Second Senate spill liability bill filed; more House hearings set

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 7 -- Prospects for Congress increasing offshore oil spill liability limits continued to improve as Alaska’s two US senators introduce their own bill on May 6 expanding the federal oil spill liability fund. The US House Natural Resources Committee, meanwhile, scheduled hearings for May 25-26 as it began its investigation of the Apr. 20 rig accident and subsequent oil spill in the Gulf of Mexico.

Republican Lisa Murkowski, the Senate Energy and Natural Resources Committee’s ranking minority member, and Democrat Mark Begich introduced S. 3339, which would expand the spill liability fund to $10 billion by raising the per barrel fee producers pay to 9¢ from 8¢. The measure also would remove the law’s sunset provisions so that governments affected by offshore spills can always have access to the fund. Nothing in their bill would limit the liability of oil companies or other parties deemed responsible, the senators said.

“The liability fund provides a critical, industry-funded source of compensation that’s immediately available to address spill-related impacts,” said Murkowski, who sponsored an amendment in 2005 to raise the fee from 5¢ to 8¢. “It’s now clear that we need to increase the overall size of the fund to ensure that it’s available in the unlikely event that there’s more than one accident at a time.”

She said the bill’s proposed 12% increase in the per barrel fee would raise as much as an estimated $612 million/year. Congress established the fund in 1986 and it was initially activated in 1989 after the Exxon Valdez tanker ran aground and spilled much of its crude oil cargo into Prince William Sound off Alaska. Its existence, which was originally authorized until 1994, was extended until 2017 under the 2005 Energy Policy Act. Although it currently contains $1.6 billion, there is a $1 billion limit to its use for each incident.

“There’s no question we need more resources for oil spill research and prevention,” Begich said. “I’ll be working with Sen. Murkowski and other members of Congress to beef up efforts to deal with oil spills. Alaska has historically led the nation in developing new technologies that allows us to develop oil and gas responsibly, so we need to build on that expertise.”

House legislation
The senators’ measure came a day after Rep. Rush Holt (D-NJ) introduced companion legislation to a measure Sen. Robert Menendez (D-NJ) offered with two other senators on May 3 that also would raise the offshore oil spill liability limit established under the 1990 Oil Pollution Act from $75 million (at which time further claims can be made against the oil spill liability fund) to $10 billion. “In a fair and just world, companies like BP should pay for every last cent of the mess they’ve made—not taxpayers, not the tourism industry, not the fishing industry, not small businesses,” Holt said.

“Our bill is clear: The buck stops with oil companies. It shouldn’t spill over to taxpayers,” he maintained. Reps. F. Allen Boyd Jr. (D-Fla.), Artur Davis (D-Ala.), Paul Hodes (D-NH), Jay R. Inslee (D-Wash.), Suzanne M. Kosmas (D-Fla.), Kendrick B. Meek (D-Fla.), and Frank Pallone (D-NJ) are cosponsors.

Meanwhile, the House Natural Resources Committee chairman and ranking minority member said in a joint May 6 statement that staff members were dispatched to the spill area earlier in the week, and that events there would be closely monitored to determine when it would be appropriate to send a bipartisan delegation of committee members in.

“While it may take a rocket scientist to plug this well, it sure doesn’t take one to know that something went terribly wrong in the gulf,” said Chairman Nick J. Rahall (D-W.Va.). “We must not get in the way of the experts who are working tirelessly to stop the leak.” Hearings on May 25-26 will seek answers from US Interior Secretary Ken Salazar, governors from coastal states, senior executives from BP and Transocean Ltd., the American Petroleum Institute, and the National Ocean Industries Association, he indicated.

“There are many tough questions that need to be asked and answered on what happened, what went wrong, and if the federal government responded appropriately,” said Doc Hastings (R-Wash.), the committee’s ranking minority member. “Those responsible for the spill must be held fully accountable for their actions. These issues and many more must be examined thoroughly and in great detail. However, right now, our foremost focus must be on addressing the crisis at hand.”

Contact Nick Snow at [email protected].