Natural Resource Damage Assessments

SUMMARY: Section 1006(e)(1) the Oil Pollution Act of 1990 (OPA)

requires the President, acting through the Under Secretary of Commerce

for Oceans and Atmosphere, to promulgate regulations for the assessment

of natural resource damages resulting from a discharge or substantial

threat of a discharge of oil. By today's Notice, the National Oceanic

and Atmospheric Administration (NOAA) is seeking comments concerning

the proposed rule.

The proposed rule is for the use of authorized federal, state,

Indian tribal, and foreign officials, referred to in OPA as

``trustees.'' Natural resource damage assessments are not identical to

response or remedial actions addressed by the larger statutory scheme

of OPA. Assessments are not intended to replace response actions, which

have as their primary purpose the protection of human health, but to

supplement them, by providing a process for making the public whole for

injury to natural resources and/or services.

Reviewers of this proposed rule should be aware that NOAA is

subject to a consent decree that requires NOAA to submit a final rule

to the Federal Register by the end of December 1995 (Natural Resources

Defense Council v. United States Coast Guard, No. CV-94-4892, Order for

Partial Settlement (E.D.N.Y. June 26, 1995). Due to the short timeframe

for development of a final rule, reviewers should not expect any

extensions of the comment period.

DATES: Written comments should be received no later than October 2,

1995.

ADDRESSES: Written comments are to be submitted to Linda Burlington or

Eli Reinharz, c/o NOAA/GCNR, 1315 East-West Highway, SSMC #3, Room

15132, Silver Spring, MD 20910.

FOR FURTHER INFORMATION CONTACT: Linda Burlington (telephone (301) 713-

1217) or Eli Reinharz (telephone (301) 713-3038, ext. 193), Office of

General Counsel Natural Resources, FAX (301) 713-1229.

SUPPLEMENTARY INFORMATION: The Oil Pollution Act of 1990 (OPA), 33

U.S.C. 2701 et seq., provides for the prevention of, liability for,

removal of, and compensation for the discharge, or substantial threat

of discharge, of oil into or upon the navigable waters of the United

States, adjoining shorelines, or the Exclusive Economic Zone (an

incident). Section 1006(b) of OPA provides for the designation of

federal, state, Indian tribal, and foreign natural resource trustees to

determine if injury to, destruction of, loss of, or loss of use of

natural resources and/or services has resulted from an incident, assess

natural resource damages, present a claim for damages (including the

reasonable costs of assessing damages), recover damages, and develop

and implement a plan for the restoration, rehabilitation, replacement,

or acquisition of the equivalent of the injured natural resources and/

or services under their trusteeship.

Section 1006(e)(1) of OPA requires the President, acting through

the Under Secretary of Commerce for Oceans and Atmosphere, to

promulgate regulations for the assessment of natural resource damages

resulting from incidents. By today's Notice, NOAA is seeking comments

concerning the proposed rule. The proposed rule is for use by

designated trustees.

On January 7, 1994, NOAA published a proposed rule for assessing

natural resource damages under OPA (59 FR 1061). NOAA received numerous

comments on the January 1994 proposed rule. Based on these comments,

NOAA is considering a fundamental restructuring of the rule to provide

even greater emphasis upon restoration. To ensure that all interested

parties have adequate opportunity to review and comment on this

restructuring, NOAA is reproposing the rule.

There are several significant differences between today's proposed

rule and the January 1994 proposed rule. First, today's proposed rule

eliminates the need for the determination of ``compensable values'' as

a separate component of a natural resource damage claim. However, this

approach does not make the value of natural resources irrelevant. Value

still plays an important role in designing restoration actions that

will truly make the public and environment whole for the types of

natural resource injuries and service losses resulting from an

incident. Second, the proposed rule emphasizes that trustees will be

seeking, on behalf of the public, restoration of what was lost--natural

resources and/or services provided, both human and ecological. Third,

the proposed rule brings selection of restoration actions clearly into

the public planning process. The public process outlined in the

proposed rule affords federal agencies compliance with the requirements

of the National Environmental Policy Act and accomplishes the goal of

public involvement that was sought in the January 1994 proposed rule.

Finally, the proposed rule authorizes trustees to determine appropriate

assessment methods on an incident-specific basis, from a range of

procedures including simplified methods to complex field studies. The

proposed rule removes the distinction between categories of approaches

termed ``expedited'' or ``comprehensive,'' and provides guidance for

choosing appropriate methods based on the incident and the particular

natural resource injuries or service losses of concern. This proposed

rule does, however, require that assessment methods be reliable and

valid in the particular context, and that the methods be cost-

effective.

Prior to issuing a proposed rule, NOAA published eight Federal

Register Notices requesting information and comments on approaches to

developing natural resource damage assessment procedures. 55 FR 53478

(December 28, 1990), 56 FR 8307 (February 28, 1991), 57 FR 8964 (March

13, 1992), 57 FR 14524 (April 21, 1992), 57 FR 23067 (June 1, 1992), 57

FR 44347 (September 25, 1992), 57 FR 56292 (November 27, 1992), and 58

FR 4601 (January 15, 1993). NOAA conducted a public meeting on March

20, 1991, for additional public participation into the process and held

four regional workshops during 1991 in Rockville, Maryland; Houston,

Texas; San Francisco, California; and Chicago, Illinois, to learn of

regional concerns in coastal and inland waters. One workshop held in

Alexandria, Virginia, in November, 1991, provided a forum for early

discussions of various economic issues likely to be raised during the

rulemaking process. In addition, on August 12, 1992, NOAA held a public

hearing on the issue of whether constructed market methodologies,

including contingent valuation (CV), can be used to calculate reliably

passive use values for natural resources, and if so, under what

circumstances and under what guidance. On January 15, 1993, NOAA

published in full the report of the panel commissioned by NOAA to

evaluate the reliability of CV in calculating passive use values for

natural resources. 58 FR 4601.

NOAA published the proposed OPA rule on January 7, 1994 (59 FR

1061). The proposed rule contained a statement of issues of interest to

[[Page 39805]]

stimulate discussions on some of the more intriguing suggestions

considered in developing the proposed rule. Immediately after

publishing the proposed rule, NOAA held six regional meetings in

January and February of 1994. A seventh workshop was held in March of

1994 in Washington, D.C., to summarize the discussions and results of

the six regional meetings. NOAA published an informational notice to

summarize the kinds of concerns raised in the discussions and refine

some issues on which NOAA was particularly soliciting comments. 59 FR

32148 (June 22, 1994).

NOAA received numerous comments on the January 1994 proposed rule.

Based on these comments, NOAA is considering a fundamental

restructuring of the rule to provide even greater emphasis upon

restoration. To ensure that all interested parties have adequate

opportunity to review and comment on this restructuring, NOAA is

reproposing the rule.

This preamble is organized in the following manner: the

Introduction gives an overview of the proposed rule and is followed by

a discussion of each of the subparts of this proposed rule. Subpart A

provides a general introduction, subpart B describes trustee

authorities, subpart C gives definitions pertinent to this proposed

rule, subpart D describes the Preassessment Phase, subpart E describes

the Restoration Planning Phase, and subpart F describes the Restoration

Implementation Phase. Finally, the preamble provides a general summary

of the comments on the January 1994 proposed rule.

INTRODUCTION

I. Goal of OPA: Focus on Restoration

The goal of OPA is to make the public and environment whole for

injury to, destruction of, loss of, or loss of use (injury) of natural

resources and/or services resulting from an actual or substantial

threat of a discharge of oil (OPA sec. 1002(b)(2)(A)). This goal is

achieved by planning and implementing appropriate actions to restore,

rehabilitate, replace, or acquire the equivalent of injured natural

resources and/or services (restore). The purpose of this proposed rule

is to provide a framework for conducting sound natural resource damage

assessments (NRDAs or assessments) that achieve restoration under OPA

for incidents.

This proposed rule emphasizes several processes to achieve the goal

of restoring injured natural resources and services: (1) Identification

and evaluation of injuries to natural resources and/or services; (2)

employing assessment methods relevant to the circumstances of a

particular incident; (3) identification and evaluation of restoration

alternatives; and (4) involvement of the public in the process of

selecting restoration actions appropriate for a given incident.

NOAA believes that an NRDA process that meets the essential

procedural elements of identifying and evaluating relevant injuries and

restoration alternatives, and soliciting public input will accomplish

three major goals: (1) Involve the public in the decision of what

actions will make them whole; (2) ensure that appropriate scientific

procedures and methods for determining restoration actions for a given

incident are followed; and (3) reduce transaction costs.

NOAA recognizes that restoration planning by federal trustee

agencies is subject to the requirements of the National Environmental

Policy Act (NEPA) (42 U.S.C. 4321 et seq.), except when a categorical

exclusion applies. However, NOAA believes that the process identified

in this proposed rule mirrors the decisionmaking process embodied in

NEPA, without requiring significantly different steps or products than

those envisioned in OPA. Thus, compliance with the procedures set forth

in the proposed rule would fulfill the requirements of NEPA. Steps and

products that are analogous under OPA and NEPA are identified in a

diagram in Appendix A at the end of the preamble.

Finally, NOAA has developed guidance documents on various aspects

of the NRDA process. These guidance documents are available in draft

on: Preassessment, injury assessment, restoration, compensation

formulas, and NEPA compliance (citations for the documents are included

in the Bibliography at the end of this preamble). These draft documents

are available from the address at the front of this preamble. The

guidance documents are being prepared in conjunction with this

rulemaking to provide additional technical information to those

performing assessments under OPA and other interested members of the

public. These documents will not constitute regulatory guidance, nor

will they have to be followed for a damage assessment to be conducted

in accordance with these regulations. The documents, in their final

form, will be made available through a public information distribution

service.

II. Overview of the Restoration Planning Process: NRDA Under the

Proposed Rule

Regardless of the scope or scale of the incident, the restoration

planning process provided in this proposed rule is generally the same.

In the Preassessment Phase, trustees must first determine threshold

issues that establish their authority to begin the NRDA process, such

as: (1) Whether OPA is applicable (e.g., did the incident involve

oil?); (2) whether an exclusion from liability under the statute

applies (e.g., natural resources were affected by a discharge from a

public vessel); and (3) whether natural resources under their trustee

authority were potentially affected by the incident. Trustees then

assess whether injuries will be adequately addressed through response

actions, or whether further action is warranted to consider the need

for additional restoration.

If further action is justified, the trustees prepare a ``Notice of

Intent to Conduct Restoration Planning,'' or ``Notice.'' Based on

information available at this early stage of the assessment process,

the Notice may also describe the trustees' proposed strategy for

assessing injury and determining appropriate restoration actions. This

proposed rule advocates using injury assessment procedures that

directly provide information on restoration and are cost effective.

Once the Notice is published, trustees continue with the injury

assessment component of the Restoration Planning Phase, in which

trustees evaluate natural resource and/or service injuries. Following

injury assessment, trustees determine the type and scale of restoration

to address the injuries. Restoration under the proposed rule includes

two components: (1) Primary restoration--actions taken to return the

injured resources and services to baseline, including the natural

recovery option, and (2) compensatory restoration--actions to make the

environment and public whole for resource services lost from the date

of the incident until recovery of the injured resources. The type and

scale of compensatory restoration are related to the type and scale of

primary restoration selected. Scaling of appropriate compensatory

restoration actions is accomplished on a service-to-service comparison

to services lost as a result of the incident, or through valuing the

loss of the services and gains from compensatory restoration projects

where service-based scaling is not feasible.

Trustees develop a Draft Restoration Plan, identifying and

evaluating a

[[Page 39806]]

reasonable range of alternatives for restoring the injuries, including

a no-action alternative, and describing the trustees' tentative

preferred alternatives. The Draft Restoration Plan is subject to public

review and comment, after which a Final Restoration Plan is developed.

The Final Restoration Plan is then implemented during the Restoration

Implementation Phase, either through an agreement by the parties

responsible for the incident (responsible parties) to implement

restoration with trustee oversight, through immediate payment of the

demand for restoration costs by the responsible parties, or through

litigation to collect restoration costs.

The timing and degree of public involvement in the assessment

process, and the type of documents produced at various stages of the

process, will be tailored to the scope and scale of the incident. For

instance, for small incidents assessed with a model or compensation

formula, it may be appropriate to compress the Notice and draft

restoration documents into a single document that reports the inputs

used and results of the model application, along with the alternate and

preferred restoration actions. In contrast, larger incidents that

require in-depth site-specific studies to identify and evaluate

appropriate restoration may require a series of plans that would

benefit from public notice and/or comment. In addition, when trustees

propose to implement part of a regional restoration plan for a given

incident and that plan has previously been available for public review

and comment, trustees may choose only to notify the public of the

decision to link a given incident to the regional plan.

III. Issues of Interest

A. Evaluating a Reasonable Range of Restoration Alternatives

Restoration actions under this proposed rule are defined to include

activities designed to make the environment and public whole for

natural resources and/or services injured as a result of an incident.

Restoration is defined to include primary restoration actions that

return injured natural resources and services to the conditions that

would have existed in the absence of the incident, and compensatory

restoration actions that make the public and the environment whole for

interim service losses. Thus, throughout this proposed rule,

``restoration'' refers to any appropriate combination of primary and

compensatory restoration actions designed to address natural resource

and service injuries.

NOAA proposes that trustees identify a reasonable range of

restoration alternatives and then evaluate those alternatives based on

such factors as: (1) Extent to which each alternative can return the

injured natural resources and services to baseline and make the

environment and public whole for the interim service losses; (2) extent

to which each alternative improves the rate of recovery; (3) extent to

which each alternative will avoid additional injury; (4) level of

uncertainty in the success of each alternative; (5) extent to which

each alternative benefits more than one natural resource and/or

service; (6) cost of each alternative; (7) effects of each alternative

on public health and safety, and the environment; and (8) whether any

alternative violates any laws or regulations.

Like NEPA, this proposed rule only requires that a reasonable range

of restoration alternatives be considered. Under OPA, trustees are

directed to return injured natural resources and services to the

condition that would have existed in the absence of the incident. Thus,

trustees must evaluate possible restoration actions in light of their

effectiveness in returning natural resources and services to baseline.

The lowest cost restoration alternative may not always represent the

preferred alternative. Instead, the costs of restoration alternatives

should be evaluated by comparing the costs of alternative actions to

the relative effectiveness of each in returning injured natural

resources and services to baseline taking interim service losses into

account. Also like NEPA, trustees following this proposed rule are

required to consider a no-action alternative.

B. Regional Restoration Planning

Regional restoration planning is encouraged under this proposed

rule as a mechanism to plan and implement restoration for small

incidents resulting in natural resource and/or service injury, where

incident-specific restoration is impractical. The regional restoration

planning process can pull together proposed or desired projects from

numerous public entities, where such projects would be expected to

restore the types of natural resource and service injuries anticipated

from incidents in particular geographic areas. Regional restoration

plans will shorten the assessment schedule and reduce overall costs,

especially for small incidents. NOAA proposes the NEPA programmatic

environmental impact analysis as a model for evaluating regional

restoration plans.

C. Technical Adequacy of Assessment Procedures

Under this proposed rule, the type and scale of technical and

scientific analyses should be focused on information requirements for

determining restoration given the circumstances of a particular

incident. In making the determination of technical adequacy, trustees

should be guided by current understanding of best scientific practices.

However, when choosing among assessment procedures and methods that

could provide greater levels of certainty or precision in assessment

variables, trustees should evaluate the costs and time requirements of

more in-depth procedures, expected increase in precision, and

likelihood that greater precision will result, relative to the expected

total damages for the injury being evaluated. Thus, for a given set of

circumstances, use of a model or extrapolation from the scientific

literature may be more appropriate for determining restoration than

generating site-specific field data. This analysis of increased costs

associated with expected increases in amount and quality of assessment

information provided by different methods will ensure that assessment

procedures and methods chosen are reasonable.

D. Public Participation

OPA section 1006(c)(5) requires that the restoration process be

open to the public before final decisions are made and actions taken.

The restoration planning process should provide an adequate opportunity

for public participation and addressing public concerns.

In light of this requirement, NOAA is proposing an open planning

process. To prevent delays in the restoration process at the time of an

incident, trustees should afford the public an opportunity to be

involved in planning activities prior to an incident (i.e., pre-

incident planning and regional restoration plan development). If pre-

incident public planning is not possible, the public must, at a

minimum, be invited to participate in the development of draft and

final incident-specific restoration plans. The nature of public

participation will depend on the issues and actions being considered;

however, common elements include: (1) Notice of the decision to proceed

with restoration planning; (2) notice and comment on a Draft

Restoration Plan; and (3) notice of a Final Restoration Plan. Public

meetings may be appropriate in certain circumstances.

[[Page 39807]]

In regard to the development of a restoration plan, NOAA believes

that effective public participation enhances the probability that

appropriate restoration actions will be implemented. Solicitation of

comments from members of the scientific community, including natural

resource injury, restoration, and economic experts, as part of a public

participation program may supplement expert peer review of trustee

strategies, plans, and tentative decisions. This type of public

participation would also satisfy NEPA's requirement that the public be

involved in assessing the environmental consequences of major federal

actions. NOAA also believes that Restoration Plans developed under this

proposed rule serve as Environmental Impact Statements (EIS) for

purposes of NEPA. Examples of restoration plans that follow the NEPA

EIS format are listed in the bibliography at the end of this preamble.

Cooperative participation by responsible parties in the restoration

planning process is consistent with the goals of an open process. Thus,

NOAA believes that responsible parties should be invited to participate

in the NRDA process, where such participation will not impede

fulfilling the trustees' mandate to restore expeditiously injured

natural resources and services.

DISCUSSION

Subpart A--Introduction

I. Purpose

The purpose of this proposed rule is to promote expeditious

restoration of natural resources and services injured as a result of an

incident. To fulfill this purpose, this proposed rule provides an

administrative process for involving interested parties, a range of

assessment procedures for identifying and evaluating injuries to

natural resources and/or services, and a process for selecting

appropriate restoration actions from a range of alternatives.

II. Scope

This proposed rule is available for use by designated federal,

state, Indian tribal, and foreign natural resource trustees to

determine appropriate actions to restore natural resources and services

injured by a discharge, or substantial threat of a discharge, of oil

into or upon navigable waters or adjoining shorelines or the Exclusive

Economic Zone.

The Secretaries of the Interior, Commerce, Agriculture, Defense,

and Energy are the primary federal natural resources trustees. The

roles and responsibilities of the various federal departments regarding

NRDA vary according to their resource management responsibilities and

the susceptibility of these natural resources and/or services to

injury. Designation of federal trustees and broad guidelines describing

trustee functions are addressed in subpart G of the National Oil and

Hazardous Substances Pollution Contingency Plan (NCP), 40 CFR part

300.600. For state trustees, most governors have delegated trustee

responsibilities to specific state agencies, as provided under OPA.

III. Effect of Using These Regulations

Assessments performed by federal, state, or Indian tribal trustees

in accordance with these regulations receive the evidentiary status of

a rebuttable presumption provided by OPA section 1006(e)(2). In brief,

this presumption means that the responsible parties have the burden of

proving that the trustees' claim and determinations are incorrect. This

presumption applies to all assessment procedures developed under this

proposed rule. However, where trustees use procedures that are

determined not to be in accordance with this proposed rule, trustees

will not obtain a rebuttable presumption for that portion of the

assessment. Assessments performed by foreign trustees in accordance

with these regulations are not entitled to a rebuttable presumption.

IV. Coordination

A. General

Coordination among all parties affected by an incident is crucial

to an efficient and effective assessment. Coordination, from pre-

incident planning through joint and cooperative assessment, restoration

planning and implementation, can assist in decreasing the time until

restoration is implemented, preventing double recovery of damages, and

ensuring that assessment costs are reasonable. More detailed discussion

of some aspects of coordination appears in Appendix B at the end of

this preamble.

B. Coordination Among Trustees

This proposed rule encourages trustees with shared or overlapping

natural resource management and protection jurisdiction to coordinate

their NRDA activities, including coordination in pre-incident planning.

Coordination among trustees will avoid duplicative claims for damages,

address shared trust resource concerns, and result in more effective

funding of assessment work. Trustees must designate a Lead

Administrative Trustee for each joint assessment under this proposed

rule and the NCP. This rule encourages trustees to consider cooperation

agreements such as memoranda of understanding, to structure both non-

incident and incident-specific activities. Trustees may act

independently when there is a reasonable basis for dividing NRDA

responsibilities, so long as there is no double recovery of damages for

the same incident and natural resource. However, independent

assessments may not be in the best interests of the trustees, the

responsible party, or in achieving prompt restoration of injured

resources.

C. Coordination With Response Agencies

Coordination among trustees and response agencies can result in

reducing or eliminating natural resource and/or service injuries

residual to the cleanup. ``Response'' or ``cleanup'' refers to those

actions taken under the NCP to protect public health and welfare or the

environment when there is a discharge or a substantial threat of a

discharge of oil, including actions to contain or remove discharged oil

from water and shorelines.

D. Coordination With Responsible Parties

Active and early involvement of responsible parties may eliminate

some of the problems trustees have encountered immediately following an

incident, such as lack of funding, personnel and equipment. In

addition, a joint trustee-responsible party assessment may be more

cost-effective and avoid duplicate studies. Therefore, the proposed

rule requires the trustees to invite the responsible parties to

participate in the NRDA process.

The proposed rule leaves determination of the timing and extent of

responsible party participation to the judgment of the trustees on an

incident-specific basis. While active responsible party involvement is

the preferred method of conducting assessments, it may not be

appropriate for trustees to delay assessment activities while

negotiating the terms of responsible party involvement.

In making a determination to allow responsible party participation

in the assessment, trustees should consider factors including, but not

limited to: (1) Whether responsible parties have been identified; (2)

the willingness of responsible parties to participate in the

assessment; (3) the willingness of responsible parties to fund

assessment costs of the trustees; and (4) the willingness and ability

of responsible parties to conduct assessment activities in a

technically sound and timely manner.

[[Page 39808]]

E. Coordination With the Public

A major goal of OPA is to involve the public in the restoration

planning process. The proposed rule requires trustees to provide public

notice of their intent to conduct restoration planning, and allow for

public review and comment on the Draft Restoration Plan. Depending on

the nature of the incident and expected assessment activities, comment

may be solicited at additional stages to ensure the best information

base is available to trustee decisionmakers.

In highly complex incidents, or those incidents that are expected

to involve multi-year efforts, trustees may have an opportunity to set

up one or a series of public meetings to ensure opportunity for public

input. Attendance should be encouraged by all parties that are

involved, participating, or interested in the incident.

Trustees may also conduct public outreach on non-incident-specific

restoration issues. Trustees are responsible for representing the

public's interests in natural resources and/or services affected by

incidents. Trustees can better fulfill this trust responsibility by

informing the public about NRDA provisions in statutes and the

processes trustees undergo in assessing injury and determining

restoration actions.

To the fullest extent practicable, trustees should implement public

outreach, which will:

(1) Encourage a broad understanding of restoration and build trust,

thus allowing for quicker recognition and support of the restoration

process overall;

(2) Provide opportunities for joint fact-finding, improving the

collection of quality data; and

(3) Incorporate public concern, providing for more effective

restoration planning.

V. Considerations for Facilitating Restoration

A. General

Pre-incident planning and regional restoration plan development are

tools trustees should consider as means to enhance successful

restoration planning and implementation. More extensive discussion on

these topics is included in Appendix B at the end of this preamble.

B. Pre-Incident Planning

NOAA believes that commitment of time, funding, and personnel to

planning prior to an incident will help ensure that the assessment

process results in technically sound and cost-effective plans. Pre-

incident plans may: identify natural resource damage assessment teams;

establish trustee notification systems; identify support services;

identify natural resources and/or services at risk; identify regional

and area response agencies and officials; identify available baseline

information; establish data management systems; and identify assessment

funding issues and options. Potentially responsible parties should be

included in the pre-incident planning process to the fullest extent

practicable.

C. Regional Restoration Planning

OPA emphasizes making the environment and public whole for natural

resource and/or service injuries. Where practicable, incident-specific

restoration is the preferred alternative to accomplish this goal.

However, for many incidents, including smaller incidents, such

incident-specific action may be impractical. Yet, the impact of small

incidents may still represent a significant concern for trustees. Thus,

to achieve OPA's mandate to restore injured natural resources and

services regardless of the type and scale of those injuries, trustees

are encouraged to use or modify existing regional restoration plans, or

develop new regional restoration plans. Planning in a regional (e.g.,

ecosystem or watershed) context is appropriate so long as natural

resources and/or services comparable to those expected to be injured by

an incident are addressed in the plans.

VI. Review of the Regulations

Although OPA does not contain a specific provision for the update

of these regulations, NOAA believes that they should be reviewed on a

regular basis to keep the procedures current with new developments.

Thus, NOAA is proposing that these regulations be reviewed and revised,

as appropriate, at least every five years.

Subpart B--Authorities

I. Relationship to Other NRDA Regulations

A. CERCLA Regulations

The Department of the Interior (DOI) has developed regulations for

assessing natural resource damages resulting from hazardous substance

releases under the Comprehensive Environmental Response, Compensation,

and Liability Act of 1980 (CERCLA) (42 U.S.C. 9601 et seq.), and the

Clean Water Act (33 U.S.C. 1321 et seq.). The CERCLA regulations are

codified at 43 CFR part 11. The CERCLA regulations originally applied

to natural resource damages resulting from oil discharges as well as

hazardous substance releases. This proposed rule will supersede 43 CFR

part 11 with regard to discharges of oil and substantial threats of a

discharge of oil, when final. Assessments commenced under the CERCLA

regulations before the effective date of the final OPA rule may be

completed in compliance with the CERCLA regulations, and will be deemed

conducted in accordance with the OPA regulations.

If natural resources and/or services are injured by a discharge or

release of a mixture of oil and hazardous substances, trustees must use

43 CFR part 11 in order to obtain a rebuttable presumption.

B. State, local, and Indian tribal NRDA Procedures

Many states have developed their own NRDA statutes and regulations.

When state, local, or Indian tribal NRDA procedures are determined to

be in accordance with this proposed rule, use of these procedures will

afford the trustees the evidentiary benefit of the rebuttable

presumption. Under the proposed rule, state, local, or Indian tribal

NRDA procedures are in accordance with the OPA regulations when the

procedures:

(1) Require all recovered damages to be spent on restoration,

subject to a plan made available for public review and comment, except

for those damages recovered to reimburse trustees for past assessment

and emergency restoration costs;

(2) Determine compensation based on injury and/or restoration;

(3) Are consistent with the standards for the technical procedures

and methods outlined in Sec. 990.51 of this part;

(4) Were developed through a public rulemaking process; and

(5) Do not conflict with OPA or this proposed rule.

II. Relationship to the NCP

The proposed rule would supplement the procedures established under

the NCP for the response to an incident, and provide procedures by

which trustees may determine appropriate restoration of injured natural

resources and services that are not fully addressed by response actions

conducted pursuant to the NCP.

III. Prohibition on Double Recovery

The proposed rule requires trustees to consider the actions of

other trustees with respect to the same incident and natural resources

and the effect of the prohibition on double recovery of damages in OPA

section 1006(d)(3).

[[Page 39809]]

IV. Compliance With Other Applicable Laws and Regulations

NEPA applies to restoration planning by federal trustees, unless a

categorical exclusion applies. NEPA is triggered when federal trustees

issue a Notice of Intent to Conduct Restoration Planning, under

Sec. 990.43 of the proposed rule. NOAA believes that compliance with

the procedures in the proposed rule would fulfill the requirements of

NEPA.

When taking actions under this proposed rule, trustees must comply

with all worker health and safety considerations specified in the NCP

for response actions.

Where an incident implicates trustees' statutory or regulatory

requirements in addition to those in OPA and this proposed rule,

trustees should comply with those requirements. Compliance with all

applicable laws and regulations will help to minimize duplicative and

conflicting efforts. When following procedural requirements other than

those specified by OPA and this proposed rule, trustees should identify

those requirements in the restoration plan. Applicable requirements

that may need to be considered include, but are not limited to the:

Endangered Species Act; Coastal Zone Management Act; Migratory Bird

Treaty Act; National Marine Sanctuaries Act; National Historic

Preservation Act; Marine Mammal Protection Act; worker health and

safety-related acts; and NCP. To the extent that federal trustees can

legally comply with state, local, or Indian tribal procedural

requirements, they should do so.

V. Settlement Authority

Trustees may settle claims for natural resource damages at any

time, provided that the settlement is adequate in the judgment of the

trustees to make the environment and public whole for the injury,

destruction, loss of, or loss of use of natural resources and/or

services that have or are likely to have occurred; with particular

consideration of the adequacy of the compensation to provide for the

restoration of such resources. Sums recovered in settlement of such

claims may only be expended in accordance with a restoration plan that

is made available for public review.

VI. Emergency Restoration

Emergency restoration actions should be considered in situations

where immediate action is necessary to minimize continuing or prevent

additional injury. Although emergency restoration actions may be

considered and implemented by trustees at any time throughout the NRDA

process if the above conditions are met, typically trustees begin

evaluating the need for emergency restoration during response. If

emergency restoration actions have the potential to interfere with the

response, trustees must consult and/or coordinate with response

agencies prior to implementing emergency restoration. Where emergency

restoration actions are not expected to interfere with response

activities, trustees must notify response agencies prior to

implementation of emergency restoration to inform the latter of the

trustees' intended actions and reasoning for believing that no

interference with the response will result.

Trustees must provide notice to the responsible parties of any

emergency restoration actions and invite their participation in the

conduct of those actions within a reasonable timeframe.

Emergency restoration is an exception to the OPA section 1006(c)(5)

requirement that actions be subject to prior public review and comment.

Because of this exception, this proposed rule allows trustees to take

emergency restoration action only if such action is feasible, likely to

achieve the goal of minimizing or preventing injury, and is conducted

at a cost that is not unreasonable. Notifying the public of the

justification for, the nature and extent of, and the results of

emergency restoration actions within a reasonable time following the

actions is consistent with emergency action guidance under NEPA as

well.

The costs associated with evaluating, planning, and implementing

emergency restoration may be claimed as part of the damages claim.

Subpart C--Definitions

There are a number of fundamental terms and concepts that are not

explicitly defined or described in OPA. Interpretation of these terms

and concepts plays a critical role in the NRDA process under OPA.

