Thursday, May 6, 2010

Oil Pollution Act Of 1990

After the Exxon Valdez oil spill in 1989, Congress passed the Oil Pollution Act of 1990, warmly referred to as “OPA90″. OPA90 provided for an emergency spill fund so that response for a future spill could begin right away; established the US Coast Guard as the lead agency responsible for spill response; and for the first time required minimum insurance coverage and detailed spill contingency plans for operators of marine vessels, including operators of offshore oil and gas leases.
Another thing that OPA90 did, that seems to have escaped the notice of a legion of plaintiffs’ attorneys and potential claimants: it caps the commercial liability of those operators:
§1004 The liability for tank vessels larger than 3,000 gross tons is increased to $1,200 per gross ton or $10 million, whichever is greater. Responsible parties at onshore facilities and deepwater ports are liable for up to $350 millon per spill; holders of leases or permits for offshore facilities … are liable for up to $75 million per spill, plus removal costs.
There have been reports in the news media speculating as to BP’s liability, bidding up the amount each time: $1 billion, $3 billion, $8 billion, $14 billion…
I’m no lawyer, but with OPA90, that sounds a tad high to me.
OPA90 clearly holds BP responsible for the environmental cleanup. They could potentially be liable for personal injury claims related to the rig explosion and fire; injuries to personnel were not the result of the oil spill, after all. The liability for the loss of the rig by contract normally rests with the contractor, in this case Transocean, who is mostly insured for such events.
But claims of individuals and businesses affected by the spill are subject to the $75 million limit. This would include damages to fisheries, demurrage, business interruption, damage to the oil & gas resource, whatever you might imagine. A bankrupt company is of little use in cleaning up a spill.
Oh, and as for interpreting the law, you don’t have to believe me — three Democratic senators, all from coastal states opposed to offshore drilling, agree.
“[British Petroleum] says it’ll pay for this mess. Baloney,” says Florida Sen. Bill Nelson. “They’re not going to want to pay any more than what the law says they have to, which is why we can’t let them off the hook.”
Nelson has co-sponsored the bill with New Jersey Sens. Frank Lautenberg and Bob Menendez. According to their joint release, the law only requires the company responsible to cover all costs related to cleaning up an oil spill, but places a $75-million cap economic damages such as lost business revenues, damages to natural resources or lost local tax revenues.
“The bottom line is that oil spills can leave massive holes in the economy. If you spill it, you should have to fill it,” said Menendez, the bill’s primary sponsor. “There is no such thing as a ‘Too Big to Spill’ oil well, which is why we need this economic protection in place.”
[Emphasis added in 3rd paragraph. Bob Menendez channeling Johnnie Cochrane in the original. - ed.]
The liability limit was originally put in the law, as I understand, to gain industry support (the maritime industry, as well as oil and gas) for passage of the law. Plus, it was a practical consideration. Lawmakers at the time realized that in the event of a large scale spill event effecting a major harbor, waterway, or coastal area, the only limit on damages is the creativity of lawyers being paid on contingency.
But the lawmakers also didn’t conceive of a spill of the magnitude of the Deepwater Horizon spill.
For its part, BP has begun the macabre dance of trying to shift as much blame as possible to other parties, mainly rig owner Transocean, at this stage:
Robert Wine, a BP spokesman in London, says the responsibility for the drilling on the Deepwater Horizon was entirely Transocean’s. “It was not appropriate to second-guess Transocean,” says Mr. Wine. “It’s not BP’s role to oversee the safety of the rig.” Like many of its peers, BP did not require Transocean to install the acoustic back-ups used in the North Sea to trigger the blow-out preventer in the Gulf, which is not required by American law. Past experience shows that BP’s erection of a smokescreen to shift the blame will not survive scrutiny. Retreating to comfort zones could prove to be unsustainable.
Transocean spokesman Guy Cantwell says the company is “continuing to coordinate with everyone involved” in the investigation, and that “Transocean has a recognized safety record.”
[Source. Link may require registration.]
This deal will take years to play out in the courts and will doubtless spur the legislative ambitions of other politicians. As for me, I’m just hoping that BP controls this well very soon, that the environmental damage is minimal, and that the legislative and regulatory damage is minimal, too.
Cross-posted at VladEnBlog.


  1. There was the delayed response. There was the worrying about the image. There was the lack of resources. No, I’m not talking about Hurricane Katrina, but the Obama Administration’s handling of the British Petroleum oil spill.

    But it gets better. It is not only like Bush’s Katrina, but like Halliburton too.

