Matthew Wald of The New York Times reports the details of the previously obscure Oil Spill Liability Trust Fund, a $1.6 billion fund financed by a minuscule tax on oil -- eight cents per barrel, which Wald says is roughly 0.1%. According to Wald, the fund is designed to pay damage claims resulting from oil spills, though not cleanup and containment costs. But that's not all it does. It also limits the liability of oil companies like BP.
Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill.That's a pretty good deal the oil companies negotiated back then...for the opportunity to make unlimited profits and lobby the government with unlimited money(BP spent 16 million on lobbying last year) the get a limit on the liability they face to the tune of 75 million. 75 mil is chump change to someone like BP. We ar so screwed.
The fund was set up by Congress in 1986 but not financed until after the Exxon Valdez ran aground in Alaska in 1989. In exchange for the limits on liability, the Oil Pollution Act of 1990 imposed a tax on oil companies, currently 8 cents for every barrel they produce in this country or import.
The tax adds roughly one tenth of a percent to the price of oil. Another source of revenue is fines and civil penalties from companies that spill oil.