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CLAIM SUMMARY / DETERMINATION 

Claim Number: N19045-0004 

Claimant: National Shipping of America, LLC 

Type of Claimant: Corporate 

Type of Claim: Loss of Profits and Earnings 

Claim Manager: 

Amount Requested: $1,246,296.17 

Action Taken: Denial

EXECUTIVE SUMMARY: 

In March 2019, a fire broke out at the Intercontinental Terminals Company tank farm in Deer 

Park, Texas. Several tanks containing chemicals and oil burned and, as a result, released their 

contents. The chemicals and oil then commingled inside the containment area surrounding the 

tanks. After the substances commingled in the containment area, the containment area breached

and the mixture eventually discharged into the Houston Ship Channel (HSC), a navigable 

waterway of the United States. A portion of the HSC was closed because of the release. 

Both the EPA and U.S. Coast Guard responded and it was determined the spill was a release 

of hazardous substances under the Comprehensive Environmental Response, Compensation and 

Liability Act (CERCLA). 

The claimant, National Shipping of America, LLC operates the M/V NATIONAL GLORY

which sails every other Wednesday from Houston, arriving the following Wednesday in San 

Juan delivering cargo, food items and consumer goods.1 It seeks lost profits in the amount of 

$1,246,296.17.2

 

The NPFC has thoroughly reviewed all documentation submitted with the claim, analyzed 

the applicable law and regulations, and after careful consideration, has determined that the claim 

is not compensable under OPA and must be denied. 

I. RELEASE OF HAZARDOUS SUBSTANCES, RESPONSIBLE PARTY AND RECOVERY 

OPERATIONS:

Release of Hazardous Substances 

On Sunday March 17, 2019, a chemical fire ignited at the Intercontinental Terminals 

Company (ITC) tank farm in Deer Park, Texas. ITC reported the fire to the National Response 

Center the same day.3 The EPA Region VI Federal On-Scene Coordinator mobilized to the site.4 

 

1 See, https://natship.us/our-services/ (last visited August 17, 2020). See also, Claimant’s Description of Business. 2 Optional OSLTF Claim Form dated March 27, 2020. The claimed costs are described as; Lost Revenue/Lost 

Freight, Expenses at Barbours Cut Terminal, Additional Vessel Expenses During Eight Day Delay, Delay Expenses 

at Jacinto Port, Expenses to Divert Reefer Containers to Jacksonville, Drayage and Line Haul Expenses to Move 

Perishable Food Items, Consumer Goods, and Cargo from Spill/Closed Area to Outside Spill/Closed Area.

3 NRC Report #1240304 dated March 17, 2019. 4 EPA Region VI POLREP #1; EPA Region VI ITC tank fire site profile, available at

https://response.epa.gov/itctankfire (last visited August 18, 2020).
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The impacted tank farm included 15 petro-chemical storage tanks that contained a variety of 

different petroleum and chemical products such as: Yubase 6, Gasoline Blend Stock, and Yubase 

4. Plus, Xylene, Pyrolysis Gasoline, Naphtha, Base Oils, and Toluene. The fire began in the 

centrally located Naphtha tank and spread to 13 of 15 tanks within the containment area. As the 

tanks were compromised, they leaked their contents creating a mixture of chemical and 

petroleum products within the containment area.5 On March 22, 2019, the commingled 

substances breached the containment area eventually entering Tucker Bayou and the HSC.6 On 

March 23, lab results from the sampling in Tucker Bayou and in Buffalo Bayou found 

exceedances of the water quality levels for benzene and xylene.7 

The fire, the release, and the response caused channel closures and waterway traffic 

restrictions. 

Responsible Party

Intercontinental Terminals Company LLC (ITC) is the owner and operator of the terminal 

and tanks used to store oil and chemicals, including those that were discharged. The EPA 

identified ITC as a “potentially responsible party” under CERCLA.8 ITC’s facilities were not 

designated as the source of the discharge under OPA. Also, the U.S. Coast Guard has not 

identified ITC as an OPA responsible party. 

