http://juneauempire.com/nation-and-world/news/2017-12-19/federal-support-oil-spill-fund-will-end-2018
Posted December 19, 2017 04:30 pm - Updated December 19, 2017 06:45 pm
By JAMES BROOKS Juneau Empire
Federal support for oil spill fund will end in 2018
Per-barrel tax is set to expire at month’s end, and no replacement is in
sight
The nation’s main oil-spill response fund will lose its biggest
financial support at the end of the month, according to federal
officials and watchdog groups.
On Monday, Public Employees for Environmental Responsibility said by
email that a 9-cent per-barrel excise tax on all American crude oil will
expire at the end of the year. That tax goes into the fund to pay for
oil spills from a variety of sources, including pipelines, refineries,
oil wells and ships.
Rick Steiner, a retired University of Alaska Anchorage professor and
board member of PEER, said by email that the issue was a “spectacularly
fumbled ball by Congress.”
According to an email from Bill Grawe, director of the fund’s managing
agency, to Steiner, the fund contains approximately $5.7 billion. Staff
at the agency, when reached by the Empire on Monday afternoon, confirmed
that the tax will lapse at the end of the year and that the fund’s value
will start to shrink after the tax lapses.
The trust fund doesn’t just pay for immediate response in the case of an
oil spill: It also funds pipeline safety programs, aircraft upgrades for
the Coast Guard, and liability claims stemming from spills. In federal
fiscal year 2015, the fund paid more than $225 million in major
expenses, those greater than or equal to $250,000 each.
Created by Congress in 1986, the fund assumed greater authority after
the Exxon Valdez oil spill and the subsequent Oil Pollution Act of 1990.
That act imposed a 5-cent per-barrel tax that lasted until 1994 when it
expired, just as it is scheduled to do at the end of this year. The 2005
Energy Policy Act (effective in April 2006) revived the tax, and
legislation in 2008 increased it to 8 cents per barrel, an amount that
rose to 9 cents per barrel this year.
While oil-spill costs are supposed to be repaid by the person who spills
oil, federal officials said that doesn’t always happen. Frequently,
companies or individuals can’t afford the tens or hundreds of thousands
of dollars needed to clean even a minor spill, which means the fund
relies on the tax to ensure its long-term health.
Lt. James Nunez of the U.S. Coast Guard’s 17th District, said by phone
that the fund is used more frequently to pay for small incidents, like a
boat sinking, than large events, like the Deepwater Horizon spill in the
Gulf of Mexico.
“Right now, just here in Southeast, it’s been used six times in the
calendar year,” he said.
Statewide, it’s been used 19-20 times.
“It does get accessed regularly,” he said.
In Juneau, the fund was used after the 42-foot boat Whimsea burned and
sank in June in Don D. Statter Memorial Harbor. In 2015 and 2016, the
Coast Guard spent almost $900,000 from the fund to raise and dismantle
the 96-foot tugboat Challenger, which sank in Gastineau Channel near the
Juneau Yacht Club.
Elsewhere in the past few months, the fund has been used to clean up
spilled oil in Baltimore’s harbor, to remove a fishing boat stranded off
Hawaii’s Waikiki Beach, and to pay claims from a pipeline break in
Michigan’s Kalamazoo River.
Even without the tax, the fund is expected to remain available for spill
response. How long it lasts will be determined by how many oil spills
take place.
By email, Steiner pointed out that the expiring tax is paid by oil
companies, who will now benefit from lower costs and recoup as much as
$500 million per year.
