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Standardizing Assessment of Natural Resource Damages: Massachusetts Is Taking the First Step

MassDEP is developing a standard methodology for assessing natural resource damages for small to medium oil spills to surface water that will be incorporated into forthcoming regulations, which will require persons responsible for these spills to pay the assessed natural resource damages, above and beyond cleaning up the spill.  MassDEP is expected to expand the standard assessment to include spills of hazardous materials and spills to groundwater.  MassDEP plans to pool these funds to improve watersheds that have been harmed by releases of oil or hazardous materials.

In the current program, the Commonwealth negotiates individually with responsible parties to assess natural resource damages for larger spills. These assessments, which are negotiated in tandem with federal trustees and tribal trustees when federal laws such as the Oil Pollution Act are implicated, involve significant administrative costs.  Undertaking case-by-case assessments is not feasible for every spill due to these costs.  By developing a standard methodology, MassDEP hopes to recover damages from smaller sites.  If implemented, the standard assessment would be used for oil spill volumes of greater than 10 gallons but less than 10,000 gallons.

MassDEP’s presentation materials explain the proposed standard methodology for small to medium oil spills to surface water.  Factors in the assessment method include the type of oil, the area of surface water or wetlands impacted by the spill, and the duration of the impact.  It also accounts for the value of the type of habitat harmed, the acreage of similar habitat that would need to be replicated in order to replace the value of the habitat lost, a factor to account for program costs, and inflation.  Notably, the amount of oil released is not part of the assessment.  Based on this methodology, and using data from spills between 2009 and 2017, MassDEP estimates that approximately 67% of small to medium oil spills would result in assessments less than $5,000.

If Massachusetts continues this initiative, it will join Washington and Florida as states with streamlined assessment tools for natural resource damages.  In Washington, unless an individualized assessment is done, compensation tables are used to determine the amount of damages per dollar of oil released to a water of the state based on the toxicity of the oil released, and the environmental sensitivity of the resource.  For spills less than 1,000 gallons, the damages range from $1 to $100 per gallon; for larger spills, the range is $3 to $300 per gallon spilled.  Florida by statute has created a compensation schedule which applies to releases of oil that cause harm to a natural resource, which is used in all cases unless a responsible party is not identified, the responsible party opts out and requests a case-by-case analysis, or a cooperative assessment is conducted with federal agencies.  The compensation schedule takes into account the volume of the release, the characteristics of the pollutant discharged, and the type and sensitivity of the resource harmed. 

If MassDEP develops and implements this standard methodology, it will close a gap in its current program by addressing the harm to natural resources caused by smaller releases of oil or hazardous material.  However, there remain significant questions about this new program, including who will pay the assessed natural resource damages for a site where the remediation is being conducted by an “eligible person” or another party without liability for the underlying release.  Further, it will increase the costs of resolving liability at these sites, which could deter redevelopment of Brownfields. 

© 2019 Beveridge & Diamond PC

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About this Author

Dylan King, Beveridge Diamond Law Firm, Boston, Environmental Law Litigation Attorney
Associate

Dylan maintains a diverse environmental litigation and regulatory practice, working with clients nationwide across industrial sectors. He has developed experience with solid waste facility siting, pipeline and hazardous material transportation regulations, site contamination litigation, and local zoning matters. Dylan joined the firm following his graduation from Vermont Law School with a certificate in Energy Law.

During his time at Vermont Law School, Dylan worked with the Vermont Law School Energy Clinic, helping clients develop solar...

781-416-5755
Jeanine LG Grachuk, Environmental Litigation Lawye, Beveridge Diamond, Energy Permitting Attorney
Principal

Jeanine Grachuk’s practice includes environmental compliance counseling, environmental permitting of energy and brownfields redevelopment projects, and advice on managing environmental risk in complex transactions such as through environmental risk insurance.  Ms. Grachuk has experience with environmental issues arising within a variety of industrial sectors, including power generation, chemical production, and solid waste disposal. 

781-416-5713