OIL SPILLS FROM OFFSHORE DRILLING:
A POLLUTION PROBLEM AND A LEGAL PROBLEM,
AND FEDERAL EFFORTS TO SOLVE THEM
DAVID DURAN
199
TABLE OF CONTENTS
I.
Introduction. . . . . . . . . . .
.. . . . . . . . . .
1
'II'.. The Environmental Consequences of an Oil Spill. . . . 2.
III.
IV.
7.
VI.
VIIi
VIII.
The Technology in Offshore 'Drilling:
Preventative- Devices.
the
Glean Up Procedures and their Effectiveness. . . i .
10
.Federal Regulation, and Legislation. . . . .
i
Ik
Accessibility of Private Remedies. . . . . . . . . .
22
'Conclusion. . . . . . . . .
. . . . . . . . . . . .
Footnotes. . . . . . . . . . . . . . .
200
. .
. 27
.
29
OIL SPILLS FROM, OFFSHORE: DRILLING:
A POLLUTION PROBLEM AND A LEGAL PROBLEM,
AND FEDERAL EFFORTS TO SOLVE THEM
Stimulated by the potential oil provinces in, the seabeds
of the continental shelf and slope regions, offshore drilling
is swiftly "becoming a growing, segment of petroleum development
and production.
In 196.8' offshore wells furnished about
12 percent of the oil and 10 percent of the gas production
in the. Uni ted States. ~
With an approximate 20 percent increase
•in drilling operations per year, by 1980 25 percent of all
2
oil produced is estimated to come from offshore viells „
The year .1980 has also been projected, by the President's Panel
oh Oil Spills, as marking the inception of the annual drilling
of 3000 to 5000 wells and of the yearly occurrence of a major
oil spill from these wells.
Already,- three major oil spills
have occurred from wells off the shores of this continent:
the Santa Barbara oil slick(1969), and the Chevron and Shell,
bldv.'outs(1970) in the Gulf Coast.
These spills serve not only
as a small taste of what may be forthcoming, but also serve as
a 'basis for the realization that an oil spill, from offshore
drilling is a pollution and legal, problem, perhaps hot as
great, as that presented by the shipping industry, but serious;
enough, to merit special attention.
As a pollutant, :an oil spill adversely affects marine,
life and the private owners, and users of the coastal areas.
Federal governmental efforts to minimize or totally eliminate
this threat, inherent in offshore drilling, are encompassed in.
£G1
33
regulations, prescribed by the Secretary of Interior as authorized under the Outer Continental Shelf Lands Act of 1953,^
and legislation, essentially under the Federal Water Pollution
Control Act.^
In order to determine the adequacy of federal
control of oil spills from offshore drilling, it is necessary
to thoroughly analyze the effects of oil spills on the marine
ahd human environment, the.preventative-technology in the
offshore rig system, the availability and effectiveness of clean
up rjrocedures, and the accessibility of private remedies for
property damaged by the spill.
The impact of the National
Environmental Policy Act of 19^9^
011
offshore well regulations
carjict be easily disregarded, in light of its expression of the
national policy to consider environmental factors in the agency
decision-making process.
The Act's influence 011 federal control
of offshore drilling will be discussed accordingly.
The Environmental Consequences of an Oil Spill
Although an oil spill is detrimental to both marine life
and people, the extent of its immediate harm usually depends
on, the season in which the slick occurs.
For example, an oil
spill appears most harmful when it occurs during the reproduction
and migration stages of the marine cycle.
The long term effects
of oil pollution remain uncertain simply because of the limited
research that has been done on the biological effects of
hy.drocarbon(the chemical Compound in oil) on. marine and. plant
7
life.
Therefore, the known environmental consequences of an
oil spill are the most immediate, visible., and, at times, obvious.
202
3
Since oil has a tendency to concentrate either on the
surface of the sea or at its bottom, the marine organisms
affected are the ones that inhabit those areas.
Damage to
fish by the oil is usually not thought serious because their
slimy bodies repel the oil.
Basically, this is true, except
for those fish that feed or live on the surface.
The fish
o
easily become entrapped and suffocate in the floating oil.
To the detriment of fisherman, the fish may simply move away
from the polluted area.
Sea-bottom crustaceans, such as shell-,
fish, -shrimp, and crabs, are also vulnerable to oil pollution.
By far, the most destructive effect of oil, because of its
toxicity, is on. the intertidal organisms that serve as part of
9
the food chain.
The toxic fractions of oil are water soluble.
One study showed that diatoms, a class of pianktonic algae or.
which oysters feed, will not grow where the
i n water is. even slightly
contaminated with these toxic fractions."
Perhaps speculative, but still a subject of concern, is
evidence tending to show that oil, when ingested by fish and
11
the fish subsequently consumed by man, may cause, cancer.
Moreover, oil spills affect marsh plant life along the
coasts.
Oil can damage seed development and vegetation reproduc-
tion during the growing season.
Probably one of the most visible, and pathetic, consequences
of oil spills is the killing of water fowl.
There were
3,686
- o
birds reported killed by the Santa Barbara blowout.
The death
toll is probably greater since only those birds that reach the
shoreline are counted.
Spills of crude and heavy oil
203
soil feathers which in turn result in loss of insulation and
buoyancy.
The birds have no alternative but to sink and drown,
or die of pneumonia from the loss of body heat.
As a poisonous
substance, oil, if ingested, can also lead to the fatal inflammation of the digestive tract.
Treatment of the oiled birds
does not lessen the impact of a major oil spill on water fowl.
10
Only 20 percent or fewer of the treated birds have survived."'-^
More obvious is the effect of oil pollution on the aesthetic,
on business, and on property.
