GOP Blocks Bill to Raise Oil Companies' Liability to $10 Billion

Republican Sen. Lisa Murkowski of Alaska objected Thursday when a group of Democrats tried to pass a bill to increase oil companies' liability after an oil spill from $75 million to $10 billion. With Murkowski's objection to the bill, the measure is stalled for now.

Murkowski, the top Republican on the Senate's Energy and Natural Resources Committee, told the three Democrats that she shares their empathy for Gulf Coast residents who are suffering from the effects of the British Petroleum spill, especially because her own state struggled to recover from the devastating results of the Exxon Valdez oil spill more than 20 years ago.

"We're with you on this," she said.

But Murkowski criticized the bill as the wrong way to make local businesses whole because it would inadvertently help large global oil companies by driving smaller U.S. operators out of business. She said independent oil companies could not afford the increased liability costs associated with offshore drilling and would be forced from the market. Small operators now provide one-third of domestic oil production and two-thirds of domestic natural gas.

The only companies left to drill in the waters off America's coasts, she said, would be Saudi Aramco, Exxon, China's national oil company , and British Petroleum. Rather than lifting the liability cap, Murkowski suggested that private businesses, such as shrimpers, be allowed to seek unlimited damages in state court.

But the three Democrats sponsoring the bill, Sens. Robert Menendez and Frank Lautenberg of New Jersey, and Bill Nelson of Florida, vowed to find another way to pass their measure to force BP and other oil companies to pay for all of the damages they cause.

"When BP makes $5.6 billion in three months, when the top five companies make $25 billion in three months, $10 billion is a drop in the bucket," said Menendez.

He also rejected the suggestion that businesses affected by an oil spill should take oil companies to court to recoup their damages. "I know my distinguished colleague from Alaska knows what happened in the Exxon Valdez case -- that took 20 years for claimants to try to get their just response, and some of them fell off along the way because they couldn't hang in there and they lost everything," he said.

Lautenberg said that small companies should be able to afford the same liability as large corporations or they should not be drilling in the first place. "If you want to make the money, you have to pay the bills that go with it," Lautenberg said. "If an independent company causes that kind of damage and goes out of business, so be it."