[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
IMPLEMENTATION OF THE OIL POLLUTION ACT
=======================================================================
(109-67)
HEARING
BEFORE THE
SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
__________
APRIL 27, 2006
__________
Printed for the use of the
Committee on Transportation and Infrastructure
____
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
DON YOUNG, Alaska, Chairman
THOMAS E. PETRI, Wisconsin, Vice- JAMES L. OBERSTAR, Minnesota
Chair NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee ELEANOR HOLMES NORTON, District of
WAYNE T. GILCHREST, Maryland Columbia
JOHN L. MICA, Florida JERROLD NADLER, New York
PETER HOEKSTRA, Michigan CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan BOB FILNER, California
SPENCER BACHUS, Alabama EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio GENE TAYLOR, Mississippi
SUE W. KELLY, New York JUANITA MILLENDER-McDONALD,
RICHARD H. BAKER, Louisiana California
ROBERT W. NEY, Ohio ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas ELLEN O. TAUSCHER, California
GARY G. MILLER, California BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania JIM MATHESON, Utah
SAM GRAVES, Missouri MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania RUSS CARNAHAN, Missouri
TED POE, Texas ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio
(ii)
?
SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION
FRANK A. LOBIONDO, New Jersey, Chairman
HOWARD COBLE, North Carolina BOB FILNER, California, Ranking
WAYNE T. GILCHREST, Maryland Democrat
PETER HOEKSTRA, Michigan CORRINE BROWN, Florida
ROB SIMMONS, Connecticut GENE TAYLOR, Mississippi
MARIO DIAZ-BALART, Florida JUANITA MILLENDER-McDONALD,
DAVID G. REICHERT, Washington,Vice- California
Chair MICHAEL M. HONDA, California
CONNIE MACK, Florida ANTHONY D. WEINER, New York
LUIS G. FORTUNO, Puerto Rico BRIAN HIGGINS, New York
CHARLES W. BOUSTANY, Jr., Louisiana BRIAN BAIRD, Washington
DON YOUNG, Alaska JAMES L. OBERSTAR, Minnesota
(Ex Officio) (Ex Officio)
(iii)
CONTENTS
TESTIMONY
Page
Gilmour, Rear Admiral Thomas, Assistant Commandant for
Prevention, U.S. Coast Guard, Department of Homeland Security.. 3
Kennedy, David, Director, Office of Response and Restoration,
National Oceanic and Atmospheric Administration, U.S.
Department of Commerce......................................... 3
Lane, Jan, Director, National Pollution Funds Center............ 3
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Gilmour, Rear Admiral Thomas.................................... 21
Kennedy, David.................................................. 29
Lane, Jan........................................................ 21
SUBMISSION FOR THE RECORD
Lane, Jan, Director, National Pollution Funds Center, response
to a question from Rep. Coble.................................. 10
IMPLEMENTATION OF THE OIL POLLUTION ACT
----------
Thursday, April 27, 2006
House of Representatives, Committee on
Transportation and Infrastructure, Subcommittee
on Coast Guard and Maritime Transportation,
Washington, D.C.
The committee met, pursuant to call, at 10:00 a.m. in room
2167, Rayburn House Office Building, Hon. Frank A. LoBiondo
[chairman of the committee] presiding.
Mr. LoBiondo. Good morning. The Subcommittee will come to
order.
The Coast Guard and Maritime Transportation Subcommittee is
meeting this morning to oversee oil spill prevention and
response programs implemented under the Oil Pollution Act of
1990 and to review the level of funding in the Oil Spill
Liability Trust Fund.
Over the past two years, we have been reminded time and
again the importance of the Coast Guard's oil spill prevention
and response responsibilities. As recently as two days ago, the
Coast Guard responded to a seven mile long oil slick in the
Delaware Bay, which is still under investigation. This spill,
coupled with the recent hurricanes in the Gulf Coast region,
and last year's large oil spills in the Delaware River and off
the coast of Alaska have resulted in the release of millions of
gallons of crude oil into U.S. waters. I commend the Coast
Guard and its many Federal, State and local partners for the
response to these incidents.
In response to these spills, Congress has taken several
steps to provide the Coast Guard with additional authorities to
improve its capabilities to prevent and response to oil spills.
The House has passed H.R. 1412, the Delaware River Protection
Act, and a conference report on H.R. 889, the Coast Guard and
Maritime Transportation Act of 2006, has adopted the provisions
included in H.R. 1412.
The conference report includes a provision that will adjust
oil spill liability limits for vessels to reflect the changes
in the inflation since the passage of the Oil Pollution Act of
1990. This provision will encourage the use of double hulled
vessels by more than doubling liability limits on single hulled
vessels, making them more expensive to operate than the safer
double hulled alternative. The provision will also restore a
great share of the responsibility for costs associated with the
spills to the vessel owner and will enhance the solvency of the
Oil Spill Liability Trust Fund.
I, however, am very concerned about the effect recent
events may have on the long term health of the fund. The Coast
Guard's investigation into the Athos I oil spill has found no
evidence of violations by the river pilot or of the vessel, nor
can we identify the owners of the object that struck the
vessel's hull. I hope the witness will provide us with an
update on the investigation into the spill and the potential
cost to the fund if no liable party is identified.
I am also concerned about the potential use of oil spill
liability trust funds to pay for damages in the Gulf region
resulting from Hurricane Katrina. We have received estimates
that the cost associated with the response and restoration
activities could reach up to $800 million. I hope to learn more
about whether the Administration is suggesting that some of
these costs be absorbed by the Fund and how this could affect
the Fund's balance.
I am also interested in hearing testimony regarding the
Federal Government's research and development efforts under
OPA. OPA requires Federal agencies to conduct a wide scope of
oil spill research. However, we have made very little progress
towards this goal.
I believe that it is extremely important we continue to
develop technologies and procedures to improve our prevention
and response to oil spills. In the conference report on H.R.
889, we included a provision to authorize a program to
investigate technologies and procedures to remove or otherwise
mitigate submerged oil in U.S. waterways. I hope the enactment
of this provision will spur the Administration to support
further research in these areas.
Before I introduce our witnesses, I would like to express
my appreciation and that of the Committee to Admiral Gilmour
for his more than 30 years of dedicated service to our Country.
