Gulf Oilspill

Floor Speech

Mr. DURBIN. Mr. President, last night the President of the United States addressed one of the toughest issues any President has ever had to face. This is an environmental disaster of historic magnitude. It is one that could not have been anticipated. We have never had anything quite like it--at least near the United States. It is certainly one the President and our government did everything they could do to respond, but this frustrating situation continues.

What the President reminded us of last night is that we need to coordinate every effort, but understand that, in the end, there is no U.S. department of deep sea drilling. What it comes down to is that we need to turn to the private sector, which has the resources, the expertise, and the capability of not only dealing with the continuing oilspill in the Gulf of Mexico but the aftermath as well.

It has been clear from the outset that this President has been very firm and resolute that British Petroleum, this oil company, is going to be held responsible for the damage that has been done. It will be at their expense, and not at the expense of American taxpayers, that we will help the businesses affected and do anything within our power to restore the devastation which has occurred to the environment.

It was interesting yesterday that in testimony before the House of Representatives, many of the leaders of the major oil companies that compete with BP were as forthright publicly as they have been privately in other conversations. They made it clear that many of the activities engaged in by BP were inconsistent with the highest standards of their industry. They made it clear that when it came to this blowout preventer, which should have stopped the flow of oil, it was inadequate. It hasn't been tested. It was not the kind of technology that had redundancy built in so that there would be some peace of mind and understanding that in the event of a rig disaster, it would work. It failed, and it failed in a situation which has caused more environmental damage in our country than we have ever seen from one occurrence.

I saw 21 years ago what happened in the Prince William Sound of Alaska, and I can tell you that more than two decades later, they are still suffering--suffering from lawsuits against the Exxon oil company, which unfortunately were ruled against the plaintiffs; suffering from environmental damage which will continue at least indefinitely.

What we have in the situation in the gulf is different. We have an admission by BP that they are at fault and an acceptance of responsibility for what they characterize as legitimate claims. I think it is proper--and many of us in the Senate joined majority leader Harry Reid in making the request--that BP set aside some $20 billion in an escrow fund, a trust fund that will be available to pay for these damages. It troubles me that this company is talking about declaring a dividend and paying out billions of dollars to its shareholders when, frankly, we don't know what the ultimate cost is going to be of the cleanup in the Gulf of Mexico. I want to be certain BP continues in business and meets its responsibility, that it sets aside the funds necessary to protect our Nation from the damage it has caused.

I also believe we need to increase the responsibility of oil companies when it comes to future drilling. Right now, there is a tax on each barrel of oil of 8 cents--8 cents. A barrel of oil is now selling for about $75. So 8 cents on each barrel is paid by an oil company into an oilspill liability fund. That has generated a little over $1 billion in the event that we run into a disaster which needs to be taken care of. In the BP circumstance, the company is assuming liability. But tomorrow, God forbid, if another tragedy occurs with a company that doesn't have BP's resources, it will be this oilspill liability fund that will be called on to repair the damage, and $1 billion is not enough. Eight cents a barrel is not enough.

Before the Senate today is an extenders bill which will increase the amount per barrel to 41 cents. This will be gathered together over time from the oil producers and the oil industry into an insurance fund, a basic oilspill insurance fund. I think that is only reasonable. The bill also increases the liability cap of companies under this oilspill liability to $5 billion. Currently, it is $1 billion. So both of these items are in our bill in an effort to hold the major oil companies accountable for any future disasters and to protect the taxpayers from paying out-of-pocket or paying out of the Treasury for any of these costs.

What is interesting is that the Republicans are going to come forward with a substitute brought on by John Thune, who is a Senator from South Dakota. The Republican substitute eliminates the increase in the tax on a barrel of oil for the oilspill liability fund. Of course, the big oil companies don't want to pay it, and this elimination of the tax is certainly on their agenda. It is unfortunate that Republican Senators are going to come forward and propose this. We need this money in the oilspill liability fund. To have a situation where this money is not being collected leaves us vulnerable in terms of future disasters where the taxpayers will be picking up the bill.

There is a provision in the Thune amendment, the Republican substitute, which eliminates the provision in our bill relating to the Tax Code when it comes to American companies shipping jobs overseas. Most of us believe that if we are going to get out of this recession, we need to strengthen American businesses and certainly hire more people in the United States, pay them a decent wage, and bring them back to work and out of the ranks of the unemployed.

At this point in time, many American companies are locating production facilities overseas because of perverse incentives which we have created in our Tax Code. The bill brought to the floor eliminates many of these incentives--eliminates the tax loopholes companies are using to be more profitable by locating overseas. So the Thune amendment, the Republican substitute amendment, comes forward and says: We don't want to do that. We want to leave in the Tax Code--according to the Republicans--those provisions which create incentives to ship American jobs overseas.

That makes no sense to me.

Last night I attended a meeting of the deficit commission, to which I was appointed by Senator Reid. There was an economist there who tried to make the argument that allowing businesses in the United States--and giving them incentives, incidentally--to locate and produce overseas was good for the American economy. He argued if they could produce more overseas, it would ultimately mean they would be more profitable and produce more jobs in the United States.

I told him if that logic applied, then we ought to have a record number of manufacturing jobs because, over the last 20 years, more and more American businesses have moved production facilities offshore, overseas.

Instead, the opposite is true. In my State and in Michigan, all across the United States we have seen manufacturing jobs declining dramatically while production facilities have been sent overseas. This theory that is obviously behind the Republican Thune substitute is that we ought to reward American companies for locating and producing overseas. I do not agree with that. I hope we will oppose the Thune substitute and we will move as soon as we can to deal with the situation where we have increased jobs here in the United States to deal with this recession.

I understand we are going to have speakers later on in the Democratic side and I want to reserve time for those speakers. I reserve the remainder of time on the Democratic side, and if there is no one here to speak on the Republican side, I will yield the floor and suggest the absence of a quorum.

Is it my understanding that the time will be taken from the Republican side at this point?

The ACTING PRESIDENT pro tempore. Without objection.

Mr. DURBIN. I believe the Republicans, if I am not mistaken, under the unanimous consent were first in morning business.

I yield the floor and suggest the absence of a quorum, with the understanding the time that runs now will come from the time previously allotted to the Republican side.

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