Oil Spill Reporting & Related Legal Claims
Oil spills on the waters surrounding the U.S. can cause devastating harm to the environment, as well as damaging public health and the regional economy. The largest oil spill in the history of the petroleum industry is the BP Deepwater Horizon oil spill of 2010. This occurred when a BP oil rig released over 200 million gallons of crude oil into the Gulf of Mexico. The BP oil spill resulted in criminal charges and billions of dollars in fines, but the region still has not fully recovered more than a decade later.
When an oil spill meets a certain threshold, anyone responsible for the spill must inform the federal government. They also may need to notify states in some cases. Moreover, anyone who discovers an oil spill should contact the National Response Center at (800) 424-8802, even if they were not involved in causing the event. If this is not possible, the event may be reported to the regional office of the Environmental Protection Agency (when the event occurred on inland waters) or the local U.S. Coast Guard Marine Safety Office (when the event occurred on coastal waters, the Great Lakes, or the Mississippi River, or at a port or harbor).
Standards for Reporting Oil Spills
Under EPA rules, oil spills on navigable waters or adjoining coastlines must be reported if they violate water quality standards, cause a film or “sheen” upon the surface of the water or the adjacent coastline, or cause a sludge or emulsion to be deposited below the surface of the water or on the adjacent coastline. Thus, the sheer quantity of oil in the spill is not the only factor that may mandate reporting.
A handful of exemptions apply to reporting oil spills. For example, a spill does not need to be reported if the EPA administrator has permitted a discharge of oil related to research and development projects. Any discharge from a properly functioning engine on a vessel does not need to be reported. Certain types of discharges identified by the National Pollutant Discharge Elimination System (NPDES) also are exempt. Finally, certain discharges more than three miles from the coastline may be permitted under international law. The International Convention for the Prevention of Pollution From Ships (MARPOL) allows tankers to discharge mixtures with oil content under limited circumstances.
Compensation Under the Oil Pollution Act
In response to the Exxon Valdez oil spill of 1989, Congress enacted the Oil Pollution Act. This law holds accountable any party that was responsible for a discharge of oil from a vessel or facility into navigable waters, the shorelines of these waters, or exclusive economic zones. Responsible parties are not only strictly liable but jointly and severally liable. This means that a claimant does not need to prove that the responsible party failed to meet a certain standard of care, and any responsible party in an incident involving multiple responsible parties may be liable for the full amount of compensation. Generally, a claim must be made first to the responsible party. If it denies liability or fails to settle the claim within 90 days, the claimant can go to court or present the claim to the Oil Spill Liability Trust Fund, which is administered by the U.S. Coast Guard. Claimants also may pursue claims under any applicable state laws.
The OPA covers both removal costs and damages resulting from a spill. A claimant may recover damages under the OPA for harm to real or personal property, loss of subsistence use, loss of profits, or impaired earning capacity. (Government entities may recover other types of damages.) While compensation for removal costs is not capped, compensation for damages is subject to caps. These depend in part on the type of vessel or facility from which the oil was released.