A major spill can foul 30 miles
of beach and shore-front property, rendering iIthe
shoreline
L
a .swimming hazard and displeasingly odorous.
In terms of
economics, all businesses along the coastal waters are affected,
but those suffering the greatest damage are the ones that depend
directly on the sea for their livelihood.
The tainting of
commercial species of fish by oil may result in either sale
losses or a proscription imposed by the authorities against
the capture of such fish. Field surveys in Texas indicate
that the fish and shrimp populations are reduced in oil polluted
1c
w a t e r s . O i l pollution also causes property damage to boats,
ships, and equipment employed in the coastal waters and harbors.
An industry located on the coast can quickly have its water
cooling equipment clogged by oil.
Furthermore, the fire hazard
of an oil spill is an existing threat, especially in harbor
areas with nearby refineries.
The Technology in Offshore Drilling: the Preventative Devices
Since the initial drilling process has a high potential
204
3
for causing oil spills and since the danger of a spill is increased
by the continuous drilling of wells in an. area until a producing
well is found, the technological analysis 'will concentrate on
the offshore drilling apparatus.
An attempt to treat other
technological aspects of offshore well development, such as those
related to production, storage, and transportation systems, would
prove too voluminous an undertaking.
In order to better understand what causes, oil to erupt or
escape from the drilling system, it will be worthwhile to
^examine the technique of offshore drilling.
The basic equipment
usually consists of the rotary drilling rig and the drilling
1
o
platform."
in height.
The drilling rig has a derrick, about 200 feet
A bit is adjusted on to a heavy drill pipe, to
which, additional sections are added as drilling continues,.
At the base of the derrick is the rotary table.
The rotary
table keeps the drill pipe turning while the bit at; the end
of the pipe digs into the rocks.
Once the hole has been cut onto the sea.bottom, "drilling
mud" is pushed down through the drill pipe and- forced up
through the space between the drill pipe and the sides of the;
hole until the mud reaches the surface.
At the surface, the
cuttings(the chips of rock) are removed from the mud, and the
mud. is recirculated into the hole in a continous motion.
Labeling the fluid "mud" 17
is deceptive of its costliness and of
•its .important functions.-'
The mud performs as a lubricant that
cools the bit, as a carrier by. bringing the cuttings to. the
surface, as a sealer by preventing the wall from caving, and as
205
pressure-producing agent by keeping any high pressure gas,
oil, or water from blowing out of the hole unrestrained.
However, the drilling mud's special functions are contingent
upon proper monitoring and control of its weight.
Regulating
the weight of the drilling mud is a very delicate procedure.
Mud which is too heavy may create an overpressure and break
iP
the rock formation, resulting in "lost
circulation.On
the other hand, mud which is too light may not have sufficient
pressure to withstand the intense oil and water pressure already
existing in the formation, thus causing a "blowout."
A blowout
is an "uncontrolled flow of well
10 fluids and (or) formation
fluids (gas, oil, or water)." '
Obtaining a proper balance
is a fairly difficult task, and any mistakes by the operator
may set off a blowcut reaction, the prelude to a major oil spill.
As drilling operations progress, casings, long steel pipes,
are put into the well to support its walls and avert possible
blowouts.
There are several strings of casings in offshore
drilling.
The first casing string is the conductor casing,
which begins at the platform surface and continues on until
it pierces solid rock at the sea bottom.
Under present federal
law the minimum depth it must be inserted into the sea floor
20
is 300 feet.
.Surface casing follows the conductor casing
and varies according to the depth of the well.
The next
strings of casings are the intermediate casings and the extent of
their use depends on well conditions.
Finally, the production
casing is the last casing required before the completion of
the well.
The production casing penetrates the "lowest producing
206
7
formation."21
Equipment of great importance in offshore drilling is
the drilling platform.
The platform must withstand natural
and man-made conditions on the sea.
If the platform structure
collapses either by accident or environmental forces, the
platform failure may impair the workability of any safety
valves and a blowout will occur.
Technological advancements have made three types of
platforms available.
If the oil is located near the shore-
line at a depth of 300 feet or less, the "jackup drilling
22
platform" or the "fixed platform" is used.
The jackup
drilling platform is self-elevating and buoyant enough to
transport heavy equipment.
The fixed platform, as its name
implies, is a fixed structure firmly placed on the sea bottom.
If the oil field is located 23
in deeper water, the "floating
drilling platform" is used.
J
This platform is designed to
resist severe weather conditions, and usually is shaped in
the form of a barge unit.
With the basic mechanics of offshore drilling in mind,
one can now proceed to consider the utility of the safety
devices and procedures available to prevent an oil spill.
A well blowout is the most common source of major oil spills
from offshore drilling.
Nevertheless, proper safety measures
may be taken to prevent its occurrence.
Blowouts can be prevented by the use of high density
oh.
drilling mud which is resistent to formation pressure.
formations fluids that have entered into the wellbore cause
207
Any
33
10
pressure imbalance and a subsequent "kick"(a threatened
blowout).
The imbalance of pressure is usually created by
the use of mud of insufficient density or by a deficiency in
the quantity of drilling mud placed in the hole as the drill
pipe is being withdrawn.
High density mud could cure the
25
pressure imbalance but it is costly and; makes drilling difficult-, •
Alternatively, modern monitoring and warning devices provide
early detection of the "kick," allowing time for the injection
'-A
of additional mud into the wellbore before the blowout occurs.^
Not too many companies use these devices or are willing to
invest in the costly, high density mud since the general
objective is to save costs of drilling .wherever possible.
