[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]







                   RECENT REGULATION OF THE MARITIME
                INDUSTRY: ENSURING U.S. JOB GROWTH WHILE
                      IMPROVING ENVIRONMENTAL AND
                             WORKER SAFETY

=======================================================================

                                (112-84)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                COAST GUARD AND MARITIME TRANSPORTATION

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 26, 2012

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure









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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey            Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire       RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois             GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana               TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri                 HEATH SHULER, North Carolina
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania         LAURA RICHARDSON, California
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana         DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
    Tennessee
                                ------                                7

        Subcommittee on Coast Guard and Maritime Transportation

                FRANK A. LoBIONDO, New Jersey, Chairman
DON YOUNG, Alaska                    RICK LARSEN, Washington
HOWARD COBLE, North Carolina         ELIJAH E. CUMMINGS, Maryland
ANDY HARRIS, Maryland                CORRINE BROWN, Florida
FRANK C. GUINTA, New Hampshire       TIMOTHY H. BISHOP, New York
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              MICHAEL H. MICHAUD, Maine
JEFFREY M. LANDRY, Louisiana,        NICK J. RAHALL II, West Virginia
  Vice Chair                           (Ex Officio)
JOHN L. MICA, Florida (Ex Officio)











                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY
                               Panel One

Vice Admiral Brian M. Salerno, Deputy Commandant for Operations, 
  United States Coast Guard, accompanied by Jeffrey G. Lantz, 
  Director of Commercial Regulations and Standards, United States 
  Coast Guard....................................................     8
James A. Hanlon, Director, Office of Wastewater Management, 
  Office of Water, United States Environmental Protection Agency.     8

                               Panel Two

Hon. Christopher Koch, President and CEO, World Shipping Council.    21
James Gutowski, Chairman, Fisheries Survival Fund, Barnegat 
  Light, New Jersey..............................................    21
Jimmy Lafont, Callais and Sons, Cut Off, Louisiana...............    21
Don Marcus, Secretary-Treasurer, International Organization of 
  Masters, Mates, and Pilots.....................................    21
Paul Cozza, President, CSL International.........................    21

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Vice Admiral Brian M. Salerno and Jeffrey G. Lantz, joint 
  statement......................................................    38
James A. Hanlon..................................................    45
Hon. Christopher Koch............................................    68
James Gutowski...................................................    79
Jimmy Lafont.....................................................    88
Don Marcus.......................................................    90
Paul Cozza.......................................................    95

                       SUBMISSIONS FOR THE RECORD

Hon. Rick Larsen, a Representative in Congress from the State of 
  Washington, request to submit letter from Amy L. Fowler, 
  Manager, Clean Air Initiatives, Puget Sound Clean Air Agency, 
  to Hon. Frank A. LoBiondo, a Representative in Congress from 
  the State of New Jersey, April 25, 2012........................     6
James A. Hanlon, Director, Office of Wastewater Management, 
  Office of Water, United States Environmental Protection Agency, 
  responses to questions from the Subcommittee on Coast Guard and 
  Maritime Transportation........................................    61

                         ADDITION TO THE RECORD

California State Lands Commission, letter to Hon. Frank A. 
  LoBiondo, a Representative in Congress from the State of New 
  Jersey, and Hon. Rick Larsen, a Representative in Congress from 
  the State of Washington, May 10, 2012..........................   108






 
                        RECENT REGULATION OF THE
                      MARITIME INDUSTRY: ENSURING
                    U.S. JOB GROWTH WHILE IMPROVING
                    ENVIRONMENTAL AND WORKER SAFETY

                              ----------                              


                        THURSDAY, APRIL 26, 2012

                  House of Representatives,
          Subcommittee on Coast Guard and Maritime 
                                    Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 9:05 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Frank LoBiondo 
(Chairman of the subcommittee) presiding.
    Mr. LoBiondo. Good morning. The subcommittee will come to 
order.
    The subcommittee is meeting today to review regulations 
affecting the maritime industry. We are interested in how the 
implementation of these regulations is impacting vessel safety, 
the flow of commerce through our ports, and the ability to grow 
jobs in the maritime sector.
    The Coast Guard has broad authority to regulate maritime 
commerce, including establishing and enforcing rules to ensure 
maritime safety and vessel facility security. The Coast Guard 
and the EPA share extensive authority to write regulations for 
the protection of our environment. With such vast authority 
comes great responsibility to regulate industry in a fair and 
reasonable way. This hearing will focus on ensuring that these 
agencies' rulemakings are just that, fair and reasonable.
    Maritime commerce is essential to the U.S. economy. While 
regulations must address concerns related to safety, security, 
and stewardship, they must also balance the importance of 
maintaining the free flow of maritime commerce. Domestic 
shipping alone is responsible for over 500,000 American jobs 
and $100 billion in annual economic output. In addition, 90 
percent of all global trade and over 25 percent of our gross 
domestic product moves via the sea.
    With the economy still in a fragile state and unemployment 
at record levels, it is imperative that the Federal Government 
foster an atmosphere where our maritime industry can compete 
and expand. To that end, I am concerned about the cost and 
impact of several recent and forthcoming rulemakings that will 
affect the maritime sector. Specifically, rules requiring 
fishing vessel certification and examinations, the installation 
of ballast water treatment systems aboard vessels, and the 
establishment of methods to reduce air emissions from vessels 
could have tremendous impacts on our economy. If these and 
other rules are not written and executed in a commonsense 
manner, I am concerned they would make it financially 
impossible to operate vessels in U.S. waters.
    We need to ensure the safety of commercial fishing, but we 
need to do so in a way that maintains the economic viability of 
the industry for vessel owners and operators. The Coast Guard 
has already said on the record that it does not have the 
resources to meet the looming October 15th deadline to conduct 
a fishing vessel safety examination. If the Service believes 
that it cannot meet this deadline, then we need a clear answer 
on what the impact will be on the industry on October 16th so 
we can take appropriate action to ensure that thousands of 
fishermen are not forced out of work.
    Ballast water regulations are a major concern for this 
subcommittee. Currently, the Coast Guard and the EPA have 
developed separate regulations under two different Federal laws 
to govern the discharge of ballast water. And although the 
agencies have worked together to try to reach uniformity, these 
programs still differ in implementation dates, vessels covered, 
geographic reach, enforcement, and penalties for noncompliance. 
And this will only become less uniform and more confusing and 
burdensome for vessel owners as each individual State adds its 
own discharge requirements on top of the EPA's program.
    Under the EPA's current program, 29 States and tribes have 
added their own different discharge standards. I think it is 
completely unreasonable to ask vessel operators to comply with 
2 Federal standards and as many as 29 different, contradictory 
and unachievable, unattainable State and tribal standards.
    This situation is out of control. Some of these States plan 
to enforce ballast water discharge standards in the next year 
for which no treatment technology has yet been invented. Nobody 
can explain how they are going to reach standards with 
technology that is not there to do it.
    The Commercial Vessel Discharge Reform Act, which 
originated in this subcommittee and passed in the House, will 
correct these issues by creating a uniform national standard 
for ballast water. I strongly encourage our colleagues in the 
other body to show their understanding of the gravity of this 
situation by adopting the bill as soon as possible.
    I am also concerned about the implementation of the North 
American emissions control area. Beginning August 1st, vessels 
transiting the U.S. EEZ will need to burn lower sulphur fuel. 
While I understand the critical importance of improving the air 
quality in our coastal regions, I am concerned the EPA and 
Coast Guard have yet to establish a process on how they will 
deal with vessels whose engines cannot burn the lower sulfur 
fuels or vessels that cannot acquire the new fuel because it is 
not widely available or vessels seeking to achieve the same air 
quality improvements through alternate compliance methods and 
foreign equivalences.
    Finally, I am concerned the agencies did not properly 
consider the economic impact this rule will have on smaller 
vessels that must travel entirely within the EEZ.
    It seems to me that both agencies have a lot of work to do 
in the next 3 months if they expect to implement the new rules 
in a fair manner when they are expected to be.
    Finally, I am concerned over the ongoing delays in the 
process of merchant mariner credentials and inefficiencies in 
the National Maritime Center's medical certification process. 
The issue is especially important to me as these credentials 
are essentially a mariner's ticket to work, and bureaucratic 
delays have a direct negative impact on those who keep our 
economy moving at sea. I hope our witnesses can explain what 
steps they are taking to improve this system and knock out some 
of these problems.
    And, Admiral Salerno, finally, we have all heard the news 
about the commandant, and please wish Admiral Papp a very 
speedy recovery. We all wish that he is back to full speed 
soon. Let him know that our thoughts and prayers are with him 
and his family and the Coast Guard family.
    And, also, as this will be your last appearance in uniform 
before this subcommittee I want to thank you for your over 35 
years of outstanding service. The commitment that you have made 
to our country, the sacrifices that you and your wife and your 
family have made for the United States of America is 
extraordinary. We owe you a great debt of gratitude.
    Admiral Salerno. Thank you, sir.
    Mr. LoBiondo. And with that I yield to Mr. Larsen.
    Mr. Larsen. Thank you, Mr. Chairman; and thank you for 
convening today's hearing to assess the status of Federal 
rulemaking activities affecting the U.S. Maritime industries.
    Regulations issued by the Coast Guard and the EPA are 
necessary to provide certainty and stability for our domestic 
maritime industries, and I appreciate your commitment to this 
oversight task.
    Before I start, I do want to just echo your kind words, Mr. 
Chairman, regarding Admiral Papp's recent diagnosis and his 
successful surgery earlier this week. I want to extend to the 
Admiral my admiration for his forthright manner in which he has 
handled his very personal matter and express to him my sincere 
wishes for a quick and full recovery. The Coast Guard needs him 
to return to the helm soon. So if you can pass it on, Admiral 
Salerno.
    As well as to you, Admiral Salerno, thank you for your 
service to the Coast Guard as well. And you know the chairman 
said this would be your last time, but you never know with this 
subcommittee. And your wife as well, I understand, is here with 
you today.
    Our domestic maritime industries generate annually over 
$100 billion in economic output and $11 billion in tax revenue. 
And while these numbers are impressive, more can be done. This 
explains why revitalizing and growing our maritime economy 
remains a very high priority for me.
    Regulations the Coast Guard has issued remain pivotal in 
balancing competing stakeholder interests to create a level 
playing field across a wide variety of needs, including 
maritime safety, port security, efficient and reliable maritime 
commerce, and sensible and effective marine environmental 
protection.
    It is a huge job for a multimission maritime military 
service, and I can think of no more elegant statement to convey 
the importance of the Coast Guard than when Admiral Papp 
reminds us that, quote, ``the Coast Guard protects people on 
the sea, it protects our country from threats delivered by the 
sea, and even protects the sea itself.''
    Few Federal agencies have such an expansive regulatory 
scope or the ability to positively affect and enhance virtually 
every sector of our domestic maritime economy than does our 
U.S. Coast Guard. Accordingly, we have an obligation here to 
ensure these regulations that the Coast Guard issues are fair, 
are targeted, and support our maritime industries, which, by 
extension, will be good for job creation, good for the U.S. 
economy, and good for the American people.
    Certainly there are some Coast Guard rules that I want to 
discuss this morning to better understand their practical 
implications. For example, implementation of the Transportation 
Worker Identification Credential, or TWIC, remains far behind 
schedule and over budget. It is my understanding the Coast 
Guard is presently developing a draft rule for electronic TWIC 
card readers. I will want to hear from Admiral Salerno when we 
can reasonably expect to see a draft rule published in the 
Federal Register.
    Also, as a co-sponsor of H.R. 3173, legislation to reform 
the TWIC administrative processes, I would like to learn what 
actions the Coast Guard is considering to eliminate the 
requirement for mariners to make more than one visit to a TWIC 
enrollment center.
    On a related topic, the issuance or reissuance of mariner 
credentials, especially the review of medical records, remains 
a sore point. Faulty administrative processes have increased 
cost, prompted delays, and created confusion in what otherwise 
should be a fairly routine paperwork process for seafarers, and 
I will want to hear an update from the Coast Guard on what the 
agency has done to address those deficiencies. Such 
inefficiencies remain unacceptable. Simply because the Coast 
Guard has been unable thus far to remedy existing deficiencies 
should not justify stranding qualified able-bodied people on 
the dock. We have to get this right. We need to do it now.
    I also want to get an update on when the Coast Guard 
expects to publish a final towing vessel safety rule and 
whether the Coast Guard has adequate resources and whether it 
can remain on schedule to implement several new requirements 
for fishing vessels under the 2010 Authorization Act.
    Regarding regulations issued by the EPA to address ballast 
water and other incidental discharges from vessels, I will be 
very interested in hearing from Mr. Hanlon on what changes the 
Agency is considering to address stakeholder comments submitted 
regarding EPA's draft vessel general permit, especially 
requirements for new-built vessels.
    Additionally, I will also seek to be reassured by both the 
EPA and the Coast Guard that each agency's ballast water 
regulations have been scrubbed and coordinated sufficiently to 
avoid overlap in requirements and excessive cost to industry.
    Last, I commend EPA for developing regulation to implement 
a North American emission control area consistent with MARPOL 
Annex VI in order to reduce harmful emissions from ocean-going 
commercial vessels transiting through U.S. waters or entering 
U.S. ports.
    It remains important that we continue to take action to 
reduce health risks linked to hazardous air emissions from 
vessels. We do need, however, to carefully consider and weigh 
options available to meet these environmental and human health 
goal with the economic variables facing different commercial 
maritime operators.
    I was disappointed that we don't have a witness from EPA 
here to better explain the Agency's rationale for the ECA rule. 
Despite this gap, I look forward to hearing the recommendations 
from others in how this rule might be refined.
    With that, Mr. Chairman, I want to thank you for scheduling 
this important hearing. I hope that you will schedule in the 
near future an oversight hearing to review the administration's 
plans for releasing reserves from the Strategic Petroleum 
Reserve and to reaffirm our shared position that oil released 
from the SPR be transported in full compliance with the Jones 
Act to benefit U.S. carriers and mariners.
    Two final points. I understand as well Mr. Hanlon is 
retiring soon after service to our country; and I appreciate 
your service to our country, Mr. Hanlon.
    And, finally, I would ask an unanimous consent request to 
enter into the record a letter from the Puget Sound Clean Air 
Agency that is actually in support of EPA's regulation to 
implement a North American emission control area.
    Thank you.
    Mr. LoBiondo. Without objection, so ordered.
    Mr. Larsen. Thank you.
    [The information follows:]





