Thanks to St Ronald of Reagan: BP limited to $75million in losses

[Ruby the Liberal]

From Business Insider: http://bit.ly/cVipON

As NYT notes, the company is insulated from all kinds of legal liability thanks to a fund set up by the government by the government in the 80s.

Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill.

[FreakinDJ]

1. You've got to be kidding me

[ladjf]

2. That law must be repealed immediately and retroactively. nt

[brewens]

3. Just what I was thinking. Let's see the Republicans block that! n/t

[ladjf]

21. Although, the exec from BP is claiming that the accident was the

fault of BP. Here we go. nt

[anigbrowl]

30. FYI, retroactive laws are unconstitutional...and also:

Article one, section nine.

Now there's plenty of room to argue for huge damages in containment. And failures to meet required safety standards or gross negligence REMOVES the liability cap. NYT didn't read the law carefully enough.

[The Second Stone]

35. Only criminal laws that are retroactive

are unconstitutional.

[anigbrowl]

39. Not so.

Administrative law, as created by agencies, can be retroactive under certain circumstances but the constitution is very clear on this. Calder v Bull is the classic case.

[ixion]

4. Yep, we cut them a great deal for a lease (or just give it to them) and

then make sure any risk they assume is covered, for free, by the government.

And these are the same stogie chompin' hucksters that do nothing but prattle on about the 'free market'

Yeah, socialized risk for corporations. That's some capitalism! Not.

[Ruby the Liberal]

5. Worse than free - it is covered by a tax that is passed onto consumers

[cap]

6. well let's just dump the clean up costs onto all those good Red States

and let the "smaller government" or privatization handle it... No need for the big bad federal government to get involved!

Socializing risk and privatizing profits... gotta love it.

[katandmoon]

7. Privatized profit, socialized risk.

[Skink]

8. Obama thinks not.

[Ruby the Liberal]

10. Where has he stated that they have unlimited liability for anything other than containment & cleanup

?

[Skink]

12. The news covered him saying BP will pay for this on Sunday.

[Ruby the Liberal]

13. Yes, the cleanup and containment costs. The 80s bill limits their liability

to those harmed by the spill to $75 million.

[harkadog]

41. He said no such thing.

He parsed his words very carefully. He said clean up and containment. Not liability.

[cap]

9. oh and the maximum that this fund can have is $2.7 billion

I am just going to love the fact that all those Red State Pols will be on bended knee asking Obama for assistance.

[chat_noir]

11. check out Jed Lewison's article at Daily Kos

http://www.dailykos.com/storyonly/2010/5/3/863045/-NYT:-1990-law-limits-BPs-damage-liability-to-$75-million

[Lone_Star_Dem]

14. Yep. This is one of the things I'm hoping to see changed

No matter what people want to say, we do have a better chance of seeing some things changed for the better under this admin than if we were still under Bush/Cheney.

Amending this law and tightening regulations on already permitted drilling are two of the things I'd really like to see happen. Then I'd like to see the politicians all choke on the possibility of expanding offshore drilling to new regions.

[jillan]

15. OMFG - so that means the taxpayers are going to end up paying for this?

[Statistical]

18. Well technicall no. It is worse gasoline buyers already paid for it (past tense).

The fund was setup and paid for by fees on gasoline purchases.
So you/me/everyone has been paying into this fund for a decade just waiting for an oil company to cause a disaster.

I wonder if a massive "I fucked up" slush fund with billions of dollars in it might influence companies to be reckless?
Who woulda thunk it.

[Lone_Star_Dem]

49. Not quite. It was a 5-cent-per-barrel tax on oil imported to and exported from the US

They also stopped paying into the fund in 1994 and then reinstated it again in 2006.

Linky to clarify.

http://www.uscg.mil/npfc/About_NPFC/osltf.asp

[Lone_Star_Dem]

50. No, they're not.

This means that the personal liability against BP is capped at 75 million. This is in regards to the impact the spill has had on health, welfare and finances of people who choose to go after BP for reimbursement.

BP is responsible for the expense of the clean up separate from this amount.

[safeinOhio]

16. Activist conservative courts allow

unconstitutional laws that clearly violate the letter and intent of the Seventh Amendment.

[florida08]

17. $@#%!$

what a cheap, lying, no-good, rotten, four-flushing, low-life, snake-licking, dirt-eating, inbred, overstuffed, ignorant, blood-sucking, dog-kissing, brainless, dickless, hopeless, heartless, fat-assed, bug-eyed, stiff-legged, spineless, worm-headed sack of monkey shit

So we get to pay for their fund AND anything over the 2 billion?! Thanks Reagan..just damn thanks for socializing our demise

[metalbot]

24. Reagan? Let's at least be honest about the blame

From Wikipedia:

The bill enjoyed widespread support, passing the House 375-5 and the Senate by voice vote before conference, and unanimously in both chambers after conference.

