[Federal Register Volume 60, Number 249 (Thursday, December 28, 1995)]
[Proposed Rules]
[Pages 67226-67251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31371]
[[Page 67225]]
_______________________________________________________________________
Part III
Department of Transportation
_______________________________________________________________________
Coast Guard
_______________________________________________________________________
33 CFR Part 157
Structural Measures To Reduce Oil Spills From Existing Tank Vessels
Without Double Hulls; Proposed Rule
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 /
Proposed Rules
=======================================================================
-----------------------------------------------------------------------
[[Page 67226]]
DEPARTMENT OF TRANSPORTATION
Coast Guard
33 CFR Part 157
[CGD 91-045]
RIN 2115-AE01
Structural Measures To Reduce Oil Spills From Existing Tank
Vessels Without Double Hulls
agency: Coast Guard, DOT.
action: Supplemental notice of proposed rulemaking.
-----------------------------------------------------------------------
summary: The Coast Guard solicits comments on structural measures for
certain existing tank vessels of 5,000 gross tons (GT) or more that do
not have double hulls. This supplemental notice of proposed rulemaking
(SNPRM) responds to comments received on the notice of proposed
rulemaking, presents a summary of a regulatory assessment for various
structural measures, notifies the public of the availability of this
assessment, and solicits comments on the economic feasibility of the
measures. This SNPRM represents the third step in the Coast Guard's
three-step effort to establish structural and operational measures,
that are economically and technologically feasible for reducing the
threat of oil spills from tank vessels without double hulls, as
required by the Oil Pollution Act of 1990 (OPA 90). It analyzes a
number of measures and describes the results of extensive cost and
benefit research on those measures deemed technologically feasible. No
regulatory text is introduced in this SNPRM; however, comments received
on this SNPRM will enable the Coast Guard to assess the economic
feasibility for structural measures.
dates: Comments on this notice must be received on or before March 27,
1996.
addresses: Comments may be mailed to the Executive Secretary, Marine
Safety Council (G-LRA/3406) (CGD 91-045), U.S. Coast Guard
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may
be delivered to room 3406 at the same address between 8 a.m. and 3
p.m., Monday through Friday, except Federal holidays. The telephone
number is (202) 267-1477.
The Executive Secretary maintains the public docket for this
rulemaking. Comments will become part of this docket and will be
available for inspection or copying in room 3406, U.S. Coast Guard
Headquarters, between 8 a.m. and 3 p.m., Monday through Friday, except
Federal holidays.
for further information contact: LCDR Suzanne Englebert, Project
Manager, Standards Evaluation and Development Division, at (202) 267-
6490. This number is equipped to record messages on a 24-hour basis.
supplementary information:
Request for Comments
The Coast Guard encourages interested persons to participate in
this rulemaking by submitting written data, views, or arguments.
Persons submitting comments should include their names and addresses,
identify this rulemaking (CGD 91-045) and the specific section of this
proposal to which each comment applies, and give the reason for each
comment. Please submit two copies of all comments and attachments in an
unbound format, no larger than 8\1/2\ by 11 inches, suitable for
copying and electronic filing. Persons wanting acknowledgment of
receipt of comments should enclose a stamped, self-addressed postcard
or envelope.
The Coast Guard will consider all comments received during the
comment period. It may change this proposal in view of the comments.
The Coast Guard plans to hold a public meeting concerning this
SNPRM. A notice of public meeting will be published in the Federal
Register to announce the date, time, and location of the meeting.
Regulatory History
Section 4115(b) of the Oil Pollution Act of 1990 (OPA 90) (which
appears as a statutory note following 46 U.S.C. 3703a) directs the
Coast Guard to develop structural or operational requirements for tank
vessels of 5,000 gross tons or more without double hulls to serve as
regulations until 2015, when all tank vessels operating in U.S. waters
are required to have double hulls under section 4115(a) of OPA 90 (46
U.S.C. 3703a). Regulations issued under the authority of section
4115(b) must provide as substantial protection to the environment as is
economically and technologically feasible.
On November 1, 1991, the Coast Guard published an advance notice of
proposed rulemaking (ANPRM) (56 FR 56284) which discussed structural
and operational measures intended to meet the requirements of section
4115(b) of OPA 90. The ANPRM included a request for data on the
technical and economic feasibility of those measures for use on vessels
covered by section 4115(b). Eighty-eight comments were received by the
close of the extended comment period, which ended on January 30, 1992
(57 FR 1243).
After reviewing the comments, the Coast Guard published an NPRM
entitled ``Structural and Operational Measures to Reduce Oil Spills
from Existing Tank Vessels Without Double Hulls'' (existing Vessels) on
October 22, 1993 (58 FR 54870). The Coast Guard issued two subsequent
correction notices on November 19, 1993 (58 FR 61143), and December 14,
1993 (58 FR 65298), which made technical corrections to the NPRM. In
response to several comments received on the NPRM, the Coast Guard
published, on December 16, 1993, a notice of public meeting and
extension of comment period (58 FR 65683).
The Coast Guard held a public meeting on January 20, 1994, to
obtain information from the public on the proposed regulations. Topics
addressed by speakers included applicability, differences between tank
barges and tankships, exemptions, and economic and technical
feasibility of the proposed regulations. Some of the basic assumptions
of the proposed regulations related to certain structural measures were
also discussed, particularly their reliance on Regulation 13G of Annex
I of the International Convention for the Prevention of Pollution from
Ships, 1973, as modified by the Protocol of 1978 (MARPOL 73/78).
Information on the public meeting is available for public review at the
address under ADDRESSES.
In light of the comments received at the public meeting and in
response to the written comments received on the NPRM, the Coast Guard
conducted an extensive review of its regulatory plan for this
rulemaking. To expedite the implementation of section 4115(b) of OPA
90, the Coast Guard developed a three-pronged approach which
encompassed three separate rulemaking projects. First, the Coast Guard
issued a final rule on August 5, 1994, requiring the carriage of
emergency lightering equipment and the inclusion of the vessel's
International Maritime Organization (IMO) number in the advance notice
of arrival report (59 FR 40186); second, it issued a supplemental
notice of proposed rulemaking (SNPRM) on November 3, 1995, (60 FR
55904) regarding additional operational measures; and third, it is
issuing this SNPRM to describe its analysis of the technological
feasibility and cost effectiveness of imposing various structural
requirements.
Comments received on most of the structural measures proposed in
the regulatory text of the Existing Vessels NPRM (58 FR 54870) were
negative. As a result, the Coast Guard is no longer proposing any of
the structural
[[Page 67227]]
measures it proposed in the NPRM. Instead, the Coast Guard is
reexamining the economic and technological feasibility of imposing
certain structural requirements in light of the findings contained in
the revised regulatory assessment. The Coast Guard also intends to
carefully consider all comments received from the public on this
analysis of the revised regulatory assessment, and determine whether
any structural measure is both economically and technologically
feasible.
Background and Purpose
The Coast Guard recognizes that operational and structural measures
perform unique and important functions to prevent oil pollution. The
second phase of the Coast Guard's three-phase effort to establish
measures for existing tank vessels addresses reducing the risk of a
grounding, collision, or fire. Many pollution incidents from tank
vessels can be prevented by applying operational measures. Common
failure modes which lead to pollution incidents include personnel
error, navigation problems, and improper maintenance practices. A
separate SNPRM entitled ``Operational Measures to Reduce Oil Spills
From Existing Tank Vessels Without Double Hulls'' (Operational Measures
SNPRM) (60 FR 55904; November 3, 1995) proposes requirements for bridge
resource management training, vessel specific training, rest hour
minimums, enhanced structural surveys, maneuvering performance
capability requirements, and other requirements aimed at reducing the
risk of accidents involving existing tank vessels.
The Coast Guard's third phase of this effort to reduce oil
pollution from certain existing tank vessels addresses mitigation of
pollution if an accident occurs. The Coast Guard evaluated those
structural measures that would reduce the oil outflow on various
existing vessel designs. This analysis included measures such as
fitting double bottoms or sides, requiring hydrostatic-balanced loading
(HBL) for all vessel configurations, and fitting segregated ballast
tanks (SBTs) or clean ballast tanks (CBTs) on those vessels presently
without them.
Discussion of Comments and Changes
Background information on proposals for structural measures for
existing vessels without double hulls is provided in the preambles to
the ANPRM and NPRM. These proposals focus on measures to reduce oil
outflow after a collision or grounding has occurred.
The Coast Guard received 132 comments on the Existing Vessels NPRM.
Thirty of these comments related to the operational measures phase of
this rulemaking project while the remaining 102 comments discussed
issues related to reducing the oil outflow on an existing tank vessel
after an accident occurs. The following discussion summarizes the
comments received on the NPRM and is divided by topic: (1)
applicability and treatment of existing double hull or double bottom
vessels, (2) consistency with international standards, (3)
protectively-located spaces (PL/spaces), (4) hydrostatic-balanced
loading (HBL), (5) protectively-located segregated ballast tanks (PL/
SBT) requirements, (5) alternative measures, (6) phase-in alternatives
and economic incentives, (7) regulatory assessment--general, (8)
regulatory assessment--costs, and (9) regulatory assessment--benefits.
1. Applicability and Treatment of Existing Double Hull or Double Bottom
Vessels
The Coast Guard received one comment that inquired about the
lightering zones referred to in section 4115 of OPA 90. The comment
questioned how the lightering zones would impact the vessels that are
required to comply with structural requirements for existing tank
vessels. The Coast Guard issued a final rule on August 29, 1995,
entitled ``Designation of Lightering Zones'' (60 FR 45006), which
established four lightering zones in the Gulf of Mexico. Under the
provisions of the final rule, tank vessels without double hulls may
lighter in the Exclusive Economic Zone (EEZ) in these zones, including
the existing vessels affected by this rulemaking. These vessels would
be allowed to continue conducting lightering operations in these zones
after they are phased out of service under the provisions of section
4115(a) of OPA 90 until 2015. However, under section 4115(b) of OPA 90,
these vessels would also be required to meet any structural and
operational measures for tank vessels without double hulls.
Another comment indicated that States should not attempt to preempt
this proposed Federal regulation. The Coast Guard works closely with
local and State governments and encourages them to actively participate
in its regulatory process. There should be no conflict between State
and Federal law; however, to the extent there is such a conflict,
Federal law remains supreme (U.S. CONST. art. VI, cl. 2).
