andrew j. garger

Andrew J. GargerAndrew J. Garger

Vice President, Legal & General CounselVice President, Legal & General Counsel

Water Quality Insurance SyndicateWater Quality Insurance Syndicate

Do You Remember?Do You Remember?

OPA’s PredecessorsOPA’s Predecessors

Water Quality Improvement ActWater Quality Improvement Act

Federal Water Pollution Control ActFederal Water Pollution Control Act

Clean Water ActClean Water Act Outer Continental Shelf Lands Act Outer Continental Shelf Lands Act

AmendmentsAmendments

Trans-Alaska Pipeline Authorization ActTrans-Alaska Pipeline Authorization Act

Deep Water Ports ActDeep Water Ports Act

THE OIL POLLUTION ACT OF THE OIL POLLUTION ACT OF 1990 (OPA) P.L. 101-3801990 (OPA) P.L. 101-380


Responsible Party:Responsible Party: Owner, Operator or Owner, Operator or Charterer by demiseCharterer by demise

Nature of Liability:Nature of Liability: Strict, joint and severalStrict, joint and several

Pollutant:Pollutant: Oil of any kind, except if Oil of any kind, except if classified as an hazardous classified as an hazardous substance under CERCLA substance under CERCLA



Jurisdiction: Jurisdiction: Navigable waters, adjoining Navigable waters, adjoining shorelines, or the Exclusive shorelines, or the Exclusive Economic Zone Economic Zone

OPA LIABILITY LIMITSOPA LIABILITY LIMITS

Higher for Single Hulled Vessels than for Higher for Single Hulled Vessels than for Double Hulled Vessels. Double Hulled Vessels.

Example: 3000 gross ton double hulled Example: 3000 gross ton double hulled vessel has limit of the greater of $2000 per vessel has limit of the greater of $2000 per gross ton or $17,800,000gross ton or $17,800,000

Single hulled tank vessel same size the Single hulled tank vessel same size the greater of $3200 per gross ton or greater of $3200 per gross ton or $23,496,000$23,496,000

WHAT IS RECOVERABLE ?WHAT IS RECOVERABLE ?WHAT IS RECOVERABLE ?WHAT IS RECOVERABLE ?

Removal CostsRemoval Costs Natural Resource Natural Resource

DamagesDamages

Damage to PropertyDamage to Property

Loss of Subsistence UseLoss of Subsistence Use

Lost RevenueLost Revenue

Lost ProfitsLost Profits

Increased Costs of Increased Costs of Public ServicesPublic Services

Spill Response OverviewSpill Response Overview

Types of IncidentsTypes of Incidents Types of Spilled ProductsTypes of Spilled Products Responsible Party’s (RP) Initial ResponseResponsible Party’s (RP) Initial Response MPRGMPRG

Spill Response Overview ContinuedSpill Response Overview Continued

USCG InvolvementUSCG Involvement Other Government Agency InvolvementOther Government Agency Involvement Response Resource AvailabilityResponse Resource Availability Security Issues Under the MTSASecurity Issues Under the MTSA

Spill Response Overview ContinuedSpill Response Overview Continued

Third Party Issues and ConcernsThird Party Issues and Concerns Things that can Drive the Cost of the Spill Things that can Drive the Cost of the Spill

ResponseResponse Natural Resource Damage Assessment Natural Resource Damage Assessment

(NRDA) Considerations(NRDA) Considerations

Mississippi River SpillMississippi River Spill

Collision July 23Collision July 23rdrd – Barge DM-932, TUG MEL – Barge DM-932, TUG MEL OLIVER, M/V TINTOMARAOLIVER, M/V TINTOMARA

• Mile 99 near entrance to Harvey CanalMile 99 near entrance to Harvey Canal• Approximately 9000 bbls of #6 oil (heavy). Approximately 9000 bbls of #6 oil (heavy).

Approx. half spilledApprox. half spilled• ACL, owner of the DM-932 (double skinned ACL, owner of the DM-932 (double skinned

barge) is responsible partybarge) is responsible party


CASUALTY RESPONSECASUALTY RESPONSE• On scene- spill response managers, spill On scene- spill response managers, spill

response contractors, environmental response contractors, environmental experts, Coast Guard, state officials, 3experts, Coast Guard, state officials, 3rdrd party claims handlers. party claims handlers.

