New York’s Oil Spill Fund Remains Inadequate to Respond to Crude Rail Disaster, Groups Call to Raise Its Cap to $100 Million

Environmental Advocates of New York | March 18, 2015 | Press Release

Albany – After four recent oil-by-rail disasters in North America in less than a month, it could not be more clear that New York’s “Oil Spill Fund” must be increased so that it is adequate to cover the response costs and damages associated with loss of life and destruction of property that have been caused by rail disasters elsewhere. A coalition of environmental groups is urging the state to take stronger action to protect and strengthen the fund in the face of the serious risks to safety and natural resources posed by the 4,000 percent increase in crude-oil transport over the past six years.

Riverkeeper, The Sierra Club, Environmental Advocates of New York and the Adirondack Council are calling on state legislators and Gov. Andrew Cuomo to do more to address the diminished size of the spill fund. The recognition by the Executive and the Legislature that the fund is inadequate is appreciated.  However, the $15 million increase in the fund cap to $40 million proposed by the Executive and Assembly budgets could and should be increased. In today’s dollars, the $25 million fund created in 1977 would be a $96.4 million fund today. Thus, we urge that the fund cap be increased to $100 million to bring it back to parity with the monetary protection it afforded nearly four decades ago. It should also be indexed to inflation going forward, to ensure that the fund keeps pace with economic reality. 

The current pressures on the fund are tremendous and they will only get worse if there is a spill from the thousands of oil rail cars that pass through our state each week.  The total liabilities for the Lac-Mégantic, Quebec, rail disaster in July 2013, for example, could easily reach $2.7 billion over the next decade.

In addition to calling for a more significant increase in the capacity of the spill fund to respond to a crude-oil disaster, we make the following recommendations with respect to the structure and management of the fund:

  • Fund emergency preparedness separately from spill response. We welcome proposed funding for emergency response equipment, supplies and training for state and local emergency services personnel.  In addition, we strongly support the Assembly’s proposed legislation which would keep that funding separate from the account that pays for remediation costs, as well as the damages associated with loss of life and property damage and economic losses suffered by individuals and businesses in the event of a spill.  If maintained in a joint account, payments for emergency preparation could potentially deplete the response fund, leaving the state without the resources necessary to respond after a spill.
  • Keep the Spill Fund under the fiduciary management of State Comptroller’s Office, instead of transferring it to the Department of Environmental Conservation. We commend the Comptroller’s Office for successfully managing the Spill Fund for the past 40 years, and believe that it is best qualified to continue the fund’s management.  We support the Legislature’s rejection of the Executive Budget’s proposal to move the Spill Fund.

“Federal regulators have told us to expect at least 10 major derailments of crude oil trains a year. There have already been 4 in the last 3 weeks.  It’s no longer a matter of if, but when a catastrophe will happen in a New York community.  If we are without a robust spill fund, New York citizens could be left to shoulder the cost of the cleanup and damages, just as the citizens of Canada were a year and a half ago. The state has to be adequately prepared for this inevitability,” says Kate Hudson, Riverkeeper’s Special Projects Director. “We applaud the Governor’s and the Assembly’s budget proposals to increase the spill fund cap to $40 million, but that leaves the fund at levels far below what it was more than three decades ago while the risk of a catastrophic accident has increased exponentially.”

Peter Iwanowicz, executive director of Environmental Advocates of New York said, “Raising the cap on the Oil Spill Fund to $100 million is not a silver bullet, but it’s a good start in recognizing the enormous dangers and risks that this industry has forced upon our communities. Even today, despite all the issues that have arisen and the tremendous increase on transshipments of volatile Bakken Shale and possible Canadian Tar Sands crossing our borders, the fund remains one of the only forms of recourse for New Yorkers. When a disaster happens  — and that time will come — it is only right that the costs of cleanup be shouldered by the industry, not our communities.”

"With oil trains threatening New York's communities and clean water daily, bold action is needed.  In the state budget more funds for spill prevention and emergency responder training should be provided, the oil spill cleanup fund should be increased, and the Comptroller's independent management of the fund should be continued," said Adirondack Council Executive Director William C. Janeway.  "Proposals by Governor Cuomo and the Legislature to increase funds available for emergency response and training to help address the risk of oil trains are appreciated but need to be improved upon."

“One catastrophic crude oil train derailment in New York could wipe out an entire community along with the solvency of the spill fund itself,” said Roger Downs, Conservation Director for the Sierra Club Atlantic Chapter.  “New Yorkers assume tremendous risk and little economic benefit from the millions of gallons of explosive crude oil that rumble through our cities and along our precious waterways every day.  Inaction on the part of the federal government to adequately address these risks should not prevent state lawmakers from building the most robust spill fund possible.”

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Contacts:

Riverkeeper: Cliff Weathers: 914-478-4501 x239

Sierra Club: Roger Downs, 518-426-9144

Environmental Advocates: Travis Proulx: 518-462-5526 x238

Adirondack Council: John Sheehan: 518-441-1340

http://www.eany.org/our-work/press-release/groups-urge-100-million-oil-spill-fund

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@PAUSEnergy tweeted this page. 2015-03-27 17:28:10 -0400
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New York’s Oil Spill Fund Remains Inadequate to Respond to Crude Rail Disaster
PAUSE, People of Albany United for Safe Energy
PAUSE is a grassroots group of individuals who have come together to promote safe, sustainable energy and fight for environmental justice. We engage the greater public to stop the fossil fuel industry’s assault on the people of Albany and our environment.