Cleaning up oil spills may cost companies that are responsible for them more money now that the United States Department of the Interior’s Bureau of Ocean Energy Management (BOEM) has increased the liability limit from $75 million to $134 million. That is a 79 percent increase and the highest amount that it can be raised to without Congress stepping in and changing how the legislation is written. However, this increase, which was proposed in February and will take effect in January, is good news to every offshore injury lawyer who represents injured offshore workers as a result of these types of incidents.
“BOEM is taking an important step to better preserve the ‘polluter pays’ principle of the Oil Pollution Act and further promote safe and environmentally responsible operations,” said Walter Cruickshank, the organization’s acting director, in a statement. “This is needed to keep pace with inflation, which has increased 78 percent (since 1990).”
Strangely, the Oil Pollution Act’s liability limit is supposed to be readjusted every three years to keep pace with the inflation rate, but this has not been done since it was signed into law in 1990 with two exceptions, an increase in 2006 that only applies to tankers carrying crude oil and one earlier this year that relates to spills coming from onshore setups.
Fortunately, BP waved this cap as it related to the company’s role in the Deepwater Horizon oil spill in 2010. The organization may end up responsible for tens of billions of dollars in payments to affected residents, cleanup work, fines and legal settlements with Jones Act attorneys and their clients. However, companies responsible for these types of spills in the future may not wave this cap, which is why many are seeking to raise the limit to a significantly higher figure than $134 million.
Repeated efforts had been made to increase the cap in the immediate aftermath of the Deepwater Horizon incident, but politicians could not agree on exactly where to place the limit, and no change was made. Many felt that the cap should be removed entirely while others believed that doing so would result in companies with fewer resources no longer being able to compete in the industry.
However, politicians were able to pass legislation in a much timelier manner following the Exxon Valdez oil spill in 1989 as the Oil Pollution Act became law a year later.
That piece of legislation’s limit on how much money these companies are responsible for only applies to economic damage claims from affected organizations and every oil rig accident attorney who represents them. There is no limit to how much is spent cleaning up the spill. Also, the liability limit is removed entirely if the spill was the result of willful misconduct, gross negligence or a similar reason.
One senator, Ed Markey, is going to continue to work on what he hopes will be the next step.
“The Obama administration has now done what it can under the law to raise the liability for oil spills, and it is up to Congress to take the next step to hold oil companies fully accountable when they spill oil,” Markey said in a statement. “We learned from the BP disaster that the fines and liabilities oil companies face for safety and spill violations amount to slaps on the wrist when compared to the damage they cause and the profits these companies keep.”
In 2010, BP started providing live broadcasts of the Deepwater Horizon spill to the general public after a congressional subcommittee chaired by Markey demanded it. Live video of the spill had only been available to a select few for 23 days prior to that point.