At a Senate hearing Tuesday on the massive BP oil spill in the Gulf of Mexico, Senator Bernie Sanders said Congress should lift a cap on oil company liability for economic damages. The Obama administration favors lifting the cap for future oil spills, a Justice Department official testified. Sanders is a cosponsor of legislation to make BP pay for all of the economic losses suffered by gulf coast businesses and residents as a result of the April 20 explosion at the Deepwater Horizon oil rig. The legislation would raise a $75 million cap on BP's legal liability for economic damages, retroactively, to $10 billion. “It is beyond comprehension that you have an oil company making over $5 billion in profits in the first quarter of this year at the same time as you have the nation running a record-breaking deficit that the taxpayers of this country should be asked to pay one nickel in costs,” Sanders said.
“You’re ignoring the best way to go forward by simply lifting the cap,” Sanders told Associate Attorney General Thomas Perrelli during the Senate Energy and Natural Resources Committee hearing. “I would hope that this committee and the Senate would move aggressively in a very different direction than the administration has indicated.”
Sanders also was skeptical of BP’s assurances that it will be responsible for all the costs associated with the oil spill, the cleanup and related economic losses. “Just because BP says something, I’m glad you believe them, but you may be one of the few people in America that trusts them,” the senator told Perrelli, the No. 3 official in the Justice Department who oversees the environmental division.
As the oil slick drifted onto beaches and into fragile coastal marshes, there is likely to be significant economic damage suffered by the fishing and tourist industries, small businesses and residents. The economic damages are likely to dwarf the cleanup costs.
The $75 million liability cap, which was set 20 years ago by the Oil Pollution Act of 1990, is clearly outdated. Unless the cap is increased, oil companies, which earned profits in excess of $24 billion in the first quarter of 2010, would only have to legally pay for a fraction of the overall economic impact of the preventable disaster.
Watch the Senator at Tuesdays hearing click here.