Relevant definitions in OPA, CERCLA, the Clean Water Act, or other

related laws, and associated regulations, are repeated in this proposed

rule as a matter of reference. Other terms and concepts found in this

proposed rule were developed to be consistent with current usage.

This section concentrates on some of the terms and concepts that

are foundational to the NRDA process under this proposed rule, such as

``injury,'' or terms that do not possess a common meaning.

Baseline

As defined in this proposed rule, the term baseline refers to the

condition of natural resources and/or services that would have existed

had the incident not occurred. Although injury quantification requires

comparison to a baseline condition, site-specific baseline information

may not be required. In many cases, injuries can be quantified in terms

of incremental changes, rather than in terms of absolute changes

relative to a known baseline. For example, Type A models do not require

site-specific baseline information to quantify injury. Rather, the

injury is quantified in terms of incremental adverse changes resulting

from the incident. Similarly, counts of oiled bird carcasses can be

used as a basis for quantifying incremental bird mortality resulting

from an incident.

This proposed rule does not distinguish between baseline,

historical, reference or control data in terms of value and utility in

determining the degree and spatial/temporal extent of natural resource

and/or service injuries. To the extent that baseline data, historical

data, reference data or control data can provide valid information on

which to base a determination of the projected conditions of the

natural resource and/or service in the absence of the incident, these

forms of data may effectively serve as baseline information. Trustees

are encouraged to collect information from the field, laboratory,

literature, models, or any combination thereof.

Types of information that may be useful in determining baseline

include:

(1) Information collected on a regular basis and for a period of

time;

(2) Information identifying historical patterns or trends;

(3) Information from areas unaffected by the incident, that are

judged sufficiently similar to the area of the incident with respect to

the variable being measured; or

(4) Information from the area of the incident after the particular

variable, e.g., interim lost use, has been judged to have recovered.

Exposure

Exposure documentation is required to determine injury under this

proposed rule except when natural resource and/or service injuries are

the result of response activities or the substantial threat of a

discharge of oil. Exposure can be expressed broadly as direct or

indirect contact with the discharged oil. Exposure may be determined,

alone or in combination, through: field investigations; laboratory

exposure studies; transport and fate modeling; or the literature.

[[Page 39810]]

Incident

An incident is any occurrence or series of occurrences having the

same origin, involving one or more vessels, facilities, or any

combination thereof, resulting in the discharge or substantial threat

of discharge of oil into or upon navigable waters or adjoining

shorelines or the Exclusive Economic Zone. When a discharge of oil

occurs, natural resources and/or services may be injured by the actual

discharge of oil or response activities related to the discharge. When

there is a substantial threat of a discharge of oil, natural resources

and/or services may also be injured.

Injury

OPA authorizes trustees to recover damages for ``injury to,

destruction of, loss of, or loss of use of'' natural resources (sec.

1002(b)(2)(A)). Trustees must establish that injury has resulted from

an incident. Under this proposed rule, injury is defined as an

observable or measurable adverse change in a natural resource or

impairment of a natural resource service. Measurable adverse changes

may be projected through use of models or extrapolation techniques.

There are two general bases for determining injury under this

proposed rule. Trustees must either determine that: (1) The natural

resource was exposed, there is a pathway connecting the incident with

the resource, and an adverse change to the natural resource and/or

service has occurred; or (2) for injuries resulting from response

actions or incidents involving a substantial threat of a discharge, an

injury to a natural resource or an impairment of use of a natural

resource service has occurred as a result of the incident. Thus, under

this proposed rule, injury may result from direct or indirect exposure

to oil, as well as from response-related activities, and loss of

services is explicitly included in the definition of injury.

Oil

Under OPA section 1001(23), ``oil'' includes:

Oil of any kind or in any form, including, but not limited to,

petroleum, fuel oil, sludge, oil refuse, and oil mixed with wastes

other than dredged spoil, but does not include petroleum, including

crude oil or any fraction thereof, which is specifically listed or

designated as a hazardous substance under subparagraphs (A) through

(F) of section 101(14) of [CERCLA] and which is subject to the

provisions of that Act.

If a component of a mixed spill is a hazardous substance under

CERCLA, CERCLA and the CERCLA NRDA regulations apply. The definition of

``oil'' under OPA does not cover all petroleum-related products. For

instance, substances whose properties or behavior are substantially

different from oil (e.g., natural gas condensates) are excluded under

OPA. However, substances that are relatively similar (e.g., non-

petroleum oils such as vegetable oils and animal fats) are covered by

OPA. Although the U.S. EPA and U.S. Coast Guard have recognized that

animal fats and vegetable oils are substantially less harmful to the

environment than petroleum-based oils, the preamble to the recent

revisions to the NCP states that ``oil of any kind or in any form''

clearly suggests the inclusion of non-petroleum oils. 59 FR 47386

(Sept. 15, 1994). This conclusion is also consistent with U.S.

Department of Transportation guidance, which states that ``oil''

includes ``petroleum, fuel oil, vegetable oil, animal oil, sludge, oil

refuse, and oil mixed with wastes other than dredged spoil, but does

not include natural gas condensate.'' 49 CFR 194.5. While the mechanism

of injuries by non-petroleum oils may be different than that of

petroleum oils, it is evident, based on current literature, the nature

of such injuries are similar (i.e., death) for both types of oils.

According to EPA guidance, ``oil'' covered by OPA includes: (1)

Crude oil and fractions of crude oil including the hazardous

substances, such as benzene, toluene, and xylene, which are indigenous

to petroleum and its refined products; and (2) hazardous substances

that are normally mixed with or added to crude oil or crude oil

fractions during the refining process, including hazardous substances

that have increased in level as a result of the refining process. (U.S.

EPA Memorandum on the Petroleum Exclusion Under the Comprehensive

Environmental Response, Compensation, and Liability Act, July 31, 1987;

BNA, 1988) Hazardous substances added to petroleum that increase in

concentration through any process other than refining, or added as a

result of contamination of the petroleum during use (including waste

oil), would not be excluded from CERCLA. For example, the presence of

dioxin in oil used as a dust suppressant on highways would bring a

discharge of such a mixture under the jurisdiction of CERCLA, not OPA.

Pathway

Pathways include the medium, mechanism, or route by which the

incident has resulted in an injury. For discharges of oil, a pathway is

the sequence of events by which: (1) The oil travelled through various

components of an ecosystem and contacted the natural resource of

concern; or (2) exposure to oil in one part of an ecosystem was

transmitted to the natural resource of concern, without the oil

directly contacting the natural resource.

Reasonable Assessment Costs

To evaluate the reasonableness of assessment costs, the incremental

increase in assessment information must be reasonably related to the

action's incremental cost. The scale of assessment efforts must be

appropriate in the judgment of the trustees relative to the need for

increased information, which is a highly incident-specific

determination. The costs of an assessment or assessment actions that

are focused on providing information required to determine restoration

requirements must also be judged relative to the extent of injury and

expected restoration costs for the incident. Reasonable assessment

costs also include the administrative, legal, and enforcement costs

necessary to carry out this part. Trustees may recover the reasonable

assessment costs they incur under this proposed rule even if they

ultimately determine not to pursue restoration, provided they establish

jurisdiction under OPA during the Preassessment Phase.

Recovery

Recovery is defined in the proposed rule as the return of injured

natural resources and services to baseline. This concept encompasses

the inherent tendency for natural resource and/or service attributes to

vary over space and time.

Projecting recovery involves determining the likelihood and rate at

which natural resources and/or services will return to baseline. The

availability and quality of baseline information can influence recovery

projections. Trustees should use the best available information that

can be gathered through field or laboratory studies, models, the

literature, and other sources appropriate to the incident or injury to

project recovery.

Restoration

Under this proposed rule, restoration is broadly defined as any

action or combination of alternatives or actions to restore,

rehabilitate, replace, or acquire the equivalent of injured natural

resources and services.

This proposed rule includes the concepts of primary and

compensatory restoration. Primary restoration is human intervention or

natural recovery that returns injured natural resources

[[Page 39811]]

and services to baseline. Compensatory restoration is action taken to

make the environment and the public whole for service losses that occur

from the date of the incident until recovery of the injured natural

resource.

Services

Natural resources are valued in terms of the services or functions

they provide to other natural resources or the public. Thus, under this

proposed rule, services refer to the ecological functions performed by

natural resources or the public benefits derived therefrom. Such

services can be classified as follows:

(1) Ecological services--the physical, chemical, and biological

functions that one natural resource provides for another. Examples

include provision of food, protection from predation, nesting habitat,

and biodiversity, among others; and

(2) Public services--the functions that natural resources provide

for the public. Examples include fishing, hunting, nature photography,

education, and access, among others.

Value

An individual's value of a good is represented by the amount of

other items that the individual is willing to give up to obtain or is

willing to accept to forgo the good. The total value of a natural

resource or service includes direct use values (e.g., values

individuals derive from consuming or viewing a natural resource) and

passive use values (values not linked to direct use, e.g., the value

individuals derive from knowing a natural resource exists). In many

contexts, particularly in markets, value is represented in terms of

units of currency, the commonly accepted form of exchange. However,

value can be measured using a variety of possible measures, including

units of a resource service. In this proposed rule, value can be

measured either in terms of units of resource services or dollar

amounts.

Subpart D--Preassessment Phase

I. Purpose

During the Preassessment Phase, trustees make several critical

determinations that shape the remainder of the assessment. Trustees

must initially determine whether actions under OPA are justified, then

proceed to make early estimates about the types of injury assessment

and restoration actions that may be warranted, based on the

circumstances of a given incident.

II. Determinations

A. Determination of Jurisdiction

In order for trustees to proceed with restoration planning under

OPA, certain conditions must be met:

(1) An ``incident'' under OPA has actually occurred (i.e., there

has been a discharge or substantial threat of a discharge of oil);

(2) The incident does not fall within exclusionary conditions set

forth in section 1002(c) of OPA (e.g., the discharge was not allowed by

federal permit); and

(3) Natural resources under the trusteeship of the trustees have or

may be affected as a result of the incident.

Frequently, the first two conditions are determined by the response

agency; USCG or EPA may have already made these determinations that OPA

applies to the incident before notifying trustees. The third condition,

however, is necessarily determined by each trustee. If any of these

conditions is not met, the trustees may not take additional action

under this proposed rule.

A determination that OPA applies and that a trustee has

jurisdiction to act under OPA may trigger initiation of the NRDA

process.

B. Determination to Conduct Restoration Planning

1. General

The key determination to be made by trustees in the Preassessment

Phase is whether it appears likely that restoration actions should be

pursued by the trustees. This determination depends on the following

conditions:

(a) Injuries likely have resulted or will result from the incident;

(b) Response actions may not adequately address the potential

injuries; and

(c) Feasible restoration actions exist to address the potential

injuries.

If any of the above conditions is not met, trustees may not take

additional action under this part. However, trustees may recover all

reasonable assessment costs incurred up to the point when they

determined that the conditions were not met. If all of the above

conditions are met, the trustees must issue a ``Notice of Intent to

Conduct Restoration Planning'' (Notice). The form and content of this

Notice will vary depending on the circumstances of individual

incidents, and is discussed below.

Other factors to consider during the Preassessment Phase include:

funding, data collection, and opening the administrative record.

Trustees may also need to consider the applicability of the defenses to

liability provided in OPA section 1003 and the monetary caps on

liability provided in OPA section 1004.

2. Identifying Natural Resources and/or Services at Risk

Determining whether natural resources and/or services are, or are

likely to be, injured requires that trustees consider the:

(a) Circumstances of the incident. Factors to consider may include

geographic location, source, type, time and duration, and volume of the

discharge;

(b) Characteristics of the discharge or threatened discharge.

Factors to consider may include physical parameters of the oil;

(c) Characteristics of the natural resources. Factors to consider

may include the natural resources in the area of the incident, the

services they provide, habitat and species types, seasonal implications

on sensitive life stages, and unique ecological components; and

(d) Potential for injury. Factors to consider may include potential

for exposure, plausible pathways, causal mechanisms, and availability

of assessment procedures and data to analyze these factors.

3. Effectiveness of Response Actions in Eliminating Injury

Once trustees ascertain that trust resources and/or services are,

or may be expected to be, injured as a result of the incident, trustees

can make the determination whether these concerns are likely to be

adequately addressed through response actions. If response actions will

not alleviate residual natural resource and/or service injuries,

trustees must determine whether there is a need and potential for

restoration actions to address residual impacts, and begin identifying

these actions, to facilitate the Restoration Planning Phase of the NRDA

process.

4. Early Identification of Potential Restoration Actions

Whenever practicable, potential restoration actions need to be

identified as early in the NRDA process as possible. Such

identification is needed to help justify the decision to proceed with

an assessment that will lead to restoration actions, and provide focus

for designing injury assessment studies that will produce useful

information on the type and scale of restoration needed for injured

natural resources and services. Some considerations important to the

early identification of restoration actions include:

[[Page 39812]]

(a) Potential nature, degree, and spatial/temporal extent of

injury, with or without restoration;

(b) Need and potential for restoration;

(c) Potential scope and scale of restoration;

(d) Extent to which relevant information is known, or the time and

money required to obtain such information; and

(e) Requirements imposed by other laws and regulations that would

affect restoration.

If trustees determine that restoration actions are appropriate to

the incident, the trustees should proceed to the Restoration Planning

Phase.

III. Notice of Intent to Conduct Restoration Planning

If the trustees determine that there is a reasonable likelihood

that injury has occurred as a result of the incident and restoration

actions that would address these injuries should be pursued, the

trustees may proceed with injury assessment. At this point, the trustee

must prepare the Notice of Intent to Conduct Restoration Planning

documenting the trustees' preassessment activities and the basis for

the decision to proceed. Depending on information available at this

early stage of the assessment process, the Notice may also include a

description of the trustees' proposed strategy to assess injury and

determine the scope and scale of restoration. The contents of a Notice

may vary, but will typically discuss:

(a) The facts of the incident;

(b) Trustee authority to proceed with assessment;

(c) Natural resources and/or services that are, or are likely to

be, injured as a result of the incident;

(d) Potential restoration actions relevant to the expected

injuries; and

(e) If determined at the time, potential procedures to assess

injuries, and determine the appropriate scope and scale of restoration

for the affected natural resources and services.

The Notice must be made publicly available. The means by which it

is made publicly available and whether public comments are solicited on

the Notice will depend on the scope and scale of the incident, and the

need to conduct further investigation to identify likely injury

assessment and restoration actions, among other things. Trustees must

also provide a copy of the Notice to the known responsible parties and

invite their participation in the conduct of restoration planning.

IV. Administrative Record

The administrative record facilitates the restoration process by

providing a central repository for all materials relied upon by

trustees in making final determinations about restoration actions

appropriate for an incident. The administrative record should be opened

after trustees determine the need to conduct restoration planning. The

Notice will identify a trustee representative to contact with questions

regarding the administrative record.

The administrative record must contain sufficient information to

support the public's review of the trustees' decisionmaking process.

The administrative record must contain documents and other factual

information considered by trustees in selecting assessment actions,

including documents that support options the trustees ultimately

rejected. Pertinent documents submitted in a timely manner by the

responsible parties and public, including public comments, must be

included in the administrative record.