Admiral, congratulations, and we wish you a well-deserved
retirement.
I look forward to your testimony this morning, and I now
would like to turn to Mr. Filner for any statement he may have.
Mr. Filner. Thank you, Mr. Chairman, and thank you for
scheduling this hearing.
We passed the landmark legislation, the Oil Pollution Act
of 1990, in the wake of the Exxon Valdez disaster in Alaska. It
had languished in the House and Senate for years until Congress
got this wake-up call that it was in our national interest to
make sure that disasters like that don't happen again. But
marine casualties do continue to occur, perhaps not spilling as
much oil, but impacting our local communities nonetheless.
Mr. Chairman, I would like to focus on three issues and
hope the panel might refer to them. First, given our 16 year
history since enactment of the Oil Pollution Act, are the
limits of liability of ship owners proportional to the risk or
damage that their vessels could cause to our coastal
communities? Second, as we saw with the accident of the New
Carissa in Oregon several years ago, bunker fuels can cause a
lot of damage to our coastline and environment. However, the
double hulled requirements of the OPA only apply to tankers and
tank vessels that transport oil as cargo. It does not require
any improved safety protection for fuel tanks, even though a
large ship today can carry as much fuel as a World War II
tanker.
Third, Hurricane Katrina, and you mentioned this, Mr.
Chairman, has resulted in a large amount of oil being spilled
along our Gulf Coast. What is the potential liability exposure
of the Oil Pollution Liability Trust Fund to help pay for these
cleanup and remediation costs? Did vessel owners and shore
based oil facility operators take normally prudent measures
when they saw the storm coming, or did their failure, for
example, to fill their storage tanks with water contribute to
the oil being spilled from these tanks?
Mr. Chairman, last year the Subcommittee took some small
steps in helping to address some of the issues raised by the
large oil spill on the Delaware Bay that affected your
district. It is time for this Subcommittee to look at the Oil
Pollution Prevention program from a national and international
perspective and see what improvements need to be made to help
decrease the likelihood of future oil spills in the United
States.
Thank you again, Mr. Chairman, for scheduling this hearing.
I look forward to working with you to improve oil pollution
prevention and liability systems.
Mr. LoBiondo. Thank you, Mr. Filner.
Mr. Coble, would you like to start off with anything?
Mr. Coble. Thank you, Mr. Chairman. I will be very brief.
Admiral, I just want to reiterate what the Chairman said.
We appreciate your years of good service with America's oldest
continuous sea-going service and best wishes to you.
Mr. Chairman, I am told that Hurricane Katrina, you touched
on this, I think, peripherally, caused at least ten major oil
spills in the Gulf region, resulting in the release of
approximately 8 million gallons of oil into the waterways in
the region. I hope that one of the witnesses might touch on the
manner in which these hurricane-related costs are currently
being funded in the Gulf region.
It is good to have you all with us, and I yield back, Mr.
Chairman.
Mr. LoBiondo. Thank you, Mr. Coble.
Mr. Taylor? OK. Mr. Taylor will pass.
We are very pleased with our panel today. We have Rear
Admiral Thomas H. Gilmour, who is Assistant Commandant for
Marine Safety, Security and Environmental Protection for the
United States Coast Guard. We have Ms. Jan P. Lane, the
Director of the National Pollution Funds Center for the United
States Coast Guard. And Mr. David Kennedy, Director of the
Office of Response and Restoration, for the National Oceanic
and Atmospheric Association.
We thank the panel members. Admiral Gilmour, please
proceed.
TESTIMONY OF REAR ADMIRAL THOMAS GILMOUR, ASSISTANT COMMANDANT
FOR PREVENTION, UNITED STATES COAST GUARD, DEPARTMENT OF
HOMELAND SECURITY; JAN LANE, DIRECTOR, NATIONAL POLLUTION FUNDS
CENTER; DAVID KENNEDY, DIRECTOR, OFFICE OF RESPONSE AND
RESTORATION, NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION,
UNITED STATES DEPARTMENT OF COMMERCE
Admiral Gilmour. Thank you, Mr. Chairman.
Mr. Chairman, Representative Filner and distinguished
members of the Committee, good morning. I am Rear Admiral
Thomas Gilmour, Assistant Commandant for Prevention. And with
me, as stated, is Ms. Jan Lane, the Director of the National
Pollution Funds Center.
We are pleased to appear before you today to discuss oil
pollution prevention and the Oil Spill Liability Trust Fund.
Congress enacted the Oil Pollution Act of 1990 in the wake of
the Exxon Valdez spill in Prince William Sound and a rash of
other major spills. OPA's scope was ambitious, as it set new
requirements for vessel construction, crew licensing and
manning, mandating contingency planning, enhancing Federal
response capability, broadening enforcement authorities,
increased penalties and created a new research and development
program and increased the liability for those responsible
vessels and facilities that spill oil.
The Oil Spill Liability Trust Fund has been referred to as
the cornerstone of the OPA 1990 regime. The Fund provides the
resources for Federal incident-specific response and is
available to compensate individuals, businesses, natural
resource trustees and State and local governments for their
costs and damages resulting from a spill when responsible
parties do not pay.
The Fund is also used by Congress as a source for direct
appropriations to the various Federal agencies responsible for
the administration and enforcement of OPA, which supports
programs to prevent spills, to coordinate preparedness for
spill response at the national, State and local levels.
Enhanced spill research and development initiatives compensate
injured parties and make polluters pay when spills occur.
The enormous success of the OPA 1990 regime can be measured
in large part by the overall reduction in the quality of oil
spilled since 1990. The combination of OPA and the Fund has
been highly effective in achieving the success and in
comprehensively addressing oil pollution risks and damages.
Despite the many success stories over the 16 years since OPA
was enacted, risks to the long term viability of the Fund
persists. The financial rate or tax on oil expired in 1994, but
fortunately in the summer of 2005, Congress provided for the
resumption of the financing rate. The rate is effective this
month and continues in effect through the end of 2014, with
revenue to be deposited to the Fund.
While a resumption of the financing rate is an important
step in ensuring continued viability of the Fund, there are new
challenges on the horizon. One key issue is the limit on
liability. OPA provides for adjustments to vessel liability
limits by regulation to reflect increases in the consumer price
index, but limits have not been adjusted for the CPI since OPA
was enacted. While the Coast Guard has taken steps toward
making the CPI base adjustment for vessels through regulation,
we believe the magnitude of the adjustment needed is greater
than what the CPI based adjustments will provide.
