Abstract: Financial Responsibility Requirement of the Oil Pollution Act of 1990
William E. Pritchard, III
The Oil Pollution Act of 1990 requires that the operator of any offshore facility establish and maintain evidence of financial responsibility of $150 million. The term "facility" includes all structures, equipment, or devices, other than vessels on deep-water ports, used for purposes of exploring for, drilling for, producing, storing, handling, transferring, processing, or transporting oil.
The term specifically includes pipelines. "Offshore" facilities include those in, on, or under any navigable waters, including inland waters, of the states of the United States, territories, and possessions, and facilities subject to the United
States jurisdiction in, on, or under any other waters. Thus, wetlands, playa lakes, and intermittent streams may be included.
The Minerals Management Service is in the process of publishing regulations governing the establishment of the financial responsibility requirement. Currently, the requirement may be met by any one, or by any combination, of the following methods: evidence of insurance, surety bond, guaranty, letter of credit, qualification as a self-insured, or other evidence of financial responsibility. Small independent oil and gas companies that do not have the ability to self insure stand to be the hardest hit by implementation of the requirement.
AAPG Search and Discovery Article #90983©1994 GCAGS and Gulf Coast SEPM 44th Annual Meeting, Austin, Texas, October 6-7, 1994