The administrative record should be limited to final documents when

possible. Where no final document is available at the time of selection

of restoration actions, the draft may be included in the administrative

record if the document contains information not found in other

documents in the record, but which is considered by the trustees in

selecting a restoration action. Pre-decisional, deliberative internal

agency memoranda should be treated like draft documents, i.e., excluded

from the record, unless relied upon in choosing restoration actions.

Ordinarily, the administrative record should include: the Notice,

draft and final restoration plans, and public comments. Any relevant

data, investigation reports, scientific studies, work plans, quality

assurance plans, decision documents, and literature may be included in

the administrative record. Any agreements among the participating

trustees or with the responsible parties should also be included in the

administrative record.

Although this proposed rule is silent on the standard of review for

NRDA, NOAA expects that assessments and restoration selection based on

an open administrative record will be afforded review on the record by

the courts.

V. Data Collection During Preassessment

This proposed rule allows trustees to conduct limited data

collection and analysis throughout the Preassessment Phase. The purpose

of data collection at this stage is to facilitate the determination of

whether natural resources and/or services have been injured by the

incident and require some form of restoration. Ephemeral information

(i.e., information that may be lost if not collected immediately) may

also be collected during the Preassessment Phase if the information is

necessary for any stage of the restoration planning process. In

addition, information needed to design and implement anticipated

assessment procedures may be collected during this phase. Data

collection during this phase must be coordinated with response actions

such that the collection does not interfere with or hinder the response

actions.

Subpart E--Restoration Planning Phase

I. Purpose

The purpose of the Restoration Planning Phase is to evaluate

information on potential injuries to natural resources and/or services

(injury assessment), and use that information to determine the need for

and scale of restoration actions (restoration selection). The NRDA

process is essentially a restoration scoping exercise, and the various

studies and analyses conducted during this phase should be viewed from

the restoration perspective.

During the Restoration Planning Phase, trustees should focus on

determining which natural resources and services need to be restored,

and how to design and scale that restoration. Potential NRDA activities

should be scrutinized closely to ensure that the results will be useful

and relevant to restoration.

The Restoration Planning Phase integrates and provides the linkage

between injury and restoration, through the injury assessment and

restoration selection components of the phase. Development of a

conceptual linkage between injury and restoration early in the NRDA

process (i.e., in the Preassessment Phase) should both expedite the

assessment process and minimize costs by assisting the trustees in:

focusing on the most relevant injuries to be included in the

assessment; designing studies that are relevant to restoration; and

designing appropriate restoration projects.

II. General Criteria for Acceptable Procedures

In order to be in accordance with this proposed rule, any

procedures for assessing injury and scaling restoration actions must be

consistent with the following criteria:

(a) If available, injury determination and quantification

procedures that provide information of use in determining the

appropriate type and

[[Page 39813]]

level of restoration appropriate for a particular injury or loss shall

be used;

(b) If a range of procedures providing the same type and quality of

assessment information are available, the most cost-effective procedure

will be used;

(c) The incremental cost of more complex studies must be reasonably

related to the expected increase in relevant assessment information

provided by the more complex study; and

(d) Procedures selected must be reliable and valid for the

particular context.

III. Injury Assessment

A. Purpose

The goal of injury assessment, which includes determination and

quantification of injury, is to determine the nature, degree, and

spatial/temporal extent of injuries to natural resources and/or

services, thus providing a technical basis for evaluating the need for

and scale of restoration. While the basic steps discussed below are

applicable to all assessments, selection of approaches for

demonstrating exposure, pathway, and injury will be incident-specific.

Thus, this proposed rule provides a range of possible procedures and

methods for injury determination and quantification, including

simplified (e.g., models, literature extrapolation) and more detailed

procedures (e.g., generation of original data). Trustees are encouraged

to use simplified procedures, when appropriate.

Under OPA, trustees must determine whether injuries ``resulted

from'' the incident. Establishing that a specific injury has resulted

from a particular incident may be accomplished through a number of

procedures, alone or in combination. These include field

investigations, laboratory studies, models, and the literature.

To determine injury under this proposed rule, trustees must

determine if:

(1) The definition of ``injury'' is met; and

(2) The injured natural resource has been exposed to the discharged

oil and a pathway links the incident and the injured natural resource

and/or service, or,

for injuries resulting from response actions or incidents involving a

substantial threat of a discharge, an injury or an impairment of use of

a natural resource service has occurred as a result of the incident.

If any of the above conditions for determining injury provided in

this section is not met, trustees may not take additional action under

this part. However, trustees may recover all reasonable assessment

costs incurred up to the point when they determined that the conditions

were not met. If all the conditions are met, trustees may proceed with

the assessment. These steps and concepts are described in more detail

below.

B. Injury Determination

1. Definition of Injury

Under this proposed rule, trustees must determine if the definition

of ``injury'' has been met. ``Injury'' is defined as an observable or

measurable adverse change in a natural resource or impairment of a

service.

Injury includes adverse changes in the chemical or physical quality

or viability of a natural resource. The simplest example is death of an

organism, but indirect, delayed, or sublethal effects may also be

considered. Other potential categories of injuries include adverse

changes in: survival, growth, and reproduction; health, physiology and

biological condition; behavior; community composition; ecological

processes and functions; physical and chemical habitat quality or

structure; and services to the public.

Although injury often is thought of in terms of adverse changes in

biota, the definition of injury under this rule is broader. Injuries to

non-living resources (e.g., removal of oiled sand on a beach) as well

as injuries to resource services (e.g., lost use associated with a

fisheries closure to prevent harvest of tainted fish, even though the

fish themselves may not be injured) may be considered.

This list of potential adverse changes is not intended to be

inclusive of all injuries that trustees may evaluate.

2. Exposure

The purpose of the exposure portion of an injury assessment is to

determine whether natural resources came into contact with the oil from

the incident. Early consideration of exposure (i.e., ideally during the

Preassessment Phase) should help to focus the assessment on those

natural resources and/or services that are most likely to be affected

by an incident.

Trustees must determine whether the natural resource came into

contact, either directly or indirectly with the oil discharged from the

incident. Under this proposed rule, exposure is broadly defined to

include not only direct physical exposure to oil, but also indirect

exposure (e.g., injury to a organism as a result of a food web

disruption). Documenting exposure is a prerequisite to determining

injury, except for response-related injuries and injuries from

substantial threats of discharges. However, evidence of exposure alone

may not be sufficient to conclude that injury to a natural resource has

occurred (e.g., the presence of petroleum hydrocarbons in oyster

tissues may not, in itself, constitute an injury).

Exposure can be demonstrated with either quantitative or

qualitative methods. As with other elements of the NRDA process,

selection of approaches for demonstrating oil exposure will depend on

the type and volume of discharged oil, natural resources at risk, and

nature of the receiving environment. For example, chemical analysis of

oil in sediments, alone, may not be adequate to conclude that a benthic

organism was otherwise exposed to the oil. Likewise, the presence of

petroleum in fish tissue, alone, may not be adequate to link the

exposure to the discharge because metabolism of the oil may blur the

chemical characterization. The combination of the two approaches may,

however, demonstrate exposure.

Typically, procedures for exposure analysis include: (a) Field

observations or measurements; (b) laboratory exposure studies; (c)

transport and fate modeling; and (d) the literature. This proposed rule

emphasizes that these procedures may be used alone, or in combination,

depending on the specific nature of the incident. Trustees must

determine the most appropriate approach to evaluating exposure on an

incident-specific basis. For example, for some types of incidents,

visual observation in the field and/or modeling may be sufficient to

evaluate exposure. For other incidents, more involved site-specific

sampling, including chemical analysis and biological data collection,

may be more appropriate.

3. Pathways

To determine whether an injury resulted from a specific incident, a

plausible pathway linking the incident to the injury must be

identified. As with exposure, demonstrating a pathway is a prerequisite

to determining injury, but evidence of a pathway, alone, is not

sufficient to conclude that injury has occurred (e.g., demonstrating

that prey species are oiled can be used to document that a plausible

pathway to a predator species exists. However, such data do not, in

themselves, demonstrate that the predator species is injured).

Pathway determination can include evaluation of either:

(a) The sequence of events by which the discharged oil was

transported from the incident and came into direct

[[Page 39814]]

physical contact with the exposed natural resource (e.g., oil

transported from an incident by ocean currents, wind, and wave action

to directly oil shellfish); or

(b) The sequence of events by which the discharged oil was

transported from the incident and caused an indirect impact on a

natural resource and/or service (e.g., oil transported from an incident

by ocean currents, wind, and wave action cause reduced populations of

bait fish, which in turn results in starvation of a fish-eating bird;

or, oil transported from an incident by currents, wind, and wave action

causes the closure of a fishery to prevent potentially tainted fish

from being marketed).

Pathway determination does not require that injured natural

resources and/or services be directly exposed to oil. In the example

provided above, fish-eating birds are injured as a result of decreases

in food availability. However, trustees must always determine the

existence of a plausible pathway relating the incident to the injured

natural resource and/or service, even if the injury is not caused by

direct exposure to oil.

Pathways can include, but are not limited to, movement/exposure

through the: water surface; water column; sediments, including bottom,

bank, beach, floodplain sediments; groundwater; soil; air; direct

accumulation; and food-chain uptake.

As with exposure determination, procedures for pathway analysis

include field investigations, laboratory studies, modeling, and the

literature. As noted above, this proposed rule emphasizes that these

procedures may be used alone, or in combination, depending on the

specific nature of the incident. Trustees must determine the most

appropriate approach to determine whether a plausible pathway exists on

an incident-specific basis.

Understanding the potential pathways will also help to narrow the

scope of the NRDA investigation, and may be important in deciding which

assessment procedures to use. For example, the Type A model does not

address injuries that occur via air or terrestrial pathways, thus it

would not be appropriate in such cases.

4. Selection of Injuries to Include in the Assessment

During the Preassessment Phase, trustees may collect information on

a wide range of potential injuries. As a result, a long inventory of

potential injuries resulting from the incident is often developed.

Because the collection of information on injury must be directly

related to the incident and consistent with restoration planning,

developing scientific knowledge for its own sake is not appropriate

under this rule.

To compile the inventory of potential injuries, trustees should

determine the extent to which the following information is known or can

be obtained for each injury:

(a) The natural resource/service of concern;

(b) The adverse change that constitutes injury;

(c) The potential degree, and spatial/temporal extent of the

injury;

(d) The evidence indicating injury;

(e) The mechanism by which injury occurred;

(f) The evidence indicating exposure;

(g) The pathway from the incident to the natural resource/service

of concern;

(h) The potential natural recovery period;

(i) The kinds of primary and/or compensatory restoration actions

that are feasible; and

(j) The kinds of procedures available to evaluate the injury, and

the time and money requirements.

The result of the above analysis will be a list of injuries to be

evaluated in the assessment.

C. Injury Quantification

Injury quantification is the process by which trustees determine

the degree and spatial/temporal extent of injuries. Thus, injury

quantification is the means by which appropriate restoration is

determined.

1. Conceptual Approaches to Quantification

Trustees may pursue one or more of several different conceptual

approaches to injury quantification. Under these approaches, injury may

be quantified in terms of: (a) The degree and spatial/temporal extent

of injury to a natural resource; (b) the degree and spatial/temporal

extent of injury to a natural resource with subsequent translation of

that change to a reduction in services provided by the natural

resource; or (c) the amount of services lost as a result of the

incident. Examples of the first approach include quantifying the number

of seabird mortalities caused by a discharge of oil, or measurement of

the area of a river in which hydrocarbon concentrations exceed water

quality standards. Examples of the second approach include quantifying

reductions in fish populations with subsequent estimation of the number

of recreational fishing days lost as a result of this injury, or

quantifying the amount of lost spawning habitat as a result of oiling

with subsequent estimation of the number of fish that would have been

produced by that habitat. An example of the third approach includes

direct measurement of the number of beach user days lost as a result of

a beach closure. Trustees are encouraged to use whichever approach, or

combination of approaches, is most appropriate to the circumstances of

the incident.

For reasons indicated in subpart C under the definition of baseline

in the preamble, site-specific baseline information may not be

required.

2. Injury Quantification Information Needs

Because the purpose of injury quantification is to design and scale

restoration actions, a large number of quantification measures may be

adopted by trustees. In general, injury quantification should be

designed to evaluate injury by addressing the following:

(a) Degree of the injury. Degree may be expressed in terms of

percent mortality, proportion of a population, species, community, or

habitat affected, extent of oiling, and availability of substitute

services.

(b) Spatial extent of the injury. Spatial extent may include

quantification of the total area or volume of injury.

(c) Temporal extent of the injury. Duration of injury may be

expressed as the amount of time that the natural resource and/or

service will be injured until natural recovery occurs, including past

and interim injury periods.

In order to scale restoration actions, trustees may find it useful

to develop an estimate of the total quantity of injury that integrates

severity, and spatial and temporal extent of injury. For example,

quantification of the total losses of wetland habitat injured by oil

could be obtained by estimating the: (a) Total number of acres of

severely oiled wetland in which vegetation is totally killed; (b)

natural recovery time for severely oiled wetland; (c) total number of

acres of moderately oiled wetland in which vegetation is not completely

killed but the wetland has lower levels of productivity; and (d)

natural recovery time for moderately oiled wetland. This information

could be combined to quantify the total number of ``acre-years'' of

wetland injury to scale restoration actions.

D. Analysis of Natural Recovery

Trustees must estimate the time for natural recovery without

restoration, but including any response actions. Recovery is defined as

a return of injured natural resources and services to baseline.

Analysis of recovery times

[[Page 39815]]

may include evaluation of factors such as: (a) Degree and spatial/

temporal extent of injury; (b) sensitivity of the injured natural

resource and/or service; (c) reproductive potential; (d) stability and

resilience of the affected environment; (e) natural variability; and

(f) physical/chemical processes of the affected environment. Approaches

to estimating recovery times include literature reviews of recovery at

similar sites or for similar species, computer models, and professional

judgement.

E. Injury Assessment Procedures and Methods

1. General

Whenever practicable, procedures should be chosen that provide

information of use in determining the restoration appropriate for that

injury. This proposed rule provides a range of assessment approaches,

from simplified to more detailed. The technical and scientific adequacy

of approaches will be judged based on the circumstances of the incident

and injuries, and the information needed to determine restoration

actions. Trustees should, however, first determine whether simplified

assessment procedures are appropriate for a given incident. In general,

more detailed assessment procedures may include, alone or in any

combination, (a) field investigations; (b) laboratory methods; (c)

model-based methods; and (d) literature-based methods.

2. Selection of Procedures

Trustees must base their selection of assessment procedures on an

evaluation of the following factors:

(a) Potential nature, degree, and spatial/temporal extent of the

injury;

(b) Potential restoration actions for the injury;

(c) Range of assessment procedures available, including the

applicability of simplified assessment procedures;

(d) Time and cost necessary to implement the assessment procedures;

and

(e) Relationship between the information generated by the

assessment procedures and the information needed for restoration

planning.

