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3 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response Summary of applicable statutes, identifying strengths/weaknesses and noting how and by which agency laws are implemented Contents Executive Summary Introduction Federal Laws, Regulations, and Agency Responsibilities Pre-Spill Oversight and Preparedness Requirements Agency Responsibilities Outer Continental Shelf Lands Act: 43 U.S.C Oil and Gas and Sulphur Operations in the Outer Continental Shelf: 30 CFR Section 250 (BSEE) and 30 CFR Section 550 (BOEM) Geological and Geophysical (G&G) Explorations of the Outer Continental Shelf: 30 CFR Section Outer Continental Shelf Oil and Gas Information Program: 30 CFR Section Oil Spill Financial Responsibility for Offshore Facilities: 30 CFR Section Outer Continental Shelf Lands Act: 43 U.S.C (2002) Spill Oversight, Preparedness, and Requirements Clean Water Act of 1972 (formerly, Water Pollution Control Act): 33 U.S.C. Section 1251 et seq. (2002) Oil Pollution Act of 1990: 33 U.S.C. Section 2701 et seq. (1990) Spill Response Authority Liability, Damages, and Funding Oil-Spill Response Requirements for Facilities Located Seaward of the Coast Line: 30 CFR Section Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA): 42 U.S.C et seq. (1990) The National Oil and Hazardous Substances Pollution Contingency Plan (National Contingency Plan): Section 105, CERCLA (42 U.S.C. 9605); 40 CFR Section Area Contingency Plans U.S. Coast Guard Sectors Jacksonville, St. Petersburg, Miami, Key West, and Mobile: 33 CFR Section Resources and Ecosystems Sustainability, Tourist Opportunities, and Revived Economies of the Gulf Coast States (RESTORE) Act of 2012: 33 U.S.C. 1321, Subsection (t) Congressional Actions: OPA Amendments (proposed and passed) S 3298: Oil Spill Technology and Research Act of Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response i

4 S 1836: Foreign Oil Pollution Act HR 3393: Foreign Oil Spill Liability Act of HR 5499 and S S 214: Big Oil Bailout Prevention Unlimited Liability Act of HR 3619: The Coast Guard Authorization Act Florida Laws, Regulations, and Agency Responsibilities Florida State Laws and Regulations Florida Pollutant Discharge Prevention and Control Act (FPDPCA) Florida Statute , Liability for Damage to Natural Resources, and (e) State Emergency Management Act Public Health Energy Resources Florida Legislative, Executive, and Agency Responsibilities Florida Legislature Office of the Governor Florida Department of Environmental Protection Florida Department of Health Florida Division of Emergency Management Florida Fish and Wildlife Conservation Commission Florida Department of Transportation Florida National Guard Local Government Roles and Responsibilities Florida Analysis of Existing Laws and Regulations Recommendations...38 Appendices...40 Appendix A: The Offshore Energy Exploration & Production Sector Appendix B: Organizational Structure of the National Response System Appendix C: Draft List of Recommendations Regarding the Deepwater Horizon Oil Spill Response in Florida Appendix D: Florida House of Representatives Workgroup 1 Recommendations Appendix E: Acronyms ii Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

5 Executive Summary Following the explosion of the Deepwater Horizon (DWH) offshore drilling rig on April 20, 2010, federal, state, and local governments and the responsible party (RP) faced an unprecedented challenge in the Gulf of Mexico. Never before had a subsea drill unit malfunction of that magnitude occurred in U.S. waters. This incident called on the existing governing frameworks for offshore activities and oil spill and disaster response, both of which cut across every level of governance, from national to local, and involved multiple actors at each of those levels. Section 496 of Chapter of the Laws of Florida created the Commission on Oil Spill Response Coordination. The commission was charged with preparing a final report that identifies potential changes to state and federal laws and regulations, which will improve response capabilities and processes, and protect Florida s people and resources. This report is one of several reports that will help form the basis for the final report. The analysis conducted for this report tries to answer the question of whether existing federal and state laws for oil spill planning and response are adequate to deal with large-scale spills such as the DWH incident. While the general framework of statutes and implementing regulations for oil spill response and cleanup is sound, there are some notable gaps and it is clear that some significant improvements in operating policies and procedures are needed to address these complex issues. As was noted in the National Commission s Report to the President, complex systems almost always fail in complex ways.... If we are to make future deepwater drilling safer and more environmentally responsible, we will need to address all [the] deficiencies together; a piecemeal approach will surely leave us vulnerable to future crises in the communities and natural environments most exposed to offshore energy exploration and production. 1 The analysis and recommendations in this report are framed with this complexity in mind. Future governmental activity could be influenced by several factors, including conditions in the Gulf region, independent inquiries, judicial actions, and the availability of data for further study. As multiple state and federal agencies seek to better our oil spill preparedness and response capabilities, it will be important to understand the current framework for addressing such incidences. 1 National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Report to the President, Deepwater: The Gulf Oil Disaster And The Future Of Offshore Drilling, at viii, x (2011) (quoting NASA, Columbia Accident Investigation Board 6 (2003), available at at Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 1

