Marine oil pollution

Bill McCormick, Science, Technology, Environment and Resources Section

The issue of marine oil pollution has become topical with several major oil spills occurring in 2009 and 2010. Despite improvements in control technologies, spills can have a significant impact on coastal and marine environments and thus on the livelihoods of those in the fishing and tourism industries. The Australian Maritime Safety Authority coordinates the response to oil spills under the National Plan to Combat Pollution of the Sea by Oil and Other Noxious and Hazardous Substances.

Recent oil well blowouts

The Montara Wellhead Platform blowout on 21 August 2009 resulted in the spillage of oil and gas into the Timor Sea. The spill lasted 105 days until a relief well was drilled and the well could be capped. The rig operator (PTTEP Australasia) initially estimated that 64 tonnes per day (400 barrels) of crude oil were being lost but no accurate estimate was ever made of the spillage. The oil slick caused damage to the waters and coastline of Indonesia and East Timor. In November 2009 the Australian Government set up the Montara Commission of Inquiry. The Commission report was submitted to the Minister for Resources and Energy in June 2010, who has not yet released it publicly.

On 20 April 2010, in the Gulf of Mexico, a blowout caused an explosion and fire on the Deepwater Horizon drilling rig at BP’s Macondo Prospect. The leak was finally stopped on 15 July 2010. The failed blowout preventer was replaced in early September 2010. Initially between 53 000 and 62 000 barrels of oil were leaking daily, although this decreased over time. The total spill is estimated to have been 4.9 million barrels. An estimated 6.4 million litres of dispersant were sprayed on the surface of the water or added at the wellhead at the seafloor. Thirty seven per cent of the US federal waters in the Gulf were closed to fishing at the height of the spill. In June 2010 BP agreed to set up a $20 billion claims fund to cover the liabilities for the spill. By September 2010 BP had spent an estimated $8 billion on the clean-up.

Recent ship oil spills

Significant shipping traffic occurs through the Great Barrier Reef (GBR) Region and along the east coast of Australia. In 2009 the cargo ship, the Pacific Adventurer, leaked more than 270 tonnes of fuel oil which polluted the beaches of Moreton Island, Bribie Island and the Sunshine Coast. The Shen Neng 1, a bulk coal carrier that ran aground, spilled three tonnes of fuel oil and gouged a three-kilometre long channel in the reef in April 2010. A Pacific Adventurer-sized spill within the GBR Marine Park could have damaged a significant area of reef.

Compulsory pilotage has been introduced for specific routes through the northern portion of the GBR and the Torres Strait. There have been calls for extension of this pilotage for significant portions of shipping routes within the rest of the GBR Region. The Shen Neng 1 was off course by 12 kilometres. As part of the response to improve safety issues arising from the Shen Neng grounding, the Australian Maritime Safety Authority decided against extending compulsory pilotage within the GBR and instead extended the current coverage of the Reef Vessel Traffic Service to the southern boundary of the GBR.

In 1992 the International Convention for the Prevention of Pollution by Ships made it mandatory for new oil tankers ordered after 1993 to be fitted with double hulls to reduce the risk of oil spills. More recent amendments require the phasing-out of single hull tankers by 2010.

Environmental impacts

Oil spills affect marine life through the direct toxicity of oil, by the smothering effects of the oil on plants and animals, and by coating beaches and rocky shore habitats. The toxicity and physical properties of oil change over time. Chemicals used to disperse oil and increase the rate of breakdown can themselves be toxic to marine life. There are long-term impacts of oil spills and they need to be assessed. The Australian Government and PTTEP Australasia, in response to the Montara oil spill, have agreed to a two to ten year monitoring plan that includes scientific studies to provide information on marine life, wildlife and habitats, water quality and shoreline ecology.

Oil spill compensation

There are limits to the amount of compensation that shipping companies and oil exploration companies are liable for under international conventions.

Under the Civil Liability Convention tanker owners are required to maintain insurance to cover pollution damage up to a maximum of $170 million. Where the damage exceeds this limit the Convention on the Establishment of an International Fund for Compensation for Oil Pollution provides additional compensation of up to $1.2 billion. For non-tankers, the Bunker Convention provides liability based on ship size, so a 30 000 tonne ship would be liable for $23 million.

As part of the permit/approval process, the operators of Montara and other offshore oil wells are required to maintain adequate insurance to cover clean-up costs or other remediation effects of oil spills but not for compensation for environmental damage.

In July 2010, Indonesian President Yudhoyono said he would seek compensation from PTTEP Australasia for seaweed farmers and fishermen whose livelihoods were affected by the Montara oil spill—this may amount to over $2 billion. East Timorese President Ramos-Horta was also seeking compensation from the company and the Australian Government for damage to the marine environment in East Timor.

It would seem there is a need for a broader regulatory system for compensation of pollution damage covering offshore oil exploration and production similar to the Conventions that cover shipping.

Impact on offshore oil exploration

After the recent well blow-outs, the US Federal Government and the Australian Government responded but with several differences. The depth of water in which these wells were drilled was significantly different, with Montara being drilled in about 80 metres of water while the Macondo well was drilled in about 1500 metres. Wells are being drilled in increasingly deep water, creating significant difficulties in controlling any blows-outs, as the Macondo disaster demonstrated.

Unlike the Australian Government, which continued to award offshore exploration permits while waiting on the recommendations of the Montara Commission of Inquiry, the US Government ordered a six-month moratorium on deep water drilling while existing rigs were being inspected. A US Federal Court Judge in New Orleans blocked the ban but the ruling is subject to appeal. Amendments to legislation presently before the US Congress could bar companies from access to offshore areas if the companies have been heavily fined for air or water pollution.

Comments

Deep water oil exploration presents significant issues as to how to respond to blow-outs. The compensation implications of spills such as from Macondo can be potentially catastrophic for all but the largest oil companies. Will the Australian Government be liable to cover any shortfall?

Library publications and key documents

Australian Maritime Safety Authority, Major oil spills in Australia, http://www.amsa.gov.au/Marine_Environment_Protection/Major_Oil_Spills_in_Australia/

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