On comment stated that the more limited definition of oil used in
this rulemaking, which excludes animal fats and vegetable oils, should
apply to all OPA 90 regulations. Other comments requested the exemption
of vessels which carry non-persistent oils. The NPRM specifically
excluded vessels carrying only animal fats and vegetable oils because
the proposed structural requirements were believed to be too costly for
vessels carrying only non-petroleum oils. Additionally, the exemption
was proposed in an effort to be consistent with the international
structural measures for existing vessels established in MARPOL 73/78.
The Coast Guard has determined that the application of some of the
structural measures presented in this SNPRM is technologically feasible
for all existing tank vessels. Comments on the economic feasibility of
imposing structural measures on vessels that carry only non-petroleum
oils are solicited. The Coast Guard also requests comments on the
benefits that may result from structural requirements. It should be
noted that the Operational Measures SNPRM (60 FR XXXX; date) proposes
the application of operational measures to all existing tank vessels,
including non-petroleum oil carriers.
Several comments requested clarification on whether the proposed
rulemaking would apply to vessels operating in the U.S. EEZ and to
vessels that carry cargo to foreign destinations. One comment asked
whether the rulemaking would apply to vessels that unload cargo at
deepwater ports or that engage in lightering in U.S. waters. The Coast
Guard determined that any operational or structural measures
reulemaking implementing section 4115(b) would be consistent with the
applicability section 4115(a) of OPA 90 which requires certain existing
tank vessels without double hulls to be phased out of operation by
2015. Therefore, this SNPRM would apply to vessels unloading cargo at
deepwater ports or engaging in lightering in U.S. waters. It would also
apply to any other existing tank vessel without a double hull that is
required to be phased out under section 4115(a) of OPA 90.
The Coast Guard rulemaking implementing section 4115(a) entitled
``Double Hull Standards for Vessels Carrying Oil in Bulk'' (CGD 90-051)
(60 FR 13318; March 10, 1995) added 33 CFR 157.10(d), which applies the
regulations to certain tank vessels carrying oil in bulk as cargo
operating in U.S. waters, including vessels unloading oil as cargo at
deepwater ports and lightering in established lightering zones more
than 60 miles from the territorial sea baseline. The regulations also
apply to non-dedicated oil spill response vessels (OSRVs). The
Navigation and Inspection Circular (NVIC) 10-94, ``Guidance for
[[Page 67228]]
Determination and Documentation of the Oil Pollution Act of 1990 (OPA
90) Phase-out Schedule for Existing Single Hull Vessel Carrying Oil in
Bulk,'' provides a detailed explanation of the applicability of section
4115(a). Without conclusively resolving all the complex interplay
between the Oil Pollution Act and the Law of the Sea, the Coast Guard
presently intends that operational and structural requirements would
not apply to foreign tankships engaged in innocent passage on U.S.
navigable waters, which includes the territorial sea of the United
States and the EEZ.
One comment requested clarification on whether structural measures
would apply to Floating Production and Storage Off-loading (FPSO)
Systems, Floating Production Systems (FPS), and Mobile Offshore
Drilling Units (MODUs). FPSO systems and FPS are tank vessels; however,
they would be excluded from this rulemaking if they are less than 5,000
GT, are not engaged in the movement of petroleum oils, and are not used
in lightering operations. MODUs are not included under the definition
of tank vessel in OPA 90. Therefore, they would not have to comply with
structural measures.
One comment asked why the NPRM differentiated between crude
tankships of 20,000 deadweight tons (dwt) or more and product carriers
of 30,000 dwt or more. The NPRM reflected the distinction in vessel
size made by Regulation 13G of Annex I of MARPOL 73/78. This
distinction was continued in the regulatory assessment in this SNPRM to
enable those companies operating vessels on international routes to
compare estimated cost and benefit results.
The Coast Guard received several comments which objected to the
imposition of structural measures on tank barges. The regulatory
assessment in this SNPRM reviewed several technologically feasible
measures that could be implemented on barges to reduce oil outflow.
Comments are solicited on the economic feasibility of these measures.
The Coast Guard received one comment on the double hull
requirements proposed in Sec. 157.410(a) of the NPRM. The comment
recommended the immediate construction of double hull vessels in lieu
of retrofitting existing vessels with structural measures. Section
4115(a) of OPA 90 establishes a phase-in schedule for double hull
requirements for all existing tank vessels. These section 4115(a)
provisions establish a schedule that balances environmental safety with
the overall impact on the U.S. economy, worldwide U.S. shipping
capability, and oil availability to U.S. consumers. The Coast Guard
does not have the authority to change the phase-out schedule of section
4115(a); rather, it is tasked with issuing interim regulations to
protect the marine environment until all vessels are required to be
equipped with double hulls under section 4115(a).
2. Consistency With International Standards
The Coast Guard received several comments which expressed support
for the development of regulations that are equivalent to Regulation
13G of Annex I of MARPOL 73/78. Another comment stated that for 70
percent of the fleet that it applied to, the NPRM duplicated the
requirements of the proposed Regulation 13G of Annex I of MARPOL 73/78.
The comment further stated that the Coast Guard has neglected its
responsibility to make an independent decision to designate the
strongest feasible antipollution measures. As previously stated, the
Coast Guard's goal is to implement its statutory mandates in
regulations that are consistent with international regulations wherever
doing so is lawful, appropriate, and practical. Based on comments from
the NPRM, the Coast Guard has reevaluated various pollution prevention
measures. Accordingly, the Coast Guard conducted an extensive cost and
benefit analysis of structural measures that are both consistent with
international standards and that exceed current international
agreements. The regulatory assessment in this SNPRM reflects the
structural measures deemed technologically feasible for existing tank
vessels.
One comment recommended that product tankships from 20,000 dwt to
30,000 dwt be exempted from further rulemaking action because they
presently comply with MARPOL 73/78 and the Port and Tanker Safety Act
of 1978. The comment contended that these tankers would already be in
compliance with the provisions of the published NPRM. The above
statements are accurate; however, the Coast Guard also considered
requirements above those of MARPOL for the regulatory assessment in
this SNPRM and has continued to include this group of vessels to ensure
it reflects accurate cost benefits.
3. Protectively-located Spaces (PL/Spaces)
The Coast Guard received several comments on the proposed
requirements for PL/spaces. In the NPRM, a PL/space includes any tank
or void space that is not used for the carriage of cargo, cargo
residue, slops, dirty ballast or fuel oil. The protectively-located
(PL) qualifier refers to the distribution of these spaces along the
length of the vessel's hull as described in Appendix C to 33 CFR 157.
One comment stated that a requirement for oil-free spaces has already
been in effect under international rules and corresponding U.S. law
that covers all vessels except for small tank vessels built since 1979;
thus, the comment contends, the proposed requirement for PL/spaces
would provide no additional improvement for nearly 30 percent of the
world's single hull tanker fleet. Another comment contended that
approximately 75 to 80 percent of the world fleet of crude carriers
consists of tankers that are not fitted with SBT or CBT (pre-MARPOL
tankers). The comment indicated that HBL with a safety factor of 1.0 or
less, as used in Regulation 13F of MARPOL, is more economical and
technically viable in the case of groundings than the originally
proposed PL/spaces for these vessels.
The Coast Guard focused its analysis for this SNPRM on determining
what would happen if various PL/space requirements were applied to pre-
MARPOL vessels. In this assessment, it took into account whether the
pre-MARPOL vessels are fitted with SBT or CBT. This SNPRM summarizes a
revised regulatory assessment and solicits comments on the economic
feasibility of requiring pre-MARPOL tank vessels to be fitted with PL/
spaces as compared to HBL.
One comment stated that requiring PL/spaces on non-SBT tankships
would lead to greater oil outflow in a grounding or collision. Another
comment indicated that, based on recent calculations performed by the
oil tanker industry on ships of different sizes, PL/spaces are capable
of achieving an improvement in estimated oil outflow reduction,
provided certain operating conditions are maintained. The Coast Guard
agrees with both comments. When PL/spaces are used in such a way that
they result in an increased freeboard, oil outflow in groundings could
be expected to increase. However, the use of PL/spaces, in such a way
that the operational freeboard is essentially unchanged (by ballasting
the PL/spaces), will result in reduced oil outflow. As suggested by
several comments, the Coast Guard modified its original assessment and
considered the implementation of PL/spaces made in conjunction with
HBL.
One comment questioned whether ships that are fitted with SBTs in
accordance with the provisions of Regulation 13E of Annex I of MARPOL
73/78 would be accepted as meeting the provisions of Sec. 157.410(a) in
the NPRM
[[Page 67229]]
as it applies to the provision of side or bottom protection. The
comment indicated that under a strict interpretation of the provisions
of Sec. 157.410(a) of the NPRM, these vessels would not be in
compliance with the proposed requirement. The intent of the NPRM
proposal was that any vessel in compliance with Regulation 13E of Annex
I of MARPOL 73/78 would also be in compliance with proposed 157.410(a)
of the NPRM.
One comment recommended that existing tank vessels be fitted with
PL/spaces that protect 100 percent of the cargo tank length
encompassing the full depth of each side. The comment suggested that
the benefits would include a significantly reduced likelihood of oil
outflow and greater use of surplus tonnage for pollution control. The
comment stated that this would also accelerate a replacement program
with double hull tankers as freight rates rise and estimated that
existing tankers would have about the same operating cost as a new
double hull tanker. The Coast Guard analyzed the retrofit of full
double sides, which may be interpreted as fitting PL/spaces along the
length of the vessel, and presents the results in the regulatory
assessment in this SNPRM. Comments on the economic feasibility of this
measure for existing tankships are solicited.
One comment stated that both the preamble and proposed rule
explicitly state that PL/spaces must either protect 30 percent of each
side or 30 percent of the bottom of the vessel. The comment stated that
more consideration should be given to all around protection, especially
in cases where a vessel falls short of the NPRM's proposed PL/space
requirement. The NPRM proposed PL/spaces in this proportion because
doing so is consistent with existing international standards. The Coast
Guard continued to consider this arrangement in the regulatory
assessment of this SNPRM, and also considered more stringent variations
of PL/space protection.
One comment questioned whether a non-SBT tank vessel would be able
to use its full cargo carrying capacity when trading outside the U.S.
