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Oil Spill in the Gulf of Mexico

Recovery of Public Natural Resources by the Federal and State Governments in the Event of an Oil Spill
Prepared by Louisiana Sea Grant Law & Policy Program
May 18, 2010

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Factsheet Overview:

  • The Oil Pollution Act of 1990 and the Louisiana Oil Spill Prevention and Response Act provide for federal and state natural resource damages and loss of ecological services
  • Damages are evaluated using the Natural Resource Damage Assessment (NRDA) in which the federal and state agencies work as a team.
  • Trustees are designated to represent the interests the United States, the State, and any Indian tribe of foreign country that has natural resource damages.
  • The NRDA process is divided into three parts:
    • Pre-Assessment: provides information necessary to determine whether or not to pursue damage assessment and restoration.
    • Restoration Planning: determines the injuries and losses, what should be restored, available methods for restoration, and the appropriate extent of restoration.
    • Restoration Implementation: goal is to restore injured resources to their pre-spill, baseline condition and seek additional compensation if necessary.

Introduction

Both the Oil Pollution Act of 1990 (OPA) and the Louisiana Oil Spill Prevention and Response Act (LOSPRA) provide for federal and state natural resources damages and loss of ecological services from the responsible party (RP) through the use of the Natural Resource Damage Assessment (NRDA). Federal and state agencies will work as a team on the Deepwater Horizon spill NRDA with the RP, British Petroleum.

The goal of the NRDA and subsequent restoration is to make whole the public trust resources and the public’s loss of the use of those resources that are damaged or impaired following a discharge of oil. According to LOSPRA, “natural resources” include all land , fish, shellfish, fowl, wildlife, biota, vegetation, air, water, groundwater supplies, and other similar resources owned, managed, held in trust, regulated, or otherwise controlled by the state (La. R.S. 30:2454). NRDA’s goal is achieved by returning injured natural resources to their pre-spill condition and providing compensation to the public for the loss of use from the time of the spill through the recovery period. Recovery can be achieved by restoration, rehabilitation, or replacement of the damaged resources or acquisition of equivalent resources and /or services. The measure of the natural resource damages include the cost of restoring, rehabilitating, replacing, or acquiring the equivalent of the damaged natural resource; the diminution in value of those natural resources pending restoration; plus the reasonable costs of assessing those damages (33 USC 2706(d)). Under LOSPRA, the responsible party must make full payment or initiate its own restoration, rehabilitation, replacement, or mitigation of damages to natural resources (La. R.S. 30:2480). The money received by the trustees under OPA are held in a revolving trust accounts and can be used only to reimburse or pay costs incurred by the trustee for restoring, rehabilitating, replacing, or acquiring the equivalent of the damaged natural resource. Any monies remaining after all costs are paid are to be deposited into the Oil Spill Liability Trust Fund (Fund) (33 USC 2706(f)).

The main federal natural resource agencies involved are the National Oceanic and Atmospheric Administration (NOAA) [marine fisheries, marine mammals and others] and the U.S. Fish and Wildlife Service, which is part of the U.S. Department of Interior [national wildlife refuges, migratory and marine birds, etc.]

The state natural resource agencies involved are the Louisiana Department of Wildlife and Fisheries, the Department of Natural Resources, and the Department of Environmental Quality. The Louisiana Oil Spill Coordinator’s Office (LOSCO)- found in the Department of Public Safety-coordinates and participates with these agencies’ NRDA activities and serves as the lead administrative trustee for the joint federal-state NRDA. LOSPRA provides that the Louisiana oil spill coordinator in conjunction with the trustees shall develop an inventory that identifies and catalogs the physical locations, the seasonal variations in location, and the current condition of natural resources; provides for data collection related to coastal processes, abandoned pits, facilities, sumps, reservoirs, and oil spills; and identifies the recreational and commercial use areas that are most likely to suffer from an unauthorized discharge of oil (La. R.S. 30:2480).

The NRDA Process is Divided into Three Parts:

The NRDA process will normally be conducted in three phases: pre-assessment, restoration planning, and restoration implementation.

