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Deepwater Horizon oil spill sparks calls for $10bn levy on BP and drilling ban

Suzanne Goldenberg and Ed Pilkington
London Guardian [1]
May 5, 2010

The catastrophic spill in the Gulf of Mexico set off a backlash against the oil industry yesterday, with a demand for a ban on future offshore drilling. The anger came as BP executives admitted in a private briefing for members of Congress that the gusher on the floor of the Gulf of Mexico could reach 40,000 barrels a day – eight times higher than the current estimate – if they cannot cap the flow.

It also carries the risk of a financial sting, with the White House yesterday backing a proposal by senators that would put oil companies on the hook for up to to $10bn (£6.5bn) for the cost of a spill.

The White House spokesman, Robert Gibbs, said the administration supported a proposal to make liability retroactive. The cap would be 133 times greater than the $75m bill that BP, which operated the Deepwater Horizon rig, faces under existing US laws following its explosion on 20 April. “It’s time to believe our eyes and accept the obvious risks of drilling,” Robert Menendez, a Democratic senator from New Jersey, told a press conference. “This is about making Big Oil responsible for its excesses.”

Arnold Schwarzenegger, California’s governor, had arrived at a similar conclusion, reversing his support for expanded drilling to help the state’s $20bn budget crisis. “You turn on the TV and see this enormous disaster; you say to yourself, why would we want to take on that kind of risk?” he told a press conference.

Full article here [1]