Recovery Operations

EPA Region VI and U.S. Coast Guard Sector Houston-Galveston responded. During the 

initial stages of the response, federal and state authorities quickly determined that the release 

involved CERCLA hazardous substances and responded under CERCLA authority.9 EPA 

Region VI provided the Federal On-Scene Coordinator (FOSC) who oversaw the response and 

removal operations. EPA exercised pollution-response authority under CERCLA based on 

sampling data indicating a release or threat of release of CERCLA-listed hazardous substances, 

including toluene, benzene, xylene, naphthalene, ethylbenzene and styrene.10 On March 23, EPA 

delivered an Administrative Order to ITC, requiring ITC to conduct actions to abate or mitigate 

an imminent and substantial threat to the public health or welfare by the discharge or substantial 

threat of a discharge of hazardous substances from the Deer Park facility into or upon the 

navigable waters or adjoining shorelines.11 

 

5 Email from CDR to NPFC dated January 22, 2020. CDR was in charge of the CG Incident 

Management Division at Sector Houston/Galveston during the spill.

6 Email from CDR to NPFC dated January 22, 2020.

7 In addition, naphthalene, ethylbenzene, methyl tert-butyl ether (MTBE), and toluene exceeded the TCEQ levels in 

the Tucker Bayou sample; EPA Region VI POLREP #2. 8 EPA Region VI POLREPs #1-#4. 9 EPA Region VI POLREP #2.

10 EPA Region VI letter to ITC attorneys dated September 27, 2019; U.S. Coast Guard Second 80’s Tank Farm Fire 

Product Listing PowerPoint presentation attached to email from MSTC to NPFC dated May 2, 2019. 11 EPA Region VI POLREP #2.
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II. CLAIMANT, RP, AND THE NPFC: 

Absent limited circumstances, the Federal Regulations implementing the Oil Pollution Act of 

1990 (OPA)12 require all claims for removal costs or damages to be presented to the RP before 

seeking compensation from the NPFC.13

The claimant presented its costs to ITC on June 25, 2019.14 In response to the claimant, ITC, 

sent a letter to the claimant which indicated that it has not been designated a Responsible Party 

under OPA and denied the claimant’s costs.

15 

The amounts claimed against the Oil Spill Liability Trust Fund (OSLTF) are $1,246,296.17 

in alleged loss of profits and earning capacity.16 In response to a letter from the NPFC notifying 

it of the claim, ITC explained why it believed this event is properly characterized as a CERCLA 

release and why it believed it should not be liable under OPA.17

III. DETERMINATION PROCESS:

 The NPFC utilizes an informal process when adjudicating claims against the Oil Spill 

Liability Trust Fund (OSLTF).18 As a result, 5 U.S.C. § 555(e) requires the NPFC to provide a 

brief statement explaining its decision. This determination is issued to satisfy that requirement.

 When adjudicating claims against the OSLTF, the NPFC acts as the finder of fact. In this 

role, the NPFC considers all relevant evidence, including evidence provided by claimants and 

evidence obtained independently by the NPFC, and weighs its probative value when determining 

the facts of the claim.19 The NPFC may rely upon, is not bound by the findings of fact, opinions, 

or conclusions reached by other entities.20 If there is conflicting evidence in the record, the 

NPFC makes a determination as to what evidence is more credible or deserves greater weight, 

and makes its determination based on the preponderance of the credible evidence.

IV. DISCUSSION: 

 Under OPA, an RP is liable for all removal costs and damages resulting from either an oil 

discharge or a substantial threat of oil discharge into a navigable water of the United States.21 

 

12 33 U.S.C. § 2701 et seq. 13 33 U.S.C. § 2713; 33 CFR 136.103. 14 See, OSLTF Claim Form. 15 Letter from ITC (counsel) to Claimant (counsel) legal dated October 24, 2019 16 See, supra note 2. 17 Letter from ITC (counsel) to NPFC dated May 14, 2020. 18 33 CFR Part 136. 19 See, e.g., Boquet Oyster House, Inc. v. United States, 74 ERC 2004, 2011 WL 5187292, (E.D. La. 2011), “[T]he 

Fifth Circuit specifically recognized that an agency has discretion to credit one expert's report over another when 

experts express conflicting views.” (Citing, Medina County v. Surface Transp. Bd., 602 F.3d 687, 699 (5th Cir. 

