What makes the Matson spill different

When it comes to oil or other hazardous materials that have caused damage to natural resources through spillage, “most natural resource damages (NRD) litigation claims are express statutory creations.” That’s according to Carol Dinkens, a partner at Vinson & Elkins and the firm’s Environmental Practice Group Leader. This means NRDs primarily fall under either the Comprehensive Environmental Response, Compensation, and Liability Act of 2006 (CERCLA), the Oil Pollution Act of 1990 (OPA) or the Clean Water Act of 1972 (CWA).

Part of the problem in determining the cost of this spill is that none of these statutes were around the last time a molasses spill large enough to cause damage to the environment occurred.

Another problem is that molasses isn’t considered a hazardous substance by any of these statutes.

Lastly, the Molasses can’t be cleaned up except through natural bacterial processes, while the amount of damages these statutes allow the designated trustees of the damaged natural resource to seek largely depends on how much money is required specifically for clean up. If there’s no clean-up bill, can Matson still be appropriately fined for the destruction of Honolulu Harbor’s marine Eco-system?

A Bacterial Feast
First let’s look at what really happened to that marine Eco-system.

Molasses is refined sugar and, while it’s true that (as of yesterday) roughly 25,000 dead fish and other creatures have been collected by various investigators, the mass death of these creatures is not an issue of toxicity.

“Think of yeast,” said University of Manoa professor of Oceanography Brian Powell over the phone. “They process sugars and oxygen to produce carbon dioxide. It’s similar in the marine environment: You have all these bacteria that will ingest this sugar, along with all the oxygen that they can get out of the water. And that’s what’s suffocating all the marine life in the harbor. In this case the water isn’t really bad—it’s not contaminated or anything—the oxygen has simply been removed.”

“Molasses is much heavier than water,” continued Powell. “So it all just sank and spread out along the ocean floor. It’s about 40 percent denser than seawater. It’s even heavier than sand.”

The same microbes that are killing off marine life in the harbor by gobbling up all the oxygen are also the only way to extract the heavy molasses from the seafloor.

“All of a sudden these bacteria were given a huge amount of sugar,” said Powell. “The only thing preventing them from continuing to digest this sugar is that now they’ve run out of oxygen. With more oxygen, they could break down and dissolve the sugar much faster.”

So what can we do to clean up this mess? Unfortunately, nothing.

“We’re really relying on the marine microbial environment to take care of it,” said Powell. “If you go in and try to mix up the molasses or pull it off the seafloor, you might end up spreading it. I would be inclined to leave it where it is. Mother Nature will take care of it—eventually.”

Using the Clean Water Act
According to Dinkens’ article “Natural Resource Damages Litigation,” statutes like the CWA establish liability for “injury to, destruction of, or loss of natural resources” caused by the release of hazardous substances. The term “natural resources” includes “land, fish, wildlife, biota, air, water, ground water, drinking water supplies, and other such resources.” The term “release” is defined as “any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment.”

The problem is the definition of “hazardous substances.”

311(b)(2)(A): “The Administrator shall develop, promulgate, and revise as may be appropriate, regulations designating as hazardous substances, other than oil as defined in this section, such elements and compounds which, when discharged in any quantity into or upon the navigable waters of the United States or adjoining shorelines ... present an imminent and substantial danger to the public health or welfare, including, but not limited to, fish, shellfish, wildlife, shorelines, and beaches.”

The list of hazardous substances includes some 225 items but does not include sucrose (C12H22O11), or any other component of molasses. However because the list can be revised, and because the molasses has clearly caused substantial damage to the marine Eco-system, it should be possible to still pursue an NRD using the CWA. It would be up to the state Attorney General (AG) to file an NRD suit.

The Cost of Spilled Sugar
The CWA outlines the ways in which companies can be fined for NRD. There are some sections that the AG could site that would almost certainly result in fines for Matson. These include possible administrative and civil penalties for violating sub-section (b), the Congressional declaration of policy against discharges of oil or hazardous substances.

Under sub-section (b)(6), Administrative Penalties, there are two classes of penalties. Class I “may not exceed $10,000 per violation, except that the maximum amount of any class I civil penalty under this subparagraph shall not exceed $25,000” Class II “may not exceed $10,000 per day for each day during which the violation continues; except that the maximum amount of any class II civil penalty under this subparagraph shall not exceed $125,000.”

Under sub-section (b)(7), Civil Penalties, there are four different things Matson could be charged with. The first three, “discharge, generally,” “failure to remove or comply,” and “failure to comply with regulation” could each land Matson with a civil penalty of up to $25,000 per day of violation. The fourth “gross negligence,” could result in “a civil penalty of not less than $100,000, and not more than $3,000 per barrel of oil or unit of reportable quantity of hazardous substance discharged.”

Matson supposedly fixed the leak on Wednesday, September 11, which means a two-day violation. All together, this puts Matson’s fines at around $80,000, assuming only one civil penalty for “discharge, generally,” is awarded. Add another $100,000 if all three of the per-day violations are included and another possible $100,000 or so if gross negligence is awarded for an estimated $280,000 maximum.

The real money in NRD suits comes from sub-section (f), Liability for actual costs of removal. The problem here, again, is that there are no technical costs for removal—the molasses has to be cleaned up naturally by the bacteria in the harbor.

However, according to 311(f)(4), “The costs of removal of oil or a hazardous substance for which the owner or operator of a vessel or onshore or offshore facility is liable ... shall include any costs or expenses incurred by the Federal Government or any State government in the restoration or replacement of natural resources damaged or destroyed as a result of a discharge of oil or a hazardous substance.”

It will be up to whomever Governor Abercrombie designates as trustee to the harbor to conduct a thorough natural resource damage assessment (NRDA) to show a judge how much money it will cost to restore the harbor to it’s “baseline” condition. If the NRDA has enough facts and figures to support that number, it may be possible to still fine Matson under sub-section (f) as well as (b).

If so, the amount the state can seek would be much higher. One crucial factor to determine in this case would be whether the molasses was spilled from a vessel (the ship), or from a facility (storage tanks), as vastly different amounts can be sought depending on the scenario.

From sub-section (f): “[The] owner or operator of any vessel from which oil or a hazardous substance is discharged … shall be liable up to $150 per gross ton of such vessel (or, for a vessel carrying oil or hazardous substances as cargo, $250,000), whichever is greater.”

However, “[The] owner or operator of any such facility from which oil or a hazardous substance is discharged ... shall be liable in an amount not to exceed $50,000,000.”

Reports say that the leak was noticed the day after the Matson ships had been filled and sent off to Oakland, indicating that the leaky pipe was a part of the holding tanks (facility). It is therefore especially crucial for the NRDA to explain in detail exactly how much money will be needed to restore the harbor Eco-system as a judge could award up to an additional 50 million in damages.