U.S. Department 

of Homeland Security

United States 

Coast Guard 

Director 

United States Coast Guard 

National Pollution Funds Center 

Natural Resource Damage (NRD) 

Claims Division 

U.S. Coast Guard Stop 7100 

4200 Wilson Blvd, Suite 1000 

Arlington, VA 22203-1804 

Staff Symbol: (CN) 

Phone: 202-493-6623 

E-mail: @uscg.mil 

16480 

March 27, 2011 

CERTIFIED MAIL Number: 7011 1570 0001 48029334 

Tony Penn 

NOAA Office of Response and Restoration 

SMC4, RM. 10317 

1305 East West Highway 

Silver Spring, MD 20910

Re: Claim Number N10036-OC06 - Deepwater Horizon Oil Spill Assessment 

Dear Mr. Penn: 

The National Pollution Funds Center (NPFC) has completed its review of the National 

Oceanic Atmospheric Administration’s (NOAA) claim for costs to assess lost human use 

of natural resources resulting from the Deepwater Horizon oil spill (Claim Number 

N10036-OC06). We have determined that the claimed amount of $32,980,000 is 

compensable under the Oil Pollution Act (OPA, 33 U.S.C. 2701 et seq.) and the OPA 

regulations (33 C.F.R. §136 and 15 C.F.R. 990 et seq.). The basis of our decision 

follows. 

 

Summary of the Incident and Claim 

On April 20, 2010, the Deepwater Horizon mobile offshore drilling unit exploded and 

sank, discharging an estimated 134.41

 to 210.02 million gallons of oil into the Gulf of 

Mexico. The U.S. Coast Guard designated the source of the spill as an offshore facility 

located on an area leased by BP Exploration & Production, Inc. (BP). BP accepted the 

designation and advertised its OPA claims process. 

Following the spill, NOAA, along with the Department of the Interior and five Gulf 

Coast states3

, acting as natural resource trustees designated under OPA and appropriate 

 

1

 http://www.bp.com/sectiongenericarticle800.do?categoryId=903674&contentId=7067698 2

 "Deepwater Horizon Oil Spill Early Restoration Plan." Gulf Spill Restoration Publications. National 

Oceanic Atmospheric Administration, 1 Dec. 2011. Web. 13 Mar. 2012. 

<http://www.gulfspillrestoration.noaa.gov/wp-content/uploads/2011/12/Final-ERP-121311-print-versionupdate.pdf>. 

Claim Number: N10036-OC06 

1 of 11 

3

 Louisiana, Mississippi, Alabama, Florida, and Texas 
state laws, initiated an assessment of natural resource damages resulting from the 

discharges and response to discharges of oil. By the August-September 2010 period, the 

trustees observed over 950 miles of oiled shoreline habitat, 400 oiled sea turtles, and over 

1,500 oiled birds4

; the Unified Command reported 39,885 square miles of Gulf of 

Mexico federal waters remained closed to fishing5

; and NOAA identified lost human use 

opportunities associated with various natural resources, including fishing, swimming, 

beach-going, and viewing of birds and wildlife6

. The trustees are working together to 

develop assessment plans for each of these resources to determine the nature and extent 

of these losses. 

On February 15, 2012, NOAA presented its claim to the NPFC for costs to assess 

potential lost human use injuries. The claimed amount is $32,980,000. This 

determination presents the NPFC’s analyses and findings with respect to this claim and 

the claim requirements under OPA. 

Jurisdictional Information 

The NPFC first considered whether the claimed damages arose from an incident as 

defined by OPA. 33 U.S.C. §2701 et seq. To be covered, the incident must involve a 

discharge of oil or a substantial threat of discharge of oil from a vessel or facility into 

navigable waters of the United States after August 18, 1990. Based on the information 

provided by NOAA in its claim, and the President’s April 29, 2010 designation of this 

incident as a spill of national significance, the NPFC finds that this claim is for natural 

resource damages resulting from an OPA incident. 

