The Oil Pollution Act of 1990

The Oil Pollution Act (OPA) 90 is an act of Congress enforced in response to the Exxon Valdez incident of Good Friday 1989. The accident involved the Exxon Valdez which spilled more than 11 million gallons of crude oil into Prince William Sound. It emerged from the incident that the country lacked sufficient resources to counter cases of oil spills. The country’s facility entrusted with the role of responding to cases of maritime oil pollution was the United States Coast Guard. However, the agency was incapacitated to effectively execute its role due to insufficient funding from the Federal, State, and local authorities. Whilst, to the lack of adequate funding, the United States Coast Guard also lacked the necessary training to counter such incidents as the Exxon Valdez spill. Upon the realization of the ineffectiveness of US systems to deal with cases of poor response to oil pollution, Congress initiated the process of drafting an Act that would power the necessary resources to counter oil spill incidents in the United States. In the wake of 1990, the US Congress proposed several bills which would later set up the Oil Pollution Act of 1990. The new Act had the objective of allocating more resources for the Coastal Guard to enable a better response than that experienced in the Exxon Valdez (Busenberg, 2013). This paper explores the Oil Pollution Act of the year 1990 passed the Congress after the Exxon Valdez spill into Prince William Sound. Explored in the paper are the: overview of the OPA 90, detailed background information, theoretical explanation of policy issues, alternatives, and recommendations. The Oil Pollution Act (OPA) was enacted in 1990 as a response to the Exxon Valdez spill. This incident spilled more than 11 million gallons of crude oil into Prince William Sound. The Valdez spill was significant in making the US realize that it was short of the resources needed for oil spill response. Consequently, the OPA became of the most notable outcomes of the Valdez spill. Ideally, this Act came as an amendment to the Federal Water Pollution Act and addressed several challenges linked to the prevention, response, and compensation for oil pollution events taking place in US navigable waters (Sump, 2011). The Oil Pollution Act introduced higher oil-spill liability limits, alongside modifying the financial responsibility requirements (Wood, 2009). The Oil Pollution Act was preceded by two ineffective laws namely the Federal Water Pollution Control Act (FWPCA) 1972 and the Clean Water Act (CWA) 1977. It was worth noting that these two Acts constituted the oil pollution response, liability framework, and containment used during the Exxon Valdez. At this point that it emerged the oil spill liability and response laws in the country were defective. Ideally, such laws ought to be clear on the parties responsible for reporting and responding to the incident; those who will lead the containment and cleanup exercises; detailed damages, costs, and expenses to be incurred by the party deemed responsible for the spill (Sump, 2011). In addition, the Act ought to define the means of compensating the damage caused by the spill and finite conditions under which the responsible party can transfer liability to a third party, limit liability, or evade it all the same. Congress and the US Coast Guard were well aware of the inefficiencies of the two Acts utilized to respond to the Exxon Valdez spill. Specifically, the Acts failed in their ability to define oil spill damages and a structure to be used in compensating those affected by the incident. Attempts to pass OPA had not been successful until Good Friday 1989 (Gibbs, 2015). Whilst revealing much about the deficiencies of oil spill mechanisms, Exxon Valdez was not the sole incident that many feared could occur. The failures of CWA would be most evident in the event of a major spill in which the responsible party is underfinanced, unprepared, and unmotivated. However, the Exxon Shipping Company had sufficient funds to finance the estimated clean-up cost of $2.5 billion (Sump, 2011). The major accident saw the Exxon Valdez crash on the Alaskan Bligh Reef, on March 24, 1989. The navigation of the vessel onto the reef exhibited considerable negligence hence a breach of a single hull of the tanker; ideally, it deposited more than 11 million gallons of crude oil into the scene. Efforts to identify the causes of the accident have been marred by different misjudgments and mistakes; inclusive of the fact that the vessel was navigated by an unqualified mate. The pilot navigated the vessel through the wrong shipping lane in an attempt to evade ice flows a move which rendered the Coast Guard incapacitated to have contact with Exxon Valdez in the course of transit via Prince William Sound. The first three months after the Exxon Valdez spill saw Congress engage in a series of debates aimed at introducing bills that would find a lasting solution to oil pollution challenges, particularly the compensation and response systems. Indeed, both houses came up with several bills which attempted to address all issues surrounding oil pollution. However, the Coast Guard held a position that termed most of the bills unworkable, unnecessary, or ill-conceived. The Coastguard only emphasized the provisions that were essential to its goals concerning means of improving the Oil pollution system in the country. However, the late June of 1989 saw the Coast Guard lose its capability of losing its influence over the avalanche of ideas. In the review of the origin of the Oil Pollution Act, it is worth the poor funding of the oil spill response of the Coast Guard prior to the Exxon Valdez spill. Notably, at the time of the accident, the Coast Guard had only $6.7 million to fund the response mission-this kit was commonly referred to as the 311(k) fund (Sump, 2011). This amount was far below the intended balance of $35 million, yet Congress was reluctant in allocating more funds for the Coast Guard. Considering the limitation of the 311(k) fund, the Coast Guard ought to have sought an emergency appropriation for different sizes of spills from Congress. The situation became worse considering that there were no trained teams or responsible parties that would bear responsibility for large spills. There was no doubt about the need to activate the Oil Spill Liability Trust Fund (OSLTF) and have it used as a constituent of the new federal oil spill scheme. Some of the issues to be discussed included the funding of the OSLTF, the appropriation and availability of the entire OSLTF content, the availability of a portion of the fund to the Coast Guard without appropriation, and the level at which OSLTF funding should stop. It subsequently emerged that the only success in addressing the limitations with funding issues lied within Congress. This realization led to the activation of the OSLTF, with its funding being subject to a tax of five cents imposed on each oil barrel from 1990 to 1994. The structure of the tax was aimed at maintaining the OSLTF at $1 billion. The OSLTF also received a boost from the outstanding balances in such other oil spill funds as the Offshore oil Pollution Compensation, the Trans-Alaska Pipeline, and the Deepwater Port funds. In addition, the OSLTF received $1 billion in borrowing authority from OPA 90 expanding the fund to $2 billion. The OPA 90 provides that the party responsible for a facility that discharges oil or exhibits a significant threat of discharge is liable for the costs of removal as per the specifications of the NCP and specific damages associated with the discharged oil. The exceptions to CWA liability provisions are inclusive of oil discharges from a public vessel, oil discharges authorized by a local, State, or Federal law, or oil discharges from onshore facilities that enjoy the cover of the Trans-Alaska Authorization Act’s liability provisions. In §1002(d), the OPA 90 provides that in the event that a responsible party is capable of establishing that the damages and removal costs associated with a spill were solely associated with an omission or act by a third party, then the responsibility will be borne by the third party. §1004 increases the liability for facilities larger than 3000 gross tons to $12000 for each ton. In addition, deepwater