• Over 1000 responders at height of cleanup. Over 1000 responders at height of cleanup.


SPILL RESPONSESPILL RESPONSE• Coast Guard closed 58 miles of the Coast Guard closed 58 miles of the

Mississippi River (at least 3 days).Mississippi River (at least 3 days).

• Down-river water intakes boomed off. Down-river water intakes boomed off.

Aggressive Cleanup MeasuresAggressive Cleanup Measures

Mississippi River Spill Mississippi River Spill

Public Commentary (NOLA.COM)Public Commentary (NOLA.COM)• ““Was Joseph Hazlewood piloting the tanker?”Was Joseph Hazlewood piloting the tanker?”• ““Sounds like someone had too much to drink.”Sounds like someone had too much to drink.”• ““How in the hell do you not see a 600 foot tanker? How in the hell do you not see a 600 foot tanker?

Can you say DUI.?”Can you say DUI.?”• ““Sounds like Al Qaeda.”Sounds like Al Qaeda.”• ““I might just call it a day and get on out of work I might just call it a day and get on out of work

and throw and oil spill party.”and throw and oil spill party.”• ““If they were only using Cosmo Kramer’s bladder If they were only using Cosmo Kramer’s bladder

system that he invented this could have all been system that he invented this could have all been avoided.”avoided.”


Coast Guard Investigation Coast Guard Investigation • Many hearings held. Many hearings held. • Barge Pilot took the 5Barge Pilot took the 5thth

• Preliminary Statement by Coast Guard indicated Preliminary Statement by Coast Guard indicated improper licensure. improper licensure.

• Ultimately criminal charges were brought against the tug. Ultimately criminal charges were brought against the tug.

Natural Resource Damage Natural Resource Damage AssessmentAssessment

Natural Resource Damage AssessmentNatural Resource Damage Assessment

• Huge potential damagesHuge potential damages

• Passive-Use (loss of enjoyment) Passive-Use (loss of enjoyment)

• Wildlife habitatsWildlife habitats

• Bird kills Bird kills


Class Action LawsuitsClass Action Lawsuits• At least six filed naming ACL, DRD, and At least six filed naming ACL, DRD, and

others.others.• Includes loss of revenue claims.Includes loss of revenue claims.• Classes have not been certified. Classes have not been certified.

CERCLA AND OPA ‘90 DEFINE CERCLA AND OPA ‘90 DEFINE “NATURAL RESOURCES” “NATURAL RESOURCES” AS AS LAND, FISH,WILDLIFE, BIOTA, AIR, WATER, GROUNDWATER, LAND, FISH,WILDLIFE, BIOTA, AIR, WATER, GROUNDWATER, DRINKING WATER SUPPLIES, AND OTHER SUCH DRINKING WATER SUPPLIES, AND OTHER SUCH RESOURCES.RESOURCES.

INJURYINJURY REFERS TO THE ACTUAL ADVERSE IMPACTOR LOSS REFERS TO THE ACTUAL ADVERSE IMPACTOR LOSS OF THE NATURAL RESOURSE RESULTING DIRECTLY OR OF THE NATURAL RESOURSE RESULTING DIRECTLY OR INDIRECTLY FROM EXPOSURE TO A RELEASE OR THREAT INDIRECTLY FROM EXPOSURE TO A RELEASE OR THREAT OF RELEASE OF OIL OR A DISCHARGE OR RELEASE OF A OF RELEASE OF OIL OR A DISCHARGE OR RELEASE OF A HAZARDOUS SUBSTANCE. HAZARDOUS SUBSTANCE.

DAMAGEDAMAGE IS THE AMOUNT OF MONEY SOUGHT BY THE IS THE AMOUNT OF MONEY SOUGHT BY THE TRUSTEES TO COMPENSATE FOR THE INJURY THROUGH TRUSTEES TO COMPENSATE FOR THE INJURY THROUGH RESTORATION OR REPLACEMENT PROJECTS.RESTORATION OR REPLACEMENT PROJECTS.

WHAT IS A NATURAL RESOURCE ?WHAT IS A NATURAL RESOURCE ?