Pre-assessment

Pre-assessment of damages resulting from a discharge of oil will provide information necessary for trustees to determine whether or not to pursue damage assessment and restoration. The first step in the pre-assessment process is to ensure that jurisdiction exists to pursue restoration under OPA. In order to proceed, the trustees have to verify that:

  • An incident occurred,
  • The incident is not
    • Permitted under a permit issued under federal, state, or local law, or
    • From a public vessel, or
    • From an onshore facility subject to the Trans-Alaska Pipeline Authority Act, and
  • Natural resources that the trustee has authority over may have been, or may be, injured as a result of the incident. (15 CFR 990.41)

All three conditions listed above must be met to proceed with the assessment (15 CFR 990.41). If all three are met, the trustees must next determine if injuries have or are likely to result from the incident, if response actions have not adequately addressed or are not expected to address the injuries resulting from the incident, and if feasible primary and/or compensatory restoration actions exist to address the potential injuries (15 CFR 990.42). Pre-assessment may include initial evaluation of extent of injury, including preliminary data collection and analysis, and the development of a damage assessment plan. If the decision is made to move to Phase 2, a Notice of Intent to conduct restoration planning will be published in the Louisiana Register as public notice. If all conditions are met except for the last one, the trustees may recover all reasonable costs incurred up to this point in the process (15 CFR 990.41).

Restoration Planning

Restoration planning is done in order to determine the injuries or losses, the extent and timeframe of losses, determine what should be restored, available methods for restoration and the appropriate extent of restoration. The first step in making a determination of the injury is to determine if an injury has occurred (15 CFR 990.51, 15 CFR 990.30). Evidence of injury includes, but is not limited to, adverse changes in: survival, growth, and reproduction; health, physiology, and biological condition; behavior; community composition; ecological processes and function; physical and chemical habitat quality or structure; and public services. The second step is to determine that an injured natural resource has been exposed to oil, and a pathway can be established from the discharge to the exposed natural resource or that an injured natural resource or impairment of a natural resource service has occurred as a result of response actions or a substantial threat of a discharge of oil (15 CFR 990.51). Evidence of a pathway include, but are not limited to, the sequence of events by which the discharged oil was transported from the incident and either came into direct physical contact with a natural resource, or caused an indirect injury.

Additionally, the trustees must determine the degree and spatial and temporal extent of the injuries relative to a baseline established prior to the injury (15 CFR 990.52). The trustees may quantify the injuries in terms of: 1) the degree, and spatial and temporal extent of the injury to a natural resource; 2) the degree, and spatial and temporal extent of injury to a natural resource, with subsequent translation of that adverse change to a reduction in services provided by the natural resource; or 3) the amount of services lost as a result of the incident. Trustees must also estimate the time for natural recovery without restoration, but including any response actions (15 CFR 990.52).

Trustees must consider a reasonable range of restoration alternatives before selecting the preferred alternative (15 CFR 990.53). Each alternative must contain primary and/or compensatory restoration components that, as a package, make the environment and the public whole. Alternatives must be considered technically feasible and in accordance with applicable laws, regulations, or permits (15 CFR 990.53). Evaluation of the alternatives include examining issues such as the costs, the extent to which each is to meet the goals and objectives in restoration and/or compensation, the likelihood of success, and the effect of each on public health and safety (15 CFR 990.54).

Two public documents will be published for public comment during this phase: the Draft Restoration Plan and the Final Damage Assessment and Restoration Plan (DARP), which will specify the value given to the natural resource damages incurred and specify the project or projects the RP will perform to make the public whole. The Draft Restoration Plan should include, along with other factors, a summary of injury assessment procedures used; a description of the nature, degree, and spatial and temporal extent of injuries resulting from the incident; the goals and objectives of restoration; the range of restoration alternatives considered; and an identification of the trustees’ tentative preferred alternative (15 CFR 990.55). The Final Restoration Plan will include all the information from the Draft Restoration Plan and response to public comments and an indication of changes made, if applicable (15 CFR 990.55).

Restoration Implementation

The goal of restoration is to make the environment and the public whole following an injury or loss of natural resources and associated services, as a result of a discharge of oil. In order to accomplish this the trustees implement restoration activities designed to restore injured resources to their pre-spill or baseline, condition, and seek compensation for the loss of injured resources or services. Litigation or negotiation with the responsible party may be pursued to fund these activities and compensate for lost use.

If the parties reach agreement, the final DARP and the Restoration Implantation Plan (RIP) will be included in a Consent Agreement that will be filed with the Federal District Court in New Orleans. After a 30 day period during which public comments are considered, the Court will issue a Consent Decree and the DARP and RIP will be implemented. The Court retains jurisdiction over implementation of the Consent Decree.