As the crisis in the Gulf Coast continues, lawmakers are debating either raising oil companies' $75 million dollar liability cap - some say as high as $10 billion dollars - or removing the cap altogether.
"It is clear that the liability caps must be adjusted, and in some instances lifted altogether," U.S. Associate Attorney General Tom Perrelli told the House Transportation and Infrastructure Committee during a hearing on the Oil Pollution Act of 1990, Wednesday.
OPA 90, as the act is commonly called, requires responsible oil companies to pay for all cleanup costs in the event of a spill. However, the law provides that entities such as BP may only be billed up to $75 million dollars to remunerate private parties for losses incurred, in addition to cleanup costs.
Some lawmakers expressed a fear that removing the liability cap could make insurance unaffordable for smaller companies; however, many advocate a tiered approach to financial liability that would base the cap rate on the risk of each company's operations, and not on the size of the company itself.
Perelli did not agree with many in Washington who believe that new legislation reducing or deleting liability caps should apply retroactively, so as to apply to BP's still gushing Deepwater Horizon leak.
OPA 90 left room for interpretation in asserting that the liability cap will not apply in the case of "gross negligence or willful misconduct," and failed to define these terms. Lawmakers, including Rep. Gene Taylor (D-MS) pushed for a clearer definition of these terms in developing new legislation.
Taylor questioned Acting Minerals Management Service Director Bob Abbey on the MMS' history of negligence in monitoring and evaluating drilling operations and granting of "categorical exemptions," presenting information that the MMS failed to conduct 16 "monthly" inspections of the Deepwater Horizon rig in the past four years.
Abbey responded to questioning by saying that he was not there "to defend past practices of the Minerals Management Service."
House Debates Removing BP's $75 Million Liability Cap
As the crisis in the Gulf Coast continues, lawmakers are debating either raising oil companies' $75 million dollar liability cap - some say as high as $10 billion dollars - or removing the cap altogether.
"It is clear that the liability caps must be adjusted, and in some instances lifted altogether," U.S. Associate Attorney General Tom Perrelli told the House Transportation and Infrastructure Committee during a hearing on the Oil Pollution Act of 1990, Wednesday.
OPA 90, as the act is commonly called, requires responsible oil companies to pay for all cleanup costs in the event of a spill. However, the law provides that entities such as BP may only be billed up to $75 million dollars to remunerate private parties for losses incurred, in addition to cleanup costs.
Some lawmakers expressed a fear that removing the liability cap could make insurance unaffordable for smaller companies; however, many advocate a tiered approach to financial liability that would base the cap rate on the risk of each company's operations, and not on the size of the company itself.
Perelli did not agree with many in Washington who believe that new legislation reducing or deleting liability caps should apply retroactively, so as to apply to BP's still gushing Deepwater Horizon leak.
OPA 90 left room for interpretation in asserting that the liability cap will not apply in the case of "gross negligence or willful misconduct," and failed to define these terms. Lawmakers, including Rep. Gene Taylor (D-MS) pushed for a clearer definition of these terms in developing new legislation.
Taylor questioned Acting Minerals Management Service Director Bob Abbey on the MMS' history of negligence in monitoring and evaluating drilling operations and granting of "categorical exemptions," presenting information that the MMS failed to conduct 16 "monthly" inspections of the Deepwater Horizon rig in the past four years.
Abbey responded to questioning by saying that he was not there "to defend past practices of the Minerals Management Service."