Oil Spill Response

# Oil Pollution Act of 1990, United States

October 24, 2010, 8:11 pm
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The Exxon Valdez aground on Bligh Reef, Prince William Sound. (Source: NOAA)

The Oil Pollution Act (OPA) was signed by George H. Bush in 1990, primarily in response to the Exxon Valdez oil spill in Prince William Sound, Alaska that discharged more than 10 million gallons of crude oil into the Prince William Sound. The Act was designed to expand oil spill prevention measures and to establish new requirements for oil transportation, cleanups, and response capabilities of the federal government and industry.  The OPA improved the nation's ability to prevent and respond to oil spills by establishing provisions that expand the federal government's ability, and provide the money and resources necessary, to respond to oil spills. The OPA also created the national Oil Spill Liability Trust Fund, which is available to provide up to one billion dollars per spill incident.

The OPA amends Section 311 of the Clean Water Act and the Federal Water Pollution Control Act. Amendments included: changes to federal response authority; penalty increases for oil spills; establishment of U.S. Coast Guard response organizations; mandated tank vessel and facility response plans; and the formulation of area contingency plans for selected areas. Under the OPA, the owner or operator of a facility from which oil is discharged (the responsible party) is liable for the costs associated with containment or cleanup of the spill and any damages resulting from the spill. If a responsible party is unknown or refuses to pay, an Oil Spill Liability Trust Fund will provide up to one billion dollars for any one oil pollution incident or oil spill. The trust fund receives primary revenue from a five-cent tax on every barrel of imported or domestic oil. However, the primary revenues ceased in 1994 due to a ‘sunset’ provision law.

Under the Act, the Office of Pipeline Safety (OPS) was established. The office is responsible for implementing the Oil Pollution Act for onshore pipelines. Their objective is to decrease the potential for pipeline spills, diminish environmental consequences of spills, and ensure quick response and well-planned spill cleanup. The OPS participates with the National Response Team, led by the Environmental Protection Agency (EPA) and United States Coast Guard.

The Coast Guard Maritime Transportation Act of 2004 amended portions of the Oil Pollution Act of 1990 by providing exemption liability for passive financial entities who are lessors in vessel lease financing transactions. Congress borrowed this amendment exemption from the Comprehensive Environmental Response Compensation and Liability Act (CERCLA).

Key Provisions of the Oil Pollution Act

§1002(a) Provides that the responsible party for a vessel or facility from which oil is discharged, or which poses a substantial threat of a discharge, is liable for: (1) certain specified damages resulting from the discharged oil; and (2) removal costs incurred in a manner consistent with the National Contingency Plan (NCP).

§1002(c) Exceptions to the Clean Water Act (CWA) liability provisions include: (1) discharges of oil authorized by a permit under Federal, State, or local law; (2) discharges of oil from a public vessel; or (3) discharges of oil from onshore facilities covered by the liability provisions of the Trans-Alaska Pipeline Authorization Act.

§1002(d) Provides that if a responsible party can establish that the removal costs and damages resulting from an incident were caused solely by an act or omission by a third party, the third party will be held liable for such costs and damages.

§1004 The liability for tank vessels larger than 3,000 gross tons is increased to $1,200 per gross ton or$10 million, whichever is greater. Responsible parties at onshore facilities and deepwater ports are liable for up to $350 millon per spill; holders of leases or permits for offshore facilities, except deepwater ports, are liable for up to$75 million per spill, plus removal costs. The Federal government has the authority to adjust, by regulation, the $350 million liability limit established for onshore facilities. §1016 Offshore facilities are required to maintain evidence of financial responsibility of$150 million and vessels and deepwater ports must provide evidence of financial responsibility up to the maximum applicable liability amount. Claims for removal costs and damages may be asserted directly against the guarantor providing evidence of financial responsibility.

§1018(a) The Clean Water Act does not preempt State Law. States may impose additional liability (including unlimited liability), funding mechanisms, requirements for removal actions, and fines and penalties for responsible parties.

§1019 States have the authority to enforce, on the navigable waters of the State, OPA requirements for evidence of financial responsibility. States are also given access to Federal funds (up to $250,000 per incident) for immediate removal, mitigation, or prevention of a discharge, and may be reimbursed by the Trust fund for removal and monitoring costs incurred during oil spill response and cleanup efforts that are consistent with the National Contingency Plan (NCP). §4202 Strengthens planning and prevention activities by: (1) providing for the establishment of spill contingency plans for all areas of the U.S. (2) mandating the development of response plans for individual tank vessels and certain facilities for responding to a worst case discharge or a substantial threat of such a discharge; and (3) providing requirements for spill removal equipment and periodic inspections. §4301(a) and (c) The fine for failing to notify the appropriate Federal agency of a discharge is increased from a maximum of$10,000 to a maximum of $250,000 for an individual or$500,000 for an organization. The maximum prison term is also increased from one year to five years. The penalties for violations have a maximum of $250,000 and 15 years in prison. §4301(b) Civil penalties are authorized at$25,000 for each day of violation or $1,000 per barrel of oil discharged. Failure to comply with a Federal removal order can result in civil penalties of up to$25,000 for each day of violation.

§9001(a) Amends the Internal Revenue Act of 1986 to consolidate funds established under other statutes and to increase permitted levels of expenditures. Penalties and funds established under several laws are consolidated, and the Trust Fund borrowing limit is increased from $500 million to$1 billion.