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Proposal would require oil handlers, transporters to prove ability to pay for spills

OLYMPIA  – 

Oil handlers operating in Washington would have to prove they have the funds or insurance needed to cover the costs of responding to an oil spill under new regulations proposed by the Washington Department of Ecology. The regulations would cover pipelines, oil handling facilities and terminals, and large vessels.

In 2022, the Washington Legislature directed Ecology to adopt rules regarding financial responsibility requirements for oil handling facilities and vessels. Financial responsibility for vessels would range from $500,000 to $1 billion based on vessel type and size. Financial responsibility for oil handling facilities – including refineries, terminals, and pipelines – would range from $5 million to $300 million. 

“When companies operating oil handling facilities and vessels cannot adequately cover the cost of a spill to Washington’s waters, the price is paid by state and federal governments,” said Carlos Clements, program manager for Ecology’s Spill Prevention, Preparedness, and Response program. “Public funds should not have to pay for the costs of spills that damage the economic and environmental vitality of our state.” 

Although Washington’s spill response program already operates under the principle of “the polluter pays,” the state does not currently have a certification program that requires oil handlers to prove the ability to fund a potential response. Federal financial responsibility requirements only apply to vessels, and have lower limits than those proposed in the Washington rule.

The proposed financial responsibility requirements do not limit how much an oil handler would be responsible for in the event of a spill. There is no limit of liability for oil spill cleanup and damages in Washington. 

The public can review documents and submit comments online now through March 8. Input can also be provided at one of three online public hearings in February: