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Washington’s Federal Legislators Focus on Oil Spill Response, Prevention, and Reparations in the Pacific Northwest

April 12, 2006

In the first few months of 2006, Washington state representatives, senators, and senatorial candidates appear to be making the issue of oil spills a priority. So far this year, Washington legislators have urged payment of the pending multi-billion dollar punitive damage award in the Exxon Valdez litigation, played a role in tabling a Senate bill that would have allowed increased tanker traffic in Puget Sound, and introduced bills to both the House and Senate aimed at preventing oil spills during the transfer process, strengthening U.S. Coast Guard inspections, and decreasing oil spill response time by state and federal agencies.

This focus may be due in part to a series of high-profile oil spills in the Northwest over the past several years. As discussed previously in the Environmental News, the New Carissa oil spill off the coast of Oregon has been viewed as a warning of the kinds of major oil spills that can occur.[1] In Puget Sound, the 2004 Dalco Passage spill of approximately 1,500 gallons received considerable attention, particularly since the spill went undetected for a significant time, the responsible party was not identified for weeks after the spill occurred,[2] and, at that time “was the nation’s most expensive spill per gallon,” costing $2 million.[3] In another spill, a barge owned by Foss Maritime Company released approximately 4,800 gallons of industrial fuel oil at the ChevronTexaco terminal into Puget Sound near Shoreline, Washington in December 2003 (“Point Wells spill”).[4] The Point Wells spill fouled a pristine four-hundred-acre marine sanctuary, Suquamish tribal shellfish beds, public beaches, and the Doe-kag-wats marsh on the northern shore of Port Madison.[5] In April 2005, the Washington Department of Ecology (“Ecology”) fined Foss Maritime $577,000 in penalties for the 2003 Point Wells spill. This penalty was imposed in addition to an assessment of $4.5 million in cleanup costs and an as yet undetermined amount for the costs to restore environmental resources damaged by the spill.[6] The $577,000 fine is the second-largest ever issued by Ecology for a petroleum spill. Ecology Director Jay Manning explained last year that, “The lesson here is that there’s no such thing as an insignificant spill. Anyone who operates any size of watercraft must take extra care to not spill fuel into the water.”[7]

Looking back further, Washington regulators imposed the largest oil spill compensation claim in 1994, for the 1991 spill by the Japanese fishing vessel Tenyo Maru.[8] In the Tenyo Maru spill, 100,000 gallons of intermediate fuel oil and diesel spilled about twenty-five miles northwest of Cape Flattery after the Chinese freighter Tuo Hai collided with the Tenyo Maru, which was carrying over 350,000 gallons of intermediate fuel oil and about 97,800 gallons of diesel. The Tenyo Maru quickly began to sink and release oil after the collision.[9] In the Tenyo Maru spill, the company responsible for the spill settled with Ecology for $5,200,000; a consent decree has been filed and project implementation is underway.[10]

While Ecology, as a state agency, cannot fine the U.S. Army Corps of Engineers, it cited the federal agency in March 2006 for spilling approximately 50 gallons of hydraulic oil into the Columbia River from the oceangoing dredge Essayons in October 2005 (following four previous oil spills dating back to 2002 from the same vessel, two of which resulted in releases to the Columbia River).[11] According to Ecology, a private vessel could have been fined up to $10,000, and Ecology was not notified of the spill for nearly ninety minutes after it occurred.[12]

A review of data kept by Ecology shows that, in Washington state, twenty-five damage assessments from spills occurring between 2002 and 2005 are currently in progress, including assessments for the Dalco Passage and Point Wells spills.[13] According to Ecology, there have been at least twelve spills of over 1,000 gallons in Washington since 2002.[14] The response to a recent, relatively small, fifteen-gallon oil spill in Puget Sound from a Harbor Island stormwater outfall on March 17, 2006, illustrates the response efforts now in place in Washington: After the spill was reported, the U.S. Coast Guard and Ecology responded “by sea, land and air,” eventually using $15,000 from the federal Pollution Liability Trust Fund to boom the outfall. Ecology has not received any reports of harm to marine birds or other wildlife from the spill, but Stephen Metruck, Coast Guard captain for the port of Puget Sound, told a Seattle-area newspaper, “Any pollution within Puget Sound is something we take seriously.”[15] This high level of concern appears to be shared by Washington’s Congressional delegation.

