One day after the public learned about an oil spill off the coast of Huntington Beach, Rep. Michelle Steel sent President Joe Biden a letter asking him to authorize a major disaster declaration. She said on Oct. 3 the federal resources such a declaration would bring to the area were “imperative for a swift recovery and the support of assistance efforts for all Californians.”
Last week, a bipartisan group of 10 local leaders – including four out of five county supervisors, a state senator and state assembly member – plus three coastal cities wrote their own letter to Biden that also cited this request.
“I just think at this point we don’t really know what all the damages are and the recovery from this is going to be quite some time,” said Huntington Beach Mayor Kim Carr, a Democrat who signed the letter. “If the congresswoman sees an opportunity to help our small businesses, I support that.”
It’s not hard to see why local officials would clamor for any available help. While the size of the spill has been downgraded from an initial high estimate of 141,000 gallons to roughly 25,000 gallons, politicians still are hearing firsthand from local tourism businesses who’ve lost significant revenue during the spill and from fishery owners that can’t go back to work. And a presidential declaration can quickly crack open the federal checkbook to help individuals and public infrastructure impacted by disasters.
But there are strict rules around presidential disaster declarations, which experts say aren’t in play for the Huntington Beach oil spill. That’s why a major disaster has never been declared for an oil spill in the United States.
There also is another established program to get resources to small businesses and nonprofits impacted by disasters such as oil spills. State and federal officials say they’re working through that process for this spill now, with news on that front expected soon.
Do oil spills qualify?
When it comes to hopes for relief through a presidential disaster declaration, it appears some Orange County politicians may be barking up the wrong tree.
A major disaster wasn’t declared for the 1969 oil spill off Santa Barbara that helped spark the modern environmental movement. Or for the Exxon Valdez spill of 1989, which leaked 10.8 million gallons of crude oil off the coast of Alaska. Or for 2010’s Deepwater Horizon spill in the Gulf of Mexico, which is considered the largest in marine oil spill history.
Only the governor of an impacted state can request authorization of a major disaster, and the president can’t make one without a request from the governor. That’s why other local Congress members, including Reps. Katie Porter, D-Irvine, and Mike Levin, D-San Juan Capistrano, said they hadn’t asked Biden for such a declaration.
“Rep. Levin has spoken with Gov. Newsom about a potential disaster declaration request, and he trusts the governor to make the request if it is needed,” Levin spokesman Eric Mee said.
When asked this week whether Newsom was considering such a request, his office deferred to comments he made during a press conference while he was touring the site of the oil spill on Oct. 5, when he made a state declaration of emergency.
“When the conditions are such that we can reach that next threshold … we will pursue those declarations. But at this moment, the declaration we put out yesterday was as far as we feel we can go directly with the President.”
A major disaster declaration has only been formally requested for an oil spill once, for a leak off Rhode Island in 1976, according to the Federal Emergency Management Agency, or FEMA, which administers the program. President Gerald Ford denied the request.
The main barrier UCLA professor Sean Hecht, who focuses on ocean and coastal law, sees is that the Stafford Act dictates disaster declarations are reserved for natural catastrophes and for “fires, floods and explosions” from any cause. While presidents do have some discretion in these cases, and some spills do involve explosions, in general he said, “It’s hard to see how an oil spill would qualify.”
Presidents have declared major disasters 2,623 times, according to FEMA records. They’re most commonly made for severe storms, flooding and hurricanes. In California, it’s often for wildfires. That’s why Hecht said he thinks the program is a “poor fit” for oil spill response, since it was designed around getting funds to residents who’ve lost their homes or to cities that have had crucial infrastructures, such as roads or electricity, taken out.
Issuing disaster declarations for oil spills has been debated before, particularly after the massive Deepwater Horizon spill in 2010. But generally, if there’s an oil company or other party that can be held accountable for a disaster, the idea is that entity should be responsible for covering all costs rather than draining more money from the often-strapped federal Disaster Relief Fund.
When it comes to lost revenues, Hecht said business owners are largely stuck relying on business interruption insurance while they fight in civil court for compensation from the oil company. Multiple lawsuits seeking class-action status already have been filed against Amplify Energy and its subsidiary Beta Offshore, which operates the pipeline that leaked off the coast.
