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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21 Spring 2015 Proceedings www.uscg.mil/proceedings The USCG NPFC tracks and compiles incident costs and expenditures and then bills responsible parties. If the responsible party does not pay promptly, the NPFC refers the debt to either the Department of Justice or the Depart- ment of Treasury for further collection activity. Currently, the Oil Spill Liability Trust Fund accounts receivable bal- ance is more than $289 million. Total cost recoveries to the fund exceed $1.2 billion. Success So does the fund meet the goals set at its inception? Yes, by all measures, it has succeeded. Oil spills on U.S. waters are promptly cleaned up, either by the spiller or through the FOSC/National Contingency Plan structures. The fund also has proven to be eminently scalable, allowing response equally to small, localized spills and also major spills of national signifcance — most recently the Deepwater Horizon oil well blowout in the Gulf of Mexico. Most importantly, for more than 40 years, every Coast Guard or EPA FOSC has been able to draw upon the appropriate funds for every oil response. About the author: Mr. Allen R. Thuring is the senior fnancial analyst at the Coast Guard's National Pollution Funds Center. Since 1983, he has managed Coast Guard oil and chemical response funds. He was the Coast Guard fund manager for the Exxon Valdez response and has been involved with every major oil and chemical spill response since then. He is a former Coast Guard offcer and has spent 43 years with the Coast Guard. He holds a B.A. from the Univer- sity of Virginia and an MBA from George Washington University. Endnote: 1. OPA suspended the tax when the OSLTF balance exceeded $1 billion, and Con- gress included a sunset provision that ended the tax on December 31, 1994. Con- gress reinstated this excise tax in 2006 and revised the tax provisions further in 2009. First, Congress removed the upper limit on the OSLTF balance that would suspend excise tax collection. Second, the excise tax was raised to $0.08 per barrel of crude oil produced or imported into the United States, and the same amount for any refned petroleum products imported. In 2017, the excise tax rate increases to $0.09 per barrel, and the excise tax is due to end on December 31, 2017. only pay OPA claims resulting from oil spills when claims were either ignored or denied by the responsible party or for claims from mystery oil spills where no responsible party could be identifed. The claims fund limit is essentially the OSLTF available bal- ance when the claim is adjudicated. OPA allows claims for various reasons, but they generally are for unpaid response costs, economic damages, or natural resource damages. OPA does provide two general limits on amounts that can be spent on an incident: • no more than $1 billion can be expended on a single incident, • no more than $500 million can be spent on natural resource damage claims for an incident. The Coast Guard National Pollution Funds Center is del- egated authority under OPA to receive and adjudicate all Oil Spill Liability Trust Fund claims, and more than $700 million has been paid out of the claims fund to date. Congressional Appropriations Each year Congress appropriates funds to the Coast Guard, the EPA, and various other federal agencies charged with responsibilities under OPA. The total amount appropriated out of the Oil Spill Liability Trust Fund varies, but it gener- ally totals around $100 million each year. Congress can and does provide agencies with guidance from time to time on how these appropriated funds are to be used. The Polluter Pays The fnal major OPA provision affecting the Oil Spill Liabil- ity Trust Fund deals with spiller liability and cost recovery. This is commonly referred to as the "polluter pays" prin- ciple. If the Oil Spill Liability Trust Fund must be used for an incident, the responsible party is liable for all the costs that result from the FOSC's actions, all emergency fund expendi- tures for the incident, and all claims fund expenditures that result from the incident. For more information: All fund statistics courtesy of the Coast Guard National Pollution Funds Center. For more information, go to www.uscg.mil/npfc.

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