On March 24, 2006, perhaps not coincidentally, the seventeenth anniversary of the eleven-million-gallon Exxon Valdez oil spill in Alaska’s Prince William Sound, Representative Dave Reichert (R-WA-08) sent letters seeking some closure to the 1989 disaster. Representative Reichert urged both Rex Tillerson (CEO, ExxonMobil)[16] to pay, and his colleagues in the United States Congress[17] to require payment, of the $4.5 billion punitive damage award awarded to the fishermen and other plaintiffs in the In re Exxon Valdez litigation. The current award was reduced from the original $5 billion award, payment of which has been stayed pending appellate court proceedings. Exxon alleges the award is unconstitutional and should be reduced to no more than $25 million.[18] This call to pay reflects the fact that Exxon has avoided paying any of the judgment while appealing decisions in Alaska federal district court to the Ninth Circuit six times, and winning every time.[19]

Representative Reichert, echoing plaintiffs’ sentiments, stated, “I’m frankly appalled that after almost 20 years, the fisherm[e]n and others who lost their livelihoods as a result of Exxon’s negligence still have not received a single penny of the punitive damages awarded to them … ExxonMobil earned $36 billion last year, a record for a single company, yet it still has not paid any of the punitive damages to people harmed by this disaster … 33,000 fishermen, businesses, and affected communities are still waiting for just compensation.”[20] Representative Reichert also noted that the Exxon Valdez Oil Spill Trustee Council estimates that the spill damaged 1,300 miles of coastline and killed approximately 2,800 sea otters and 35,000 birds.[21] University of Washington law professor William H. Rodgers, Jr. explains that the Exxon Valdez “spill killed more birds, contaminated more shoreline, covered more water, spawned more lawsuits, and ruined more lives than any oil spill in the history of this continent.”[22]

Exxon countered that it has paid $900 million to the Exxon Valdez Oil Spill Trustee Council, which consists of three state and three federal representatives and oversees use of settlement funds to restore damage to the environment of the Prince William Sound and surrounding areas.[23] Further, Exxon noted that the civil settlement included a “Reopener Clause,” under which Exxon is required to spend “an additional $100 million to fund restoration or rehabilitation of resources whose injuries were not foreseeable in 1989.”[24] In support of its appeals and arguments for remittitur, Exxon stated that it paid $2.2 billion toward cleanup of the Valdez spill between 1989 and 1992, and that it also “voluntarily began paying … over $300 million in … damage claims immediately to fully compensate those directly damaged by the spill[, to over] 11,000 people and businesses[.]”[25] Exxon also argued that the “unprecedented punitive damage judgment of $4.5 billion is meant solely to punish,” and that “it is not, in any way, an issue of compensation to the plaintiffs. It is not an outstanding claim that must be resolved. The appeals process has not delayed in any way payments for the actual damages caused by the spill,” and Exxon “is exercising a fundamental right to appeal these damages.”[26]

In another legislative initiative, on November 8, 2005, Senator Ted Stevens (R-AK) introduced S. 1977,[27] a bill that would have repealed section five of the Marine Mammal Protection Act, 33 U.S.C. 476 (a section also known as the Magnuson Amendment of 1977). The Magnuson Amendment seeks to protect Puget Sound from oil spills by restricting the tanker traffic supplying state refineries.[28] Former senator Warren Magnuson (D-WA) “put the Puget Sound protections in place after concluding that the Cherry Point refinery in Whatcom County could become a ‘super port’ for Alaskan crude oil.”[29] Senator Maria Cantwell (D-WA) stated last November that she would filibuster Senator Stevens’ bill, which would have allowed increased oil tanker traffic in Puget Sound by expansion of BP’s Cherry Point refinery, and to do “everything in [her] power to prevent giveaways to big oil companies that will increase the risk of a major oil spill in our precious Puget Sound.”[30] In March 2006, however, Senator Stevens asked that his bill be “permanently postponed” – an action some surmised was intended to remove a potential political advantage for Senator Cantwell over Mike McGavick, a Washington republican running for U.S. Senate.[31]

Meanwhile, Senator Cantwell introduced S. 2440, the Oil Pollution Prevention and Response Act of 2006, 109th Cong. (2006), to the Senate on March 16, 2006.[32] S. 2440 would, among other changes, strengthen safety standards for towing vessels; increase the frequency and comprehensiveness of vessel inspections performed by the U.S. Coast Guard; require promulgation of regulations to reduce the risk of spills during oil transfers; improve coordination with tribes with respect to oil spill prevention, preparedness, and response; and create a Federal Oil Spill Research Committee.[33]

In a related initiative, Representative Jay Inslee (D-WA) introduced H.R. 4724, the Oil Spill Prevention Act of 2005, 109th Cong. (2006), to the House on February 8, 2006.[34] H.R. 4724 attempts to prevent spills during the oil transfer process.[35] According to Representative Inslee’s office, H.R. 4724 contains U.S. Coast Guard recommendations provided after the Point Wells Spill – recommendations that Representative Inslee seeks to implement nationally.

