WASHINGTON (Dow Jones Newswires), May 12, 2010
The White House on Wednesday unveiled legislation it is sending to Congress to allow the federal government to collect more damages from companies responsible for oil spills as a sunken rig in the Gulf of Mexico continues to spew thousands of gallons of oil along the Louisiana coast.
The legislation comes as President Barack Obama said he is deeply frustrated the leak hasn't been plugged and his administration
On Tuesday, the administration said it is splitting the main agency that polices deep-water oil drilling amid concerns the regulator has
In addition to changing a cap on damages the government can collect, the legislation would provide support for fishing industries and
The White House isn't proposing a specific increase in the cap on damages, saying instead the administration will work with Congress.
The legislation, if passed, would also result in an immediate 1-cent increase in the per-barrel tax on oil produced in the U.S. That would
The money collected from these taxes is used to help pay for removal and response costs incurred by the U.S. Coast Guard and Environmental Protection Agency under the Oil Spill Liability Trust Fund. The tax increase would raise the amount in the fund to $1.5 billion from $1 billion.
The bill would result in an increase of $118 million in discretionary spending by several federal agencies. The Interior Department, which oversees U.S. oil drilling, would get $29 million to increase U.S. oil inspections and to boost overall enforcement. The Food and Drug Administration would get $2 million to test and ensure seafood from the area is safe to eat.
The Obama administration has stressed that BP PLC (BP), the company that operated the deep-water oil rig that exploded last month in the Gulf, will bear the costs of the vast spill despite a cap on damages written into law several decades ago.
It is unclear what caused the rig to explode, and little clarity came from a Senate hearing Tuesday where officials from BP, Halliburton and Transocean testified. The companies pointed fingers at one another.
Another hearing on the Gulf disaster is scheduled for Wednesday in the House.
Copyright (c) 2010 Dow Jones & Company, Inc.
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