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White House Endorses Unlimited Liability Cap For Oil Spillers

Oil Spill

First Posted: 06/07/10 07:00 PM ET Updated: 05/25/11 05:40 PM ET

Democrats in Congress and officials in the White House are making yet another major push to pass legislation to make the liability for oil companies involved in damaging spills unlimited.

On Monday evening, the White House confirmed that it favors the most recent piece of legislation that would drop any numerical ceiling to the amount of money an oil company like BP would have to pay for economic damages caused by a spill. Currently, the cap is $75 million.

"The president supports removing caps on liability for oil companies engaged in offshore drilling," said spokesman Ben LaBolt. "Oil companies should have every incentive to maximize safety and arbitrary caps on liability create a disincentive to achieve that goal."

The statement was the most detailed the administration has offered to date with respect to the debate surrounding BP's liability. And it reflects a growing sentiment within the White House that more aggressive action (if not optics) need to be in place to stem the fallout of the Gulf crisis. Several weeks ago, U.S. Associate Attorney General Tom Perrelli made the case for an unlimited cap without formally endorsing the policy.

The government, he said before a congressional hearing, needs to "ensure that there is no arbitrary cap on corporate responsibility for a similar major oil spill."

So far, votes to raise the liability cap -- first to $10 billion and then unlimited -- have failed to pass via unanimous consent in the Senate. But now, congressional negotiators are planning alternative legislative routes. On Wednesday, Sen. Robert Menendez (D-N.J.), the author of the liability-cap-raising bill, is set to testify before the U.S. Senate Committee on Environment and Public Works about his proposal.

Afterward, it is expected that senators will look towards a piece of legislation to which they can attach Menendez's bill as an amendment. The strongest possibility is that it will ultimately be included as part of broader energy legislation -- a risky proposition considering the uncertainty surrounding that bill's passage.

"Including it in [a] broad energy bill is a possibility," said a Senate aide, "but other options for getting it passed quicker are being explored."

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