Another safety measure, for blowout 27
prevention is to
increase the number of casing strings.
'
This may be considered
by the oil industry unfeasible because of its costliness.
The Santa Barbara blov/out could have, been avoided if Union
Oil had placed, the required casing lengths in the wellbore;
instead, the company obtained a. waiver from the U.S. Geological
Survey. °
A third method of averting ah oil spill involves the
installation of "blowout preventers" and safety valves for
the purpose of shutting off the wellbore until, the problem is
arrested.
In eliminating the threat of losing control of
the well, three blowout preventers are ordinarily used during
2°
drilling. '
The two lower preventers consists of two steel
rams that horizontally unite across the tubing.
The lower
preventers nay either' 'have "pipe rams" which seal the' space
33
between the casing and the drill pipe, or "blind rams"
which completely close the section of the hole where the
drill pipe is not present.
The top blowout preventer is
of the "bag-type," which closes around the drill pipe but
allows it to move in its normal vertical motion.
require periodic checkup and maintenance.
The preventers
As of yet, there is
no mandatory federal requirement that blowout preventers be
placed in the drilling system, except for drilling beyond the
OQ
conductor casing.-''
Besides the use of blowout preventers, surface safety
valves and "storm chokes" may also prevent polluting accidents.
Pneumatic pressure keeps the surface safety valves in an
open position until a fire occurs.
In the event of fire
certain fusable plugs melt, releasing the pressure and causing
the valves to close.
Offshore wells on federal waters ~>are
-
required to have pneumatic systems with fusable plugs.JJ"
A "storm choke" is a type of safety valve that automatically
closes if there is any irregularity in the oil flow.
Even though their use is beneficial in many respects,
the blowout preventers, surface safety valves, and chokes are
plagued v;ith certain defects.
These preventative devices may
under particular circumstances increase the leakage from the
well, further polluting the waters.
For example, in the
Santa Barbara blowout shutting the blowout preventers
09 forced
the oil to shoot out from a crack in the sea floor.-''"
Moreover,
the surface safety valves and chokes are subject to erosion
from sand and oil flow, thus destroying their ability to
209
33
effectively shut the well.
Undoubtedly, technological improvements in safety devices
are still needed, and this need extends to platform construction
as well.
Platforms are not built to adequately resist hurricanes,
earthquakes, and other natural phenomena.
In 196^ a hurricane
33
in the Gulf of Mexico destroyed fifty w e l l s . J
The report
of the President's Fanel on Oil Spills emphasized the lack
of adequate standards for offshore platforms to withstand
an earthquake.
Major spills caused by such natural
phenomena is more than a mere possibility, but an ever increasing
threat.
"Nevertheless, improved technology is of little value so long
as economic factors outweigh the necessity of safety precautions
against oil spills.
Oil companies show more concern in cutting
down their production costs by placing only minimum safety
devices on the drilling rig and platform.
Clean,TJp Procedures and their Effectiveness
The problems of containment and removal of oil slicks
are further evidence of technological inadequacy of oil spill
control.
Although not very effective, several methods do
exist to remove or reduce oil slicks, such as dispersion,
sinking, burning, and absorbtion. These methods are often
combined with mechanical containment systems.
In determining
the usefulness of each clean up procedure, costs and the
marine environment will necessarily be considered, basically
for two reasons.
Firstly, the type of clean up method used
210
33
is greatly influenced by its costs, and secondly, the methods
frequently used are generally the most toxic to marine life.
Initially, it is important to mention that researchers
have discovered that marine bacteria degradates hydrocarbons
in the oil.
But since the decomposition rate is so slow
that the slick will reach the shoreline before complete
degradation and since research on the subject is minimal,
it would be inappropriate to label biodegradation a clean up
method.
Dispersion is & relatively inexpensive method of cleaning
up an oil slick and can prevent an oil slick from reaching
shore.
Dispersants are chemical compounds that aid in spreading
and emulsifying the oil into the water.
Even though they
increase the biodegradation of oil, this method is confronted
with two significant problems:
mixing and toxicity.
Mixing
the dispersants with the oil requires the use of powerboat
propellers„ 1
A more serious problem is the dispersants1
toxic effect on marine l i f e . A
National Oil and Hazardous
Materials Pollution Contingency Plan which was proposed by
the Council on Environmental Quality and is enforced by the
U.S. Coast Guard and the Environmental Protection Agency
forbids the use of dispersants in certain kinds of oil spills,
such as on any shoreline, in areas with major fish populations,
TO
or in waters less than 500 feet deep.-''
However, the prohibited
use of dispersants in the enumerated situations may be waived
if dispersion lessens the probability of a fire hazard or
decreases the danger to seabirds with minimal environmental
211
hQ
harm.
Because of their toxicity, the true "benefit" from using
dispersants is their ability to merely keep the oil out of
sight.
Another approach to the clean up problem is the utilization
of sinking agents.
Singing agents are usually dense matter,
such as powdered chalk or sand, which upon application to the
oil cause it to sink to the bottom.
Although they are just as
inexpensive as dispersants,
ii.1sinking agents may have a damaging
effect on sea bottom life.
Like dispersants, they keep
the oil from becoming visibly noticeable.
Moreover, the
sunken oil has a tendency to rise to the surface again if the
sea floor is disturbed by a storm or a ship's propeller.
If
the sand or chalk is spread unevenly over a thick spill, the
mass can partially sink, turn over, and rise again.
Sinking
agents can only be used upon authorization from the Environmental
k2
Pr otec ti on Agency.