    
    Mr. LoBiondo. Thank you.
    We are going to go to our first panel today; and our first 
witness is Coast Guard Vice Admiral Brian Salerno, the deputy 
commandant for operations. The admiral is being accompanied by 
Mr. Jeffrey Lantz, director of commercial regulations and 
standards for the Coast Guard. Welcome you both.
    Admiral, the floor is yours.

 TESTIMONY OF VICE ADMIRAL BRIAN M. SALERNO, DEPUTY COMMANDANT 
   FOR OPERATIONS, UNITED STATES COAST GUARD, ACCOMPANIED BY 
   JEFFREY G. LANTZ, DIRECTOR OF COMMERCIAL REGULATIONS AND 
  STANDARDS, UNITED STATES COAST GUARD; AND JAMES A. HANLON, 
  DIRECTOR, OFFICE OF WASTEWATER MANAGEMENT, OFFICE OF WATER, 
         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

    Admiral Salerno. Good morning, Chairman LoBiondo, Ranking 
Member Larsen, distinguished members of the committee.
    Thank you, Mr. Chairman and Mr. Larsen, for your remarks 
about Admiral Papp. I will be sure to convey those to him. And 
thank you as well for your kind comments about me. I very much 
appreciate it.
    I am pleased to have this opportunity to be provide you 
with an update and to answer any questions that you may have on 
the Coast Guard's regulatory development program.
    The Coast Guard is very aware of our regulatory 
responsibilities, as well as the importance that this 
subcommittee places on our ability to develop regulations in a 
timely and efficient manner to ensure that statutory 
requirements are met.
    We are equally aware of your concern that our procedures 
properly account for the effects that regulations have on 
commercial entities and on maritime workers.
    Several years ago, the Coast Guard's regulatory process was 
in trouble. We had too many projects with too few people 
working on them, resulting in the average time to complete a 
project being too long. Congress made investments in 2008 and 
2009 to address this situation by increasing the number of 
personnel dedicated to the rulemaking process by approximately 
50 percent. We now have a total of 82 people dedicated to the 
regulatory process, who in turn work with subject matter 
experts on the headquarters staff to complete specific 
projects.
    We are very grateful to the Congress for making this 
investment, and I assure you we have put these new resources to 
good use, for in conjunction with them the Coast Guard has 
undertaken a series of internal process improvements. These 
include aligning our regulatory development program with an 
internationally recognized quality management framework known 
as ISO 9001. We have also invested in information technologies 
to streamline our planning and managerial functions, and we 
have enhanced training for all personnel who participate in the 
regulatory development process.
    As a result of these combined investments and process 
improvements the Coast Guard has increased the annual rate at 
which rules are published by nearly 50 percent. And even though 
new regulatory projects have been added by new legislation we 
have nevertheless reduced the backlog of projects by 36 percent 
between fiscal years 2009 and the beginning of fiscal year 
2012.
    Just as importantly, we have reduced the average age of 
pending requirements--projects from 6.2 years to approximately 
3.8 years. Our desire is to drive this down even further to 3.3 
years by the end of this fiscal year to ensure that regulations 
are produced in an even more timely fashion.
    Our goal has not only been to remove the backlog and to 
improve timeliness of regulations but also to validate the 
proposed regulations are crafted in a way that best serves the 
public. As such, we are committed to fully complying with 
Executive Order 13563 entitled Improving Regulations and 
Regulatory Review by ensuring in all of our rulemaking 
proposals that appropriate procedures are followed, that the 
benefits outweigh the costs, and that they are easily 
understood, reduce uncertainty, and they are enforceable.
    In conclusion, I want to assure you that, even though we 
can point to significant regulatory achievements over the past 
few years, the Coast Guard is making every effort to further 
improve timeliness, effectiveness, and efficiency in our 
rulemaking process.
    Thank you and I look forward to your questions.
    Mr. LoBiondo. OK. Now we are going to go to our second 
witness, Mr. James Hanlon, director of the Office of Wastewater 
Management at EPA.
    Mr. Hanlon, you are recognized.
    Mr. Hanlon. Thank you, and good morning, Chairman LoBiondo, 
Ranking Member Larsen, and members of the subcommittee.
    I am James Hanlon, director of the Office of Wastewater 
Management in the Office of Water at EPA. Thank you for the 
opportunity to discuss EPA's regulation of vessel discharges, 
including ballast water, under the Clean Water Act.
    Today I will discuss the draft vessel permit that was 
published for public comment in December of 2011, highlight 
some of the proposed improvements that the draft would make to 
the existing vessel permit, and discuss the regulation of 
ballast water discharges by EPA's draft and the Coast Guard's 
final rule.
    I will also provide an overview of the draft small vessel 
general permit, which was also published for comment in 
December.
    The current vessel permit expires in December of 2013. The 
December 2011 draft vessel permit continues to cover 
approximately 70,000 vessels, would continue to regulate the 26 
specific discharge categories that were contained in the 2008 
permit, and would include conditions on the discharge of fish 
hold effluent from large fishing vessels.
    We received approximately 5,500 comments during the public 
comment period that ended in February. We are reviewing and 
considering these comments and will make changes to the draft 
permit as appropriate. We plan to finalize the permit this 
November so that vessel owners and operators will have a full 
year to comply, to plan for, and implement any new permit 
conditions prior to the permit's effective date.
    In developing the draft permit we focused on environmental 
protection based on sound science, ensuring vessel safety and 
minimizing burdens for permittees with commonsense and easy to 
implement provisions. In developing ballast water limits for 
both the current vessel permit as well as the updated draft 
permit we considered limits on both the technology available to 
treat the pollutants and limits that are protective of water 
quality.
    EPA used the results of studies conducted by EPA's Science 
Advisory Board and the National Academy of Sciences to inform 
ballast water discharge limits in the draft vessel permit which 
are generally consistent with those contained in both the 
International Maritime Organization's Ballast Water Management 
Convention and the final Coast Guard rule. The draft vessel 
permit and the Coast Guard's requirements are generally 
aligned, a result of the agencies' working relationship.
    As EPA works to finalize the draft vessel permit we will 
continue to work closely with Admiral Salerno and his 
colleagues at the Coast Guard.
    In order to fulfill the Clean Water Act requirements, the 
draft vessel permit proposes to apply numeric treatment limits 
for ballast water discharges to a broader class of vessels than 
the Coast Guard's final rule and proposes some provisions that 
would prescribe additional management and monitoring 
requirements. As we work to finalize the vessel permit we will 
consider the information in the record, including public 
comments received, as well as the underlying Clean Water Act 
requirements.
    With regard to the smaller vessels, Public Law 110-299 
passed in 2008 provided a 2-year moratorium on Clean Water Act 
permitting requirements for incidental discharges from 
commercial vessels less than 79 feet. This moratorium was 
subsequently extended to December of 2013. EPA proposed the 
small vessel permit to provide Clean Water Act authorization 
and coverage for commercial vessels less than 79 feet.
    Recognizing that these small commercial vessels are 
substantially different in how they operate, the draft small 
vessel permit is shorter and simpler than the permit for larger 
vessels. The draft permit specifies best management practices 
for several broad discharge management categories that contain 
commonsense practices to reduce environmental impacts from 
these discharges, including measures to reduce the risk of 
spreading invasive species. As with the draft large vessel 
permit, we are currently in the process of considering public 
comments received which will inform our development of the 
final small vessel permit.
    Once again, Chairman LoBiondo, Ranking Member Larsen, and 
members of the subcommittee, thank you for the opportunity to 
discuss EPA's proposed vessel permit.
    Again, thanks for the personal comments extended to me this 
morning, and I look forward to answering any questions you may 
have.
    Mr. LoBiondo. Thank you very much, Mr. Hanlon.
    Admiral Salerno, on the ballast water rulemaking the Coast 
Guard recently issued a final rule on ballast water essentially 
adopting the IMO standard for all ships operating within the 
waters of the United States. Why did the Coast Guard push back 
the implementation schedule in the final ballast water rule?
    Admiral Salerno. Sir, we pushed back the implementation 
schedule because of the time it took to complete that 
rulemaking process. We felt we needed to give the industry 
sufficient time to react to the regulations and to make plans 
to acquire and install the necessary equipment.
    And I will defer to our director of regulatory standards if 
he had any additional comment in that regard. Mr. Lantz.
    Mr. Lantz. Thank you, Chairman.
    In addition, as Mr. Hanlon mentioned in his statement, the 
Coast Guard and EPA are working closely together and consulting 
as we did that rule, and we wanted to harmonize the 
implementation date with the incoming VGP final rule.
    Thank you.
    Mr. LoBiondo. Admiral Salerno, on official vessel safety, 