2010)). 20 See, e.g., Use of Reports of Marine Casualty in Claims Process by National Pollution Funds Center, 71 Fed. Reg. 

60553 (October 13, 2006) and Use of Reports of Marine Casualty in Claims Process by National Pollution Funds 

Center 72 Fed. Reg. 17574 (concluding that NPFC may consider marine casualty reports but is not bound by them). 21 33 U.S.C. § 2702(a).
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An RP’s liability is strict, joint, and several.22 When enacting OPA, Congress “explicitly 

recognized that the existing federal and states laws provided inadequate cleanup and damage 

remedies, required large taxpayer subsidies for costly cleanup activities and presented substantial 

burdens to victim’s recoveries such as legal defenses, corporate forms, and burdens of proof 

unfairly favoring those responsible for the spills.”23 OPA was intended to cure these deficiencies 

in the law. 

OPA provides a mechanism for compensating parties who have incurred a loss of profits or 

earning capacity where the responsible party has failed to do so. OPA authorizes OSLTF 

reimbursement to a claimant who has suffered a loss of profits and earnings as a result of an 

incident.24 Loss of profits and earning capacity are defined as,”[d]amages equal to the loss of 

profits or impairment of earning capacity due to the injury, destruction, or loss of real property, 

personal property, or natural resources, which shall be recoverable by any claimant.”25

The NPFC is authorized to pay claims for uncompensated damages that result from the 

discharge or substantial threat of the discharge of OPA oil into navigable waters of the United 

States.26 The NPFC has promulgated a comprehensive set of regulations governing the 

presentment, filing, processing, settling, and adjudicating such claims.27 The claimant bears the 

burden of providing all evidence, information, and documentation deemed relevant and 

necessary by the Director of the NPFC, to support and properly process the claim.28 The 

regulations specifically address what a claimant must show to prove a lost profits claim in 

addition to limiting the compensation available from the OSLTF.29 The regulations specifically 

require proof of lost profits by comparing profits earned in previous time periods with the profits 

earned when the loss was alleged to be suffered.30

OPA defines a “claim” to mean “a request made in writing for a sum certain, for 

compensation for damages or removal costs resulting from an incident.” 31 

An “incident” under OPA is defined as “any occurrence or series of occurrences having the 

same origin, involving one or more vessels, facilities, or any combination thereof, resulting in 

the discharge or substantial threat of discharge of oil.”32 

OPA defines “oil” as “oil of any kind or in any form, including petroleum, fuel oil, sludge, 

oil refuse, and oil mixed with wastes other than dredged spoil, but does not include any 

substance which is specifically listed or designated as a hazardous substance under 

subparagraphs (A) through (F) of section 101 (14) of the Comprehensive Environmental 

 

22 See, H.R. Rep. No 101-653, at 102 (1990), reprinted in 1990 U.S.C.C.A.N. 779, 780. 23 Apex Oil Co., Inc. v United States, 208 F. Supp. 2d 642, 651-52 (E.D. La. 2002) (citing S. Rep. No. 101-94 

(1989), reprinted in 1990 U.S.C.C.A.N. 722). 24 33 U.S.C. § 2712(a)(4). 25 33 U.S.C. § 2702(b)(2)(E). 26 See generally, 33 U.S.C. § 2712(a)(4); 33 U.S.C. § 2713; and 33 CFR Part 136. 27 33 CFR Part 136. 28 33 CFR 136.105. 29 33 CFR 136.231, 136.233, and 136.235. 30 33 CFR 136.233 31 33 U.S.C. § 2701(14). 32 33 U.S.C. § 2701(14)(emphasis added).

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that were mixed with hazardous materials present on a navigable waterway, with the intent of 

ensuring the final legislation was broad enough to cover these events. By all accounts, it was. 

