Alaska’s senior senator blocked legislation Thursday that would have dramatically increased liability caps on oil companies, in the wake of one of the industry’s biggest disasters.
Sen. Lisa Murkowski (R-Alaska) objected to a voice vote request by Sen. Robert Menendez (D-N.J.) on the bill, which would have spiked the maximum liability for oil companies after an oil spill from $75 million to $10 billion. The legislation has significant support from Democrats, and the White House has indicated it backs an increase in liability caps.
But Murkowski said the legislation is “not where we need to be right now” and would unfairly advantage large oil companies by pricing the small companies out of the market. Murkowski did signal that she would be open to “look at the liability cap and consider raising it.” Just not at this moment.
Murkowski isn’t worried about smaller oil companies, she’s worried about the big ones – the ones that do things like offshore drilling.
First off, these liabilities are never levied in full. The fact that the maximum liability would only amount to two quarters of profits from BP should also say enough. Imagine some company in another industry causing some disaster on such a scale as the oil spill in the Gulf. It would spell a most likely doom to that company. Instead, this oil spill will cost BP, but not to the point that their future is in question.
Second, and most important, who does Murkowski expect to pay for these clean ups? One of the purposes of these increased liabilities is for the government to have a way to recoup their costs of dealing with the spill. Does Murkowski expect the government to just eat those costs? Citizens of this country have to pay for everything anymore, even if they call 911, but big business is supposed to just skate by on the government dime? Welcome to the corporate welfare state.
But the most amazing thing is how people seem to suffer from tunnel vision on these disasters. Everything is about the “poor oil companies”, but what about all the other industries suffering from this spill? A good example is commercial fishing, especially the shrimp industry. They can’t catch our food from the depths of the oil filled Gulf, and that means they are essentially unemployed now. Well the President has a plan to help them, but I’m sure the Republicans will also complain about it, because it entails a “higher tax”:
Oil companies face an immediate tax rise of 1 cent per barrel to help to pay for the clean-up in the Gulf of Mexico under proposed legislation rushed out by the White House yesterday.
The measure, unveiled as BP began a new attempt to contain the ruptured well that has leaked millions of gallons of crude oil into America’s southern coastal waters, would put an extra $500 million (£340 million) over ten years into the Oil Spill Liability Trust Fund, which covers damage caused by such disasters.
Under a $118 million spending plan outlined in the package, people affected by the spill — such as fishermen who have lost their livelihoods because of the contamination — will be granted financial assistance, and federal agencies will get additional funds to monitor the slick and assess its impact.
Now the oil companies won’t pay this higher tax – we will. They will quickly pass it on to the pump. Of course that will also amount to higher profits for the oil companies. You get about 20 gallons of gas from a barrel of oil, and I doubt the gas prices will become something like $2.72 95/100 per gallon. Instead they will round it up to $2.73 9/10 (always with the .9). So that means that 1 cent tax per barrel will amount to 19 cents of extra profit per barrel to the oil companies.
The U.S. also needs to come up with a better way to handle response. As I pointed out last week, the Republicans were blaming the Obama administration for not having oil booms on hand as laid out in a plan from 1994. The nearest boom was in Illinois. Boom’s should be staged in coastal areas that are in the vicinity of offshore drilling, I won’t argue that, but who pays for them? Oil booms cost a “few hundred thousand dollars each”, and things like this increased tax could help purchase more booms for staging purposes. Will the Republicans support that? I doubt it.
Republicans and the oil companies always look at ways to cut costs. Things like acoustical regulators, which many believe could have aided in avoiding the current disaster. Clinton put a plan in requiring them before he left office. Cheney came into office and got rid of the requirement. Why? Because the $500,000 price tag was to much for the oil companies to pay. I guess in Cheney/Republican math, paying $33 million a day to clean up an environmental disaster is much better than paying $500,000 to avoid one.
So make no mistake about it. Murkowski and the rest of the Republicans want everything to be “business as usual” for the oil companies. They make a mess, we clean it up. All they are worried about is the profit the oil companies can bring in – nothing else.