Senate faces quick test vote on punishing BP over Gulf spill

Senate Democrats seeking to punish BP for the Gulf of Mexico oil spill will ask colleagues on Thursday to unanimously approve legislation that raises oil companies’ liability cap on economic damages from offshore spills from $75 million to $10 billion.

Sens. Bill Nelson (D-Fla.), Robert Menendez (D-N.J.) and Frank Lautenberg (D-N.J.) plan to ask for so-called unanimous consent to approve the measure early Thursday afternoon, Senate aides said. Under this process, a single senator can prevent passage.

The action comes amid increasing pressure on BP and other companies involved in the April 20 explosion of the Deepwater Horizon rig and ongoing spill that BP has been unable to contain.

Democrats are politically eager to show they are acting to hold the industry accountable – Senate Majority Leader Harry Reid’s (D-Nev.) office circulated an announcement of a press conference  Nelson, Menendez and Lautenberg are holding later in the afternoon.

Capitol Hill anger at BP increased Wednesday when a House panel said its investigation into the spill had revealed several deficiencies with the deepwater well’s “blowout preventer.”

The device is supposed to be a failsafe mechanism that prevents the type of uncontrolled release that is now occurring in the Gulf. The spill drew new attention Wednesday when BP released a video of oil billowing into the ocean from a pipe, thousands of feet undersea.

BP, rig owner Transocean Ltd., oil services contractor Halliburton and Cameron International – which built the blowout preventer – are all taking heat this week from Congressional inquiries into the accident.

The White House supports raising the liability cap, but has not provided a target figure.

Several GOP lawmakers have also called for raising the liability cap. Sens. David Vitter (R-La.) and Jeff Sessions (R-Ala.) announced a new bill Thursday that creates a new cap that equals the last four quarters of the responsible party’s profits or double the current limit, whichever is greater, they said. The two senators indicated BP could be liable for $20 billion in damages under their bill.

“Making a company at fault pay their last four quarters of profits is a much more effective way to ensure that energy companies actually pay for their mistakes without chasing many of them out of business,” Vitter said in a prepared statement. “And under our bill, the bigger companies would be liable for more than the $10 billion cap others propose.”

BP CEO Tony Hayward has already said  damages from the disaster would exceed the $75 million cap and pledged  all “legitimate” claims will be honored.

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