How high the liability cap?
By Kate Sheppard
There's growing frustration about the administration's response to the oil spill in the Gulf of Mexico, with complaints that officials have been sluggish in demanding BP be more transparent and hesitant to criticize the company's inability to plug the well. The administration clearly faces a number of tough choices here with few right answers, but there's one area where it could be weighing in on specifics but haven't: the liability cap on oil spills.
An effort is underway in the Senate to raise the liability cap to $10 billion. This would be significantly higher than the current cap of $75 million, set under the Oil Pollution Act of 1990, though it still might still be well below the estimated $14 billion in costs anticipated in the gulf spill. Senate Democrats have tried twice to bring up the measure under unanimous consent but were twice blocked -- first by Lisa Murkowski (R-Alaska) and then by James Inhofe (R-Okla.).
Both Republicans offered the same argument: Too high of a cap would keep smaller, "independent" oil companies from entering the marketplace. The idea that a company should be able to drill and potentially cause problems that it can't afford to fix should register as patently ridiculous. But then Obama's own interior secretary, Ken Salazar, essentially agreed with them. "You don’t want only the BPs of the world to be involved in these operations," said Salazar in a Senate hearing last week.
Robert Menendez (D-N.J.), a co-sponsor of the bill to raise the limit, was clearly taken aback by the suggestion: "That simply means if you're smaller you can get away with taking the same risk and having less liability." The same day, Majority Leader Harry Reid suggested that perhaps there should be no upper limit on the amount oil companies are forced to pay out.
Shortly thereafter, Obama tried to defuse the conflict, issuing a statement calling on Republicans to stop blocking the bill. But he did not offer a figure for how high he thought it should be. Even yesterday, press secretary Robert Gibbs didn't offer a figure, only noting that it should be raised "to a place that would ensure that the economic damages" are covered.
The administration has been very clear that it expects BP to cover all costs related to the spill. "BP will pay for every bit of this," Gibbs reaffirmed Sunday. But raising the liability cap would serve to both reinforce that and deter future risky drilling. Some concrete direction from the White House on the oil spill liability would be a good place to start asserting some direct political pressure.
Washington Post editor
May 25, 2010; 9:09 AM ET
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