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About Natural Resource Damage Funding

Oil spills from vessels and facilities into our navigable waterways can have devastating impacts on wildlife sanctuaries, protected wetlands, unspoiled seashores, and pristine lakes and streams. Fortunately, there is a safety net to help cover the costs of reclaiming our nation’s invaluable natural resources following an incident.

Every day, across the country, oil spills threaten to injure or destroy our natural resources. Restoring, rehabilitating, and replacing these resources comes with a high price tag. It is the duty of the responsible party (RP) to pay for damages incurred when an oil spill impacts these natural resources. When the RP is not known or is unresponsive, the National Pollution Funds Center (NPFC) can provide access to the Oil Spill Liability Trust Fund (OSLTF) as a second line of defense.

While historically the NPFC provided only limited funding to address natural resource damages, a 1997 Department of Justice decision opened the doors for more direct access to the OSLTF. To ensure efficient and effective management of these claims, NPFC established the Natural Resource Damage (NRD) Claims Division, which provides responsive adjudication of claims and distributes information to potential claimants and the public.

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Natural Resources

Oil Pollution Act of 1990 (OPA) defines the term natural resources as land, fish, wildlife, biota, air, rivers, lakes, streams, or drinking water that belongs to, is managed by, or held in trust by the United States, or any state or local government or Indian tribe.

The term natural resources damages (NRD) refers to costs incurred when natural resources are injured or destroyed by an oil spill, including the cost of assessing those impacts.

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Natural Resource Trustee Claimants

Those who own, manage, or hold in trust natural resources are designated as Trustees and may submit NRD claims. The President designates federal Trustees. The governor of each state designates state and local officials as state Trustees. Tribal governments recognized by the United States government can designate representatives to act as their tribal Trustees.

Trustees include representatives from

  • Department of Agriculture
  • Department of Commerce (National Oceanic and Atmospheric Administration)
  • Department of Defense
  • Department of Energy
  • Department of the Interior
  • States and Territories, Indian Tribes, and Foreign Countries

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RP Claimants

Responsible parties may also submit claims to NPFC if the total of all removal cost and damage claims is more than the RP’s statutory liability limit or if the spill was caused solely by a third party, an Act of God, or an Act of War.

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Natural resource damage claims are intended to pay for the costs of:

  • Assessing the damage;
  • Restoring, rehabilitating, replacing, or acquiring the equivalent of the natural resources injured by the oil spill; and
  • Compensating for the lost use of the affected resources.

Depending on the circumstance, claims can provide funding “up-front” or in a reimbursable manner. Costs claimed must be based on a plan that has been made available for public comment.

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Types of Funding

NPFC provides funding for restoring natural resource damages in several ways.

Initiate Requests

A funded initiate request allows the trustee (in this case limited to a Federal Lead Administrative Trustee, as per Executive Order 12777) through an interagency agreement (IAA) with NPFC to use the OSLTF's Emergency Fund money to collect ephemeral (short-lived) NRD data.

Assessment Claims

A funded assessment claim allows the trustee (Federal, state, or tribal) to use OSLTF Principal Fund money to pay for assessing the damage to the injured natural resource, establishing the nexus between the incident and injury, and then the nexus of the injury to the natural resource damages. Assessment claims can either be paid upfront or after the Natural Resource Damage Assessment is completed.

Restoration Claims

A funded restoration claim allows the trustee (Federal, state, or tribal) to use OSLTF Principal Fund money to pay for the implementation of the preferred restoration alternative(s) as identified by the Damage Assessment and Restoration Plan. The goal of the restoration alternative(s) is to restore, rehabilitate, replace, or acquire equivalent natural resources and natural resource services so that the natural resource or service and the public are made whole with respect to their loss.

This can be done by primary and/or compensatory restoration.

  • Primary restoration seeks to restore the natural resource or service to the level (baseline) had the incident not occurred.
  • Compensatory restoration seeks to address the interim losses that occurred between the incident and the return to baseline.

Emergency Restoration Claim

In situations where the threat to natural resources is particularly severe and time is of the essence, an emergency restoration claim allows a trustee (Federal, state or tribal) to use OSLTF Principal Fund money to pay for actions whose goal is to avoid or minimize irreversible losses of natural resource and natural resource services resulting from either an oil spill or a substantial threat of an oil spill. Emergency Restoration claims can either be paid upfront or after the emergency restoration action has occurred.