Industry’s Assault Fails to Sink Oil Cleanup Bill

Embattled legislation aimed at protecting the California coast from oil tanker spills survived an assault by the petroleum industry Wednesday but faces still more obstacles to becoming law.

Over objections of oil representatives, the Assembly Ways and Means Committee approved what the environmental protection lobby calls its “top-priority” bill of the year. The measure was sent to the full Assembly, where its future is murky.

One obstacle to passage is a tug of war between two of the capital’s most powerful lobbies--the trial lawyers and the oil industry--as time runs short before the Legislature’s scheduled adjournment at midnight Friday.

The divisive issue, basically, is whether oil spill cleanup crews hired by petroleum interests should be immune from being sued for property damage they may cause during the course of their work.

Even if a settlement is reached, the legislation must be approved by a two-thirds vote of each house because it imposes a tax. Securing a two-thirds margin is difficult in the Legislature even when opposition is relatively light.

Still another hurdle is Gov. George Deukmejian’s warning that he would veto the oil spill cleanup proposal unless his concerns are met. Deukmejian’s warning reflected much of the opposition voiced by the oil industry.

The legislation, the two versions of which are carried by Sen. Barry Keene (D-Benicia) and Assemblyman Ted Lempert (D-San Mateo), would create a vastly expanded state program designed to prevent and clean up tanker oil spills of huge magnitude, such as the spill from the tanker Exxon Valdez in Alaska last year.

Under the Keene bill, oil companies and other elements of the petroleum industry would be assessed a tax of 25 cents per barrel to create a $150-million state fund to finance quick cleanups. Additionally, under both bills, the state would be given unlimited borrowing authority for more money to cope with offshore oil spills.

Attempts by the oil industry to reduce the size of the fund to $50 million, and thus lessen its tax burden, failed in the Ways and Means Committee on Wednesday, along with other weakening amendments.

But Michael B. Kahl, lobbyist for the Western States Petroleum Assn., told reporters later, “We don’t intend to give up.”

For weeks, the influential trial lawyers and the oil industry, both groups among the most generous contributors to legislative election campaigns, have engaged in a high-stakes fight over whether oil spill cleanup crews hired by petroleum interests should be granted a limited form of immunity from lawsuits.

Oil industry representatives contend that immunity from liability for professional responders is necessary because they must act quickly in case of a spill and not be inhibited by fears that they might get sued.

The trial lawyers, however, argue that if property is damaged by carelessness during cleanups, responders should be held liable.

The Keene bill provides a 60-day period of limited immunity during cleanup operations for professional crews. The Lempert measure was amended in the Senate over his opposition Monday to provide crews with 90 days of immunity, plus a 45-day extension. Another amendment reduced the response fund from $150 million to $50 million.

It remained unclear whether differences between the two bills will be reconciled.