EEZ, and whether it would be accepted as meeting the proposed
provisions of the NPRM if certain cargo tanks are simply left empty
when trading in U.S. waters. The comment suggested that tanks that are
normally used for carrying cargo during worldwide trading could be
converted to void spaces for U.S. trading if adequate crude oil
washing, full gas freeing, and blanking of pipelines leading to the
tanks are accomplished. According to the comment, these operations
could be witnessed by a classification society which could issue voyage
certificates listing the tanks as void or SBT spaces. Blanks could be
removed for resuming worldwide trading. For non-SBT tank vessels,
simply leaving certain cargo tanks empty is one of the measures
considered in the regulatory assessment in this SNPRM. As explained in
the discussion on applicability, there are also certain circumstances
in which a non-SBT tank vessel could be able to carry a full cargo load
and engage in U.S. trade. While it is technologically feasible to take
tanks out of service and reduce oil outflow, comments are solicited on
the economic feasibility of this practice. Comments that propose
enforcement mechanisms for this type of measure are also requested.
One comment recommended that PL/spaces be required to protect
against collisions by permanently filling them with ballast water. The
Coast Guard has focused this phase of the rulemaking on reducing oil
outflow after an accident. The regulatory assessment in this SNPRM
evaluated PL/spaces in unballasted, HBL, and full-ballast states to
determine the effects on oil outflow. While oil outflow is reduced when
the vessel is completely ballasted down, the practice also causes cost
increases due to possible port draft restrictions and may compound a
vessel's grounding risk. Comments are solicited on this SNPRM's
assessment of the different ballast states as they are combined with
PL/spaces and the economic feasibility of such combinations.
One comment stated that locating all PL/spaces forward could lead
to unacceptable levels of trim or stress on some ships. On most tank
vessel designs, the most technologically feasible place to install PL/
spaces is in the tankship's midbody; however, due to unique design
considerations and the need to vary a vessel's draft or cargo carrying
capacity based on the route traveled, the Coast Guard does not intend
to require PL/spaces be located in a particular part of a ship.
4. Hydrostatic-Balanced Loading (HBL)
The Coast Guard received several comments concerning the HBL option
proposed in the NPRM. Two comments stated that the NPRM must require
HBL as a minimum measure to effectively provide ``as substantial
protection to the environment as is economically and technologically
feasible.'' The Coast Guard recognizes HBL as an effective outflow
reduction measure and included it in several forms for the regulatory
assessment in this SNPRM. The assessment considers HBL as a
technologically feasible measure for all existing tank vessels, even
those presently meeting MARPOL 73/78 requirements. Comments on the
economic feasibility of HBL requirements are solicited.
The Coast Guard received one comment stating that requiring
specific structural or operational measures like HBL, which force ships
to change loading or operational practices from one trade to another,
are unsafe because of an increase in the opportunity for human error.
The concerns expressed in the comment are valid; however, the degree of
human error that would be introduced into the vessel's procedures
depends on several factors. An example could be a poorly worded loading
procedure which complicates loading and increases accident risk to a
tank vessel. The Operational Measures SNPRM (60 FR 55904; November 3,
1995) attempts to mitigate the risk of human error that could be
incurred by complex or confusing loading instructions. In contrast, the
regulatory assessment in this SNPRM assumes that adequate operational
measures are in place to mitigate this type of potential human error
and only considers HBL for its potential oil outflow reduction
capabilities. The Coast Guard solicits comments on quantifying the
negative effect that HBL could cause due to frequent loading
adjustments.
Several comments expressed concern that the Coast Guard is imposing
measures, such as HBL, on ships for which they were not designed and
could be introducing hull bending stresses which exceed classification
society standards. The Coast Guard studied the structural consequences
of the measures proposed in the NPRM, in terms of hull bending moments,
and concluded in the regulatory assessment for this SNPRM that, in
general, excessively high global stress levels due to HBL should not be
a problem. The technical feasibility of HBL is assumed based on hull
bending stresses and sloshing loads. However, in some cases,
unacceptably high local stresses may be created due to HBL. The Coast
Guard solicits comments on specific cases in which local stresses would
exceed maximums set by recognized classification societies.
One comment stated that the formula for HBL presented in the NPRM
was based on the draft guidelines for alternatives required under
Regulation 13G of Annex I of MARPOL 73/78. The comment stated that use
of the formula for HBL results in a high loss of cargo carrying
capacity. Further, the comment states that the original formula was
based on the height of an intermediate
[[Page 67230]]
oil-tight deck on a tankship fitted with double sides, and may not be
suitable for application to the definition of HBL in the context of
existing tankers. The Coast Guard believes that the definition of
``hydrostatic-balanced loading'' used in the NPRM should not be used.
The IMO has finalized the guidelines concerning the implementation of
HBL and modified the original definition. A factor of 1.0 replaced the
original factor of 1.1. Consequently, the Coast Guard has used the
definition of ``hydrostatic-balanced loading'' that is consistent with
the guidelines developed by the IMO for the regulatory assessment in
this SNPRM.
Another comment suggested the use of HBL combined with PL/spaces as
an alternative to applying HBL to all tanks. The Coast Guard presents
several combinations of PL/space and HBL in the regulatory assessment
for this SNPRM and solicits comments on them.
One comment stated that 50 percent of all tankship collision damage
is located above the waterline only; therefore, vessels should be
required to load their side tanks only to the waterline level. The
comment stated that if side tanks were filled using HBL procedures, and
40 percent of the cargo was carried in the side tanks, all spills due
to grounding would be reduced by 40 percent in the case of a grounding.
The Coast Guard's probabilistic oil outflow analyses, as described in
``Interim Guidelines for the Approval of Alternative Methods of Design
and Construction of Oil Tankers Under Regulation 13F(5) of Annex I of
MARPOL 73/78'' (IMO Marine Environmental Protection Committee's
Resolution MEPC 37/14; December 23, 1994), of various measures,
including HBL, is assessed in this SNPRM. Comments are solicited on the
oil outflow reduction estimates achieved through HBL and the resulting
costs associated with the reduction.
One comment suggested that the Coast Guard place a notation in 33
CFR 157, subpart G, that states that structural increases or
modifications to the cargo area of a vessel may be necessary to apply
HBL when a vessel receives cargo. Another comment stated that the high
tensile steel used in some ships may not be suitable for the fatigue
effects that could result from HBL. Other comments expressed concerns
about using HBL because of the possibility of sloshing. The Coast Guard
recognizes that when employing HBL, in some cases, it may be necessary
to retrofit swash bulkheads or modify the vessel's structure to reduce
the effects of fatigue. Prior to applying HBL, the owner or operator of
a loading tankship would have to evaluate the effects of HBL on a
tankship's cargo tanks and structure to determine if swash bulkheads or
other modifications are necessary. The regulatory assessment in this
SNPRM did not consider shipyard cost for the modifications needed to
accommodate HBL. Comments are solicited on specific structural
modifications and their anticipated added shipyard cost, if any, for
HBL measures.
One comment expressed concern that HBL may raise the risk of
spillage due to an increase in total sailings resulting from reduced
unit cargo loading. The oil outflow benefit analyses summarized in this
SNPRM does not directly account for the effects of increased traffic
due to reductions in cargo carrying capacity. Another comment stated
that the benefits for all structural measures were overestimated
because they did not reflect the added risk of an accident due to an
increase in traffic volume. Historical accident data was used to
estimate how much oil is spilled annually as a result of accidents.
Estimated cargo shutout from measures similar to Regulation 13G of
Annex I of MARPOL 73/78 reveal that the resultant increase in tank
vessel traffic would be 12 percent. While this traffic increase could
also increase accident risk, it represents approximately a 2 percent
increase in the total U.S. port deep draft traffic volume. It is
reasonable to assume that this small increase in traffic volume would
be offset by the accident reduction measures implemented through the
Coast Guard's proposed Operational Measures (60 FR 55904; November 3,
1995.
One comment inquired as to whether a load line would be necessary
to enforce the use of HBL. The Coast Guard did not propose any changes
to the International Convention on Load Lines, 1966, within the NPRM.
If an HBL requirement is deemed economically feasible, it could be
enforced using a number of methods. A tankship's master could be
required to ensure that the ullage measurement reports or other tank
gauging reports are recorded, kept in the Oil Record Book, and
available for examination. Additionally, a visual inspection of draft
marks should be sufficient to determine if a vessel has employed HBL
loading procedures. The Coast Guard requests comments on the best way
to determine whether a vessel is in compliance with its HBL loading
plans.
One comment stated that, for ultra large crude carriers (ULCCs) and
very large crude carriers (VLCCs) operating at offshore terminals, the
risk of grounding is limited; however, collision is the most likely
accident to occur. The comment proposed that, for these vessels, a very
safe method of operation would be to HBL only the side cargo tanks. The
Coast Guard disagrees. For collisions, the use of PL/spaces is
necessary to reduce oil outflow. HBL provides added oil outflow
protection only in groundings. If a collision were to cause the side of
a large tankship to be pierced and a cargo tank to be ruptured, the
hydrostatic head, which acts in balance with the seawater, would be
lost; thus, oil would flow out of the tank.
5. Alternative Measures
The Coast Guard received several comments which encouraged it to
adopt alternative systems to reduce oil outflow. These include
emergency rescue and emergency transfer systems, resilient membranes,
vacuum and underpressure systems, independent tanks, and intermediate
oil tight decks. Alternative measures to prevent oil outflow are viable
in some applications. For the regulatory assessment in this SNPRM,
specific alternative measures were not researched. Cost assessments for
alternative measures vary greatly. While there are indications that
some of these measures could be less costly than PL/spaces or HBL, they
were not included in the regulatory assessment because none of them
meet the benchmark equivalency for alternative compliance found in
``Guidelines For Approval of Alternative Structural or Operational
Arrangements as Called for in Regulation 13G(7) of Annex I of MARPOL
73/78,'' Resolution MEPC.64(36) adopted on November 4, 1994. These
guidelines include oil outflow criteria that must be met for certain
damage assumptions and general operational and safety points such as
exposure of the tanker to stress, creation of fire or explosion
hazards, stability considerations, and loading requirements. The Coast
Guard solicits comments on these alternative measures. Specifically,
the Coast Guard requests comments on whether they meet or exceed the
IMO guidelines, whether they have been submitted and approved by IMO's
Marine Environment Protection Committee (MEPC), and whether they are
economically and technologically feasible.