For more information, please contact Jessica Ferrell.

[1] See Final Natural Resource Damage Plan Released for New Carissa Oil Spill in Oregon.

[2] See Lisa Stiffler, Oil Spill Found in Dalco Passage (Jan. 29, 2005); see also Joel Connelly, The Best Response to an Oil Spill is to Prevent It, Seattle Post-Intelligencer (Dec. 14, 2005). According to Kathy Fletcher of People for Puget Sound, “Two relatively small spills have pointed a vivid picture of how unprepared we are for a large spill.” Joel Connelly of the Seattle Post-Intelligencer identified the spills to which Ms. Fletcher referred: “The first was the Point Wells spill on Dec. 30, 2003, when an understaffed unboomed fuel transfer went array. The second was the Dalco Passage spill on Oct. 14, 2004, first reported by a tugboat in the middle of the night but not responded to for another 12 hours.” Id.

[3] Fred Felleman, We Must Reverse Complacency Over Oil-Spill Management, Seattle Times (Dec. 29, 2004).

[4] See Wash. Dept. of Ecology, Background; Point Wells Oil Spill: Health Questions and Answers; U.S. Coast Guard, Report of Investigation into the Circumstances Surrounding the Incident Involving Oil Spill / Foss 248 P2 on 12/30/2003.

[5] Wash. Dept. of Ecology, Point Wells Oil Spill Draws $577,000 in Penalties (Apr. 12, 2005).

[6] Id.

[7] Id.

[8] See Wash. Dept. of Ecology, Washington Oil Spill Resource Damage Assessments, 1991 – 2005.

[9] NOAA, Northwest Region, Case: Tenyo Maru Oil Spill.

[10] See Wash. Dept. of Ecology, Washington Oil Spill Resource Damage Assessments, 1991 – 2005, supra.

[11] Wash. Dept. of Ecology, Corps Cited for Spilling Oil from Dredge into Columbia River (March 2, 2006).

[12] Barbara LaBoe, Corps of Engineers Cited by State for Oil Spill, Daily News (March 3, 2006).

[13] See Wash. Dept. of Ecology, Dalco Passage Spill.

[14] See Wash. Dept. of Ecology, Washington Oil Spill Resource Damage Assessments, 1991 – 2005, supra.

[15] Lisa Stiffler, Oil Spill Blamed on Stormwater Outfall (March 18, 2006).

[16] See http://seattletimes.nwsource.com/news/local/links/exxonletter.pdf.

[17] See http://seattletimes.nwsource.com/news/local/links/ExxonMobile.pdf.

[18] See, e.g., In re Exxon Valdez, 296 F.Supp.2d 1071 (D. Alaska 2004) (appeal pending). The consolidated civil cases pertaining to the $4.5 billion punitive damage award have moved between the U.S. District Court in Alaska and the Ninth Circuit Court of Appeals multiple times. See, e.g., In re Exxon Valdez, 229 F.3d 790 (9th Cir. 2001) (appeal after remand, 239 F.3d 985 (9th Cir. 2001), 270 F.3d 1215 (9th Cir. 2001); on remand, 236 F.Supp.2d 1043 (D. Alaska 2002), vacated and remanded by Ninth Circuit, Docket No. 03-35166 (Aug. 18, 2003), opinion after remand, 236 F.Supp.2d 1071 (D. Alaska 2004). This series of lawsuits and opinions is beyond the scope of this article. For detailed information, see William H. Rodgers, Jr. et al., The Exxon Valdez Reopener: Natural Damage Settlements and Roads Not Taken, 22 Alaska Law Rev. 135 (Dec. 2005); Daisuke Wakabayashi, Fishermen Seek End to Alaska Court Case, Reuters (March 25, 2006).

[19] See generally id.;Rodgers, Exxon Valdez Reopener, supra, at 187.

[20] See Dave Reichert, Reichert Demands Compensation for Exxon Valdez Spill: On the 17th Anniversary of the Disaster, Reichert Asks Colleagues to Demand Justice From ExxonMobil (March 24, 2006).

[21] Reichert, Reichert Demands Compensation, supra.