H.E.A.- HABITAT EQUIVALENCY ANALYSISH.E.A.- HABITAT EQUIVALENCY ANALYSIS

R.E.A. – RESOURCE EQUIVALENCY ANALYSISR.E.A. – RESOURCE EQUIVALENCY ANALYSIS

COMPLEX FORMULAE USED TO FIGURE OUT COMPLEX FORMULAE USED TO FIGURE OUT WHAT NEEDS TO BE DONE TO CREATE, WHAT NEEDS TO BE DONE TO CREATE, RESTORE OR PROTECT THE INJURED RESTORE OR PROTECT THE INJURED RESOURCE .RESOURCE .

ALPHABET SOUPALPHABET SOUP

THE GULF SPILLTHE GULF SPILL

LARGEST SPILL IN HISTORY ??LARGEST SPILL IN HISTORY ?? MASSIVE SPILL RESPONSEMASSIVE SPILL RESPONSE EVERY TYPE OF CLEANUP EVERY TYPE OF CLEANUP

TECHNOLOGY BEING USED TECHNOLOGY BEING USED EFFECTS WILL BE FELT FOR YEARS IF EFFECTS WILL BE FELT FOR YEARS IF

NOT DECADES.NOT DECADES.

LARGEST SPILLSLARGEST SPILLS

Lakeview Gusher, CA. 9 Mill. Bbls.Lakeview Gusher, CA. 9 Mill. Bbls. Deepwater Horizon 3-8.7 Mill. Bbls.Deepwater Horizon 3-8.7 Mill. Bbls. Gulf War 2-6 Mill BBLS. Gulf War 2-6 Mill BBLS. Ixtoc I - Gulf of Mexico 3.5 Mill Bbls.Ixtoc I - Gulf of Mexico 3.5 Mill Bbls. Exxon Valdez – 257,000 Bbls.Exxon Valdez – 257,000 Bbls. Yet, only 8% of oil in water every year is Yet, only 8% of oil in water every year is

from tanker /pipeline/well spills. from tanker /pipeline/well spills.

EXAMPLE OF MODU EXAMPLE OF MODU

COAST GUARD SEARCH AND RESCUECOAST GUARD SEARCH AND RESCUE

COAST GUARD RESPONSE COAST GUARD RESPONSE

COAST GUARD RESPONSECOAST GUARD RESPONSE

SURVEILLANCE FLIGHTSSURVEILLANCE FLIGHTS

OVERFLIGHT PHOTO OVERFLIGHT PHOTO

OVERFLIGHT – GULF OF MEXICOOVERFLIGHT – GULF OF MEXICO

OVERFLIGHT PHOTOOVERFLIGHT PHOTO

OVERFLIGHT MAPOVERFLIGHT MAP

BP COMMAND CENTERBP COMMAND CENTER

SPILL TRAJECTORY MAPSPILL TRAJECTORY MAP

RESPONSE STATUSRESPONSE STATUS

LOCAL GOVERNMENT INVOLVEMENTLOCAL GOVERNMENT INVOLVEMENT

VARIOUS RESPONSE ACTIVITIESVARIOUS RESPONSE ACTIVITIES

STAGING AREA - BOOMSTAGING AREA - BOOM

SHORELINE PROTECTION - SANDBAGSSHORELINE PROTECTION - SANDBAGS

USE OF MILITARY CRAFTUSE OF MILITARY CRAFT

OIL IN WATEROIL IN WATER

OIL SKIMMINGOIL SKIMMING

OIL SKIMMINGOIL SKIMMING

100716-G-5030M-007-- GULF OF MEXICO -- Crewmembers monitor the oil skimming set-up aboard CGC Walnut, a 225-foot sea-going buoy tender based in Honolulu while CGC Resolute stands by in the background. The Walnut is skimming oil near the BP oil spill site after transiting the Panama Canal. Coast Guard photo by Petty Officer 1st Class John Masson.

