oversight

Coast Guard: Federal Costs Resulting From the Exxon Valdez Oil Spill

Published by the Government Accountability Office on 1990-01-26.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

     ._-. -. .“.   ..- ._


COAST GUARD ---’
              -
Federal Costs
Resulting From the
Exxon Valdez Oil Spill
United Statee
Gei\eral Accounting Of’ftce
Washington, D.C. 2054(1

Resources, Community,    and
Economic Development     Division


B-236137.5

January26,1990

The Honorable Earl Hutto, Chairman
The Honorable John R. Kasich, Ranking
  Minority  Member
Subcommittee on Readiness
Committee on Armed Services
House of Representatives
On April 10, 1989, you asked us to provide information              on the
federal costs of dealing with the Exxon Valdez oil spill,
which occurred on March 24, 1989, in Alaska's Prince William
Sound. The lo-million-gallon          spill --the largest   ever in U.S.
waters-- triggered     an extensive cleanup effort.        A  number of
federal agencies contributed        to the effort     by monitoring   and
supporting    the cleanup, helping to remove oil from the water
and beaches, dealing with dead and injured wildlife,              and
assessing the damage to the environment.            In your letter,    you
expressed concern that the federal agencies involved be fully
reimbursed for their activities         by Exxon, the company
responsible     for the spill.     As agreed with Congressman
Kasich, who was designated as our contact,           we focused on
determining
Be what costs            federal    agencies   estimate     they have incurred,
--    whether the agencies            had procedures       to seek reimbursement
      from Exxon, and
--    the extent        to which these agencies           have been reimbursed.
This interim report addresses estimated costs reported by
federal agencies as of September 30, 1989, and reimbursements
received through November 15, 1989. Our final               report should
be issued later this year.         It   will    provide  updated   cost
information    and discuss (1) the adequacy of procedures for
agencies to identify,      document, and seek reimbursement for
costs resulting     from the spill;      (2) the adequacy with which
the Coast Guard communicated these procedures to the
agencies involved;      (3) the effectiveness         of agencies'
procedures to accurately       identify      total costs: and (4) the
timeliness    of the reimbursement process.
  B-236137.5

  COSTS INCU&&EQ
  We found that nine agencies incurred costs from the spil1.l
  By July 1989, about 3 months after the spill,    seven of these
  agencies were already accumulating  their costs.    As a result
  of our inquiries,  the two agencies that  were not  accumulating
  costs have since done so for us.
  The nine agencies reported that they had incurred costs
  totaling  $125.2 million     through September 30, 1989. Of this
  amount, $111.8 million     was for cleanup, $12.3 million         was for
  damage assessment, and $1.1 million          was for other costs
  resulting  from the spill.2        Four agencies---the    Departments of
  Defense, Transportation,       the Interior,      and Commerce--
  accounted for 94 percent of the total costs.             The Department
  of Defense, which had been directed          by the President to
  assist in the cleanup, incurred the most, $62.8 million.              The
  Department of Transportation,        which through the Coast Guard
  was responsible     for day-to-day    coordination     of federal
  cleanup activities,     spent the next highest amount, $33.3
  million.    (See sec. 1 for further       details    on costs.)
  COST REIMBURSEMENT
  All but one of the nine agencies (the Department of Justice)
  have sought full or partial reimbursement.   They have used
  two approaches to do so:


  lThe nine agencies were the Departments of Defense, the
  Interior,  Commerce, Agriculture,    Justice, Transportation,
  Health and Human Services,     and Labor, and the Environmental
  Protection  Agency.
  2We classified    costs incurred into three categories:           cleanup
  or removal, damage assessment, and other costs.              Cleanup
  costs cover the removal and disposal of oil.              Damage
  assessment costs involve the evaluation           of damages to natural
  resources.     Other costs cover activities        that do not fall in
  either the cleanup or the damage assessment category,               such as
  the Indian Health Service's      investigation       of the
  contamination    of the Alaska Natives'       food supply.     Future
  costs to restore the environment to its pre-spill             state
   (restoration   costs),  as well as the cost of damages to which
  dollar values cannot be assigned, are not included in these
B three categories.


