October 14, 1979
Page 37877
HOUSE REJECTS SENATE OFFER ON OIL SPILL LIABILITY FUND
Mr. MUSKIE. Mr. President, the Senate has made significant efforts this year to enact oil spill liability bill which would create a fund to pay cleanup and damage claims for the spill of oil and hazardous substances into the navigable waters of the United States. On Thursday, October 5, the Senate passed H.R. 6803. We then immediately made our staff available to begin work with the House staff to draft compromise amendments which would be added to this legislation and sent back to the Senate. With so many conferences and so much floor activity, this seemed the most sensible approach.
The Senate staff was available to begin meeting early Friday morning, but the House staff was not available until late Monday afternoon. That delay has made it difficult to negotiate an agreeable compromise, but nevertheless, the Senate has made a strong effort to provide significant concessions on the key issues that separate the House and Senate.
The staff was instructed to try all reasonable avenues to reach a compromise. If those suggestions were acceptable to the House staff, then they were to bring the proposals back to the Senate Members to see if they were acceptable.
What are the three major issues that separate the House and Senate bills? The House has indicated they are hazardous substances, preemption of State laws, and liability coverage for inland oil barges. There are dozens of other differences, but these have been identified as key issues.
In order to accommodate the House position, the Senate staff suggested major concessions to the House:
First. Hazardous substances. The Senate staff has suggested dropping completely the hazardous substances provision. This is a tremendous concession on the part of the Senate. The House staff on numerous occasions urged elimination of this provision. In a sense this is the heart of the Senate bill. The staff offered to attempt to convince the Senate Members that such a compromise was necessary.
Second. Preemption of State laws. The Senate-passed bill has absolutely no preemption of State laws, whatsoever. States are allowed to maintain their own cleanup funds and to charge a fee on oil and/or hazardous substances to establish such funds. States are allowed to create funds to compensate economic damages and natural resource damages. States are allowed to establish liability schemes and other requirements as they see fit.
The Senate staff has suggested going halfway on this key issue and has proposed preempting State funds to compensate economic and third party damages. This would allow States to maintain their own fund to pay cleanup costs of spills and to establish their own liability schemes.
I want to emphasize that existing law contains no restraint on the authority of States. What has been suggested by the Senate staff as a compromise is an erosion of existing State authority. This is a questionable compromise in my view, but one proposed by the staff in an attempt to accommodate the demands of the House. Apparently it is not enough.
Third. Inland oil barges. The Senate staff has suggested a compromise that splits the difference between the House and the Senate bills. The Senate bill establishes liability on inland oil barges at $300 per gross ton or $500,000 per vessel, whichever is greater. The House bill is $150 per gross ton and $150,000 minimum. The Senate staff has suggested as a compromise $225 per gross ton and $325,000 maximum. That is an absolute 50-50 compromise.
Yet the response from the House staff has been that this provision is so important to them that the Senate must take the House provision completely. The Senate staff accompanied its suggestion with a willingness to discuss other levels as well, but the answer was that only one offer is acceptable, and that is the House bill.
So where do we stand on these three key provisions? On two provisions the Senate staff has suggested a compromise that goes at least halfway to the House position. On the third item, hazardous substances, the Senate staff has suggested going all the way to the House position. So the House would come out well ahead on the key items on what were identified by the House staff as the key obstacles to getting a bill.
The Senate staff made these suggestions Wednesday afternoon, and agreed to consider additional changes in the Senate bill if the House felt that was necessary. Instead, the proposal was rejected.
In essence the House has said this:
You must drop hazardous substances even though they threaten the public and the environment;
You must be willing to take away the existing power of States to establish their own liability laws, cleanup funds, and third-party damage compensation funds; and you must be willing to give the inland oil barge industry exactly what they have demanded.
The Senate staff suggestions may have gone further in compromising than the Senate Members would be willing to accept. But that proposition was not even tested, because the proposal was not viewed by the House staff as going far enough.
Let me match the suggestions of the Senate staff against the suggestions of the House staff. What has the House offered in these discussions?