Claimant Eligibility 

Natural resource trustees are designated pursuant to OPA, 33 U.S.C. §2706 (b)); 

specifically, federal trustees are designated by the President. 33 U.S.C. § 2706(b)(2). 

Federal trustsees designated under this section shall assess natural resource damages for 

natural resources under their trusteeship. 33 U.S.C. § 2706(c)(A). Pursuant to 33 C.F.R. 

§136.207, natural resource trustees may present claims to the Oil Spill Liability Trust 

Fund (OSLTF) for uncompensated natural resource damages, which include the 

reasonable cost of assessing those damages. 

This claim for natural resource damage assessment costs was submitted by NOAA. 

NOAA, under the authority of the Secretary of Commerce, is an appropriate federal 

natural resource trustees pursuant to the President’s designation of federal trustees under 

OPA, Executive Order 12777 (56 Fed. Reg. 54757, October 22, 1991), and Subpart G of 

 

4

 Federal Register, Vol. 75, No. 190, Pgs. 60800-60802, October 1, 2012: 

http://edocket.access.gpo.gov/2010/pdf/2010-24706.pdf 5

 Unified Command for the BP Oil Spill, “The Ongoing Administration-Wide Response to the Deepwater 

BP Oil Spill,” September 9, 2010: http://www.restorethegulf.gov/release/2010/09/09/ongoingadministration-wide-response-deepwater-bp-oil-spill

Claim Number: N10036-OC06 

2 of 11 

6

 Federal Register, Vol. 75, No. 190, Pgs. 60800-60802, October 1, 2012: 

http://edocket.access.gpo.gov/2010/pdf/2010-24706.pdf 
the National Oil and Hazardous Substances Pollution Contingency Plan (40 C.F.R. 

§300.600). 

General Claim Presentment Requirements

Claims to the Fund must be presented in writing to the Director, NPFC, within three 

years after the date on which the injury and its connection with the incident in question 

were reasonably discoverable with the exercise of due care, or within three years from the 

date of completion of the natural resource damage assessment under OPA (33 U.S.C. 

§2706(e)), whichever is later. 33 U.S.C. 2712(h)(2); 33 C.F.R. §136.101(a)(1)(ii). This 

claim is for costs associated with the development of a damage assessment plan to 

determine the nature and extent of lost human use of natural resources resulting from the 

incident. The assessment was not complete when the claim was received on February 15, 

2012; therefore, the claim was received within the period of limitations for claims. 

Natural resource damage claims presented to the NPFC must be based on a plan that the 

public has had an opportunity to review. 33 U.S.C. §2706(c)(5). On December 22, 2011, 

NOAA published its assessment plan for lost human use on the NOAA Gulf Spill 

Restoration webpage7

, thereby meeting this requirement. 

Claim Presentment to the Responsible Party 

With certain exceptions, claims to the NPFC for damages must be presented first to the 

responsible party (RP). 33 U.S.C. §2713(a). If a claim is presented in accordance with 

§2713(a) and the claim is not settled by any person by payment within 90 days after the 

date upon which the claim was presented, the claimant may elect to commence an action 

in court or present the claim to the OSLTF. 33 U.S.C. §2713(c)(2). 

NOAA presented its assessment plan and claim for implementation costs to BP on 

November 9, 20118

. The plan identified potential types of human use losses resulting 

from the incident, the overall approach to assessing and scaling injury, 12 specific Tasks 

for assessing the potential direct use and total value losses, and costs by quarter for 

“NOAA Staff”, “Consultants/Contracts” and “Travel” with a total sum certain of 

$36,570,000. BP agreed to fund a portion of the direct use “Consultant/Contract” costs 

associated with aerial imagery ($3,590,000)9

 and, on February 6, 2012, requested 

additional information and established conditions for paying Tasks 1-710. On February 8, 

2012, BP again responded to NOAA’s request for funding, declining to fund Tasks 8-12 

and stating that if NOAA agreed to certain conditions for Tasks 1-7 BP was “prepared to 

 

7

 http://www.gulfspillrestoration.noaa.gov/wp-content/uploads/Assess-Plan-and-Budget-for-Upfront-Funding.pdf . 8

 Letter dated November 9, 2011 from NOAA to BP transmitting their Interim, Partial Claim for 

Assessment Costs. 9

 See exhibit 5 in NOAA’s claim (N10036-OC06) to the NPFC “2011 Human Use Aerial Imagery Work 

Plan” dated 11/14/11; and NOAA Interim, Partial Claim for Assessment Costs page five, paragraph 

three. 

