The Oil Spill Liability Trust Fund (OSLTF) established by the Oil Pollution Act (OPA) is funded in several ways:

• Investment interest on the Fund's principal,
• Costs recovered from responsible parties,
• Civil and criminal penalties from responsible parties,
• Barrel tax on domestic and imported oil, and
• Transfers from other legacy pollution funds.

To date, the largest source of income for the Fund has been from the per-barrel excise tax on imported and domestic oil, originally 5-cents-per-barrel tax. The Energy Policy Act of 2005 re-instated the tax in April 2006.. The Energy Improvement and Extension Act of 2008 extended the per-barrel excise tax through December 2017 and increased the per-barrel excise tax from 5 cents to 8 cents from 2009-2016 and to 9 cents in 2017. 

The Act also repealed the requirement that the tax be suspended when the Fund balance exceeded any given amount.

The per-barrel tax to finance the Oil Spill Liability Trust Fund is addressed at section 4611 of the Internal Revenue Code (26 U.S.C. 4611). The tax applies to crude oil received at a United States (US) refinery and to petroleum products entered into the US for consumption, use, or warehousing. The tax also applies to other domestic crude oil used in, or exported from, the US.

The tax on crude oil received at a US refinery is paid by the refinery operator. The tax on imported petroleum products is paid by the person entering the product for consumption use or warehousing. The tax on other crude oil is paid by the person using or exporting the crude oil.

While the Coast Guard is delegated certain authorities to manage and use the Oil Spill Liability Trust Fund, collection of taxes and deposit of collections to the Fund is managed by the Department of Treasury.

The OSLTF has 2 components.

• The Emergency Fund is used to fund removal activities and the initiation of natural resource damage assessments.
• The Principal Fund, that portion of the OSLTF exclusive of the Emergency Fund, is used primarily to carry out two functions:
  • Adjudication and payment of claims for certain uncompensated removal costs and damages

Congressional Appropriations to various federal agencies (including the Coast Guard) responsible for implementation, administration, and enforcement of OPA, and oil spill research and development.

Congress created the Fund in 1986, but did not pass legislation to authorize the use of the money or the collection of revenue to maintain it until August 1990, when President George H. W. Bush signed OPA into law and authorized use of the OSLTF.

Expenditures from the Fund for any one oil pollution incident are limited to $1 billion or the balance of the Fund, whichever is less. Natural resource damage assessments and claims in connection with any one incident are limited to $500 million of the $1 billion per incident limit.

Under OPA, those responsible for oil incidents are liable for costs and damages. The NPFC has a billing and collection program to recover costs expended by the Fund, carried out in accordance with the U.S. debt collection laws. In recent years, the NPFC has been able to collect between $7-$14 million per year of the removal costs and damage costs it pays from the Fund. There are several barriers to achieving a higher rate of recovery:

• In nearly 50% of spills, the FOSC is unable to identify the source of the spill or identify a responsible party (RP).
• Costs expended in excess of a responsible party's liability limit are generally unrecoverable.
• The response for spills involving onshore facilities (such as leaking, abandoned pipelines, underground tanks, or oil wells) is typically complex and costly, but hard to collect on because many of these facilities are abandoned or uninsured.

Although not comprehensive, the table below summarizes some of the differences.

The status and forecast of the OSLTF is available in the Liability Limits Report.

NPFC Claim Determinations issued by CY, NRD Determinations and Deepwater Non-NRD Determinations:

• 2017
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• 2016
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• 2015
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• 2014
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• 2013
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• 2012
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• 2011
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• 2010
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• 2009
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• NRD
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• Deepwater Non-NRD

Notice: The Decisions made available here are for research and informational purposes only.  Not all documents consist of the final signed version.

There is no required format for claims. You must, however, support your claim with documentation, put the claim in writing, and sign it.

See Forms & Documents for Submitting Claims for more detailed guidance on submiting claims. (You do not need a lawyer to file a claim; you will not be compensated for any attorney's fees if you do use a lawyer to assist in preparing or filing a claim.)

Yes. The Oil Pollution Act (OPA) requires claimants to first submit their claims to the Responsible Party (RP). If the RP denies liability or fails to settle within 90 days, you may then present the claim to the NPFC. You must include documentation of your submission to the RP as well as any other communications with the RP with your claims submission to the NPFC.

If there is no RP, such as in the case of a mystery spill, you must describe the circumstances of the spill and explain why an RP was not identified.

For OPA-based damage claims, you have three years after the date on which the injury and its connection with the incident were reasonably discoverable to submit a claim. However, if you conducted the assessment in accordance with the damage assessment regulations (15 CFR 990), you have three years from the date the assessment was completed.

Natural Resource Trustees can request funding from the NPFC for:

• Pre-assessment activities (initiation of natural resource damage assessment),
• Natural resource damage assessment (NRDA) and/or restoration, and/or
• Emergency restoration.

An initiate funding request provides a mechanism by which funds needed by trustees to initiate preassessment activities immediately following an oil spill can be reimbursed. A natural resource damage assessment claim is a trustee request for funding to cover expenses incurred (or expected to be incurred) from injury assessment and/or restoration activities.