Four comments recommended that the Coast Guard include provisions
for using alternative systems to provide flexibility in complying with
the requirements for structural measures. One comment suggested that
the Coast Guard adopt the recommendations of the National Research
Council report entitled ``Tanker Spills: Prevention by Design,'' which
encourages the adoption
[[Page 67231]]
of multifaceted measures such as a combination of PL/spaces and HBL.
Another comment stated that the regulation should provide an owner or
operator with a choice of equivalent measures so that the owner or
operator may select the best arrangement for each ship in his or her
fleet. The third comment stated that the NPRM should describe the
results that a system should achieve, or quantitative measures of
effectiveness, instead of mandating a single structure measure. The
fourth comment stated that the proposed alternative oil outflow
prevention measure provision grants total discretion to the Coast Guard
without providing any criteria for the alternative measure, such as
ensuring that it is at least as environmentally protective as the
specified measure for the type and size of tankship under review.
The regulatory assessment in this SNPRM analyzes multifaceted
measures such as combining PL/spaces with HBL and SBT with HBL. The
Coast Guard still considers alternatives to, or choices between
measures viable and solicits comments on the measures that should be
deemed equivalent and their economic feasibility. Additionally, the
Coast Guard is reviewing the performance criteria in the IMO
alternative guidelines and encourages comment on them. The Coast Guard
views the following safety requirements as key in this type of system
equivalency evaluation: the human interface required by the operator to
control the system: the operational complexity and increased burden
placed on the operating crew as a result of working with an inherently
complex system that would increase the probability of a spill due to
human error; the added potential for fire and explosion, including the
performance of the inert gas and vapor recovery systems (if installed)
once the alternative measure has been installed; the adverse impact on
intact and damage stability; the adverse impact the installed
alternative measure has on structural strength, including sloshing
loads and the need to fit large structural fixtures in existing tank
structures; and the overall consideration of the operational history of
the alternative and its components.
The Coast Guard received several comments which suggested that
response systems be fitted as alternative measures to the ones proposed
in the NPRM. These systems have already been evaluated in ``Discharge
Removal Equipment for Vessels Carrying Oil'' (58 FR 67988; December 22,
1993). The alternatives considered in this SNPRM are passive pollution
prevention systems, not spill response systems which require human or
machine intervention following a collision or grounding. The Coast
Guard has implemented several response oriented requirements including
Vessel Response Plans (58 FR 7424; February 5, 1993) and the discharge
removal requirements and believes that the structural measures intended
by section 4115(b) should be addressed through vessel design or passive
protection.
6. Phase-in Alternatives and Economic Incentives
The Coast Guard received several comments regarding the 3-year
phase-in provision that was proposed in the NPRM. One comment stated
that the 3-year phase-in period would result in the acceleration of
shipyard schedules, higher costs, and tonnage restraints. The comment
contended that the 3-year phase-in schedule would be economically
overburdensome on the tankship owner because it would require many
vessels to be removed from normal service to perform the modifications
required by the proposed rulemaking. The assessment for this SNPRM
reflects cost estimates associated with removing the vessel from
service for an extended shipyard period. However, no shipyard
scheduling constraints were considered. Comments on this phase-in cost
and specific shipyard availability constraints are solicited.
Many comments expressed concern that the original proposed 3-year
phase-in period was too generous. One comment expressed concern that no
action would be taken by industry and the Coast Guard to reduce oil
spills and pollution during this period. Other comments stated that the
proposed phase-in period penalizes operators who have already invested
in modern double hull vessels because it reduces the cost of single
hull vessel operation. One comment contended that a vessel should be
required to retrofit during the regularly scheduled drydocking period
which immediately follows the issuance of the final rule.
The Coast Guard has taken action to implement interim measures for
existing tank vessels by issuing regulations for emergency lightering
equipment and advanced notice of arrival requirements (59 FR 40186;
August 5, 1994) and proposing regulations for operational measures (60
FR 55904; November 3, 1994; STD). These two efforts will reduce the
risk of oil discharges from existing tank vessels that do not have
double hulls, regardless of the outcome of the feasibility assessment
for structural measures. Since a tank vessel on an ocean or
international route is required by its flag administration or
classification society to drydock twice every 5 years, the 3-year
phase-in schedule proposed in the NPRM reflected an implementation
period comparable to one for the regularly scheduled drydocking period
immediately following the issuance of the final rule. The Coast Guard
requests comments on the economic feasibility of the 3-year phase-in
period versus a 5-year period or a 1-year period. Comments are also
requested on an appropriate phase-in period for those measures that do
not require drydocking. The regulatory assessment for this SNPRM
estimates that a 60,000 dwt pre-MARPOL vessel's annualized value and
cost is $273,000 less for its estimated 5 remaining years than its
counterpart double hull vessel which can operate indefinitely.
One comment stated that the 3-year phase-in schedule for Regulation
13G is flawed. The comment contended that newer vessels should be
allowed a longer time period to comply with the proposed structural
requirements. The comment stated that for these vessels, the risk to
the environment should be commensurately lower, provided the vessels
have been properly maintained. Oil outflow can be reduced even on newer
single hull vessels meeting MARPOL 73 or MARPOL 78 requirements as
shown by the regulatory assessment in this SNPRM. While it is true that
the oil outflow reduction benefits presented in this SNPRM for vessels
fitted with SBT or CBT are less than for pre-MARPOL tankers, they
exist. Comments are requested on possible phase-in periods for vessels
fitted with SBT or CBT that, in light of the benefit analysis presented
in this SNPRM, would be economically feasible.
One comment contended that the phase-in period would place U.S.
vessels at a significant disadvantage in relation to foreign vessels.
The comment stated that U.S. vessels were required to retrofit SBTs in
accordance with the Port and Tanker Safety Act of 1978, and would
already be in compliance with the proposed SBT requirements of the
NPRM. The comment indicated that the proposed phase-in period would
provide foreign vessels with additional time to retrofit SBTs. Section
4115(b) of OPA 90 requires the Coast Guard to issue this rulemaking so
that it is economically feasible for both U.S. and foreign tank
vessels. The Coast Guard solicits comments on the economic feasibility
of a phase-in period for foreign tank vessels that is shorter than 3
years.
[[Page 67232]]
One comment expressed concern that the NPRM does not provide
incentives to tanker owners for pursuing and adopting new technologies.
The comment stated that shipowners' budgets generally do not include
monies for pure research, and without clear incentives to embrace new
technologies, there is a small chance that vessel owners will use them.
The comment urged the Coast Guard to amend the proposed rule to include
specific incentives to encourage the industry to develop and adopt such
technologies. Another comment stated that many vessel owners already
are operating with double hull vessels and/or SBTs. The comment stated
that companies using these vessels should receive pollution credits.
Additionally, the comment contended that pollution credits should be
issued to owners who build new tankers or significantly upgrade
existing tankers. The comment stated that these credits could be traded
for debits to continue using existing tankers with little modification.
Similarly, another comment stated that owners who build new tankers
should receive tax credits. Issuing monetary incentives for company
research, granting pollution credits to a company to support uneven
implementation of oil outflow reduction measures among their fleet, or
granting tax credits for companies that comply with requirements are
beyond the authority and scope of this rulemaking.
7. Regulatory Assessment--General Comments
Several comments questioned the assumptions made in the Regulatory
Impact Analysis (RIA) performed by Mercer Management Consulting, Inc.
for the NPRM. One comment stated that the RIA for the NPRM does not
take into account the barrels of oil saved from spillage by other OPA
90 rules. The Coast Guard has developed a wide range of regulations
mandated by OPA 90 to implement provisions pertaining to spill
prevention, mitigation, cleanup, and liability. To facilitate the
rulemaking process, the Coast Guard has divided rulemaking requirements
into relatively small, individual rulemaking projects and has prepared
regulatory, environmental, regulatory flexibility, and paperwork
analyses for each project. To expedite effective rulemaking, the Coast
Guard analyzed each project as a stand alone rulemaking. Recognizing
that there are interactive effects of the suite of OPA 90-derived
regulations, the Coast Guard has begun a programmatic regulatory
assessment for the OPA 90 rulemaking projects.
One comment stated that the RIA for the NPRM assumed that all the
work for structural modifications can be done during a normal
drydocking period. The comment contended that this is not correct
because the cleaning for hot work entails a much higher degree of
cleaning and more lost service time. The Coast Guard recognizes that
additional cleaning and gas freeing would be necessary to perform
structural modifications and has included the cost of an extended
drydock in the regulatory assessment for this SNPRM.
One comment disagreed with the assumption that some existing ships
will be replaced rather than converted. The results of the assessment
conducted for this SNPRM indicate that no vessels are expected to be
replaced early as a result of the measures researched.
One comment disputed the size of the international vessel
population assumed in the RIA. The comment stated that the
international fleet affected by the NPRM would range from 1,500 to
2,000 vessels, not the 300 or 400 assumed in the RIA. The regulatory
assessment in this SNPRM revises the NPRM vessel population numbers,
based on the number of tankships applying for a Certificate of
Financial Responsibility, excluding certain tankships such as double
hull tankships. The RIA for this SNPRM estimates that there are a total
of 1,085 existing tankships likely to be affected by this SNPRM.
Several comments stated that the assumption made in the NPRM RIA
that newer vessels that comply with MARPOL Regulation 13G will be
allocated to U.S. trades in the same proportion as non-complying
vessels is inaccurate. The comments went on to state that the number of
newer vessels operating in the U.S. trade is higher because of the Port
and Tanker Safety Act of 1978. The comments contend that the existing
fleet of vessels meeting either MARPOL PL/SBT standards or having
double hulls is already sufficient to carry all U.S. cargo. One comment
stated that the NPRM proposals would have a devastating impact on the
product tanker market. Another comment stated that there was no
consideration in the NPRM for a company's ability to secure adequate
capital to replace existing vessels with double hull vessels. The
vessel population and U.S. coastal trade population affected by this
rulemaking were reconsidered for the regulatory assessment in this
SNPRM. Build dates were also researched and correlated with trade
estimates. Neither the ability of the existing fleet of double hull or
MARPOL PL/SBT tankers to meet U.S. import needs nor a company's ability
to secure funding is influential for this rulemaking. Comments are
solicited on the specific economic feasibility of these measures on
product tankers.
