Cleanup Cost May Run Close to $100 Million

The cost of cleaning up Wednesday’s nearly 300,000-gallon oil spill off Huntington Beach is expected to reach tens of millions of dollars, with the bulk to be paid by the owner of the damaged tanker and its insurance carriers.

Cleanup officials said it was much too early to determine what it will all cost. But Coast Guard experts said that, based on their experience with other spills, the cost would certainly be less than $100 million.

New York-based American Trading Transportation Co. will bear the burden of paying cleanup costs and defending lawsuits because it is the sole owner of the disabled tanker.

“The ship’s owner has accepted legal and financial responsibility for the spill,” said Vivian Davis, a spokesman for British Petroleum, which hired American Trading to transport its oil from Alaska to Southern California.

American Trading issued a statement saying it had a $400-million insurance policy with a Norwegian firm to cover claims stemming from the accident.

British Petroleum’s liability is limited because its only connection to the spill was in chartering the American Trader to transport 23 million gallons of oil to Huntington Beach.

Despite their different liabilities, both BP and American Trading sent crews to aid in the cleanup Wednesday.

The financial liabilities surrounding the Huntington Beach spill differ greatly from those that accompanied the nation’s largest oil spill last March at Prince William Sound in Alaska.

Exxon Corp. owned the tanker that dumped 10.92 million gallons of oil into the sound, which devastated a chunk of Alaska’s coastline and much of the marine life there.

Because it owned the vessel, Exxon has had to assume many of the costs associated with cleaning up Alaska’s shoreline. So far, the company has placed the bill--for itself and others--at $2 billion, not including any liability from the more than 150 lawsuits Exxon is facing.

Estimates of cleaning up the oil off Huntington Beach were hard to come by Wednesday because the operation is still in the early stages and any drastic change in weather conditions could cause the situation to worsen.

“There are many variables,” said David Stith, president of Underwater Technics, a Philadelphia-based marine salvage and pollution company. “I have handled spills that we have anticipated would only cost several million dollars and we exceeded that by a factor of 10.”

The Coast Guard said, however, that it expects the final tally to be somewhere in the tens of millions of dollars.

“There isn’t any history to support more than $100 million” on such a spill, said Ron Dixon, a senior program analyst for the Coast Guard in Washington.

American Trading President Sanford V. Schmidt said he would be shocked if the bill was higher than $100 million.

“God forbid,” he said. “We haven’t had a drop of oil come to the shore yet. If that costs hundreds of millions of dollars, I’m in the wrong business.”