EWARK, N.J. – U.S. Senators Edward J. Markey and Bob Menendez today introduced a pair of bills to eliminate bailouts for the multi-billion-dollar oil and gas industry, increase accountability for big oil companies responsible for disastrous spills, and improve the federal government's ability to help areas affected by an oil disaster. The legislation is cosponsored by Jack Reed (D-R.I.), Richard Durbin (D-Ill.), Barbara Mikulski (D-Md.), Al Franken (D-Minn.), Jeff Merkley (D-Ore.), Sheldon Whitehouse (D-R.I.), Bill Nelson (D-Fla.), Gary Peters (D-Mich.) and Cory Booker (D-N.J.),
“We need to ensure that oil companies, not American taxpayers, are the ones held fully responsible for any oil spill offshore,” Sen. Markey said. The BP disaster highlighted the massive costs and damage that the can result from offshore oil spills. Ensuring that there is unlimited liability for any oil company from a spill is a critical step to ensure that no oil company again puts speed over safety."
"Under this legislation: If you drill and you spill, then you must pay the bill. If you hurt small businesses or communities, you fix them. If you hurt someone, you make it right," said Sen. Menendez, a senior member of the Senate Banking and Finance Committees. “It is fundamentally wrong for American taxpayers and local communities to pay for the mistakes of large oil companies, who take advantage of government bailouts to avoid accountability, and bear the burden of cleaning up the environmental disasters they’ve caused. By removing the arbitrary cap on big oil companies' liabilities, we can ensure those companies do the right thing by the American people when accidents happen."
“Oil spills threaten our economy and the environment, and it’s essential that we end bailouts and push for rules to ensure big oil companies are held accountable for their actions,” said Sen. Jack Reed.
“American taxpayers shouldn't be on the hook for economic and environmental damage from a big oil company's spill,” said Sen. Whitehouse. “This legislation will hold companies fully accountable for the mess they make."
“Michiganders know the devastating impacts of an oil spill far too well, following the disastrous pipeline rupture that spilled into the Kalamazoo River,” said Sen. Peters. “This legislation will hold big oil companies financially accountable for their actions – and their accidents – in order to ensure the health and safety of our people and our environment.”
“The devastating environmental and economic costs of oil spills shouldn’t fall on the backs of hardworking taxpayers,” said Sen Booker, a member of the Senate Committee on Environment and Public Works. “This legislation will safeguard the American people by making sure these costly cleanups are paid for by the companies responsible for causing them, not out of the pockets of hard working citizens.”
The Big Oil Bailout Prevention Legislation Package is consists of the following separate bills:
Federal law currently protects oil companies by capping their oil spill liability for economic damages at $134 million—an amount that pales in comparison to the more than $90 billion in profits the five largest oil companies enjoyed in 2014, and is easily surpassed by an oil spill as shown by the 2010 Deepwater Horizon disaster.
That cap means an oil company responsible for a spill does not have to pay more than $134 million for economic damages, such as lost business revenues from fishing or tourism or lost tax revenues of state and local governments, unless, as in the case of BP and the Deepwater Horizon spill, the oil company was found to be grossly negligent or to violate federal law. Current law requires an oil company responsible for a spill to pay for all costs—without limit—related to mitigating or cleaning up the spill including the use of booms, cleaning up spills, rehabilitating wildlife, and skimming for oil, but arbitrarily imposes the $134 million cap on economic damages.
In the event that damage claims from a spill exceed the amount in the Oil Spill Liability Trust Fund, the legislation allows the U.S. Treasury to temporarily refill the fund and be repaid with interest once it is replenished. The Oil Spill Liability Trust Fund was established to provide quick relief for victims of an oil spill, to provide immediate funds to respond to a spill and help pay for damages after a company hits its $134 million liability cap, or if the culprit cannot be found or has gone bankrupt. It is funded by an 8 cent tax for every barrel of oil produced or imported into the United States. However, there is a $1 billion per incident cap, which be eliminated under this legislation, on payouts from the fund.