MODIFIED FISHING VESSELMODIFIED FISHING VESSEL

OIL SKIMMEROIL SKIMMER

SKIMMING OPERATIONSSKIMMING OPERATIONS

BOOM IN FLORIDABOOM IN FLORIDA

EMULSIFIED OILEMULSIFIED OIL

GULF OF MEXICO - Vessels of Opportunity participants chase and corral oil near Dauphin Island, Ala. More than 38,000 people are participating in the nation's largest oil spill response in history. U.S. Coast Guard photo.

LARGEST OIL SKIMMER EVERLARGEST OIL SKIMMER EVER

BEACH CLEANUP - SCAT TEAM BEACH CLEANUP - SCAT TEAM

BEACH CLEANUPBEACH CLEANUP

MARSH GRASS CLEANUPMARSH GRASS CLEANUP

SNARE BOOMSNARE BOOM

CONTAINMENT BOOMCONTAINMENT BOOM

CONTAINMENT BOOM AND SORBENT BOOMCONTAINMENT BOOM AND SORBENT BOOM

SORBENT AND PROTECTIVE BOOMSORBENT AND PROTECTIVE BOOM

PROTECTIVE BOOMPROTECTIVE BOOM

PROTECTIVE BOOMINGPROTECTIVE BOOMING

IN-SITU BURNINGIN-SITU BURNING

IN SITU BURNINGIN SITU BURNING

IN – SITU BURNINGIN – SITU BURNING

CHEMICAL DISPERSANTSCHEMICAL DISPERSANTS

DIVER – SEARCHING FOR DIVER – SEARCHING FOR UNDERWATER POLLUTIONUNDERWATER POLLUTION

SUBSEA DISPERSANTSSUBSEA DISPERSANTS

BRETON NATIONAL WILDLIFE REFUGEBRETON NATIONAL WILDLIFE REFUGE

BROWN PELICAN AGAINBROWN PELICAN AGAIN

WILDLIFEWILDLIFE

SEA TURLE NEST SEA TURLE NEST

SEA TURTLE NESTSEA TURTLE NEST

SEA TURTLE SEA TURTLE

TOP KILL PROCEDURETOP KILL PROCEDURE

TOP HAT TOP HAT

ATTEMPT TO CAP THE WELLATTEMPT TO CAP THE WELL

LOOP CURRENT RESEARCHLOOP CURRENT RESEARCH

DECONTAMINATION AT PORTSDECONTAMINATION AT PORTS

DECONTAMINATION SITEDECONTAMINATION SITE

DECONTAMINATIONDECONTAMINATION

POLITICAL VISITS POLITICAL VISITS

MEDIA RESPONSEMEDIA RESPONSE

What Now?What Now?

Current SituationCurrent Situation

94 and 180 million gallons have spilled (2.2-94 and 180 million gallons have spilled (2.2-4.4 million barrels)????4.4 million barrels)????

Successful Capping of Well (for now)Successful Capping of Well (for now) Need to be removed if leakingNeed to be removed if leaking Oil would flow freely againOil would flow freely again Would then try to use subsea containment Would then try to use subsea containment

systems to capture escaping oil and divert systems to capture escaping oil and divert to surface vessels.to surface vessels.

RELIEF WELLRELIEF WELL

Aftermath of Gulf SpillAftermath of Gulf Spill

MOST EXPENSIVE SPILL IN HISTORY: 3.5 million MOST EXPENSIVE SPILL IN HISTORY: 3.5 million in cleanup expenses in cleanup expenses

DRIVING MASSIVE POLITICAL RESPONSEDRIVING MASSIVE POLITICAL RESPONSE CONGRESSIONAL HEARINGS AND LEGISLATIVE CONGRESSIONAL HEARINGS AND LEGISLATIVE

PROPOSALSPROPOSALS ECOLOGICAL FALLOUTECOLOGICAL FALLOUT CRIMINAL PROBECRIMINAL PROBE ECONOMIC EFFECTSECONOMIC EFFECTS CVIL LAWSUITSCVIL LAWSUITS

