Gulf oil spill: Alaska senator blocks move to raise oil spill liability

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A week ago, Sen. Lisa Murkowski (R-Alaska) teamed up with her Democratic senatorial counterpart, Mark Begich, to introduce a bill that would raise the [Correction: liability trust fund for] economic damages from oil spills to $10 billion.

On Thursday, she blocked an attempt by Sen. Robert Menendez (D-N.J.) to expedite a bill seeking to raise liability, saying it needed further study.


Murkowski, who has received $1.2 million from energy and natural resource interests in her political career, said she feared the impact on independent operators in her state. She noted that the Exxon Valdez spill resulted in a $5-billion court judgment against Exxon, now Exxon-Mobil.

Menendez had harsh words for her reasoning, at a press conference Thursday:

‘Some of the independent operators are $40-billion companies. So this isn’t mom and pop on the grocery store on the corner. And by the way, even if you are smaller than a $40 billion independent company, if you’re drilling, if you’re doing deep-sea drilling and the risk as we have seen the risk be actualized, should you not be responsible?’

Menendez’s Garden State colleague and fellow Democrat, Sen. Frank R. Lautenberg, chided Murkowski’s representation of the 1994 Exxon Valdez judgment, which he noted was fought fiercely in courts, and was reduced in 2008 to $507 million.

The bill blocked by Murkowski on Thursday would have raised the $75 million economic-damage liability cap to $10 billion, but it also would have eliminated a $1-billion-per-incident cap on claims against the Oil Spill Liability Trust Fund, which covers a company’s liability beyond the $75-million cap. That fund comes from a per-barrel tax on oil.

Menedez’s bill would have allowed responders to tap the fund for preparation and mitigation such as the activity occurring on the shores of the Gulf of Mexico, in response to the BP spill. If damages exceed the fund, currently $1.6 billion, claimants would be allowed to collect against future revenues from the fund, with interest, under the Menendez bill.

The measure also would have eliminated a $500-million cap on natural resource damages.

Those provisions were not in the Murkowski-Begich bill, which also would have raised the per-barrel fee that goes into the fund from 8 cents to 9 cents.

-- Geoff Mohan