U. S. DEPARTMENT OF HOMELAND SECURITY 

UNITED STATES COAST GUARD 

REPORT 

ON 

Implementation of the 

Oil Pollution Act of 1990 
Report on the Implementation of the Oil Pollution Act of 1990 

CGMTA 2004; Amendments Relating to OPA 90, Title VII, Section 707 

TABLE OF CONTENTS 

I. Executive Summary.......................................................... 2 

II. Oil Spill Liability Trust Fund (OSLTF).................................... 5 

A. Background 5 

B. History of Fund 5 

C. Fund Revenue Sources 6 

D. Fund Expenses 8 

E. Fund Projections 15 

F. Adequacy of Liability Limits 17 

G. Impacts of OSLTF Decline 20 

III. Phase-Out Schedule of Single-Hull Tank Vessels......................... 21 

A. Single Hull Tank Vessels less than 5,000 Gross Tons 22 

B. Single Hull Tank Vessels of 5,000 Gross Tons and Greater 22 

C. Single Hull Tank Vessels of 5,000 Gross Tons and Greater, with 

Double Bottom or Double sides 23 

D. Single Hull Tank Vessels Unloading at a Deepwater Port 24 

E. Single Hull Tank Vessels Offloading within a lightering zone 24 

IV. Vessel Monitoring Systems and Aids -to-Navigation.................... 24 

A. Summary of Automatic Identification System (AIS) 24 

B. RACONs 26 

C. Summary of Coast Guard Studies (PAWSAs. PARS and WAMS) 26 

V. Summary of Tank Barge and Towing Vessel Safety Issues............. 27 

A. Marine Transportation of Petroleum 27 

B. Pollution Statistics 28 

C. Significant Spills from Tank Barges and Tank Ships 32 

D. Applicable Federal regulations for Tank Barges and Towing Vessels 34 
I. EXECUTIVE SUMMARY 

This report is provided pursuant to section 707 of the Coast Guard and Maritime Transportation 

Act of 2004, P.L. 108-293, 118 Stat. 1076. Section 707 calls on the Coast Guard to report on the 

implementation of the Oil Pollution Act of 1990 (OPA 90), including: 

*1. The status of the level of funds currently in the Oil Spill Liability Trust Fund and 

projections for level of funds over the next 5 years, including a detailed accounting of 

expenditures of funds from the Oil Spill Liability Trust Fund for each of fiscal years 2000 

through 2004 by all agencies that receive such funds. 

2. The domestic and international implications of changing the phase-out date for single hull 

vessels pursuant to section 3703a of title 46 U.S.C., from 2015 to 2010. 

3. The costs and benefits of requiring vessel monitoring systems on tank vessels used to 

transport oil or other hazardous cargo, and of using additional aids to navigation, such as 

RACONs. 

*4. A summary of the extent to which the response costs and damages for oil spills have 

exceeded the liability limits established in section 1004 of the Oil Pollution Act of 1990 (33 

U.S.C. 2704), and a description of the steps that the Coast Guard has taken or plans to take to 

implement subsection (d)(4) of that section. 

5. A summary of manning, inspection, and other safety issues for tank barges and towing 

vessels used in connection with them. 

* For ease of reading these two sections have been combined and responded to in Section II 

of this report. 

A. Level of Funds, Liability Limits and Long Term OSLTF Viability 

The level of funds in the Oil Spill Liability Trust Fund (OSLTF) at the end of FY 2004 was $842 

million. Based on past spending trends and current forecasts, the OSLTF is expected to be 

depleted by FY 2009. 

By FY 2007, the level of funds in the OSLTF may not be sufficient to cover all anticipated uses 

due to conflicts in Congressional earmarks and appropriations precedence for various Fund uses. 

Further, among those uses, the actual removal costs and damages the OSLTF may pay are highly 

dependent on the number and severity of oil spills. A single major or catastrophic oil spill could 

have a significant impact on the OSLTF balance and these projections. 

There have been 19 oil spill incidents since 1992 that are known to have resulted in removal 

costs and damages in excess of OPA liability limits. All such incidents involved vessel spills. 

OPA liability limits have not been adjusted for inflation since OPA was enacted. The authority 

to adjust liability limits for inflation pursuant to OPA section 1004(d)(4) was delegated by the 

President to various agencies in section 4 of Executive Order 12777, October 18, 1991, and 

would be accomplished through regulation. The Coast Guard has not been delegated this 

2 
authority, but is in the process of pursuing such a delegation. The impact on the OSLTF of 

liability limit adjustments for inflation, as indicated by the responsible party’s increased share of 

expenses for the 19 incidents in which removal costs and damages have exceeded established 

limits would be limited. However, there are indications from the data available that the potential 

cost share for the OSLTF for vessel spills is disproportionately large and that an increase in the 

liability limits for such vessels may be desirable to better reflect the “polluter pays” policy that is 

the foundation of the OPA liability and compensation regime. 

The long-term viability of the OSLTF is questionable unless additional sources of revenue can be 

identified and put into place. This outlook results from the combination of structural imbalance 

between significant, consistent outlays and sporadic, declining revenues. 

The current structure of the OSLTF as it has evolved is not self-sustaining. Despite a continuing 

demand on its resources, its principal revenue sources, the tax on oil and transfers from the 

legacy funds that were replaced by the OSLTF, have expired. 

OPA provides that the OSLTF is the ultimate insurer for oil spill removal costs and dama ges 

when those responsible do not pay. In many incidents, liable responsible parties cannot be 

located, do not have the ability to pay, or have defenses or limits to their liability. Therefore, 

recoveries from liable parties cannot fully reimburse the removal costs and damages expended 

from the OSLTF. 

While penalty deposits and interest on the fund balance provide significant OSLTF revenue, they 

have not made up the shortfall in cost recovery from liable parties. In addition, the OSLTF must 

make substantial contributions to annual agency operations as well as payments in support of the 

Prince William Sound Oil Spill Recovery Institute (OSRI) and the Alaska Denali Commission 

(Denali) that are not balanced by offsetting revenue. The result is a decline in the balance of the 

OSLTF. 

The impact of the exhaustion of the OSLTF is significant and far-reaching. First, if the OSLTF 

would not be available to fund cleanup of oil discharges, so Federal responses will either have to 

be terminated or funded from alternative revenue sources such as annual Federal appropriations. 

Second, without a viable OSLTF, those persons that incur removal costs or damages as a result 

of an oil spill may not be compensated. Significantly, state and local governments will be 

deprived of important compensation for their qualifying spill response projects. Finally, Federal 

agency operations funded by appropriations from the OSLTF will have to be funded from other 

sources. 

B. Implications of Changing Phase-out Date of Single Hull Ta nk vessels 

The implications of accelerating the single hull tank vessel phase-out date from 2015 to 2010 are 

mixed. The impacts vary, and the report includes charts and analyses depicting the impacts, 

based upon vessel gross tonnage date of build, whethe r the vessel has a double bottom or double 

sides, and where the vessel unloads. The U.S. tank barge fleet would be greatly affected by 

accelerating the single hull phase-out: approximately 1,650 tank barges (representing 38% of the 

3 
total tank barge fleet) would lose 5 years of service life. Overall, approximately 1,700 U.S. and 

70 foreign single hull tank vessels would be affected and lose some service life in U.S. waters. 

C. Vessel Monitoring Systems and Aids -to-Navigation 

The Coast Guard, in conjunction with industry and other agencies, continuously studies and 

assesses the nation’s waterways in an effort to cost-effectively reduce the risks in marine 

navigation in U.S. waterways. As part of the MaritimeTransportation Security Act of 2002, the 

Coast Guard now requires over 3,400 vessels to carry an Automatic Identification System (AIS). 

This system automatically transmits information between ships and shore, and from ship-to-ship. 

The information includes vessel name, type, size, course and speed. AIS is capable of integrating 

with radar and electronic charts. Although AIS costs roughly $7,000 per unit to install, the 

qualitative benefits from dramatically increasing our maritime domain awareness (and 

concomitant reduction in risk) are believed to outweigh the costs. Additionally, the Coast Guard 

operates 113 RACONs or radar responders. The benefit of a RACON is its ability to provide an 

identifying signature to landmarks or buoys on a shipboard radar display, at a cost of $40,000 per 

unit. Currently, there are no indications that any marine casualty cases could have been avoided 

from additional RACONs. 

D. Summary of Tank Barge and Towing Vessel Safety Issues 

The Coast Guard’s implementation of the provisions of OPA 90 continues to show great success. 

While the volume of barge transportation in petroleum and chemical cargoes continues to show 

an increasing trend, the number of infractions, civil penalty investigations, and spills for tank 

barges continues to decline. This is a result of industry’s high compliance rate, and the Coast 

Guard’s emphasis on safety and prevention. To continue improvement, the Coast Guard sought 

and obtained (in the Coast Guard and Maritime Transportation Act of 2004) the authority to 

develop an inspection and certification program for all uninspected towing vessels, and to 

establish a safety management system which addresses operations and manning of towing 

vessels. This new authority will be used to continue to improve safety and reduce risk in the 

tank barge and towing vessel industry. The report includes charts and analyses of the industry’s 

performance since OPA 90, and also provides a synopsis of the significant regulations that 

pertain to tank barge and towing vessel safety. 

