6/12/79
SUMMARY OF OIL, HAZARDOUS SUBSTANCES, AND HAZARDOUS
WASTE RESPONSE, LIABILITY, AND COMPENSATION
ACT OF 1979
The proposed legislation addresses releases to the environment of
oil, hazardous substances and hazardous wastes from spills and from
Inactive and abandoned disposal sites. It establishes a comprehensive
and uniform system of notification, emergency government response, en-
forcement, liability and compensation for such Incidents by:
(1) requiring notification to government of spills and the
presence of Inactive and abandoned hazardous waste
disposal sites;
(2). empowering government to clean up and mitigate the pollution
without delay 1n Incidents where the liable parties do not
respond adequately or cannot be quickly Identified:
(3) enforcing higher standards of care by providing for recovery
of government response costs and third party compensation
as well as penalties from liable parties; and
(4) providing for quickly compensating innocent victims of spills
for damages to property and the loss of opportunity to harvest
marine life.
Upon learning of a spill or a release of wastes from an abandoned
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or inactive disposal site, the legislation would enable the government,
in advance of judicial action, to induce any liable parties to prevent
or cleanup and mitigate the problem by authorizing the government, if
necessary, to act in their place without delay and later recover the
public costs. The legislation would also provide for compensation to
.innocent victims of spills for damages to property or lost opportunity
t: harvest marine life, in advance of judicial action. Additionally,
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for spills, any third party damages paid as a result of an inadequate
response by the potentially liable parties could also be recovered by
the government. Even where a responsible, economically viable party
could not be identified, government response could still be taken with-
out delay to protect public health, safety or a significant environ-
mental resource.
In contrast, government response to inactive and abandoned sites
under existing funded statutory authority first requires documentation
of an "imminent and substantial" threat to public health or welfare
and successful judicial action to enjoin responsible parties
before any remedial actions may occur. This can require months and often
years. Where a responsible party cannot be identified or is not financi-
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ally viable, no effective government response is authorized by existing
. laws, unless the disposal site discharges oil or specifically designated
hazardous substances into navigable waters. . In this case, the government
can take action and recover the costs of cleanup, mitigation, and restor-
ation of natural resources. However, if the discharge is to other than
navigable waters or involves hazardous wastes but not designated hazardous
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substances, or the incident alone'or in combination with other such inci-
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dents requires more than the existing $35 million appropriation, effective
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government.response is precluded by existing laws. Moreover, existing
Federal and State authorities covering spills and inactive and abandoned
sites preclude payment of third party damages, except after often costly
oiid lonciLhly litiyation by the innocent victims under State Uort law.
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The proposed legislation is built upon and would incorporate
Section 311 of the "Clean Water Act" and the proposed "Comprehensive Oil
Pollution Liability and Compensation Act" developed by the Department of
Transportation (DOT) for the 96th Congress. With minor conforming amend-
ments the proposed legislation extends the DOT draft H-JII for oil spill
compensation from just "navigable waters" to the "environment," and
includes spills of designated hazardous substances. This proposed .
legislation also incorporates the notification, emergency response,"
penalty and spill prevention provisions of Section 311 and ensures
the carry-over of Section 311 regulations, case law and government
response capability. In effect, the legislation converts the Section
311 (k) -fund from an appropriated fund to an expanded fee-based fund
and adds a compensation system for third party damages to property
and lost opportunity to harvest marine life from spills of oil and
hazardous substances.
The draft legislation also uses Section 3-11 and the DOT draft >v"Ll
as a basis for addressing inactive and abandoned waste disposal sites.
The proposed legislation adapts the Section 311 notification, emergency
response and liability program to releases or threatened releases to the
envircrment of hazardous wastes from inactive and abandoned disposal sites.
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It does not, however, provide a compensation system for third party
damages resulting from such sites.
Finally, the proposed legislation expands the basis for collecting
fees in the DOT-proixjsud fund to cover also hazardous substances nnu
hazardous wastes and adds an annual Federal appropriation to the fund.
The major policy decisions incorporated in the proixssca legislation .ire
sum-orizcd in- the following discussion.
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Coverage. The proposed legislation would cover releases into all
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environmental media., including navigable waters, groundwaters, land
and air. The covered materials would include oil, all hazardous
substances designated under Section 311 of the Clean Water Act
and under the same provision as incorporated in.the proposed legislation,
and wastes defined as hazardous under Section 3001 of the Solid Waste
Disposal Act (SWOA). The legislation would cover spills and abandoned and
inactive hazardous waste disposal sites, but not discharges or sites with
permits (or in the case of the SWDA, "interim status") under existing
Federal environmental protection laws. In addition, the legislation would
authorize use of the fund and recovery of costs for incidents involving
releases to the environment posing an imminent and substantial danger to
public health or welfare, regardless of any of the above limitations on
.materials or sources.
Size of the Fund. The proposed legislation would authorize the fund
to raise $1.625 billion from appropriations and fees over a four year
period; authority for additional fees and appropriations would cease
upon reaching this limit, unless Congress reauthorized fee collection
and appropriations. The sources of revenue for the fund include:
(a) per unit fees on petroleum oil, petrochemical feedstocks
for organic chemicals, and certain other inorganic chemicals and heavy
metals up to a total of $400 million per year; (b) Federal appropriations
of up to $100 million per year; (c) recovered costs of government
response; (d) amounts recovered by the fund as the subrogee of
compensated victims; (e) one-time transfer of funds authorized by four
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in society. Because the fees will be raised from all competitors in
an industry, the approach assumes that costs will ultimately be passed
on to users and consumers.- All oil and almost all hazardous substances
are products of the oil industry, chemical and allied industries, and
heavy metals industries. In addition, most hazardous wastes are produced
from these industries. All organic chemicals are derived from petrochemical
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feedstocks. Certain heavy metals, halogens/ acids,. and bases are signifi-
4
cant elements and compounds for many toxic inorganics. Figure (1) depicts
how oil, petrochemical feedstocks, and certain inorganic elements and com-
pounds eventually become oil and hazardous substances which may be spilled
and hazardous wastes found in inactive and abandoned sites.
To cover incidents where oil/ hazardous substances, and hazardous
wastes are released, the legislation establishes authority to collect up
to $400 million annually through the following fees:
(a) A total of $100 million per year raised by a fee, not to exceed
three cents per barrel of crude or unfinished petroleum oil received, from
refineries for domestically produced and refined petroleum oil and from
the owners of imported and exported petroleum oil.
(b) A total of $200 million per year raised by a fee, not to exceed
one-half cent per pound of petrochemical feedstock supplied to others or
uses, by the supplier to produce organic chemicals. The petrochonical feed-
stocks include ethylene, propylene, butylanes, butadiene, butanes, benzene,
toulene, xylcncs, nnjJtlulenc, carbon black, nud inctlvine, other thin thnu
used to make arcnonia.
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REFWINt TD
PftO&UCB
FEEDSTOCKS
i. Relatlunshlp of Fee System to Spills and Uncontrolled Disposal Sites
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(c) A total of $100 million per year raised by a fee, not to exceed
two dollars per ton paid by suppliers (including self-suppliers) on
certain .inorganic elements and compounds, including but not
limited to certain heavy metals, halogens, acids and bases.
The fees would be collected from fewer than 988 companies (the exact
number will be less because a number of companies produce several of
the materials subject to the fee).
Within the above total limits for each category of fees per year,
the legislation authorizes the Executive Branch to modify the fees by
regulation on an annual basis to more nearly reflect the claims and
payments experience of the fund. In addition, within four years, the
Executive Branch is required to recommend any statutory nodif ications
in the maximum annual level of fees collected upon petroleum oil,
petrochemical feedstocks, and inorganic elements and compounds, to
more nearly reflect the operating experience of the fund.
The legislation establishes several safeguards to minimize
inequities and any unintended, adverse impacts of the fee system.
Once a fee has been levied on a given quantity, no further fees nay
be imposed on that quantity. Oil which is refined and then used as an
organic feedstock is the only exception to this principle. The
legislation limits the fee to two percent of the market price of any
crude petroleum oil, petrochemical feedstock or inorganic element or
compouixl against which the fee is charged. This safeguard, together
with thu relatively small size of the fund, ensures that, economic
dislocations or shifts in feedstock or resource use will not result
from the fee system. As an economic incentive for rccycliny and
energy conservation, the fee may be reduced through a credit for
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recycling and reuse of materials subject to the fee.
The proposed $400 million fee system is expected to have a
negligible impact on the U.S. economy. The size of the fund is
small both in relation to the overall economy and in relation to
the industries paying the fees. The fee on crude oil will amount
to a very small percentage of crude oil prices. -The fee on exude oil
in 1980 would be approximately 1.85 cents per barrel or 0.11 percent of
expected 1980 crude oil prices of $16..83 per barrel. The effect of'the
fee system on inorganic chemicals is expected to result in price Increases
of less than one percent. The effect of the fee system on the organic
chemical industry will be to increase petrochemical feedstock prices by
less than 2.0 percent and final organic chemical product prices by an
average of 0.6 percent. This may have a slightly dampening effect upon
the- rate of growth of sales in the chemical industry, but liJce the crude
oil price increases, would not result in any production shifts,
employment losses or plant closings. The changes in chemical prices
will not be great enough to produce any changes in the process
economics of the petrochemical industry sufficient to create shifts
in feedstock or resource use. In the first two years, the effect of
the fee system will actually be less than the projections above as the
fees are phased-in and the fund grows from $250 million to $500 million.
In later years the effect of the fee system 'is likely to be even less
than projected as inflation makes each fee a smaller part of ].?rrr«?rH.
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for" its response costs. These costs of Federal or State response
include: cleanup or removal; such other actions necessary to prevent,
minimize, or mitigate damage to public health or safety, or the environ-
ment; and restoration of natural resources or acquisition of equivalent
resources. Government response is authorized where the government
determines that the responsible party will not adequately respond.
The fund would also compensate innocent victims of spills of oil and
hazardous substances for real or personal property damages or the i?gg
of opportunity to harvest marine life. In general, ^laVs for third
party damages are presented directly to the spiller or other liable
party and only if they deny all liability or no settlement occurs
within 120 days, whichever occurs first, nay the claim be submitted
to the fund.
• For releases, or substantial threats of releases, of hazardous.
wastes (which includes waste oils) from waste disposal sites, the
fund may be used to compensate government for its response costs to
prevent, minimize or mitigate substantial danger to public health or
safety, or to a significant environmental resource. Like spills,
government response is authorized where the government determines that
the responsir party will not adequately respond or where there is no
known responsible party. The government may respond by providing or
arranging for the provision of up to $300,000 in emergency assistance,
such as temporary alternative drinking water supplies or temporary evac-
uation, removal of explosive or highly toxic hazardous wastes from the
site, and on-site actions to quickly prevent, minimize or mitigate the
danger. Emergency assistance may also include all investigations and
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planning necessary to determine how to contain and/or remedy further
contamination. Emergency assistance may result either in enforcement,
under other environmental authorities,, where a liable parly is
discovered but refuses to remedy the situation, or further government
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response, or both.
As further govenment response, the fund may provide and operate
for one year (or arrange for the provision) of the least cost method
of achieving containment of the hazardous wastes consistent with
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eventual permanent remedy (if containment is different} . Wherever
the cost of containment may exceed $200,000 per site, tie government
must first determine what would be the least cost method of containing
the wastes over 20 years or the life of the containment, •whichever is
less. Containment includes on-site actions to prevent ox Trdnirnjg^
the continued release of hazardous wastes so they will not migrate
to cause substantial danger to public health or safety oar to significant
environmental resources, as well as monitoring necessary "to assure the
success of the containment. Containment does not induce off-site
treatment and discosal unless this is the least cost *»»**«? of containing
the wastes, or unless other parties pay any additional casts ncodnd
for off-site treatment and disposal. Examples of contairsaent include
clay cover, neutralization, perimeter protection using cxkes or trenches,
collection and treatment of leachate and runoff, replacement of
breached containers and on-site treatment and redisposai on-site.
Because of the estimated high costs of government response
necessary to contain the spread of hazardous wastes from inactive and
abandoned disposal sites and the belief that government response
should be the first priority, payment of third party damages are not
. authorized for releases from these sites.
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In addition to these uses of the fund, government costs incurred
when responding to an iitminent and substantial danger to public
health .or welfare would' be recoverable froa the fund.
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Preemption and the Role of the States. In order to enable the
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States to assume responsibility for remedying the problems caused by
the vast majority of inactive and abandoned sites and- focus Federal
assistance on those sites presenting the most serious public health,
safety or environmental problems, the proposed legislation would not
preempt in any way the States' authority to establish funds, ''set
limits of liability, or impose a fee or otherwise raise revenues to
support such funds.
The fund created by the proposed legislation would enable +^
government to use up to $300,000 for emergency assistance at abandoned
and inactive waste sites, regardless of State involvement. Provision
of all costs of containment at these sites, however, would be «•"» ine^
upon several conditions.. First, the State would have to agree by
contract to assure any necessary continued maintenance of the
ment, including the costs of such maintenance, beginning one year
after containment is first achieved and extending for up to 19 years
or the life of the containment, whichever is less. The State may either
this function itself, contract it out, or bind responsible
parties and .their .successors to perform this responsibility. Second,
the State must also assure in the contract that if off-site disposal
capacity is necessary for containment, this capacity will be provided.
If the costs of initially achieving containment would exceed $200,000,
the State must also pay 10 percent of the costs of achieving containment
and maintaining it the first year. If the site is owned by a State
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or local government, the State or local share of containnent would
be 50 percent.
If a State decided, to implement other than the least cost con-
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tainment, the State would have to pay the difference between its
alternative and the least cost alternative. Provision is also made
. for the fund to cost share in a centralized treatment and disposal
facility for several sites in an area. In this case the State or
other interested parties would pay the difference betweea the costs
of the centralized facility and the total of the least cast dn-site'
containment methods at each of the several sites.
The above preconditions on use of the fund for containment provide
the basis for States and local governments to assist in defijiing
priorities for governnent response among abandoned and inactive sites.
The proposed legislation would require the Administrator of EPA to
establish by regulation a priority system based on criteria specified
in the statute and including the roles of State, local, ***•* Federal
governments in assisting the Administrator in his detenniaation of
priorities. The proposed legislation prohibits use of the fund for
a given site unless the Administrator determines that the
or inactive hazardous waste disposal sits is mace eligible by the
priority systsn.
The legislation would also require the Administrator; of .EPA to
revise the National Contingency Plan to establish a contracting systen
for allowing States to provide emergency assistance and containment
for abandoned 'or inactive sites and to be fully reimbursed by the
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fund. The States could contract with the fund to carry art any Federal
government response authorized by the legislation.
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With respect to spills/ the proposed legislation, presenpts States
fron establishing funds, liability schemes or financial responsibility
requirements which vrould duplicate the purposes of the 'legislation but
it does not preerpt States for other purposes-. Thus, S tastes could compel
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payment of a tax or fee to establish a fund to pay for ^TE"?"*! injuries
of innocent victims or purchase of pollution abatement esniipaent.
Liability. Owners and operators of vessels or facilities; which are
the source of or pose a threat of pollution are subject tto joint,
several and strict liability for all costs and damages cssvered by
the fund. Owners, lessees and operators of inactive or aSaandoned
hazardous waste disposal sites are subject to joint, several and
strict liability for costs of government response covereS by the
fund if they caused or contributed to a release of hazardous wastes.
In addition, any other persons who caused or contributed; ±o the
releases at such disposal sites, including but not limited to
prior owners, lessees, and generators or disposers could 2fae simi-
larly liable. This retrospective extension of liability ^recognizes
that in scene cases, persons other than current owners or operators
may have contributed to, and therefore are responsible ***- damages
caused by such releases.
The legislation establishes limits to T •< a'nf
circumstances. In the case of a vessel other than a shi=? or an
inland oil barge, the limit of liability would be ?150 per gross
registered ton or $250,000, whichever is greater. For imlanrl
cil barges the liability limit would be $150,000 or 5150 per gross
registered ton, whichever is greater. In the case of a shin,
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the liability limits would be $250,000 or $300 per gross registered
tan (up to a maximum of $30,000,000), whichever is greater. For
offshore facilities operated under authority of the Cuter Continental
Shelf Lands Act, the limit would be the total of removal costs plus
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$50,000,000. In the case of abandoned and inactive hazardous waste
disposal sites or onshore facilities or offshore facilities (not
under the OCS Lands Act), the liability limit may be established at
$50,000,000 or a lower limit, but not less than $0,000,000. The
Limits to liability do not apply for willful misconduct, gross
negligence, violation of relevant Federal regulations, failure to
provide notice of a release, or failure to cooperate or assist in
cleanup operations requested by responsible federal officials.
The legislation establishes limited defenses to liability.
Defenses include Ca) incidents caused solely by an act of war or •
of God, or (b) as to a particular claimant, that the claimant's
gross negligence or willful misconduct contributed to the economic
loss.
The fund itself is liable for damages fron spills and subject
to similar defenses. The fund is liable for damages from releases
at abandoned or inactive hazardous waste disposal sites, but this
is limited to the costs of government response and applies only
where the. site has been certified as meeting the criteria for
priority established by tha Administrator of FJ?A. Thus the
fund provides compensation in thos« instances where claims,
including those of Federal and State governments, are not fully
satisfied by payment from a responsible party, or where the
responsible party cannot be identified or is not liable under
• the Act.
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SUPERFUND ECONOMICS
- RATIONALE .AND IMPACTS
INTRODUCTION
The annual revenue needs of the fund and the fee system established
by the proposed legislation are premised on a number of factors and
assumptions. The annual revenue needs are based upon an as-needed system
of response to spills of oil and hazardous substances .and a phased
approach to dealing with the huge problem posed by uncontrolled
hazardous waste disposal sites. EPA has projected that up to $6 billion
may be needed to provide emergency assistance and containment for
the 1200 to 2000 potentially hazardous sites. Simply managing such
a volume of projects and funds 1n a two or three year period would be
administratively Impossible, to say nothing of the fact that enough
sufficiently skilled contractors would simply not be available 1n such
a short period. Moreover, since the fund 1s to be principally supported
by Industry fees, annual revenues must be limited to an amount that
Industry can reasonably be expected to bear. Finally, since the exact
size and extent of the hazardous waste site problem 1s not known, the
Administration's bill authorizes a fund for four years with total revenues
of $1.625 billion. At the end of this period, the fund and fee system
will 'have to be reauthorized by Congress.
We have recommended that the annual revenues of the fund be built
up to $500 million over several years. The projected allocation of
annual expenditures at the $500 million level 1s summarized 1n Table 1.
This amount will provide sufficient resources to cleanup and pay limited
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TABLE 1
ESTIMATED ALLOCATION OF EXPENDITURES BY SOURCE OF FUNDS
(1n minions, of dollars)
JXPENDITURES OIL CHEMICALS FEDERAL APPROPRIATION
Uncontrolled hazardous 40 200. 60
waste disposal sites
Spills of oil and 40 40 20 • 100
hazardous substances
Administration and 20, 60 20 lool/
reserve
500
-'Once a reserve fund of up to $50 million 1s established, administration
costs will drop by the amount of funds 1n the reserve and those annual
revenues which are unnecessary to maintain the reserve and pay for
administrative costs will be allocated to uncontrolled hazardous waste
disposal sites. Thus, 1n any one year, the $300 million allocated to
such sites may be Increased by up to $50 million for a total of $350 million.
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third party damages for spills, and to begin to attack the uncontrolled
site problem, without significantly affecting the financial well-being
of the Industries affected.
The $500 million yearly expenditure represents a steady state
spending rate which will not be achieved Immediately. During the first
year of fund operation, EPA will have to hire and train personnel 1n the
proper administrative and operational aspects of the program. In addition
the fee will be collected under the auspices of regulations which will
take some time to develop. As a result, a full $500 million could not
be raised or spent during the fund's Initial year of operation. Recog-.
nlzlng this, the legislation provides for a phased Initiation of the fund
as follows: first full year 50 percent ($250) of $500 million; second year
75 percent ($375) of $500 million; and third and fourth years, $500 million.
SELECTION OF A FEE SYSTEM
Of the $500 million In needed annual revenues, appropriations will
account for up to $100 million. Industry has argued that such an
appropriation 1s necessary In order that the Congress and the Admini-
stration have a sufficient financial stake 1n the program to ensure
efficient management and closa- scrutiny of expenditures and of any
necessary reauthoHzatlon.
'The remaining $400 million would be derived annually from Industry
fees. In establishing the fee system we have tried, given the amount of
revenues required and the'Umlt on Federal appropriations, to balance
three key objectives: administrative simplicity, equity, and minimizing
unintended adverse Impacts. Since these three objectives, to a signifi-
cant degree, conflict with one another, the proposed system obviously can
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not be perfect in all respects. While consideration Initially was given
to a number of alternative fee systems,, two options were evaluated as
especially worth considering: (1) a fee on crude oil, petrochemical
feedstocks, and Inorganic materials; and (2) a fee on the disposal of
hazardous wastes. The pros and co.ns of these two options are summarized
below.
Option 1; Hazardous Waste Disposal Fee
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PRO: (1) Establishes an equitable fee for hazardous waste with respect
to the current hazardous waste stream.
(2) Would provide an Incentive for reduction of the waste stream
(I.e., resource conservation and recovery) assuming fee were
based on volume or mass.
(3) Avoids creating an Incentive for Increased manufacturing abroad.
CON: (1) Depends on RCRA manifest and permit system which is currently
not operational. Although due to be promulgated December 31, 1979
and effective 6 months later, manifest and permit systems could be
held up 1n courts thereby preventing collection of fees.
(2) Would provide an Incentive (I.e., not having to pay the fee) for
generators not to enter the manifest and permit systems.
(3) Would add a significant increase to current hazardous waste dis-
posal costs thereby providing a strong incentive for Illicit
dumping. Average current charge for disposal in landfills is
about $30/ton. To raise $300,000,000 annually would require a
fee of approximately SlO/ton, a one-third increase in costs.
(4) A fee system for spills of oil and hazardous substances would
still be necessary because from an equity point of view, a fee
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on disposal of hazardous waste could not be used fairly to respond
to hazardous substance spills,. It 1s not obvious how such a two
pronged fee system could preclude hitting the same party twice,
once for disposal and once for spills.
(5) Requires collection of a .fee from large numbers of disposers
(approximately 30,000)
Option 2; Oil. Inorganic and Petrochemical Feedstock*Fee
PRO: (1) Establishes a single fee system which applies to spills of oil
and hazardous substances and releases from uncontrolled hazardous
waste disposal sites.
(2) Provides a broad-based fee which 1s relatively easy to administer
due to relatively small numbers of those who would pay fee (under
1200 plants or 700 companies). For oil, Information necessary
to Implement system 1s already available from Department of Energy.
(3) Establishes an economic Impact celling of 2% of sales price so
that no substance or company 1s hit too hard.
(4) Achieves equity by Imposing a fee on oil and chemicals which:
(1) are spilled directly, (2) become chemicals which are spilled,
and (3) become hazardous wastes.
(5) Provides an Incentive for recycling of raw materials.
(6) Provides an Incentive for conservation of natural gas and oil,
(7) Avoids creating an Incentive for Increased manufacturing abroad.
CON: (1) May Impose fee on feedstocks which produce some substances or
wastes which are not hazardous (however this should not produce
unfair competitive advantages since all such affected competing
companies will be paying the fee)
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6.
(2) Will require additional Industry reporting on which to base most
Inorganic fees and some or all petrochemical feedstock fees.
The second option has been selected. The proposed system of fees
covers oil, petrochemical feedstocks, and certain highly toxic and/or
high volume Inorganic materials Including heavy metals, halogens, adds,
\
bases, and ammonia. This fee 1s based upon the belief that the fee should
come as broadly as possible from those segments of Industry and consumers
«
who are most responsible for Imposing the risks 1n society. (The approach
assumes that most costs will ultimately be passed on to users and consumers).
All oil and almost all hazardous substances are products of the oil Industry,
chemical and allied Industries, and heavy metals Industries. In addition,
most hazardous wastes are produced by these Industries or as a result of
using products from these Industries, All organic chemicals are derived
from petrochemical feedstocks. Heavy metals, halogens, adds, and bases
are significant raw materials for many toxic Inorganics. Figure (1) depicts
how oil, petrochemical feedstocks, and Inorganic materials eventually
become oil and hazardous substances which may be spilled and hazardous
wastes found 1n Inactive and abandoned sites.
The legislation would authorize the following annual fees: (1) crude
oil- up to $100 million; (2) petrochemical feedstocks- up to $200 million;
and ('3) Inorganic materials- up to $100 million. The largest of these
annual fees, $200 million from petrochemical feedstocks, constitutes less
than 0.4 percent of the $55,8 billion value of shipments from the petro-
chemical Industry 1n 1978.
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JELECTIONX OF PETROCHEMICAL FEEDSTOCKS ON WHICH TO BASE FEE
In developing the fee system for organic chemicals, the primary
Issue was which chemicals should form the base from which to go back to
their feedstocks and assess a fee (As pointed out earlier all organic
chemicals are^derlved from petrochemical feedstocks). For the following
reasons 1t was determined that this base should be all organic chemicals
(hence, the fee should be collected from-all petrochemical feedstocks).
Many organic chemicals and their byproducts 1n the halogenated hydrocarbon,
pesticide, and aromatic categories are known to be extremely hazardous.
Experience to date tells us that chemical relatives to known problem
chemicals and their byproducts are likely to be problems. The number and
volume of organic chemicals which are not hazardous or likely to be
hazardous 1s relatively small. Also, the complexity of the organic
chemical Industry would make 1t extremely difficult to pick and choose
among organic chemicals 1n determining which feedstocks or organic chemicals
to Impose a fee on. For example, benzene, Itself a designated hazardous
substance produced from petrochemical feedstocks, 1s converted as a
primary building block Into cyclohexane, then to ad1pon1tr1le and
hexamethylened1am1ne 1n the organic chemical sector, and finally 1s
converted to nylon 6-6. Nylon, as a resin, becomes a plastic product,
and as a fiber, a textile product. This example of a product flow Is
only one of many Involving benzene products and petrochemicals 1n general.
The major petrochemical feedstocks upon which the fee will be
collected are: toluene, xylene, napthalene, benzene, butylene, butadiene,
butane, ethylene, propylene, carbon black, and methane (other than that
used to make ammonia).
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SELECTION OF INORGANIC RAW MATERIALS ON WHICH TO BASE FEE
The number of potential sources of Inorganic chemicals 1s vastly
larger than for organic chemicals. For this reason 1t seemed unworkable
and unreasonable to place a fee on all Inorganic materials. Therefore
selection criteria were necessary to determine which Inorganic materials
(heavy metals, halogens, add formers, caustic formers, ammonia) to assess.
The selection of Inorganic materials to be subject to a fee was
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based upon satisfaction of two or more of the following considerations:
the material must be hazardous 1n a number of forms; the material 1n
some form must be hazardous 1f spilled; the material must be produced
1n large amount; the material must be capable of Increasing the hazard
potential of other elements.
Of the heavy metals, arsenic, cadmium, mercury, lead and chromium
are Included 1n the fee system because they are produced 1n quantity and
many compounds Incorporating these elements are hazardous. Additional
detailed Information on these heavy metals 1s provided 1n Appendix A.
All of these elements are subject to maximum contaminant levels under
the Safe Drinking Water Act. Lead and chromium are used 1n chemical
manufacturing 1n other forms, I.e., lead oxide, sodium and potassium
dlchromate, chromlte an chromic add. Antimony, nickel, cobalt, beryllium,
zinc,' barium and selenium were considered but are not proposed to be subject
to the fee at the present time. Their omission results from their satisfaction
of only one of the above 4 criteria at this time. Should additional data
demonstrate their satisfaction of an additional criterion, they could be
added at a later date.
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9.
Of the halogens, chlorine, bromine and fluorine satisfy at least two
of the above criteria and are Included 1n the fee system. These elements,
or their adds which are produced 1n large volumes, are hazardous 1f spilled,
can form hazardous materials and wastes, and can Increase the mobility of
'heavy metals 1f present 1n a disposal site 1n their acidic forms. Elemental
fluorine and Iodine are not produced 1n sufficient quantities to justify fee
collection. Ethylene dlbromlde and methyl bromide are produced 1n large
#
quantities and are quite hazardous.
Hydrochloric, hydrofluoric, sulfurlc, phosphoric and nitric adds
would be subject to fee collection because of their large production volumes,
spill hazard, their Incorporation Into hazardous compounds and their satis-
faction of the reactivity and corroslvlty criteria of the EPA proposed
hazardous waste regulations. Acidic disposal site conditions may corrode
waste containers and Increase the mobility and toxlclty of some heavy metals.
Sodium and potassium hydroxides would be subject to fee collection
because of their large production volumes, spill hazard,-and their satis-
faction of the EPA proposed hazardous waste reactivity and corrosivlty
criteria.
Ammonia and ammonium nitrate are subject to fee collection
because of their large production volumes, spill hazard, their Incorporation
into'hazardous compounds.
Other Inorganic materials are known to demonstrate chronic toxlclty
but were not Included at this time because Initial concern has been on acute
toxlclty. When the 11st of designated hazardous substances 1s expanded to
Include chronic toxlclty, the Inorganic materials subject to a fee should
be considered .for expansion.
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10.
RATIONALE FOR ESTABLISHMENT OF FEE COLLECTION POINTS FOR HAZARDOUS SUBSTANCES^
The fee would be collected from suppliers (producers or Importers)
of petrochemical feedstocks and Inorganic materials as they are shipped,
or used on site, by these suppliers. The rationale for establishing
the fee collection points for hazardous substances 1s based on the
following considerations. The collection point should be early enough
1n the waste production cycle so that the fee 1s equitably distributed
«
among all hazardous waste generators. The collection point should be
early enough 1n the manufacturing cycle so that the fee 1s equitably
distributed among all hazardous substances suppliers. The collection
point should be late enough 1n the manufacturing cycle so that uses of
petroleum, natural gas, and minerals other than for hazardous substance
production, for example agricultural application of elemental sulfur
and use of petroleum and natural gas as sources of energy, are not
subject to the fee. Finally, the number of collection points should
be kept as small as possible to minimize administrative costs and
difficulties of fee collection.
These considerations argue for the establishment of the fee collection
point very early In the hazardous waste and minerals generation cycle. The
effect of establishing the fee collection point on petrochemical feedstocks
and Inorganic materials 1s examined below.
A major use of petroleum and natural gas Is the production of chemicals.
Almost all petrochemical feedstocks are produced from petroleum and natural
J/For a discussion of the fee collection system for crude oil, see
~ A Fee Collection Mechanism for the Oil Pollution Liability and
Compensation Legislation, written by Michael W. Chrlstensen and
Maryann B. Froench, DOT, August 1978,
-------
11.
gas, However, 1f the fee were collected on petroleum and natural gas
producers, non-hazardous uses, such as .fuels, would be Inequitably subject
to a fee. The first step 1n organic chemicals production 1s the processing
of petroleum and natural gas Into a small number of feedstocks or building
blocks which can then be transformed Into thousands of more complex
organic compounds (Intermediates) and eventually Into hundreds of thousands
of complex products. All petrochemical feedstocks are subject to the fee
i «
since all are judged equally hazardous 1n terms of products or wastes.
Therefore, all suppliers (Including on-s1te users) of petrochemical feed-
stocks will pay the fee. If the fee collection point were shifted further
down the production path to organic Intermediates a number of problems
would ensue. The number of fee collection points would be substantially
Increased. Substantial difficulties 1n recognizing and determining the
correct fee 1n the more complex Intermediates would also be encountered.
Inorganic materials present a different set of Issues, Inorganic
materials are produced from minerals, sea water, and process wastes.
If the fee were to be collected on minerals, sea water and process wastes,
an exact composition would be necessary to calculate the fee due. Such a
calculation would not be feasible. Also some minerals are used directly
for non-hazardous uses, for example limestone may be used in cement and
sulfur 1n agriculture. Bromine 1s produced from natural brines and chlorine
can be produced from sea water, Major amounts of sulfurlc add are produced
from oil, natural gas and flue gas refinement. These considerations suggest
strongly that establishment of the fee collection point on shipment of
minerals or other sources or Inorganic materials would not be reasonable
or feasible.
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12.
The fee would be collected on all.shipments or'on-site use by
suppliers (producers or Importers) of Inorganic materials. Inorganic
materials may be transformed Into more complex Intermediates, directly
Into products or combined with organic chemicals Into organic-Inorganic
Intermediates or final products. The number of these more complex compounds
numbers In the thousands. If the fee were collected on intermediates or
*
final products, many hazardous materials shippers or waste generators
would not be subject to the fee. Fee collectors would find 1t very
difficult to determine the required fee on complex Inorganic or Inorganic-
organic Intermediates or final products. Establishment of the fee
collection point on suppliers of Inorganic materials (Including self-
suppliers) provides the minimum number of fee collection points.
Table 2 shows the number of plants and companies from which fees
will be collected for crude oil, petrochemical feedstocks, and Inorganic
materials.
ORGANIC/INORGANIC FEE DISTRIBUTION RATIONALE
The principle used to distribute the fee between petrochemical
feedstock and Inorganic material suppliers was that the distribution
should reflect the generation of hazardous wastes. Alternative
distribution systems—based on production—were rejected because
they did riot reflect hazardous waste generation. All data used
were weight corrected to eliminate any Inherent bias toward the
heavier Inorganic elements due to their higher atomic weights.
In response to the Resource Conservation and Recovery Act of 1976,
EPA prepared a study of the 17 major Industries producing hazardous
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13.
TABLE 2
FEE COLLECTION - NUMBER OF- COLLECTION POINTS-''
COLLECTION ON PETROCHEMICAL FEEDSTOCKS NUMBER^/ OF
COMPANIES PLANTS
Ethylene 26 37
Propylene - 38 67
Butylenes (Butenes) 13 20
Butadiene 15 20
Butane N.A. N.A
Benzene 38 ' 54
Toluene 34 47
Xylenes (Mixed) 30 37
0-Xylene 12 12
P-Xylene .11 13
Napthalene 6 12
Methane (non ammonia use) 10 12
Carbon Black 7 30
Subtotal • 240 361
COLLECTION OF INORGANIC RAW MATERIALS
(Heavy Metals)
Arsenic, Arsenic trloxlde 1 l
Cadmium 67
Chromium, chromate, sodium/potassium
dlchromate, chromic add 32 46
Lead, lead oxide 8 19
Mercury 1 12
(Halogens)
Bromine, Methyl bromide, ethylene
dlbromlde 12 16
Chlorine, hydrochloric add 71 122
Hydrofluoric add 12 22
(Acid Forming)
Phosphorous, Phosphoric add 37 70
SulfuHc add 73 158
Nitric add 46 88
(Caustic Forming)
Sodium, sodium hydroxide 36 72
Potassium hydroxide 10 13
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14.
TABLE 2.(Con't)
COLLECTION ON PETROCHEMICAL FEEDSTOCKS NUMBER OF
COMPANIES PLANTS
(Other)
Ammonia 60 94
Ammonium nitrate 41 65
Subtotal 446 805
TOTAL 686^/ 1166-2/
J/Excluslve of fee on crude oil and some Imported petrochemical feedstocks
and Inorganic raw materials.
2/Source: Stanford Research Institute, Directory of Chemical Producers
I/Since the same company or plant may (and often does) produce more than
one petrochemical feedstock or Inorganic raw material, these totals
overstate the actual number of collection points. Although the above
figures do not explicitly reflect the approximately 300 crude oil
refineries from which the oil fee will be collected, many of these
refineries are part of the same companies producing petrochemical feedstocks.
-------
15,
wastes. Wastes for 8 of the 17 Industries (organic chemicals, primary
metals, electroplating, Inorganic chemicals, petroleum refining, rubber
and plastics, paints and allied products and Pharmaceuticals) representing
92% of the estimated 35 million tons of hazardous waste generated annually
1n the U.S. were characterized by the study as 45% organic and 55% Inorganic
by weight. These percentages were then corrected to eliminate the inherent
bias toward the heavier Inorganic elements, yielding fee collection
t
percentages of about 68% from organic* and 32% from Inorganics. These
figures were rounded off to 2:1 and produced the $200 to $100 million
fee collection figures.
SAFEGUARDS
Like any fee system, the proposed fee scheme may have the potential
for Inducing unintended or unreasonable results 1n certain Instances
(e.g., an Inorganic chemical producer who uses petrochemical feedstocks
and competes against firms which produce the same product but use a different
process which does not use petrochemical feedstocks subject to the
fee). As a result, a series of safeguards have been built Into the fee
system 1n order to minimize Inequities and Inintended adverse impacts.
In order to avoid more than one fee collection on any quantity of oil*,
petrochemical feedstock, or Inorganic material, the fee will only be
levied once on a given quantity of such material.
