Who Pays For Environmental Disasters

Explainer

Millions in cleanup costs. $167 for seagull replacements. Who pays for oil spills?

By Gwen Baumgardner, Ryan Tiedgen

California’s Huntington Beach is reopening, but the cleanup is far from over after a pipeline leaked 126,000 gallons of crude oil into the Pacific Ocean. The spill was one of the largest oil spills in the state’s history and is expected to cost millions.

Typically the owner and operator of the pipeline is liable for the spill, which in this case is Amplify Energy Corp. However, investigators believe the anchor from a passing ship could have caused the pipeline tear and leak. If so, that would pass liability costs to that third party.

Determining who pays for this particular oil spill could take years, but there are safeguards in place to pay for ocean cleanup in the interim. Those cleanup efforts will likely be funded by the Oil Spill Liability Act, which taxes each barrel of oil produced. Those taxes go into a federal fund for disaster response and relief.

University of Southern California Gould School of Law professor Robin Craig, specializes in environmental law. She said even after financial liability is determined, an oil spill’s impact is difficult to quantify.

“How much does it cost to clean up an otter,” she asked. “How much does it cost to rehabilitate a traumatized otter?” 

 

 

 

 

Gwen Baumgardner: IT’S AS BAD AS IT LOOKS.

California resident/ boater: ‘Look at that look at that, i’m touching it’

Baumgardner: AND IT’S EXPENSIVE TOO!

OIL SPILLS, LIKE THE MOST RECENT IN CALIFORNIA, CAN COST MILLIONS, SOMETIMES BILLIONS.

SO WHO PAYS FOR THESE ENVIRONMENTAL DISASTERS?

LET’S GET THIS STRAIGHT,

FINANCIAL LIABILITY IS OFTEN THE EASY PART…DETERMINED with THE OIL POLLUTION ACT OF 1990.

IT OUTLINES THAT THOSE ‘responsible for the use, transportation, storage, and disposal’ OF THE OIL ARE LIABLE FOR THE COSTS OF CLEANING UP.

TYPICALLY, THIS IS THE COMPANY THAT OWNS AND OPERATES THE PIPELINE.

UNLESS…A THIRD PARTY CAUSES THE SPILL. WHICH MIGHT BE THE CASE IN CALIFORNIA. 

REPORTER: “Is there suspicion the leak was caused by the anchor of a ship? Is that something that you’re looking into?

Martyn Willsher, CEO, Amplify Energy: “That is one of the distinct possibilities, yes.”

Baumgardner: THOUGH IT TURNS OUT THE BIGGEST EXPENSE OF AN OIL SPILL ISN’T ALWAYS THE CLEANUP. IT’S USUALLY THE FINES AND THE COST OF RESTORATION. AKA- WHAT IT TAKES TO GET THE ENVIRONMENT BACK TO HOW IT WAS BEFORE THE SPILL. WHICH ISN’T EASY TO QUANTIFY.

HERE’S USC LAW PROFESSOR ROBIN CRAIG.

Craig:  “How much does it cost to clean up an otter? How much does it cost to rehabilitate a traumatized otter? // (12:00) In the Exxon Valdez spill they had to figure out how much a killer whale’s worth.”

Baumgardner: IN THAT CASE- THEY PUT THE COST OF A SEAGULL REPLACEMENT AT $167.

AND THE EXPENSES CONTINUE ALL THE WAY TO THE COAST. THE IMPACT TO NEARBY COMMUNITIES CAN MEAN A LOSS OF TOURISM. PAYING BACK CITIES AND BUSINESS IS A FACTOR THAT OFTEN PLAYS OUT IN COURT. 

IT CAN TAKE MONTHS OR YEARS TO ASSESS THE SCOPE OF THE DAMAGE. BECAUSE CLEANUP AFTER SPILLS NEEDS IMMEDIATE ACTION, THERE ARE SAFEGUARDS IN PLACE TO FUND THE WORK IN REAL-TIME. 

OIL COMPANIES PAY LIABILITY TAXES ON EVERY BARREL PRODUCED. THAT MONEY GOES INTO A FEDERAL CLEANUP FUND. 

REMEMBER THE 2010 BP OIL SPILL IN THE GULF OF MEXICO

IT’S REPORTED TO HAVE COST BP AND ITS DRILLING PARTNERS AT LEAST $71 BILLION. 

AND WHILE EXPERTS BEGIN TO DETERMINE THESE FACTORS IN HUNTINGTON BEACH, ONE THING’S FOR SURE- IT WON’T BE CHEAP. 

LET ME KNOW YOUR THOUGHTS IN THE COMMENTS BELOW. AND BE SURE TO HEAD OVER TO OUR WEBSITE’S BIAS METER.

 

 

 

 

 

 

 

 

 

 

 

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California’s Huntington Beach is reopening, but the cleanup is far from over after a pipeline leaked 126,000 gallons of crude oil into the Pacific Ocean. The spill was one of the largest oil spills in the state’s history and is expected to cost millions.

Typically the owner and operator of the pipeline is liable for the spill, which in this case is Amplify Energy Corp. However, investigators believe the anchor from a passing ship could have caused the pipeline tear and leak. If so, that would pass liability costs to that third party.

Determining who pays for this particular oil spill could take years, but there are safeguards in place to pay for ocean cleanup in the interim. Those cleanup efforts will likely be funded by the Oil Spill Liability Act, which taxes each barrel of oil produced. Those taxes go into a federal fund for disaster response and relief.

University of Southern California Gould School of Law professor Robin Craig, specializes in environmental law. She said even after financial liability is determined, an oil spill’s impact is difficult to quantify.

“How much does it cost to clean up an otter,” she asked. “How much does it cost to rehabilitate a traumatized otter?” 

 

 

 

 

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