now we know that the Authorization Act calls for certain 
standards to be met and that vessels that do not receive their 
first examination prior to October 15th will not be allowed to 
fish until they do so. There are over 30,000 fishing vessels 
that have to undergo this. I think we are quite a ways away 
from being able to implement that. So I am going to assume that 
the Coast Guard is going to be unable to examine all of the 
fishing vessels. Now is the Coast Guard going to prevent those 
vessels that have not been examined from fishing? I mean, if 
not, will the fishermen be held liable if they are caught 
without an exam sticker? How is this all going to work?
    Admiral Salerno. We will not prevent people from leaving 
the dock, Mr. Chairman. Our intention is to have aggressive 
outreach with the fishing vessel community, begin conducting 
those examinations prior to the October deadline.
    But, again, it only applies to fishing vessels that operate 
beyond 3 miles. Many will not operate beyond 3 miles. If we 
detect a vessel beyond the 3-mile limit operating that does not 
have a decal indicating that it has been examined, we will 
issue a notice, what we are calling a fix-it ticket--
shorthand--to obtain the necessary examination within 30 days.
    Also, if we are constrained by capacity and we cannot 
accommodate that within the 30-day period, we will extend that 
timeframe.
    So our intention is to work with them, not let the fishing 
industry suffer because of a lack of capacity within the Coast 
Guard. We are watching our resource needs very carefully in 
that regard and have added a number of additional people to our 
roster for the purpose of conducting those examinations.
    Mr. LoBiondo. Also, under the Coast Guard Authorization Act 
of 2010--and this is something I am hearing quite a bit about 
and getting quite a bit of pushback on--this requires new 
commercial fishing vessels built after August 1st of 2012 to be 
certified by the American Bureau of Shipping or other Coast 
Guard recognized classification societies. There seems to be a 
great deal of confusion over how the Coast Guard will interpret 
built after August 1st, and concerns about what could be 
incredibly increased additional cost has put many in the 
industry putting off orders for new vessels which in turn is 
affecting our fish yards and I think--our shipyards and I think 
defeating the purpose of what we intended, to get newer vessels 
out on the water. When will the Coast Guard issue guidance on 
the definition of ``built''?
    Admiral Salerno. Sir, the definition of built will go out 
for clarity quite soon in policy but also be informed or part 
of a regulatory project that is currently underway.
    But for clarity today, the build definition will align with 
the date the keel is laid for a new vessel. Essentially, this 
is consistent with other build date determinations in other 
regulations. So the date that the keel is laid or similar 
states of construction for novel designs, that would be the 
date that we would consider the build date.
    Mr. LoBiondo. I am going to turn to Mr. Hanlon for just a 
minute on ballast water, and this is a huge concern. I think 
one of the subcommittee's greatest concerns with the current 
situation is the lack of a single uniform national discharge 
standard for ballast water. And I know that the EPA and the 
Coast Guard have worked closely together to try to be as 
uniform as possible, but the draft vessel general permit and 
the Coast Guard rules are far from identical. The Coast Guard 
rules require that new vessels built after December 2013, to 
install treatment technologies. Why has the EPA proposed a 
retroactive implementation date of January 1, 2012? And I would 
really like to know how that is fair for a vessel owner to be 
retroactive that way?
    Mr. Hanlon. Thank you, Mr. Chairman, for that question.
    First of all, with respect to the proposed Coast Guard rule 
back in 2009, they had the same date we did. So we were sort of 
on par through our proposal in November of last year.
    Again, as Admiral Salerno said, because of the delays in 
issuing their final rule they went to a December 2013 date. We 
have not issued our final permit yet. We have every intention 
of being consistent with the date requirements that were 
included in the final Coast Guard rule.
    Again, our permit is scheduled to be finalized in November 
of this year. As I said in my statement, we are working through 
the 5,500 comments. The final decisions on the scope and 
details of the permit are made by the administrator's office. 
But this is an item that has been in every briefing that we 
have had, and we fully intend to have a consistent set of 
requirements, as we did with the two proposals, in the final 
permit the EPA issues in November to be consistent with the 
March 2012, final Coast Guard rule.
    Mr. LoBiondo. So we understand that you are going to change 
the date to ensure uniformity?
    Mr. Hanlon. Those decisions are made above my pay grade. 
Basically short of assuring you that that will happen that will 
be an issue that will be front and center before the 
administrator's office as the final decisions are made, and I 
can't imagine we would do anything different.
    Mr. LoBiondo. Well, I mean, you used a couple of words that 
are I think very important to me and especially important to 
fishermen who are affected by all of this, and that is common 
sense. And somebody really scratches their head when they have 
got something that is almost impossible to comply with.
    Rick, if you would, just a little bit more and then I will 
turn it over to you.
    Can the EPA and the Coast Guard guarantee uniformity when 
you have two different Federal laws governing ballast water 
discharge and 50 States have the ability to put their own 
standards in?
    Mr. Hanlon. With respect to coordination with the States, 
the last iteration, the 2008 permit, was done on a very 
compressed schedule, and so the time the States had to assess 
the draft permit and then issue their 401 certifications under 
the Clean Water Act was in a very short period of time.
    This time around, we have given the States 6 months to sort 
of look at the draft permit. Their comments or their 
certifications are due in June of this year. We met with the 
States in January. We had a meeting with 15 to 20 States and 
have gone through their concerns with respect to ballast water 
management, et cetera. And that----
    You know, EPA certainly doesn't have the authority to speak 
for the States. They are more understanding of sort of what our 
directions are and certainly what the directions in the final 
Coast Guard rule are. And we don't--we hope to avoid some of 
the issues we had last time as the State 401 certifications 
come in in June.
    Mr. LoBiondo. So do you have reason to believe that New 
York and California are going to conform?
    Mr. Hanlon. We are working very closely with those States, 
Mr. Chairman. I can't sit here and say--I can't speak for the 
Governors in those States, but they understand where we are 
going and what the objectives are of both the EPA vessel 
permit, as well as the Coast Guard rule.
    Mr. LoBiondo. The small vessel general permit proposes to 
regulate 27 discharges from commercial vessels less than 79 
feet, including fishing vessels. Vessel owners will have to 
ensure they comply with best management practices to reduce or 
eliminate such discharges as air conditioner condensation, 
bilge water, rainwater runoff, ice from fish holds, and if they 
do not meet they could be liable for civil penalties totaling 
more than $36,000 per violation.
    Many of the proposed management practices, in my view, and 
I think most of the members of the committee, are impossible to 
comply with, especially on fishing vessels. For example, the 
EPA prohibits the discharge of unused bait unless that bait has 
been caught in the same water body, but the water body is not 
defined. I mean, would this prohibit fishermen in the Gulf of 
Mexico from using bait mackerel or herring caught in New 
Jersey? I don't understand.
    And the second part to this is, another proposed management 
practice prohibits the discharge of seawater cooling water 
while at port. Without constant circulation of seawater through 
the cooling system the catch will go bad. It will spoil before 
it can be offloaded at the port. How does the EPA intend to 
address how this is basically impossible to comply with? It is 
not feasible, these and some of the other management practices, 
which I have to tell you are starting to make our hair catch 
fire as we look at these things.
    Mr. Hanlon. Again, Mr. Chairman, thank you for that 
question.
    With respect to the smaller class of vessels, again, this 
is the first time that we are including those within the scope 
of the permit. So, basically, we proposed a path forward in the 
small vessel permit that was issued in November. Many of the 
5,500 comments that we received speak to the small vessels.
    The requirements for small vessels are not numeric limits, 
as is the case with large vessels. They are all good 
housekeeping best management practices, and our best estimate 
for the range of costs for an average small vessel ranges 
between $17 and $98 per year. The paperwork requirements for a 
small vessel is on one page. Basically, this would be sort of 
the documentation that a small vessel operator would have to 
have with them on the vessel for the full 5-year period with an 
update that they have sort of gone through a checklist 
basically on a quarterly basis. And we would be happy to submit 
this for the record.
    The bait issue is one that we have received some comments 
on. And with respect to fish hold issues, approximately 30 of 
the 5,500 comments dealt with that. But on the other side of 
that issue, you know, we are aware of contaminants such as 
viral hemorrhagic septicemia, a viral infection that has caused 
adverse effects of fish populations in different ecosystems 
