Washington - As the Gulf Coast braces for the environmental and economic damage that the current massive oil spill is predicted to cause, U.S. Senator Robert Menendez (D-NJ) along with Senators Frank Lautenberg (D-NJ) and Bill Nelson (D-FL) today 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.
Senator Menendez said: "The bottom line is that oil spills can leave massive holes in the economy. If you spill it, you should have to fill it. 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. There is no such thing as a 'Too Big to Spill' oil well, which is why we need this economic protection in place. With some predicting that this spill could potentially make its way up the eastern seaboard, and with future plans for drilling along the East Coast, I look at this bill as a safety net for our small businesses owners and fisheries on the Jersey Shore as well."
Senator Lautenberg said: "Throughout my career, I have stood by a fundamental principle: that polluters-and not the taxpayer-should pay to clean up contamination. Oil spills should not be an exception to the rule. The oil companies must be held responsible for every cost related to an oil spill -- and that includes both the environmental and economic damages. The devastation in the Gulf provides further evidence why we must protect and preserve the Atlantic from expanded oil drilling. I remain dedicated to keeping the Jersey Shore clean and our fishing, shellfish, and tourism industries strong."
Sen. Bill 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 that 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 FY10. However, there is a $1 billion per incident cap on payouts from the fund.
The Big Oil Bailout Prevention Act would:
Recent oil company profits:
|Oil Company||Q1 2009 Oil Company Profits||Q1 2010 Oil Company Profits||Q1 2010 Profits Compared to Q1 2009|
|BP||$2.4 billion||$5.6 billion||+133%|
|Chevron||$1.8 billion||$4.6 billion||+156%|
|ConocoPhillips||$0.8 billion||$2.1 billion||+163%|
|ExxonMobil||$4.6 billion||$6.3 billion||+38%|
|Shell||$3.3 billion||$4.9 billion||+49%|
|TOTAL||$12.9 billion||$23.5 billion||+82%|