Written by attorney Sebastian Gibson

The Legal Responsibility of BP to Pay for Damages Caused by the Oil Spill

In view of the magnitude of the catastrophe off the coast of Louisiana, Alabama, Mississippi and Florida caused by the BP Deepwater Horizon oil spill, it is almost inconceivable that under the Oil Pollution Act of 1990, an oil company's liability for economic damages to communities affected by their oil spill is $75 million. Although oil companies face unlimited liability for cleanup costs, that doesn't do much for all the communities and individuals and fishermen affected by the oil spill. Although BP's representatives have made statements that suggest they will pay for all of the damages caused by their oil spill, and won't limit themselves to the $75 million dollar cap and will pay all justifiable claims, time will tell if this will indeed be the case. Some damages will simply be irreversible. Others will be difficult to determine. And how will BP handle claims of all of those involved in the fishing industry who will be put out of business altogether? Finally, who will be repaid for the damage to the environment? Some Republicans are already saying the Obama administration is being too tough on the oil industry while others are claiming they are not being tough enough. One Republican with a large national radio audience is even, unbelievably, blaming environmentalists for the oil spill under the tortured logic that it was the environmentalists who forced oil companies to drill where it's riskier and has stated the Sierra Club should foot the bill. The Sierra Club is calling on supporters to make that Republican their top fundraiser. Another Republican with a large national following and who has shouted "Drill Baby Drill" from the rooftops is now claiming that BP can't be trusted, despite the fact that her husband apparently worked for BP for 18 years. Others are saying the U.S. government should take over the efforts to stop the oil leak, not realizing that the U.S. government simply doesn't have the equipment that BP has. This is not to say BP was prepared for an oil leak of this magnitude. Clearly, they weren't, by the fact that the oil is continuing to gush more than a month after it started pouring into the ocean, and at a far greater level than BP originally admitted. The Associate Attorney General has stated that it is the Department of Justice's mandate to recover every dime of taxpayer funds that are used in handling the disaster. Democrats in Congress are attempting to raise the current cap on oil companies must pay for damages to $10 billion, but Republicans are blocking the effort. The fear is that without a cap on damages, only the biggest oil companies could afford to drill or obtain the insurance to drill. Another approach suggested is to increase the cap on damages to the last four quarter's of a company's profits or $150 million, whichever is greater. Even if such legislation were to be passed, however, it is unlikely it would apply to the Deepwater Horizon oil spill. The BP Deepwater Horizon oil spill will be this country's worst ever environmental disaster and as devastating as it is to watch it's effect on the environment and the fishing industry in that part of the country, it may turn out to be equally difficult to watch as people's livelihoods are ruined, as Congress fights over the issue and as BP reacts when billions in claims are presented for payment.

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