Oil Spill Up-Date
By Jim Davis
Oil spill prevention remains a hot issue in Washington State. Although major progress appears to have been made in oil spill response capacity along the Olympic Coast (i.e., adoption of a Washington State Oil Spill Contingency Plan with strengthened coastal provisions), most crucial issues have still not been fully resolved.
At the national level, the US House and US Senate did not agree on how to modify the off-shore oil and gas drilling ban that has protected our coast for the past two decades. The Senate could not go along with the more draconian House Bill (giving states the option of requesting/allowing drilling off their shores) and the House was unwilling to settle for lifting the drilling ban only for portions of the Gulf of Mexico. The current Congress may bring up the issue during the lame duck session this fall, but it really depends on how the mid-term elections come out. At this point, it looks like gridlock may maintain the status quo, which is great for protecting our coast.
Efforts this year by Senator Stevens of Alaska to modify the Magnuson Amendment failed. This legislation limits Washington State refining capacity, and thus oil transport over state waters, to levels that are adequate for Washington State residents. Without this provision, the Puget Sound could become ground zero for refining petroleum products to meet the need of an ever increasing American appetite for gasoline. Shipment of crude oil and refined products could increase dramatically if the Magnuson Amendment were ever rescinded.
As indicated above, the State Oil Spill Contingency Plan adopted by the Washington Department of Ecology appears to have strengthened response capacity along the Olympic Coast. The Plan now requires industry to pre-station equipment (e.g., ocean capable boom to collect spilled oil), supplies, and human resources at Neah Bay and Grays Harbor. This requirement will improve rapid response to spills off the coast or along western portions of the Strait of Juan de Fuca.
The Neah Bay rescue tug was dealt a minor blow this summer when Foss Maritime informed the Washington Department of Ecology that they were not interested in renewing their contract for providing tug services at Neah Bay. Foss claims that their decision was based on the shortage of ocean going tugs and the higher fees that they could command in other areas (e.g., the hurricane ravaged gulf coast). Ecology is scrambling to find another company that can provide this critical service during winter months. Long-term solutions to this dilemma are discussed below.
The Washington State Oil Spill Advisory Council has released their annual report and detailed recommendations to the Governor’s Office and State Legislature. The report can be accessed at www.governor.wa.gov/osac/report/default.htm. The report outlines a state-of-the-art oil spill prevention program for Washington, recommends state revenue sources for funding portions of the program, advocates funding for a year-round rescue tug at Neah Bay, and encourages funding for clean-up and removal of derelict vessels that are leaking oil into state waters.
Recommended revenue sources for Washington’s Oil Spill Prevention Program include a new fuel transfer fee, removal of the export credit on the oil barrel tax, and lifting of the barrel tax cap. These and other revenue enhancing options will be hotly debated this legislative session in Olympia. If these or other revenue sources are not accessed this year, Washington’s oil spill prevention program will be weakened and new state-of-the-art program components will need to be abandoned. Stay tuned for regular up-dates from the Oil Spill Prevention Action Network.
The new fuel transfer fee would affect all fuel transfers on or near state waters, including bulk transfers from fuel barges to ships or stationary tanks, bunker fuel for cargo ships, and marina distribution of fuel for recreational boaters. This new $.05 per barrel tax ($.0012/gallon) would raise $10,000,000 per biennium (i.e., two year budget period for the State of Washington). The fee is risk based (linked to the amount of fuel transferred) and is spread equitably across all marine fuel users. It is so small per gallon that most users will not even notice it.
The state barrel tax that funds existing oil spill program components is currently set at $.05 per barrel for all crude oil and petroleum products brought into the state over water. However, there is an export credit (i.e., they get the money back) if the refined product is shipped out of state. This existing credit is in direct opposition to a risk based tax system. Oil products that are shipped over Washington State waters twice are not taxed, while oil products that are shipped once are taxed. Removal of the export credit would raise $6,200,000 per biennium for oil spill prevention. Businesses that increase the risk of oil spills through the use of tug towed fuel barges to other states would pay their fair share if this export credit is removed.
$.01 of the $.05 barrel tax is dedicated to an oil spill response account (OSRA) managed by the Washington Department of Ecology. When the OSRA reaches $9,000,000 (due to limited clean-up expenditures), the account is capped and industry only pays $.04 per barrel. The Oil Spill Advisory Council has recommended that this cap be modified and that revenue generated from the $.01 portion of the tax be redirected into the Oil Spill “Prevention” Account when the OSRA reaches $9,000,000. This change would provide about $2,900,000 per biennium for oil spill prevention in Washington State. The $.05 per barrel tax has not been increased since it was established in 1992, even though petroleum product prices have increased dramatically.
The Oil Spill Advisory Council is recommending year round funding of an upgraded rescue tug at Neah Bay. A rescue tug boat stationed at Neah Bay is absolutely essential for preventing groundings of tankers, barges, and cargo ships off the Olympic Coast and in the Strait of Juan de Fuca. The Neah Bay tug has responded to vessels in distress 29 times since it was first stationed in the late 1990s. Currently a tug is available for only six to eight months (fall, winter, and spring) due to limited state funding. The Washington State legislature will decide whether to provide funding to contract out the service (as it has done with Foss Maritime) or to enable the state to purchase a state-of-the-art tug and contract for tug crew services. Funding for the Neah Bay tug will depend on increased revenues generated through the sources outlined above. Existing funding for the Neah Bay tug (vehicle transfer title fees) expires at the end of 2007. The Advisory Council report also recommends study of the need for additional rescue tugs stationed near the entrance to the Columbia River and in the San Juan Islands.
You can make a difference in protecting the Olympic Coast from oil spills by keeping informed on important issues and responding to advocacy opportunities when they arise. Contact OCA at jimdaviscpc@comcast.net if you would like to be plugged into our action network.