[Federal Register Volume 64, Number 76 (Wednesday, April 21, 1999)]
[Notices]
[Pages 19575-19578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9899]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF TRANSPORTATION
Coast Guard
[USCG-1998-4620]
Oil Pollution Act of 1990 (OPA 90) Phase-Out Requirements for
Single Hull Tank Vessels
AGENCY: Coast Guard, DOT.
ACTION: Notice of policy.
-----------------------------------------------------------------------
SUMMARY: In a notice published on November 16, 1998, the Coast Guard
requested comments on whether a single hull tank vessel, converted to
include double sides or a double bottom, should be accepted as a
different hull design when applying the tank vessel phase-out dates
under the Oil Pollution Act of 1990 (OPA 90). This notice discusses the
comments received and the Coast Guard's determination. The Coast Guard
has decided that changing the hull configuration of an existing single
hull tank vessel to a single hull tank vessel with double sides or a
double bottom, after August 18, 1990, will not result in a change to
the tank vessel's originally scheduled phase-out date as required by 46
U.S.C. 3703a.
DATES: This policy is effective April 21, 1999.
ADDRESSES: Unless otherwise indicated, documents referred to in this
notice are available for inspection or copying at the Docket Management
Facility, (USCG-1998-4620), U.S. Department of Transportation, Plaza
level, room PL-401, 400 Seventh Street SW, Washington DC 20590-0001,
between 9 a.m. and 5 p.m., Monday through Friday, except Federal
holidays. The telephone number is 202-366-9329. You may also access
this docket on the Internet at http://dms.dot.gov.
FOR FURTHER INFORMATION CONTACT: For questions on this policy, please
contact Mr. Bob Gauvin, Project Manager, Office of Operating and
Environmental Standards, Commandant (G-MSO-2), U.S. Coast Guard
Headquarters, telephone 202-267-1053. For questions on viewing material
in the docket, contact Dorothy Walker, Chief, Dockets, Department of
Transportation, telephone 202-366-9329.
SUPPLEMENTARY INFORMATION: The Coast Guard published a request for
comments (63 FR 63768) on November 16, 1998. The notice encouraged
interested persons to provide written comments, information, opinions
and arguments on whether single hull tank vessels that were altered
with double sides or a double bottom should be considered a different
hull configuration for
[[Page 19576]]
determining their OPA 90 phase-out date. The comment period ended on
January 15, 1999, and there were 32 submissions to the docket.
The Coast Guard held no public meeting on this request for
comments. Two comments did request a public meeting, but the Coast
Guard determined that the written comments in the docket adequately
addressed the issues and that a public meeting would not be helpful in
acquiring additional information.
Background
Section 4115 of the Oil Pollution Act of 1990 (Pub. L. 101-380,
August 18, 1990) (OPA 90) amended title 46, United States Code, by
adding a new section 3703a. This section contains the double hull
requirements and phase-out schedule for single hull tank vessels
operating in U.S. waters. It requires an owner to remove a single hull
tank vessel from bulk oil service on a specific date, depending on a
vessel's gross tonnage, build date, and hull configuration. The phase-
out schedule allows more years of service for single hull tank vessels
configured to include double sides or a double bottom than for single
hull tank vessels without these hull configurations.
The OPA 90 timetable for double hull requirements and phase-out
schedule for single hull tank vessels are implemented in 33 CFR part
157, Appendix G. Both OPA 90 and our implementing regulations are
silent on if, or when, a vessel owner can convert a single hull tank
vessel to include double sides or a double bottom to qualify for a
later phase-out date. As a result, some vessel owners have asked the
Coast Guard to clarify the types of vessel conversions permitted and
their associated phase-out dates.
In 1997, the Vessel Compliance Division replied to a question
asking if a single hull tank vessel with wing cargo tanks reconfigured
as segregated ballast tanks or void spaces to create double sides would
qualify for a different OPA 90 phase-out date. They indicated that this
type of conversion and an associated later phase-out date was
acceptable provided that the modified tanks meet the double side
dimension requirements applied to new tank vessels in 33 CFR
157.10d(c)(1). Converted double side segregated ballast tanks must also
provide protection to the full extent of a vessel's cargo tank length.
In 1998, we received another inquiry from the same source asking if
hull conversions completed after a single hull tank vessel's original
phase-out date qualified the vessel to reenter bulk oil service with a
later phase-out date.
Recent inquiries by the maritime industry indicate a continued
interest in the possibility of converting single hull tank vessels to
include double sides or a double bottom to increase a vessel's
operational life past its original OPA 90 phase-out date. In our
November 16, 1998, request for comments, we asked for information to
help us develop a clear policy on phase-out dates.