Political ActionPolitical Action

Congressional HearingsCongressional Hearings Legislative ProposalsLegislative Proposals ““Independent “Presidential CommissionIndependent “Presidential Commission Extralegal PressureExtralegal Pressure Who should be in charge, Dept. of Interior Who should be in charge, Dept. of Interior

or Coast Guardor Coast Guard

ECOLOGICAL FALLOUTECOLOGICAL FALLOUT

As of July 17, 2010As of July 17, 2010 2,200 dead birds found2,200 dead birds found 500 dead sea turtles500 dead sea turtles 590 miles of Gulf shoreline oiled590 miles of Gulf shoreline oiled 1/3 to ½ fisheries are closed1/3 to ½ fisheries are closed Fisheries imperiled, including shrimp/crabsFisheries imperiled, including shrimp/crabs Underwater plumes of oil foundUnderwater plumes of oil found Oil getting into food chain - crabsOil getting into food chain - crabs

NRDA as a result of Ecological FalloutNRDA as a result of Ecological Fallout

Assessment of environmental effects to Assessment of environmental effects to determine what BP must pay to restore the determine what BP must pay to restore the Gulf Environment.Gulf Environment.

Inexact Science Inexact Science

Drilling MoratoriumDrilling Moratorium

First one overruled in Court, reissued by First one overruled in Court, reissued by AdministrationAdministration

8000 drilling workers and 24,000 people 8000 drilling workers and 24,000 people who service the 33 rigs effected have future who service the 33 rigs effected have future employment jeopardizedemployment jeopardized

$750 million in annual wages$750 million in annual wages

Other Economic EffectsOther Economic Effects

Tourism downTourism down Fishing: The fisherman, companies that Fishing: The fisherman, companies that

build and maintain boats, people who build and maintain boats, people who process and resell catch, and the process and resell catch, and the restaurants. restaurants.

20 billion compensation fund set up20 billion compensation fund set up Factors for payment: Proximity to Coast, Factors for payment: Proximity to Coast,

dependence on resources, industry.dependence on resources, industry.

SEE YOU IN COURTSEE YOU IN COURT

Government Criminal Probe – Low burden Government Criminal Probe – Low burden of proof, Migratory Bird Treaty Act, Refuse of proof, Migratory Bird Treaty Act, Refuse Act, Criminal Negligence. Act, Criminal Negligence.

Settlement s to injured and killedSettlement s to injured and killed

Hundreds of Economic Claims but mitigated Hundreds of Economic Claims but mitigated by BP Settlment Fund.by BP Settlment Fund.

Oil in New York ??Oil in New York ??

Supercomputer simulations suggest it is Supercomputer simulations suggest it is likely oil will move up the East Coastlikely oil will move up the East Coast

Within next six months.Within next six months. Factors: wind speed, current patterns, Factors: wind speed, current patterns,

temperatures and past weather patterns.temperatures and past weather patterns.

Long Term OutlookLong Term Outlook

Move more oil by tanker??Move more oil by tanker?? Natural gas/ nuclear/Wind FarmsNatural gas/ nuclear/Wind Farms Green energy Green energy

Resources will bounce back – Exxon ValdezResources will bounce back – Exxon Valdez– www.evostc.state.ak.us/facts/qanda.cfmwww.evostc.state.ak.us/facts/qanda.cfm

Thanks!Thanks!

BREAKING LIABILITY LIMITSBREAKING LIABILITY LIMITSBREAKING LIABILITY LIMITSBREAKING LIABILITY LIMITS

• Gross negligence, willful misconduct Gross negligence, willful misconduct (no privity or knowledge of owner required).(no privity or knowledge of owner required).

• Violation of federal safety, construction or Violation of federal safety, construction or operating standard.operating standard.

• Failure to report spill or cooperate with Failure to report spill or cooperate with clean-up.clean-up.

BP Spill Issue BREAKING LIABILITY BP Spill Issue BREAKING LIABILITY LIMITSLIMITSBP Spill Issue BREAKING LIABILITY BP Spill Issue BREAKING LIABILITY LIMITSLIMITS

Gross negligence, willful misconduct. Gross negligence, willful misconduct. (no privity or knowledge of owner required)(no privity or knowledge of owner required)

Violation of federal safety, construction or Violation of federal safety, construction or operating standard.operating standard.

Failure to report spill or cooperate with Failure to report spill or cooperate with clean-up.clean-up.

andrew j. garger

Documents

river water intakes

oil spill party

response contractors

gulf spill

liability act cercla

double hulled vessels

gross ton double hulled

oil heavy