A second safeguard relates to the limit of the fee for any given
petrochemical feedstock or inorganic material. To help insure that no
serious dislocations are created by this system, total fees collected
*An"exceptlon 1s made for crude o11 wh1ch 1s refined and used as
a feedstock. In this case the fee 1s collected on the crude(for
oil spills) and on the feedstock (for hazardous substance and
hazardous waste releases)
-------
16,
on feedstocks and Inorganic materials are limited to two percent of
their market price. Any assessed firm which believes Its fee 1s In
excess of the two percent limit, may petition the Executive to have Us
fee lowered so as not to exceed the two percent cap, Thus, although
It 1s possible that some firms might have to operate at reduced rates
of profit, 1t 1s not expected firms or plants would actually be forced
to close as a result of this fee system.
A series of limits have been Included on the amount of funds which
can be raised by the fee system. An annual limit of $400 million 1s the
total amount of fees which may be collected 1n any one year. The total
annual limit 1s broken down Into categories. No more than $100 million
may.be collected yearly on crude oil. $200 million 1s the annual 11m1t
on petrochemical feedstocks* and $100 million 1s the annual limit for
Inorganic materials. Additionally there are per unit limits for each
of these categories. For crude oil the fee may not exceed three cents
per barrel. For petrochemical feedstocks, the limit 1s h cent per
pound. Inorganic materials fees are limited by a $2 per ton celling.
Perhaps the most Important safeguard 1s that the per unit fees will
be established (within their above described maximum limits) by rulemaking.
In the rulemaking process, an economic analysis 1s required by Executive
Order to be conducted and all those affected by the fee will be able to
participate 1n the development of the fee before it Is established by rule.
The final safeguard is of a longer term nature. It is the mid-course
adjustment study which will make recommendations to Congress within four
years of enactment on any needed revision of the fee structure system.
-------
17.
The recommendations will be based upon the study which will focus both
on how the fee has been collected up to that point and on the nature of
the hazardous substance and hazardous waste release problems. The goal
of the mid-course adjustment 1s to make any necessary changes to Insure
that the fee system is equitable a'nd reflects the experience of the fund
relative to the proportion of the annual disbursements funded by each
sector of the economy.
-------
Economic Impact Analysis
Proposed Superfund Fee System
The proposed $400 million Superfund fee system is expected to have a negligable
impact on the U. S. economy. The size of the fund is small both in relation to the
overall economy an3 in relation to the industries who will be paying the fees most
directly. To insure that this will be true for all industry segments the fees will
be limited to two percent of the market price of any product against which the fee
is charged. This limitation together with the relatively small size of the fund is
expected to insure that no significant raw material or product substitutions or
economic dislocations will result from the fee system.
The following sections present the conclusions of the economic impact analysis
in more detail.
Macroeconomic.Impacts
Because the $400 million per year fund is so small in relation to our $2,400,000*
million economy, no macroeconomic impact analysis has been performed. The impact of
the fund would not be noticed in any econometric model; first, because such models
are not sensitive to such small changes, and second, because^tfie additional costs
borne by those industries which are paying the fee would be offset in part by in-
creased revenues in other industries, namely, those which will clean up the spills
and hazardous waste sites.
This is not to say that charging $400 million per year to the oil, chemicals,
.and metals industries and diverting those resources to the "environmental restoration
industries" will not have any macroeconomic effect. It certainly will; however, the
effect will be small in relation to the size of the U. S. economy. The nation will
shift its resources away from the products of the fee-paying industries and towards
the restoration of the environment. The net effect of"this shift will be real, but
too small to make an appreciable difference in a macroeconomic model.
Microeconomic Impacts
The proposed Superfund fee system includes separate fees on crude oil, petro-
chemical feedstocks, and inorganic raw materials. The effects of these different
fees on the petroleum refining, petrochemicals, and selected metals and inorganic
chemicals industries is discussed below:
Petroleum Refining
The proposed superfund fee on crude oil will amount to a very small percentage
of crude oil"prices. Annual U. S. crude use is expected to be 5,475 million barrels
in 1980.** Distributing the full $100 million required annual revenues over this
base would result in a fee of about 1.85 cents per barrel of crude. This would
amount to only 0.11 percent of expected 1980 crude prices of $16.83 per barrel.**
Of course the full $100 million in revenues will not be raised until 1982. By then
* Estimated current dollar GNP for 1980; Data Resources, Inc.
**Estimates by Data Resources, Inc.
-------
-2-
the number of barrels of crude used as well as the price per barrel of crude should
have risen. Both of these trends will reduce the size of the fee as a percentage
of crude prices.
An increase in costs of only 0.1 percent should have no noticeable effect on
the petroleum refining industry. Since the fee will impact all competitors equally,
the additional cost to refiners will be passed along to the products made from crude.
This will affect different products differently, of course, but in no event should
the effect be large enough to be noticeable. The resultant increase in the price
of gasoline at the filling station, for example, would be only 4/100 of a cent per
gallon.*
Because the superfund fees are expected to be such a small percentage of both
crude oil and final product prices, the economic impact of the fees should not be
noticeable. No production curtailments, employment reductions, or plant shutdowns
are anticipated.
Petrochemicals
The proposed Superfund fee system for- the petrochemicals industry will consist
of a fee charged per pound of petrochemical feedstock up to a maximum of two percent
of each feedstock's market price. Table I depicts how this fee would be derived
assuming that the full $200 million revenues would be required in 1980. The two
percent limitation would apply to nine of the fourteen chemicals. For the remaining
chemicals the required fee would be 0.31 cents per pound, or $6.20 per ton.
As indicated by the flow diagram in Figure I the petrochemical industry is a
very complex industry. A great variety of final chemical products are produced from
many chemical intermediates which in turn are produced from other intermediates of
from the feedstock chemicals against which the fees will be assessed. Any one
chemical can often be made from a number of processes using different feedstocks.
To analyze the impact of the fees upon the industry a computer model which simulates
the interaction's between the major products and processes in the industry has been
employed. A technical description of this model is contained in Appendix I.
Basically it is a linear programming model which contains itemized costs for each
chemical process and which allocates the production requirements of the industry to
the most economical processes. Although the model does not cover every chemical
produced by the industry, it includes all of the major chemicals and covers ninety
percent of the industry's output.
This model has been employed to determine the following:
(1) What impact will the superfund fee system have upon chemical prices?
(2) Will the changes in chemical prices load to any changes in chemical
or process use?
To answer the first question the model was used to trace through the expected
price changes for petrochemicals starting with the imposition of the proposed fees
* Estimate based upon Department of Energy estimating rule-of-thumb that the cha%nge
in gasoline price per gallon will be 1/42 of the change in crude price per barrel.
-------
TABLE I
SUPERFUND FEES
EDSTOCK
Toluene ^ 2^
p-Xylene
m-Xylene
o-Xylene
Napthalene
Benzene
Butylene^3)
Butadiene
N-Butane(3)
Iso-Butane
Methane(4)
Ethylene
Propylene
Carbon Black
TOTALS
ANNUAL USE (1)
(Billions Ibs)
0.4
3.7
N.A.
1.0
0.3
11.9
2.4
4.1
1.1
2.2
5.7
28.0
13.6
6.0
80.4
PETROCHEMICALS
($200,000,000)
LIST PRICED 1)
(cents/lb)
11.7
18.7
N.A.
18.7
8.4
15.1
8.2
25.7
8.4
9.5
6.0(5)
15.7
9.7
4.3
REQUIRED
FEE
(cents/lb)
0.234
0.310
N.A.
0.310
0.168
0.302
0.164
0.310
0.168
0.190
0.120
0.310
0.194
0.086
ANNUAL
REVENUES
($ Million)
0.9
t
11.5
N.A
3.1
0.5
5.9
3.9
2.7
1.9
4.2
6.8
86.8
26.4
5.2
$200
FEE AS A PERCENT
OF FEEDSTOCK PRICE (€
(%)
2.0
1.7
N.A
1.7
2.0
2.0
2.0
1.2
2.0
2.0
2.0
2.0
2.0
2.0
A. = Not Available
.) Data Resources, Inc. estimates for 1980. (2) Excludes that portion used in
:oducing benzene. (3) Excludes that portion used in producing butadiene.
I) Excludes that portion used in producing ammonia. (5) Equivalent to $2.50 per
lousand cubic feet. (6) Fee as a percent of final product prices will be much less.
;e Text.
-------
FIGURE T
PETROCHEMICAL INOUSTRY
I*.
Source: Data Reioureci, Inc., Lexington, Mais.
-------
Flow of Industrial Organic Chemicals
Progress From Raw Material to Consumption
(Ettimiitd 1978 Vatuai of Shipmtmi)
Pttrochrmical
Fnditocki
SS Billion
u
Chtmicil Building
Block*
S10 Billion
U
Industrial Organic
Chamiealf
S24 Billion
U
Chtmicil Stctori with Organic
Critmical Inputi
Plaiticj, rttint and ivnthttie rubbtr
Manmada fibtrt
Rubbtr ind plamct produeti
Cltaning and toilat prtparationi
I I
$40 Billion
I I
Output of ehtmieal wetor tuantial
to induttry output
Final
Demand
Comumption
S4 Billion
S27 Billion
I mduitry oute
Induitrit* that art Major Utan of
Products from Organic Chamical Stetor
Agriculture Houtihold Applianeat
Automotiva Papar & Allitd Produeti
Conitruction Printing & Publiihing
Footmtar Taxtiltt
(Total chipmarm by tha lalactcd
indunriet — $530 billion)
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-3-
on the feedstocks, through the resultant cost and price increases for the inter-
mediate chemicals, to the end-of-the-line price changes for the final petrochemical
feedstocks. This analysis was done before the.two percent limit was adopted using
a uniform fee of 0.29 cents per pound of feedstock. The conclusion of the analysis
was that, although feedstock prices would increase about two percent, the average
price increase for the final petrochemical products would be about 0.6 percent.
Adding a two percent maximum fee would change the individual prices in the model,
but the average estimate would remain the same.
In analyzing the expected price changes, the computer model automatically deter-
mines whether resultant changes in process economics will produce any shifts in feed-
stock or process use. If the changes in chemical prices are great enough to change
the cost ranking of processess, the model will automatically allocate production to
those processes which become the most economical. This will produce concomitent
shifts in the industry's use of feedstocks and capital resources.
When the proposed petrochemical fees without the two percent limit were added
to the feedstock prices, no changes in feedstock or process were noted. Basically
this was because the differences in process costs were greater than the cost changes
produced by the fees. Thus, the cost-ranking of average processes was the same with
the fees and without. In no instance was it found that the fees would make a process
so much more expensive that another process would become more economical. The addi-
tion of the two percent fee limit would strengthen this conclusion. The fees would
impact the feedstocks in a much more uniform manner with the two percent limit in
effect, thereby reducing the differences in cost changes between processes.
The above analysis does not take into account any changes in chemical sales that
might result from the increased prices. If final chemical product processes increase,
then it might be expected that the volume sold would decrease. Hence, fewer chemicals
would be produced and fewer feedstocks used. With final product prices increasing by
an average of 0.6 percent as a result of the superfund fees, any drop in total chemical
sales would be expected to be small. Generally, the products of the petrochemical
industry are relatively price inelastic, which means that a 0.6 percent increase in
sales would lead to a fail in sales of less than 0.6 percent. This would result in a
lower volume of intermediate chemicals and feedstocks being produced, although the
change would be so small as to be hardly noticeable. With industry sales growing at
rate of 4-6 percent per year, a reduction in demand of 0.5 percent would not be
noticed as a decline in production, but as a reduced rate of growth.
In summary, our analysis shows that the effect of the proposed superfund fee
system on the chemical industry will be to increase feedstock prices by about 2.0
percent and final chemical product prices by about 0.6 percent. This is expected
to have a slightly dampening effect upon the rate of growth of sales in the industry,
but would not result in any production shifts, employment losses or plant closings.
The changes in chemical prices will not be great enough to produce any changes in
the process economics of the industry sufficient to create shifts in feedstock or
process use.
Inorganic Chemicals and Other Raw Materials
The Superfund fee system will also apply to the inorganic chemicals and other
raw materials listed in Table II. To collect the required $100 million, a fee of
-------
TABLE II
SUPERFUND FEES
INORGANIC
MATERIALS
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Ammonia
Arsenic
Arsenic
Arsenic Trioxide
Bromine
Bromine
Methyl Bromide
Ethylene. Dibromide
Cadmium
Chlorine
Hydrochloric Acid (100%)
Chromium
Chromium
Dodium Dichr ornate
Chromite
Potassium Dichromate
Chromic Acid
Hydroflouric Acid
Lead
Lead
Lead Oxide
Mercury
Nitric Acid (95%)
Phosphoric Acid( )
Potassium Hydroxide
Sodium Hydroxide (100%)
Sul Curie Acid. (100?,)
TOTALS
INORGANICS
($100,000,000)
ANNUAL USE{1) LIST PRICE (2)
(Tons)
17,000,000
650
31,000
28,500
10,000
114,000
5,000
11,500,000
1,000,000
4,000
143,000
995,000
N.A.
33,000
288,000
1,500,000
120,000
2,000
5,642,000
1,400,000
216,000
13,000,000
34,500,000
86,532,000
($/Ton)
132
N.A.
230
500
820
700
4,500
120
125
N.A.
740
N.A.
960
1,430
700(3)
960
1,320
4,400
162(3)
400
500<3)
184(3)
50
ANNUAL
VALUE
($ Million)
2,244
N.A.
7.1
14.25
8.2
79.8
22.5
1,380
125
N.A.
106
N.A.
N.A.
47.2
202
1,440
158
8.8
884
560
103
' 2,392
2,070
$11,857
FEE AS A
PERCENT OF PRICI
(%)
0.95
N.A.
0.55
0.25
0.15
0.18
0.03
1.05
1.01
N.A.
0.17
N.A.
0.13
0.09
0.18
0.13
0.10
0.03
0.78
0.32
0.25
0.68
2.0(5)
(1) EPA estimates for 1980. (2) Chemical Marketing Reporter, April 23, 1979.
(3) Average price for various grades.(4) Commercial and technical grades only.
(5) Fee would be limited to two percent of market price.
-------
-4-
about $1.15 per ton would be necessary; however, this would exceed the two percent
limitation for sulfuric acid. For this reason the fee would be limited to about
$1 per ton for sulfuric acid resulting in revenues of approximately $34.5 million.
The remaining $65.5 million of required revenues would spread over the 52 million
tons of other substances, resulting in a fee of about $1.26 per ton. The final
column of Table III shows how such a fee would compare with the current market
price of the affected products.
The fee ranges from a low of 0.03 percent of current list price for chromium
and mercury to a high of 1.01 - 1.05 percent for chlorine and hydrochloric acid,
and, of course, 2.0 percent for sulfuric acid. Cost increases of this magnitude
are not likely to create significant shifts in product demand. All competitors will
be paying the same fee, therefore no one group of manufacturers will be placed at
a disadvantage relative to their competitors. Furthermore, in many cases most
competing products will be paying the fees. All of the major acids, for example,
will be paying the fee and even though the fee will vary among acids as a percent
of market price, the differences do not appear to be so large that they will create
shifts in acid use. The fee-induced price increase will result in some decrease in
product demand. Such shifts will be slight, however, and are not expected to result
in hardships or dislocations. In most cases they will not be noticed due to the
relatively much more dramatic movements of other market forces.
The sector of the economy that will perhaps be hit most heavily by these fees
will be the fertilizer industry. Fees on ammonia, nitric acid, and sulfuric acid
will all bear directly or indirectly upon fertilizer prices. While the addition of
the fee is not expected to create any significant change in demand for fertilizers,
the impact of the fee will be complicated by two factors. First, because of excess
import problems and the decreasing availability of natural gas, many ammonia pro-
ducers today are finding themselves in a tight stituation. As a result of these
other economic pressures some plants may be forced to close. A fee of $1.26 per
ton in 1983, or 0.95 percent of ammonia prices will not change this situation. No
additional plant closings or significant drops in demand should result from the fee.
An additional complication will be the resultant impact upon the agricultural
community. Since farmers must accept market prices for their crops and livestock,
any short-term increase in fertilizer prices must come out of farm profits. In the
long run higher fertilizer prices would lead to reduced farm production, so that
food prices would increase and the effects of the fee system would be passed on to
the general public.
Table IV shows the overall increase in fertilizer costs that would be borne
by the agricultural sector when the fund is operative at the $500 million dollar
level. The total cost of $41.2 million represents 0.7 percent of estimated agri-
cultural expenditures for fertilizers in 1978,* and about 0.13 percent of. tho esti-
mated $31 billion of 1980 farm income.** These percentages are small, and are
not expected to cause any significant economic impacts.
* U. S. Department of Agriculture estimates $5.6 billion fertilizer expenditures
for 1978.
**Data Resources, Inc. estimates 1980 farm income at $30.99 billion.
-------
Table IV
SUPERFUND FEE SYSTEM
Fees Paid by Agriculturai~Users
HAZARDOUS
SUBSTANCE
ANNUAL AMOUNT
USED FOR AGRICULTURE*
(million tons)
ANNUAL FEES PASSED ON
TO AGRICULTURAL USERS**
($ million)
Ammonia
Nitric Acid
Sulfuric Acid
16.0
5.8
27.3
20.2
7.3
13.7
TOTAL FEES PAID 41.2 million
* Derived from: Chemical Economics Handbook; Standard Research Institute,
Menlo Park, California.
* Assumes a fee of $1.26/Ton on ammonia and nitric acid; $0.50/ton on
sulfuric acid.
-------
-5-
One other sensitive spot in the hazardous substance list is likely to be
sulfuric acid. About 10% - 20% of the annual production of this chemical comes
as a by-product of pollution control systems and some industrial processes. Hence,
in some parts of the country sulfuric acid may be sold for $60 a ton, while in
others the market price might be $30 a ton and in some locations the acid might
have to be given away. A fee of two percent of market price is not likely to have
any serious impacts.
To close this discussion it should be pointed out that ammonia, other fertilizer
materials, and sulfuric acid represent a very large part of the volume of hazardous
substances which are manufactured and spilled each year. Although fees on these sub-
stances might be thought to be unnecessarily burdensome by some groups, there seems
to be no justification for implementing a fee system for hazardous substance spills
without including these most important hazardous substances. •
-------
Appendix 1
Structure of the Models .
The DRI Petrochemical Supply and Pricing Models are optimization models that
stimulate the production process of the industry. It is designed to exactly meet
production requirements, (i.e., demand + exports - imports + inventory change) at
the minimum cost to the industry. The manner in which costs are built up insures •
that market prices are also outputs of the model. The structure of the model is
diagrammed in Chart I. There is a separa'te model for each year.
The ROWS are the chemical products in the model. COLUMNS contain processes,
exports, imports, inventory change and various accumulators. In the short-term
models (1976-1979) the processes have the prefix X and represent existing, plus
announced capacity. In the long-term models (1980,1985, 1990) there are processes
with the prefix Y, as well as the X processes, Y processes represent capacity
which the models elect to build over and above the X process capacity in order
to meet expected demand.
Exports and inventory change decrease domestic supply and imports increase
domestic supply. Assumptions on exports, imports, and inventory change are entered
as fixed BOUNDS in the model. Capacities for the X processes are also entered in
the BOUNDS section of the model.
The right hand side (RHS) of the model contains final demands (for end pro-
ducts) and exogenous demands (for intermediates). The final demands are obtained
from econometric demand equations. The exogenous demands (or demands for minor
uses) are assumptions based on the rate of growth of the economy and the penetra-
tion of the other uses category into the economy. The OBJECTIVE FUNCTION contains
all the feedstock costs, utility costs, labor costs,'by-product credits, etc. By-
product credits have a positive sign and all other items in the objective function
have negative signs. The model maximizes the negative cost of production for the
industry. Since the demands must be met, this is logically equivalent to mini-
mizing costs.
-------
STRUCTURE OF THE PETROCHEMICAL MODEL
CHART 1
DRI PETROCHEMICAL MODEL:
ROWS
0205
P1001
X X
I I
E L
T D
Y P
COLUMNS L E
+1 -l.OE
-i-l
BOUNDS
1
1
i
RHS
OBJECTIVE FUNCTION
ROWS section
COLUMNS section
Right hand side
BOUNDS SECTION
OBJECTIVE FUNCTION
Chemical products
Processes, exports, imports,
inventory change
Final demands (for final products)
Exogenous demands (for intermediates)
Capacities
Cost function
-------
APPENDIX B
FEE COLLECTION ON INORGANIC RAW MATERIALS
BACKGROUND
- B.I -
-------
C?5057
TABLE OF CONTENTS
HEAVY METALS
Arsenic
Cadmium
Chromium
Lead
Mercury
PAGE
B.3
B.7
B.U
B.16
B.21
HALOGENS
Bromine
Chlorine
Fluorine
B.26
B.31
B.35
ACID FORMING CLASSES
Sulfur .
Nitrogen
Phosphate Rock
B.41
B.45
B.50
CAUSTIC FORMING CLASSES
Potash (Potassium Hydroxide)
Sodium and Sodium Hydroxide
B.56
B.57
- B -
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
1. Heavy Metals
1.1 Arsenic
1.2 Cadmium
1.3 Chromium
1.4 Lead
1.5 Mercury
- B.2 -
-------
ELEMENT = ARSENIC
RAW MATERIAL
SOURCE
I
to
•
LJ
I
I I
PRIMARY DOMESTIC
FROM
COPPER. GOLD,
& SILVER ORES
2,100 TONS
OF ARSENIC
SECONDARY DOMESTIC
NONE
KNOWN
IMPORTED
FROM
COPPER ORE &
CONCENTRATES
8,100 TONS
OF ARSENIC
I $ | = Fee collected on
element equivalent weight
FIRST
PROCESSING OPERATION
| BASE METAL SMELTER |
FLUE DUST TREATMENT
1
1
1
1
1
1
1
1
1
1
1
1
ARSENIC TRIOXIDE
As203
(WHITE ARSENIC)3
97Z OF DEMAND
1/1/79 PRICE
PER TON OF
A«2°3 " $ 23°
PRODUCED BY:
1 COMPANY
1 SITE
GOVERNMENT
STOCKPILES
1 NONE KNOWN
INDUSTRY STOCKS
DEPLETED
4,500 TONS
"l
1
CHEMICAL
PROCESSING OPERATION
INTERMEDIATE
ARSENIC
COMPOUNDS
PURE METAL
640 TONS
COMPOUNDS
8,850 TONS
END USE
AGRICULTURE 81%
CERAMICS
& GLASS
CHEMICALS
PHARMACEUTICALS
OTHER
82
52
2%
3Z
DEMAND 24,190
TONS OF ARSENIC
T
1
J
> IMPORTED
USCG WEP-1/73 73
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
ARSENIC
Arsenic is a minor constituent of complex ores of copper., gold and silver.
Production of arsenic relates to the metallurgical processing of these ores. The
technology of recovery by-product arsenic and its marketable compounds is compli-
cated and relatively inefficient. Only one domestic firm presently recovers
arsenic as a commercial product (a copper-smelting-refining complex of the
American Smelting and Refining Co. (ASARCO), Tacoma, Washington). All of the
arsenic is processed to the oxide form, commonly known as "white arsenic." ASARCO
is reported in SRI. 1978 Chemical Producers, as the only U.S. company producing
white arsenic.
TECHNOLOGY FOR RECOVERY OF ARSENIC FROM ORES;
Recovery is based on the efficiency of the base-metal-smelter flue dust treat-
ment. Crude flue dust is combined with pyrite or galena and roasted in a rever-
beratory furnace. Condenaate collected from the gases of the furnace is crude
white arsenic. Most of the product enters end-use manufacture in the crude form.
White arsenic is the basic material used in the manufacture of various chemical
compounds. White arsenic is arsenic trioxide or arsenious oxide ^203)* Prime
white arsenic is a fine white powder containing 99.SZ arsenic trioxide. For
consumers, white arsenic is shipped in bulk and also packed in barrels containing
600 - 650 pounds each.
USES:
Approximately 972 of the arsenic enters end-product manufacture in the form of
white arsenic, the remaining 3Z is used as metal for metallurgical additives in
specialized lead and copper alloys.
Arsenic, utilized for its toxic qualities in the agricultural industry, accounted
for about 82Z of total arsenic demands. Arsenic trioxide is the raw material for
arsenical pesticides, including lead arsenate, calcium arsenate, sodium arsenite,
and organic chemicals which are used in insecticides, herbicides, fungicides, and
algaecides.
Almost all of the applications of arsenic are dissipative. Hone is recovered
from scrap sources.
- B.4 -
-------
ENVIRONMENTAL PROBLEMS;
Recovery of arsenic is dependent upon the technological efficiency and economic
factors in the treatment of smelter flue dust as veil as the variable arsenic
content of the copper ores* As one of the contaminants in smelter stack gases,
elimination of arsenic is a component of the major problem of minimizing air
pollution* The disposal of arsenical materials at metallurgical plants is a
solid waste disposal problem, especially important in relation to soil and water
pollution.
The toxic properties of arsenical compounds constitute a hazard to livestock and
water supply and comprise a limiting factor in usage.
SUPPLY-DEMAND;
Table B.I shows the arsenic supply-demand relationships for 1964 - 1973. The
domestic supply of by-product arsenic is available from estimated resources of
copper. The United States, has historically imported most of its arsenic
requirements, principally as compounds and is expected to continue to rely on
foreign sources.
SOURCE: Mineral Facts and Problems. Department of the Interior,
Bureau of Mines, 1975, pages 99-106.
- B.5 -
-------
TABLE B.I
ARSENIC
Arsenic supply-demand relationships, 1964 - 1973
(Short tons)
•
World production:
Rest of World
Total
'Components of U.S. supply:
°* Contained in inported copper
Distribution to U.S. supply:
U.S. demand pattern:
1964
... 2 , 600
... 49,900
... 52,500
... 2 600
5,100
... 14 000
... 155
... 4.600
... 26 455
•
. . . 1 500
... 24,955
. .. 20,800
. .. 1 500
1,100
755
800
24.955
1965
5,000
50.600
55,600
5 000
7,300
12 000
180
1.500
25 980
1 3QO
24 ,680
20 , 500
1 900
1,000
580
700
24.680
1966
2,900
50,800
53L700
2,900
6,500
14 400
180
1.300
25 280
1 000
24,280
20 , 500
1 800
800
480
700
24.280
1967
1,800
53,200
55jOOO
1,800
3,200
20 800
300
1.000
27 100
400
26,700
21,800
2 000
1,000
900
1,000
26 . 700
1968
1,400
56,700
58,100
1,400
4,700
19 300
400
400
26 200
2,300
23,900
19,900
2 100
900
300
700
23 . 900
1969
2,500
50,900
53^400
2,500
7,800
14 000
400
2.300
27 000
6,400
20^600
16,300
2,100
1,000
500
700
20.600
1970
2,300
52,200
54,500
2,300
8,600
14,400
500
6.400
32 200
11 ,900
20,300
§
16,100
2,100
1,000
500
600
20 . 300
1971
2,100
49,700
51,800
2,100
5,400
13,300
540
11,900
33 240
13,600
19j640
15,600
2,000
970
500
570
19.640
I
47
48
I
8
10
13
15
\f>
18
15
]
18
1972
,900
,000
,900
,900
,400
500
670
,600
070
.100
,970
,100
.900
940
480
557
,970
1973
2,100
48,000
50,100
2,100
8,100
8 850
640
16,100
35,790
11,600
24,190
19,700
2,000
1,200
490
800
24.190
-------
ELEMENT = CADMIUM
FIRST
PROCESSING OPERATION
|ZINC FLUE DUST|
RECOVERY
CHEMICAL
PROCESSING OPERATION
END USE
FROM
ZINC ORES
2.066 TONS
OF CADMIUM
ELECTROLYTIC RECOVERY
1
1
SECONDARY DOMESTIC |
VERY
SMALL
AMOUNT
I
I
1
_______
|
1
1
IMPORTED |
ZINC ORE
&
FLUE DUST
1,433 TONS
OF CADMIUM
I
CADMIUM METAL
Cd
1/1/79 PRICE
PER TON OF
Cd = $ 4,500
PRODUCED BY:
6 COMPANIES
7 SITES
~ ~ | $ 1 ~
.-j
.1
1
1
I
I 1
1
GOVERNMENT
STOCKPILES |
* * *
1,006 TONS
1 1
INDUSTRY STOCKS |
• * • J
Is I • Fee collected on
eteTnent equivalent weight
'INCREASED
243 TONS
-
-
INTERMEDIATE
CADMIUM
COMPOUNDS
t
• 1
,
TRANSPORTATION
18%
COATING
& PLATING 31%
BATTERIES 10%
PAINTS 17%
PLASTICS &
SYNTHETIC
PRODUCTS 16%
OTHER 8%
DEMAND 6,187
TONS OF CADMIUM
EXPORTS: 31 TONS
I I
i t
1 $|
V
PURE METAL
1,956 TONS
1
> IMPORTED
_J USCC WEP-1/73 It
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
CADMIUM I/
The geochemical association of cadmium with zinc and lack of ores exclusively
mined for cadmium contacts makes cadmium production a function of zinc produc-
tion. Cadmium is recovered as a by-product of zinc ore processing, primarily
zinc sulfide ores. Many producers of zinc and zinc compounds produce primary
cadmium as an integral part of their operation. In early 1975, there were 6
firms and 7 plants producing cadmium metal in the. United States. Two firms
produce cadmium oxide in additional to the primary metal. Cadmium sulfide,
selenide, and lithopane are manufactured by one primary producer and a number
of chemical firms also produce cadmium acetate, carbonate, nitrate, sulfate and
special plating salts. .
TECHNOLOGY;
Recovery of cadmium during processing of zinc bearing ores follows a variety
of producers. These include:
(1) collected from flue dust during roasting and sintering of zinc
concentrates,
(2) electrolytic method of producing zinc, the roasted concentrate
and the collected flue dust are taken into solution with sulfuric
acid and a zinc-cadmium dust is precipitated by adding zinc dust.
The fumes or sludges may contain 5 to 502 cadmium.
Cadmium recovery ranges between 14 pounds per ton of slab zinc produced in
domestic smelters and 3 pounds/tons in foreign smelters. The average is 12
and 6 pounds/tons. Variation is due to cadmium content of ore and efficiency
of recovery precess.
USES;
Coating and plating account for over 46Z of demand for cadmium metal. It is
also used in nickel-cadmium and silver cadmium batteries. Faints and pigments
are the largest uses of cadmium compounds. In plastics, cadmium stearates are
used along with barium and zinc compounds as heat stablizers and as a clarifying
agent, in polyvinyl chloride.
SUPPLY-DEMAND:
The U.S. is the world's largest consumer of cadmium, (30Z of world production).
In 1974, over 50Z of U.S. cadmium demand was met by imports. In 1974, the U.S.
imported approximately 202 of its zinc concentrate needs, approximately 7SZ from
Canada and Mexico. About 52 of the metal output in 1974 was derived from
imported cadmium flue dust; (15Z in 1968). Except for a very small amount of
secondary production, the remaining cadmium was obtained by processing domestic
and imported zinc concentrate.
Table B.2 provides the cadmium supply-demand relationships from 1964 - 1974.
- 8.8 -
-------
TABLE B.2
CADMIUM
Cadmium supply-demand relationships, 1964 - 1974
(Short tons)
World production:
Components of U.S. supply:
f* Imports, content of ore
Distribution to U.S. supply:
Industry stocks, Dec. 31.....
U.S. demand pattern:
Plastics and synthetic
Total U.S. primary
1964
2,350
11.654
2,350
51
552
2,421
1,106
6,480
1,426
720
475
1,720
234
1,300
375
230
4.334
1965
2,200
10,914
2,200
1,061
2.556
1,426
7,243
2,042
37
700
2,001
308
1,280
425
450
5.164
1966
2,350
11.972
2,350
184
1,679
2,898
2,042
9,153
1,751
190
7,212
913
3,150
250
1,000
1,196
703
7.212
1967
1,900
12,635
14^535
1,900
516
794
2,069
1,751
7,030
1,139
346
5,545
850
2,450
200
555
1,108
382
5,545
1968
2,100
14.453
16.553
2,100
404
964
3,028
1,139
7,635
924
265
6,446
990
2,925
200
675
1,261
395
6,446
1969
2,325
17,067
19,392
2,325
1,378
539
3,655
924
8,821
1,116
542
7,163
1,100
3,263
250
725
1,350
475
7,163
1970
1,778
16,450
18,228
1,778
3
1,246
2,957
1,127
7,111
2,391
187
4,533
885
1,380
150
648
1,193
277
4,533
1971
1,777
15,344
17,121
1,777
1
1,750
2,188
2.391
8,107
2,657
33
5,417
1,058
1,650
180
775
1,425
329
5,417
1972
2,390
16,110
18,500
2,390
479
1,211
1,762
2,636
8,478
1,662
509
6,307
1,250
1,900
450
950
1,250
507
6,307
1973
2,840
15,960
18,800
2,840
385
1,946
874
1,662
7,707
1,326
153
6,228
1,250
1,745
620
1,120
995
498
6,228
1974
2,066
16,734
18,800
2,066
1,006
1,956
1,433
1,326
7,787
1,569
31
6,187
1,100
1,900
600
1,100
1,000
487
6,187
-------
Table B.3 provides projection of U.S. Cadmium Demand by End Use in Year 2000.
TABLE B.3
Projections and Forecasts for U.S Cadmium Demand by End Use
1973 - 2000
2000 FORECASTS
1973 LOW HIGH PROBABLE
Plastics & Synthetic products..
Total
1,250
1 745
620
1 120
995
498
6,228
1,500
1 500
1 700
1 700
2,000
900
9,300
2,500
2 200
5 000
2 500
3,000
2 000
17,200
2 000
2 000
3 000
2 000
2,500
1 200
12,700
Domestic mine production accounts for 2/5 of Demand.
\f SOURCE: Mineral Facts and Problems, Department of the Interior,
~ Bureau of Mines, 1957, pages 157 - 204
- B.10 -
-------
in
RAW MATERIAL
SOURCE
PRIMARY DOMESTIC
NONE
KNOWN
SECONDARY DOMESTIC
FROM SCRAP
(PRINCIPALLY FROM
STAINLESS STEEL)
65,000 TONS
OF CHROMIUM
IMPORTED
ORE 329,000 TONS
OF CHROMIUM
ALLOYS 107,000
TONS OF CHROMIUM
"1
1
1
1
1
1
1
1
1
1
1
1
l"5~f " Fee collected on
FIRST
PROCESSING OPERATION
1
PYROM
HYDRO
(CHRO
...
...
METALLURGICAL |
INDUSTRY:
ELECTROCHEMICAL AND
ETALLURGICAL PROCESSES
CHEMICAL INDUSTRY:
-METALLURGICAL PROCESS
MITE ORE ROASTED WITH
ALKALINE)
SODIUM DICHROMATE
Cr
ORE GRADES:
(1) CHEMICAL
(2) METALLURGIC
(3) REFRACTORY
1/1/79 PRICE
PER TON OF
SODIUM DICHROMATE'
$ 740
PRODUCED BY:
22 COMPANIES
26 SITES
GOVERNMENT
STOCKPILES
142,000 TONS
INDUSTRY STOCKS
DEPLETED
20,000 TONS
- - n
I
I
I
I
I
I
1 1
I
CHEMICAL
PROCESSING OPERATION
END USE
I
I
element equivalent weight
INTERMEDIATE
CHROMIUM
COMPOUNDS
TRANSPORTATION
16%
CONSTRUCTION 23%
MACHINERY 19%
FABRICATED
METAL 7%
REFRACTORY 2%
PLATING 6%
CHEMICALS 10%
OTHER 17%
DEMAND 625,000
TONS OF CHROMIUM
EXPORTS: 40 TONS
1 1
1 1
^
COMPOUNDS
2,000 TONS
1
> IMPORTED
j USCG WEP-1/73 74
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
CHROMIUM
Chroraite (FeC^O^) is the sole source of chromium used commercially. U.S. chro-
tnite resources in Montana and Che Pacific Coast States are relatively small and
there has been no mine production since 1961. The domestic chromite industries
are dependent on foreign supply except for material purchased from Government
stockpiles. Three types of industries are included: metallurgical, chemical
and refractory. Chromite consists of varying percentages of chromium, iron,
aluminum and magnesium oxides. Historically, chromite ore has been classified
into three grades, associated with end use; metallurgical, chemical and refrac-
tory. Chemical grade is used in all three consuming industries.
In 1975, metallurgical companies with plants at 12 locations produced chromium
alloys and chromium metal primarily for use in steelmalcing and other alloy
manufacture; 7 refractory companies at 11 locations produced chroraice-bearing
refractory products for use in metallurgical furnaces, and 3 chemical firms at 3
locations produced the basic chromium chemical sodium dichromate, from which all
other chromium chemicals are derived.
Chromium metal in its purest form (99.9962) is produced in limited quantities by
vapor deposition from anhydrous chromium iodide. Commercial chromium metal is
produced either by electrolysis of a chromium-containing electrolyte or by alu-
minothermic reduction of pure chromic oxide. Sodium dichroraate is produced from
chromite ore by alkaline roasting and subsequent leaching; or by action of
sulfuric acid on sodium chromite.
USES:
In the metallurgical industry, the major use of chromium is in stainless steel.