When trustees have made a determination that a simplified

assessment procedure is the most appropriate procedure for a given

incident or injury, the responsible parties may request that trustees

use incident-specific assessment procedures instead of a simplified

assessment procedure if the responsible parties, in a timeframe

acceptable to the trustees:

(a) Identify the incident-specific assessment procedures to be used

and the reasons supporting the technical appropriateness of such

procedures for the incident or injury;

(b) Advance the costs of using such incident-specific assessment

procedures; and

(c) Agree not to challenge the reasonableness of the costs of using

such incident-specific assessment procedures.

3. Simplified procedures

a. Type A procedures. Trustees may use the Type A procedures

identified in 43 CFR part 11, subpart D, that address oil discharges

provided that conditions are sufficiently similar to those listed in 43

CFR 11.33 regarding use of the procedures. For further discussion, see

Appendix C to this preamble.

b. Compensation Formulas. In the January 1994 proposed rule, NOAA

proposed compensation formulas for use for small incidents in estuarine

and marine environments and inland waters. NOAA is now considering

temporarily reserving those formulas. For further discussion, see

Appendix C to this preamble.

4. Incident-specific procedures

Trustees may also use incident-specific assessment procedures,

provided they are cost-effective and relevant to determining the scope

and scale of restoration appropriate for that injury. Incident-specific

assessment procedures include, alone or in any combination:

(i) Field methods;

(ii) Laboratory methods;

(iii) Model-based methods; and

(iv) Literature-based methods.

IV. Restoration Selection

A. Purpose

Once injury assessment is completed, trustees must develop a plan

for restoring the injured natural resources and services. Under the

proposed rule, trustees must identify a reasonable range of restoration

alternatives, evaluate those alternatives, select an alternative,

develop a Draft Restoration Plan for public review, and produce a Final

Restoration Plan that addresses public concerns.

B. Development of a Reasonable Range of Alternatives

1. General

Trustees must identify a reasonable range of alternative

restoration actions for consideration, except as provided in

Sec. 990.58 regarding the use of a Regional Restoration Plan.

Generally, trustees will identify a package of actions and/or services.

However, if there is a reasonable basis for separately evaluating

actions to restore separate natural resources and/or services, then

trustees may do so. Acceptable restoration actions include any of the

actions authorized under OPA (i.e. restoration, rehabilitation,

replacement, or acquisition of the equivalent), any combination of

those actions, and natural recovery.

Restoration alternatives may have two components: (a) Primary

restoration, which is human intervention or natural recovery that

returns injured natural resources and services to baseline; and (b)

compensatory restoration, which is action taken to make the environment

and the public whole for service losses that occur from the date of the

incident until recovery of the injured natural resources.

What constitutes a reasonable range of alternatives will vary from

case to case but must always include a no-action alternative. A no-

action alternative is not the same as a natural recovery alternative.

Under the no-action alternative, no human intervention would be taken

for primary or compensatory restoration. In contrast, under a natural

recovery alternative, human intervention could be taken for

compensatory restoration action. A natural recovery alternative could

also include minimal primary restoration actions by trustees to prevent

interference with natural recovery (e.g., closing an area to human

traffic).

2. Primary Restoration

Alternative primary restoration actions can range from natural

recovery with no human intervention, to actions that prevent

interference with natural recovery, to more intensive actions expected

to return injured natural resources to baseline faster or with greater

certainty than natural recovery.

When developing the primary restoration components of the

restoration alternatives, trustees must define the desired outcome to

be accomplished, and the criteria by which successful recovery will be

judged. The goals and objectives should be clear and site-specific. The

trustees should define the minimal acceptable criteria for recovery.

When identifying primary restoration alternatives to be considered,

trustees should first consider whether activities exist that would

limit the effectiveness of restoration actions (e.g., residual sources

of contamination). Trustees should also consider whether any primary

restoration actions are necessary or feasible to return the physical,

chemical, and biological conditions necessary to allow recovery

[[Page 39816]]

or restoration of the injured resources (e.g., replacement of sand or

vegetation). Trustees should consider whether restoration actions

focusing on certain key species or habitats would be an effective

approach to achieving baseline conditions.

3. Compensatory Restoration

In addition to primary restoration, trustees have the discretion to

include a compensatory restoration action in some or all of the

restoration alternatives. The service loss that must be addressed by a

particular compensatory restoration action will vary depending on the

nature of the primary restoration component of the overall restoration

alternative.

a. Developing Types of Alternatives

When identifying the compensatory restoration components of the

restoration alternatives, trustees must first consider compensatory

restoration actions that provide services of the same type and quality

as those lost. This is the preferred approach to identifying

compensatory restoration actions. If, however, such actions are

infeasible, or too few in number to provide a reasonable range of

alternatives, trustees may then include other compensatory restoration

actions among the alternatives, so long as the actions will provide

services of at least comparable type and quality as those lost, in the

judgment of the trustees.

b. Scaling Compensatory Restoration Actions

To ensure that a compensatory restoration action will appropriately

compensate for the service loss, trustees must scale the action. The

approaches that may be used to assess the appropriate scale of a

compensatory restoration action include the service-to-service approach

and the valuation approach.

i. Service-to-Service Approach

Under the service-to-service approach to scaling, the appropriate

quantity of replacement services is determined by obtaining equivalency

between lost and replacement services after discounting appropriately.

Trustees must use the service-to-service approach for alternatives that

provide services that are of the same type and quality, and are subject

to comparable resource scarcity and demand conditions as those lost.

The third criterion is being proposed to address situations where the

public will no longer have the same level of need for services of the

same type and quality as those lost by the time the compensatory

restoration alternative could be implemented. In such situations, a

strict equivalency between quantities of lost and replacement services

may not adequately compensate the public. NOAA solicits comment on the

proposed criteria for use of the service-to-service approach.

Under the service-to-service approach, NOAA recommends use of

habitat equivalency analysis when lost resource services are primarily

of indirect human use, for example, species habitat or biological

resources. (See Appendix D at the end of this preamble for a

description of habitat equivalency analysis.) If lost services are

human uses, for example recreational services, then a behavioral model

of human use may be used to determine the scale of project necessary to

attract the appropriate level of human uses. For example, if the

interim lost services are lost recreational beach days, then the

restoration alternative may be designed to provide the requisite number

of recreational beach days by, perhaps, improving access to existing

public beaches.

NOAA is interested in receiving comments on these suggested methods

as well as any additional methods that might be appropriate for use

with the service-to-service approach.

ii. Valuation Approach

In situations where trustees must consider alternatives that

provide services that are of a different type or quality, or are

subject to non-comparable resource scarcity or demand conditions than

those services lost, trustees may use the valuation approach to

scaling.

The valuation approach requires that trustees determine the amount

of services that must be provided to produce the same value lost to the

public. The approach relies on the idea that lost value can be

determined using one of a variety of possible units of exchange,

including units of resource services or dollars. The valuation approach

requires that the value of lost services be measured explicitly and

that the compensatory restoration alternative provide services of

equivalent value to the public. To properly scale the compensatory

restoration alternative, the trustee might have to measure the values

of varying sizes of the compensatory restoration alternative to

determine the size of a project that will replace the value of lost

services. For proper comparison, all values lost or provided over time

should be converted into present value terms by discounting.

Measuring the value of lost services in terms of units of

replacement services rather than dollars may be the most direct

approach to scaling the compensatory restoration alternative. Although

such procedures are currently not well-defined in the literature, it is

likely that the method would use a form of conjoint analysis. Other

valuation methods include the travel cost method, factor income

approach, hedonic price models, models of market supply and demand, and

contingent valuation. (See Appendix D at the end of this preamble for

descriptions of these methods.) Trustees are not limited to these

methods, and may use any reliable method suitable for calculating

interim lost value. Where the circumstances are such that a site-

specific application of one of these valuation methods does not meet

the reasonable cost criterion, the trustees may consider estimating

interim lost value using benefits transfer. The choice of approaches in

a particular context will depend upon the types of injuries and the

type of services provided by the compensatory restoration alternative.

Trustees should consider using similar methods for measuring the

value of the lost services and the value of the services provided by

the compensatory restoration alternatives. If different valuation

methods are used, then trustees should take steps to ensure that the

variation in methods does not introduce bias. NOAA seeks comment on

possible approaches for assessing and adjusting for biases that may

occur in this situation.

If valuation of the services provided by an alternative could not,

in the judgment of the trustees, be performed consistent with the

definition of reasonable assessment costs, the trustees may calculate

the value of the lost services and then select the scale of a

restoration alternative that has a cost equivalent to the lost value.

The responsible parties will have the option of requesting that the

trustees value the alternative, if the responsible parties, within a

timeframe acceptable to the trustees, advance the costs of doing so and

agree not to challenge the reasonableness of the costs of performing

such valuation.

Because the reformulated unified restoration approach envisions a

fundamentally different role for valuation methods from what was

contained in the January 1994 proposed rule, NOAA has not included

standards for utilization of such methods in today's proposed rule.

However, NOAA is still considering, and seeks comment on, whether

standards for the use of valuation methods, including contingent

valuation, should be included in the final rule (or in accompanying

guidance documents),

[[Page 39817]]

and, if so, what level of guidance would be appropriate.

c. Treatment of Uncertainty and Discounting

When scaling a compensatory restoration action, trustees should

address the uncertainties associated with the predicted consequences of

restoration projects and must discount to the present the interim lost

services, or the value of interim lost services due to the injury as

well as the gain in services or the gain in service value from the

restoration project. The reference date for the discounting calculation

is the date at which the demand is presented.

The choice of an appropriate discount rate is linked to the

treatment of uncertainties associated with the losses due to the injury

and the gains from the compensatory restoration alternative.

NOAA recommends that, where feasible, the trustees should use risk-

adjusted measures of losses and gains, in conjunction with a riskless

rate of discount serving as a proxy for the consumer rate of time

preference. Alternatively, if the streams of losses and gains cannot be

adequately adjusted for risks, then NOAA recommends use of a discount

rate that incorporates a suitable risk adjustment to the riskless rate.

The periods of losses due to injury and, particularly, the period

of gains from compensatory restoration projects potentially extend far

into the future. Because the rates of return on financial instruments

vary substantially through time and future rates can be predicted

imperfectly, NOAA recommends use of a long-term average of the rates of

return from the selected instrument. The analysis will be conducted

either in nominal terms (i.e., in dollars of the year in which the

losses or gains are incurred) or in real terms (e.g., in units of

services, or in dollars of a specified base year). The nominal U.S.

Treasury rate shall be used if the components of the claim are

denominated in nominal terms. Otherwise, if components of the claim are

denominated in real terms (of the discounting reference year), then

real U. S. Treasury rates are to be used. To calculate the real rates,

trustees should use an appropriate price index to remove expected

inflation from the appropriate nominal U.S. Treasury rate.

NOAA seeks comment on various issues related to discounting the

streams of consumer losses and gains. For what uncertainties is it most

important for trustees to develop adjustments? What procedures are

suitable for adjusting the streams of losses and gains for uncertainty?

What is the appropriate price index to employ to adjust nominal

discount rates for inflation (e.g., Gross Domestic Product deflator, or

Consumer Price Index)? Should the discount rate be an after-tax rate,

rather than a pre-tax rate? Is a long-term average of the rates of the

selected instrument the best predictor of future rates? If so, over

what period should the average be calculated?

U.S. Treasury bill and bond rates may be found in the Federal

Reserve Bulletin, issued monthly, or the Treasury Bulletin, issued

quarterly. The Gross Domestic Product fixed-weighted price index and

the Consumer Price Index may be found in the Survey of Current

Business, issued monthly, and the Economic Report of the President,

issued annually. The Administration prediction for future Gross

Domestic Product deflators is updated twice annually at the time the

budget is published in January or February and at the time of the Mid-

Session Review of the Budget in July. The current Treasury rates and

inflation adjustment assumptions are reported in regular updates of

Appendix C of Circular No. A-94, available from the OMB Publications

Office (202-395-7332).

C. Restoration Alternatives for Simplified Assessment Procedures

Simplified assessment procedures, described in Sec. 990.54(d) of

the proposed rule, provide different types of results or output that

can be used in designing and scaling incident-specific restoration

actions. For example, when using the Type A model, trustees have

several alternative approaches: (1) A restoration plan may be developed

to address the injuries predicted by the model; (2) the restoration

actions predicted by the Type A model may be implemented; or (3) the

lost values resulting from a model run may be used to identify the

scale of a project. As discussed below, the proposed rule also allows

trustees to consider using a Regional Restoration Plan instead of

developing an incident-specific restoration plan when they have used

simplified assessment procedures.

D. Evaluation of Restoration Alternatives

1. General

Once trustees have developed the restoration alternatives, they

must evaluate those alternatives. This evaluation is based on the:

(a) Extent to which each alternative can return the injured natural

resources and services to baseline and make the environment and public

whole for interim service losses;

(b) Extent to which each alternative improves the rate of recovery;

(c) Extent to which each alternative will avoid additional injury;

(d) Level of uncertainty in the success of each alternative;

(e) Extent to which each alternative benefits more than one natural

resource and/or service;

(f) Cost of each alternative;

(g) Effects of each alternative on public health and safety, and

the environment; and

(h) Whether any alternative violates any laws or regulations.

Based on evaluation of the listed factors, trustees select a preferred

restoration alternative. If there are two or more preferred

alternatives, trustees must select the most cost-effective alternative.

2. Other Considerations

a. Pilot Restoration Studies

If the range of restoration alternatives under consideration is

limited or poorly developed, trustees may implement pilot studies.

b. Cost Benefit Analysis

When selecting a restoration alternative, trustees should consider

the relationship between costs and benefits. However, reducing the

selection process to a strict comparison of restoration costs to

monetized natural resource values is not required and may not be

appropriate. Instead, the proposed rule would require trustees to

evaluate each alternative according to a number of factors, identify a

preferred alternative, select the most cost-effective alternative if

there is more than one preferred alternative, and provide the public

and responsible parties with an opportunity to review and comment on

the trustees' selection. NOAA believes this approach provides adequate

protection against selection of an inappropriately costly alternative.

NOAA seeks comment on alternative approaches to the restoration

selection process.

E. Draft Restoration Plan

1. Purpose

After selecting a restoration alternative, trustees must prepare a

Draft Restoration Plan. Development of a Draft Restoration Plan

provides a vehicle for: (a) Informing the affected and interested

public of the results of the trustees' analyses and decisions, and

encouraging public comments; and (b) performing expert peer review,

when comments are solicited from various professional communities or

other knowledgeable persons.

2. Contents

A Draft Restoration Plan should reflect the restoration planning

process

[[Page 39818]]

as provided above and must, at a minimum, contain: (a) A summary of

injury assessment procedures and methods used; (b) a description of the

nature, degree, and spatial/temporal extent of injuries to natural

resources and/or services resulting from the incident; (c) the goals

and objectives of restoration; (d) the range of restoration

alternatives considered and a discussion of how such alternatives were

identified and developed; (e) a discussion of the trustees' evaluation

of the restoration alternatives; (f) a description of a monitoring plan

for documenting restoration effectiveness and the need for corrective

action and performance criteria for judging the success and completion

of restoration and the need for corrective action; and (g) a

description of the involvement of the responsible parties in the

assessment process, and proposed involvement in the restoration

process.

The types of parameters that should be addressed in the monitoring

plan may include: (1) Duration; (2) frequency of monitoring needed to

gauge progress and success; (3) the level of sampling needed to detect

success or the need for corrective action; and (4) whether monitoring

of a control or reference site is needed to determine progress and

success.

