CHAPTER 12 OCS EMERGENCY PREPAREDNESS
| Jurisdiction | United States |
(Oct 1998)
OCS EMERGENCY PREPAREDNESS
Nixon, Hargrave, Devans & Doyle LLP
Washington, D.C.
202/457-5356
Table of Contents
I. THE OIL POLLUTION ACT OF 1990—LIABILITY AND COST RECOVERY
A. Liability
1. Responsible Parties
2. Key Definitions
3. Retroactivity
4. Scope of Recoverable "Removal Costs" and "Damages"
B. Limitations of Liability
1. What the Limits Are
2. Exclusions from Limitations of Liability
C. Defenses
1. Act of God
2. Act of War
3. Act or Omission of Third Party
4. Exceptions for Failure or Refusal
D. State Role and Authority
E. Decision to Respond Versus Accepting Designation as a Responsible Party
1. Difference between responsibility for cleanup and accepting designation
2. Options for recipient of designation letter
3. Factors in determining whether to accept responsibility to clean up and/or designation
II. BRIEF COMPARISON WITH KEY PROVISIONS OF OTHER LAW
A. Outer Continental Shelf Lands Act (OCSLA)/OPA Relationship
1. Scope of Coverage
2. Historical Liability for Recoverable Damages
3. Regulatory Program of MMS
B. Common Law
1. Admiralty Law
C. Federal Water Pollution Control Act
1. Relation of 311 to 301 and NPDES to Oil Discharges Offshore
2. Definitions of Navigable Waters
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D. Comprehensive Environmental Response, Compensation and Liability Act (CERCLA)
1. Precedent
2. Mixed Spills
3. Responsibility and Authority
4. Petroleum Exclusion
E. Resource Conservation and Recovery Act (RCRA)
1. Savings Clause in OPA for Solid Waste Disposal Act (SWDA)(RCRA)
2. Exclusion
F. Relationship Between Federal and State Laws
1. State Laws
2. Federal Statutes that Entirely Preempt State Authority
3. Parallel Authority
4. Common Law
III. DISCHARGE/RELEASE NOTIFICATION
A. Sources of Discharge
1. Types of Sources
2. Agency Jurisdictional Responsibilities
B. Substance Spilled or Released
C. Required Regulatory Notifications
1. Common Reporting Requirements
2. Tailored List
3. Exemptions/Exclusions
4. Subsequent Reports
D. Location
IV. REMOVAL AUTHORITY—OIL AND HAZARDOUS SUBSTANCES
A. Federal Responsibility
B. Consistency with NCP
C. Responder Immunity
D. Unified Command
V. CONTINGENCY PLANNING
A. National Contingency Plan
1. Scope
2. NCP Elements
3. Organizational Elements
B. Area Contingency Plans (OPA)
C. Individual Response Plans
1. Oil Pollution Act Tank Vessel and Facility Contingency Planning
D. Response Plan Requirements Specific to Offshore Facilities
E. HAZWOPER Plans
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VI. ROLES AND RESPONSIBILITIES/JURISDICTION
A. Division of Responsibility between MMS and the Coast Guard
1. Relevant Definitions
2. Responsibility Over MODU Operation
3. Fixed Facilities
4. Floating OCS Systems
5. Shared Oversight Functions
6. Lead Agency for Investigations
B. Who's Who—Roles and Responsibilities in a Response
VII. COST RECOVERY AND CLAIMS
A. Federal Oil Spill Liability Trust Fund (Fund)
1. Uses of Fund
2. Designation Procedure/Advertisement
3. Subrogation
4. Presentation to RP and Fund/Election and Exceptions
5. Statute of Limitations
6. Notification and Presentation of Claims/Other than the OSLTF
7. Actions Against Third Parties by Potentially Responsible Party
B. Financial Responsibility
C. Actions Against Entity Who is Not Responsible Party
1. Guarantor
2. Indemnity
3. Contribution Actions
D. Cost Recovery by the Government
1. Case Examples
2. Bankruptcy of Responsible Party
E. Litigation and Jurisdiction
VIII. ENFORCEMENT UNDER OPA/CWA FOR OIL AND HAZARDOUS SUBSTANCES
A. Criminal Penalties
B. Civil Penalties Under OPA
C. Outer Continental Shelf Civil Penalties (MMS)
D. Inspection and Entry
Attachments:
I -- Comparison of Response Plan Requirements Under the Oil Pollution Act of 1990 and Minerals Management Service (MMS) Rules for Offshore Facilities
II -- Summary of OCS Civil Penalties Paid 9/1/97—12/31/97
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Corrections
Please note that 30 C.F.R. Part 250 has been redesignated. See 63 Fed. Reg. 29478 (May 29, 1998) ("Redesignation" Rule), and 63 Fed. Reg. 34596 (June 25, 1998) (correction).