Claim Number: N10036-OC06 

3 of 11 

10 See exhibit 8 in NOAA’s claim (N10036-OC06) to the NPFC “BP’s response to presentment: email.” 
discuss possible funding of agreed upon activities” 11. The claim was not settled by 

payment by February 7, 2012. 

On February 15, 2012, more than 90 days after providing its assessment plan and claim 

for implementation costs to BP, NOAA presented a claim to the NPFC for funds to 

implement its Lost Human Use Assessment Plan. The claim totaled $32,980,000 to 

implement the uncompensated Tasks identified in the assessment plan presented to BP on 

November 9, 2011. 

Based on the above facts, the NPFC finds that the claim before the NPFC was properly 

presented to BP. BP made a partial payment of direct use “Consultant/Contract” costs 

associated with aerial imagery, explicitly denied Tasks 8-12, and did not fund Tasks 1-7 

after 90 days12. 

Claimant's Burden of Proof and Adherence to NRDA Regulations 

Under OPA, trustees bear the burden of proving their entitlement to the amount claimed 

for compensation of natural resource damages. 33 C.F.R. §136.105. Any determination 

or assessment of damages to natural resources for the purposes of OPA by a trustee in 

accordance with the regulations at 15 C.F.R. Part 990 shall have the force and effect of a 

rebuttable presumption on behalf of the trustee in any administrative or judicial 

proceeding under this Act. 33 U.S.C. §2706 (e)(2) and 15 C.F.R. §990.13. Trustee 

determinations made in accordance with 15 C.F.R. 990 et seq. are initially presumed 

correct, but the presumption of correctness may be rebutted if the rebuttal evidence is of 

sufficient weight. 

After careful review of the claim and supporting documents, the NPFC finds that NOAA 

followed 15 C.F.R. 990 et seq. Specifically, they coordinated actions with other trustees 

to ensure no double recovery of damages, issued a notice of intent to conduct restoration 

planning, prepared a plan that was reviewed by the public, and are maintaining an 

administrative record that is available for public review. 

NPFC Review of Claim and Associated Costs 

Following the spill, NOAA-led surveys of recreation activities identified lost human use 

opportunities associated with fishing closures and various natural resources in the Gulf 

region, including fishing, swimming, beach-going, and viewing of birds and wildlife13. 

 

11 See exhibit 9 in NOAA’s claim (N10036-OC06) to the NPFC “BP’s response to presentment letter.” 12 BP did offer to discuss possible funding of Tasks 1-7 if the trustees agreed to share data and other 

conditions (see exhibit 9, “BP’s response to presentment letter”). OPA assigns trustees the authority to 

assess and restore natural resource damages for which the RP is liable (33 U.S.C. §2706(c)), and to 

determine the scope of RP participation in injury assessment and restoration planning activities (15 

C.F.R. §990.14 (c)(4)). Accordingly, the NPFC defers to the trustees in balancing the benefits of fully 

cooperative efforts where all data is shared with the need to conduct a timely assessment and hold the 

RP liable for damages resulting from their spill. 

Claim Number: N10036-OC06 

4 of 11 

13 Federal Register, Vol. 75, No. 190, Pgs. 60800-60802, October 1, 2012: 

http://edocket.access.gpo.gov/2010/pdf/2010-24706.pdf 
NOAA’s Lost Human Use Assessment Plan that forms the basis of this claim seeks to 

quantify the nature and extent of these losses. 

