Obama’s Oil Spill Bill Seeks $118 Million, Oil Company Tax Increase

WASHINGTON, DC, May 12, 2010 (ENS) – As oil continues to gush from the wellhead left open by the explosion and sinking of the Deepwater Horizon, President Barack Obama today sent legislation to Congress to strengthen the federal response, speed assistance to affected people, and update the oil spill liability system to better address catastrophic events.

In a statement accompanying the bill, the White House said, “The Deepwater Horizon oil spill in the Gulf of Mexico is a massive and potentially unprecedented environmental disaster which can seriously damage the economy and environment of our Gulf states and could jeopardize the livelihoods of thousands of Americans who live throughout the Gulf region.”

While the bill asks for additional funds, the White House insisted that the Obama administration “will not relent in pursuing full compensation from the responsible parties for the expenses it has incurred and for the damage caused by the spill.”

Workers clean up oil along a beach at South Pass, Louisiana near where the the Mississippi River meets the Gulf of Mexico. May 11, 2010. (Photo courtesy U.S. Coast Guard)

The bill seeks Congressional authorization for one time discretionary spending of a total of $118 million.

This figure would includes expenditures such as $5 million for the Economic Development Administration’s Economic Adjustment Assistance program that awards grants to state, local, and nonprofit entities in the affected region for strategic planning and technical assistance.

Potential activities to be funded include short-term and long-term economic recovery plans, and state and local economic recovery coordinators.

Also in the $118 million would be $15 million to compensate fishermen for earnings lost as a result of the spill.

The Secretary of Commerce has the authority to declare a fisheries disaster, but doing so does not automatically provide any funds to compensate fishermen for their lost earnings. A Congressional appropriation is necessary for such compensation to occur.

White House officials said the administration will continue to work to ensure that the responsible parties make every effort to compensate those harmed by this oil spill and will only tap into these resources as a last resort.

The U.S. Food and Drug Administration would receive an additional $2 million to monitor and respond to the environmental impact of the oil on seafood fished from the gulf and surrounding areas. These efforts could include testing and deploying technology to speed analysis of seafood samples for contamination that could harm consumers.

The legislation would enable people impacted by a spill of national significance such as the Deepwater Horizon spill, but who might not ordinarily qualify for the Supplemental Nutrition Assistance Program, SNAP, to become eligible for the program. People who are already participating in the regular SNAP may be eligible for additional benefits as well.

In addition, the measure would enable the Department of Agriculture to provide food directly to states to distribute to those who are in need. These include a variety of canned and frozen products including fruits, vegetables, and meats.

If approved by Congress, the legislation will provide $29 million for the Secretary of the Interior for additional inspections, enforcement, studies and other activities that are outside of those recoverable from the responsible parties or the Oil Spill Liability Trust Fund.

Plane sprays chemical dispersant on oil from the Deepwater Horizon spill. May 11, 2010. (Photo by Steve Wilson)

The measure contains $2 million for the Environmental Protection Agency and $5 million for the National Oceanic and Atmospheric Administration to conduct environmental studies that improve the federal response to the spill.

In addition, the bill would, for any single incident, raise the expenditure limitation for the Oil Spill Liability Trust Fund from $1 billion to $1.5 billion and the cap on natural resource damage assessments and claims from $500 million to $750 million.

The Oil Spill Liability Trust Fund ensures that there are sufficient resources available to pay for clean-up and damages associated with an oil spill.

In particular, the Trust Fund finances ongoing federal government activities in responding to the BP oil spill, and then provides the legal authority for the government to seek full reimbursement from the responsible party for these activities.

The proposed legislation would also raise the caps on liability for responsible parties.

While the bill does not state target caps, the White House said the administration looks forward to working with the Congress to develop levels for the various caps that provide for substantial, and proportional, increases.

The administration proposes to increase the tax that oil companies pay to finance the Oil Spill Liability Trust Fund from eight cents per barrel to nine cents per barrel starting this year.

This increase in the oil spill liability tax moves forward a planned increase in 2017 of one cent per barrel, and sets a tax of 10 cents per barrel starting in 2017 to make sure that there is long-term oil industry financing for the Trust Fund.

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