  2
    ,
,   I




        B-236137.5

        --   The 311(k) fund, established    by the Clean Water Act to
             finance the cleanup of oil spills     and administered  by the
             Coast Guard. Under the Coast Guard's regulations,
             agencies must seek advance authorization     of their spill-
             related activities    from the Coast Guard's on-scene
             coordinator    and submit the costs of these activities    to
             the Coast Guard for approval and referral     to Exxon for
             reimbursement.
        we   Separate and direct reimbursement agreements with Exxon.
             Under this approach, agencies deal directly      with Exxon
             and receive reimbursement in accordance with the terms of
             the agreement.    (See sec. 2 for further  details    on
             reimbursement procedures.)
        As of November 15, 1989, Exxon had reimbursed $80.8 million
        of the $125.2 million      of costs incurred.     The unreimbursed
        balance of $44.4 million       includes amounts not yet billed      to
        Exxon, bills    being processed by agencies or Exxon, and
        amounts questioned by Exxon or the Coast Guard. Recovery of
        almost one-half     of the $44.4 million,     or $21.6 million,   is
        uncertain    for the following     reasons:
        --   The Coast Guard or Exxon is determining      the allowability
             of $17.8 million,    most of it for Department of Defense
             activities.    Concerns involve (1) charges for Army Corps
             of Engineers dredges, which Exxon considers excessive:
              (2) costs of various activities    that the Coast Guard's
             on-scene coordinator    did not approve in advance, as
             required by the regulations:     and (3) costs for which the
             Coast Guard has requested more detailed      documentation.
        --   Costs reported for damage assessment by the Departments
             of Agriculture,    the Interior,   and Commerce, and the
             Environmental    Protection   Agency exceed what Exxon has
             formally   agreed to pay by $3.1 million.     Exxon has made
             no formal commitment to pay this additional      amount.
        --   The Department of Justice has not yet decided whether it
             will request reimbursement for its litigation   costs of
             $0.7 million  because it does not normally seek
             reimbursement for such costs.
        In addition,      $1 million of the unreimbursed balance of $44
        million    will not be reimbursed.    The Department of the
        Interior    and two units within the Department of Health and
        Human Services have not coordinated       with and obtained
        Vapproval from the Coast Guard's on-scene coordinator         for the
        activities     that these costs covered, and therefore,     the Coast
        3
  B-236137.5

  Guard cannot approve reimbursement for them. Knowing this,
  the two agencies do not plan to submit bills    to the Coast
  Guard for the $1 million.    (See sec. 3 for further  details on
  reimbursements.)
  In the future,     federal agencies will likely    incur further
  cleanup and damage assessment costs, as well as area
  restoration    costs.    The total extent of additional    cleanup,
  assessment, or other costs beyond September 30, 1989, is
  unknown. Agencies involved in assessing the damage to the
  environment expect to incur another $9.2 million         in costs
  between October 1989 and February 1990. Although indications
  are that Exxon will pay future Coast Guard-approved federal
  cleanup costs, Exxon has made no formal commitment to pay
  additional   costs incurred for damage assessment and spill
  restoration.


  For this report,     we gathered information     from nine federal
  agencies in Washington, D.C., and from field offices          in
  Alameda, California;     Seattle,  Washington: and Anchorage,
  Alaska.   We interviewed     agency officials   and analyzed cost
  data obtained from each agency.        As agreed with Congressman
  Kasich, we accepted the amounts reported by the agencies
  without verification     because an extensive review of each
  agency's time reporting      and cost accounting systems,
  conducted at a number of geographically        dispersed locations,
  would be a lengthy undertaking.        We reviewed the information
  in this report with officials      at the nine agencies, and they
  concurred with its accuracy.
  As arranged with your offices,    unless you publicly      announce
  its contents earlier,    we plan no further  distribution     of this
  report until   30 days from the date of this letter.        At that
  time, we will send copies to interested     parties     and make
  copies available   upon request.
  Major contributors    to this report are listed  in appendix I.
  Should you need additional    information  on the contents of
  this report,   please call me at (202) 275-1000.



