Compass: Oil spill trust fund needs more money and focus on prevention

By RICK STEINERApril 25, 2013 

A universal truth in all major oil spills is that once the oil is spilled, the damage is done. Spill response and restoration are largely ineffective. 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 spill are well documented, and will likely persist for decades.

Despite billions of dollars spent on these two response efforts, both failed to prevent severe, long-term impacts. 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 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 (OSLTF), which collects 8 cents per barrel on oil nationwide, is authorized to pay for spill prevention measures, but as spending requests must go through a politicized congressional appropriations process, the fund is virtually never used for spill prevention, and almost always is just for after-spill response costs -- a politically easier sell in Congress. Thus, many necessary prevention measures are either left to be paid from government general funds (e.g. we taxpayers), or are left unfunded altogether. This is simply bad economics, and needs to be fixed. It is time that industry begins to pay its spill prevention bill in full.

Last month, the Prince William Sound Regional Citizens' Advisory Council (PWS RCAC) took a big step toward fixing this long-standing problem by adopting a resolution proposing that Congress amend the OSLTF and the Oil Pollution Act of 1990 (OPA 90), in four ways: 1. Increase the oil fee paid into the fund; 2. institute a fee on cargo ships; 3. make the fund easily accessible for spill prevention measures nationwide, and 4. increase the financial liability limits for spills.

If Congress passes legislation based on the RCAC proposal, 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 could 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 RCACs, 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 paying for necessary spill prevention measures.

And while there is presently $2.7 billion in the fund, if the RCAC proposal is adopted and the fund begins paying for spill prevention measures nationwide, it will be quickly depleted. Thus, it will be necessary to increase the revenue into the fund as proposed by the RCAC resolution. As well, the spill tax should be imposed on all tar sands oil and shale oil, which are now exempt from paying anything into the fund.

These enhancements would more than double income into the fund from the current $500 million a year to more than $1 billion a year, and this additional funding would help offset current government spill prevention budgets. This would transfer the current costs of spill risk reduction from government 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 sublime win-win.

The RCAC resolution also proposes that the current spill liability limits be significantly increased, as they currently don't spur responsible corporate behavior.

If Congress adopts the RCAC proposal, then we won't have to just sit around waiting to mount an ineffective, multibillion-dollar 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 in Alaska from 1980 to 2010, and is now an environmental consultant with Oasis Earth, based in Anchorage.

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