Proceedings Of The Marine

SPR 2015

Proceedings magazine is a communication tool for the Coast Guard's Marine Safety & Security Council. Each quarterly magazine focuses on a specific theme of interest to the marine industry.

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19 Spring 2015 Proceedings The Exxon Valdez In March 1989, that world was stood on its head when the Exxon Valdez ran aground in Prince William Sound, Alaska. The 311(k) fund balance that day was $6.7 million. Fortu- nately, Exxon Corporation undertook the spill response and quickly repaid all the federal response costs, which eventu- ally came to more than $120 million. This catastrophic event (and expense) engendered thorough Clean Water Act review, focusing most signifcantly on the adequacy of the 311(k) fund. In response, Congress passed the Oil Pollution Act of 1990 (OPA), which created the Oil Spill Liability Trust Fund (OSLTF). The OSLTF structure retained the 311(k) fund's penalty and cost-recovery revenue and added dedicated excise tax revenues of one nickel per barrel of crude oil produced or imported into the United States, and the same amount for any refined petroleum products imported into the United States. Excise tax revenue currently exceeds $400 million each year. 1 To the extent Oil Spill Liability Trust Fund monies are not needed for spills, Congress charged the Treasury with investing available OSLTF funds in its own securities. The Coast Guard National Pollution Funds Center (NPFC) and the Treasury review these amounts annually. Annual inter- est earned averages $17 to $18 million. Cumulative interest earned since OSLTF creation exceeds $870 million. Changes Under OPA OPA also changed how the Oil Spill Liability Trust Fund was spent. The 311(k) fund was a revolving trust fund. If funds were available, the federal on-scene coordinator (FOSC) could use them to respond to a spill. If the fund balance fell too low, Congressional appropriations in the annual budget process augmented it. Additionally, while the Clean Water Act allowed spending the 311(k) fund for oil or hazardous materials response, OPA The Clean Water Act/Federal Water Pollution Control Act of 1972 (CWA) and the Oil Pollution Act of 1990 (OPA) are arguably the most expansive federal pollution laws. They provide guidance, and, most important for responders, cre- ate a range of response tools to deal with oil and hazardous materials spills on U.S. waters. Key components include: • an expectation that the spiller is responsible and liable to clean up the spill; • creating the National Contingency Plan and defning federal on-scene coordinator authorities; • creating "special teams," including the Coast Guard's National Strike Force and the Environmental Protection Agency's (EPA) Emergency Response Team; • fnancing a fund that pays for removals if the respon- sible party does not step forward. The Coast Guard manages this fund, which: • pre-empts the responsible party from using delay as a response option, despite the law; • provides the federal on-scene coordinator the money to quickly hire private response companies if the responsi- ble party does not act or if the spill's origin is a mystery. Funding Response The 311(k) fund, named for the CWA section in which it appears, was used in its frst year and during responses to a signifcant number of oil spills by 1973, engendering much growth in the spill response industry. In 1980, Congress passed the Comprehensive Environmen- tal Response, Compensation, and Liability Act (CERCLA) and its attendant fund, commonly referred to as "Super- fund," to pay for response to chemical spills and hazardous waste sites. Thus was born a dual-fund world: CERCLA/ Superfund for hazardous materials, pollutants, and con- taminants and 311(k) for oil. The Oil Spill Response Fund Four decades of success. by Mr. Allen r. tHuring Senior Financial Analyst Coast Guard National Pollution Funds Center History and Heritage

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