Deepwater Horizon oil spill

The Bureau of Ocean Energy Management (BOEM) has announced its proposal to administratively increase the limit of liability for oil spill removal costs and related damages.

The latest proposal to increase the costs from $75m to approximately $134m is said to be part of the ongoing efforts of the Obama administration to ensure the safe and responsible production of domestic offshore energy resources.

According to BOEM, under the Oil Pollution Act of 1990, the increase would apply to offshore facilities in both federal and state waters.

The increase is also said to be consistent with the national commission on the BP Deepwater Horizon oil spill recommendations, as well as other studies requiring a rise in the limit of liability.

BOEM director Tommy Beaudreau said: "This proposed change is the first administrative increase to the liability cap since the Oil Pollution Act came into effect 24 years ago and is necessary to keep pace with the 78% increase in inflation since 1990.

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"This adjustment helps to preserve the deterrent effect and the ‘polluter pays’ principle embodied in the law."

"BOEM is also inviting public comments on the adjustment methodology, the clarity of the rule and any other pertinent matters."

As determined by the Department of the Interior, the proposed amendments ensure that any party that causes an oil spill would pay an increased amount of any potential damages and are further expected to protect the environment.

BOEM is also inviting public comments on the adjustment methodology, the clarity of the rule and any other pertinent matters.

BOEM promotes energy independence, environmental protection and economic development through responsible, science-based management of offshore conventional and renewable energy resources.

Image: Deepwater Horizon oil spill. Photo: courtesy of NASA/GSFC, MODIS Rapid Response AND AND FT2.