4 
II. Oil Spill Liability Trust Fund (OSLTF) 

A. Background 

The Oil Pollution Act of 1990 (OPA) addressed the wide-ranging problems associated with 

prevention, response, and compensation for oil pollution from vessels and facilities in our 

nation’s navigable waters, adjoining shorelines, and exclusive economic zone. OPA greatly 

increased Federal oversight of maritime oil transportation, while providing greater environmental 

safeguards. This was accomplished by setting new requirements for vessel construction and 

crew licensing and manning, mandating contingency planning, enhancing Federal response 

capability, broadening enforcement authority, increasing penalties, creating new research and 

development programs, increasing potential liabilities, adding new compensation provisions, and 

significantly broadening financial responsibility requirements. 

Title I of OPA established new and higher liability limits for oil spills, with commensurate 

changes to financial responsibility requirements. It substantially broadened the scope of 

damages, including natural resource damages, for which polluters are liable. It also provided for 

the use of a $1 billion Oil Spill Liability Trust Fund (OSLTF or the Fund) to pay for expeditious 

oil removal and uncompensated damages. In section 7 of Executive Order 12777, the President 

delegated management responsibility for the OSLTF to the Secretary of the Department in which 

the Coast Guard is operating. Upon re-delegation by the Secretary, the Commandant of the 

Coast Guard delegated responsibility to the newly created National Pollution Funds Center 

(NPFC), an independent unit reporting directly to the Coast Guard Chief of Staff. 

B. History of the Fund 

In August 1990, when President George H. W. Bush signed OPA into law and authorized use of 

the OSLTF, the Fund was already four years old. Congress created the Fund in 1986 but did not 

pass legislation to authorize the use of the money or the collection of revenue to maintain it. 

Only after the 1989 T/V EXXON VALDEZ oil spill and the passage of OPA was authorization 

granted. Provisions establishing the Fund are at 26 U.S.C. 9509. In addition to authorizing use 

of the OSLTF, OPA consolidated the liability and compensation requirements of certain prior 

Federal oil pollution laws and their supporting funds, including: 

• The Federal Water Pollution Control Act (FWPCA) 311k revolving fund, 

• The Deepwater Port Liability Fund, 

• The Trans-Alaska Pipeline Liability Fund, and 

• The Offshore Oil Pollution Compensation Fund. 

With the gradual consolidation of these funds and the collection of a tax on the petroleum 

industry, the OSLTF balance increased to more than $1 billion. Fund uses were delineated by 

OPA Section 1012 (33 U.S.C. 2712) to include: 

• Removal costs incurred by USCG and U.S. Environmental Protection Agency (EPA) Federal 

On-Scene Coordinators (FOSCs); 

5 
• Payments to Federal, state, and Indian tribe trustees to conduct Natural Resource Damage 

Assessments (NRDAs) and restorations; 

• Payment of claims for uncompensated removal costs and damages; and 

• Administrative, operational, and personnel costs and expenses incidental to implementation, 

administration, and enforcement of OPA and certain provisions of section 311 of the 

FWPCA (33 U.S.C. 1321). 

C. Fund Revenue Sources 

The OSLTF has several recurring and 

nonrecurring sources of revenue. 

1. Barrel Tax 

The largest source of revenue has been a 5¢ 

per barrel tax, collected from the oil industry 

on petroleum produced in or imported to the 

United States (Figure 1). The tax was 

suspended on July 1, 1993, because the un-obligated Fund balance exceeded $1 billion (26 

U.S.C. 4611(f)(2)). It was reinstated on July 1, 1994, when the balance declined below $1 

billion. The tax expired on December 31, 1994, pursuant to 26 U.S.C. 4611(f)(1). 

2. Transfers 

A second major source of revenue has been 

transfers from other existing pollution funds 

(Figure 2). Total transfers into the Fund 

since 1990 have exceeded $550 million. 

Over $216 million in transfers from the Oil 

Pollution Fund, Offshore Oil Pollution 

Compensation Fund, and Deepwater Port 

Liability Fund were deposited into the Fund 

in 1990. The largest source has been the Trans-Alaska Pipeline Liability Fund (TAPS), 

which transferred $335 million over the period 1995 to 2000. No additional funds remain to 

be transferred to the Fund. 

3. Interest 

Currently, the largest ongoing source of OSLTF 

revenue is the interest on the Fund principal 

from U.S. Treasury investments (Figure 3). As a 

result of historically low interest rates, interest 

income has declined significantly in recent 

years, falling to $13.5 million (or 45% of 

revenue) in FY 2004. The Department of the 

6 

$200 

$100

$150 

$250 

$300 

$350

$50 

$-

1990 1991 1992 1993 1994 1995

Figure 1: Barrel Tax Revenue ($M) 

Figure 2: Transfers into OSLTF ($M) 

$200

$250 

$150

$100 

$50 

$-

199019911992199319941995199619971998199920002001 

Figure 3: Interest Earned ($M) 

$80 

$70 

$60

$50 

$40 

$30

$20

$10 

$-

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Treasury serves as the Fund’s investment manager. 

4. Cost Recoveries from Responsible Parties 

A fourth source of revenue is cost recoveries 

from responsible parties (RPs). Those 

responsible for oil incidents are liable for costs 

and damages. The NPFC has a billing and 

collection program to recover costs expended 

by the Fund. Figure 4 shows cost recoveries 

for FY 1995 to FY 2004, which usually 

fluctuate between $3 million and $12 million 

per year. The unusually high collections in FY 2001 resulted from a large settlement in 

respect to the 1994 T/B MORRIS J. BERMAN oil spill. 

NPFC collected 27% of the OSLTF removal and claims expenditures made during the period 

FY 1995 to FY 2004 as shown in Figure 5. There are several barriers to achieving a higher 

rate of recovery. Often, the FOSC is unable to identify the source of the spill or identify a 

responsible party. The prospect of successful cost recovery for a Federal Project involving 

an onshore facility is generally low. Many Federal projects arise from legacy environmental 

problems associated with aging infrastructure such as leaking underground storage tanks, 

abandoned pipelines, leaking oil wells, and abandoned oil production facilities. 

Unfortunately, in many instances like these, the government cannot collect because of lack of 

sufficient evidence to litigate successfully or otherwise compel the RP to pay, or because the 

RP is bankrupt, deceased, or otherwise unable to pay. These projects are typically complex 

and costly, often involving removal over a period of years as action is taken to clean up soil 

and groundwater that is discharging to navigable waters. 

7 

Figure 4: OPA Costs Recovered ($M)

$70 

$60 

$50

$40

$30

$20

$10

$-

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

Figure 5: Removal and Claims Expenditures vs. Cost Recovered ($M) 

$600 

$492.3 

$500 

Amount Recovered 

Total Removal and 

Claims Expenditures

$300 

$200 

$400 

$130.6 

$100 

$-

FY 1995 – FY 2004 
5. Penalties 

Penalties paid pursuant to section 311 of 

the FWPCA, section 309(c) of the 

FWPCA for violations of section 311, the 

Deepwater Port Act of 1974, and section 

207 of the Trans-Alaska Pipeline 

Authorization Act are required to be 

deposited into the Fund. Penalty deposits 

are generally between $4 million and $7 

million per year, with two very large 

penalties deposited to the Fund in FY 

2000 and FY 2003 (Figure 6). 

6. Summary of Revenues 

A summary of OSLTF revenues can be found in Figure 7. 

D. Fund Expenses 

1. The Emergency Fund 

To ensure rapid, effective response to oil spills, OPA Section 6002 provides that the 

President has the authority to make available from the OSLTF, without further appropriation, 

up to $50 million each year to fund removal activities and initiate Natural Resource Damage 

Assessments (NRDAs). Funds not used in a fiscal year are carried over to subsequent fiscal 

years and remain available until expended. To the extent that $50 million is inadequate, 

8 

Figure 6: OSLTF Penalty Collections ($M) 

$50

$40

$30 

$20 

$10

$-

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

Figure 7: Summary of OSLTF Revenues ($M) 

$350 

$300 

$250 

$200 

$150 

$100 

$50 

$-

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

Barrel Tax Revenue Transfers into OSLTF Interest Earned OPA Costs Recovered Fines and Penalties 
authority was granted under Section 323 of the Maritime Transportation Security Act 

(MTSA) of 2002 to advance up to $100 million from the OSLTF to fund removal activities. 

This provision has not been utilized to date. 

2. Removal Activities 

The OSLTF provides funding for oil pollution removal activities when oil is discharged into 

the navigable waters, adjoining shorelines, and the exclusive economic zone of the U.S. 

Funding is also provided to prevent or mitigate the substantial threat of such an oil discharge. 

The Emergency Fund may be used for, but is not limited to, containing and removing oil 

from water and shorelines, preventing or minimizing a substantial threat of discharge, and 

monitoring the removal activities of RPs. Examples of removal costs include the cost of: 

• Contract services (e.g., cleanup contractors), 

• Equipment used in removals, 

• Chemical testing required to identify the type and source of oil, 

• Proper disposal of recovered oil and oily debris, 

• Costs for Government personnel and temporary Government employees hired for the 

duration of the spill response, and 

• Completion of documentation. 

