Trust Fund Ignores Rule of Law

Hans von Spakovsky / June 17, 2010

Why does President Obama keep saying that his administration will do everything it takes to make BP “pay for the damage the company has caused” in the Gulf? Is there some question in his mind about BP’s liability? Is this another case where neither the president nor his advisers have read the applicable law? Or is it just politics driving the White House to make the American people think the administration is doing something about this crisis?

In truth, there is no question about BP’s liability: the Oil Pollution Act of 1990 (OPA) sets out exactly what BP and anyone else who caused the spill have to pay for. Under 33 U.S.C. § 2702, BP is responsible for all removal costs; all injuries to real or personal property; damages for loss of subsistence use of natural resources; loss of profits or impairment of earning capacity due to injury, destruction, or loss of natural resources or real or personal property; and damages for the cost of providing increased public services by any state. These categories of damages would cover all of the costs that everyone has been talking about, including the losses of the many fishermen in Louisiana and Mississippi who make their living from the sea. It would not, of course, cover the wages of oil workers who are now stranded because of the President’s decision to suspend all oil drilling for six months. But then, why should BP be liable for that? Obama’s moratorium is an unreasonable decision that is supported neither by the states in the Gulf nor experts in the oil and gas industry. (more…)