NOAA's New Natural Resource DamageAssessment Scheme: It's Not AboutCollecting Money

On Friday, January 19, 1996, a Providence-bound barge carrying four million gallons of household heating oil ran aground off Moonstone Beach, Rhode Island, after its tug boat burst into flames.1 The barge, The North Cape, spilled more than 828,000 gallons of oil into Block Island Sound.2 One Boston reporter noted that "[t]he worst oil spill in Rhode Island history couldn't have struck at a more pristine spot."3 Moonstone Beach and its surrounding salt ponds and marshes are home to countless birds and abundant sea life, including world-famous lobsters, scallops, clams, and flounder.4 Hundreds of thousands of lobsters washed ashore dead, hundreds of birds died from consuming oil, countless clams and mussels died or were severely contaminated, and government officials closed the beach and 250 square miles of fishing grounds.5 The oil also defiled the habitat of the piping plover, an endangered species.6 Federal, state, and local government workers converged on the Rhode Island coast to contain the oil, begin the clean-up process, and assess the extent of the injury.7 Eventually, the government officials will present a natural resource damage claim to the barge's owner, Ecklof Marine.8 That claim will consist of the cost of assessing the damages, restoring the area to its prespill condition, and compensating the public for its temporary loss of this natural resource - not to mention the actual cost of removing the oil.9 Before the federal and state officials can present that claim, they must determine precisely what these injured or destroyed natural resources are worth to the people of New England. The National Oceanic and Atmospheric Administration (NOAA) recently developed new procedures that will change the way the government determines natural resource value and compensates the public.10 The oil spill in Rhode Island will be the first natural resource injury assessed under NOAA's new approach.11 I. Overview In the Oil Pollution Act of 1990 (OPA),12 Congress instructed NOAA to promulgate regulations establishing procedures for assessing natural resource damages resulting from the discharge of oil.l3 After nearly five years at the task, NOAA published a final rule on January 5, 1996 that outlines the new natural resource damage assessment process (the Final Rule).14 For more than ten years, the Department of the Interior (DOI) has also studied natural resource damages and developed similar regulations under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).15 NOAA's most recent regulations have benefitted from the collaboration and cumulative experience of the two agencies.16 In the typical spill situation under the conventions of OPA or CERCLA, federal, state, and Indian officials (appointed as public trustees for natural resources) work with the parties responsible for injuring natural resources to return those resources to their normal functioning conditions. In addition, the governing statute authorizes the trustees to collect damages from the responsible parties for the interim and permanent loss of the natural resources. A natural resource damage assessment is the administrative procedure through which the natural resource trustees evaluate the injuries to natural resources in order to arrive at appropriate damage figures. Trustees conceptualize natural resource damages in several ways, the most obvious of which is the economic market value of the natural resource and the animals dependent on that resource. In addition, to facilitate an accurate determination of total value, trustees view the damage measurements in terms of lost use and nonuse values.17 Use values represent the measurable direct or indirect human benefit from the natural resource18 and can be measured using market or indirect market methods. Nonuse values represent a nonconsumptive value derived from a natural resource without any direct physical or aesthetic use and include option,19 existence,20 and bequest values. …