The USCG has responsibility for removal actions in the coastal zone, while EPA has 

responsibility in the inland zone. Figures 8 and 9 show the number of new cases opened and 

the corresponding dollar amounts for USCG and EPA removal actions. It is important to 

note that these cases do not represent all cases where oil is spilled, but only those incidents 

where the OSLTF was accessed. 

9 

Figure 8: USCG vs. EPA Cases 

600 

500 

400 

300 

200 

100 

-

CG 

EPA 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 
Figure 9: OSLTF Response Funds Assigned ($M) 

$120 

EPA 

$100 

CG 

$80 

$60 

$40 

$20 

$-

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

The EPA cases are generally removal actions occurring at onshore facilities. There are 

several apparent reasons for the significant number and cost of spills from facilities. First, 

the vast oil production industry infrastructure is aging, including oil wells, refineries, leaking 

underground storage tanks, and pipelines. A great number of oil wells that were drilled 

(onshore and offshore) have been depleted and are now abandoned, most with no identifiable 

responsible party. Many of these pollution sites are 20 to 50 years old—pre-dating current 

state regulatory programs—and have not been properly maintained (Figure 10). 

Second, a complex factor in the domestic oil production economy has been the wide cyclic 

swings in the price per barrel of crude oil. As a result, the domestic oil industry has produced 

a large number of marginal or non-viable oil well facilities that are “abandoned” when 

production is no longer economically viable, leaving behind a grim environmental legacy. 

A third factor is that the vast majority of onshore oil-producing, -transporting, and -storing 

facilities that spill or threaten to spill are older facilities that do not have adequate insurance 

at the time of the spill. When no viable responsible party is identified or no insurance 

coverage is available, response costs are likely to be borne directly by the OSLTF 

Emergency Fund without effective recourse. OPA, as originally designed, did not anticipate 

the extent to which the OSLTF would be needed to address water pollution threats from 

aging, often derelict, land-based facilities. 

Many of these same arguments are 

directly cited by and corroborated in a 

2001 report to the President by the 

National Energy Policy Development 

Group (National Energy Policy 

Development Group, Reliable, 

Affordable, and Environmentally Sound 

Energy for America’s Future, May 

2001, p. 3-10). 

“Mystery spills,” or spills for which a 

respons ible party cannot be identified, 

also have a sustained impact. 

10 

Figure 10: Source of Federal Project Spills ($M) 

$80

$70

$60 

$50

$40

$30

$20

$10 

$0 

2001 2002 2003 2004

Facility Mystery Vessel
3. NRDA Initiate Requests 

The Emergency Fund is also available to pay for the Initiation of Natural Resource Damage 

Assessments (INRDAs) conducted by designated Federal natural resource trustees. In the 

pre-assessment phase, outlined in 15 CFR 990, Subpart D, trustees must determine 

jurisdiction, undertake preliminary data collection, assess the effectiveness of the response, 

identify feasible restoration measures, and provide a notice of intent to conduct restoration 

planning. The NPFC and the Federal Lead Administrative Trustee (FLAT) execute an InterAgency Agreement (IAG) for each OPA incident requiring funds for pre-assessment phase 

activities. Natural resource trustees include authorized representatives of the U.S. 

Departments of Commerce (NOAA), Interior, Defense, Agriculture, and Energy, as well as 

states, Indian tribes, and foreign trustees. Pursuant to Executive Order 12777, amounts to 

initiate assessment are available exclusively to the five Federal trustees, who may further 

allocate funds among all other affected trustees. Initiates have not had a significant impact 

on the OSLTF. Figure 11 shows the cost of all initiates has totaled $3.6 million since the 

Fund’s inception. 

4. Claims 

OPA provides that any person or 

government may present a claim 

for compensation for removal 

costs or damages resulting from 

an oil pollution incident covered 

by the Act. Claims can be 

presented for: 

• Uncompensated Removal 

Costs, 

• Natural Resource Damages, 

• Damage to Real or Personal Property, 

• Loss of Profits and Earning Capacity, 

• Loss of Subsistence Use of Natural Resources, 

• Loss of Government Revenues, and 

• Increased Cost of Public Services. 

Some claims may incorporate many different types of damages, and there are instances in 

which the responsible parties and/or their guarantors may file claims for removal and damage 

costs they incurred. RPs may submit defensive claims, alleging an “act of God,” “act of 

war,” or “sole fault of a third party.” RPs may also submit limit-of-liability claims, in which 

the RP demonstrates that the OPA liability limit applies and that it incurred removal costs in 

excess of the applicable limit. While the total number of claims from RPs requesting 

reimbursement fo r costs expended in excess of their liability limits is low (six from 1992 to 

11 1990 

1991

Figure 11: OSLTF Payments for INRDAs ($K) 1992 1993

$1,000 

1994

$800 

1995 

$600 

1996

$400

1997 

$200 

1998 1999

$-

2000 2001 2002 2003 2004
Government Revenu...

Natural Resources ...

Loss of Property (106)

Subsistence Use (2)

Removal Costs (4875) 

Loss of Profits (477)

Public Services (13)

Limit of Liability (6)

2004), the total cost of these claims represents the largest dollar value of all claim types 

(Figure 12). 

To centralize the OSLTF claims process, the President delegated authority to pay claims 

from the OSLTF to the Secretary of the Department in which the Coast Guard is operating. 

Upon re-delegation by the Secretary, the Commandant of the Coast Guard further delegated 

that authority to the NPFC on March 12, 1992. The NPFC’s claim procedures attempt to 

strike a reasonable balance between the objectives of compensating deserving claimants and 

acting as a fiduciary for the Fund. Before claimants can be compensated, they must satisfy 

the statutory requirements of OPA. The incident must involve a discharge of oil or a 

substantial threat of a discharge of oil from a vessel or facility into the navigable waters, 

adjoining shorelines, or the exclusive economic zone of the U.S. The removal actions for 

which costs are claimed must be consistent with the National Contingency Plan (NCP), and 

the claim must be submitted within express time periods (generally three years for damages, 

six years for removal costs). 

The most common claim type received by the NPFC is removal cost claims. These claims 

may be presented by any person who has incurred costs for removal actions that are 

consistent with the NCP. Removal cost claimants include state governments, putative RPs 

who can show that the oil came from another source, cleanup contractors who have not been 

paid by the hiring RP, and members of the public who have discovered a spill and responded 

to the need for cleanup. Most of the removal cost claims presented to the NPFC are state 

claims. 

A claimant must claim a damage or removal cost compensable under OPA and must have 

first presented the claim to the RP or guarantor except in certain circumstances. Two 

exceptions to this are that state governments may present claims for uncompensated removal 

costs directly to the NPFC, and claimants may present removal or damage claims directly to 

the NPFC if there is no known RP. Other exceptions allow a claim to be presented directly 

to the Fund when the Fund advertises for such claims or when an RP presents a claim based 

on an OPA defense or liability limit. 

12 

Figure 12: Claims Paid by Types ($M) FY 1992 - FY 2004 

$35 

$30 

$25 

$20 

$15 

$10 

$5 

$-

Affirmative Defense (7) 
5. Agency Appropriations 

Several Federal agencies receive annual appropriations from the OSLTF to cover certain 

administrative, operational, personnel, enforcement, and research and development costs as 

authorized in OPA and as delegated by Executive Order 12777 (Table 1). Agency 

responsibilities for carrying out OPA requirements include regulation, administration and 

enforcement of changes in vessel construction; tighter controls on licensing and manning; 

new requirements for vessel and facility operations and response planning; stricter liability 

and compensation requirements including increased financial responsibility, management of 

the OSLTF, compensation to claimants, and cost recovery from responsible parties; and 

improved cooperative relationships among responding agencies and oil industry stakeholders, 

including periodic drills and implementation of changes to the National Contingency Plan, 

Area Contingency Plans and National Response System. 

Table 1: Agency OSLTF Appropriations ($K) 

In FY 1997, Congress amended OPA to provide funding for the Prince William Sound Oil 

Spill Recovery Institute (OSRI) from the interest earned on $22.5 million of Trans Alaska 

Pipeline Liability Fund (TAPS) monies previously transferred to the OSLTF (P.L. 104-324, 

sec 1102(b), Oct 19, 1996, 110 Stat. 3965). Pursuant to the Coast Guard and Maritime 

Transportation Act of 2004 (P.L. 108-293, section 704, August 9, 2004), interest funding for 

OSRI is to continue until 2012, at which time the $22.5 million shall thereafter be made 

available for purposes of OPA section 1012 in Alaska. 

A similar Congressional action provided funding to the Alaska Denali Commission starting 

in FY 2000 and continuing indefinitely. The funding is the interest earned on the final $182 

million transferred to the OSLTF from the TAPS Fund. Omnibus Appropriations Act of 

1999 (P.L. 105-277, Title III section 329) (note at 43 USC 1653). Section 329(a) of that Act 

provides that notwithstanding any other provision of law, the remainder of the balance of the 

TAPS liability fund transferred under authority of OPA 8102(a)(2) to the OSLTF after June 

16, 1998, shall be used in accordance with this section. Section 329(b) provides that the 

interest from the amount so transferred and deposited to the OSLTF after June 16, 1998, shall 

be transferred annually by the NPFC to the Denali Commission to be used to repair or 

replace bulk fuel storage tanks in Alaska that are not in compliance with Federal or state law 

(in accordance with a program developed in consultation with the Coast Guard). There is no 

statutory end date for this funding mechanism. 

