JUNEAU - U.S. Sen. Mark Begich doesn't expect a chilling effect on drilling from his legislation requiring that companies responsible for certain oil spills set up escrow accounts to deal with damage and claims.
Begich, D-Alaska, said that if companies are worried about having to put aside money, because they think they're going to have a spill, then "they have bigger problems."
Begich said the bill, which he's cosponsoring with Democratic Sens. Ron Wyden of Oregon and Amy Klobuchar of Minnesota, is aimed at ensuring spill victims are quickly and fairly compensated.
It's one in a slate of bills he and other lawmakers are proposing in the wake of the April oil rig explosion in the Gulf of Mexico that killed 11 workers and unleashed an oil slick that has yet to be contained. Alaska's senior senator, Republican Lisa Murkowski, for example, is proposing steps including increasing liability on deepwater drilling and creating a bipartisan commission to determine what went wrong with the ill-fated Gulf rig and recommend ways to improve offshore safety.
While BP PLC recently agreed to establish a $20 billion escrow account following that accident, Begich said that's not enough: he said putting it into law will ensure the decision isn't changed by any future administration.
He also told reporters Monday that it's important to have a process in place for other companies interested in developing federal leases.
He said, in some ways, BP proved the point that an escrow is needed. From a company's standpoint, he said it's smart to show investors that money is being set aside for potential liability; and from the government's perspective, it was important to show victims there'd be a pool from which they could draw compensation.
Begich is from a state that depends heavily on the oil and gas industry to run; he responded to President Barack Obama's recent commendation of renewable energy by citing three "prime spots" in Alaska, to drill for more oil and gas, including the Arctic National Wildlife Refuge. He said companies he's spoken with want to operate responsibly and safely and shouldn't worry about his bill. If anything, he said, it should provide the industry with greater clarity and certainty.
Under the measure, the set-aside would be required only when there's a spill. It calls for the U.S. Interior secretary to determine the potential cost, and for companies to set aside responsive funds. It's not yet clear how quickly an assessment would be done or at what point there would be a cutoff for claims; one complaint following a settlement surrounding the 1989 Exxon Valdez oil disaster in Alaska was that some unforseen longterm environmental impacts weren't accounted for. Begich said the Interior secretary also would lay out rules and regulations for quantifying legitimate complaints.
Begich said the bill is "rational, it's not based on emotion," and that he's hoping for broader support, including from Republicans, as people learn more about it.