Posts Tagged coast guard

The Oil Spill Liability Trust Fund

Posted by on Monday, 24 May, 2010

This fund is established to create a government account to pay for oil spill cleanup, and was financed in the past by a tax on sales of oil barrels. Tax collection expired in 1994 along with other Superfund tax collection, but now there are rumors that this tax will return at a higher level. According to Breitbart it may even return as a rider to the unemployment extension bill. The unemployment extension bills have a good chance to pass while unemployment remains high.

Although taxes haven’t been collected for this cleanup fund in 16 years, the current oil spill liability trust fund still contains $1.6 billion according to Breitbart. The funds will not be depleted unless the federal government cannot find the responsible party for the oil spill, according to the EPA, and it’s obvious who is responsible when a tanker or an oil rig spills oil all over the ocean. Of course, the company could refuse to pay and fight the federal government in court, but that will increase their costs further as well as adding even more damage to their reputation.

This fund is managed by the US Coast Guard. The Coast Guard uses part of the money to clean up the oil spill and reserves the rest of it to pay out claims. All of the people living along the southern coast of the United States are affected by the Gulf disaster, and they can receive compensation from this trust fund. Federal On Site Coordinators can use the fund directly for emergency response to the cleanup, other government agencies have to get approval from these coordinators, and private citizens have to submit claims about specific property or loss of livelihood related to the oil spill.

The Coast Guard spends money out of the fund, and the responsible party assumes liability for all of its expenses. This makes sure that claims can be paid quickly and the oil spill is cleaned up as fast as possible, since the Coast Guard has many ships at its disposal. British Petroleum has to pay back all of the money the federal government uses through this trust fund both to clean up the beaches and disperse oil in the water, and pay the claims from shrimp boats, fishers, and other Gulf residents who are not receiving income because of this disaster.