Oil Pollution Act of 1990

OPA

The Oil Pollution Act (OPA) was signed by George H. Bush in 1990, primarily in response to Exxon Valdez oil spill in Prince William Sound, Alaska that discharged more than 10 million gallons of crude oil into the Prince William Sound

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

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

Created National Oil Spill Liability Trust Fund Provides up to one billion dollars per spill incident.

Exxon Valdez aground Prince William Sound, Alaska

Objectives

Act established new requirements and extensively amended the Federal Water Pollution Control Act (33 U.S.C. 1301 et. seq.) to provide enhanced capabilities for oil spill response and natural resource damage assessment.

It required Service consultation on developing a fish and wildlife response plan for the National Contingency Plan, input to Area Contingency Plans, review of Facility and Tank Vessel Contingency Plans, and to conduct damage assessments associated with oil spills.

Overview

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 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 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

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.

Overview

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

OPS participates with the National Response Team, led by USEPA and US Coast Guard

Provisions

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).

Federal trustees may, upon request from a State or Indian tribe, assess damages to natural resources for them as well. Trustees shall develop and implement a plan for the restoration, rehabilitation, replacement, or acquisition of the equivalent of natural resources under their trusteeship.

Provisions

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

Title I, section 1011, provides that trustees are to be consulted on the appropriate removal action to be taken in connection with any discharge of oil.

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.

Provisions

Title I, section 1012, provided for the uses of the oil pollution fund. In addition to response costs, the fund may be used without appropriations to pay the costs of assessments, as well as to pay claims for natural resource damages if there are no funds or insufficient funds from a responsible party.

Provisions

The liability for tank vessels larger than 3,000 gross tons is $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 million 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

Federal government has the authority to adjust, by regulation, the $350 million liability limit established for onshore facilities

Provisions

Title IV, section 4201, amended subsection 311(d) of the Federal Water Pollution Control Act with respect to Federal removal authority. It declared the contents of the National Contingency Plan to consist of a detailed oil and hazardous substance pollution prevention plan, including fisheries and wildlife. The Fish and Wildlife Response Plan was developed in consultation with US Fish & Wildlife Service and National Oceanic and Atmospheric Administration.

Provisions

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

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

Provisions

States have the authority to enforce, on the navigable waters of the State, OPA requirements for evidence of financial responsibility

States are 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

Provisions

Strengthens planning and prevention activities by: providing for the establishment of spill

contingency plans for all areas of the U.S.

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

providing requirements for spill removal equipment and periodic inspections

Provisions

Fine for failing to notify the appropriate Federal agency of a discharge is $10,000 to a maximum of $250,000 for an individual or $500,000 for an organization

Maximum prison term increased from one year to five years. Penalties for violations have a maximum of $250,000 and 15 years in prison

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

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

Provisions

Title IV, section 7001, provided for oil pollution research and development

Interagency Coordinating Committee on Oil Pollution Research established to research and develop methods to restore and rehabilitate natural resources damaged by oil discharges, and to research and evaluate the relative effectiveness and environmental impacts of bioremediation technologies.

Deepwater Horizon Gulf Oil Spill

Deepwater Horizon Oil Spill

The spill is the "worst environmental disaster the US has faced", according to White House energy adviser Carol Browner.[250] Indeed, the spill was by far the largest in US history, almost 20 times greater than the Exxon Valdez oil spill.[251] Factors such as petroleum toxicity, oxygen depletion and the use of Corexit dispersant are expected to be the main causes of damage.[252][253] Eight U.S. national parks were/are threatened.[254] More than 400 species that live in the Gulf islands and marshlands are at risk, including the endangered Kemp's Ridley turtle, the Green Turtle, the Loggerhead Turtle, the Hawksbill Turtle, and the Leatherback Turtle. In the national refuges most at risk, about 34,000 birds have been counted, including gulls, pelicans, roseate spoonbills, egrets, terns, and blue herons.[75] A comprehensive 2009 inventory of offshore Gulf species counted 15,700. The area of the oil spill includes 8,332 species, including more than 1,200 fish, 200 birds, 1,400 molluscs, 1,500 crustaceans, 4 sea turtles, and 29 marine mammals.[255][256] As of November 2, 2010, 6,814 dead animals had been collected, including 6,104 birds, 609 sea turtles, 100 dolphins and other mammals, and 1 other reptile.[257][258] According to the U.S. Fish and Wildlife Service, cause of death had not been determined as of late June. According to NOAA, since January 1, 2011, 67 dead dolphins have been found in the area affected by the oil spill, with 35 of them premature or newborn calves.

