adjudicating mystery spills, a natural resource damage claims case ...

ADJUDICATING MYSTERY SPILLS, A NATURAL
RESOURCE DAMAGE CLAIMS CASE STUDY FROM
FLORIDA’S GOLD COAST
ABSTRACT
The United States Coast Guard National Pollution Funds Center
(NPFC) is charged with adjudicating claims (i.e., determining and
executing financial reimbursement, as appropriate) for natural
resource damages (NRD), among others, made by tribal, state and
federal natural resource trustees against the one billion dollar
Oil Spill Liability Trust Fund (OSLTF). Claims made for natural
resource damages include assessment, restoration and emergency
restoration of natural resources injured by oil spills. Often these
claims involve mystery spills, adding complexity to both claim development
and adjudication since spilled source oil characterization,
source verification and cost recovery are often not feasible.
These mystery spills should not be ignored, since it’s the intent of
the Oil Pollution Act 1990 to allow claims to be adjudicated
against the OSLTF even if no responsible party can be identified.
An example of the complexities presented by mystery spill NRD
claims submitted to the NPFC for adjudication is described in this
paper. On August 8, 2000, oil tar balls and oil mats were observed
on beaches in the area of Fort Lauderdale, Florida from an unknown
source. Within the next few days, approximately 20 miles of
high-use recreational beaches, from North Miami Beach northward
to near Pompano Beach (primarily Broward County
beaches), were oiled and required shoreline treatment. The oil spill
incident most likely occurred from a ship traveling northward in
the western edge of the Gulf Stream the previous evening. Natural
resource injuries to birds, turtles, fish and shellfish were determined
and quantified by trustees using spill impact modeling; and
public beach use loss was extrapolated from information gathered
about baseline beach use. Restoration projects were based on the
type and scale of these modeled and extrapolated injuries.
This paper describes technical challenges presented to NPFC
by mystery spill claim adjudication using the Fort Lauderdale
Mystery Spill case study: specifically, NPFC’s validation of claims
by natural resource trustees that the mystery spill caused the
degree and extent of claimed injuries, even when very few injured
organisms were found following the spill. Consistent claim valida-
Carolyn Boltin
Chief, Natural Resource Damage Claims Division
United States Coast Guard
National Pollution Funds Center
4200 Wilson Blvd, Suite 1000
Arlington, Virginia 22203, USA
Email: CBoltin@ballston.uscg.mil
Timothy J. Reilly
Principal, Lighthouse Technical Consultants, Incorporated
149 Main Street
Rockport, Massachusetts 01966, USA
Email: treilly@lighthousetechnical.com
1
tion, regardless of a known or unknown responsible party, is necessary
for effecting rational and defensible NRD claim adjudication
actions by NPFC.
INTRODUCTION
In 1990, Congress passed the Oil Pollution Act (OPA) to help
address a wide range of issues associated with preventing, responding
to, and paying for oil pollution. Title 1 of OPA established
oil spill liability and compensation requirements including
the Oil Spill Liability Trust Fund (OSLTF) to help facilitate
cleanup activities and compensate for damages from oil spills. In
1991, the United States Coast Guard created the National Pollution
Funds Center (NPFC) to implement Title 1 of OPA, administer
the OSLTF, and ensure effective response and recovery. If the
party responsible for an oil spill does not pay or is not known,
claimants may ask the NPFC for reimbursement from the OSLTF.
Claims may be submitted to the NPFC for payment of the following:
uncompensated removal costs, damages to real or personal
property; loss of subsistence use of natural resources; loss of profit
and earning capacity; net loss of government revenue by federal,
state, or political subdivisions; net cost for increased public services
by a state or its political subdivisions; and natural resource
damages (NPFC, 2004). With respect to this latter class, natural
resource damages (NRD), NPFC is charged with adjudicating
claims for NRD made by tribal, state and federal natural resource
trustees against the $1 billion Oil Spill Liability Trust Fund
(OSLTF). Claim adjudication is a statutorily mandated action,
whereby NPFC determines whether claims submitted may be reimbursed
in full or part (or denied) for payment from OSLTF.
