Sens. Robert Menendez (D-NJ), Frank Lautenberg (D-NJ) and Bill Nelson (D-FL), introduced legislation that would dramatically raise the amount of money that oil companies like British Petroleum would have to pay in economic damages in an event of a spill. The appropriately-titled “Big Oil Bailout Prevention Act” would raise the economic damages liability cap for offshore oil spills from $75 million to $10 billion.
Why would that be needed? Because BP would face limited responsibility for covering costs beyond cleanup and containment. Under provisions of the Oil Spill Liability Trust Fund – a rainy day piggy bank for handling the immediate costs of dealing with disasters- operators of the offshore rig face no more than $75 million in liability for non-cleanup and containment damages. The actual damages to Gulf Coast industries will easily soar well beyond that total. The Oil Spill Trust Fund Act was passed in response to the Exxon Valdez spill in Alaska, and although well-intentioned, unfortunately included liability limits that are woefully inadequate.
In addition to forcing oil-spillers to cover the costs of economic recovery, the legislation would require companies like BP to spend future revenues on cleanup and containment costs that exceed the Oil Spill Liability Trust Fund’s $1.6 billion. It would also eliminate the $1 billion cap on individual claims against the fund and allow community responders to access the fund for “preparation and mitigation up front.” All of which is desperately needed by the many victims of BP’s ever-growing Gulf oil slick.
Richard J. Arsenault, 2011
