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

RCED-91-68 Published: Mar 05, 1991. Publicly Released: Mar 13, 1991.
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Highlights

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.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation 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.
Closed – Implemented
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.
Department of Transportation 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.
Closed – Implemented
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.
Department of Transportation The Secretary of Transportation should develop procedures for quickly notifying agencies about the potential or actual use of the Oil Spill Liability Trust Fund.
Closed – Implemented
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.
Department of Transportation 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.
Closed – Implemented
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.
Department of Transportation 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.
Closed – Implemented
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.

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Topics

Cost analysisCrude oil pipeline operationsFederal fundsInteragency relationsLiability (legal)Oil pollutionOil spillsReimbursements to governmentWaste disposalWater pollution control