Claims adjudication consists of a review of the claim and supporting
documentation to determine compliance with all pertinent
statutory and regulatory requirements, and normally involves,
inter alia, technical evaluation and documentation of claimed
costs. Claims made for natural resource damages include assess-

2 2005 INTERNATIONAL OIL SPILL CONFERENCE
ment, restoration and emergency restoration of natural resources
injured by oil spills. Specific guidance for developing such NRD
claims can be found on the NPFC NRD Claims Division website
at: www.uscg.mil/hq/npfc/nrd.htm .
Often these NRD claims involve mystery spills (i.e., spills in
which no responsible party has been identified), adding complexity
to both claim development and adjudication since spilled
source oil characterization, source verification and cost recovery
directly from the responsible party are often not feasible. These
mystery spills should not be ignored, since it is the intent of the Oil
Pollution Act 1990 to allow claims to be adjudicated against the
OSLTF even if no responsible party can be identified. This paper
describes technical challenges presented to trustees and NPFC by
mystery spill claim development and adjudication, respectively,
using the Fort Lauderdale Mystery Spill (FLMS) as a case study,
and also describes the larger implications to other trustees contemplating
the submission of NRD claims based on mystery spills.
MYSTERY SPILLS AND NATURAL RESOURCE
DAMAGE CLAIMS
Mystery spills in the United States comprise a significant fraction
of OPA spill incidents. Based on petroleum spills reported to
the United States Coast Guard for the years 1991-2001 (using
U.S. Coast Guard’s Marine Safety Information System and Marine
Investigations Module reporting systems), approximately 1 in
every 5 spills was from an unknown (mystery) source (USCG,
2004). Many of these mystery spills are of small size (i.e., less than
100 gallons). However, some of these spills, such as the Fort
Lauderdale Mystery Spill described below can be of a spill volume
that can cause significant environmental impacts. Moreover, since
these spill are OPA incidents, it is incumbent upon federal, state
and tribal trustees to assess and restore injuries to natural resources
resulting from these incidents.
Mystery oil spills present numerous challenges with respect
to developing and adjudicating natural resource damage claims.
For example, since the responsible party is unknown, there is often
little known regarding the details surrounding the actual spill of oil
since these incidents often go unobserved, and are only responded
to once they are reported by a third party. Thus, important information
about the spill is unknown—e.g., was it a prolonged or
instantaneous spill incident? Where did the spill occur? What was
the volume of the spill? What petroleum products actually spilled
and what was the chemical composition of the spilled material(s)?
What were the meteorological conditions at the time of the
unknown spill? Such unknown information can have a material
impact on determining and quantifying the nature, degree and
extent of injuries to natural resources; which, in turn, can impact
the magnitude (and costs) of restoration projects proposed to
address these injuries in NRD claims. These factors present
challenges to trustee claimants developing NRD claims based on
mystery spills.
Because parties responsible for mystery spill incidents are
unknown, these claims go to NPFC NRD Claims Division for
adjudication and funding. Factors making a mystery spill NRD
claim challenging for a claimant to develop are often the same
ones that make adjudication actions difficult for NPFC. Accordingly,
NPFC works with claimants to understand and clarify
challenging mystery spill claim issues and to understand the
rationale behind assumptions and assertions made in the claim.
NPFC’s consistent, thorough and coordinated claim adjudication
process effectively serves the needs of claimants, OSLTF fiduciary
requirements of NPFC, and the trust resources to be assessed and
restored. An example of such a mystery spill claim and corresponding
NPFC adjudication action is provided below.
FORT LAUDERDALE MYSTERY SPILL:
A NRD CLAIM CASE STUDY
Incident: On Tuesday morning, August 8, 2000, oil tar balls and
oil mats were observed on beaches in the area of Fort Lauderdale,
Florida. Within the next few days, approximately 32 Km (20
miles) of high-use recreational beaches and nearshore areas, from
North Miami Beach northward to near Pompano Beach (primarily
Broward County beaches), were oiled and required shoreline treatment.
Despite a concerted effort to identify the source and responsible
party for the incident, the origin of the oil remains unknown
(NOAA and FDEP, 2002). Hence, the U.S. Coast Guard classified
this spill as a mystery spill. Natural resource trustees for this incident,
the National Oceanic and Atmospheric Administration
(NOAA) and the Florida Department of Environmental Protection
(FDEP), estimated the amount of oil stranded on the shoreline to
be approximately 15,000 gallons (Zengel, 2000; NOAA and
FDEP, 2002). NOAA and FDEP were parties to the natural resource
damage claim (i.e., the “claimants”). This claim was submitted
to the NPFC since no responsible party was identified.
Observed Impacts: Within a few days of the August 8, 2000 spill,
oil tar balls and oil mats contamination of high beach value shoreline
resulted in lower beach attendance at a number of beaches.
The greatest recreational impacts occurred at Fort Lauderdale
Beach, John U. Lloyd Beach State Park, Dania Beach and Hollywood
Beach. Each of these beaches was closed to swimming on
August 8 and 9, 2000 (NOAA and FDEP, 2002). No fish or invertebrate
kills were observed throughout the area following the incident.
Though sea turtles were hatching on area beaches at the time
of the incident, only one dead oiled hatchling turtle was observed
washed up on a beach (South Florida Sun-Sentinel, August 11,
2000a). Several pelicans were observed oiled at Dania Beach
(South Florida Sun Sentinel, August 10, 2000) but were not recovered
due to their continued flight capability. However, four oilcontaminated
birds (two pelicans, one mockingbird and a pigeon)
were retrieved and sent to the Wildlife Care Center for rehabilitation
(South Florida Sun Sentinel, August 11, 2000b).
Mystery Spill NRD Claim Development Issues to Address: In
order to develop the FLMS NRD claim for submission to NPFC
for payment, the NRD claimants (NOAA and FDEP) were
required to not only conduct normal NRDA activities (i.e., injury
assessment and restoration plan development) but also address
the suite of unknowns surrounding this mystery spill, which are
central to the conduct of a defensible injury assessment (e.g.,
defining spill scenario, source oil composition and toxicity, etc.).
Though there were a plethora of issues that required addressing in
FLMS, we present a few here for illustrative purposes.
Spill Scenario Development: Using oil spill (SIMAP) modeling
and local shipping traffic practices as forensic tools to help address
these issues, the trustees concluded that the oil was likely discharged
from an area near the western edge of the Gulf Stream
sometime during darkness the evening or morning prior to it being
reported on the beach on Aug. 8, 2000. This is based on: the backtracking
of the oil from the oiled beaches using SIMAP modeled
spill hindcasting techniques; the likelihood that the spiller would
have released the oil after dark on 7 August (since it was not reported
as seen until morning on 8 August); and the practice of
northbound ship traffic traveling in the Gulf Stream (French
McCay et al., 2001).
Source Oil Composition: Source oil classification was based on
the collection and analysis of a tarballs that washed ashore. Tar
balls collected from the beach contained a total polyaromatic
hydrocarbon (PAH) content of 200 ppb of total PAH (=
0.00002%), based on tarball sample 2N0222-01 (LSU, 10 August
2000 memo). Thus, the oil was highly weathered when it came
ashore. In addition to tarballs washed ashore, black oil was
observed floating on the water. The spill occurred at 29°C. At this

warm temperature, most evaporation of volatile and certain semivolatile
constituents—such as monoaromatic hydrocarbons
(MAH) and certain lower molecular weight PAH—occurred
within the first 16 hours of the spill incident. Due to warm ambient
air and water temperatures, it is likely that oil weathering proceeded
rapidly and that the oil contained significant PAH concentrations
at the time of the spill (French McCay et al., 2001).
Trustees characterized the spilled oil as an Intermediate Fuel Oil
(IFO), sometimes referred as a Number 5 Fuel Oil. Since the percentage
of semivolatile and volatile polyaromatic hydrocarbons
(PAH) and monoaromatic hydrocarbons (MAH) have a material
effect on toxicity in the SIMAP model used to determine impacts
to biota in the FLMS claim, claimants needed to determine more
specifically the concentrations of these constituents, especially the
PAHs. Because a source oil sample was not available to provide a
more quantitative PAH analysis for a No. 5 (intermediate) fuel oil,
claimants used a surrogate PAH fraction as determined from a
recent spill of a mix of No. 6 and No. 2 fuel from the PEPCO
pipeline in Maryland (into the Patuxent River, April 2000). That
source oil contained 3.3% PAH with log(Kow)≤5.6, which are the
acutely toxic components (French McCay et al., 2001). Thus, a
PAH content of 3.3% was used in the FLMS model runs.
Spill Volume: The monoaromatic oil components (benzenes,
xylenes and toluenes also known as BTEX) were not measured
in the source oil for either FLMS or the PEPCO spill, but are
assumed to have negligible impact on water column organisms
because of its high volatility (French McCay et al., 2001). The
oil volume that came ashorewas estimated by Zengel (2000) to be
approximately 15,000 gallons based on observations of amount of
oil on each beach segment. Zengel’s estimates were corrected for
the volatile and semi-volatile content (3.3% PAH + 23.4% other
volatile hydrocarbons), resulting in a volume estimate of 20,456
gallons. Assuming the Gulf Stream velocity estimated by NOAA
NRDA personnel on scene during the clean-up and using wind
data for the days preceding the oil stranding, the discharge location
was likely southeast of the most heavily oiled beaches. The oil
would have crossed the west edge of the Gulf Stream at midnight,
and then come ashore between 0800 and noon on 8 August. Thus,
the likely spill occurred between 1900 and 2300 on 7 August. This
range of spill times was run with the model to determine the
sensitivity of the injury results to the assumed spill time. The spill
was assumed to occur continuously over 1 hour along a straight
track line (French McCay et al., 2001). To determine impacts to
biological assemblages present within the area of modeled impact,
the SIMAP model was run using the biological assemblage
database from the Natural Resource Damage Assessment Model
for Coastal and Marine Environments, NRDAM/CME for this
portion of coastal Florida (ASA, 1996).
Fort Lauderdale Mystery Spill NRD Claim: The trustees determined
and quantified injuries in four main categories: 1) recreational
beaches, 2) sea turtles, 3) water column injuries to fish and
invertebrates, and 4) seabirds. Based on this work, the trustees
claimed that the mystery spill incident caused the loss of public
beach use and significantly injured sea turtles, fish and invertebrates,
and seabirds. The trustees used restoration costs as the
measure of damages for injuries to the ecological resources
(i.e., “service-to-service” scaling approach). These costs include
the costs to design, permit, construct, and monitor the restoration
projects. Injuries and losses to the use of public beaches were more
cost-effectively quantified in terms of lost value to resource users.
For this category of injury, the trustees proposed to conduct
restoration actions by using recovered funds to provide replacement
services to resource users—i.e., “value-to-cost” scaling
approach (Conner and Wieczynski, 2003). A listing of determined
injuries and proposed restoration projects, including respective
costs, to compensate for these injuries is provided in Table 1.
NATURAL RESOURCE DAMAGE ASSESSMENT 3
Challenges in Adjudicating a Mystery Spill Claim: The NPFC
NRD Claims Division is tasked with two major functions: 1) paying
claims for natural resource damages that comply with Oil
Pollution Act of 1990 (et seq.), and applicable state and federal
laws such as NEPA, the damage assessment regulations at 15 CFR
990 and the Coast Guard’s claim regulations at 33 CFR 136; and
2) exercising a fiduciary responsibility to the source of claim
funding, the OSLTF. Accordingly, the NPFC pays for, inter alia,
reasonable assessment costs and the costs required to implement a
restoration plan that restores, rehabilitates, replaces, or acquires
the equivalent natural resources injured by an oil spill. Functionally,
it is the job of the NRD Claims Division to evaluate submitted
natural resource damage claims to verify that claimed assessment
costs are reasonable and a submitted restoration plan complies
with these state and federal requirements.
