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A Times Editorial

Congress should raise the cap on oil companies' liability for spills

The sorry spectacle in Washington this week of three companies blaming each other for the Deepwater Horizon oil rig explosion illustrates why government must be vigorous and vigilant in this disaster. The companies cannot be trusted to put aside their self-interest to do the right thing. Only government can hold them accountable. One step toward that end, to encourage safe practices and protect the taxpayer: Congress needs to increase companies' liability for economic damages suffered by other industries affected by oil spills.

Congress set the liability cap on economic costs at $75 million in 1990 after the Exxon Valdez spill. Now bills in both the U.S. House and Senate would increase the woefully inadequate cap to $10 billion. President Barack Obama expressed support Wednesday for raising the cap an unspecified amount as he unveiled a broader plan for immediate aid in affected states. Most likely, the language pushed by coastal state lawmakers, including Florida Sen. Bill Nelson and Rep. Kendrick Meek, will be added to another bill in coming weeks. Regardless, it needs to get done.

In testimony this week on Capitol Hill, BP America president Lamar McKay told a Senate committee repeatedly, "We're going to pay all legitimate claims." But left unsaid is that the cap on liability means whatever BP doesn't pay, it's likely taxpayers will — or else innocent bystanders who suffered economic damage will go uncompensated.

Some have questioned whether the change could apply retroactively to the Deepwater spill. But the fact is, at least 210,000 gallons more oil is flowing into the Gulf of Mexico each day, and the damage is still undetermined for many businesses.

The outdated liability cap is just another example of how the oil industry has had its way for too long in Washington, ultimately encouraging risk-taking over environmental concerns and sound emergency planning. But a disaster of this magnitude tends to change attitudes. The Senate climate change legislation rolled out Wednesday by Sens. John Kerry of Massachusetts and Joseph Lieberman of Connecticut would maintain the 235-mile no-drilling zone along Florida's Gulf Coast and halt any new offshore drilling until the cause of the Deepwater incident is understood. That is where the line should remain, despite the president's attempt to move it much closer.

It was clear in testimony before a Senate panel this week that the American public likely won't get a straight answer from the three companies involved. Executives from BP and two other companies, Transocean and Halliburton, spent more time pointing fingers than offering any confidence that they have a solution for stemming the flow of oil. Taxpayers shouldn't have to shoulder the cost of their continuing failure. Congress needs to raise the liability cap for the damages still to come.

Congress should raise the cap on oil companies' liability for spills 05/12/10 [Last modified: Wednesday, May 12, 2010 6:56pm]
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