6 This report recommends considering the following for improved response capabilities in future incidents: Update or amend Area Contingency Plan (ACP) policy guidance to include the use (or restriction) of dispersants, qualifications of response personnel, and when various components of the plan are to be implemented following a spill/release. Amend ACP documents to allow for better identification and prioritization of environmentally sensitive areas/habitats (e.g., maps depicting marsh habitat along interior bays near tidal inlets). Improve participation in ACP development process by state, local (county, city, and town) and the public. Integrate viable scientific knowledge and technology into planning process (e.g., knowledge of currents, tidal variations). 2 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

7 1 Introduction This report provides an overview of federal and state statutes pertaining to offshore oil exploration and spills, identifies the strengths and weaknesses of those laws and regulations, and offers recommendations for government action related to oil spill response and preparedness. The current oil spill governance structure is complex and takes place at the intersection of two legal regimes: one addressing offshore activities and the other addressing oil spills and related disasters. In the aftermath of the DWH incident, numerous petitions for reform and reorganization of oil spill-related regulatory structures surfaced. However, the strengths of the current regulatory framework for oil spills are easily overlooked in the face of a major, highprofile, and contentious oil spill. Today s oil spill liability structure successfully places the cost of preparing for and responding to oil spills on the parties most able to bear that cost the transporters and the oil industry. Additionally, it addresses the full range of damages that result from oil spills and sets out protocols and funds to assess and recover such damages. Recent events have demonstrated to the regulatory community that while the scheme is workable and even ingenious, it requires revisions to keep pace with modern technology and oil sector advancements. The specific challenges explored in this document include scientific and legal uncertainty, simultaneous overlap and fragmentation, and the difficulties of balancing efficiency and inclusion. This report provides information that will be useful in any potential reassessment of current regulations and development of recommendations for improved oil spill planning and response. 2 Federal Laws, Regulations, and Agency Responsibilities The governing framework for oil spills in the United States consists of a combination of federal, state, and international authorities. 2 The largest and most prominent federal statute related to oil spills is the Oil Pollution Act of 1990 (hereinafter OPA), which, in addition to other advancements, expanded and clarified the authority of the federal government, created new oil spill prevention and preparedness requirements, and solidified the role and obligations of responsible parties. The primary federal law governing oil development and operations in waters within federal jurisdiction is the Outer Continental Shelf Lands Act, implemented by the Secretary of the Interior. Shown in Figure 1 below are the Territorial Sea (straight bright line), Contiguous Zone (dashed bright line), and the Exclusive Economic Zone (bright thick line) delineations in the 2 J.L. Ramseur, Oil Spills in U.S. Coastal Waters: Background and Governance (Washington, DC: Congressional Research Service, 2012). Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 3

8 Gulf of Mexico. As discussed later in this document, pipeline and vessel statutes cover oil spill preparedness and response guidelines for entities that transport oil within U.S. waters. Figure 1. Federal & State Maritime Boundaries ArcGIS, U.S. Maritime Limits and Boundaries, available at: The U.S. exclusive economic zone (EEZ) extends 200 nautical miles 3 offshore, encompassing diverse ecosystems and vast natural resources, such as fisheries and energy and other mineral resources. The U.S. EEZ is the largest in the world, spanning over 13,000 miles of coastline and containing 3.4 million square nautical miles of ocean larger than the combined land area of all 50 states. 4 DWH was in the Macondo Prospect (Mississippi Canyon Block 252, abbreviated MC252), an oil and gas prospect in the United States Exclusive Economic Zone of the Gulf of Mexico. Agency responsibilities can be grouped into (1) oil spill prevention and preparedness and (2) oil spill response and cleanup. The Bureau of Safety and Environmental Enforcement (BSEE) oversees all field operations including permitting and research, inspections, offshore regulatory programs, oil spill response, and newly formed training and environmental compliance 3 One nautical mile is equal to 1.3 statute miles. 4 NOAA, The United States is an Ocean Nation, Available at: 4 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