around the United States. Since 2005, it has been identified in 
the Great Lakes.
    And so there is always a balancing issue in terms of how do 
you deploy common sense in terms of moving potentially 
contaminated--contamination from outside a watershed into a 
watershed through either live bait sources or boat holes, et 
cetera. And so that is the balancing act we are sort of in the 
process of doing now, and those issues will all be considered 
prior to our issuing the final permit in November.
    Mr. LoBiondo. Well, I sure hope so. Because while I 
appreciate and I think the operators appreciate the sort of 
reduced level of burden, so to speak, on what they are expected 
to do, it still appears to me that many of these best 
management practices are going to be impossible to meet or 
attain. And if that is the case, these folks are going to be 
subject to some pretty large fines.
    And it is not a great deal of comfort to a boat operator to 
say that, well, you know, here the green visors folks in 
Washington are going to try to figure all this out and make 
sure it works. It has got to work out on the water.
    Now, they all want to accomplish the same thing. But what 
they are being told has to be attainable, it has to be 
reasonable, and it can't put them out of business if they are 
going to comply here.
    So there is an awful lot of work to be done. I really want 
to be optimistic about the Agency's ability to get this under 
control, but I have to tell you I am pretty skeptical at this 
point.
    Mr. Larsen, I will turn to you.
    Mr. Larsen. Thank you, Mr. Chairman.
    You asked many of the questions I had on 401 certification. 
So, for instance, the coordination and cooperation between the 
EPA and the Coast Guard with regards to vessel general permit. 
So I won't replow that ground, perhaps only for their 
clarification. But I want to move to a few other issues, if I 
may.
    This is for Admiral Salerno with regards to fishing vessel 
examinations. Has the Coast Guard hired the full complement of 
examiners in order to conduct the examinations?
    Admiral Salerno. Well, we have a number of qualified 
examiners already in our workforce. We have 62 full-time 
examiners, plus other marine inspectors which have the 
qualification to conduct fishing vessel exams, about 198 in 
total. The additional that are coming on this year in fiscal 
year 2012, an additional 23 examiners will be coming on.
    Now in addition to our full-time cadre we make use of our 
volunteer force, the Coast Guard auxiliary, many of them who 
are qualified. Plus there is provision for third-party 
examinations of these vessels as well. So we are watching this 
very closely.
    The full population, quite honestly, sir, is a little bit 
hard to nail down. There are a number of State registered 
vessels that we don't have complete visibility on. So we are 
watching this closely, and it may very well be that we come 
back with a need for more resources in this regard, but we are 
not at the point where we are ready to ask for that.
    Mr. Larsen. So you have not yet made a decision on whether 
you intend to shift funds from other accounts in order to 
maintain this examination program?
    Admiral Salerno. Well, sir, our inspection force can shift 
very easily from one inspection type to another. As I 
mentioned, we have quite a few marine inspectors in our active 
workforce which have this qualification. They can be moved 
around as needed based on the needs of the day to accommodate 
this need.
    Now, we anticipate a surge in fishing vessel examinations. 
We are preparing for that. We are confident that we can get 
through this initial tranche, but again with the caveat that we 
may find that we need additional resources in the future.
    I do want to reiterate we will not allow the industry to 
suffer if we have a shortfall in capacity. We will work with 
the industry to get through this. We will continue to allow 
them to fish and not make them suffer if we don't have enough 
people to do the job.
    Mr. Larsen. With regard to the TWIC reader rule, can you 
let us know when the Coast Guard expects to publish its draft 
rule for public comment?
    Admiral Salerno. Sir, I can tell you that is absolutely 
highest priority, not only within the Coast Guard. It has been 
very clear within DHS. It is high priority from the Secretary 
herself.
    We are moving out very aggressively on this. As you know, 
we were obligated to wait for the results of the TSA pilot 
program. We received that study in February of this year, and 
since that time have been working very hard to get that reader 
rule out as quickly as possible. We are making progress. We are 
finalizing it now. We anticipate being able to go out with a 
proposed rule this summer.
    Mr. Larsen. Well, you probably heard from the Secretary. I 
have heard from a lot of other folks and am very concerned 
about this card reader rule not being ready and yet 
reenrollment is coming up for a lot of TWIC holders. It is a 
serious concern for these folks.
    The other issue with regard to TWIC brought up I think H.R. 
3173, the issue of going back for a second trip to the 
enrollment center. We are pursuing this legislation. It is 
sponsored by Mr. Scalise from Louisiana. Because there is a lot 
of concern about mariners having to make two trips. Can we get 
around that or work through that by having the Coast Guard and 
DHS as a whole move forward on it so we can avoid two trips?
    Admiral Salerno. Sir, we hear the same concern expressed 
multiple times. I would have to defer to TSA on that particular 
question. That is a process that they control.
    From a Coast Guard perspective, we are obviously in the 
enforcement side of it. You know, do the mariners and yard 
workers have the required TWIC? The actual production and 
issuance of a TWIC is a TSA function. We work very closely with 
TSA in this, but I would defer to them as to whether or not 
they can reduce that down to one trip.
    Mr. Larsen. So, last May, I asked Admiral Cook for a status 
update on two provisions that were in the Coast Guard 
Authorization Act regarding modification to oil spill emergency 
response activities to expand the definition of a higher volume 
port area for the Straits of Juan de Fuca and the encouragement 
for the Coast Guard to initiate negotiations with Canada for 
enhanced maritime traffic management and spill response in the 
North Puget Sound region of Washington State. Do you have an 
update on those efforts to implement those provisions?
    Admiral Salerno. Yes, sir.
    Regarding the high-volume port area, we did issue a notice 
of intent in the Federal Register to expand the definition of 
the high-volume port area as indicated in the Authorization 
Act. We had it still an active project within our rulemaking. 
However, we are also aware that there is a provision in Senate 
bill 1665 which would make that change legislatively. If that 
were to occur, it would obviously become effective upon 
enactment. If that does not become law, we will continue with 
that regulatory process. It does require, of course, all of the 
typical things you do with the rulemaking, the cost benefit 
analysis and so forth. So if it happens legislatively it will 
be much quicker.
    Mr. Larsen. I asked in my testimony with regards to towing 
vessel regulation. Section 701 of the Authorization Act of 2010 
requires publication by the Coast Guard of a final rule for 
towing vessel inspection by one year after the date of the 
enactment. While you have published a draft rule, there is 
still no final rule. Can you explain to us the cause of the 
delay in implementing the final rule?
    Admiral Salerno. Yes, sir. We are very mindful we missed 
the deadline that was in the Authorization Act. But, as you 
point out, we did get the proposed rule on the street. We have 
received about 3,000 comments from the affected industry. And, 
again, the industry itself is very complex. It ranges from 
large corporations to mom and pops.
    So we are very diligently going through those comments. 
Some of them are quite difficult to answer. It is going to 
require some thinking to make sure that we are fair to that 
full spectrum within the affected industry.
    We are working on that very aggressively, and I don't have 
an actual timeframe. I can tell you it is very high on our 
priority list to get that reg out. In the meantime, we are 
working with the industry in our bridging program. So we are 
putting Coast Guard inspectors on towing vessels as part of a 
pre-inspection phase, if you will, to make sure that they 
comply with the existing requirements for uninspected vessels 
and bring them up to speed to ease that transition for those 
vessels and to inspect its status. That is going very, very 
well.
    Mr. Larsen. And, finally, Mr. Chairman, one more question 
and then I will yield back.
    A witness on the second panel, Admiral, will raise concerns 
the Coast Guard has adopted IMO regulatory standards for watch 
keeping that do not adequately account for fatigue among 
officers and crew, which in their testimony it says creates 
persistent safety liabilities. Has the Coast Guard ever used 
independent human factor professionals to review the work 
hours, workload, and fatigue aboard U.S. flight vessels and 
should it? And a 91-hour workweek seems excessive on a 
transportation mode with so much potential for damage and loss 
of life. What has the Coast Guard done to address the fatigue 
issue?
    Admiral Salerno. Sir, fatigue is of great interest to the 
Coast Guard. There are mandatory hours of rest within the 
international convention STCW.
    And if you permit me, sir, I would like to ask Mr. Lantz, 
Director of Standards. He has been working this issue directly 
and I think can get into some of the details.
    Mr. Larsen. Thank you.
    Mr. Lantz. Thank you, sir.
    You are correct in the workweek. But I think it is 
important to note that in amending STCW, which the Coast Guard 
did through IMO, we actually increased the numbers of mandated 
