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Oil Companies: Clean Up Your Own Mess

David Pettit

Posted July 30, 2010

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You make a mess, you clean it up.  We learned this as kids.  The oil spill bill introduced by Senator Reid, S. 3663, is true to this principle.  But the Republican oil spill bill, S. 3643, would let oil companies walk away without cleaning up the biggest messes ever seen in the United States and make the American taxpayers bail them out. 

Sen. Reid’s bill removes the artificial liability cap on economic and natural resources damages that was written into the Oil Pollution Act of 1990:  $75 million.  Under Sen. Reid’s bill, if an oil company causes a spill that causes $1 billion in economic and cleanup damages, the oil company is liable for those damages without people having to prove that the oil company was reckless or grossly negligent, which the current law requires.  

The Republican alternative, at Section 201, pretends to eliminate the $75 million cap but in fact authorizes the President to set a cap anywhere from $0 on up, depending on a number of confusing factors, one of which (the availability of insurance against blowouts) doesn’t exist.  

Under the Republican proposal, damages from an oil spill that are over whatever limit the President sets, but under $20 billion, would be paid by all other oil companies operating on the Outer Continental Shelf in proportion to the number of wells they have.  Damages over $20 billion would be paid out of the Oil Spill Liability Trust Fund, which is funded by a tax on oil produced, until that fund runs out of money.  After that, the tab is on the taxpayers.  

How would that work using the BP spill as an example?  BP claims it has already paid or reserved $32 billion; in my view, BP is looking at close to $100 billion in liabilities.  If the President had set the liability cap at $10 billion, let's say, then the Oil Spill Liability Trust Fund would be on the hook for $70 billion.  How much is in that fund now?  $2.7 billion; see

In fact, the Republican proposal would not apply to the BP Deepwater Horizon incident because it only applies to leases entered into after the date that their proposal is enacted into law.  That means that all wells drilled at any time in the future on leases that exist today -- including the BP lease where the Macondo well is located --  would still be under the inadequate $75 million cap.  Under Sen. Reid’s bill, the $75 million cap would be lifted for the Macondo well and all currently-existing wells. 

What’s worse, even if the Republican proposal did govern some well many years in the future, who would pay to clean up a BP-sized mess after the $20 billion damages pool and the Oil Spill Liability Trust Fund were wiped out?  Not the oil company that caused it, not the other oil companies drilling on the outer continental shelf, not the oil companies who pay taxes on the oil they produce.  Who does that leave?  



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bill wiltJul 30 2010 08:00 PM

Hey, like your latest Charismatic Megafauna, a feral K9, looks like. Mebbe a Wolfie, like what that composer-guy wrote about--hope you got the duck outa da belly before you shot...the pix.

On BP, however, you are WAAAAAAY WAY off. BP now I think is less than five years old, and most 5-year-old people still wear diapers. (Remember that Corporations are People, Too, according to the Wild-And-Crazy-Five of the Supremes!).

And also, five-year-olds are notoriously resistant to getting a "talking to," whether from parents or a bunch of senators or representatives sitting behind a big ol' curved bench.

You'll need to bring Baby BP back in, put him over your knee, pull his pants down, and smack his ruddy butt about 15 times with a folded-over belt (you can't use the buckle--that would be "enhanced instructional gluteal rubrification," according to the manual I have here--it's "Why We Are Always Certain We've Gotten The Straight Scoop" from the kids we have had to put into High Efficiency After-School Detention". The manual is, of course, written by Richard "No-Brainer" Cheney. The manual proudly declares that it puts to use instructional techniques that have been tested and proven for at least five centuries ante-Geneva Conventions. "These techniques work on people," the author asserts, "whether they have brains we can reach or not."

(In chapter 18, Cheney describes the famous dinner in Silence of the Lambs, is it, where the protagonist serves both his victim and his enamorata and himself the victim's lightly-braised brains (no nerves in the brain, apparently?) as an entrée, with the comment, "This is what I mean when I'm talking about a 'no-brainer'.")

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