Now that the "kill shot" has failed to stanch the flow of oil into the Gulf of Mexico, it's likely the gusher will continue all summer long. It's impossible to know how much it will cost the region's businesses and residents, but it will be a lot. So the question looms large: Who will pay?
It shouldn't be the people whose communities and businesses are imperiled. And it sure shouldn't be taxpayers. That leaves BP and the oil industry. BP - which appears likely to become the subject of a criminal probe into its role in the spill - is responsible for the cost of containment and cleanup. But the law caps the company's liability for other economic damages at $75 million. Another $1 billion can come from the industry-financed Oil Spill Liability Trust Fund. But that's just a drop in the ocean.
Congress should raise the cap on oil-company liability, and the increase should be retroactive, if legally possible.
BP officials said they expect to pay more than $75 million. Still, increasing the cap would ensure that the oil giant - which had a first-quarter profit of about $6 billion - couldn't reconsider once the crisis ebbs. A bill by Sen. Robert Menendez (D-N.J.) would raise the cap to $10 billion. It would also increase the $1 billion per incident limit on trust-fund withdrawals. And the White House wants to hike payments to the trust fund from 8 cents per barrel of oil pumped to 9 cents.
The American Petroleum Institute said a $10-billion cap would force smaller companies to abandon deep-water drilling, reducing the domestic supply of oil. So be it. Companies shouldn't drill if they can't cover the costs when things go terribly wrong. hN