Senate Republicans Block Bid To Raise Oil-Spill-Damages Limit
May 13 2010 - 3:36PM
Dow Jones News
An effort by a few Senate Democrats to raise the cap on damage
claims that BP Plc (BP) must pay for a a Gulf of Mexico oil spill
was blocked on Thursday after Republicans said the plan wouldn't
work.
Sen. Lisa Murkowski (R, Alaska) led the charge against the
measure, aimed at raising to $10 billion the limit on damage
claims. The current limit, of $75 million, has been widely
criticized by lawmakers as too low. Republicans blocked efforts to
proceed, saying independent offshore oil developers would not be
able to stay in business under the legislation because small
companies wouldn't be able to self-insure against claims.
"The only companies that are going to be able to self-insure
against this level of strict liability are the national oil
companies, the super majors," Murkowski said. She said that would
create a "monopoly" on offshore drilling among giant companies such
as BP. "We need to ensure that BP as the responsible party
pays."
BP has scrambled to stop oil from spilling from a well a mile
below the surface since a deadly oil-rig explosion on April 20. BP
officials have declined to estimate the extent of costs associated
with the spill. Earlier this week, Lamar McKay, the head of BP's
U.S. unit, said the company would pay all "legitimate" claims
related to the spill. He said that "claims have to have some
basis."
The White House came out ahead of the vote with an announcement
on Wednesday with proposed legislation to allow the federal
government to collect more damages from companies responsible for
the spill. But the Obama administration didn't propose a specific
increase in the cap on damages, and on Thursday refrained from
offering support for the measure from Sen. Bill Nelson (D., Fla.),
Sen. Bob Menendez (D., N.J.), and Sen. Frank Lautenberg (D., N.J.).
The Democrats must now go back to the drawing board.
"I'm really disappointed some of my colleagues decided to block
the legislation to hold BP accountable for this environmental
disaster," Nelson said in a statement. He said that Congress
"needed to raise the cap to $10 billion. And I'm not sure $10
billion is going to be enough."
-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654;
siobhan.hughes@dowjones.com
(Jared Favole contributed to this report.)
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