Pallone Introduces Legislation to Hold Big Oil Accountable for Dangerous Spills

Washington, D.C. - December 1, 2016 (The Ponder News) -- Congressman Frank Pallone (NJ-06) introduced two pieces of legislation to eliminate liability caps for the oil and gas industry and increase accountability for big oil companies responsible for disastrous spills. 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.

The legislation includes:

• Big Oil Bailout Prevention Unlimited Liability Act of 2016, which eliminates the $134 million liability cap for economic damages caused by an offshore oil spill
• Big Oil Bailout Prevention Trust Fund Act of 2016 – eliminates the $1 billion per-incident cap on claims against the Oil Spill Liability Trust Fund (OSLTF), along with the $500 million cap on OSLTF monies used for natural resource damages

“Spills by oil companies do irreparable harm to our environment, the health of wildlife and the livelihood of thousands,” said Pallone. “American taxpayers and local communities should not have to pay for the mistakes of large oil companies and left to rebuild on their own. Big Oil must take responsibility for their actions and my legislation will help ensure that they are held accountable.”

In July 2016, U.S. Sens. Bob Menendez and Cory Booker introduced companion versions of the bills in the Senate.

“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. Robert Menendez, a senior member of the Senate Banking and Finance Committees, and who introduced the Senate version of the legislation. “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.”

That current 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.