ports and onshore facility responsible parties are subjected to a liability of up to $350 million per spill. The Federal government is capable of regulating, hence adjusting the $30 million liability limit set for the onshore facilities. The OPA 90 also requires offshore facilities to keep proof of $150 million, deepwater ports, and vessels, alongside providing financial responsibility proof up to the upper applicable liability amount. There is a provision to directly assert claims for damages and removal costs against the guarantor entitled with the provision of financial responsibility evidence. According to §1018(a), CWA cannot preempt State Law. Ideally, States are capable of imposing additional liability, fines and penalties, removal action requirements, and finding mechanisms for responsible parties. Also, the OPA 90 provides that States can enforce requirements for financial responsibility evidence on navigable waters. The various States can also utilize funds held by the Federal government for prevention of discharge, immediate removal, or mitigation; the Trust Fund can do reimbursement for monitoring and removal costs incurred in the course of response and cleanup operations provided they are consistent with the NCP. The development of such public policies as the Oil Pollution Act can be explained using theories developed by various science and environmental scientists. For instance, the group and political system theories have effectively been used to demonstrate the role of groups and public officials in the development and the current state of the Oil Pollution Act of 1990. The explanation provided by the two theories primarily revolves around the different positions taken by Congress and the United States Coast Guard toward the creation and enforcement of the Act. The group theory has focused on the principal dynamic aspects of policy development, particularly in such pluralistic societies as the United States; however, the theory seemingly over-emphasizes the power and essence of groups, alongside understating the creative and independent role of public officials in policy formation. It is worth noting that a significant number of groups exist as a result of policies. The theory states that the struggle and interaction among groups are the primary elements of political life. Ideally, a group refers to a collection of individuals using common interests or attitudes to pursue other groups in society. In addition, the group theory states that group struggle is the primary source of public policy. Using the group theory to explain the OPA 90, it is worth noting that the development of this policy exhibited a lack of independence among public officials. Indeed, the early stages of the policy development were characterized by an immense deal of struggles between both houses and the Coast Guard. Neither of the units was given chance to develop the policy on its own. According to Sump (2011), the role of the United States in the international community significantly influenced the negotiations towards the Oil Pollution Act of 1990. Prior to the enforcement of the Act, individual States had the authority to subject the spiller to removal liabilities; however, the Federal law preempted state laws governing the collection of damages. This represented another case in which state officials could not independently enforce policies governing oil pollution. The struggle between public officials persisted when Senator George Mitchell, alongside other legislators, maintained that OPA 90 did not have any provision restricting the States’ capability of imposing unlimited liability on all parties responsible for spills within state waters. The position of the senator met resistance from the US Coast Guard and the President who insisted on the adoption of the Fund Convention and the International Convention on Civil Liability for Pollution Damage (Sump, 2011). In consistency with the group theory, the enforcement of such policy as the Oil Pollution Act was not easy in the presence of contesting positions among public officials. The nature of the group theory to over-estate the power of groups in policy development is illustrated by the overshadowing influence of Congress in the formation of the Oil Pollution Act of 1990. The Coast Guard had its own views on the provisions which it thought capable of increasing its responsiveness to such spills as the Exxon Valdez. Despite being a powerful public facility in the United States, its views were not taken into consideration as it was overpowered by Congress (National Research Council, 2013). This trend asserts the position of the group theory that the process of policy development understates the essence of public officials in the process. According to the political systems theory, public policies result from the response of political systems to demands originating from their environment. As asserted by Sump (2011), a political system is inclusive of the interrelated and identifiable activities and institutions from the authoritative value allocations in the society. Basically, the development of the Oil Pollution Act of 1990 was in response to the inability of the Coast Guard of the United States to effectively respond to the Exxon Valdez incident. Notably, the inefficiency of the response system surrounded the funding of the Coast Guard to execute its roles. A close observation of the policy reveals that it has ambiguous language concerning the calculation of costs into the limit on the liability of responsible parties. Ideally, according to the OPA 90, a responsible party could be subjected to a limit on liability in the existence of specific conditions. In the event of the responsible party being subjected to a limit on liability, this is done on grounds of the features of its vessel. One of the alternatives to the OPA 90 could entail the increase of emergency funding. Essentially, the Deepwater Horizon incident exhausted the funds available for emergency response through the OSLTF (Kiern, 2011). This incident led to an immediate response by the President and Congress to increase the emergency funding kit for OSLTF. Subsequently, the Senate used a voice vote to pass the measure and presented it to the house of approvals where it met a 410-0 approval (Kiern, 2011). The OPA amendment, aiming at the permission of additional emergency enhancements to the Coast Guard, alongside other federal agencies up to a limit of $100 million per advance would substantially increase the funding of the OSLFT (Davis, 2012). Apart from the Deepwater Horizon accident, considering that Congress is notified of the advancement amount and necessitating circumstances, the possibility of other accidents necessitated several other alternatives for the OPA 90 (Kiern, 2011). The release of more emergency funds, due to the reaffirmation of OPA’s limit concerning the number of funds available for a specific event of $1 billion and $500 million to counter natural damage would be a primary consequence of this alternative. The other alternative to the OPA 90 entails the removal of limits on liability caps. Initially, the OPA 90 set limits concerning the amounts subjected to responsible parties in the event of major oil spills. The legislation seems unfavorable considering the responsibility of third parties. The proposal to remove the amounts subjected to responsible parties in the events of major oil spills was initiated by President and the Congress in 2010 with the target of offshore facility operators. In the absence of alternatives, the OPA 90 would have such implications as misunderstandings on the limit on liability regarding responsible parties, removal and clean-up costs, and maritime agreements between nations. Besides amendments and alternative policies, there can be other means of transporting crude oil to avoid potential oil spills. Notably, the Alaskan trade is characteristic of sufficient tankers capable of meeting projected demand for a couple of years. In the occasion that the Alaskan North Slope production experiences a further decline, in the absence of new products, the globe would no longer need new tankers-at least for a decade (Kiern, 2011). An immense deal of complexity surrounds the demand and supply of the coastal products trade which are seemingly becoming less attractive.

