Oil Pollution Act Of 1990

Under the George H. W. Bush Admin, the Oil Pollution Act of 1990 was passed. Far from being the first environmental legislation on oil spills (those go back pre-1900s), the act came late on the heels of the 1967 English Channel oil spill, which only slapped the oil company, Torrey Canyon, with a little $50 fee, despite the $8 million in cleanup costs from the spill.

After several other oil spills and oil spill-related outcry from the public (we like our oceans) happening as a part of the environmental movement that started in the mid-1960s, the Oil Pollution Act Of 1990 was eventually passed.

The act tried to incentivize companies to spill oil less often by assigning responsibility (re: liability) for oil spill damages and cleanup costs. It created a guide for What to Do When Another Oil Spill Happens, and imposed regulations on oil companies to make them be more careful.

Spilt milk is one thing, but spilled oil is another.

From an economic point of view, the Oil Pollution Act Of 1990’s aim was to correct a market failure by assigning the unpaid social cost caused by companies. When all liabilities are assigned, a negative externality can be gotten rid of, and social cost paid off.