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Gulf oil spill: Angry lawmakers consider tough oil company liability measures

May 25, 2010 |  2:59 pm

Angry Capitol Hill lawmakers began Tuesday considering tough new measures aimed at ensuring that the oil industry pays the economic and environmental costs of spills. One day after visiting the site of the massive Gulf of Mexico spill, members of the Senate Energy and Natural Resources Committee vowed to strengthen the federal law passed after the 1989 Exxon Valdez disaster and to hold oil giant BP "fully accountable" for the catastrophe, which one estimate says could cost in excess of $14 billion.

The U.S. government is committed to "making sure that all responsible parties in any oil spill are held fully accountable for the costs and the damages they have imposed on our people, our communities and our natural resources,’’ Thomas J. Perrelli, associate attorney general, assured the panel. The Justice Department, he said, plans to fight a move in court by drilling rig operator Transocean to limit its liability to $26.7 million.

The hearing comes amid rising anger and frustration in Congress over the unabated spill, and as lawmakers increase demands on BP to pay bills for outside scientists and mental health professionals to aid Gulf Coast residents.

Obama administration officials said they are doing everything they can, but a CNN/Opinion Research Corporation survey released Monday showed 51% of respondents disapprove of the administration’s handling the spill. The administration came out in support of removing the cap on the industry’s liability for deep-water drilling, but drew criticism from a usual ally over its reluctance to endorse a retroactive increase.

BP has pledged to pay claims even if they exceed the $75-million cap, Perrelli noted.

"You may be the last person in America who trusts or believes what BP says," Sen. Bernie Sanders (I-Vt.) lectured Perrelli. "A year from now, the TV cameras will not be there, and some fisherman is going to have to go to court to try to get damages from BP, a multibillion-dollar corporation. This guy doesn’t stand a chance." Sanders is a cosponsor of the proposed "Bailout Prevention Liability Act," which would raise the cap to $10 billion, retroactively.

Perrelli responded, "We are committed to recovering every single dime from BP. ..."

Republicans sought to turn up the heat on the administration over whether it is doing all it can. "As Out-Of-Control Oil Spill Rages On Gulf Coast, Obama Darts To California In Effort To Save Boxer,’’ the National Republican Senatorial Committee said in a news release. During the hearing, Sen. John Barrasso (R-Wyo.) complained, "Public anger truly is growing. The American people are angry, angry at BP and angry at the administration."

Sen. Debbie Stabenow (D-Mich.) said the White House was dealing with "holdovers from the former administration" who took an anti-regulatory attitude.

BP has spent more than $760 million on responding to the spill, according to federal officials. The company has received more than 25,000 claims for economic damages. Exxon, now known as Exxon Mobil Corp., paid about $3.8 billion in cleanup costs, fines and compensation related to the Exxon Valdez spill off Alaska.   

"The recovery from the Exxon Valdez oil spill has been long and sad, and it took 20 years for litigation over punitive damages to be resolved," said Sen. Lisa Murkowski of Alaska, the committee’s top Republican. "That in and of itself was a tragedy we can’t let happen again."

The hearing comes as Congress this week takes up $68 million in emergency aid for the Gulf Coast and a proposal to raise the 8-cent-per-barrel tax on domestic oil by as much as 32 cents to fund an oil spill cleanup fund.

Also under consideration are increasing civil and criminal penalties for violations of offshore drilling rules and lifting limits on punitive damages against big oil companies.

-- Richard Simon in Washington