A more effective method in comparison to the other clean
up techniques is the use of sorbents which absorb or adsorb
the oil and form a floating mass, making collection of the
oil much easier.
Straw and reticulated polyurethane foam are
commonly used as sorbents for small oil spills.
Reticulated
polyurethane has greater absorption qualities than straw ana
can be rinsed and reused in the sea.
Unfortunately, sorbents
can be used with some success only in small spills.
There
are also problems of recovering the sorbents and of disposal.
In the absence of mechanical means
manually.
sorbents must be recovered
In addition, dumping facilities may not be at hand
212
13
for disposal.
The straws applied in the Santa Barbara oil
spill had to be transported by truck to a dumping area several
miles away.
Sorbents are costly, and an attempt to employ
them in large spills can run into several hundred thousand
he.
dollars.
J
Burning agents are used in relatively small, thick slick s
The burning agents vary in types from ignitors to wicking
materials that form a raft on the surface of the oil to
sustain the flames.
Because they are incapable of achieving
complete combustion of the oil, the use of burning agents
is a less efficient procedure of cleaning up spilt o i l . ^
Their use also contributes to serious air pollution and can
endanger nearby harbors with the intense fire.
In containment devices, oil pollution control barriers,
"boom^," prevent an oil slick from passing from one side of the
barrier to the other.
The barrier must be structured to stop
any oil from escaping above or below the barrier, which means
that it must carefully follow the waves.
h/jBooms cannot contain
oil where the waves are over five feet.
Thus, the effectiven
of the barrier is minimized once it is placed in the open sea.
Even in calm waters, the amount of oil that can be contained
is limited. Once oil is piled in the water, it has an
"iceberg effect" and becomes deep enough to escape underneath
!• p
the barrier.
If the barrier is against a current, oil
bubbles entrain in the flowing water underneath the slick
and move deep enough to slide under the barrier.
Moreover,
barriers corrode in sea water and are easily breakable under
23.3
wave pressure.
To remove the oil from the sea surface, skimming devices
are useful for small spills in harbor areas, but are a
Ito
complete failure in the open sea. -
For the skimmer to pick
up the oil, it has to sweep a large amount of the surface.
The sweeping must be done at a slow rate to keep the oil
from going past the skimmer.
Since they are fairly small
in size, skimmers require barriers to thicken the oil in
order to speed the pick up rate.
The above examination of clean up techniques and devices
illustrates the primative stage of technology in controlling
oil spills.
As the national Petroleum Council, an oil-industry
advisory board to the Interior Department, has noted:
There have been no demonstrations of oil-recovery
devices with the ability to pick up oil from large
*. waters at the needed rates and
••.'ith the increased public awareness of the need for environmental safeguards, technology will improve.
Federal Regulation and legislation
Deficient prevention and control of oil spills from
offshore drilling may be directly associated with inadequate
remedial federal regulation and legislation.
In view of the continuing pressure for offshore well
expansion and its effect on present federal policy in controlling oil spills, a brief investigation of the sources that have
given rise to this pressure will create the proper setting
for analyzing the applicable federal regulations and statutes.
214
The most obvious reason for expanding the number of offshore
wells is the strong United States' dependency on oil.
Even
though they are rapidly diminishing resources, oil and gas
currently supply three-fourths of all the; United States
energy requirements.-^*
The Department of Interior indicated
that the amount of energy which will have to be supplied
by petroleum, will increase by
approximately 50 percent
between 1965 and 1 9 8 0 . T h e economics of oil marketing is
also a major source of the pressure for offshore well expansion.
The: oil industry makes Its profits at the wellhead, and not
by the retail price paid, by the c o n s u m e r . p r o f i t s at the
•wellhead are subject to a depletion, allowance, and are thus
Kh.
given, tax pref errential treatment. ^
allowance for retail selling1.
There is. no depletion,
Consequently, oil companies
are much more willing to explore new sources of oil than merely
increase their retail prices.
Another source of pressure
for expansion comes from the foreign oil import quotas, that
are claimed to exist primarily to maintain United States'
self-sufficiency in oil.
Otherwise, 'unrestricted imports
would, impair national security by reliance on foreign energy
r e s o u r c e s F i n a l l y , the most convincing reason for expansion,
of offshore wells is
the jobs and revenues it produces.
For instance, federal income from lease sales and royalties
averages over
billion per year.-^
Under these- circumstance
favorable legislation for oil expansion with as little hindrance
as possible' is not •surprising.
5
33
Federal efforts to control oil spills from offshore
drilling can best be understood in terms of jurisdiction.
For jurisdictional purposes, the seas off the continent are
divided into two zones:
continental shelf.
the territorial seas and the outer
The Submerged Lands Act of 1953 granted
to the states title and ovmership of the seabed lying three
geographical miles seaward of the coast line.-"
This area
is roughly what is known as the "territorial seas."
The
United States Supreme Court extended the grant nine miles
seaward in the Gulf of Mexico for Florida and Texas since
such boundaries were recognized before these states entered
CP
the u n i o n . B e y o n d
the three (or nine in the Gulf) mile limit
seaward is the outer continental shelf which is under the
exclusive jurisdiction of the federal government. '
The
boundaries of these regions have frequently been disputed.
In the latest decision of the United States Supreme Court
thirteen states bordering on the Atlantic Ocean were denied
60
jurisdiction beyond the three geographical miles seaward.
Under the provisions of the Outer Continental Shelf Lands
Act of 1953(OCSL), the Secretary of Interior has authority
to lease the seabeds in the outer continental shelf.
The
leasing programs are administered by the Bureau of Land
Management,
U.S. Geological Survey(USGS) provides the data
for the programs.