Chandeleur Islands May 2010

Dispersant May 5, 2010

Fishing Closure 86,985 sq mi

Impacts to Fisheries

Initial cost estimates to the fishing industry were $2.5 billion

On August 31, 2010, a Boston lab hired by the United Commercial Fishermen's Association to analyze coastal fishing waters said it found dispersant in a seafood sample taken near Biloxi, Miss., almost a month after BP said it had stopped using the chemical

Impacts to Fisheries

According to the European Space Agency, the agency's satellite data was used by the Ocean Foundation to conclude that 20% of the juvenile bluefin tuna were killed by oil in the gulf's most important spawning area. The foundation combined satellite data showing the oil spill extent each week with data on weekly tuna spawning to make their conclusion

Loss of juvenile tuna was significant due to the 82% decline of the tuna's spawning stock in the western Atlantic during the 30 years before the oil spill

On April 20, 2011, NOAA reopened 1,041 square miles (2,700 km2) of Gulf waters immediately surrounding the Deepwater Horizon wellhead to commercial and recreational fishing of fish, oysters, crabs and shrimp after testing results found that 99 percent of samples contained no detectable dispersant residues or oil-related compounds, and the few samples that did contain residues showed levels more than 1,000 times lower than FDA levels of concern.

Impacts to Fisheries

In July 2011 BP released a report claiming that the economy had recovered and there was no reason to believe that anyone would suffer future losses from the spill, with the limited exception of oyster harvesters

Bruce Guerra, a crab fisherman in Louisiana for 25 years, said that since the BP oil spill crabbers are trapping 75 percent fewer crabs and that "crabs have been coming up dead, discolored, or riddled with holes since last year's spill". Fishing industry could take years to fully realize the spill's effects

Use of dispersants can cause long-term damage to marine food webs

Higher order predators are particularly vulnerable. It takes a tuna five to 15 years to mature. So although we may have fish now, we may not have them in five to 15 years.

Effects to Wildlife

As of November 2, 2010, 6,814 dead animals had been collected, including 6,104 birds, 609 sea turtles, 100 dolphins and other mammals, and 1 other reptile

Cause of death had not been determined as of late June. According to NOAA, since January 1, 2011, 67 dead dolphins have been found in the area affected by the oil spill, with 35 of them premature or newborn calves.

Effects to Wildlife

In late July 2010, Tulane University scientists found signs of an oil-and-dispersant mix under the shells of tiny blue crab larvae in the Gulf, indicating that the use of dispersants had broken the oil into droplets small enough to easily enter the food chain

Marine biologists from the University of Southern Mississippi's Gulf Coast Research Laboratory found "orange blobs" under the shells of crab larvae "in almost all" of the larvae they collected from over 300 miles (480 km) of coastline stretching from Grand Isle, Louisiana, to Pensacola, Florida

Effects to Wildlife

On September 29, 2010, Oregon State University researchers announced the oil spill waters contain carcinogens. The team had found sharply heightened levels of chemicals in the waters off the coast of Louisiana in August, the last sampling date, even after BP successfully capped its well in mid-July

Near Grand Isle, Louisiana, the team discovered that polycyclic aromatic hydrocarbons or PAHs, which are often linked to oil spills and include carcinogens and chemicals that pose various risks to human health and animals, remained at levels 40 times higher than before the oil spill.

Use of disperants make PAHs bio-avaliable in the food chain

Effects to Wildlife

Researchers found evidence of chemicals as deep as 3,300 feet (1,000 m) and as far away as 8 miles (13 km) in May 2010, and say the spread likely worsened as more oil spilled.

PAHs can kill animals right away in high enough concentrations and can cause cancer over time

In February 2011, the first birthing season for dolphins since the spill, the director of the Institute for Marine Mammal Studies in Gulfport reported that dead baby dolphins were washing up along the Mississippi and Alabama shorelines at about 10 times the normal number for the first two months of the year

Effects on Wildlife

From mid-January to late March 2011, scientists counted almost 200 dead dolphins in the Gulf, with another 90 in 2010

A study published in the journal Conservation Letters

showed the actual number of mammal deaths due to the spill may be as much as 50 times higher than the number of recovered carcasses

In April 2011, one year from the onset of the spill, scientists confirmed that they had discovered oil on dead dolphins found along the Gulf Coast. Fifteen of the 406 dolphins that had washed ashore in the last 14 months had oil on their bodies; the oil found on eight of them was linked to the April 2010 BP oil spill