A responsible party's liability for removing costs and
damages is limited unless certain exceptions apply. The
liability limit for a vessel spill is based on a formula that
considers a vessel's tonnage and whether the vessel, ship or
barge, is a tank vessel or a non-tank vessel. Liability limits
for on-shore facilities, off-shore facilities and deepwater
ports are set at designated amounts.
Fundamental to OPA is the polluter pays principle. Thus,
the issue is whether the current liability limits are
sufficient to support the polluter pays principle.
The catastrophic impacts of Hurricanes Katrina and Rita
included substantial damage to oil production infrastructure
and an estimate discharge of more than 9 million gallons of
oil. Fortunately the Stafford Disaster Relief and Emergency Act
funds were available to finance the Federal response and
assistance in connection with the environmental cleanup. The
Fund has not been tapped for cleanup costs of oil spills caused
by these hurricanes. However, we are concerned about major
claims exposure for natural resource damage and for oil removal
costs and damages incurred by responsible parties and other
third parties.
While responsible parties are generally liable under the
Oil Pollution Act for costs, they too may present a claim to
the Fund for their costs and damages that exceed their
applicable OPA liability limit, or for their costs and damages
if they can establish one of the OPA complete defenses to
liability.
One OPA defense that is likely to be seriously tested as a
result of these hurricanes is the act of God defense. One of
the principal reasons the Fund was created was to provide for a
source of funding in response and compensation when responsible
parties do not pay. The question today is whether that risk is
properly apportioned between the responsible parties and the
Fund. Clearly, responsible party limits, at least for vessels,
are long overdue for an increase. That need was recognized in
H.R. 1412, the Delaware River Protection Act, which Chairman
LoBiondo introduced and which was subsequently incorporated in
large part as Title VI of H.R. 889, the Coast Guard and Marine
Transportation Act of 2006.
We look forward to working closely with Congress as we
report further on the adequacy of liability as a means to
ensure the polluter pays its fair share and that the OPA and
the Fund regime continues to provide effective and efficient
oil spill prevention, response and compensation services to the
public.
Thank you again for the opportunity to testify before you
today, and we will be happy to answer questions.
Mr. LoBiondo. Thank you, Admiral Gilmour.
Ms. Lane, thank you for being here. Please proceed. I'm
sorry, Mr. Kennedy.
Mr. Kennedy. Thank you for the opportunity to present
NOAA's role in response, restoration and research under the Oil
Pollution Act. I am David Kennedy, Director of the Office of
Response and Restoration at NOAA.
OPA created a comprehensive prevention response liability
and compensation regime to respond to oil pollution incidents.
Under OPA, NOAA acts as a natural resource trustee for coastal
and marine resources. NOAA's responsibilities include working
through the national and regional response teams to ensure the
most appropriate response and cleanup actions are taken to
protect resources from further injury, working with our co-
trustees to assess and restore injured natural resources, and
carrying out oil spill research and development under Title VII
of OPA.
Our Nation must be prepared to respond to major oil spills.
The near-simultaneous Athos I and Selandang Ayu referred to
already spills in late 2004 and the magnitude of oil spilled
again referred to after Hurricanes Katrina and Rita last fall
serve as reminders of that fact.
NOAA's response to each incident is dependent on the
skill's characteristics. Using its expertise and state of the
art technology, NOAA forecasts the movement and behavior of
spilled oil, evaluates the risks to resources and
recommendations protection priorities and appropriate cleanup
actions. In addition, NOAA scientists and economists work with
other trustees and responsible parties to ensure the coastal
and marine resources injured by oil spills are restored.
I would like to share with you three examples of NOAA's
past response and restoration work. On November 26th in 2004,
the MT Athos I, a 750 foot tanker, hit several submerged
objects in the Delaware River, spilling approximately 265,000
gallons of heavy oil. In addition to surface and shoreline
oiling, a portion of the oil migrated below the water surface,
complicating the response and assessment efforts. During the
event, NOAA provided oil trajectory analysis, weather
forecasts, shoreline impact assessments, and recommendations on
environmentally appropriate cleanup techniques.
The NOAA navigation response team conducted emergency
navigational surveys to locate the objects responsible for the
incidents and to identify potential sunken oil collection
points. U.S. Coast Guard suspended vessel traffic through the
area, and the Salem Nuclear Power Plant shut down two reactors
as a precaution to prevent oil-fouled water intakes. The
detection of submerged oil was a critical economic issue in
this case, essential to the reopening of the port and the
reactivation of the power plant. NOAA led a special task force
to develop detection and mitigation methods for the submerged
oil. NOAA's efforts aided in the rapid return of normal vessel
traffic and helped the plant, a significant regional power
supplier, come back online.
NOAA also led State and Federal trustees in efforts to
initiate natural resource damage assessment. NOAA continues to
work closely with Fish and Wildlife Service in the States of
New Jersey, Delaware and Pennsylvania to restore coastal marine
resources injured from the Athos spill. On December 7th and 8th
of 2004, the cargo vessel Selandang Ayu lost power and ran
aground and broke in half in the shores of Unalaska Island,
Alaska, losing about 60,000 tons of soybeans along with 335,000
gallons of fuel oil. Again, NOAA conducted shoreline and aerial
surveys and prepared a comprehensive map of shoreline
contamination as well as providing on-scene weather
information.
NOAA staff coordinated environmental issues for the unified
command, including technical matters related to potential
dispersant use and trajectory forecasts for the residual oil on
board. NOAA also worked with the Coast Guard and State of
Alaska to monitor cleanup operations. NOAA continues to work
with other natural resource trustees and the responsible party
to conduct a damage assessment.
Public meetings have been held to solicit local input on
potential restoration alternatives. And NOAA is committed to
providing the public with up to date information and
opportunities for review and comment during the damage
assessment restoration planning process.
As it relates to Katrina, the magnitude of environmental
impacts of the aftermath of Katrina are unprecedented. As has
been mentioned, 9 million gallons roughly released, thousands
of vessels sunk and stranded. NOAA was one of the first Federal
agencies to respond after the Coast Guard, and we provided
staffing to multiple command posts, provided U.S. Coast Guard,
EPA and States with critical scientific information to support
cleanup and recovery. This included the assessment,
prioritization and mitigation of over 1,000 hazardous material
releases.