8. Regulatory Assessment--Costs
Comments on the Existing Vessels NPRM and from the public meeting
expressed concern about the accuracy of the costs and benefits stated
in the Regulatory Impact Assessment (RIA). The comments indicated that
the costs, in some cases, were not fully developed. Comments included
concern over using only two ship sizes to calculate the cost, the
assumption that there will be minimal cargo capacity loss across the
fleet, the gross underestimate of compliance costs for tank barges, the
potential adverse costs to vessels which carry non-persistent oils, and
the 3-year phase-in costs as compared to following the MARPOL 73/78,
Regulation 13G schedule. After reviewing the comments, the Coast Guard
redirected its approach, expanded the vessel models used in the cost
analysis, and revised its assessment to reflect these comments.
The Coast Guard received several comments regarding the economic
feasibility of the regulations. One comment stated that Congress made
it clear that all regulations should be economically feasible. The
comment stated that requiring industry to spend $573 million over a 3-
year period for unknown environmental benefits would be pressing the
intent of Congress. Another comment stressed that a requirement that a
measure be economically feasible does not mean that it must be the
least expensive. Pollution prevention benefits are measured as a ratio
of cost per barrel of oil not spilled. The most desirable measures
would be those that prevent the spillage of the greatest number of
barrels of oil at the lowest cost. The Coast Guard recognizes that a
measure can be costly; however, if it provides a significantly improved
degree of protection in terms of barrels of oil not spilled, it may
still be cost effective. The Coast Guard solicits comments on the cost
effectiveness of the measures presented in this SNPRM.
One comment noted that when retrofitting PL/spaces on vessels in
the 80,000 dwt to 300,000 dwt range, there is a loss of approximately
15 percent of the cargo volume. The comment further stated that for an
80,000 dwt vessel without SBT, there is a loss of approximately 29
percent of the cargo volume. A tank vessel owner commented that if the
company's VLCCs were required to be converted to PL/SBT or PL/spaces,
the company
[[Page 67233]]
would lose more than $1 million of revenue per year, and that a medium
size crude carrier could have a $500,000 reduction in revenue per year.
The comment stated that this would change the economic formulas for the
company's fleet and would force the company to lay up or sell half of
its fleet because it would no longer be economically feasible to
operate the vessels. Another comment stated that the capital costs and
lost cargo capacity costs for dedicated PL/spaces or HBL would be much
higher for most ships than the amount estimated in the NPRM RIA because
many existing vessels would be required to have their cargo
compartments structurally refit to accommodate a 30 percent PL/Space
requirement of the NPRM. The Coast Guard recognizes this argument and
includes a revised cargo shutout estimate in this SNPRM assessment.
Comments on the regulatory assessment for this SNPRM and the economic
feasibility of the measures within it are solicited.
The Coast Guard received several comments on the economics of
requiring HBL for existing tank vessels. One comment stated that
requiring HBL would be economically burdensome. Four comments
questioned the NPRM's statement that HBL was not economically feasible.
Three comments stated that HBL could be implemented without costly
structural modifications. One comment added that the most costly
structural modification would be the installation of swash bulkheads;
however, the comment stated that it has been demonstrated that swash
bulkheads are not necessary in most cases. Two of the comments stated
that HBL is economically feasible because the reduced cargo carrying
capacity requires more trips to be made. The comment contended that as
a result of the need to make more voyages to haul a given amount of
cargo, more revenue would be generated and the market demand for
tankers would increase. Cargo shutout and structural refit needs for
HBL implementation were revised and are presented in the regulatory
assessment in this SNPRM. Comments on the economic and technological
feasibility of the different HBL measures discussed within this SNPRM
are solicited.
One comment stated that the NPRM RIA's estimate of $4 billion for
the present value of total compliance for HBL over 20 years could
readily be financed by the major oil companies out of annual profits.
The comment stated that, traditionally, the oil industry has passed on
a doubling or even a tripling of the price of crude oil, as well as the
price of its transportation, and could do so for this rulemaking.
Section 4115(b) tasked the Coast guard with implementing interim
structural and operational measures that were technologically and
economically feasible. The definitions of these two qualifiers were not
developed within OPA 90 or its associated documents. The Coast Guard
has researched structural measures deemed technologically feasible and
is publishing this SNPRM assessment in order to receive comments on
their economic feasibility. After the comment period for this SNPRM has
closed, an assessment of the economic feasibility for structural
measures will be done and further action will be taken accordingly.
Specific comments justifying why a measure is either economically
infeasible or how it could be feasible are solicited.
9. Regulatory Assessment--Benefits
The Coast Guard received several comments questioning the accuracy
of the benefit estimates presented in the NPRM. Many comments stated
that, in general, the benefits specified in the NPRM RIA were
overstated. Four comments stated that the effectiveness estimates were
not accurate. One comment specifically indicated that projected
effectiveness for PL/spaces, the Underpressure System (UPS),the
Emergency Rapid Transfer System (ERTS), and the Emergency Rescue System
(ERS) were extremely optimistic. Other comments stated that the
estimated effectiveness of SBT was correct as presented in the tables
but underestimated within the NPRM text. Another comment stated that
the benefits associated with PL/spaces were significantly understated
in the NPRM because the costs for cleanup, third-party claims, and
damage to natural resources were not included.
The Coast Guard reviewed the NPRM RIA and has revised the benefit
assessment for certain measures presented in the NPRM. It has also
added benefit analysis on other structural measures and presents a
summary in this SNPRM. The costs associated with third-party cleanup
and damage to natural resources were not considered because the Coast
Guard reviews benefits as the amount of oil not spilled rather than a
dollar value. Details on the extensive work the National Oceanic and
Atmospheric Administration has done on this subject can be found in its
NPRM entitled, ``Natural Resources Damage Assessments; Proposed Rule''
published on August 3, 1995 (60 FR 39804). Comments are solicited on
the revised benefits assessment for this SNPRM.
Other comments argued that PL/spaces would not reduce oil outflow
by 30 percent in collisions as assumed in the RIA. The comment
contended that the reduction in oil outflow would be considerably less
because collisions do not occur uniformly along the side-shell of a
vessel. At the public meeting held on January 20, 1994, a speaker
presented his company's conclusions about oil outflow from PL/spaces
based on probabilistic investigations and analyses, as described in
``Interim Guidelines for the Approval of Alternative Methods of Design
and Construction of Oil Tankers Under Regulation 13F(5) of Annex I of
MARPOL 73/78'' (IMO Marine Environmental Protection Committee's
Resolution MEPC 37/14; December 23, 1994). The results indicated that
PL/spaces, when retrofitted on a non-SBT tankship, would result in a
higher oil outflow when compared to the outflow of the same tankship
that has not been fitted with PL/spaces. The speaker indicated that
retrofitting PL/spaces on a non-SBT tankship would create a higher
freeboard, which would result in greater oil outflow if the vessel's
hull were to become damaged. The Coast Guard agrees that the
effectiveness of PL/spaces as assumed in the NPRM RIA may have been
overstated. The Coast Guard has conducted further studies to obtain
more accurate estimates of the effectiveness of PL/spaces. A summary of
the revised benefit estimates for PL/spaces is contained in the
regulatory assessment for this SNPRM.
One comment stated that an IMO sponsored model of oil outflow
indicated that, for any unprotected tank configuration, it is not
possible to attain 100 percent effectiveness in a grounding scenario.
The comment contended that within the structural limitations of most
existing ships, the UPS system will be substantially less than 100
percent effective and that the NPRM overestimated its effectiveness.
The Coast Guard has revised its estimates for the measures presented in
this SNPRM. The UPS was not analyzed further; however, the Coast Guard
is willing to analyze alternative oil outflow prevention measures if
they meet international alternative standards, including safety
assessments.
One comment stated that the RIA for the NPRM did not analyze
historical incidents. Two comments stated that, without accurate
estimates of the number of oil spills and the volume of oil spilled, it
is impossible to accurately quantify environmental benefits and costs.
The Coast Guard reviewed the
[[Page 67234]]
historical data used for the NPRM RIA and revised it for the regulatory
assessment for this SNPRM. Comments on the revised data are solicited.
Assessment
The methodology for completing the regulatory assessment for this
SNPRM employed a two phase process. First, a screening analysis was
conducted to evaluate the effectiveness, efficiency, and technological
feasibility of certain structural measures on a baseline of analytical
tank vessel models. The screening analysis included an estimation of
the onetime expense associated with refitting the vessel at a shipyard,
called a rough order-of-magnitude (ROM) estimate; the cost of losing
cargo carrying capacity due to implementing a measure that would not
allow cargo carriage in certain tanks or above certain levels, called
cargo shutout; and other costs such as loss of revenue during the
shipyard period, called opportunity costs. It also included an estimate
of the potential reduction in accidental oil outflow and operational
oil outflow for certain measures. For this assessment, operational oil
outflow is the oil prevented from being discharged by pre-MARPOL
vessels if, instead of being allowed to discharge dirty ballast water,
they are fitted with SBT or CBT and are not permitted to discharge
dirty ballast water. Vessels are not allowed to discharge dirty ballast
water in U.S. navigable waters; however, in accordance with
international conventions they may do so in certain areas outside of
these waters.
The second phase of this regulatory assessment consists of a
detailed analysis conducted to estimate the costs and benefits of those
measures which were deemed not only technologically feasible, but also
appeared to be the most effective at reducing oil outflow on the
affected existing single hull tank vessel fleet. The detailed analysis
included a breakdown in costs, benefits, and a cost-benefit analysis
over the 19-year period this rule is expected to be in effect.
Screening Analysis
1. General
There were five steps to the screening analysis phase of this
assessment. First, baseline analytical tank vessel models were
developed that represented the existing single hull tank vessel fleet.
Second, selected measures were imposed on four of these analytical tank
vessel models and the resultant oil outflow reductions were calculated.
Third, cargo shutout, operating costs, and onetime ROM refit costs were
developed. Then cost-effectiveness ratios were developed and the
results of each measure were correlated with selected baseline
analytical tank vessel models. Finally, the ratios were used to rank
the measures and identify those combinations of measures and vessel
categories that resulted in the lowest cost per barrel of oil not
spilled. Table 1 summarizes the combinations of vessels and measures
researched for this screening analysis.
