1. NATURAL RESOURCE DAMAGES FUNDAMENTALS Joan P. Snyder Stoel Rives, LLP Presented to Oregon Association of Environmental Professionals October 9, 2003

2. Portlnd3-1457954.1 Natural Resource Damages Under federal Superfund—”injury to, destruction of, or loss of natural resources, including the reasonable costs of assessing such injury, destruction or loss resulting from” a release of a hazardous substance. 42 USC 9607(a)(4)(C). Under Oregon (mini-Superfund) law—”damages for injury to or destruction of any [public] natural resources caused by a release.” ORS 465.255(1). Oregon has separate provision for damages from injury, death, contamination or destruction of fish or wildlife resulting from pollution (e.g., fish kills). ORS 468B.060(1).

3. Portlnd3-1457954.1 Natural Resource Damages Under federal Oil Pollution Act (OPA, 33 USC 2702(b)(2)) –Damages to trustees for “injury to, destruction of, loss of or loss of use of, natural resources, including the reasonable costs of assessing the damage” from a discharge of oil. –Damages to an affected claimant for injury to, or economic losses resulting from, destruction of real or personal property; for loss of subsistence use of natural resources; and for loss of profits or earning capacity. –Damages to state or federal governments for loss of revenues from taxes or royalties, damages, and damages for the state’s net costs of providing increased public services caused by the oil discharge.

4. Portlnd3-1457954.1 Examples Exxon Valdez/New Carissa—oil Commencement Bay/Portland Harbor—varied, historic contaminants Coeur D’Alene Basin—mine tailings

5. Portlnd3-1457954.1 Use of Damages Must be used “only to restore, replace of acquire the equivalent of” the damaged resource. 42 USC 9607(f)(1). Purpose of restorative work is to return the resources to their “baseline” condition, which is the “physical, chemical, or biological properties that the injured resources would have exhibited or the services that would have been provided” absent the release of hazardous substances. 43 CFR 11.82(b)(1)(I).

6. Portlnd3-1457954.1 Important Qualifiers: Under Superfund, Oregon mini-Superfund and OPA— applies only to the damages “caused by” or “resulting from” a release. Under CERCLA: “There shall be no recovery where such damages and the release of a hazardous substance from which such damages resulted have occurred wholly before December 11, 1980.” 42 USC 9607(f)(a). Federal claims must be brought by the federal, state and tribal trustees for the resources at issue, and there is no double recovery.

7. Portlnd3-1457954.1 How Do Natural Resource Damages Relate to the Environmental Risk Remedied by a CERCLA Remedial Action? Resource Value Impairment due to habitat destruction NRD 19501980 Impairment due to releases of hazardous substances “Restoration Plus” Restoration 2003 No existing impairment baseline Injury by hazardous substances Presumed restoration start date

8. Portlnd3-1457954.1 How are NRD Determined? Agency-down enforcement-driven—Commencement Bay –Pursuant to OPA (NOAA) or CERCLA (DOI) assessment regulations (which has a rebuttable presumption of correctness) Litigation—e.g., Coeur D’Alene, Montrose Cooperative NRDA Process—Portland Harbor?

9. Portlnd3-1457954.1 Timing: When are NRD Determined? Historical View: NRD Assessment is what comes after CERCLA remedial action. Current Trend: NRDA can and should be conducted in concert with RI/FS for remedial action.

10. Portlnd3-1457954.1 Have we answered the legal and scientific questions necessary to determine NRD? “While there is ample room for disagreement on the facts and the law as it is to be applied to this case, it is undisputed that [the case of NRD for the Coeur D’Alene basin] is unique in its size, its history and its complexity. The case is of great importance and calls for the exercise of the greatest care and caution in its consideration, a task that is very difficult when expert witnesses with impeccable qualifications reached opposite conclusions on almost every issue.” --Coeur D’Alene Tribe and USA v. Asarco, et al. (9/03/03 Opinion)

11. Portlnd3-1457954.1 Have we answered the legal and scientific questions necessary to determine NRD? In the Fox River, USFWS valued NRD at $176-333 million. Wisconsin Department of Natural Resources valued it at $55 million.

12. Portlnd3-1457954.1 Is a court the right place to determine NRD? “After listening to approximately 100 witnesses, 78 days of trial and having reviewed 8,695 exhibits... it is the judgment of this Court that... the liability of certain responsible parties... is evident, but the Defendants are correct when they argue that there has been an exaggerated overstatement by the Federal Government and the Tribe of the conditions that exist and the source of the alleged injury to natural resources.... [T[he Court finds its hands are often tied and ‘justice’ is dictated by the statutes passed by politicians who at the time could not have imagined the factual scenario pending before this Court.” --Coeur D’Alene Tribe and USA v. Asarco, et al. (9/03/03 Opinion)