BP Clears Hurdle To Drill In Gulf While Oil Spill Liability Laws Remain Unchanged


WASHINGTON D.C. -- The Obama administration is set to allow BP to resume exploratory drilling in the Gulf of Mexico roughly a year-and-a-half after the company oversaw the largest offshore spill in history -- but without any changes to the laws that hold companies responsible for the economic damages that such spills cause.

Friday's announcement from the Bureau of Ocean Energy Management that BP could proceed with plans to drill four exploratory wells roughly 200 miles from the Louisiana coast was a coda to a summer-long saga that forced the government to confront uncomfortable questions about offshore drilling and its economic and environmental impacts.

Government officials said Friday that BP had proved its "compliance with the heightened standards that all deepwater activities must meet." An Obama administration official noted that 43 oil drilling plans in the Gulf had already been approved and that this was the first approval specifically for BP. In each case, the official noted, the company had to pass environmental and safety tests including "the ability to demonstrate containment" of a spill.

In other words: BP had to show that there wouldn't be a repeat of the spill that lasted for three months and saw an estimated 4.9 million barrels let in to the Gulf of Mexico.

But on the off chance that the crisis was replayed, the same sort of liability laws would remain in place. Eighteen months after the Deepwater Horizon rig exploded, oil companies are only subject to payment of $75 million on economic damages caused by a spill. For a time, there was a heavy push among Democrats in the Senate to raise the cap, as established under the Oil Pollution Act of 1990, to $10 billion.

The Obama administration then pushed for the cap to be lifted in entirety. But they couldn't get oil-state Democrats on board. And Republicans, arguing that lifting the ban would effectively prohibit smaller oil drillers from operating offshore (because of the risk they'd be incurring), were unified in opposition. By the time the one-year anniversary of the spill rolled around, the legislation was essentially dead.

"We continue to support the removal of caps on liability for oil companies engaged in offshore drilling, and encourage Congress to take action on this important reform," White House spokesman Clark Stevens told the Huffington Post at the time.

And the legislation remains dead today. A top Senate Democratic aide confirmed that there had been no movement and no signs of such in the near or long term. The aide clarified that the law does allow affected parties to sue oil spillers for economic damages above $75 million. But you have to prove "gross negligence" in order to be successful.

The Obama administration remains supportive of raising the economic damages liability cap so that the issue doesn't end up having to be decided on legal definitions of negligence. But in the absence of congressional action, they have pushed for stronger compliance on the front end of drilling.

"We have put in place a broad number of safety standards that every plan and permit needs to meet," the administration official said. "This exploration plan met those standards."

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