Klobuchar, Begich, Wyden Introduce Oil Spill Escrow Legislation

Press Release

U.S. Senator Amy Klobuchar (D-MN) joined Senators Mark Begich (D-AK) and Ron Wyden (D-OR) in introducing legislation to require BP and future oil companies to set aside funding in an escrow account to address damages and claims from major oil spills like the one in the Gulf of Mexico. Klobuchar had previously called for BP to establish a fund to compensate the individuals and businesses harmed by the oil spill, and the oil company announced last week that it would agree to pay $20 billion into an independently controlled fund. The Guaranteed Oil Spill Compensation Act of 2010 would require that similar funds be opened in the event of any future oil spill.

"The American people need to be assured that there will be no delay in payments or attempts to evade responsibility for any future damages oil companies may cause when oil spills occur," Klobuchar said. "We must continue to hold BP accountable for its commitments and to ensure that the parties at fault, and not the American taxpayer, are responsible for fully compensating the country for disasters like these."

"I believe this legislation achieves what many of us want: Americans damaged by this oil spill and future spills are fairly compensated in a timely way. That didn't happen to Alaskans with the Exxon Valdez. We must ensure it does happen with our fellow citizens in the Gulf of Mexico," Begich said. "It's another tool for our toolkit as Congress works on liability reform designed to make those injured whole again, while at the same time allowing responsible companies to provide oil our country needs."

Under the bill, the Secretary of Interior would make an assessment of outstanding liability in the event of a spill under provisions of the Oil Pollution Act of 1990. The company at fault would be required to deposit funds into a separate account to ensure victims of the spill are properly compensated. Unexpended funds would be returned to the company five years after the date of deposit or the date the Secretary determines all federal, state, and civil claims have been satisfied. The measure would have no affect on other liability.

After the Exxon Valdez tanker spilled more than 11 million gallons of oil into Alaska's Prince William Sound in 1989, damages totaled more than $7 billion. In 1994, a federal court initially ordered Exxon to pay $5 billion in punitive damages. Although Exxon publicly pledged to compensate victims of the spill, the company fought paying damages and appealed court decisions multiple times. After 20 years of litigation, the Supreme Court ultimately reduced these damages to $500 million in 2008. An estimated 8,000 of the original Exxon Valdez plaintiffs died while waiting for their compensation as Exxon fought them in court.

Klobuchar is also a sponsor of S.3472, a bill that would remove the liability cap for offshore oil drilling accidents.

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