13 
6. Summary of Expenses 

The OSLTF expenses are comprised of oil spill responses/removals, claims, and annual 

appropriations to Federal agencies (Figure 13). 

7. Comparison of Revenues and Expenses 

Figure 14 compares the incoming revenues to the outgoing fund expenditures in the OSLTF 

for FY 2000 to FY 2004. In FY 2004, expenses exceeded revenues by $113 million. 

14 

Figure 13: Summary of OSLTF Expenses ($M) 

$150 

Appropriations 

$200 

Claims 

Removal 

$-

2000 

$50 

2001 2002 2003 2004 

$100 

Figure 14: Comparison of OSLTF Revenue and Expenses ($M) 

$300 

$250 

$200 

Revenues $150 Expenditures 

$100 

$50 

$-

2000 2001 2002 2003 2004 
E. Fund Projections 

Based on historical trends and recent Fund projections, we anticipate that an average decline of 

$200 million per year will occur and that the Fund could be completely depleted by FY 2009. 

Figures 15, 16, and Table 2 provide Fund projections through FY 2009. The assumptions upon 

which the forecast is based are summarized below. 

1. OSLTF Revenue Assumptions 

• Cost recovery income is based on historical rates and expected trends. Collections in 

FY 2004 were above average; no large recoveries are currently pending. 

• Penalty income is based on historical rates. 

• Interest on investments is based on an anticipated 2.0% Treasury investment rate applied 

against the previous year's ending balance. 

2. OSLTF Expense Assumptions 

• FY 2005 to FY 2009 expenses have been straight-lined and do not reflect the potential for 

a spill of national significance or the potential appropriations/Fund use conflicts 

discussed below. 

• Emergency Fund expenses are based on recent expenditure trends. 

• Emergency Fund prior year obligations are current as of FY 2004 but will be expended 

over the next three years based on past trends. 

• Forecasts of paid claims are based on past trends, claims pending, and trustee information 

about potential future natural resource damage (NRD) claims. In general, we are 

forecasting significant increases from responsible parties and NRD claims from trustees. 

The FY 2007 forecast includes anticipated large claims from the ATHOS I, SELENDANG 

AYU, and the NEW CARISSA. 

• Transfers to USCG, EPA, DOI, DOT, and Treasury remain at FY 2005 levels throughout 

the forecast, consistent with recent history. 

3. Potential Appropriations/Funds Use Conflicts 

By FY 2007, we anticipate conflicts between various Fund uses. Therefore, one or more uses 

may not be fully covered by the Fund. The conflict arises because the total of the anticipated 

FY 2007 expenses, plus the Fund balance of $204.5 million that generates interest payments 

for OSRI and Denali, plus the balance that may be available from prior years in the 

Emergency Fund exclusively for response and to initiate natural resource damage 

assessments, is expected to exceed the FY 2006 end-of-year balance. Anticipated revenue is 

inadequate to make up the shortfall. At this point, the Fund may be unable to fully support all 

anticipated uses. 

15 
Figure 15: Comparison of Projected Revenue and Expenses ($M) 

$350 

Revenue $300 

$250 Expenses 

$200 

$150 

$100 

$50 

$0 

FY04 FY05 FY06 FY07 FY08 FY09 

An average deficit of $200 million is projected to occur between FY 2004 and FY 2009. The 

Fund is expected to be depleted by FY 2009, at which time revenues and expenses would fall 

to zero. 

The Fund is expected to expire by FY 2009. Conflicts in expenditures, as discussed above, 

are expected in FY 2007. 

16 

Figure 16: Projected Fund Balance ($M) 

$900 

$800 

$700 

$600 

$500 

$400 

$300 

$200 

$100 

$0 

FY04 FY05 FY06 FY07 FY08 FY09 
Table 2: Oil Spill Liability Trust Fund Projections ($M) 

FY 2004 - FY 2009 

F. Adequacy of Liability Limits 

1. The Law 

Under section 1004 of OPA (33 U.S.C. 2704), a responsible party’s (RP’s) liability for 

removal costs and damages is limited, unless the incident is caused by gross negligence or 

willful misconduct or is the result of violation of an applicable Federal regulation. The 

liability limit for a vessel spill is based on a formula that considers the vessel tonnage and 

whether the vessel is a tank vessel (ship or barge) or non-tank vessel. Liability limits for 

onshore facilities, offshore facilities, and deepwater ports are set at established amounts. If 

an RP pays or incurs removal costs or damages in excess of an applicable liability limit, the 

RP may present a claim to the OSLTF for compensation of the excess amount (OPA section 

1008 (33 U.S.C. 2708)). 

2. Consumer Price Index (CPI) Adjustments 

OPA liability limits have not been adjusted for inflation since OPA was enacted. The 

authority to adjust liability limits for inflation pursuant to OPA section 1004(d)(4) was 

delegated by the President to various agencies in section 4 of Executive Order 12777, 

October 18, 1991, and would be accomplished through regulation. The Coast Guard has no t 

been delegated, but is in the process of, requesting this authority. 

17 
3. Limit of Liability Claims Paid and Pending from Responsible Parties 

To date, the NPFC has received seven RP claims based on entitlement to a limit on liability 

in connection with vessel oil spills. The NPFC has so far paid a total of $36.3 million to RP 

claimants. An additional $52.4 million claimed by RPs for the seven incidents is still under 

adjudication, and the amounts to be paid have not been finalized. 

To gain a better appreciation of these seven incidents, we have broken them down by vessel 

type as follows: 

• Tank Ship – One incident resulted in payments totaling $18.5 million with an additional 

$11 million in claims pending. 

• Tank Barge – Four incidents resulted in payments of $17.7 million with an additional $2 

million in claims pending. 

• Non-Tank Vessel – Two incidents have resulted in pending claims of $39.3 million. 

4. Potential OSLTF Exposure for Limit of Liability Claims 

Figure 17 is a compilation of incid ent costs for 17 incidents between FY 1993 and FY 2004 

where the costs of the incident are known to have exceeded limits of liability. All of these 

incidents involved vessel spills. Seven of these 17 incidents generated claims, which are 

described above. Claims have not been submitted in the remaining ten incidents for various 

reasons (e.g., criminal liability, DOJ settlement, or gross negligence and/or violation of 

Federal regulation, for which limits of liability would not apply). While most of the 

incidents have not generated claims, the information regarding known costs does help 

provide a more robust analysis of the overall costs and risk of exposure to the Fund with 

regard to vessel limits to liability. Figure 17 illustrates the relative risk of exposure to the 

Fund resulting from significant incidents by the different types of vessels. 

In Figure 17, the potential exposure or projected cost of the 17 incidents between FY 1993 

and FY 2004 is separated by vessel type as represented by separate bars. Each bar is divided 

into three components that illustrate who would have borne the cost if limits of liability had 

been applied in each of the incidents. The bottom section of each bar represents what the 

responsible parties’ cost share would be by vessel type if limits of liability applied for all 17 

incidents. The cross-hatched shading represents the incremental increase to liability limits 

had the limits been adjusted to reflect significant increases in the Consumer Price Index as 

provided in OPA section 1004(d)(4) (33 U.S.C. 2704(d)(4); the Fund bears the risk of this 

crosshatched area, rather than RPs, until liability limits are adjusted for inflation. The top 

section of each bar illustrates the Fund’s additional potential exposure for the incident costs 

had limits of liability applied. 

18 
Figure 17: OSLTF Potential Exposure of Claims from Responsible Parties ($M) 

(17 Incidents between FY 1993 and FY 2004)

Two incidents that occurred near the beginning of FY 2005 provide a more current 

representation of OSLTF exposure from limits of liability for responsible parties (Figure 18). 

The SELENDANG AYU is a cargo vessel that broke up off of the Aleutian Islands; and the 

ATHOS I is a single-hulled tank ship that struck an object, resulting in an oil spill in the 

Delaware River. Although response to both incidents is still ongoing and total costs are 

merely projected, the graph below shows how costs would be attributed assuming limits are 

held for the vessels and how much the exposure would have shifted from the Fund to the 

responsible parties had the limits been adjusted for CPI through 2004. The middle bars plus 

the dark upper portion represent the current exposure to the Fund. The bottom portion of the 

bar represents the responsible parties’ current exposure. 

Based upon the graphical representation of estimated financial exposure for major incident 

costs by vessel type depicted in Figure 17, two observations stand out regarding limits of 

liability as they relate to risk or exposure to the Fund. First, as indicated by the crosshatched 

portion of each bar, adjustments to liability limits for inflation would reduce the risk to the 

19 

Total Estimated Cost of Incidents 

Figure 18: OSLTF Potential Exposure of Claims from Recent Large Spills 

$300 

Estimated Incident Cost Exposure to OSLTF, $275 

Not Including CPI Adjustment Portion

Estimated Maximum Impact of CPI Adjustment

$250 

$225 

on Cost Exposure $200 

$175 

Exposure (Liability Limit)

Estimated Responsible Party Potential 

$150 

$125 

$100 

$75 

$50 

$25 

$-

Athos I Selendang Ayu 
Fund, but the reduction would be limited. Second, spills from tank barges and non-tank 

vessels can result in significant removal cost and damages, and the Fund’s share of the risk 

given current liability limits for such vessels is greater by several magnitudes than the risk to 

the RPs. Although only two spills by a tank ship have exceeded their liability limit since 

1992, at least nine spills by tank barges and eight by non-tank vessels have done so, with the 

Fund at risk for costs up to four times the liability limit. 

