Lessons Learned from BP Deepwater Horizon Oil Spill
On January 11, 2011 the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling Report was released to President Obama. Governor Gregoire directed Ecology and the Partnership to evaluate the report for significant lessons learned and recommendations that would have potential impacts to Washington State.
This site was created to provide information on the joint review by Ecology and the Puget Sound Partnership on the National Commission Report.
Our state faces significant risks for major oil spill
While our state does not face the direct risks of deepwater drilling off state shores, more than 15 billion gallons of oil are shipped annually through state waters.
A major spill from any of the state-regulated vessels that transit our waters – oil tankers, fuel barges, large cargo vessels, commercial fish-processing vessels and passenger ships – could dump millions of gallons to Washington waters.
Cross border impacts from major spill are likely
Depending on the location of the spill, oil from a major spill also could reach waters in other states such as Oregon and cross the international border with Canada.
Major spill likely to reach our shores in hours, minutes
Unlike the Gulf spill, a major spill in Washington waters would likely reach our shores in hours or minutes instead of days. Such a spill could cost our economy $10.8 billion and impact 165,000 jobs.
During the past 30 years, Washington has experienced major spills and related incidents such as refinery explosions, liquid fuel pipeline ruptures, oil tanker groundings, fuel transfer mishaps and spills caused when commercial vessels sank or collided.
Findings and Recommendations from Ecology and Puget Sound Partnership Review
The following sections of this report outline the gaps and strengths of the existing response system in Washington and recommend actions necessary to improve our ability to prevent, plan for and respond to oil spills.
Commission Report Finding 1: The need for a new approach to risk assessment and management (Chapter 9, page 251).
“Neither the industry’s nor the federal government’s approaches to managing and overseeing the leasing and development of offshore resources have kept pace with rapid changes in the technology, practices, and risks associated with the different geological and ocean environments being explored and developed for oil and gas production.”
Although this finding is related specifically to the operation of off-shore drilling practices, it is applicable to Washington’s operational risks inherent with oil transportation and refining activities taking place on our state waters and lands. Preventing spills, large and small in Washington is a top priority and a legislative goal (“zero spills”). Meeting this goal requires the agency to identify industry specific risks at every level in marine transportation and oil handling systems, and to target those risks with the right prevention activities.
Washington Gaps and Strengths
Considerable progress has been made through oil spill prevention activities that emphasize vessel inspections and providing technical assistance to large commercial ships. Other activities include conducting risk analysis by addressing water way risk management and following the Point Wells spill, pre-booming and inspection of high risk oil transfers that occur over state waters. However, incidents continue to occur. Key prevention issues, such as fatigue, inadequate crewing requirements and inadequate company training, operating procedures and policies continue to be prominent causal factors in these incidents. Ecology must continue working with industry partners to emphasize human factors as the key to spill prevention in Washington’s waters. Spill data also indicates that incidents from non-regulated sources, such as fishing and recreational vessels, pose a disproportionate risk of incidents and spills.
Commission Report Finding 1: The need for improved oil spill response planning (Chapter 9, page 265).
“…it was clear that neither BP nor the federal government was prepared to deal with a spill of the magnitude and complexity of the Deepwater Horizon disaster…
This finding in the Commission Report relates to the need for “a common interagency approach” to area planning and contingency plan review. Washington, Idaho and Oregon have combined regional level oil spill planning into a single, shared Northwest Area Contingency Plan (Area Plan). The Area Plan contains response policies and tools, and provides a coordination mechanism for all three states and the federal government. The Area Plan is updated annually. Industry oil spill plans are reviewed for their consistency with the Area Plan and are measured against regulatory standards for approval.
Washington Gaps and Strengths
In addition to challenges associated with fast currents and high seas, one of the biggest gaps in the Northwest is our capability to respond to large oil spills when they cross the international border with Canada. Planning under the Canada-United States Joint Marine Pollution Contingency Plan is less advanced than with our state partners. There are many complex coordination and logistical issues that must be addressed well ahead of a spill. The goal must be to mount a response that is rapid, aggressive and well coordinated with our Canadian partners in industry, the federal government and province.
Recognizing the importance of transboundary planning, the Pacific States/British Columbia Oil Spill Task Force launched a multi-year initiative in 2008 to review and document existing US/Canadian oil spill response planning and capabilities. The report will be completed in June 2011. The work group for the project is addressing mutual aid agreements, regional response plans, incident management systems and guidelines for agency decision making process.