Recommendations 

After a thorough study of the Oil Pollution Act, it is highly recommended that there ought to be a careful examination of all policy issues related to crude oil transportation. The past decades have seen several oil transportation accidents which have resulted to the spill of millions of tons of oil gallons into maritime waters. Evaluations of the various accidents have revealed great inefficiencies among response operations and liable facilities. The response operations have failed to address the damages and costs associated with these accidents within the recommended time span. On the other side, the responsible bodies have not been able to compensate the affected parties in the appropriate manner. This tends draws substantial illustration from the Exxon Valdez spill after which the United States Coast Guard could not respond to the accident as per the expectations of international maritime safety standards. Consequently, the US Congress went ahead to propose several bills which later led to the introduction of the Oil Pollution Act of 1990.

References

Busenberg, G. J. (2013). Oil and Wilderness in Alaska: Natural Resources, Environmental Protection, and National Policy Dynamics . Washington, DC: Georgetown University Press.

Davis, A. (2012). Pure Economic Loss Claims Under the Oil Pollution Act: Combining Policy and Congressional Intent. Columbia Journal of Law and Social Problems , 45(1), 1-42.

Gibbs, D. (2015). Crude Oil Properties and the Hazards of Transport: Background, Data and Literature Summary. New York: Nova Science Publishers, Inc.

Kiern, L. (2011). Liability, Compensation, and Financial Responsibility Under the Oil Pollution Act of 1990: A Review of the Second Decade. Tulane maritime law journal , 36(1), 3-64.

National Research Council, (. (U.S.), & National Academy of, E. (2013). Best Available and Safest Technologies for Offshore Oil and Gas Operations: Options for Implementation . Washington, D.C.: National Academies Press.

Sump, D. (2011). The Oil Pollution Act of 1990: A Glance in the Rearview Mirror. TULANE LAW REVIEW, 85(1), 1101-1119.

Wood, B. (2009). The oil pollution act of 1990: improper expenses to include in reaching the limit on liability. Appalachian Journal of Law , 8(1), 179-200.