How Will This Spill Be Different?


A reader writes:

I was a young man living in Britanny during the Amoco Cadiz disaster, which spilled 6 times more oil than the Exxon Valdez. The Amoco Cadiz resulted in a judgment against Amoco in 1990 for - are you ready for this? - $120 million dollars, probably 1/20th the actual cost, if that. The only way to stop this is to make the company pay for the *full cost* - and yes, that's many billions of dollars. It's not like they can't afford it. As long as it's far more profitable to take the financial hit on a spill than to prevent it, this kind of thing will continue to happen. Why would it stop?

The federal government is set to bear the overwhelming cost of the cleanup, but* Brad Plumer sees reform on the horizon:

... Senators Robert Menendez, Frank Lautenberg, and Bill Nelson are now pushing the "Big Oil Bailout Prevention Act," which would raise the liability cap on economic damages from $75 million to $10 billion. Given that BP is already spending $6 million per day on cleanup, that would be a huge deal. Presumably one argument for raising the liability limit is that it would give rig operators even more incentive to invest in safety measurersespecially in light of reports that BP fought against requirements to invest in a $500,000 remote-control shutoff switch.

(Photo: BP CEO Anthony Hayward peers out a window before leaving the U.S. Department of the Interior May 3, 2010 in Washington, DC. Hayward and other BP executives were meeting with Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano and others about the recent deepwater oil rig explosion and subsequent leak in the Gulf of Mexico. By Chip Somodevilla/Getty Images.)

*Update from a reader:

It appears that you may be conflating the $75 million cap on economic damages with the cost of the cleanup. The Oil Pollution Act says that the responsible party pays for all of the cleanup costs.  Talking Points Memo did a summary on who pays: "There are two broad categories of costs associated with the catastrophic BP Gulf oil spill: one is cleanup; the other is damage caused by the oil -- to shoreline property, local tax revenues, the fishing and tourism industries, and other businesses and individuals." The latter category is where the "who pays?" question gets really complicated.