The Coast Guard is issuing a final rule which increases the statutory limits of liability for vessels, deepwater ports, and onshore facilities, under the Oil Pollution Act of 1990 (OPA 90). The increase is standard procedure for the Coast Guard, as it is required by the OPA 90 to adjust the statutory limits every three years to reflect the increases in the Consumer Price Index. Under Title I of the OPA 90, the responsible party for any vessel or any facility from which oil is discharged, or which poses a substantial threat of discharge of oil, into navigable waters or adjoining shorelines…are strictly liable, jointly and severally, under 33 U.S.C. §2702 for removal costs and damages resulting from the incident. Yet, a responsible party’s liability is limited to a specified dollar amount, pursuant to 33 U.S.C. §2702.

To prevent the real value of the statutory limits from depreciating over time, and preserve the “polluter pays” principle embodied in the OPA 90, 33 U.S.C. §2704(d)(4) requires that the limits of liability be adjusted “not less than every three years…to reflect significant increases in the Consumer Price Index.” The timing of the three-year adjustment is rather unfortunate for oil and gas companies, given that the industry is currently facing bleak economic conditions with record low oil prices.