EPA Tests Dispersant Use For Gulf Oil Spill Prior To Possible Expansion
Wednesday, May 12, 2010 (InsideEPA.com) — EPA and other federal agencies are testing the use of chemical dispersants near the seafloor in response to the ongoing oil spill in the Gulf of Mexico to examine whether it would be effective to expand to the current cleanup effort and future spills use of the chemicals, about which researchers warn little is known of their effects on aquatic organisms.
More than 372,000 gallons of the dispersants have been used so far to prevent leaking oil from the BP offshore oil well and subsequent spill from reaching the shore. The chemicals act like dish soap to break up oil slicks and distribute oil particles throughout the water column. Researchers say the use of the dispersants in the Gulf is unprecedented and that should spur new efforts to research the chemicals’ effects on aquatic life.
BP, which owns the well, conducted three tests deploying dispersants near the site of the leak. EPA Administrator Lisa Jackson said during a May 12 conference call that the first two tests were inconclusive and that the agency is waiting for the results of the third test before determining whether to authorize additional subsurface dispersant use.
EPA wants to ensure that using dispersants underwater would be at least as effective at breaking up the spilled oil as surface application and would not cause additional human or environmental health impacts, Jackson said. More than 28,000 gallons of dispersants were used in the subsurface tests, Jackson said.
Jackson acknowledged that the dispersants create a risk trade-off, because they expose aquatic organisms that live in the water column and near the sea floor to dispersed oil in an effort to keep that oil from reaching coastal ecosytems that are home to a diverse array of wildlife. Dispersants are “not a silver bullet,” Jackson said, but rather an attempt to find the least adverse method for responding to the massive oil spill.
EPA and the National Oceanic and Atmospheric Administration (NOAA) used several methods in testing the dispersant use, including visually observing the amount of oil reaching the surface, measuring changes in oil particle sizes within the water column, calculating the concentration of dissolved oxygen, testing for the presence of chemicals within the water and performing biological tests, according to Jackson and NOAA Administrator Jane Lubchenco.
“There’s always been a desire to test subsea dispersant use,” Jackson said, noting that it could become a more flexible tool to fight oil spills because it can be done regardless of the time of day or weather patterns, unlike other strategies like skimming oil from the surface, burning oil or applying dispersants to oil slicks from the air.
Many Unknowns
Researchers have warned that there are many unknowns when it comes to dispersant use, especially in applying them underwater. A 2005 National Research Council report, “Oil Spill Dispersants: Efficacy and Effects,” is among the most detailed reports to date on the chemicals, but even that report acknowledges significant shortcomings in the availability of existing data and recommended EPA and other agencies establish an “integrated research plan” to further examine dispersant use. An author of that report says little follow-up research has been done since it was released.
Two dispersants have been used so far in response to the Gulf spill, Corexit 9500 and Corexit EC9527A, both manufactured by Nalco Energy Services LP. Material Safety Data Sheets for the chemicals that EPA posted online say the chemicals pose “low” risk to humans and the environment but note that no toxicity studies have been conducted.
Both chemicals are on a list of dispersants that have been pre-approved by EPA for surface use in oil spills more than three miles offshore and in water deeper than 10 meters. Subsurface use has not been authorized beyond the three tests that were conducted.
Congress also is examining the use of dispersants in the wake of the spill. The chemicals were discussed at a May 11 joint hearing of two Senate Environment & Public Works subcommittees. Carys Mitchelmore, a professor at the University of Maryland who has studied dispersants, said it would be “impossible to predict” the consequences of their use in response to the BP spill. She noted in her testimony that little is known about aquatic life that would not have been exposed to oil if not for the dispersant use, and that limited toxicological information exists to fully assess risks to such organisms. She noted that some species are more vulnerable to dispersant exposure.
Sen. Benjamin Cardin (D-MD), who chairs the water and wildlife subcommittee, during the hearing pressed EPA officials to step up their research into the chemicals and share their findings with the public.
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Industry Hints At Legal Challenge To Retroactive Increase Of Spill Liability
Wednesday, May 12, 2010 (InsideEPA.com) — The oil industry is criticizing efforts by congressional Democrats and the Obama administration to retroactively raise the industry’s cleanup and other liability for oil spills in the wake of BP’s massive spill in the Gulf of Mexico, charging that the high constitutional bar on retroactive laws could present an argument to challenge the measures.
Oil industry officials are also arguing that efforts to raise the liability caps are unnecessary because BP has said it will pay “all legitimate claims.”
“I think it would be absolutely impossible to make [any legislation] retroactive,” one industry source says. “I don’t think you could do it retroactively. I don’t think it would be legally feasible. I don’t know how they can do it,” the official says.
But proponents of increasing the industry’s liability retroactively, including Sen. Robert Menendez (D-NJ), say the Supreme Court has upheld retroactive application of environmental liabilities in several cases where it ruled to uphold the Superfund law’s retroactive liability system.
The industry’s criticisms are directed at similar proposals floated by a group of Senate Democrats and the administration to raise the Oil Pollution Act (OPA) cap on liability for spills. The law, which was enacted in 1990 in the wake of the Exxon Valdez spill, creates a trust fund financed by a per-gallon tax on petroleum. The funds are available to cover EPA, Coast Guard and state removal costs, natural resource damages (NRD) and payment for claims of uncompensated damages and removal costs in the event of a spill, which is then replenished by a responsible party. But unless the party is negligent or violates a regulatory mandate, its liability is limited to $75 million for economic damages and $500 million for natural resource damages (NRD). Total payments for a single spill out of the fund are also capped at $1 billion.