Commission Report Finding 2: The need for a new approach to handling Spills of National Significance (Chapter 9, page 267).
“The Macondo well blowout caused the largest accidental oil spill in history—one that presented an unprecedented challenge to the response capability of both government and industry. Clearly, neither was adequately equipped: In fact it was quickly evident that even the response capacity indicated in industry’s spill response plans did not exist. Though the National Contingency Plan permitted the government to designate the spill as one of “national significance,” this designation did not trigger any procedures other than allowing the federal government to name a National Incident Commander… “
This finding in the Commission report relates to the National Contingency Plan and the role of the federal government in managing a National Significance (SONS). The report offers many recommendations for increased government oversight of the party responsible for a spill, better integration of science and policy expertise in the response and improved communication with the public.
Washington Gaps and Strengths
When the Gulf spill was designated as SONS, Washington, like other states around the nation, assisted Gulf states and their residents by sending response equipment to the area. Washington strongly encourages reciprocity as a means to assist other coastal states and provinces. However, we lacked a mechanism or process to evaluate the requests, and quickly worked with Area Plan partners to develop one. Timely decisions were made on how to backfill or mitigate for equipment that moved, and we balanced the need to aid the Gulf and maintain the level of preparedness in our state if a spill were to occur while our response assets were moved to the Gulf. This was critically important since any major response assets moved to the spill had to transit through the Panama Canal. This long transit placed the equipment on an approximately 30 day recall schedule, should they be needed to respond to a second major spill in the northwest.
Another concern that arose during the response was the Coast Guard and EPA’s emergency rule making that temporarily lowered federal response standards nation-wide. The emergency rule temporarily lowered the Average Most Probable Discharge standard in order to facilitate the movement of resident equipment into the Gulf, without placing the plan-holder out of compliance with federal standards. This lowered standard was considered by Ecology and many in industry as unacceptably low for the Pacific Northwest area, even as a temporary standard. The Department of Ecology, in coordination with response contractors and contingency plan holders, developed a methodology to analyze the level of preparedness that must be maintained in Washington. This methodology helped ensure sound decisions were made about equipment movement to the Gulf.
As the SONS process was further developing we became aware, through direct communication with NW Treaty Tribes, that a federal Tribal Consultation Policy mechanism didn’t exist. Although there is not a national framework for this consultation, Washington has devised a mechanism for tribal participation in decision making processes through the Regional Response Team and Northwest Area Planning Committee. Throughout the process of determining response equipment moves, the tribes were part of the discussion on what would be moved.
Commission Report Finding 3: The need to strengthen state and local involvement (Chapter 9, page 268).
“The response to the Deepwater Horizon disaster showed that state and local elected officials had not been adequately involved in oil spill contingency planning, though career responders in state government had participated extensively in such planning. Before the Deepwater Horizon spill, state and local elected officials were not regular participants in Area Committee meetings or familiar with local Area Contingency Plans. The Coast Guard and Area Committee member agencies had done little to reach out to state and local elected officials.”
Local elected official, tribal government and citizen involvement in the oil spill planning process is critical if an area is to be truly prepared to deliver a well coordinated response. This involvement ensures that the response team is able to take advantage of local knowledge and local resources in the response. The Northwest Area Plan has a long standing policy to include tribes and local government in Unified Command. Beyond decision making processes, local involvement also includes volunteer management and assisting in the identification of local commercial vessels of opportunity for use as response assets.
Washington Gaps and Strengths
One of the planning strengths in Washington is local and tribal involvement in developing Geographic Response Plans (GRP), which are an appendix to the Area Plan. GRPs are site-specific response plans for oil spills to water. They are strategies tailored to a specific beach, shore, or waterway and meant to minimize impact on sensitive areas threatened by the spill. GRPs are a good place to start involving communities in the planning process, but more work is needed.
Local Involvement in Oil Spill Drills
Drills are a requirement for companies to test their plans. They are also an opportunity to involve local officials and tribes in the Area Plan, so that the coordination and prioritization issues experienced in the Gulf do not occur here. Area plan initiatives are also an opportunity for companies and response agencies to learn local knowledge that is critical during a spill response. All parties to a spill need to know other people involved in the spill response prior to the day of the spills, this requires practice. We recognize that funding limitations for tribes and local government is a limiting factor to their involvement.