It is also used as a constituent in a variety of alloy steels, cast irons and
non-ferrous alloys. In the form of chromite, it is used in the refractory
industry for iron and steel processing, non-ferrous alloy refining, glassraaking
and cement processing.
In the chemical industry, it is used to manufacture sodium dichromate, which in
turn is used to produce a wide variety of industrial chemicals. These chemicals
are used in the manufacture of pigments, chromium plating compounds, salts for
leather tanning and chromium metal.
- B.12 -
-------
TECHNOLOGY:
In metallurgical industry, chromite is converted to chromium alloys or additives
by pyrorcetallurgical techniques. Chromite ore, fluxes, and reducing agents are
smelted in a 3 phase furnace, and various types of ferrochromium products are
made. Chromium metal is made by either electrochemical or pyrometallurgical
process.
The chemical industry treats chromite by a hydrotnetallurgical process involving
roasting chromite with sodium carbonate, lime, and sulfuric acid followed by
leaching to remove sodium dichromate and sodium sulfate. After the leach
solution is purified, the sodium sulface ia removed by evaporation, and after
crystallization, sodium dichromate is obtained.
SUPPLY-DEMAND:
Chromium-containing alloys and industrial wastes return small quantities of
secondary chromium to the market. Stainless steel is the most sizable source of
this supply. Chromite forms the largest percentage of imported chromium supply
followed by chromium ferro alloys. Chromium, in the form of ore, enters duty
free. There are tariffs on intermediate chromium products.
Table B.4 provides the chromium supply-demand relationships JErom 1964 - 1974.
- B.13 -
-------
TABLE B..
4
CHROMIUM
Chromium supply-demand relationships, 1964 - 1974
(Thousand short tons of chromium)
World production:
. Total
Components of U.S. supply:
Net sales Government
at
J-. Distribution to U.S. supply:
1 Exports, alloys & chemicals..
U.S. demand pattern:
Fabricated metal products....
Other
Total U.S. primary demand
(industrial demand less
1964
0
1,474
1,474
38
442
18
2
510
1,010
405
10
9
586
92
133
90
32
112
14
44
69
548
1965
0
1,706
1J06
43
469
38
7
405
962
372
9
24
557
86
118
81
28
124
13
51
56
514
1966
0
1,550
1 J50
49
22
575
67
9
372
1,094
429
6
45
614
97
132
91
32
123
15
46
78
565
1967
0
1,635
1^635
43
23
389
39
4
429
927
406
10
39
472
75
101
70
25
93
13
42
53
429
1968
0
1,736
1J36
45
44
341
42
6
406
884
328
20
33
503
80
109
74
26
94
15
47
58
458
1969
0
1.814
1,814
61
79
346
44
4
328
862
256
19
46
541
90
118
85
29
94
16
49
60
480
1970
0
2A050
2j050
58
78
443
26
4
256
865
269
21
26
549
90
121
80
30
90
16
48
74
491
1971
0
2,184
2t184
63
42
403
54
4
269
835
382
7
42
404
80
91
60
25
63
14
39
32
341
1972
0
2A184
2,184
52
55
341
92
5
382
927
338
11
18
560
95
125
86
34
70
18
52
80
508
1973
0
2,386
2,386
53
80
282
113
3
338
869
239
16
13
601
107
135
90
36
77
18
55
83
548
1974P
0
2,536
2,536
65
142
329
107
2
239
884
219
9
31
625
103
140
90
40
86
17
61
88
560
P Preliminary
-------
ENVIRONMENTAL PROBLEMS:
Air Pollution control equipment is required on furnaces, but disposal of
collected dust and slag remains a problem. Chromic acid is a strong oxident.
Sodium dichromate is a harmful dust.
Table B.5 provides projection of Chromium demand by End Use in Year 2000.
TABLE B.5
Projection of Chromium by End Use to Year 2000
(1,000 tons of chromium)
Total.
1973
LOW
601
940
HIGH
1.430
PROBABLE
. 107
135
90
. 36
77
18
. 55
83
150
210
180
50
20
40
110
180
230
310
270
100
60
80
160
220
200
280
240
90
30
70
120
210
1.240
IJ SOURCE: Mineral Facts and Problems, Department of the Interior,
"" Bureau of Mines, 1975, pages 241 - 252.
- B.15 -
-------
ELEMENT - LEAD
1
1
10
1
RAW MATERIAL
SOURCE
PRIMARY DOMESTIC
FROM
LEAD ORE
586,000 TONS
OF LEAD
SECONDARY DOMESTIC
FROM SCRAP
£ft1 t\f\f\ TAfelG
OU1 ,UUU iUNb
OF LEAD
IMPORTED
FROM
ORE
97,000 TONS
OF LEAD
|
1
1
1
1
1
1
1
1
1
1
1
FIRST
PROCESSING OPERATION
(SMELTING OF|
LEAD ORE
LEAD METAL
Pb
1/1/79 PRICE
PER TON OF
Pb - $ 660
PRODUCED BY:
6 COMPANIES
4 SITES
GOVERNMENT
STOCKPILES
266.000 TONS
INDUSTRY STOCKS
|^$ | - Fee collected on
element equivalent weight
INCREASED
74.000 TONS
I I
CHEMICAL
PROCESSING OPERATION
I
END USE
LEAD ALLOYS
& LEAD
COMPOUNDS
1
GASOLINE
ADDITIVES 16Z
TRANSPORTATION
512
CONSTRUCTION 52
PAINTS 82
AMMUNITION 62
ELECTRICAL 22
OTHER 12
DEMAND 1,532,000
' TONS OF LEAD
EXPORTS: 62,000
TONS OF LEAD
1
1 1
[p
PURE METAL
118,000 TONS
> IMPORTED
USCC WEP-1/73 7
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
LEAD I/
The U.S. is the largest consumer of primary lead, 277 of world consumption in
1974. Domestic mine production has aggregated about 62% of total primary demand
for lead, the remainder from imported materials and stockpile sales, the domestic
mining industry comprises about 31 individual mines in 15 states. The 7 leading
mines, all in Missouri, produced 80% and the leading 25 mines produced 99% of
total domestic mine production
Almost all lead and lead-zinc ores are produced from underground mines. Ores are
concentrated at the mine site at most larger mines. Flotation is the major con-
centration method used to recover lead and zinc concentrates. The treatment of
lead concentrates includes sintering or roasting, smelting, dressing and refining.
The sintering step agglomerates the fine concentrates and removes most of the
sulfur as sulfur dioxide, which goes Co the acid plant to be converted to sulfuric
acid. The sintered product is smelted in a lead blast furnace to produce impure
lead bullion, slag, and fume. The lead goes from the blast furnace to the
dressing kettle. A drossing kettle and furnace is used to reduce impurities and
to remove copper from the bullion. The refined lead product contains more than
99.9% lead.
Lead concentrates were reduced to lead bullion at 6 smelters located in Idaho,
Missouri, Montana, and Texas. Three of these plants in Missouri and one in Idaho
'are also refineries; a plant in Nebraska is classed as a refinery.
Four fully integrated mining and smelting companies, St. Joe Minerals Corp., AMAX
Lead Co. of Missouri, Bunker Hill Co., and ASARCO, Incorporated, accounted for
nearly 70% of the total domestic mine production and 100% of the total production
of primary refined lead in 1973.
St. Joe Minerals Corp. operated 7 mines, 4 concentrators, and a lead smelter at
Herculaneum, Mo.; AMAX Lead Co. of Missouri operated a mine, mill, and smelter
complex at Buick, Mo., jointly owned by AMAX and Homes take Mining Co.; Bunker Hill
Co., a subsidiary of Gulf Resources and Chemical Corp., operated mines and a
smelter-refinery near Kellogg, Idaho; and ASARCO operated mines in Colorado and
New Mexico and smelters at El Paso, Tex., East Helena, Mont., and Glover, Mo.
ASARCO also operated a lead refinery at Omaha, Neb. In addition to treating
domestic ores and concentrates, the 3 ASARCO smelters and the Bunker Hill smelter
treated, imported ores and concentrates. Other companies operating lead and lead-
zinc mines included Ozark Lead Co., a subsidiary of Kennecott Copper Corp.; Hecla
Mining Co.; Idarado Mining Co.; a subsidiary of Newmont Mining Corp.; Day Mines,
Inc.; Cominco, Ltd.; Standard Metals Corp.; Federal Resources Corp.; Fend Oreille
Mines and Metals Co.; and Park City Ventures, jointly owned by The Anaconda
Company and ASARCO and operated by Anaconda.
- B.17 -
-------
USES:
The uses of lead fall into 2 general classifications:
(1) Metallic, used alone or alloyed with other elements.
(2) Chemical, used to form chemical compounds.
The largest use is in storage batteries. The second largest use is in gasoline
and antiknock additives. Other uses are in transportation (bearings, lubrication);
construction (roofing, piping, sound barriers); radiation shielding; and lead
paint. Oxides of lead are used as oxidizing, agents in the manufacture of dyes,
metals, rubber substitutes, oil refining and adhesives. Lead'arsenate is used as
an insecticide in agriculture.
Secondary lead is lead recovered from scrap, wastes, drosses and residues. Such
material is collected, smelted, refined to produce refined lead or lead-base
alloys. In the United States, about 80% of the lead used in the manufacture of
storage batteries is recycled. The importance of secondary lead is illustrated
by production in the United States, which amounted to approximately 601,000 Cons
from old scrap in 1974 compound with mine production of 664,000 tons.
PROBLEMS:
Environmental problems relative to production and consumption of lead are air
pollution and waste disposal. Toxicity of lead is one of the best-known and
oldest occupational hazards. Improved techniques are needed for controlling toxic
emissions from smelters and for disposing of solid and liquid wastes from con-
centration plants, foundries and lead fabricating plants.
SUPPLY-DEMAND;
Table B.6 provides the lead suppy-demand relationships, from 1964 - 1974.
- B.18 -
-------
TABLE B.6
LEAD
Lead supply-demand relationships, 1964 - 1974
(Thousands short tons)
1964
World production:
Rest of World 2
Total 2
Components of U.S. supply:
Domestic smelters:
i Net Government stockpile excess
Distribution to U.S. supply:
U.S* demand pattern:
U.S. primary demand
(industrial demand
286
.449
,735
209
159
470
+43
208
240
,329
198
10
,121
223
374
147
104
56
88
129
i!21
651
1965
301
2,666
2,967
308
117
496
+53
223
198
1,395
193
8
1,194
225
391
137
109
57
94
181
1,194
698
1966
327
2,812
3,139
325
127
485
+64
285
193
1,479
206
5
1,268
247
404
132
120
78
102
185
1,268
783
1967
317
2,842
3,159
264
125
477
+28
364
206
1,464
231
7
1,226
247
394
120
103
79
98
185
1,226
749
1968
359
2,940
3,299
365
122
471
+29
338
231
1,556
169
8
1,379
262
453
117
110
82
87
268
1,379
908
1969
509
3,014
3,523
525
130
516
+22
279
169
1,641
228
5
1,408
271
492
119
102
79
96
249
1,408
892
1970
572
3,168
3,740
537
141
506
+12
245
228
1,669
326
8
1,335
279
548
121
99
73
87
128
1,335
829
1971
578
3,165
3,743
585
81
490
+ 10
193
326
*
1,685
244
6
1,435
264
625
100
81
88
131
146
1,435
945
1972
619
3,145
3,764
583
105
498
+45
246
247
1,724
264
8
1,452
279
668
88
89
85
128
115
1,452
954
1973
603
3,249
3,852
576
111
539
+211
178
264
' 1,879
214
67
1,598
274
700
87
109
81
135
212
1,598
1,059
1974
664
3,181
3,845
586
97
601
+266
118
214
1,882
288
62
1 ,532
250
785
78
116
87
133
83
1,532
931
-------
Table B.7 provides the forecast for U.S. Lead demand by End Use for Year 2000.
TABLE B.7
Projections and forecasts for U.S. Lead Demand by End Use
(Thousand short tons)
Total
I/ SOURCE: Mineral Facts
1973
274
700
87
109
81
135
212
. 1,598
and Problems,
2000 FORECASTS
LOU HIGH
50
1,200
100
130
70
110
120
1,780
Department
300
2,100
200
200
200
220
300
3,520
of the
PROBABLE
110
1,600
120
150
100
150
200
2,430
Interior,
Bureau of Mines, 1975, pages 591 - 610
- B.20 -
-------
ELEMENT = MERCURY
RAW MATERIAL FIRST
SOURCE PROCESSING OPERATION
1
PRIMARY DOMESTIC
1
tn
•
to
t->
MINES
83.18 TONS
OF MERCURY
SECONDARY DOMESTIC
RECOVERED
FROM SCRAP
225.72 TONS
OF MERCURY
IMPORTED
NONE
KNOWN
| SMELTED
~~~l
1
1
1
1
1
1
1
1
1
1
1
• * •
• • »
L$ 1 * Fee collected on
MERCURY METAL
Hg
1/1/79 PRICE
PER TON OF
Hg - $ A, 474
PRODUCED BY:
1 COMPANY
1 SITE (1978)
GOVERNMENT
STOCKPILES
89.41 TONS
INDUSTRY STOCKS
INCREASED
100.28 TONS
CHEMICAL
PROCESSING OPERATION
END USE
I I
element equivalent weight
295 COMPANIES
CONSUME MERCURY
63 COMPANIES
ACCOUNT FOR 95Z
OF CONSUMPTION
27 COMPANIES
itci? cirfnijnADV
Ubt DtiiUNUAKY
MERCURY
195 COMPANIES
USE REDISTILLED
MERCURY
CAUSTIC SODA
AND CHLORINE
PRODUCTION
DENTAL
SUPPLIES
ELECTRICAL
INSTRUMENTS
PAINTS
OTHER
DEMAND 29
26Z
5%
43%
9%
92
8Z
.74
TONS OF MERCURY
1 1
1 1
[T]
GENERAL
1,980 TONS
1
> IMPORTED
USCG WEP-1/73 7
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
MERCURY I/
The mercury industry in the U.S. is comparatively small in terms of quantity pro-
duced, value of production and number of producers. The product of mercury mines
is cinnabor ore (red sulfide, 86.2? mercury, and 13.82 sulfur) which is processed
to recover prime virgin metal, 99.92 pure. It is sold on the basis of flasks
containing 76 pounds.
Mercury ore is crushed before furnacing and the mercury is extracted from ore
and concentrated by heating in retorts or furnaces to liberate the metal as
vapor, followed by the cooling of the vapor and collection of the condensed
metal.
Mines in 1974 totaled 12. Two hundred ninety-five companies reported consumption
of mercury, 63 companies accounted for 952 of total domestic consumption in 1973 -
1974. Twenty-seven companies used secondary mercury and 195 used redistilled
mercury.
PROBLEMS:
Environmental contamination from plant effluents will have to be controlled if
some uses of mercury are to survive.
Much of the mercury consumed is for dissipative uses which can lead to environ-
mental pollution, i.e., spent catalysts losses from mercury-cell chlor-alkali
plants.
USES;
Used in manufacture of alkalines and chlorine. Consumed in electrolytic cells
for production of caustic soda and chlorine. Also used in electrical applica-
tions, paints and instruments, agricultural chemicals, and dental supplies.
One-sixth of U.S. supply is represented by domestic primary production. Two-
thirds from foreign sources and the remainder from government stockpiles,
industry stock and secondary materials*
SUPPLY-DEMAND:
Table B.8 provides the mercury supply-demand relationships, from 1964 - 1974.
- B.22 -
-------
TABLE B.
8
MERCURY
Mercury supply-demand relationships, 1964 - 1974
(76-pound flasks)
World production:
Total
Components of U.S. supply:
Distribution to U.S. supply:
F Exports, including reexports
i Apparent surplus ( + ),
U.S. demand pattern:
Plastic & synthetic products
Total U.S. industrial demand
Total U.S. primary demand
(industrial demand less
1964
. 14 142
.240,991
.255,133
. 14,142
. 7,519
nooo
. 41,107
. 12,181
91,949
. 17,362
384
. 81 354
. -7,151
. 9 572
. 5 068
. 9 651
. 17 138
. 6 516
. 3 144
335
656
.*29,274
. 81,354
. 73,835
1965
19,582
248,291
267,873
19.582
14.906
31,764
17,838
17.362
101.452
20.386
8,037
73,560
-531
8,753
3,439
10,086
18,402
8,466
3.116
418
924
19,956
73^560
58,654
1966
22,008
242,986
264,994
22,008
8,535
7,865
34,757
20.386
93,551
20,076
833
71,509
+1,133
11,541
2,133
7,294
17,638
8,929
2,374
232
1,932
19^436
71,509
62,974
1967
23,784
208.289
232^073
23,784
10,696
11,454
23,899
- 20^)76
89,909
18,277
3,102
69,517
-987
14,306
2,386
7,459
16,223
7,178
•3,732
283
2,489
15,461
69j517
58,821
1968
28,874
230,820
259,694
28,874
10,570
23,810
23,956
18^277
105,487
22,907
7,599
75,422
-441
17.453
3,079
7,978
19,630
10,566
3,430
424
1,914
10,948
75,422
64,852
1969
29,640
259,627
289,267
29,640
10,573
3,077
30,848
22^907
97,045
22,692
615
77,372
-3^634
20,720
2,880
6,655
18.490
9,730
2,689
712
2,958
12,538
77L372
66,799
1970
27,296
256,718
284,014
27,296
7,348
703
21,672
22,692
79,711
16,554
4,703
61,503
-3,049
15,011
2,286
4,832
15,952
10,347
*690
2,238
8,336
61,503
54,155
1971
17,883
282,751
300,634
17,883
10,899
5,767
29,750
16J554
80,853
16,862
7,232
52,257
+4 L502
12,154
2,361
4,871
16,885
8,605
1,477
682
1,012
4,210
52,257
41,358
1972
7,333
270,251
277^584
7,333
12,139
512
29,179
16,862
66,025
15,708
963
52,907
-3t553
11,519
2,983
6,541
15,553
8,222
1,836
578
800
4,875
52j907
40,768
1973
2,171
274,008
276,179
2,171
7,746
2,583
46,076
74,284
19,659
342
54,283
13,070
2,679
7,155
18,000
7,603
(3)
(3)
5,776
54,283
46,537
1974
2,189
262,286
264j475
2,189
5,940
2.353
52,102
19,659
82,243
22,298
466
59,479
16,897
3,024
6,202
19,678
6,813
(3)
(3)
6,865
59^479
53,539
* Preliminary
Includes mercury transferred to other Government agencies
3 Mainly indicated changes in industry stocks
* Included under other
^ Includes Government laboratory use of 15,746 flasks in 1964
-------
During 1973 and 1974, imports were by far the major component of domestic
supply, 62% of total in 1973. Secondary sources furnished 10", U.S. mines 3%,
industry stocks 21%, Government releases 4%. Canada was the leading supplier.
Four consumption categories, caustic soda, chlorine production, electrical
applications, instruments and paint accounted for 84% of total U.S. mercury
demand in 1973.
Table B.9 provides projection of Mercury Demand by End Use in Year 2000.
TABLE B.9
Projections of Mercury Demand by End Use
(76-pound flasks)
1973 LOW HIGH PROBABLE
Total
.. 13 070
.. 2 679
.. 18 000
.. 7 155
7 603
.. 5,776
.. 54,283
10 000
2 000
20 000
4 000
o
3,000
39,000
20 000
4 000
30,000
9 000
11 000
8,000
82,000
15 000
3 000
25,000
5 000
5 000
5,000
58,000
_!/ SOURCE: Mineral Facts and Problems, Department of the Interior,
Bureau of Mines, 1975, pages 669 - 682
- B.24 -
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
2. Halogens
2.1 Bromine
2.2 Chlorine
2.3 Fluorine
- B.25 -
-------
ELEMENT = BROMINE
RAW MATERIAL
SOURCE
| I
PRIMARY DOMESTIC
| $ I - Fee collected on
element equivalent weight
PROCESSING OPERATION
| CHLORINATION OF|
BRINE
1
to
10
en
i
BRINE
216,000 TONS
OF BROMINE
SECONDARY DOMESTIC
FROM SCRAP
601,000 TONS
OF BROMINE
IMPORTED
FROM
ORE
97,000 TONS
OF BROMINE
" 1
1
1
1
1
I
1
I
1
I
1
BROMINE Br
1/1/79 PRICE
PER TON OF
Br - $ 700 (bulk)
- $ 1,200 (drums)
ETHYLENE DIBROMIDE
PER TON
$ 700
INTEGRATED PLANTS
CONVERT CRUDE
BROMINE INTO
COMPOUNDS LIKE
ETHYLENE DIBROMIDI
PRODUCED BY:
6 COMPANIES
9 SITES *
INDUSTRY STOCKS
NET
ZERO
CHEMICAL
PROCESSING OPERATION
I
I
USAGE OF BROMINE
ETHYLENE DIBROMIDE
59*
ELEMENTAL BROMINE
11X
METHYL BROMIDE
4Z
PROPRIETARY
COMPOUNDS
262
END USE
PETROLEUM
ADDITIVES
66%
SANITARY
PREPARATIONS 10Z
FIRE
RETARDANT
OTHER
15Z
82
DEMAND 181,000
TONS OF BROMINE
I
(p
BROMINE COMPOUNDS
11 TONS
1
> IMPORTED
1 USCG V
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
BROMINE
The U.S. has enormous reserves of bromine-rich brine. Various inland lakes or
seas with no present outlets to the ocean have been concentrating salts by evap-
oration for thousands of years, and therefore, are valuable sources of bromine.
Additionally, the bromine obtainable from sea water is virtually infinite. About
3/4 of the nation's bromine comes from the brine of Arkansas and virtually all
the remainder originates in Michigan.
In 1976 there were 6 bromine producers operating 9 plants in the U.S. and 3 pro-
ducers account for more than 80Z of the total production. Many bromine plants
are vertically integrated, providing compounds such as ethyfene dibromide at the
extraction site. Michigan brines also contain iodine, which is usually extracted
just before the bromine is removed. Brines in Searles Lake, California, contain
minor amounts of bromine, together with substantial amounts of borax, soda ash,
sodium sulfate and potassium chloride.
TECHNOLOGY;
Elemental bromine is extracted from the brine, which contains sodium bromide, by
replacing the bromine ion with elemental chlorine. The incoming brine is
slightly acidulated to facilitate the chlorination process. Crude bromine, as
obtained from the brine, is mixed with water, chlorine and organic impurities.
It is then purified, usually by distillation and dried by contact with con-
centrated sulfuric acid. In the integrated plants, bromine is converted directly
into bromine compounds such as ethylene dibromide.
USES;
The largest single industrial use is as ethylene dibromide, a gasoline additive.
Other uses of bromine are as fire retardants; in sanitation preparations; and in
agricultural chemicals (methyl bromide). The 1974 usage of bromine and its com-
pounds in the U.S. are:
Ethylene Dibromide 592
Elemental Bromine 10.62
Methyl Bromide 4.12
Other (proprietary compounds) 26.3Z
- B.27 -
-------
ENVIRONMENTAL PROBLEMS;
Elemental bromine is difficult to ship, especially by water, because of its
corrosive and poisonous nature and the weight of the containers required. A
governmental program affecting the bromine industry has been the attempt to
reduce atmospheric pollution from automobile exhaust by reducing or eliminating
the tetraethyl lead and ethylene dibromide additives in,gasoline* Many bromine
compounds are poisonous or irritating and must be packaged in leak-proof
containers.
SUPPLY-DEMAND:
The steadily declining availability of petroleum, higher gasoline prices and the
resulting depressing effect on gasoline consumption, coupled* with the reduction
in gasoline additives may reduce the demand for bromine by the oil industry*
Table B.10 provides the bromine supply-demand relationships from 1964 - 1974.
- B.28 -
-------
TABLE B.IO
BROMINE
Bromine supply-demand relationships, 1964 - 1974
(Thousand pounds of bromine)
World production: ._, ,„„ ,,c 240 349 943 355,946 386,864 418,250 432,094
" ™ °'™ 2.2.200
Tot.,
306.000 352.600 366.000 388.100 396,700 443,040 473.218 '506.607 '583.352 617.208 644,294
..... . 5 « 355>9« »
I.p~t ............... ;; ...... ,„ ^ ...^ ,,.188 .6.188 2..U 30.000 33.^ 33,0.0 32,000 30,993 21,000
• Industry stock, Jan. 1 ..... * - « - ' - -
T Total «.S. supply ......... 248,000 285.300 292,800 319,100 333,500 365.290 382,892 388,960 418,910 449,300 453,116
Distribution to U.S. supply:
, t ^ 32;;200 it,J.. ,^M ,„.... 3,3.300
U.S. demand pattern
1
p:;n:i™.5!:"± -.- .«.«• «•.•» •«.»• TIE *i^ *%•% iw us 2":832o *%%
Sfi'sas^!::::::::: 5g S:S 5S S:B Sg g-g a« S« S:!S 5:S 5i5i
Tot.IU.S. d.^ 224.600 256.000 238.000 274.600 296.SOO 327.200 34. ,678 336,960 3S7,9!0 3>3,3°0 362,770
Reviled e E«ti«»ted * Lens than
-------
Table B.ll provides projections and forecasts of Bromine demand by End Use in
Year 2000.
TABLE B.ll
Projections and Forecasts for Bromine by End Use to Year 2000
(1,000 pounds of bromine)
2000 FORECASTS
1973 LOW HIGH PROBABLE
253 800
37,300
52,300
29,900
300 000
130,000
130,000
120,000
800 , 000
160,000
400,000
190,000
480,000
150,000
300,000
180,000
Total 373,300' 680.000 1.550.000 1.110.000
II SOURCE: Mineral Facts and Problems, Department of the Interior,
Bureau of Mines, 1975, pages 185 - 194
- B.30 -
-------
ELEMENT = CHLORINE
RAW MATERIAL
SOURCE
I I
PRIMARY DOMESTIC
BRINE
(SODIUM CHLORIDE)
SUPPLY VIRTUALLY
LIMITLESS
SECONDARY DOMESTIC
tn
LJ
NO RECYCLING
OR
SECONDARY SOURCE
OF
CHLORINE
IMPORTED
NO IMPORTS
OF
RAW MATERIALS
(BRINE)
FIRST
PROCESSING OPERATION
(IN ANY OF 3 WAYS: |
(1) ELECTROLYSIS OF
BRINE (SOLUTION OF
NaCl IN WATER)
(2) ELECTROLYSIS OF
FUSED SODIUM CHLORIDE OXIDATION
(3) CHEMICAL OXIDATION
OF CHLORIDES
1
1
1
1
1
1
1
1
1
1
1
I
CHLORINE
Cl
1/1/79 PRICE
PER TON OF
C12 " $ 135
U.S. PRODUCTION:
10,887,000 TONS
OP PHinRTNF
Ur vfluUmnu
INTEGRATED PLANTS
CONVERT C12
DIRECTLY INTO
CHLORINATED
COMPOUNDS
PRODUCED BY:
34 COMPANIES
70 PLANTS
I $ | = Fee collected on
element equivalent weight
INDUSTRY STOCKS
CHLORINE
NET ZERO
CHEMICAL
PROCESSING OPERATION
|MAY OCCUR AT
INTEGRATED PLANTS
END USE
PRODUCTS:
CHLORINATED
INORGANICS
HYDROCHLORIC ACID
CHLORINE DIOXIDE
HYDRAZINE
CHLORINATED
ORGANICS
POLYVINYL
CHLORIDES
CHLORINATED
SOLVENTS
CHLORINE
74,000 TONS
CHLORINE
COMPOUNDS
1
j
PAPER
PRODUCTS
PLASTIC AND
SYNTHETIC
PRODUCTS
CHEMICAL
SOLVENTS
CHEMICAL
AUTOMOTIVE
FLUIDS
AGRICULTURE
18Z
22%
23Z
10%
5%
WATER &'SANITARY
SERVICES 6%
OTHER 16%
DEMAND: 10,944,000
TONS OF CHLORINE
EXPORTS: 17,000
TONS OF CHLORINE
I
> IMPORTED
USCG WEP-1/73 74
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
CHLORINE I/
Chlorine, a yellowish poisonous gas, may be produced in concentrations ranging from
102 to 99Z. Prior to shipment, the gas is dried, compressed, or liquified by refri-
geration.
Chlorine is produced in 3 ways:
(1) By electrolysis of brine (solution of sodium chloride in water).
(2) By electrolysis of fused sodium chloride.
(3) By chemical oxidation of chlorides.
The chlorine contained in the salt reserves of the U.S. is estimated at 37 trillion
tons. In addition to the solid salt deposits, these are virtually limitless quan-
tities in saline lakes, underground mines and the oceans.
In integrated plants, chlorine is sent directly to react with other chemicals to
form chlorinated products. Sodium hydroxide (NaOH) is produced as a co-product of
the electrolysis of brine.
In 1976, 34 companies operated 70 plants. The 3 top-ranking companies accounted for
about 49? of the total. A large part of the chlorine production was consumed on site.
USES;
The largest end use (33Z) is in the manufacture of "chemicals" not covered by the
classifications plastics, agriculture or sanitary services. The chemicals include
chlorinated inorganics such as hydrochloric acid, chlorine dioxide, hydrasine,
chlorinated organic chemicals, chlorinated solvents and ethylene dichloride.
The second largest use (222) is in the field of plastics (e.g. vinyl chloride). A
third use (18Z) is in paper and pulp industry (elemental form or chlorine dioxide).
Chlorine is also used in the chlorination of drinking water, (62) and the manufac-
ture of pesticides, germicides, herbicides (52).
PROBLEMS;
Problems in chlorine production result from its chemical reactivity and toxicity.
Another potential hazard to the environment is the large volume and high concentra-
tions of the element which are stored and transported at high pressures and for long
distances over public thoroughfares. Equally dangerous are the compounds of
chlorine-vinyl chloride, and chlorine herbicides and pesticides.
BY-PRODUCTS OF CHLORINE PRODUCTIONS;
Producing chlorine by electrolysis of brine, produces 1.1 tons of sodium hydroxide
for each ton of chlorine.
There is no recycling or secondary source of chlorine.
SUPPLY-DEMAND;
Table B.12 presents the Chlorine supply-demand relationships for 1964 - 1974.
- - B.32 -
-------
TABLE B.I2
CHLORINE
Chlorine supply-demand relationships,
(Thousand short tons)
tforld production:
Components of U.S. supply:
Estimated industry
to
CJ
Distribution to U.S. supply:
Estimated industry stocks,
U.S. demand pattern:
Plastic & synthetic products.
Chemicals:
Water & sanitary services....
Total U.S. primary demand...
1964
5,945
8,055
14,000
5,945
22
197
6,164
24
44
6,096
908
750
950
675
244
225
2,344
6,096
1965
6,517
8,633
15,150
6,517
39
24
6,580
50
43
6,487
1,150
950
1,000
750
275
250
2,112
6,487
1966
7,204
9,376
16,580
7,204
72
50
7,326
170
21
7,135
1,225
1,050
1,050
825
350
350
2,285
7,135
1967
7,680
10.310
17,990
7,680
59
170
7,909
200
36
7,673
1,400
1,200
1,150
900
375
400
2,248
7,673
1968
8,444
10,446
18,890
8,444
42
200
8,686
200
36
8,450
1,415
1,356
1,190
928
454
460
2,647
8,450
1964 - 1974
1969
9,422
12,378
21,800
9,422
23
200
9,645
200
26
9,419
1.696
1,600
1,250
900
400
500
3,073
9.419
1970
9,935
13,494
23.429
9,755
25
200
9,980
200
26
9,754
1,760
1,670
\
1,300
900
420
530
3,174
9,754
1971
9,349
15,465
24,814
9,349
35
200
9.584
200
11
9,373
1,700
1,600
1,250
850
400
530
3,043
9,373
1972
9,869
15,815
25,684
9,869
38
200
10,107
200
7
9,900
1,800
1,850
1,400
850
350
530
3,120
9,900
1973
10,303
18,286
28,589
10,303
50
200
10,553
200
13
10,340
1,860
12,300
^,400
1,000
520
620
ll,640
10,340
1974
10,887
°19,113
°30,000
10,887
74
200
11,161
200
17
10,944
1,970
2,430
2,540
1,060
550
660
1,734
10,944
I f largTsegment of the industry formerly classified as "Other" was reclassified in 1973 into its proper catagories
"Plastic and synthetic products" and "Solvents.
-------
Chlorine derived plastics are Che fastest growing segment of the chlorine
industry.
Table B.13 provides Che projection of Chlorine Demand by End Use to Year 2000.
TABLE B.I3
Projections of Chlorine Demand by End Use
(Thousand shore ton)
Plastics & synthetic products..
Chemicals:
1973
1,860
2,300
2,400
1,000
520
620
1,640
10,340
LOW
5,000
8,300
6,000
2,000
1 000
2 000
3,000
27,300
HIGH
9,000
14,000
8,000
3,000
2 000
3 000
7,000
46,000
PROBABLE
7,500
13,500
7,000
2 500
1 500
2 500
5,000
39,500
The increasing concern over environmental pollution is expected to
promote economical means of extracting chlorine from industrial waste.
\J SOURCE: Mineral Facts and Problems, Department of the Interior,
~~ Bureau of Mines, 1975, pages 231 - 239
- B.34 -
-------
ELEMENT = FLUORINE
RAW MATERIAL
SOURCE
I
U)
•
LJ
in
l
PRIMARY DOMESTIC
PHOSPHATE
ROCK MINING
77,000 TOMS
OF FLUORINE
FLUOSILICIC ACID
37,000 TONS
OF FLUORINE
SECONDARY DOMESTIC
NONE
KNOWN
IMPORTED
FLUORSPAR
439.000 TONS
OF FLUORINE
CRYOLITE
6,000 TONS
OF FLUORINE
) $ j " Fee collected on
element equivalent weight
FIRST
PROCESSING OPERATION
I I
. (1) HYDROGEN FLUORIDE
PRODUCED BY REACTING
FLUORSPAR WITH SULFURIC ACID
(2) FLUORINE RECOVERED
FROM FLUOSILICIC ACID
1
1
1
1
1
I
1
1
1
1
1
1
HYDROGEN FLUORIDE
HF
1/1/79 PRICE
PER TON OF
HF - $ 890 (gas)
13 COMPANIES MINE
FLUORSPAR
9 COMPANIES
DDflnllS*P Ut? AT* 1 /*
PRODUCE Hr AT IH
SITES
14 COMPANIES
PRODUCE
FLUOSILICIC ACID
AT 22 SITES
6 COMPANIES
PRODUCE FLUORSPAR
BRIQUETS g 7
SITES
INDUSTRY STOCKS
DEPELETED
33,000 TONS
CHEMICAL
PROCESSING OPERATION
INTERMEDIATE
FLUORINE
COMPOUNDS
INCLUDING
FLUORO-CARBONS
END USE
CHEMICAL
INDUSTRY
ALUMINUM
PRODUCTS
272
24Z
CRUDE STEEL 47*
GLASS AND
POTTERY.
OTHER
1%
\l
DEMAND: 508,000
TONS OF FLUORINE
EXPORTS: 3,000
TONS OF FLUORINE
I
FLUORINE IN
HYDROFLUORIC ACID
60,000 TONS
1
> IMPORTED
J COMPOUNDS
u
USCC WEP-1/73 77
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
FLUORINE I/
Traditionally, the most important commercial source of fluorine is the mineral
fluorite (Ca?2 ~ calcium fluoride), known as fluorspar. Increasing amounts,
however, are being recovered from fluosilicic acid (^SiFg), a by-product reco-
vered by the phosphoric acid industry.
Three major companies operating mines and mills in southern Illinois and western
Kentucky, account for 83Z of the total domestic production of fluorspar. A total
of 13 companies mine fluorspar in the United States. In 1976, 9 companies
operating 14 plants produced hydrofluoric acid. The secondary source of
fluorine, is by-product fluosilicic acid recovered from the manufacture of
phosphoric acid. Currently, 14 phosphoric acid plants recover this acid and pro-
vide about 72 of the total domestic demand. Consumers are also turning to
fluorspar briquetors. Six companies operating 7 plants produce over 500,000 tons
of briquets per year, mostly from imported acid grade fluorspar.
Technically, pure fluorite contains 51.1Z calcium and 48.92 fluorine. Three
principal grades are available commercially - acid, ceramic, and metallurgical.
TECHNOLOGY:
Because fluorspar varies widely in mineralogical content, a variety of metallur-
gical processes are used to produce a saleable product. By far, the largest uses
of acid-spar (acid grade fluorspar) is in the production of hydrofluoric acid.
It is obtained by reacting fluorspar with sulfuric acid in a retort.
USES;
The major use of fluorine is in the form of fluorspar. It is a critical raw
material for many industries. The major consuming industries are iron and steel,
(44Z); chemical (32Z); aluminum and magnesium (22Z); and the remaining 2Z was
used to make glass, ceramic, enamel, calcium cyanide, welding rod, and cement.
