[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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