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The Oil Spill

The Situation
We all know about the oil spill in the gulf. President Obama wants to pass a law that will remove the cap on liability for spills (this doesn't include removal costs, they pay %100 of that). In other words, BP will pay billions to the people who lost their incomes, instead of the current $75 million.

My condolences
I'd like to start off by telling the people in the Gulf Coast that I hope they will make it through this okay.

The Current Law
The current law is The Oil Pollution Act of 1990, which states that "holders of leases or permits for offshore facilities, except deepwater ports [port, not rig], are liable for up to $75 million per spill, plus removal costs". The same Act sets up a trust fund that will pay for $1 billion per spill, and it says that individual states can pass laws that establish a different amount of liability, including unlimited.

So, as far as BP is concerned, they have to pay $75 million plus removal costs while the trust pays $1 billion.

The President's Unconstitutional Wish
President Obama has said that he hopes to lift the cap for the current spill, which is clearly unconstitutional. The Constitution specifically forbids ex post facto laws, which means "after the fact". Congress can't pass a law to take care of something that already happened. Essentially, it would be the same as having a photocop take your picture going 50 mph in a 50 mph zone, having the state change the speed limit changed to 35 mph the following week, and then sending you a ticket for going 15 mph over the speed limit. It is unconstitutional.

Clarification of My Views:
I want to make myself clear. Is it right for there to be a cap on BP's liability? No, they should have to pay for every penny. Do they have to pay for it all and can Congress make them? No. The law is there and the Constitution specifically forbids ex post facto laws. So while the moral thing would be for them to pay, legally, they only have to pay $75 million.

The Solution (Short and Long-Term)
In terms of paying for the spill, I can only think that we as a nation need to be pay for it. I know it's not right, but it's the only legal solution I can think of.

For the future, we should remove all liability. There are many benefits from this here are some:
1) No more spills - Would any company dream of using unsafe techniques or machinery if they knew they could lose billions?
2) Less oversight - If a company is inspecting like crazy to make sure they don't lose billions, why would the government need to pay millions of dollars for a bureaucracy to oversee the industry?
3) It's fair - In pretty much every other case of liability, when you cause damage, you pay for it all. Why not in big oil?

Comments

  1. AnnaJune 17, 2010 at 4:34 PM

    I like the idea of more responsibility placed on the oil companies, which would lead to less government over site. I'm pretty sure that in 99% of all situations less government over site is better.

    I hate that so many choices are being taken away from us.

    That said, if the BP is at fault, then they should pay. Law or no law, they should do the right thing. And not because they are forces or threatened, but because it's right.

    Utopian, I know.

    ReplyDelete
  2. RandyJune 19, 2010 at 8:23 AM

    So, an anonymous person commented (and I don't know why it isn't visible, but they broke the rules, so even it is was visible, I would have deleted it) that they didn't feel it was fair for me to draw the analogy between a speeding ticket and the worst eco-disaster in history. If anyone can see a problem with the analogy, please point it out and I'll correct it. The only thing that is different is the size of both the situation and the punishment, but that's what an analogy is.

    I don't have a problem with changing the law for future instances, in fact, I think it's one of the worst laws I've ever seen. I doubt it's a coincidence that it passed during the first President Bush's administration, but we've had twenty years to change it. Also, I don't think I'd mind if Congress made BP pay with an adjustment for inflation (which is $164 million at 4% for 20 years).

    ReplyDelete
  3. EmilyJune 19, 2010 at 6:49 PM

    I like your solution- no caps, and people will take much more responsibility for safety and security. One thing that upsets me is that the government refused help from the Dutch three days after the spill. Even if they could only make a small dent, at least it's a dent!

    Good luck everyone on the Gulf Coast. I hope that everything gets taken care of soon.

    ReplyDelete

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