Because claims must comply with OPA -and other- regulatory
and statutory requirements, claim adjudicatory actions by NPFC
must be consistently applied to all NRD claims. Such consistent
evaluation/verification efforts are uniquely challenging when
adjudicating mystery spill natural resource damage claims where
much of the basic spill information (e.g., responsible party identification,
spill scenario and oil composition), having a material
affect on spill impacts and claimed costs, is not known. However,
federal, state and tribal trustees of natural resources, as well as the
NPFC (having NRD claim adjudication authority) are mandated
under OPA to address natural resource damages resulting from oil
spills, including mystery oil spills, despite this lack of critical
information. To comply with this mandate, trustees are forced
to construct “best guess” estimates regarding spill scenario, fate
and effect details when developing mystery spill NRD claims.
Correspondingly, NPFC must evaluate the reasonableness of these
derived spill fate and effects approximations, as well as corresponding
restoration plans to compensate for these injuries, to
determine whether such NRD claims should be paid or not. What
does NPFC require in mystery spill NRD claims to effect claim
verification when field-derived data supporting the claim are
lacking? The answer lies in the provision of technically defensible
rationales that support trustees’ claim. The more supporting
rationale (grounded in science, economics and engineering) and
reasonable explanation supplied by a NRD claimant to NPFC, the
more straightforward—and successful—the claim adjudication
process is likely to be.
For example, in the FLMS NRD claim, NPFC found the underlying
basis (rationale) for the spill scenario to be reasonable; i.e.,
based on a reasonably implemented application of SIMAP, a peer
reviewed and commonly used spill fate and effects model. Conversely,
NPFC found that the use of PEPCO IFO as a surrogate for
PAH composition, a major driver in modeled oil toxicity in the
SIMAP model and, thus, a critical modeling datum input, was not
well supported in the claim or in the modeling report found in the
Administrative Record. Hence, NPFC researched the relative PAH
characteristics of 25 comparable intermediate fuel oils and found
that the use of the PEPCO/No. 5 fuel oil, with a 3.3% PAH fraction
was reasonable, and fell well within the range of these highly
variable types of fuel oils, as did the 23.4% volatile aromatic
(BTEX) fraction. Further, NPFC found that the trustees reasonably
scaled restoration projects and that the capability of most of the
projects to restore injured resources was well supported in the
claim with a clear rationale for most of these projects provided.
However, for bird restoration, NPFC questioned whether concomitant
benefits existed for the mangrove restoration project to
restore lost bird resources as well as lost water column resources.
The major seabird species predicted by modeling as impacted by
this incident included double-crested cormorants and, to a lesser
extent, pelicans. Specifically, mangrove habitat provides nesting
habitat for these, and other, seabird species. NPFC considered
if mangrove habitat creation proposed for restoration of water

4 2005 INTERNATIONAL OIL SPILL CONFERENCE
Table 1. Summary of Fort Lauderdale Mystery Spill Natural Resource Damage Claim
column injuries could concomitantly compensate for seabird
losses. If mangrove habitat creation would provide nesting habitat
for lost birds, then funding signage creation as bird restoration, as
the claimant proposed, would result in over-compensation for bird
restoration. Over compensation for an injured resource is not allowed
under OPA. However, the proposed site for the mangrove
restoration is not optimal habitat for colony nesting bird species
such as the brown pelican and the double-crested cormorant.
While the area of the proposed mangrove (~10 acres) would be
sufficient to support a bird colony, there are multiple potentially
negative variables associated with this site that make nesting es-
tablishment difficult. For example, the proposed mangrove restoration
area is not protected from ground predators such as small
mammals, and is proximal to people/development. Given that
mangrove creation, as proposed, will not adequately compensate
for bird losses, NPFC determined that the proposed bird signage
was an appropriate restoration strategy for injured avian resources.
