UT GOP Candidate Mike Lee Wants Low Liability Cap For Oil Companies, Even If It Places ‘Taxpayers On The Hook’

On Friday, U.S. Senate candidate Mike Lee (R-UT) sat down with the Salt Lake Tribune’s Robert Gehrke for a wide-ranging interview. With the help of corporate front groups like the Club for Growth and FreedomWorks, Lee and businessman Tim Bridgewater defeated incumbent Sen. Bob Bennett (R-UT) in the Republican primary convention over a month ago. Libertarian leader Rep. Ron Paul (R-TX), as well as RedState, Sen. Jim DeMint (R-SC) and others have endorsed Lee over Bridgewater for the run-off election, which will be held today.

Lee was asked by the Tribune if he supported efforts, such as the one by Sen. Bill Nelson (D-FL), to raise the liability cap for oil companies from the current $75 million to at least $10 billion. Lee’s response was a blunt, “no,” followed later by an explanation that the minuscule $75 million cap was part of a “set of settled expectations that you give to a business when it decides to make an investment.” Lee said it would be a “mistake” to raise the liability cap for companies like BP and Anadarko, even if maintaining the status quo leaves “taxpayers on the hook for part of the damage”:

SL TRIBUNE: Currently there’s a cap on liabilities that BP is expected to pay $75 million dollars. There’s legislation that Bill Nelson sponsored to increase that liability to $10 billion dollars. The oil companies say that will put them out of business. Is that something you would be supportive of, increasing that cap on liability for environmental damage?


SL TRIBUNE: Why is that?

LEE: This company is reliant, the entire industry, is reliant on the insurance its provided by law. Now had that cap not been in place, we would be facing a completely different question. But you have a set of settled expectations that you give to a business when it decides to make an investment in this. Our country benefits from this type of activity and allows us to produce more oil and allows more of our petro dollars to remain in the United States. We’ve relied on that, and to take that away I think would be a mistake.

SL TRIBUNE: Does that leave taxpayers on the hook for part of the damage?

LEE: Well yea probably does. And the government can look at that and say look, we put this damages cap in place, so we understood what that meant.

SL TRIBUNE: Isn’t that equivalent to a bailout?

LEE: I don’t think, well, I don’t think that’s equivalent to a bailout. I think that’s the government saying there’s some things its going to — if you look at the Outer Continental Shelf, something over which the United States has jurisdiction, and the United State wants to clean that up, then it’s free to do so. There’s nothing in that liability cap that requires the Federal government to do it. Well I’m not sure that necessarily means the taxpayers will end up paying the bill. It maybe the industry generally will just contribute to it. In fact I would expect other people involved in offshore drilling will have a part of the clean up because they would want to to show this can be done safely and when disasters do happen it can be cleaned up.

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Lee’s candid answers place him in ideological alignment with other leaders of the conservative movement who have fought aggressively to block bills aimed at raising the liability cap for BP and other oil companies. Sens. Jim Inhofe (R-OK) and Lisa Murkowski (R-AK) have repeatedly prevented the bill to lift the cap from reaching the floor of the Senate for debate.

Lee also said he expects industry to act out of charity to clean up the spill and pay for BP’s damage. Of course, ExxonMobil fought the victims of the Exxon Valdez spill all the way to the Supreme Court, where the Roberts Court drastically lowered the compensation levels by 80%.

Despite the history of oil companies doing everything possible not to pay for their pollution, this widely held conservative belief, that industry will always do the right thing without government intervention, is emblematic of the modern American right. In every major policy battle of the Obama era — energy, financial reform, health reform, etc. — Republicans have decried any form of regulation and oversight as an unjust “government takeover” of private business. Even when businesses act in a criminal way, like on Wall Street before the financial crisis or with BP’s deadly skirting of best drilling practices, the GOP has stepped up to apologize to industry while obstructing every attempt for reform.