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Alaska-1440-(1)

An Introduction to Alaska Pollution Laws & Regulations

In 1989, the oil tanker EXXON VALDEZ ran aground in Prince William Sound, Alaska, spilling around 37,000 tonnes of Alaska North Slope crude oil that spread over an estimated 1,800km, coating rocky shorelines and impacting populations of sea birds, otters, and more. This incident was the catalyst for significant changes in pollution regulation within Alaska. Recommendations following the incident also served as the basis for the Federal Oil Pollution Act, 1990.

Alaska imposes requirements on vessels in addition to those already set by the Federal government. It is important that Members work closely with their appointed Qualified Individual to ensure compliance.

For further articles on OPA 90 and Trading to the USA, please see our Pollution Guides page.

With thanks to Schwabe, Williamson & Wyatt for their guidance.

All vessels operating within Alaska state waters must comply with Alaska VRP requirements in addition to Federal VRP requirements. State waters extend seaward 3 nautical miles from lower, low water as established by the National Oceanic and Atmospheric Administration (NOAA). Additional areas included as state waters are Cook Inlet and Prince William Sound.   

Tank Vessels

‘C Plans’

Tank vessels are subject to stricter requirements than Federal law, and must carry an Alaska- approved Oil Discharge Prevention and Contingency Plan, or ODPCP if they are calling at Alaska ports in passing through Alaskan waters in any capacity other than on innocent passage. This plan is more often referred to as a ‘C Plan’, and gives the vessel access to the relevant Oil Spill Response Organisation, or ‘OSRO’ (see OSRO section, below).

The holder of the C Plan must be the person exercising ‘primary operational control’ over the tanker’s operations whilst in Alaska waters. Depending on the arrangements with the vessel, this could mean the owner, operator, or demise charterer is required to have a C Plan under Alaska law.

In practice, for both reasons of time and cost, it is not feasible for the operator of a spot-chartered tanker to prepare and obtain approval of a C Plan. State review of a proposed tank vessel C Plan takes at least six months. Instead, a party in Alaska – typically an oil major as the charterer of the ship – allows the visiting tanker to shelter under their existing C Plan, as well as their OSRO coverage.

To make this permissible under Alaska law, the C Plan holder must be certified as having “primary operational control” of the ship. The International Group has accepted this concept and has approved a number of “Primary Operational Control Agreements” for the purposes of poolable cover. It should be noted that this concept does not envisage the party signing the Primary Operational Control Agreement actually exercising any degree of control of the vessel over and above that envisaged in the normal charter party relationship. It is merely a documentary formality necessary to allow ships to trade in to Alaska without the need for the shipowner to complete onerous and expensive procedures.  

Members are advised to contact the Club prior to signing any Primary Operational Control Agreement to ensure that the proposed terms do not fall foul of International Group requirements and potentially prejudice cover.

The domestic insurer of the C Plan holder sometimes requests a set of letters from P&I Clubs to confirm entry and extent of cover. These are commercial requests rather than a legal requirement. Members should liaise with their usual contact at the Club for advice.

Non-tank Vessels

Non tank vessels over 400GT must also have an approved contingency plan that meets Alaska requirements- the SOPEP and NTVRP do not satisfy Alaska requirements.

Unless performing an innocent passage, this contingency plan must be in place before the vessel enters Alaska waters. Members should liaise with their QI to ensure these plans are submitted to the relevant authorities for approval no less than 5 working days prior to a vessel’s arrival in Alaska waters.

Alaska COFRs are valid for one year and must be renewed each year. Members are advised to liaise with their QI for assistance with Alaska COFRs for Non tank vessels.

Tank Vessels

Tank vessels cannot fully satisfy Alaska COFR requirements with proof of entry in an IG P&I Club. 

The value of the Alaska COFR will vary and depends upon the tanker’s storage capacity and the type of cargo onboard. The amounts also adjust every three years to account for inflation. The amounts are due to be updated in 2026.
 

