Find Answers To Your Questions By Searching Here:

BP and Big Oil's unbelievable oil spill liability deal

But their $75 million limit is under fire and may be lifted soon

It came as a shock to many to learn through recent reports that British Petroleum is protected by a $75 million liability limit for non-containment and cleanup costs of the Gulf of Mexico spill.

Three Senators want to dramatically change this. The “Big Oil Bailout Prevention Act” would increase the so-called economic damages liability limit to $10 billion.for offshore oil spills. The bill was written by Sen. Robert Menendez (D-NJ) and sponsored by Sen. Frank Lautenberg (D-NJ) and Sen. Bill Nelson (D-FL).

"We can't let the burden fall to the taxpayers,” Menendez told the Huffington Post. “We should ensure that those who cause the damage are fully responsible. There is no such thing as a 'Too Big to Spill' oil well."

Even though the bill was quickly crafted after the spill began in the wake of the Transocean Deepwater Horizon sinking on April 22, it would have a bearing on the growing disaster in the Gulf, where over 200,000 gallons of oil per day are covering an area larger than the size of Delaware. Therefore, BP would not be able to “grandfather” its way out of the higher liability limits.

This liability is in addition to the existing $1.6 billion Oil Spill Liability Trust Fund which is used to handle immediate disaster costs. The bill would also do away with a current $1 billion limit on individual claims on the fund. The trust fund was established by Congress in 1986 and is known as a rainy day fund did not actually start getting funded until the Exxon Valdez spill in 1989. It was based upon a tradeoff where, in exchange for the $75 million liability limit, oil companies would pay a one-tenth of a percent tax on every barrel imported or produced in the U.S. Presently that tax is 8 cents a barrel. The fund is also paid into by penalties and fines from oil spills. The $75 million liability caps individual, company and government claims.

With a disaster like the one brewing in the Gulf of Mexico, trust fund managers say that even the total amount of money in the trust is not much more than the proverbial drop in the bucket.

“One billion dollars sounds like a lot of money, but it really might not be,” a Juneau, Alaska based fund manager named Mr. LeVine told the New York Times.

Since 1991, liability has surpassed the limits 51 times, according to the Department of Homeland Security. Most of the incidents were caused by ships, fishing boats and barges. Not many envisioned a scenario were oil would pour unimpeded out of the sea bed from a runaway well head.

The list of those whose lives and businesses are crippled from oil spills include fishermen, tourist operators and hotels. Even governments can file for suffering a loss in tax revenues.

Other purposes of the trust fund are for response preparation such as collecting booms or for reimbursing federal agencies such as NOAA and the Coast Guard for their efforts.

11 workers were killed in the Deepwater Horizon explosion April 20.

Learn your rights as a seaman by ordering free copy of The Insider's Guide to Winning Your Maritime Injury Case written by Jones Act and maritime accident injury lawyer Brian Beckcom.

Maritime Work is Dangerous

Our maritime lawyers realize that maritime work can be dangerous when companies cut corners on safety. That's why we've dedicated our time to putting out free information for workers.