The Secretary is further authorized to
prescribe any necessary regulations in granting federal leases.
Any operations conducted after the lease has been granted are
216
under the supervision of the USGS.
Its regulations, referred
to as "OCS orders/' cover specific technical arrangements
and drilling requirements, including well spacing, well casing,
surveys, and control measures, for wells in the outer continental
shelf.
After the Chevron and Shell oil spills in 1970, the
OCS orders increased the number of safety devices required;
in an effort to "prevent damage or any waste of any natural
resource, or injury to life or property."0
Pursuant to his authority to require the prevention of
pollution in offshore oil operations, the: Secretary Issued the
following regulation:
The lessee shall not pollute the waters of the
high seas or damage the aquatic life of the
sea or allow extraneous matter to enter and
damage any mineral or water-bearing formation.
The lessee shall dispose of all useless liquid
products of wells in a manner acceptable to
the supervisor
This regulation was in existence even, before the Santa
Barbara incident, -which indicates problems of enforcement.
In addition to his power of prescribing regulations, the
033L Act has been interpreted, to give the Secretary the
authority to suspend any activities of the lessees, including
the drilling of a new well,- If he considers such acts harmful
64
to the environment.
In Union Oil v. Korton, the suspension
was held not to be an interference with leasing rights.0-*
Since any regulations in existence at the time of the lease
are incorporated into the lease, " the Secretary may in fact
cancel, the lease if he finds a violation of these .rules.
217
33
The National Environmental Policy Act of 1969(NEPA)^
has been influential in the Department of Interior's environmental considerations in its offshore leasing program.
NEPA requires all federal agencies to publish environmental
impact statements for every major action that affects the
environment.
In the landmark case of National Resource
Defense Counsel, Inc. v. Morton. NEPA l^as held to apply
sp
to the Interior Department's offshore oil leases.
The
Department must consider all alternatives and their environmental consequences, including:
1.
2.
3.
5.
6.
7.
8.
Eliminations of import quotas.
Increase onshore exploration and
development.
Development of oil shale.
Increase nuclear energy development.
Increase use of low sulfur coal
and/or desulfurization of coal,
Development of coal liquification
and gasification.
Development of geothermal^resources.
Development of tar sands.-'-'
NEPA's objective to establish a harmonial relationship
between man and nature has been regarded as supplemental
to the Cuter Continental Shelf Lands Act and of prime
70
importance in formulating drilling regulations.
In as much as the Department of Interior has power to
issue strong regulations against oil pollution and impose
stringent pollution control requirements on the lessee, the
Department's rules appear to be permissive rather than
mandatory.
The USGS exercises its power tc grant waivers
of its orders freely, at the expense of the environment.
218
It v;as the USGS that waived the well casing requirements in
71;
the Santa Barbara blowout
and the safety-valve requirement
no
in the Shell blowout.''
In both instances, the blowouts might
have been prevented had the requirements been imposed.
Enforcement is further hindered by inadequate detection
and surveillance devices and staff.
The insufficient number
of federal oil 'well inspectors contributes to the unlikelihood
of detecting safety violations before the blowout.
In the
Chevron blowout in the Gulf, there were over a thousand
no
violations that were disc over ed-TOO late.1'-3
Regulations are
meaningless without enforcement.
Come progress in federal control of oil spills from
offshore drilling has been made in the field of water pollution
legislation.
Control of oil spills is expressed in terras
of liability to the federal government for
clear up costs.
ryj.
The "Water Quality Improvement Act of 19?0,/H' repealed the
1924 Oil Pollution Act and its i 9 6 0 amendment which imposed
only limited
7 z. liability to grossly negligent or wilful oil
1
spilling, '^ The Water Quality Improvement Act was
later recodified in the Federal Water Pollution Control Act ame
7n
ments of 1972
with only minor changes, and will henceforth
be referred to as the Federal Water Pollution Control Act
(FWPC).
The Act authorizes the President to research methods
to contain oil spills and create a National Contingency Plan
to prevent damage from oil.
More importantly, the FWPC Act makes unlawful any
219
33
discharge of oil into United States waters, holding the
owner or operator of an offshore or onshore facility, or vess
liable for actual costs of removal unless he can prove
the following:
. . .that the discharge was caused solely by
(A) an act of God, (B) an act of war, (C)
negligence on the part of the United States
Government, or (D) an act or omission of
a third party. .
An offshore drilling rig falls within the Act's definition of
an offshore facility:
. . .any facility of any kind located in,
on, or under any of the navigable waters
of the United States other than a vessel
or public vessel.'
Since "navigable waters" ordinarily refers to the territorial
70
seas under state jurisdiction,'' the Act is not intended to
include offshore rigs in the cuter continental shelf.
This
is further exemplified in Section 1321 (i) (2) which sbates
that the recovery of removal costs "shall not apply in any
case where liability
is established" in the Outer Continental
On
Shelf Lands Act.
This provision refers to the liability
established by the regulations issued by the Secretary of
Interior for offshore drilling operations in the outer
c cr.tinental s helf.
In the event of inability to prove any of the four
allowable defenses in the Act, liability to the United States
government for clean up costs may be incurred as high as
|S million for offshore facilities. 8l
Horec-ver, if the federal government can prove that the
220
21
the discharge was caused by willful negligence or willful
misconduct on the part of the owner or operator, such owner or
operator will be subject to unlimited liability for the
full removal costs.
If the oil company should fail to report
a spill of which it lias knowledge of, the company may be
„
82
penalized up to $10,000 for each failure to report.
