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One Year After BP, Congress Has Yet To Change Oil Spill Liability Cap

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OIL SPILL
Damage wrought by the BP oil spill. |
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WASHINGTON -- One year after a disastrous months-long oil spill in the Gulf of Mexico, Congress remains mired in disagreement over how much money victims of future catastrophes should be granted to cover the economic damages they incur.

Legislation to raise oil companies' spill liability cap from $75 million to $10 billion -- or even to make it unlimited -- has stalled, with few clear options for passage. Senior aides on Capitol Hill say that “there are on-going negotiations” on how to proceed. But at this juncture, the political world has all but moved on.

At a Monday briefing, White House Press Sec. Jay Carney touted new safety and environmental standards that the administration has instituted for oil companies that want to do deepwater drilling. But when pressed on whether the president was comfortable with the fact that, since the BP crisis, 10 permits had been granted for offshore drilling with nary a change in the liability limits those companies are responsible for, he had little to say.

“I confess that I don’t have any specifics on the issue of the cap on [oil spill] damages,” Carney said during his daily press conference. “What I think, though, is the administration is committed and focused on making sure that… [when] we have begun issuing permits for deepwater, it only does so if an industry demonstrates a capacity to deal with these kinds of spills, so that what happened in the Gulf last year does not happen again."

"We feel confident," Carney added, "that the procedures in place do demonstrate that the industry can contain and deal with that kind of spill.”

There are, indeed, practical limitations to how much the White House can do to reform offshore drilling. During the height of the debate over economic liability for oil companies, the administration came out in favor of simply abolishing caps on economic damages. This was a step further than even some Democratic lawmakers had been pushing and it fed the impression that reform to the Oil Pollution Act of 1990, which set the cap, was imminent. (Some members of the president's party were only seeking to raise the limit to $10 billion.)

But the reforms stalled. Republican senators blocked efforts to pass a reform package by unanimous consent, arguing that it would deter small companies from deepwater drilling. Oil-industry-friendly Democrats, including Sens. Mary Landrieu (D-La.) and Mark Begich (D-Alaska), echoed those objections. And while an unlimited liability proposal put forward by the Democratic leadership passed through the Environment and Public Works Committee in early June, they couldn’t find the votes to overcome a filibuster.

“We continue to support the removal of caps on liability for oil companies engaged in offshore drilling, and encourage Congress to take action on this important reform,” White House spokesman Clark Stevens told The Huffington Post in a follow-up email.

Beyond partisan divides, there are other explanations for an absence of reform. With respect to last year’s crisis, those who suffered economic damages have had the option of reimbursement through BP’s oil-spill compensation fund, which has dolled out $3.8 billion to roughly 180,000 people and businesses, according to its most recent report. Those funds for victims of the disaster may have dulled the appetite for longer-term reforms.

Then there is the simple fact that the crisis itself has faded sharply as a political issue. Instead, it has been replaced by widespread concern over the rising price of oil. Champions of reform say this may explain where current priorities lie, but it remains an unconvincing excuse for inaction.

“I can’t believe Congress hasn’t addressed things like liability, and that some lawmakers still are dead set on carrying out the oil industry’s agenda, regardless of all the safety, economic and environmental concerns,” said Sen. Bill Nelson (D-Fla.) a vocal supporter of raising the cap. “Meantime, the companies say we need to allow additional offshore drilling. What they don’t say is: we've already given them almost 30 million additional acres in the Gulf of Mexico where they haven’t even started drilling yet.”