05.12.05

Cantwell Calls for Action to Save National Oil Spill Trust Fund

New Coast Guard Report Predicts Trust Fund Used to Clean Up Puget Sound Spills Will Run Out of Money in Next Four Years

WASHINGTON, D.C. – U.S. Senator Maria Cantwell (D-WA) said today that Congress must address a looming shortfall in the national Oil Spill Liability Trust Fund (OSTLF), which has been used to help clean up oil spills in the Puget Sound region. A new report issued today by the U.S. Coast Guard predicts that the Trust Fund, which helps fund the cleanup of oil spills nationwide, will run out of money by 2009.

"Imagine having an oil spill with no money in the bank to clean it up. It could be devastating to our economy and our quality of life in Washington state," said Senator Cantwell, senior Democrat on the Senate Commerce Committee's Fisheries and Coast Guard subcommittee. "The Oil Spill Liability Trust Fund provides a critical safety net. That's particularly true when a responsible party hasn't been identified or is in dispute, like the recent Dalco Passage spill. It also makes sure the public interest is protected when the costs of a cleanup exceed the responsible party's liability limits."

The Oil Spill Liability Trust Fund was funded through a per-barrel fee on oil companies until it reached its statutory cap of $1 billion. The Fund was designed to be maintained from interest on that original $1 billion, but increasing clean-up costs and low liability caps have eroded the principal amount.

Today's Coast Guard report noted that "the impact of the exhaustion of the OSTLF is significant and far-reaching. First, if the OSTLF would not be available to fund cleanup of oil discharges, Federal response will either have to be terminated or funded from alternative revenue sources such as annual Federal appropriations. Second, without a viable OSLTF, those persons that incur removal costs or damages as a result of an oil spill may not be compensated. Significantly, state and local governments will be deprived of important compensation for their qualifying spill response projects," according to the report.

"When Congress passed the Oil Pollution Act of 1990, it never envisioned that the Oil Spill Liability Trust Fund would run dry," added Cantwell. "It's not fair to put our maritime communities and economy at risk. Instead, we should be providing them certainty that they won't get stuck footing the bill in the tragic event of a spill. I look forward to working with my colleagues on the Commerce Committee to help address this problem in legislation. I'm optimistic we'll be able to come up with a common-sense, bipartisan solution."

The level of interest on this issue is expected to be high, including among members of the Commerce Committee. The tragic Exxon Valdez incident led to passage of the original Oil Pollution Act of 1990, with the leadership of Committee Chairman Ted Stevens (R-AK).

The projected depletion of the oil spill fund was part of a report to Congress, required by the Coast Guard Authorization Act of 2004. The report also addresses a number of related issues, including the implications of expediting the use of double-hulls on tank vessels that transport oil from 2015 to 2010 as well as technology and navigational measures to reduce the incidence of oil spills. Senator Cantwell plans to work with her Senate colleagues on complementary legislation to also address these critical issues.

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