Citizens’ council calls for increased oil spill funding

Guest Opinion


Rick Steiner
Rick Steiner

A universal truth in all major oil spills is that once the oil is spilled, the damage is done. In Alaska, damage from the 1989 Exxon Valdez persists today, 24 years later. In the Gulf of Mexico, serious impacts from the 2010 Deepwater Horizon blowout are well documented, and will almost certainly persist for decades as well. Despite the billions of dollars spent on these two response efforts, both failed to prevent severe, long-term impacts.

It is important to admit that spill response and restoration are largely ineffective, so we need to do everything possible to prevent spills from ships, pipelines, and drilling.

But although we know exactly how to better reduce spill risks, we are continually told that there is not enough money available to do so, particularly with current federal budget problems. The federal government’s Oil Spill Liability Trust Fund, which collects 8 cents per barrel on oil nationwide, is authorized to pay for spill prevention measures, but such requests must first go through a politicized congressional appropriations process. Because of this, the fund is virtually never used for spill prevention, and almost always just for after-spill response costs – a politically easier lift in Congress. Thus, many necessary prevention measures are either left to be paid from government general funds (e.g. us taxpayers), or are left unfunded altogether. Clearly, this is bad economics, and needs to be fixed. It is high time that industry begins to pay its spill prevention bill in full.

Last month, the Prince William Sound Regional Citizens’ Advisory Council took a big step toward fixing this long-standing problem, by unanimously adopting a resolution proposing to amend the fund and the Oil Pollution Act of 1990, in four ways:

  1. Increase the oil fee paid into the fund;
  2. Institute a spill fee on cargo ships, which are covered by the fund but do not currently pay into it;
  3. Make the fund easily accessible for spill prevention measures nationwide;
  4. Increase the Act’s financial liability limits for spills.

If the U.S. Congress passes legislation based on the council’s resolution, it would constitute the most significant increase in oil spill prevention and response preparedness funding in U.S. history, while actually reducing government costs.

The expanded fund would support additional safety measures in Prince William Sound, Cook Inlet, the Aleutians, the Arctic, and all the nation’s waterways. It could pay for such safety measures as risk assessments, vessel traffic systems, continuous ship tracking, routing agreements, rescue tugs, escort tugs, weather buoys, enhanced ship inspection, aids-to-navigation, enhanced oversight of offshore drilling facilities and pipelines, additional citizens’ councils, expanded response capabilities, and so on.

To do such, the fund needs to become easily accessible by the Coast Guard and other federal agencies, coastal states (including Alaska), and local governments without having to go through the congressional appropriations process. The Coast Guard needs discretionary authority to put the fund to work implementing necessary spill prevention measures.
And while there is presently about $2.7 billion in the fund, if the council’s proposal is adopted and the fund becomes available for enhanced spill prevention measures nationwide, it would be depleted fairly quickly. Thus, it will be necessary to increase the revenue into the fund. On specifics, I would suggest the following:

  1. Increasing the current oil fee from 8 cents per barrel to say 20 cents per barrel (only 0.2% of current oil price, or less than one cent per gallon of gasoline)
  2. Instituting a fee on cargo ships, say 10 cents per ton of cargo shipped through U.S. ports.
  3. Tar sands oil and shale oil projects, which are now exempt from the fee, need to begin paying into the fund.

These three enhancements would more than double income into the fund from the current $500 million per year to over $1 billion per year, and again, at no cost to the federal budget. In fact, this additional industry funding would help offset and replace current government spill prevention budgets. This would transfer the current costs of spill risk reduction from government and the taxpayers, directly to the industry posing the risk, something that should resonate with both sides of the political aisle. Reducing the risk of spills while reducing government costs – a win-win.

The council’s resolution also proposes that the current Act’s financial liability limits be significantly increased, as they do not currently provide sufficient incentive for responsible corporate behavior. Many suggest that spill liability limits be eliminated altogether.

Through this resolution, the council is again providing exemplary leadership in securing the safety of the seas and coasts of Alaska, and the rest of the nation. If Congress and the administration adopt the proposal, then we won’t have to just sit around waiting to mount a multi-billion dollar, ineffective response to the next Exxon Valdez or Deepwater Horizon – we may just be able to prevent such costly disasters in the first place.

  • Rick Steiner was a marine conservation professor from 1980-2010, and is now an environmental consultant with Oasis Earth, based in Anchorage.
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