RULES WOULD LIMIT POLLUTERS' LIABILITY

By NATALIE PHILLIPS
Daily News reporter

ANCHORAGE- If the Exxon Valdez oil tanker ran aground in Prince William Sound under new proposed federal regulations, there wouldn't be a $1 billion settlement. Instead, a formula would be used to calculate the damage, and the final figure would be something like $150 million to $250 million, according to state officials.

''It is still a lot of money, but it doesn't take into account the losses of public resources that can't be fixed,'' said Ernie Piper, damage assessment and restoration program manager for the state Department of Environmental Conservation.

Basically, the new regulations, written by the National Oceanic and Atmospheric Administration, would allow the government to collect money for resources that are damaged and can be fixed. For example, if a wetland area is damaged and it can be repaired or a new one constructed nearby, the polluter would have to pay for that. But because there is no way to replace killer whales, there would be no charge.

The new regulations are also written in a way that the polluter might end up helping determine what damage was done and what measures should be taken to restore the damage.

''They (NOAA officials) really totally rewrote the book here, and they came back with whole new regulations,'' said Craig Tillery, an assistant state attorney general. ''And there is such a short public comment period. It is a little bit unfair to the public.''

The oil industry also has reservations about the proposed regulations, but for different reasons.

''Their stated focus on restoration is a welcome improvement,'' said Phil Cooney, a senior attorney with the American Petroleum Institute. ''We think the agency's stated emphasis on restoration rather than the pure extraction of monetary damages is a more appropriate focus, it is the focus the industry has.''

But when ''you read the fine print,'' government officials are left to determine what damage can be fixed and at what price, Cooney said. ''These regulations are very generalized and continue to rely too heavily on (government) discretion to resolve scientific questions.''

Following the 1989 Exxon Valdez oil spill, Congress adopted the 1990 Oil Pollution Act, which requires NOAA to write regulations for assessing damage done to natural resources in the case of an oil spill. In early 1994, NOAA released its first draft of proposed regulations, but the comments the agency received lead lawyers to completely rework the proposed regulations. The latest version of the regulations was released in August. Public comment was accepted by NOAA through Oct. 2.

The public comment period was short because the Natural Resources Defense Council sued the federal government for dragging its feet in issuing the new regulations. In an out-of-court agreement, the government agreed to have regulations adopted by the end of the year.

The public comments will be taken into consideration when the final regulations are written and published by Dec. 31, according to Linda Burlington, who is working on the NOAA project.

During the short public comment period, NOAA received 61 comments, including a 100-page letter from the API. The state of Alaska wrote an eight-page letter that said if the regulations were in effect during the 1989 Exxon Valdez oil spill, the state and federal governments and Exxon would most likely ''still be enmeshed in the cumbersome process spelled out in the regulations, instead of accomplishing the restoration.''

And a handful of citizens who serve as a watchdog of the Exxon Valdez Oil Spill Trustee Council, which oversees the spending of the $1 billion settlement, wrote a letter saying they found ''significant problems'' with the proposed regulations.

Specifically, the members of the citizen group that oppose the new regulations pointed out that the law requires a restoration plan to be written immediately following an incident.

''The rule assumes that the restoration effort can quickly be put together as a series of well-defined projects,'' wrote Vern McCorkle, chairman of the Trustee Council public advisory group. ''In our experience, future years' restoration needs are dependent on previous years' results. Thus, requiring a detailed, project-based restoration plan to forecast all required restoration projects is not realistic.''

Clearly, proponents and opponents of the proposed regulations read them differently. API contends that the regulations are written to address only actual damages and that they don't limit the state and federal government from filing criminal and civil lawsuits to collect other types of damages, including the loss of ''passive uses'' such as sea kayaking.

''That is fine to say that now, but I can guarantee you that there will be a battery of lawyers saying (these regulations) were your exclusive remedy,'' Tillery said.

A senior attorney with the NRDC, Sarah Chasis, said, ''Our concern is the public is loosing out and the polluter is winning . . . The shift seems to be favoring the polluter over the public and that is very troubling.''

In 1991, the state and federal governments settled criminal and civil legal actions against Exxon in an out-of-court agreement worth $1 billion. The company still faced lawsuits from commercial fishermen and other users of the Sound, and a jury last year ordered Exxon to pay them $5.3 billion in damages.

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