New state House bill would make oil owners financially liable for oil spills

By Juan Morfin/Washington State Journal

Financial responsibility for an oil spill will rest with those who own the facilities and vessels that produce and transport the oil under the proposed Bill 1691.

“The goal is to minimize the long-term, permanent damage that can occur in a catastrophic spill,” said Rep. Mia Gregerson, D-Kent, lead sponsor of this bill.

The bill requires owners or operators of vessels and oil installations to demonstrate their financial capacity to pay for their oil damages and to obtain a Certificate of Financial Responsibility (COFR) from the Ministry of Ecology (Ecology). This COFR will be used to determine if the responsible party of a vessel or facility is liable for damage caused by an oil spill.

Among other things, to demonstrate their financial responsibility to Ecology, oil facilities must show that they can compensate federally recognized Indian tribes in the worst case of an oil spill.

Gregerson likens these new requirements to car insurance. “I know that the law requires us to have car insurance if we choose to drive on our roads and streets. So we want the same in this case [for oil owners],” she said.

Gregerson is not alone in her concerns. Laura Feinstein, a member of the Sightline Institute, an independent think tank working to advance sustainability in the Pacific Northwest, testified in support of the bill.

“We don’t have to look far to find examples of oil spills, leaks and explosions resulting in catastrophic damage to our waterways, lands and livelihoods,” Feinstein said.

Opposition to the bill came from representatives of interest groups such as the Western States Petroleum Association (WSPA), the Columbia River Steamship Operators’ Association (CRSOA), and BP America. Each group had unique criticisms and concerns about Bill 1691, and they implored the House Environment and Energy Committee to rethink their bill.

“We ask that you return the option of self-insurance as a method of certifying the financial responsibility of facilities,” said Greg Hanon, the WSPA representative. Since this option is sufficient enough to be accepted in other states like Oregon and California, the WSPA could not understand why it was left out of the bill.

CRSOA officials said the bill was redundant because it added complexity to an already existing patchwork of laws.

“We struggle to understand the benefit of creating a state certificate of financial responsibility that creates redundant requirements, adds administrative burdens, and provides no improvements in protection,” said CRSOA representative Amber Carter.

According to Carter, the bill’s tax memo reveals that ecology does not have the skills or personnel to develop or operate a state COFR, such as the one this committee is proposing.

Tom Wolf, the representative of BP America, criticized the bill’s granting of unilateral decision-making authority to the director of Ecology to determine who does and does not obtain a COFR if a facility or vessel has had a spill.

“Giving the director the ability to revoke a certificate based on a company’s assurance; I don’t know what the parameters are for the director to make that decision,” Wolf said.

House Bill 1691 is scheduled for a hearing in executive session Jan. 20 at 1:30 p.m.

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