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Oil Spill Liability Cap May Increase

In 1990, the federal government passed the Oil Pollution Act (OPA) in response to the Exxon Valdez oil spill. OPA established strict liability for the company responsible for an oil spill and mandated that companies have a plan in place prevent spills and for cleaning up any accidents that do occur. OPA also placed a cap on the amount companies could be forced to pay for economic damages related to an oil spill. No cap was placed on the amount of money a company would pay for cleanup costs.

Earlier this week, the Coast Guard moved to raise the liability cap on economic damages to keep up with inflation. The proposed increase of 15.6 percent would raise the cap to $404.6 million.

The Coast Guard's proposal would apply to deep-water ports, offshore vessels and onshore facilities, including pipelines.

Since the Exxon Valdez oil spill in 1989, there have been over 40 major oil spills in the United States and hundreds of other oil spills that often go unreported to the public.

While only a small percentage of oil spills are caused by collisions between large transporting vessels or by the explosion of oil rigs or other drilling platforms, those spills tend to be very harmful to the environment and local economy due to the sheer volume of oil that is released.

Categories: Oil Spill
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