State of Alaska’s oil spill prevention and response funding unsustainable

Council voices support for full funding

Photo of Representatives from the Alaska Department of Environmental Conservation and SERVS observing an oil spill exercise in Prince William Sound.
Representatives from the Alaska Department of Environmental Conservation and SERVS observe an oil spill exercise in Prince William Sound.

The State of Alaska’s Oil and Hazardous Substances Release Prevention and Response Fund is in trouble. Funding for the prevention of spills is projected to be in a deficit by 2025.

Reduced pipeline flow contributes to shortfall

The amount of money going into the accounts ebbs and flows according to how many barrels flow through the pipeline. The amount of oil, which peaked in 1988 at 2.1 million barrels a day, has slowed considerably over the years and is now averaging just over 500,000 barrels a day. The revenues from the .95 cent surcharge on refined fuels were also originally overestimated. These factors, combined with lack of adjustment for inflation, have all resulted in the shortfall.

Response account used for contaminations other than oil and gas

Compounding the revenue problems, money from the response account has recently been used for sites that have been contaminated with per- and poly-fluoroalkyl substances, or PFAS, which is a group of potentially toxic human-made chemicals. It is possible that more funds from this account will be targeted for PFAS testing and remediation in future years. As a result, the fund balance is shrinking and Alaska’s ability to respond adequately to a major oil spill may be at risk.

Currently, crude and refined oil industries are the only contributors to the fund, even though the response account is used for other hazardous substances, such as the previously mentioned PFAS, acid, drilling mud, antifreeze and for remediation of junkyards containing a multitude of hazardous substances.

Effects of reduced funds

The director of the Alaska Department of Environmental Conservation’s Division of Spill Prevention and Response, Denise Koch, spoke with the Council during a recent meeting, voicing concerns about how this shortage could affect the State. She reported that her department is under pressure to reduce its budget, with seven positions eliminated for the upcoming fiscal year. Without an increase in revenue they may lose additional positions in future years.

Council supports stable and adequate funding

During a meeting in January, the Council reaffirmed its position on the 470 Fund, and passed a motion supporting:

  • Revenue adjustments that include an increase in the .95 cent surcharge on refined fuel products.
  • Inflation-proofing the fund.
  • Broadening the tax base to collect revenue from non-oil industries that are served by the fund but do not currently contribute it.

Delays due to coronavirus

There was significant support for making the funding sustainable in both the Senate and House but the legislature recessed early due to coronavirus concerns and did not address the issue. The Council hopes to see a revenue adjustment during either a special session or next year.

How does this spill prevention and response fund work? Where does the money come from?

Commonly referred to as the “470 Fund” after the bill that created the law in 1986, it was meant to ensure adequate funds are on hand for immediate response to major spills, as well as for maintaining an effective prevention program. Designed to be self-sustaining, this fund pays for the State’s efforts to prevent spills of oil and other hazardous substances and the State’s ability to be prepared and respond quickly to spills when they happen.

To accomplish this, a 5-cents-per-barrel tax is paid to the State by the producers of the crude oil that flows through the Trans Alaska Pipeline System. The 470 fund is separated into two accounts: Four of the five cents go into an account for spill prevention, and one cent goes into an account to support response. Additionally, a .95 cent surcharge on refined fuel products is collected for spill prevention. Both accounts collect settlement penalties and interest earnings. Those who spill substances are also required to reimburse the State for those costs.

Alaska’s oil spill laws and regulations opened for public review

Collage of four images showing Exxon Valdez oil from 1989, tangled oil spill boom from 1989, and a protesting fishing vessel, along with a 2019 photo of lingering oil in Prince William Sound.
This photo collage shows three scenes from the Exxon Valdez oil spill and one of Exxon Valdez oil in Prince William Sound in 2019.

The Alaska Department of Environmental Conservation recently began a process to review and potentially change oil spill laws and regulations in Alaska. The department’s first step, a public scoping, opened on October 15, 2019.

The department is currently asking for input from stakeholders, the public, and industry on areas where Alaska’s oil discharge prevention and response contingency plan laws and regulations could be streamlined. In the department’s official announcement for this review process, Commissioner Jason Brune stated that “I’ve heard from many Alaskans that contingency plans are unnecessarily burdensome while lacking corresponding environmental benefits. To achieve Governor Dunleavy’s goal of being open for business, today we are beginning a fully transparent scoping process seeking the public’s input.”

