69–010 

Calendar No. 940 

110TH CONGRESS REPORT " ! SENATE 2d Session 110–445 

A BILL TO AMEND THE OIL POLLUTION ACT OF 1990 TO DOUBLE THE LIABILITY LIMITS FOR SINGLE-HULL TANKERS AND TANK BARGES FOR 

2009, AND FOR OTHER PURPOSES 

AUGUST 22, 2008.—Ordered to be printed 

Filed under authority of the order of the Senate of August 22 (legislative day, 

August 1), 2008 

Mrs. BOXER, from the Committee on Environment and Public 

Works, submitted the following 

R E P O R T 

[To accompany S. 2700] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Environment and Public Works, to which was 

referred the bill (S. 2700) to amend the Oil Pollution Act of 1990 

to double the liability limits for single-hull tankers and tank barges 

for 2009, and for other purposes, reports favorably thereon with an 

amendment and recommends that the bill, as amended, do pass. 

BACKGROUND

This bill to amend the Oil Pollution Act of 1990 to double liability limits for single-hull tankers and tank barges for 2009, and for 

other purposes, would double existing federal liability limits for responsible parties to an oil spill in U.S. waters if the spill comes 

from a single-hull tank vessel, and remove all federal limitations 

on liability for such spills occurring after 2009. 

After the Exxon Valdez oil spill on March 24, 1989, in Prince William Sound, Alaska, this Committee in the 101st Congress reported 

legislation which was later enacted as the Oil Pollution Act of 1990 

(Public Law 101–380). This comprehensive legislation overhauled 

the nation’s marine oil spill prevention and response policies, and 

specifically recognized the risks of catastrophic oil spills due to the 

single-hull design of certain tank vessels. Consequently, the Oil 

Pollution Act of 1990 set a deadline of 2010 for the phase-out of 

the use of certain single-hull tank vessels in the U.S., with extenVerDate Aug 31 2005 06:12 Aug 23, 2008 Jkt 069010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR445.XXX SR445

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sions to 2015 for certain of those ships with double-sides only or 

double-bottom only. 

Under the Oil Pollution Act of 1990, liability for cleanup costs 

and damages resulting from oil spills rests with a ‘responsible 

party’ who is usually the owner or operator of a vessel. In the event 

of a spill, the responsible party must pay removal costs incurred by 

the government or others, and damages to claimants who are injured by the spill. Damages may include natural resources damages, damages to real or personal property, damages for loss of a 

subsistence use of a natural resource (fishing, etc.), damages for 

lost revenue or profit caused by a spill, and damages for the cost 

of government response necessitated by the spill. 

The Oil Pollution Act of 1990 set limitations on liability for damages and cleanup costs for parties deemed responsible for a spill. 

Damage and cleanup costs exceeding these limits could be paid out 

of the federal Oil Spill Liability Trust Fund, which is capitalized 

by a $0.05 tax on each barrel of oil. The Coast Guard Authorization 

Act of 2006 (Public Law 109–241) increased the liability limits for 

all types of vessels, and is mandated to adjust liability limits for 

inflation every three years. This bill would further increase liability 

limits for one year and then phase out all liability limits for singlehull tank vessels. 

Since 1990, no single-hull tank vessel has been built in the 

United States. More robust double-hull tank ship designs have 

been built and used throughout the world, as other countries took 

similar action to phase out the use of single-hull tank vessels for 

certain petroleum commodities. Recently, some countries, including 

those in the European Union, have taken action to phase out single-hull tank vessels more rapidly than the 2015 deadline required 

by the Oil Pollution Act of 1990. 

According to the Government Accountability Office, between 1990 

and 2006, there were 24 major oil spills from tank vessels in the 

U.S. (i.e., those spills requiring federal intervention and assistance 

for cleanup and damages, including cleanup and damages claims to 

the federal Oil Spill Liability Trust Fund, totaling more than $1 

million). Government Accountability Office, Maritime Transportation, Major Oil Spills Occur Infrequently, but Risks to the Federal Oil Spill Fund Remain, GAO–07–1085 (2007). 