G. Impacts of OSLTF Decline 

A principal purpose of the Fund is to ensure the President has the resources to respond when oil 

discharges or substantially threatens to discharge to navigable waters, adjoining shorelines, and 

the exclusive economic zone. If the Fund is exhausted, the $50 million now made available from 

the Fund annually will no longer be available and the President will not have the resources 

readily available for response. 

Table 3 shows the distribution, by state, of OSLTF response funds over the past eight years. 

Every state, the District of Columbia, the Commonwealth of Puerto Rico, and the various 

Territories administered by the Department of the Interior have received Federal response and 

OSLTF funding for oil spills. All continue to be at risk for oil spills. Without the OSLTF, states 

would have to provide funds for these highly visible emergency events. 

Table 3: Oil Spill Response Funds by State ($K) 

FY 1997 - FY 2004 

State/Territory Total 

Alabama 1,667.4 

Alaska 16,597.2 

American Samoa 17,605.6 

Arizona 530.0 

Arkansas 1,291.5 

California 40,334.3 

Colorado 994.3 

Connecticut 4,751.3 

Delaware 744.0 

District of Columbia 83.2 

Florida 16,448.4 

Georgia 4,210.5 

Guam 4,944.0 

Hawaii 4,962.3 

Idaho 2,472.1 

Illinois 10,291.3 

Indiana 5,819.2 

Iowa 2,076.8 

Kansas 10,317.0 

State/Territory Total 

Kentucky 21,796.8 

Lousiana 100,397.5 

Maine 1,977.1 

Maryland 10,159.5 

Massachusetts 7,096.7 

Michigan 13,009.9 

Minnesota 35.2 

Mississippi 2,371.1 

Missouri 1,118.7 

Montana 837.8 

Nebraska 1,662.2 

Nevada 110.0 

New Hampshire 1,294.2 

New Jersey 2,381.3 

New Mexico 231.3 

New York 7,287.3 

North Carolina 1,656.9 

North Dakota 117.5 

Northern Marianas 50.0 

State/Territory Total 

Ohio 11,385.8 

Oklahoma 11,097.8 

Oregon 9,941.3 

Pennsylvania 10,782.2 

Puerto Rico 4,187.1 

Rhode Island 999.0 

South Carolina 1,594.4 

South Dakota 85.0 

Tennessee 3,640.3 

Texas 9,932.7 

Utah 620.6 

Vermont 440.0 

Virgin Islands 197.5 

Virginia 1,323.7 

Washington 5,160.5 

West Virginia 8,409.5 

Wisconsin 104.1 

Wyoming 349.1 

Alaska, California, Florida, and Louisiana are big coastal states with significant oil transport and 

production. It follows that they have many spills that require Federal funds. Illinois, Kansas, 

Kentucky, Oklahoma, and West Virginia are the site of significant abandoned oil production 

wells and facilities whose cleanup is being funded by the OSLTF. Thirty-nine states (out of 56 

states, territories, and possessions) had combined OSLTF costs that exceeded $1 million during 

this period (FY 1997-FY 2004). Clearly, the Federal response mechanism, the National 

Contingency Plan, and the OSLTF provide a significant benefit to all states, which assume the 

20 
operational and financial burden of responding to oil spills to their navigable waters and 

shorelines. 

In the event the OSLTF were depleted, the President would still have the statutory respons ibility 

under the Federal Water Pollution Control Act (FWPCA) to respond to oil spills. However, 

without a viable funding mechanism to pay for oil spill response, the government would find 

itself in the position it was in prior to the T/V EXXON VALDEZ spill in Prince William Sound, 

when the President had authority to respond but did not have adequate resources to do so. 

Another major purpose of the Fund is to compensate third parties for removal costs and damages 

when polluters do not pay. If the Fund were exhausted, persons who have a right to 

compensation under OPA would be deprived of a ready source of compensation and would have 

to resort to more costly and time-consuming litigation against a non-paying responsible party. In 

passing OPA, Congress intended that injured persons would not have to resort to litigation in 

order to be compensated (House Report 101-653, August 1, 1990, p. 117). Further, in many 

instances responsible parties cannot be located or simply do not have the financial ability to pay 

claimants. Thus, in the absence of a viable Fund, claimants may have no effective means of 

compensation. 

The largest category of claimants to the OSLTF is states, which submit removal cost claims for 

oil spills they alone respond to. These same state organizations are often part of the “first 

responders” community that DHS is committed to supporting. 

Additionally, the Fund is the source for substantial annual appropriations to various agencies, 

principally the USCG and EPA. If the Fund were exhausted, Federal appropriations would have 

to come from other sources, or the activities financed from such appropriations would have to be 

reduced. 

III. IMPLICATIONS OF CHANGING PHASE-OUT DATE OF SINGLE HULL TANK 

VESSELS 

The Coast Guard was asked to outline the domestic and international implications of changing 

the phase-out date for single hull vessels pursuant to section 3703a of title 46, United States 

Code, from 2015 to 2010. Changing the single hull tank vessel phase-out date from 2015 to 

2010 would vary depending on vessel gross tonnage, date of build, whether the vessel has a 

double bottom or double sides, and the vessel unloading location. In this report domestic 

implications are depicted in terms of reduced service life for U.S. single hull tank vessels, and 

international implications are depicted in terms of reduced service life for foreign single hull 

tank vessels trading to the U.S. 

Overall, approximately 1,700 U.S. and 70 foreign single hull tank vessels would be affected and 

lose some service life in U.S. waters. The greatest impact would be on the U.S. tank barge fleet, 

where approximately 1,650 tank barges (representing 38% of the total tank barge fleet) would 

lose 5 years of service life. Detailed analyses are contained in paragraphs A through E below. 

21 
A. Single hull tank vessels less than 5,000 gross tons 

Paragraph (c)(2) of section 3703a of title 46, United States Code, requires the phase-out of all 

single hull tank vessels less than 5,000 gross tons on January 1, 2015. Changing the phase-out 

date to January 1, 2010, would have the following implications: 

Domestic implications: All U.S. tank vessels less than 5,000 gross tons would lose 5 years of 

service life. The vast majority of these tank vessels are barges, and they would be significantly 

impacted as reflected in Table 4: 

Table 4. U.S. Tank Vessels less than 5,000 gross tons that would lose 5 years of service life 

Number of Gross Tonnage Comments 

Tank Vessels (total) (based on gross tonnage) 

• represents 38% of total U.S. tank barge fleet 1,648 tank 1,829,630 GT • represents 47% of tank barges less than 5,000 barges GT 

• represents less than 1% of total U.S. tank ship 26 tank ships 11,181 GT fleet 

International implications: Foreign tank vessels less than 5,000 gross tons do not generally trade 

to the U.S., so the implications in this area would be negligible. The available data indicates that 

less than 1% of all foreign tank vessels that traded to the U.S. in 2004 were less than 5,000 gross 

tons. 

B. Single hull tank vessels of 5,000 gross tons and greater 

Domestic implications: Paragraphs (c)(3) and (c)(4) of section 3703a of title 46, United States 

Code, already require the phase-out of all single hull tank vessels of 5,000 gross tons and greater 

on or before January 1, 2010. Therefore changing the phase-out date from 2015 to 2010 would 

not impact these U.S. single hull tank vessels. 

International implications: The phase-out requirements in paragraphs (c)(3) and (c)(4) of 

Section 3703a of title 46, United States Code, which phase-out all single hull tank vessels of 

5,000 gross tons and greater on or before January 1, 2010, also apply to foreign tank vessels 

trading to the U.S. Therefore changing the phase-out date from 2015 to 2010 would not impact 

these foreign tank vessels trading to the U.S. 

