North Carolina moves to raise limit on oil spill damages

News & ObserverJune 11, 2010 

RALEIGH — Lawmakers hope to erase a cap on damages that the state could collect from BP before an oil slick arrives at the state's shores.

A state House committee approved a bill Thursday that wipes out a limit on damages the state could collect from an oil spill. Currently the state's cap mirrors a federal limit of $75 million. That cap was set for North Carolina in 1989 after the Exxon Valdez oil spill in Alaska.

The bill would apply to all spills of oil or hazardous materials in the state's waters, but the backers specifically aimed it at the oil gushing in the Gulf of Mexico, said Rep. Pricey Harrison, a Greensboro Democrat and one of the primary sponsors.

Experts fear the spill could be carried by the gulf loop current to the Atlantic Coast. Oil hitting the state's coast could wreak havoc, destroy wildlife and harm tourism and livelihoods for decades, Harrison said.

"If someone destroys our natural resources ... I don't know how you account for all those losses," Harrison said.

The bill has hurdles to clear before the full House and Senate vote on the proposal. Along the way, opponents will argue that unlimited liability on oil companies would force businesses to leave or avoid the state. The bill could not only affect the potential for offshore drilling but also any business that has a gas or oil storage tank or a company that hauls fuel or oil, said Bill Weatherspoon, executive director of the N.C. Petroleum Council, an arm of a national industry group.

Unlimited liability would create an impossible choice for businesses across the state, he said.

"What do you do? Do you stay in business and gamble every day, or do you find an insurance policy that will cost you through the teeth to cover you for some unlimited number?" he said. "The legislature needs to take it slow and easy on something like this and make sure they understand the law of unintended consequences."

North Carolina is one of at least four states that have introduced legislation in response to the April 20 explosion and sinking of the Deepwater Horizon oil rig in the Gulf of Mexico, according to the National Conference of State Legislatures.

New Jersey's legislation would ban offshore drilling.

South Carolina's would establish contingency plans for oil hitting its shores.

Louisiana lawmakers have filed several bills and resolutions related to the spill and the federal response to it.

Meanwhile, Congress has debated raising the cap on federal liability.

Read more of this story at NewsObserver.com

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