Gulf oil spill: Senators seek to raise liability cap

A group of Democratic senators announced Monday that they were seeking to increase the cap for company liability in connection with damages from oil spills, a move prompted by the massive slick working its way across the Gulf of Mexico.

Sens. Robert Menendez and Frank R. Lautenberg, both of New Jersey, and Bill Nelson, of Florida, introduced legislation to raise the cap, which they said was $75 million on any company’s liability for economic damages. In a statement, the trio said the new legislation would raise the cap to $10 billion.

BP announced Monday morning that it accepted responsibility for the cleanup costs from its oil well shaft, which is spewing an estimated 5,000 barrels of oil into the gulf every day. Others say the spill rate is much higher.

“BP says it’ll pay for this mess. Baloney. They’re not going to want to pay any more than what the law says they have to, which is why we can’t let them off the hook,” Nelson said.

Cleanup of the spill is expected to run into the billions of dollars and it is too soon to estimate what will be the tab on additional losses from lost income from harmed fisheries and any environmental damage.

According to the senators, the current law says that when the current cap is reached, an aggrieved party can make a claim to the Oil Spill Liability Trust Fund, which is projected to have $1.6 billion in the current fiscal year. However, the fund, which gets its money from an 8-cent tax for every barrel of produced or imported oil, has a $1 billion-per-incident cap.

-- Michael Muskal

Twittrer.com/LATimesmuskal

Comments

[runcatalina]

doh. . .seems a little late to be changing the law. That should have been done after the Valdez incident.

[StrayCat]

The tax increase to boost the Oil Spill Liability Trust Fund is another typical knee-jerk reaction from politicians. Any tax increase on Big Company will ultimately be paid by the consumer - in this case at the gas pump. So tax increase is not the answer, but it a great gimmick in election year politics!
Someone was sleeping at the wheel yet again and allowed this disaster to happen. And I don't necessarily mean someone at Big Oil. I'm sure there are oversight committees at State and/or national government level who were supposed to keep an eye on things and make sure that compliance standards were regularly audited and were met.
This is similar to the fiasco in the financial sector where politicians have - so far- been successfully scapegoating Goldman Sachs and others. The fact that the SEC, Federal Reserve and other oversight bodies had been sleeping at the wheel while Big Finance was getting away with all their bad deeds hardly ever gets mentioned.