    Turns out Barack Obama has gotten more money from British Petroleum than any other American politician. Not just that, but BP spent $15.9 million lobbying the Democrats and Obama last year.

    The result of all that money to Obama? The Obama Administration exempted British Petroleum from an environmental drilling study.

    Oh, and while the oil was spreading, the Interior Department Chief of Staff was white-water rafting on the Grand Canyon as part of a “work-focused” trip.

    That’s like Obama’s Director of the National Counterterrorism Center, who stayed on a ski vacation post-Christmas instead of returning to deal with the panty-bomber.

    These guys remain amateurs. They run a good campaign, but they can’t govern to save our lives.

  2. they didn't do the best job, but this is hardly Obama giving BP the freedom medal for its response, and blaming it all on ex Mayor Nagin.

  3. Joe they are totally blamming this on BP and Bush and anyone else. Where has the Obama admin taken responsability? They didn't do ANYTHING about it for 12 days. And that isn't a city with a mayor or a state with a governor. No no no this is all the feds and no one else. If I remember it was the "Chocolate City" mayor and Governor that had too by law take care of things first. The screwed up big time and blamed Bush like every Democrat in the nation. There were a lot of jurisdictions in that disaster and if Bush jumped too soon you would have called it a police state. Bush couldn't win. This disaster was up ,to the fed only. Only the Obama admin.had that jurisdiction of our Gulf coast and the oil rigs. Obama sat back and did nothing for over 8 days other then quiz BP on what they were going to do? Alls good because Gibbs came out and said BP is going to pay for it all. What about the disaster? BP will just charge more at the pump and give even more money to the Democrats and Obama to look a blind eye. BP is paying for it with our money. Can you afford $5/gal or more for gas all because Obama didn't want to get involved with something that was his responsability? If he is this hands off on something that is 100% his duty how whould he have been if he had lots of people to blame like Katrina. Who's job was it to evacuate for Katrina when the fed gave the warning? Who failed there?

  4. Chris, once again your pushing rightwing talking points long ago proven false.

    but thats how it goes with you guys. just repeat what Rush, Levin, Hannity, Beck and others say. Don't fact check it yourself.

  5. not to get off your subject, but you brought up the jurisdiction issues.

    Friday, August 26

    GULF COAST STATES REQUEST TROOP ASSISTANCE FROM PENTAGON: At a 9/1 press conference, Lt. Gen. Russel Honoré, commander, Joint Task Force Katrina, said that the Gulf States began the process of requesting additional forces on Friday, 8/26. [DOD]

    Saturday, August 27



    GOV. BLANCO ASKS BUSH TO DECLARE FEDERAL STATE OF EMERGENCY IN LOUISIANA: “I have determined that this incident is of such severity and magnitude that effective response is beyond the capabilities of the State and affected local governments, and that supplementary Federal assistance is necessary to save lives, protect property, public health, and safety, or to lessen or avert the threat of a disaster.” [Office of the Governor]

    FEDERAL EMERGENCY DECLARED, DHS AND FEMA GIVEN FULL AUTHORITY TO RESPOND TO KATRINA: “Specifically, FEMA is authorized to identify, mobilize, and provide at its discretion, equipment and resources necessary to alleviate the impacts of the emergency.” [White House]

    SUNDAY, August 28



    MORNING — LOUISIANA NEWSPAPER SIGNALS LEVEES MAY GIVE: “Forecasters Fear Levees Won’t Hold Katrina”: “Forecasters feared Sunday afternoon that storm driven waters will lap over the New Orleans levees when monster Hurricane Katrina pushes past the Crescent City tomorrow.” [Lafayette Daily Advertiser]

    9:30 AM CDT — MAYOR NAGIN ISSUES FIRST EVER MANDATORY EVACUATION OF NEW ORLEANS: “We’re facing the storm most of us have feared,” said Nagin. “This is going to be an unprecedented event.” [Times-Picayune]

    AFTERNOON — BUSH, BROWN, CHERTOFF WARNED OF LEVEE FAILURE BY NATIONAL HURRICANE CENTER DIRECTOR: Dr. Max Mayfield, director of the National Hurricane Center: “‘We were briefing them way before landfall. … It’s not like this was a surprise. We had in the advisories that the levee could be topped.’” [Times-Picayune; St. Petersburg Times]

    4PM CDT — NATIONAL WEATHER SERVICE ISSUES SPECIAL HURRICANE WARNING: In the event of a category 4 or 5 hit, “Most of the area will be uninhabitable for weeks, perhaps longer. … At least one-half of well-constructed homes will have roof and wall failure. All gabled roofs will fail, leaving those homes severely damaged or destroyed. … Power outages will last for weeks. … Water shortages will make human suffering incredible by modern standards.” [National Weather Service]

