OIL SPILL -- May 12, 2010 at 11:57 AM ET
White House Seeks to Raise Oil Companies' Liability Cap
With costs mounting in the effort to contain the Gulf Coast oil leak, the Obama administration said Wednesday it will move to raise the cap on damages that the government can collect from oil companies during a spill.
Administration officials did not say how much they would like to see the cap increase, only that they would work with lawmakers to lift the amount from its current $75 million. Several key Democrats have said they would like to see the cap rise to as much as $10 billion.
Any increase, administration officials said, would apply retroactively in order to apply to the BP spill currently off the Louisiana coast. In testimony before a Senate panel on Tuesday, Lamar McKay, president and CEO of BP America, said he expected the costs of the cleanup to surpass $75 million.
"We think that we're going to exceed that, obviously," McKay said.
The legislation would also lift the per-barrel tax on oil produced in the United States by one penny, to 9 cents. In 2017, the tax would increase to 10 cents per barrel. Money from the tax goes to a federal trust fund that covers damage claims following an oil spill.
The trust fund now holds about $1.6 billion, Politico reports. "Raising this by just one penny to 9 cents-per-barrel would represent a 12.5 percent increase, raising as much as $612 million annually by some estimates."
The White House is hoping the bill will pass through Congress "in the next few weeks," Jeff Liebman, acting deputy director of the Office of Management and Budget, said Wednesday.