Thank you for the opportunity to talk about NOAA's
important work under OPA. My written statement has more in-
depth description of our work and current research efforts. Of
course, I would be happy to answer any questions. Thank you.
Mr. LoBiondo. Thank you, Mr. Kennedy.
Mr. Filner?
Mr. Filner. Thank you for being here this morning.
As I outlined in my opening remarks, I had several areas of
interest. For example, the limits of liability for cleanup and
restoration, as I understand it, were established under OPA
after the Exxon Valdez. But the limits are based on gross
tonnage of the vessel and are not necessarily risk-based.
So I guess the questions I have, do the limits of liability
in OPA reflect the risk with cleaning up an oil spill after a
marine casualty whether the oil was transported as fuel or as
cargo? Can we get to a risk-based kind of a coverage here?
Ms. Lane. I think the only thing that we could probably
look to is recent data that we have been able to collect over
the past several years. And recent data would suggest that for
certain high risk vessels that limits may be disproportionately
low and should be raised well above CPI levels, which as you
know, could only be achieved through Congressional action.
The cost data in respect to oil spills from cargo vessels
and tank barges, or costs that exceeded limits, indicate that
liability limits for those vessel types may pose the greatest
risk. And since 1999, there have been 55 vessel incidents
involving over $1 billion in incident costs that have resulted
in oil removal costs and damages of $800 million in excess of
their OPA liability limits. That is, 80 percent of the cost of
those 55 incidents exceeded their liability limits. Eighty-
three percent of those costs were realized in 29 incidents,
about more than half the incidents involving 2 tank ships, 13
tank barges and 14 cargo vessels. And only one of these, the
DPL 152 that recently hit a submerged platform in the Gulf
after Hurricane Katrina, had double hulls. All the others were
single hulls.
Sixty-one percent of the excess liability costs that we
have seen were for tank barges and cargo vessel spills alone.
In addition, there were 26 incidents involving smaller vessels,
small fishing and other vessels, where limits were exceeded.
But those incidents represented only 17 percent of the costs.
Fourteen of the larger cases have resulted in $240 million
in claims to the Fund and four additional cases are ongoing,
which we believe could result in claims of more than $160
million to the Fund. We believe that this data shows that the
OSLTF may be at a disproportionate risk for removal costs and
damages, particularly with respect to tank barges and cargo
vessels. Because limits on that particular class of vessels are
relatively low compared to tankers and compared to the risk of
a spill. And that CPI liability increases alone may not be
adequate to reflect the appropriate share of risk between
polluters and the OSLTF.
Mr. Filner. And so what conclusions do you draw? What
adjustments should we make in the limits of liability? Do you
have some specifically related to those figures that we should
change?
Ms. Lane. We don't have any specific levels that we would
recommend. The Administration has not reviewed it. H.R. 889
asks us to take a look at that. I am not sure if we will have
adequate time within the 45 day reporting requirement to
provide any recommendations on specific limits. I think we
would look to a dialogue with Congress and with the industry
about what limits might be appropriate, based on the data that
we've seen.
Mr. Filner. That is one area we ought to talk more about.
Just briefly on Hurricane Katrina, Mr. Chairman, there were
many examples, I think the sum totals were given in the
testimony. There was one oil company which had a 250,000 barrel
above-ground storage tank, and it was dislodged and damaged.
The tank at the time contained, as I understand, 65,000 barrels
of crude oil and released approximately 25,000 barrels of that.
And it impacted about 1,700 homes in an adjacent neighborhood.
As I understand it, a prudent owner would have filled the
tank with water to prevent the storm surge from lifting it off
its foundation. This was not done by the oil company. Should
they be allowed to limit their liability for this oil spill and
have the Federal Government pay for the cost, or should we talk
about again what a prudent owner should have done?
Ms. Lane. I think that that really gets to the question of
claims and whether or not responsible parties will be able to
file a claim against the Fund successfully. In some cases, they
may be claiming a defense to their liability. One defense may
be an act of God defense. And we will be looking at that very
closely, as I am sure you are aware, act of God in the statute
is defined as an unanticipated grave natural disaster, other
natural phenomenon of an exceptional, inevitable and
irresistible character.
Mr. Filner. No, but that was the election in 1994. That was
not an act of God.
[Laughter.]
Mr. Filner. Read that definition again so people can get
what I was saying.
Ms. Lane. The effects of which could not have been
predicted or avoided by the exercise of due care or foresight.
And to establish the defense, the act of God must be the sole
cause of the discharge. Each claim that we receive will be
adjusted on its merits, taking into account the specific
circumstances of the discharge.
To the extent possible, we will look at industry standards
as well as facility plans for design, construction, maintenance
of the facility, as well as prevention, preparedness, including
shutdown procedures and response. And we will look at the
extent to which the facility owners complied with both industry
standards and their specific facility plans, and the extent of
due care and foresight that was taken in preparing for the
storm and preventing the discharge.
It is worth noting that prior to Katrina, we had received
six act of God claims from responsible parties against the
Fund. They were all vessel spills and all were denied on the
basis that they did not meet the due care, foresight and sole
cause thresholds of the defense.
In general, I would say that it is a very difficult defense
to establish. However, with Katrina, I think we will be
breaking new ground, as has been experienced in so many other
areas with Katrina, because of the magnitude and severity of
the storm. We could find that RPs are more successful in
asserting this defense than they have been in the past. But
again, we will have to look at each case on a case by case
basis.
Mr. Filner. Right. Thank you, Mr. Chairman.
Mr. LoBiondo. Mr. Coble.
Mr. Coble. Thank you, Mr. Chairman.
Admiral Gilmour, the Coast Guard estimated approximately
$750 million was available in the Oil Spill Liability Trust
Fund at the beginning of fiscal year 2006. Do you have an
estimate as to the balance currently held within that fund?
Admiral Gilmour. Sir, I am going to let Ms. Lane handle
that question. She has the answer for you.
Mr. Coble. OK, thank you.