Volunteer Management Program
Many Washington State citizens feel outraged and frustrated when oil spills impact their beaches and are compelled to take action. For many, this means looking for opportunities to be involved as volunteers and contribute to restoring their community. Through the Beach Watchers program, Ecology has provided training to community groups around the state who serve as “eyes” for Ecology and in many cases are the closest field observers to help size up reported spills.
Many volunteers are interested in participating with oiled wildlife care. Because of the potential to harm affected wildlife and the potential for human exposures to toxic oil and diseases, additional levels of training are required. This training is coordinated by the Washington Department of Fish and Wildlife and federal agencies within an existing network of wildlife care organizations.
There are a number of issues to be addressed regarding use of volunteers during oil spill response including liability, proper training , compensation, reporting and supervision relationships. Similar to the need to have local governmental and tribal involvement prior to a large spill, it is also critical to have trained and organized volunteers to be -accessible during spill incidents. While managing volunteers is an inherently government function, funding for use of volunteers should be borne by the industry during an actual spill incident.
Vessel of Opportunity Program
In a major spill it will be evident early on that the need for vessels to support response activities over large geographic areas will outgrow the professional dedicated vessel response assets. The Vessel of Opportunity Program (VOO) is an opportunity to utilize existing vessels such as fishing and other commercial vessels in our waters during oil spill response. The Gulf oil spill offered many lessons learned in using local fishing fleets and other commercial vessels as spill response assets. The VOO program offer assistance in many response activities including:
There are many viable advantages to using vessel of opportunities such as accessing local knowledge of water ways and environmental conditions. It also offers employment opportunities for an economic sector that may be severally impacted by oil spills.
One of the many lessons learned from the gulf is the advantage of establishing a VOO program well before a major spill occurs. In the Deepwater Horizon spill the pressures to develop an ad-hoc program lead to a number of unintended corner cutting procedures that resulted in unnecessary waivers for training requirements and a lack of process to determine vessel ownership and sea-worthiness.
Currently in Washington, there are several programs led by industry response contractors that could be built upon for a more robust VOO program. This would include enhancing the program to ensure that:
The VOO program should be designed to supplement but not replace professional responders. VOOs can be managed through response contractors and should be available equally to all regulated plan holders to establish a level regulatory playing field.
Commission Report Finding 4: The need to increase research and development to improve spill response (Chapter 9, page 269).
“The technology available for cleaning up oil spills has improved only incrementally since 1990. Federal research and development programs in this area are underfunded. In fact, Congress has never appropriated even half the full amount authorized by the Oil Pollution Act of 1990 for oil spill research and development. In addition, the major oil companies have committed minimal resources to in-house research and development related to spill response technology.”
The National Commission’s Report makes a compelling finding that oil spill response technology and practices to respond to and clean up spills has only seen limited improvement since 1990. Although the Gulf spill introduced and tested some new technology, it was also evident that oil spill response technology and practices was not keeping pace with the risk of spills. While Washington has achieved a solid baseline in terms of equipment that is cached in areas of highest risk, it is also true that these investments have not brought in the latest technology already deployed elsewhere in this nation.
Washington Gaps and Strengths
Commission Report Finding 5: The need for new regulations to govern the use of dispersants. (Chapter 9, page 269). ;
“The decision to use dispersants involves difficult tradeoffs: If dispersants are effective, less oil will reach shorelines and fragile marsh environments, but more dispersed oil will be spread throughout the water column. Prior to the Deepwater Horizon incident, the federal government had not adequately planned for the use of dispersants to address such a large and sustained oil spill, and did not have sufficient research on the long-term effects of dispersants and dispersed oil to guide its decision-making.”
Planning efforts for the use of dispersants has been inadequate and the Deepwater Horizonn incident serves as a wake-up call for coastal states. The large quantities of dispersants applied to the spill, the subsea application method, the previously undisclosed chemical formula of the products being used and our understanding of the long term impacts from the use of dispersants are all areas to evaluate in the future. During the Gulf response there was conflict over the dispersant process between the two federal agencies that directly regulated their use (EPA and USCG). Given this controversy, the need for further research on dispersant use and coastal states’ local knowledge of their environments and values, it is imperative that states continue to be authorized to set dispersant policies using local considerations rather than mandating policies from the federal government in a “one size fits all” approach.
Washington Gaps and Strengths
As part of the Northwest Area Contingency Plan, policies and decision making processes have been developed specifically for the use of dispersants in our environment. The Deepwater Horizon has shown the importance of how much more specific and sophisticated state policy should be.
Commission Report Finding 1: The need to increase existing limitation on responsible party liability (Chapter 9, page 283).
