The 2010 Deepwater Horizon Oil Spill: Natural Resource Damage Assessment Under the Oil Pollution Act

The 2010 Deepwater Horizon Oil Spill: Natural Resource Damage Assessment Under the Oil Pollution Act

The 2010 Deepwater Horizon oil spill leaked an estimated 4.1 million barrels of oil into the Gulf
of Mexico, damaging the waters, shores, and marshes, and the fish and wildlife that live there.
The Oil Pollution Act (OPA) allows state, federal, tribal, and federal governments to recover
damages to natural resources in the public trust from the parties responsible for the oil spill.
Under the public trust doctrine, natural resources are managed by the states for the benefit of all
citizens, except where a statute vests such management in the federal government.
In particular, OPA authorizes Trustees (representatives of federal, state, and local government
entities with jurisdiction over the natural resources in question) to assess the damages to natural
resources resulting from a spill, and to develop a plan for the restoration, rehabilitation,
replacement or acquisition of the equivalent, of the natural resources. The types of damages that
are recoverable include the cost of replacing or restoring the lost resource, the lost value of those
resources if or until they are recovered, and any costs incurred in assessing the harm. OPA caps
liability for offshore drilling units at $75 million for economic damages, but does not limit
liability for the costs of containing and removing the oil.

The process established by OPA for assessing the damages to natural resources is known as
Natural Resources Damage Assessment (NRDA). In the three steps of the NRDA process, the
Trustees are required to solicit the participation of the responsible parties and design a restoration
plan. This plan is then paid for or implemented by the responsible parties. If the responsible
parties refuse to pay or reach an agreement with the Trustees, the Trustees can sue the responsible
party for those damages under OPA. In the alternative, the Trustees may seek compensation from
the Oil Spill Liability Trust Fund, but there is a cap of $500 million from the Fund for natural
resources damages. The federal government may then seek restitution from the responsible
parties for the sums taken from that Fund.

The Trustees are not required to adhere to the NRDA process set forth in the OPA regulations.
However, they are accorded a rebuttable presumption in court for any determination or
assessment of damages conducted pursuant to the regulations. Of course, the Trustees and the
responsible parties are permitted to enter into settlement agreements at any point throughout the
NRDA process.

The NRDA process in the Gulf is in the Restoration Planning Phase. The caps on the Oil Spill
Liability Trust Fund and on OPA liability have captured Congress’s attention, as has Gulf
restoration. In 2012, President Obama signed the RESTORE Act, which establishes from Clean
Water Act penalties the Gulf Coast Restoration Trust Fund, which is available for restoration
activities in the Gulf Coast region.

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