Two coastal state Senate Democrats who have been mostly critical of the Democratic leadership’s oil spill legislation have introduced separate bills that seek to reach a compromise on some of the most divisive issues.

The bills, offered by Sens. Mary Landrieu of Louisiana and Mark Begich of Alaska, target the most contentious provision in the existing Senate bill — eliminating the existing $75 million cap on liability damages for a producer responsible for an oil spill. Some Democrats, as well as Republicans, are concerned that the proposed unlimited cap would prevent small and mid-sized producers from obtaining the insurance needed to operate offshore.

Both Landrieu and Begich are avowed opponents of Sen Robert Menendez’s (D-NJ) legislation, which would lift the liability cap for an individual offshore producer to $10 billion (see Daily GPI, May 5).

Landrieu’s legislation would raise the initial liability cap for an individual producer to $250 million. Damages between $250 million and $10 billion would be covered by a mutual insurance fund that producers would pay into. However, for any damages exceeding $10 billion, the producer responsible for the oil spill would bear those costs.

Her measure is a stand-alone bill at this point, but it could be attached to whatever oil spill bill the Senate considers, said Landrieu spokesman Aaron Saunders.

Begich’s proposal would require producers to carry insurance for at least $250 million in damages. Any damages between $250 million and $20 billion would be shared by operators paying into a mutual fund. The burden would fall to the responsible producers for any damages that exceed $20 billion.

The Landrieu bill also states the Gulf moratorium “shall not apply to any application for a permit to drill submitted on or after the date of enactment of this [bill]” if Interior Secretary Ken Salazar finds that the applicant has complied with the “National Notice to Lessees and Operators” (NTL 2010 NO5, NO6) and has completed all required safety inspections.

Moreover, her measure would require Salazar to decide on whether to issue a permit within 30 days of determining that an applicant has fulfilled the requirements. And Landrieu, a staunch proponent of revenue sharing, proposes “accelerated revenue sharing” with Gulf-producing states to promote coastal restoration in the wake of the Deepwater Horizon rig explosion. According to the latest government figures, almost five million bbl oil oil leaked from the Macondo well before it was temporarily capped on July 15 (see Daily GPI, July 16).

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