Libertarian law professor Richard Epstein, writing in the Wall Street Journal: "we'd all be much better off if there were no statutory liability cap and if operators both big and small were required to purchase insurance—amounting to the tens of billions if necessary—when they operate in dangerous waters or terrains....This logic also suggests that the Price Anderson Act's $375 million cap on damages for each responsible party to cover incidents at a nuclear power facilities should be rethought."
Well, maybe. But the requirement to purchase insurance is a regulation in its own right. How much insurance must a firm buy? What if it is so costly that it makes drilling not worth it, or that it drives energy costs up dramatically? Some might say the cost increase would be good because it would encourage conservation or energy efficiency. The liability cap that matters most is probably not the ones Professor Epstein mentions, but the one inherent in the idea of a limited liability corporation that protects shareholders from being personally on the hook for liabilities. Anyway, it's interesting to see one of the most vociferous proponents of the idea that it's unconstitutional to require individuals to buy health insurance come out for the proposition that it's desirable to require oil companies to buy liability insurance.
It's also interesting to see the utilitarian argument that Professor Epstein uses: "we'd all be much better off" -- as opposed to a rights-based argument.
One idea might be, if the federal government owns the land that it offering to lease to these oil companies, to just sell the property rather than leasing the drilling rights. That way if an oil company wrecks the land, it's wrecking its own land rather than everyone's land. And there's a pretty well-developed body of law about what happens if you wreck your neighbor's property as a result of something that happens on your own property.