Coordination between NPFC and Claimant on Claim Issues:
Because NRD claims often contain complex scientific, economic
and engineering information and data that is subject to multiple
interpretations, it is frequently necessary for NPFC to discuss

claim adjudication issues with claimants to better understand
assumptions, rationale and conclusions in NRD claims. This is
especially true in NRD claims based on mystery spills since critical
data/information are often not known. This was the case in the
Fort Lauderdale Mystery Spill NRD claim. For example, NPFC
discovered a number of apparent inconsistencies in model input
information (e.g., reported PAH content and LC50 input information
were inconsistently or erroneously reported in supporting
claim documentation; variances in these model data inputs would
have a significant effect on quantified injuries to marine fish and
invertebrates). Discussions with the claimant revealed that the
appropriate model input data were used and discrepancies
identified during claim review were simply claimants’ errors in
reporting data inputs. Moreover, open discussions between
claimants and NPFC regarding unique claim issues facilitate a
more thorough understanding of the incident (and claim) and
increase the collective abilities to accurately compensate for injured
natural resources. Such discussions may be had before claim
submission to ensure that claims are appropriately constructed
during claim development and after submission to address underlying
claim issues as they arise.
Claim Adjudication: As a final phase of claim adjudication,
NPFC makes a determination regarding the claim payment. This
determination is based on the claim’s demonstration of compliance
with OPA and other applicable state and federal statutes and regulations.
In the case of the Fort Lauderdale Mystery Spill, NPFC determined
that claimants had met all major requirements and
criteria for a successful assessment and restoration claim and the
claim was paid in the full amount requested by NOAA and the
State of Florida: $2,213,207 ($632,296 to reimburse the claimants
for past assessment costs and $1,580,911) to fund the implementation
of the restoration plan as described in Table 1 (NPFC, 2003).
CONCLUSIONS
Mystery spills present unique challenges when developing a claim
for natural resource damages since basic spill information that
may have a material affect on the level of natural resource injuries,
such as spill scenario and source oil composition, is often not
known. That notwithstanding, natural resource trustees are mandated
to assess the nature, degree and extent of injuries and
develop a restoration plan that compensates for these injuries from
such incidents. The US Coast Guard’s NPFC Natural Resource
Damage Claims Division adjudicates and pays claims for NRD
from oil spills, including mystery spills, through the consistent use
of statutory and regulatory claim requirements. Using the August
2000 Fort Lauderdale Mystery Spill as a case study, it is observed
that, though critical information about a mystery spill may be unavailable,
forensic tools such as oil spill fate and effects models,
comparative oil analyses and an understanding of local shipping
patterns, among others, can provide useful information for trustees
to fill critical knowledge gaps within a mystery spill natural resource
damage claim.
The claimants provision of clear and defensible rationales for
injury assessment studies, important assumptions and data interpretations
serve to clarify NRD claims for NPFC (and the public)
and facilitate a more straightforward and, likely, successful NRD
claim. In the case of FLMS, such rationales and supporting technical
documentation generally provided sufficient evidence for
claims of aquatic resource injuries where scant “hard evidence”
(i.e., observations of fish, invertebrate and turtle kills) was evident.
However, where supporting rationale was considered inconclusive
by NPFC, such as claimants’ rationale for using a 3.3% total PAH
concentration in modeling toxicity of spilled IFO, a highly variable
petroleum product, based on data from only one other spill
incident, NPFC conducted additional evaluation to determine that
this important modeling input variable was reasonable and
NATURAL RESOURCE DAMAGE ASSESSMENT 5
supportable. Accordingly, claimants are well served to provide
strong rationale and supporting evidence, where feasible, to support
NRD claims. Finally, communications between claimants and
NPFC before claim submission regarding difficult or confusing
claim issues will help to ensure a more successful and timely claim
adjudication, once submitted. NPFC welcomes such line of
questions from claimants to facilitate more comprehensive and
successful NRD claims.
BIOGRAPHIES
Ms. Carolyn Boltin is the Chief of the Natural Resource Damage
Claims Division of the U.S. Coast Guard National Pollution Funds
Center in Arlington, VA. She is an economist with a Bachelor’s
degree in marine science from the University of South Carolina
and a master’s degree in natural resource economics from Clemson
University.
Mr. Timothy J. Reilly is a Principal at Lighthouse Technical
Consultants, Incorporated in Rockport, MA. He is an environmental
Scientist specializing in natural resource damage assessments
with a bachelor’s degree in marine biology from the University of
Massachusetts and a master’s degree in environmental health from
the University of Minnesota.
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