Begich to Introduce Law Requiring BP to Set Aside Spill Account
Blasts BP Plan to Give Backdoor $2.6B Payment to Shareholders through Escrow Account
Citing Alaska's long and convoluted experience with getting damages and claims settled after the Exxon Valdez oil spill, U.S. Sen. Mark Begich today joined a call for BP to abandon its reported plans to set aside billions for a shareholder dividend until it first commits to setting aside enough money to cover the companies' liabilities from the oil spill disaster in the Gulf of Mexico.
Begich signed a letter to BP CEO Tony Hayward saying no money should be set aside for a shareholder dividend until the company first establishes a fund to cover the damages from the oil crisis. Begich also said he plans to introduce legislation soon requiring the creation of an escrow account in which BP and future oil spillers would be required to set aside funds for oil spill clean-up and damages.
Below are the comments Begich delivered at a news conference in Washington DC:
"Twenty-one years ago, the oil tanker Exxon Valdez ran aground in Alaska's Prince William Sound, gushing an estimated 11 million gallons of crude oil into the waters of my state. This was the worst oil spill in American history. Oil hit 1,300 miles of shoreline and killed hundreds of thousands of birds and marine mammals.
"Beyond the lasting impact to Alaska's pristine waters and shores was the devastating impact to working Alaskans. Thousands of Alaskan fishermen and small business owners lost millions of dollars as their livelihoods collapsed.
"To add insult to injury, Exxon fought the legitimate claims of Alaskans harmed by the spill for nearly two decades. The case went all the way to the Supreme Court. It was 19 years after the spill, in 2008, when the Court issued a final judgment in the case, reducing Exxon's liability to just 10 percent of what the original court had ordered.
"Meanwhile, hundreds of Alaskans entitled to damages had died; thousands of lives were forever harmed. Alaskans learned many lessons from the Exxon Valdez spill. One of the most important was to set up a system from the get-go to guarantee that those affected by oil spills are justly compensated.
"That's vital today with the tragic BP spill in the Gulf of Mexico.
"Legislation I have been working on the past several weeks would do that. It would require BP to deposit into an escrow account held by the U.S. government enough money to compensate those affected by it.
"Doing this presents constitutional challenges because Congress can't pass laws affecting just one company. I believe my approach is constitutional because it requires oil companies who want to develop federal oil and gas leases - present and future - to agree to be responsible for spills.
"In the event of a spill, the secretary of Interior can make an assessment of outstanding liability under provisions of the federal legislation passed in the aftermath of the Exxon Valdez, the Oil Pollution Act of 1990. The company responsible for the spill must deposit funds into a fund to be administered by the Secretary, minus the existing balance of the Oil Spill Trust Fund.
"That fund currently totals about $1.7 billion, which everyone agrees is inadequate to deal with the damages from this Gulf spill. I don't know what the adequate escrow amount is in this case, but I do know BP needs to provide Americans the confidence that it is doing everything it can to make those affected by this spill whole. The company can do so by setting aside money in this escrow account.
"I have been discussing this draft legislation with my colleagues in this building. I welcome their suggestions as well as those from the administration. I certainly look forward to the results of the President's meeting with BP officials tomorrow.
"My bottom line is this: the Americans damaged by this oil spill must be fairly compensated in a timely way. That didn't happen to Alaskans with the Exxon Valdez. It must happen with our fellow citizens in the Gulf of Mexico."
For video or audio of Sen. Begich's comments:
Direct download for audio: http://begich.senate.gov/public/files/20100615-OilSpillPressEvent.mp3
Posted: June 15, 2010
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