From the very beginning, there was no doubt about the fact that the House staff would insist on the format of their bill — a text reviewed by the Senate committee and rejected in favor of a bill building upon the Clean Water Act which currently deals with spills of oil and hazardous substances. The Senate Environment and Public Works Committee felt that any effort to create a new legislative authority to deal with the additional problems associated with spills of oil and hazardous substances, namely, economic damages, should be part of the existing law which has been in place for years. Yet the House staff refused to consider the merits of using the Senate format and insisted on using their arrangement which creates an entirely new legal regime outside the statute which already governs many aspects of this issue.
The Senate staff met with intransigence on another issue of significant importance to the Senate — the question of coverage of hazardous substances. The suggestions from the House staff was agreement to conduct a study of the issue.
As I noted, an area of great significance to the Senate is the issue of preemption of State liability statutes. The House staff refused to negotiate with any particularity on this matter. They only agreed to talk about preemption after every other decision was made. When pressed, they admitted to be willing to accept very little in the preemption field.
Let me give you an example of what the House position on preemption means. The State of Washington had a law on the books which imposes strict liability upon a spiller of oil to pay for all cleanup expenses and damages resulting from that spill. The defenses to that liability are act of war or sabotage or negligence on the part of the United States or State of Washington. There are no other defenses to liability.
If the House preemption provision were to prevail, then the Washington law would be effectively repealed. The provisions of the House liability scheme, which include limits of liability for the spiller and greater opportunity for defenses to liability would supercede the policy that State has already fashioned for itself.
Obviously, the State of Washington in its wisdom has determined that strict and unlimited liability is a necessary protection from the dangers of oil spills. There are two factors at work in such a policy — the guarantee of total compensation to all damaged parties and the incentive created by such a policy on the carrier of the oil to safer handling.
It was this latter purpose which the Senate especially wished to preserve. In many other areas of importance to the Senate — damage assessment, defenses to liability, uses of the fund, levels of liability, financial. responsibility, and definition of operative terms, the House staff suggestions offered little or no movement.
Mr. President, what has been suggested by the staff was only lip service to the Senate concerns:
No effort was made to accommodate the Senate concern over the issue of hazardous substances.
No effort was made to accommodate the Senate concern over the preservation of State's rights.
No effort was made to accommodate the Senate concern over the use of a legal framework which has been in place for years.
And these are only the major issues. And the Senate saw nothing from the House staff on the
many lesser issues important to a final bill.
The House insisted on their bill, start to finish, take it or leave it.
The House has sent a bill back to the Senate. It is unacceptable for many reasons. I have already outlined the major reasons for our rejection of this bill; I would like now to discuss some of the less obvious but equally important problems with the House passed bill.
First, the structure of the House bill is designed so as to repeal section 311 of the Clean Water Act as it relates to spills of oil. And it replaces that program, which has been in effect for almost 9 years, with a completely new framework which in many respects is far less protective than what current law provides.
I would like to print at this point in the RECORD an analysis made at my request by EPA of the impact of the House-passed bill on the current section 311 program.
The analysis follows:
WASHINGTON, D.C.,
October 13, 1978.
Hon. EDMUND S. MUSKIE,
Chairman, Subcommittee on Environmental Pollution,
Committee on Environment and Public Works,
U.S. Senate, Washington, D.C.
DEAR MR. CHAIRMAN: Enclosed is the technical review you requested on the impact of the House-passed Superfund bill, H.R. 6803, on the provisions of existing law, specifically the Clean Water Act.
This effort was necessarily hurried but it represents our best judgment on these complicated issues.
Sincerely yours,
THOMAS C. JORLING, Assistant Administrator.
ANALYSIS
Factual review of the implications of the House-passed Superfund Bill on existing Law, Clean Water Act, section 311, as it relates to the discharge of oil and hazardous substances.
(1) The Clean Water Act [Section 502(7) ] defines navigable waters to be "waters of the United States, including the territorial seas." This is an all inclusive term and is the broadest reach of jurisdiction possible. The House-passed Superfund bill defines the waters narrowly — in the words of its report "intentionally more restrictive than the meaning ascribed to navigable waters in some other Acts." If the House-passed Superfund bill became law, the result of these two different definitions would be twofold:
A) overlapping jurisdiction in some waters between 311 and Superfund; and B) exclusive 311 jurisdiction in other waters. This division and overlap would serve no public policy objective and would cause considerable confusion to on-scene coordinators, dischargers, and to the public. It would result in considerable litigation and inefficiency.
