Federal law may limit BP liability in spill
Federal law may limit BP liability in spill
Economic losses in the area to likely exceed $75 million
By ERICA WERNER/Associated Press
Published: Tuesday, May 4, 2010 12:13 AM MDT
WASHINGTON Federal law may limit how much BP has to pay for damages such as lost wages and economic suffering in the Gulf Coast oil spill, despite President Barack Obamas assurances that taxpayers will not be on the hook.
A law passed in response to the 1989 Exxon Valdez spill in Alaska makes BP responsible for cleanup costs. But the law sets a $75 million limit on other kinds of damages.
Economic losses to the Gulf Coast are likely to exceed that. In response, several Democratic senators introduced legislation Monday to raise the liability limit to $10 billion, though it was not clear that it could be made to apply retroactively.
White House press secretary Robert Gibbs said Monday the administrations commitment was for BP to pay for all costs associated with the spill.
Obama said the same thing during a tour of the area Sunday. Let me be clear: BP is responsible for this leak; BP will be paying the bill, the president said.
Kenneth Baer, spokesman for the Office of Management and Budget, also noted that if BP were found to have acted negligently in the spill or to have violated federal laws, the damages cap under the Oil Pollution Act would be lifted.
Baer said BP could also be held liable under additional federal or state laws.
You can be sure that BP will be held accountable to the full extent of the law, he said.
Nevertheless, the existence of the liability cap might complicate Obamas commitments to make BP pay for numerous costs anticipated in the Gulf such as shortened fishing seasons and lost tourism. It is not clear how high those costs could rise.
Were glad that the costs for the oil clean up will be covered, but thats little consolation to the small businesses, fisheries and local governments that will be left to clean up the economic mess that somebody else caused, said Sen. Robert Menendez, D-N.J.
BP issued a fact sheet Monday committing to pay all necessary and appropriate cleanup costs as well as legitimate and objectively verifiable claims for other loss and damage caused by the spill. A company representative did not immediately return a phone message left seeking comment on whether claims would be paid out over $75 million.
Beyond the $75 million in law, the federal government also maintains an Oil Spill Liability Trust Fund supported by industry fees. It can make a total of $1 billion in payouts per incident to individuals, businesses and governments.
Roughly 2.6 million or more gallons has spilled into the Gulf since the April 20 blast that sunk an oil rig and killed 11 workers.
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