Senate panel removes spill liability cap; passes Menendez bill

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, July 1 -- The US Senate Environment and Public Works Committee passed Sen. Robert Menendez’s (D-NJ) bill to increase the offshore oil spill liability limit, with an amendment proposed by chairwoman Barbara Boxer (D-Calif.) to eliminate the liability cap for a party deemed responsible for an offshore spill.

“The catastrophe in the Gulf of Mexico makes it clear that the companies responsible must be held fully accountable for the damages they cause to the economy and the environment,” Boxer said following the voice vote.

Menendez’s original bill, S. 3305, would have raised the liability limit established under the 1990 Oil Pollution Act to $10 billion from $75 million. The amended measure now heads to the full Senate.

The committee’s ranking minority member, James M. Inhofe (R-Okla.), said in an opening statement that he was disappointed that a compromise he proposed was not considered. He said that he used language originally offered by Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member, which would have let the president set liability caps based on water depth, estimated well pressure, a well’s proximity to emergency response equipment and infrastructure, and a company’s safety record.

The American Petroleum Institute said in a statement that the committee’s action would make insurance for exploration and production activities in the gulf unavailable, effectively pushing out more than 100 US companies which are operating there and leaving the area to a few multinational oil companies and state oil firms.

“The accident in the Gulf of Mexico has shown us that we need to focus on safety and environmental protection,” API Pres. Jack N. Gerard said. “But legislative proposals that would make domestic resources unavailable or uneconomic, instead of focusing on improving safety, must be turned aside.”

The committee also passed S. 3515, cosponsored by Jeanne Shaheen (D-NH) and Mark Udall (D-Colo.), which would establish a research and development program, technology demonstrations, and a risk assessments program at the US Department of the Interior to address oil spill response, mitigation and cleanup issues. It included another Boxer amendment which would incorporate the program into the existing OPA research framework and authorize additional DOI oil spill research.

A third bill cosponsored by Thad Cochran (R-Miss.), Mary L. Landrieu (D-La.), David Vitter (R-La.), and Roger F. Wicker (R-Miss.) to reestablish a gulf program office under the Clean Water Act also won the committee’s approval.

Contact Nick Snow at nicks@pennwell.com.



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