Another barrier to a major disaster declaration is that, to justify such a request, a governor must provide FEMA with estimated damages. Those are still being collected and calculated as part of the investigation, U.S. Coast Guard authorities said Friday.
To qualify for federal disaster relief, damages must exceed FEMA’s per-capita formula, noted Mark Neveau, who was a federal coordinating officer for FEMA for 16 years. Based on this year’s numbers, California would have to show damages from the oil spill of at least $65.2 million, while Orange County would have to show damages of at least $13 million.
Local damages are piling up. Newport Beach Mayor Diane Dixon said having the beaches closed cost her city $75,000 in parking fees and $12,000 in recreation program fees when compared with the same time one year ago. They also had roughly 1,200 hours of unbudgeted staff overtime to respond to the spill.
Collecting data on damages can take some time, which is why Neveau said disaster declarations can come months after the actual incident occurred.
Are more resources needed?
A final hurdle for a disaster declaration is that a governor must certify the situation is so severe that it’s “beyond the combined capabilities of state and local governments to respond.”
When asked what specific tasks state and local officials can’t handle, and what additional resources she feels Orange County needs that might justify a disaster declaration, Steel’s office deferred to local officials and businesses for details.
At this point, Orange County District 2 Supervisor Katrina Foley said it looks as though state and local authorities have the spill response well in hand, and she said an infusion of federal cash or other resources doesn’t appear to be necessary. The joint state and federal command overseeing cleanup already has Amplify Energy reimbursing some costs, Foley said.
Orange County CEO Frank Kim said declaring a local emergency was important after the oil spill because it activated the county’s Emergency Operations Center and helped coordinate communications with the beach cities affected by the spill and the responding state and federal agencies.
The state declared an emergency in connection with the spill a few days after it was discovered. Kim said that allowed agencies, including state Fish and Wildlife, to send staff to oversee the response.
Making those declarations also opened access to a federal Oil Spill Liability Trust Fund, which is helping cover the U.S Coast Guard response, Foley said.
Kim said it’s not clear whether the county needs additional federal resources right now, and officials are trying to figure out long-term needs such as restoration of damaged wetlands. The county also this week hired a law firm to represent it in any future litigation and ensure it gets reimbursed for any spill-related expenses.
Other help possible
For impacted businesses that haven’t yet gotten any relief, and nonprofits who say they’ll be cleaning up environmental impacts in the area for years, the notion that there already are enough resources to address fallout from the spill is hard to believe.
John Villa, executive director of the nonprofit Huntington Beach Wetlands Conservancy, said they have consultants trying to determine how much oil soaked into the soil of the fragile marsh environment. He knows the full-force cleanup effort won’t go on forever, and it won’t be able to get every bit of oil.
“Once everybody leaves here, our job is then what’s left behind that they didn’t clean up,” Villa said. “If I don’t get money from the responsible party, my only way to do it is through grant writing.”
But there is one other potential lifeline in the works.
The federal Small Business Association can declare a disaster even without a presidential disaster declaration. The bar for that designation is much lower, and Kevin Wynne, West Coast spokesman for the SBA’s Office of Disaster Assistance, said it can quickly bring low-interest loans to local small businesses and nonprofits impacted by the spill.
California still has to request a disaster declaration from the SBA. But to apply, they simply have to submit paperwork from at least five small businesses who testify they’ve had “substantial economic impact” as a result of the disaster. Wynne said his agency is working closely with state officials, who are collecting that paperwork now.
If the SBA determines a disaster declaration is warranted, he said they can start taking loan applications from impacted businesses within 24 hours and turn funds around within two weeks.
Small businesses, agriculture and aquatic ventures, and nonprofits can get up to $2 million in loans to cover working capital costs, such as payroll and debt payments. Loans would be available for nine months for all impacted businesses in Orange County, along with adjacent counties. Businesses could pay loans back over 30 years, with a deferral period upfront and interest rates fixed below 4%. And nonprofits get a break of one percentage point.
If local leaders aren’t already advocating for SBA disaster relief, Wynne said they might want to start.
“We know these businesses are hurting,” Wynne said. “This is a real good program to get these small businesses up and running again, with a very, very simple application process.”
Source: Orange County Register