"Senate Panel Votes To End Oil Spill Liability Cap"

"Congress on Wednesday took major steps to rein in Big Oil's offshore drilling practices, as one Senate panel voted to lift all caps on liability in oil spills and another moved to deny offshore leases to companies with poor track records.

The action on Capitol Hill comes 72 days after an explosion involving a BP oil rig, which has left millions of gallons of oil pouring into the Gulf of Mexico from a ruptured deep-water well.

Action kicked off on Wednesday in the Senate Environment and Public Works Committee, where Democrats pushed through a bill eliminating the $75 million cap on liability that oil companies currently enjoy for damages from offshore spills, like the one devastating the U.S. Gulf coast.

The committee's vote would open the oil industry to potentially unlimited compensation for economic losses suffered by local businesses and communities and for damages to natural resources.

The change, if approved and made law, would apply retroactively to BP Plc's massive Gulf of Mexico spill, although the company has already said it would cover all costs, which will run into the billions of dollars."

Richard Cowan reports for Reuters July 1, 2010.