Vitter proposes increasing the liability limit for oil spills to the offending company’s profits for the last four quarters, or double the current — and laughable — $75 million limit, whichever is greater.
But if the intent is to hold BP to its admission of responsibility, why impose an arbitrary limit at all? Up to 800,000 barrels of oil a day continue to leak into the Gulf of Mexico. The dome, the siphon, the junk shot, the top kill and the underwater robots have, so far, failed. Commercial fishing, recreational fishing and tourism, all big-money industries along the coast, are at risk. The cleanup, if anyone can figure out how to clean oil from a coastal marsh, will surely exceed the current liability limit. And what dollar value can be placed on a fragile ecosystem, a seafood hatchery, a hurricane buffer or a cultural heritage?
Superficially, Vitter’s proposal seems to be a kind of tort reform. But the goal of real tort reform isn’t to save a corporation’s bacon. It’s to prevent the blameless from being victimized in the civil court system. You do that by limiting punitive damages or by establishing rules to keep frivolous claims out of court.
CenLamar 
The existing cap on liability or any cap for oilfield liability is ridiculous. In La the only two caps I can think of are $500K for Medical Malpractice liability and State liability. Those have a rational basis, in keeping doctors insured and available, and limiting the excessive judgments against the State(that’s me & you, the taxpayer, ultimately) when the actual tortfeasor didn’t have enough insurance. There is no liability crisis in the oil & gas business, they just have enough money to buy whatever they want in Congress. The only thing to do is to get rid of the cap entirely.
Lamar – I agree that it is a post-fire barn door closing proposal. However, it’s better than nothing. A single dollar over the cap that can be recovered from BP is one less dollar that the taxpayers will have to fork over.
We can do it like we do doctors now – make the cap $1 billion. Make the people who want to drill either insure or self-insure for the first $250 – 500 million. Then have them all pay into a common insurance fund for the remainder, up to $1 billion. Allow an administrative law judge to hear claims. You could also force them to establish a response/mitigation firm, that would a private company normally, but under the Coast Guard control in a crisis.
Maybe having a team equipped, trained and ready to act, as opposed to what we have seen for going on two months now, is the way to go for the future. The Coast Guard did a great job in the week after Hurricane Katrina. They are great at rescuing people in a crisis. It has not performed as well this time around. Maybe this just isn’t the Coast Guard’s bag.