In a move identified by the U.S. Coast Guard as a necessary reflection of the substantial increase in the Consumer Price Index  since 2019, a new regulatory rule has been issued by the agency to increase the limits of liability for vessels, deepwater ports, and onshore facilities under the Oil Pollution Act of 1990.  The new limits take effect March 23, 2023.

Pursuant to OPA 90, the responsible parties for any vessel or facility from which oil is discharged, or which poses a substantial threat of discharge of oil, into or upon the navigable waters (or adjoining shorelines/exclusive economic zone) of the United States, has strict liability for removal costs and damages that result from such an incident. OPA 90 places statutory limits on liability for a responsible party, except in cases of gross negligence, willful misconduct, and/or a violation of an applicable federal safety, construction, or operating regulation.

Regulatory inflation increases to the limits of liability are statutorily required by OPA 90 and the Coast Guard has explained that such increases are necessary to preserve the deterrent effect and “polluter pays” principle contained in OPA 90.  The rule change is nondiscretionary for the Coast Guard and the calculation of the increase in the liability limits is a ministerial task reflected by the change in CPI and the need to respond to inflation.  The Coast Guard followed 33 CFR 138.240 in setting the methodology and formula for the increase.  In short, the agency calculated an applicable annual percent increase in the CPI of 7.91, percent which has been applied uniformly across all types of vessels, deepwater ports, and onshore facilities to increase the maximum limit of liability.  For vessels, the adjusted limits are as follows:

The maximum limit of liability for Deepwater Ports and Onshore Facilities was also increased by 7.91 percent to $725,710.800 (up from $672,514,900).   The estimated number of vessels affected by these increases is expected to be minimal (i.e. less than three (3) vessels per year are anticipated to have an OPA 90 incident which would exceed the existing limit of liability).  The Coast Guard also estimates that the CPI adjustments will not result in an increase in responsibility guarantor insurance premiums across the industry.