In 1990, Democrats controlled both houses. Clearly it must have been Reagan using his mind control powers to convince 255 of 260 House Democrats to vote for this (assuming that all Republicans voted for it).

[florida08]

27. so?

[tkmorris]

31. edited until further research is done

[metalbot]

53. You're right, let's just blame Reagan

It's easier, after all. He isn't "one of ours". I mean, with the house voting like it did, he's a total bastard for signing something that was widely endorsed by Democrats. If he'd really loved the environment, he'd have vetoed this, in spite of the fact that the completely Democrat controlled congress could and would override his veto. That asshole. He's the one responsible.

[florida08]

57. You're operating under

the assumption that a politician affiliated with a certain party adopts those principals. Do you believe that Ben Nelson or Max Baucus adheres to the principals of the democratic party or the rest of the blue dogs that backed the GOP during the health reform debate? The democratic party in the Reagan years held a lot of dixiecrats in congress. Reaganites who pushed through his agenda. James Baker and Phil Gramm were just two who had been democrats.

Baker was loyal to Reagan. Phil Gramm, the co-writer of the Gramm-Leach-Bliley Act that repealed Glass Steagall, was a democrat in Reagan's first term and sponsored many of his policies. Even Reagan had been a democrat admiring Frank Roosevelt and supported his New Deal.

Politicians switch affiliations to promote themselves and agendas. Lieberman,Spector,and Crist are doing just that. I am an independent and have no unwavering loyalty to either party and why I said "so" to your blaming the so-called 'democratic party' during the Reagan years. Reagan was one of ours who supported Richard Nixon. He was influenced by a Ge Executive. When GE dropped his show he dropped the democrats.

You can't know a person by his label..you have to know his ideology. Democrats are people like Alan Grayson and Anthony Wiener.
Don't just look at past historical data.

[Ruby the Liberal]

47. Here ya go:

http://www.uscg.mil/npfc/About_NPFC/osltf.asp

[Thothmes]

55. Also, think George Bush signed the legislation

in August 1990

[Enthusiast]

19. But it's all I.O.U.s!

The moneye doesn't actually exist, you know, just like Social Security.

[Statistical]

33. Well it will exist when the govt has to issue new debt to China to come up with the funds. n/t

[Festivito]

20. Its in teh CONstewshun, promot the corporat welfar. SERIES !!111!!!!1

Kinda in generall.

Aaaaaaaaaaaaaaaarrrrrrrrrrggggggggggggggghhhhhhhh!

[The Straight Story]

22. Obviously Clinton/Obama didn't know about this law, which is why they left it in place (nt)

[Greyhound]

26. LOL!

[FLSurfer]

23. As a Florida resident I have been trying to keep up

with the Oil eruption in the Gulf.
I've never heard of the Oil Spill Liability Trust Fund so I googled it.
The results seem to indicate it was passed in 1990?
Is this it?
http://www.epa.gov/emergencies/content/learning/oilfund.htm?cm_sp=ExternalLink-_-Federal-_-EPA
If it is, George the 1st that signed it, not Reagan.

Doesn't change the results.
We still get screwed.

[Ruby the Liberal]

25. It was passed in 1986 then funding started in 1990

[FLSurfer]

28. Thank you Ruby.

I hoped I was wrong. I remember we had a majority in the Senate back in 1990 so I was a bit confused how this could have happened.

[harkadog]

42. No. It was passed in 1990. The Oil Pollution Liability Act

[Ruby the Liberal]

46. Incorrectamundo. Here's the link:

In August 1990, when President George H. W. Bush signed the Oil Pollution Act (OPA) into law and authorized use of the Oil Spill Liability Trust Fund (OSLTF), the Fund was already four years old. Congress created the Fund in 1986, but did not pass legislation to authorize the use of the money or the collection of revenue necessary for its maintenance

http://www.uscg.mil/npfc/About_NPFC/osltf.asp

[florida08]

29. I'm confused

According this website: http://www.blankrome.com/index.cfm?contentID=37&itemID=46

The Energy Policy Act of 2005 (signed into law on August 8, 2005) reinstates the five cents per barrel tax on “crude oil” and “petroleum products.” The tax will serve as a source of revenue for the Oil Spill Liability Trust Fund (“OSLTF”) beginning as early as April 1, 2006. The original tax, which statutorily expired on December 31, 1994, was part of the Oil Pollution Act of 1990’s (“OPA 90”) financing of the OSLTF.

