HARD AGROUND - Wreck of the Exxon Valdez - March 24, 1989

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OIL SPILL BILL WINS APPROVAL
HOUSE SENATE PANEL REACHES COMPROMISE

By DAVID WHITNEY
Daily News reporter

Anchorage Daily News
Date: 07/27/90
Day: Friday
Edition: Final
Section: Nation
Page: A1

WASHINGTON- Sixteen months after the Exxon Valdez ran aground in Alaska and caused the worst oil spill in U.S. history, a House Senate conference committee approved compromise legislation Thursday intended to minimize the chance of such a disaster occurring again.

The measure is expected to be approved by both chambers next week and sent to the White House for President Bush's signature.

The compromise bill requires alcohol and drug testing of tanker crews, orders tankers to be replaced by vessels with double hulls and establishes Coast Guard units to be stationed around the country and equipped to respond quickly when spills occur.

It also creates a $1 billion national fund to pay for cleaning up future spills and compensating those who have lost money because of spilled oil. That fund will be financed by a 5 cent a barrel tax on oil, meaning that the price of gasoline is certain to increase as a result.

The fund would not be utilized if a tanker owner were determined to be "grossly negligent" in causing a spill. And even if it weren't negligent, its costs for polluting beaches would increase substantially.

In cases of major oil spills, the president would have to take direct federal control of cleanup operations instead of leaving it to the polluter, as occurred in the Exxon Valdez case.

"The driving force behind this legislation is the Exxon Valdez," said Sen. John Kerry, DMass.

The legislation was praised by Alaska Gov. Steve Cowper.

"With this bill, Congress is on the eve of charting a new course of environmental protection for the country," Cowper said in a statement. "This is especially good news for Alaskans who sacrificed enormously to make it a reality."

Rep. George Miller, a California Democrat who helped forge the final bill, called the measure the "opening salvo of an environmental decade."

But the legislation is a mixed bag for states.

It preserves their right to enact and enforce tougher liability standards Alaska, Washington and California, among others, hold spillers fully liable for spills but weakens their authority to enforce beach cleanups.

Under the legislation, the Coast Guard would determine, in consultation with state government, the question of "how clean is clean." A state could pay to enforce a higher standard than approved by the Coast Guard, but it would have to sue the spiller to recover its costs.

There is another problem with the bill. The kind of money needed to fight a major oil spill may not be available when it is needed most.

The legislation authorizes immediate payments out of the $1 billion fund up to $50 million. Amounts more than that would require congressional approval.

When a major spill occurs, forcing Congress to appropriate more cleanup money poses little problem if Congress is in session. But Congress typically doesn't meet in November, December and most of January. A major spill during those months could crimp cleanup operations.

That complaint was raised Thursday by Alaska Sen. Ted Stevens and Rep. Don Young, who pointed out that the Exxon Valdez spill was costing the company up to $15 million a day.

Young said that if a major spill caused by a fly by night tanker occurred in December when Congress was not in session, the $50 million ceiling could be reached within a week.

"We're going to have a tax on oil, and we're still not going to have the money available," he warned.

"This $50 million limitation will lead to real hardship in areas suffering disasters of this kind," Stevens said, referring to the Exxon Valdez spill.

Despite these problems, the final legislation was widely viewed as a vast improvement over current oil spill laws.

"We are happy that Congress has finally agreed to legislation that will help protect our precious coastlines and inland waterways from devastation caused by oil spills," said Michael Fischer, executive director of the Sierra Club.

"Passing this bill is a good first step in making sure polluters pay for the damage they cause," he said in a prepared statement.

Under the legislation, the fixed liability of a tanker owner is raised from $150 per gross ton of tanker weight to $1,200. That means that for a tanker the size of the Exxon Valdez, the liability of the Exxon Corp. would increase from about $14 million to $115 million.

But Exxon has acknowledged full responsibility for the Alaska spill and has already paid out more than $2 billion.

A spokesman for Arco Marine Inc., the shipping arm of the Atlantic Richfield Co., said the company generally approves of the bill.

"From the standpoint of the double hull issue, we think it's reasonable for us. We can deal with it," said Ed Robinson, Arco Marine vice president of operations in Long Beach, Calif. "But we still believe more technical data is needed to find a better solution than just double hulls."

Robinson said other provisions of the huge bill shorter hours for tanker crews, the greater liability for tanker owners the company can also deal with.

"We're a large corporation," he said. "But it may pose a problem for the smaller operators."

For Alaska, the bill contains several measures of comfort and solace.

It authorizes a spill research center in Cordova, which will cost up to $23 million over the next decade, and establishes citizen advisory councils to oversee oil operations in the state. It also will pay for increased Coast Guard radar coverage of Prince William Sound and place a navigation light on Bligh Reef, where the Exxon Valdez ran aground March 24, 1989, and spilled nearly 11 million gallons of North Slope crude oil.

As an additional symbolic measure, the legislation prohibits the Exxon Valdez tanker from returning to Alaska waters. That rebuilt tanker, renamed the Exxon Mediterranean, has been reassigned to the Middle East.

The legislation also orders a two year audit of the transAlaska pipeline, at a cost of up to $10 million, to find out whether it is capable of sustained use.

The pipeline now carries about 25 percent of the country's domestic oil production.

The legislation also dissolves the existing Alaska pipeline liability fund after all claims against it have been paid. Claims from three spills of pipeline oil, including the Exxon Valdez, the 1987 Glacier Bay tanker accident in Cook Inlet and the Huntington Beach, Calif., spill this year, are still outstanding.

There is a limit of $100 million each on such claims. The fund now contains about $265 million.

After those claims are settled, any remaining money would be returned to the pipeline's oil company owners in the form of credits against future contributions to the national liability fund.

Alaska, which owns a share of the oil carried by the pipeline, would be first in line for a rebate of up to $12.5 million of any surpluses.

Daily News reporter Larry Campbell contributed to this story.


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