Hydrofluoric acid is a key chemical for the following reasons:
(1) it is used in non-fluorinating processes as a catalyst
(2) it is used in almost all fluorochemical-manufacturing
processes, including the manufacture of fluorocarbons.
The aluminum industry also used hydrofluoric acid for the production of aluminum
fluoride and synthetic cryolite
- B.36 -
-------
ENVIRONMENTAL PROBLEMS;
Hydrogen Fluoride has an adverse effect on vegetation, grazing animals (cattle).
In industrial situations, airborne fluorides are a potential hazard. In January,
1976 the EPA issued new emission standards for aluminum smelters. Although most
fluorocarbons are non-toxic, regulations are under considerations because of the
hazard fluorocabons pose to the environment, (ozone depletion in the stratosphere).
SECONDARY SOURCES:
About 252 of the total fluorine consumption in the United States is not by secon-
dary source. The uses of fluorine by primary aluminum smelters are currently
being recycled materials.
SUPPLY-DEMAND:
Table B.14 shows the fluorine supply-demand relationships for the period 1968 -
1977.
- B.37 -
-------
TABLE B.14
FLUORINE
Fluorine supply-demand relationships, 1968 - 1977 (Revised)
(Thousand short tona of fluorine)
World mine production:
Components of U.S. supply:
Met £ovt. purchase (~) or sale (+)•••<
Imports:
i
Total
Distribution to U.S. supply:
Apparent surplus (+) or deficit (-)
U.S. demand pattern:2
1968
114
.. 1,689
.. 1,803
114
9
473
18
137
751
, . 560
6
145
+40
i. 191
106
219
13
31
560
1969
82
1,846
1,928
82
4
517
11
145
759
610
2
131
+ 16
201
123
254
12
20
610
1970
121
1,958
2^079
121
45
491
12
131
800
618
7
189
-14
233
105
249
m
21
618
1971
154
2,238
2,392
122
32
52
483
12
14
189
904
605
6
197
+96
212
104
243
7
39
605
1972
154
2,134
2,288
113
41
532
14
9
197
906
608
1
170
+ 127
214
109
254
10
21
608
1973
143
2,235
2,378
112
31
546
11
21
170
891
608
1
147
+135
179
120
276
8
25
608
1974
128
2,319
2,447
91
37
601
11
22
147
909
686
3
194
+26
241
130
290
9
16
686
1975
101
2,194
2^295
63
38
473
12
31
194
811
560
1
144
+ 106
200
103
234
5
18
560
1976
122
2,115
2,237
85
37
403
6
57
144
• 732
573
2
125
+32
171
113
273
5
11
573
1977e
114
2,095
2L209
77
37
439
6
60
125
744
508
3
92
+ 141
135
120
241
4
8
508
e Estimate.
* Apparent surplus or deficit equals total U.S. supply minus industrial demand minus exports minus industry stock, December 31.
2 Reported demand.
^ Estimated; based largely on the following assumed rates of consumption: 1950-1959 — 70 pounds of fluorine per ton of Aluminui
1960-69 — 65 pounds of fluorine per ton of Aluminum; 1970-1977 — 53 pounds of fluorine per ton of Aluminum.
-------
Table B.15 provides projections of Fluorine demand by End Use to the Year 2000.
TABLE B.I5
Projections of Fluorine by End Use to the Year 2000
(Short tons of fluorine)
Primary Aluminum production*. ••
Total
1976
171
113
273
5
11
573
LOW
600
360
400
20
100
1,480
HIGH
700
450
500
60
200
1,910
PROBABLE
700
360
500
60
200
1,820
I/ SOURCE: Mineral Commodity Profiles; Bureau of Mines, August, 1978.
- B.39 -
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
3. Acid Forming Classes
3.1 Sulfur
3*2 Nitrogren
3.3 Phosphate Rock
- B.40 -
-------
ELEMENT »= SULFUR
PTDCT CHEMICAL
RAW MATERIAL *lltbl oon™ IMPORTED
IIQffi UFP— 1 IT\ ~i
Uuv»v> ncjK * / i J «
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
SULFUR I/
Sulfur is widely distributed throughout the world. About 902 of the sulfur consumed
is used in the form of sulfuric acid. The major problem facing the domestic sulfur-
producing industry is a probable basic change in major sources of sulfur supply. This
is brought about by the necessity for the removal of sulfur from solid, liquid and
gaseous effluents or wastes for the protection of the environment. The enforced pro-
duction of co-product sulfur for environmental reasons will change the present supply
pattern. Secondarily, it will be influenced by the exhaustion of cheap sources of
noncombined sulfur.
m
The most important source of United States sulfur production is the elemental sulfur
mined by the Frasch process from deposits in Texas and Louisiana. Ten mines operated
by 3 companies accounted for most of the Frasch operation. The second most important
source of domestic sulfur production is the elemental sulfur recovered as a co-product
of sour natural gas and petroleum refinery operations, "recovered" sulfur. The third
source of domestic production is the sulfur contained in by-product sulfuric acid pro-
duced at copper, lead, and zinc roasters and smelters. The contained sulfur in pyri-
tes, hydrogen sulfide, and sulfur dioxide accounts for another"source of supply. In
1974, sulfur in all forms was produced by 68 companies at 178 operations in 31 states.
USES:
The largest use of sulfur is as a chemical reagent rather than as a component of a
finished product. Its predominant use as a process chemical generally requires that
it be first converted to an intermediate chemical product prior to its initial use by
industry. In most of the ensuing chemical reactions between these intermediate pro-
ducts and other minerals and chemicals, the sulfur values are generally not retained
in the end product, but*are often discarded as a waste product.
Sulfuric acid is the most important of these intermediate products. Ninety percent of
the sulfur consumed in the U.S. in 1974 was either converted to sulfuric acid or pro-
duced directly in this form. Other intermediate products were carbon disulfide and
sulfur dioxide, each 32 of initial sulfur consumption. Four percent of total consump-
tion was used directly in the elemental form.
*
In 1976, sulfuric acid was produced by 160 plants owned by 71 companies. Sixty-one
percent of the sulfuric acid production (55Z of the total sulfur consumption) was used
for the manufacture of fertilizers. The remaining 39Z of sulfuric acid production
(35Z of the total consumption) was used for a wide variety of purposes covering essen-
tially every sector of domestic manufacturing industries; i.e., paper products,
paints, .non-ferrous metal production, explosives, petroleum refining, iron and steel
products.
SUPPLY-DEMAND:
There have been two trends in the production of sulfur. Fraach sulfur has steadily
declined because of resource depletion and higher costs, and recovered sulfur has
risen because of environmental considerations. It is likely that environmental
restrictions will force a substantial additional production of sulfur in other
forms, particularly so in the case of by-product sulfuric acid from non-ferrous
smelters.
Table B.16 shows the supply-demand relationships for Sulfur for 1964 - 1974.
- B.42 -
-------
TABLE B.I6
SULFUR
Sulfur supply-demand relationships, 1964
(Thousand long tons)
World production:
Components of U.S. supply:
w Distribution to U.S. supply:
Apparent surplus (+),
deficit (-) of supply*....
U.S. demand pattern:
Agriculture (fertilizers)...
Plastic & synthetic products
Non-ferrous metal
Total U.S. primary demand..
1964
. 7,087
.20 813
7,087
1,582
4,683
13,352
. 4,403
. 1,928
. 7,255
. 3,090
500
415
505
235
215
155
330
1.810
. 7,255
1965
8,196
21 .804
8,196
1,646
4,403
14.245
3,425
2,635
7,981
+ 204
3,610
555
430
510
265
230
165
295
1.921
7,981
1966
9.141
22,559
31,700
9,141
1,674
3,425
14,240
2,704
2,373
9,145
+ 18
4,425
555
440
520
310
260
190
275
2,170
9.145
1967
9,121
24,579
33,700
9,121
1,639
2,704
13,464
1,954
2,193
9,251
+66
4,735
495
400
505
260
265
195
220
2,176
9,251
1968
9,735
25,565
35,300
9,735
1,754
1,954
13,443
2,655
1,602
9,072
+ 114
4,470
550
390
490
300
250
180
170
2,272
9,072
1969
9,545
27.655
37,200
9,545
1,795
2,655
13,995
3,338
1,551
9,169
-63
4,465
570
365
445
370
260
190
125
2,379
9.169
- 1974
1970
9,557
29.643
39.200
9,557
1,667
3,338
14,562
3,829
1,433
9,227
+73
4,680
495
350
4.20
, 390
255
195
120
2.322
9,227
1971
9,580
31,320
40j900
9,580
1,429
3,829
14,838
4,120
V536
9,173
+9
4,800
515
320
380
410
255
200
105
2,188
9,173
1972
10,218
32,782
43,000
10,218
1,188
4,120
15,526
3,796
1,852
9,854
+24
5,210
540
340
390
430
260
220
110
2,354
9.854
1973
10.921
35,079
46,000
10,921
1,222
3,796
15,939
3.928
1,777
.10,234
5,520
580
370
420
500
280
230
110
2,224
10,234
1974
11,419
29,481
50,900
11,419
2,150
3,928
17,497
3,957
2,601
10,880
+ 59
5,980
610
390
440
560
290
240
110
2,260
10,880
1 The difference between total U.S. distribution of supply and total U.S. supply.
-------
Table B.17 provides Che projection of Sulfur Demand by End Use in the Year 2000.
TABLE B.17
Projections of Sulfur Demand by End Use to Year 2000
(Thousand long tons)
Plastic & synthetic products •••
Non-ferrous metal production...
Total
I/ SOURCE: Mineral Facts
1973
5 520
580
370
420
500
280
230-
110
2,224
10,234
and Problems
LOW
9,400
1,100
300
1,300
400
500
5,000
18,000
, Department
HIGH
14,300
1,400
600
1,500
600
600
7,000
26,000
of the
PROBABLE
12,300
1,300
400
1,500
500
500
6,500
23,000
Interior,
Bureau of Mines, 1975, pages 1,057 - 1,078
- B.44 -
-------
ELEMENT - NITROGEN
RAW MATERIAL
SOURCE
PRIMARY DOMESTIC
NITROGEN FROH
AIR PRODUCED
13,016,000 TONS
OF CONTAINED
NITROGEN
SECONDARY DOMESTIC
Ul
I
NO SECONDARY
SOURCES
OR
RECYCLING
IMPORTED
NONE
1 Fee collected on
element equivalent weight
FIRST
PROCESSING OPERATION
| NITROGEN COMBINED |
WITH HYDROGEN TO
FORM AMMONIA
NITROGEN ALSO COMBINED
AT HIGH TEMPERATURES
WITH OXYGENS TO FORM
OXIDES
CHEMICAL
PROCESSING OPERATION
NITROGEN
NH3
(AMMONIA)
1/1/79 PRICE
PER TON OF
ANHYDROUS NH3
=• $ 130
NITRIC ACID
PER TON
- $ 220
63 COMPANIES
AT 104 SITES
PRODUCED AMMONIA
MAJOR NITROGEN:
BEARING COMPOUNDS
(EXCLUDING
AMMONIA)
ACRYLONTRILE
AMMONIUM NITRATE
AMMONIUM SULFATE
AMMONIUM
PHOSPHATES
NITRIC ACID
UREA
INDUSTRY STOCKS
INCREASED:253,000
TONS OF CONTAINED
NITROGEN
ANHYDROUS AMMONIA
& NATURAL NITRATES
373,000 TONS OF
CONTAINED
NITROGEN
END USE
AGRICULTURE
(FERTILIZERS) 74X
FOOD PRODUCTS
(ANIMAL FEEDS) 2Z
EXPLOSIVES 4%
PLASTIC AND
SYNTHETIC
PRODUCTS 6Z
PAPER PRODUCTS 1/2
RUBBER PRODUCTS
(SYNTHETIC) 1/2
OTHER 13%
DEMAND:12,869,000
TONS OF CONTAINED
NITROGEN
EXPORTS: 247,000
TONS OF CONTAINED
NITROGEN IN
ANHYDROUS AMMONIA
1
> IMPORTED
USCG WEP-1/73 74
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
NITROGEN I/
Nitrogen is recovered from the air in two useful forms Chat in practice are two
distinct commodities: (1) as an element, which may be used either as a gas, to
exclude air from industrial processes; or as a liquid to provide refrigeration;
and (2) as fixed nitrogen, a compound with other elements, in which form it is an
essential plant nutrient and a constituent of many important chemical products*
As a fixed nitrogen, it is combined with hydrogen to form ammonia. (This extract
from Mineral Facts and Problems will discuss fixed nitrogen only).
The fixed nitrogen industry developed after commercialization of the Haber pro-
cess in Germany in 1913. United States capacity, in the beginning of 1975, was
over 14.6 million Cons of contained nitrogen or 17.7 million.tons of ammonia. In
1976, there were 63 companies operating 104 plants with a capacity of over 18
million tons. Ammonia, the basic product of the fixed nitrogen industry, is used
in that form by the consumer, whether farmer or industrialist. However, a large
number of secondary products are also manufactured from ammonia and sold in such
forms to the ultimate consumer.
Of the 13 million tons of fixed nitrogen produced and consumed in the U.S. in
1974 included in addition to ammonia, the following estimated quantities in major
nitrogen-bearing compounds are:
Major Nitrogen-bearing Compounds
(excluding Ammonia)
Thousand short tons
Gross Nitrogen
Weight Content
Acrylontrile 700 200
Ammonium nitrate 7,551 2,500
Ammonium sulfate 2,065 400
Ammonium phosphates 6,829 1,200
Nitric Acid 8,186 1,700
Urea 3,687 1.600
7,600
OSES:
Seventy-four percent of U.S. production goes into fertilizers. Other uses
include plastics (6Z); explosives, particularly ammonium nitrate (42); pulp and
paper; and rubber.
TECHNOLOGY;
Fixed nitrogen is recovered from the atmosphere and after use, is eventually con-
verted back to the elemental nitrogen of the atmosphere by various chemical and
biological processes. A small amount of fixed nitrogen is produced as ammonia
when coking coal. The most common and industrially efficient way to produce
fixed nitrogen is- to combine it with hydrogen to produce ammonia. Some nitrogen
is fixed by combining it at high temperatures with oxygen to form oxides, and
thus nitric acid, another basic chemical.
- B.46 -
-------
At the least of the problem of fixing nitrogen for fertilizer use is the high energy
consumption necessary, particularly since that energy must be supplied in a clean and
increasingly expensive form. Gaseous nitrogen contains a minimum of the free energy.
The free energy content of methane, or of the hydrogen that is made from it and used to
form ammonia is high. Feedstock natural gas used in ammonia plants is variously
reported to be about 20,000 to 22,000 cubic feet per ton of product.
There are no secondary sources or recycling of nitrogen in either the fixed or elemental
form.
PROBLEMS:'
By the end of the century, natural gas is expected to be very scarce, and ammonia pro-
duction will have to be based on coal, or dependency on foreign producers in countries
where natural gas is still abundant. Some attention has been focused on the fixed
nitrogen industry by environmentalists in recent years - pollution of surface wastes by
fertilizers and destruction of the ozone layer of the atmosphere by nitrogen oxides.
SUPPLY-DEMAND:
Table B.18 provides the Nitrogen (fixed) supply-demand relationships, for 1964 - 1974.
- B.47 -
-------
TABLE B.I8
NITROGEN
Nitrogen supply-demand relationships, 1964 - 1974
(Thousand short tons of contained nitrogen)
Wqrld production:
Rest of World......
Total.............
Components of U.S. supply:
Total..
i
to
^Distribution to U.S. supply:
00 Estimated industry stock,
U.S. demand pattern:
Agriculture (fertilizers)-*...
Food products (animal feeds).
Plastic & synthetic products.
Paper products (pulp and
Rubber products (synthetic)..
Total U.S. primary demand^....
1964
6,447
14,891
21,338
6,447
234
200
6,881
540
224
6,117
6,881
4,650
90
525
450
40
40
322
6,117
1965
7,465
16,566
24,031
7,465
269
540
8,274
572
354
7,348
8,274
5,800
90
525
475
40
40
378
7,348
1966
8,904
18,661
27,565
'8.904
349
572
9,825
541
484
8,800
9,825
7,000
90
525
475
40
40
630
8,800
1967
10,205
21,422
31,627
10,205
443
541
11,189
1,530
443
9,216
11,189
7,200
100
525
530
50
50
761
9,216
1968
10,130
25,297
35,427
10,130
396
1,530
12,056
1,310
950
9,796
12,056
7,400
100
500
550
50
50
1,146
9,796
1969
10,678
28,770
39,448
10,678
439
1,310
12.427
1,193
920
10.314
12,427
7,400
110
495
600
50
50
1,609
10,314
1970
11,531
31,231
42,762
11,531
428
1,193
13,152
1,369
807
10,976
13,152
8,209
160
500
600
50
50
1,407
10,976
1971
14,107
33,684
47,791
12,107
420
1,369
13,896
1,494
407
11,995
13,896
8,556
175
545
650
55
55
1,959
11,995
1972
12,651
35,497
48,148
12,651
342
1,494
14,487
1,540
584
12,363
14,487
8,650
145
520
750
65
75
2,158
12,363
1973
12,870
38,630
51,500
12,870
281
1,540
14,691
857
741
13,093
14,691
9,690
200
540
790
70
80
1,723
13,093
1974
13,016
40,400
53,416
13,016
373
857
14,246
1,110
267
12,869
14,246
9,520
200
530
780
70
80
1,689
12,869
1 Anhydrous ammonia and natural nitrates from Chile.
2 Anhydrous ammonia.
3 Includes natural nitrates from Chile.
-------
The cost of production of fixed nitrogen is greatly influenced by the cost of
fuel: for 1 ton of ammonia, about 38,000 cubic feet of natural gas is consumed
which is about 46,000 cubic feet per ton of nitrogen.
Table B.19 provides projections of Nitrogen demand by End Use in Year 2000.
TABLE B.19
Projections for Nitrogen by End Use to Year 2000
(Thousand short tons)
Food Products (animal feeds). «•
Plastics & synthetic products..
Paper products (pulp & paper)..
Rubber products (synthetics)...
Total
II SOURCE: Mineral Facts
1973
9,690
200
540
790
80
70
1,723-
13,093
and Problems,
LOW
16,300
290
900
1,300
130
120
2,960
22,000
Department
HIGH
28,100
600
1,600
2,300
200
200
5,000
38,000
of the
PROBABLB
zrowi
500
1,000
2,000
180
170
4.150
29.000
Interior,
Bureau of Mines, 1975, pages 749 - 760.
- B.49 -
-------
ELEMENT = PHOSPHATE ROCK
RAW MATERIAL
SOURCE
PRIMARY DOMESTIC
CD
en
O
MINES:
23 COMPANIES
OPERATING 38 MINES
45,686,000 TONS
OF PHOSPHATE ROCK
DEMAND
SECONDARY DOMESTIC
NO SECONDARY
OR
RECYCLED
SOURCES
IMPORTED
NO SIGNIFICANT
QUANTITIES OF
ROCK
(SHOWN UNDER
IMPORTED
COMPOUNDS)
]^$ | = Fee collected on
element equivalent weight
FIRST
PROCESSING OPERATION
jWET PROCESS|
PHOSPHORIC ACID
ELECTRIC FURNACE
PHOSPHORIC ACID PLANTS
1
1
1
1
1
1
1
1
1
1
I
1
PHOSPHATE ROCK
H3P04
80Z OF PHOSPHATE
ROCK IS USED TO
PRODUCE H3PO4
1/1/79 PRICE
PER TON OF
H3P04 -
(INFLATED TO
REFLECT 100Z
CONCENTRATION)
$ A53
33 COMPANIES AT
60 SITES
PRODUCE H3P04
INDUSTRY STOCKS
DEPLETED
1.845.OOP TONS
CHEMICAL
PROCESSING OPERATION
r
PRODUCTS OF
H3P04
SODIUM
TRIPOLYPHOSPHATE
DICALCIUM
PHOSPHATE
DIAMMONIUM
PHOSPHATE
PHOSPHATE ROCK AND
FERTILIZERS
COMBINED
182,000 TONS OF
PHOSPHATE ROCK
DEMAND
END USE
FERTILIZER 80Z
DETERGENTS 1%
ANIMAL FEEDS 4Z
FOOD PRODUCTS 4Z
OTHER 4%
DEMAND:
34,770,000 TONS
OF PHOSPHATE ROCK
EXPORTS:
13,997,000 TONS
1
j
> IMPORTED
USCG WEP-1/73 74
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
PHOSPHATE ROCK
The term "phosphate rock" is generally applied to any rock containing more than
202 P2°5. The most important phosphorus raw material source is phosphorite or
amorphous phosphate rock. Commercial phosphate rock contains one or more
phosphatic minerals, such as fluorpatite or tricalcium phosphate, and impurities
of various amounts of organic making iron and aluminum oxides or phosphates; car-
bonates of lime or magnesium and fluorine compounds. In the United States, there
are 3 major phosphate rock producing areas; Florida and North Carolina; the
Western States of Idaho, Montana, Utah, Wyoming; and Tennessee. In 1976, there
were about 23 companies operating 38 mines in those states. ,
The production distribution in 1973 - 1974 was 81.7Z and 80.92 respectively from
Florida and North Carolina, 12.32 and 13.82 respectively from the Western States,
and 6.02 and 5.32 respectively from Tennessee. Florida and North Carolina
phosphate rock was used mostly in wet phosphoric acid plants; Western States
phosphate rock was consumed in both wet process phosphoric acid plants and in
electric furnaces; Tennessee rock was exclusively used in electric furnaces.
TECHNOLOGY;
Atfout 802 of the demand for phosphate rock is used to produce phosphoric acid
(682 through wet process, 122 furnace phosphoric acid). Essentially, all
phosphate rock produced for domestic consumption in Florida, North Carolina and
part of the production in the Western States is used to produce wet process
phosphoric acid (about 682 of phosphate rock demand). Phosphate rock is digested
with sulfuric acid to produce phosphoric acid and a waste impure gypsum. About
162 of the phosphate rock consumed in the U.S. is smelted in electric furnaces
with a balanced charge of coke and silica. Elemental phosphorus is volatized,
condensed, and collected underwater. Some of this elemental phosphorus is oxi-
dized to produce phosphoric acid (about 122 of phosphate rock demand) or con-
verted into numerous anhydrous derivatives (172 of demand). In 1976, there were
about 33 companies operating 60 plants producing phosphoric acid.
USES;
The principal products derived from phosphate rock are fertilizers, detergents,
animal feeds and food products. The agriculture segment dominates the consump-
tion pattern, 842 is used in agriculture. The remaining 162 of the rock was used
to produce elemental phosphorus, electri-c furnace phosphoric acid, and anhydrous
derivatives.
The principal end uses of furnace phosphoric acid were sodium tripolyphosphate
and dicalcium phosphate. The end uses of wet process phosphoric acid are the 2
major phosphatic fertilizers, diammonium phosphate and triple superphosphate.
- B.51 -
-------
Most U.S. phosphate rock contains 3t or more fluorine as a fluorpatite. Fluorine
evolves when phosphate rock is calcined; when it is digested with sulfuric acid;
and when phosphoric acid is separated from waste gypsum and concentrated.
Increasing quantities of fluorine are recovered for water treatment and conversion
into metal fluxes. In 1974, about 1.52 of the phosphate rock demand was used as
defluorinated rock.
ENVIRONMENTAL PROBLEMS:
Past strip mining operations and waste disposal systems have caused some problems-
On private land, the phosphate industry is now subject to a large number of regu-
latory agencies authorized to exercise control over mining and beneficiating
phosphate rock. State and Federal air and water quality guidelines for each
segment of the industry have been developed, proposed, and in some instances,
implemented. These include guidelines for the basic fertilizer chemicals,
phosphorus derived chemicals, and the non-fertilizer phosphate manufacturing
industry.
SUPPLY-DEMAND:
The U.S. does not import significant amounts of phosphate rock. It does import
phosphate agricultural and industrial chemicals. In 1974, it was estimated that
the imported tonnage of phosphate agricultural and industrial chemicals was
equivalent to 910,000 short tons of phosphate rock.
Table B.20 provide the Phosphate rock supply-demand relationships, 1964 - 1974.
- B.52 -
-------
TABLE B.20
PHOSPHATE ROCK
Phosphate rock supply-demand relationships, 1964 - 1974
(Thousand short tons)
World production:
Total
Components of U.S. supply:
tn
Ul
Distribution to U.S. supply:
Apparent surplus (+),
U.S. demand pattern:
Total U.S. primary demand..
1964
. 25 715
. 37,004
. 62,719
. 25,715
175
. 5,140
. 31 030
. 6 123
. 6 374
. 18,532
+ 1
. 14 826
1 483
741
741
741
. 18,532
1965
29,482
40,816
70j298
29,482
148
6,123
35,753
6,529
7,323
21,866
+35
17,492
1,749
875
875
875
21 ,866
1966
39,044
44,150
83,194
39,044
178
6,529
45,751
10,118
9,248
27,382
-997
21,906
2,191
1,095
1,095
1,095
27,382
1967
39,770
46,144
85j914
39,770
139
10.118
50.027
9,942
10,072
27,902
+2.111
22,322
2,232
1.116
1,116
1,116
27,902
1968
41.251
51,326
92,577
41,251
116
9,942
51,309
13,943
12,099
25,336
-69
20,269
2,028
1,013
1,013
1,013
25,336
1969
37,725
52,873
90,598
37,725
140
13,943
51,808
13,697
11,336
25,534
+1,241
20,428
2,043
1,021
1,021
1,021
25,534
1970
38,739
54,896
93,635
38,739
136
13,697
52,572
14,566
11,738
27,163
-895
21, "730
2,172
1,087
1,087
1,087
27,163
1971
38,886
53,622
92,508
38,886
84
14,566
53,536
11,951
12,587
27,788
+1,210
22,230
2,222
1,112
1,112
1,112
27,788
1972
40,831
58,150
98j981
40,831
55
11,951
52,837
10,501
14,275
29,535
-Ij474
23,629
2,363
1,181
1,181
1,181
29,535
1973
42,137
65,923
108,060
42,137
65
10,501
52,703
7,595
13,875
31,233
24,799
2,312
1,374
1,374
1,374
31,233
1974
45,686
74,212
119,898
45,686
182
7,595
53,463
5,750
13,897
34,720
-904
27,568
2,568
1,528
1.528
1,528
34,720
The difference between distribution of U.S. supply and total U.S. supply.
-------
Table B.21 provides projections of Phosphate Rock demand by End Use in Year 2000.
TABLE B.21
Projections for Phosphate Rock by End Use to Year 2000
(Thousand short tons)
1973 LOW HIGH PROBABLE
Total
24,799
2,312
1,374
1,374
1,374
31,233
42,400
4,240
2,120
2,120
2,120
53,000
72 , 000
7,200
3,600
3,600
3,600
90,000
55,200
5,520
2,760
2,760
2,760
69,000
If SOURCE: Mineral Facts and Problems, Department of the Interior,
Bureau of Mines, 1975, pages 819 - 834.
- B.54 -
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
4. Caustic Forming Classes
4.1 Potash and Potassium Hydroxide
4.2 Sodium and Sodium Hydroxide
- B.55 -
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
POTASH AND POTASSIUM HYDROXIDE
Potash is Che common terra for compounds of the element potassium. The chief com-
pound of potassium found in potash ores is the chloride (KC1). Significant amounts
of potash are recovered from present day salt lakes and natural brines and from
underground potash deposits* In 1976, the U.S. potash industry comprises 10 firms,
which operate 11 facilities: 7 underground mines in New Mexico, 1 underground solu-
tion mine in Utah, 2 brine treatment plants in Utah, and 1 brine treatment plant in
California* All these companies produce potassium chloride (potash muriate).
Potash is sold in the following forms:
«•
1) as the chloride KC1,
2) as a naturally occurring double sulfate of potassium
and magnesium (langbeinite),
3) as the sulfate
4) as the nitrate 003,
5) as manure salts (usually crude ore as mined).
About 95Z of potash goes into fertilizers. The remaining 52 is used in chemical
production. The 1974 total U.S. demand for potash was 6,086,000 tons, 5,793,000
tons for agricultural uses and 293,000 tons for chemical use.
Potassium hydroxide (caustic potash) is produced by the electrolysis of con-
centrated potassium chloride solution. Sulfur compounds are removed by the addi-
tion of potassium nitrate to Che fused caustic. The purest form is obtained by
solution in alcohol, filtration and evaporation.
The uses of potassium hydroxide are in soap manufacture, bleaching, manufacture of
oxalic acid and potassium salts; reagent in analytical chemistry, medicine, process
engraving; in foods as an alkali; electrolyte in alkaline storage batteries and
some fuel cells, absorbant for carbon dioxide and hydrogen sulfide. In 1976, there
were 9 companies operating 11 plants with a total annual capacity to produce
potassium hydroxide of 335,000 tons.
ENVIRONMENTAL PROBLEMS:
There are difficulties in disposing of tailings and waste solutions of potash
without environment damage. Potassium hydroxide is highly toxic by ingestion and
inhalation; and a strong irritant to tissue.
DEMAND;
The 1977 production of potassium hydroxide, as reported by the Bureau of Census,
Current Industrial Reports, totaled 301,246 tons.
.- B.56 -
-------
FEE COLLECTION ON INORGANIC RAW MATERIALS
SODIUM HYDROXIDE AND SODIUM JL/
SODIUM HYDROXIDE
Sodium hydroxide (caustic soda), NaOH, is the most important commercial caustic.
It is produced principally by the electrolysis of sodium chloride (brine), during
the production of chlorine. Producing chlorine by electrolysis of brine produces
1.1 tons of sodium hydroxide for each ton of chlorine. As long as the demand for
chlorine grows, new outlets for sodium hydroxide are needed. These new outlets
have always been found before, although by displacing some of the market for sodium
carbonate. When there is an excess of caustic, exportation £lso provides an
outlet for the chemical.
USES:
Sodium hydroxide is used in the following industries: chemical manufacture, rayon
and cellophane; petroleum refining; pulp and paper; aluminum, medicine, detergents,
soap, textile processing; vegetable oil refining, reclaiming rubber; regenerating
ion exchange resins; organic fusions; etching and electroplating, laboratory reagent.
ENVIRONMENTAL HAZARDOUS;
Sodium hydroxide is highly toxic by ingestion and inhalation and is a strong irri-
tant to tissue (eyes, skin, mucous membranes). Tolerance is 2mg. per cubic meter
of air.
SUPPLY-DEMAND;
No information from Bureau of Mines publication. The U.S. Department of Commerce,
Bureau of the Census, Current Industrial Reports, on Inorganic Chemicals, reports
production in 1977 of 10.9 million short tons of liquid sodium hydroxide. (The
liquid production figures represent the total production including quantities
later evaporated to solid caustic).
SODIUM '
Metallic sodium is produced by the electrolysis of sodium hydroxide. In 1976,
metallic sodium was produced by 3 companies operating 5 plants.
The bulk of the metallic sodium productions has been used in the past to make
antiknock compounds for gasoline. The status of gasoline additives is changing
rapidly and the future requirements for metallic sodium in this field are indefin-
ite. A secondary use for sodium is in metal refining, especially titanium. Sodium
is also used to remove oxide scales from a variety of metals and in the manufacture
of pharmaceuticals and sodium hydroxide.
- B.57 -
-------
TECHNOLOGY:'
The manufacture of metallic sodium from salt is presently conducted in the U.S. in
Downs electrolytic cells. The electrolyte ia a mixture of molten sodium chloride,
calcium chloride and alkali fluorides. Direct current of 5 to 7 volts disassoci-
ates the salt into sodium and chlorine. The metal must be protected from exposure
to moisture and air in tightly sealed containers. An inert gas is often used as a
protective blanket over the sodium.
There are no government stockpiles of sodium compounds and the producer's stocks
are only a few days supply. There is little or no recycling of sodium compounds.
USES:
Sodium is used for tetraethyl and tetramethyl lead: titanium'reduction; sodium
peroxide; sodium hydroxide; polymerization catalyst for synthetic rubber; laboratory
reagent, coolant in nuclear reactors; electric power cable; non-glare lighting;
radioactive forms for tracer studies in medicine.
SUPPLY:
The Bureau of the Census, Current Industrial Reports, shows the 1977 domestic pro-
duction of sodium (metal) as 158,752 tons.
SOURCES: Mineral Facts and Problems, Department of the Interior,
Bureau of Mines, 1975, pages 1,017 - 1,029
Inorganic Chemicals, Current Industrial Reports,
Bureau of the Census, 1977
- B.58 -
-------
12 JUN1979
125057
A RTT.T.
To amend the Federal Water Pollution Control Act, as amended, and the
Solid Waste Disposal Act, as amended/ to provide a system of response/
liability/ and compensation for releases of oil/ hazardous substances/
and hazardous wastes, to establish a response and liability fund/ and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled/ That this Act may be
cited as the "Oil, Hazardous Substances/ and Hazardous Waste Response/
Liability, and Compensation Act of 1979."
Sec. 2. Section 7003 of the Solid Waste Disposal Act/ as amended, is
further amended by striking "is presenting" and iiiserting in lieu thereof
"may present" and by striking "the alleged disposal" and inserting in
lieu thereof "such hand! ing, storage, treatment, transportation or
disposal".
Sec. 3. Subtitle G of the Solid Waste Disposal Act, as amended, is
further amended by adding the following new section:
"Sec. 7010. For purposes of administering or enforcing Subtitle C
or Section 7003 of this title, the Administrator or the Attorney General
of the United States, as appropriate/ may by subpoena require the atten-
dance and testimony of witnesses and production of reports, papers,
documents,•answers to questions and information that the Administrator
-------
2
or the Attorney General deems necessary. Witnesses shall be paid the
same fees and mileage that are paid witnesses in the Courts of the
United States. In the event of contumacy, failure, or refusal of any
person to obey any such subpoena/ any district court of the United
States in which venue is proper shall have jurisdiction to order any
such person to comply with such subpoena. Any failure to obey such an
order of the court is punishable by the court as a contempt thereof."
Sec. 4. The Federal Water Pollution Control Act, as amended, is further
amended by adding at the end thereof the following new title:
"TITLE VI — OIL, HAZARDOUS SUBSTANCES, AND HAZARDOUS
RESPONSE, LIABILITY, COMPENSATION, AND FUND
DEFINITIONS
Sec. 601. For purposes of this title, the term —
(a) "act of God" means an unanticipated grave natural disaster or
other natural phenomenon of an exceptional, inevitable, and irresistible
character, the effects of which could not have been prevented or avoided
by the exercise of due care or foresight;
/
(b) "Administrator" means the Administrator of the United States
Environmental Protection Agency;
(c) "barrel" means forty-two United States gallons at 60 degrees
Fahrenheit;
-------
(•; <~, r f» r "7
3 U /i b u b /
(d) "claim" means a demand in writing for a sum certain;
(e) "containment" means those least cost actions consistent with
eventual permanent remedy/ taken in the event of a release or significant
threat of release from an uncontrolled hazardous waste disposal site to
prevent or minimize the release of hazardous substances as defined in
section 601 (o) (3) so that they will not migrate to cause substantial
danger to present or future public health or safety/ or to,-a significant
environmental resource. The term includes/ but is not limited to such
on site actions as storage/ confinement, perimeter protection using
dikes/ trenches or ditches/ clay cover, neutralization/ clean-up of
released hazardous substances/ recycling or reuse, diversion, destruction,
segregation of reactive wastes/ the replacement of leaking containers,
collection of leachate and runoff, on-site treatavent, and the monitoring
to ensure that such actions protect the public health or safety, and the
environment. The term does not include off-site transport of hazardous
substances, storage, treatment, destruction, and/or redisposal off site
except as provided in subsection (b) of section 603;
(f) "contiguous zone" means the entire zone established or to be
established by the United States under article 24 of the Convention, on
the Territorial Sea and the Contiguous Zone;
;
(g) "emergency assistance" means actions up to a cost of $300,000
which the Administrator in his discretion determines must be immediately
taken in the event of a release or the significant threat of a release
from an uncontrolled hazardous waste disposal site to prevent, minimize/
-------
4
or mitigate the release of hazardous substances as defined in section
601 (o) (3) so that they will not cause substantial danger to present or
future public health or safety, or to a significant environmental resource.
The term includes, but is not limited to, security fencing; provision of
temporary alternative water supplies; temporary evacuation of threatened
individuals not otherwise provided; and transportation, storage, destruc-
tion, or treatment and redisposal off site of hazardous substances where
the Administrator determines that, due to the seriousness of the danger
which may be created by the physical, chemical, or biological properties
of the substances and the potential for human exposure, or the unavail-
ability of on-site methods for preventing or minimizing the danger, such
off-site actions are essential to protect the public health or safety or
a significant environmental resource. The term also means any one or
more of the following: (1) planning to determine the feasibility of
containment? (2J monitoring and surveys to define the release or threat
of release, the hazardous substances involved, and the danger to public
health, safety, or the environment; (3) engineering, architectural,
legal, fiscal, or economic investigations; and ('4) studies, investigations,"
surveys, designs, plans, working drawings, specifications, procedures,
/
or other necessary actions to provide for emergency assistance, contain-
ment, and recovery of the costs of emergency assistance and containnent.