  Kenneth M. Mead
Y Director, Transportation    Issues


  4
.




                                  CONTENTS


    LETTER                                                                1
    SECTION
       1        SUMMARYOF COSTS FEDERAL AGENCIES REPORTED
                  FOR ACTIVITIES STEMMINGFROMTHE SPILL                    7
      2         PROCEDURES
                         FOR OBTAINING REIMBURSEMENT                     18
      3         STATUS OF COST REIMBURSEMENTFOR FEDERAL
                  AGENCIES' ACTIVITIES STEMMINGFROMTHE
                  SPILL                                                  22
    APPENDIX
      I         MAJOR CONTRIBUTORSTO THIS FACT SHEET                     27
    TABLE
     1.1        Costs Reported by Federal       Agencies      (Through
                  September 30, 1989)                                     9
     1.2        Types of Activities Conducted by the
                  Department of Defense                                  11
     1.3        Types of Activities  Conducted by the
                  Department of Transportation                           12
     1.4        Types of Activities Conducted by the
                  Department of the Interior                             13
     1.5        Types of Activities Conducted by the
                  Department of Commerce                                 14
     1.6        Types of Activities       Conducted by Other
                  Agencies                                               16
     3.1        Status of Cost Reimbursements        (as of
                  November 15, 1989)                                     23
     3.2        Payments That Are Uncertain--Agencies,
                  Amounts, and Reasons                                   24
     3.3        Costs That Federal Agencies       Will   Not Bill--
                  Amounts and Reasons                                    26
            Y




                                      5
FIGURE
 1.1       Federal Agencies That Have Reported
             Costs From the won Valdez-Oil     Spill                         7

 1.2       Distribution    of Reported         Federal     Costs
             by TYPO                                                         8

 1.3       Distribution    of Reported         Federal     Costs
             by Agency                                                      10

 1.4       Distribution    of Department            of Defense
             costs                                                          11

 1.5       Distribution    of Department            of Transportation
             costs                                                          12

 1.6       Distribution    of Department            of the Interior
             costs                                                          13

 1.7       Distribution    of Department            of Commerce Costs       14

 1.8       Distribution    of Costs of Other Agencies                       15

 2.1       Federal Agencies I Cost Reimbursement
             Approaches                                                     18

 2.2       Reimbursement    Process Under 311(k)                            20

 3.1       Status of Reimbursement of Reported                Costs
              (as of November 15, 1989)                                     22




       Y




                               6




                                                .
                                           ’
                                   1, II                                              I
                                                                        :
                                                                                 ii
    .
                                                                                                ,

.




                                                                    AGENCIES REPORTEQ



        0    Nine agencies          incurred         costs   from the spil1.l
              -- By July 1989, about 3 months after the spill,   seven
                 agencies reported that they were already tracking   and
                 accumulating  their costs.
              -- All units within the remaining two agencies were not
                 accumulating     costs because they either considered these
                 activities     to be part of their normal operations   or were
                 not aware they could obtain reimbursement.        As a result of
                 our inquiries,     both agencies began accumulating   cost data.
        Fiaure 1.1. . Federal Aaencie s That Have Reported Costs
         rom the Exxon Valdez Oil 5~3111


                    Agencies accumulating                       Additional   agencies
                    spill-related costs                         accumulating    spill-related
                    by July 1989                                costs after our inquiries

                    l Department of the lnterlor                l   Department of Labor
                    l Department of Commerce                    l   Department of Health and
                    e Department of Agriculture                       Human SetvIces
                    l Department of Defense
                    l Department of Justice
                    l Department of Transportation
                    o Environmental Protection
                        Agency




        lAn additional      agency, the Department of Energy, also reported that
        it incurred some costs to study Alaska's oil production        and
        delivery     systems, but it did not identify   or accumulate these costs
        because it considered the activities       to be part of normal agency
        responsibilities.       Energy is not seeking reimbursement and does not
        expect to be reimbursed.       Because no estimate was available   for
        these costs, we excluded Energy from our list.