9 functions. 5 The Bureau of Ocean Energy Management (BOEM) is responsible for overseeing the leasing of offshore resources, plan administration, environmental studies, National Environmental Policy Act (NEPA) analysis, resource evaluation, economic analysis, and the Renewable Energy Program. For maritime oil spills, the U.S. Coast Guard (USCG) is designated as the agency responsible for directing and overseeing cleanup activities. 6 The aforementioned laws, regulations, and agency responsibilities are explained in greater detail in the sections that follow. 2.1 Pre-Spill Oversight and Preparedness Requirements Appendix A provides a brief overview of the offshore energy extraction and production sector to frame the following discussion related to governance structures of the oil and gas exploration and production industry. Statutes regulating oversight and preparedness for oil spills are primarily enforced by the Department of the Interior. This section identifies the legal authorities granted to federal agencies to enforce regulations aimed at preparing the oil extraction industry for leaks, spills, and other incidents that might harm the natural resources of the U.S. coastline and particularly inland waterways Agency Responsibilities Prior to the DWH oil spill, the Minerals Management Service (MMS) regulated most oil exploration activities in federal waters. Public attention and scrutiny during and following the MC252 7 well failure and subsequent DWH incident revealed various internal conflicts of interest and corruption within MMS. The report of the National Commission on the BP DWH Oil Spill and Offshore Drilling best depicts the internal problems at MMS, observing that (p)erhaps because of the cumulative lack of adequate resources, absence of a sustained agency mission, or sheer erosion of professional culture within some offices, MMS came progressively to suffer from serious deficiencies of organization and management. 8 At the time, the reorganization of MMS was the latest in a series of agency reform actions the Secretary of the Interior Ken Salazar had taken since January The process occurred in three phases, beginning in June 2010, while the MC252 well remained uncapped and was still discharging oil into the Gulf of Mexico, Secretary Salazar replaced MMS with a transitional 5 Department of the Interior, Fact Sheet: the BSEE and BOEM Separation An Independent Safety, Enforcement, and Oversight Mission (January 19, 2010). Available at: BSEE-BOEM-separation-2.pdf. 6 The United States Environmental Protection Agency (EPA) oversees all oil spill that occur inland. 7 The Macondo Prospect (Mississippi Canyon Block 252, abbreviated MC252) is an oil and gas prospect in the United States Exclusive Economic Zone of the Gulf of Mexico, off the coast of Louisiana and was the sight of the Deepwater Horizon fire and explosion. 8 National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling,.Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling (2011). Page 78. Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 5

10 agency, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). The second phase of the reorganization in October 2012 involved the transfer of the Office of Natural Resources Revenue to the Policy, Management, and Budget Assistant Secretary. October 1, 2011, the third phase of reorganization occurred when BOEMRE was divided into two separate agencies BOEM and BSEE. Figure 2 displays the post-dwh structure of the federal agencies overseeing oil extraction and spill preparedness in federal waters. Secretary of the Interior Assistant Secretary for Land and Minerals Management Office of Policy, Management and Budget Bureau of Ocean Energy Management (BOEM) Bureau of Safety and Environmental Enforcement (BSEE) Office of Natural Resources Revenue Figure 2. Restructured Department of the Interior BOEM is now responsible for managing the development of the nation s offshore resources in an environmentally and economically responsible way. 9 The agency s primary functions are leasing of marine oil resources, plan administration, environmental studies, National Environmental Policy Act (NEPA) analysis, resource evaluation, economic analysis, and the Renewable Energy Program. BSEE now enforces safety and environmental regulations. Its functions include all field operations, including permitting and research, inspections, offshore regulatory programs, oil spill response, and newly formed training and environmental compliance functions. 10 The separation of BOEMRE into separate agencies successfully isolated the resource development and energy management functions from the safety and enforcement functions. The Office of Natural Resources Revenue now manages the revenue collection function within a separate Department of the Interior (DOI) office. This move attempts to eliminate the conflict of interest issues that previously existed within MMS. 9 Department of the Interior, Fact Sheet: the BSEE and BOEM Separation An Independent Safety, Enforcement, and Oversight Mission (January 19, 2010). Available at: BSEE-BOEM-separation-2.pdf. 10 Ibid. 6 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

11 2.1.2 Outer Continental Shelf Lands Act: 43 U.S.C The Outer Continental Shelf Lands Act (OCSLA) authorizes the Secretary of the Interior to issue, on a competitive basis, leases for oil and gas in submerged lands of the outer Continental Shelf (OCS, see Figure 1 in Section 3). The act authorizes the Secretary to grant rights-of-way, rightsof-use, and easements through the submerged lands of the OCS. 11 Since its original enactment in 1953, the OCSLA has been amended several times, most recently as a result of the Energy Policy Act of These amendments have included the establishment of an oil spill liability fund and the distribution of a portion of the receipts from the leasing of mineral resources of the OCS to coastal states Oil and Gas and Sulphur Operations in the Outer Continental Shelf: 30 CFR Section 250 (BSEE) and 30 CFR Section 550 (BOEM) The Oil and Gas and Sulphur Operations in the Outer Continental Shelf rule (30 CFR Section 250) was initially published by BOEMRE on October 14, 2010, following the division of BOEMRE into BOEM and BSEE, its responsibilities were split between BOEM and BSEE. The Secretary of the Interior announced a ruling codified under Title 30 of the code of Federal Regulations (CFR) stating that Chapter II-Minerals Revenue Management, Subchapter B-Offshore, and Subchapter C-Appeals would be implemented by BSEE and Chapter V would be implemented by BOEM. Subpart C Pollution Prevention and Control, was divided between BSEE and BOEM, with pollution prevention during operations and inspection of facilities housed under BSEE and air quality concerns housed under BOEM. Part 250 established the requirements for offshore oil, natural gas, and sulphur operations. These operations include activities after a lease is established and most will stay under BSEE. Some sections, such as the approval of subsurface gas storage, granting right-of-use and easements, and lease cancelations were set under BOEM. 30 CFR Section 550 contains the regulations of the BOEM Offshore program that govern oil, gas, and sulphur exploration, development, and production operations on the OCS. When an entity conducts operations on the OCS, they must submit requests, applications, and notices, or provide supplemental information for BOEM approval. All financial responsibility functions were moved under the authority of BOE, under its mission to manage the development of offshore resources in an economically responsible way. BOEM was also given the authority in Chapter V for lease sales, bidding systems, the regulatory oversight of incentive-based royalty relief, and establishing royalty relief thresholds U.S.C BOEM, OCSLA History. Available at: Shelf/Lands-Act-History/OCSLA-HIstory.aspx. 13 All information from: Department of the Interior, 30 CFR Chapter II, Reorganization of Title 30: Bureaus of Safety and Environmental Enforcement and Ocean Energy Management. Docket ID: BOEM Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 7