(hj "environment" means the environment within the United States
and the environment which may be affected by pollution as defined in
section 601 (bb) of this title;
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(i) "Executive" means the head of any Federal department, agency/
or administration to whan the President of .-the United States delegates
or assigns any of the powers or responsibilities granted by this title;
(j) "foreign claimant" means any person residing in a foreign
country, the government of a foreign country, or any agency or political
subdivision thereof, who asserts a claim;
(k) "fund" means the fund established by section 60§ of this
t
title;
(1) "gross negligence" means the failure to use even slight care,
accompanied by a disregard for the consequences that may ensue from the
act;
(m) "groundwater" means water in a saturated zone or stratagem
beneath the surface of land or water, and any other water used as a
source of public drinking water;
(n) "guarantor" means the person, other than the owner or operator,
who provides evidence of financial responsibility for an owner or operator;
(o) "hazardous substance" means (1) any substance designated
pursuant to section 311 of this Act prior to the effective date of this
title, (2) any substance designated pursuant to section 602 (a) (2) of
this title; and (3) any waste (A) having the characteristics identified
in or (B) listed pursuant to section 3001 of the Solid Waste Disposal
Act, as amended;
(p) "inland oil barge" means a non-self-propelled vessel, certi-
ficated to carry oil in bulk as cargo and certificated to operate only
on the inland waters of the United States while operating in those
waters;
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(q) "inland waters of the United States" means the United States
portion of-the Great Lakes and those waters'of the United States lying
inside the baseline from which the territorial sea is measured and those
waters outside that baseline which are a part of the Gulf Intracoastal
Waterway;
(r) "internal waters" means waters lying inside the baseline from
which the territorial sea is measured, as recognized by the United
States;
(s) "navigable waters" or "navigable waters of the United States"
means the waters of the United States, including the territorial seas;
(t) "offshore facility" means any facility of any kind located in,
on, or under, any of the navigable waters of the United States, and any
facility of any kind which is subject to the jurisdiction of the United
States and is located in, on, or under any other waters, other than a
vessel or a public vessel;
(u) "oil" means oil of any kind or in any form,' including, but not
limited to, petroleum, fuel oil, sludge, oil refuse, and oil mixed with
wastes other than dredged spoil;
(v) "onshore facility" means any facility (including, but not
Limited to,-motor vehicles and rolling stock) of any kind located in,
on, or under, any land within the United States, but does not include an
uncontrolled hazardous waste disposal site or any facility which has
qualified for interim status or received a final permit under Subtitle c
of the Solid Waste Disposal Act, as amended;
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(w) "otherwise subject to the jurisdiction of the United States"
means subject to the jurisdiction of the United States by virtue of
United States citizenship, United States vessel documentation or numbering,
or as provided for by international agreement to which the United States
is a party;
(x) "owner or operator" means (1) in the case of a vessel, any
person owning, operating, or chartering by demise, such vessel, and (2)
in the case of an onshore facility, an offshore facility or an uncontrolled
hazardous waste disposal site, any person owning or operating such
facility or site, and (3) in the case of any abandoned offshore or
onshore facility, the person who owned or operated such facility immedi-
ately prior to such abandonment;
(y) "person" means an individual, firm, corporation, association,
partnership, consortium, joint venture, commercial entity, State, munici-
pality, commission, political subdivision of a State, or any interstate
body;
(z) "petrochemical feedstock" means liquid or gaseous hydrocarbon
used primarily for the preparation of more complex chemicals,,i.e.,
ethylene, propylene, butylenes, butadiene, butanes, benzene, toluene,
xylenes, napthalene, carbon black, and methane other than that used to
make ammonia.
(aa) "petroleum oil" means petroleum, including crude petroleum or
any fraction or residue therefrom;
(bb) "pollution" means oil or a hazardous substance other than a
hazardous waste as defined in section 601(o)(3) of this title —
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(1) released from a vessel or an onshore facility in violation
of subsection (b) of section 602 of this title; or
(2) released from a vessel engaged in any segment of the
movement of oil loaded at the terminal facilities of the pipeline
authorized by the Trans-Alaska Pipeline Authorization Act, as
amended by this Act (43 U.S.C. 1651 et seq.) for transportation to
a port under the jurisdiction of the United States, and released
frcm that vessel prior to being brought ashore in such a port; or
(3) in or on the territorial sea, internal waters, or immedi-
ately adjacent shoreline, of a foreign country, in a case where
damages are recoverable by a foreign claimant under this title; or
(4) in or on the waters of the high seas which may affect
natural resources belonging to, appertaining to, or under the
exclusive management authority of, the United States;
(cc) "public vessel"" means a vessel owned or bareboat-chartered
and operated by the United States, or by a State or political subdivision
thereof, or by a foreign nation, except when such vessel is engaged in
cormerce;
(dd) "refinery" means a permanently situated facility, located in
the United States, which receives crude petroleum oil for the purpose of
t
refinement;
(ee) "release" includes, but is not limited to any spilling,
leaking, pumping, pouring, emitting, emptying, discharging, escaping,
leaching, or dumping into the environment, but excludes (1) discharges
in compliance with a permit under section 402 of this Act, (2) discharges
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resulting from circumstances identified and reviewed and made a part of
the public record with respect to a permit issued or modified under
section 402 of this Act and subject to a condition in such permit, (3)
continuous or anticipated intermittent discharges frcm a point source,
identified in a permit or permit application under section 402 of this
Act, which are caused by events occurring within the scope of relevant
operating or treatment systems, (4) releases fron a hazardous waste
treatment, storage, or disposal facility in compliance with any interim
status standards promulgated by the Administrator under Subtitle C of
the Solid Waste Disposal Act, as amended, or any final permit under said
Act, (5) any release in compliance with a permit issued under section
102 or section 103 of the Marine Protection, Research, and Sanctuaries
Act of 1972, as amended, and (6) any injection of fluids authorized
under applicable underground injection control programs pursuant to Part
C of the Safe Drinking Water Act, as amended;
(ff) "removal costs" means (1) costs incurred under subsections (a)
or (e) of section 603 of this title; section 5 of the Intervention on
the High Seas Act, or subsection (b) of section 18 of the Deepwater Port
Act of' 1974, as amended by this Act and (2) other costs of reasonable
measures taken after an incident resulting in the release or threatened
release of oil or a hazardous substance to prevent, minimize, or mitigate
damage from that incident, but does not include costs'"of emergency
assistance or containment;
(gg) "remove" or "removal" refers to the cleanup or removal of
released oil or hazardous substances frcm the environment, the disposal
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of removed material/ or the taking of. such other actions as may be
necessary to prevent, minimize, or mitigate damage to the public health
or safety, or to the environment, which may otherwise result from a
release or threat of release;
(hh) "ship" means either of the following types of vessel constructed
or adapted primarily to carry oil or hazardous substances in bulk as
cargo in the cargo spaces;
(1) a self-propelled vessel, or
(2) a non-self-propel led vessel which is not an inland oil
barge;
(ii) "strict liability" or "strictly liable" means liability for
the release of oil or a hazardous substance as defined in this title
regardless of negligence, knowledge, good faith, intent, surrounding
circumstances, degree of care, or any reasonable precautions;
(jj) "supplier" means any person who either produces, manufactures,
or imports petrochemical feedstocks or inorganic elements and compounds
and either provides, through sale or any other means, these feedstocks
or elements and compounds to other persons, or uses those feedstocks or
elements and compounds himself;
(kk) "uncontrolled hazardous waste disposal site" means any natural
or man-TO3.de facility or site of any kind located in, on, or under, any
land or waters within the United States which has been or is being used,
in whole or in part, for the storage of hazardous substances as defined
in section 601(o) C3)(A) or (B) of this title, or for the retention,
disposal, deposit, injection, placing, or treatment, or dumping of
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hazardous substances, but does rot include any facility which is subject
to regulation under Subtitle C or D of the Solid Waste Disposal Act, as
amended;
(11) "United States" and "State" include the several States of the
•United States, the District of Columbia, the Commonwealth of Puerto
Rico, the Canal Zone, Guam, American Samoa, the United States Virgin
Islands, the Ccnrnonwealth of the Northern Marianas, and any other terri-
tory or possession over which the United States has jurisdiction;
(nsn) "United States Claimant" means any person residing in the
United States, the Governnent of the United States or an agency thereof,
or the government of a State or a political subdivision thereof, who
asserts a claim;
(nn) "vessel" means every description of water craft or other
artificial contrivance used, or capable of being used, as a means of
transportation, on water other than a public vessel.
PROHIBITED RELEASES, NOTICES, PENALTIES
Sec. 602. (a) (1) Hie Congress hereby declares that it is the policy of
the United States that there should be no releases of oil or hazardous
substances into the environment.
(2) The Administrator shall develop, promulgate, and revise as may
be appropriate, regulations designating as hazardous .substances, other
than these referred to in section 601 (o) (1) and (3) of this title, such
elements and compounds which, when released in any quantity into the
environment, may present substantial danger to the public health or
safety, or to the environment.
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(3) The Administrator shall by regulation determine for the purposes
of this title those quantities of oil and any hazardous substances as
defined in section 601 (o) (1) and (2) of this title, the release of which
may be harmful to the public health or safety, or to tha environment.
(b) The release of oil or hazardous substances, other than hazardous
wastes as defined in section 601 (o) (3) (A) or (3) of this title, either
into or upon (1) land, (2) grcundwatar, (3) the navigable waters of the
United States or the waters of the contiguous zone, or in connection -
with activities under the Outer Continental Shelf T^r^q Act or the
Deepwater Port Act of 1974, or which may affect natural resources belonging
to, appertaining to, or under the exclusive management authority of the
United States (including resources under the Fishery Conservation and
Management Act of 1976), in such quantities as may be harmful, as deter-
mined by the Administrator under subsection (a) (3) of this section, is
prohibited, except (1) in the case of such release of oil into the
waters of the contiguous zone or which may affect natural resources
belong to, appertaining to, or under the exclusive management authority
of the United States (including resources under the Fishery Conservation
and Management Act of 1976), where permitted under the International
Convention for the Prevention of Pollution of the Sea.by Oil, 1954, as
f
amended, or other international agreatient to which the United States is
a party and which is intended to replace that Convention, or (2) where
permitted in quantities and at times and locations or under such circum-
stances or conditions as the Executive may, by regulation, determine not
to be harmful. Any regulations issued under this subsection shall be
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consistent with maritime safety and with marine and navigation laws and
regulations and applicable water quality standards.
(c)(1) Any person, including/ for purposes of this paragraph, any
agency or department of the United States Government, in charge of a
vessel or any public vessel owned by the United States or a State or
political subdivision thereof or an onshore facility or an offshore
facility shall, as scon as he has knowledge of any release^of oil or a
hazardous substance from such vessel or facility in violation of subsec-
tion (b) of this section, immediately notify the appropriate agency of
the United States Government of such release-.
(2) Any person
(A) in charge of a vessel from, which oil or a hazardous
substance is released in violation of subsection (b) of this
section into or upon the navigable waters of the United States,
adjoining shorelines, or unto or upon the waters of the contig-
uous zone, or
(B) in charge of a vessel from which oil or a hazardous
substance is released in violation of subsection (b) of this
section in connection with activities under the Outer Conti-
nental Shelf Lands Act or the Deepwater Port Act of 1974, or
»
which may affect natural resources belonging to, appertaining
to, or under the exclusive management authority of the United
States (including resources under the Fishery Conservation and
Management Act of 1976}, and who is otherwise subject to the
jurisdiction of the United States at the time of the release,
or
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(C) in charge of an onshore facility or an offshore
facility fron which oil or a hazardous substance is released
in violation of subsection (b) of this section, who fails to
notify immediately the appropriate agency of the United States
Government as scon as he has knowledge of such release shall,
upon conviction, be fined, not more than $10,000, or imprisoned-
for not more than one year, or both.
Any person subject to criminal penalties for failure to provide
notice of a release pursuant to this subsection who fails to do so
shall not be entitled to the limitation of liability set out in
subsection (c) of section 604 of this title. Notification received
pursuant to this paragraph or information obtained by the exploita-
tion of such notification shall not be used against any such person
in any criminal case, except a prosecution for perjury or for
giving a false statement.
(d) (1) Within 90 days of the effective date of this Act, or, if
regulations have not been promulgated at that time under sections 3001
and 3004 of the Solid Waste Disposal Act, as amended, within 180 days of
promulgation of such regulations, any person who may be subject to
liability for an uncontrolled hazardous waste disposal site under subsec-
tion (b) of section 604 of this title shall notify the Anrninistratcr of
the existence of such site, specifying the amount and type of any oil or
hazardous substances to be found there, and any known, suspected, or
likely releases of such substances from such site. The Administrator
may prescribe the manner and form of the notice and the information to
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be included. Any such person who knowingly fails to notify the Adminis-
trator of the existence of any such site shall, upon conviction, be
fined not more than $10,000, or imprisoned for not more than one year,
or both. In addition/ any such person who fails to provide the notice
required by this subsection shall not be entitled to the limitation of
liability set out in subsection (c) of section 604 of this title or the
defenses to liability set out in subsection (d) of section ^.604 of this
title.
(2) Following provision of notification of the existence of
an uncontrolled hazardous waste disposal site under paragraph (1)
of this subsection, any person who, pursuant to section 604(b) of
this title, may be liable for a release or threat of release of oil
or a hazardous substance frcm the site who takes action to remove,
mitigate, or lessen the likelihood of a release or threat of release
shall, in the event of such release or threat of release be entitled
to subtract from any amount for which he may be liable under that
»
section that portion of the costs of such actions as the Administrator
may approve as reasonable and appropriate. Provided, however, that
nothing contained in this paragraph shall in any way be deemed or
interpreted to limit or affect any liability such person may have
to any other party as a result of the release or threat of release.
(3) After the effective date of this Act, it shall be unlawful
for any person required to provide the notification of an uncontrolled
hazardous waste disposal site set out in paragraph (1) of this
subsection knowingly to destroy, mutilate, erase, dispose of,
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conceal or otherwise render unavailable or unreadable any records
relating to the site or any hazardous substances contained or
deposited therein. Any person who violates this paragraph shall,
upon conviction, be fined not irore than $20,000, or imprisoned for
not more than one year, or both.
(e)(1) Any owner, operator, or person in charge of any onshore
facility or offshore facility from which oil or a hazardous substance is
released in violation of subsection (b) of this section shall either be
assessed a civil penalty by the Secretary of the department in which the
Coast Guard is operating of not more than $5,000 for each offense or,
in the case of releases of hazardous substances, be subject to a civil
action under paragraph (2) of this subsection. Any owner, operator, or
person in charge of any vessel from which oil or a hazardous substance
is released in violation of subsection (b) of this section into or upon
the navigable waters of the United States, adjoining shorelines, or into
or upon the waters of the contiguous zone, and any owner, operator, or
person in charge of a vessel from which oil or a hazardous substance is
released in violation of subsection (b) of this section in connection
with activities under the Outer Continental Shelf Lands Act or the
Deepwater Port Act of 1974, or which iray affect natural resources belonging
to, appertaining to, or under the exclusive iranagement authority of the
United States (including resources under the Fishery Conservation and
Management Act of 1976), and who is otherwise subject to the jurisdiction
of the United States at the time of the release, shall either be assessed
a civil penalty by the Secretary of the department in which the Coast
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Guard is operating of not more than $5,000 for each offense or, in the
case of releases of hazardous substances, be subject to a civil action
under paragraph (2) of this subsection. No penalty shall be assessed
unless the owner or operator shall have been given notice and opportunity
for a hearing on such charge. Each violation is a separate offense.
Any such civil penalty may be comprcmised by such Secretary. In deter-
mining the amount of the penalty, or the amount agreed upon in conprcmise,
the appropriateness of such penalty to the size of the business of the
owner or operator charged, the effect on the owner or operator's ability
to continue in business, and the gravity of the violation, shall be
considered by such Secretary. The Secretary of the Treasury shall
withhold at the request of such Secretary the clearance required by
section 4197 of the Revised Statutes of the United States, as amended
(46 U.S.C. 91), of any vessel the owner or operator of which is subject
to the foregoing penalty. Clearance may be granted in such cases upon
the filing of a bond or other security satisfactory to such Secretary.
(2) The Administrator, taking into account the gravity of the
offense, and the standard of care manifested by the owner, operator,
or person in charge, may, after consultation with the Secretary of
the department in which the Coast Guard is operating, commence a
civil action against any such person subject to a penalty under
paragraph (1) of this subsection for the release of a hazardous
substance to impose a penalty based on consideration of the size of
the business of the owner or operator, the effect on the ability of
the owner or operator to continue in business, the gravity of the
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violation, and the nature, extent, and degree of success of any
efforts made by the owner, operator, or person in charge to minimize
or mitigate the effects of such release. The amount of such
penalty shall not exceed $50,000, except that where the United
States can show that such release was the result of willful negligence •
or willful misconduct within the privity and knowledge of the
owner, operator, or person in charge, such penalty shall rot
exceed $250,000. Each violation is a separate offense. Any action
under this paragraph may be brought in the district court of the
United States for the district in which the defendant is located or
resides or is doing business, and such court shall have jurisdiction
to assess such penalty. No action may be commenced under this
clause where a penalty has been assessed under paragraph (1) of
this section.
(3) Civil penalties shall not be assessed under both this
section and section 309 of this Act for the same'release.
(4) Any costs of ranoval incurred in connection with a release
excluded by section 601 (ee) (1), (2), (3), (4), (5), or (6).. of this
title shall be recoverable from the owner or operator of the source
of the release. The Administrator is authorized to commence a
civil action for such costs in the district court of the United
States for any district in which the cwner or operator is located
or resides or is doing business, and such court shall have jurisdic-
tion to order the payment of the costs and to grant any and all
other appropriate relief. Any ironeys received by the Administrator
pursuant to this paragraph shall be deposited in the fund.
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EMERGENCY RESPONSE, ACTION TO REMOVE OR MTEEGftlE,
NATIONAL CONTINGENCY PLAN, JUDICIAL RELIEF
Sec. 603.(a) (1) Whenever any oil or a hazardous substance is released
or there is (A) a substantial threat of such a release into the environ-
ment, or (B) a release into the environment of any pollutant or contami-
nant which may present an imminent and substantial danger to the public
health or welfare, the Executive is authorized to act to .remove or
arrange for the removal of such oil, hazardous substance, pollutant, or
contaminant at any time, unless he determines such removal will be done
properly by the owner or operator of the vessel or onshore facility or
offshore facility or uncontrolled hazardous waste disposal site from
which the release occurs.
(2) For the purposes of this subsection, the terms "release" and
"released" shall include the discharge, release, and injections excluded
by. items (.1), (2), (3), (4), (5), and (6) of section 601 (ee) of this
title, as well as all other releases included in that subsection.
(3) If the Administrator determines that the source of a release
for which action is being taken pursuant to this subsection is an uncon-
trolled hazardous waste disposal site, that action shall be terminated
iimvediately. A determination made under this paragraph shall not affect
the liability of any person for the costs of any action taken, or affect
in any way the payment of moneys obligated under paragraph (1) of this
subsection prior to the date of the determination.
(b) (1) Whenever any hazardous substance as defined in section
601 Co) (.3)' is released, or there is a substantial threat of such a release,
fron an uncontrolled hazardous waste disposal site, the Administrator is
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authorized to provide emergency assistance and containment of the hazardous
substances or to arrange for. the provision of such assistance and
containment, unless he determines that the owner or operator of the
site, or some other person, will properly provide such assistance and
containment. Provided, however, that the Administrator shall not provide
containment unless the Stats in which the site is located first enters
into a contract providing adequate assurance that (A) it will provide
for or otherwise assure any and all maintenance of containment and any
and all, containment costs which may prove necessary, beginning not later
than one year frcm the date containment is first effectuated, as determined
by the Administrator, and extending for 19 years or the expected life of
the containment, whichever is less; and (B) that it will assure the
availability of a hazardous waste disposal facility acceptable to the
Administrator for any necessary off-site storage, destruction, treatment,
or redisposal of the hazardous substances. Provided further, that the
Administrator shall not provide containment projected by him to cost in
excess of $200,000 for any site unless (A) he first determines that it
is the least cost method of containing the hazardous substances- ever 20
years or the expected life of available containment methods, if less;
and (B) the State, or other person, first enters into a contract providing
adequate assurance that it will pay at least 10 per centum of the costs
of first effectuating and maintaining for one year thereafter containment.
Provided further, that the Administrator shall not provide containment
at an uncontrolled hazardous waste disposal site owned by a State or a
political subdivision of a State unless the State or subdivision first
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enters into a contract providing adequate assurance that it will pay at
least 50 per centum of the costs of first effectuating containment and
maintaining it for one year thereafter.
(2) Subject to the provisions of this title, the Administrator
may pay for (A) 100 per centum of the costs of emergency assistance;
and either (B) 100 per centum of the costs of first effectuating
containment and maintaining it for one year thereafter., wherever
the eligible costs of such containment do not exceed $200,000; (C)
90 per centum of the costs of first effectuating the contaiiment
and maintaining it for one year thereafter, wherever the eligible
costs of such containment are in excess of $200,000; or (D) 50 per
centum of the costs of first effectuating containment and maintaining
it for one year thereafter wherever the uncontrolled hazardous
waste disposal site is owned by a State or political subdivision
• thereof. Any payments for work incurred to effectuate containment
shall at no time exceed the Federal share of the-cost of such work
incurred to the date of the voucher covering such payment plus the
Federal share of the value of materials, chemicals, or other conrod-
ities which have been stockpiled in the vicinity of and for such
containment activities.
(3) The State or political subdivision shall bear the cost of
any remedial measures it may choose to take instead of the least
cost containment, as determined by the Administrator, or in addition
to any containment provided hereunder, such as complete waste
and/or soil transport off site and treatment and redisposal at
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secured facilities off site. The Administrator is authorized, in
lieu of providing containment or arranging for the provision cf
containment under paragraph (1) of this subsection, to reimburse
the State or subdivision for such expenses, if approved by the
Administrator, up to the amount which would have been necessary to
effect the Federal share of any containment which could be provided
thereunder.
(4) (A) Subject to the requirements of paragraph (1) of this
subsection, the Administrator is authorized to provide for complete
or partial waste transport, storage, destruction, or treatment and
redisposal off site at secured facilities, or to arrange for the
provision of such actions, if he determines that such actions are
the least cost means of containment for an uncontrolled hazardous
waste disposal site over a pericd of up to 20 years.
(B) Where the life cycle cost and environmental impact
of providing for off-site transport of hazardous substances
frcm two or more uncontrolled hazardous waste sites and of
providing for centralized off-site storage, destruction, or
treatment and redisposal at a secured facility off site dees
not exceed the total sum of the life cycle costs of the
least cost containment at each of the sites, or the State or
other person agrees by contract to pay the differencs between
the Federal share of the total sum of containment at each of
the sites and the costs of centralized off-site transportation,
storage, destruction, or treatment and redisposal, such central-
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izsd off-site actions shall be deemed to be the least cost
means of containment, and the .Administrator is authorized to
provide for the transport of the wastes and their centralized
off-site destruction, storage, or treatment and redisposal.
Provided, the total cost of any action authorized by the
Administrator under this clause shall not exceed the total sum
of the Federal share of the costs of containment 'which could
be authorized by him at each of the sites.
(5) Within 12 months after enactment of this title, if a
State or political subdivision thereof can shew to the satisfaction
of the Administrator that it does rot have legal authority to
assume responsibility for maintenance of containment, or if it has
such authority but has no legal authority to allocate funds for
that purpose or to match the Federal share of containment/ the
Administrator may assume the responsibility for, and the costs of,
first effectuating containment and/or maintenance of containment
for up to an additional 12 months beyond the period provided for in
paragraph (1) of this subsection if the State or political subdivision
by contract agrees to assume the responsibility and subsequent
costs at the end of such additional period, or to seek the legal
authority to do so, as may be appropriate.
(6) If the Administrator provides containment pursuant to
paragraph (1) of this subsection and the State or political subdi-
vision thereof fails to comply with applicable requirements of any
contract entered into pursuant to this subsection, the Administrator
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shall, after providing 60 days rotica to the State, seek, in a
court of competent jurisdiction to enforce the contract and/or tc
recover from the State the costs of maintaining such ccntairsrent
and the Stata or local share of the costs of containment at the
site.
(7) Where a State or a political subdivision thereof is
acting in behalf of the Administrator, the Administrator is authorized
to provide technical and legal assistance in the administration and
eriforcernsnt of any contract or subcontract in connection with
emergency assistance or containment assisted under this title, and
to intervene in any civil action involving the enforcement of such
contract or subcontract.
(c) Within 180 days after the effective data of this section, the
Executive shall revise and republish the National Contingency Plan for
the removal of oil and hazardous substances, originally prepared and
published pursuant to section 311 of tlrls Act to reflect and effectuate
the responsibilities and powers created by this title in addition to
those ratters specified in section 311 (c) (2) of this Act on the date
prior to the date of enactment of this title. In preparing such amendments
the Executive shall propose for public review and hold public hearings
on a new section of the Plan to be known as the "National Uncontrolled
Hazardous Waste Disposal Site Response Plan." Following such hearings,
the Executive shall revise as necessary and finally adopt and publish
the said Response Plan, which shall include at a minimum:
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(1) methods for discovering and investigating such sites;
(2) methods for evaluating, including least cost analyses,
and containing any releases or threats of releases from such sites
which pose substantial danger to the public health or safety, or to
significant environmental resources;
(3) methods and criteria for determining the appropriate
extent of emergency assistance, containment, and other measures
authorised by this title;
(4) appropriate roles and responsibilities for the Federal,
State, and local governments and for interstate and non-governmental
entities in effectuating the Plan.
(5) provision for identification, procurement, maintenance,
and storage of response equipment and supplies;
(6) a method for and assignment of responsibility for reporting
the existence of uncontrolled hazardous waste disposal sites which
may be located on federally owned or controlled properties and any
releases of hazardous substances from such sites.
Following publication of the revised National Contingency Plan,- the
renoval of oil and hazardous substances and actions to minimize damage
from oil. and hazardous substance releases shall, to the greatest extent
possible, be in accordance with the provisions of the plan. The Executive
may/ frctn time to time as he deems advisable, revise, otherwise further
amend, and republish the National Contingency Plan.
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(d) (i) Consistent with the Naticr.al Contingency Plan, the Executive
rray issue regulations consistent with maritime safety and with rarir.e
and navigation laws (A) establishing methods and procedures for removal
of released oil and hazardous substances; (B) establishing criteria for
the development and irrplamentation of local and regional oil and hazardous
substance removal contingency plans; (C) establishing procedures,
irethods, and equipment and other requlrenxsnts for eguipriint to prevent
release of oil and hazardous substances from vessels and frcra onshore
facilities and offshore facilities, and to contain such releases; and
(D) governing the inspection of vessels carrying cargoes of oil and
hazardcus substances and the inspection of such cargoes in order to
reduce the likelihccd of releases of oil and hazardous substances.
(2) My owner or operator of a vessel or an onshore facility
or an offshore facility and any other person subject to any regula-
tion issued under paragraph (1) of this subsection who fails or
refuses to comply with, the provisions of any such regulations,
shall be liable for a civil penalty of not more than $5,000 for
each such violation. This paragraph shall not apply to -any owner
or operator of any vessel seaward of the territorial sea of the
United States unless such owner or operator is otherwise subject to
the jurisdiction of the United States. Each violation shall be a
separata offense. The Executive may assess and coipronisa such
penalty. No penalty shall be assessed until the owner, operator,
or other person charged shall have been given notice and an oppor-
tunity for a hearing on such charge. In determining the amount of
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27
the penalty, or the amount agreed upcn in compromise, the gravity
of the violation, and the den-ens trated -good faith of the cwr.er,
operator, or other person charged in attempting to achieve rapid
compliance after notification of a violation, shall he considered
by the Executive.
(e) Whenever a marine disaster in or upon the navigable waters of
the United Statas has created a substantial threat of a pollution hazard
to the public health or welfare of the United States, including, but not
limited to, fish, shellfish, and wildlife and the public and private
shorelines and beaches of the United States, because of a release, or an
imminent release of large quantities cf oil, or of a hazardous substance
fron a vessel, the United States may (1) coordinate and direct all
public and private efforts directed at the removal or elimination of
such threat; and (2) summarily renove, and, if necessary, destroy such
vessel by whatever means are available without regard to any provisions
of law governing -the employment of personnel or the expenditure of
appropriated funds. Any expense incurred under this subsection or under
the Intervention on the High Seas Act (or the convention defined in
section 2(3) thereof) shall be carpensable as a removal cost under
section 607 of this title.
(f) In addition to any other action taken by a State or local
government, when the Executive determines there may be a substantial
danger to the public health cr safety of the United States, because of
an actual or threatened release of oil or a hazardous substance from an
onshore facility, an offshore facility, or an uncontrolled hazardous
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waste disposal site, the Executive rcay require the Attorney General of
the United States to secure such relief as may be necessary to abate
such threat, ar.d the district court of the United States in the district
in which the threat cccurs shall have jurisdiction to grant such relief
as the public interest and the equities of the case ray require.
(g) (1) If any emergency assistance cr containment activity is
carried out by the Administrator pursuant to section 603 (b). (1) of this
title in relation to an uncontrolled hazardous waste disposal site
located on property which is cwned or operated by the person who owned
or operated the property at the time it was utilized for the dispos-1 of
hazardous substances as defined in section 601(o) (3) of this title, and
if the said person utilized the' site at that time for the disposal of
any such wastes produced by him, either at the site or elsewhere, and if
said person failed to properly provide such emergency assistance or
containment upon request of the Administrator, the Administrator mav
cotmenca a civil action to impose a. penalty against such person. The
size of the penalty shall be based upon consideration of the size of the
business of such person, the effect upon his ability to continue in
business, the seriousness of any threat presented by the release or
threatened release of hazardous substances as defined in section 601(o)(3)
of this title from the site, and any efforts made by such person to
minimize or mitigate the effects of any release or threat of release,
•
Any penalty imposed hereunder shall be in. addition to any costs of such
emergency assistance or containment recovered from such perscn by the
fund pursuant to this title. Provided, however, that in no event shall
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any penalty imposed hereunder exceed two and ens half tinnes the amount
of the costs of emergency assistance and/or /containment incurred by the
Administrator.
(2) Any action under this paragraph rray be brought in the
district court of the United States for the district in which the
defendant is located or resides or is doing business, and such
court shall have jurisdiction to assess and order the .payment of
such penalty and to grant any and all other appropriate relief.
Any rrcneys received by the Administrator pursuant to this subsection
shall be deposited in the fund.
(h) Anyone authorized by the Executive to enforce the provisions
of this title may (1) beard and inspect any vessel upon the navigable
waters of the United States or the waters of the contiguous zone, (2)
upon presentation of his credentials, have a right of entry to, upon,
over, or through any premises or property containing an offshore facility
or an onshore facility or an uncontrolled hazardous waste disposal site,
or any premises or property where the effects of a release of oil
or hazardous substances are being, or may reasonably be expected to be
experienced, (3) while on such property, take samples or photographs and
make any analyses he deans necessary of any soil, water, residues,
wastes, air, or other substances suspected to be or to contain oil or
hazardous substances, (4) with or without a warrant arrest any person
who violates the provisions of this title, or any regulations issued
thereunder in his presence or view, and (5) execute any warrant or other
process issued by an officer or court of competent jurisdiction.
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LIABILITY
Sec. 604. (a) Subject to the provisions of subsections (c) and (d) of
this section, the owner and operator of a vessel, other than a public
vessel., or of an onshore facility or an offshore facility, which is the
sourca of pollution, or which poses a threat of pollution in circumstances
where removal costs are incurred, shall be jointly, severally, and
strictly liable for all damages rasultir.g from pollution ov. the threat
thereof for which a claim iray be asserted under secti.cn 607 of this
title.
(b) Subject to the provisions of subsections (c) and (d) of this
section, the owner and operator of an uncontrolled hazardous waste
disposal site, if they caused or contributed or are causing or contributing
to any release, or to the conditions which produce any such release, of
a hazardous substance as defined in section 601(o) (3) of this title fron
such site, or the threat thereof where the costs described in subsection
(d) of section 607 of this title ara incurred, and any other person who
caused or contributed or is causing or contributing to such incident,
including but not limited to prior owners, lessees, and generators,
transporters, or disposers of such hazardous substances, shall be jointly,
severally, and strictly liable for all costs for which a clajja iray be
/
asserted under that subsection.
(c) (1) Except when the pollution or threat thereof is caused in
whole or in part by willful misconduct or gross negligence, within the
privity or knowledge of the owner or operator of a vessel cr an onshore
or offshore facility, cr in whole or in part by a violation, within the
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privity or knowledge of the owner cr operator, or applicable public
health, safety, construction, or operating standards cr regulations or
the Federal Government; or except where the owner or operator is subject
to criminal penalties for failure to furnish any notice of a release
required by subsection (c) of section 602 of this title, or fails or
refuses to provide all reasonable cooperation and assistance requested
by the responsible Federal official in furtherance of cleanup and removal,
and
(2) Except when the release cr threat of a release of a hazardous
substance as defined in section 601 (o) (3) of this title from an uncon-
trolled hazardous waste disposal site is caused in whole or in part by
willful misconduct or gross negligence, within the privity or knowledge
of any person liable under subsection (b) of this section, or in whole
or in part by a violation within the privity or knowledge of any such
liable person of any applicable, public health, safety, construction, or
operating standards or regulations of the Federal Government; or except
where any such person fails to furnish the notice required by subsection
(d) of section 602 of this title, or fails or refuses to provide all
reasonable cooperation and assistance requested by the responsible
Federal official in furtherance of emergency assistance or containment
activities, the total of the liability under subsection (a) or subsection
(b) of this section and any rsnoval costs or costs of emergency assistance
or containment recoverable by, or on behalf of, the owner or operator
or other, liable person shall be limited to —
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(A) in the ca.se of a vessel other than a ship or other
than an inland oil barge, S150 per gross registered ton or
$250,000, whichever is greater.
(B) in the case cf an inland oil barge, $150,000 or $150
cer gross registered ton, whichever is greater;
(C) in the case of a ship, $250,000 or $300 per gross
registered ton (up to a roaxinraa of $30,000,000), .'whichever is
greater;
(D) in the case of an offshore facility operated under
authority of the Cuter Continental Shelf Lands Act, the total
of ranoval cost; plus $50,000,000; or
(E) in the case cf an uncontrolled hazardoxus waste
disposal site or an onshore facility or an offshore facility
other than one described in paragraph (D) , $50,000.. 000 unless
a lesser limit is established by the Executive under subsection
(e).
(d) There shall be no liability under subsection (a) or subsecti.cn
(b) of this section where an owner, operator, guarantor, or other liable
person can prove that—
(1) the pollution or release or threat thereof is caused
solely by an act of God or an act of war;
(2) as to a particular claimant the economic loss is caused,
in whole or in part, by the gross negligence or willful misconduct
of that claimant; or
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(3) as to a particular claiirant to the extent that the economic
less is caused by the negligence of that claimant. Provided,
however, that nothing contained in this subsection shall be construed
or interpreted to Limit or deny any claim, presented by or on behalf
of any authorized agency of the United States Government arising
out of such agency's response to pollution or to a release or
threat thereof pursuant to this title.
(e) The Executive may issue regulations establishing limits of
liability of no lass than $3,000,000 and no more than $50,000,000 for
various classes of onshore facilities and offshore facilities other than
those described in subsection (c)(2)(D) of this section and for uncon-
trolled hazardous waste disposal sites. Any such regulations shall take
into account the size, type, location, storage and handling capacity,
and other matters relating to the likelihood of releases of oil or
hazardous substances involving those classes.
(f) The Executive shall, frcm time to time, report to Congress on
the desirability of adjusting the monetary limitations of liability
specified in subsection (c) of this section.
(g) (1) Subject to the provisions of paragraph (2) of this subsection,
the fund shall be liable,- to .the extent that the loss is not otherwi.se
compensated, for all valid claims for losses or damages for which a
claim may be asserted under section 607 of this title. Should moneys to
pay any such claim not be available in the fund, the Executive shall
defer payment of the claim until moneys are available.
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(2) Except for the removal costs specified in section 601(ff)(1)
of this title, there shall be no liability under paragraph (1) of
this subsection —
(A) where the pollution or release from an uncontrolled
hazardous wasta disposal sita is caused solely by an act of
war; ••'•'.
(B) as to a particular claimant where the economic loss
is caused, in whole or in part, by the gross negligence cr
willful misconduct of that claimant. Provided, however, that
nothing contained in this clause shall be construed or inter-
preted to limit or deny any claim presented by or on behalf of
any authorized agency of the United States Government arising
out of such agency' s response to pollution or to a release or
threat thereof pursuant to this title.
(h) (1) In addition to the damages and costs for which claims may
be asserted under section 607 of this title, and without regard to the
limitation of liability provided in subsection (c) of section 604 of
this title, any person or persons liable under subsection (a)-or subsec-
tion (b) of this section shall also be jointly and severally liable to
the claimant for interest on the amount paid in satisfaction of the
claim for the period froa the date upon which the claim was presented to
such person to the date upon which the claimant is paid, inclusive, less
the period, if any/ fron the date upon which the liable person shall
offer to the claimant an amount equal to or greater than that finally
paid in satisfaction of the claim to the date upon which the claimant
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shall accept that amount, inclusive. However, if the liable person
shall offer to the claimant, within sixty days of the date upon which
the claim was presented, or of the date upon which advertising was
commenced pursuant to section 608 of this title, whichever is later, an
amount equal to or greater than that finally paid in satisfaction of the
claim, the Liable person shall be liable for the interest provided in
this paragraph only from the date the offer was accepted by the claimant
to the date upon which payment is irade to the claimant, inclusive.
(2) The interest provided in paragraph (1) of this subsection
shall be calculated at the average of the highest rate for conrvercial
and finance company paper of maturities of one hundred and eighty
days or less obtaining on each of the days included within the
period for which interest must be paid to the claimant, as published
in the Federal Reserve Bulletin.
(i) No indemnification, hold harmless, or similar agreement shall
fce effective to transfer from the owner or operator of a facility, or
fran any person who may be liable for a release or threat of release
from an uncontrolled hazardous waste disposal site pursuant to.subsection
(b) of this section, to any other person the liability imposed under
subsection (a) or (b) of this section, other than as specified in this
/
title- Provided, That this provision dees not preclude an agreement
whereby the holder of a leasehold interest for the exploration of oil
agrees to indernnify for, or hold harmless fron, that liability the owner
or operator of a facility which is, .by contract or other agreement,
engaged in' activity on behalf of the holder of the leasehold interest.
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(j) Nothing in this title, including the previsions of subsection
(i) of tlnis section, shall bar a causa of action that an cwnar or operator
or any other person subject to liability under subsections (a.) or (b) of
this section, or a guarantor, has or would have, by reason of sxibregaticn
or otherwise against a,ny person.
(k) To the. extant that they ara in conflict with, cr otherwise
inconsistent with, any other provisions of Federal Law relating to
liability or the liroitaticn thereof, the provisions of this secti.cn
shall supersede all such other previsions of law, including those, of
subsection (a) of section 4283 of the Revised 'Statutes, as arcerded (46
U.S.C. 183(a)).
FBIAKCIAL RESPONSIBILITY
Sec. 605 (a) (1) The owner or operator of any vessel (except a ncn-self-
propelled barge -that dees not carry oil or hazardous substances as fuel
or cargo) over three hundred gross tons, which uses 'an offshore facility
or the navigable waters shall establish and rain-tain in acccrdanca with
regulations promulgated by the Executive, evidence of financial responsi-
bility sufficient to satisfy the maxiirtum amciuit of liability to which
the owner or operator of such vessel would be e>cpcsed in a case where
tiiere is an entitlement to limit liability in acccrdanca with the provi-.
sions of subsection (c) of section 604 of this title,'Provided, That the
Executive may prescribe by regulation levels of financial responsibility
requirements applicable to persons owning cr operating more than one
vessel; Provided further, That in no case iray the total amount of financial
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responsibility so prescribed be less than the ancunt applicabla to the
largest of those vessels as determined under this paragraph. Financial
responsibility rray be established by any one, or any permitted corbina-
ticn, of the following methods acceptable to the Executive: evidence of
insurance, guaranty, surety bond, or qualification as a self-insurer.
Any bond filed shall be issued by a surety ccnpany authorised to do a
surety business in at least one of the United States.
(2) The Secretary of the Treasury shall refuse the clearance
required by section 4197 of the Revised Statutes of the United States to
any vessel subject to this subsection which dees not have certification
furnished by the Executive that the financial responsibility provisions
of paragraph (1) of this subsection have been corplied with.
(3) The Secretary of Transportation, in accordance with regulations
pronulgated by him, shall (A) deny entry to any port or placa in the
United States, or to the navigable waters of the United States, to, and
(B) detain at the port or placa in the United Statss fron which it is
about to depart for any other port or placa in the United States, any
vessel subject"to this subsection which, upcn request, dees not produce
certification furnished by the Executive that the financial responsibility
provisions of paragraph (1) of this subsection have been complied with.
(b) The owner or operator of an offshore facility which (1) is
used for drilling for, producing, or processing oil, or (2) has the
capacity to transport, store, transfer, or otherwise handle more than
one thousand barrels of oil at any one time, shall establish and maintain,
in accordance with regulations promulgated by the Executive, evidence of
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financial responsibility sufficient to satisfy the rra>dir.u?a amount cf
liability to which trie owner or operator of the facility would be exposed,
in a case where he would, be entitled to limit his liability in accordance
with tha provisions of section 604(c) of this title, or $50,000,000,
whichever is less; Provided, That the Sxecutive may prescribe by regulation
levels of financial responsibility requirements applicable to persons
owning or operating :rere than one facility; ?rovi_ded ^rth_er, That in no
case iray the financial responsibility requirement prascribed be lass
than the highest airount applicable to any one of those facilities as
dete.rcnir.ed under this subsection.
(c) (1) Any person who fails to comply with the requirsrants of
subsection (a) (1) or subsectd.cn (b) of this section, the regulations
promulgated thereunder, or any denial or detention order issued under
subsection (a) (3) of this section, shall be subject bo a civil penalty
of not irore than $10,000.
(2) Such penalty raay ba assessed by the Executive; no penalty
shall be assessed until, notice and an opportunity for hearing en
the alleged violation have bean given. In deterroi,ning the arcimt
of penalty or the amount agreed upon in ccnprouise, the dercnstrated
i
coed faith of the party shall be taken into consideration.
(3) At the request of tha Executive, the Attorney-General rray
bring an action in trie naire of' the fund to collect the penalty
assessed.
(d) Any claim authorised by subsection (a) of section 607 of this
title may ba asserted directly against any guarantor providing evidence
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of financial responsibility as required under this section. In defending
such claim Ln respect to its merits, the guarantor snail be entitled to
invoke all rights and defenses which would ba available to the owner or
operator under this title, but the guarantor rray not invcka po]-icy or
contractual defenses otherwise available to hin in an action brought by
the owner or operator. If the guarantor's obligation to irake payment, of
such a claim arises solely out of the requirsrants of this- subsection,
the guarantor is entitled to reimbursement from the owner or operator.
The guarantor need not provide protection for costs, less, or damage
intentionally caused.
(e) The Executive shall conduct a study to determine (1) whether
adequate private insurance protection is available on reasonable terms
and conditions to the owners and operators of vessels, onshore facilities,
offshore facilities, and uncontrolled hazardous waste disposal sites
subject to liability under section 604 of this title, and (2) whether
the market for such insurance is sufficiently competitive to assure
purchasers of features such as a reasonable range of deductibles, cc—
insurance provisions and exclusions. The Executive shall submit the
results of his study, together with his recormandations, within two
years of the data of enactment of this Act, and shall submit an interim
report on his study within one year of the date of enactment of this
Act.
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FUND ESlSaLISHMEST, .-.CMTMISl'E^JnCN, AMD FENCING
Sec. 6G6. (a) There is hereby established" in. the Treasury of the United
States an Oil and Hazardous Substances Liability Fund, which shall be
administered by the Executive. The fund rray sue and be sued in its own
name.
(b)- The total moneys received by the fund front the appropriations
and fees authorized, by subsections (e) and (f) of this section shall
not exceed $250,000,000 .in fiscal year 1981, $375,000,000 in fiscal year
1982, $500,000,000 in fiscal year 1983, and $500,000,000 in fiscal year
1.984.
(c) The fund shall be ccr^titutee. f.rcrn —•
CD such starts as rray be appropriated to it, as provided for
in subsection, (a) of this section; and
(2) all fees collected pursuant to subsection (f) of this
section;
(3) all ironays- recovered on behalf of the' fund ur^der section
610 of thi.s tit,le?
(4) all moneys transferred from funds abolished pursuant to
section 6 of this Act; and
(5) all other ircneys recovered or collected on behalf of the fund.
under this title, including penalties assessed under this title, rrcnevs
recovered pursuant to section 602(e)(3) of this title, and interest
received fron the investment of rxneys held in the fund pursuant to
subsection (g) of this section.
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(d) (1) The fund shall be available only to trie extent and in such
amounts as provided in appropriation acts for:
(A) removal costs described in clause (1) of subsection (s)
of section 601 of this title;
(B) costs of emergency assistance described in subsection
(ff) of section 601 of this title;
(C) costs of containment described in subsection (gg) of
section 601 of this title;
(D) costs incurred pursuant to section 603(a)(1)(B) of this
title;
(E) the processing, settlement, and payment of claims under
section 609 of this title; and
(F) adrtujiistrative and personnel costs of the Federal Govern-
ment incident to the administration of this title, including but
not limited to claims settlement activities and adjudicator:/ and
judicial proceedings, and reports and studies required by this
title, whether or not such costs are recoverable under section 610
of this title.
(e) There is hereby authorized to be appropriated to the rand fran
the general fund of the United States Treasury, not to exceed ?50,000,000
in fiscal year 1981, $75,000,000 in fiscal year 1382, and $100,000,000
per year in fiscal years 1SS3 and 1984. Any and all surrs appropriated
to or deposited in said fund shall retrain available until expended.
(.f) (1) There is iirccsed upon the owners of refineries recaivina
crude or unfinished petroleum oil and upon the owners of any petroleum
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oil for export at the point of expert or leading for export or of ariv
petroleum oil for entry into the Unitsd States at the point of entry or
unloading for entry/ whethar for import or transfer to a foreign countrv,
a fee, not to exceed 3 cents per barrel of petrolev™. oil received.,
exported, or entered. Frc^/i.ded, however, that the total of fees imposed
under this paragraph shall not exceed 360,000,000 in fiscal year 1981,
$80,000,000 .in fiscal year 1982, and 5100,000,000 per year in fiscal
years 1933 and 1934.
(2) There is irnpcsed upon each supplier of petrochemical
feedstocks a fee, not to exceed 0.5 cents,1 per pound, on any arncunt
or petrcch-srrical feedstock supplied to another person or: used by
said supplier. Pjroylded, tovever, that the total of fees imposed
under this paragraph shall not exceed $90,000,000 in fiscal year
1381, $150,000,000 in fiscal year 1982, and $200,000,000 per year
in fiscal years 1983 and 1984.
(3) There is irncosed upon each supplier of inorganic elements
and cr^pcTind-'T a fee, not to exceed 2 dollars per ten, on any arcunt
of inorganic element, or catpour.d supplied to another person or used
by said supplier. The inorganic elements and ccrrpoi^ads subject to
this fee are
(A) arsenic and tha ecuivaient weight of arsenic in
arsenic trioxide, cacrcti.ur>, chrcmiun and the equivalent weight
of dnrcmiisn ici chrardte, chranic acid, sodium dichrorrata, and
potassium dichrcrrate, lead and tha equivalent weight of lead
in lead oxide, and mercury;
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(3) chlorine, hydrochloric acid, hydrofluoric acid, ard
bromine in rrethyl brcmide and ethvlene dibrcniidR;
(C) phosphoric acid, sulfuric acid, nitric acid, potassium
hydroxide, ar.d sodium hydroxide;
(D) amronia and trie equivalent weight of airrronia in
aiurcniura nitrate; and • • •
(E) such other inorganic alsnenta and corfccums as tha
Administrator may deem appropriate, based upon infonration
available to him as a result of listing or characterizing
hazardous substances or of iirplanenting this Act. Provided,
112^—.' t^at the total of fees imposed under this paragraph
shall net exceed $50,000,000 in fiscal year 1981, $70,000,000
in fiscal year 1982, and $100,000,000 per year in'fiscal years '
1983 and 1984.
(.4) (A) Any fees iirpcsed by paragraphs (1), (2) , and (3) shall
be assessed and collected by the Secretary of the Treasury or his
delegate, and -the provisions of subtitle F of the Internal Revenue
Cede of 1954 shall apply to the assessment and collection of such
fee as if such fee were a tax described in Chapter 32 of such Cede.
(3) Any fees prescribed by this subsection shall be
imposed only once en any quantity of petroleum oil, feedstock,
element, or cerrpound, except that any fee irrcosed on any
quantity of refined petroleum used as feedstock shall be
added, once and only once, to the fee iitposed on that quantity
pursuant to paragraph (1) of this subsection. The administrator
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rray recc:rmer:.a to the Secretary of the '.rraarjurv dn socr.crnic
incentive for recycling feedstocks and elar-snts or ccr^cou-rd."
ccvared by this svibsecticn by reducing the fee on such feedstocks
and elsnents or corpounda retnoved frcrrt the waste stream of =i
prcd-uct.io.ri process and recycled in. such production process or
reintrcducsd into products cr used as a scurca of enerc:v. The
Secretary of trie Treasury shall, based upon. th=='rsccnitisr.dat-ic-a
of the Adrai.ni5-trr?,tor, est.anJa.ah tine airexmt of any s-:ch reduction
of fee by regulation., groviaad, hcv^'/er, that in r.o event
shall any reduction, of fee exceed the fee en such feedstock
and element cr corpcand.
(5) In no event shall the fee irr^osed witia rasped to a.
quantity of petrcciisnical feedstock or inorganic elerr^nt or corpcund
pursjuant t.o paragraphs (2) or (3) of this siibsecti.cn exceed tr,,o cer
centura of the price, or the petrc
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45
based upon the recommendation of the Administrator, establish the
new fee schedule by regulation. No regulation that modifies fees
pronulgated by the Secretary of the Treasury, nor any ncdificaticn
of such a regulation, whether or not in effect, may be stayed by
any court pending ccrrapleticn of judicial proceedings for the review
of that regulation or ncdificaticn.
(g)(1) The Secretary of the Treasury or his delegate shall, after
consultation with the Secretary of Transportation and the Administrator,
invest such portion of the fund, up to $50,000,000, as is not, in his
judgment, required to neet current withdrawals. The primary purpose of
this capital reserve is to assure the availability of money to cover the
costs of Federal response actions.
(2) Any funds invested by the Secretary of the Treasury under
paragraph (1) shall be in public debt securities with maturities
suitable for the needs of the fund, as determined by said Secretary
after consultation with the Secretary of Transportation and the
Administrator, and bearing interest at rates determined by the
Secretary of the Treasury taking into consideration current market
yields on outstanding marketable obligations of the United States
of comparable maturities. The income on these investments shall be
credited to and form a part of the fund.
(h) To the extent practicable, the Secretary of the Treasury shall
keep precise records as to the sources of all moneys in the fund and as
to all claims and payments made. For purposes of the annual report
' provided for in subsection (A) of section 614 of this title, claims and
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46
payments shall be categorized as claims and payments (1) for the release
or threatened release of oil fron uncontrolled hazardous waste disposal
sites; (2) for the release or threatened release of hazardous substances
from uncontrolled hazardous waste disposal sites; (3) for all other
releases or threatened releases of oil; and (41 for all other releases
or threatened releases of hazardous substances.
DAMAGE AND CXAIMRNIS
Sec. 607. (a) Claims asserted and ccrrcensable but unsatisfied under
provisions of the Trans-Alaska Pipeline Authorization Act, section 311
of this Act, the Deepwater Port Act of 1974, and title III of the Outer
Continental Shelf Lands Act Amendments of 1978, which provisions are
repealed or modified by section 6 of this Act my be asserted under this
title; and other claims for damages for economic loss incurred on or
after the effective date of this section, resulting from pollution, or
for costs specified in section 601(ff)(1) of this title incurred by
reason of a release or threat thereof, may be asserted under this title
for ~
(1) removal costs;
(.2) injury to, or destruction of, real or personal property;
C3) injury to, or destruction of, natural resources, including
costs for damage assessment; and
(4) loss of opportunity to harvest marine life due. to injury to or
destruction of natural resources.
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47
(b) A claim authorized by subsection (a) of this section nay be
asserted —
(1) Under item 1,
(A) by any agency of the United States government,
(B) by any State, with respect to reimbursements allowed
under the system established in the National Contingency Plan.
(C) by any United States claimant —
(i) who is an owner or operator of a vessel or an
onshore facility or an offshore facility;
(ii) which is engaged in the storage, handling, or
transportation of oil or hazardous substances; and
C'iii) who, in the course of normal operations,
maintains expertise, supplies, or equipment to be used
for the removal of oil or hazardous substances; and
(iv) who, respecting a release not emanating from a
vessel or an onshore facility or an offshore facility
owned or operated by such claimant, incurs removal costs
referred to in section 601 (££) (2) of this title, as certified
by the responsible Federal official; or
(0) by any United States claimant who is an owner or
operator of a vessel or onshore facility or offshore facility,
for cleanup costs associated with a release'occurring from
... •
that vessel or facility: Provided; That the owner or operator
of a vessel or onshore facility or offshore facility who would
otherwise be liable under subsection (a)' of section 604 of
this title may assert such a claim only if he can show that he
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43
is entitled to a defense to liability under section 604 (d) (1)
of this title or, if not entitled .'to such a defense to liability,
that he is entitled to a limitation of liability under subsection
(c) of section 604 of this title: Provided further, That
where he is not entitled to such a defense to liability but
entitled to such a limitation of liability, such rl?.T.m may be
asserted only as to the removal costs Incurred in excess of
»
that limitation:
(2) under item 2 by any United States claimant, if
the property involved is owned or leased by the claimant;
(3) under item (3), by the President, as trustee, for natural
resources over which the United States Government has sovereign
rights or natural resources within the territory or fishing conser-
vation zone of the United States to the extent they are managed or
protected by the United States, or by any State for natural resources
within the boundary of that State belonging to, managed by, controlled
by, or appertaining to the State: Provided that compensation paid
under this item shall be used only for assessing the damages to and
the restoration of the natural resources damaged or for acquisition
of equivalent resources;
(4) under item 4 by any United States claimant;
C51 under items 1 through. 4, by a foreign claimant to the
same extent that a United States claimant may assert a claim if —
(A) the pollution occurred (i). in the internal waters or
'(ii) in or on the territorial sea or the immediately adjacent
shoreline of a foreign country of which the claimant is a
resident;
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49
(B) the claimant is not otherwise conpensated fear his
loss;
(C) the discharge was fron a facility located adjacent to
or within the navigable waters or fron a vessel within the
navigable waters or was discharged in connection with activities
conducted under the Outer Continental Shelf Tfinrfc Act, as
amended by the Act (43 U.S.C. 1331 et seg.) or the Deepwater
«
Port Act of 1974, as amended by the Act (33 U.S.C. 1501 et
seq.); and
(D) recovery is authorized by a treaty or an executive
agreement between the United States and the foreign country
involved, or if the Secretary of State, in consultation with
the Attorney General and other appropriate officials, certifies
that such country provides a comparable remedy for United
States claimants: Provided, that subclauses (A), (C), and (D)
of this clause shall not apply where the ^T*-in< is asserted by
a resident of Canada and where pollution involves oil discharged
fron a vessel carrying oil that has been (i) transported
through the pipeline authorized by the Trans-Alaska Pipeline
Authorization Act, as amended, (ii) i
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50
resident of Canada may assert a claim for all damages, including
clean-up costs which would have been cognizable under subsection
(c) of section 204 of the Trans-Alaska Pipeline Authorization
Act;
(6) Under item 1, by a foreign owner or operator of a vessel
to the same extent that a United States owner or operator of a
vessel may assert such a claim under clause (1) of this subsection
where the pollution involved is that set forth in clauses (1), (2),
or (4) of subsection (bb) of section 601 of this title; and
(7) under any item, by the Attorney General, on his own motion
or at the request of the President, on hphalf of any group of
United States claimants who may assert a claim under this subsection,
when he d^a**n'lri'a? that the claimants would be more VfcrifltPly
represented as a class in asserting their claims. Failure of the
Attorney General to take action shall have- no bearing on any class
action maintained by any claimant for damages authorized by this
section.
(c) If the number of members of a class in an action brought under
clause (7) of subsection (b) of this section exceeds one thousand,
publication of notice of such action in local newspapers of general
circulation in the areas in which the damaged persons reside shall, be .
deemed to fulfill the requirement for public notice established by Rule
23 (c) (2) of the Federal Rules of Civil Procedure.
(d) (1) The Administrator shall, within 12 months of the effective
date of this title, establish by regulation a priority system for responding
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to releases or threats of releases from uncontrolled hazardous waste
disposal sites which shall include, but not'be limited to:
(A) methods, including the role of the States in determining
State priorities for response, and in assisting in the Administrator's
determination of national priorities for response, and criteria for
determining response priorities in the development of which the
Administrator shall, to the extent possible/ take into account:
the significance of the threat to public health, safety, and signi-
ficant environmental resources; the population at risk, the hazard
potential of the hazardous mhg*«nr«a at such sites; the potential
for contamination of drinking water supplies; the potential for
direct human contact; the potential for destruction of sensitive
ecosystems; State preparedeness to assume State costs and responsi-
bilities; and such other factors as he deans appropriate; and
(B) a system, including the use of contracts, whereby the
State or States affected by a release of hazardous substances from
such sites may act where necessary to provide emergency assistance
and containment and may be reimbursed for the reasonable costs
incurred for such assistance and containment from the fund.
(2) Claims for the costs of anergency assistance and containment
carried out pursuant to subsection (b) of «"-H/?n 603 of this title
may be asserted if the Administrator certifies that such costs have
been incurred in a manner consistent with the regulations prom-
ulgated pursuant to paragraph (1) of this subsection —.
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(A) by any agency of the United States government;
(B) by any State, with respect to any reimbursements
allowed by the said regulations; or
(C) by any person who is an owner or operator of an
uncontrolled hazardous waste disposal site, or any other
person who may be liable for a release from such site, for any
such costs aggnrT-i^-Hta^ with a release occurring TM^H that site:
Provided/ That ihe owner or operator of any uncontrolled
hazardous waste disposal site, or any other person who would
otherwise be liable under subsection (b) of section 604 of
*-hia title, nay assert such a claim only if he can shew that
he is entitled to a defense to liability under subsection (d)
of section 604 of this title, or, if not entitled to such a
defense to liability, that he is entitled to a limitation of
liability under subsection (c) of «iPcH.on 604 of this title:
further, That where he is not entitled to such a
defense to liability but entitled to such a limitation of
liability, such
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53
DESIG8AHCN AND ADVERTISEMENT
Sec. 608.(a)(1) When the Executive receives information of an incident
which involves pollution or when he exercises his authority to respond
to a release of a hazardous substance fron an uncontrolled hazardous
waste disposal site, he shall, where possible, designate the source or
sources of the pollution or release and shall iTnn^iAt^ly notify the
owner, operator, and the guarantor of the source of that designation
and, in the case,of an uncontrolled hazardous waste disposal, site, any
other liable party, where possible.
(2) Any person designated under paragraph (1) of this subsection
nay deny that designation. If the owner, operator, or guarantor of a
source of pollution fails to inform the Executive, within five days
after receiving notification of the designation, of his denial, that
owner, operator, or guarantor, as required by regulations pronulgated by
the Executive, shall advertise the designation and the procedures by
which rOa-img nay be presented to him. If advertisement is not otherwise
ma^«* in accordance with this paragraph, the Executive shall, as he finds
necessary, and at the expense of the owner, operator, or guarantor
involved, advertise the designation and the procedures by which claims
nay be presented to that owner, operator, or guarantor.
*
(b) In a case where —
(1) the owner, operator, and guarantor all deny a designation
in accordance with paragraph (2) of subsection (a) of this section,
(2) the source of the pollution or release was a public
vessel, or
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54
(3) the Executive is unable to designate the source or sources
of the pollution or release under paragraph (1) of subsection (a)
of this section, he shall advertise or otherwise notify- potential
claimants of the procedures by which claims nay be presented to the
fund.
(c) Advertisement tinder subsection (a) of this section shall
connence no later than fifteen days from the date of the designation
made thereunder and continue for a period of no less than thirty days.
CLAMS
Sec. 609. (a) Cl?'{™ may be presented directly to the fund by any author-
ized agency of the United States Governnent for the costs described in
clauses (A) through (D) of section 606 (d) (1) of this title/ and the
Executive is authorized to pronulgate regulations designating the Federal
official or officials who may obligate available money in the fund for
such purposes. Except as provided in subsection (b) of this section,
all other claims shall be presented to the cwner, operator, or , guarantor.
(b) All «-ia-»ni.« shall be presented to the fund —
(1) where the Executive has advertised or otherwise notified
•
claimants in accordance with subsection (b) of section 608 of this
title, or
(2) by an owner, operator or other liable person where he may
recover under the provisions of subsection (b) (1) or under subsection
(d) (2) of section 607 of this title.
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55
(c) In the case of a ^laim presented in g^rir>-p5^nc» with subsection
(a), and in which —
(1) the person to whan the claim is presented denies all
liability for the claim, for any reason, or
(2) the rlalm is not settled by any person by payment to the
claimant within 120 days of the date upon which. (A) the rlalm was
presented, or (B) advertising was ccmnenced pursuant to paragraph
(2) of subsection (a) of section 608 of this title, whichever is
later, the claimant nay elect to conmence an action in any court of
competent jurisdiction against the owner, operator, or guarantor,
or to present the ^"»»^ to the fund, that election to.be irrevocable
and exclusive. Should the Claimant elect to cenroence an action in
court, the standards of liability, and the defenses and limitations
thereto set forth in section 604 of this title shall apply, any
other laws to the contrary notwithstanding.
(d) In the case of a ^i^m prgsgntsd in ^'"p'F'^ancQ with subsection
(a) of this section, where full and adequate compensation is unavailable,
either because the ^"j^Hni exceeds a limit of liability invoked under
subsection (c) of section 604 of this title or because the owner, operator,
and guarantor are financially incapable of meeting their obligations in
f
full, a claim for the unccmpensated damages may be presented to the
fund.
(e) In the case of a rlalm which has been presented to any person,
pursuant to subsection (a) of this section, and which is presented to
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56
the fund pursuant to subsection (c) or (d) of this section, such person,
at the request of the claimant, shall transmit the claim and supporting
documents to the fund. The Executive may, fay regulation, prescribe the
documents to be transmitted and the terms under which they are to be
transmitted.
Cf) In the case of a claim presented to the fund, pursuant to
subsection (b) , (c) , or (d) of this section, and in which the fund —
(1) denies all liability for the claim,, for any reason, or
(2) does not settle the claim by payment to the claimant
within sixty days of the date upon which (A) the claim was presented
to the fund or (B) advertising was commenced pursuant to subsection
(c) of section 608 of this title, whichever is later, the claimant
may submit the dispute to the Executive for ^o*?lgi«?n in
with section 554 and related provisions of title 5, United States
Code.
(g) (1) The Executive shall promulgate regulations which establish
uniform, procedures and standards for the appraisal and settlement of
claims against the fund: Provided, that nothing contained in this
section or the preceeding section shall be construed as authorizing the
Executive to deny any qlaim presented by any authorized agency of the
United States Government for cleanup, removal, emergency assistance, or
containment costs or costs incurred under section 603 (a) (1KB) of this
title. Should moneys for any such «*ia*m not be available in the fund,
the Executive shall defer payment of the ^larm until moneys are available.
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57
(2) Except as provided in paragraph (3) of this subsection,
the Executive shall use the facilities.and services of private
insurance and claims adjusting organizations or State agencies in
processing claims against the fund and may contract to pay compensa-
tion for those facilities and services. Any contract made under
the provisions of this paragraph may be made without regard to the
provisions of section 3709 of the Revised Statutes, as amended (41
U.S.C.. 51, upon a showing by the Executive that advertising is not
reasonably practicable. The Executive shall «?g**ah\ •? gfr procedures
for the approval and payment of rlnims. When the services of a
State agency are used in processing and settling claims, no payment
may be made on a claim asserted on behalf of that State or any of
its agencies or subdivisions unless the payment has been approved
by the Executive.
(3) To the extent necessitated by extraordinary
where the services of such private organizations or State agencies
are inadequate, the Executive may use Federal personnel to process
claims against the fund.'
(h) Without regard to subsection (b) of section 556 of title 5,
United States Code, the Executive is authorized to appoint, from fr*™* to
time for a period not to exceed one hundred and eighty days, one or more
panels, each comprised of three individuals, to hear and decide disputes
submitted to the Executive pursuant to subsection (f). At least one
member of each panel shall be qualified in the conduct of adjudicatory
proceedings and shall preside over the activities of the panel. Each
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53
member of a panel shall possess competence in the evaluation and assessment
of property damage and the economic losses resulting therefrom. Panel
members nay be appointed from private life or from any Federal agency
except the staff administering the fund. Each panel member appointed
from private life shall receive a per diem conpensation, and each panel
member shall receive necessary travel and other expenses while engaged
in the work of a panel. The provisions of chapter 11 of i£tle IS,
United States Code, and of Executive Order 11222, as amended, regarding
special government employees, apply to panel members appointed from
private life.
(i) (1) Upon receipt of a request for decision from a claimant,
properly made, the Executive shall refer the dispute to an administrative
law judge, appointed Tnrta- section 3105 of title 5, United States Code
or a panel appointed under subsection (h) of this section.
C2) The administrative law judge and each member of a panel
to which a dispute is referred for decision shall be a resident, of
the United States judicial circuit within which the damage complained
of occurred, or, if the damage complained of occurred within two or
more circuits, of any of the affected circuits, or, if the damage
occurred outside any circuit, of the nearest circuit.
(3) Upon receipt of a dispute, the administrative law judge
or panel shall adjudicate the case and render a decision in accordance
with section 554 of. title 5, United States Code. In any proceeding
subject to this subsection, the presiding officer may require by
subpoena any person to appear and testify or to appear and produce
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59
books, papers, documents, or tangible things at a hearing or deposi-
tion at any designated place. Subpoenas shall be issued and enforced
in accordance with procedures in subsection (d) of section 555 of
title 5, United States Code, and rules pronulgated by the Executive.
If a person fails or refuses to obey a subpoena, the Executive may
•
invoke the aid of the district court of the United States where the
person is found, resides, or transacts business in requiring the
attendance and testimony of the person and the production by him of
books, papers; documents, or any tangible things.
(4) A hearing conducted under this subsection shall be conducted
within the United States judicial district within which, or nearest
to which, the damage cnnplained of occurred; or, if the damage
of occurred within two or more districts, in any of the
affected districts, or,, if the .damage uojuiied outside any district,
• of the nearest district.
(5) The decision of the administrative law judge or panel
under this subsection shall be the final order of the Executive
except that the Executive in his discretion and in accordance with
rules which he may promulgate, may review the decision upon his own
initiative or upon exception of the claimant or the fund.
* ,
(6) Final orders of the Executive made under this subsection
shall not be subject to judicial review.
(j) (1) In any action brought against an owner, operator, or guarantor,
both the plaintiff and defendant shall serve a copy of the complaint and
?il subsequent pleadings therein upon the fund at the same time those
pleadings are served upon the opposing parties.
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60
(2) The fund nay intervene in the action as a matter of
right.
(3) In any action to which the fund is a party, if the owner,
operator/ or guarantor admits liability under this title, the fund
upon its motion shall be dismissed therefrom to the extent of the
admitted liability.
(4) If the fund receives from either the plaintiff or the
defendant notice of such an action, the fund shall be bound by any
judgment entered therein, whether or not the fund was a party to
the action.
(5) If neither the plaintiff nor the defendant owner or
operator gives notice of such an action to the fund, the limitation
of liability otherwise permitted by subsection (c) of section 604
of this title is not available to that defendant, and the plaintiff
shall not recover from the fund any sums not paid by.the defendant.
(k) In any action brought against the fund, the' plaintiff may join
the owner, operator, or guarantor, and the fund may implead any person
who is or may be liable to the fund under any provision of this title.
(1) No claim may be presented, nor may an action be connenced for
damages recoverable under this title, unless that claim is presented to,
*
or that action is commenced against, the owner, operator, or guarantor,
or against the fund, as to their respective liabilities within three
years from the date of discovery of the economic loss or cost for which
a rlaiin may be asserted under subsection (a) of section 607 of this
title.
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61
SUBRCG&ITON
Sec. 610. (a) Any person or governmental entity, including the fund, who
shall pay compensation to any claimant for an economic loss or cost,
** under section 607 of this title, shall be subrogated to all
rights, claims, and causes of action which that claimant has under, this
title.
{b) Upon request of the Executive, the Attorney General may conroei
an action, on behalf of the fund, for the compensation p*"^ by the fund
to any claimant pursuant to this title. Such an action may be ccomenced
rnyfr*1" any law against any owner, operator, or guarantor, or against any
other person or governmental entity, who is "M«K»«» thereunder to the
compensated claimant or to the fund, for the damages for which the
was paid.
(c) In all claims or actions by the fund against any person pursuant
to the provisions of subsections (a) and (b) of this section, the fund
recover —
(1) for a rlaim presented to the fund (where there has been a
denial of source designation) pursuant to section 608 (b) (1) of this
title, or (where there has been a dmial of liability) pursuant to
>
section 609 (c) (1) of this title —
(A) subject only to the limitation of liability to which
the defendant is entitled imder subsection (c) of section 604
of this title, the amount the fund has p^* to the claimant,
without reduction;
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62
(B) interest on that amount, at the rate calculated in
accordance with section 604 (h) (2) • of this title, from the date
upon which the claim was presented by the claimant to the
defendant to the date upon which the fund was paid by the
defendant, inclusive, less the period, if any, from the date
upon which the fund shall offer to the claimant the amount
finally p^l^ by the fund to the claimant in satisfaction of
the claim against the fund to the date upon which the claimant
shall accept that offer, inclusive, and
• »
CO all costs incurred by the fund by reason of the
claim, both of the claimant against the fund and the fund
against the defendant, including, but not limited to, processing
costs, investigating costs, court costs, and attorney's fees;
and
(2) for a claim presented to the fund pursuant to section
609 (c) (2) of this title —
(A) in which the amount the fund has
paid to the claimant exceeds the largest amount, if any, the
defendant offered to the claimant in satisfaction of the ^**m
of the claimant against the defendant —
(i) subject to dispute by the defendant as to any
excess over the amount offered to the claimant by the
defendant, the amount the fund has paid to the claimant;
(ii) interest, at the rate ralrnlateri in accordance
with section 604 (h)(2) of this title, for the period
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63
specified in clause (1) of this subsection; and
promulgate, may review the decision upon his own
initiative or upon exception of the claimant or the
fund.
(iii) all costs incurred by the fund by reason of
the ^Taitn of the fund against the defendant, including,
but not limited to, processing costs, investigating
costs, court costs, and attorney's fees; or
(B) in which the amount the fund has paid to the claimant
is less than or equal to the largest amount the defendant
offered to the claimant in satisfaction of the claim of the
claimant against the defendant —
(i) the amount the fund has paid to the claimant,
without .reduction;
(11) interest, at the rate ffaT<""ljM!gd in accordance
with section 604 (h) (2) of this title, from the date upon
which the claim was presented by the claimant to the
defendant to the date upon which the defendant offered to
the claimant the largest amount referred to in this
subclause: Prov^***, That if the defendant tendered the
offer of the largest amount referred to in this subclause
within 120 days of the date upon which the ^laim of the
claimant was either presented to the defendant or adver-
tising was comenced pursuant to section 608 of this
title, the defendant shall not be liable for interest for
that period; and
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64
(ill) interest from the.date upon which the claim
of the fund against the defendant was presented to the
defendant to the date upon which the fund is paid, inclu-
sive, less the period, if any, from the date upon which
the defendant shall offer to the fund the amount, finally
paid to the fund in satisfaction of the «*i«
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65
(2) Review of any regulation issued under this title may be had
upon application of an interested person only in the Circuit Court of
Appeals of the United States for the District of Columbia. Any such
application for review must be made within ninety days from the effec-
tive date of the regulation.
(b) For the purposes of paragraph a) of subsection (a) of this
-section, venue shall lie in any district wherein the injury ccroplained
of occurred, or wherein the defendant resides, nay be found, or has his
principal office. For the purposes of this section, the fund shall
reside in the District of Columbia.
(c) The provisions of subsection (a) and (b) of this section shall
not apply to any controversy or other natter resulting from -die assessment
of. collection of any fee, as provided by section 606 (f) of this title,
--car to the review of any regulation promulgated under the Internal Revenue
Code of 1954.
HEEAIICNSHIP TO UIUilH IAW
Sec. 612. (a) Except as provided in this title —
(1) No action may be brought in any court of the United States, or
o£ any State or p»i •{•Hfai subdivision thereof, for A4nuM«*g for an economic
loss or cost described in subsection (a) of section 607 of this title, a
rla-»n for which may be asserted under this title, and - - - :
(2) no person may be required to contribute to any fund, the '
purpose of which is to pay cnnpansation for such a loss or cost, nor to
cgf?^ii'gh br maintain evidence of financial responsibility relating to
the satisfaction of a claim for such a loss or cost.
