Bill Would Make Oil Companies Responsible for Economic Damage of Spill

OCEAN CITY — U.S. Senators Robert Menendez (D-NJ), Frank Lautenberg (D-NJ) and Bill Nelson (D-FL) introduced legislation to ensure that oil companies are not allowed off the hook when it comes to paying for economic damages as a result of spills.
Currently, the responsible party in an oil spill must cover all costs related to clean up; however, 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. Menendez’s Big Oil Bailout Prevention Act would raise the liability cap from $75 million to $10 billion.
“The bottom line is that oil spills can leave massive holes in the economy. If you spill it, you should have to fill it,” said Menendez at press conference here June 3. “We’re glad that the costs for the oil clean up will be covered, but that’s little consolation to the small businesses, fisheries and local governments that will be left to clean up the economic mess that somebody else caused. We can’t let the burden fall on the taxpayers – we should ensure that those who cause the damage are fully responsible.”
He said with future plans for drilling along the East Coast, he looked at the bill as a safety net for small businesses owners and fisheries on the Jersey Shore.
Lund’s Fisheries President Jeff Reichle said the seafood industry here was scared to death of what it saw happening in the Gulf of Mexico.”
In a written statement, Nelson said: “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.”
Once the responsible party liability 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 2010. However, there is a $1 billion per incident cap on payouts from the fund.
The Big Oil Bailout Prevention Act would:
• Raise the liability cap for offshore oil well spills from $75 million to $10 billion.
• 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.
Menendez said if oil companies were going to put communities at risk while making enormous profits, “They have to be prepared to pay for all the damages they cause.” He said its unacceptable that BP made over $16 billion in profits in 2009 but they are only responsible for $75 million of economic damages.