(2) The House-passed Superfund bill amends section 311 to exclude "petroleum oil". Thus, in those portions of the waters of the United States which are not covered by the restricted definition of navigable waters under the House-passed Superfund bill, there would be no oil response and liability program under existing law. In effect, it would constitute a repeal of section 311 with respect to those waters.
(3) Both the Clean Water Act and the Superfund bill create duties and liabilities regarding the discharge of oil into waters of the territorial sea, the Contiguous Zone and the High Seas. With respect to discharges into the territorial sea and the Contiguous Zone, the provisions are the same, however, with respect to discharges of waters beyond the Contiguous Zone, the existing law, Section 311(b) (3), provides for the threshold (i.e., the discharge which requires notice and establishes the potential for liability) to be those discharges "which may affect natural resources belonging to or pertaining to ...", whereas the House passed bill would amend that provision and uses the words "causing injury to or loss of natural resources belonging to or pertaining to . . .".
The effect of this change would seriously weaken the environmental protection objectives as it would require a determination to be made, generally by the discharger, of actual injury or loss as opposed to potential injury or loss. The effect of this would be (1) to increase litigation, and (2) to create an incentive on the part of the discharging source not to notify and trigger the sequence of liability because, it is always possible to allege no actual injury or loss to natural resources occurred, and shift the burden to the government and to the environment. It could negate the environmental objectives of the statute. This is especially acute in the deep ocean waters where the ability to prove immediate actual harm is always difficult, if not impossible.
(4) The House-passed bill changes the definition of oil from that which appears in the Clean Water Act. The change in this definition of oil would create tremendous uncertainty and confusion with respect to those portions of waters where both the existing Clean Water Act and Superfund Law would apply. There seems to be no public policy served by that difference.
(5) The House-passed bill includes removal costs under section 311 as eligible costs under the Superfund for subsections (c), (d), and (1) of section 311. It omits subsection (f) (4) of section 311 which was added in the 1977 amendments to allow costs to restore and replace natural resources damaged as a result of a spill.
(6) The House-passed bill changes the section 311 defenses to liability available to discharging sources. Section 311 provides that the defenses are available where the spill was "solely" caused by an act of God, act of war, or act of a third party. The House-passed bill uses the word "primarily", thus introducing the concept of contributory and comparative negligence which could have the affect of increasing markedly the amount of litigation. It will certainly reduce the amount of recovery by the government as the clarity of "solely" is negated.
(7) The House-passed bill repeals subsection (p) of section 311 which requires financial responsibility. This provision in existing law applies to all forms of oil (beyond those of the House-passed Superfund) and to hazardous pollutants. The effect of this repeal is to eliminate from existing law financial responsibility requirements for those pollutants.
(8) The Clean Water Act does not preempt State liability laws for oil or hazardous substances. There are many States with such laws, for instance, Washington, California, Texas, Georgia, and Maine. Many make no distinction between oil and hazardous pollutants. The House bill preempts at least some elements of those laws. Under the House bill there will be uncertainty with respect to the preemption of oil and not hazardous pollutants, especially within States that have coverage over both oil and hazardous pollutants in the same law, such as Florida and Texas.
(9) The Administration has strongly supported including a limitation on all penalty provisions applicable outside U.S. waters to protect foreign vessels and thereby achieve consistency with International Law and U.S. Foreign Policy. The House Bill does not include those provisions.
Mr. MUSKIE. Mr. President, these are significant issues on which the Senate Environment and Public Works Committee, was not willing to recede.
Further, the House bill does not include any substantive provision on damage assessment. This provision is an essential ingredient to a workable liability and compensation program.
The House bill regards the fund as an insurance policy for the spiller. The fund can deny liability for any claim, thereby throwing the whole issue into adjudication. The Senate bill, on the other hand, makes the fund available immediately for compensation purposes and allows it to recover through subrogation. The emphasis in the House bill is on protection of the spiller; the Senate bill is designed instead to protect the damaged party.
