New Ultra-Low Sulfur Diesel Regulations on the Horizon
On November 10, 2005, Mr. Bode addressed the Ultra-Low Sulfur
Diesel Implementation Workshop in Phoenix, Arizona. Speaking
on behalf of the Independent Liquid Terminals Association to
over 500 attendees from all segments of the petroleum industry,
Mr. Bode identified the challenges and legal issues confronting
the industry as it attempts to meet the stringent new Ultra-low
sulfur diesel requirements next year. Mr. Bode reviewed the EPA's
enforcement regime and guidelines, and presented various scenarios
that are likely to generate disputes. Mr. Bode advised the stake-holders
in the process - refiners, pipelines, terminal operators, marketers,
and trucking companies - to identify in advance the likely areas
of dispute and to develop written protocols to resolve them.
The ULSD Workshop was hosted by the American Petroleum Industry,
the American Trucking Association, the Environmental Protection
Agency, and over eleven other petroleum associations.
* * *
$5 Billion Exxon Valdez Award Overturned
After a three-judge panel overturned the original $5 billion
verdict in the 1989 Exxon Valdez oil spill a year ago, U.S. District
Court Judge Russel Holland reduced the punitive damages award
to $4 billion. However, on Friday, December 5, 2003, nearly 15
years after the spill occurred, the 9 th Circuit Court of appeals
ordered Judge Holland to against reconsider the damages.
In 1994, a jury in anchorage, Alaska, had ordered Exxon to pay
the original aware to thousands of plaintiffs composed of commercial
fishermen, Alaskan natives, property owners, and others harmed
by the worst oil spill in the nation’s history. The plaintiffs
still believe they should have received $5 billion in punitive
damages to punish the oil company. However, Exxon argued that
it learned its lesson in paying more than $3 billion to clean
up Prince William Sound and consequently should not have to pay
any punitive damages.
At the time, $5 billion represented the largest punitive damage
award in history and was equal to one year of Exxon’s profits.
Exxon attorneys argued that the Supreme Court case, State Farm
Mutual Automobile Company vs. Campbell, supported their claim
that the original award was excessive. In that case, the Supreme
Court ruled that $145 million to punish State Farm was excessive
since actual damages were only $1 million. The Supreme Court
held that a ratio of 9-1 should not be exceeded in determining
punitive to actual damages and that juries could not award huge
sums of money just to punish companies that are considered big,
wealthy, or distasteful. Furthermore, Exxon’s attorneys
argue that the tanker spill was an isolated, unintended incident,
which should translate to a ratio of 1-1 or less.
Commercial fishermen and local Alaskans, who were most impacted
by the spill, tell a different story. A local fisherman in Cordova,
R. J. Kopchak, said that he was very angry with the Court’s
reducing the punitive damages award. He said no herring remain
in the waters at or near Prince William Sound and few salmon
are left. Kopchak, whose herring fishing operation is now defunct,
said, “We can no longer make a living commercial fishing.” Other
plaintiffs noted that, in addition to severely damaging fishing
and hunting grounds, the spill also reduced property values along
the 1,500 miles of coastline affected by the 11 million gallon
spill. The plaintiffs also allege that the captain of the Valdez,
Joseph Hazelwood, was drunk when he ran the ship aground and
that Exxon allowed him to operate oil tankers despite knowing
of his drinking problem.
Exxon has already paid $3.2 billion in cleanup costs, settlements,
and other fees and penalties. Judge Holland said he would attempt
to reach a decision by the end of January 2004. (Source:
EPA Oil Program Update, January 2004).
* * *
U.S. Announces Major Clean Water Act Settlement With Retail
Giant Wal-Mart
The Department of Justice and the U.S. Environmental Protection
Agency, along with the U.S. Attorney’s Office for the District
of Delaware and the states of Utah and Tennessee , today announced
a Clean Water Act settlement for storm water violations at Wal-Mart
store construction sites across the country. Under the terms
of the agreement, Wal-Mart has agreed to pay a $3.1 million civil
penalty and reduce storm water runoff at its sites by instituting
better control measures, thereby setting an industry standard
for developers and contractors.
In addition to being the nation’s largest retailer, Wal-Mart
is one of the largest commercial developers in the country, building
more than 200 stores each year across the United States under
the brand names Wal-Mart Stores, Wal-Mart Supercenters , and
Sam’s Clubs.
“Storm water requirements have been in place for a long
time. Developers like Wal-Mart must share responsibility with
their construction contractors to ensure compliance,” said
Assistant Attorney General Thomas L. Sansonetti of the Justice
Department’s Environment and Natural Resources Division. “Today’s
settlement is a strong signal of this Administration's commitment
to increased enforcement of our nation’s environmental
laws and regulations.” (Source: Department of Justice,
Environmental and Natural Resources Division Press Release, May
12, 2004).
* * *
Fifth Circuit Restricts Reach of "Navigable Waters" Under
OPA
Recently, the Fifth U.S. Circuit Court of Appeals (which covers
Texas) examined the reach of the Oil Pollution Act for discharges
of oil into waterways. The government sued a landowner for cleanup
costs related to an oil spill in the state of Louisiana. The
landowner contested the suit by the government, arguing that
the waterway in question was not a navigable water and therefore
was beyond the reach of the OPA.
The Fifth Circuit disagreed and found the landowner liable for
costs incurred by the government in cleaning up the spill. In
making its decision, however, the court further refined the limits
of the definition of "navigable waters," which could
be an important precedent for all federal courts located in the
Fifth Circuit. (Source: Texas Environmental
Compliance Update, January 2004).
The following websites provide the latest news on oil spills,
Oil Pollution Act violations, legislative updates, and other
energy and environmental news:
Environmental Protection Agency:
http://www.epa.gov/oilspill/pdfs/0104update.pdf
Department of Justice, Environmental and Natural Resources
Division:
http://www.usdoj.gov/enrd/pressroom.htm
U.S. Coast Guard, National Pollution Funds Center:
http://www.uscg.mil/hq/npfc/press.htm
National Oceanic and Atmospheric Administration, Damage Assessment
and Restoration Program:
http://www.darp.noaa.gov/publicat.htm
Department of Energy, Environmental Policy and Guidance
http://tis.eh.doe.gov/oepa/whatsnew.html
Additional news sources:
http://www.oil-spill-web.com/news/latest.htm
http://www.spillpoint.com/index.cfm?MainCatID=3&TY=MainCat
http://www.cleanupoil.com/News.htm
http://enviro2.blr.com/single_type.cfm/type/31
