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Most of the oil spills in marine, estuarine, or freshwater environments of the United States are small (less than 1,000 gallons) and result in minimal injury to natural resources or little to no loss of services. However, federal, state, and Indian tribe trustees for natural resources are entitled under a variety of laws, including the Oil Pollution Act of 1990, to collect damages (money) from responsible parties to compensate for the foregone services and restoration of the services provided by the natural resources. Alaska, Washington, and Florida have developed a formula-based approach to calculating natural resource damages resulting from most spills; the federal National Oceanic and Atmospheric Administration and several other states are considering developing a compensation formula. The ideal compensation formula is a simplified assessment process that (a) can be applied rapidly, (b) requires relatively small transaction or assessment costs, (c) requires minimal site- and spill-specific data as inputs, (d) is based on generally accepted scientific and economic principles and methods, and (e) results in damage values acceptable to both the trustees and the responsible party. In theory, a compensation formula could be applied to most small oil spills in United States waters.

EVALUATION OF COMPENSATION FORMULAE TO MEASURE NATURAL RESOURCE DAMAGES1