As can be seen from this bill, the House has insisted totally on their format; their staff have made no effort to reach a compromise on the major issues of importance to the Senate. They have offered studies for substance — technical changes in exchange for good public policy.
Mr. President, I can hardly call this an exercise in compromise. After reviewing the suggested concessions on the part of the Senate staff and the intransigence on the part of the House staff, I can only assume that the House is simply not interested in pursuing a legislative solution to this problem this year. And may I add that it was at the urging of the chairman of the House Merchant Marine Committee, the chairman of the Coast Guard Subcommittee, and their ranking minority members (Mr. MURPHY, Mr. BIAGGI, Mr. RUPPE, and Mr. TREEN) that caused this bill to move out of the Environment and Public Works Committee. Their letter indicated a willingness to discuss the issues we have outlined. It was in anticipation of such good faith negotiations that the Senate proceeded with its bill. I would like to share with you the contents of that letter, and I ask that it be inserted at this point in the RECORD.
The letter follows:
WASHINGTON, D.C.,
August 2, 1978.
Hon. EDMUND S. MUSKIE,
Chairman, Subcommittee on Environmental Pollution
Committee on Environment and Public Works,
Dirksen New Senate Office Building, Washington, D.C.
DEAR MR. CHAIRMAN: We would like to take this opportunity to call your attention to a matter which, in our opinion, is one of extreme importance, the issue of oil pollution liability and compensation legislation.
As you are aware, the Committee on Merchant Marine and Fisheries, in the First Session of the present Congress, completed action on, and reported, H.R. 6803. That bill, which provided for a comprehensive system of oil pollution liability and compensation, was passed by the House on September 12, 1977, by a vote of 332 to 59 and was subsequently referred to the Senate. It is, of course, now pending before your Subcommittee.
Since the referral of H.R. 6803, your subcommittee has been considering S. 2900, a bill introduced by you on the same general subject. The primary difference, as we understand it, between the two bills is the fact that your proposal includes provisions relating to hazardous substances, as well as to oil. What prompts our present concern are recent reports that the difficulty in addressing the problem of hazardous substances has led to the possibility that action on the legislation may be postponed until the next Congress.
We sincerely hope that the reports are not correct. We recognize the problems inherent in melding hazardous substance legislation with that involving oil alone, and it was because of those difficulties that our Committee decided last year that it would be much easier to treat the two subjects separately. It may well be that there is some reasonable method by which they can be joined together, but, in any case, we strongly urge you to see that the oil pollution legislation moves forward, whether with or without comparable provisions for hazardous substances.
You will recall that after the several pollution casualties in the Winter of 1976–77 many Members of both Houses, as well as thegeneral public, urged prompt action, for legislation to resolve the several issues involved including liability and compensation for damages. We do not believe that the public will understand further delay, particularly should the U.S. be unfortunate enough to suffer another Argo Merchant disaster or one similar to the casualty involving the Amoco Cadiz. A recent similar, though small, reminder occurred only this week, with the grounding of the dredge barge Pennsylvania in Rockaway Inlet, New York, with a resulting spill of diesel and fuel oil.
We have been and continue to be of the opinion that H.R. 6803, in some acceptable form, should be enacted during the present Congress. The bill is a culmination of extensive work begun in earlier Congresses, and, in its final version, it has received widespread support from a broad range of interested individuals and groups, including the Administration, maritime management and labor, oil interests, environmental groups, state governments, and the general public.
Certainly, we can assure you that we have no desire to attempt in any way to intervene in your subcommittee deliberations. However, we urge you to see that some legislation is moved forward. Should you decide that hazardous substances should be a part of that legislation, we stand ready to consider that inclusion in a forthcoming conference. If, on the other hand, the present difficulties surrounding hazardous substance regulations and their proper handling should make present legislation on the subject impossible, we urge you then to move the oil pollution bill forward so that that important subject may be resolved prior to the end of the present Congress. In that case, we can promise you our wholehearted cooperation in addressing hazardous substance legislation at the earliest possible opportunity during the course of the next Congress.
With highest personal regards, we are,
Sincerely,
JOHN M. MURPHY, Chairman, Merchant Marine and Fisheries Committee.
MARIO BIAGGI, Chairman, Subcommittee on Coast Guard and Navigation.