                                                         7




                                                                                                    I
l     Nine agencies reported total estimated costs to be $125.2
million   in three main areas.
                           ,
Fiaure 1.2. . Distributzon   of Reaorted Federal Costs bv TV-


                                                              Dagqe    Assessment Costs ($12.3



                                                             Other Costs ($1 .l million)




                                                             Cleanup Costs ($111.8 million)




              Note:Estimatedcosts shown am those incurredas of September30,1989.




          Y
                   C&$ts Reported        bv Federal          Aaen&es          (T&Qg&Jeoten&g

Dollars       in Millions
                                                                        I
                                Cost         for   the    fol.lowrPa        act   ivities
                                                          Damage
Aaencv                                                   assessment                  Other         Total
Department       of
  Defense                       $ 62.8                       $          0            $         0   $ 62.8
Department of
  Transportation                   33.3                                 0                      0     33.3

Department       of the
  Interior                             9.4                        2.6                          0     12.0

Department of
  Commerce                             3.6                        6.0                          0       9.6
Department of
  Agriculture                          1.9                        2.8                          0       4.7

Environmental
  Protection          Agencya          0.6                        0.9                          0       1.5

Department       of
  Justice                                    0                          0                0.7           0.7

Department of
  Health and Human
  Services                             0.1                              0                0.4          0.5

Department       of Labor              0.1                    0                       0               0.1
Total                           $111.8                       Q&L                    $U             $125.2
aThe amount for the Environmental      Protection Agency does not
include about $3.6 million      for a research and development
(bioremediation)     study on the use of microorganisms   to break down
oil.   Exxon agreed to provide direct cash contributions       of about
$1.7 million     for the study.




          Y



                                                   9
l      Four   agencies           accounted            for   94 percent           of the estimated            costs
reported.
 .                                       .
     IX2 1.3, .      Distribut&on                of   ReD0r-t   ed Federal           Costs by Agency




                                                                Department of Transportation ($33.3
                                                                million)



                                                                9.6%
                                                                Department of the Interior ($12.0 million)




                                             -                  7.6%
                                                                Department of Commerce ($9.6 million)


                                                                6%
                                                                Fiie Other Agencies ($7.5 million)

                                                                Departmentof Defense ($62.8 million)
          Nom: Estimated costs shown am those repor@ as of September 30,198Q. Estimated costs for the
          period total $125.2 million.




                                                       10
DEPARTMENTOF DEFENSECOSTS
0      Department     of Defense estimated                costs       totaled            $62.8
c
F'           .I                                                                           osts


                                                              9.6Oh
                                                              Air Force ($6.0 million)



                                                              Army ($14.5 million)


                                                             Navy ($42.3 million)




                                                                                     :
                                                                                .;? ,’
                Now Estfmatedcosts shown are fhow reportedasof September30,196Q.

                                                                                    .




 a
Tble        :
Defense.
Cost                                 e
Navy                                 Provided barrack ships to house cleanup
                                     crews and to support cleanup activities
                                     on nearby beaches.   Also provided oil
                                     skimmers, booms, tow boats, other
                                     equipment, and personnel necessary to
                                     support the removal of oil from the water
                                     and shorelines.
AmY                                 Provided two Corps of Engineers dredges
                                    to help remove oil from the water.   Also
                                    provided medical evacuation equipment and
                                    personnel to support the cleanup effort.
Air Force                           Provided aircraft  to transport  material
                                    and equipment to Alaska.    Also provided
                                    personnel and telecommunications    and
                                    support services for the cleanup effort.



                                               11
DEPARTMENTOF TRANSPORTATIONCOSTS
*       Department      of Transportation        estimated       costs      totaled        $33.3
million.




                                                   Federal Aviation Administration ($0.8
                                                   millbn)




                                                   Coast Guard ($32.5 million)




                           f Activities     Conducted bv the Department                      of

Cost incurred      bv              Descriptioq
Coast Guard                        Responsible for the day-to-day     monitoring
                                   of the cleanup, which included the use of
                                   Coast Guard vessels, aircraft,      and
                                   personnel.    Also, coordinated   federal
                                   assistance  in the cleanup effort.
Federal Aviation                   Provided air       traffic control              services
Administration                     for the area       around Valdez.