Ms. Lane. As you probably know, we will be providing a
report to Congress which includes a nine year forecast of the
Fund. It was recently cleared by the Administration and you
should be receiving that soon. What that report will show is
that the current balance of the Fund is $662 million. And the
emergency fund balance is $46 million.
I can provide you some additional details on the revenue
forecast and expense forecast and projected balances that will
be reflected in that report, if you would like, sir.
Mr. Coble. Well, how does this current balance----
Mr. LoBiondo. Excuse me, yes, we would like that.
Ms. Lane. OK.
[The information received follows:]
[GRAPHIC] [TIFF OMITTED] T8282.001
Mr. LoBiondo. Thank you.
Ms. Lane. Again----
Mr. LoBiondo. If we could provide that in a written
response afterwards.
Ms. Lane. Yes.
Mr. Coble. Thank you, Mr. Chairman.
How does this available balance currently held within the
Fund carry out the spill prevention response and restoration
actions? What do you say to that?
Ms. Lane. Of the various agencies? There are several
different components to that. I think one very important
component is the agency appropriations that are received every
year for the agencies that have a key role in the
implementation of OPA 1990. They receive about $90 million a
year for their roles and responsibilities in prevention,
preparedness, response infrastructure, compensation, liability
and R&D. It provides the ready capability for agencies for the
Federal Government to be able to respond to spills when they
occur.
Also there is a $50 million emergency fund appropriation
that is a portion of that balance. And it is available for all
response costs that are required for responding to the spill,
for removal costs, and those funds generally are available for
the Federal responders as well as State responders and----
Mr. Coble. But are you comfortable with the current
balance?
Ms. Lane. I would say that we are very fortunate that the
tax was reinstated last summer. That will be bringing an
additional $200 million into the Fund on average each year. And
that certainly will go a long way to keeping the Fund healthy.
There are, as a result of a number of spills, larger spills
that we have seen in the past couple of years, I believe that
they are going to tax the Fund significantly over the next
couple of years, particularly with respect to claims,
particularly with respect to the Athos. And we would expect to
see the Fund balance over the next couple of years probably by
the end of fiscal year 2007 drop to a level of about $500
million. And then after those Athos costs, or payments, are
made, and barring any large Katrina claims or other large
spills, we should see the balance start to gradually increase
again until the tax revenue expires.
Mr. Coble. OK. Well, at the outset, I expressed interest in
how the hurricane-related response and restoration costs in the
Gulf region are being funded. I don't believe you all addressed
that. If you did, I missed it. How about addressing that?
Ms. Lane. Yes, sir, I would be happy to do that.
Again, we have a report to Congress, which you should get
soon, which will provide a little bit more detail. But
unfortunately, that report will not make any specific
predictions about the specific impact on the Fund. At this
time, the estimates are really impossible to quantify. We just
simply don't have the data. The $800 million that was indicated
earlier was just a very rough estimate, based on our
experience, historical estimates, experience with the Exxon
Valdez, experience with the Athos and other large spills that
we have seen.
What the report will do is just try and address the
potential impacts. And it will show that to date, there have
been no costs charged to the OSLTF for Katrina. We are all
aware of the magnitude of the spills down there, some 900
million gallons spilled, 6 major, 5 medium spills, 120 wrecked
or destroyed offshore platforms in the Gulf, 300 pipelines
destroyed.
And in addressing all this, the Coast Guard has received
$178 million in Stafford Act funding for ESF-10 pollution
removal activities to respond to those incidents. However, we
believe that the potential for claims still exists, based on
our experience with other large spills.
Mr. Coble. Well, this will be addressed, I presume, in more
detail when your report is forthcoming.
Ms. Lane. Yes, sir, but we really are not able in the
report to specifically quantify the amount of impact on the
Fund.
Mr. Coble. OK. I think my time has expired, Mr. Chairman. I
yield back.
Mr. LoBiondo. Thank you.
Mr. Taylor.
Mr. Taylor. Thank you, Mr. Chairman. I want to thank our
witnesses.
What percentage of barges that operate in American waters--
just a couple quick questions--what percentage of barges as of
today are double hulled? What percentage of tankers in the
Jones Act trade are double hulled? What percentage of
international commerce tankers, those coming from overseas, are
double hulled?
Second question, directly to Admiral Gilmour, I never want
to miss the opportunity to brag on the great job the Coasties
did in Hurricane Katrina. A lot of guys leaned forward, made
great decisions at the end of the month when I know there were
a lot of aviation fuel and steaming fuel and again, if FEMA had
done half as well as you all, Michael Brown might still be on
the Government payroll.
So the question to the Coasties is, one of the outcomes of
the storm, particularly on the Mississippi Gulf Coast, is that
every single waterfront fueling facility was out of business.
Shrimp season comes up, you need two things to run a shrimp
boat. Well, you need a crew. You have to have a boat, a crew,
oil and ice. And since every one of our waterfront facilities
is gone, and because the business has not been good for the
past few years, I am noticing a great reluctance of people to
invest in waterfront oil and facilities.
What if anything can we do with the Oil Pollution Act to
try to grant some waivers or at least work with people who are
willing to run a fuel truck to the water's edge so we can start
fueling boats this summer and for those people who understand
the business, at least get them fuel. I am going to ask, I know
that is an involved question, but I want you all to think that
through, because I know most of those truckers probably did not
have the insurance they need to fuel boats. But I can tell you
that folks who were in the business are not jumping back into
the business. And so we have to find something to fuel those
boats, and I want you to think about that.
Lastly, to Ms. Lane, I heard with great interest that the
costs of, apparently what you are telling me is that the cost
of the cleanups are not matching the fines. As someone who was
here for the passage of the Oil Pollution Act in 1990 when we
were talking about unlimited liability, my question to you
would be, did we actually have to reach into appropriated funds
to pay for those cleanups, or to date, has that money been
coming out of the Trust Fund? And if it has been coming out of
the Trust Fund, are annual collections meeting annual outlays,
or are we dipping into previous year collections to make last
year's outlays?
And lastly, for Mr. Filner, in fairness, at least in the
case of one of those spills, the Murphy oil spill in Chalmette,
Louisiana, it is not only an act of God, but the levees that
the taxpayers of the United States built failed. And so I would
hope that we would keep that in mind. Had the levees not
failed, there would not have been a spill at the Murphy oil
facility in Chalmette. Just wanted to throw those two cents in
there.