Summary of Comments
The comments fell into two clearly opposed groups on whether a
single hull tank vessel could, after August 18, 1990, add double sides
or a double bottom and use that alteration to change the vessel's
category under Sec. 3703a and thus have a later phase-out date.
The comments generally urged that the Coast Guard either--
NOT ALLOW a single hull tank vessel converted with double
sides or a double bottom after August 18, 1990, to be considered under
a different category in Sec. 3703a to result in later phase-out dates;
or,
ALLOW single hull tank vessels converted with double sides
or a double bottom after August 18, 1990, to be considered under a
different category in Sec. 3703a that would result in a later phase-out
date or a return to operation after the vessel's phase-out date.
Conversion to add double sides or a double bottom SHOULD NOT be
allowed to change the phase-out date under OPA 90.
Nineteen comments stated that no change or extension of a single
hull tank vessel phase-out date is allowed by OPA 90. These comments
came from members of the U.S. Senate, U.S. House of Representatives,
MARAD, the U.S. shipbuilding industry and associations, major ship
companies and associations, environmental groups and individual
citizens. One individual's comment included eighty (80) signatures
supporting the ``* * * replacement of single hull oil tankers by double
hull oil tankers * * *'' as scheduled by OPA 90. This group of nineteen
comments offered the following reasons for their position:
Congress intended OPA 90 to protect the environment from
the increased risk of oil spills that were specifically linked to older
single hull tank vessels.
The phase-out schedule of Sec. 3703a was deliberate and
designed to ensure balance between the environment and the interests of
the vessel owners. When developing the phase-out schedule, Congress
took into account economic conditions; owner capital investment
concerns; national oil transportation needs; shipbuilding resources
availability; existing vessels and need for tank vessels which would
operate in U.S. trade after OPA 90 became effective.
The phase-out schedule was liberal, but, as with all of
OPA 90, it does not provide for equivalence, waivers, or exemptions to
its requirements.
OPA 90 was intended to protect the environment from
operational or accidental discharge of oil by removing older single
hull tankers from service, as soon as possible, and by constructing new
double hull tankers with the latest technology, design, and materials
for safer operations, reducing damage to the environment.
Allowing the continued operation of existing single hull
tank vessels for longer periods of time than established by the OPA 90
schedule is not acceptable or fair to owners who have invested in the
building of new double hull vessels.
Conversion to add double sides or a double bottom SHOULD be allowed
to change the phase-out date under OPA 90.
Thirteen comments supported allowing a change of phase-out date
after a single hull tank vessel converts to either double sides or a
double bottom. These thirteen comments came from ship owners, oil
companies, a shipyard company, a marine terminal company, and a
licensed U.S. merchant mariner. This group of thirteen comments offered
the following reasons for their position:
There is no language in OPA 90 or U.S. regulations that
prohibits a conversion of a single hull tank vessel to add double sides
or a double bottom from being considered under a different category in
Sec. 3703a for the additional operating years allowed for that hull
configuration.
If Congress had intended not to allow such a conversion of
single hull tank vessels to be considered, they would have used the
words ``vessels built with double sides or a double bottom,'' instead
of ``vessels equipped with double sides or a double bottom.'' Not
defining when the vessel had to be equipped with double sides or a
double bottom, allows it to occur after the statute became effective
(August 18, 1990).
The acceptance of the alteration of an existing vessel's
design is not considered a major conversion under 33 CFR 157.03. This
also allows the ``natural action'' of single hull tank vessels, or a
single hull tank vessel originally built with double sides or a double
bottom, to be converted to a
[[Page 19577]]
complete double hull and meet the OPA 90 requirements. It provides an
incentive to completely double hull an existing vessel and has been
used by U.S. tanker and barge owners to convert their tank vessels to
be compliant with the double hull standards.
One comment pointed out that section 3606 of Pub. L. 105-
85 halted the industry practice of reducing gross tonnage to extend the
phase-out date. This comment suggested that if the Congress did not
approve of a Coast Guard position to allow double sides or a double
bottom modification, then they could take legislative action once
again.
Given the current market conditions and expectations for
needs of transportation and supply of oil to the U.S., this issue will
not effect an increase of shipyard orders for new double hull tank
vessels, specifically built in U.S. shipyards for the Jones Act trade.
The cost to build a U.S. Jones Act tanker is approximately three times
the cost to build the same tanker in the foreign shipyard market.