[22] Rodgers, Exxon Valdez Reopener, supra (citing Alaska Oil Spill Commission, Spill: The Wreck of the Exxon Valdez 1, 5 (1990) (contaminated 1,244 miles of coastline); Robert E. Jenkins & Jill Watry Kastner, Running Aground in a Sea of Complex Litigation: A Case Comment on the Exxon Valdez Litigation, 18 USCLA J. Evtl. L. & Pol’y 151, 153, 167 (1999-2000) (250,000 birds killed and 330 lawsuits); Steve Keeva, After the Spill, 77 ABA J. 66, 66 (Feb. 1991) (181 separate suits in state and federal courts, over 75 law firms); Miles Tolbert, The Public as Plaintiff: Public Nuisance and Federal Citizen Suits in the Exxon Valdez Litigation, 14 Harv. Envtl. L. Rev. 511, 511 n.1 (1990) (within a month of the spill, the oil had covered 1,000 square miles of state land and waters and 1,300 claims were filed)).

[23] See Exxon Valdez Oil Spill Trustee Council.

[24] See generally Rodgers, Exxon Valdez Reopener, supra, at 135-140.

[25] ExxonMobil, ExxonMobil's Appeal of the Punitive Damages Judgment.

[26] Id.; Ken Freeman, ExxonMobil Alaska Public Affairs Manager, Valdez Punitive Damages: Letter to the Editor (Feb. 23, 2005).

[27] See http://thomas.loc.gov/.

[28] 33 U.S.C. § 476 provides:

(a) The Congress finds that--
(1) the navigable waters of Puget Sound in the State of Washington, and the natural resources therein, are a fragile and important national asset;
(2) Puget Sound and the shore area immediately adjacent thereto is threatened by increased domestic and international traffic of tankers carrying crude oil in bulk which increases the possibility of vessel collisions and oil spills; and
(3) it is necessary to restrict such tanker traffic in Puget Sound in order to protect the navigable waters thereof, the natural resources therein, and the shore area immediately adjacent thereto, from environmental harm.
(b) Notwithstanding any other provision of law, on and after October 18, 1977, no officer, employee, or other official of the Federal Government shall, or shall have authority to, issue, renew, grant, or otherwise approve any permit, license, or other authority for constructing, renovating, modifying, or otherwise altering a terminal, dock, or other facility in, on, or immediately adjacent to, or affecting the navigable waters of Puget Sound, or any other navigable waters in the State of Washington east of Port Angeles, which will or may result in any increase in the volume of crude oil capable of being handled at any such facility (measured as of October 18, 1977), other than oil to be refined for consumption in the State of Washington.

[29] Charles Pope & Neil Modie, Sound Tanker Bill Scuttled, Seattle Post-Intelligencer(March 3, 2006).

[30] Id.

[31] Alicia Mundy, Stevens Drops Oil-Tanker Bill to Give Cantwell’s GOP Foe an Edge in Race, Seattle Times (March 3, 2006); see also Blaine Harden, Puget Sound Bill Ignites Hill Battle, Wash. Post (Nov. 28, 2005). Senator Patty Murray (D-WA) applauded Senator Stevens’ decision to withdraw his proposal, attributing that withdrawal in part to Senator Cantwell’s efforts. See Patty Murray, Delegation Efforts Pay Off for Puget Sound (March 2, 2006). Courtney Boone, Senator Stevens’ spokeswoman, however, stated that “Mike McGavick is the person who convinced Senator Stevens to not pursue the legislation.” Liz Ruskin, Stevens Ends Push to Allow More Tankers, Anchorage Daily News (March 3, 2006). Still, British Petroleum may be able to pipe in Canadian crude oil “through the back door,” if it manages to get its oil into Washington by pipeline, rather than over water. See Robert McClure, BP plan Would Pipe Crude From Canada to State, Seattle Post-Intelligencer (March 10, 2006).

[32] See http://thomas.loc.gov/.

[33] S. 2440, §§ 101, 102, 103, 104, 301; see also Maria Cantwell, Cantwell Announces Comprehensive Oil Spill Prevention Legislation (Dec. 5, 2005); Jake Ellison and Robert McClure, Cantwell to Seek Tougher Rules for Oil Tankers in Sound, Seattle Post-Intelligencer (Dec. 5, 2005).

[34] H.R. 4724 was referred to the House Subcommittee on Coast Guard and Maritime Transportation on Feburary 9, 2006. See http://thomas.loc.gov.

[35] H.R. 4724; see also Oil Spill Experts Advance Discussion on Puget Sound Protections During Forum (Dec. 12, 2005).

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