddling in terms of responsibility,” she might sound harsher toward the company.  But she says it’s been clear about its intentions to pay.  Despite that, only moments later she introduced her legislation to make sure B-P would make good on its promise.


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