Thursday, May 6, 2010

Are Senators unaware of the Oil Spill Liability Trust Fund? (BP, RIG)

Quote of the day comes from Florida Senator Ben Nelson. He is one of three Senators introducing legislation to retroactively increase the maximum liability that an oil company is on the hook for, from $75million to $10billion.

Here is a LAWMAKER, suggesting that a company be punished beyond what the LAW allows:
"BP says it'll pay for this mess. Baloney," said Nelson. "They're not going to want to pay any more than what the law says they have to, which is why we can't let them off the hook."
And for those wondering - yes, it it unconstitutional for Congress to do this, as CBS News reporter Mark Knoller wrote:

Even though the Constitution expressly forbids passage of ex post facto laws, some in Congress and at the White House want to retroactively raise the amount for which British Petroleum is liable in the April 20th oil well calamity.
Ex post facto is Latin for "after the fact." And an ex post facto law is one that is enacted or changed to apply retroactively to a crime or other action.
Under current law, BP is liable up to $75 million for cleanup of the oil spill.
But New Jersey's Democratic Senators Robert Menendez and Frank Lautenberg are co-sponsoring a measure to substantially increase the liability limit to $10 billion.
They seem unconcerned by Article 1, Section 9 of the Constitution which states explicitly:
"No bill of attainder or ex post facto Law shall be passed."
The defense these Senators use is that the courts have upheld unconstitutional laws in the past. How comforting.
Lost on these Senators is that BP and Transocean have already surpassed that $75million cap voluntarily - BP has already given $25million checks to four Gulf states, and plans to do all they can to help with cleanup.
Importantly, that $75million fund I mentioned above is magnitudes smaller than the $2.7billion maximum allowed in the Oil Spill Liability Trust Fund, which collects five cents per barrel of oil produced in the USA and imported, for the specific purpose of paying for oil spills and their repercussions. Based on daily US production and imports, and with penalty income and about $550million in transfers from the unused predecessor fund, there should be well over $2billion in this fund to be used for a disaster such as this.
Oh, hippies can feel free to thank George W. Bush for signing the 2005 Energy Policy Act, which re-instated the liability trust fund. It had been discontinued under the Clinton administration.

Copyright 2010 AlphaNinja

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