Senate Dems fail to secure quick passage of oil spill liability measure

Senate Democrats seeking to punish BP for the Gulf of Mexico oil spill were turned back Thursday when they sought quick passage of legislation that significantly raises oil companies’ liability cap on economic damages from offshore disasters.

Sen. Robert Menendez (D-N.J.) – backed by Sens. Frank Lautenberg (D-N.J.) and Bill Nelson (D-Fla.) – sought so-called unanimous consent for the bill’s passage Thursday afternoon. But Sen. Lisa Murkowski (R-Alaska) objected, scuttling the effort.

ADVERTISEMENT
The Democrats said the legislation - which would raise the cap from $75 million to $10 billion - would ensure that taxpayers don't have to pay the bill for industry spills. “This bill should serve as a rallying cry for holding big oil accountable for the damages of this disaster and any future ones,” Menendez said.

Murkowski said she agreed that lawmakers should consider raising the $75 million cap.

But the $10 billion figure, she said, would have the unintended effect of allowing only the biggest oil companies to develop offshore, because smaller and independent companies could not afford the bonding and insurance needed with a cap that high. Murkowski said the cap should be raised “in a way that doesn’t give the biggest oil companies a monopoly.”

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

Democrats are eager to show, for political benefit, that they are acting swiftly to hold the industry accountable – Senate Majority Leader Harry Reid’s (D-Nev.) office circulated an announcement of a press conference that Nelson, Menendez and Lautenberg scheduled Thursday on the issue.



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 flow that is now damaging 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 underwater.

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 - and applying it retroactively - but has not said how high it wants to go.

 Several GOP lawmakers have also called for raising the liability ceiling.

Sens. David Vitter (R-La.) and Jeff Sessions (R-Ala.) announced a new bill Thursday that creates a new cap equivalent to the last four quarters of the responsible party’s profits or double the current limit, whichever is greater, they said. The 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 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 that damages from the disaster would exceed the $75 million cap and pledged to honor all “legitimate” claims.

More in Energy & Environment

Administration boosts liability limit for oil spills

Read more »