The department is taking comments on all of its regulations on oil discharge prevention and contingency plans. In addition, the department is accepting comments on Alaska’s laws on oil and hazardous substance pollution control. These laws, or statutes, are the foundation of oil spill prevention and response regulations. Regulations can be changed by the agency that oversees them, however state law can only be amended by the legislature. While no specific revisions are being proposed by the department at this time, the Council sees this effort as having the potential to lead to a weakening of oil spill prevention and response requirements put in place after the Exxon Valdez oil spill.

Once the current public scoping is complete, the department plans to review the submitted comments and then propose specific revisions to the regulations. If changes are proposed, the department will provide an opportunity for public review and comment. Public comment periods on specific changes are required to be open for a minimum of 30 days.

The specific sections under review are:

The original deadline of January 15 has been extended. Written comments must be submitted to ADEC no later than 11:59 p.m. on March 16, 2020.

The Council encourages the public to comment in support of strong regulations that protect our communities, environment, cultures, economies, and human health from oil pollution.


The Exxon Valdez oil spill taught many lessons about oil spill prevention and preparedness, such as ensuring responders are better trained ahead of time to use cleanup equipment. The strong rules that resulted from that spill mean better preparedness today.

Why Alaska has such strong rules

Strong statutes and regulations are one of the main reasons why Prince William Sound has not had a major oil spill since the Exxon Valdez disaster. The world-class oil spill
prevention and response system for the Valdez Marine Terminal and associated tankers is a direct result of post-Exxon Valdez spill laws and regulations, which were designed to protect Alaskans and our environment, as well as commercial and sport fishing, aquaculture, recreation, tourism, subsistence, and cultural interests.

These laws and regulations help prevent oil spills and ensure that there are enough trained responders and equipment in place should prevention measures fail.

Read more: The history of Alaska’s world-renowned oil spill preparedness and response system

Council applauds decision to keep public engagement tool for spill response in Alaska

Recent council concerns about a proposed change to Alaska’s spill response plan have been alleviated for now. However, the council is following a new proposal that also has the potential to affect stakeholder input.

In a letter to the council on September 1, the Alaska Department of Environmental Conservation, or ADEC, announced that its proposal to change the Regional Stakeholder Committee had been withdrawn. The Regional Stakeholder Committee is a vital tool for public involvement during oil spills, and has been effective for communication during spill drills and exercises in Prince William Sound for over a decade.

Early in 2016, the Alaska Regional Response Team, or ARRT, a group made up of 15 different federal and state agencies that share responsibilities for managing oil and chemical spill responses in Alaska, proposed changes that could have reduced the council’s, and the public’s, access to important information about a spill. The change would also have reduced citizens’ input to spill response leaders.

Involving citizens was recognized by Congress and Alaskans as an important aspect in oil-spill laws and regulations that were overhauled after the Exxon spill.

During the public comment period that followed, the council and several local communities and organizations supported keeping the committee as it was, rather than splitting stakeholders into two groups. One of the new groups, which would have included the council, would have received far less information and access to decision-makers than the other.

ADEC stated that the workgroup that put the proposal forward met on August 31, at which time a determination was made to withdraw the proposal.

Read moreCouncil applauds decision to keep public engagement tool for spill response in Alaska

New plan for using dispersants in Alaska is in effect

The Alaska Regional Response Team, or ARRT, established a new plan earlier this year for how oil spill dispersants, an alternative oil spill response option, would be used during an oil spill. The ARRT is a group of federal and state agencies that share responsibilities for managing oil and chemical spill responses in Alaska.

Mechanical response, such as booms and skimmers that actually remove oil from the water, is the priority response option by state and federal law.

The new plan was effective January 27, 2016, although parts of the plan will not go into effect until 2018.

Details of new plan

The new plan describes two different processes for dispersant use. Dispersants will be “preauthorized” in certain areas, and all other areas are “undesignated.”

A new “preauthorization area” will go into effect in 2018. This area extends from 24 nautical miles offshore out to 200 nautical miles offshore (approximately 27.6 to 230 miles), south of Alaska’s mainland through the Aleutian chain. The ARRT’s rationale is that preauthorizing, or deciding before an oil spill occurs where chemical dispersants are allowed, could speed up response time. In the preauthorized area, dispersants are considered to be approved by government agencies before an oil spill happens. Therefore, the U.S. Coast Guard, as federal on scene coordinator, can decide to apply dispersants to a crude oil spill. Areas farther than 200 nautical miles from shore are international waters, and are not part of this plan.

Read moreNew plan for using dispersants in Alaska is in effect

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