THE BLOG

Why Should There Be Any Liability Limitation for Oil Spills?

05/16/2010 07:35 pm ET | Updated May 25, 2011

I did not think that Congress could do anything more craven than granting immunity to gun manufacturers for certain types of lawsuits. With all of the persons, companies and institutions engaged in curing illness and saving lives, Congress chose (out of the myriad entities which contribute to the well-being of our country) to immunize an industry that manufactures a product that kills people. But now along comes the revelation that the Oil Pollution Act of 1990 granted a liability limitation of 75 million dollars to the oil industry for spills by offshore facilities.

The statute talks in terms of $75 million per spill "plus removal costs." I did some preliminary research as to what was included in the limitation, but I remain uncertain as to what is or is not covered, and frankly, I don't care. A bill to increase the limit from $75 million to $10 billion was defeated. My question is: Why should there be any limit?

Sen. Lisa Murkowski (R-Alaska) argued in opposition to the increase in limits that it would injure the smaller companies engaged in offshore drilling and affect their ability to obtain financing and insurance for exploration. So let me see if I understand this. A company which causes damage from an oil spill which exceeds the value of the company (plus insurance) should somehow receive protection from the U.S. Congress. As Sen. Robert Menendez said, these small independent companies are not "mom and pop groceries stores." Why, as in the case of the gun industry, has the oil industry been singled out for protection, and if the cap is not sufficient to pay all of the damages, who pays the difference?

The irony of granting any limitation can be found in Mobil's roughly $45 billion profit and earnings of a trifling $53 million per day without paying any U.S. income tax in 2009 as is reported in some of the articles I have reviewed. I do not vouch for the validity of the numbers, but a billion one way or the other does not make the liability limitation any less ludicrous. Shell Oil paid $2.1 billion in 2008 just for the rights to drill off Alaska's north coast. I understand the need to end our reliance on foreign oil and encourage exploration, but I also recognize the need to protect the fishing industry and all those who rely upon it and all others who depend upon a healthy ocean and an oil-free shore line for their livelihood. It is they who need protection -- not the giant oil companies