PHILIP E. RUPPE, Ranking Minority Member, Merchant Marine and Fisheries Committee,
DAVID C. TREEN, Ranking Minority Member, Subcommittee on Coast Guard and Navigation.
Mr. MUSKIE. Mr. President, some have argued that superfund legislation must be enacted in this Congress no matter how poorly drafted or ill-conceived that legislation may be. I reject that argument. It is not as if our shores will be awash with oil with no authority to act against a major spill.
Existing law is adequate to provide protection against all but the most catastrophic of spills. And existing law creates fewer litigable issues than would be created by the House-passed bill.
I ask to print in the RECORD at this point a memorandum summarizing the Federal statutes which are currently extant covering liability for both cleanup and damages resulting from spills of oil.
The memorandum follows:
MEMORANDUM
WASHINGTON, D.C.,
October 12, 1978.
To Senator Edmund S. Muskie.
From Sally Walker and Karl Braithwaite.
Subject: Update of July 17 Memo on Discussion of the Need for S. 2900.
There are several questions which should be raised about proceeding with further action on Superfund.
1. Is the coverage provided in the Superfund really necessary?
There are currently in existence several statutes covering liability for both cleanup and damages resulting from spills of oil. They are:
The Clean Water Act. This law establishes liability out to 200 miles for cleanup of spills of oil and hazardous substances and also establishes liability for damages to natural resources caused by spills of oil and hazardous substances out to 200 miles. A $35 million appropriated fund covers claims beyond the limits of liability. Vessels are liable up to $150 per gross ton with a minimum of $250,000; inland oil barges are liable up to $125 per gross ton with a minimum of $125,000; facilities are liable up to $50 million (may be lowered by President to maximum of $8 million).
The Trans-Alaska Pipeline Act. This law establishes liability for cleanup and damages resulting from spills of Alaskan oil. A $100 million fund covers claims beyond the limits of liability. Vessels are liable up to $14 million for proven claims.
The Deepwater Ports Act. This law establishes liability for cleanup and damages from spills of oil around deepwater ports. A $100 million fund covers claims beyond the limits of liability. Vessels are liable up to $150 per gross ton with a ceiling of $20 million: facilities are liable up to $50 million.
The Outer Continental Shelf Lands Act. This law establishes liability for cleanup and damages for spills of oil from OCS rigs and vessels carrying OCS oil. Vessels are liable up to $300 per gross ton with a minimum of $250,000; facilities have unlimited liability for cleanup and are liable up to $35 million for damages.
Mr. MUSKIE. Mr. President, I have expressed many times my feelings that a superfund bill is appropriate only under certain conditions. Without those conditions, which were clearly and simply expressed to the House, my support for a superfund bill ceases to exist. Without such protections, I feel confident that existing Federal and State law is adequate, albeit inconsistent in spots, to address the current situation. I expressed my reservations with this legislation in a letter to former Massachusetts Gov. Frank Sargent and ask that the text of that letter be printed in the RECORD at this point.
The letter follows:
WASHINGTON, D.C.,
August 17, 1978.
Mr. FRANCIS SARGENT,
Boston, Mass.
DEAR FRANK: In your recent "open letter" to me, you asked me to say "It isn't so," that it is not me blocking passage of an oil spill liability bill which you treat as if it were being carried from the mountain by Moses. Parts of the oil pollution liability bill passed by the House came from the pits, not the heights. Before you cast me as the snarling villain who stabbed the bill in the back, please consider the following points.
(1) The oil pollution liability legislation is not dead. My Subcommittee on Environmental Pollution acted a month ago to approve an alternative to the House-passed version which struck you as so valuable. I think my approach is a good one. My opinion of the House version will become clear later on.
The key purpose of the legislation is to set up a revolving fund called the "superfund." I think it is called superfund because it represents a "super" deal for the oil companies. It is a government- sponsored and government-administered insurance policy for the major oil companies. It has a laudable purpose — one I fully support. That is to protect the average fisherman, motel owner or coastal businessman from financial disaster in the event of a catastrophic oil spill along the American coast. Not a word in the legislation is designed to stop the spill.But if one happened, the superfund would help ease the pain by making cash available.
