E2-Wire

The Obama administration broke away from Senate Democrats on Tuesday when it echoed a Republican argument against raising liability claims on oil companies.

President Barack Obama harshly criticized Senate Republicans today for blocking a measure to raise the liability cap on oil spills.

Under current law, oil companies can only be held liable for $75 million of damages. After the BP oil spill in the Gulf of Mexico, senators from both parties have proposed drastically raising the cap to as high as $17 billion.

But the last two times the measure has come up on the Senate floor, individual Republicans have objected.

"I am disappointed that an effort to ensure that oil companies pay fully for disasters they cause has stalled in the United States Senate on a partisan basis. This maneuver threatens to leave taxpayers, rather than the oil companies, on the hook for future disasters like the BP oil spill," Obama said in a statement this afternoon.

"I urge the Senate Republicans to stop playing special interest politics and join in a bipartisan effort to protect taxpayers and demand accountability from the oil companies," he added.

This morning, Sen. James Inhofe (R-Okla.) objected to the legislation, arguing the $10 billion proposed cap was arbitrary. Sen. Lisa Murkowski (R-Alaska) objected the last time the cap came up for a vote.

Gulf State Republicans David Vitter (La.), Jeff Sessions (Ala.), Roger Wicker (Miss.) and George LeMieux (Fla.) offered their own legislation, which would increase the liability cap to $17 billion.

Senate Majority Leader Harry Reid (D-Nev.) said Tuesday that the Senate Democratic caucus will huddle in mid-June to discuss how to proceed on energy and climate change legislation.

Reid said that after the Memorial Day recess – which occurs during the first week of June – he will meet with the heads of the committees with jurisdiction over the issue. A broader gathering will follow.

“The week after we get back, the first week we will be back here, I will during that time try to get all the chairmen together who have jurisdiction on energy-related matters. Then the following week I hope to have a full caucus where we will just talk about nothing but energy,” Reid told reporters in the Capitol.

Senate Republicans may have gained an unexpected ally in their battle against a Democratic bill to raise the cap on oil company liability for offshore spills: Interior Secretary Ken Salazar.

Twice in recent days, Republicans have blocked Democratic efforts to win quick passage of legislation that would raise the economic damages cap from $75 million to $10 billion.

Sens. Lisa Murkowski (R-Alaska) and James Inhofe (R-Okla.) — who have blocked the Democratic bill — argue that a cap too high would make it financially impossible for smaller and independent oil-and-gas companies to operate offshore.

Senate GOP leaders are asking what went wrong with oversight of companies.

Senate Majority Leader Harry Reid (D-Nev.) on Tuesday proposed a complete lift of any liability cap on economic damages paid by oil companies that are responsible for oil spills.

Reid told reporters that a proposal pending before the Senate to lift the liability from the current $75 million to $10 billion is inadequate because the $10 billion figure is "too small."

"We're told that the damage from the oil spill in the Gulf now is $14 billion already," Reid said, referring to the BP spill off the coast of Louisiana. "I'm for no cap."

Sens. Robert Menendez (D-N.J.) and Bill Nelson (D-Fla.) have written the proposal to raise the liability cap from $75 million to $10 billion. Democrats tried to bring the proposal to a vote last week but were blocked by Sen. Lisa Murkowski (R-Alaska).

By the end of the week, nine congressional hearings relating to the Gulf oil disaster will have been held. A bunch more are coming. 

Asserting what it calls its “primary jurisdiction” over offshore oil and gas drilling, the House Natural Resources Committee on Tuesday released a schedule for seven hearings into the spill lasting through the month of June.

The hearings will examine both the causes of the Gulf spill and the regulatory implications of the disaster.

“We will vigorously investigate what happened in the Gulf of Mexico, but we will do so in the broader context of what this means for future offshore leasing,” Natural Resources Chairman Nick Rahall (D-W.Va.) said in a statement. “The committee will take a comprehensive look at MMS’s [the Minerals Management Service's] regulations to determine if remedial actions may be necessary to prevent such a tragic disaster from occurring again.”

In Senate panel hearing, Interior secretary reasserts need to overhaul offshore-drilling regulations.

A large coalition of environmentalists wants Obama to step up efforts to win passage of climate change legislation this year.

* BP now says it’s capturing 40 percent of the oil leaking into the Gulf of Mexico

The oil giant has doubled its estimate of the amount of oil it’s gathering from the tube inserted into a damaged undersea well pipe.

BP now says it’s capturing 40 percent of the oil gusher stemming from the April 20 accident at the Deepwater Horizon rig.

But not all the news is good, Reuters reports.

“BP's progress in capturing more oil through a tube inserted by undersea robots into the mangled ‘riser’ pipe of the well came amid new evidence that a powerful sea current in the Gulf was pushing the crude closer to the U.S. Eastern seaboard,” the wire service reported.