example, when the Argo Merchant off the coast of Maine broke up in 1976, the 

 Federal Government spent over $500,000 for field and laboratory work asso- 

 ciated with the spill, but because there was no agreed to assessment process 

 we still may have fallen short of providing that basic information necessary 

 in bringing an adequate natural resource damage claim. 



Another major benefit of codified damage assessment procedures is that 

 they act as a disincentive to spillers. Certainly, the knowledge of a po- 

 tential liability for damages to natural resources will act as a disincentive 

 itself, but advance knowledge on the part of a potential spiller of what the 

 total natural resource costs for which he may be liable, may induce a poten- 

 tial spiller to use more care in or to completely avoid areas identified by 

 the regulations as sensitive or having the highest restoration costs. How 

 much such advance notice of potential liability will create a disincentive is, 

 as is the case in many areas of the law, open to question. But the Environ- 

 ment Committee decided that advance notice of fair damage assessment rules not 

 only would provide an extra disincentive, but would in addition be the most 

 fair treatment for both the spiller and the public. 



Possibly the most important reason for codified damage assessment pro- 

 cedures is that they provide a standard mechanism for making whole the public 

 for its loss in a spill where natural resource damage is involved. The Envi- 

 ronment Committee believed that damages based on direct economic losses of 

 natural resources and the costs necessary for restoration of the damaged re- 

 sources represents the true loss incurred in a spill and should be used 

 rather than arbitrary penalties that are based on the number of gallons 

 spilled or some other artificial measure. 



There are many examples of where such ad hoc assessments have failed to 

 adequately estimate or compensate for such losses. In 1972 a Steuart Trans- 

 portation Company barge sank in the Chesapeake Bay spilling 250,000 gallons 

 of No. 6 fuel oil. Damages were estimated at $1,330,000. This included 

 cleanup costs of $610,000, the value of the spilled oil at $80,000, and the 

 value of the waterfowl killed estimated to be $640,000. The estimate of the 

 number of waterfowl killed and the method for determining their value was 

 subsequently questioned. 



Everyone agreed that the waterfowl were valuable, but a dispute over 

 the best process for computing this valuation resulted in the discounting of 

 this entire area of damage from the final assessment. While the Committee 

 realized that arguments on how best to complete a damage assessment will go 

 on for years, it decided that there must be at present a best technique for 

 making such judgments and that this should be used to avoid the obvious in- 

 equities such as those in the Chesapeake spill just described. 



The Senate bill would mandate after a formal regulatory review process 

 the use of such a "best" procedure until a more reliable one is discovered and 

 can be incorporated into the regulations for damage assessment. In other 

 words, the approach used in the bill calls on the Federal agencies involved 



160 



