Senate Panel Backs $1-Billion Oil Cleanup Fund

Reacting to the Exxon Valdez disaster, a Senate committee approved a bill Thursday to create a cleanup fund of up to $1 billion for future oil spills while sharply increasing the financial liability of tankers and barges that carry oil.

The measure, adopted by the Senate Environment and Public Works Committee, also authorizes the government to order those responsible for oil spills to clean them up and to impose triple damages if they refuse after being ordered to do so by the President.

Since the bill is sponsored by Senate Democratic leader George J. Mitchell of Maine, it is considered likely to win Senate approval this year. A similar measure has been approved by the House Merchant Marine and Fisheries Committee.

“Exxon may abandon the Alaskan cleanup, but if this legislation becomes law, no company will be able to walk away from a future oil spill,” Sen. Joseph I. Lieberman (D-Conn.) said in a statement. “The public is angry about Exxon’s action--or lack of action--and the time is ripe to translate their anger into effective legislation.”

Under the bill, tanker owners would be liable to pay spill cleanup costs of $500 per gross ton of oil or a minimum amount of $10 million. The current law provides for payments of $150 per ton or a minimum of $250,000. Other vessels, including barges, would be liable for $300 per gross ton of oil or a minimum of $500,000.

Deep water port facilities, now liable for $50 million, would have a liability of $100 million under the bill. Other on-shore facilities would have the same limit.

One provision of the bill, however, would alter a federal policy adopted after the Santa Barbara oil spill in 1969 requiring offshore oil platform operators to pay an unlimited amount of oil spill cleanup costs along with a maximum penalty of $35 million.

Instead, under an amendment sponsored by Sen. John B. Breaux (D-La.), a combined ceiling of $100 million would be established for both cleanup costs and penalties paid by offshore oil drillers. The provision was adopted by voice vote, with only Lieberman audibly dissenting.

Environmental specialists said that a leak caused by drilling on the Outer Continental Shelf could be more extensive--and expensive--than even a tanker spill like the Exxon Valdez disaster in Alaska’s Prince William Sound.

The bill provides that the $1-billion fund would be used for cleanup costs once the owners or operators had reached their cleanup cost ceilings.

The fund would be financed by contributions from owners of oil cargoes. The House Ways and Means Committee has approved a 3-cent-per-barrel fee, effective in September, but the Senate Finance Committee has taken no action yet on the amount of the fee.

Under current law, the fee would not go into effect until Congress enacts comprehensive oil spill legislation.

Strengthening the President’s authority in major oil spills, the bill would require the preparation of a national contingency plan for removal of oil and hazardous substances.