May 18, 2010

Republicans Block Effort to Raise Oil Spill Liability Cap

For the second time in the past week, Senate Democrats again attempted to increase oil companies' liability for oil spill cleanup and damages, but Republicans stood in the way. Sen. James Inhofe objected on the Senate floor to passing legislation that would raise the liability cap from it's current level of $75 million to $10 billion.

Following the same rationale explained by Sen. Lisa Murkowski last week, Inhofe protested the increased liability cap because it may exclude small oil companies from being able to get the insurance and financing needed to drill offshore. "If you have [the cap] too high, you are going to be singling out BP and the other four largest majors and the nationalized companies, such as China and Venezuela, and shutting out the independent producers," said Inhofe. "I don't want that to happen. Let's wait and see where that cap should be."

While oil continues to gush into the waters off the Gulf Coast, it's difficult to imagine anyone making an argument in defense of oil companies, rather than constituents, but, as David Roberts from Grist notes, "You underestimate the Republican party."

By blocking Democrats' efforts to pass the Big Oil Bailout Prevention Act, Republicans are leaving American taxpayers on the hook for bailing out BP. "If you're involved in a dangerous activity, one that can create enormous environmental and economic damage, then you should face the liability for such, whether you are BP or whether you are some intermediate entity," argued Sen. Bob Menendez.

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