“Liability for damages from spills from offshore facilities is capped under the Oil Pollution Act at $75 million, unless it can be shown that the responsible party was guilty of gross negligence or willful misconduct, violated a federal safety regulation, or failed to report the incident or cooperate with removal activities, in which case there is no limit on damages (see Chapter 8). Claims up to $1 billion above the $75 million cap for certain damages can be made to, and paid out of, the Oil Spill Liability Trust Fund, which is currently supported by an 8-cent per-barrel tax on domestic and imported oil.”
As of February 3, 2011, British Petroleum reported has paid out just over $5 billion in clean-up costs and claims for the Gulf of Mexico spill to date. Enormous additional expenses were incurred in the effort to control the release. These figures also do not include natural resource damage assessments, penalties or future 3rd party damages, all of which promise to be very large.
Federal and state laws make the party responsible for a spill liable for compensating those who suffered as a result of a spill (economic damages) and for restoring injured natural resources (natural resource damages). Additionally federal laws provide a claims process to petition for compensation from the federal dedicated Oil Spill Liability Trust Fund. The federal government, however, imposes limits on the amount of damages for which the responsible party is liable, and the amount of compensation available through the trust fund.
Washington Gaps and Strengths
Under Washington State law, unlike the federal government, liability for oil spill costs and damages is unlimited. Demonstration of financial responsibility, however, is subject to specified limits. Washington state law grants the Department of Ecology authority to administer state financial responsibility requirements by rule, if necessary. While regulations for vessels have been established, financial responsibility regulations for facilities have not been set.
There is also a gap in verifying that vessel and facility operators meet state financial responsibility levels. Ecology relies upon the federal government (USCG) and the State of California’s Office of Spill Prevention and Response (OSPR), whose financial responsibility levels are similar to this state’s, to verify compliance and issue certificates.
Commission Report Finding 2: The need to increase limitations on payments from the Oil Spill Liability Trusts Fund (Chapter 9, page 285).
“If liability and financial responsibility limits are not set at a level that will ensure payment of all damages for spills, then another source of funding will be required to ensure full compensation. The federal government could cover additional compensation costs, but this approach requires the taxpayer to foot the bill. Therefore, Congress should raise the Oil Spill Liability Trust Fund per-incident limit because the current limits are clearly inadequate.”
The Federal Oil Spill Liability Trust Fund (OSLTF), with an estimated balance of $2.5 billion (as of fiscal year 2012), was established to be a funding source for paying oil spill response costs for “orphan” oil spills and those spills which exceed the federal limits of liability. Eligible state response expenses for responding to spills can also be covered through the OSLTF. Additionally, Washington State has the Oil Spill Response Account (OSRA) which can pay for response and cleanup costs for large oil spills, up to the unspent balance.
It was apparent from the outset of the spill in the Gulf that response costs and damages were likely to exceed the existing federal liability limits, which could then place the responsibility on the government to cover the cost of the spill response. To their credit in this incident, BP committed to cover all response costs; however, few other corporations would have the financial resources that BP has. Existing financial responsibility levels expose the government to significant financial risk when responsible parties cannot be held liable to cover all response costs.
Washington Gaps and Strengths
There have been incidents where the state response policy conflicts with the federal response policies and creates a situation in which the state might have to cover all or a significant portion of an oil spill’s cleanup costs. As an example, cleanup of the SS Catala shipwreck in Ocean Shores, Grays Harbor County required over $7 million in state funds to remove and dispose of 34,000 gallons of heavy fuel oil. The US Coast Guard initially recommended against using federal OSLTF monies for this project. Fortunately, the state was eventually reimbursed approximately $6.5 million but had to carry the expenses for two years after initiating the project, and were uncompensated for the remaining $500,000.
Washington’s Oil Spill Response Account (OSRA) was originally established at $25 million in 1991, but the cap was reduced over time and is currently has $9 million cap. The example of the SS Catala indicates the state is not positioned financially to mount an aggressive response to oil spills, if the responsible party and federal government are unable or unwilling to pay for the response. In addition, due to the slow and cumbersome claims process to access the OSLTF, the state may be inadequately funded to respond to other spills while its waits to be reimbursed from the OSLTF or responsible party.
Ecology and Puget Sound Partnership Review of Lessons Learned from Gulf Oil Spill
Ecology and Puget Sound Partnership Review of the National Commission Report on BP Deepwater Horizon Oil Spill
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