hours of rest on a weekly basis for our crewmembers from 70 to 
77. We also ensured that they had 10 hours of rest each day. 
And for the Coast Guard to implement this we don't consider 
mealtime or short breaks as contributing to that risk. We are 
looking at uninterrupted rest.
    Mr. Larsen. You do not consider breaks and meals as part of 
that in that 10 hours?
    Mr. Lantz. No, sir.
    In response to the first part of your question, yes, we 
have consulted professionals with regard to fatigue issues. We 
do have an active crew endurance management system which is a 
voluntary program which we are trying to leverage throughout 
the industry. We have had some success in the towing industry. 
But we do use that as a way to help the industry implement 
voluntary standards to reduce the impact of fatigue on their 
crew.
    Thank you.
    Mr. Larsen. And just as a note, Mr. Chairman, although Mr. 
Hanlon I think in his testimony said he could be nominally 
available to answer questions on ECA, I understand it is not in 
your purview. I won't put you on the spot for that for those.
    Mr. Hanlon. Thank you, sir.
    Mr. Larsen. You are welcome.
    Mr. LoBiondo. The gentleman from coastal Louisiana, Mr. 
Landry.
    Mr. Landry. Thank you, Mr. Chairman.
    Admiral, thank you. Thank the Coast Guard for their service 
to this country.
    The Coast Guard's reputation in my district and their 
approval rating is, I can promise you, better than EPA's; and I 
want to help you keep that approval rating. I would like to see 
you all take it up a notch.
    I am just curious. Do you all ever sit around and work on 
deregulating things or looking at regulations that maybe are 
not working or are over burdensome to the industry and say, do 
you know what, we applied this way back when and maybe it is 
not applicable today and we should take those things off of the 
books?
    Or do we--and it is not just--you know, I am not pointing 
it at the Coast Guard, but it just seems like all our agencies 
do come up with ways to continue to add regulation after 
regulation after regulation.
    Admiral Salerno. Yes, sir. In fact, we not only do that, we 
are directed to do so in the Executive Order 13563, the 
retrospective review of regulations, and in fact have 
identified a number of regulations that are undergoing scrutiny 
to see if maybe they need to be revised or removed. So I take 
your point, yes, sir.
    Mr. Landry. You know, 100 years ago, 90 percent of all of 
the cargo brought into the United States traveled on an 
American-flag vessel. Today, 95 percent of the cargo coming 
into this country comes in on a foreign-flag vessel. Any idea 
why?
    Admiral Salerno. Well, I think the reasons are quite 
complex. I am not sure I could give a satisfactory answer in 
just a few seconds. But it obviously relates to international 
competitiveness, competitive advantages internationally. As an 
American, of course I would love to see that all be on U.S. 
ships.
    Mr. Landry. And I believe you. I am just wondering if the 
regulatory environment that we create--and again I am not just 
singling out the Coast Guard, but I think it starts all the way 
from EPA to OSHA to the impact they have in our shipbuilders 
and then putting that burden on the mariners themselves. If all 
of these mounds of regulations that other foreign-flag vessels 
are not subjected to, if that doesn't have anything to do with 
causing our maritime industry to be less competitive in the 
world, I mean, do you think there is any correlation?
    Admiral Salerno. Well, let me assure you, sir, we make 
every effort to make sure that U.S. regulations are consistent 
with international regulations; and for foreign ships that come 
into U.S. ports we are very diligent in making sure they comply 
with those same standards. There is not an easier path from a 
regulatory standpoint for a foreign ship to conduct business in 
the United States then for a U.S. ship. We do everything we can 
to level that playing field.
    Mr. Landry. And I just want to touch on two things, and I 
appreciate the ranking member bringing this up.
    These TWIC visits. You know, I get my passport in the mail, 
and I know you said it is to the Department of Homeland 
Security, but is it possible for you all to help us garner the 
support necessary? I mean, would the Coast Guard be willing to 
step out with other Members of Congress in supporting a 
position that will eliminate this second visit?
    Admiral Salerno. I am not sure I am competent to speak to 
that, sir. I know there are some technical reasons that TSA has 
cited as far as validating the biometrics on the card.
    Mr. Landry. Well, I mean, we could come up with an excuse--
they can come up with an excuse for just about anything. And I 
guess I am looking for an agency such as the Coast Guard which 
utilizes a lot more common sense than anyone else, if they 
could look at DHS and say I don't believe that you are using 
any common sense.
    Admiral Salerno. But what we have tried to do, and I think 
successfully, is, given the fact that TSA has their system, is 
make it as easy as possible for mariners who also have to 
receive a merchant mariner credential so that we don't add to 
the burden of having to go in to collect biometrics in addition 
to what TSA is requiring.
    Mr. Landry. Well, what amazes me is the fact that we are 
going to have a constituent of mine on the second panel who TSA 
wouldn't even allow in an airport using his TWIC card. I mean, 
you know, it is amazing. Here we have a card issued by them. 
They make a demand to go to two different visits. We are 
talking about this, you know, biometric excuse. He goes up to 
the TSA counter to get into the airport, you know, to go 
through security. He hands them their card, and they say it is 
not a valid ID. Do you see what I am saying?
    So, anyhow, I just would appreciate if you all could lend 
us some support on that.
    In the ballast water, a little more Clorox? You know, I am 
serious, sir. Does it have to be that complicated? I am just--
--
    Admiral Salerno. Well, sir, again, we rely on the 
scientific input from EPA as to what works. And even as we look 
at ballast water management systems and different types of 
systems that may use chemicals, there are concerns that, OK, 
what do you do after you have killed all the bugs in the tank? 
Can you then discharge that water? Because it may in fact 
create other environmental damage, and I would defer to the 
scientific experts on that.
    Mr. Landry. I appreciate it. Thank you.
    Thank you, Mr. Chairman.
    Mr. LoBiondo. Admiral Salerno, there have been--over the 
past decade, there have been several incidents where vessels 
suffered casualties and the safety of workers on vessels and at 
ports was jeopardized by incorrectly declared cargo container 
weights. Would the Coast Guard support the proposal before the 
IMO to amend a SOLAS requirement, the weighing of cargo 
containers before they are loaded on ships which would 
establish kind of a regimen for this?
    Admiral Salerno. Sir, we are aware of that concern. We 
share that concern with the industry. It does create safety 
hazards.
    Again, let me ask Mr. Lantz, who leads the U.S. Delegation 
to the IMO Maritime Safety Committee, to comment on that.
    Mr. Lantz. Thank you, Mr. Chairman.
    Yes, we do support the IMO taking that issue up to ensure 
that containers--the weights of containers are fully declared 
and understood when they are loaded on ships. That is an issue 
that was brought forward. We supported that issue being 
considered at IMO.
    Mr. LoBiondo. Thank you.
    Mr. Hanlon, one last question. I mentioned in my opening 
statements about some of the things that we are trying to work 
through with these mission control areas. The United States and 
Canada recently petitioned the IMO for an emissions control 
area surrounding North America to 200 miles offshore. Can you 
tell us whether the EPA or how they are going to evaluate 
approved flag State equivalencies, what standard will be used, 
how this is going to start working out?
    Mr. Hanlon. I am not in a position to respond to that this 
morning. We would be happy to get back to you on the record for 
that.
    Mr. LoBiondo. OK. Thank you.
    [Please see the response to question 2.e. on page 65 for 
this information.]
    Mr. LoBiondo. Mr. Larsen?
    OK. Admiral Salerno, Mr. Lantz, Mr. Hanlon, thank you very 
much. And, once again, Admiral Salerno, thank you for your 
service to our country and God speed.
    We will now take a brief break for the second panel to get 
set up.
    [Recess.]
    Mr. LoBiondo. Thanks to our second panel. We will get back 
underway again.
    For our second panel we have the Honorable Chris Koch, who 
is the former chairman of the Federal Maritime Commission and 
current president and CEO of the World Shipping Council. We 
have Mr. James Gutowski, a scalloper out of Barnegat Light, New 
Jersey, who is representing the Fisheries Survival Fund, and is 
here with a fellow fisherman and the mayor of Barnegat Light, 
Mr. Kirk Larson.
    And now I would like to yield to Mr. Landry for an 
introduction.
    Mr. Landry. Thank you, Mr. Chairman.
    It is my pleasure to introduce Mr. Jimmy Lafont. He is a 
constituent of mine. And we call him ``T. Jim.''
    You know, often, T. Jim, this chamber has said that the 
committee needs a translator so the Members and the 
stenographer know what I am saying. And I don't know where they 
get that. Do you understand me?
    Mr. Lafont. Fullheartedly.
    Mr. Landry. Then I don't see what the problem is, Mr. 
Chairman. I guess we don't have----
    Mr. LoBiondo. I am not going to say what I am thinking.
    Mr. Landry. Thank you, Mr. Chairman.
    Mr. LoBiondo. OK.
    Our last two witnesses are Mr. Don Marcus, who is the 
secretary-treasurer of the International Organization of 
Masters, Mates, and Pilots; and Mr. Paul Cozza, who is the 
president of CSL International.
    With that, we will get started. Mr. Koch, you are now 
recognized.