Nothing in the Act is intended to abrogate any liability
to private parties, and the states are expressly authorized
to impose further liabilities for discharge of oil into
the state water boundaries.^
Although the FWPC Act represents the most forceful
remedial legislation yet enacted in its allocation of
clean up costs and removal of oil pollution, certain weaknesses
defenses
in the Act affect its maximum potential.
The impact of a
$10,000 penalty on a multimillion dollar industry is
questionable.
According to the U.S. Geological Survey,
a temporary shutdown of operations might be a more effective
Oh
d e t e r r e n t M o r e o v e r , the jurisdictional limitation of the
Act to state territorial waters creates a dual standard
of federal supervision, resulting in stricter federal action
in state waters than in the cuter continental shelf.
While
the FWPC Act is phrased in terms of absolute liability on
the polluter for clean up costs and removal, except for the
four defenses of an act of Cod, act of war, negligence of
the federal government, or act or omission of a third party,
the Interior Secretary's regulations do not appear to impose
strict liability.^
This observation is based on Regulations
zz±
33
Section 250.^3^) which places the expense of removal of
pollutants on the lessee if pollution "proximately result(s)
therefrom" and "damages" aquatic life, beaches, or private
86
property.
Consequently, defenses to spilt oil liability
might be asserted in the outer continental shelf that cannot
be asserted in the territorial seas.
Jurisdictional limitations also apply to the United
States Coast Guard, one of the prime enforcers of pollution
control on the coastal waterways, but again their
authority is
On
limited to the territorial three mile boundary. '
Further loopholes are found in the FV/FC Act when one or
more of the four defenses to strict liability provided in
the Act are raised by oil companies that drill in areas
frequented by hurricanes or earthquakes.
Aside from the inconsistencies between the Outer
Continental Shelf Lands Act and the Federal Water Pollution
Control Act and their available loopholes, the rig operator
is nevertheless liable for clean up costs, in some instances
without limit, regardless of whether the platform is in
the territorial seas or in the outer continental shelf.
Accessibility of Private Remedies
Questions remain as to what privatie actions and remedies
are accessible to persons damaged by the spill under federal law,
and whether such accessibility is sufficient to deter offshore
rig' polluters.
No federal statute specifically treats damages
caused by the spill to a private claimant's property or interest. 88
222
33
The federal courts, exercising their exclusive original
jurisdiction in admiralty cases or under diversity of citizenship, have usually applied maritime law and have allowed
the traditional common law actions of nuisance, trespass, and
negligence.
However, the Outer Continental Shelf Lands Act and the
Federal Water Pollution Control Act have authorized or
adopted state lav; in regard to privatie suits.
So long as
state law is not inconsistent with federal lav/ and regulations
of the Interior Secretary, the OCSL Act declares the "civil
and crimimal laws of each adjacent State as of the effective
date of this Act(1953)11 as the lav; of the United States for
89
the outer continental shelf. '
Similarly, the FWPC Act was
not intended to "affect or modify in any way the obligations
of any owner or operator
of any offshore facility to any
on
person" for damages.'"
The United States Supreme Court has
interpreted the above provision of the FWPC Act as leaving
the states at liberty to impose liability
for damages to
Q1
the state and to private interests.''-
Since maritime and
state law draw mostly on traditional theories of tort liability,
whether state or federal admiralty law is applied has little
significance.
In oil pollution cases the principle common law theories of
recovery are nuisance, negligence and trespass.
Nuisance is the most-
successful in giving rise to private liability, for it only
requires injury caused by an interference with reasonable
223
2h-
enjoyment of property rights or a special injury different
from that suffered by the general public.
In a negligence
action, deviation from a particular standard of care and
causation must be shown.
Under the prevailing view of
trespass liability, an intentional act is still required, and
thus, it is the least workable theory of recovery for accidental
oil spills.
The nonbeachfroiit owner is especially precluded
from using the trespass theory since he can show no actual
entry.
In recent, decisions the federal courts have shown, a
liberal trend, in finding compensable damages for private
92
injury from an oil spill.
Recovery has been allowed only
if the: injury proved is definite and carefully defined.
For example,, the fisherman must not only prove with certainty
that the oil spill reduced marine life, but also prove that such
reduction diminished profits that he
03 cpuld have realized
had it not been for the oil slick.-
An assessment of the
recovery of private interests for damages caused by oil spills
from offshore wells can best be made by viewing the, type
of interest claimed and the. theory under which recovery has
been allowed or refused.
Despite^ the difficulty of proof, the. federal courts
generally allow private parties whose income, depend on marine
life to recover compensable damages.
In Union Oil v. Op-pen,
the defendant owners of the blowout, well in Santa Barbara
were found to owe a duty of care to the plaintiff commercial
224
25
fishermen to guard against the negligent reduction of sea
gk
life.
Although they may not have had a proprietary right
to sea life, the federal court did find that they had lost a
"prospective economic advantage."
In establishing the duty
owed by the defendants, the court was influenced by the public
concern for the environment, by the fact that the oil spill
did directly result in loss of fish life, and the strong
policy of preventing such occurrences in the future.
However,
recovery was limited to the particular class of fishermen.
The injury to commercial fishermen has also been viewed as
as a public nuisance, a tortious interference with the public
right to fish, compensable because of the fishermen's
special interest in the fish, different from that of the
qc
general public.'v
Public and private vessels have been able to recover
for the damaging effects of an oil spill on their vessels.
In Oppen v. Aetna Ins. Co., the plaintiffs were able to
recover for physical injury to their private pleasure boats
•under a maritime tort theory.-'
But interference with the
exercise of navigational rights afforded the public generally,
in the polluted waters, is not an actionable maritime tort
since no special injur3r is suffered.