 

NOAA’s assessment plan describes specific Tasks for assessing the lost direct use/ 

recreational14 and total value15 of human use loss over a 15-month period from October 

1, 2011 through December 31, 2012. Plan direct use/recreational Tasks describe 

generally accepted assessment methods that involve on-site sampling and surveys to 

determine the number and value of lost and/or diminished value trips resulting from the 

spill. Plan total value assessment Tasks describe efforts to develop a survey16 for 

assessing the total value of lost human use of natural resources using stated preference 

methods17. NOAA states that the trustees settled on this valuation approach after 

determining that that resource–to-resource and service–to-service approaches were not 

appropriate, as required under OPA (15 C.F.R. §990.53); specifically, that such 

approaches have not been used in the past for spills of this size, potential magnitude of 

passive use losses are likely to be large, and valuation of replacement natural resources 

and/or services would impose unrealistic time and/or cost requirements18,19. 

In reviewing the proposed assessment approach involving both direct and total value 

assessment, the NPFC requested that NOAA clarify the relationship between the different 

assessment approaches20. NOAA responded that they are complimentary, whereby total 

value determines the monetary amount of the total injury and what is required to 

compensate the public for those losses, while the direct assessment will be used to inform 

part of the injury scenario for the total value survey. 

After reviewing all of the claim information, including the response to the NPFC request 

for further information, the NPFC finds that the proposed assessment procedures comply 

with the requirements for assessment procedures at 15 C.F.R. §990.2721. The NPFC 

notes, however, that the scope of this claim is limited to survey development and, if 

NOAA submits a subsequent claim for the costs to implement the survey, the NPFC will 

adjudicate the second claim on its merits and independent of this determination. 

 

14 Direct/recreational use losses include boating and boat-based fishing, shoreline fishing and shoreline 

use. 15 Total value losses include direct/recreation losses, as well as the value that people place on natural 

resources that they never actually use, sometimes referred to as non-use or existence values. 16 Claimed costs are for survey development. It is expected that additional funds will be needed to 

implement the survey once completed. 17 Stated preference methods may include conjoint analyses, contingent valuation and stated choice 

techniques. 18 NOAA claim section 3.2 GENERAL APPROACH TO THE STUDY 

19 March 1, 2012 memo from Mr. Fredy Hernandez (NPFC Claims Manager) to Mr. Tony Penn (NOAA 

claimant) 20 March 1, 2012 memo from Mr. Fredy Hernandez (NPFC Claims Manager) to Mr. Tony Penn (NOAA 

claimant) 

Claim Number: N10036-OC06 

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21 The NPFC is aware that use of survey-based techniques to determine the total value of lost human use 

has been subject to debate among economists and injury assessment practitioners, which NOAA 

acknowledges (http://www.darrp.noaa.gov/economics/tools.html). Such survey-based valuation 

methods are valid and may be reasonable for use in damage assessments under both NOAA’s damage 

assessment regulations, 15 CFR Part 990, (15 C.F.R. §990.53) and the Department of the Interior’s 

Damage Assessment Regulations, 43 CFR Part 11. 
Following acceptance of the proposed assessment approach, NPFC reviewed the 

submission to determine how the costs claimed were determined with respect to the work 

proposed to be performed. 

The cost to implement NOAA’s Lost Human Use Assessment Plan is $36,570,000. 

NOAA’s sum certain for this claim is $32,980,000, which reflects BP’s decision to fund a 

portion ($3,590,000) of the direct loss consultants/contracts budget item for aerial 

imagery. 

After reviewing cost information provided with the claim, the NPFC requested that 

NOAA clarify (1) budget information by providing the total cost of each of the 12 Tasks 

by quarter for “NOAA staff”, “Consultants/Contracts”, and “Travel”, (2) the roles of 

NOAA staff and contractors, and (3) claimed travel costs. NOAA responded with the 

additional budget information, that the assessment will be conducted by the 

consultants/contractors, with NOAA staff facilitating, coordinating, and managing the 

work, and that the travel amount claim reflects the magnitude and spatial extent of the 

spill, as well as the number and location of consultant/contractors that will be involved in 

this assessment22. 

