Senate Environment and Public Works Chairwoman Barbara Boxer (D-Calif.) added her voice yesterday to those calling for a lifting of the "outdated" liability cap following last year's oil spill in the Gulf of Mexico.

During a Senate Environment and Public Works Committee hearing on the recommendations by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Boxer said she would collaborate with other senators seeking increased compensation for spill victims.

Former Sen. Bob Graham (D-Fla.), the spill commission co-chairman, recommended re-examining BP PLC's $75 million liability cap, a limit established under the 1990 Oil Pollution Act following the Exxon Valdez oil spill in Alaska. Graham said a new amount should be assessed, taking inflation and risk into account.

"It's important to maintain a strong independent sector within the oil and gas industry," Graham said. "But on the other hand if the liability cap is too low and is not reflective of the real economic consequences, then the cost is not going to go away, but it's either going to be borne by the innocent victim ... or, as we have seen in other industries, it becomes the federal government's responsibility."

Sen. Sheldon Whitehouse (D-R.I.), a member of the EPW Committee, said he would introduce the "Oil Spill Victims Redress Act" and the "Maritime Liability Fairness Act," two pieces of legislation that would work toward that goal.

The first bill would expand responsibility for compensation payments beyond companies considered "responsible parties" under the Oil Pollution Act. The second would overturn a 2008 Supreme Court decision in Exxon Shipping Co. v. Baker, which limited punitive damages to the amount of compensatory damages assessed in a case. The legislation would allow spill victims to collect larger sums from companies like BP, Halliburton Co. and Transocean Ltd.

Capping regulations

During the hearing, committee ranking member James Inhofe (R-Okla.) said he would introduce his own legislation to create a committee of Cabinet secretaries from several federal agencies to assess the cumulative effect of U.S. EPA regulations on the economy. He criticized attempts by the commission to impose more regulations on the oil industry.

The Oklahoma senator also asked the commission members present at the hearing to take a definitive stance on encouraging deepwater drilling in the Gulf of Mexico.

Graham and his co-chairman, William Reilly, said oil companies should once again be permitted to drill in the Gulf.

"The moratorium -- insofar as it penalized companies that were not in any way implicated in the spill, responsible companies that had good environmental and safety records -- went on too long," Reilly said.

Sen. Frank Lautenberg (D-N.J.), however, cautioned the commissioners to balance the costs and benefits of drilling for oil off the Gulf Coast.

"When oil is drilled, oil will be spilled," Lautenberg said.