On August 4, Congress finally passed the Oil Pollution Act of 1990, ending nearly two decades of squabbling over what the nation’s laws dealing with oil spills would be. Congressional Quarterly called it “possibly the harshest action Congress has ever taken against the domestic energy industry and one of the most far-reaching environmental protection bills passed in recent years.”
“[T]hough the industry managed to limit its cost in significant ways, the measure could end up costing energy producers and transporters billions,” CQ said.
Here is our analysis of some of the major points of the Oil Pollution Act:
Liability
Total liability for tankers whose capacity is 3,000 gross tons or less is at least $2 million or $1,200 per gross ton, whichever is greater. For tankers larger than that, minimum liability is $10 million or $1,200 per gross ton, whichever figure is larger. (By comparison, the first two years of clean-up costs for the Exxon Valdez spill cost more than $2 billion.)
For barges (including those in which refined oil products are shipped inter-island in Hawai`i), liability is reckoned at $600 per gross ton or $500,000, whichever is greater.
There are no limits on liability if the spill “was proximately caused” by gross negligence, willful misconduct, or illegal activity, or if the spiller fails to report the spill as required by law, or fails (“without sufficient cause”) to comply with an action ordered by a responsible federal authority.
Liability insurance or some other kind of security must be procured by the owners or operators of oil-carrying vessels up to the limits of liability set forth in the Act. However, “if the responsible party owns or operates more than one vessel, evidence of financial responsibility need be established only to meet the amount of the maximum liability applicable to the vessel having the greatest maximum liability.”
Drunk Drivers
It may seem like a small thing, but the Oil Pollution Act allows the Coast Guard to avail itself of records kept by the National Driver Register on anyone holding or seeking to hold a pilot’s license or merchant mariner’s document.
Double Hulls
For years, the oil industry managed to muddy the waters over debate on double hulls, claiming that they were not an effective means of preventing oil spills. However, a U.S. Coast Guard report cited in the Final Report of the Alaska Oil Spill Commission estimated that had the Exxon Valdez been equipped with a double hull, up to 60 percent less oil would have been spilled when the tanker hit the reef.
Thus, one of the most trumpeted aspects of the Oil Pollution Act was its requirement that new tankers be built with double hulls and that existing single-hulled tankers be phased out. We should all live so long. It will be at least 2010, and possibly 2015, before the last of the single-hulled oil-carrying vessels is banished from U.S. waters.
Federalized Spills
One of the chief criticisms of the handling of the Exxon Valdez spill was that the Coast Guard did not take charge of — or “federalize” — the clean-up. The Exxon Corp., which did take charge, had no knowledge of the local scene or easy ability to acquire it. Resources that could have been mustered early on in the clean-up operation were wasted and damages were greater than they need have been.
As the Coast Guard points out, however, federalizing a spill means that the U.S. government assumes responsibility (at least until things can be settled in court — which may take years) for payment of expenses it may incur in the clean-up phase.
The Oil Pollution Act makes the process of federalizing a spill a tad easier. The liability provisions of the act should make recovery of most costs a sure thing. A kind of “good Samaritan” clause provides legal immunity to anyone (except the responsible party) who may help in the clean-up effort. More importantly, the act requires to Coast Guard to set up response groups that will develop contingency plans and be able (ideally) to leap into action should a spill occur.
The industry, too, is supposed to develop contingency plans for each vessel or terminal used in the transport of oil. Under the auspices of the American Petroleum Institute, it has set up something called the Marine Spill Response Corporation, which will purchase and store oil spill response gear at five strategic locations around the continental United States. Additional, smaller regional response sites will be established, too. Hawai`i is going to get something in between, although no one at the MSRC can yet say just what. In any case, the industry’s generic spill response plan will be available to be invoked by reference in the contingency plans for individual vessels and terminals. This should streamline the process of industry development of the plans — as well as that of Coast Guard approval of them.
Deadlines
Perhaps one of the most important lessons of the Exxon Valdez spill was the need for timely response. Given the protracted deadlines in the Oil Pollution Act, that lesson seems to have been lost on Congress. The Coast Guard has six months just to decide how to divide the country into the geographic areas that will each be assigned a response team. It has 12 months more to develop the contingency plans for each area.
A leisurely two-year period is allowed for developing regulations for the industry contingency plans, although beyond that, the industry has just six more months before it must submit such plans. The Coast Guard gets another six months for review.
The act was approved in August 1990. Assuming no further glitches or delays, it will likely be August 1993 before the first ship sets sail under cover of an approved contingency plan resulting from the Oil Pollution Act of 1990.
Volume 1, Number 6 December 1990
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