Enacted and Proposed Oil Spill Legislation in the 112th Congress
Released: 2013-01-16T00:00:00

Introduction

Congressional interest in oil spill legislation has historically waxed and waned. Recent oil spills led some Members of the 112 th Congress to express an increased level of interest in oil spill legislation. On April 20, 2010, an explosion occurred at the Deepwater Horizon drilling platform in the Gulf of Mexico, resulting in 11 fatalities. The incident disabled the facility and led to a full evacuation before the platform sank into the Gulf on April 22, 2010. A significant release of oil at the sea floor was soon discovered. According to the National Incident Command's Flow Rate Technical Group estimate, the well released approximately 206 million gallons (4.9 million barrels) of oil before it was contained July 15, 2010.

The 2010 Gulf oil spill and two pipeline spills—an Enbridge pipeline in Michigan (2010) and an ExxonMobil pipeline in Montana (2011) —continued to generate some interest in a variety of oil spill-related issues.

This report identifies legislation that addresses oil spill-related issues. For this report, oil spill-related issues include oil spill policy matters that concern prevention, preparedness, response, liability and compensation, and Gulf of Mexico restoration. In the context of this report, oil spill issues do not generally include matters pertaining to offshore leasing and drilling.

For the most part, the underlying statutes for these oil spill-related provisions are found in either the Oil Pollution Act of 1990 (OPA), the Clean Water Act (CWA) and its amendments, or the Outer Continental Shelf Lands Act (OCSLA) and its amendments.

Table 1 provides a list of acronyms used in the report. Table 2 identifies enacted oil spill legislation. Table 3 (House proposals) and Table 4 (Senate proposals) provide a snapshot of oil spill-related bills in the 112 th Congress, many of which were (at least in part) offered in response to issues raised by the Deepwater Horizon oil spill.

Some of the bills are similar (if not identical) to proposals from the 111 th Congress. (See Text Box below.) Other bills reflect recommendations by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

The 112 th Congress enacted two statutes with oil spill-related provisions. First, on January 3, 2012, the President signed P.L. 112-90 (the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011), which includes, among other provisions, the following:

increases the maximum amount of civil penalties for violations of safety requirements; authorizes the Secretary of Transportation to require the installation of automatic and remote-controlled shutoff valves on newly constructed transmission pipelines; directs the Secretary of Transportation to submit a report analyzing leak detection systems and issues involved in requiring them. Based on this analysis (and after a review period by Congress), the Secretary of Transportation may issue leak detection requirements; and requires the Pipeline and Hazardous Materials Safety Administration to review whether current regulations are sufficient to regulate pipelines transmitting "diluted bitumen," and analyze whether such oil presents an increased risk of release.

Second, on July 6, 2012, the President signed P.L. 112-141 (MAP-21). That act included a subtitle referred to as the RESTORE Act. A detailed summary of that act is provided below.

The bills included in the following tables below are not an exhaustive list of bills that may have some impact on oil spill policy. For example, some Members offered proposals that sought to spur offshore oil exploration and development. As highlighted below, one enacted bill included such a provision and several other such bills passed the House:

P.L. 112-74 , the Consolidated Appropriations Act, 2012 (signed December 23, 2011), included a provision that amends the Clean Air Act (CAA), transferring air emission authority in the OCS off Alaska's north coast from the U.S. Environmental Protection Agency (EPA) to the Department of the Interior (DOI). H.R. 1230 (passed the House May 5, 2011) would have directed the DOI Secretary to conduct four oil and gas lease sales—three in the Gulf of Mexico and one off the coast of Virginia—within specific time frames. H.R. 1229 (passed the House May 11, 2011) would have amended the permit process time frame and change the venue for judicial review. H.R. 1231 (passed the House May 12, 2011) would have directed the DOI Secretary to make certain areas of OCS available for leasing based on estimates of oil and gas resources. H.R. 2021 (passed the House June 22, 2011) would have amended the CAA to modify the definition of OCS source, to exclude counting support vessel emissions, and to eliminate Environmental Appeal Board authority over exploration permits.

