Coast Guard says oil spill liability trust will be depleted by ?09

Coast Guard says oil spill liability trust will be depleted by æ09    The U.S. Coast Guard has said in a new report that funds in the Oil Spill Liability Trust Fund (OSLTF), reckoned to be $842 million at the end of fiscal year 2004, will be depleted by fiscal year 2009.
   As early as 2007, 'the level of funds may not be sufficient to cover all anticipated uses due to conflicts with Congressional earmarks and appropriations for various fund uses,' the Coast Guard said in a statement.
   Since the actual spill removal costs and damages that the fund must pay depend on the number and severity of oil spills, 'a single major or catastrophic oil spill could have a significant impact' on the fund balance, the Coast Guard explained.
   Therefore, 'the long-term viability of the Oil Spill Liability Trust Fund is questionable unless additional sources of revenue can be identified and put into place. The current structure of the fund as it has evolved is not self-sustaining,' particularly since 'the tax on oil and transfers from the legacy funds that were replaced by OSLTF have expired,' the Coast Guard warned.
   If the fund is exhausted, federal responses to oil spills will have to be terminated or funded by other means, which will deprive state and local governments of 'important compensation for their qualifying spill response projects,' the report said.
   One solution for replenishing the oil spill liability trust fund is to use a combination of reinstating the fee on imported oil and indexing liability limits to inflation, the Coast Guard said.
   There have been 19 oil spill incidents since 1992 that are known to have resulted in removal costs and damages in excess of liability limits set by the Oil Pollution Act of 1990 (OPA '90). All such incidents involved vessel spills.
   'OPA liability limits have not been adjusted for inflation since OPA was enacted,' the Coast Guard noted. In addition to such a timely adjustment, since data from the 19 spills suggests that 'the potential cost share for the fund for vessel spills is disproportionately large, an increase in the liability limits for such vessels may be desirable to reflect the 'polluter pays' policy that is the foundation of the OPA liability and compensation regime,' the report said.
   The report also said the U.S. domestic tank barge industry will be impacted if the phase-out date for single-hull tankers is accelerated from 2015 to 2010. Specifically, about 1,650 tank barges — representing 38 percent of the nation's total tank barge fleet — would lose five years of service life.
   'Overall, approximately 1,700 U.S. and 70 foreign single-hull tank vessels would be affected and lose some service life in U.S. waters,' the Coast Guard noted.
   The Coast Guard prepared its 'Report on Implementation of the Oil Pollution Act of 1990' at the request of Congress. For the full report, see https://www.uscg.mil/hq/npfc/pdf/osltf_report.pdf.