04-3619. Outer Continental Shelf Facility Security

AGENCY:

Coast Guard, DHS.

ACTION:

Notice of agency policy.

SUMMARY:

On Wednesday, October 22, 2003, the Coast Guard published a series of final rules for maritime security requirements mandated by the Maritime Transportation Security Act of 2002, including provisions for mobile offshore drilling units (MODUs) not subject to the International Convention for the Safety of Life at Sea, 1974, and certain fixed and floating facilities on the Outer Continental Shelf (OCS) other than deepwater ports. This Notice of agency policy clarifies which fixed and floating OCS facilities are subject to regulation under Title 33 CFR part 106. This Notice also clarifies how the Coast Guard establishes applicability to Title 33 CFR part 106.

DATES:

This policy is effective as of November 21, 2003.

FOR FURTHER INFORMATION CONTACT:

For further information on the subject of this Notice, contact Lieutenant Commander Eric Walters (G-MOC) U.S. Coast Guard by telephone at [phone] or by electronic mail at [e-mail].

SUPPLEMENTARY INFORMATION:

The requirements of 33 CFR part 106 apply to owners and operators of any fixed or floating facility, including MODUs not subject to 33 CFR part 104, operating on the Outer Continental Shelf (OCS) of the United States for the purposes of engaging in the exploration, development, or production of oil, natural gas or mineral resources, that are regulated by 33 CFR Subchapter N, and that meet certain operating conditions of crewing or production. These regulations were developed under the authority the Maritime Transportation Security Act, which among other things, requires the development of security plans designed to deter, to the maximum extent practicable, transportation security incidents (TSIs). TSIs are security incidents resulting in a significant loss of life, environmental damage, transportation system disruption, or economic disruption in a particular area.

The Coast Guard recognized that fixed and floating facilities come in a wide array of designs, and support a variety of activities, functions and processes that are intrinsic to the exploration, development or production of oil, natural gas, or mineral resources. Without the benefit of security measures, these facilities may be susceptible to a TSI. To ensure we included all relevant OCS facilities, we made our maritime security regulations applicable to those OCS facilities regulated under 33 CFR subchapter N (see 33 CFR 106.105. Applicability). Subchapter N applies to a wide variety of OCS facilities, including facilities used to support drilling, extraction, and transmission. The security requirements of Title 33 CFR Part 106 apply to those OCS facilities now regulated under subchapter N, as may be further limited by the “consequence thresholds” discussed below.

The Coast Guard used the National Risk Assessment Tool (N-RAT) to determine “consequence thresholds” for various vessel and facility types to determine which vessels and facilities could be involved in a TSI. However, with regard to the facilities regulated by Title 33 part 106, and as indicated in the Preamble to the temporary interim rules published on July 1, 2003 (68 FR 39250), we worked with the Minerals Management Service (MMS) to compare OCS facility production rates and operations to develop appropriate “consequence thresholds.” This is because the N-RAT was not able to provide sensitivity to the OCS facility size or production level that was sufficient for assessing the “significant loss of life”, “economic disruption in a particular area”, “transportation system disruption”, or “environmental damage”, that is necessary for us to make a TSI determination.

In Title 33 CFR 106.105, the Coast Guard identified three operating conditions to determine if the “consequence threshold” for a TSI was present on a particular OCS facility: the facility hosts more than 150 persons for 12 hours or more in any 24 hour period continuously for 30 days or more; the facility produces greater than 100,000 barrels of oil per day; or the facility produces greater than 200 million cubic feet of natural gas per day.

These criteria have been developed solely to establish the “consequence thresholds” for a TSI. Because a “consequence threshold” is applied as a metric, the particular activity, function or process that causes the threshold to be reached is irrelevant. Therefore, the Coast Guard uses the term “production” to include the handling, transfer or transmission of oil or natural gas by an OCS facility. In that regard, reference is made to the definition of “production” used in 33 CFR subchapter N (140.10). Simply put, the Coast Guard finds that an OCS facility that supports a pipeline transmission junction transporting 100,000 barrels of oil per day presents the same TSI risks as an OCS facility that supports wells extracting 100,000 barrels of oil day from a down hole formation. Similarly, the Coast Guard finds that an OCS facility that supports both extraction and transportation activity, where neither the extraction nor the transportation components individually exceed the “consequence threshold”, but the aggregate of both activities exceeds the “consequence threshold”, presents the same TSI risk.

Policy: Title 33 CFR part 106 applies to those OCS facilities already regulated by 33 CFR subchapter N that meet the operating conditions of section 106.105 (a), (b) or (c). The Coast Guard uses the definition of the term “production” given in 33 CFR subchapter N (140.10) to include those activities, functions and processes that could render the OCS facility susceptible to a TSI. These activities, functions and processes may include, but are not necessarily limited to, the handling, transfer or transportation of oil or natural gas by an OCS facility supporting pipeline transmission junctions. The Coast Guard will continue to work with the Minerals Management Service (MMS) as necessary to refine and update the “threshold characteristics” upon which the applicability of 33 CFR part 106 is based.

To this end, the MMS has provided the Coast Guard with a list of OCS facilities that, according to MMS data, meet or exceed the “threshold characteristics” in 33 CFR part 106. The Coast Guard has sent letters to owners or operators of these facilities informing them that they must comply with the requirements of 33 CFR part 106. The Coast Guard intends to work closely with the MMS to identify all OCS facilities to which 33 CFR part 106 applies, and to inform the owners and operators of these facilities that they have been so identified. Owners and operators who believe their OCS facilities have been misidentified, or otherwise do not meet the “threshold characteristics” may appeal as prescribed in 33 CFR 101.420. While the Coast Guard will make a good faith effort to identify and notify the owners and operators of those OCS facilities subject to the requirements of 33 CFR part 106, ultimate responsibility for complying with 33 CFR part 106 rests with the cognizant OCS facility owner or operator.

Dated: February 12, 2004.

T.H. Gilmour,

Assistant Commandant for Marine Safety, Security and Environmental Protection.