       Y




                                            12
           Department             of the Interior            estimated          costs      totaled
j ZlZ.0     million.
  Fiaure        1,6. .        .
                             Distribution         of Department             of the Interior                   costs




                                                                   Fiih and Wildlife Service ($4.4 million)


                                                                  National Park Service ($7.0 million)

                                                                  4.8%
                                                                  Other ($0.8 million)




                 Note: Estimatedcosts shown are those mpwted as of September 30.1999.




 Tab1 1. :
 _e                      T     es
 Interior
 Cost incurred               bv                Descriwtion
 National         Park Service                 Supervised cleanup on National    Park
                                               lands, protected   park resources from
                                               damage, and established    a data base for
                                               future cleanup activities.
 Fish and Wildlife                             Captured sea otters and other animals
    Service                                    affected  by the spill.   Assessed damage
                                               done to fish and wildlife   habitats.
 Other                                         Response and damage assessment activities
                                               of two agencies, including administrative
                                               support activities.


            Y



                                                           13
0      Department of Commerce estimated costs totaled   $9.6 million
(reported by units of the National Oceanic and Atmospheric
Administration).
      e 1.7. . Dist.r.&ution of Dewartment of Comm erce Costs




                                                                   Natbnal Ocean Service ($3.4 million)

                                                                   National Marine Fisheries Service ($5.3
                                                                   million)


                                                                  9.4%
                                                                  Other ($0.9 million)




               Note: Estimated costs shown are those reported as of September 80,1989.



Table      1.5:       Tvwes of Activities                    Conducted bv the Dewartment of
Commerce

ocs                                            Descriwtion
National          Ocean Service                The Hazardous Material       Response Branch
                                               coordinated   all scientific     data on the
                                               oil spill   and advised the on-scene spill
                                               coordinator   about the status of the oil
                                               spill.    This included making nautical
                                               charts for Navy use.
National Marine                                Identified     salmon hatcheries     and marine
  Fisheries  Service                           mammal rookeries      for protection     and
                                               subsequent cleanup efforts,         studied
                                               halibut    habitat  to determine if closures
                                               to fishing     were necessary, and assessed
                                               the damage to the environment          (use of
                                               National Oceanic and Atmospheric
                                               Administration     ships was included).
Other                                          This included the use of a helicopter,
           a                                   weather stations,   and buoys to support
                                               cleanup efforts   and scientific studies.
                                                            14
! 0       Five other        agencies         reported         estimated             costs   totaling         $7.5
i million.




                                                               Environmental Protection Agency ($1.5
                                                               million)

                                                               93%
                                                               Department of Justice ($0.7 million)




                                                              6.7%
                                                              Department of Health and Human
                                                              Services ($0.5 million)
                                                  I
                      I                                       1.3%
                      I                                       Department of Labor ($0.1 million)
                      1                                       Department of Agriculture ($4.7 million)
             Note: Estimatedcosts shown are those reportedas of September30,1989.




         Y




                                                         15




                                                                                                   . _   .


                                                              ,”
cost   incurred    bv        Descrigtion

Department of                Identified        areas for protection  ‘and
  Agriculture                cleanup,        monitored Exxon's cleanup, and
                             assessed        environmental  damage.
Environmental                Monitored the extent of pollution     and
  Protection                 advised the Coast Guard's on-scene
  Agency                     coordinator   on cleanup strategies.
                             Provided technical     support for the on-
                             scene coordinator,    advised the State of
                             Alaska on the disposal of hazardous
                             material,   and performed damage assessment
                             studies.
Department      of Justice   Investigated  civil  and criminal   matters
                             associated with the oil spill     and
                             prepared for potential   future claims or
                             litigation.
Department of Health         The National    Institute     for Occupational
  and Human Services         Safety and Health investigated         worker
                             protection   issues associated with the
                             cleanup effort.       The Indian Health
                             Service provided health care services and
                             subsistence    support for Alaska natives
                             affected   by the oil spill.        The Food and
                             Drug Administration       incurred costs for
                             seafood testing      and inspection    for
                             possible contamination.
Department    of Labor       Investigated    workers' complaints    and
                             injuries    and ensured that worker    safety
                             regulations    were met.