12 2.1.4 Geological and Geophysical (G&G) Explorations of the Outer Continental Shelf: 30 CFR Section 251 The Geological and Geophysical (G&G) Explorations of the Outer Continental Shelf (30 CFR Section 251) regulation pertains to changes to the proprietary term of certain geophysical information previously under the purview of MMS (now BOEM and BSEE). According to the Federal Register, MMS proposed to extend the proprietary term of geophysical information that a permittee reprocessed 20 or more years after MMS issued the relevant permit under which the originating data were collected. This rule proposed to give up to five years of additional protection to reprocessed vintage geophysical information that MMS retains and, without an extension, is subject to release by MMS 25 years after issuing the permit. The extension provides incentives to permittees and third parties to reprocess, market, or in other ways use geophysical information that might not otherwise be reprocessed without the term extension. 14 These duties are now shared by BSEE and BOEM. 15 Section of this regulation ( Test drilling activities under a permit ) requires each actor to complete a drilling plan and submit it to BOEM. The drilling plan must include the proposed type, sequence, and timetable of drilling activities; a description of the drilling rig, indicating the important features, with special attention to safety, pollution prevention, oil spill containment and cleanup plans; and onshore disposal procedures. Any actor must submit an environmental report to BOEM as well. The environmental report must include: A summary with data and information available at the time of submittal of the related drilling plan. BOEM will consider site-specific data and information developed since the most recent environmental impact statement or other environmental impact analysis in the immediate area. The summary must meet the following requirements: It must concentrate on the issues specific to the site(s) of drilling activity. However, the actor/applicant only needs to summarize data and information discussed in any environmental reports, analyses, or impact statements prepared for the geographic area of the drilling activity. It must list referenced material. Include brief descriptions and a statement of where the material is available for inspection. It must refer only to data that are available to BOEM. Details about the proposed project such as: A list and description of new or unusual technologies The location of travel routes for supplies and personnel 14 Federal Register 74, no. 155, August 13, 2009, pages CFR Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

13 The kinds and approximate levels of energy sources The environmental monitoring systems Suitable maps and diagrams showing details of the proposed project layout. A description of the existing environment. For this section, the following information on the area must be included: Geology Physical oceanography Other uses of the area Flora and fauna Existing environmental monitoring systems Other unusual or unique characteristics that might affect or be affected by the drilling activities. A description of the probable impacts of the proposed action on the environment and the measures proposed for mitigating these impacts. A description of any unavoidable or irreversible adverse effects on the environment that could occur Outer Continental Shelf Oil and Gas Information Program: 30 CFR Section 552 Section 552 of the Outer Continental Shelf Lands Act 17 provides procedures and requirements for submitting oil and gas data and information resulting from exploration, development, and production operations on the OCS to the Director of the Department of the Interior. In addition, the OCS Oil and Gas Information Program 18 establishes a procedure for the Director to make certain information available to the governors and local government officials of nearby states. The Director provides states with a Summary Report of data and information designed to assist them in planning for the onshore impacts of potential OCS oil and gas development and production CFR 251.7(2) U.S.C et seq CFR 552 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 9

