McCarthy Supports Stiffer Fines for One-Hull Tankers

Saying the oil industry has failed to guard against oil spills, Lt. Gov. Leo T. McCarthy endorsed a proposal Friday designed to make up for the industry’s “sloppy mismanagement practices.”

McCarthy praised pending legislation that would encourage companies to run only double-hulled tankers in California waters, saying the recent Huntington Beach spill could have been prevented if the American Trader oil tanker had a double hull.

With the dry-docked tanker as a backdrop, McCarthy endorsed amendments to a bill that would double fines for spills involving a single-hulled vessel.

The Oil Spill Prevention and Response Act has picked up support from state legislators since the Feb. 7 spill, McCarthy said, and proponents have decided to beef up penalties to pressure companies to take extra precautions.

“We’re telling British Petroleum and the rest of the oil industry very simply: Double your hulls or we’ll double your fines,” McCarthy said.

Companies now face no penalties for oil spills in California. British Petroleum, which operated the American Trader, would face $8 million in penalties if the legislation had been in place when the spill occurred, McCarthy said.

The Coast Guard maintains that the American Trader spill would not have happened if the vessel had been double-hulled, McCarthy said. More than 400,000 gallons of Alaskan crude oil fouled 12 miles of Southern California beaches after the tanker’s anchor tore a gash in the forward hull.

If the legislation becomes law, the fines for a spill from a single-hulled ship would be $20 per gallon, or $60 per gallon in cases of gross negligence. The penalties for double-hulled vessels would be $10 per gallon, or $30 per gallon if gross negligence caused the spill.

McCarthy also called on the American Trading & Transportation Co., owner of the American Trader, to set an example for the oil industry by voluntarily retrofitting the tanker with a double hull.

The 811-foot vessel arrived Thursday in San Francisco, where it will undergo repairs.

The legislation, proposed by Assemblyman Ted Lempert (D-San Mateo), would also establish a $500-million emergency fund to finance state response efforts after a major spill.

Oil companies would increase the fund by paying a fee of 50 cents per barrel of oil, Lempert said, conceding that the industry would likely pass on the cost to consumers. He estimated the fee would translate into a quarter-cent increase per gallon at the gas pump.

The proposal, which Lempert said is designed to make it “economically intolerable for companies to have oil spills,” would also require ships without double hulls to carry 50% more liability insurance to pay for any damages caused by a spill.

A traffic control system would be created along the coast and tug escorts would accompany all tankers, McCarthy said.

The bill, AB 2603, is scheduled to come before the Assembly Natural Resources Committee on Monday.

McCarthy also acknowledged that the spill-prevention legislation would probably translate into higher gasoline prices, but said the strategy is preferable to facing the enormous costs of a spill like the Exxon Valdez disaster in Alaska last year.