CONFEREES AGREE ON OIL SPILL LIABILITY MEASURE FOR U.S.

U.S. congressional conferees have agreed on a comprehensive oil spill liability bill and plan to submit it to Congress before a scheduled August recess. In final actions, conferees agreed to an increase in shipowners' liability for spills from the present $150/vessel ton to $1,200/vessel ton. Owners of the crude would not be jointly liable for spills. Minimum liabilities would be $10 million for vessels larger than 3,000 gross tons and $2 million for smaller vessels. Current federal laws

Aug. 6, 1990

3 min read

U.S. congressional conferees have agreed on a comprehensive oil spill liability bill and plan to submit it to Congress before a scheduled August recess.

In final actions, conferees agreed to an increase in shipowners' liability for spills from the present $150/vessel ton to $1,200/vessel ton. Owners of the crude would not be jointly liable for spills.

Minimum liabilities would be $10 million for vessels larger than 3,000 gross tons and $2 million for smaller vessels. Current federal laws cap liability at $14 million.

Liability for offshore facilities was set at $75 million plus unlimited removal costs. Onshore facilities or deepwater ports would be liable for $350 million in damages. There are no liability limits if a spill results from a spiller's gross negligence, willful misconduct, or violation of a federal operating or safety standard.

The bill would use an existing 5/bbl fee on oil to build a $1 billion oil spill cleanup fund, half of which could be used for a single spill. Oil spill victims could draw from the fund when the spiller's liability limit has been reached, the spiller is unknown, or settlement is delayed.

OTHER PROVISIONS

Earlier in the conference, legislators decided to require double hulls on most oil tankers and barges and require improved spill response and preparedness. The federal government would direct cleanup of all major spills.

Conferees also voted not to have the U.S. join a pair of international oil spill liability and compensation agreements because they would preempt more stringent federal and state liability laws.

Congressional committees have considered oil spill liability bills since 1975, but a major hurdle was a controversy over whether legislation should preempt state liability law. The compromise bill allows states to impose stricter liability laws and set up their own oil spill compensation funds.

The American Petroleum Institute warned that the absence of federal preemption opens the door for unlimited liability at the state level.

The bill will allow oil companies to establish a planned Petroleum Industry Response Organization to combat spills.

PIRO would hold personnel and equipment in readiness at five regional centers in the event of spills (OGJ, Feb. 5, p. 32).

Sponsors wanted, and the conferees agreed, to place the Coast Guard in charge of cleanup operations involving PIRO, limit the liability of cleanup response operations, and not create competing federal response teams.

However, conferees did not exempt response groups like PIRO from state liability laws.