The federal fund used to clean up oil spills nationwide will be drained by 2009, in part because cleanups cost more than authorities collect from those responsible, according to a Coast Guard study released Monday.
WASHINGTON The federal fund used to clean up oil spills nationwide will be drained by 2009, in part because cleanups cost more than authorities collect from those responsible, according to a Coast Guard study released Monday.
The report found that over the next five years, the fund will run an annual deficit of up to $200 million a year, depleting the current $710 million balance by October 2009. In the fiscal year ending last Sept. 30, cleanup costs were $143 million, while the amount of money recovered in penalties, interest and other revenues was just $30 million.
Federal authorities collected just 27 percent of the removal and cleanup costs from responsible parties for spills between 1995-2004, the report said, while interest revenues have declined and a tax on oil that used to fuel the fund has expired.
"A stable source of funding for oil spill cleanup costs and damages is vital in protecting the environment and compensating those who have been damaged by spills," said Jan Lane, director of the National Pollution Funds Center, which administers the fund.
She said the Coast Guard is working with Congress to find a solution to the funding problem.
Since January 1994, there have been 14 devastating spills from tank barges and ships, including:
--A 260,000 gallon spill last November in the Delaware River.
--Two spills of more than 150,000 gallons in Galveston, Texas.
--A nearly 166,000 gallon spill when a tank ship struck a bridge near Portland, Maine.
--A 538,000 gallon spill in the Mississippi River near Buras, La.
Money did not start flowing into or out of the Oil Spill Liability Trust Fund until after the 1989 Exxon Valdez oil spill, and a large source of income was a 5-cent tax per barrel on oil produced or imported to the United States. That tax expired in 1994.
Penalties are difficult to recover, the Coast Guard report said, because authorities often can't identify the source of the spill or the vessel or company responsible. And when they can, the responsible party may be bankrupt or unable to pay.
Source: Associated Press