News / USA

Gulf Oil Spill Prompts Debate on Liability

Nearly one month after an oil rig exploded in the Gulf of Mexico, triggering a massive leak that has yet to be contained, U.S. legislators are debating change in federal liability regulations for energy companies that drill off U.S. shores.

With oil continuing to spew from a wrecked underwater well in the Gulf of Mexico, two critical questions remain: how will the leak be plugged, and who will pay damages for what could prove to be the most expensive disaster to strike the United States since Hurricane Katrina.

U.S. legislators of both major parties agree that petroleum-giant BP should shoulder the costs of containing and removing the oil, as the company has promised to do.

In addition, Democratic Senator Charles Schumer of New York wants to eliminate a $75-million cap on legal liability for energy firms whose oil rigs damage the environment and impose economic losses on the United States.

"There is an effort in Congress to remove that cap," he said. "I think it will pass. You have to make sure BP pays for the whole thing [entire clean-up]. It is their fault."

Schumer was speaking on NBC's Meet The Press program. He also argued for enhanced federal regulation and oversight of off-shore oil drilling.

Forcing energy companies to pay the full costs of disaster mitigation may be politically popular, but could have negative unforeseen consequences, according to Republican Senator Mitch McConnell of Kentucky, who also appeared on Meet The Press.

"If you raise the [liability] cap too high, there will be no competition," said McConnell. "The danger in taking the cap too high is that you end up with only massive, very large oil producers able to meet that cap and produce [oil] in the Gulf."

Last week, President Obama criticized executives from BP and other companies for attempting to deflect blame for the oil spill while they were testifying on Capitol Hill. McConnell, the top Republican in the Senate, said Congress will probe the Obama administration's handling of oil exploration permits as well as its response to the Gulf disaster.

Senator Jeff Sessions of Alabama, a Gulf Coast state, says he is satisfied with BP's assumption of financial responsibility, and that he expects the company to follow through on its commitments.

"They [BP] said 'we will be responsible for all damage to the beaches, all clean-up costs'. Then the question [becomes]: how far beyond that do they go in other consequential economic damages. They have said they will be responsible for paying them," said Sessions. "They should have more than enough money to pay them, and we expect them to pay every cent."

Sessions was speaking on ABC's This Week program.

BP has promised to pay all claims that are deemed valid. In previous disasters, like the 1989 Exxon Valdes spill in Alaskan waters, determining the validity of claims has taken years of costly litigation.

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