Cargo Calculation (effective as of October 1, 2023)
(See 18 AAC 75.235(a)(3)-(4))
Crude The greater of $668.70, per incident, per barrel of storage capacity or $222,900,000. 
Non Crude The greater of $222.90, per incident, per barrel of storage capacity or $2,229,000.  The COFR for tanker vessels carrying non crude cargo is capped at a maximum of $78,015,000.

For the entire value of the COFR for tankers carrying refined oil products, and the first US$111,450,000 for tankers carrying crude oil, the proof of financial responsibility must by law contain language allowing direct action against the guarantor and is consequently not acceptable to IG Clubs. 

For amounts in excess of these minimum limits on tankers carrying crude oil, a Certificate of Entry from an IG Club is acceptable, as the direct action requirement no longer applies to these higher amounts.

Like the C Plan, above, it is not feasible for vessels operating on spot to arrange an Alaska COFR.  Moreover, Alaska law requires that the C Plan holder also be the party that holds the Alaska COFR to demonstrate that it has the financial capacity to activate and implement the C Plan to respond to a spill. For these reasons, it is usually the oil major charterer that arranges both.

Oil majors have made significant changes to their operations in Alaska over the past decade, and new players have entered the market. Historically, oil majors held a C Plan that covered their owned or spot-chartered tankers and established financial responsibility for them through self-insurance, by demonstrating that they had sufficient unencumbered assets in the United States that could be used to pay to clean up an oil spill from a chartered vessel.

The newer players in the market do not use self-insurance to satisfy the COFR requirement. The Club is aware of instances where charterers (as C Plan holders) have demanded that a tanker owner obtain their own Alaska COFR, adding the charterer as an additional assured on the policy.  This does not align with Alaska law and is a commercial demand. 

Some Charterers have attempted to persuade Alaska authorities to require the owner/operator to obtain their own COFR (by purchasing COFR insurance for the first $111,450,000 and using the member’s entry in a P&I Club for amounts over that).  This approach is not accepted by Alaska authorities, who continue to insist that the C Plan holder must obtain the Alaska COFR. The C Plan holder, as the person exercising primary operational control, is the only entity legally required to obtain an Alaska COFR.

In those instances where Members are forced through commercial reasons to obtain their own Alaska COFR, Members have sought insurance through domestic insurers willing to underwrite pollution liability on terms acceptable to Alaska.

The Club is also aware of requests from Charterers to be named on a tanker owner’s P&I Certificate to evidence financial requirements above the minimum limits set out above on the basis that by having entered into a Primary Operational Control Agreement, they have an insurable interest as an “operator” of the vessel. This is not acceptable to International Group Clubs, and additional cover may be required. Members should contact the Managers for guidance.

Non Tank Vessels

Non tank vessels over 400GT must also have an Alaska COFR, though they can satisfy the financial security requirement with proof of entry in an IG P&I Club. Separate proof of financial responsibility must be provided in respect of deductibles exceeding $50,000. See Notice to Members No.7 2003/4.

Like COFR requirements for tank vessels, the value of the Alaska COFR for non-tank vessels will vary and depends upon the storage capacity and the type of cargo onboard. The amounts similarly adjust every three years to account for inflation.

For a non-tank vessel carrying predominantly nonpersistent product, the COFR requirement is the greater of $222.90 per incident, for each barrel of total oil storage capacity, persistent and nonpersistent product, on the vessel or $2,229,000.  For a non-tank vessel carrying predominantly persistent product, the COFR requirement is the greater of $688.70 per incident, for each barrel of total oil storage capacity, persistent product and nonpersistent product, on the vessel or $11,145,000.  These values will be adjusted for inflation in 2026.

Clubs do not issue Alaska COFR Certificates but, as in the same way as for Federal COFRs, the Club is able to issue letters with standard wording confirming entry and the provision of pollution insurance for members to use when applying for an Alaska COFR.  