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66
(b) Nothing in subsection (a) of this section shall preclude or be
interpreted to preempt any State from establishing liability funds,
establishing limits of liability, setting financial responsibility
requirements, or imposing any taxes or fees upon any person, or upon oil
or ba7r^Tr^onj3 jffilyy^nc'rM? for the purpose of gy<*g»hi ^ cfai**% liability aTy^
compensation schemes for losses or costs not canpensated under this
title which are associated with pollution, or for any losses or costs
t
associated with releases of hazardous substances as defined in section
601(o) (3] at uncontrolled hazardous waste disposal sites.
(c) Nothing in subsection (a) of this section shall prohibit an
action by the fund, under any other provision of law, to recover compen-
sation paid pursuant to this title.
(d) Regardless of any State statutory or <.s.iiuoi law to the contrary,
no person who asserts a claim for damages pursuant to this title shall
be deemed or held to have waived any other r'1*^™ for damages not covered
or assertable under this title arising from the same incident, transaction,
or set of circumstances, nor to have split a cause of action. Further,
no person asserting a claim pursuant to this title shall as a result of
••
any determination of a question of fact or law m*A*. in connection with
that rTaim be deemed or held to be collaterally estopped from raising
such question in connection with any other claim not covered or assertable
under this title arising from the same incident, transaction, or set of
circumstances.
(e) In the case of conflict or inconsistency, the provisions of
this Act shall supersede all other provisions of Federal law which may
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67
define liability for the release of oil or hazardous substances, provide
a mechanism for responding to such releases/, set up a claim mechanism
relating to losses resulting from such releases/ or otherwise regulate
cor control the release or threat of release of oil or hazardous substances.
Provided, That this title does not preempt the authority of the Federal
Government to ^aVai action under other previsions of Federal law for any
remedies not provided by this title.
TO
Sec* 613. The President is authorized to dfflfypitg and assign any
duties or powers imposed upon him or assigned to the Executive, and,
except. to the extent limited by section 606 (f) of this title, to promulgate
any regulations necessary to carry out the provisions of this title.
STUDIES, REVIEW OF FEES AND PENALTIES
Sec. 614. (a) The Executive shall submit to the Congress within six
months after the end of «?^<^h fiscal year, beginning one year aft»r the
establishment of the fund pursuant to section 606 of this title, a
x.ejjorL summarizing the receipts and disbursements «**• from' the fund
during that year, showing categories of sources and types of damages
reimbursed. The report shall a\sn describe the qdminlsti'a+'iqn and func-
tioning of the fund during the period covered and present any recomenda-
tions the Executive may have for improvement.
(b) No more than three years after the effective date of this
title, the Executive shall make a comprehensive report to the Congress
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63
on experience with the implementation of this title, including, but not
limited to, an analysis of: (1) whether the prohibitions against releases
are effective; (2) the extent to which the fund is effective in enabling
government to respond to and mitigate the effects of releases and threat-
ened releases of oil and hazardous substances; (.31 the cost of responding
to and the potential threat to public health or safety, or to significant
environmental resources, posed by remaining uncontrolled hazardous waste
disposal sites; (4). whether the fees, appropriations, and penalties
established hereunder are sufficient and equitable; and (5) state parti-
cipation in the system of response, liability, and compensation established
by this title. In preparing such report, the Executive shall consult
with appropriate Federal, State, and local agencies, affected industries
and claimants, and other interested parties. Based upon the analyses
and consultation required by this subsection, the Executive shall also
include in the report any recommendations for legislative changes he may
deem necessary for the better effectuation of the purposes of this
title, including but not limited to reoannendations concerning authoriza-
tion levels, fees, State participation, liability and liability., limits,
and financial responsiblity provisions.
EFFECTIVE DRIES, SAVINGS PROVISION
Sec. 5. (a). This section, section 7 and all provisions of this Act
authorizing the appropriation of funds, the delegation of authority, and
the promulgation of regulations shall be effective on the date of enactment
of this Act.
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69
(b) All other provisions of this Act and the regulations applicable
thereto shall be effective on the first day.'of the first calendar month
beginning on or after the one hundred and eightieth day after the date
of enactment of this Act; Provided that any regulations issued pursuant
to this title nay provide for such an additional period in which to
comply or for such an effective date as the Executive nay determine is
reasonable*
(c) Any regulation issued pursuant to any provision of section 311
of the Federal Water Pollution Control Act, as amended, which is in
effect on the date immediately preceding the effective date of section 6
of this Act shall be deemed to be a regulation issued pursuant to the
authority of Title VI of section 4 of this Act and shall remain in full
force and effect unless or until superceded by new regulations issued
thereunder*
(d) Any regulation
CL) respecting financial responsibility,
12) issued pursuant to any provision of law repealed by
section 6 of this Act, and
(3) in effect on the date immediately preceding the effective
date of section 6 of this Act shall be ^a*™** to be a regulation-
issued pursuant to the authority of Title VI of section 4 of +-*ria
Act and shall remain in full force and effect unless or until
superceded by new regulations issued thereunder. _. . .
(e) No provision of this Act shall be 4gqmgi or held to moot any
litigation concerning releases of oil or hazardous substances cotmenced
prior to the effective date of this Act.
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70
CONFORMING AMENDMENTS
Sec. 6. (a) Subsection (b) of section 204 of the Trans-Alaska Pipeline
Authorization Act (37 Stat. 586) is amended, in the first sentence, by
inserting jrftgr "any area"/, the words "in the State of Alaska"; by
inserting after "any activities'*, the words "related to the trans-Alaska
oil pipeline", and by inserting at the .end of the subsection a new
sentence to read as follows: "this subsection shall not agjply to removal
costs resulting from pollution as that term is defined in subsection
(ff) of section 601 of the Oil, Hazardous Substances, and Hazardous
Wastes Response/ Liability/ and Compensation Act of 1979.".
(b) Subsection (c) of section 204 of the Trans-Alaska Pipeline
Authorization Act is hereby repealed. The Trans-Alaska Pipeline Liability
Fund is hereby ***•>! * «?!*»*. All assets of that fund, as of the effective
date of this section,, shall be transferred to the fund established by
section 606 of Title VI, as set out in apcHm 4 of this Act. The fund
shall assume any and all liability incurred by the Trans-Alaska Pipeline
Liability Fund under the ^pr™? of subsection (c) of section 204 of the
Trans-Alaska Pipeline Authorization Act.
(c) Section 17 of the Intervention of the High Seas Act (88 Stat.
10) is amended to read as follows:
*,
Sec. 17. The fund established under section 606 of the Oil,
Hazardous Substances, and Hazardous Wastes Response, Liability, and
Compensation Act of 1979 shall be available to the Secretary for
actions and activities taken under section 5 of this Act.".
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(d) Section 311 of the Federal Water Pollution Control Act, as
/ is hereby repealed. The fund «3«^*>^T •* gh«*3 pursuant to subsection
(k) of that section is hereby ahnlishpfi, and any and all assets of that
fund, as of the effective date of this section, shall be transferred to
the fund established by section 606 of Title VI, as set out in section 4
of this Act. ;
- — (e) The Deepwater Fort Act of 1974 (88 Stat. 2126) is amended as
follows:
(1) In section 4(c) (1) , strike "section 18(1) of this Act, "
and insert in IT on thereof "section 605 of the Oil, Hazardous
Substances, tfaganfonq Wastes Response, Liability, and Ccmpensation
Act of 1979.".
(2) Subsections (b) , (d) , (e) , (f)f (g), (h) ,
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discharge of oil fron a deepwatsr port or a vessel within any
safety zone.".
(5) Subsections (c), (k), and (m) of section 13 are redesignated
(b), (c), and (d), respectively.
(f) Title TTT of the Outer Ccntinential Shelf Tf*r>£s £ct Amendments
of 1978 is repealed. Any fees or moneys deposited in the Offshore Oil
Pollution Condensation Fund established under Section 302 of" that title
shall be deposited in the- fund established by section 606 of Title VI,
as set out in section 4 of this Act. The fund shall assume any and all
11.flh13.ity incurred by the Offshore Oil Pollution Compensation Fund under
title IH of the Outer Continental Shelf Lnnrtn Act Amendments of 1978.
/
(g) Subsection (b) of section 504 of the Federal Water Pollution
Control Act, as *i"'aryted/ is hereby repealed.
SEPAPABXLTTY
Sec. 7. If any provision of this Act, or the application of any provision
of this Act to any person or circumstance, is held invalid, the application
of such provision to other persons or ^ •n^jpgt-anrva^ f saasS, the remainder
of this Act shall not be affected thereby."
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SECTION-BY-SECTION ANALYSIS OF A BILL
To amend the Clean Water Act, as amended, and the Solid
Waste Disposal Act, as amended, to provide a system of
response, liability, and. compensation for releases of oil,
hazardous substances, and hazardous wastes, to establish a
response and liability fund, and for other purposes.
Amendment of Section 7003, Solid Waste Disposal Act
Section 2
This section amends the "Imminent Hazard" authorities
of section 7003 of the Solid Waste Disposal Act, as amended.
The Administrator of the Environmental Protection Agency
(EPA) may seek court action in the appropriate district
court to restrain any person from contributing to hazardous
waste management practices which "may present" an imminent
and substantial endangerment to public health or the environ-
ment. This section is intended to clarify the "imminent
and substantial" test so that it clearly applies to the
risk of endangerment as well as endangerment itself which
is presently imminent and substantial.
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Amendment of Subtitle G, Solid Waste Disposal Act
Section 3
Section 3 adds a new section 7010 to the Solid Waste
Disposal Act, as amended. This section can be used for
administering section 7003 and subtitle C of the Solid Waste
*
Disposal Act, as amended, and the new title VI to the Clean
Water Act, as amended, added by this bill. It grants the
Administrator and the Attorney General of the United States
subpoena power to require attendance and testimony of wit-
nesses, and the production of reports, papers, documents,
answers to questions, and information the Administrator or
the Attorney General deems necessary. Appropriate district
courts will have jurisdiction to order compliance with
subpoenas issued under this section. Failure to obey a
compliance order is punishable by a contempt citation.
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' Amendment to Clean Water Act
Section 4
This section amends the Clean Water Act, as amended, by
adding a new Title VI as follows:
TITLE VI--HAZARDOUS SUBSTANCES AND HAZARDOUS
WASTE RESPONSE, LIABILITY, COMPENSATION AND FUND
Definitions
Section 601
This section defines the terms used in Title VI.
A number of the definitions have been drawn directly
from Section 311 of the Federal Water Pollution Control Act;
specifically, "vessel", "public vessel", "contiguous zone",
"otherwise subject to the jurisdiction of the United States",
"offshore facility", "barrel", and "navigable waters".
Other definitions have been drawn in substance from the
statute with minor clarifying modifications; specifically
"inland oil barge", "United States", "state", and "inland
waters of the United States". Other definitions such as
"uncontrolled hazardous waste disposal site" are new.
"Containment" is defined in subsection (e) as those
least cost actions consistent with eventual permanent remedy
taken at uncontrolled hazardous waste disposal sites to prevent
or minimize the continued release of hazardous substances.
The concept of containment is intended to stop the migration
of hazardous substances so they will not cause substantial
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danger to present or future public health or safety, or to
a significant environmental resource. Examples of containment
actions include, but are not limited to, providing perimeter
protection using dikes, diversion, replacement of leaking
containers, onsite treatment, clean up of released hazardous
substances, and monitoring for migration of environmental
contaminants. Offsite transport, treatment, -and/or redisposal
is not included in "containment" except in accordance with
section 603 (b).
Subsection (g) defines "emergency assistance" as a
series of initial actions costing up to $300,000 at
uncontrolled hazardous waste disposal sites which the
Administrator of EPA determines in his discretion must
be taken immediately. These actions can be grouped into
two categories. First are those actions taken to prevent
or abate substantial danger or its threat posed to present
or future public health or safety or to a significant
evironmental resource. These types of action would include
such things as security fencing, providing temporary
alternative drinking water, temporary evacuation of
threatened individuals not otherwise provided and removal
and offsite disposal of wastes where determined necessary
by the Administrator. Second are those actions necessary
to determine the magnitude and scope of the problem and
ways in which the problem may be contained. Full site
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investigation including monitoring, surveys, planning
and design of containment systems is intended in this
second category of actions.
Subsection (h) defines "environment" as the environment
of the United States and the environment which could be
affected by pollution as described in section 601(bb).
"Gross negligence" is defined in subsection (1) to mean
the failure to use even slight care along with disregard for
the consequences of an act.
Subsection (m) defines "ground water" as water in the
saturated zone beneath the land or water surface. The term
also includes any other water which is used as a source of
public drinking water. The addition of this term ensures
that "nonnavigable" waters with important public uses will
be within the jurisdiction of this Act.
Subsection (o) defines "hazardous substances" to include
substances designated pursuant to existing Section 311(b)(2)(A)
of the CWA, or Section 3001 of the Solid Waste Disposal Act,
as amended. In addition, substances designated by the
Administrator pursuant to Section 602(a)(2) of this title
are included. This expanded definition will permit the use
of the fund for hazards created by potentially dangerous
substances identified under this Act and the Solid Waste
Disposal Act.
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Subsection (p) defines "inland oil barge" as a vessel
which is certificated both to carry oil in bulk and to
operate only on the inland waters of the United States (see
subsection (g)). The applicable limitation of liability is
found in subsection 604 (c) (2). The approach taken here
parallels that taken in section 311 of the Clean Water Act.
t
In subsection (t) the term "offshore facility" is
defined very broadly and includes, among other facilities,
deepwater port facilities licensed under the Deepwater Port
Act as well as facilities which are subject to the Outer
Continental Shelf Lands Act and the Submerged Lands Act.
In this connection, mobile drilling rigs at a drilling site
in the drilling mode fall within this definition. When moving
by water to and from the drilling site, those mobile rigs
would be "vessels."
An "onshore facility" is defined in subsection (v) in the
same manner as it is currently defined in section 311 of the
CWA, except that uncontrolled hazardous waste disposal sites
are specifically excluded, as are sites which are regulated
under the Solid Waste Disposal Act.
In subsection (x) the term "owner or operator" has much
the same meaning given that term in existing section 311 of the
CWA with respect to vessels and onshore and offshore facilities,
and adds the same definition for owners or operators of an
uncontrolled hazardous waste disposal site.
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Subsection (y) defines "person" as it was defined in
Section 311 of the CWA except that the definition excludes
the Federal government.
In subsection (z) "petrochemical feedstock" is defined
as a liquid or gaseous hydrocarbon used primarily for the
preparation of more complex organic chemicals. Examples of
petrochemical feedstocks include ethylene, propylene,
butylenes, butadiene, butanes, benzene, toluene, xylene,
naphthalene, carbon black, and methane other than that used
to make ammonia.
In subsection (aa), "petroleum oil" is defined to
include crude petroleum and any of its fractions or residues,
Subsection (bb) defines "pollution" in terms of its
source and location. Specifically, pollution refers to
releases of oil or hazardous substances in violation of
•
section 602 (b) of this title, releases of oil from vessels
engaged in the transportation of oil from Alaska to the
Continental United States, releases into the waters of a
foreign country (if damages are unrecoverable by a foreign
claimant), and releases in the high seas which may affect
natural resources belonging to, appertaining to, or under
the exclusive management authority of, the United States.
"Pollution" does not include releases from uncontrolled
hazardous waste disposal sites.
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Subsection (cc) defines "public vessel" as a subclass
of vessel that performs governmental functions for foreign
as well as Federal, State or local units of government. It
is a significant definition for purposes of ascertaining
liability and means of compensation. Public vessels are
exempted from the liability provision in subsection 604 (a) .
A vessel owned and operated by a governmental: entity, however,
is not necessarily a public vessel under this definition.
To qualify as a public vessel, the vessel must be both owned
or chartered by demise and operated by the entity concerned.
Furthermore, a government owned or operated vessel, engaged
in commercial activities, is not included in the definition.
Subsection (ee) defines "release" in much the same manner as
"discharge" is currently defined in Section 311 of the Federal
Water Pollution Control Act or Clean Water Act (CWA). However,
releases include not only those to "navigable waters" (Section
601 (s)) but also to "ground water" (Section 601 (m)) and land.
Certain releases regulated under other statutes are exempt
from coverage.
Subsection (ff) defines "removal costs" as the cost of
measures taken to prevent, minimize or mitigate damages
resulting from the release or threatened"release of oil or
hazardous substances from vessels, onshore or offshore
facilities. The term does not include costs of emergency
assistance or containment necessary in the case of releases
from uncontrolled hazardous waste disposal sites.
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Subsection (gg) defines "remove" or "removal" very
broadly to include the actual removal of oil or hazardous
substances from land, navigable waters, or ground water, the
disposal of removed materials, or any other actions such as
confinement of oil or hazardous substances which might be
necessary to prevent, minimize, or mitigate damage to the
«
public health or welfare or to the environment which may
result from the release or threatened release of oil or
hazardous substances from vessels, onshore or offshore
facilities.
Subsection (hh) defines "ship" as a subclass of vessel
which is constructed or adapted to carry oil or hazardous
substances in bulk as cargo. Cargo is intended to refer to
oil being transported as merchandise from one place to
another, including oil owned by the ship owner or operator.
"Ship" includes self-propelled vessels and those non-self
propelled vessels which are not inland oil barges (see
subsection (p)). The definition is significant in terms of
the provisions of section 604, relating to limitation of
liability.
In subsection (ii) "strict liability" is defined broadly
as liability without regard to negligence, knowledge, good
faith, intent, surrounding circumstances, degree of care or
any reasonable precautions.
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"Supplier" is defined in subsection (jj) as a producer,
manufacturer, or importer of petrochemical feedstocks or
inorganic elements and compounds. A supplier either provides
the above described petrochemical feedstocks or inorganic
elements and compounds to other persons by sales or other
means, or uses those materials himself.
Subsection (kk) defines "uncontrolled hazardous waste
disposal site" as any location which has been or is being
used for the storage, retention, injection, deposit, treatment,
placing, disposal, or dumping of hazardous substances. Sites
which are regulated under the Solid Waste Disposal Act, as
amended, are not included within this definition.
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Prohibited Releases, Notices, Penalties
Section 602
This section states the National policy that there
should be no releases of oil or hazardous substances into
the environment. Certain releases must be reported to the
Federal Government and civil penalties are provided for .
prohibited releases.
Subsection 602(a)(2) requires the Administrator to
designate as hazardous those substances which, when released
in any quantity, may present substantial danger to the
public health or welfare. The "may present substantial
danger" test is less stringent than the "imminent and sub-
stantial danger test" of existing section 311 of the CWA,
and will permit the Administrator greater latitude in
designating substances which may be hazardous. Substances
already designated under Section 311 of 'the CWA and wastes
designated as hazardous under Section 3001 of the Solid
Waste Disposal Act, as amended, will be retained, (See Savings
Provision, Section (5)), and the Administrator will designate
additional elements, and compounds under this section.
Subsection 602 (a) (3) closely parallels section 311
of the CWA in providing that the Administrator shall determine
by regulations those quantities of designated hazardous
substances which may be harmful. Consistent with the 1978
amendments to the CWA, such quantities need not be harmful
in all instances, but instead will be general estimates of
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potential harm based on the characteristics of the substance.
Quantities are to be determined only for hazardous substances
designated pursuant to section 602(a)(2); hazardous substances
defined in section 601(o)(3); (hazardous wastes) are not
subject to this subsection.
Subsection 602(b) also closely parallels section 311 of
the CWA in prohibiting releases of oil and hazardous
substances in quantities which may be harmful. One important
change is that releases in excess of harmful quantities either
into or upon land or ground water, as well as navigable or
other waters, are prohibited.
Requirements that releases be reported to the Federal
government are contained in subsection 602(c). These notifi-
cation provisions help ensure that Federal response teams
are quickly aware of potentially harmful incidents and can,
when necessary, respond to and minimize'the effects of such
releases. The owner or operator of any vessel or facility
must immediately notify the Federal Government of releases
from such vessel or facility which are in violation of
subsection (b). Failure to notify is a criminal offense,
subject to either fine or imprisonment, or both. Failure to
notify will also result in the loss of the liability limitations
set out in section 604(c).
Subsection 602(d) provides that any person who may be
subject to liability for an uncontrolled hazardous waste
disposal site under subsection 604(b) of this title must
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notify the Administrator of the existence of such a site
within 90 days of the effective date of this Act, or within
180 days of the promulgation of regulations issued under
sections 3001 and 3004 of the Solid Waste Disposal Act, as
amended, whichever is later. Notification shall specify the
amount and type of hazardous substances present at such
site, as well as any known, suspected or lively releases of
hazardous wastes from such site. Failure to notify is a
criminal offense, with penalties the same as those in
Subsection 602(c). Failure to notify will also result
in the loss of both liability limits and defenses
described in section 604. Notification by a liable person
shall not be used against that person in any criminal case,
except a prosecution for perjury or for giving a false
statement.
Paragraph 602(d)(2) provides an incentive to a person
who may be liable for releases from uncontrolled hazardous
waste disposal sites. Any such person who takes action to
prevent, minimize or mitigate a release or the threat of a
release is entitled, in the case of a release, to subtract
from his liability any portion of his costs in preventing,
minimizing or mitigating which the Administrator deems
reasonable. This subsection does not affect the liability
of the person liable for the release to any other party due
to a release or threat of a release.
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Subsection (d)(3) prohibits the destruction or con-
cealment by anyone subject to the notification provisions
of this section of any records relating to an uncontrolled
hazardous waste disposal site. After the effective date of
this Act, a violation is a criminal offense subject to fines
or imprisonment, or both.
.Subsection (e) provides for civil penal'ties for the
release of oil and hazardous substances in violation of
subsection 602(b). Civil penalties will not be assessed
for releases of hazardous substances (wastes) as defined in
subsection 601(c)(2). Penalty provisions, including factors
to be considered in assessing such penalties, are the same
as in existing section 311 of the CWA. In addition, subsection
(e)(2) clarifies that civil penalties greater than $5,QOO do
not apply to releases of oil.
It must be emphasized that the penalties provided in
subsection (e) are civil, not criminal, in nature. A primary
factor to be used in determining the amount of the penalty
will be the extent of damage to the environment and the
public health and welfare. In assessing the penalty,
•
consideration should be given to the standard of care and
good faith efforts made by the owner or operator in
preventing the release and in mitigating its effects.
The Administrator is authorized in section 602(e)(4) to
commence a civil action to recover costs incurred for mitiga-
tion and removal of releases which are excluded by section 601(ee)
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By authorizing suit by the Administrator in these specific
cases, it is intended to remove liability for releases from
permitted sources from the strict liability regime imposed
for other releases by this title.
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Emergency Response, Action to Remove or Mitgate,
National Contingency Plan, Judicial Relief
Section 603
This section is the basic provision which authorizes
the Federal Government to act to abate problems caused by
releases of oil or hazardous substances into the environment.
Subsection (a) allows the Executive either to remove or
*
arrange for the removal of oil or hazardous substances in
the event of a release or substantial threat of a release of
these materials into the environment. The Executive may
only act if he determines that the removal will not be
properly carried out by the owner or operator of the vessel,
onshore facility or offshore facility, including permitted
facilities and vessels otherwise excluded by section 601(b).
The Executive may also respond to the release of any other
materials to the environment which may present an imminent
and substantial danger to the public health, regardless of
the source of the release. Where an imminent and substantial
danger exists, the Executive may only act if he determines
that the owner, operator or another person will not properly
respond to protect the public health or welfare.
Subsection (a) enables the Executive to respond to a
release of oil, hazardous substances, or pollutants presenting
an imminent and substantial danger in instances where the
cause of the release is not immediately known (the so-called
"mystery spills"). If at any time after initiating the
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government's response the Administrator of EPA determines
that the release is from an uncontrolled hazardous waste
disposal site rather than a spill, the spill response must
be terminated immediately. Thereafter, any government
response would include provision of emergency assistance and
containment rather than removal. Payment of any monies
obligated prior to the termination would be honored, and any
"removal" costs will be deemed emergency assistance costs
for purposes of recovery from responsible parties.
Subsection (b)(1) relates to Government actions taken
at uncontrolled hazardous waste disposal sites. EPA's
Administrator is authorized to provide emergency assistance
up to-$300,000 (see section 601(g)) and containment (see
section 601(e)) or arrange for its provision at uncontrolled
sites if he determines that proper emergency assistance and/or
containment will not be provided by the owner, operator, or
some other person. The authority to act in emergency assistance
and containment actions is triggered by the release or substantial
threat of a release of a hazardous substance as defined in
section 601(o)(3) (i.e. hazardous wastes) at an uncontrolled site.
If the expected costs of achieving containment and
maintaining it for one year thereafter are $200,000 or less,
then provision of containment (but not emergency assistance)
is contingent upon the State agreeing in advance by contract
to two conditions, where applicable. The State must agree
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to (1) operate and maintain the containment (e.g., run
pumps, maintain drainage ditches and empty and treat wastes
collected in a sump); and (2) assure that, if needed, public
or private offsite storage, treatment and redisposal capacity
will be made available at a hazardous waste disposal facility
acceptable to the Administrator. The fund would pay for those
*
actions necessary to achieve containment {i.e. stop the continuing
spread of hazardous wastes) and any necessary operation and
maintenance of the containment for one year after the date
it is first achieved. Where there is a continuing need to
operate and maintain (O&M) the containment, the State's
responsibility would be to provide for or otherwise assure
continuing O&M after the first year and for up to 19 additional
years or the life of the containment, whichever is less.
If the expected costs of achieving and maintaining
•
containment for one year thereafter are more than $200,000,
then the Administrator must also determine the least cost means
of containment over 20 years or the expected life of available
containment methods, if less. The least-cost containment must
be consistent with future permanent remedy if containment does
not provide permanent remedy at a site. As used in this title
the "least-cost means of" containment refers to analyses of
optional methods and their life cycle costs of preventing or
minimizing the spread of hazardous wastes from a site. Such
analyses will assist the Administrator in determining which of
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several options having approximately equal reliability and each
costing in excess of $200,000 should be considered least-cost.
It is not intended that such analyses delay timely government
response to protect public health, safety or significant
environmental resources. In determining least-cost containment
options, innovative or alternative methods which may improve
the state-of-the-art of containment should not be precluded
from consideration solely because they are not the least-cost.
Where there is only one method of containment, including where
that method requires offsite transport, storage, treatment,
destruction and/or redisposal, it is intended that such
offsite actions be considered a priori as the least-cost
containment. The Administrator's determination of the least-
cost containment option is conclusive.
In addition, if the expected costs of achieving containment
and maintaining it for one year thereafter are more than
$200,000, then the State (or other public or private person)
must agree in advance and by contract to provide. 10 percent
of the costs of achieving and maintaining for the first year
the least-cost containment. If the uncontrolled site is
owned by a State or by a political subdivision of a State,
then the non-Federal share must be at least 50 percent; this
cost sharing provision applies to all such sites regardless
of their costs.
Subsection (b)(2) authorizes the Administrator to pay
100 percent of the costs of emergency assistance up to $300,000 and
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100 percent of the costs of containment under $200,000, and 90%
of the costs of containment where projected to cost in
excess of $200,000, unless the site is owned by a State or
one of its subdivisions, in which case the Federal costs
could not exceed 50 percent. These costs sharing ratios
would prevail in any payments made for labor and materials
to effectuate containment and maintain it during the first
year. In-kind payments would not be accepted as cost-sharing.
Subsection (b)(3) provides that the State or its political
subdivision in which a site is located must pay for any actions
it may take other than or in addition to that which the Adminis-
trator has determined to be the least-cost containment. In such
a case the Administrator may reimburse the State or a political
subdivision for the amount which the Federal Government would
otherwise have provided to achieve the least-cost containment
and for one year thereafter. For example, if the State wished
to provide complete waste and/or soil transport, treatment, and
redisposal at a secured offsite facility, but the Administrator
had determined that onsite containment could be achieved in a less
costly manner, the State would be required to pay the cost
differential.
In determining the method of containment, subsection (b) '(4)
•
authorizes the Administrator to provide for offsite disposal in
remedying a particular site only if this is the least-cost means
of containment over a twenty year period or more. In certain
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instances, a single, centralized offsite facility may prove to
be the best means to provide for containment at two or more
uncontrolled hazardous waste disposal sites. Where the 20 year
life cycle costs of transport offsite and centralized storage,
destruction, or treatment and redisposal is the least cost,
the Administrator may contribute the total individual
«
containment expenses which the Federal Government would
have incurred at each of the several sites to the costs of
the centralized facility. In cases where the proposed capacity
of a centralized facility would exceed that needed for the
group of controlled sites, the cost comparison would be
based upon that portion of the centralized facility's
costs attributable to the storage, or treatment and redisposal
of hazardous wastes coming from the group of uncontrolled sites.
In any case where the Administrator provides cost sharing for
offsite disposal, the costs will be subject to the one year
limit on maintenance after containment was first achieved
as described above.
Subsection (b)(5) provides that if up to 12 months
after enactment, a State or one of its political subdivisions
is lacking legal authority either to fund its share of the
costs or to assume responsibility for operating and maintaining
containment, the Administrator may assume the State or local
share of the costs of the least-cost containment and/or
continue maintenance of containment for an additional 12
months if the State or its political subdivision agrees to
assume responsiblity and subsequent costs by no later than
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- 22 -
the end of the second year or to seek the authority to do
so. Under subsection (b)(6) , if any State fails to comply
with its contract regarding containment/ the Administrator,
after .providing 60 days notice, is required to seek to
enforce the contract and/or recover the State or local costs
of containment committed to in the contract through court
action. It is intended that, to the extent practicable,
containment take into account the use of techniques which
will provide for subsequent reclaiming or recycling of ,
hazardous wastes or rendering the wastes inert.
Where a State or political subdivision acts on behalf
of the Administrator, Subsection (b)(7) authorizes him to
provide assistance in carrying out any contract relating to
emergency assistance or containment. The Administrator may
intervene in any civil action relating to the enforcement of
the contract.
Subsection (c) directs the Executive to revise the
National Contingency Plan for removal of oil and hazardous
substances. The Plan was originally developed under Section
311 of the Clean Water Act. In revising the Plan, the
Executive will reflect the new responsibilities given him by
this title. In particular the Executive will add a new
*
section to the Plan for response to uncontrolled hazardous
waste disposal sites. The new section on uncontrolled sites
will include: methods for discovering and investigating
sites; tools for evaluating and containing releases or
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- 23 -
threats of releases from sites; methods and criteria for
determining the appropriate extent of emergency assistance
and containment; appropriate roles for various levels of
government in implementing the plan; provision for obtaining
and maintaining necessary response equipment; and a system
for establishing reporting requirements for releases of
hazardous substances from Federally-owned uncontrolled
sites. Actions taken to abate problems caused by releases
of hazardous substances should conform to the plan to the
maximum extent possible.
Subsection (d) empowers the Executive to develop regulations
consistent with the National Contingency Plan. This subsection
closely parallels Section 311(j) of the Clean Water Act.
The regulations would: establish methods and procedures for
removal of released oil and hazardous substances; establish
regional and local oil and hazardous substance removal .
contingency plans; govern the inspection of vessels and
cargoes of vessels to reduce the probability of ,oil and
hazardous substance release; and require the development of
spill prevention control and countermeasure plans by vessels
and onshore and offshore facilities. Civil penalties are
established for violations of the regulations of up to
$5,000 for each violation. This civil penalty does not apply
to vessels seaward of the territorial sea of the United States
unless the owner or operator of the vessel is otherwise subject
to the jurisdiction of the United States.
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- 24 -
Subsection (e) grants the United States special powers
in cases of marine disasters which create a substantial threat
to public health or welfare from releases or imminent releases
of large quantities of oil or a hazardous substance from a
vessel. In such cases, the United States may manage all efforts
directed at removal or elimination of the threat. The United
*
States may also remove and if necessary destroy the vessel
without limitations imposed by laws governing the employment
of personnel or expenditure of appropriated funds. Costs
from implementing this subsection, or under the Intervention
on the High Seas Act, will be considered compensable as
removal costs under this title.
Subsection (f) allows the Executive to direct the
Attorney General of the U.S. to petition for injunctive
relief to abate the threat of substantial danger to the
public health or welfare because of a release or threatened
release of oil or a hazardous substance. The Executive may
take this action in addition to any actions taken by State
or local governments. The district courts of the United
States are given jurisdiction to grant such relief as the
public interest and the equities of the case may require.
Subsection (g) provides for the imposition of a penalty
not to exceed two and one-half times the costs to the fund
of emergency assistance and/or containment if certain owners
or operators of uncontrolled sites fail to properly provide
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- 25 -
emergency assistance or containment upon the Administrator's
request. The penalty could be imposed if the present owner
or operator of the site owned or operated the property at
the time it was utilized for disposal where such person(s)
produced (either at the site or elsewhere) some or all of
the hazardous wastes disposed at the property. The penalty
will be in addition to any costs by the gove'rnment for emergency
assistance and containment recovered from the owner or operator
by the fund.
Subsection (h) grants authority to anyone authorized by
the Executive to enforce the provisions of this title to:
o board and inspect any vessel upon the navigable .
water of the United States or the contiguous zone;
o have right of entry to property containing an
onshore or offshore facility, uncontrolled
hazardous waste disposal site of any property
where the effects of a release of oil or hazardous
substances may occur;
o take photographs, samples or perform necessary
analyses on the property;
o arrest any person who violates the provisions
of this title; and
o execute a warrant or other process issued by an
officer of or a court of competent jurisdiction.
This provision does not apply to public vessels.
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Liability
Section 604
Subsections (a) and (b) establish liability. Owners and
operators of vessels or facilities which are the source of
or pose a threat of pollution are subject to joint, several,
and strict liability for the damages resulting from
pollution or its threat and for which a claim may be
asserted as described in section 607. Liability for
a threat of pollution arises where removal costs are
incurred. Owners and operators of uncontrolled
hazardous waste disposal sites are subject to joint,
several, and strict liability for the costs of emergency
assistance and containment if such owners or operators
caused or contributed or are causing or contributing
to the circumstances or conditions producing a release
of oil or hazardous substances from such sites. In
addition, any other persons who caused or contributed
to or are causing or contributing to such incidents,
including but not limited to prior owners, lessees,
guarantors, generators, and transporters or disposers
shall be similarly liable. The more extended reach of
liability in the case of releases from'uncontrolled
hazardous waste disposal sites, compared to vessels
or facilities, acknowledges that in some cases persons
other than current owners or operators may have con-
tributed to, and therefore are responsible for,
damages caused by such releases.
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- 27 -
Subsection (c) provides for limits to liability under
certain circumstances. Such limits are not applicable if
the pollution or release is caused in whole or in part by
willful misconduct or gross negligence within the privity
or knowledge of the owner, operator or other liable person,
or in whole or in part by violation of relevant federal
regulations. The limits also do not apply if the .owner or
operator or other liable person fails to provide notice as
required by Section 602(c), or fails to cooperate or assist
in cleanup operations requested by the responsible federal
official.
For vessels other than ships or inland oil barges, the
liability is limited to the greater of $250,000 or $150 per
gross registered ton. The liability limit for ships is the
greater of $250,000, or $300 per gross registered ton, up to
a maximum of $30,000,000. For inland oil barges, liability
limits are the greater of $150,000 or $150 per gross registered
ton. For offshore facilities operated under authority of
the Outer Continental Shelf Lands Act, liability is limited
to the total of removal costs plus $50,000,000. A liability
limit of $50,000,000 applies to all other offshore facilities,
as well as onshore facilities and uncontrolled hazardous
waste disposal sites.
However, some owners and operators might be subject to
unreasonably high limits of liability, considering the
threat posed by a particular facility. For example, a
release of oil from a tank truck (which is, by definition, a
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- 28 -
facility) is unlikely to result.in pollution of the magnitude
caused by a release of oil from a deepwater port or a release
of hazardous substances from a large storage facility.
To require the owner of the tank truck to be strictly liable
for $50,000,000, and to carry insurance up to that level,
may be inequitable. Therefore, subsection (e) authorizes
t
the establishment of different limits of liability for
facilities other than offshore production facilities and for
uncontrolled hazardous waste disposal sites. In establishing
such limits, the Executive is required to take into account
the size, type, location, storage and handling capacity, and
any other matter bearing on the likelihood of a release.
In no case may reduced liability limits be less than
$3,000,000.
Future experience under the Act, or distortion created
by inflation, may make it desirable to adjust the specified
limits of liability. Therefore, subsection (f) requires the
•»
Executive to report to the Congress periodically its recom-
mendations on the matter.
The owner or operator is also exonerated as to a particular
claimant if the claimant's gross negligence or willful mis-
conduct contributed to the loss; a partial defense is provided
to the extent that the economic loss is caused by the simple
negligence of a claimant. These two defenses, unlike the
others, apply to acts or omissions relating to the economic
loss. Thus, if a particular claimant does not cause the
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- 29 -
incident in any way, he may still be barred, totally or
partially, from recovery, if his own acts or omissions
caused the economic loss.
Subsection (g) sets out the basic liability of the fund
established under section 606. The specific procedure for
asserting claims against the fund is outlined in section
607, whereby the fund serves to provide compensation in
those instances where claims are not fully satisfied by
payment from a responsible party, or where the responsible
party cannot be identified or is not liable under the Act.