Tourism Impacts

U.S. Travel Association estimated that the economic impact of the oil spill on tourism across the Gulf Coast over a three-year period could exceed approximately $23 billion, in a region that supports over 400,000 travel industry jobs generating $34 billion in revenue annually

Other Economic Losses

On July 5, 2010, BP reported that its own expenditures on the oil spill had reached $3.12 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs

OPA of 1990 limits BP's liability for non-cleanup costs to $75 million unless gross negligence is proven. BP reported it would pay for all cleanup and remediation regardless of the statutory liability cap. Nevertheless, some Democratic lawmakers sought to pass legislation that would increase the liability limit to $10 billion

Total insured losses from the accident could reach $3.5 billion. Final losses could be $12 billion

Total losses could amount to $30 billion, of which estimated total claims to the market from the disaster, including control of well, re-drilling, third-party liability and seepage and pollution costs, could exceed $1.2 billion

By the end of September 2011, BP reported that it had spent $11.2 billion. Third-quarter profit of $1.79 billion (compared to $5.3 billion in 2009) showed, however, that BP continued to do well and should be able to pay total costs estimated at $40 billion

Local officials in Louisiana expressed concern that the offshore drilling moratorium imposed in response to the spill would further harm the economies of coastal communities

According to the U.S. Energy Information Administration (EIA), offshore drilling in the Gulf of Mexico accounts for 23.5% of U.S. oil production. The chief argument in the U.S. offshore drilling debate has been to make the United States less dependent on imported oil

American dependence on imports grew from 24% in 1970 to 66% in 2008

Whos to Blame

In January 2011 the White House oil spill commission released its final report on the causes of the oil spill. They blamed BP and its partners for making a series of cost-cutting decisions and the lack of a system to ensure well safety. They also concluded that the spill was not an isolated incident caused by "rogue industry or government officials", but that "The root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur. After its own internal probe, BP admitted that it made mistakes which led to the Gulf of Mexico oil spill. In June 2010 BP set up a $20 billion fund to compensate victims of the oil spill. To July 2011, the fund has paid $4.7 billion to 198,475 claimants. In all, the fund has nearly 1 million claims and continues to receive thousands of claims each week.

In September 2011, the US government published its final investigative report on the accident. In essence, that report states that the main cause was the defective cement job (Halliburton), BP, and Transocean were, in different ways, responsible for the accident

Finding of Fault

On January 5, 2011,[420] the White House oil spill commission released a final report detailing faults by the companies that led to the spill.

The panel found that BP, Halliburton, and Transocean had attempted to work more cheaply and thus helped to trigger the explosion and ensuing leakage. The report states: "Whether purposeful or not, many of the decisions that BP, Halliburton, and Transocean made that increased the risk of the Macondo blowout clearly saved those companies significant time (and money).

BP released a statement in response to this, saying, "Even prior to the conclusion of the commissions investigation, BP instituted significant changes designed to further strengthen safety and risk management. Transocean, however, blamed BP for making the decisions before the actual explosion occurred and government officials for permitting those decisions. Halliburton stated that it was acting only upon the orders of BP when it injected the cement into the wall of the well. Halliburton also blamed the governmental officials and BP. It criticized BP for its failure to run a cement bond log test.

Finding of Fault

In the report, BP was accused of nine faults. One was that it had not used a diagnostic tool to test the strength of the cement. Another was ignoring a pressure test that had failed. Still another was for not plugging the pipe with cement. The study did not, however, place the blame on any one of these events. Rather, it concluded with the following statement blaming the management of Macondo:

Better management of decision-making processes within BP and other companies, better communication within and between BP and its contractors and effective training of key engineering and rig personnel would have prevented the Macondo incident.

The panel also noted that the government regulators did not have sufficient knowledge or authority to notice these cost-cutting decisions

The record shows that without effective government oversight, the offshore oil and gas industry will not adequately reduce the risk of accidents, nor prepare effectively to respond in emergencies. However, government oversight, alone, cannot reduce those risks to the full extent possible. Government oversight must be accompanied by the oil and gas industry's internal reinvention: sweeping reforms that accomplish no less than a fundamental transformation of its safety culture. Only through such a demonstrated transformation will industryin the aftermath of the Deepwater Horizon disastertruly earn the privilege of access to the nation's energy resources located on federal properties.

As noted above, the US government report issued in September 2011 states Halliburtun, BP and Transocean were are, in different ways, responsible for the accident.