    LATE PM — REPORTS OF WATER TOPPLING OVER LEVEE: “Waves crashed atop the exercise path on the Lake Pontchartrain levee in Kenner early Monday as Katrina churned closer.” [Times-Picayune]



  6. Monday, August 29


    7:30 AM CDT — BUSH ADMINISTRATION NOTIFIED OF THE LEVEE BREACH: The administration finds out that a levee in New Orleans was breached. On this day, 28 “government agencies, from local Louisiana parishes to the White House, [reported that] that New Orleans levees” were breached. [AP]

    8AM CDT — MAYOR NAGIN REPORTS THAT WATER IS FLOWING OVER LEVEE: “I’ve gotten reports this morning that there is already water coming over some of the levee systems. In the lower ninth ward, we’ve had one of our pumping stations to stop operating, so we will have significant flooding, it is just a matter of how much.” [NBC's "Today Show"]

    11:13 AM CDT – WHITE HOUSE CIRCULATES INTERNAL MEMO ABOUT LEVEE BREACH: “Flooding is significant throughout the region and a levee in New Orleans has reportedly been breached sending 6-8 feet of water throughout the 9th ward area of the city.” [AP]

    MORNING — BROWN WARNS BUSH ABOUT THE POTENTIAL DEVASTATION OF KATRINA: In a briefing, Brown warned Bush, “This is, to put it mildly, the big one, I think.” He also voiced concerns that the government may not have the capacity to “respond to a catastrophe within a catastrophe” and that the Superdome was ill-equipped to be a refuge of last resort. [AP]

    MORNING — MAYFIELD WARNS BUSH ABOUT THE TOPPING OF THE LEVEES: In the same briefing, Max Mayfield, National Hurricane Center Director, warns, “This is a category 5 hurricane, very similar to Hurricane Andrew in the maximum intensity, but there’s a big big difference. This hurricane is much larger than Andrew ever was. I also want to make absolutely clear to everyone that the greatest potential for large loss of lives is still in the coastal areas from the storm surge. … I don’t think anyone can tell you with any confidence right now whether the levees will be topped or not, but there’s obviously a very very grave concern.” [AP]

    MORNING — BUSH CALLS SECRETARY CHERTOFF TO DISCUSS IMMIGRATION: “I spoke to Mike Chertoff today — he’s the head of the Department of Homeland Security. I knew people would want me to discuss this issue [immigration], so we got us an airplane on — a telephone on Air Force One, so I called him. I said, are you working with the governor? He said, you bet we are.” [White House]


    11AM CDT — MICHAEL BROWN FINALLY REQUESTS THAT DHS DISPATCH 1,000 EMPLOYEES TO REGION, GIVES THEM TWO DAYS TO ARRIVE: “Brown’s memo to Chertoff described Katrina as ‘this near catastrophic event’ but otherwise lacked any urgent language. The memo politely ended, ‘Thank you for your consideration in helping us to meet our responsibilities.’” [AP]

    LATE MORNING — LEVEE BREACHED: “A large section of the vital 17th Street Canal levee, where it connects to the brand new ‘hurricane proof’ Old Hammond Highway bridge, gave way late Monday morning in Bucktown after Katrina’s fiercest winds were well north.” [Times-Picayune]

    11AM CDT — BUSH VISITS ARIZONA RESORT TO PROMOTE MEDICARE DRUG BENEFIT: “This new bill I signed says, if you’re a senior and you like the way things are today, you’re in good shape, don’t change. But, by the way, there’s a lot of different options for you. And we’re here to talk about what that means to our seniors.” [White House]

  7. 4:30PM CDT — BUSH TRAVELS TO CALIFORNIA SENIOR CENTER TO DISCUSS MEDICARE DRUG BENEFIT: “We’ve got some folks up here who are concerned about their Social Security or Medicare. Joan Geist is with us. … I could tell — she was looking at me when I first walked in the room to meet her, she was wondering whether or not old George W. is going to take away her Social Security check.” [White House]

    8PM CDT — GOV. BLANCO AGAIN REQUESTS ASSISTANCE FROM BUSH: “Mr. President, we need your help. We need everything you’ve got.” [Newsweek]

