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May 24, 2010

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jmotorhead

The operator already ran for the liability umbrella. The new plan is nothing like FDIC. FDIC is funded via premiums charged to the member institutions, same for NCUIA. As for the limit helping small operators, the King has no clothes. If you know your on the hook for the damage you might not cut back on safety costs. And the limits are for all not just the small time operator. What is the liability limits for a chemical spill?

jmotorhead

I agree. Make them responsible for the costs. The tax pushes the burden to the consumer and tax payer. I have to give BP credit as they have not ran to the liability protection like some of the other involved. There has been some call to change the limits, but some are saying that would be bad. The limits should never been put in ther in the first place, but EXXon has lots of friends.

Brian R

Smaller companies may not have enough assets to cover it. eg, in this case if they pinned it on the rig operator (Can't remember their name right now. Transocean?) rather than BP. You could take all they've got and not even come close to the cleanup costs.

I haven't read much about this, but the general idea sounds sort of like an oil industry FDIC. Although the Superfund might be a closer analogy.

J Carmichael

Ok, I'll concede that it is because of the liability mandated. Why not change the mandate? Might make companies a bit more attentive if they realize they are on the hook for their corporate life... no?

jmotorhead

I think it is in response to the OPA 90, Oil Pollution Act 1990. The act limits the liability at $75 million.

(33 U.S.C. 2702)
SEC. 1004. LIMITS ON LIABILITY.
(a) GENERAL RULE.—Except as otherwise provided in this section,
the total of the liability of a responsible party under section
1002 and any removal costs incurred by, or on behalf of, the responsible
party, with respect to each incident shall not exceed—
(1) for a tank vessel, the greater of—
(A) $1,200 per gross ton; or
(B)(i) in the case of a vessel greater than 3,000 gross
tons, $10,000,000; or
(ii) in the case of a vessel of 3,000 gross tons or less,
$2,000,000;
(2) for any other vessel, $600 per gross ton or $500,000,
whichever is greater;
(3) for an offshore facility except a deepwater port, the total
of all removal costs plus $75,000,000; and
(4) for any onshore facility and a deepwater port,
$350,000,000.
(b) DIVISION OF LIABILITY FOR MOBILE OFFSHORE DRILLING
UNITS.—

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