PURPOSE OF THE LEGISLATION

The Committee believes that while the Oil Pollution Act of 1990 

provides a firm deadline for the complete phase-out of the use of 

single-hull tank vessels in the U.S., current federal limitations on 

liability may not be sufficient to deter such ships from being used 

in the U.S. petroleum trade after they have been banned from 

other countries sooner than they will be banned in the U.S. As 

such, this bill would double existing liability limits to $6,000 per 

gross ton for single-hull tank vessels during calendar year 2009, 

and remove all federal limitations on liability after 2009. This complete removal of liability limits is intended to encourage oil tank 

vessel owners and petroleum shippers to begin using double-hull 

tank vessels earlier than outlined in the Oil Pollution Act of 1990. 

During debate on the bill at executive session on May 19, 2008, 

Committee members expressed concern that the bill as drafted may 

be interpreted to have retroactive effect—that is, the updated liVerDate Aug 31 2005 06:12 Aug 23, 2008 Jkt 069010 PO 00000 Frm 00002 Fmt 6659 Sfmt 6602 E:\HR\OC\SR445.XXX SR445

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ability limits would apply to spills occurring before 2009. Committee members present, including the bill’s sponsor, agreed that 

this was not the intent of the bill and that further amendment of 

the language may be required to ensure the bill would reflect no 

retroactive effect. 

SUMMARY OF THE LEGISLATION

Section 1. Increased single-hull liability limits for 2009 

This section would amend Section 1004(a)(1)(A) of the Oil Pollution Act of 1990 (33 U.S.C. 2704) to update limitations on liability 

for the calendar year 2009 and beyond. For CY 2009, the liability 

limit for oil spills involving single-hull tank ships would be $6,000 

per gross ton, up from $3,000 per gross ton. After 2009, federal liability for oil spills from such vessels would not be limited, to the 

extent the U.S. Constitution allows. 

LEGISLATIVE HISTORY

On December 8, 2004, Senators Lautenberg and Corzine introduced S. 3035, the Oil Spill Prevention and Liability Act of 2004, 

which proposed, inter alia, phasing out federal limitations on liability for single-hull tank vessels. The Committee took no action on 

the bill; however, several of the bill’s provisions were included in 

the enacted version of the Coast Guard Authorization Act of 2006. 

On March 4, 2008, Senator Lautenberg introduced S. 2700. It 

was referred to the Committee on Environment and Public Works, 

which did not hold any hearings on the bill. 

On May 21, 2008, the Committee on Environment and Public 

Works approved the bill by voice vote. 

ROLLCALL VOTES

There were no rollcall votes during the consideration of the bill 

by the Committee. A Lautenberg substitute amendment that provided technical corrections to clarify dates in which proposed 

changes to certain federal oil spill liability limits will apply was 

adopted by unanimous consent. 

MANDATES ASSESSMENT

In compliance with the Unfunded Mandates Reform Act of 1995 

(Public Law 104–4), the Committee agrees with the findings of the 

Congressional Budget Office, noted below, that this bill would impose no Federal intergovernmental unfunded mandates on State, 

local or tribal governments. The bill does not directly impose any 

private sector mandates. 

CONGRESSIONAL BUDGET OFFICE ESTIMATE

S. 2700—A bill to amend the Oil Pollution Act of 1990 to double 

the liability limits for single-hull tankers and tank barges for 

2009 

Summary: S. 2700 would amend the Oil Pollution Act of 1990 

(OPA) to raise the statutory limits on liability that owners or operators of single-hull tanker vessels face when an oil spill occurs. The 

bill would double the liability limits for spills that occur during the 


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2009 calendar year and essentially eliminate such limits for spills 

that occur after 2009. 

CBO estimates that enacting higher limits would reduce direct spending from the Oil Spill Liability Trust Fund (OSLTF) by $3 

million over the 2009–2013 period and by $6 million over the 2009– 2018 period. Enacting S. 2700 would not affect revenues or spending subject to appropriation. 