BILLING CODE 4910-10-M
[GRAPHIC][TIFF OMITTED]TP28DE95.005
BILLING CODE 4910-14-C
To develop the baseline fleet and its characteristics, several
designs were considered. It was assumed that the pre-MARPOL tank vessel
had crude oil washing capabilities but no other required MARPOL
features. MARPOL 73 tank vessels were assumed to be fitted with SBT,
and MARPOL 78 tank vessels were assumed to have PL/SBT. As part of the
process of ensuring that the design of the baseline models was
appropriate, the baseline tank vessels were investigated for intact
stability, longitudinal bending stresses, shear stresses, and sloshing
frequencies. It was also assumed that the vessels were constructed to
comply with the prevailing American Bureau of Shipping rules when the
vessels were built; specifically, the still water bending moment,
bending stress, and shear stress values. The resulting average shear
stresses and bending moments were satisfactory. The fill depth level to
tank depth level ratio for all loading conditions of the vessels
investigated did not fall below 75-80 percent,
[[Page 67235]]
meaning that the sloshing frequencies were not near the roll or pitch
periods of the vessels. Resonance can occur in longitudinal modes for
liquid level ratios in the range of 30-45 percent, which are well below
normal oil cargo levels and well below levels resulting from the
application of HBL in this assessment. Another important consideration
in developing the analytical tank vessel models was to ensure that they
were, in general, reasonable representations of tank vessels serving
the U.S. An analysis was conducted to determine the representativeness
of the model tank vessels with respect to the existing fleet. The
70,000 dwt and 264,000 dwt pre-MARPOL, MARPOL 73 and MARPOL 78 models,
and the 40,000 dwt pre-MARPOL model were compared to data on existing
tank vessels obtained from ``The Tanker Register,'' Clarkson Research
Studies, 1994. Information on the number of center and wing tanks, and
on the cargo and ballast capacity, for existing vessels was analyzed.
This analysis confirmed that the key vessel characteristics associated
with the model vessels were within the distributions found on existing
tank vessels.
The four deadweight categories (two tankship categories and two
tank barge categories) selected for this screening represent a
significant portion of tank vessels that are affected by section
4115(b) of OPA 90. Due to the nature of the measures and baseline tank
vessels examined, certain of the baseline vessel and pollution
prevention combinations were not analyzed because the tank vessel model
already substantially meets the specification of the measure. For
example, the MARPOL 78 baseline model tank vessel already substantially
meets (and exceeds) PL/Space specifications. Additionally, because
analyses of the pre-MARPOL baseline tank vessels and tank barges
indicated that they generally operate at close to an HBL condition, the
MARPOL 73 tank vessel models were selected to analyze the benefits of
the measures employing HBL.
The measures researched in this screening have the following
parameters:
Measure 1.a. reflects a measure that includes PL/Spaces covering 30
percent of the projected area of the sides or the projected area of the
bottom of the vessels. For this measure, additional bulkheads were
assumed to be installed to provide the minimum width of the PL/Spaces.
Measure 1.b. reflects a measure for PL/Spaces covering 30 percent
of the projected area of the sides or the projected area of the bottom
of the vessels; however, the vessels were also required to include
water ballast in the wing tanks selected as PL/Spaces to provide the
maximum feasible draft in the load condition. It was assumed additional
ballast piping and pumping capability would be required.
Measure 1.c. reflects a measure for PL/CBT or PL/Spaces covering 30
percent of the projected area of the sides or the projected area of the
bottom of the vessels; however, the vessels were also configured to
carry ballast to the maximum extent possible in lieu of other spaces,
with no new pumps or piping being refit. Exiting cargo wing tanks were
assumed to remain as empty as possible with trim and longitudinal
bending moment considerations.
Measure 2.a. reflects a measure for HBL which is incorporated in
all cargo tanks.
Measure 2.b. reflects a measure for HBL which is incorporated only
to the extent necessary for compliance with Regulation 13G of Annex I
of MARPOL 73/78.
Measure 3 reflects a measure for a combination of HBL and PL/Spaces
covering 30 percent of the projected area of the sides or the projected
area of the bottom of the vessels; however, they were also configured
to carry ballast to the maximum extent possible in lieu of other
spaces, with no new pumps or piping being refit.
Measure 4 reflects a measure to refit a double bottom that has the
minimum required depth of B/15 or 2 meters (6.56 feet) installed to
cover the full length of the cargo tanks.
Measure 5 reflects a measure to refit double sides that have a
minimum width of 2 meters to cover the full length of the cargo tanks.
Measure 6 reflects a measure to fit PL/Spaces covering 30 percent
of the projected area of the sides or the projected area of the bottom
of the vessels on tank barges. For this measure, additional bulkheads
were assumed to be installed to provide the minimum width of the PL/
Spaces.
Measure 7 reflects a measure to have PL/Spaces covering 30 percent
of the projected of the projected area of the sides or the projected
area of the bottom of the tank barge; however, the barges were also
configured to carry ballast to the maximum extent possible in lieu of
other spaces, with no new pumps or piping being refit. Existing cargo
wing tanks were assumed to remain as empty as possible with trim and
longitudinal bending moment considerations.
2. Costs
Table 2 summarizes the estimates of the cargo shutout, the onetime
refit ROM costs, and the operating and voyage costs as a result of
implementing the measure on the tank vessel models. Cargo shutout was
calculated as the difference between the cargo capacity (98 percent) of
the unmodified vessel and the cargo capacity after the measure was
applied. It is expressed in both the volumetric difference and as a
percentage of the cargo capacity of the baseline model.
BILLING CODE 4910-14-M
[[Page 67236]]
[GRAPHIC][TIFF OMITTED]TP28DE95.006
BILLING CODE 4910-14-C
[[Page 67237]]
3. Benefits
Benefits were developed by estimating the total annual expected
accidental and operational oil outflow avoided as a result of each
measure. The estimate the annual reduction in the number of barrels
spilled as a result of the measures, the total annual accidental and
operational oil outflow was estimated both before and after the measure
was implemented. The accidental oil outflow estimates for grounding and
collisions were annualized using historical spill data provided in the
regulatory assessment for the NPRM and verified through an independent
calculation using worldwide casualty data. Lloyd's Maritime Information
Services Casualty Information System was analyzed for a sample of tank
vessels drawn from Clarkson's Tanker Register to estimate the per-
vessel annual probability of having grounding and collisions. The
analysis resulted in annual grounding and collision probabilities of
0.026 and 0.017, respectively, for an existing tank vessel moving oil
through U.S. waters in 1990.
The accidental oil outflow estimates are also presented using both
Regulation 13F and 13G calculations. The Regulation 13F calculations
are based on a probabilistic methodology, described in ``Interim
Guidelines for the Approval of Alternative Methods of Design and
Construction of Oil Tankers Under Regulation 13F(5) of Annex I of
MARPOL 73/78'' (IMO Marine Environmental Protection Committee's
Resolution MEPC 37/14; December 23, 1994), which uses currently
available accident damage statistics for tank vessels. To obtain the
total accidental oil outflow, the average bottom outflow estimate was
combined with the average collision outflow estimate by using a weight
of 0.6 for grounding damage and a weight of 0.4 for collision damage.
The Regulation 13G calculations are more deterministic, as described in
MEPC Resolution 64(36) entitled, ``Guidelines for Approval of
Alternative Structural or Operational Arrangements as Called for in
Regulation 13G(7) of Annex I of MARPOL 73/78.'' Both calculations take
into account hydrostatic pressure from the cargo oil and the outside
sea water in the case of bottom damage. They also allow for 50 percent
capture by double bottom tanks in cases where bottom damage extends
through these tanks. To estimate the reduction in the expected annual
oil outflow as a result of the measures, the annual oil outflow for the
vessel after the measure was implemented was subtracted from the total
oil outflow of the baseline tank vessel. Table 3 summarizes the
estimated oil outflows after implementation of each measure.
BILLING CODE 4910-14-M
[[Page 67238]]
[GRAPHIC][TIFF OMITTED]TP28DE95.007
BILLING CODE 4910-14-C
[[Page 67239]]
4. Cost-benefits
To estimate the cost-effectiveness ratio for each combination of
tank vessel model and measure, an annualized cost of compliance
calculation was divided by the annualized total expected oil outflow
avoided. Because operating and voyage costs differ significantly
depending on whether the tank vessel is deployed in the international
or U.S. coastal fleet, cost-effectiveness ratios were developed
separately for the tank vessel models by these fleet categories. These
ratios were also developed assuming the tank vessels have another 5
years of remaining service life; however, the ranking of the results of
the analysis do not change if a longer remaining service life is
assumed. Table 4 summarizes the cost-effectiveness ratios attained in
this screening analysis.
BILLING CODE 4910-14-M
[[Page 67240]]
[GRAPHIC][TIFF OMITTED]TP28DE95.008
[[Page 67241]]
[GRAPHIC][TIFF OMITTED]TP28DE95.009
BILLING CODE 4910-14-C
[[Page 67242]]
Detailed Analysis
1. General.
The results from the screening analysis cost-effectiveness phase
indicated that for tank vessels in both the international and U.S.
coastal fleets, the appropriate measures to analyze in depth included:
(1) pre-MARPOL vessels with a combination of PL/CBT and HBL (measure
3), and (2) for both MARPOL 73 vessels and MARPOL 78 vessels, an HBL
measure on certain tanks (measure 2.b.). Although MARPOL 78 model tank
vessels were not analyzed in the screening analysis, these vessels are
similar to MARPOL 73 vessels in terms of oil outflow and related
characteristics.
The screening analysis measure 3, pre-MARPOL vessels with a
combination of PL/CBT and HBL, was chosen over measures 1.b and 1.c
because of its overall cost-effectiveness and accidental oil outflow
mitigation characteristics. In general, implementation of measure 1.c.
results in higher oil outflow when bottom damage occurs. The cost
effectiveness of measure 1.b and measure 3 may be considered to be
roughly equivalent, however, the accidental oil outflow cost
effectiveness for pre-MARPOL 264,000 dwt tankers in 34 percent greater
for both international and U.S. coastal tank vessels.
To analyze the measures further, four steps were taken. First, the
affected vessel population was determined and categorized by the three
vessel categories. Second, a cost analysis was conducted including per
vessel and total cost estimates. Then a benefit estimate was developed
based on an expanded range of analytical tank vessel models developed
with the same assumptions and criteria used for the screening analysis.