TESTIMONY OF THE HONORABLE CHRISTOPHER KOCH, PRESIDENT AND CEO, 
  WORLD SHIPPING COUNCIL; JAMES GUTOWSKI, CHAIRMAN, FISHERIES 
   SURVIVAL FUND, BARNEGAT LIGHT, NEW JERSEY; JIMMY LAFONT, 
  CALLAIS AND SONS, CUT OFF, LOUISIANA; DON MARCUS, SECRETARY-
 TREASURER, INTERNATIONAL ORGANIZATION OF MASTERS, MATES, AND 
      PILOTS; AND PAUL COZZA, PRESIDENT, CSL INTERNATIONAL

    Mr. Koch. Thank you, Mr. Chairman. Thanks to you and 
Congressman Larsen for the subcommittee's interest in what is 
going on in terms of maritime environmental and safety 
regulations.
    The written testimony I have submitted to the committee 
addresses four issues. The first is ballast water technology 
regulations; the second, dealing with emissions, is the North 
American ECA, which deals with NOX, SOX, 
and particulate matter emissions from ships; the third issue 
being the CO2 discussions which are going on at the 
IMO; and, lastly, the maritime safety issue of overweight 
containers or those that have misdeclared container weights.
    Briefly, with respect to ballast water regulations, we 
commend the Coast Guard and the EPA for coordinating their 
efforts in trying to come up with a single, uniform national 
standard. Our testimony points out that further effort is 
necessary to coordinate the two agencies' efforts. We were 
encouraged this morning to hear EPA indicate that they 
hopefully will coordinate and match the Coast Guard's approach, 
particularly with respect to new builds, where there is still 
some difficulty in the EPA draft VGP.
    The industry is going to have to make a massive capital 
investment to comply with these regulations. And we think the 
proposition speaks for itself, but that massive investment 
should be reasonably required of the industry once. We need to 
be able to have the Governments come up with a standard that we 
can reliably use no matter what port we come into in the U.S. 
We hope that the schedule set up for existing vessels is 
workable. We think, with a tweaking on the new builds by EPA, 
it could be workable as well.
    But when the administration talks about the industry 
needing some time, the only thing I would like to point out in 
addition is, it is the vendors, the technology vendors, that 
need time too. There are thousands and thousands of vessels 
that are going to have to install this technology, and it is 
expensive. They will have to ramp up to commercial production 
levels.
    But they also have to have their technology approved by 
very rigorous Coast Guard standards. And that is highly 
appropriate, because the IMO testing methodologies have already 
been used by some reputable States to approve technology 
systems which had to be pulled from the market because they 
could not reliably meet the IMO treatment standard. So what the 
Coast Guard put in its rules about how it is going to test that 
technology, we think, is worthwhile and appropriate. And we are 
hopeful that in the end this regime can be implemented in a 
smooth manner.
    As to the ECA, obviously the MARPOL Annex VI agreement 
reached at the IMO was a big step forward for how to deal with 
the NOX, SOX, and particulate matter 
issues. The U.S. and Canada jointly proceeded with the North 
American ECA, which comes into effect August 1. So long as the 
1 percent sulfur fuel is reasonably available, our members 
certainly intend to comply with that regime effective August 1. 
And then we also note, in 2015, the sulfur fuel level drops 
down even further to 0.1 percent sulfur in 2015.
    As to CO2 emissions, it is an ongoing issue at 
the IMO. My testimony provides greater detail of what the 
various issues are there. We would note the success of the IMO 
in coming up with mandatory new efficiency design index 
standards for new-build ships. That is a successful step 
forward. It means those ships will be more efficient, which 
means they will produce less in the way of carbon emissions.
    The rest of the carbon emission agenda at the IMO is a 
complicated one, as our testimony talks about. And I would be 
happy to answer any questions you may have with respect to 
that.
    Finally, on maritime safety, our testimony notes we have an 
ongoing issue that has been of concern to carriers, to the 
crews on the ships, and to longshore workers about containers 
that show up that have misdeclared container weights. Shippers 
are required by the Safety of Life at Sea Convention to provide 
an accurate container weight, but oftentimes that doesn't 
happen. That can produce serious operational and safety issues.
    We have taken the view, along with the International 
Chamber of Shipping and BIMCO, that the convention should be 
amended to require loaded containers to be weighed before they 
are put on a ship. In the U.S., that is the law under OSHA 
regulations, but it doesn't apply to the boxes coming into the 
U.S. or other foreign-to-foreign commerce. So we are hopeful 
that initiative can gain some ground, and we do hope that the 
U.S. Government will be supportive of that at the IMO.
    That concludes my summary, Mr. Chairman. I would be happy 
to answer any questions at the appropriate time.
    Mr. LoBiondo. Thank you.
    Jimmy, you are recognized.
    Mr. Gutowski. Chairman LoBiondo, Ranking Member Larsen, 
members of the subcommittee, thank you for holding this 
important hearing and giving me the opportunity to testify.
    My names is James Gutowski, and I am part-owner of a 
scallop vessel, Kathy Ann, and other vessels in Barnegat Light, 
New Jersey. I am accompanied here today by the town's mayor and 
fellow scalloper, Mr. Kirk Larson.
    I am the chairman of the board of the Fisheries Survival 
Fund, which represents full-time Atlantic sea scallop 
fishermen. I am also a member of the Garden State Seafood 
Association, which shares the concerns discussed.
    My full statement has been submitted for the record.
    This hearing touches upon two important issues to 
fishermen: safety in our profession and the health of the 
marine environment on which our livelihoods depend. There is 
really no one more vested in these issues than we are. I 
appreciate the subcommittee's work to improve fishing industry 
safety and the support you provide commercial fishermen more 
generally.
    I would like to discuss certain issues in the Coast Guard 
Authorization Act of 2010 that have the potential to seriously 
disrupt our businesses and actually jeopardize our fishing 
vessels' safe operation. I also want to address issues related 
to the Environmental Protection Agency's proposed Vessel 
General Permit, or VGP. The EPA has no particular experience or 
expertise about fishing vessels. That lack of knowledge shows 
in the proposed VGP.
    H.R. 2838, the Coast Guard and Marine Transportation Act of 
2011, addresses some issues. We hope the subcommittee can 
address our initial concerns and the Senate follows suit in 
recognizing the need for commonsense solutions.
    Briefly on the authorization act issues, the timing 
requirements for mandatory vessel inspections and the 
particularly burdensome load-line and vessel classification 
requirements are not workable.
    Mr. Chairman, members of the subcommittee, we appreciate 
your efforts to include in H.R. 2838 a provision to extend the 
start of the dockside inspection until 2015 and require 
inspection of vessels to occur every 5 years rather than every 
2 years. As a practical and safety matter, these changes will 
make the inspection program more effective and provide the 
Coast Guard time to develop an implementation plan.
    As to classing and load-line requirements, we strongly 
believe that these have never received a fair, clear-eyed 
review of the total economic costs. These costs could lock 
fishermen into older, less efficient vessels. Experts within 
the industry estimate these requirements will increase the 
price of a new scallop vessel by about 25 percent, adding $1 
million to a $3 million price tag for a new scallop vessel. 
Those costs will put new-build out of reach for many fishermen 
who need them and will discourage major refits to make vessels 
safer and more efficient.
    In short, the unintended consequences of these mandates may 
decrease safety and lost shipyard jobs. Our suggestion is to 
direct the Coast Guard to develop, in conjunction with the 
fishing industry, an alternative program to load-line 
requirements and repeal requirements to class vessels. At the 
very least, there needs to be a rigorous investigation of the 
costs and the benefits of those requirements and delay an 
implementation while these issues are studied.
    On the VGP, my written testimony details a number of 
problems with the proposed permit, many of which would be 
resolved with the H.R. 2838. Again, Fisheries Survival Fund and 
the Garden State Seafood Association and I thank you for your 
leadership in this regard.
    The proposed VGP shows that EPA is the wrong entity to 
regulate fishing vessels. The 79-foot dividing line splits the 
scallop fleet right down the middle. Some vessels would be 
subject to VGP requirements, while others would not. The VGP 
also forces fishermen to choose which regulatory requirement, 
those of National Marine Fisheries Service or those of the EPA, 
it will have to violate. The VGP would disallow seawater 
cooling when a vessel is in port and not underway. However, 
many times we must run our generator in port to provide 
electricity to our vessels' mandatory monitoring systems, which 
we run at the dock.
    If the Senate does not follow suit and adopt the changes 
