White House: Lift Liability Cap for Gulf Spill

BP CEO Tony Hayward

The White House is pushing to lift the limit on how much BP pays for the Gulf Coast oil spill.

Press Secretary Robert Gibbs said Tuesday the administration wants to work with Congress to change a law that caps at $75 million BP's liability for economic damages like lost wages or dwindling tourist dollars.

BP PLC is responsible for all cleanup costs under the Oil Pollution Act, but Gibbs said that other costs could easily top $75 million.

Democratic Sen. Robert Menendez is co-sponsoring a measure that would raise the liability limit to $10 billion. Menendez also wants it to be made retroactive so it can apply to the huge spill that began after an oil rig exploded in the Gulf on April 20.

Gibbs said the administration supported Menendez's attempts to raise the limit retroactively. He also noted that if BP is found to have acted negligently or violated the law, the cap would not be in effect. The Oil Pollution Act was passed in 1990 in response to the Exxon Valdez spill.

Menendez said he was confident that the liability measure could be applied retroactively. He cited the 30-year-old Superfund law that has forced companies to pay for previously polluted hazardous waste sites.

"This is about making Big Oil responsible for its excesses," Menendez said.

"I don't trust Big Oil," added Sen. Frank Lautenberg, a Democrat and another one of the bill's co-sponsors.

BP chief executive Tony Hayward declined to comment on the bill.

"We won't be entering into that legislative discussion," Hayward said at a news conference Tuesday.

Special Section: Gulf Coast Oil Disaster
Oil Spill by the Numbers
Gulf Oil Spill Containment Efforts

Asked whether the company expected to spend money beyond the $75 million limit, Hayward said the cap was largely irrelevant.

"It's got nothing to do with caps. All legitimate claims ... will be honored," he said.

BP says on its website that it is committed to paying "all necessary and appropriate cleanup costs" as well as "legitimate and objectively verifiable claims for other loss and damage caused by the spill."

The federal government also maintains an Oil Spill Liability Trust Fund supported by industry fees. It can make a total of $1 billion in payouts per incident to individuals, businesses and governments.

Roughly 2.6 million or more gallons has spilled into the Gulf since the April 20 blast that sunk an oil rig and killed 11 workers.

President Barack Obama has said repeatedly that taxpayers will not be on the hook for the massive oil spill, which threatens the Gulf Coast. But prior to Tuesday the administration hadn't staked out a position on how the liability limit might be dealt with.
  • CBSNews

Comments