White House Asks Congress To Lift Cap on Oil Spill Liability

The White House asked Congress to lift liability caps on oil companies, increase the excise tax that finances cleanups and provide $118 million in emergency spending to help deal with the ongoing oil spill in the Gulf of Mexico.

The legislative request comes nearly four weeks after the Deepwater Horizon rig exploded April 20 and sank off the Louisiana coast. White House officials insisted that BP, which leased the oil rig from Transocean Ltd., will repay the government for the majority of the requested emergency spending, much of which would go to unemployment aid for affected workers and help for communities on the Gulf Coast.

The White House still needs to hash out details of the package with Congress, particularly regarding its proposed changes to the Oil Spill Liability Trust Fund, which was created by Congress after the 1989 Exxon Valdez spill and is currently financed by an 8 cents-per-barrel production tax on the oil industry.

The White House is proposing to raise the $1 billion-per-incident cap on claims from the oil spill trust fund to $1.5 billion, and to lift a $500 million cap on natural resource damage claims to $750 million.
To ensure that BP is on the hook for economic damages from the spill, the White House wants to retroactively raise the current $75 million cap on economic damages — a threshold that experts say will be passed easily in this case. But while Sens. Robert Menendez , D-N.J., and Bill Nelson , D-Fla., have proposed raising that cap to $10 billion, the White House did not propose a specific number.
“We’ll work with Congress on determining what that number will be,” said Carol M. Browner, the president’s coordinator of energy and climate policy.


http://www.uscg.mil/NPFC/About_NPFC/osltf.asp