Spill Liability

Section 1002 of the Oil Pollution Act of 1990 (OPA) holds facilities that cause oil spills responsible for cleanup costs and damages resulting from the spill. The law limits the liability of an onshore facility owner/operator to $350 million per spill unless, however, the oil spill resulted from gross negligence, willful misconduct, or a violation of federal regulations. In these cases, liability is unlimited. The unlimited liability provision also applies to the owner/operator in cases where the negligence, misconduct, or violation results from a responsible party's agent, employee, or person contracting with the owner/operator.

A responsible party can absolve their liability for the response costs and damages of an oil spill if the spill results from an act of God, an act of war, or an act or omission of a third party. In these cases, the facility owner or operator is released from the strict liability provisions. In the event that the responsible party either is not known or is absolved of their liability, the OPA established the Oil Spill Liability Trust Fund to help pay for cleanup costs, oil spill damages, and certain operational expenses incurred as a result of an oil spill response.

In addition to the liability provisions, facility owners and operators that discharge oil also may be subject to administrative or judicial penalties.