There may be short periods within the next five to ten
years when there will be an insufficient number of tankers available to
transport the Alaska North Slope (ANS) crude. ANS crude transportation
needs are slowing on a schedule from approximately 1.3 million barrels
a day in 1999, to approximately 460,000 barrels a day in 2015. Due to
this slowing schedule for ANS crude, the phasing out of the existing
tankers in the ANS operation (23 in service at this time) will shrink
until only nine to eleven tank vessels will be needed to sustain ANS
crude delivery to the west coast of the U.S. Many single hull tankers,
or single hull tankers with double bottoms only, will phase-out in ANS
trade and will not be replaced. The ability to extend a single hull
tank vessel for up to five years will allow coverage of possible
tonnage shortages during the reduction of the fleet and reduction of
oil to be transported from Alaska.
There is no increase of risk to the environment in
allowing such conversions. Statements in the Congressional Record
during the OPA 90 Congressional Conference and studies completed for
the Coast Guard, support that double sides provide protection from a
collision and a double bottom provides protection from a grounding.
Specific Questions
Comments, both supporting and opposing phase-out date changes,
responded to the four specific questions in our November 16, 1998,
Federal Register notice. The answers not already included in the
general comments summary are enclosed below.
1. If the Coast Guard does not allow single hull tank vessels to
qualify for later OPA 90 phase-out dates by converting the single hulls
to single hulls with double sides or a double bottom, what would be the
effect on U.S. oil transportation and supplies?
There would be little to no effect on oil transportation
in the U.S. as there were more than a sufficient number of tankers
available and planned, to meet U.S. demands.
Any extensions of the phase-out schedule would slow down
the demand by owners to build new U.S. double hull tankers.
Shortages of tanker tonnage may occur in the specialty
class U.S. tramp tanker trade within the clean product market. This
will raise tanker rates and the cost of oil to the consumer. Extensions
of the phase-out schedule will moderate charter tanker rates and meet
the shortages for tank vessels during these periods.
2. If single hull tank vessels which have passed their initial
phase-out date could qualify for later phase-out dates, and reenter
service by converting their single hulls with double sides or a double
bottom, what would be the effect on U.S. oil transportation and
supplies?
There will be no impact on U.S. oil transportation or
supplies.
There will be a sufficient number of tankers for U.S. oil
transportation.
Older single hull tank vessels would become heavily relied
upon, if their phase-out dates are extended, and no ready replacements
of new double hull vessels would be built or be available, should the
older converted single hull tank vessels be abruptly lost from service.
There would not be enough tankers in the Jones Act trade
and the population would be reduced from the 49 in operation now to 21.
Allowing this small period of extension (5 years maximum), could be
used by vessel owners to ensure that no shortfalls of needed tonnage
would occur and moderate tanker charter rates.
A phased out single hull tank vessel could be laid up, if
not needed. If a future transportation need occurred, the vessel could
be converted and brought back into trade until the transportation need
subsided or the converted single hull tank vessel with double sides or
a double bottom reached its changed phase-out date or January 1, 2015,
which ever comes first. This option would be beneficial in the ANS
trade.
3. If single hull tank vessels could qualify for later phase-out
dates through these types of hull conversions, what would be the effect
on the conversion of the tank vessel fleet to double hull tank vessels?
Would there be an adverse impact on the marine environment?
The U.S. environment would be adversely impacted by
vessels not complying with the original OPA 90 phase-out schedule for
single hull tankers.
Allowing extension of the phase-out dates for converted
single hull tank vessels reduces the incentive for double hull new
buildings and slows the building of double hulls, advancing the average
age and reducing the levels of safety in the existing tank vessel
fleet.
Allowing extensions of the phase-out dates would
indefinitely delay the environmental benefit of the double hull tank
vessels anticipated by Congress and the U.S. population, who have
advocated the need for double hull tankers for twenty-five (25) years.
The older converted single hull tank vessels use more
fossil fuels than the newer double hull tank vessels, increasing the
amount of hazardous air pollutants emitted into the atmosphere.
Overall double hull conversions in the U.S. would be
modestly impacted, with no impact to the environment. A converted
single hull tank vessel offers a sensible alternative for short-term
periods (5 years) of U.S. tonnage needs.
Owners of vessels will naturally wait until the deadline
before considering a double hull because at this time the economic
situation does not support the cost involved.
A single hull tank vessel having its side cargo tanks
converted to segregated ballast tanks would provide a larger double
side spacing than required of new double hulls, providing more
protection to the environment.
4. Are there any other concerns regarding whether we should
recognize a single hull tank vessel converted to include double sides
or a double bottom as a different hull design when applying the vessel
phase-out dates under OPA 90?