S. 2700 contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would not affect the budgets of state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of S. 2700 is shown in the following table. The costs 

of this legislation fall within budget function 300 (natural resources 

and environment). 

By fiscal year, in millions of dollars— 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 

CHANGES IN DIRECT SPENDING 

Estimated Budget Authority .......... * * ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 * * 

Estimated Outlays ......................... * * ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 * * 

Note.—* = reduction in direct spending of less than $500,000. 

Basis of estimate: S. 2700 would raise existing limits on the liability of owners or operators of single-hull tanker vessels that are 

responsible for oil spills into U.S. navigable waters. Under existing 

law, specified liability limits determine the total amount that a responsible party must pay to clean up an oil spill and to compensate 

third parties for damages. If the costs of a spill exceed those limits, 

the federal government generally pays any remaining costs and 

claims from the OSLTF. Current liability limits for single-hull 

tanker vessels generally vary with the size of the vessel. For example, the liability limit for single-hull tanker vessels that weigh less 

than 3,000 gross tons is the greater of $3,000 per ton or $6 million 

per spill, whereas the liability limit for single-hull tanker vessels 

that weigh more than 3,000 gross tons is the greater of $3,000 per 

ton or $22 million per spill. 

Under S. 2700, the per-ton liability limit for single-hull tank vessels would be raised from $3,000 to $6,000 for spills that occur in 

2009 (the per-spill limits would not change). For spills occurring 

after 2009, no limit is specified by the bill; instead, the limit would 

be established at the maximum allowable amount that is consistent 

with the due process requirements of the fifth amendment of the 

Constitution. CBO assumes that this provision would essentially 

eliminate any limit of liability for spills occurring after 2009 from 

single-hull tank vessels. 

The savings to the federal government associated with raising 

(and subsequently eliminating) liability limits for single-hull tanker 

vessels is uncertain because significant oil spills are relatively rare 

and cannot be predicted. In fact, since the implementation of OPA 

in 1991, liability limits have been applied only five times for spills 

from single-hull vessels. In total, those spills have accounted for 

about $262 million—around 60 percent of the $409 million that has 

been spent from the OSLTF through 2007. Morever, spills from single-hull vessels could be even rarer in the future because OPA reVerDate Aug 31 2005 06:12 Aug 23, 2008 Jkt 069010 PO 00000 Frm 00004 Fmt 6659 Sfmt 6602 E:\HR\OC\SR445.XXX SR445

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quires that the use of such vessels be phased out by 2015. At 

present, total tonnage carried by single-hull tankers is roughly 115 

million tons, an 84 percent decline from the 1998 level. 

Raising the liability limits would reduce federal costs for spills 

from single-hull vessels that occur during the 2009–2014 period, 

after which we expect that the use of such vessels will be phased 

out. CBO estimates that, starting in 2009, enacting S. 2007 would 

reduce direct spending from the OCLTF until all anticipated claims 

on single-hull vessels have been paid. Based on the cost of previous 

spills from such vessels (adjusted for the decline in the amount of 

fuel likely to be carried by such tankers in the future), CBO estimates that the bill would reduce spending by $500,000 in each of 

fiscal years 2009 and 2010 and by $1 million in each of fiscal years 

2011 through 2016. Savings would be lower in 2009 and 2010 because some claims for spills that occur in those years would be paid 

in later years. 

Intergovernmental and private-sector impact: S. 2700 contains no 

intergovernmental or private sector mandates as defined in UMRA 

and would not affect the budgets of state, local, or tribal governments. 

Estimate prepared by: Federal Costs: Deborah Reis, Jeffrey 

LaFave, and Gregory Hitz. Impact on State, Local, and Tribal Governments: Neil Hood. Impact on the Private Sector: Jacob Kuipers. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

EVALUATION OF REGULATORY IMPACT

Section 11(b) of rule XXVI of the Standing Rules of the Senate 

requires publication in the report of the Committee estimate of the 

regulatory impact made by the bill as reported. No regulatory impact is expected by the passage of the bill. The bill will not affect 

the personal privacy of individuals. 