Administration officials and others argue there is a need to increase liabilities because the spill trust fund was created before industry began extensive drilling in deep waters, where the risks of uncontrolled spills like the current one are greater than they were at the time of the law’s enactment. “The [BP] spill has also made it very clear that updates are needed to current laws governing the liability that companies have for any damages — for any damage they cause while drilling and transporting oil. The [OPA] , for instance, was passed 20 years ago when offshore exploration and production in deepwater represented a small portion of our energy supply,” Carol Browner, assistant to the President for energy and climate change, said during a May 12 conference call.
Administration Proposes Legislation
In the most recent proposal, the administration May 12 submitted legislative language to Congress that would increase the total fund payments for a single spill from $1 billion to $1.5 billion, hike NRD from $500 million to $750 million and eliminate the current $75 million cap on economic liabilities. The administration’s bill would also immediately raise the per-barrel fee on oil used to create the trust fund from 8 cents to 9 cents, and increase to 10 cents in 2017.
President Obama said in a letter to Congress that the administration hopes the language can be attached to an already pending supplemental appropriations bill.
But administration officials, in the May 12 conference call, stopped short of endorsing a proposal from Menendez and other Democratic senators to raise the economic liability cap from $75 million to $10 billion, saying instead that they will work with Congress on the payment levels. “As you know, there are some bills that have been introduced, but we will be working with [Congress] to determine what the right number is,” Browner said on the call.
Industry officials have raised concerns with the Menendez approach, saying it would make it impossible to obtain insurance coverage. “If you go to $10 billion, there are no $10 billion insurance policies,” one industry source says.
The industry officials are backing another bill, introduced May 5 by Sens. Lisa Murkowski (R-AK), the ranking Republican on the Senate energy committee, and Mark Begich (D-AK), which would temporarily increase the current 8 cent per-barrel fee to 9 cents until the fund reaches a balance of $10 billion from its current balance of about $1.6 billion.
High Constitutional Bar
Industry officials argue that there is a high constitutional bar on retroactive requirements. Constitutional provisions generally bar so-called ex post facto laws but the Supreme Court has allowed retroactive provisions in administrative laws if Congress makes the retroactive requirements explicit.
“It’s very hard constitutionally to go backwards. You run into ex post facto concerns,” one official says. The official continues, “The other thing you can argue is that since the spill is ongoing, it will cover anything that happens after the enactment of the law.”
The official also argues that the administration and Congress should not rush to enact oil spill legislation, noting that BP America Chairman Lamar McKay stressed at May 11and May 12 congressional hearings that the company would pay for all “legitimate claims” out of its own pocket, rather than from the trust fund.
“If BP pays out on its own, why would you want to do something that’s going to increase the costs to do business so much that you’re penalizing the entire nation because you can’t get the oil and natural gas that is needed. I think you have to look at the cost-benefit analysis. You have to make sure you look at all unintended consequences,” the official says.
Raising the liability cap to $10 billion, as Menendez and others are proposing, would discourage future drilling because oil companies would not be able to acquire adequate insurance to cover the potential financial risk, the officials say. The only companies that can show they can function at a $10 billion liability would be the largest private companies and the large nationally owned companies.
But proponents of retroactive application say there is ample precedent for the high court approval. “We have precedent for this,” Menendez said at a May 4 press conference, citing court approval of the Superfund law’s retroactive liability system. “[Superfund] sites were previously polluted, and companies had to be responsible to clean up the site. I think there’s precedent for it, it’s been fully litigated in the courts and has been upheld,” he said.
And Browner argued on the May 12 conference call that White House officials do not believe their legislative proposal is unconstitutional because it updates an existing statute and applies equally to all companies.
She added that although the administration is retroactively seeking to increase industry liabilities, officials would not refrain from pushing BP to fully compensate injured parties. “While we are asking for additional funds, in some cases, the federal government will not relent in pursuing full compensation for the expenses it has occurred and damage caused by this spill. And the legislation contains provisions to help us recoup those costs,” she said.
One provision in the administration’s proposal that could help do that is a request for $10 million for the Attorney General for “litigation expenses related to affirmative and defensive litigation associated with the Deepwater Horizon oil spill that may not qualify as recoverable from the Responsible Parties or the Oil Spill Liability Trust Fund,” including “for civil defensive litigation, and civil and criminal enforcement under the Oil Pollution Act, the Federal Torts Claims Act, and the Clean Water Act.”
Explicit Statement On Retroactive Application
An environmentalist who has been following the spill closely argues the administration’s proposal would likely pass muster because it includes an explicit statement of its retroactive application. The liability provisions “shall apply to all responsible parties under [OPA], including any party determined to be liable under the Oil Pollution Act for any incident that occurred prior to the enactment of this section,” the administration’s bill says.
But in a possible bid to preserve portions of the legislation in the event of a legal challenge, the administration’s bill also includes a severability clause that would preserve measures that survived an industry suit or were not challenged. If any part of the bill is found to be unconstitutional, the rest of the provisions “shall not be affected,” the legislative language states.
The environmentalist acknowledges that an effort to raise the liability cap to $10 billion will affect drilling, but notes that BP did not have an insurance policy on the Deepwater Horizon rig, instead opting to self-insure in the case of a spill. If a company has “deep pockets” it can continue to drill with the higher liability cap, the environmentalist says, adding that smaller independent producers are disadvantaged and may need to consolidate to insure against an accident.
Despite finger pointing at recent hearings as to who is responsible for the April 20 rig explosion and resulting spill, the environmentalist notes that under the OPA, BP is the responsible party because it holds the lease and is therefore responsible for the spill cleanup. The OPA does not provide for joint liability, but it does allow the responsible party to pursue a so-called “contribution action.” In such an action, BP could sue Halliburton, the cement contractor, or Transocean, which owned the rig and drilled the well. If BP can show either of those companies or another company is at fault for the explosion and spill, it can recover the costs of cleanup and other damages from that party.