contained in H.R. 2838, our primary recommendation would be to 
eliminate the VGP and allow all commercial fishing vessels to 
operate under the terms of the proposed Small Vessel General 
Permit, which more appropriately balances environment concerns 
and regulatory burdens. At a minimum, the dividing line should 
be 165 feet, which puts the vast majority of fishing vessels 
under a more sensible regime.
    We share the concerns for a clean marine environment, but 
truly believe that a better balance can be struck.
    Thank you for your time, and I will be happy to answer any 
questions you may have.
    Mr. LoBiondo. Thank you very much.
    Mr. Lafont, you are recognized.
    Mr. Lafont. Good morning, Mr. Chairman, members of the 
subcommittee. My name is Jimmy Paul Lafont. I am appearing here 
today on behalf of Callais and Sons from Cut Off, Louisiana. I 
appreciate the opportunity to come and speak in front of the 
subcommittee. And I am glad you all have my statement, because 
if I got to read it, you all probably won't understand it.
    The main issue we are here today is the regulations and the 
problem we are having in the merchant mariners to renew their 
license through the United States Coast Guard. And this is in 
no way any black eye against the Coast Guard, because I think 
they are trying to do their job. But we are getting regulated 
to death with the restrictions and the medical reviews.
    A mariner can start 1 year before his 5 years are up. And 
if it his last year and they all apply and if they have any 
kind of medical problems, it is tough, you know. And we are 
talking, like, very simple problems. In a nutshell, what is 
happening is the Coast Guard is asking the doctors to make a 
square peg for a round hole, and they don't talk in the same 
language.
    And I want to thank our Congressman, Jeff Landry, for 
helping us a whole lot on some of these issues. But it all 
boils down to regulations, and we are getting hit by them more 
and more, and all these medical issues. I mean, you are talking 
about, these are the safest mariners in the country, people 
that have licenses 50, 60 years. Unfortunately, they have some 
medical issues. And, really, the appeal process on the medical 
side is pretty bad.
    And as you know, I want to thank everybody for letting me 
speak here. I will answer any questions needed. You all have my 
testimony in front of you all. And thank you very much.
    Mr. LoBiondo. Thank you for your testimony.
    Mr. Marcus, you are now recognized.
    Capt. Marcus. Good morning, Chairman LoBiondo and Ranking 
Member Larsen.
    Mr. LoBiondo. Could you try to put your mike on?
    Capt. Marcus. Good morning, Mr. LoBiondo, Ranking Member 
Larsen, members of the subcommittee, thank you for the 
opportunity to speak here this morning.
    My name is Donald Marcus. I am a licensed master and 
secretary-treasurer of Masters, Mates, and Pilots. I am 
speaking on behalf of our members, as well as the Marine 
Engineers Beneficial Association and the American Maritime 
Officers. Together, we represent substantially all of the 
licensed masters, marine engineering officers, and licensed 
deck officers who work aboard U.S.-flagged merchant ships in 
international trade.
    We have chosen to focus this morning on an issue that has 
not received the serious attention that it deserves. That is 
fatigue. Fatigue is a widespread problem that puts safety at 
risk in an industry that operates 24/7 and that has duty 
assignments that extend for 4 months or more.
    The problem is compounded by reduced crewing levels and 
ever-increasing regulatory tasks. Complying with these tasks 
creates more workload, and there are less personnel available 
than necessary to complete the tasks. The choice is often 
between attending to traditional duties that affect the safety 
of the vessel or documenting compliance with a multitude of 
regulations that are subject to internal and external audits. 
Regrettably, paperwork and perfunctory reporting requirements 
are often prioritized over the simple safety of the vessel.
    The regulatory burden falls principally on the ship's 
master. In the past, staff officers, such as pursers and radio 
officers, assisted the master in meeting his responsibilities. 
These officers have been removed in the current crewing levels. 
Also, in order to remove a licensed deck officer, the chief 
officer, who was previously a non-watch-standing officer, now 
stands an 8-hour navigation watch in addition to his or her 
traditional operational and administrative duties.
    While the number of crew are being reduced, the number of 
international, Federal, and, as we heard here today, even State 
regulations that must be complied with and documented have 
grown exponentially. To make matters worse, ships' masters, 
chief engineers, and other officers often face criminal 
liability and de facto presumption of guilt when marine 
incidents or casualties occur. This can, and has, led to the 
imprisonment of many ships' officers around the world.
    The criminalization of simple professional errors, often 
the result of fatigue or overwork, is without justification 
when there is no oversight regarding the sufficiency of the 
personnel available to carry out shipboard responsibilities.
    The drive for reduced crewing levels has been fueled by the 
flag-of-convenience system that dominates international 
shipping. Ships are registered under the flags of countries 
that have the least taxation and regulation. Flags-of-
convenience registries compete in offering the lowest crewing 
levels in order to generate revenue.
    The abuses of the flag-of-convenience system has led to a 
greater international regulation of shipping through the 
International Maritime Organization, IMO. Unfortunately, flag-
of-convenience countries and shipowners participate in the IMO 
process of setting international standards. Accordingly, this 
has resulted in standards being set at dangerously low minimum 
levels.
    Here in the United States, the U.S. Coast Guard routinely 
accepts the compromised international standards as the basis 
for U.S. Federal regulation. This is a matter of rulemaking 
convenience. When it comes to vessel crewing levels and 
mandatory rest requirements, there is no necessity that U.S. 
standards match the lowest international requirements. Rubber-
stamping minimum international standards simply permits the 
U.S. Coast Guard to avoid an independent assessment of fatigue 
and crewing levels that could be complicated and contentious.
    The complexity of the problem has been reduced by the, 
quote, ``principles of minimum safe manning,'' unquote. This 
was recently adopted by the IMO. These principles outline many 
factors that should be used in setting, but not in enforcing, 
adequate crewing levels. What is needed is a mandate for an 
independent study by human-factors professionals on shipboard 
fatigue and crewing. Recommendations by independent 
professionals experienced in workplace fatigue should be used 
by the U.S. Coast Guard in setting safe manning levels.
    Particular attention needs to be focused on the management-
level officers whose impaired cognitive ability has the 
greatest potential for severe consequences to safety and the 
environment. A recently adopted amendment to the SOLAS, Safety 
of Life at Sea, Convention requires that all ships in 
international trade establish crewing levels in a transparent 
procedure.
    We believe it is essential that U.S. regulations require 
all ships, U.S. and foreign, calling at U.S. ports to carry 
safe manning documentation. This documentation must record the 
methodology used and the procedures and conditions taken into 
consideration in establishing the ship's crewing level. The 
documentation must meet the requirement for transparency by 
being available to crew and port State control officers.
    These issues are more fully explained in my written 
submission. Time constraints prevent us from addressing our 
concerns about the lowering of training and licensing standards 
for ships' officers by the U.S. Coast Guard under the 
International Convention on Standards of Training, 
Certification, and Watchkeeping for Seafarers code.
    I applaud Mr. Lafont for his comments about medical issues. 
We also have serious concerns regarding the need to establish a 
more rational U.S. Coast Guard process for medical/physical 
fitness examinations and appeals. We would be grateful if the 
record could be held open for a period of time to permit us to 
submit written comments on these issues.
    Thank you, and I will gladly answer any questions that you 
may have.
    Mr. LoBiondo. Thank you, Mr. Marcus.
    Mr. Cozza.
    Mr. Cozza. Thank you, sir.
    Good morning, Chairman LoBiondo, Ranking Member Larsen, and 
distinguished members of the subcommittee. Thank you for 
inviting me here today to testify.
    I am Paul Cozza, president of CSL International. We are 
headquartered in Massachusetts and are a subsidiary of Canada 
Steamship Lines, based in Montreal, concentrating on 
international short sea shipping routes.
    CSL International specializes in the marine transportation 
and handling of dry bulk cargo. We own and operate the largest 
fleet of self-unloading vessels in the world, serving clients 
in industries ranking from building and construction to 
agriculture. Self-unloading vessels serve a special sector of 
the dry bulk shipping industry, with their self-contained and 
automated discharge equipment offering high levels of speed, 
efficiency, and environmental advantages.
