Sen. Mary Landrieu proposes oil spill liability compromise


With the Senate divided about how to hold oil companies liable for future oil spills, Sen. Mary Landrieu, D-La, is offering a compromise she hopes will break the logjam.

Landrieu’s proposal wouldn’t affect the BP oil spill in the Gulf of Mexico, given that the company has voluntarily said it won’t be limited by the current liability cap of $75 million.

But instead of the unlimited cap on liability proposed in a new Senate Democratic bill to toughen regulations on the oil industry, Landrieu offered something of a hybrid proposal.

Her plan would raise the current cap from $75 million to $250 million and require companies to pay into an insurance policy covering damages of as much as an additional $10 billion. It would base premiums on the size of a company’s drilling operations, meaning larger firms would pay more.

All spill-related costs above $10.25 billion, under Landrieu’s proposal, would be borne by the company or companies responsible for the spill.

Landrieu spokesman Aaron Saunders said the senator is looking to meet the demands of some fellow Senate Democrats for unlimited liability without pushing smaller firms out of the drilling business.

The Senate bill, unveiled Tuesday by Senate Majority Leader Harry Reid, D-Nev., appears short of the 60 votes needed to begin debate this week. Republicans accused Reid of seeking an early vote so that party members can head home for the August recess and campaign against Republican unwillingness to regulate the oil and gas industry, even after the BP tragedy.

“I think people who are very serious about responding to the spill in the Gulf should be offended by what has been presented,” said Sen. Lisa Murkowski, R-Alaska, the top Republican on the Senate Energy Committee. Murkowski said the bill has some good ideas but that she can’t support a bill that would leave firms with unlimited liabilities for oil spills.

Reid said Republicans are acting as if they were “in Alice in Wonderland” by refusing to accept reasonable changes in oil and gas regulations.

“It’s just too bad that we can’t have cooperation to get something done on a bipartisan basis,” he said.

Robert Menendez, the New Jersey Democratic senator pushing hardest for unlimited liability for oil spills, said he’s working with Landrieu to figure “out a process in which the taxpayers never are held responsible for any dollars out of their pockets.” But there was no immediate comment from Murkowski on whether she or other Republicans might go along with Landrieu’s compromise.

Aaron Viles of the Gulf Coast Restoration Network expressed disappointment that neither the Senate Democratic bill nor the companion House Democratic proposal establish the kind of community advisory panel established in Alaska after the 1989 Exxon Valdez accident. He said Rep. Anh “Joseph” Cao, R-New Orleans, has agreed to propose an amendment to the House bill to establish such a panel.

“Tourism, fishing and the environment all suffer when the oil and gas industry makes mistakes in the Gulf, so it’s appropriate for those perspectives to have useful input into how the oil and gas industry behaves in the Gulf,” Viles said. “Citizens advisory committees have proved to be an effective entity in Alaska, and I’m sure they will amplify the public’s voice in the ongoing discussion about how the oil industry develops the Gulf.”

Other Louisiana lawmakers are trying to amend the House bill to end the Obama administration’s six-month moratorium on deepwater drilling. But the moratorium is popular with environmentalists and some House Democrats, making the effort to curtail it something of a long shot.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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