14 2.1.6 Oil Spill Financial Responsibility for Offshore Facilities: 30 CFR Section CFR 553 covers Oil Spill Financial Responsibility for Offshore Facilities and is the final regulation establishing requirements for demonstrating oil spill financial responsibility (OSFR) for removal costs and damages caused by oil discharges and substantial threats of oil discharges from oil and gas exploration and production facilities and associated pipelines. Under OPA section 1016, oil and gas exploration and production leases issued by BOEM for operation in the Gulf of Mexico must establish and maintain OSFR capability to meet liabilities caused by oil discharges. 19 Before the DWH incident, MMS collected information from offshore facilities to ensure that they had the financial resources necessary to pay for cleanup and damages that could be caused by oil discharges from such facilities. Currently, BOEM receives OSFR forms and oversees the regulatory process related to OSFR activities. OSFR requirements apply to the OCS, state waters seaward of the line of ordinary low water along that portion of the coast that is in direct contact with the open sea, and certain coastal inland waters. OSFR is demonstrated in various ways, including surety bonds, guarantees, letters of credit, and self-insurance, but the most common method is by means of an insurance certificate. The minimum amounts of OSFR that must be demonstrated are $35 million for covered offshore facilities (COF) located in the OCS (Table 1) and $10 million for covered offshore facilities located in state waters. The regulation provides an exemption for persons responsible for facilities having a potential worst-case oil spill discharge of 1,000 barrels or less, unless the risks posed by a facility justify a lower threshold volume. 20 Civil penalties are associated with noncompliance with OSFR. 21 These penalties double each time a facility incurs an additional violation within one calendar year of the first violation, up to a maximum of $27,000 per day. 22 Penalties are levied for failure to submit OSFR evidence, failure of a RP to prepare the necessary forms, lapse in OSFR coverage, cancellation of OSFR without alternative coverage, and failure to correct an erroneous or inadequate submission within 30 days of BOEM request CFR Ibid CFR BOEM, Civil Penalties for Noncompliance with OSFR. Available at: Program/Leasing/Regional-Leasing/Gulf-of-Mexico-Region/OSFR/Civil-Penalties-for-Noncompliance-with-OSFR.aspx (BOEM, no date). 23 Ibid. 10 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

15 Table 1. OSFR Requirements for Covered Offshore Facilities Located Wholly or Partially in the OCS COF Worst-Case Oil-Spill Discharge Volume Applicable Amount for OSFR Over 1,000 up to 35,000 barrels $35,000,000 Over 35,000 but not more than 70,000 barrels $70,000,000 Over 70,000 but not more than 105,000 barrels $105,000,000 Over 105,000 barrels $150,000,000 Source: BOEM, Civil Penalties for Noncompliance with OSFR Outer Continental Shelf Lands Act: 43 U.S.C (2002) OCSLA (43 U.S.C (2002)) establishes a procedural framework under which the Department of the Interior could lease ocean areas for the purposes of exploring and developing the oil and gas deposits. OCSLA and its amendments 24 provided the foundation for regulations that are implemented by BOEM and BSEE. Section 18 of the OCSLA states the Secretary of the Interior (Secretary) shall prepare and submit to Congress oil and gas leasing schedules to implement the policies of the OCSLA. This schedule indicates the location of leasing activity that the Secretary determines will best meet national energy needs for the five-year period following the schedules approval. 25 Within the OCSLA, Congress created the Offshore Pollution Fund, financed by a per-gallon fee on produced oil, to be used for cleanup activities and spill-related damages. 26 Since its original enactment in 1953, the OCSLA has been amended several times, most recently as a result of the Energy Policy Act of Amendments have included, for example, the establishment of an oil spill liability fund and the distribution of a portion of the receipts from the leasing of mineral resources of the OCS to coastal states U.S.C U.S.C Public Law , codified at 43 U.S.C et seq. 27 BOEM, OCS Lands Act History (BOEM, 2012). Available at: Program/Leasing/Outer-Continental-Shelf/Lands-Act-History/OCSLA-HIstory.aspx. Accessed August 22, Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 11

16 2.2 Spill Oversight, Preparedness, and Requirements Clean Water Act of 1972 (formerly, Water Pollution Control Act): 33 U.S.C. Section 1251 et seq. (2002) The Clean Water Act (CWA) represented the broadest authority for addressing oil spills prior to the Exxon Valdez spill. 28 Generally, section 311 of the act mandates requirements for oil spill reporting, response, and liability. Section 311(b)(3) of the CWA prohibits the discharge of oil or hazardous substances into U.S. navigable waters. The CWA also created a fund (the 311 Fund) to be maintained by federal appropriations; the fund could be used for cleanup and natural resource restoration in the event of a spill. Various elements of section 311 of the CWA were amended and expanded with the passage of OPA in Oil Pollution Act of 1990: 33 U.S.C. Section 2701 et seq. (1990) OPA passed in 1990 (101 HR 1465, Public Law ) was largely a response to growing public concern surrounding the Exxon Valdez oil spill in Prince William Sound, Alaska. That spill highlighted a national need for strong and comprehensive oil spill legislation and spurred Congress to enact OPA. OPA expanded and clarified the authority of the federal government (primarily the executive branch) and created new oil spill prevention and preparedness requirements. OPA also strengthened existing liability provisions, providing a greater deterrent for the oil industry, which subsequently implemented more cautious practices. Since this legislation was enacted in 1990, spill occurrence and volume have decreased substantially Spill Response Authority OPA consolidated several existing federal oil spill laws and streamlined the federal legislative criteria for oil spills on land and sea. OPA also amended key sections of the CWA and the National Oil and Hazardous Substances Pollution Contingency Plan (NCP). Specifically, OPA section 4201 amended section 113(c) of the CWA and provided the president (and the USCG) with the authority to perform cleanup immediately using federal resources, monitor the response efforts of the spiller, or direct the spiller s cleanup activities. OPA designated authority pertaining to spill response and cleanup to the U.S. Environmental Protection Agency (EPA) for land-based spills and to the USCG for spills occurring within the U.S. coastal zone, 200 nautical miles off the coastline. Florida s territorial waters runs the entire state and extends nine nautical miles into the Gulf of Mexico and three nautical miles into the Atlantic Ocean and is included in the USCG s response and cleanup authority. 28 J.L. Ramseur, Oil Spills in U.S. Coastal Waters. 12 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

