Alaska regulators seek more money for oil spill fund

A rocky beach with rocks covered in thick black oil. Spruc trees in bacground.
Oil from the Exxon Valdez oil spill on a beach in Prince William Sound (Creative Commons photo by ARLIS Reference)

ANCHORAGE, Alaska (AP) — Alaska environmental regulators are seeking additional money for the state’s oil spill response fund amid a review of requirements for petroleum producers and shippers.

Department of Environmental Conservation Commissioner Jason Brune has advocated for the state administration and Legislature to commit more money to the Spill Prevention and Response (SPAR) fund, The Alaska Journal of Commerce reported Wednesday.

Brune acknowledged the challenges in asking for an increase as the state faces a fiscal year 2022 budget deficit of about $2 billion.

It remains a priority of mine to bring sufficient funding to SPAR,” Brune said. “It’s going to be a heavy lift, but it’s one I’m going to attempt to make.”

Environmental conservation department officials declined to specify the size of a request to the Office of Management and Budget for the fund.

They recognize the “funding sustainability issues” for the fund and are committed to working with the Legislature, department spokeswoman Laura Achee said in an email.

Department officials have supported increasing a surcharge on refined fuel products sold in the state from 0.95 cents per gallon to 1.5 cents to help cover the fund’s anticipated revenue shortfall.

The refined fuel surcharge was implemented in 2015 to support the spill response fund, which largely relied on a 5-cent per barrel charge on oil produced in the state.

The fund’s prevention account also receives revenue from fines and settlements related to hazardous substance spills.

The account held $8.5 million at the end of 2019, the fund’s annual report said.

More than $25 million was spent in fiscal 2019, while the fund collected only $16.3 million, primarily from the oil surcharges.

Brune said he believes the coronavirus pandemic will increase the funding difficulties because less fuel subject to the surcharge is likely to be sold.

“With COVID, people are just driving less,” Brune said. “They’re working from home and not traveling.”

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