WASHINGTON — Sens. Bob Menendez and Frank Lautenberg, both D-N.J., are leading the fight to change part of a 1990 law that they say opens the door for taxpayer bailouts of businesses and families hurt by the massive Gulf of Mexico oil spill.
But Lautenberg helped write that 1990 law, which passed without a single “no” vote in both houses. At the time, he touted it as a crackdown on Big Oil.
“We’re letting them know we mean business,” Lautenberg said in July 1990, as the House-Senate conference committee on which he served released the final bill. “If they spill oil, it’s going to cost them.”
Here’s what he says now: “In retrospect you can be a second-guesser, but we thought it was OK at the time.”
The Oil Pollution Act of 1990, enacted after the Exxon Valdez accident in Alaska and after New Jersey beaches had seen tar balls wash up several times from oil spills in the waters around Newark Bay, did make significant changes.
It created a new tax to fill a $1 billion cleanup fund, began a 20-year phaseout of single-hull tankers and made oil companies responsible for the full cost of cleaning up offshore spills.
But on the question of economic damages, which are payments to fishermen and hotel owners and others hurt economically by the spill, the law capped oil companies’ liability at $75 million. Victims would have to go to court and sue for claims higher than that.
Menendez and other Democrats have said the damage caused by the spill at BP’s Deepwater Horizon rig is so extensive that the government would likely set up a relief fund if the company did not cover economic damages far above $75 million.
He and Lautenberg tried in May to get immediate unanimous approval for their bill raising the cap to $10 billion, but there was an objection by Sen. Lisa Murkowski, R-Alaska. Menendez tried for the third time on Thursday, this time for approval of unlimited liability, but there was an objection by Sen. James Inhofe, R-Okla.
Menendez said the law needs to be changed even though BP this week pledged $20 billion in relief.
“If in fact BP wanted to renege … they’d be limited to $75 million,” Menendez said. “We want to make sure that we don’t end up as taxpayers paying for Big Oil’s negligence.”
Menendez called the $75 million cap “ridiculously low” on Thursday. During debate last month, Lautenberg called it “measly,” “a pittance” and “a spit in the ocean.”
But in 1989, Lautenberg had no problem with the limit, according to the Congressional Record.
“Liability for damages, barring a finding of gross negligence or willful misconduct, is capped at $75 million,” Lautenberg said when he spoke in support of an amendment that made companies responsible for all cleanup costs. “This is consistent with federal policy of the last 20 years.”