March 20th, 2014
National Pollution Funds Center and the
Oil Spill Liability Trust Fund
Update for the
Spill Control Association of America
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NPFC Missions
• Provide funding for oil removal activities– USCG and EPA FOSCs
• Recover costs from responsible parties
• Pay claims for Removal Costs and Damages from oil discharges; in compliance with Regulations and OPA
• Administer the Certificate of Financial Responsibility (COFR) Program
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Oil Spill Liability Trust Fund (OSLTF)
• Established by the Oil Pollution Act of 1990 (OPA 90)
• Pay removal costs and damages from oil spills or threats of spills into/on U.S. navigable waters/EEZ
• Agency appropriations (CG, EPA, DOI, DOT) to carry out OPA programs, ~ $115M in annually
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Taxes - $427.6M
Interest $17.3M
Fines $402.4M
Recovery from RPs $125.3M
Agency Appropriations $81.6M
FOSC Removal Actions
(Emergency Fund) $95.4M
Claims $85.2M
Fund:Emergency
Fund:
OSLTF Claims
• Compensate Claimants when RP doesn’t pay
• Claims must be presented to RP first
• Statute of Limitations for Claims
• Compensate RP that establishes OPA defense or limit to liability
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OSLTF Claims Workload
• Claims (non-NRD) pending at NPFC:– Non-DWH claims portfolio - 80 claims ($141M)
• Claims over the life of the Fund– 14,337 for over $2.7B.– Of that, 2028 for $1.3B were Deepwater
• Currently involved in 4 Active Litigations for $115M
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OSRO Claim Status
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Payment rate: 85%.
Addressing the 15% Denied
• Lack of FOSC coordination:– NCP Consistency– States are not FOSCs– NRC Notification triggers the FOSC– Proper Disposal
• Need manifests
• Need tests if evidence of more than oil
– Keep good notes on direction/requirements from FOSC's & States.
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Addressing the 15% Denied
• Scope of work– Salvage Versus Removal– Removal Versus Remediation– Oil versus Hazardous
• Sample Analysis
– Disaster verses OPA• Discreet oil release & response.
– Not mixed
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Addressing the 15% Denied
• Subrogable Rights-– Claimant must have clear rights and have
uncompensated removal costs.– Stiffed sub-contractors
• Primes don't hold the uncompensated rights
– Mandatory Arbitration Clause • May Preclude Payment
– Litigation to Include Bankruptcy• May Preclude Payment
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Financial Risk Mitigation Strategies
• Call NRC• Get hired by the FOSC• Be careful for arbitration clauses• Think what an FOSC would do?• Think jurisdiction (oil, U.S. waters, discharge
or threat).• Document
Closing Comments
• OSROs are a key component of the U.S. Oil Spill regime and an important NPFC customer.
• FOSCs rely on the services you provide.• Spills and claims are fact specific.• Documentation is the key.• If in doubt about a potential future claim you may call
– Donna Hellberg 703 872 6097– Tom Morrison 703 872 6100
• Questions?
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