Alaska COFR applications can be submitted no earlier than 90 days prior to a planned operation, but no less than 15 days prior to a vessel’s arrival in Alaska waters.

Whilst sufficient resources exist in some areas to meet Federal VRP standards, there are some remote areas of Western Alaska where it is not possible to place spill response resources which could be accessed and deployed within short timeframes due to weather conditions in winter, uninhabited shorelines, and general lack of infrastructure.

To address this lack of response capability, ‘Alternative Planning Criteria’, or APCs, were created.  Vessels supplement VRP with coverage from a local response contractor with federally approved APCs. These APCs rely more heavily on preventative measures like vessel tracking, vessel routing away from shorelines, and communication with vessels that stop or operate close to shore. Members need to contract directly with either Alaska Chadux Network or 1-Call Alaska to obtain APC coverage. The contractual agreements for both conform to International Group guidelines.

Tank vessels and non-tank vessels exceeding 400GT that are not calling at a port within the Western Alaska COTP zone, but are transiting through to or from a US port, must comply with the requirement for APC. Vessels transiting Alaskan waters on innocent passage and not bound to or from a USA port are not bound by these requirements.

Legislation introduced in 2022 authorises the USCG to establish spill planning criteria for Western Alaska, to replace the APC approach. To date, the USCG has not adopted regulations to implement new criteria. West is monitoring developments and will update Members when any such change is implemented. 

Areas to Be Avoided (ATBA) in the Bering Sea and Aleutian Islands have been established at the IMO. The goal of these ATBAs is to establish a 50 nautical mile buffer between a vessel in distress and sensitive environments, allowing time for response resources to reach the area.

Vessels must take care to follow routes set out in their APC, which avoid ATBAs,  ensuring that only designated passes are utilised in accordance with their Alternative Planning Criteria.  

In some rare cases, a deviation from the routing measures outlined in the vessel’s APC may be the safest risk reduction measure to be taken. In situations where the master believes he must deviate from the vessel’s APC routing measures for the safety of the vessel or crew, the master should immediately contact the APC provider. The APC provider will work with the master and Coast Guard to quickly obtain an approved deviation.  If the master deviates from the APC routing measures without approval of the Coast Guard, the vessel will not be in compliance with its APC and could face a Coast Guard enforcement action. 

Alaska State OSRO coverage is required in addition to the Federal requirements for OSRO coverage.
Several OSRO contracts have been reviewed by the International Group and have been found to be acceptable for pooling. These include versions of contracts for Alaska Chadux Network, CISPRI, SEAPRO and 1-Call Alaska. Members are advised to contact the Club prior to signing agreements with OSRO’s to ensure the version of the contract presented does not fall foul of International Group requirements and potentially prejudice cover.

Tank vessels

Tank vessels on the spot market will need to contact their charterer to obtain OSRO coverage with either Alaska Chadux Network (ACN), 1-Call Alaska, or CISPRI (if calling Cook Inlet) though the C Plan (charterers’) existing contracts.

Tank vessels must have evidence of coverage issued by ACN, and/or 1-Call Alaska if the vessel will transit west of Cook Inlet, to comply with APC requirements. CISPRI coverage is required if operating solely within Cook Inlet.

For transits through the Southeast Alaska COTP, vessels must obtain a transit contract with SEAPRO for OSRO coverage.

Tank vessels arranging STS operations more than 3 miles from Western Alaska COTP zone must still have OSRO coverage from ACN or 1-Call Alaska to obtain USCG approval. This includes, for example, Red Dog Mine and Kivalina.

Non tank vessels

Non tank vessels over 400GT are also required to precontract with an OSRO. These include:

Cook Inlet: CISPRI

Western Alaska and Prince William Sound COTP Zones:  ACN or 1-Call Alaska

Southeast Alaska COTP Zone: any vessel calling in or transiting through must have OSRO coverage with SEAPRO.