22 
C. Single hull tank vessels of 5,000 gross tons and greater, that have a double bottom or 

double sides 

Domestic implications: Dependent on specific gross tonnage and date of build, U.S. single hull 

tank vessels tha t have a double bottom or double sides, built after January 1, 1980, would lose 

from 1 to 5 years of service life. The impact of this change is as reflected in Table 5: 

Table 5. U.S. Tank Vessels 5,000 gross tons and greater (with double bottom or double sides) 

OPA 90 

Phase-out 

Year 

Number of 

Tank Vessels 

Gross Tonnage 

(total) 

Comments 

(based on gross tonnage) 

2011 5 tank ships 123,592 GT 

• Would lose 1 year of service life 

• 5.2% of all tank ships above 5,000 

GT 

2012 3 tank ships 84,698 GT 

• Would lose 2 years of service life 

• 3.6% of all tank ships above 5,000 

GT 

2013 1 tank barge 

3 tank ships 

23,913 GT 

62,330 GT 

• Would lose 3 years of service life 

• 2.6% of all tank ships above 5,000 

GT 

2014 1 tank ship 27,508 GT 

• Would lose 4 years of service life 

• 1.2% of all tank ships above 5,000 

GT 

2015 1 tank ship 22,138 GT 

• Would lose 5 years of service life 

• 0.9% of all tank ships above 5,000 

GT 

Note: % based on current U.S. tank ship fleet and assumes total U.S. tank ship fleet gross tonnage will 

remain approximately constant 

International implications: Dependent on specific gross tonnage and date of build, foreign 

single hull tank vessels that have a double bottom or double sides, built after January 1, 1980, 

would lose from 1 to 5 years of trading life to the U.S. The impact of this change is as reflected 

in Table 6 (foreign tank vessels of 5,000 gross tons and greater that traded to the U.S. in 2004): 

Table 6. Foreign Tank Vessels 5,000 gross tons and greater (with double bottom or double sides) that traded to 

the U.S. in 2004 

OPA 90 

Phase-out 

Year 

Number of 

Tank Vessels 

Gross Tonnage 

(total) 

Comments 

(based on gross tonnage) 

2011-

2015 72 tank ships 3,152,317 GT 

• Would lose 1-5 years of service life 

in US 

• 4% of all foreign tank ships trading 

to the U.S. in 2004 

23 
D. Single hull tank vessels unloading oil at a deepwater port (Louisiana Offshore Oil Port 

– LOOP) 

Domestic and international implications: Paragraph (b)(3)(A) of section 3703a of title 46, 

United States Code, allows single hull tank vessels to unload oil at a deepwater port (licensed 

under the Deepwater Ports Act of 1974) until January 1, 2015. Therefore all single hull tank 

vessels trading to LOOP would potentially lose 5 years of service/trading life. However the 

MARPOL phase-out date for many of these single hull tank vessels is prior to January 1, 2015, 

which could reduce the impact if the U.S. phase-out date was changed to January 1, 2010. 

E. Single hull tank vessels offloading oil within a lightering zone (60+ miles offshore) 

Domestic and international implications: Paragraph (b)(3)(B) of section 3703a of title 46, 

United States Code, allows single hull tank vessels to unload oil within a lightering zone 

(established under section 3715(b)(5) of title 46, United States Code) that is more than 60 miles 

offshore, until January 1, 2015. Therefore all single hull tank vessels trading to a U.S. offshore 

lightering zone would potentially lose 5 years of service/trading life. However the MARPOL 

phase-out date for many of these single hull tank vessels is prior to January 1, 2015, which could 

reduce the impact if the U.S. phase-out date was changed to January 1, 2010. 

IV. VESSEL MONITORING SYSTEMS AND AIDS-TO-NAVIGATION 

The Coast Guard continuously studies and assesses the costs and benefits of requiring vessel 

monitoring systems on tank vessels used to transport oil or other hazardous cargo, as well as the 

risks attributed to marine navigation in U.S. waterways. As part of this effort, we work with 

industry to evaluate the impacts of technology to determine what technologies will be useful and 

cost-effective in order to reduce navigation risk. Technology that enables vessels to achieve 

greater situational awareness shows promise as being both cost effective and influential in 

reducing risk. One of these technologies is the Automatic Identification System (AIS). 

A. Summary of Automatic Identification System (AIS)1 

The Coast Guard published a final rule as part of the Maritime Transportation Security Act of 

2002 (MTSA) that requires the carriage of AIS on certain vessels. This includes domestic 

vessels in Vessel Traffic Service (VTS) areas and all vessels under the International Convention 

for the Safety of Life at Sea (SOLAS) in all waters. AIS integrates advanced technologies to 

automatically transmit and receive information from ships or shore stations in near real-time. By 

allowing automatic exchange of information, AIS increases situational awareness and permits 

more effective passing arrangements between ships and among ships and VTS. AIS contributes 

1

 The Coast Guard published the final rule for AIS in the Federal Register in October 2003 (68 FR 60559). Readers 

can access and view the AIS final rule online through the Document Management System (DMS) under docket 

number USCG-2003-14757 at http://dms.dot.gov. 

24 
to the Coast Guard’s homeland security mission by enhancing maritime domain awareness 

(MDA).2 

AIS allows for inter-vessel exchange of information. The information includes name, location, 

dimensions, type, course, and speed. Vessels can integrate AIS with other systems, such as radar 

and electronic charting. To achieve the full potential of AIS, there must be universal application. 

The rule impacts over 3,400 domestic vessels, including the following: 

• Vessels under SOLAS i.e., vessels on international voyages; 

• All commercial, self-powered vessels of at least 65 feet in VTS areas; 

• Passenger vessels that carry 150 passengers or more in VTS areas; 

• All dredges and floating plants engaged in operations in VTS areas; 

• Certain commercial towing vessels of at least 26 feet and over 600 horsepower in VTS areas; 

and 

• Foreign-flagged vessels less than 300 gross tons (non-SOLAS) and greater than 65 feet in 

length that make ports of call in the United States in VTS areas. 

Of the 3,400 U.S. vessels affected by this rule, 438 are SOLAS vessels on international voyages, 

and the balance were non-SOLAS vessels. AIS also had an impact on 70 foreign-flagged nonSOLAS vessels. 

The estimated average cost of AIS is $7,000 per unit. The estimated installation costs are $2,000 

per unit, annual maintenance costs are $250 per unit, and mariner training costs are $110 per 

mariner. The benefits of the rulemaking were calculated by examining vessel casualty cases 

contained in the Coast Guard’s Marine Safety Management System (MSMS) database. The 

monetized benefits only include marine casualty cases that could have benefited from the use of 

AIS. 

Using the above information, the discounted total cost of the rule implementing the AIS system 

was estimated to be $49.3 million over the 10-year period of the analysis (Table 7). The SOLAS 

fleet would incur only $5 million of this cost and the non-SOLAS domestic fleet would incur the 

remainder. We estimated the total present value of the benefit derived from the AIS rule to be 

$24.4 million over the period of analysis. Although the monetized discounted benefit of this 

regulation is significantly lower than the discounted cost, the qualitative benefits of this system 

are believed to far outweigh the costs. For example, the monetized benefit does not account for 

the benefit of reducing vulnerability at U.S. ports. 

2

 The Coast Guard’s definition of maritime domain awareness is “the effective understanding of anything associated with global 

maritime environment that could impact the security, safety, economy, or environment of the United States.” 

25 
Table 7: Summary of Quantifiable AIS Cost and Benefit for U.S. Flag SOLAS Vessels and Domestic 

Non-SOLAS Vessels in VTS Areas (2003–2012, 7 Percent Discount Rate, 2003 Dollars) 

Non-SOLAS Total* 

U.S. Flag Fleet in VTS 

SOLAS Fleet* Areas* 

Benefit $13.3 $11.1 $24.4 

Cost $5.2 $44.1 $49.3 

*Benefit and cost presented in millions of dollars 

If AIS carriage requirement was expanded to vessels that operate outside VTS areas, the total 

number of additional vessels affected would be approximately 19,000 U.S. vessels and more than 

1,100 foreign-flagged vessels. The approximate cost of this expansion of AIS carriage 

requirement would be $193 million (non-discounted) using the proportional costs estimated for 

the AIS rule. The benefits are unknown without a thorough evaluation of the casualty data. 

B. Radar Beacons (RACONs) 

The Coast Guard operates 113 RACONs or radar responders. The estimated cost of a RACON is 

$40,000 per unit. A RACON is a receiver/transmitter transponder device. The benefit of a 

RACON is its ability to provide an identifying signature to landmarks or buoys on a shipboard 

radar display. When a RACON receives a radar pulse, it responds by transmitting a unique 

identifiable mark back to the radar set. The Coast Guard use RACONs for the following 

purposes: 

• Identify aids to navigation, both seaborne and land-based e.g., buoys and lighthouses; 

• Identify land fall or positions on inconspicuous coastlines; 

• Identify navigable spans under bridges; 

• Identify offshore oil platforms and similar structures; 

• Identify and warn of environmentally sensitive areas such as coral reefs; and 

• Mark new and uncharted hazards. 

Currently, there are no indications that any marine casualty cases could have been avoided from 

additional RACONs. 

C. Summary of Coast Guard Studies: (PAWSAs, PARS, and WAMS) 

The Coast Guard regularly conducts waterway studies such as Ports and Waterways Safety 

Assessments (PAWSA), Port Access Route Studies (PARS), and Waterways Analysis and 

Management Studies (WAMS). In an average year, the Coast Guard performs two PAWSAs, 

two to three PARs, and about 300 WAMS. 

PAWSAs are a tool to identify risks and provide mitigation measures in the nation’s ports and 

waterways. The Coast Guard involves stakeholders (e.g., professional mariners and industry) in 

the process. This provides the Coast Guard with more information concerning the 

environmental, public safety, and economic consequences of its actions. The ultimate purpose of 

PAWSA is not only to establish a baseline of ports for consideration for VTS, but to provide the 

26 
Captain of the Port (COTP) and port community with an effective tool to evaluate risk and work 

toward long-term solutions to mitigate these risks. The goal is to find solutions that are both cost 

effective and meet the needs of waterways users. 