Admiral Gilmour. Sir, on your first question, about
percentages of tankers, tank barges and then foreign tank
vessels coming in, I would like to follow up and make sure I
give you the right answers. My gut feeling is right now the
majority are, but, and I have seen the numbers but I would like
to come back.
Mr. Taylor. The reason for that, Admiral, is not too long
after the passage of it, I attended a dinner with a lot of
international tank owners. And some of them made some remarks
like, we are just going to wait until the last minute and then
we are going to go to Congress and say, either give us a waiver
or you get no oil.
So again, it might have been a guy who had one too many
martinis, or it might have been a real threat. So what I am
trying to think, and it was made several years ago. So that is
the reason, are they complying or aren't they? Are they
complying on a time line that gets us to 100 percent by the
mandated days?
Admiral Gilmour. Yes, sir, I can positively answer that we
inspect every vessel with OPA 1990 in mind and review their
records. So they are meeting the time line. The results of
concerns on insurance, I think, when OPA 1990 happened, and
that did not happen at the end of the period where they were--
--
Mr. Taylor. If the Chairman will indulge me, one of the
other things that was said that night, and only you and Ms.
Lane and Mr. Kennedy would be in a position to see if this has
actually happened, one of the other things that again, followed
after one too many martinis, somebody said what we will do is
we will just start a paper corporation in the Bahamas and that
way if there is a massive spill, that paper corporation that
has no assets gets hit with the bill and we walk away scot-
free. Have you seen any evidence of that happening with spills
that have occurred to date?
If you have a total failure to collect on spills or
substantial failure to collect on spills because someone has
succeeded in insulating themselves, isolating themselves by
creating a paper corporation overseas?
Admiral Gilmour. I would say, and Ms. Lane can talk to
those vessels that went over their liability, but certainly I
can only think of one case where the owner walked away and that
was the Berman spill in Puerto Rico. That was a U.S. operated
company.
But other than that, I can't think of cases where people
walked away.
Mr. Taylor. How were they able to walk away?
Admiral Gilmour. Well, in that case I think their limit
was----
Ms. Lane. It was $10 million.
Admiral Gilmour. Yes, it was $10 million and it happened,
their limit was reached very quickly.
Ms. Lane. Their insurer paid up to their limit, and then
the Coast Guard took over.
Mr. Taylor. OK.
Ms. Lane. I don't believe we have seen any cases where a
responsible party has refused to respond at all, if the
responsible party is known.
Mr. Taylor. OK. How about the other questions? Ms. Lane?
Ms. Lane. I think the one question that you had regarding
whether the excess liability costs have been charged to the
Fund or charged to the appropriated funds, and the answer to
that is, they have been charged to the OSLTF and not
appropriated funds. Then the other question was, how do I see
the revenues and expenses and whether or not we are bringing
enough money into the Fund to cover the expenses. I think my
response to that would be prior to the passage, to the
reinstatement of the tax last summer, the answer would be that
revenues were not adequate to cover expenses and we saw a
declining balance in the Fund.
With the reinstatement of the tax and the additional $200
million coming into the Fund each year, I believe that trend is
changing. But again, it is dependent upon the number of spills
that you have in any given year and the magnitude of those
spills that could change at any time.
I think historically speaking, revenues are balanced fairly
well with expenses at the current time. However, I would note
that the $2.7 billion level that was designated in the Energy
Bill last year, the new level of the Fund, we don't ever expect
to reach that level. By 2014, the tax turns off. Our forecast
will show that we expect the balance to be at about $830
million.
Mr. Taylor. Mr. Chairman, one last question?
Mr. LoBiondo. Sure, go ahead.
Mr. Taylor. I am going to guess that on the day we passed
the Oil Pollution Act, the value of a barrel of oil was about
$18 a barrel. Today it is in the low 70's, last time I looked.
And I am asking this in the form of a question. Has the fact
that the value of oil has shot up rather dramatically, and yet
the liabilities have remained fairly constant, does that in any
way create a situation where the shipper has less of an
incentive to have adequate insurance?
Ms. Lane. I believe that ship owners do have adequate
insurance. In fact, most ship owners have insurance well above
the limits of liability that are specified in the law. And with
respect to an incentive, I am not sure that I can comment on
that. I think there are a lot of reasons why we need to
increase those, the limits of liability, at least commensurate
with the CPI adjustments that have occurred since 1990. I
believe the data shows that we should increase them above those
CPI adjustments as well.
Mr. Taylor. I will welcome your recommendations on the
increase of those limits.
Ms. Lane. Yes, sir.
Mr. Taylor. Thank you.
Thank you, Mr. Chairman.
Mr. LoBiondo. Just a quick follow-up on the solvency of the
Fund. I know the report is going to maybe give us a better
picture. But if you dip below zero, do you have borrowing
authority? How do you handle that?
Ms. Lane. We have borrowing authority into the emergency
fund from the principal fund. If the principal fund, if the
OSLTF goes to zero, I am not sure if that same $100 million
borrowing authority would apply. But certainly we would have to
come to Congress and seek supplemental appropriations to cover
those costs.
Mr. LoBiondo. OK. On the Athos I, I believe it was stated
that the potential claims to exceed $265 million or $270
million, in addition to the $252 million that has already been
paid from the Fund for response activities. Have the owners of
the Athos I presented a third party defense for the Coast
Guard's review?
Ms. Lane. They have presented a claim to us for costs in
excess of their liability limit. They spent $124 million on a
spill. Their limit was $45.5 million. So their excess costs
were $78.5 million.
They presented $124 million claim to us requesting
reimbursement for the $78.5 million. We have to look at all
their costs in order to determine whether or not all the costs,
all the $124 million that was spent is compensable. And we have
gotten several indications from the responsible party that they
do plan to submit a third party defense claim to us, at the
point at which their entitlement to hold their limit is
granted, if that happens, if we grant that.
Mr. LoBiondo. How does the Coast Guard review and
adjudicate claims for response action or natural resource
damage?
Ms. Lane. We rely on the regs and we have put together a
set of guidance, internal guidance that is based on those, the
regs that provide the requirements and the process that has to
be undertaken on the part of the trustees in order to file a
claim with the Fund. And we worked very closely with the
trustees in developing that guidance.
