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National Pollution Funds Center and the Oil Spill Liability Trust Fund

National Pollution Funds Center and the Oil Spill Liability Trust Fund. Update for the Spill Control Association of America. March 20 th , 2014. NPFC Missions. Provide funding for oil removal activities USCG and EPA FOSCs Recover costs from responsible parties

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National Pollution Funds Center and the Oil Spill Liability Trust Fund

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  1. National Pollution Funds Center and the Oil Spill Liability Trust Fund Update for the Spill Control Association of America March 20th, 2014

  2. NPFC Missions • Provide funding for oil removal activities • USCG and EPA FOSCs • Recover costs from responsible parties • Pay claims for Removal Costs and Damages from oil discharges; in compliance with Regulations and OPA • Administer the Certificate of Financial Responsibility (COFR) Program

  3. Oil Spill Liability Trust Fund (OSLTF) • Established by the Oil Pollution Act of 1990 (OPA 90) • Pay removal costs and damages from oil spills or threats of spills into/on U.S. navigable waters/EEZ • Agency appropriations (CG, EPA, DOI, DOT) to carry out OPA programs, ~ $115M in annually

  4. 2013 Sources 2013 Uses Taxes - $427.6M Agency Appropriations $81.6M OSLTF Interest $17.3M FOSC Removal Actions (Emergency Fund) $95.4M Fines $402.4M Claims $85.2M Recovery from RPs $125.3M Current Balance Fund: $3.4B Emergency Fund: $51M

  5. OSLTF Claims • Compensate Claimants when RP doesn’t pay • Claims must be presented to RP first • Statute of Limitations for Claims • Compensate RP that establishes OPA defense or limit to liability

  6. OSLTF Claims Workload • Claims (non-NRD) pending at NPFC: • Non-DWH claims portfolio - 80 claims ($141M) • Claims over the life of the Fund • 14,337 for over $2.7B. • Of that, 2028 for $1.3B were Deepwater • Currently involved in 4 Active Litigations for $115M

  7. OSRO Claim Status Payment rate: 85%.

  8. Addressing the 15% Denied • Lack of FOSC coordination: • NCP Consistency • States are not FOSCs • NRC Notification triggers the FOSC • Proper Disposal • Need manifests • Need tests if evidence of more than oil • Keep good notes on direction/requirements from FOSC's & States.

  9. Addressing the 15% Denied 9 • Scope of work • Salvage Versus Removal • Removal Versus Remediation • Oil versus Hazardous • Sample Analysis • Disaster verses OPA • Discreet oil release & response. • Not mixed

  10. Addressing the 15% Denied 10 • Subrogable Rights- • Claimant must have clear rights and have uncompensated removal costs. • Stiffed sub-contractors • Primes don't hold the uncompensated rights • Mandatory Arbitration Clause • May Preclude Payment • Litigation to Include Bankruptcy • May Preclude Payment

  11. Call NRC Get hired by the FOSC Be careful for arbitration clauses Think what an FOSC would do? Think jurisdiction (oil, U.S. waters, discharge or threat). Document Financial Risk Mitigation Strategies

  12. Closing Comments • OSROs are a key component of the U.S. Oil Spill regime and an important NPFC customer. • FOSCs rely on the services you provide. • Spills and claims are fact specific. • Documentation is the key. • If in doubt about a potential future claim you may call • Donna Hellberg 703 872 6097 • Tom Morrison 703 872 6100 • Questions?

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