The Oil Pollution Act of 1990: The Financial Responsibility Requirement -- Questioning Congressional Intent and the Minerals Management Service Interpretation of "Offshore Facility"
By William W. Enders
INTRODUCTION
When President Bush signed the Oil Pollution Act of 1990 (OPA) into law on August 18, 1990, he stated that the legislation followed “in the wake of the worst marine environmental disaster this Nation has ever experienced.” Indeed, despite long-standing criticism of previous oil spill legislation it seems certain that the passage of OPA came about only as a result of the public outcry which followed several consecutive oil tanker spills, most prominently the eleven-million-gallon Exxon Valdez spill into Prince William Sound on March 24, 1989. In the words of Senator George Mitchell, “[t]he dramatic collapse in oil tanker safety broke a decade-long stalemate that had prevented enactment of a comprehensive oil spill law to protect our coasts.” Accordingly, the Exxon Valdez oil spill may be viewed as having performed a valuable service by highlighting the need to enact legislation that would adequately address oil spill deterrence. However, the Valdez accident also appears to have spurred the hasty passage of a poorly constructed statute which at best has resulted in a standoff between the executive and legislative branches of our government, and at worst could devastate the operations of onshore and offshore domestic oil facilities. For the average American consumer, such damage to the domestic oil industry carries the danger of higher energy costs, increased price inflation for other consumer products, higher taxes, and an increase in the importation of foreign oil. For those concerned with the protection of the environment, OPA represents the type of poorly crafted and overbroad environmental legislation that threatens to erode public support for legitimate environmental regulations.
The controversy surrounding the implementation of OPA demonstrates the need for environmental legislation that is carefully drafted and narrowly tailored to address legitimate environmental harms without unnecessary collateral damage. To achieve such balanced legislation, Congress must avoid succumbing to the emotional rhetoric that often accompanies environmental issues and be willing to resist the urge to legislate vague or broadbrush solutions to complicated problems. However, where Congress cannot or will not take the time to craft legislation that properly addresses complex environmental concerns, the responsibility to implement the legislation in a rational manner may fall on agency shoulders. This Note will use the passage and implementation of OPA to advance the proposition that in such cases the implementing agency should not hesitate to draw on its experience and technical expertise to meet this responsibility. In particular, it questions the Minerals Management Service (MMS) interpretation of one controversial aspect of OPA, the Evidence of Financial Responsibility (EOFR) requirement for offshore facilities.
Part II of this Note briefly recounts the legislative background behind the passage of OPA and the OPA offshore EOFR requirement. Part III outlines regulations recently proposed by the MMS to implement the OPA EOFR requirements, including a broad jurisdictional definition of the term “offshore facility,” which serves to encompass many traditional onshore facilities. In Part IV, this Note examines the potential negative impact of the proposed MMS offshore EOFR regulations on oil producers, other oil-related industries, the economy, and the environment. Finally, Part V questions the legal validity of the broad MMS interpretation of an “offshore facility” by examining the legislative history of OPA, as well as the likelihood that the interpretation would survive judicial review.
This Note posits that the controversy surrounding the OPA offshore EOFR requirement is a direct result of the confusing and inconsistent wording of the OPA statutory language. It further asserts that the broad MMS interpretation of “offshore facility” would likely withstand judicial review, but probably both exceeds the scope intended by Congress and goes beyond what is necessary to protect the environment. The Note concludes that the current controversy over the proper application of the offshore EOFR requirement results from a political standoff between Congress and the MMS. Finally, it proposes that a narrower application of the offshore EOFR requirement to cover only traditional offshore facilities would likely be upheld by the courts, and that such an interpretation by the MMS provides the best means of diffusing the current controversy and preventing serious harm to both the American oil industry and the credibility of the American environmental movement.
When President Bush signed the Oil Pollution Act of 1990 (OPA) into law on August 18, 1990, he stated that the legislation followed “in the wake of the worst marine environmental disaster this Nation has ever experienced.” Indeed, despite long-standing criticism of previous oil spill legislation it seems certain that the passage of OPA came about only as a result of the public outcry which followed several consecutive oil tanker spills, most prominently the eleven-million-gallon Exxon Valdez spill into Prince William Sound on March 24, 1989. In the words of Senator George Mitchell, “[t]he dramatic collapse in oil tanker safety broke a decade-long stalemate that had prevented enactment of a comprehensive oil spill law to protect our coasts.” Accordingly, the Exxon Valdez oil spill may be viewed as having performed a valuable service by highlighting the need to enact legislation that would adequately address oil spill deterrence. However, the Valdez accident also appears to have spurred the hasty passage of a poorly constructed statute which at best has resulted in a standoff between the executive and legislative branches of our government, and at worst could devastate the operations of onshore and offshore domestic oil facilities. For the average American consumer, such damage to the domestic oil industry carries the danger of higher energy costs, increased price inflation for other consumer products, higher taxes, and an increase in the importation of foreign oil. For those concerned with the protection of the environment, OPA represents the type of poorly crafted and overbroad environmental legislation that threatens to erode public support for legitimate environmental regulations.
The controversy surrounding the implementation of OPA demonstrates the need for environmental legislation that is carefully drafted and narrowly tailored to address legitimate environmental harms without unnecessary collateral damage. To achieve such balanced legislation, Congress must avoid succumbing to the emotional rhetoric that often accompanies environmental issues and be willing to resist the urge to legislate vague or broadbrush solutions to complicated problems. However, where Congress cannot or will not take the time to craft legislation that properly addresses complex environmental concerns, the responsibility to implement the legislation in a rational manner may fall on agency shoulders. This Note will use the passage and implementation of OPA to advance the proposition that in such cases the implementing agency should not hesitate to draw on its experience and technical expertise to meet this responsibility. In particular, it questions the Minerals Management Service (MMS) interpretation of one controversial aspect of OPA, the Evidence of Financial Responsibility (EOFR) requirement for offshore facilities.
Part II of this Note briefly recounts the legislative background behind the passage of OPA and the OPA offshore EOFR requirement. Part III outlines regulations recently proposed by the MMS to implement the OPA EOFR requirements, including a broad jurisdictional definition of the term “offshore facility,” which serves to encompass many traditional onshore facilities. In Part IV, this Note examines the potential negative impact of the proposed MMS offshore EOFR regulations on oil producers, other oil-related industries, the economy, and the environment. Finally, Part V questions the legal validity of the broad MMS interpretation of an “offshore facility” by examining the legislative history of OPA, as well as the likelihood that the interpretation would survive judicial review.
This Note posits that the controversy surrounding the OPA offshore EOFR requirement is a direct result of the confusing and inconsistent wording of the OPA statutory language. It further asserts that the broad MMS interpretation of “offshore facility” would likely withstand judicial review, but probably both exceeds the scope intended by Congress and goes beyond what is necessary to protect the environment. The Note concludes that the current controversy over the proper application of the offshore EOFR requirement results from a political standoff between Congress and the MMS. Finally, it proposes that a narrower application of the offshore EOFR requirement to cover only traditional offshore facilities would likely be upheld by the courts, and that such an interpretation by the MMS provides the best means of diffusing the current controversy and preventing serious harm to both the American oil industry and the credibility of the American environmental movement.
