This article is addressing the recent oil spill and the tax on oil which will provide a huge federal “rainy day” fund to pay for the damage on the gulf coast. Up to $1 billion of the $1.6 billion reserve could be used to pay for losses from the accident, as much as half of it for what is sometimes a major category of costs: damage to natural resources including fisheries and other wildlife habitats. People forget that a huge cost is on wildlife which is susceptible to irreversible damage by the slightest changes in living conditions.
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. They are responsible for containing the spill. 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.
In the past this fund has been used to pay for small spills and damages and has been used mostly for small companies. According to this article, it now seems that the huge cost of these damages will use up a lot of this fund, which could pose a problem if it is depleted for future use.
I would like to add on to this article. Today I read an article from CNN.com (http://ac360.blogs.cnn.com/2010/05/03/bp-absolutely-will-pay-for-gulf-oil-spill-cleanup-ceo-says/?iref=allsearch) that says BP will pay for the oil spill clean up. It would have been a good idea to include a motion that would make companies pay instead of fining them.
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