Mr. LoBiondo. On Katrina, I guess the big question that you
have to deal with is whether this was an act of God or not?
Ms. Lane. Could I get back to you on that?
[Laughter.]
Mr. LoBiondo. How is that going to start to unfold? How are
you going to start to get your arms around this one?
Ms. Lane. I guess the thing I would say on that is that we
really have not made a broad determination that an act of God
defense would apply here. We are really going to have to look
at each claim as they are presented to the Fund on a case by
case basis. And again, to the extent possible, we will look at
industry standards and the facilities response plans. And with
respect to prevention, preparedness, response, their shutdown
procedures and the extent to which they complied with industry
standards and their own facility plans.
Mr. LoBiondo. That is going to be pretty tough.
Ms. Lane. It will be.
Mr. LoBiondo. On the phase-out of the single hulled
vessels, do you expect because of what is happening with the
European Union and the time line that has been established
there that the number of single hulled tank vessels operating
in U.S. waters will--what do you think the numbers are going to
be? Significantly increased when they do what they are going to
do?
Ms. Lane. I am going to defer to Admiral Gilmour on that.
Admiral Gilmour. Sir, I do not think it will have a
significant effect on those vessels that trade here. And I say
that because I think most of the vessels that do trade in the
United States, foreign, certainly domestic, have been built to
OPA 1990. It could have influenced those vessels that are in
worldwide trade. So it could have a slight impact on reducing
the number of single hulled vessels that come to the United
States.
Mr. LoBiondo. I may have a couple more. Mr. Baird?
Mr. Baird. I thank the Chairman, I thank our witnesses.
Following up on Mr. Taylor's questioning, it sounds like,
pretty obviously from your figures, Ms. Lane, that the cost of
the accidents are basically exceeding the liability limits on a
pretty reliable basis. What, and maybe Mr. Kennedy can comment
on this, what are the factors that have made that happen? What
has happened that has made those limits no longer apparently
realistic?
Ms. Lane. I believe the costs of response has increased
since 1990, just obviously with the cost of inflation. But just
the cost of responding to the spill. In many areas, in many
cases, you will be in an area that has very sensitive
resources. And the cost to protect those resources probably add
to the costs of this bill as well.
Mr. Baird. And we haven't given, Congress hasn't given you
folks the authority to increase that liability limit
commensurate with that cost increase?
Ms. Lane. We, the statue did provide a provision that
required adjustment for CPI every three years, yes, sir.
Mr. Baird. But at the cost, the point you were making
earlier, if the cost exceeds CPI, then we are going to fall
back a little bit each year?
Ms. Lane. Yes, sir.
Mr. Baird. And so that might be something the Committee
would--now, the consequence of that, presumably as you are
pointing out I think is greater demand on the Fund than had
been anticipated.
Ms. Lane. Yes, sir.
Mr. Baird. What would be the consequence of raising the
liability limit? What impacts would that have if we did that?
Ms. Lane. It probably depends on how high you raise them.
And----
Mr. Baird. Let's suppose we raised it so that the median,
so that we hit the mark half the time, so that half the time,
versus it sounded like 80 percent, the costs are 80 percent
more or less of the times exceeding the limits, let's suppose
we cut it down to 50 percent. Just hypothetically, what would
be the pros and cons of that?
Ms. Lane. I think from industry standpoint, if you raise
the limits, the cost of insurance would inevitably go up. And I
would expect that those costs would be passed on to the
consumer in the form of increases in goods and services.
Obviously the impact on the Fund would be positive, because
we would be paying out a lot fewer costs in those incidents
where limits were exceeded.
Admiral Gilmour. Sir, if I could just add on to that, at
some point I think the industry would think about trading in
the U.S. at some point.
Mr. Baird. Would think about what? I missed your point.
Admiral Gilmour. At some point, if you raise the liability
limits high enough, industry could think twice about trading in
the United States. It might limit the number of vessels that
would trade. I was assuming your question was going to
unlimited liability.
Mr. Baird. No, it really wasn't. I think there has to be
some economic calculus where you say at this point you protect
the Fund, you provide some assurance, but you still provide the
sort of super-catastrophic protection.
Did we see, have we seen, in effect we are indemnifying the
insurance industry a little bit. Have we seen a lowering, a
commensurate lowering of rates?
Ms. Lane. I am not sure I have that data. I am not aware of
any lowering of rates.
Mr. Baird. Several years ago, post-September 11th, we set
limits based on terrorist attacks. I actually tried to see if
we couldn't do something to say, well, if the public is going
to indemnify insurance industry, they ought to somehow pass the
savings on to the consumers. And I don't know that we ever
mandate that, but it is common sense to me that we might want
to consider it.
Just the thought I had, the discussion so far is mostly
focused on acts of God. When the legislation was written, it
was obviously 10 years prior to September 11th. How does that
factor in terrorist attacks? What impacts do they have on
various issues that have come up today in terms of liability,
who would bear that, how the funds would respond to that, etc.?
Ms. Lane. I think in the case of a terrorist act, that
would probably be viewed, more likely it would not be viewed as
an act of war. There are certain criteria that probably would
not be met with today's view of terrorism. So we would probably
generally view the defense in an act of terrorism as a third
party defense.
And in the case of a third party defense again, you would
look at the case on a case by case basis, you would look at the
facts of the case. The third party defense requires that the
incident be solely caused by a third party. It requires that no
contractual relationship with a third party exists, and that
they exercise due care with respect to the oil and took
precautions against foreseeable acts or omissions of a third
party.
I guess the limits of liability are also an issue that come
into view when you are talking about a terrorist act and
whether or not they may be susceptible to unlimited liability.
And I think our view on that is that simply failure to stop
removal actions once limits are reached or financial resources
are unavailable would not in and of itself be viewed as a
failure to cooperate. So it is likely that their limits would
apply in a terrorism act and then we would need to look closely
at the merits of the case to determine whether or not they
could successfully claim a third party defense.
Mr. Baird. I appreciate that. May I ask one final question?
Overall, we talk a lot in Congress about emergency
supplementals. We try to deal with how we can anticipate
various emergencies. Here is a program that has set out to do
that, where we actually tried to set up a fund in anticipation
rather than drawing on the Treasury yet again. Overall, do you
think this program has worked fairly well, and might it be a
model for other opportunities to prepare for emergencies?