The Port and Waterways Safety Act of 1978 [PWSA, 33 U.S.C. 1223 (c)] requires that the Coast 

Guard conduct a PARS prior to establishing or adjusting a traffic separation scheme (TSS) or 

any other routing measure. A TSS is an internationally recognized measure that minimizes the 

risk of collision by separating vessels into opposing streams of traffic through the establishment 

of traffic lanes. The Coast Guard estimates the costs and benefits of these improvements. 

Waterways Analysis and Management Studies (WAMS) encompass all aspects of the marine 

thoroughfare to check the effectiveness of Coast Guard programs and resources. A typical 

WAMS will look at the physical dimensions of the channel, bridges, marine facilities, 

obstructions, traffic density and patterns, vessel size, and aids-to-navigation systems. As a result 

of a WAMS, the Coast Guard often makes navigational improvements such as increasing the 

number of aids to navigation. 

V. SUMMARY OF TANK BARGE AND TOWING VESSEL SAFETY ISSUES 

A. Marine Transportation of Petroleum 

Waterborne transportation of petroleum, chemicals and related products in bulk continues to 

trend upward in the U.S. economy according to statistics compiled by the U.S. Army Corps of 

Engineers ending in 2002 (Figure 19). 

Figure 19: Annual Statistics of Petroleum and Chemical Transportation within the U.S. 

1,500 

Sum of Bulk 1185.5 

Liquids 

1047.3 

1,000 

Million Short Tons 1017.9

923.5 Petroleum & 

Petro 

Products 

500 

Chemicals 

& Related 

Products 167.6 

123.8 

0 

1990 1991 1992 1993 1994 1995 1996* 1997 1998 1999 2000 2001 2002 

Source: Waterborne Commerce of the United States, National Summaries, Part 5 by the Department of the 

Army, Corps of Engineers, Institute for Water Resources. Data obtained from Table 1 -5, Total Waterborne 

Commerce 1983-2002 by Commodity Group. 

27 
B. Pollution Statistics 

1. Enforcement Actions 3 

The annual numbers of infractions of OPA 90 related regulations continue to decline. 

Figure 20 below illustrates this decline in the numbers of civil penalty actions taken by 

the Coast Guard, and reflect the increased and wide-spread compliance by industry. 

Figure 20: Overall reduction in the Annual Infractions to OPA 90 

10,000 

8,000 

7,687 

All Civil 

Counts Penalty 

6,000 

4,000 

2,885 

2,000 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

The annual breakdown of the major sub-parts of the Code of Federal Regulations 

associated with the Act, as well as oil spills shows a decline in the number of incidents 

and improved compliance (Table 8). 

3

 Source: U.S. Coast Guard MISLE-MARS 2.3 MSN Enforcement Offenses cube, data as of November 15, 2004. The MSN Enforcement 

Offenses Cube contains detail data on enforcement offenses that have been entered into the MSN application. 

28 
Table 8: Annual Decline of Infractions by Implemented OPA 90 regulations and for oil spills. 

OPA'90 

Regs Vessel and Facility Operations General 

Calendar 

Years 

33CFR 

138 

COFR 

33CFR 

153 

General 

33CFR 

154 

Facilities 

33CFR 

155 

Vessels 

33CFR 

156 

Xfer Ops 

33USC§ 

1321 

Spills 

1992 

1993 

1994 

1995 

1996 

1997 

1998 

1999 

2000 

2001 

2002 

2003 

2004 

0 

0 

35 

48 

33 

32 

29 

17 

13 

5 

8 

6 

9 

78 

72 

97 

53 

22 

24 

11 

38 

41 

16 

17 

11 

11 

1,030 

1,598 

784 

723 

499 

443 

467 

312 

308 

241 

91 

74 

80 

1,187 

1,432 

1,570 

1,208 

627 

469 

339 

269 

215 

194 

175 

224 

137 

623 

818 

817 

709 

485 

427 

303 

294 

222 

194 

168 

95 

134 

4,769 

5,499 

6,031 

6,213 

6,185 

4,484 

3,339 

2,860 

2,712 

2,478 

2,896 

2,651 

2,514 

Count 

1995 1996 1997 1998 1999 2000 

The annual numbers of oil spill civil penalty investigations continue to decline. Figure 2001 

21 below illustrates this decline in the numbers of civil penalty actions for spills taken by 

the Coast Guard.

2002 

Figure 21: Annual decline of Civil Penalties due to enforcement of OPA 90 2003 

7,000

2004 

6,213 

6,000 

5,000 

33 USC 

1321 et al 

4,000 

3,000 

2,514 

2,000 

29 
The annual breakdown of the four major sub-parts of the Code of Federal Regulations 

associated with the Act shows a similar trend (Figure 22). 

Figure 22: Annual reduction of Civil Penalties by Subparts of 33 CFR, Subchapter O 

1,800 

Counts 

33CFR138 

COFR 

33CFR 153 

1992 

General 1,187 1,200 33CFR 154 1993 

Facilities 1,030 33CFR 155 

Vessels 

1994 

33CFR 156 Xfer 

Ops 

1995

600 

623 

1996 

134

1997

78 

80 35 0 11 1998 1999

Figure 4: Civil Penalties for OPA Related Regulations - By Subpart 2000 

2. Oil Spill Statistics for Tank Barges, Tank Ships and other vessels are found in Figure 234 . 

2001 

Figure 23: Annual spill incident statistics for tank barges and tank ships in the U.S. The data indicates a 

decline in the number of oil spills for tank barges since 1996. 2002 

400 6,000 

2003 

350 353 All Other 

Vessels 5,000 

2004 

300 4977 

Tank Barge - Tank Ship Tankbarge 4,000 All Other Vessels 

250 

200 3,000 

148 136 

150 

2,000 

100 1,126 

Tankship 1,000 

50 29 

0 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

4 Pollution statistics from the MSIS era are retained in a standa rdized report entitled Oil Spill Compendium, Pollution Incidents in and Around 

U.S. Waters, 1969 – 2002. The Compendium may be found at: http://www.uscg.mil/hq/g%2dm/nmc/response/stat s/aa.htm . Pollution incidents 

for MISLE are not yet found in the Compendium due to issues with application conversion. MISLE pollution statistics are currently being 

generated for the Coast Guard’s Business Performance plan in another application. 

30 
Review of the data which generated Figures 24 and 25 reveal that since 1996, both tank 

barges and tank ships are having fewer spills annually and for the most part those spills 

are of smaller quantity. The spike in 2000 of tank ship spill volume and subsequent 

increase in the volume per spill as shown in Figure 26, was in part due to two incidents: 

the grounding of the WESTCHES TER spilling 538,000 gallons of crude oil in the 

Mississippi River, and the collision of the POSAVINA, spilling 59,000 gallons of 

number 6 fuel oil in Boston Harbor. Another spike in 2004 for tank ships can be 

attributed to spills involving the loss of the BOW MARINER (55,000 gallons of diesel 

oil), and casualties on the TORM MARY (26,000 gallons number 6 oil), the GENMAR 

ALEXANDER (40,000 gallons of crude and number 6 oil), and the ATHOS I, the largest 

and most recent incident, with an estimated 260,000 gallons of heavy crude oil. 

Figure 24: Annual spill volume statistics by gallon for tank barges, tank ships and all 

other vessels. 

1,200,000 

All Other Tankbarge Tankship 1,101,938 

Vessels Spill Spill 

(Gallons) (Gallons) (Gallons) 900,000 

600,000 

459,589 396,724 

300,000 

213,500 

174,157 125,491 

0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 

31 
Figure 25: Annual statistics of average gallons of oil spilled 

(note higher values for 2000 and 2004 due to large spill incidents) 

25,000 

23,978 

20,000 

All Other Tankbarge Tankship 

Vessels Gallons / Gallons / 

Gallons / Spill Spill 

15,000 

Spill 

10,000 

5,479 

5,000 3,122 3,379 

Gallons 

848 Per 155 

0 80 

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Spill 

C. Significant Spills from Tank Barges and Tank Ships 

The following are narrative descriptions of fourteen significant pollution incidents involving tank 

barges and tank ships as found in the Coast Guard’s Oil Spill Compendium. Eleven of these are 

allisions, collisions or groundings where the vessel is underway; three occur during cargo 

transfer operations: 

• January 7, 1994 - The tank barge MORRIS J. BERMAN, which was being towed by the M/V 

EMILY S. grounded near San Juan, Puerto Rico, spilling approximately 750,000 gallons of 

heavy fuel oil into the Atlantic Ocean. 

• October 11, 1995 - A tank barge was damaged in a collision with another tug-and-tow, in the 

vicinity of Norco, Louisia na. The damaged barge spilled approximately 194,502 gallons of 

decanted slurry oil into the Mississippi River. 

• July 22, 1995 - Approximately 60,000 gallons of crude oil was spilled into the Delaware 

River, near Westville, New Jersey during a transfer from a tank ship to a shoreside storage 

facility. The transfer hoses were damaged when a severe thunderstorm moved through the 

area. High winds caused the ship to move away from dock suddenly, resulting in damage to 

the hoses. 

• January 19, 1996 - The towing vessel SCANDIA experienced an engine room fire, while 

towing the tank barge NORTH CAPE in the Atlantic Ocean near Point Judith, Rhode Island. 