The lack of a superfund has had an interesting side effect. The oil companies and their allies are afraid of bringing supertankers to the American coast without this sort of insurance policy. So the insurance policy will be an incentive to increase the size of tankers off our shores and in our ports.
(2) There are some fine state laws governing oil pollution liability in state coastal waters. Do we really want to tell Maine, Massachusetts and the other coastal states that they can no longer make their own decisions on how best to protect their coastal resource, especially if the threat to their shores increases with the use of supertankers? I think not. In the first place, I am suspicious of any call for state preemption, because if past history is any guide, it is the polluters who have the most to gain.
It works this way: a polluter will fight tooth and nail against federal legislation, preferring to fight environmental legislation in the state legislatures. But if enough states adopt environmental legislation on their own, the polluter comes to Congress eager to enact a "comprehensive" federal approach.The aim is to dilute the federal legislation and wipe out the state laws all at once.
Coastal states are in a minority in the Senate, which improves the chances that federal legislation would be more lenient than state law. I do not buy that approach.
Maine is second to none in the value we place on our coastal resources. You can judge for yourself how Massachusetts feels about its coast. I will not be a party to telling those states and others that protecting their coastline is not only none of their business, but they are forbidden to act on their own.
Massachusetts has liability laws tougher than those under consideration in the Congress. And state officials testified this summer that the state wants to keep its right to act.
(3) Just about the only people interested in the superfund bill are the members of the House who worked on it, and the oil companies and their maritime allies. That would make me suspicious all by itself. But looking at the House-passed bill, I find some reasons why the oil companies want it so badly:
It would encourage the use of supertankers off America's coasts.
It would actually provide less comprehensive liability for oil spills than we now have under current law.
It would also increase the number of arguments an oil carrier could use to escape liability in a court of law.
It would allow the dollar amount of liability for some facilities to be lowered administratively.
The House bill ignores the question of other hazardous materials transported on the oceans, even though the potential for environmental damage is infinitely greater from these poisons.
In a lot of ways, we are better protected under current law than we would be under this new "comprehensive" approach.
The more closely I examined the House-passed bill, the more clearly I understood why the real pressure for passage has come from the oil companies and their allies.
(4) I can also understand why the oil companies have promised to kill the oil pollution liability bill which my Subcommittee passed a month ago. The oil company lobbyists were not even polite about it. They were not threatening. They were promising to kill my legislation if it allowed states to keep their own guard up against an oil catastrophe. I hope they are not so powerful as to deliver on that promise.
For my part, I hope we can get the kind of support behind my bill that the oil companies have generated for their version. I doubt it. But we have passed sound environmental legislation in the face of powerful opposition before. If I have to stand alone, I will. But I hope you will help me by pushing for S. 2900.
And if you are looking for a villain, don't look at me, Frank. It isn't so.
Sincerely,
EDMUND S. MUSKIE.
Mr. MUSKIE. Mr. President, yesterday I introduced a bill which represents the extent to which the Senate Environment and Public Works Committee was willing to negotiate.
That legislation represents an absolute bare bones bill, one which the Senate is willing to offer to the House in the hopes of reaching final agreement on this superfund issue.
This final offer does these things: Totally removes the imposition of liability for economic damages resulting from spills of hazardous substances. Nothing is changed from existing law on the question of hazardous substances.
Reduces the liability for inland on barges to $150 per gross ton with a $250,000 minimum.
Adds some elements of preemption of State law so that third-party compensation funds as well as fees supporting such funds are preempted. Cleanup funds and fees supporting such funds are specifically preserved. State financial responsibility requirements are preempted. Double recovery for the same claim is prohibited.
Includes specific dollar limitations on some of the uses of the fund.
Clarifies certain aspects of the trans-Alaska pipeline fund dissolution.
It was my hope, and the hope of my colleagues on the Senate Committee on Environment and Public Works, that this bare bones approach would represent sufficient concessions to the House. Apparently, it did not.
I regret that the House was unable to see its way clear to come to the bargaining table with real compromise. Yet I am not so anxious to get a bill that I am willing to forego the entire structure of the Senate bill and every major piece therein. I presume that this effort will begin again next year and, perhaps with time on our side, we can develop something more useful than we were able to accomplish at this late date this year.