Throughout history, some of the most significant laws have come on the heels of environmental disasters. One of the biggest environmental disasters that spurred major legal reform was the Exxon Valdez oil spill. Occurring over three decades ago, this spill was front-page headlines for months and forever changed the pollution and insurance industries, along with many others.
What Happened In 1989
On March 24, 1989, the Exxon Valdez oil tanker hit the Bligh Reef while traversing through Prince William Sound. The tanker’s hull sustained major damage, spilling over 11 million gallons of crude oil into the surrounding Alaskan waters.
The spill was the largest in U.S. history—its magnitude strained the resources and capabilities of local and national disaster response teams. Not only were cleanup efforts hampered by the location of the spill, accessible only by helicopter and boat, but a storm blew in soon after the spill and spread the oil even farther.
The spill contaminated more than 1,000 miles of coastline, causing significant harm to local wildlife, human residents, and commercial industries. Exxon was hit with a multitude of court cases and has paid billions in cleanup costs and fines. One of the silver linings of this disaster was that it led to the Oil Pollution Act (OPA) of 1990.
OPA, 30 Years Later
Passed by Congress in August 18, 1990, OPA amended the Federal Water Pollution Control Act. It created detailed specifications for the prevention, response, liability, and compensation associated with oil pollution in U.S. navigable waters. OPA created an oil tax to fund cleanup efforts when the responsible party is incapable or unwilling to pay themselves. Also, OPA greatly expanded the EPA’s oversight of oil transportation. Per the U.S. Coast Guard, OPA strengthened environmental protectections by:
- “Setting new requirements for vessel construction and crew licensing and manning,
- Mandating contingency planning,
- Enhancing federal response capability,
- Broadening enforcement authority,
- Increasing penalties,
- Creating new research and development programs,
- Increasing potential liabilities, and
- Significantly broadening financial responsibility requirements.”
OPA & Vessel Pollution Insurance
OPA had a significant impact on oil transportation and companies operating in this market have had to make big shifts in how they protect themselves from the worst-case scenario. The shipping industry also implemented many positive changes in response to OPA. Thanks to this regulation, the frequency of spills has decreased.
Since OPA ensures financial consequences should a spill be improperly handled- today more than ever- be sure to partner with the right vessel pollution underwriter. The type of vessel pollution insurance you need to truly lessen your exposure and related costs of an environmental disaster all relates back to OPA.
To learn more about your insurance options and OPA, contact us.