    Tuesday, August 30


    MIDDAY — CHERTOFF CLAIMS HE FINALLY BECOMES AWARE THAT LEVEE HAS FAILED: “It was on Tuesday that the levee–may have been overnight Monday to Tuesday–that the levee started to break. And it was midday Tuesday that I became aware of the fact that there was no possibility of plugging the gap and that essentially the lake was going to start to drain into the city.” But later reports note that the Bush administration learned of the levee breach on Aug. 29. [Meet the Press, 9/4/05; AP]

    PENTAGON CLAIMS THERE ARE ENOUGH NATIONAL GUARD TROOPS IN REGION: “Pentagon spokesman Lawrence Di Rita said the states have adequate National Guard units to handle the hurricane needs.” [WWL-TV]


    Wednesday, August 31

    1:45AM CDT — FEMA REQUESTS AMBULANCES THAT DO NOT EXIST: “Almost 18 hours later, [FEMA] canceled the request for the ambulances because it turned out, as one FEMA employee put it, ‘the DOT doesn’t do ambulances.’” [Wall Street Journal]

    11:20 AM CDT — FEMA STAFF WARNED BROWN THAT PEOPLE WERE DYING AT THE SUPERDOME: Three hours later, Brown’s press secretary wrote to colleagues complaining that Brown needed more time scheduled to eat at a restaurant: “He needs much more that (sic) 20 or 30 minutes. We now have traffic to encounter to go to and from a location of his choise (sic), followed by wait service from the restaurant staff, eating, etc. Thank you.” [AP]

    Now maybe you get the picture that the ole W admin messed up the show and not the dems.

  8. Wow, what a whole lot of ancient history. Of course the Bush administration could have done better. So could a lot of people, including the people who should have evacuated but chose not to. I guess personal responsibility doesn't figure real big in the liberal mind-set though.

    But that was Katrina. This is an oil spill, and Joe please provide fact-checks if there is something that is wrong. You obviously don't have time or the urge to fact-check Jay-Nay and Comrade FAILk, but just saying we are repeating talking points as if that automatically makes everything that is said invalid is dishonest discussion. This administration F-ED up in its response, and now they are trying to cover it up. Does the phrase "The buck stops here" mean ANYTHING to this administration? LOL

  9. Joe do you not know the rule of the land? Do myou not know who is in charge of those kind of local disasters first? Did you ever ask why the other states and cities did so much better then New Orleans? Do you remember what a cluster ther locals made New Orleans? These people were given plenty of timew to leave and most chose not too.Stupid. Now you want to blame Bush for everything that the dumb public and local governement could have helped. I'm not saying FEMA and Bush did a great job when it was their time. But you blame it all on Bush when it doesn't even come close to being all his fault. And then when the disaster is the total responsablity of the Fed and Obama didn't do anything for over a week you blame Bush. You aren't even in reality and I pray you know it and your just playing a political game right now. Joe even the liberal press is blaming Obama for this one and it aint even started yet. But you on the left are so slow you still think the oceans will rise and CO2 is going to kill us all if we don't give the econuts our hard earned money to buy
    AIR. Real bright group you lefties are. I need to start a business selling you lefties something because you'l buy anything with the right sounding pitch.

  10. The Buck Stops Here Sign Has Been Changed to "Its Bushes Fault " John. This Guy Aint NO Truman. The Closer We Get To November The Closer This Regimes Is To Becoming a One Term and It Will Do What I Thought Impossible Make Carter Look Good!

  11. all i said was Barack response wasn't good enough, BUT he hasn't given BP a freedom medal yet.

    You guys made it into the "blame Bush thing" I responded to your comments after my post.

    So right now obama and Bush are both in the "slow department" but until he decides to give medals out to the slow and incompetent BP he's still one under Bush.

    Atleast we can agree with that right? Giving Mike Brown a medal for FEMA's response was ludicrous right?

  12. Chris you need to check you numbers ref BP and there contributions to President Obama. Your comment is extremely misleading.. BP historically has never been a big contributer to anyone. Here is a breakdown for President Obama. Lawyers/Law Firms $15,600,000 97
    Securities & Investment $10,250,000 61
    TV/Movies/Music $3,700,000 20
    Business Services $2,900,000 19
    Real Estate $2,650,000
    BP isnt even listed in the top 100. So do your homework or list your comments as opinions.. Dont use FOX tactics..The facts will trip you up everytime.

  13. I blame Bush and Cheney...Once again deregulation and not enforcing the rules..Cheney had all those closed door meetings with the oil companies...Forgave permits and put his oil friends in position to handle it all..Why did the mineral guy just quit,,,afraid we all figured that out..We will be cleaning up after Bush for years.


Please keep it clean and nice. Thank you for taking the time to post you thought. It means a lot to me that you do this.