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ADDITIONAL VIEWS OF MR. INHOFE 

The Oil Pollution Act (33 U.S.C. 2701 et seq.) was originally enacted in 1990 in response to the Exxon Valdez spill in Alaska: Congress recognized the need to adopt legislation that would establish 

an oil spill trust fund to assure the public that in the event of a 

spill, cleanups would be done without a financial burden on the 

taxpayer if a responsible party could not pay. In addition, Congress 

found it imperative to include spill liability limits for law-abiding 

responsible parties in order to sustain the crucial oil transport industry. Congress, acknowledging that a higher likelihood of spills 

exists with single hull tankers, called for the reasonable phasing 

out of single hull vessels by 2010, unless the vessel has a double 

bottomed or double sided hull. However, if a vessel operator is 

found to be in violation of Coast Guard laws and regulations at the 

time of a spill, liability limits are waived and the responsible party 

must pay the entire cost of cleanup, regardless of the set liability 

limits established under the Oil Pollution Act. This ensures that 

tanker vessels follow the laws and regulations that protect our valuable water resources. 

In 2006, Congress amended the Oil Pollution Act of 1990 by adjusting the 16-year-old liability limits by nearly 40% to account for 

inflation. Congress also authorized the Coast Guard to review and 

adjust liability limits every three years at the rate of inflation 

based on the Consumer Price Index (CPI) to ensure responsible 

parties met the true intent of the law. The next liability adjustment is scheduled for 2009. 

S. 2700, a bill to amend the Oil Pollution Act of 1990, raises the 

liability limits for year 2009 and strikes the liability limits after 

2010 for any single hull vessel (or vessel with double sides or double bottoms). Anecdotal statements regarding European Union laws 

and regulations will ultimately initiate the expanded use of single 

hull vessels in the United States have no factual evidence to illustrate that conclusion. I believe the ultimate removal of liability limits is unnecessary and creates an excessive burden on vessel owners who comply with the law and the current single hull phase-out 

established by Congress. I also believe this legislation comes at a 

difficult time during record-high oil prices and that this country 

needs to boost supply, not minimize it through laws that would discourage the delivery and transport of oil. Congress created the 25- 

year single hull phase-out timetable with the understanding that 

the critical tanker industry would suffer great economic hardships 

during a shortened compliance schedule. Therefore, Congress 

should maintain the unfettered compliance schedule outlined in the 

Oil Pollution Act of 1990. 

JAMES M. INHOFE. 


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CHANGES IN EXISTING LAW

In compliance with section 12 of rule XXVI of the Standing Rules 

of the Senate, changes in existing law made by the bill as reported 

are shown as follows: Existing law proposed to be omitted is enclosed in øblack brackets¿, new matter is printed in italic, existing 

law in which no change is proposed is shown in roman: 

* * * * * * * 

OIL POLLUTION ACT OF 1990 

* * * * * * * 

SEC. 1004. LIMITS ON LIABILITY. 

(a) GENERAL RULE.—Except as otherwise provided in this section, the total of the liability of a responsible party under section 

1002 and any removal costs incurred by, or on behalf of, the responsible party, with respect to each incident shall not exceed—

(1) for a tank vessel, the greater of—

ø(A) $1,200 per gross ton; or¿ 

(A) with respect to a single-hull vessel, including a single-hull vessel fitted with double sides only or a double bottom—

(i) $3,000 per gross ton, if the incident for which liability is imposed under section 1002 occurs after the 

date of enactment of this clause and before January 1, 

2009; 

(ii) $6,000 per gross ton, if the incident for which liability is imposed under section 1002 occurs after December 31, 2008, and before January 1, 2010; and 

(iii) the maximum amount allowable, consistent with 

the substantive due process requirements of the Fifth 

Amendment to the United States Constitution, if the incident for which liability is imposed under section 1002 

occurs after December 31, 2009; 

* * * * * * * 

Æ 


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