Any Tribal, State, or Federal Natural Resource Trustee can submit NRD claims to the NPFC for damages resulting from an oil spill incident. However, only a Federal Lead Administrative Trustee (FLAT) may submit requests for initiate funding; non-Federal Trustees are encouraged to work with the FLAT on preparing and submitting the initiate request.

Yes. The regulations at 15 CFR 990 provide a useful (but not required) framework for conducting NRDAs. Further, NOAA has published guidance documents for conducting NRDAs, which are available at //darrp.noaa.gov/legal-context under Oil Pollution Act Guidance.

The Daubert Standard is used in federal courts to establish scientific validity of evidence. While there is no definitive checklist of criteria, and much is left up to the discretion of the judge, there are several "pertinent issues" that are recommended to be taken into account and are mentioned in the published court opinion [Daubert v. Merrell Dow] on the matter. These include:

• Whether the methods upon which the testimony is based are centered upon a testable hypothesis;
• The known or potential rate of error associated with the method;
• Whether the method has been subject to peer review;
• And whether the method is generally accepted in the relevant scientific community.

It is also acknowledged in the court opinion that, "in some instances, well-grounded but innovative theories will not have been published. Some propositions, moreover, are too particular, too new, or of too limited interest to be published." This further emphasizes the discretion given to the judge in determining scientific validity. The principles of the Daubert Standard are often used by the NPFC during a claim adjudication to confirm the scientific validity of a claim. However, as stipulated by the court opinion, consideration is still given to "well-grounded and innovative theories" that may not have been subject to an accepted peer review due to the unpredictable and often unique circumstances of oil spills.

In order to obtain "rebuttable presumption" for claim adjudication, the regulations at 15 CFR 990 need to be followed during the natural resource damage assessment (NRDA) process. The regulations at 15 CFR 990 require that documentation be provided that demonstrates an appropriate and defensible NRDA was conducted. Examples of documentation commonly produced during an NRDA that may demonstrate adherence to 15 CFR 990 regulations can be found in the NRD Funding Guidelines. However, there are no requirements above and beyond demonstration of adherence to 15 CFR 990 that must be met to obtain a rebuttable presumption.

The Oil Pollution Act (OPA) limits a responsible party's (RP's) liability for removal costs and damages caused by an oil spill. If an RP pays or incurs removal costs or damages in excess of an applicable liability limit, the RP may present a claim to the NPFC for compensation of the excess amount.

33 U.S.C. § 2704 discusses these limitations as well as their exceptions.

See Limits of Liability for a summary of the limits for different types of vessels and facilities.

Insurance coverage can vary from plan to plan; you should ensure that the insurance for your vessels or facilities cover the liability requirements.

Certain vessels must carry a Certificate of Financial Responsibility (COFR), which shows that the vessel operator and/or owner has the ability to pay for cleanup and damage costs up to the liability limits required by OPA, before they can operate in the United States navigable waters:

• Vessels greater than 300 gross tons and
• Vessels of any size that are lightering or transshipping oil in the Exclusive Economic Zone (EEZ) of the United States.

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If you are the responsible party in a spill (generally meaning that you own the vessel or facility that was the source of the spill), you are liable for the removal costs and damages up to your limit of liability unless you can prove that the discharge was caused solely by:

• An act of God,
• An act of war,
• Negligence on the part of the United States Government, and/or
• An act or omission of a third party.

Not only must you prove one of the causes listed above, but you must also show that you took all reasonable precautionary steps to prevent a spill should such an accident occur. 33 U.S.C. 1321(f) lists these exceptions.

However, if you accidentally spill oil while aiding in the cleanup of an oil incident, the responsible party (RP) is generally also responsible for those related removal costs; this situation is explained in 33 U.S.C. 1321(c)(4).

Yes; the Oil Pollution Act (OPA) lists several exceptions--if you, as the responsible party:

• Caused the incident by gross negligence or willful misconduct,
• Caused the incident as the result of violation of an applicable Federal regulation,
• Didn't report the incident as required by law (assuming you knew about the incident)
• Didn't cooperate with the Federal On-Scence Coordinator (FOSC) in charge of the spill cleanup, or
• Didn't comply with government orders related to the spill cleanup.

In addition, if the incident involved a spill or threat of discharge from an Outer Continental Shelf facility or a vessel carrying oil as cargo from such a facility, you are responsible for all removal costs from federal, state, and local government agencies, regardless of the liability limits.

Similarly, the limits do not apply if you operate a tank vessel whose only oil carried as cargo is an animal fat or vegetable oil or if you operate a tank vessel that is designated as an oil spill response vessel. Are there separate limits for these?

33 USC. 2704(c) discusses these exceptions in more detail.

To receive compensation for all costs above your liability limit, you must submit a claim to the NPFC.

 

A responsible party determination to stop paying for removal, in good faith reliance on its having paid or incurred removal costs and damages in the amount of its liability limit, is not in itself a failure or refusal to provide all reasonable cooperation and assistance requested by a responsible official. The adequacy of cooperation will be determined on a case-by-case basis in light of all the relevant circumstances. For example, a responsible party that determines to stop paying for removal should fully coordinate its exit from the response with the Federal or other responsible official and pay all amounts owed to its response contractors to avoid any disruption of the continuing response effort.