Carol Browner: Liability cap increase “will mean that you only have large companies.”
White House climate czar Carol Browner has admitted that Democrat legislation moving through Congress to eliminate the cap on liability for oil spills would effectively bar small and independent U.S. energy firms from being able to explore for natural resources in the Gulf of Mexico—meaning even more job loss and lost wages during a recession, on top of President Obama’s six-month drilling moratorium.
"Maybe this is a sector where you really need large companies who can bring to bear the expertise and who have the wherewithal to cover the expense if something goes wrong," Browner said. Eliminating the $75 million cap on liability for oil spills "will mean that you only have large companies in this sector," she said.
Experts have warned that eliminating liability caps would shut out all but the largest companies from offshore exploration in the Gulf largely because obtaining insurance for operations would become impossible for smaller firms. American independent oil and natural gas producers currently hold 90 percent of U.S. offshore leases and putting them out of business would threaten thousands of good-paying jobs and may end up closing the very firms with the best safety records. Thirty percent of Gulf oil and 60 percent of Gulf natural gas production could be lost without the operation of smaller, independent U.S. firms.
Companies which would feasibly be able to operate in the Gulf include multinational and foreign state-owned companies such as the Chinese National Petroleum Corporation, BP, Brazil’s Petrobras, and Russia’s Gazprom.
Current law states that if a responsible party is found to be grossly negligent, engaged in willful misconduct or violated regulations, then the responsible parties are already liable for all costs. Therefore, eliminating liability caps may be unnecessary.