On the recordMay 13, 2010
I do think we need to look at the liability cap and consider raising it, but I think we need to be careful about unintended consequences of picking a number, $10 billion. Let me outline what I am talking about when I say 'unintended consequences.' This has been named the Big Oil Bailout Prevention Liability Act. I think we have some irony in that what this would do is give all of America's offshore oil resources to the biggest of big oil. It would be impossible, or perhaps close to impossible, for any energy company that is smaller than the supermajors, smaller than the national oil companies, to operate in the OCS. Mr. President, $10 billion in strict liability would preclude their ability to obtain financing, to obtain the bonds or insurance for any exploration. Look at who is producing in the offshore. It is the independents. They produce two-thirds of the natural gas, one-third of the oil. If we move forward in raising this liability cap to $10 billion, the only companies that are going to be able to self-insure against this level of strict liability are the national oil companies, the supermajors. And we all know who they are. There is the Saudi Aramco. There is Exxon. There is the Chinese National Oil Company and, of course, British Petroleum.
