Funding for the state agency in charge of oil spill prevention and response is projected to go into the red within three years if no action is taken by the Alaska Legislature.
The Department of Environmental Conservation’s Spill Prevention and Response Division, known as SPAR, is the agency in charge of oil spill prevention and response capabilities for Alaska.
SPAR reviews and approves oil spill prevention, response and contingency plans for oil terminals, pipelines and other oil industry facilities. SPAR is also responsible for ensuring a rapid spill response to protect human health and the environment.
SPAR’s programs are supported by a nickel surcharge added to each barrel of oil produced in Alaska. That revenue, known as the “470 Fund,” pays for prevention program costs as well as costs the state would incur in the event of an oil or other hazardous material spill. One penny per barrel of oil funds the ability for SPAR to respond to spills and is capped at $50 million. Four cents per barrel goes towards prevention and funds the day to day activities of SPAR. The prevention account has no cap.
Over the years the funds available to SPAR have been reduced by a substantial amount due to inflation, decreased oil through the pipeline, and diversion of funds into other programs such as contaminated site cleanups and litigation. An estimate by the department shows the funding will soon fall below the amount needed to keep current operations fully funded.
When the fund was created by the Alaska Legislature in 1986, the amount that could be collected for the response account was capped at $50 million. Almost 28 years later, the cap is still at $50 million. The council’s position is that that the response cap should be increased to match its original value in current dollars and adjusted annually for inflation. In addition, once the increased cap is met on the response side the one cent could be transferred to the prevention account to narrow the inflation gap.
In February, council board members Steve Lewis, John Velsko and Patience Andersen Faulkner, along with council staff and the council’s legislative monitor Doug Mertz met with elected officials in Juneau. They expressed the council’s concern that both prevention work and the state’s ability to respond to a major spill would be compromised by the potential shortfall.