       Y




                                        16
     T OF FUTURE COSTS
                                                  ,,d: ,I


l    The total extent of additional federal cleanup costs       beyond
September 30, 1989, is unknown, but there are indio&ions        that
Exxon will continue to reimburse agencies'  costs that the      Coast
Guard approves.
0      The total extent of additional    federal costs for damage
assessment beyond February 1990 is unknown. Fe-deral agencies
project   additional  costs of $9.2 million     for damage assessment from
October 1989 through February 1990, but Exxon has made no, formal
commitment to pay these costs.
0      The amounts that federal agencies may incur in the future      to
restore spill   areas to their pre-spill state are unknown, and
Exxon has made no formal commitment to pay these costs.




                                  17
                                                  SECTION 2



0    Agencies               have used two approaches                  to seek reimbursement              from
Exxon.
           -- Section 311(k) fund: Seven of the nine agencies have sought
              reimbursement from a fund established under section 311(k)
              of the Clean Water Act.
           --   Direct aareement: Three of the nine agencies have
                established  direct agreements with Exxon (two of the three
                are also using the 311(k) process for costs not covered
                under direct agreements).
a    One agency has not decided                         whether to file reimbursement
claims  for its litigation costs                        because it does not normally seek
such reimbursement.
F7                  :               Aaencies'         Cos         eimbursement       A    roaches



 Agencies   seeking                      Agencies seeking                        Agency that has not
 reimbursement     from Exxon            reimbursement   from Exxon              decided whether to
 using process under                     through direct agreement                seek reimbursement
 section 311 (k) of the                                                          from Exxon
 Clean Water Act

 l   Department of the Interior          l   Department of the Interior          l   Department of Justice
 l   Department of Commerce              l   Department of Commerce
 l   Department of Defense               l   Department of Agriculture
 l   Department of Transportation
 l   Environmental Protection

 l   Department of Labor
 l   Department of Health and
       Human Services




                                                      18
                                                                            I,_(.
                                                                            ,._     5’

                                                                             : 1    1 !

0      The basic   characteristics     of the 311(k)     process          are the
following:
      -- Typically used only for 18federalized*1 spills--those,in
         which the federal government, rather than the spiller,
         assumes charge of the cleanup.
      -- Funded mainly from appropriations,            with the spiller
         reimbursing  the federal government           when federal agencies
         incur costs from the cleanup.
      -- Covers cleanun      costs   (costs   for   removing     oil      from the water
         and beaches).
      -- Does not cover      damaae assessment costs (costs for assessing
         the damage the      spill  has caused to the natural  environment)
         or restoration      costs (costs for restoring   the natural
         environment to      its pre-spill  state).
      -- Administered    by the Coast Guard, whose regulations     require
         that activities    stemming from the spill   be pre-approved     by
         the Coast Guard's on-scene coordinator     in order to be
         reimbursed.
0     After the spill,      the Coast Guard began using           this
reimbursement process       for the Exxon Valdez spill.
     -- Although Exxon took charge of the cleanup, federal
        involvement was substantial   because of the magnitude                            of the
        spill  and the cleanup needed.
     -- From the outset,        Exxon has been paying      for         federal      cleanup
        costs.
     -- The Coast Guard began using the 311(k) fund because it was
        an existing and readily   accessible  fund that the Coast
        Guard was authorized   to administer.
     -- The Coast Guard notified   agencies that would be involved in
        the spill  cleanup to prepare "sufficient,     complete, and
        correct11 reports for all cleanup costs, including      those for
        personnel,  equipment, travel,   and purchases.




      Y




                                       19
                                                                                                                   .