Paragraph (2) of subsection (g) exonerates the fund from
liability only where the incident is caused by an act of
war. The liability of the fund may be exonerated as to a
particular claimant where the claimant's own gross negligence
or willful misconduct caused the incident or loss in whole
or in part; this does not apply to any negligence of an
authorized Federal agency in responding to a release or
threatened release. Where moneys are not available in the
fund to pay claims, payment shall be deferred until funds
are available.
In addition to the liability for damages, subsection
(h) imposes liability on owners, operators, guarantors and
other liable persons for interest over and above the limita-
tions of liability invoked under subsection (c).
Subsection (i) provides that, with a single exception,
no indemnification, hold harmless, or similar agreements
between a person liable for a facility or an uncontrolled
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- 30 -
hazardous waste disposal site under this Act and a third
party shall be effective in transferring liabilities imposed
under the Act. This prevents a liable person from attempting
to pass his liability to his contractors, whether or not
they are negligent, as a cost of doing business with him.
This bar does not apply to hold harmless agreements currently
in use between oil exploration leaseholders'and their
contractors who are engaged in activities developing the
lease.
Subsection (j) preserves to persons subject to liability
under this Act, all rights which they may have, under any
other law, against any third party. .
Subsection (k) provides for the superseding of all
Federal laws relating to limitation of liability which are
inconsistent with the provisions of this Act. -
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- 31 -
Financial Responsibility
Section 605
Subsection (a) imposes on the owners or operators of
vessels over 300 tons the requirement that they carry
insurance, or have guarantees or surety bonds or qualify
as self-insurers to meet their liability up to the level
of the limitation available under Subsection 604(c). .This
4
requirement to maintain evidence of financial responsibility
is imposed on all such vessels, including foreign vessels
using our navigable "waters or calling at offshore facilities
subject to the jurisdiction of the United States, as covered
by the Act. The Executive is authorized to prescribe levels
of financial responsibility requirements applicable to owners
or operators of more than one vessel, which must at a minimum
be sufficient to meet the maximum liability of the .largest
of such vessels.
Paragraphs (2) and (3) provide the necessary sanctions
for enforcing the financial responsibility requirements.
Failure to comply with Subsection(a)(1) will result in a
refusal of necessary clearances by the Secretary of the
Treasury under Customs laws, and the denial of entry or
detention of vessels which do not produce the necessary
certification by the Secretary of Transportation.- In this
context it should be understood that in an emergency situation
verification of certification may be obtained by officials
enforcing this provision through telephonic or telegraphic
communication with the Executive's designee.
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- 32 -
Under existing subsection 311(g) of the Federal Water
Pollution Control Act, a third party vessel which caused an
innocent vessel to spill oil or- hazardous substances is liable
for removal costs. Therefore, in its current implementing
regulations, the Federal Maritime Commission requires each
subject vessel to maintain insurance or other evidence of
financial responsibility covering both oil and hazardous
substances, whether or not such vessel actually carries both
«
types of pollutants. By that means, oil carrying vessels
are financially able to meet liability for spills -of hazardous
substances, and vice versa.
Under this bill, only the spilling vessel is initially
liable for removal costs and damages, even if some other
vessel caused the spill. In this case, to recover, the
spilling vessel must proceed against the other vessel or
the fund. Accordingly, the insurance and other evidence
of financial responsibility required by section 605(a)(1)
of this bill is intended to cover vessel operators for both
oil and hazardous substances. Thus, for example, if a vessel
which carries only oil rams a chemical tanker causing a spill
of hazardous substances, the innocent chemical tanker or the
fund, through subrogation rights provided in the bill, would
be assured of being able to recover some or all of the
expenses under the coverage required to be maintained by
the oil tanker which caused the spill. Otherwise, situations
could arise where an innocent vessel or the fund might be
placed in the inequitable position of possibly not being
able to recover from the vessel which caused the spill.
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- 33 -
Under Subsection (b) comparable requirements to maintain
financial responsibilty sufficient to meet the liability
imposed under Section 604(c) are placed on owners or operators
of certain facilities. All facilities which are either (1)
used for drilling for, producing or processing oil or (2) are
used for transporting, storing, transferring or handling oil,
and which have a capacity of 1,000 barrels or more, must
establish necessary evidence of financial responsibility. .
Subsection (c) provides that the failure of an owner or
operator of either a vessel or a facility to meet the requirements
of financial responsibility subjects that person to a civil penalty.
In order to provide claimants with a full range of options
for pursuing their claims, subsection (d) authorizes direct
action against anyone providing financial responsiblity for an
owner or operator. The person providing financial responsibility
can assert rights and defenses that the owner or operator could
have asserted, and he can invoke the additional defense that
the owner or operator caused the incident intentionally. No
other defenses can be invoked by the guarantor. - If the
guarantor's obligation to pay a claim is due solely to the
requirements of this subsection, the guarantor is entitled
to reimbursement from the owner or operator.
Subsection (e) directs the Executive to conduct a study
as to the adequacy of private insurance protection. He is
to determine whether insurance is available on reasonable
terms and conditions to provide the owners and operators of
vessels, onshore facilities, offshore facilities, and
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- 34 -
uncontrolled hazardous waste disposal sites with the means
to satisfy the requirements for'furnishing certificates of
financial responsibility.
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Fund Establishment, Administration, and Financing
Section 606
Section 606 (a) is the basic provision which establishes
the Oil and Hazardous Substances Liability Fund which will
be used to satisfy claims in accordance with the provisions
of the bill. The fund, which will be administered by the
Executive, is given the power to sue and be sued in its own
•
name.
Subsection (b) provides that the total of funds from
appropriations authorized by subsection (a) and fees
authorized by subsection (f) will not exceed $250,000,000
in fiscal year 1982, $375,000,000 in fiscal year 1982, and
$500,000,000 each in fiscal years 1983 and 1984.
Subsection (c) sets out the sources of revenue for
the fund. First are appropriations provided for under
subsection (e). Second are revenues derived from the per
unit fees on oil, petrochemical feedstocks, and inorganic
elements and compounds imposed under subsection (f). The
total of revenues derived from these fees cannot exceed
$200 million in fiscal year 1981, $300 million in fiscal
year 1982, and $400 million in each of fiscal years 1983
and 1984. (See paragraphs (1), (2), and.. (3) of subsection
(f) for specific limitations on the amounts which can be
collected from (1) oil, (2) petrochemical feedstocks,
and (3) inorganic elements and compounds in any fiscal
year.) Third are all amounts recovered by the fund under
those claimants whom the fund has compensated. The right
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- 36 -
to subrogation is set out in section 610. Fourth are amounts
transferred from funds in the Trans-Alaska Pipeline, Deepwater
Port, Offshore Oil Pollution, and section 311(k) of the
Federal Water Pollution Control Act. Fifth are all sums
which may be obtained or recovered under any other provision
of the bill, including its penalty provisions.
Subsection (d) provides that the fund shall be available
*
for removal, emergency assistance, containment and section
603(a)(1)(B) costs, the administration of the provisions
of this title, and the costs of claims processing and
payment only to the extent and in the amounts provided in
appropriation acts.
Subsection (e) authorizes appropriations to the fund
of up to $50 million in fiscal year 1981, $75 million in
fiscal year 1982, and $100 million each in fiscal years
1983 and 1984.
Subsection (f) provides the basic authority to the
Executive to collect fees for the fund. Paragraph (1)
authorizes imposition of a fee, not to exceed three cents
per barrel of oil received, from the owners of refineries
for.domestically produced and refined oil and from owners
of oil which is exported from or enters the United States.
Fees collected pursuant to this paragraph cannot exceed
$60 million in fiscal year 1981, $80 million in fiscal
year 1982, and $100 million each in fiscal years 1983
and 1984.
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- 37 -
Paragraph (2) authorizes imposition of a fee from
suppliers of petrochemical feedstocks, on any amount of
feedstock supplied to other persons or used by the supplier.
The fee cannot exceed 0.5 cents per pound. Petrochemicals
are the primary feedstocks used in the production of organic
chemicals. Fees collected pursuant to this paragraph cannot
exceed $90 million in fiscal year 1981, $150 million in
*
fiscal year 1982, and $200 million each in fiscal years
1983 and 1984.
Paragraph (3) provides for imposition of a fee, from
suppliers of inorganic elements and compounds, on any amount
of inorganic element or compound supplied to other persons
or used by the supplier. The fee cannot exceed two dollars
per ton. The list of inorganic elements and compounds upon
which a fee shall be collected includes certain heavy metals,
halogens, acids, and bases, and ammonia. This list can be
*
expanded by the Administrator of EPA based on information
available to him as a result of listing or characterizing
hazardous substances or of implementing this act. Fees
collected pursuant to this paragraph cannot exceed $50
million in fiscal year 1981, $75 million in fiscal year
1982, and $100 million each in fiscal years 1983 and 1934.
Paragraph (4) authorizes the Secretary of the Treasury
to assess and collect the fees under the provisions of
subtitle F of the Internal Revenue Code of 1954 as if such
fee were a tax. In order to avoid more than one fee collection
on any quantity of oil, feedstock, element or compound,
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- 38 -
paragraph (4) also provides that once a fee has been levied
on a given quantity, it shall not be subject to further
levies. The only exception to this principle is in regard
to crude oil which is refined and then used as feedstock. In
this case the fee on a quantity of refined petroleum used
as feedstock is levied in addition to the fee levied on the
same quantity prior to its being refined. However, once a
fee has been levied on the refined feedstock, it is not
subject to further fees.
This paragraph also provides an economic incentive for
recycling feedstocks and elements or compounds by permitting
a reduction of fee for recycling or energy production. In
no event shall any reduction of fee exceed the amount of the
fee that would otherwise have been collected. :
Paragraph (5) provides that in no event shall the fee
(exclusive of any administrative costs to industry) collected
on a quantity of feedstock, element, or compound raise the
price of that feedstock, element or compound by mor,e than two
percent when sold at arms length by the supplier.
The Secretary of the Treasury is responsible for the
assessment and collection of specific fees and is authorized
under the Internal Revenue Code of 1954 to promulgate rules
and regulations relating to such an imposition. Paragraph (6)
authorizes modification of these rules and regulations, based
upon recommendations of the Administrator of EPA, to assure,
to the extent practicable, that the collection of the fees
from the various authorized sources is reasonably equitable,
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- 39 -
based upon the claims and payments experience of the fund
as reflected in the annual reports provided for in subsection
(a) of section 614 of this title. The new fee schedule is then
established by the Secretary by regulation. It should be
noted that any fee modifications provided for in this
paragraph shall not cause the limitations on the amounts
which can be collected from the various authorized sources
in any one fiscal year, as stated in paragraphs (1), (2),
and (3) of this subsection, to be exceeded.
Because court challenges to these regulations could
be very lengthy/ any interference with the imposition
of fees while the challenge was pending could have a serious
impact on the ability to keep the fund at a sufficient level.
Therefore, any stay of regulations relating to fee schedules
is prohibited until the completion of judicial review.
Subsection (g) provides that the Secretary of the Treasury
shall determine the level of funding required for the fund
to meet its potential obligations after consultation with
the Department of Transportation and the EPA. The principal
purpose of these estimates is to assure the availability of
money to cover the costs of government response. After so
doing, the Secretary of the Treasury may invest any excess
in the fund in public debt securities, up to a maximum of
$50 million at any one time. Income from these obligations
shall become part of the fund.
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- 40 -
Subsection (h) provides that, for purposes of the
annual report in subsection (2) of section 614, and for
modification of fees pursuant to paragraph (6) of subsection
(f) of this section, the Secretary of the Treasury shall
keep precise records, to the extent practicable, as to the
sources of all moneys in the fund and as to all claims and
payments made. Claims and payments shall be'grouped into
four categories: (1) for release or threatened release of
oil from uncontrolled hazardous waste disposal sites; (2)
for release or threatened release of hazardous wastes
from uncontrolled hazardous waste disposal sites; (3) for
all other releases or threatened releases of oil; and (4)
for all other releases or threatened releases of hazardous
substances.
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- 41 -
Damages and Claimants
Section 607
This section enumerates the damages which may be claimed
under the bill. The damages fall into two basic categories,
those resulting from pollution (generally speaking, spill
incidents) by oil or hazardous substances, and those resulting
from actual or threatened releases of hazardous wastes from
uncontrolled waste disposal sites. Whenever monies included
in appropriation acts are not available in'the fund, the
Executive shall defer any claim which would otherwise be payable
until monies are available.
Subsections (a) and (b) deal with pollution related
damages. In addition to claims for economic loss incurred
on or after the effective date of this section, unsatisfied
claims which had been asserted under provisions of law
repealed or modified under this bill could be asserted.
However, the claimant must show the loss to have been compensable
under those provisions. It is important to note that the
damages enumerated in Subsection (a) may not, in all instances,
be brought by all claimants. Subsection (a) must be read in
conjunction with Subsection (b), which describes those
parties who have standing to bring the claims for the various
damages that are set out in Subsection (a).
"Removal costs" are recoverable economic loss, as
provided under Subsection (a)(1). Subsection (b)(1) specifies
the United States claimants who may recover removal costs.
United States government agencies and States may recover
for removal costs incurred under this Act, the Intervention
on the High Seas Act, the Deepwater Port Act, and, if such
costs have been incurred thereunder, Section 311 of the
Clean Water Act.
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- 42 -
United States owners or operators of a vessel or a
i
facility involved in a pollution incident have limited
standing. The owner or operator who undertakes the cleanup
of a spill may assert a claim against the fund for the cost
of such an undertaking if he either has a defense to liability
under Subsection 604(d) or is entitled to a limitation of
liability under Subsection 604(c)(1). In the latter case,
where entitled to limitation, his right to claim is limited
to excess cost incurred above the limitation to which he is
entitled. The purpose of this provision, in relation to
owners or operators, is two-fold. First, it removes any
disincentive that the owner or operator may have in under-
taking the cleanup, where he might not be liable, and second,
it serves as encouragement for him to continue his cleanup
activities even after his limitation of liability has been
reached, by affording him a basis for .compensation of the
cost of cleanup in excess of his limitation. A guarantor
involved would have the same rights, as subrogee to the
*•
owner or operator. Other owners or operators of vessels or
facilities may recover reasonable cleanup costs if they
possess and utilize special expertise in the removal of oil
or hazardous substances. This provision is meant to encourage
non-discharging vessel and facility owners and operators who
have access to cleanup capability to respond promptly to
pollution incidents.
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- 43 -
To create an incentive for maximum participation in
cleaning up, foreign vessel owners and operators are permitted
under Subsection (b)(6) to recover these costs even if the
conditions generally imposed on foreign claimants by Subsection
(b)(4) are not met.
When real or personal property is in some way injured
by pollution, an avenue of relief is provided under Subsection
(a)(2). Any United States claimant may bring claims for
property loss in accordance with Subsection (b)(2).
Damages for, injury to, and destruction of, natural
resources under Subsection (a)(3) may be claimed only by the
President, as trustee of those natural resources over which
the Federal Government has jurisdiction, or by a State for
natural resources under its jurisdiction. The jurisdiction
of the Federal Government specifically includes resources
over which it has sovereign rights and resources within its
territory or fishing conservation zone over which it exercises
some protective or managerial authority. The ,jurisdiction
of a state extends to those resources within the State's
boundaries which, although not in fact belonging to the
State, may be held in trust by the State for the benefit
of its citizens, or otherwise managed or controlled by the
State. The standing to bring such a claim is conferred in
Subsection (b)(3). An example would be a State's claim
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- 44 -
against a discharger for injury to a coastal State park.
Compensation paid for damages under Subsection (a) (3) must
be used to assess damages and to restore the damaged natural
resource or to acquire similar resources.
Subsection (a)(4) allows recovery for loss of earnings
for fishermen due to injury to the marine life resources
*
upon which they depend for their livelihood. Subsection
(b)(4) gives standing to any United States claimant to
recover losses due to injury to marine life resources.
Under Subsection (b)(5), foreign claimants, as defined
in Subsection 601(j), and subject to the limitations in
Subsection 601(bb)(3), are given rights comparable to United
States claimants, provided they meet certain conditions.
First, it should be borne in mind that pollution, as defined
in Subsection 601(bb)(3), has a particular meaning for
foreign claimants. Except for Trans-Alaska Pipeline (TAPA)
related oil, only pollution in the territorial sea, internal
«•
waters, or immediately adjacent shoreline of the foreign
country gives rise to a claim. Furthermore, (again subject
to the TAPA exception) under this subsection there are four
prerequisites to assertion of a claim--by a foreigner. All
four prerequisites must be met. Where pollution occurs in a
foreign country the claimant must be a resident of the
country where the pollution occurred. The claimant must not
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have been compensated through some other means for his loss.
The discharge which resulted in pollution must have occurred
in United States navigable waters or from certain activities
under the control of the United States. Lastly, the recovery
must be authorized by treaty or executive agreement, or the
country involved must provide a comparable remedy for United
States claimants in similar situations. In the case of oil
being transported from the Trans-Alaska pipeline to a port
under the jurisdiction of the United States, conditions as
to location of the release and the oil pollution occurrence
and the requirement for an agreement need not be satisfied
with respect to a Canadian claimant where the oil is discharged,
even outside United States navigable waters, at any time
before it is brought ashore into a United States port. This
provision substitutes for a similar provision in Subsection
204(c) of the Trans-Alaska Pipeline Authorization Act,
repealed by Subsection 6(b) 'of this bill. It should be
noted that the repeal of that provision of TAPA does not
affect in any way the scope of damages recovery which would
have been available to Canadian residents if that provision
had not been repealed. The scope will be determined by the
law which prevails at the time a claim* is asserted.
Subsection (b)(7) authorizes the Attorney General to
act on behalf of a group of claimants and to consolidate
their claims. This clause is designed to expedite the
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- 46 -
settlement of claims under Section 609. Aside from consol-
idating the settlement of claims, through the negotiations
process, it is contemplated that the Attorney General would
also be authorized to bring a class action in accordance
with the Federal Rules of Civil Procedure.
Subsection (c) provides for relaxation of the notice
publication requirements of the Federal Rules of Civil
Procedure by authorizing the satisfaction of those requirements
in connection with class action suits for classes of more
than 1,000 by publication of notices in local newspapers of
general circulation.
Subsection (d) deals with claims for the costs of
emergency assistance and containment (uncontrolled hazardous
waste disposal site costs). Because of the limited funds
available compared to the vast potential costs presented by
the problem, it is essential that a system of priorities be
adhered to. Therefore, the Administrator must certify that
the costs for which a claim is made were incurred in a
manner consistent with regulations promulgated pursuant to
subsection (d)(1) of this subsection, which contains criteria
for establishing such priorities. If. he makes such certifi-
cation, claims may be brought by any agency of the United
States government; by States, with respect to reimbursements
authorized by the regulations; and by any person liable for
the costs of a release from an uncontrolled hazardous waste
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- 47 -
disppsal site if certain conditions are met. The conditions
are identical to those contained in Subsection (b) and
require that such a liable person be entitled either to a
limitation of liability or a defense of liability under
Section 604. As in Subsection (b), the conditions are
intended to provide an incentive for cleanup. The costs
reimbursed are limited to those authorized'in Section 603(b)
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Designation and Advertisement
Section 608
Upon receiving information of an incident involving pollution
or upon responding to a release at an uncontrolled hazardous waste
disposal site, the Executive/ under subsection (b) (1) , initiates
the claims process by designating the source of the pollution _____
»
or release and by notifying the owner, operator, guarantor, or other
liable party of the designation. The designation is important.
because the owner, operator, and guarantor of the designated source
will incur certain responsibilities under subsection (b) (2) if,
within five days, they do not deny the Executive's designation.
Subsection (a) (2) requires the owner, operator, or guarantor of
a designated source to initiate advertisement of tine designation
and of the procedures by which ^a-imc may be asserted. The
failure to deny a designation <3
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Where there has been no denial of designation and the
owner, operator, or guarantor advertises properly, the claims..
process may be asserted against any of those three parties.
Subsection (b) sets out the instances in which claims may be.
brought directly against the fund, such as situations where
the owner, operator, and guarantor of the designated sources
t.
have all denied the designation, where the Executive has
determined the source of the release was a public vessel, or where
the source of the release is unknown.
Subsection (c) sets out -die time period.during which advertising
procedures are to be carried out.
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Claims Settlement
Section 609
This section establishes procedures for settling claims
for damages under this title. Subsection (a) provides that,
except for governmental removal, emergency assistance, and
containment costs, claims shall be presented directly to the
responsible party, except in those situations described in
subsection (b). In accordance with subsection (b), claims
shall be presented directly to the fund where the Executive
has advertised the claims procedure under subsection 608(b).
Claims may also be asserted directly against the fund by
owners and operators of the designated source who qualify
•
under the standing provisions of subsection 607(b)(l) or
subsection 607(d)(2).
Subsections (c) and (d) provide for a second line of
compensation. Subsection (c) allows for claims against the
fund where attempts to reach a settlement with the owner,
*•
operator, or guarantor were unsuccessful, the preconditions
for going to this second line of compensation are (1) the
denial of all liability for the claim by the person to whom
the claim was presented (owner, operator, or guarantor), or
(2) the passage of 120 days after presentation of the claim
without any settlement, whichever occurs later. At this
point, the claimant may elect to commence an action in court
against the owner, operator, or guarantor, but once having
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decided to pursue the claim in court, the claimant cannot
come back and assert his claim against the fund until he has
exhausted his remedy in cases referred to in subsection (d).
If the claimant elects to pursue an action in Court, the
standards of liability, and the limits and defenses to
liability in section 604 will apply regardless of any other
laws to the contrary.
Subsection (d) also permits a claim against the fund in
those instances where claimants are not adequately compensated
by the owner, operator, or guarantor may have successfully
invoked his limitation of liability under subsection 604(c)
and the claim may exceed that limitation. The balance would
be recoverable against the fund. For some other reasons,
such as insolvency, the owner, operator, or guarantor may
not be able to satisfy all claims. Uncompensated claims
could, therefore, be brought against the fund, which serves
as a backup for such situations.
Subsection (e) provides for regulations by the Executive
to prescribe documents to be transmitted to the fund in
support of a claim which has first been presented against a
person responsible for a release and is subsequently presented
to the fund because it was not settled in a timely manner or
because of a denial of liability or financial incapacity of
the owner, operator, and guarantor.
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Subsection (f) provides to those claimants who are
proceeding against the fund, whether it be as first resort
or second resort, the opportunity for review of the fund's
actions by the Executive in accordance with the Administrative
Procedures Act. A review of the claim by the Executive can
only occur after the fund has denied liability or failed.to
settle the claim within 120 days.
Subsection (g) gives the Executive responsibility for
establishing a uniform claims procedure; however, it does
not allow the denial of any claim from an authorized agency
of the United States Government for cleanup, removal, emergency
assistance, or containment costs. This subsection also
directs the use of private insurance adjusters or State
agencies wherever possible. When a State agency is used,
payment may not be made for a claim on behalf of that State
unless approved by the Executive. Where private organi-
zations or State agencies are inadequate, the Executive may
use Federal personnel to process claims against the fund.
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Subsection- (h) authorizes the Executive to appoint
three-member panels for 180-day period to decide disputes
submitted to the Executive under Subsection (f) and sets out
the general qualifications of panel members. At least one
member shall be qualified to conduct an adjudicatory hearing
and all shall be competent in assessment of the economic
losses that may be claimed under the Act.
Subsection (i) gives the Executive the option of
referring the dispute to an Administrative Law Judge instead
of the three-member panel.
In the case of the appointment of a panel, or the
referral to an Administrative Law Judge, each is required to
be a resident of the judicial circuit where the alleged
damage took place. The usual powers required to conduct an
administrative proceeding under the Administrative Pro-
cedures Act are conferred upon the Administrative Law Judge
and panel. This includes the authority to compel appearances,
testimony and production of material. Enforcement of this
authority is provided through the district courts. The
location of the hearings shall be the judicial district
where the damage occurred.
Paragraphs (5) and (6) of subsection (h) provide for
the review of decisions reached by the panel or the Administrative
Law Judge. Their decisions become final orders of the
Executive unless he elects to review them. These decisions
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are final orders within the meaning of the Administrative
Procedures Act. However, they -are not subject to review in
the district court.
Subsection (j) sets out rules of procedures that shall
apply in the case of actions brought in court. Both plaintiffs
and defendants are required to provide the fund with copies
of complaints and pleadings. The fund may' intervene as a
matter of right, and may be dismissed from an action/ upon
its own motion, when either the owner, operator, or guarantor
admits liability. Receipt of notice by the fund of an
action binds it to the judgment in that action even though
the fund chooses not to become a party. The sanction imposed
on plaintiffs or defendants if neither gives notice to the
fund is a loss of limitation of liability to which .the
defendant would otherwise be entitled under subsection
604 (c) and the loss of the plaintiffs' right to recover from
the fund amounts not paid by the defendant.
Subsection (k) allows the plaintiff to jcdn the owner,
operator, or guarantor in an action brought against the
fund, and the fund has a right to implead any other person
who might be liable under the Act.
The statute of limitations for presenting claims or
maintaining causes of action under this Act is set out in
subsection (1)• The claimant has three years after discovering
an economic loss resulting from pollution.
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Subrogation
Section 610
Subsection (a) provides subrogation for anyone who pays
a claimant compensation under the terms of the bill. If the
fund pays a claimant for damages asserted under section 607,
it will stand in the shoes of that claimant and may assert
any rights that the claimant had under the bill.
*
Subsection (b) empowers the Attorney General, at the
request of the Executive and on behalf of the fund to
commence an action for the compensation paid by the fund
to any claimant. The action may be commenced against any
person liable for the damages for which compensation was
paid.
Subsection (c) sets out the specific items that the
fund may recover against an owner, operator, or guarantor.
The recoverable items depend on how the owner, operator, or
guarantor responded to the claim.
The first class of owners, operators, and guarantors
consists of those who either deny designation or'who deny
liability. If the fund proceeds against such parties for
compensation paid to claimants, those parties cannot contest
»
the amount involved, except to the extent that it exceeds
the limitation of liability available under subsection 604(c).
Implicit in the fund's status as a subrogee is the defendant's
right to assert against the fund any defense that he could
have asserted against the claimant.
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Such defendants are also liable for interest for the
period from the time the claim was initially presented to
the defendant by the claimant, to the time that the fund is
paid by the defendant. Excluded from the interest liability
is the period, if any, from the time the claimant receives
an offer from-the fund, of the amount finally paid, to the
time when the fund actually paid the claimant- The defendant .
must also pay costs incurred by the fund, both in the proceeding
by the fund against the defendant, and in the proceeding by
the claimant against the fund.
The second class of defendants consists of those who
negotiated with the claimant but who were unable to reach a
settlement within the 120 day period specified in subsection
609 (c) (2). In the case of that type of defendant, where :
the fund pays to the claimant more than the defendant ever
offered to the claimant, the defendant must pay what the
fund paid, subject to the defendant's right to contest the
validity of any part of the amount paid which is,in excess
of the largest amount offered in settlement to the claimant
by the defendant. Such a defendant must also pay the interest
that the first class of the defendants described above would
have to pay and, as to costs, must pay only the costs incurred
by the fund in the proceeding by the fund against the defendant.
In the case of the second class of defendants where the
fund eventually pays an amount less than, or equal to, the
largest amount offered by the defendant to the claimant, the
fund shall recover that amount without reduction.
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The fund shall also recover interest, running from the
•
time the defendant offered the largest amount in satisfaction
of the claim. Any offer made within the specified 120 day
period will relieve the defendant of interest liability. In
any case, the fund is liable for interest from the date upon
which the defendant made payment. A defendant who offers
the fund an amount equal to that which is finally paid to
the fund shall not be liable for interest during the period
between the offer and the acceptance by the fund.
Subsection (d) provides for the distribution of the
interest recovered pursuant to subsection (c). The interest
recovered from the first class of claimants, those who deny
designation or deny liability, shall be paid over to the
claimant, but only for the period from the time the claim
was first presented by the claimant, to the time the claimant
was paid by the fund, less the period following the offer of
the fund which was finally accepted by the claimant in
settlement. This would leave in the fund the interest
received for the period from the time the claimant was paid
by the fund, to the time the fund was paid by the defendant.
The same rules apply for those defendants of the second
class who have failed to settle in 120 days, and who have
offered less to the claimant than the fund eventually paid
the claimant.
Costs and interest shall be recovered by the fund
under subsection (e) without regard to any limitations of
liability.
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Jurisdiction and Venue
Section 611
Except for the review of regulations issued under the
bill as enacted, the United States District Courts are the
courts of first and exclusive resort for controversies
arising under the Act. Claimants need not assert any
particular amount in controversy in order fot Federal
jurisdiction to attach, nor do they have to assert
diversity of citizenship in order to obtain Federal
jurisdiction. Actions brought under the Act are Federal
questions. Under subsection (b), the forum shall be located
in the district either where the injury occurred or where
the defendant resides or is found, or, in the case of a business
association, where it has its principal office. Review of
regulations issued under this bill is available in the Circuit
Court of Appeals for the District of Columbia.
Subsection (c) exempts any controversy or other matter
resulting from either the assessment or collection of any
fee as provided by section 606 (f), or the review of any
regulation promulgated under the Internal Revenue Code of
1954 from the provisions of subsections (a) and (b) of this
section.
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Relationship to Other Law
Section 612
Subsection(a)(1) is designed to prevent duplicate sources
of compensation for certain damages provided under this Act.
Any damages listed in Subsection 607(a) can be recovered
only pursuant to the Act. Any other types of damages may be
sought through means outside the Act, including remedies
through State courts. Thus, if a State wished to allow or
provide damages for personal injuries resulting from oil or
hazardous substance pollution, it would be free to do so.
The State is not preempted from providing relief for such
damages.
One purpose of the fund is to compensate those who
suffer the damages described in Subsection 607(a), who have
not otherwise been fully compensated. Therefore, under
Subsection(a)(2), no one may be required'to contribute to
any other fund which has those same purposes. A fund set up
to purchase pollution abatement equipment or a fund established
for the prevention, detection, or observation of pollution
(such as environmental monitoring or research programs), or to
pay for personal injury damages to third parties, for example,
would not be duplicative of the fund established under this
Act. Subsection(b) makes it clear that a State could compel
payment of a tax or fee to finance such a fund. This Subsection
does not totally preempt the field; it only preempts enactments
which would duplicate the purpose of the fund as it applies
to releases from vessels or facilities.
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In addition, Subsection (b) makes it clear that this
legislation does not preempt in any way a State's authority
to establish liability funds, liability and compensation
schemes, or financial responsibility requirements, or to
impose a fee or tax in order to deal with any losses or
costs associated with releases from uncontrolled hazardous
waste disposal sites.
The preemption provisions in Subsection (a) recognize
exceptions provided in this Act. Therefore, Subsection (a)
of this section should be read together with Subsection 604
(j) and Subsections (c), (d) and (e) of this section. Subsection
604(j) makes it clear that an owner or operator who is subject
to liability under this Act retains his rights under any other
law to pursue a cause of action against a third party, in-
cluding a governmental entity, whose negligence caused or
contributed to the incident through which the owner or
operator was subjected to liability. The same right is
preserved to a guarantor who is subrogated to the rights
of the owner or operator.
Subsection (c) makes it clear that the fund may bring
an original cause of action under any law to recover compen-
sation paid to a claimant, even though the recovery may be
for damages that are specified in Subsection 607(a).
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Subsection (d) ensures that.persons who assert a claim for
damages under this title will not be prevented from seeking
recovery under any other law for damages which are not covered
by this title. For instance, a person may have suffered both
economic loss and personal injury from the same incident. Such
person may assert his/her claim under this title for the economic
*
loss without being deemed to have split a cause of action. Thus,
the person would not be collaterally estopped from seeking
damages for personal injury under any other law. In addition,
this subsection provides that findings of fact or conclusions
of law made in proceedings under this title shall not be
binding in any action or proceeding under other law.
Subsection (e) provides that in the case of any conflict
or inconsistency, this Act will supercede all other provisions
of Federal law which may (1) define liability for the release
of oil or hazardous substances; (2) provide response authority
or mechanisms for such release, (3) provide a fee collection
*•
mechanism; (4) provide a claim mechanism for damages from such
releases; or (5) regulate or control in any other manner the
release or threat of release of oil or hazardous substances.
It also makes it clear that this title does not preempt the
authority of the Federal Government to take action under
other Federal laws for remedies not provided by this title.
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Authority to Delegate, Issue Regulations
Section 613
This section authorizes the President to delegate any
duties or powers which this title imposed upon him or assigned
to the Executive. The President is also authorized to
promulgate any regulations which are necessary to implement
the provisions of this title.
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Reports, Studies/ Review of Fees and Penalties
Section 614
Subsection(a) establishes an annual report which the
Executive submits to Congress six months after the end of
each fiscal year. The report describes the functioning of the
fund during that year. In the report receipts and disbursements
are summarized, categories of sources and types of damages
reimbursed are presented/ the administration of the fund is
described and recommendations for improvements are made.
Subsection (b) sets out the requirements of the comprehensive
report which will serve as the basis of the "mid-term adjustment"
for this legislation. The Executive is required to make this
report to Congress within three years of the effective date of
this title. The report describes the experiences .in the
implementtion of this title. Contents of the report include
analysis of: (1) whether the prohibitions against releases
are effective; (2) the extent to which the fund is effective
in enabling government to respond and mitigate the effects of
*•
releases and threatened releases of oil and hazardous substances;
(3) the potential threat to public health or safety/ or to the
environment posed by, and the cost of responding to, remaining
uncontrolled hazardous waste disposal sites; (4) whether the fees
and penalties established are sufficient and equitable; and (5) the
appropriate role for the States.
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The comprehensive report will also include recommendations
for legislative changes in this title including recommendations
on fees, liability, and financial responsibility and any need
to reauthorize authority to assess fees and pass appropriations
for emergency assistance and containment at uncontrolled sites.
In preparing the report the Executive shall consult with
4
appropriate Federal, State, and local agencies, industries,
claimants, and other affected parties.
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Effective Dates, Savings Provision
Section 5
Upon enactment of the Act, authority is conferred
immediately upon the applicable Federal officials to delegate
necessary authority and to draft and issue regulations in
order that these delegations and regulations may be in place
by the time the substantive provisions of the Act go -into
•
effect, the first day of the first month following 180 days
after enactment. In addition, subsection 605(e), which
requires a study of the insurance industry, subsection
614(b), the "mid-term adjustment" study, and section 7, the
separability section, and all provisions authorizing the
appropriation of funds are to be effective immediately.
Subsection (c) saves regulations issued under section
311 of the CWA, including regulations designating hazardous
substances, determining reportable quantities, and requiring
spill prevention control and countermeasure plans, unless or
until superceded. Subsection (d) of this section saves
financial responsibility regulations issued under repealed
provisions of law unless or until superceded. The purpose
of these provisions is to keep the hazardous substances
lists and the program established by regulation pursuant to
section 311 intact and to assure that any temporary delays
in the entry into force of regulations issued under this
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- 66 -
bill will not result in a lapse of the provisions of section
311 and its implementing regulations, including but not
limited to financial responsibility, notification requirements,
or liabilities imposed by those regulations. Finally,
subsection (e) is designed to insure that no ongoing liti-
gation is mooted by passage of the Act.
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Section 6
Subsection 6(a) makes some clarifying amendments to
subsection 204(b) of the Trans-Alaska Pipeline Authorization
Act. Subsection 204(b), as written, provides that permit
holders under that Act who cause oil pollution "within or
without the right-of-way for permit area" shall be liable
for the total cost of removing the pollutants.
«
Subsection 6(b) repeals that subsection of the Trans-
Alaska Pipeline Authorization Act which established liability
and a compensation fund for damages caused by oil spills
from vessels transporting oil from the pipeline terminus to
ports elsewhere in the United States. It provides for a
transfer of the assets and liabilities of the Trans-Alaska
Pipeline Liability Fund to the new fund established under
section 606 of section 4 of this Act.
Subsection (c) amends the Intervention on the High Seas
Act, in order to make available to the Secretary, for
intervention, procedures authorized by that Act, the fund
established pursuant to section 606 of section 4 of this
Act.
Subsection (d) repeals section 311 of the Federal Water
Pollution Control Act, as amended. The fund established
under subsection (k) of that section is abolished, and all
assets of the fund are transferred to the fund established
under section 606 of section 4 of this Act.
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Subsection (e) amends the Deepwater Port Act of 1974,
by deleting various subsections related to oil discharge,
liability thereof, liability fund establishment, claims
procedures, financial responsibility certificates, clean-up
costs, and numerous correlative matters, all of which will
be covered by the provisions of this Act. It further
«
redesignates provisions of that Act accordingly.
Subsection (f) repeals Title III of the Outer Con-
tinental Shelf Lands Act Amedments of 1978.
Subsection (
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Separability
Section 7
This section allows all other provisions of this Act to
remain unaffected if any provision of this Act is found to
be invalid in any way.
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