Senators want to raise oil spill liability

Senators want to raise oil spill liability    In the wake of the Deepwater Horizon oil rig spill, a group of U.S. senators are proposing a 133-fold increase in the liability cap, from $75 million to $10 billion, in the Oil Pollution Act of 1990 for economic damages the “responsible party” must pay in the event of an oil spill.

Menendez

   Sen. Robert Menendez, D-N.J., said the Big Oil Bailout Prevention Act, S. 3305, which he introduced with Sens. Frank Lautenberg, D-N.J. and Bill Nelson, D-Fla., would “ensure that oil companies are not allowed off the hook when it comes to paying for economic damages as a result of spills.”

Lautenberg

      Meanwhile, the Associated Press reported Wednesday morning that BP has managed to cap one of three leaks in the well. The repair is not expected to reduce the overall flow of oil into the Gulf of Mexico, the report said, but the reduction in breach points could make it easier to control the leak with containment device that BP is having built and hopes to lower onto another of the leaks later this week.

Nelson

   Menendez said under current law, the responsible party must cover all costs related to clean up, but there is a $75 million cap on its liability for economic damages, such as lost business revenues from fishing and tourism, natural resources damages or lost local tax revenues. Once that $75 million cap is hit, people, businesses or governments can make claims against the Oil Spill Liability Trust Fund. The fund is funded by an 8-cent tax for every barrel produced or imported into the United States, and is projected to have $1.6 billion in it by the end of fiscal year 2010. However, there is a $1 billion-per-incident cap on payouts from the fund.
   The bill also proposes:
   ' To eliminate the $1 billion-per-incident cap on claims against the Oil Spill Liability Trust Fund and allow community responders to access the fund for preparation and mitigation up front, rather than waiting for reimbursement later.
   ' If damages claims exceed the amount in the Oil Spill Liability Trust Fund (currently $1.6 billion), then claimants can collect from future revenues of the fund, with interest.
   ' Eliminate the $500 million cap on natural resources damages.
   '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.
   White House spokesman Robert Gibbs said Tuesday the $75 million cap “is not in place if somebody is found to be either grossly negligent, conduct willful — involved in willful misconduct, or in violation of federal regulations.”
   He also said, “folks in the administration were working on legislation to lift that cap and extend it. Obviously we've got a situation where $75 million could easily — we could easily top $75 million in a short period of time ' there are fail safes that are built into that law that remove the cap based on the conditions that caused the spill, and our administration will work with Congress, Democrats and Republicans, to change that cap and ensure, as I've said and as the president has said, that BP is the responsible party, they're the cause of this spill, and they'll pay for everything involved in this spill.”
   Frank Costa, chair of the Offshore Energy Committee of the International Union of Marine Insurance and president of Berkley Offshore Underwriting Managers, told American Shipper the Deepwater Horizon disaster “will undoubtedly have an effect on the cost of insurance for mobile offshore drilling units going forward, that is rates will increase due to the magnitude of this loss as well as the loss of the 'West Atlas' rig off the coast of Australia last year.”
   But he added that while the offshore energy insurance market is a subset of the larger marine insurance market, he was “not in a position to speculate on the non-energy related marine market. My past experience has shown that the general marine insurance market is not directly affected by energy market losses.”
   Meanwhile, ports along the Gulf of Mexico and Lower Mississippi River remained open on Wednesday morning as preparations were being stepped up in Florida in response to the possibility that the oil spill will affect the West Coast of Florida and Florida Keys.
   The Coast Guard said the Lower Mississippi River remained open without restrictions on vessel traffic entering or exiting, and Southwest Pass remains open to deep draft vessels and is free of any restrictions to marine traffic.
   The latest projections by the National Oceanic and Atmospheric Administration on the spread of the oil slick from the collapsed oil rig is here.
   Representatives from BP, the U.S. Coast Guard, and the Florida Department of Environmental Protection (DEP) were to meet Wednesday to plan a multiagency response if oil hits Florida's West Coast.
   In meetings over the last couple days, the Coast Guard and Florida DEP have spoken with trustees from various national and state wildlife refugee areas, along with every county emergency management office on the West Coast of Florida as well as more than 30 members of non-governmental environmental organizations including Tampa Bay Watch, Save our Seabirds, Sarasota Bay Estuary Program and Sierra Club.
   The latest NOAA predictions indicate no impact to the western coast of Florida, from Taylor County to Collier County within the next 72 hours.
   In the Keys, the Coast Guard hosted a joint meeting on Tuesday with federal, state and local partners to discuss potential impacts and response priorities should the spill affect waters there.
   NOAA is restricting fishing for a minimum of 10 days in federal waters most affected by the BP oil spill, largely between Louisiana state waters at the mouth of the Mississippi River to waters off Florida's Pensacola Bay. ' Chris Dupin