Ms. Lane. I do. I think it has worked very well. I think
one key to making it work is having a sustained revenue source.
And I think the tax provides that. And I would hope that in
2014 that there would be consideration to continuing that
sustained revenue source. I believe that is the only way that
it would work. And I think it could serve as a model in other
areas.
Admiral Gilmour. Sir, if I could add on. The tremendous
benefit of having the Fund available, having been in this
business before and after, is in case that Chairman LoBiondo
just brought up with the spill, the last couple of days, the
mystery spill in Delaware Bay, and that we can act immediately
to clean, not worrying about the costs and then going after the
responsible party, which we have done successfully in a number
of cases. But it just gives us the ability to do what needs to
be done.
Mr. Baird. Mr. Kennedy, any comments on that?
Mr. Kennedy. I would just echo what has already been said.
As a user of the Fund, I don't know of anything out there like
it. It does allow us to respond immediately. It does ensure
that we are there and doing the right thing, regardless of
whether other funds are available. So as a model, I think it
has been very successful.
Mr. Baird. I very much appreciate the expertise and the
comments of the panelists. Thank you very much.
Mr. LoBiondo. Thank you. Mr. Diaz-Balart?
Mr. Diaz-Balart. No questions at this time, Mr. Chairman.
Mr. LoBiondo. Back on Katrina for a minute, how long will
the Stafford funds be available?
Ms. Lane. I believe those funds will be available through
the remainder of this fiscal year, the $178 million. And those
are just Coast Guard funds. There are other removal activities
underway that EPA is carrying out. And I don't have any
information on the extent of their resources and how long they
expect to continue to rely on the Stafford Act.
Mr. LoBiondo. Mr. Kennedy, what if any long term
environmental impact from the Athos I spill is now documented
or are you concerned about?
Mr. Kennedy. We are continuing to do the environmental
assessment with the other trustees. I am not aware, and I don't
think we have final results that will lead us to be able to say
with any surety at this moment what the long term effects will
be. There certainly were effects as the result of the spill. We
are looking at potential ways to do restoration based on some
of the impact to the wildlife.
In particular, along the coast, some of the fishing issues
and certainly of course, we had a power plant that got shut
down. Those are not long term impacts necessarily. So I think
we are still working and we don't have answers to the long term
impact. But I think as we often see, there is a significant
recovery from those injuries already occurring.
Mr. LoBiondo. Originally when the Athos I spill took place,
I think if I am remembering correctly, because of the nature of
the crude, it was felt that an awful lot of it had sunk to the
bottom. Do we have a feeling for, if anything is left down
there or where we stand on that, Admiral? Or Mr. Kennedy, do
you?
Mr. Kennedy. I think I can field that, in that we were
involved in trying to track that submerged oil. And we have
done a lot of looking since, and we are not aware of any of
that in any significant amount that is left. And we did
monitor, we went into the next year and did a lot of surveys
after the fact, thinking possibly it would come up in the bays.
We haven't found any evidence. We think a majority of it is
gone, yes.
Mr. LoBiondo. Also for you, Mr. Kennedy, Title VII of the
Oil Pollution Act authorizes an extensive oil spill pollution
research program to be directed by the Interagency Coordinating
Committee on Oil Pollution Research. It seems that very little
has been done. No interest? Why have we not done more here?
Mr. Kennedy. Title VII laid out about five major areas that
we should address, including the Interagency Committee.
Developing a plan, if you will, and then an annual report, a
couple of other items in there. There was a lot of interest
initially, tremendous draw of experts from all over the Country
sat down to actually do the plan. And I think the Coast Guard
chaired that, those sections as we developed the plan.
But once the plan was more in place, and it was extremely
comprehensive, there have been no funds. So although
individually and collectively, collaboratively, all of the
different agencies have done research, we have been doing
research for a long time with the Coast Guard, and sometimes
with industry and others, it has been out of our own budgets.
There is no setaside funds to actually move that ball forward,
if you will.
And so it is kind of hard when you have a plan and no funds
to move it forward in any kind of comprehensive way.
Mr. LoBiondo. I am not sure, I think, Admiral, this may be
for you. There was a recent article or news report about a
violation of the act to prevent pollution from ships. It was a
ship that had apparently developed an elaborate bypass system
that it was clearly their intention to dump and I think several
individuals have been convicted of willfully and knowingly
violating this ocean pollution law.
Can you give us any comments about how we can improve our
awareness of these kinds of activities? I mean, this seemed
like it was a big company that, this wasn't just somebody
taking a bucket of something and dumping it overboard. They had
a plan to do this. I mean, do we have any way of checking if
anybody else has got some of these type of systems that we
ought to be trying to uncover?
Admiral Gilmour. Yes, sir. We, working with the Department
of Justice over the last seven or eight years, have taken a
very aggressive stance on looking for bypassing of oily water
separators. In fact, I brought along a copy of a Coast Guard
Proceedings magazine that I would be glad to leave with you
from last year that talks about some of the cases we have done.
And the most recent one from here is about two years old.
But I think the best thing that can happen is that these
cases go forward and these people are held to justice and fines
are levied. So I think we have been very successful at that in
a number of cases, and the Department of Justice, with the
Coast Guard, have an aggressive program to find when that
happens in the United States. In fact, many folks, including
the European Union, are looking at our program or a similar
program for the European Union.
Mr. LoBiondo. Are the recent convictions the result of
improved intelligence gathering, or did we just get lucky?
Admiral Gilmour. It is a combination of our inspections,
our surveillance. Many of the cases were found from
overflights. And the third area that we get is a lot of crew
complaints. We will get a crewman that will come to us and say,
this is happening. So it is a combination.
Mr. LoBiondo. Is there like a hot line or how do they know
to come to you?
Admiral Gilmour. Many different ways. They can either call
the local captain of the port or certainly we have a 1-800
number for pollution response. The majority of the time,
though, is when our inspectors go on and they confide in us,
crew members confide in us.
But in many cases we find evidence of the problem.
Mr. LoBiondo. OK. I want to thank the panel very much. We
look forward to the reports that are coming out. Good luck on
the challenges that you have in the future. And I am sure we
are going to be in touch.
The Committee stands adjourned.
[Whereupon, at 11:11 a.m., the subcommittee was adjourned.]
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