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DEEPWATER HORIZON SPILL
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May 5, 2010

Obama backs moves to raise OPA 90 liability cap

President Obama appears to be prepared to support a legislative move to raise the liability cap under OPA 90 from $75 million to $10 billion.

In the wake of the Deepwater Horizon spill, U.S. Senator Robert Menendez (D-NJ) along with Senators Frank Lautenberg (D-NJ) and Bill Nelson (D-FL) this week introduced the Big Oil Bailout Prevention Plan. Under OPA 90, the responsible party in an oil spill must cover all costs related to clean up; however, there is a $75 million cap on its liability for economic damages. Menendez's bill would raise the liability cap to $10 billion.

At a White House press briefing this morning, Press Secretary Robert Gibbs was asked whether the President would support the $10 billion cap. He responded that OMB (the Office of Management and Budget, a White House department) is "in the process of working with the Hill on legislation to lift that cap."

"I have not gotten from them a number whether it would be $10 billion or something in that neighborhood," continued Mr. Gibbs, "We would be in favor of significantly -- lifting that cap, a cap put in place in the Oil Pollution Act of 1990 so at least 20 years old."

Meantime, Senator Menendez's Big Oil Bailout Prevention Act would:

Raise the liability cap for offshore oil well spills from $75 million to $10 billion.

Eliminate the $1 billion per incident cap on claims against the Oil Spill Liability Trust Fund and allow community responders to access the fund for preparation and mitigation up front, rather than waiting for reimbursement later.

If damages claims exceed the amount in the Oil Spill Liability Trust Fund (currently $1.6 billion), then claimants can collect from future revenues of the fund, with interest.

Eliminate the $500 million cap on natural resources damages.


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