Performance criteria include structural, functional, temporal, and

other demonstrable goals that the trustees should determine with

respect to all restoration actions. For example, an agreement to create

new intertidal marsh habitat as compensation for marsh impacted by oil

could be described by performance criteria including the number of

acres to be created, the location, the elevation of new habitat, the

species to be planted and details for planting such as density, and the

timeframe in which identifiable stages of the project should be

completed.

3. Public Review and Comment

The information provided in the Draft Restoration Plan must be

adequate to allow the public to objectively assess the injuries

resulting from the incident and restoration actions being considered to

remedy those injuries. The Draft Restoration Plan must be made

available for at least a thirty (30) calendar day public review and

comment period.

The type of notice, review, and comment procedures may vary

depending on the nature and scale of restoration actions proposed. For

instance, notice may be accomplished through the Federal Register,

local newspapers, state press releases, etc., and review and comment

may be facilitated through written responses, advisory committees,

public meetings, etc.

F. Final Restoration Plan

After reviewing public comments on the Draft Restoration Plan,

trustees must develop a Final Restoration Plan. As part of the Final

Restoration Plan, trustees must consider and respond to all comments on

the Draft Restoration Plan. In response to the comments, the trustees

may need to: (1) Modify the restoration alternatives being considered;

(2) develop and evaluate alternatives that have not been given serious

consideration by the trustees; (3) supplement, improve, or modify the

analyses; (4) make factual corrections; or (5) explain why the comments

do not warrant further trustee response, citing the reasons to support

the trustee position, and possibly indicate the circumstances that

would trigger reappraisal or further response. In the Final Restoration

Plan, trustees indicate the restoration alternatives that will be

implemented and include the information in the Draft Restoration Plan.

The format of the Final Restoration Plan, which essentially follows

that of the Draft Restoration Plan, must clearly indicate any changes

to the Draft Restoration Plan.

If trustees plan to make significant changes to the Draft

Restoration Plan in response to comments, revisions will be documented

for public notice along with issuance of the Final Restoration Plan.

G. Use of Regional Restoration Plans

If trustees used a simplified assessment procedure, the proposed

rule allows them to consider using a Regional Restoration Plan instead

of developing an incident-specific restoration plan. Under the proposed

rule, trustees may use an existing Regional Restoration Plan provided

that the Plan:

(i) Was developed subject to public review and comment; and

(ii) Addresses and is currently relevant to the same or comparable

natural resources and/or services as those identified during injury

assessment as having been injured.

If these conditions are met, trustees may present the responsible

parties with a demand for the damages calculated by the simplified

assessment procedure and use the recovered sums to implement the

Regional Restoration Plan.

If there is not an existing Regional Restoration Plan that meets

these conditions and the information provided by the simplified

assessment procedure does not support development of an incident-

specific restoration plan, trustees may present the responsible parties

with a demand for the damages calculated by the simplified assessment

procedure and place the recovered funds into an account with other

similar recoveries, until such time that sufficient funds to develop

plan and implement a new Regional Restoration Plan are collected.

Recoveries may only be commingled in this manner where natural resource

and/or service injuries were similar for the incidents represented by

pooled funds, and where the incidents were within the same region (i.e.

ecosystem or watershed). New Regional Restoration Plans would then be

developed subject to public review and comment.

Trustees should develop criteria and procedures governing pooling

of funds and obligating portions of damages from simplified procedures

to planning costs. Such criteria should address: (1) The length of time

money should be maintained in an account before developing and

implementing Regional Restoration Plans; and (2) suggested maximum

percentages of recoveries that may be used for developing Regional

Restoration Plans.

NOAA requests comments on the concepts and specific guidelines for

pooling recoveries from simplified assessments and use of those monies.

If trustees use a Regional Restoration Plan, they must prepare a

Notice of Intent to Use a Regional Restoration Plan. The Notice must

include:

(1) A description of the nature, degree, and spatial/temporal

extent of injuries to natural resources and/or services resulting from

the incident;

(2) A description of the existing Regional Restoration Plan and an

explanation of how the conditions for use of a Regional Restoration

Plan are met; or a description of the anticipated process for

developing a new Regional Restoration Plan and an explanation of why

the information provided by the simplified assessment procedure does

not support development of an incident-specific restoration plan; and

(3) Identification of the damage amount sought and the calculation

of that amount.

Trustees must make a copy of the Notice publicly available.

Subpart F--Restoration Implementation Phase

I. Introduction

At the completion of the Restoration Planning Phase, the trustees

must: (a) Close the administrative record that

[[Page 39819]]

incorporates the Restoration Planning Phase and open a new

administrative record for the Restoration Implementation Phase; (b)

present a demand for restoration costs or implementation to the

responsible parties; (c) establish an account to receive any payments

of sums to be received from the responsible parties; and (d) implement

restoration. Additional actions that could occur during the Restoration

Implementation Phase include litigating a claim for damages where the

responsible parties refuse to pay for or implement restoration on

receipt of the trustees' demand, or presenting a claim for damages to

the Oil Spill Liability Trust Fund, so that restoration can be

implemented.

II. Administrative Record

Once a Final Restoration Plan or Notice of Intent to Use a Regional

Restoration Plan has been issued, the administrative record of the

Restoration Planning Phase must be closed. Except as noted below, no

additional documents will be placed in the record. The closed record

will constitute the body of information supporting the trustees'

decisions through restoration planning.

Once the record is closed, trustees may only add documents that:

(a) Are offered by an interested party that did not receive actual

or constructive notice of the Draft Restoration Plan and the

opportunity to comment on the Plan;

(b) Do not duplicate information already contained in the

administrative record; and

(c) Raise significant issues regarding the Final Restoration Plan.

For practical reasons, it is likely that trustees will need to open

and maintain an additional administrative record to document

implementation of restoration. This record should document all

Restoration Implementation Phase decisions, actions, and expenditures,

including any modifications made to the Final Restoration Plan. This

record is necessary to keep the public informed and potentially for use

in any enforcement actions, such as seeking additional work from the

responsible parties to comply with the restoration plan and

implementing agreements.

The administrative record for restoration implementation should

follow the same guidance for opening and maintaining the previous

record, and for its availability.

III. Presenting a Demand for Damages to the Responsible Parties

If the trustees and responsible parties have successfully

implemented a cooperative restoration planning process, the responsible

parties will have thorough knowledge of the trustees' preferred

restoration actions and associated costs. In the best circumstances,

the responsible parties will already have entered into an enforceable

agreement to either pay the costs associated with implementing the

Final Restoration Plan, or to implement the Plan according to trustee

performance criteria and with trustee oversight. Any such agreements

with the responsible parties will have been described in the Draft and

Final Restoration Plans reviewed by the public.

However, where a cooperative relationship with responsible parties

has not been achieved, the trustees must follow some specific statutory

requirements to recover natural resource damages, as described below.

After development of a Final Restoration Plan or a Notice of Intent

to Use a Regional Restoration Plan, the trustees must present a demand

in writing asking the responsible parties either to:

(a) Implement the Final Restoration Plan or portion of a Regional

Restoration Plan subject to trustee oversight and reimburse the

trustees for their assessment and oversight costs; or

(b) Advance to the trustees a specified sum representing all direct

and indirect costs associated with developing and implementing the

Final Restoration Plan or some portion of a Regional Restoration Plan.

The demand must also include: (a) Identification of the incident

from which the claim arises; (b) identification of the trustees

asserting the claim; (c) a brief description of the injuries for which

the claim is being brought; (d) the index to the record; (e) the Final

Restoration Plan or Notice of Intent to Use a Regional Restoration

Plan; and (f) a request for reimbursement of:

(i) Reasonable assessment costs;

(ii) The cost, if any, of conducting emergency restoration; and

(iii) Interest on the amounts recoverable under OPA section 1005,

which provides for prejudgment and post-judgment interest to be paid at

a commercial paper rate, starting from 30 calendar days from the date a

demand is presented until the date the claim is paid.

IV. Discounting and Compounding the Components of the Claim

A. General

Discounting and compounding are necessary for the trustees to be

able to present a claim for a ``sum certain.'' The reference date for

the discounting and compounding calculations is the date at which the

demand is presented. Trustees must discount, or compound, the two

components of the claim: (1) Future restoration costs; and (2) damage

assessment and emergency restoration costs already incurred.

NOAA recommends that trustees use the U.S. Treasury borrowing rate

on marketable securities of comparable maturity to the period of

analysis for both calculations, with some qualifications noted below.

Alternatively, for state or Indian tribal claims for past damage

assessment and restoration costs, the state or Indian tribe may use the

state or Indian tribal borrowing rate on marketable securities. The

analysis should be conducted either in terms of nominal values

(denominated in dollars of the year in which the losses or gains are

incurred) or in constant dollars of a specified base year. For

compounding forward past emergency restoration and assessment costs, it

seems more straightforward to employ the nominal Treasury rate as the

discount rate and to represent the costs in nominal terms, since the

nominal interest is observed and past costs are likely to be

denominated in nominal terms. Future restoration costs can be adjusted

for inflation using an appropriate inflation index for the major

categories of costs.

B. Estimated Future Restoration Costs

Most restoration projects will be carried out over a period of

years. If funds are insufficient to cover the full costs of

restoration, including post-construction maintenance and monitoring

operations, natural resource recovery will be incomplete, and the

public will be deprived of full compensation for the injuries. NOAA

recommends that trustees use the nominal U.S. Treasury rate for

marketable securities of comparable maturity to the period of analysis,

when this rate of return is available to the trustees for investment of

settlement monies. To denominate the future restoration costs in

nominal terms, the trustees should employ the indices of projected

inflation appropriate to the major components of the restoration costs

(e.g., construction price indices for construction costs; the federal

employee wage index for trustee monitoring costs).

[[Page 39820]]

If legal and/or institutional constraints prevent investment of

settlement monies yielding the U.S. Treasury rate for marketable

securities of comparable maturity to the period of analysis, then it is

incumbent upon the trustees to structure the claim to ensure that

sufficient funds will be available to fund the entire set of

restoration activities. One option is to calculate the discounted value

of this component of the claim using an alternative discount rate that

represents the yield on settlement monies available to the trustees. An

alternative option is to structure a multi-year schedule for claim

payments to ensure it provides the cash flow for each year required for

planned expenditures.

If the settlement is structured so that the responsible party

carries out the restoration projects, the trustee restoration costs to

be discounted will be substantially reduced, but not eliminated because

trustee monitoring costs will still be included in the claim.

C. Past Assessment and Emergency Restoration Costs

Damage assessment and emergency restoration costs may have been

accruing from the time of the incident. To calculate the present value

of these costs at the time the demand is presented to the responsible

parties, the trustees will compound forward the costs already incurred.

Because the rate of interest employed as the discount rate for past

costs incurred should reflect the opportunity cost of the money spent,

NOAA suggests that the trustees use the actual U.S. Treasury rate for

marketable securities of comparable maturity to the period of analysis

for compounding this component of the claim. NOAA acknowledges that, at

the discretion of the trustees, a state or Indian tribal borrowing rate

may be used to compound the state or Indian tribal component of past

costs. Where the costs are denominated in dollars of the year in which

they were incurred (i.e., in nominal terms), the nominal interest rate

should be employed.

D. Sources of Data

U.S. Treasury bill and bond rates may be found in the Federal

Reserve Bulletin, issued monthly, or the Treasury Bulletin, issued

quarterly. The Gross Domestic Product fixed-weighted price index and

the Consumer Price Index may be found in the Survey of Current

Business, issued monthly, and the Economic Report of the President,

issued annually. The Administration prediction for future Gross

Domestic Product deflators is updated twice annually at the time the

budget is published in January or February and at the time of the Mid-

Session Review of the Budget in July. The current Treasury rates and

inflation adjustment assumptions are reported in regular updates of

Appendix C of Circular No. A-94, available from the OMB Publications

Office (202-395-7332).

V. Uncompensated Claims

If the responsible parties deny all liability for the claim or fail

to settle the claim embodied in the demand within ninety (90) calendar

days after they are presented with the demand, trustees may elect to

commence an action in court against the responsible parties or

guarantors, or to present the uncompensated claim to the Oil Spill

Liability Trust Fund. Thus, delivery of the demand should be made in a

manner that establishes the date of receipt by the responsible parties.

Judicial actions and claims must be filed within three years after

the Final Restoration Plan or Notice of Intent to Use a Regional

Restoration Plan is made publicly available, as provided in the statute

of limitations for natural resource damages under OPA (33 U.S.C.

2717(f)(1)(B) and 2712(h)(2)).

VI. Accounts

OPA section 1006(f) requires that damages recovered by trustees be

retained, without further appropriation, in a revolving trust account.

Sums recovered for past assessment costs and emergency restoration

costs may be used to reimburse the trustees. All other sums must be

used to implement the Final Restoration Plan, implement an existing

Regional Restoration Plan, or develop and implement a new Regional

Restoration Plan.

Where multiple trustees are involved in a recovery, trustees may

wish to establish a joint account. One acceptable mechanism would be an

account under the registry of the applicable federal court when there

is a joint recovery involving federal and non-federal trustees. The

joint account should be managed by the trustees through an enforceable

written agreement that specifies the parties authorized to endorse

expenditures out of the account, and the agreed-upon procedures and

criteria for such expenditures.

Although a joint trustee account may be the preferred approach,

trustees also have the option of dividing the recoveries and depositing

their respective amounts in their own separate accounts. These accounts

should be interest-bearing, revolving trust accounts. These accounts

may be incident-specific or funds that allow deposit of natural

resource damages and expenditure in accordance with the limitations set

forth in OPA.

Trustees may establish escrow accounts or any other investment

accounts unless specifically prohibited by law. Funds in such accounts

must only be used as specified in OPA section 1006(f).

Trustees must maintain appropriate accounting and reporting methods

to keep track of the use of sums recovered. Brief reports on the status

of the sums recovered and expenditures for particular incidents should

be reported in the record for the Restoration Implementation Phase.

Any sums remaining in an account established under this section

that are not used either to reimburse trustees for past assessment and

emergency restoration costs or to implement restoration must be

deposited in the Oil Spill Liability Trust Fund.

VII. Implementation of the Restoration Plan

A. General

As discussed throughout this proposed rule, the Final Restoration

Plan may be implemented by the trustees, or by the responsible parties

with trustee oversight. In either case, several common steps will

characterize the Restoration Implementation Phase, including: (1)

establishment of a trustee committee and/or MOU; (2) development of

more detailed workplans for the conduct of restoration actions; (3)

monitoring and oversight; and (4) evaluation of restoration success or

need for corrective actions.

B. Trustee Committee and/or MOU

In many instances, it is likely that a trustee committee and/or MOU

will have governed trustee involvement through the Restoration Planning

Phase. However, it is critical that these agreements extend through the

Restoration Implementation Phase, or that new agreements or committees

are formed for the restoration implementation. At a minimum,

representatives of each participating trustee agency should be

appointed to an oversight committee. Functions of such a committee may

include: (1) Authorizing expenditures from a joint account; (2)

participating in monitoring of restoration actions; (3) evaluating

performance criteria for restoration actions; and (4) making the

determination that the goals and objectives of the Final Restoration

Plan have been achieved or that corrective actions need to be pursued.