17 The level of cleanup required is determined by the Federal On-Scene Coordinator (FOSC), a federal official (from the USCG for coastal zone spills and from EPA for land-based spills) who coordinates all federal efforts with, and provides support and information to, local, state, and regional response communities. Coastal zone as defined for the purpose of the NCP, means all U.S. waters subject to the tide, U.S. waters of the Great Lakes, specified ports and harbors on inland rivers, waters of the contiguous zone, other waters of the high seas subject to the NCP, and the land surface or land substrata, ground waters, and ambient air proximal to those waters. Precise boundaries are determined by EPA/USCG agreements and identified in federal regional contingency plans. 29 The FOSC takes on the responsibilities of assessment, monitoring, response assistance, and evaluation during and after oil spill incidents. Thus, jurisdiction is determined by the source of the oil, vessel, onshore facility, pipelines, and so forth. 30 (Refer to the National Oil and Hazardous Substances Pollution Contingency Plan (Section of this report) for more information regarding spill authority.) OPA also amended the NCP and transformed the plan into a multi-tiered and coordinated National Response Strategy for addressing oil spills (40 CFR Section 300, subpart D). OPA expanded the role and breadth of the NCP as well. OPA requires the president to establish procedures and standards as part of the NCP for responding to worst-case oil spill scenarios. In addition, the law establishes a multilayered planning and response system to improve preparedness and response to spills. A component of this enhanced NCP is a requirement that tank vessels, offshore facilities, and certain onshore facilities prepare oil spill response plans and submit them to the USCG. These plans have since evolved, and they are now usually fulfilled by a contractual relationship between a vessel or facility owner/operator and an emergency response company with the necessary resources on hand to respond to a worst-case oil spill. Before 1990, many states had oil spill liability laws in place; therefore, the issue of whether to preempt state laws was one of the primary obstacles to passage of OPA. Although much negotiation related to this topic occurred, the Exxon Valdez spill tipped the scales toward antipreemption. According to OPA section 1018, the act will not preempt any state from imposing additional liability or requirements with respect to the discharge of oil or related response activity. As of 2003, 16 states had imposed unlimited liability for oil spills, a higher standard than that set in OPA. Over the years since OPA was passed, it has been amended by various statutes. The most notable amendments are the Coast Guard Maritime Transportation Act (2004) and, more recently, S 3473 (June 2010) in response to the DWH spill CFR J.L. Ramseur, Oil Spills in U.S. Coastal Waters. Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 13

18 The Coast Guard Maritime Transportation Act, section 701 (Vessel Response Plans for Nontank Vessels over 400 Gross Tons), amends OPA to require the owner or operator of any nontank vessel of 400 gross tons or more that carries oil of any kind as a fuel for main propulsion to prepare and submit a response plan for each vessel. 31 This amendment also harmonizes the United States list of regulated bulk cargoes with the internationally maintained list, increasing the number of vessels that must submit a response plan for worst-case spills. Senate measure S 3473 amended OPA to authorize advances from the Oil Spill Liability Trust Fund (OSLTF) for the DWH oil spill. 32 In its current state, OPA affects all vessels, all offshore facilities, and certain onshore facilities operating in federal waters. Federal entities that have direct oversight of OPA activities include the president, the USCG, and EPA. 33 The president consults with state and regional government officials when he or she selects discharge removal plans and cleanup schedules, but that is the extent of state activity within OPA. OPA does not regulate recovery of damages incurred as a result of a collision, personal injury claims, or collision-related cargo claims; all of these damages remain subject to general maritime law Authority During the DWH Oil Spill In the case of the DWH incident, response processes minimized local authority and had the effect of supplanting local governments ability to make response decisions. This was primarily a function of the protocol within the National Contingency Plan for oil spill response, but could have been mitigated by efforts from both sides to include local knowledge and resources. Following the spill, the Florida Department of Environmental Protection (FDEP) stated that one of the key reasons local entities were not able to take part in cleanup efforts was that OPA was designed for more localized oil spills, where a response dictated by the USCG works effectively. However, the DWH oil spill was of such magnitude that it exceeded the response assumptions inherent in the NCP. 34 This proved particularly problematic when response actions had to cross jurisdictional boundaries. Furthermore, under NCP protocols, all operational response actions were directed by the USCG and by BP as the RP, which meant that impacted counties had no control over response resources. USCG generally oversees the safety of systems at the platform level of a Mobil Offshore Drilling Unit (MODU), as opposed to the sub-platform systems overseen by BOEM/BSEE. The agency 31 Blank Rome LLP, Coast Guard and Maritime Transportation Act of 2004 (September 2004). Accessed at: 32 CNN, Obama says laws must be updated after oil disaster (June 10, 2010). Available at: 10/politics/obama.gulf.spill_1_rig-oil-disaster-oil-pollution-act?_s=PM:POLITICS. 33 EPA maintains oversight duties for inland oil spills. 34 Florida Division of Emergency Management, After Action Report/Improvement Plan: Deepwater Horizon Response (Tallahassee, FL: Florida Division of Emergency Management, March 2, 2011, page 29). Accessed at: 14 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