Since the passage of CERCLA, the EPA has promulgated several policy documents 

explaining its position with respect to discharges of oil. Taken holistically and simplistically, the 

policies explain that CERCLA excludes discharges of oil40 but CERCLA could impose liability 

on certain discharges of substances that contain oil in an adulterated form. Because of the 

adulteration of the oil, if released, it would be considered a “hazardous material” not “oil” as 

defined.41 While most of the jurisprudence in this area concerns cases where the EPA is asserting 

jurisdiction under CERCLA and the defendant asserts the “petroleum exclusion” as a defense, 

the decisions discussing the intent and application of CERCLA are instructive to how to analyze 

a commingled spill. For example, one court after reviewing the legislative history of CERCLA 

and analyzing EPA’s policy documents on CERCLA’s application to oil concluded pointedly, 

“the EPA determined that the purpose of the petroleum exclusion was ‘to remove from CERCLA 

jurisdiction spills only of oil, not releases of hazardous substances mixed with oil.’”42 

Moreover, the Tenth Circuit analyzed the commingling of petroleum products and hazardous 

materials in the soil and floating in the groundwater beneath an oil refinery.43 In that case, the 

sampling results and expert testimony confirmed that certain soil at the refinery, as well as the 

petroleum plume in the groundwater aquifer beneath the refinery, contained a mixture of 

petroleum and hazardous wastes.44 In holding that the petroleum exclusion did not apply to these 

facts, the court indicated that in order for CERCLA to be inapplicable, the moving party would 

have to had provided testing to show that unadulterated petroleum was the only contaminant in 

the ground water plume. Moreover, the court would have required an expert to opine that the 

hazardous waste did not commingle with petroleum products.45

V. CONCLUSION:

It is NPFC’s determination that if a commingled mixture of oil and hazardous substances 

discharges into a navigable waterway, liability and by extension, claim compensation, for the 

spill does not fall under OPA. The OSLTF is not available to pay claims based on these facts. In 

 

S14963 (Sen. ) and S14967 (Sen. Stafford); dioxin in motor fuel used as a dust suppressant, id. at S14974 

(Sen. ); PCB's in waste oil, id. (Sen ) and contaminated waste oil, id. at S14980 (Sen. ). 40 This has become known colloquially as EPA’s “petroleum exclusion”. 41 Several courts have analyzed whether or not a particular discharge falls under CERCLA or has been exempted 

from CERCLA jurisdiction because of the application of the “petroleum exclusion”. For example, when discussing 

lead in waste oil discharge: “If the lead results from its use as an additive to petroleum products, and was found at 

the level expected of purely petroleum additives, it would fall under the petroleum exclusion and would not be a 

“hazardous substance” for the purpose of CERCLA liability. If, on the other hand, the level exceeded the amount 

that would have occurred in petroleum during the refining process, then the petroleum exclusion would not apply.” 

Mid Valley Bank v. North Valley Bank, 764 F.Supp. 1377 (E.D. Cal. 1991). See also, e.g., State of Wash. v. Time Oil 

Co., 687 F.Supp. 529 (W.D. Wa. 1988), City of New York v. Exxon, 744 F. Supp. 474 (S.D.N.Y. 1990). 42 Mid Valley Bank v. North Valley Bank, 764 F.Supp. 1377, 1383-4 (E.D. Cal. 1991). 43 Tosco Corp. v. Koch Indus., Inc., 216 F.3d 886 (10th Cir. 2000). 44 Id. 45 Id. at 894. See also, Eastman v. Brunswick Coal & Lumber Co., No. CIV. 95-255-P-C, 1996 WL 911200, (D. Me. 

Apr. 19, 1996)(A truck loaded with diesel fuel (an OPA oil) overturned and caught fire releasing its contents, and in 

conjunction with the fire, hazardous materials mixed with the diesel fuel. This mixture entered the [plaintiffs'] soil 

and groundwater, and ultimately, a navigable waterway of the United States. The court indicated that the petroleum 

exception would not apply and these facts, if alleged and proven, would constitute a CERCLA release.