[[Page 39821]]

C. Detailed Workplans

Depending on the incident, detailed workplans for accomplishing

restoration goals and objectives may or may not have been developed

during the Restoration Planning Phase. Clearly, as many details to

outline the restoration expectations, performance criteria, timelines,

criteria for success, etc., should be included in the Final Restoration

Plan and in agreements with the responsible parties as are practicable

to determine prior to restoration implementation. Performance criteria

are essential for meaningful trustee monitoring and oversight of

restoration projects.

D. Monitoring and Oversight

Reasonable monitoring costs are included in recoverable damages. A

well-designed and executed monitoring plan is required to assess

progress toward the stated goals and objectives of a restoration plan.

Reasonable monitoring costs cover those activities necessary to gauge

the progress, performance, and success of the restoration actions, and

not to generate purely scientific information.

E. Restoration Success and Corrective Actions

Restoration plans, particularly those including agreements for

responsible parties to implement restoration, must identify criteria

against which success and completion of restoration actions will be

judged. Thus, trustees should, at a minimum, determine: (a) What

criteria will constitute success, such that responsible parties are

relieved of responsibility for further restoration actions; and (b)

what criteria will necessitate corrective actions in order to comply

with the terms of a restoration or settlement agreement. For example,

in the intertidal marsh creation example used above, success may be

defined as survival of planted marsh grass at a rate of 80% vegetative

cover two years after completion of planting.

In some cases, pilot studies will lessen the need for corrective

measures. In other cases, settlement agreements can include reopeners

to deal with specific points of uncertainty, for instance, for

significant injuries that could not be determined and/or quantified at

the time of a settlement. Another possibility is for the responsible

parties to deposit an agreed-upon amount of money in an escrow account

to cover future corrective actions that could not be fully anticipated

at the time of the settlement. These funds would then be used for

future actions once defined, or revert to the responsible parties if

not needed. In most cases, trustees should consider including a

mechanism to deliberate the need for and type of corrective actions in

a settlement agreement where the types of contingencies that suggest

the need for corrective actions cannot be completely foreseen.

In all cases, the scope and scale of corrective actions must be

determined relative to the restoration goals and objectives set out in

the Final Restoration Plan. In addition, trustees must recognize that

circumstances well beyond the control of any of the parties may not be

the basis of requiring corrective actions, such as natural occurrences

that would meet an ``Act of God'' standard.

General Summary of and Response to Comments on the January 1994

Proposed Rule

NOAA received numerous comments on the January 1994 proposed rule.

NOAA appreciates the time and effort expended by the commenters.

Commenters raised many thought-provoking points that have led NOAA to

reconsider the overall approach of the rule. The bulk of the comments

fell into eight general categories.

First, NOAA received many comments about the need to keep natural

resource damage assessments focused on the ultimate goal of expeditious

restoration rather than the abstract study of injuries, calculation of

monetary damage figures, or time-consuming and expensive litigation.

Today's proposed rule is designed to place even greater emphasis on

early restoration planning.

Second, many commenters addressed the standards for calculating

compensable value in the January 1994 proposed rule. Today's proposed

rule eliminates the need for the determination of compensable values as

a separate component of a damage claim. The proposed rule does not

render the value of natural resources irrelevant; however, it does

fundamentally change the role of valuation in assessments. Valuation is

now used to determine the scale of appropriate restoration actions

rather than a monetary damage figure.

Third, commenters raised concerns about coordination among trustees

and with responsible parties and the level of trustee discretion

afforded under the proposed January 1994 rule. Today's proposed rule

provides for a public planning process designed to ensure that all

interested parties have an opportunity for involvement and that the

trustees' decisionmaking process is subject to public scrutiny. The

proposed rule also redefines ``reasonable assessment costs'' to provide

greater clarification of when trustees' assessment activities are

appropriate.

Fourth, NOAA received voluminous comments on the various assessment

procedures. In regard to the compensation formulas, as discussed in

Appendix C to this preamble, NOAA has decided to reserve the

compensation formulas for now. Some commenters expressed confusion over

the distinction between expedited and comprehensive damage assessments.

The proposed rule no longer categorizes assessments as expedited or

comprehensive and instead authorizes trustees to determine appropriate

assessment methods on an incident-specific basis from a range of

procedures including simplified methods to complex field studies.

Fifth, other commenters raised concerns about use of Regional

Restoration Plans. The proposed rule provides additional guidance on

when and how Regional Restoration Plans may be used.

Sixth, NOAA received many comments on the standards for determining

injury. Under today's proposed rule, the definition of ``injury'' has

been modified to require demonstration of a measurable or observable

adverse change. The proposed rule also provides new guidance on

determining injury, including guidance on selecting injury studies that

provide information that is relevant for restoration planning.

Seventh, NOAA received mixed comments on the provisions in the

January 1994 proposed rule concerning administrative record review.

This proposed rule continues to require development of an open

administrative record containing documents relied upon by trustees in

assessing and selecting restoration actions appropriate for particular

incidents, including relevant comments and submissions received from

responsible parties and other interested persons. Although this

proposed rule is silent on the standard of review, NOAA continues to

expect that courts will perform review on the administrative record.

Finally, many commenters expressed concern about the volume of

guidance on preassessment activities contained in the January 1994

proposed rule. Today's proposed rule includes a streamlined

Preassessment Phase.

Due to the extent of the changes in today's proposed rule, many of

which render earlier comments inapplicable, NOAA is not providing a

detailed treatment of all comments received. Instead, the proposed rule

and preamble embody the response to the comments

[[Page 39822]]

received. After reviewing today's proposed rule, commenters should

resubmit any comments that they think are still applicable, as well as

provide any new comments.

Bibliography

EIS-Compatible Restoration Plans

Entrix, Inc., Pacific Estuarine Research Laboratory (PERL), and

Philip Williams and Associates, Ltd. (PWA). 1991. Tijuana Estuary

Tidal Restoration Program. Draft Environmental Impact Report/

Environmental Impact Statement.

California Coastal Conservancy (SCC) and U.S. Fish and Wildlife

Service, Lead Agencies. SCC, Oakland. Vol I-III]; The Klamath River

Basin Fisheries Task Force (1991) [The Klamath River Basin Fisheries

Task Force. 1991. Long Range Plan for the Klamath River Basin

Conservation Area Fishery Restoration Program. U.S. Fish and

Wildlife Service, Klamath River Fishery Resource Office, Yureka,

CA].

Exxon Valdez Oil Spill Trustee Council (1994 a&b) [Exxon Valdez

Oil Spill Trustee Council. 1994 (a) (June). Draft Environmental

Impact Statement for the Exxon Valdez Oil Spill Restoration Plan.

Exxon Valdez Oil Spill Trustee Council, Anchorage, AK Exxon Valdez

Oil Spill Trustee Council. 1994 (b) (September). Final Environmental

Impact Statement for the Exxon Valdez Oil Spill Restoration Plan.

Exxon Valdez Oil Spill Trustee Council, Anchorage, AK]; Final

Environmental Impact Statement for the Management Plan of Habitat

for Late-Successional and Old-Growth Forest Related Species Within

the Range of the Northern Spotted Owl (1994).

Regional Restoration Plans

The National Estuary Program (NEP), established by Congress in

1987, has developed Comprehensive Conservation and Management Plans

(CCMP) to protect and restore ``nationally significant'' estuaries

(U.S. EPA. 1992. The National Estuary Program after Four Years, A

Report to Congress. U.S. Environmental Protection Agency, Office of

Water. EPA 503/9-92/007).

The State of Florida enacted the Surface Water Improvement and

Management (SWIM) Act to develop plans that will address restoration

of significant watersheds within its borders (SWIM Plan. 1993. Lower

St. Johns River Basin. St. Johns River Water Management District,

Palatka, FL; SWIM Plan. 1993. Lake Apopka. St. Johns River Water

Management District, Palatka, FL; SWIM Plan. 1991. SWIM Plan for the

Upper Oklawaha River Basin. St. Johns River Water Management

District, Palatka, FL; Adamus, C. 1991. SWIM Priority Ranking. St.

Johns River Water Management District, Palatka, FL). Numerous other

federal, state, tribal, and community restoration and conservation

programs and plans exist as well.

Gosselink and Lee (1987) and Omernik (1987) outline some

geographically-based approaches for regional restoration plans

(Gosselink, J.G. and L.E. Lee. 1989. Cumulative Impact Assessment in

Bottomland Hardwood Forests. Wetlands 9: 83-174.

Omernik, J.M. 1987. Ecoregions of the Coterminous United States.

Ann. Assoc. Am. Geogr. 77:118-125)

Guidance Documents

DOI. 1987. Measuring Damages to Coastal and Marine Natural

Resources: Concepts and Data Relevant to CERCLA Type A Damage

Assessments (NRDAM/CME technical document). U.S. Department of the

Interior, Office of Environmental Policy and Compliance, Washington,

D.C., DOI-14-01-0001-85-C-20, Vol I-II.

DOI. 1993. The CERCLA Type A Natural Resource Damage Assessment

Model for the Great Lakes Environments (NRDAM/GLE). U.S. Department

of the Interior, Office of Environmental Policy and Compliance,

Washington, D.C., Vol I-III.

DOI. 1994. The CERCLA Type A Natural Resource Damage Assessment

Model for Coastal and Marine Environments (NRDAM/CME). U.S.

Department of the Interior, Office of Environmental Policy and

Compliance, Washington, D.C., Vol I-VI.

Michel, J. and E. Reinharz. 1994. Preassessment Phase Guidance

Document. National Oceanic and Atmospheric Administration, Office of

General Counsel Natural Resources, Damage Assessment Regulations

Team, Silver Spring, MD.

NOAA. 1993. Restoration Guidance Document for Natural Resource

Injury Resulting from a Discharge of Oil. National Oceanic and

Atmospheric Administration, Office of General Counsel Natural

Resources, Damage Assessment Regulations Team, Silver Spring, MD.

NOAA. 1995. Specifications for Use of the NRDAM/CME Version 2.2

to Generate: Compensation Formula for Natural Resource Damage

Assessments under OPA. National Oceanic and Atmospheric

Administration, Office of General Counsel Natural Resources, Damage

Assessment Regulations Team, Silver Spring, MD.

NOAA. 1995. Injury Guidance Document for Natural Resources and

Services under the Oil Pollution Act of 1990. National Oceanic and

Atmospheric Administration, Damage Assessment and Restoration

Program, Silver Spring, MD.

NOAA. 1995. NEPA Compliance in NRDA Guidance Document. National

Oceanic and Atmospheric Administration, Damage Assessment and

Restoration Program, Silver Spring, MD.

Appendix A--Comparison of Relevant OPA/NRDA and NEPA Components

----------------------------------------------------------------------------------------------------------------

OPA/NRDA process NEPA parallels

----------------------------------------------------------------------------------------------------------------

Facilitating Restoration

Facilitating the NEPA Process

Pre-incident planning

Regional restoration planning Programmatic EIS.

Cooperation and coordination Interagency cooperation.

Public participation

Public involvement.

Preassessment Phase Environmental Assessment

Procedural Components Procedural Components.

--Determine trustee jurisdiction

--Determine need for restoration planning --Need/purpose for restoration.

--Publish ``Notice of Intent to Conduct Restoration Planning'' --``Notice of Intent'' for NEPA scoping.

--Open administrative record --Open Analysis File/Planning Record.

Limited data collection

Emergency restoration actions --Emergency actions.

Restoration Planning Phase NEPA Process

Procedural Components Procedural Parallels.

--Injury Assessment Component (Injury Determination/ --NEPA scoping process begins.

Quantification)

--Restoration Planning Component

--Develop Draft Restoration Plan --Draft EIS.

--Public Review/Comment --Public Review/Comment.

--Develop Final Restoration Plan --Final EIS.

Range of injury assessment procedures (simplified to more --Affected Environment (before

detailed) restoration).

Range of restoration alternatives (primary/compensatory --Range of restoration alternatives

restoration; natural recovery/no action) (including proposed/no action) and

Environmental Consequences.

Evaluation of restoration alternatives

--Cost-benefit analysis.

[[Page 39823]]

Restoration Implementation Phase NEPA Process

Procedural Components Procedural Parallels.

Close Administrative Record for Restoration Planning Phase --Close original Analysis File/Planning

Record.

Opening administrative record for Restoration --Open second Analysis File.

Implementation Phase

Present Demand --``Record of Decision''.

Establish account for recoveries

Implement Final Restoration Plan (includes monitoring/ --Implement Final EIS.

corrective actions)

----------------------------------------------------------------------------------------------------------------

EIS = Environmental Impact Statement.

Appendix B--Considerations to Facilitate the Restoration Process

I. Pre-incident Planning

General

NOAA believes that commitment of time, funding, and personnel to

up-front planning prior to an incident will help ensure that the

NRDA process results in appropriate restoration plans. Thus,

trustees are encouraged to develop pre-incident plans.

Pre-incident Plan Contents

NOAA suggests that pre-incident plans:

(a) Identify natural resource assessment teams. The restoration

process needs a systematic, interdisciplinary approach to insure the

integrated use of science, economics, and law required in planning

and implementing restoration. Trustees are encouraged to identify

appropriately experienced personnel needed for natural resource

assessment teams at the area and regional levels.

Personnel required for natural resource assessment teams should

be appropriate to the scope and scale of the incident and natural

resources and/or services affected. For instance, for incidents with

complicated or long-term ecological impacts, the core team could

include a natural resource trustee coordinator, restoration expert,

resource biologist, environmental (petroleum) chemist, resource

economist, quality assurance specialist, data manager/sample

custodian, statistician, resource attorney, and administrative

support specialist. If at all possible, the team should not be ad

hoc; members should be knowledgeable about relevant statutes and

regulations, and be able to establish a working relationship with

the various parties likely to be involved in incidents.

(b) Establish trustee notification systems. Prompt notification

is essential for efficient and effective initiation of the

restoration process. Response personnel are required under the NCP

to notify trustees whenever natural resources under their

jurisdiction or management have been, or are likely to be, injured

or lost as a result of an incident involving oil.

Thus, each trustee should establish emergency notification

protocols so that the process can be initiated on a 24-hour basis.

Notification could be coordinated to minimize the number of calls

response personnel must make to the trustees. Notification protocols

are also needed within the trustee agencies so that appropriate

regional and local personnel can be informed of an incident. Area

and Regional Contingency Plans should include contact information

for each trustee and clear, unambiguous criteria for trustee

notification (e.g., all spills, spills over a certain size,

location, etc.).

(c) Identify likely support services. In many circumstances, the

trustees may require specialized contractor support. For example,

research vessels may be necessary for sample collection, or outside

experts may be necessary to design and conduct studies. If, as part

of pre-incident planning, the trustees can identify appropriate

support services and pursue contracting procedures that will

expedite incident-specific hiring of contractors, potentially

detrimental delays in the assessment process can be avoided during

actual incidents.

The types of support and expertise expected, as well as

potential contractor and expert names, should be identified as part

of pre-incident planning. Contracts should be established to allow

rapid acquisition of contractor services. Identified contractors may

even be called on to participate in pre-incident planning so that

all parties are familiar with the specific needs of the restoration

process.

Backup services should also be identified since the needs of

both response and natural resource activities can exceed even

regional capabilities.

