How to win an argument.

Step 1: Start by looking for straw

No Paul, the problem isn't needing better politicians. The problem is that there are limitations being set by politicians (ie, those liability limitations for oil companies). Or that those limitations can be stripped out when it is convenient for political purposes (as with tobacco lawsuits in the 90s and probably oil companies here soon). I'd guess we'd be okay with letting the markets set these rules for the most part. If the cost of oil development included potentially billions of dollars of cleanup costs and related lawsuits every 10-20 years or so, one imagines that oil companies would either
1) do a better job not fucking up as it appears they did here. And as they do pretty much every year in places like Nigeria where they are protected by even more corruption and pro-business regulations.
2) not be involved in oil and would be doing something else potentially less hazardous.
I don't see how these are bad outcomes if you were a progressive economist.
I guess there's an argument that environmental regulations have helped here, since we don't have the third world environmental hazards. But they'd need to be seriously enforced. And it still makes little sense to limit the damages of companies when their derricks or pipelines blow up or a ship runs aground. Even on the logic of "this will deter smaller companies..." If a company can afford to set up a multi-billion dollar offshore oil derrick (and accompanying oil exploration effort) they can afford to set up some sort of legal insurance on it in the event it causes a major ecological disaster.

Resolved Further: It makes no sense to argue that politicians are corrupt as the reason a libertarian system wouldn't work and in the next sentence imply that we need to give those corrupt politicians more powers. I'm pretty sure we're not advocating giving either corporations or governments a pat on the head for their wonderful jobs.

In most cases we're talking about taking a very bloody mop to the situation, usually to stop the wedding between the two from happening. The fact that prominent economists confuse the difference between free markets and pro-business positions is not a good sign.