Oil Pollution Act (OPA) Frequently Asked Questions

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Click here to expand contentClick here to collapse content  Where does the Oil Spill Liability Trust Fund receive its balance? Who pays into it?
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The Act also repealed the requirement that the tax be suspended when the Fund balance exceeded any given amount.

Click here to expand contentClick here to collapse content  Who pays the OSLTF oil tax?

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.

Click here to expand contentClick here to collapse content  What does the trust fund pay for?           
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.

Click here to expand contentClick here to collapse content  How much money does the trust fund have in it? What is the forecast for the Fund?
The status and forecast of the OSLTF is available in the Liability Limits Report.
Click here to expand contentClick here to collapse content  How long has the trust fund been around?
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.
Click here to expand contentClick here to collapse content  Is there a limit to how much the OSLTF will pay into a response?
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.
Click here to expand contentClick here to collapse content  How much do you recover from responsible parties to pay back the Fund?
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.
Click here to expand contentClick here to collapse content  How are OPA and the OSLTF different from CERCLA and Superfund?
Although not comprehensive, the table below summarizes some of the differences.
OPA & OSLTF CERCLA & Superfund
Law Enacted 1990 1980
Type of Pollution Covered Oil spills & threats of spills into U.S. navigable waters (usually sudden events requiring immediate response) Hazardous substances, pollutants, & contaminants (often result of newly discovered past pollution with response requiring extensive planning & public participation)
Fund Administrator NPFC, Coast Guard EPA (NPFC administers only the Coast Guard use of Superfund resources)
Uses of Fund Spill response and cleanup
Claims for removal costs and damages, including natural resource damages
Appropriations by Congress
Short-term removals when prompt response is required
Long-term remedial response actions
Appropriations by Congress
Source of Funds per-barrel tax on oil
Transfers from other funds
Cost recovery
Interest on Fund balance
Fines & penalties
Tax on chemical & petroleum industries (expired 1986)
Cost recovery
Annual Congressional appropriations

Oil Spill Claims

Claims Center Information
Office Hours: 7:00 - 4:00 EST/EDT
Phone: 800-280-7118
Fax: 202-372-8397
Claim Information Email: ARL-PF-NPFCClaimsInfo@USCG.mil

 

If you have been adversely affected by an oil spill, you may be able to receive compensation. The Oil Pollution Act (OPA) defines the conditions under which you may recover costs and damages. To submit a claim:

 

  1. Show that the spill meets all OPA requirements. Your claims manager cannot process the rest of your claims package until you have proven that the spill meets these requirements. (The OPA Claims Requirements checklist provides a step-by-step guide to help you decide if a spill qualifies.)

  2. Document your costs and damages from the spill. (See the Types of Claims table below for a list of the kind of claims you can submit.)

  3. Forward your claims package to the National Pollution Funds Center, the Coast Guard office responsible for evaluating and approving OPA claims.


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Click here to expand contentClick here to collapse content  Types of Claims
Claim Type Description Who Can Submit
Natural Resource Damages (NRD)

Costs for:

  • Assessing an area's natural resource damages,
  • Restoring the natural resources, and
  • Compensating the public for the lost use of the affected resources.
Only specially designated natural resource trustees
Removal Costs

Costs to prevent, minimize, mitigate, or clean up an oil spill.

(The costs of cleaning up your own property fall under the category of property damage, not removal costs.)

Clean-up contractors, called Oil Spill Recovery Organizations (OSROs)
Federal, State, and local government entities
The responsible party
Anyone who helped clean up the spill
Property Damage

Injury to or economic loss resulting from destruction of real property (land or buildings) or other personal property.

Does not include personal injury!