Owners of beaches and operators of beach resorts and water
activities have been held by some federal courts to have a
sufficient interest in unpolluted water to allow them
recovery where spilt oil injured their beaches and water
33
activities. The interest of the beach owners has been
described in terms of a "riparian right" of access to
07
the waters, "incidental to ownership of the upland."-"
Since
the ground of recovery in such cases is based 011 a public
nuisance, the beach owner or operator must show damages
peculiar as to him, and which are different in kind from
those sustained by the general public and businesses in the
beach area.
Therefore, those businesses without- a property interest,
dependent on tourism for their prosperity, such as trailor
parks, restaurants, and grocery stores, are held not to
suffer' damages different from those suffered by the public.
The loss of business is indirectly incurred.
As previously
mentioned., a trespass theory would equally not improve the
nonbeachfront; owner's case since there is no direct intrusion.
In some instances, the federal courts have allowed the.
state to recover damages to its waters and marine, life.
The
legal standing afforded the state has been in terms of its
"technical ownership of the bounties of nature within its
borders,"^
or in terms of the special -interest of the state
in protecting its1 environment
90and the. .recreational opportunities
and welfare of its citizens.
Acknowledging the public's increased concern for the
environment and the immediate necessity of discouraging
oil spills, the federal courts will continue to open, the
doors to various private Interests affected by the spill.
Perhaps other theories of recovery will be condoned, such
as res ipsa loquitur.
The objective is not to crowd the
226
33
court docket wi'th frivolous claims but rather to provide
sufficient civil liability to penalize the polluter for his
environmental damage.
Conclusion
With, the continued expansion of offshore drilling, the
pollution and legal problems of oil spills will become more
pervasive.
Technology and operational safeguards against
oil spills are presently inadequate to meet this expansion.
The federal government's response to oil spills from offshore
drilling indicates its failure to appreciate the urgency of
the problem.
A solution to the problem of oil spills, lies not
so much in controlling the oil spill, but in controlling the
activity that produces it.
One method of achieving this
control is by eliminating the loopholes in the Federal. Water
Follution Control Act.
For instance, limited liability of
0-5 million should be replaced by an unlimited liability..
Concurrently, this would be followed by stricter regulations
and fewer leases being issued by the Secretary of Interior
on the shelf.
Undoubtedly, the termination of both oil Import
quotas and the favored tax treatment would reduce offshore
operations, but this would be only for a few years until
land-based sources would., be completely depleted.
An idealistic
solution would be to decrease the overall oil. demand and
consumption by changing American lifestyle, such as making
a "serious commitment" to public transportation.
A more suitable solution to the Inadequate federal control
227
of offshore drilling activity would be the consolidation
of the pollution authority exercised by the Department of
Interior and of the clean up liability provisions of the
Federal Water Pollution Control Act into the latter statute.
By incorporating the Interior's regulations and orders into
the Federal Water Pollution Control Act would present a
unified enforcement of federal action.
The proposal would
include the elimination of the jurisdictional limitations
presently encounted in enforcing the regulations of the Interior
and the clean up provisions of the Fw'PC Act.
The Secretary
of Interior's leasing authority would be limited to the shelf,
but he would have a supervisory role in leasing decisions
in the territorial seas, assuring that environmental effects
are considered before leasing and all possible alternatives.
The liability provided in the Act for cleaning costs would
be unlimited and absolute.
Such a provision would give
the oil companies the incentive to further improve the preventative and clean up technology.
With the Santa Barbara blowout and the subsequent blowouts
in the Gulf, the threat of oil spills from offshore drilling
is very real.
Each major oil spill destroys sigiiificant
segments of marine life, waterfowl, and recreational beaches.
Marine life is further plagued by the toxicity of clean up
dispersants and sinking agents.
Safety devices and. procedures
exist, but their requirement may be waived or left uninforced.
The federal courts in expressing the public's environmental
concern are gradually broading the civil liability of the
228
33
rig operator and other oil polluters.
Despite this environmen-
tal awareness, the federal goverjrftent has taken cursory Control
of offshore drilling activity.
billion annually!
229
Why not?
It's worth $1,5
33
FOOTSOTES
1.
National Petroleum Council's Committee on Petroleum
Resources Under the Ocean Floor, Petroleum Resources
Under the Ocean Floor ( 1 9 6 9 )
2.
Sbutler, Pollution of the Sea by Oil. 7 Houston L. Rev. 415,
417(1970).
3.
Second Report of the President's Panel on Oil Spills (U.S.
G.P.O., 1969),P. 3.
4.
43 U.S.C. 1 1331(19.64)
5.
33 U.S.C. S 1 3 2 1
6.
4 2 U.S.C. S 4331 et seq.
7.
Comment, Oil Pollution of the Sea. 10 Karv. Int'l L t J . 3 1 6 .
321(1969)":
= = = = =
8.
Id. at 321
9.
Id. at 321
(1972)
10.
D. Boesch, C. Hershner, J. Milgram, Oil Spills and the Harine
Environment (1974).
11.
-J.. Potter, Disaster by Oil (1973).
12.
Supra note 10, at 11
13.
Supra note 10, at 12
14.
W. Marx, Oil Spill (1971)
15.
Supra note 10, at 15
16.
C. Steinhart, J. Steinhart, Blowout:
Santa Barbara Oil Spill (1972).
17.
Id., at 31
18.
Id., at 31
19.
Id., at 33
20.
Supra note 10, at 78
21.
Supra note 1 6 , at 32
22.
