Coast Guard:

Millions in Federal Costs May Not Be Recovered From Exxon Valdez Oil Spill

RCED-91-68: Published: Mar 5, 1991. Publicly Released: Mar 13, 1991.

Additional Materials:

Contact:

Kenneth M. Mead
(202) 512-2834
contact@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO provided information on the Exxon Valdez oil spill, focusing on: (1) the total spill-related costs reported as of June 30, 1990; (2) the extent of the oil carrier company's reimbursement to the government for spill-related costs through September 30, 1990; and (3) improvements needed in the reimbursement process in the event of future spills.

GAO found that: (1) the federal government, as of June 30, 1990, spent almost $154 million on the spill, for which the carrier reimbursed it or was processing reimbursement of $123 million; (2) through June 30, 1990, 10 federal agencies reported spending $116.9 million for removal, $22.6 million for damage assessment, and $14.2 million for other spill-related costs; (3) 4 of those agencies accounted for 87 percent of total costs incurred, and the Department of Defense accounted for $62.2 million, the largest portion; (4) as of September 30, 1990, the oil carrier company reimbursed the federal government for $116.1 million of the $153.7 million agencies reported they spent on the spill; (5) the Coast Guard's spill coordinator did not authorize for reimbursement a number of the agencies' activities, since it did not believe that they were related to oil removal; (6) several agencies lost opportunities to obtain reimbursement from the Oil Spill Liability Trust Fund because of problems in tracking and billing their spill-related costs completely and accurately; (7) agencies estimated that future cleanup activities would require at least another $26 million; and (8) the Department of Justice was considering civil litigation against the oil carrier company to recover damage assessment and restoration costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: According to DOT, to the extent that standards and methodologies ensure that agencies' response actions are treated similarly, the regulatory guidance developed to implement the Oil Pollution Act of 1990 addresses that goal. Also, in developing the regulations dealing with reimbursements, the Coast Guard solicited the assistance of affected federal agencies to ensure compliance.

    Recommendation: The Secretary of Transportation should prepare regulatory guidance or policies which clarify standards and methodologies that agencies should use in computing and recovering their spill costs from the Oil Spill Liability Trust Fund.

    Agency Affected: Department of Transportation

  2. Status: Closed - Implemented

    Comments: As stated earlier, the Coast Guard now uses a one page agreement describing what will be reimbursed from the fund. The agreements will be incident-specific and be recognized as an obligating document.

    Recommendation: The Secretary of Transportation should develop procedures for quickly notifying agencies about the potential or actual use of the Oil Spill Liability Trust Fund.

    Agency Affected: Department of Transportation

  3. Status: Closed - Implemented

    Comments: The Coast Guard considered bills for agencies' activities that supported the response effort that have not been previously considered. As a result, an additional $64,000 was collected from Exxon.

    Recommendation: The Secretary of Transportation should reexamine agencies' activities that have not been authorized for the Exxon Valdez spill, such as worker safety inspections, to determine whether recovery should be sought.

    Agency Affected: Department of Transportation

  4. Status: Closed - Implemented

    Comments: The Coast Guard stated that regulations implementing the Oil Pollution Act of 1990 provide a broader, more comprehensive range of agency activities that can be reimbursed by the fund. In addition, the Coast Guard is now using one page agreements with each agency on tasks to be performed, activities to be reimbursed, and documents required for reimbursement.

    Recommendation: The Secretary of Transportation should, in establishing regulations to implement the Oil Pollution Act of 1990, provide a comprehensive description of the range of agency spill activities that constitute oil removal activities eligible for reimbursement from the current Oil Spill Liability Trust Fund. While such a description cannot be all-inclusive, given the differing circumstances of each spill, the key activities reimbursable for each agency represented on the national and regional response teams should be enumerated.

    Agency Affected: Department of Transportation

  5. Status: Closed - Implemented

    Comments: According to DOT, the Coast Guard has conducted discussions with agencies to address whether previously uncertified activities should be reimbursed. Some additional costs were certified and some bills were reduced. The net effect was about even.

    Recommendation: The Secretary of Transportation should verify that agencies involved in the Exxon Valdez spill used appropriate standards and methodologies in computing spill costs and have agencies submit corrected billings, if necessary.

    Agency Affected: Department of Transportation

 

Explore the full database of GAO's Open Recommendations »

Sep 15, 2014

Sep 10, 2014

Sep 9, 2014

Sep 8, 2014

Jul 31, 2014

Jul 29, 2014

Jul 24, 2014

Jul 16, 2014

Jun 27, 2014

Looking for more? Browse all our products here