In contrast, some Members introduced bills that would have prohibited oil and gas development in particular areas. The focus of these proposals generally involves environmental protection, particularly oil spill prevention. As such, these latter proposals are included in the tables below, but the former proposals are not. The bills identified in the tables are listed in (descending) order by bill number.

RESTORE Act—Summary

The RESTORE Act establishes the Gulf Coast Restoration Fund in the General Treasury. Eighty percent of any administrative and civil Clean Water Act (CWA) Section 311 penalties paid by responsible parties in connection with the 2010 Deepwater Horizon oil spill provide the revenues for the fund. Amounts in the fund will be available for expenditure without further appropriation.

Fund Administration

The act directs the Secretary of the Treasury to promulgate implementing regulations concerning trust fund deposits and expenditures. Based on this and other provisions, the act appears to give the Secretary of the Treasury the authority to determine how much money from the trust fund should be expended each fiscal year. In the provisions of the act that concern fund distributions, the act includes the phrase: "Of the total amounts made available in any fiscal year from the Trust Fund …" Another section gives the Secretary authority to stop expending funds to particular entities (e.g., states), if the Secretary determines funds are not being used for prescribed activities.

Funding Levels

The amount of revenue that would be available to finance the Gulf Coast Restoration Fund is uncertain. Some identified responsible parties, including BP, have entered in civil and/or criminal settlements with the federal government (see Text Box below). However, BP has not resolved its potential CWA civil penalties, which, as discussed below, could be substantial.

CWA Section 311 authorizes certain civil judicial penalties to the owner, operator, or person in charge of a vessel, onshore facility, or offshore facility for violations of that provision. A civil judicial penalty applies to a violation of the CWA prohibition on discharging oil into navigable waters of the United States. The monetary penalty for this violation may be up to $37,500 per day of violation, or up to $1,100 per barrel discharged. If the violation is deemed a result of gross negligence or willful misconduct, the penalty is not less than $140,000 for the violation, nor more than $4,300 per barrel discharged. No such negligence determination has been made in connection with the 2010 oil spill.

According to the most recent estimate from the federal government, the 2010 oil spill resulted in a discharge of approximately 206 million gallons (4.9 million barrels) in the Gulf of Mexico. However, the responsible parties are reportedly disputing this estimate. Moreover, an estimated 17% of the 4.9 million barrels did not enter the Gulf environment, but was directly recovered from the wellhead by BP. It is unknown whether this portion of the oil will be counted in a potential CWA penalty determination.

The $1,100 to $4,300 per-barrel range is the basis of the oft-cited judicial penalty range for the 2010 Deepwater Horizon oil spill: $4.5 billion to $21.5 billion. The low end of this range is achieved by multiplying 4.1 million barrels (amount of discharge after removing the 17% directly captured by BP) by $1,100/ barrel. The upper end of the range is achieved by multiplying 4.9 million barrels (total discharge amount) by the maximum penalty of $4,300/barrel, which presumes a determination of either gross negligence or willful misconduct.

In addition, when determining the amount of the judicial penalty, CWA Section 311(b)(8) states that "the Environmental Protection Agency (EPA) Administrator, the Secretary [of Homeland Security], or the court, as the case may be," must consider the following factors:

1. the seriousness of the violation or violations, 2. the economic benefit to the violator, if any, resulting from the violation, 3. the degree of culpability involved, 4. any other penalty for the same incident, 5. any history of prior violations, 6. the nature, extent, and degree of success of any efforts of the violator to minimize or mitigate the effects of the discharge, 7. the economic impact of the penalty on the violator, and 8. any other matters as justice may require.

Therefore, the judicial civil penalty for the incident could be less than the low end of the above range ($4.5 billion), even if gross negligence or willful misconduct is determined.

