GAO recommends Coast Guard adjust oil spill cleanup liability limit

GAO recommends Coast Guard adjust oil spill cleanup liability limit A congressional watchdog recommended that the Coast Guard adjust its liability limits for oil spill cleanup costs by vessel type and make recommendations about these changes to Congress.
   The Government Accountability Office also said the Coast Guard should adjust the limits of liability for vessels every three years to 'reflect changes in inflation, as appropriate.'
   The agency reviewed 51 spills with costs above $1 million, which have occurred since 1990. The responsible parties and the federal Oil Spill Liability Trust Fund have spent from about $860 million to $1.1 billion for oil spill removal costs and compensation for damages. The GAO noted that responsible parties generally paid 72 percent to 78 percent of these costs, while the fund covered the remainder. The 51 spills represented about 2 percent of all vessel spills in the past 16 years.
   Costs of oil spill cleanups vary by location, time of year, and type of oil spilled. Spills that occur in remote areas, for example, may increase the cost involved in mobilizing responders and equipment, the GAO said.
   'To date, the fund has been able to cover costs from major spills that responsible parties have not paid, but risks remain,' the GAO warned.
   The 2006 Coast Guard and Maritime Transportation Act increased liability limits, but the GAO's analysis found the new limit for tank barges remains low relative to the average cost of spills from vessels.
   'Since 1990, the Oil Pollution Act required that liability limits be adjusted above the limits set forth in statute for significant increases in inflation, but such changes have never been made,' the GAO said. 'Not making such adjustments between 1990 and 2006 potentially shifted an estimated $39 million in costs from responsible parties to the fund.'