Shifting BP's Clean Up Costs to Consumers? Say It Ain't So!

Who is going to pay to clean up BP's disastrous oil spill, besides BP? After all, they made $14 billion in profit last year alone. BP has asserted it will pay all "legitimate claims" for damages -- talk about a lot of wiggle room there -- but beyond actual cleanup costs, BP's economic damage liability is legislatively, and outrageously, capped at $75 million, a pittance to a company that made 186 times that amount in profit in 2009. Senate Democrats attempted to increase the liability cap to $10 billion by proposing and passing a bill, but their efforts were thwarted by Senate Republicans. The current tally for the cleanup cost stands at $760 million, but that is surely understated.

New Bill Would Quadruple Tax on Oil

BP greenwashingAs the oil spill disaster unfolded, President Obama said he expects BP to foot the bill for cleanup, and Democratic Senate Leader Harry Reid assured the American people that "Taxpayers will not pick up the tab." But as the Huffington Post is reporting this week, a new bill in Congress casts serious doubt on these reasonable assurances and expectations. The bill would quadruple the tax on oil produced in the U.S. or imported from foreign countries, to raise federal funds for the cleanup of this and future oil spills, if the responsible party is insolvent (no pun intended). The federal fund, called the "Oil Spill Liability Trust Fund," has $1.5 billion available, and in theory, the U.S. government could also seek reimbursement by the legally "responsible" company. Yes, that's right. It's another instance of privatizing profits but making the public absorb losses.

Passing on the Cost to Consumers?

The Big Oil companies would surely "pass" the tax onto consumers and so the companies have barely raised a note of public concern about the proposed tax. While clean-up costs can be enormous, the for-profit companies must be required to foot the bill, not consumers. Congress needs to reorganize the federal regulatory powers, which have been captured by Big Oil, which has been allowed far too lax oversight and has obtained ridiculously low caps on damages. Caps on damages are utterly inappropriate and counter-democratic devices that seek to bar juries and judges from imposing a full measure of financial liability to redress harms and damages that have actually been proven. This new tax bill sends the wrong message at the wrong time.

Lisa Graves

Lisa Graves is President of the Board of the Center for Media and Democracy and President of True North Research. She is a well-known researcher, writer, and public speaker. Her research and analysis have been cited by every major paper in the country and featured in critically acclaimed books and documentaries, including Ava Du Vernay’s award-winning film, “The 13th,” Bill Moyers’s “United States of ALEC,” and Showtime’s “Years of Living Dangerously.”



Companies are generally not liable for exclusively economic damages under common-law tort, so the $75m, while low, was actually an addition of liability in response to the Exxon Valdez. Regarding the question of costs being passed on to consumers: of course they will. Anything that costs BP will be passed on. Locating that cost in a tort suit rather than a tax will not change that. Moreover, those costs should be passed on. We are all culpable here; facile comparisons to i-banking are not helpful. Unless the costs of cleanup are passed on, we will continue to be paying artificially low prices for petroleum, which will lead to more such spills.

It may not be passed on to consumers - bottom line is ti depends on how competive the oil market is. If shell and co want to keep current prices or raise alittle well then prices may change alittle, but not heaps. Persenaly I am all for a greater oil tax in the states will bring down the world cost .... as the usa uses less oil.

The cost of the oil spill cleanup should be passed on to oil consumers. Like it or not, it is part of the cost of using oil. Why should anyone else pay it? Why should someone who gets all their energy from solar panels pay it? Why should 'taxpayers' pay it? It's time our society started recognizing all the costs of the environmental damage caused by our chosen lifestyle, and coming to grips with the fact that oil users (and their inability to elect a decent government) are the ultimate cause of this spill. Gasoline should be eight bucks a gallon.

They cut any corner that presents itself in the interests of maximizing their share of the wealth of the world. This capping of damage liability just encourages more of the same. Why are we letting them get away with this? We have a government that can ignore the electorate with impunity as they prostrate themselves before the giant corporations, eyes glazing over at the sight of all that wealth they don't want to disturb. It's happening everywhere as governments serve big business rather than the people they claim to represent. Why are we letting them get away with this? That is a serious question—serious enough for them to label it as seditious: Why are we letting them get away with this? Why are we afraid to stop the pillaging of the people that this connivance between BP and government is but one example of?

There should be NO cap on real Corporate liabilities. If they go under, so be it! It would probably make for a more equitable and vibrant marketplace, anyway, rather than these multinational, amoral, all-consuming, Corporate beasts that "live" forever. BP should have $6 BILLION ready cash, from their 1st Qtr 2010 PROFITS, to begin to pay for the cleanup and repairs and damages. If they're not in prison where they should be, when attempting to "clog" the well with golf-balls, duct-tape and junk-mail, I think they should also throw in some executives from BP, Halliburton, and Transocean!

I may be overstepping my bounds here, but after reading this article (<a href=""></a><a href="">business continuity</a> ) I can't help but wonder what the true motivation behind this oil disaster was. The reaction time of BP was appalling and their completely lack of concern raised more than a few red flags. Yes, they did 'the best they could' to get the spill under control but making sure their pipelines are quality in the first place could have saved billions. Just my two cents.