People or entities who own or lease the damaged property
Responsible Party: Affirmative Defense or Limit of Liability Defense
  • Affirmative Defense is an assertion that the Responsible Party is not the cause of the incident due to one of three factors: Act of God, Act of War or Sole cause of a Third Party
  • Limit of Liability Defense is asserting the Responsible Party has exceeded their Limit of Liability as defined on their COFR.
Owner or Operator responsible for the pollution incident
Loss of Profits & Earning Capacity

Damages equal to the loss of profits or impairment of earning capacity due to the injury, destruction, or loss of property or natural resources

Anyone with loss of profits or income (You do not have to own the damaged property or resources to submit a claim under this category.)
Loss of Subsistence Use of Natural Resources

Loss of subsistence use claim if natural resources you depend on for subsistence use purposes have been injured, destroyed, or lost by an oil spill incident.

Anyone who, for subsistence use, depends on natural resources that have been injured, destroyed, or lost (You do not have to own or manage the natural resource to submit a claim under this category.)
Loss of Government Revenue

Net loss of taxes, royalties, rents, fees, or net profit shares due to the injury, destruction, or loss of real property, personal property, or natural resources

Federal agencies
States
Local governments

Increased Public Services

Net costs of providing increased or additional public services during or after removal activities, including protection from fire, safety, or health hazards, caused by a discharge of oil or directly attributable to response to the oil spill incident

States
Local governments
Deepwater Horizon Spill Claims submitted as a result of the Deepwater Horizon Pollution Incident in the Gulf of Mexico.
Click here to expand contentClick here to collapse content  Claims Determinations

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

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

Click here to expand contentClick here to collapse content  Claim Format

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.)

Natural Resource Damage (NRD) Claims

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Click here to expand contentClick here to collapse content  Do we have to submit the NRD claim to the Responsible Party?
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.
Click here to expand contentClick here to collapse content  What if there is no Responsible Party?
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.
Click here to expand contentClick here to collapse content  How long do we have to submit claims after an incident?
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.
Click here to expand contentClick here to collapse content  What are the types of NRD funding available from the NPFC?

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.
Click here to expand contentClick here to collapse content  What is the difference between an Initiate Funding Request and a NRD claim?
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.
Click here to expand contentClick here to collapse content  Can a State and/or Tribal Trustee request initiate funding or submit a NRD claim without a Federal Trustee?
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.
Click here to expand contentClick here to collapse content  Are there published guidelines or procedures for conducting natural resource damage assessements (NRDAs)?
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.
Click here to expand contentClick here to collapse content  What is the Daubert Standard, and is this standard used by the NPFC during claim adjudication?

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.

Click here to expand contentClick here to collapse content  How is "rebuttable presumption" obtained?
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.

Limit of Liability

Insurance & COFRs
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Click here to expand contentClick here to collapse content  The potential costs from an oil spill can be astronomical; how can I possibly be expected to finance all cleanup costs and claims?

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.

Click here to expand contentClick here to collapse content  What is the limit of liability for my vessel/facility?
See Limits of Liability for a summary of the limits for different types of vessels and facilities.
Click here to expand contentClick here to collapse content  Won't my insurance cover these costs?
Insurance coverage can vary from plan to plan; you should ensure that the insurance for your vessels or facilities cover the liability requirements.
Click here to expand contentClick here to collapse content  How are COFRs related to limits of liability?

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.

Read More...

Concerns of Responsible Parties (RPs)
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Click here to expand contentClick here to collapse content  I'm considered the RP, but I didn't cause the spill; am I still liable?

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).

Click here to expand contentClick here to collapse content  Are there situations when I can't claim a limit to liability?

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.

Click here to expand contentClick here to collapse content  I have exceeded my limit of liability; what do I do now?

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

 

Click here to expand contentClick here to collapse content  OPA limits on liability do not apply if a responsible party fails or refuses to provide all reasonable cooperation and assistance requested by a responsible official in connection with removal activities. If a responsible party determines to stop paying for removal after it has paid or incurred OPA removal costs and damages up to the OPA liability limit amount, will that be considered a failure or refusal to provide all reasonable cooperation and assistance?
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.