Selected Recent Cases of Interest (supplement to OCS Emergency Preparedness paper):
United States v. Bois D'Arc Operating Co., 1998 U.S. Dist. LEXIS 14910 (E.D. La. 1998)This case distinguishes between lessee (responsible for OPA cleanup claims) and permittee (responsible for well closure under Louisiana law) for purposes of reimbursement of closure and cleanup costs; the issue was decided in a Rule 19 context where plaintiff sought to join the state oil and gas board as an indispensable party.
Commonwealth of Puerto Rico v. The M/V Emily S and the Barge Morris J. Berman, 13 F.Supp2d 147 (D.P.R. 1998).The owner of the tug argued that it was not a responsible party under the Oil Pollution Act because the oil leaked from the barge that had been under tow. The court treated them as one unit and held both responsible.
United States v. Varlack Ventures, Inc., 1998 U.S. App. LEXIS 15181 (3d Cir. 1998) and United States v. Boynes, 1998 U.S. App. LEXIS 15182 (3d Cir. 1998).Both cases describe warrantless searches of vessels, which can occur either based on probable cause or because they fall within the "exigent circumstances" exemption to the 4th amendment.
LeBoeuf v. Texaco, 1998 U.S. Dist. LEXIS 10415 (E.D. La. 1998).Presentment of a claim to a responsible party or its guarantor is a condition precedent to recovery but is not a jurisdictional prerequisite for all claims in a discharge case.
Colonial Pipeline v. Driggs Group, 155 F. Supp. 3d 558 (4th Cir. 1998).The 4th Circuit affirms dismissal of Colonial's claim against the third party because there was not enough evidence for the jury to reasonably find it more probable than not that the third party damaged the pipeline and caused the oil discharge.
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One of the most alarming environmental emergencies that can occur offshore is a major unanticipated spill of oil or petroleum products. Planning for such events is both required by law and advisable. This paper focuses on the requirements that govern oil spills as well as factors in preparation and actions during an event that can help minimize damages or criminal or civil penalties, and assist a responsible party in managing costs and preserving its image. While the paper refers to releases other than oil that could occur in offshore operations, the focus is on the Oil Pollution Act of 1990 ("OPA").
I. THE OIL POLLUTION ACT OF 1990 — LIABILITY AND COST RECOVERY
A. Liability. Title I of OPA establishes the federal liability scheme for vessels and facilities that spill oil on waters subject to U.S. jurisdiction. It sets out the scope of the act: the vessel, facilities, and waters that OPA applies to, the standard of liability and compensable damages. The provisions of Title I also set up the claims procedures, financial responsibility requirements, and uses of the $1 billion Oil Spill Liability Trust Fund. Liability is strict, joint, and several, as established under the Federal Water Pollution Control Act ("FWPCA" or "CWA").
1. Responsible Parties. A "responsible party" is someone under the statute who is in general strictly, jointly and severally liable for removal costs and damages.
a. Vessel: any person owning, operating, or demise chartering the vessel from which oil is or may be discharged.
b. Onshore Facility: Any person owning or operating the facility from which oil is or may be discharged (excluding government agencies).
c. Offshore Facility: The lessee or permittee of the area in which the facility from which oil is or may be discharged is located or holder of a right of use and easement (excluding government agencies).
d. Deepwater Port: The licensee.
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e. Pipelines: Any person owning or operating the pipeline from which oil is or may be discharged.
f. Abandoned Facilities: The person who would have been responsible immediately prior to the abandonment.
Producing oil fields appear to qualify as a "facility" under OPA. Avitts v. Amoco Prod. Co., 840 F. Supp. 1116, 1121 (S.D. Tex. 1994), vacated and remanded, 1995 U.S. App. LEXIS 9972 (5th Cir. 1995), opinion withdrawn and substituted opinion, 53 F.3d 690, 693-94 (5th Cir. 1995) (ultimately dismissing claim for lack of federal subject matter jurisdiction because only state claims were alleged).
2. Key Definitions. OPA (33 U.S.C. 2701) contains 37 definitions; in many cases OPA repeats verbatim definitions from the CWA:
a. Navigable waters: All waters of the United States beginning with wetlands and extending seaward 3 miles to the limits of the territorial seas (note that this is the same definition as under the CWA, which has been broadly construed to the limits of Congress' power under the Commerce clause of the U.S. Constitution). Discharges in or threats of discharges of oil to these waters are covered by OPA.
b. Baseline: The line of ordinary low water along the coastline in direct contact with the open ocean, and the line marking the seaward limit of inland waters.
c. Contiguous Zone: The area from 3 miles seaward of the baseline to 12 miles.
d. Territorial Seas: The belt of seas 3 miles seaward of the baseline.
e. Inland Zone: Area in which the Environmental Protection Agency (EPA) is predesignated as the Federal OnScene Coordinator (FOSC).
f. Coastal Zone: Area in which the U.S. Coast Guard (USCG) is predesignated as the FOSC.
g. Exclusive Economic Zone: The zone over which the U.S. has exerted natural resource protection, out to a distance of 200 miles from the baseline (except where limited by the jurisdiction of other nations' waters). OPA covers discharges in these waters.
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...h. Wetlands: Part of the "waters of the United States" regulated under section 404 of the CWA, which prohibits the discharge
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