Pelosi: Eliminating liability caps for oil companies worth considering

“You would hope that there would not be more than $10 billion of damage, but understand it is for each episode,” the speaker added.

A group of senators have introduced legislation that would raise the liability cap to $10 billion from a current limit of $75 million, a threshold which BP has already acknowledged it is likely to surpass. President Barack Obama has said he wants an increase in liability, too.

Administration officials said this week that there should not be a liability cap for offshore activities that present risks of large spills.

“We take the position that, for the highest-risk activities, in terms of offshore oil and gas development, there should not be a limit in terms of liability on damages,” Deputy Interior Secretary David Hayes told a House panel May 26.

“And the administration would like to work with the Congress to establish essentially a sliding scale of potential liability caps that focus on the relative risks associated with the activities,” he added.

Senate Democrats have sought three times to pass their increase in liability by unanimous consent. Two of the efforts sought to raise the cap to $10 billion, the third sought to remove the cap entirely.

Each time, a Republican senator objected. The GOP has said it would be premature to raise the caps before an investigation into the BP spill is complete, and they have worried that raising the cap for all companies could drive smaller, independent oil producers out of business.

Pelosi said there’s some momentum for eliminating the caps entirely.

“There is a movement afoot in the Congress for that, that why have a cap?” she said. “The exposure for the oil companies is the damage that was done.”

Ben Geman contributed