19 conducts full system surveys of each MODU every two years to ensure compliance with US and international regulations. When an oil spill occurs, USCG chairs the National Response Team (NRT), a group of agency representatives that delegates roles during the response effort. Additionally, the Coast Guard leads the relevant Regional Response Teams (RRTs), which comprised of Regions IV and VI during the Gulf spill (see Figure 5 on Page 19). 35 Executive Order (signed by President George H. W. Bush on October 18, 1991) delegated response authority in the coastal zone to the Coast Guard FOSC. The FOSC is broadly empowered to direct and coordinate all response and recovery activities of federal, state, local, and private entities (including the RP), and will draw on resources available through the appropriate ACPs and RRTs. For more information on the FOSC, please see Section Liability, Damages, and Funding OPA unified various federal liability funds and provisions as well, creating a freestanding liability structure that outlines and enforces damage payments. Motivated by the failure of existing systems to make vessel owners primarily liable for the response, OPA broadened the scope of damages (or costs) for which a RP would be liable, including all cleanup costs incurred. Furthermore, OPA increased the range of liable damages to include the following: Injury to natural resources Loss of personal property (and related economic losses) Loss of subsistence use of natural resources Loss of revenue resulting from destruction of property or natural resource injury Loss of profits and earning capacity resulting from property injury of natural resource injury Cost of providing extra public services during or after spill response. The only defense from incurring these liable damages was if the spill was caused by an act of God, act of war, or act/omission of certain third parties. However, OPA does set limits on the liabilities that can be assigned to a RP (excluding instances of gross negligence or willful misconduct). Liability limits for mobile offshore drilling units (such as DWH) are grouped with liability limits for vessels at $3,200 per gross ton. If the damages caused by a spill from an offshore drilling unit exceed this amount, they are grouped with offshore facilities. Offshore facility liability is unlimited for removal costs but capped at $75 million for other costs and damages. 35 J.L. Ramseur,and Curry L. Hagerty, Deepwater Horizon Oil Spill: Selected Issues for Congress (Washington, DC: Congressional Research Service, 2010). Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 15

20 The Oil Spill Liability Trust Fund Before the enactment of OPA, it was generally known that the current funding for oil spill response was inadequate and that the damage recovery process was quite difficult for private parties to navigate. To address these concerns, in 1989 Congress supplemented OPA s increased range of covered damages with the Oil Spill Liability Trust Fund (OSLTF, Public Law ). 36 OSLTF consolidated the liability requirements under the Federal Water Pollution Control Act, Deepwater Port Act, Trans-Alaska Pipeline System Authorization Act, and Outer Continental Shelf Lands Act. After the merging of these various federal funds and initiation of a tax on the petroleum industry, OSLTF was able to increase to $1 billion with the possibility of borrowing another $1billion if necessary. The permitted uses of OSLTF funds are delineated by OPA to include: Removal costs incurred by the USCG and EPA State access for removal activities Payments to federal, state, and Indian tribe trustees to conduct natural resource damage assessments and restorations Payment of claims for uncompensated removal costs and damages Research and development Other specific appropriations. Today OSLTF s Principal Fund is funded by an 8-cent-per-barrel tax (up from 5 cents in 1990) on the oil industry and any related interest generated in the account. The tax will increase to 9 cents in 2017, but it will terminate at the end of that year unless otherwise mandated to stay in place. In addition, Congress (under OPA) created an emergency fund within OSLTF that is available to the USCG for removal costs, as well as to the natural resources trustees (discussed below) for the costs of initiating natural resource damage assessments under OPA (see Figure 3). This emergency fund was initially set at $50 million a year (with the option of rolling over unused funds). For instances when the initial $50 million proves to be inadequate, the Maritime Transportation Security Act of 2002 granted authority to Figure 3. OSLTF s Principal and Emergency Fund advance up to $100 million from the Principal Allocation Fund to fund removal activities (Public Law 36 Congress created the fund in 1986 but did not pass legislation to authorize the use of the money or the collection of revenue necessary for its maintenance. It was only after the Exxon Valdez grounding and passage of OPA that authorization was granted. 16 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

