Who Pays For The Oil Spill

The oil continues to spew and out of the coastline from the Deepwater Horizon oil break. Go to many areas along the Louisiana coast and you can see it polluting the shores, marshes and wildlife and fisheries. My newspaper today says the oil may continue to come ashore more than a year after the broken oil well is capped. And the subsurface oil may linger below the surface and pollute for more than 100 years.

The cost of clean-up will be many billions, and British Petroleum is the prime candidate to pay much of it. There are many subsidiary companies working at that broken rig too. Any company that is in a contractual relationship with British Petroleum can be found to be negligent. So when BP hired companies to perform services and they violated the law and were grossly negligent, they lost their liability cap." Evidence abounds that BP and many of those other companies did not follow basic drilling and support procedures as required by law. The oil break itself would never have happened had BP had in place the required drill break cap. It said it was trying to save money by not adding it.

What percentage of damage they each be levied is up in the air. In fact, it will take many years of litigation to determine and many at fault may declare bankruptcy to avoid paying anything. Already here, many experts are saying the environmental cost and economic loss will be far greater than the hurricane of 2005. BP estimated last week that it already had spent $625 million on responding to the disaster. That includes payments to hundreds of seafood fisherman and women, millions in financial grants to pay for lost tourist revenue in this tourist dependent area and, and costs associated with reducing the flow of oil from the broken riser at the mile deep well head and drilling of two relief wells to permanently seal the original well. It is but a drip of the amount needed to clean and repair damage caused by the break.

Here's the problem in getting the 20 billion or so that would actually be needed to fix the mess. The Oil Pollution Act has a limit on liability of $75 million per incident, with another $1 billion available to pay claims from a single event from the Oil Spill Liability Trust Fund after the cap is reached. These limits were placed by the U.S. Congress whose members receive huge financial support in their election campaigns from...you guessed it..the oil companies. The petroleum industry here and in every other country is a strong political force. One would not be wrong in euphemistically saying that the petroleum companies and the politicians sleep in the same oil bed.

Congress, under pressure after the big oil spill, is "considering legislation" that would retroactively raise the cap on corporate liability to as much as $10 billion It's a very slow process to even determine the amount of loss and cost to repair (or try to repair) it. There has never before been this large of an oil spill and never one in which chemical dispersants have been used to keep the oil below the surface. The dispersants have added another layer of chemical pollution that caused the oil to travel so slowly and to clump and pollute for what should be another 100 years.

It appears the entire Gulf Coast could become a dead-zone, below and above. In short the people of Louisiana and the wildlife there are losing their livelihoods and paradise, their way of life, everything they cherish on the gulf, the bayou, the marshes, the swamps. There is no fix for that.