Council on Environmental Quality, A Report to the President
by the Council on Environmental Quality,vol.3 O.C.S. Oil and
230
A Case Study of the
30
Gas:
An Environmental Assessment (April, 1974).
23.
Id.
24.
Supra note 16, at 33
25.
Supra note 1 6 , at. 34
26.
Supra note 16, at 34
27.
Supra note 1 6 , at 33
28.
Supra note 16, at 33
29.
Supra note 10, at 79
30.
Supra note 10, at 79
31.
Supra note 10, at 82
32.
Supra note 10, at 80
33.
Supra note 14, at 58
34.
Second Report of the President's Panel on Oil Spills (U.S.
G.P.O., 1969
35.
Supra note 1 6 , at 33
36.
Supra note 10, at 89
37.
Supra note 10, at 87
38.
Suvra note 10, at 87
39.
Supra note 10, at 86
40.
Supra note 10, at 87
41.
Supra note 10, at 88
42.
Supra note 10, at 88
43.
Supra note 10, at 90
44.
Supra note 14, at 71
45.
Supra note 1 0 , at 91
46.
Supra note 10, at 90
47.
W. A h e m , Jr., Oil and the Outer Coastal Shelf:
231
the Georges
31.
Bank Case (1973).
48
Supra note 10, at 92
49
Supra note 10, at 99-102
50.
National Petroleum Council, Environmental Conservation, vol.
II, PP. 257-8.
51.
National Petroleum Council's Committee on Petroleum
Resources Under the Ocean Floor, Petroleum Resources
Under the Ocean Floor 16 ( 1 9 6 9 ) .
52.
U;.S. Department of Interior, United States Petroleum
53.
Weinberg, Contrived Crises: An Environmental lawyer's
View of the Supposed Fuel Shortage! 6 Environ. L. Rev. 27
(1975)
5h*
Int. Rev. Code of 1954. § 6 1 3 A . . . ; Before 1969, the oil
industry enjoyed a depletion allowance which enabled
oil companies to deduct 27.5 percent of the gross
income from, production. In 1969 this was reduced to
22 percent. After the Tax .Reform Act.of 1976, it
remained at 22 percent. However, bj^ i98i the depletion
allowance will decrease 2 percent and continue to
decline yearly until it reaches 15 percent in 1984.
The depletion allowance will be 15 percent thereafter.
55*
Supraj,note 16, at 121
56..
Supra.note 1 6 , at 123
57.
43 U.S.C. § 1311
58.
United States v. Florida, 363 U.S. 121 ( i 9 6 0 ) .
59.
43 U.S.C. § 1 3 3 2
60.
United States v. Maine, 420 U.S. 515 (1975).
61.
43 u . s . c . § 1332
62.
30 C.F.R.
63.
Id-
64.
Union Oil v. Morton, 512 F.2d 743, 746 (9th Cir. 1975).
through 1980 (1968).
S 250 (1969)
65.
66.
43 U.S.C. g 1334
(a)
|2}
232
6?.
42 U.S.C. ss 4331(a), 4332.
68.
National Resource Defense Counsel, Inc. v. I-Iorton,
453 P.2d 827 (D.C. Cir. 1972).
69.
Id.
70.
Union Oil v. Norton 512 P.2d 7^3, 7^9 (9th Cii; 1975).
71.
A. Nash, D. Harm, G. Olsen, Oil Pollution and the Public
Interest: A study of the Santa Barbara Oil Spill (1972).
72.
Supra note 10, at 80
73.
Supra note 14, at 90
74.
84 Stat, 91 (now in Federal Water Pollution Control Act
33 U.S.C. § 1321).
75.
33 U.S.C. II 1001-15 (repealed 1970)
76.
33 U.S.C.
77.
33 U.S.C. g 1 3 2 1
(f) ( 3 ) .
78.
33 U.S.C. 3 1 3 2 1
(a) (11).
79.
Stone, Legal Aspects of Offshore Oil and Gas Operations,
8 Natural Resources J. 478. 480 (1968).
80.
33 U.S.C. 1321 (i) (2).
81.
33 U.S.C. 1321 (f) (3).
82.
33 U.S.C. 1 3 2 1
83.
Askew v. American Waterways Operator, Inc., 4il U.S. 325 (1973).
84.
Supra note 14, at 91
85.
Nichols, Legal Problems Regarding the Extraction of Minerals
(Including Oil and Gas) From the Continental Shelf (1971).
86.
30 C.F.R. § 250.43 (b) (1969).
87.
Supra ntoe 14, at 98
88.
Annct., 26 A.L.R. Fed. 3^6 (1976).
89.
43 U.S.C. 1333 (a) (2).
90.
33 U.S.C. s 1321 (0) (i).
| 1321
(b) ( 5 ) .
233
33
91.
92.
Askew v. American Waterways Operators, Inc., 4ll U.S. 325 (1973).
Since injunctions are a rarety in private civil liability
they will not be discussed as a remedy. The plaintiff's
interest is always outweighed by society's dependency on
oil.
93.
Union Oil Co. v. Oppen, 501 F.2d (9th Cir. 197*0.
9l.
Id.
95c
Burgess v. M/V Tamano, 370 F. Supp. 247 (D.C. 1973).
96.
485 F.2d 252 (9th Cir. 1973).
97.
Kirwin v. Mexican Petroleum Co., 267 F. 460 (D.C. 1920).
98.
Maryland, Dept. of Natural Resourcesv. Amerada Ress Corp.,
350 F.. Supp. 1060 (D.C. 1972).
99.
Maine v. M/V Tamano, 357
Supp. 1097 (D.C. 1970).
234