MI-NT                     PROCESSWQER 31l(XL

1.       Agencies         submit       costs      to the Coast Guard for                       approva;l.
2.       The Coast Guard passes approved costs                                     on to Exxon.
3.       Exxon reimburses               the 311(k)           fund for           amounts approved by the
         Coast Guard.
4.       The Coast Guard reimburses agencies                                  from the 311(k)           fund for
         the submitted and approved costs.
                  .
Fiaure     2.2.        ReimbusRement              Process        Under        3ll(kl




                  Federal agencies eubmlt costs              b      l    Costs it approves from other
                  to Coast Quard for approval                             agencies

                                                                    0 Its own costs




                                                                                       Exxon
                                                                                                   I




              Federal agencies receive
              reimbursement passed on by the                            Coast Quard receives




                                                                                                        I
              Coast Quard                                               reimbursement from Exxon




                                                        20
0    Agreement between   Exxon and the Forest    Service   (a Department
of Agriculture agency)
     -- Signed on April 7, 1989, this agreement provided for
        payment of cleanup costs on national       forest lands:
        reimbursement of salaries,     travel,  lodging,  equipment, and
        supplies,     plus an overhead reimbursement of 15.9 percent of
        direct    costs.
l      Agreement between Exxon and four trustees--Departments   of
Agriculture,    Commerce, and the Interior, and the State of Alaska
     -- Signed on April 13, 1989, this agreement provided        for
        reimbursement of damage assessment costs.
     -- Exxon agreed to pay $15 million     in total,   with $8.5 million
        provided initially   and the additional     $6.5 million to be
        provided in $1 million   increments whenever the advance
        balance becomes less than $300,000.
     -- The federal  (Agriculture, Commerce, and the Interior)   share
        of the agreement was $9.2 million    of the full amount and
        $6.3 million  of the first $8.5 million.




      Y




                                  21
                                      STATUS        OF    COST      =X&BURSEMENT


I

III
      l    Status      of cost reimbursement                       as of November 15, 1989
           -- The status             of reimbursement                  falls       into      four      categories.
               1.      Payments received                   from Exxon.
               2.      Bills       being processed                 by agencies             or Exxon.
               3.     Payments that are uncertain   because (1) the Coast Guard
                      or Exxon has determined that the costs reported may not
                      be reimbursable,   (2) Exxon has made no formal
                      commitment to pay for a part of the damage assessment
                      costs reported,   and/or (3) an agency has not decided to
                      bill  Exxon for its costs.
               4.     Amounts that will not be billed                                  because agencies                do not
                      plan to seek reimbursement.
      ]         .                                                                                Costs        (as of
      Fovember 15, 3.989)

                                                                    Payment Uncertain ($21.6 million)




                                                                    .8%
                                                                    Amount That Will Not Be Billed ($1.O
                                                                    million)




                                                                    Bills Being Processed by Agencies or
                                                                    Exxon ($21.8 million)
                         d                                          Payment Received From Exxon ($80.8
                                                                    million)
               Note: Estimated costs are those reported as of September 80,1969. Estimated costs for this period
           Y   totaled $125.2 million.


                                                             22
                                                            Ixtnounts
                                  Anwrunt                  uncertain
                                 paid by                    or not
                                                          m-

                     $ 62.8       $41.5       $ 4.6           $16.7

1Departmentof
  !lkamportation       33.3        27.0         6.3                   0

1Depaemmtofthe
  Interior             12.0            3.0      8.5                0.5

Departmentof
                           9.6         4.7      2.1                2.8

Department of
 Fqriculture               4.7         4.4      0.2                0.1

Envimmtal
 Protection Agency         1.5         0.2            0            1.3

1Departmentof
  Justice                  0.7            0           0            0.7

1Deparhnentof
  HealthandHuman
  Services                 0.5            0           0            0.5