The tug and barge drifted until the barge grounded on Moonstone Beach, Rhode Island. 

Damage to the barge resulted in approximately 828,000 gallons of No. 2 oil being spilled into 

the water. 

32 
• March 18, 1996 - The tank barge BUFFALO 292 experienced a structural failure, resulting in 

a bend of approximately 30 degrees in the hull. Approximately 176,400 gallons of fuel oil 

was spilled into Galveston Bay, Texas, in the vicinity of the Gulf Intracoastal Waterway and 

the Houston Ship Channel. 

• September 27, 1996 - The tank ship JULIE N struck a bridge near Portland, Maine. Damage 

to the ship resulted in approximately 165,900 gallons of fuel oil being spilled into Casco Bay. 

• June 27, 1998 - The tank barge CTCO 211, in tow of the M/V CHRISTINE CENAC, 

collided with the M/V AMERICAN HERITAGE near Darrow, Louisiana. Approximately 

154,000 gallons of crude oil was spilled into the Mississippi River, from the CTCO 211. 

• January 12, 1999 - The towing vessel ELKHORN RIVER collided with the tank barge M & 

M 100 near Port Fourchon, Louisiana. Approximately 51,406 gallons of diesel fuel was 

spilled into Bayou Lafourche. 

• January 29, 1999 – The tank barge WTC 2014, in tow of the M/V TED WAXLER, collided 

with a mooring buoy in Bayou Sorrel, Louisiana. Approximately 64,000 gallons of unleaded 

gasoline was spilled into the waterway. 

• November 28, 2000 - The tank ship WESTCHESTER grounded in the Mississippi River, 

near Buras, Louisiana. Approximately 538,000 gallons of crude oil were spilled into the 

river from the number one (starboard) cargo tank. This incident accounted for 38% of the oil 

spill volume reported to the U. S. Coast Guard for the year 2000. Also, this was the largest 

oil spill into U.S. waters since 1996. 

• June 12, 2000 - The number one tank of the tank barge NMS 111 was overfilled, resulting in 

approximately 80,000 gallons of number 6 oil spilling into the Houston Ship Channel. 

• June 8, 2000 - While departing a facility in Boston, MA, the tank ship POSAVINA was 

damaged by the tug ALEX C. Damage to the tank ship resulted in the spillage of 

approximately 59,000 gallons of number 6 fuel oil into the waterway. 

• November 7, 2001 - While waiting to enter the McAlpine lock and dam on the Ohio River, 

the tank barge WTC 105 was moored along a guide wall. At that location, three of the 

barge's starboard cargo tanks were damaged by an unknown object, below the waterline. 

Approximately 124,320 gallons of gasoline was discharged into the Ohio River. 

• September 22, 2001 - The Liberian flag tank ship NEW AMITY collided with the tank barge 

NMS 1486, while navigating in the Houston Ship Channel. As a result, approximately 

50,000 gallons of intermediate fuel oil was spilled into the waterway. 

• July 5, 2002 – The U.S. flag tank barge USNS SWOB 28 spilled approximately 105,000 

gallons of waste oil in Guam. 

• February 21, 2003 – The U.S. flag tank barge B-150 exploded during transfer operations. 

The subsequent fire resulted in a spill estimated at 6,000 gallons of unleaded gasoline on the 

Arthur Kill, Staten Island, New York. 

• April 27, 2003 – The U.S. flag tank barge B-120 grounded spilling 40,000 gallons of number 

6 oil in Buzzards Bay, Massachusetts. 

• May 5, 2003 – The U.S. flag tank barge KIRBY 26906 spilled 20,000 gallons of number 2 

diesel oil in the Mississippi River in way of Baton Rouge, Louisiana. 

33 
• February 19, 2004, the Marshall Islands flag tank ship GENAR ALEXANDER spilled 

approximately a comb ined 40,000 gallons of crude oil and number 6 oil in the New Orleans 

area. 

• February 28, 2004 – The Singapore flag tank ship BOW MARINER sinks, spilling a cargo of 

3.6 million gallons of ethyl alcohol and 55,000 gallons of diesel oil off the coast of New 

Jersey. 

• March 19, 2004 – The U.S. flag tank barge M 407 grounded, spilling over 151,000 gallons of 

petroleum naphtha in Galveston, Texas. 

• August 2, 2004 – The Danish flag tank ship TORM MARY spilled over 26,000 gallons of 

number 6 oil in the Sabine waterway of Texas. 

• November 26, 2004 – The Cypriot flat tank ship ATHOS I struck a submerged object and 

suffered damage to its number 7 cargo tank releasing an estimated 260,000 gallons of heavy 

crude oil into the Delaware River. 

D. Applicable Federal Regulations for Tank Barges and Towing Vessels 

The following sections are brief listings and descriptions of some of the significant federal 

regulations that pertain to tank barge and towing vessel safety. 

An itemized listing of all applicable regulations would be extensive and unnecessarily lengthen 

this report. This section summarizes requirements found in Title 46 and Title 33 of the Code of 

Federal Regulations. 

1. Title 46, Code of Federal Regulations (CFR) – SHIPPING: 

46 CFR Subchapter C (Parts 24-28): The regulations in this subchapter contain the current 

requirements for towing vessels that transport tank barges carrying combustible or flammable 

liquid cargo in bulk. These regulations include fire suppression requirements for certain 

towing vessels that will come into effect in April 2005. For further discussion on towing 

vessels, see the Coast Guard and Maritime Transportation Act of 2004, below. 

46 CFR Subchapter D (Parts 30-39): The regulations in this subchapter contain requirements 

for materials, design, construction, inspection, manning and operation of U.S. flag tank 

vessels (and tank barges), including handling and stowage of cargo and duties of officers and 

crew. These regulations pertain to all U.S. flag tank vessels carrying combustible or 

flammable liquid cargoes in bulk. 

46 CFR Subpart I (Parts 90-105): This part provides specific requirements for the intervals 

of various examinations pertaining to the suitability of U.S. flag vessels to remain in service; 

these examinations include a drydock examination, internal structure examination, and cargo 

tank internal examination. The regulations stipulate various intervals based on the vessel’s 

construction (material and hull type) and location of service (fresh or saltwater). 

46 CFR Subchapter O (Parts 150-154): The regulations in this subchapter contain additional 

requirements for vessels carrying certain bulk dangerous cargoes. These regulations may be 

in addition to, supplement, or modify requirements in other subchapters in Chapter I of 46 

34 
CFR. Part 151 specifies requirements for tank barges and Part 153 provides requirements for 

tank ships (both U.S. and foreign-flagged ships). 

2. Title 33, Code of Federal Regulations – NAVIGATION AND NAVIGABLE WATERS 

33 CFR Part 138: The regulations in this part provide the requirements for the vessel owner, 

operator, and/or demise charterer to establish and maintain evidence of financial 

responsibility to cover their liability in the event of an oil or hazardous material spill. These 

regulations discuss the Certificate of Financial responsibility and the six appendices provide 

copies of the various required forms associated with this part. 

33 CFR Subchapter O (Parts 151-159): The regulations in this subchapter contain extensive 

and detailed requirements pertaining to vessels carrying oil; control and discharge removal of 

pollution by oil; oil pollution prevention regulations for vessels; requirements for oil transfer 

operations; rules for the protection of the marine environment relating to tank vessels 

carrying oil in bulk; and reception facilities for disposal of waste oil. 

33 CFR Subchapter P (Parts 160-169): The regulations in this subchapter contain a variety 

of requirements relating to the navigation safety of vessels carrying oil in bulk. Specific 

items include general ports and waterways safety; vessel traffic management; inland 

waterway navigation regulations; towing of barges; navigation safety regulations; shipping 

safety fairways and offshore traffic separation schemes; and escort requirements for certain 

tankers. 

3. Towing Vessel Regulatory Efforts and Recommendations 

Towing Vessel Inspection Status : The Coast Guard sought authority to add towing vessels to 

the list of vessels inspected for certification; this authority was subsequently provided in 

section 415 of the Coast Guard and Maritime Transportation Act of 2004 (CGMTA). This 

resulted in the initiation of a rulemaking project to develop a comprehensive set of 

regulations for the inspection and certification of all currently un-inspected towing vessels 

less than 300 gross tons involved in the transportation of cargo. Early public involvement 

began in December 2004 through the Towing Safety Advisory Committee and continued in 

January-February 2005 with a series of public meetings to gather information for 

development of an Advanced Notice of Proposed Rulemaking. Public meetings were held in 

New Orleans, St. Louis, Oakland and Washington, DC. Recommendations are being 

developed based on input from these public meetings. 

Safety Management System Utilization: CGMTA also provided the authority for the Coast 

Guard to establish, by regulation, a safety management system standard appropriate for the 

characteristics, methods of operation, and nature of service of towing vessels. Requirements 

for such a system will be included in the regulatory project regarding the inspection of 

towing vessels. The investigation reports for two incidents involving towing vessels, ANNE 

HOLLY incident in St. Louis (1998) and the SCANDIA-fire / barge NORTH CAPEgrounding (1996) resulting in a major oil spill in Rhode Island, both recommended that a 

safety management system be developed and required for use with towing vessels. 

35