Accordingly, after reviewing the claimed activity, costs, and additional information 

provided, the NPFC finds that currently there is not sufficient evidence to rebut the 

trustee’s determination that the proposed survey-based methodology, which is allowed 

under 15 C.F.R. §990.53 and (2) claimed costs of $32,980,000 are reasonable and 

appropriate for the proposed work to be performed, given the scale and complexity of the 

incident, magnitude of potential, and need for assessment. 33 U.S.C. §2706 (d)(1)(C), 33 

C.F.R. §136.211. 

Revolving Trust Fund and Return of Unused Funds to the OSLTF 

As established by OPA (33 U.S.C. §2706(f)) and NRDA regulations (15 C.F.R. §990.65), 

sums recovered by trustees for natural resource damages must be retained by the trustees 

in a revolving trust account. All other sums must be used to implement the Lost Use 

Assessment Plan, as approved by this determination. For purposes of this claim, the 

NPFC will deposit funds into the Damage Assessment Restoration and Revolving Fund 

Account managed by NOAA. 

All unused funds, including interest earned, shall be returned to the OSLTF in a timely 

basis and no later than six months from the completion of the assessment as described in 

this determination in accordance with 15 C.F.R. §990.65. 

 

Claim Number: N10036-OC06 

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22 NOAA’s March 5, 2012, letter in response to NPFC’s request for additional information dated March 1, 

2012. 
Cost Documentation, Progress Reporting, and Final Report

As the claimant, NOAA shall ensure that all expenditures of OSLTF funds are 

documented appropriately and spent according to the Lost Human Use Assessment Plan 

as approved in this determination. Any funds not spent or appropriately documented 

shall be returned to the Fund. 

One year from the date of this determination, and annually thereafter, NOAA shall 

provide the NPFC with a report on the status of implementation and expenditures. These 

annual progress reports should include: 

1. Certification by NOAA that all assessment activities have been conducted in 

accordance with the Lost Human Use Assessment Plan as approved in this 

determination; 

2. A progress report that includes a description of work accomplished, timeline for 

future activities, and any unexpected problems incurred during implementation; 

3. A summary of expenditures by category (i.e., labor, consultant/contractors, and 

travel); and 

4. A narrative description of the work accomplished by each individual and how that 

work fits into the overall progress for the year. Enough detail should be included to 

determine reasonableness of costs for each employee when cost documentation is 

received with the final report. 

In addition to annual reports NOAA shall submit a final progress report within 120 days 

of the date that plan implementation is complete. This report should include: 

1. Certification by NOAA that all expenditures of OSLTF funds (including interest 

earned) were in accordance with the plan as approved by the NPFC; 

2. A summary of findings; 

3. Copies of final reports and/or studies; 

4. Documentation of OSLTF funds remaining in the Revolving Trust Fund for this 

claim, including account balance and interest earned; and 

5. Documentation of all expenditures as follows: 

a. Labor: For each employee – 

i. A narrative description of the work accomplished by each individual and how 

that work fit into the plan. Enough detail should be included to determine 

reasonableness of costs; and 

ii. The number of hours worked, labor rate, and indirect rate. An explanation of 

indirect rate expenditures, if any, will be necessary; 

b. Travel: Paid travel reimbursement vouchers and receipts; 

c. Contract: Activities undertaken, lists of deliverables, and contract invoices and 

receipts; 

d. Purchases/Expendables: Invoices and receipts, along with an explanation of 

costs; and 

e. Government Equipment: Documentation of costs, including the rate (i.e. hourly, 

weekly) and time for all equipment used for which costs were incurred. 

Claim Number: N10036-OC06 

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With the final report(s), the NPFC will reconcile costs and all remaining funds and/or 

inadequately documented costs will be returned to the OSLTF. 

The NPFC has prepared a standardized template with detailed instructions to facilitate 

annual progress and final cost reporting. These templates are provided on the compact 

disc included with this determination. 

Conclusion 

The NPFC has reviewed the claim submitted by NOAA for costs to assess lost human use 

of natural resource resulting from the Deepwater Horizon incident in accordance with 

OPA (33 U.S.C. 2701 et seq.) and its implementing regulations (15 C.F.R. 990 et seq. 

and 33 C.F.R. §136). We have determined that $32,980,000 is compensable to fund 

activities in the Lost Human Use Assessment Plan. This offer constitutes full and final 

payment for costs associated with this damage assessment plan. 