Department of
 Labor               0.1           0           0.1             0

Total                Q&i&         $80.8       W&




                                       23
PAYMENTUNCERTAIN
0     The approval          of $21.6 million      is uncertain   for    six agencies.
                             s That Are Uncertain--Aaencies,           Amounts.   and
Reasons
Dollars       in Millions
Asencv                        Amount           Reason
Department                     $7.4            The Corps of Engineers
  of Defense                                   provided two dredges, for
                                               removing oil from the water.
                                               Exxon wants to pay skimmer rates
                                               rather than the higher rates for
                                               dredges charged by the Corps,
                                               according to the Coast Guard.
                                7.1            The Coast Guard has asked for
                                               additional   data to support the
                                               amounts billed    for Navy barrack
                                               ships and landing craft and for
                                               Army oil spotting     services.
                                1.8            The Army provided medical
                                               evacuation equipment and personnel
                                               in support of the cleanup effort.
                                               The Coast Guard maintains that the
                                               on-scene coordinator  did not
                                               request or authorize  these
                                               services.
                                0.4        The Air Force provided
                                           telecommunication     services to
                                           coordinate    the Department of
                                           Defense's activities,      according to
                                           Department of Defense officials.
                                           The Coast Guard maintains that
                                           these services were not requested
                                           or authorized    by the Coast Guard's
                                           on-scene coordinator.
Departments                    $3.1        Exxon has made no formal commitment
  of Agriculture,                          to pay more than $15 million    in
  the Interior,        and                 damage assessment costs to federal
  Commerce                                 agencies and the State of Alaska.
                                           As of September 30, 1989, damage
                                           assessment costs incurred by the
                                           federal agencies totaled   $3.1
          Y
                                           million  more than their share of

                                           24
      Acrencv              Amount   Peasor!
                                    the $15 million      Exxon had agreed to
                                    PaYe
      Department of          0.3    The Coast Guard wanted additional
        Commerce                    support for the amounts billed     for
                                    fisheries,     weather, and public
                                    affairs    services.
    / Department      of     0.7    According to agency officials,
    ,   Justice                     Justice does not normally seek
                                    reimbursement of its costs, but it
                                    is tracking  and accumulating  its
                                    costs pending any future
                                    litigation.
      Environmental          0.6    The Environmental    Protection
        Protection                  Agency submitted a bill      to the
        Agency                      Department of Transportation
                                    without any supporting     data or
                                    documentation.    The Coast Guard
                                    requested additional     support for
                                    the bill.
I
I Department of             0.2     According to agency officials,            the
    Health and                      Food and Drug Administration           is
    Human Services                  seeking approval from the Coast
                                    Guard on-scene coordinator         for
                                    costs related to its food
                                    inspection     activities    in the spill
                                    area: the Food and Drug
                                    Administration       is preparing
                                    documentation      to obtain this
                                    approval.




                Y




                                    25
0        Two agencies       will     not submit bills    for    $1.0 million   of their
costs.
   le 3.3. .       Costs That Federal         Aaencies   Will    Not Bill--Amounts    and
PeasQns
Dollars       in Millions
Aqencv                       Amount:           Heason
Department                     $0.7            Interior    established    a data base
  of the Interior                              for evaluating      the impact the oil
                                               spill    would have on its national
                                               park resources in Alaska, according
                                               to agency officials.         These
                                               activities    were initiated     under
                                               Interior's    authority;     and because
                                               they were not coordinated        with the
                                               Coast Guard's on-scene coordinator,
                                               Interior    has no plan to submit them
                                               to the Coast Guard for
                                               reimbursement through the 311(k)
                                               fund.
Department                         0.3         According to agency officials,         the
  of Health                                    Indian Health Service and the
  and Human                                    National    Institute    for Occupational
  Services                                     Safety and Health did not obtain
                                               prior approval from the Coast Guard
                                               for their activities;       hence, these
                                               organizations       have not submitted
                                               bills  because the Coast Guard would
                                               not approve them for reimbursement.




          Y




                                              26
APPENDIX I                                                               APPENDIX I

                          OR CONTmUTORji         TO w.5    FACT   SHE=

   OURczE;s.COmTY.               AND ECONOMICDEVETOPMFNTDIVISION,
PASHINGTON,      D.C.
Ronald J. Maccaroni, Assistant     Director
Steven R. Gazda, Evaluator-in-Charge
Robert G. Taub, Evaluator
OFFICE                           COUNSEL
Jackie     A. Goff,     Senior   Attorney


Randall B. Williamson,  Assignment               Manager
Ronald E. Thompson, Site Senior
Stanley G. Stenersen, Evaluator




(344451)
           Y

                                            27
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