Finally, a cost-benefit analysis was developed along with an
effectiveness analysis.
Data on the world tanker fleet was obtained from several sources,
including Lloyd's Maritime Information Services, Clarkson Research
Studies Limited, Coast Guard Marine Safety Management System, and
industry. Vessels that are expected to comply with this rulemaking were
identified based on whether the vessel had complied with current
financial responsibility regulations as implemented under OPA 90 and
the Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA), as amended. All oil tankers in the world fleet that
complied with the Coast Guard's financial responsibility final
rulemaking (59 FR 34210) requirements to obtain a Certificate of
Financial Responsibility (COFR) as of April 30, 1995, were used as a
baseline tank vessel population for this assessment. A check of the
COFR database was completed to update the tank vessel numbers and make
them reflect COFRs issued as of August 30, 1995. An alternative
approach was also developed to assess the accuracy of using COFRs to
define the baseline fleet. Port call data from 1991 to 1993 was
obtained for U.S. ports, including the Louisiana Offshore Oil Port
(LOOP). This data was matched with the worldwide tanker database to
estimate the number of annual port calls to and from the U.S. for tank
vessels in the international fleet.
Once the affected fleet was identified, vessels were categorized
into one of the three vessel categories: pre-MARPOL, MARPOL 73, and
MARPOL 78. Because the measures vary depending on vessel category,
total fleet compliance costs and the number of barrels of spilled oil
avoided as a result of the measure vary significantly depending on the
distribution of the existing tank vessel fleet by vessel category. This
categorization was based primarily on the vessel's delivery date,
deadweight tonnage, and type (product or crude carrier). Vessels
permitted to engage in U.S. coastal trade are commonly referred to as
Jones Act vessels and are required to be built and flagged in the
United States. These vessels must, in general, be serviced and repaired
in the United States, and were designated to be in the U.S. coastal
trade. Because not all U.S. flag vessels qualify as Jones Act tankers,
U.S. flag tankers that operate on routes to international ports were
included in the international fleet. Analysis of port call data
confirmed that these vessels are engaged in international trade.
2. Costs
The incremental costs for existing single hull tank vessels to
comply with the proposed measures were estimated for eight
international tank vessel models and six U.S. coast tank vessel models,
and for three vessel categories: pre-MARPOL. MARPOL 73, and MARPOL 78.
To estimate total costs, the baseline fleet of existing single hull
tank vessels was projected from 1996 to 2015 based on the double hull
rulemaking phaseout schedule. Once the regulated baseline fleet are
defined and projected from 1996 to 2015, total costs were estimated by
multiplying the number of vessels projected to be in operation in a
given year by the appropriate per-vessel compliance cost estimates.
Table 5 summarizes the estimated fleet categorization and the phaseout
of tank vessels affected by this rulemaking.
BILLING CODE 4910-14-M
[[Page 67243]]
[GRAPHIC][TIFF OMITTED]TP28DE95.010
BILLING CODE 4910-14-C
[[Page 67244]]
General assumptions for this phase of the regulatory assessment
included: (1) a vessel owner or operator will begin to comply with this
rulemaking starting in 1999 and the entire fleet of tank vessels will
be in compliance with the proposed measures by 2002; (2) one-third of
the fleet would be in compliance with the rulemaking each year between
1999 and 2001 until the entire fleet is in full compliance by the
beginning of 2002; (3) pre-MARPOL tank vessels would require physical
modifications to implement PL/CBT and the number of days the tank
vessel would be laid up was estimated by deadweight tonnage; (4) MARPOL
73 and 78 vessels would have no disruption in service since HBL would
not require steel work or other physical modifications; (5) all tank
vessels were assumed to be in full compliance with all applicable
existing U.S. laws; and (6) prior compliance with HBL on MARPOL 73 or
MARPOL 78 vessels was assumed to be zero.
The incremental compliance costs as a result of the measures were
estimated by deadweight and vessel category for the international and
U.S. coastal fleets. The categories for compliance costs were estimated
as: (1) cost of operating or voyage inefficiency due to cargo shutout
as a result of implementing the proposed measures; (2) cost to retrofit
the existing tank vessel; and (3) cost associated with the time the
vessel is expected to be out of service (i.e., opportunity costs) while
the vessel is being retrofitted with the measure.
For each modeled tank vessel (pre-MARPOL, MARPOL 73, and MARPOL
78), the percentage of cargo shutout was estimated by dividing the
change in cargo capacity before and after the proposed measure was
implemented by the cargo capacity of the baseline vessel. Although the
cargo shutout percentage varies depending on the characteristics of the
tank vessel, an averaged effectiveness ratio was used for the several
tank vessels that were modeled. Table 6 summarizes the cargo shutout
estimates for the affected vessels.
BILLING CODE 4910-14-M
[GRAPHIC][TIFF OMITTED]TP28DE95.011
BILLING CODE 4910-14-C
Retrofit cost estimates were developed by vessel category to
conform to the structure of the proposed measures. The measure
researched for pre-MARPOL tankers required implementation of PL/CBT
using existing cargo wing tanks. These vessels would incur costs
associated with converting the cargo tanks to ballast tanks and
modifying the cargo piping and related systems. Cost differences were
included in this analysis for the disparity between foreign and U.S.
shipyards. MARPOL 73 and MARPOL 78 vessels, however, would not incur a
onetime cost because the measure researched for these vessels required
implementation of HBL. A structural analysis of the analytical tank
vessel models determined that, in general, HBL could be implemented on
[[Page 67245]]
these vessels without having to reinforce bulkheads and related
structures.
Opportunity costs were estimated to account for the onetime cost
tank vessels would be out of service as a result of being retrofitted.
This cost was estimated by subtracting from the daily time charter rate
the daily operating cost that would be saved as a result of being out
of service as well as crew cost savings if the retrofit would take more
than two weeks since crews would be flown home. For pre-MARPOL vessels,
the number of days the tank vessel would be laid up was estimated by
deadweight ton range. A summary of the onetime costs and opportunity
costs for the measures is presented in Table 7. For MARPOL 73 and
MARPOL 78 vessels, no disruption in service was assumed. Therefore, no
opportunity costs were considered.
BILLING CODE 4910-14-M
[GRAPHIC][TIFF OMITTED]TP28DE95.012
BILLING CODE 4910-14-C
The affected fleet was also analyzed to determine whether a vessel
owner or operator would replace the vessel with a double hull vessel
rather than implement the measures researched in this regulatory
assessment. The key consideration underlying the decision about whether
to ``replace'' or ``retrofit'' depends on whether the amortized costs
to purchase and operate a double hull tank vessel are less than the
annualized incremental cost for a single hull vessel to comply with the
proposed measure. The existing single hull tank vessel is assumed to be
replaced if the amortized cost of purchasing and operating a new double
hull vessel earlier than required is less expensive than retrofitting
the existing tank vessel with the proposed measure. This analysis
dependent on several factors, including the onetime retrofit costs of
the measures; the annual costs related to cargo shutout; the number of
years remaining until the existing single hull vessel must be replaced
by a double hull vessel; the price the vessel owner would receive if
the single hull vessel was replaced (scrap or secondhand price); and
the capital costs and operating costs of a double hull vessel. The
analysis indicated that none of the fleet of existing single hull
vessels would be replaced early by double hull vessels due to the
measures in this phase of the regulatory assessment. The primary reason
for this outcome is that the compliance costs for the measures,
including the onetime capital costs, are relatively low in comparison
to the annualized cost to purchase and operate double hull vessels.
3. Government Costs
The majority of tank vessels owned or operated by the Federal
Government, such as oil tank vessels used by the U.S. Navy, qualify as
public vessels under OPA 90 and are not subject to this rulemaking. The
National Defense Reserve Fleet/Ready Reserve Force (NDRF/RRF) currently
does not qualify for the public vessel exemption and has ten tank
vessels available for service that would be affected by this
rulemaking. Because the NDRF/RRF is composed of vessels similar to
those used in this analysis, costs and benefits would be similar.
However, there is legislation being discussed that would exempt these
vessels from the OPA 90 double hull phase-in requirements. Because
these vessels may not be subject to this rulemaking and no specific
regulatory language is proposed in this SNPRM, this analysis did not
include costs to the NDRF/RRF.
The burden of implementing structural measures may require the
Coast Guard to conduct plan review for those vessels refitting their
tanks or
[[Page 67246]]
spend time inspecting vessels for compliance; however, since specific
regulatory language is not proposed in this SNPRM, no government cost
is associated with it.
4. Benefits
The incremental reduction in the volume of oil spilled as a result
of the measures was determined by estimating the difference in the
accidental oil volume spilled and operational discharges for the
baseline fleet before and after the measures were implemented on the
analytical tanker models. This benefit analysis was completed in three
steps. First, accidental oil spill volumes and operational discharges
for the baseline fleet over time by vessel category and deadweight ton
ranges were completed. Second, the effectiveness of the measures to
reduce accidental spill volumes and operational discharges on the
applicable portions of the baseline fleet was determined. Third, the
effectiveness ratios were used to estimate the reduction in oil spill
volumes as a result of each measure.
The volume of oil spilled due to accidents by the baseline fleet
was estimated based on an analysis of historical oil spill data in both
U.S. waters and international waters. This analysis was similar to the
accident analysis done for the screening phase of this regulatory
assessment. Historical data taken from the regulatory assessment done
for the NPRM was adjusted using worldwide spill data to fully account
for the effectiveness of the measures in reducing oil spills for the
international fleet. Additionally, annual spill rates were estimated
based on oil movement projections and an annualized estimate of the
adjusted accidental spill data. The volume of oil moved in any year
after 1995 was estimated by reducing the volume of oil moved by the
baseline fleet by the proportion of existing single hull tank vessels
projected to be in operation for each year between 1996 and 2015.
Accidental oil spill volumes were estimated by applying the spill rates
to the volume of oil moved by the baseline fleet in future years. These
spill volumes were estimated by deadweight ton range and vessel
category for tank vessels in the international and U.S. coastal fleets.
