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By Juan Morfin
Washington State Journal 

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

 

Last updated 2/9/2022 at 11:34am



The financial responsibility for an oil spill will fall on those who own the facilities and vessels that produce and transport oil under proposed House Bill 1691.

“The goal is to minimize the permanent long-standing damage that can happen when a catastrophic spill happens,” said Rep. Mia Gregerson, D-Kent, the primary sponsor of this bill.

The bill requires the owners or operators of oil vessels and facilities to demonstrate their financial ability to pay for its oil damages and to obtain a certificate of financial responsibility (COFR) from the Department of Ecology (Ecology). This COFR will be used to determine whether the party responsible for a vessel or facility is liable for damages caused by an oil spill.

Among other things, to demonstrate financial responsibility to Ecology, oil facilities need to show they can compensate federally recognized Indian tribes in a worst-case oil spill situation.

Gregerson likens these new requirements to car insurance. “I know by law we're required 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 fellow at Sightline Institute, an independent think tank that works to advance sustainability in the Pacific Northwest, testified in strong support of this bill.

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

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

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

Representatives from CRSOA said the bill is redundant as it adds complexity to an already existing patchwork of laws.

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

According to Carter, the bill’s fiscal note reveals Ecology does not have the skills or the staff to develop or manage a state COFR, such as the one this committee is proposing.

Tom Wolf, the representative for BP America, criticized the bill’s allowance of unilateral decision-making power for Ecology’s director in determining who does and does not get 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 assurity; I don’t know what the parameters are for the director to make that decision,” Wolf said.

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

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