If you accept this offer, please complete the enclosed Acceptance/Release Form and 

return to: 

 Director (cn) 

 National Pollution Funds Center 

U.S. Coast Guard Stop 7100 

 4200 Wilson Boulevard, Suite 1000 

 Arlington, VA 20598-7100 

If we do not receive the signed original Acceptance/Release Form within 60 days of the 

date of this letter, the offer is void. If the settlement is accepted, your payment will be 

mailed within 30 days of receipt of the Release Form. Please provide account 

information and instruction for the transfer of funds to your trustee account when you 

submit the Release Form. 

If you have any questions regarding this determination, please feel free to contact me at 

202-493-6623. 

 

Claim Number: N10036-OC06 

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Claim Number: N10036-OC06 

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Encl: (1) Acceptance/Release Form 

(2) Compact Disc with standardize template and instructions to facilitate annual 

progress and final cost reporting 

 
U.S. Department 

of Homeland Security

United States 

Coast Guard

Director 

United States Coast Guard 

National Pollution Funds Center 

U.S. Coast Guard Stop 7100 

National Pollution Funds Center 

4200 Wilson Boulevard, Suite 1000 

Arlington, VA 20598-7100 

Phone: 202-493-6623 

E-mail: @uscg.mil 

Claim Number: N10036-OC06 Claimant Name: National Oceanic Atmospheric Administration 

 

 

 

 

NOAA, the undersigned, accepts the determination of $32,980,000 as compensation for 

the claim listed above. 

On February 15, 2011, the NOAA presented a claim to the Oil Spill Liability Trust Fund 

(OSLTF or the Fund) in the total amount of $32,980,000 for upfront costs to lost human 

use of natural resources resulting from the discharge of oil on or about April 20, 2010, 

from an area of land leased by BP (the Deepwater Horizon incident). 

The NOAA accepts the settlement offer of $32,980,000 as full compensation for the cost 

to assess lost human use damages as described in the March 27, 2012 determination 

(N10036-OC06). 

NOAA agrees to provide annual and final reports to the NPFC as directed in the 

determination. NOAA agrees to comply with 33 U.S.C. §2706(f) and 33 C.F.R. §136.211 

by depositing into a revolving trust account the amounts awarded in the March 27, 2012 

determination and any amounts in excess of those required for these reimbursements to 

accomplish the assessment studies approved in the determination shall be deposited to the 

OSLTF. 

NOAA hereby assigns, transfers, and subrogates to the United States all rights, claims, 

interest and rights of action, that it may have against any party, person, firm or 

corporation that may be liable for the loss. NOAA authorizes the United States to sue 

compromise or settle in the name of NOAA and that the NPFC be fully substituted for 

NOAA and subrogated to all NOAA rights arising from the March 27, 2012 

determination. 

NOAA acknowledges that the United States has pending legal actions associated with the 

Deepwater Horizon incident in federal district court but warrants that no settlement will 

be made by any person on behalf of the NOAA with any other party for costs that are the 

subject of the claim against the OSLTF and NOAA will cooperate fully with the NPFC in 

any claim and/or action by the United States against any person or party to recover the 

compensation paid by the OSLTF. The cooperation shall include but not be limited to, 

immediately reimbursing the OSLTF any compensation received from any other source 

Claim Number: N10036-OC06 

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Claim Number: N10036-OC06 

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for the same claim, and providing any documentation, evidence, testimony, and other 

support, as may be necessary for the NPFC to recover from any other party or person. 

NOAA certifies that to the best of its knowledge and belief the information contained in 

this claim represents all material facts and is true, and understands that misrepresentation 

of facts is subject to prosecution under federal law, including but not limited to 18 U.S.C. 

§§287 and 1001. 

FOR THE NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION 

_________________________________________ _______________________ 

 Tony Penn Date 

 NOAA Office of Response and Restoration