- Gulf Oil Drilling Platform
The Congress is currently grappling with the question of whether there should be an end to liability limits for offshore spills. At the moment there is a $75 million cap on oil spill liability. This week the Senate voted to kill that limit. This is a tough one to answer. All businesses whether knowingly or not make a decision as to the risk versus reward on any strategy they want to put into place.
If the Congress is proposing to put into law a statue that says, you have an open ended liability for any oil spill you cause, than it seems that open sea oil drilling will come to an end in this country. We would become even further reliant on the Mideast countries for our energy supplies. If a company stands to make a couple of billion dollars on a well, but could have $25 or $50 billion in liabilities on a screw up, why should they play? The risk is too great.
Furthermore, what insurance company is going to take on that liability for a small thing called a premium. Now if the intent of the Congress is to kill off the smaller operators off shore because only the big guys are contributing the most in political contributions, than this new bill will achieve just what the Congress is seeking. Let’s kill small time drillers.
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