(d) Identify natural resources and/or services at risk. In the

NCP, regional and area planning committees are responsible for the

identification of natural resources under their jurisdiction that

are potentially vulnerable to oil spill incidents for given

geographic areas. The plans may, for example, identify wetland

habitats near oil terminals or bird rookeries near shipping routes.

If there is an incident, the response teams will focus their efforts

on protection of these natural resources and/or services considered

most vulnerable.

Trustees should actively participate in such planning committees

to identify natural resources and/or services at risk. Further,

trustees should identify and evaluate possible assessment procedures

for these natural resources and/or services. In addition to

participating actively in regional and area planning activities,

trustees should develop a working relationship with response

agencies and officials.

(e) Identify available baseline and other relevant information.

Trustees should identify and catalogue sources of baseline

information as part of pre-incident planning, including seeking

input on sources of information. Types of information that may be

important include: (1) Petroleum hydrocarbon contamination in

indicator organisms; (2) species census and inventory; (3) baseline

data on species populations; (4) recreational use statistics; (5)

values for selected natural resources and/or services; and (6)

restoration measures applicable to injured natural resources and

services. Familiarity with the types of baseline information and

identification of data gaps and needs will allow the trustees to

formulate better study designs and restoration approaches;

(f) Establish data management systems. Data management and

record keeping are critical throughout the restoration process. Data

management systems may best be designed during pre-incident planning

to minimize the possibility of losing critical information during an

incident. For small incidents, this may be a relatively simple

filing system, but for large incidents, a centralized computer-based

system may be essential.

Trustees may decide to develop consistent data management

formats, such as field, laboratory and quality assurance forms, to

facilitate data management. At a minimum, data management should

address the: (1) Type and volume of data; (2) uses and users of the

data; (3) availability of existing data management structures; (4)

quality assurance needs; (5) reporting requirements; and (6) access

to the data. Data management should also include provisions for

distribution of updates for the trustees and others on a timely

basis; and

(g) Identify assessment funding issues and options. Funding of

trustee activities should be addressed during pre-incident planning

because of the need to initiate actions expeditiously after an

incident. Trustees may have several sources of potential funding,

the: (1) Responsible parties; (b) Oil Spill Liability Trust Fund;

and (c) agency funding. Trustees should consult the most up-to-date

guidance available from the U.S. Coast Guard for access to the Fund

and incorporate these procedures into pre-incident planning.

II. Regional Restoration Planning

General

OPA emphasizes making the public whole for injuries to natural

resource and/or services. Where practicable, incident-specific

restoration is the preferred alternative to compensate the public

for their losses. However, for many incidents, such incident-

[[Page 39824]]

specific planning may be impractical because, for instance, injuries

are not extensive or are short-term. For small incidents, incident-

specific planning costs may be high compared to the estimated

damages.

Thus, to achieve OPA's mandate to restore injured natural

resources and services regardless of the scope and scale of those

injuries, trustees are strongly encouraged to use or modify existing

restoration plans, or develop new regional restoration plans. Such

regional planning is appropriate so long as natural resources and/or

services comparable to those expected to be affected by an incident

are addressed in the plans.

Availability of Regional Restoration Plans

Trustees may rely on or adjust existing regional restoration

plans, so long as they have followed or can be modified to meet the

planning requirements under this proposed rule. Lacking existing

regional plans, trustees should seek to develop such plans. The

trustees may organize these plans based on such factors as geography

(e.g., ecosystems or watersheds), injuries anticipated from

incidents, or restoration alternatives.

Regional restoration plans must be developed or annotated in

such a way that trustees are able to justify linking the injuries

from a particular incident or set of incidents with a specific

restoration project or set of projects within the plan. This may be

facilitated by describing the types of injuries anticipated from oil

incidents to specific resources within a region, and describing

these injuries in terms of the types and importance of functions and

services, ecological and human use.

III. Coordination

General

Trustee coordination is crucial to an efficient and effective

assessment and restoration planning process because of the need to

address shared trustee interests in natural resources and/or

services affected by incidents. OPA prohibits double recovery of

damages, which strongly suggests that, where multiple trustees are

involved in an incident, they actively coordinate their activities

from as early in the process as possible, as well as through pre-

incident planning activities.

Incentives for Coordination

Incentives for cooperation include:

(a) Access to funding--requests for reimbursement of the costs

of initiating natural resource damage assessment from the Fund

require that trustees attempt to coordinate their assessments and

their funding requests;

(b) Conflict resolution--lack of coordination among the trustees

or with the responsible parties will likely produce an adversarial,

litigation-charged atmosphere. A joint trustee-responsible party

effort will help resolve legal, administrative and technical

conflicts; and

(c) Pooling limited resources--a joint trustee-responsible party

effort will allow the pooling of financial and human resources for

more efficient and effective restoration planning and

implementation.

Trustees will benefit greatly if coordination procedures can be

established well before an incident occurs. It must be emphasized

that all cooperative arrangements are subject to trustee oversight

because of their fiduciary responsibility to the public.

Agreements

Trustees should consider Memoranda of Understanding (MOU) to

formalize their cotrustee relationships. The MOU or similar

agreements may be prepared either in anticipation of an incident or

shortly after an incident. It is important that trustee agreements

address, at a minimum: the purpose of the agreement; trustee

participants; trustee organization; trustee responsibilities; and a

decisionmaking process.

Trustee agreements may serve as the foundation for building pre-

incident plans for natural resource activities as discussed above.

Of special importance is the selection of a Lead Administrative

Trustee (LAT).

Lead Administrative Trustee (LAT)

When conducting joint assessments under this rule, trustees must

designate a Lead Administrative Trustee (LAT). The LAT serves as the

contact for trustee interaction with response agencies, responsible

parties and the public, and provides general administrative support

to the restoration process.

This proposed rule also does not require that a LAT be a federal

agency. However, when more than one federal trustee(s) is involved,

the federal trustees must select a federal LAT (FLAT) if the

trustees wish to access the Fund to initiate natural resource

activities. In such cases, the FLAT will coordinate federal efforts

with the selected LAT. In addition, if a federal agency is

participating in the NRDA, NEPA is applicable, and a federal trustee

must serve as the lead agency for NEPA planning purposes. Where

appropriate, the trustees may designate co-LATs, consisting of a

federal LAT and the state, tribal, or foreign trustees.

A LAT should be selected by mutual agreement of the trustees. In

designating a LAT, trustees may want to consider such factors as:

Jurisdictional oversight; capability and willingness to address

trust resources; and sequence and duration of involvement in the

incident or similar incidents. Selection of a LAT should be made as

soon as practicable after notification of an incident.

Cotrustee Responsibilities

Cotrustees should be prepared to participate fully in the

restoration process by: Participating in or conducting those studies

or analyses for which they have special expertise or management

authority; make staff available to participate in other NRDA

activities, in particular, to represent the trustee in decisions

requiring cotrustee unanimity; and committing financial resources.

Each trustee may limit this participation based on the extent of

injury to its natural resources as well as legal and financial

constraints.

Coordination With Response Agencies

To the fullest extent practicable without interfering with

response activities, natural resource concerns should be integrated

with response activities before pursuing a NRDA; liability for

natural resource damages is limited to damages for injuries or

losses residual to the response phase, plus any injuries related to

the response. NOAA strongly encourages trustees to coordinate

natural resource injury assessment activities, such as gathering

ephemeral data related to an oil spill incident, with response

actions. Mechanisms to coordinate response and trustee data

gathering needs and processes may also be addressed in pre-incident

planning.

Coordination With the Responsible Parties

Under OPA, trustees have the responsibility to determine

appropriate actions to restore injured natural resources and

services. However, NOAA strongly encourages trustees to include the

responsible parties as full or partial participants in the

restoration process, whenever it can be achieved without compromise

of the trustees' statutory obligations to act on behalf of the

public trust. In determining whether, when and how to invite the

responsible parties to participate, trustees may consider factors

including, but not be limited to, the: willingness of the

responsible parties to participate; capability of the responsible

parties to participate (e.g., knowledge, expertise, and personnel);

and (c) willingness of the responsible parties to pay for the

restoration process.

Enforceable Agreements

Trustees are encouraged to enter into enforceable agreements

with cooperative responsible parties. Enforceable agreements may

have several benefits, including keeping trustees and responsible

parties dealing openly with each other, and reducing transaction

costs associated with separate assessment studies. Enforceable

agreements may address any or all parts of the restoration process,

but should contain, at a minimum, provisions for: the type and level

of participation, joint or independent; deliverables; funding;

public review; and termination.

NOAA encourages the trustees and responsible parties to conduct

joint assessment activities. For joint activities, enforceable

agreements should stipulate that the trustees and responsible

parties are: obligated to use jointly-collected data; barred from

collecting new or different data that challenges jointly-collected

data; obligated to document such jointly-collected data; barred from

challenging the scientific or technical adequacy of methods agreed

upon under the agreement; and encouraged to develop binding

stipulations regarding the interpretation and use of joint study

results.

Negotiations with the responsible parties should not prevent the

trustees from proceeding with their obligations to develop the

restoration plan in a timely fashion.

Coordination Among the Responsible Parties

While it is obviously not as easy to identify the mix of

potential responsible parties that will participate in a given

incident, there are issues that can be addressed in general terms by

the potential responsible parties in advance, that will enable them

to enter the cooperative restoration process more

[[Page 39825]]

efficiently and effectively. In an incident with a single well-

identified responsible party, the ability to assess the situation,

identify the appropriate course of action and most effectively

implement a cooperative response will be improved by pre-incident

planning. In an incident with multiple potential responsible

parties, the need for pre-incident planning is more apparent. In

this latter situation, the potential responsible parties need to

consider the efficacy of a cooperative restoration process, and the

terms under which they would consider entering into such a process.

Appendix C--Simplified Injury Assessment Procedures

I. Type A Models

The Department of the Interior (DOI) is responsible for

developing simplified ``Type A'' NRDA procedures under CERCLA. These

procedures were originally intended to cover both hazardous

substance releases as well as oil discharges. This proposed rule

would allow trustees to use any final Type A procedure incorporated

into DOI's regulations that addresses oil discharges, so long as the

conditions of an incident under OPA are sufficiently similar to the

conditions set forth at 43 CFR 11.33 for use of the Type A

procedures.

Only one final Type A procedure has been incorporated into DOI's

regulations. That procedure is a computer model applicable to minor

discharges in coastal and marine environments, known as the Natural

Resource Damage Assessment Model for Coastal and Marine Environments

(NRDAM/CME) Version 1.2.

The NRDAM/CME Version 1.2 is composed of three submodels that

predict the physical fate of the spilled substance, the biological

effects, and the economic damages caused by the incident. The

physical fates submodel database predicts the dispersion,

concentration, and eventual fate of the discharged oil. The model

accounts for mechanical removal of oil from the environment and the

normal weathering, degradation, and evaporation process. The

biological effects submodel uses the output from the physical fates

submodel, user-supplied information on habitat type and fishing

closures, and a regionally and seasonally specific database of

marine and estuarine fish, invertebrates, and birds to predict

biological injury. The economic damages submodel determines the

monetary compensation necessary for the lost use of the injured

resources. The economic database includes values for commercially

and recreationally harvested species, beach use, and bird watching.

DOI has issued a proposed rule to revise the NRDAM/CME Version

1.2 to comply with the decision in Colorado v. U.S. Department of

the Interior, 880 F.2d 481 (D.C. Cir. 1989) and as part of the

statutorily-mandated review and update of DOI's NRDA regulations. 59

FR 63300 (Dec. 8, 1994). The updated version of the model (Version

2.2) includes significantly more detailed data and more

sophisticated computer technology. The revised model also includes a

fourth submodel focusing on restoration costs. Interior has also

proposed a Type A procedure for minor discharges in the Great Lakes,

known as the Natural Resource Damage Assessment Model for Great

Lakes Environments (NRDAM/GLE) Version 1.31. 59 FR 40319 (August 8,

1994). When final, trustees may use the revised NRDAM/CME and the

NRDAM/GLE for assessments under OPA.

II. Compensation Formulas

As part of the proposed regulations, NOAA proposed a

compensation formula that could be used for small incidents in both

the estuarine and marine environments and the Great Lakes (and other

inland waters). The purpose of the formula is to readily estimate

impacts based on the amount of oil discharged and several simple

data inputs.

To maintain consistency with existing procedures and facilitate

public review of the estuarine and marine formula, the NRDAM/CME

Version 1.2 was used to estimate damages in a representative range

of hypothetical spill scenarios. Those results were the basis of the

estuarine and marine compensation formula. The basic algorithms of

the physical fates and biological submodels within the NRDAM/CME

Version 1.2 were deemed appropriate for this approach. However, to

use more recently-developed information, revised databases were

substituted for both the current biological and economic databases

in the NRDAM/CME Version 1.2. A restoration submodel was also added

to allow the use of average restoration costs to the extent

possible.

The inland waters compensation formula was proposed before DOI

published a proposed rule incorporating the NRDAM/GLE Version 1.31.

Therefore, NOAA used an earlier draft of the NRDAM/GLE to develop

the formula and provided that earlier version for public review with

the January 1994 proposed rule.

DOI is currently scheduled to issue the final revised NRDAM/CME

and the final NRDAM/GLE in early 1996. One option NOAA has

considered is to wait until those models are final and reissue the

compensation formulas. However, to repeat the formula development

after the models are final would require an additional three to five

months, thereby delaying interested parties' use of the formulas

until late 1996. Trustees need some simple method available for at

least an order of magnitude estimate of impacts that, ``on

average,'' are likely to result from relatively small discharges of

oil. Thus, a guidance document has been developed to provide an

interim tool for such a purpose.

The compensation formula guidance document is intended to

provide instructions on how, using the proposed NRDAM/CME Version

2.2 to recreate the spill scenarios used to develop the 1994

proposed estuarine/marine compensation formulas. This guidance will

allow interested parties to recreate the scenarios with the proposed

models, which are significantly different in some ways from the

draft models used to develop the proposed formulas. This approach

also will allow reviewers to comment on the possibility of NOAA

recreating the formulas once the NRDAM/CME and the NRDAM/GLE are

promulgated as final rules. This approach should allow an evaluation

of how the compensation formulas might change from that proposed in

January 1994 and provide approximate estimates of damages for

hypothetical spills based on the formula if it is developed using

the versions of the NRDAM/CME and NRDAM/GLE that are promulgated as

final rules in the future.

Using the data in the guidance document, trustees will have a

simplified, cost-effective tool to use in estimating expected

impacts of most discharges of oil. This information may prove to be

useful in early decisionmaking in a NRDA or in settlement

discussions. In order to use this guidance, trustees must have the

proposed computer models developed by DOI. Computer diskettes

containing the NRDAM/CME Version 2.2 and the NRDAM/GLE Version 1.31

can be obtained from the Office of Environmental Policy and

Compliance, Room 2340, Department of the Interior, 1849 C Street,

NW, Washington, DC 20240, telephone: (202) 208-3301.

Appendix D--Compensatory Restoration Scaling Methods

The following is a list of methods that are mentioned in this

preamble as potential approaches to scaling compensatory restoration

alternatives. The trustees are not limited to these methods and may

use any method that are deemed to be appropriate to the particular

situation.

A. Habitat Equivalency Analysis

This method may be used to scale r

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