The benefits also included estimates on the difference in the
operational discharges for the baseline fleet before and after the
proposed measures would be implemented. Assumptions made for the
benefits of the measures for reducing operation discharges included:
(1) for the operational discharge analyses, only pre-MARPOL tank
vessels have operational discharges because these vessels are not
equipped with sufficient SBT or CBT capacity; (2) pre-MARPOL tank
vessels in the U.S. coastal fleet were assumed to have no operational
discharges because they spend the majority of their time in U.S.
waters; however, the pre-MARPOL tank vessels in the international fleet
were estimated to have operational discharges when outside U.S. waters;
(3) for the operational discharge analyses, pre-MARPOL tank vessels
were assumed to meet MARPOL 73 requirements and discharge no more than
1/15,000 of their cargo per voyage; and (4) annual operational
discharge volume varies proportionately with the estimated number of
U.S. voyages. Projected accidental and operational discharges for the
baseline fleet with no measures implemented were estimated over the
period of this rulemaking and are summarized in Table 8.
BILLING CODE 4910-14-M
[GRAPHIC][TIFF OMITTED]TP28DE95.013
BILLING CODE 4910-14-C
Effectiveness ratios were developed based on the results of the oil
outflow analyses conducted on the analytical tank vessel models. In
addition to developing the effectiveness ratios for the existing single
hull tank vessel fleet, ratios were also developed for potential
``early phase-in'' of double hull tank vessels with comparable carriage
capacity. Accidental oil spill incident effectiveness ratios were
developed for three of the five incident categories: groundings,
collisions, and structural failures. The measures were not expected to
directly affect oil outflow in the event of fires or explosions or oil
spills that occur during cargo transfer operations. Effectiveness
ratios for groundings and collisions were developed based on the oil
outflow estimates using the guidelines for Regulation 13F and 13G of
Annex I of MARPOL 73/78. Structural failure ratios were developed based
on an analysis of casualty incidents as reported in a Ship Structural
Committee report entitled ``A Limited Survey of Ship Structural
[[Page 67247]]
Damage,'' published in 1971 (NO. SSC-220). A 100 percent effectiveness
ratio for operational spills, applicable to the PL/CBT and HBL measure
on pre-MARPOL tank vessels, was used for this analysis because it was
assumed they would use the CBTs, thereby avoiding the need to discharge
dirty ballast from cargo tanks. Effectiveness ratios for each measure
and a comparison between comparable deadweight ton double hull design
are summarized in Table 9.
BILLING CODE 4910-14-M
[[Page 67248]]
[GRAPHIC][TIFF OMITTED]TP28DE95.014
BILLING CODE 4710-14-C
[[Page 67249]]
The estimated incremental benefits of the measure in terms of the
number of spilled barrels avoided was calculated by multiplying the
effectiveness ratios by the accidental oil spill and operational
discharge volumes estimated for the baseline fleet. As the existing
single hull tank vessel fleet is phased out over time, the benefits are
projected to decrease to zero at the beginning of 2015. The present
value and annualized value of the number of barrels spilled that would
be avoided were also estimated using a real discount rate of seven
percent. Table 10 summarizes the number of spilled barrels avoided in
selected years starting in 1999, by vessel category, for the
international and U.S. coastal fleets. It also includes a break down of
benefits by fleet categories. For this section of the table, small
vessels are defined as all international and U.S. coastal tank vessels
less than 30,000 dwt and large vessels are defined as all international
and U.S. coastal tank vessels that are greater than or equal or 30,000
dwt. The Jones Act fleet numbers represent both small and large vessels
numbers. Therefore, these three categories are not mutually exclusive.
BILLING CODE 4910-14-M
[GRAPHIC][TIFF OMITTED]TP28DE95.015
BILLING CODE 4910-14-C
5. Cost-benefits
The estimated cost per barrel of unspilled oil is categorized by
international and U.S. coastal fleets in Table 11. These cost-
effectiveness estimates were developed using a 7 percent real discount
rate. The table also includes a breakdown of estimated cost per barrel
of unspilled oil for small vessels, large vessels and Jones Act
vessels. These fleet categories are not mutually exclusive. As shown in
Table 11, there is a difference in the estimated cost-benefit for pre-
MARPOL international tank vessels as compared to the U.S. coastal tank
vessel fleet. The primary reason for this difference is that the
measure reduces both accidental and operational oil outflow for the
pre-MARPOL international fleet. The retrofit costs for these vessels to
implement the measures are also greater for U.S. coastal tank vessels
of a given deadweight tonnage because they would be required to have
the retrofit work performed at U.S. shipyards, which historically have
charged higher rates than foreign shipyards.
BILLING CODE 4910-14-M
[[Page 67250]]
[GRAPHIC][TIFF OMITTED]TP28DE95.016
BILLING CODE 4910-14-C
The present value cost of the measures researched in this
assessment was estimated over a 19-year time period (1996 to 2015).
Using a 7 percent real discount rate, the present value cost would be
$1.41 billion. The annualized value is approximately $133 million. The
present and annualized value of the number of barrels of spilled oil
avoided is estimated to be about 131,000 barrels and 12,300 barrels,
respectively.
This SNPRM is an economically significant regulatory action under
section 3(f) of Executive Order 12866 and has been reviewed by the
Office of Management and Budget under that order. It requires an
assessment of potential costs and benefits under section 6(a)(3) of
that order. It is significant under the regulatory policies and
procedures of the Department of Transportation (DOT) (44 FR 11040;
February 26, 1979).
Because the Coast Guard wishes to provide the public with an
opportunity to comment on the economic feasibility of this assessment,
no regularity text is introduced in this SNPRM. Comments received on
this SNPRM will enable the Coast Guard to further evaluate the economic
feasibility for structural measures and determine whether additional
regulations are appropriate to implement section 4115(b) of OPA 90.
Notice of Availability
The Coast Guard solicits comments on the regulatory assessment for
this SNPRM. Copies of the regulatory assessment, entitled ``Regulatory
Assessment of Supplemental Notice of Proposed Rulemaking on Structural
Measures for Existing Single Hull Tankers'' are available for
inspection at U.S. coast Guard Headquarters or can be ordered through
the National Technical Information Service (NTIS), Springfield,
Virginia, 22161 by requesting report number PB96-119086. Orders can
also be placed by calling NTIS at (703) 487-4650 or (800) 553-6847.
Small Entities
Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq., ), the
Coast Guard must consider whether this proposal, if adopted, will have
a significant economic impact on a substantial number of small
entities. ``Small entities'' may include (1) small businesses and not-
for-profit organizations that are independently owned and operated and
are not dominant in their fields and (2) governmental jurisdictions
with populations of less than 50,000.
This rulemaking considered small business impact for vessels
privately held by independent companies with an estimated capital
investment value of less than $500 million or companies with that have
less than 500 employees. State and local governments, which altogether
own less than a dozen tank vessels, will not be significantly affected.
Not-for-profit organizations do not engage in the transportation of oil
in bulk by water.
There are a number of companies meeting the definition of a small
business operating tank vessels. Of the 190 U.S. tankships affected by
this rulemaking, 16 are owned by 6 small businesses. Many of these
company's tankships are over 30 years old, have less cargo carrying
capacity than their competition, and are laid up due to market or
company financial conditions. Six small businesses own or operate 32 of
the affected U.S. tank barge population. No foreign small businesses
own or operate foreign tank vessels that would be affected by this
rulemaking.
If structural measures were imposed on the small businesses that
own or operate tank vessels, an economic impact is unavoidable, as the
statue clearly targets existing vessels of 5,000 GT or more that carry
oil in bulk as cargo and that do not have double hulls. A complete
review of this impact on small entities would be done if the Coast
Guard proposes specific structural requirements.
This SNPRM responds to comments received on the NPRM, presents a
summary of a regulatory assessment for various structural measures,
notifies the public of the availability of this assessment, and
solicits comments on the economic feasibility of the measures. This
SNPRM does not propose specific regulatory text. Therefore, the Coast
Guard certifies under 5 U.S.C. 605(b) that this SNPRM will not have a
significant economic impact on a substantial number of small entities.
If you think that your business or organization qualifies as a small
entity and the NPRM cost assessment, as modified by the discussions and
data provided in this document, will have a significant economic impact
on your business or organization, please submit a comment (see
ADDRESSES) explaining why you think it qualifies and in what
[[Page 67251]]
way and to what degree this proposal will economically affect it.
Collection of Information
Under the Paperwork Reduction Act (44 U.S.C. 3501, et seq., ), the
Office of Management and Budget (OMB) reviews each proposed rule that
contains a collection-of-information requirement to determine whether
the practical value of the information is worth the burden imposed by
its collection. Collection-of-information requirements include
reporting, recordkeeping, notification, and other similar requirements.
This proposal contains no collection of information requirements.
Federalism
The Coast Guard has analyzed this proposal under the principles and
criteria contained in Executive Order 12612 and has determined that
this proposal does not have sufficient federalism implications to
warrant the preparation of a Federalism Assessment.
Environment
The Coast Guard has considered the environmental impact of this
supplemental notice of proposed rulemaking under COMDTINST M16475.1B.
Although this SNPRM proposes no Federal regulations and therefore does
not amount to the type of major Federal action typically subject to
analysis under the National Environmental Policy Act (NEPA), the Coast
Guard solicits comments on its analysis of structural measures. An
Environmental Assessment (EA) from the notice of proposed rulemaking
(NPRM) is available in the docket for copying and inspection as
indicated in the ``ADDRESSES'' section of this preamble.
By the year 2015, all tank vessels (with certain exceptions) over
5,000 dwt operating in U.S. waters will be equipped with double hulls.
In the interim, the Coast Guard has been given wide latitude under OPA
90 section 4115(b) to set structural and operational standards for
single hull vessels for the purpose of reducing the amount of oil
spilled into the marine environment.
Sound structural design and efficient operational procedures, when
combined with other requirements of OPA 90, should contribute to
increased environmental protection and human safety. The impact of
section 4115(b), however is not expected to result in significant
impact on the quality of human environment, as defined in the NEPA.
Although no regulatory text is introduced in this SNPRM, the public
is encouraged to comment on the technological and economic feasibility
of the structural measures discussed in this SNPRM. Comments received
on this SNPRM will enable the Coast Guard to assess the economic and
technological feasibility of structural measures to reduce the risk of
oil outflow from existing tank vessels and effectively implement
section 4115(b) of OPA 90.
Dated: December 21, 1995.
A.E. Henn,
Vice Admiral, U.S. Coast Guard, Acting Commandant.
[FR Doc. 95-31371 Filed 12-22-95; 2:10 pm]
BILLING CODE 4910-14-M