San Francisco Bay spill costs to exceed $61m federal limit

Erica Werner, Associated Press Yahoo News 18 Dec 07;

Clean-up costs for last month's oil spill in San Francisco Bay are on track to exceed the $61 million federal insurance liability limit, the U.S. Coast Guard said Tuesday.

As of last Saturday, $54.7 million has been spent to respond to last month's 58,000-gallon spill, with clean-up costs averaging about $770,000 per day, the agency said.

The cost of clean-up is expected to surpass the $61 million liability cap on insurance payments by the owner of the Cosco Busan, the cargo ship that sideswiped the San Francisco-Oakland Bay Bridge in heavy fog on Nov. 7.

After testifying to a Senate subcommittee Tuesday, Coast Guard Commandant Adm. Thad Allen said the agency and the Justice Department were discussing how to proceed after that limit is reached.

In the wake of the spill, Sens. Barbara Boxer and Dianne Feinstein of California have introduced legislation to raise the insurance liability limits set by the Oil Pollution Act of 1990.

Under current law, the liability cap would be lifted if gross negligence were found in the accident. Other ways also can be found for the so-called responsible party — in this case Regal Stone Ltd._ to pay above the liability limit.

"No one should think that Regal Stone is going to do anything other than meet its legal responsibilities," said company spokesman Jim Lawrence.