Republican Senator applauds liability cap hearing

Raising the liability cap on oil spills is needed but the issue needs closer examination, a Republican Senator said Tuesday night. 

Sen. Lisa Murkowski (R-Alaska), ranking member of the Senate Energy and Natural Resources Committee, applauded the decision to hold a May 25 hearing on raising the liability cap under the Oil Pollution Act. 

Murkowski supports an increase in the cap but said, "the Senate needs to gain a better understanding of how these complex legal and statutory provisions interact." 

Raising the limit from $75 million to $10 billion could economically harm smaller oil drilling operations because it will be difficult for them to get insurance, she said. She is working with the Obama administration and Senate Democrats to find an appropriate cap level. 

"Such a cap would only exclude all but the biggest oil companies from operating offshore," Murkowski said. 

Murkowski's release pointed out that Interior Secretary Ken Salazar called the $10 billion figure "arbitrary" and increasing it too much would hinder competition in the Gulf of Mexico. 

State and federal law provides for a limit on strict liability, liability without limit for cleanup and unlimited liability for compensatory and economic damages, she said. There are no limits on compensatory or punitive damages a company can be forced to pay if it is found responsible for the spill. 

British Petroleum head Tony Hayward has said the company is ignoring the $75 million cap and paying claims to coastal businesses affected by the oil spill as they are filed, regardless of the total cost. 

Murkowski is co-sponsoring legislation to raise taxes on the oil industry and increase to $10 billion the amount of money in the Oil Spill Liability Trust Fund to help pay for offshore spills. 

Other legislation she is considering would:

• Allow the Treasury to temporarily provide the Oil Spill Liability Trust Fund if claims exceed the $1.6 billion total that would be repaid by a fee on oil companies. 

• Increase the $1 billion per incident cap on claims from the trust fund. 

• Double the $500 million cap to $1 billion on natural resources damages. 

• Establish a bipartisan commission to investigate the cause of the Deepwater Horizon spill and recommend worker safety and environmental laws to "improve domestic energy security." 

• Expand research and development of U.S. Coast Guard spill response capability.

• Require Senate confirmation of Mineral Management Service directors.