Now according to Govtrack:http://www.govtrack.us/congress/bill.xpd?bill=s109-1222
S. 1222: Oil Spill Liability Trust Fund Maintenance Act of 2005
This bill never became law.

[Statistical]

32. My understand (and may not be correct) is...

The bill was passed in 1986 creating the fund and the liability cap.
However the fund had no funding. Another bill in 1990 passed a tax to fund the slush fund.
The tax was in place from 1990-1994 at which point THE TAX on new barrels of oil expired.

There was an attempt to reinstate the tax (grow fund even larger) in 2005 but it never passed.
The fund nor the liability limit was never repealed it simply means no "new money" is being contributed to the fund as of 1994.

Still I am not 100% sure that is right but I think it is.

[florida08]

36. ahhh

that's probably right..thanks

[Ruby the Liberal]

38. I think you are right. Senate bill proposed today would change liability from $75m to $10b

Here: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8266033

[anigbrowl]

34. Relax - negligence or safety violations remove the liability cap

Title 33 USC sec.2704(c).

Can't cut and paste on my phone now but basically negligence, safety violations or reporting failures (including by subcontractors) cancels the limit.

http://www.law.cornell.edu/uscode/33/usc_sec_33_00002704----000-.html

[Statistical]

37. So what negligence (in legal sense of word) did BP commit?

BP was in compliance with regulations at the time of the explosion. Now those regulations suck ass and are ineffectual because Congress has handed oil/gas industry everything they want on a silver plater but from a legal standpoint they were compliant.

Negligence must be proven. The govt will need to make a case that BP didn't take steps it knew were necessary to prevent the accident. The regulations were woefully inadequate but according to the (limit) information available BP was compliant with them. If they complied with regulations, filed proper reports and did everything to procedure it s unlikely a charge of negligence would stick.

If the govt knew the regulations were inadequate and that a spill was likely unless further precautions were taken and didn't strengthen the regulations who was negligent?

[anigbrowl]

40. i think the lack of remote backup/testing on the BOP would qualify

Remember this law can also apply where subcontractors are involved. It'll be a complex case but the failure of a critical safety function is the obvious place to start.

[harkadog]

52. Negligence is violation of an industry standard.

Good luck in proving a standard in drilling 5000 feet down under the ocean.

[florida08]

43. interesting..from CNN

The failure of the "shear ram," the set of steel blades intended to slash through a pipe at the top of a well and close off the flow of crude, should not have surprised BP or the corporations that work for it. Eight years ago, the Minerals Management Service found that 50 percent of the shear rams tested failed. So calling the failure of the "last resort device" an accident is like calling the damage caused by a drunken driver an accident. Failure to take the proper precautions is not an accident; it's negligence.

http://www.cnn.com/2010/OPINION/05/03/brazile.oil.new.orleans/

[Strelnikov_]

48. Personally, I don't consider 50/50 to be 'fail-safe' or 'last resort'

But then, that's just me.

I am not experienced in the art of privatizing the profits and socializing the risks.

[harkadog]

44. This was not Reagan

The Oil Pollution Act was passed by a Democratic Congress and signed by Bush I.

[Ruby the Liberal]

45. Two different things. Reagan's watch passed The FUND, Bush admin AUTHORIZED ITS USE. Link:

In August 1990, when President George H. W. Bush signed the Oil Pollution Act (OPA) into law and authorized use of the Oil Spill Liability Trust Fund (OSLTF), the Fund was already four years old. Congress created the Fund in 1986, but did not pass legislation to authorize the use of the money or the collection of revenue necessary for its maintenance

http://www.uscg.mil/npfc/About_NPFC/osltf.asp

Edit to add: the $75 million cap was in the 1986 legislation.

[Omaha Steve]

56. Thanks for the link

K&R for the post too.

[deaniac21]

51. I'll bet Nancy placed the bomb on the rig.

[workinclasszero]

54. Well hell no wonder these oilmen cowboys are so reckless!

The government(taxpayers) will pick up the tab when things go south!

Damn who knew these oil robber barons were really dirty socialists!:shrug:

[Wilms]

58. .

[AngryOldDem]

59. If we are looking to lay blame....

...dump it ALL on that POS St. Ronnie. Almost everything bad -- from the banks to this oil spill -- can be traced back to his trickle-down, laissez-faire-on-steroids administration. The bill for the good times eventually comes due -- It just may take a few decades. But it WILL be paid. With interest.