Funding Distribution and Authorized Uses

The act distributes monies from the Gulf Coast Restoration Fund to various entities through multiple processes. All of the funds—not counting authorized administrative activities—would support activities in one or more of the five Gulf of Mexico states. The majority of the funds (65%) is allocated directly to the states (or political subdivisions), with certain conditions. The different fund allotments and their conditions are discussed below and illustrated in Figure 1 .

35%—Equal Shares to the Five Gulf States

The largest portion of the fund (35%) is divided equally among the five Gulf of Mexico states: Alabama, Florida, Louisiana, Mississippi, and Texas. The act has further requirements for specific distributions to political subdivisions in Florida and Louisiana. In Florida, 75% of its share will be distributed to the "8 disproportionately affected counties." In Louisiana, 30% of its share goes to individual parishes based on a statutory formula.

The act stipulates that the state (or county) funding must be applied toward one or more of the following 11 activities:

1. Restoration and protection of the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches, and coastal wetlands of the Gulf Coast region. 2. Mitigation of damage to fish, wildlife, and natural resources. 3. Implementation of a federally approved marine, coastal, or comprehensive conservation management plan, including fisheries monitoring. 4. Workforce development and job creation. 5. Improvements to or on state parks located in coastal areas affected by the Deepwater Horizon oil spill. 6. Infrastructure projects benefitting the economy or ecological resources, including port infrastructure. 7. Coastal flood protection and related infrastructure. 8. Planning assistance. 9. Administrative costs (limited to not more than 3% of a state's allotment). 10. Promotion of tourism in the Gulf Coast Region, including recreational fishing. 11. Promotion of the consumption of seafood harvested from the Gulf Coast Region.

To receive its share of funds, a state must meet several conditions, including a certification (as determined by the Secretary of the Treasury) that, among other things, funds are applied to one of the above activities and activities are selected through public input. In addition, states must submit a multiyear implementation plan, documenting funded activities.

30%—Gulf Coast Ecosystem Restoration Council

The act distributes 30% of its trust fund monies to a newly created Gulf Coast Ecosystem Restoration Council. The Council is composed of high-level officials from six federal agencies and the governor (or his/her designee) from each of the five Gulf states. Based on its Comprehensive Plan, the Council will finance ecosystem restoration activities in the Gulf Coast region.

30%—Unequal Shares to the Five Gulf States Disbursed by the Council

The act directs the Council to disburse 30% of the trust fund monies to the five Gulf states. The Council is to develop a distribution formula based on criteria listed in the act. In general, the criteria involve a measure of shoreline impact; oiled shoreline distance from the Deepwater Horizon rig; and coastal population. CRS is not aware of an authoritative source that has estimated how much each state would receive under these criteria.

To receive funding, each state must submit a plan for approval to the Council. State plans must document how funding will support one or more of the 11 categories listed above. However, only 25% of a state's funding can be used to support infrastructure projects in categories 6 and 7 above.

2.5%—Gulf Coast Ecosystem Restoration Science, Observation, Monitoring, and Technology (GCERSOMT) Program

The act establishes the Gulf Coast Ecosystem Restoration Science, Observation, Monitoring, and Technology (GCERSOMT) program, funded by 2.5% of monies in the trust fund. The National Oceanic and Atmospheric Administration (NOAA) Administrator will implement the program, which will support marine research projects that pertain to species in the Gulf of Mexico.

2.5%—Centers of Excellence

The act disburses 2.5% of monies in the trust fund to the five Gulf states to establish—through a competitive grant program—"centers of excellence." The centers would be nongovernmental entities (including public or private institutions) in the Gulf Coast Region.

Interest Earned by the Fund

Finally, interest earned by the trust fund would be distributed as follows:

50% would fund the Gulf Coast Ecosystem Restoration Council, so it can "carry out the Comprehensive Plan." 25% would provide additional funding for the Gulf Coast Ecosystem Restoration Science, Observation, Monitoring, and Technology program mentioned above. 25% would provide additional funding for the centers of excellence research grants mentioned above.