Government And Oil Industry Begin Battle Over Oil Spill Assessments

The National Oceanic and Atmospheric Administration (NOAA) has fired the first round in the potentially long and bitter battle over oil spill damage assessment between the U.S. government and the oil transport industry.

NOAA has recently published its attempt to formulate a logical set of rules on oil spill assessment in an advanced notice of proposed rulemaking in the Federal Register. The cornerstone of NOAA's controversial policy is its recommended use of the contingent valuation methodology (CVM) to calculate the value of a particular resource to individuals who do not use or plan to use it. In simpler terms, CVM can be used to assess the damage caused by an oil spill to the public's general welfare. While NOAA and several environmental groups believe that CVM is the only logical answer to accurate oil spill damage assessment, the oil transport industry sees it as yet another government-sponsored penalty resulting from the Oil Pollution Act of 1990.

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