Depending on the type of conversion to a single hull
tanker, it could effect the gross tonnage of the tank vessel, imparting
a change to the vessel's phase-out due to reduction of the vessel's
gross tonnage from original admeasurement. This would extend the tank
vessel's phase-out even later (possibly 7 to 8 years) from its original
phase-out per Sec. 3703a.
The reconfiguration of oil cargo tanks could pose new
operational risks; ballast tanks experience high corrosion rates
accounted for in the design of new double hull tank vessels.
The average age of the U.S. tanker fleet would increase.
Older single hull
[[Page 19578]]
tankers would not be maintained, and become unsafe as they got older
and closer to the extended phase-out date, making them a greater risk
to the environment.
Allowing the extension of the phase-out schedule by
recognizing the conversion of single hull tank vessels under OPA 90
could be of strategic value to the U.S. in certain national security
scenarios.
Eliminating the conversion of single hull tank vessels
could possibly reduce, rather than increase, shipyard activity in the
U.S.
For the U.S. tanker industry to succeed it is essential
that the companies involved know that the rules and standards are
clear, inherently stable and likely to stay that way for the
foreseeable future. With investment decisions reaching out over 20
years, we should not make changes to the ground rules which could have
catastrophic effects.
Examination of this issue has been couched as an
evaluation by a federal agency of the economics of the U.S. flag
market. Such decisions should be left up to the Congress.
There would be increasing difficulty in hiring qualified
U.S. merchant seaman. When crew members lose jobs due to the phase-out
of their vessels, their tendency is to migrate to fields outside the
maritime field and not to return. Extensions of the phase-out schedules
could assist keeping these seamen employed until vessel replacement is
completed.
Discussion
OPA 90 and our implementing regulations in 33 CFR 157 require that
tank vessels either convert to full double hull configuration or be
removed from the carriage of oil in bulk service by the dates set out
in 46 U.S.C. Sec. 3703a. We have not, before today, established a
policy on whether a single hull tank vessel could alter its hull
configuration with a double bottom or double sides in order to change
its OPA 90 phase-out date.
Previously, we had interpreted OPA 90 as not specifically
precluding a change in phase-out date for tank vessels that reduced
their gross tonnage. However, in section 3606 of Pub. L. 105-85,
enacted on November 18, 1997, Congress added a new paragraph (e) to
Sec. 3703a. It effectively stopped the industry practice of using
protectively located segregated ballast tanks to reduce a tank vessel's
gross tonnage and change its phase-out date under OPA 90.
After a vessel's phase-out date, OPA 90 allows tank vessels without
double hulls to continue to deliver oil until January 1, 2015, either
to a deepwater port or in one of the four lightering zones we
established in the Gulf of Mexico. (See 33 CFR 156.300.)
Many vessel owners, including American Heavy Lift, Maritrans, and
Bouchard Transportation Services, have already modified, or are in the
process of modifying, existing single hull tank barges or tankers with
double hulls to meet the requirements of OPA 90.
Although a number of comments discussed possible shortages of
tankers in the Alaska North Slope (ANS) crude trade, the Department of
Energy does not anticipate such shortages in ANS operations. Further,
there are Jones Act trade vessels currently trading foreign that could
be employed in ANS operations, if needed.
While the comments contained a variety of responses both for and
against a policy of allowing vessels to change their phase-out dates
based on conversions after the effective date of OPA 90, most of these
issues were considered by Congress when developing OPA 90. No comments
cited immediate operational problems or pressing need to allow vessels
to operate beyond their currently scheduled phase-out date.
The OPA 90 double hull requirements were intended to protect the
environment from oil spills. The only amendment Congress has made to
the OPA 90 phase-out schedule in Sec. 3703a stopped the change of
phase-out dates resulting from reductions in gross tonnage. By
enactment of Pub. L. 105-85, Congress demonstrated its unwillingness to
delay the OPA 90 schedule for the double hull requirement.
Policy
Based on all of the reasons set out above, the Coast Guard has
decided that its policy should be consistent with the plain language of
Sec. 3703a and the intent of OPA 90. Therefore, changing the hull
configuration of an existing single hull tank vessel to a single hull
tank vessel with double sides or a double bottom, after August 18,
1990, will not result in a change to the tank vessel's originally
scheduled phase-out date as required by Sec. 3703a. This policy is
effective immediately and applies to all tank vessels.
The Coast Guard will shortly open a rulemaking to make appropriate
changes to the double hull regulations in 33 CFR part 157 and will
revise Navigation and Vessel Inspection Circular No. 10-94 consistent
with this policy.
Dated: April 15, 1999.
James M. Loy,
Admiral, U.S. Coast Guard Commandant.
[FR Doc. 99-9899 Filed 4-20-99; 8:45 am]
BILLING CODE 4910-15-P