21 ) Financial Responsibility To ensure that RPs can be held accountable for damages in the instance of a spill, OPA requires that vessels and offshore facilities maintain evidence of financial responsibility (e.g., insurance). RPs for offshore facilities in federal waters must demonstrate $35 million financial responsibility, unless the president determines that a greater amount (not exceeding $150 million) is justified (33 U.S.C. 2716(c)). A National Pollution Funds Center publication stipulates that where incidents have multiple RPs, liability is joint and several, which means that each [RP] is liable for the entire amount of removal costs and damages resulting from a spill Natural Resource Damages When a spill occurs, natural resource trustees conduct natural resource damage assessments to determine the extent of the damage caused by the spill. Natural resource trustees are appointed by the governor from each state involved and the president. Governors usually appoint a state or tribal government representative, and the president is likely to appoint a representative from the National Oceanic and Atmospheric Administration (NOAA). OPA states that the measure of natural resource damages includes: The cost of restoring, rehabilitating, replacing, or acquiring the equivalent of the damaged natural resources The diminution in value of those natural resources pending restoration The reasonable cost of assessing those damages. Pursuant to OPA, NOAA developed regulations pertaining to natural resource damage assessments in 1996 (61 Federal Register 440, 1996). Damages may include losses of both direct use and passive use of natural resources. NOAA s regulations focus on the costs of primary restoration (returning the resource back to baseline conditions) and compensatory restoration (addressing interim losses) Oil-Spill Response Requirements for Facilities Located Seaward of the Coast Line: 30 CFR Section 254 The CWA, as amended by OPA, requires that a spill-response plan be submitted for offshore facilities prior to February 18, OPA specifies that after that date an offshore facility may not handle, store, or transport oil unless a plan has been submitted. The authority and responsibility 37 Oil Spill Liability Trust Fund (OSLTF) Funding for Oil Spills. National Pollution Funds Center Publication NPFCPUB (page 3). Arlington, VA, January Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 17

22 under 30 CFR Section 254 were delegated to BSEE. Regulations at 30 CFR Section 254 establish requirements for spill response plans for oil-handling facilities seaward of the coast line, including associated pipelines. BSEE uses the information collected under 30 CFR Section 254 to determine compliance with OPA by lessees/operators. Specifically, BSEE uses the information gathered to: Determine the effectiveness of the spill-response capability of lessees/operators Review plans prepared under federal and state regulations and submitted to BSEE to satisfy BSEE s condition that they meet the minimum requirements of OPA Verify that personnel involved in oil spill response are properly trained and familiar with the requirements of the spill response plans, and to witness spill response exercises Assess the sufficiency and availability of contractor equipment and materials Verify that sufficient quantities of equipment are available and in working order Oversee spill response efforts and maintain official records of pollution events Assess the efforts of lessees/operators to prevent oil spills or prevent substantial threats of such discharges Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA): 42 U.S.C et seq. (1990) Congress enacted the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund and codified as 42 U.S.C et seq., on December 11, CERCLA was amended by the Superfund Amendments and Reauthorization Act (SARA) on October 17, CERCLA gave the federal government the authority and the funding (i.e., Superfund) to clean up sites contaminated by hazardous waste. The CERCLA response effort is guided by the National Oil and Hazardous Substances Pollution Contingency Plan, which is commonly referred to as the NCP. As discussed above, the NCP describes the steps that RPs (including federal facilities) must follow in reporting and responding to situations in which hazardous substances are released into the environment The National Oil and Hazardous Substances Pollution Contingency Plan (National Contingency Plan): Section 105, CERCLA (42 U.S.C. 9605); 40 CFR Section 300 Initially established in 1968, the NCP was amended by the CWA in 1972, CERCLA in 1980, and OPA in Oil spill response actions required under the regulations of the NCP are binding 38 All information in this section was taken from 30 CFR Section J.L. Ramseur, Oil Spills in U.S. Coastal Waters. 18 Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response

23 and enforceable per these enforcement authorities. The NCP contains the federal government s framework and operative requirements for responding to an oil spill and the release of a hazardous substance. (See Appendix B for a graphic of the NCP structure.) The NCP establishes the National Response System (NRS, see Figure 4), a coordinated national oil spill response framework organized by multiple national, regional, and local tiers. 40 The NRS consists of four key components the NRT, RRTs, Area Committees (ACs), and FOSC. National National Contingency Plan Regional Regional Contingency Plan Local Area Contingency Plan Vessel Contingency Plan Facility Contingency Plan Figure 4. The National Response System There are 13 RRTs, one for each of the 10 federal regions, plus Alaska, the Caribbean, and the Pacific Basin (Figure 5). 41 Regional Response Teams Region I Region III Region V Region VII Region IX The Caribbean Region II Region IV Region VI Region VIII Region X Alaska Pacific Basin Figure 5. Regional Response Teams CFR Section 300, subpart D. 41 U.S. National Response Team, Regional Response Team Home Pages, last modified August 22, Available at: Accessed August 23, Report 1: Analysis of Current State and Federal Laws Addressing Oil Spill Planning and Response 19