    I appreciate the opportunity to appear here today with you.
    Short sea shipping is the coastal movement of cargo on the 
water that does not cross an ocean and could also in some 
instances be served by rail or truck. We are able to transport 
cargo more efficiently and with far lower environmental impacts 
than trucks or trains.
    Secondly, I would like to bring to the subcommittee's 
attention the impact the North America Emission Control Area, 
or ECA, will have on our industry and offer a solution that 
achieves equivalent environmental goals without sacrificing the 
environmental benefits that short sea shipping provides.
    Implemented under the International Convention to Prevent 
Pollution from Ships, the ECA establishes sea-going vessel air-
quality standards for a 200-mile radius around the coastline of 
the U.S. and Canada and sets limits on the sulfur limits of 
fuel used within the ECA. The ECA standards are far stricter 
than will be imposed elsewhere in the world, both in terms of 
the distance the ECA extends from the shore and the level of 
permitted fuel sulfur content. We are concerned the 200-mile 
ECA is too stringent for some vessels and may not provide any 
appreciable environmental benefits beyond 50 miles for lower 
horsepower ships, such as CSLs.
    On August 1st, 2012, vessels operating in the ECA must use 
fuel with no more than 1 percent sulfur content. We at CSL are 
prepared to meet and support that standard despite resulting in 
not-insignificant cost increases to our business, in millions 
of dollars. By August 1st, 2015, however, vessels operating 
within the ECA will be required to use an ultra-low 0.1 percent 
sulfur fuel, which is a marine diesel. Prices for this ultra-
low-sulfur fuel, to the extent the fuel is even available, will 
raise their costs and, more importantly, the resulting costs to 
the customers that we serve.
    Because we trade in routes typically not beyond 100 miles 
from the coast, our vessels must use the reduced-sulfur fuel 
for the majority of their voyage, as opposed to transocean 
vessels, which only need to use the fuel when transiting the 
ECA, which in many instances is less than 10 percent of their 
voyage. Outside the ECA, ships may use sulfer at 3.5 percent 
sulfur.
    Although well-intended, flaws in current ECA regulations 
will jeopardize the short sea shipping sector. Based on supply 
issues, we are also concerned that the compliant North American 
marine fuel prices could nearly double in 2015 to meet this 
regulation. This anticipated increase in 2015 fuel costs will 
hamper marine competition. It could cause a modal shift from 
energy-efficient short sea ships to higher emitting shore-based 
rail and truck, with the unintended consequence of creating 
more landside congestion as well as increased air pollution 
closer to population areas.
    CSL, working in concert with our customers, also forecasts 
that the resulting high transportation costs in 2015 will 
negatively affect their business. Approximately two-thirds of 
the cargo that we ship is in support of the construction 
industry in the United States. Therefore, this mandated cost 
increase has strong potential to negatively impact both 
commercial and residential development in the U.S.
    CSL fully recognizes and supports the value of reducing its 
carbon footprint. We commissioned a study to analyze our ships' 
emissions using the modeling approach that the U.S. 
Environmental Protection Agency itself used in their ECA 
developmental process. The study indicated that air quality 
impacts from lower horsepower ships diminished significantly as 
the ships moved further away from the coast, with a sharp drop 
in impact about 39 miles offshore.
    Accordingly, we urge policymakers, namely Congress and the 
EPA, in consultation with the U.S. Coast Guard and the Maritime 
Administration, to revisit the ECA boundary and reduce the 200-
mile ECA to 50 miles for 0.1 percent sulfur in 2015 for ships 
of 20,000 horsepower or less. This revision will move away from 
the current one-size-fits-all regulation and align with a 
scientifically based approach which achieves the same 
environmental protection goals.
    In summary, CSL supports and endorses environmental 
initiatives in maritime transportation. For over 150 years, the 
CSL Group has pioneered technologies that make seaborne dry 
bulk transportation more environmentally efficient. We are 
investing millions of dollars in a fleet renewal program that 
will significantly reduce our environmental footprint.
    Through scientific testing, our proposal does not have a 
negative impact on the coast and will not contribute to modal 
shift impacts or negative impacts to the building and 
construction industry. If you would like further information, I 
have left our full report and additional details in a longer 
written testimony.
    Thank you very much today for this opportunity to make this 
presentation.
    Mr. LoBiondo. Thank you very much, Mr. Cozza.
    Mr. Koch, I would like you to comment on, when we are 
talking about ballast water regulations, what would the impact 
be if the 401 certifications in California and New York were to 
be enforced? Can you talk a little bit about that?
    Mr. Koch. I believe New York has signaled, at least in the 
current VGP, that it recognizes the standards it has proposed 
are not realistic. We are having a little bit more difficult 
time getting California to recognize that what they have 
proposed is not realistic.
    A ship can install one set of equipment to treat ballast 
water; it can't put on two. So what ship operators will be 
faced with is a choice of what technology they are going to 
install. My expectation would be that any ship operator would 
install what the U.S. Coast Guard says should be put on and EPA 
says should be put on and which meets Coast Guard and EPA 
testing requirements.
    If it doesn't meet California requirements, then the vessel 
operator has various choices. It could not discharge ballast 
water in California, it could choose not to call California 
ports, or it could sit down with the California State 
authorities and see if it can get them to see reason. The 
latter is what we are certainly hoping will be the outcome and 
is what we are working on.
    Mr. LoBiondo. OK. Thank you.
    Mr. Gutowski, can you talk a little bit about whether you 
believe or how the Coast Guard has been proactive in informing 
the fishing industry of the new vessel safety exam requirement? 
Have they been coming to you? Have they been proactive in 
talking about the need to do this?
    Mr. Gutowski. To be candid, I am not sure.
    I can tell you that, from my perspective, the fishing 
industry as a whole is not really prepared for this. We have 
our boats inspected every 2 years voluntarily because we are 
mandated to carry observers. And if we do not have that sticker 
on our vessel, we will not be able to leave the dock. But all 
vessels are not. So those that are not required to carry 
observers, I do not think that the majority of those would 
understand that this is coming.
    Mr. LoBiondo. OK.
    I next want to ask you about on the classing of vessels. 
The Coast Guard Authorization Act of 2010 mandated that all 
fishing vessels greater than 50 feet in length be designed, 
built, and maintained to specifications outlined by the 
classification society.
    Can you talk a little bit about why this requirement is 
going to increase the costs? I think we were talking about 
something by 25 percent, construction costs. What is behind 
that?
    Mr. Gutowski. Well, depending on what that class is, Mr. 
Chairman--and I am sure not--I don't have the answer to that. I 
would like to try to get to that, if it is ABS or what type of 
class this is. But we consider those cost increases to be in 
certain types of steel, miking shafts, piping, a large range of 
upgrades to a normal commercial fishing vessel that will add 
those costs.
    But more disturbing to me as a boat owner that has a vessel 
that has been taken care of pretty well over a 15-, 20-year 
period, this alternate compliance program that would begin in 
2020 would make all vessels over 50 feet come up to the same 
standard on a refit by that time, which would be, I would 
think, equally as costly. And with some vessels in our industry 
not doing well, I think that it will literally cripple some of 
the larger fisheries and coastal communities.
    Not to mention the infrastructure. I am not sure that our 
shipyards in the United States will be able to achieve all that 
work within that period of time.
    So there are a few points. I hope I have answered your 
question.
    Mr. LoBiondo. Mayor Larson, you were pretty articulate 
about this in some private conversations. Do you want to add 
anything to Jimmy's comments?
    Mr. Larson. Just, Jimmy had a great comment there on--I 
never even thought about that--the 2020 thing, that there isn't 
enough shipyards to handle all the upgrades for all the boats. 
Because I am sure everybody would wait until the last year.
    But my concerns to Mr. LoBiondo a few weeks ago was, I 
wanted to build a new boat, and I had just found out that I 
can't build a new boat after July 1st, 2012, without complying 
with all the new standards, what standards or what class they 
are going to go by. From what I understand, maybe I shouldn't 
say, but the Coast Guard really hasn't come up with those 
standards yet on what it is.
    And I am in the middle here. I would love to build a new 
boat. We are catching a lot of scallops right now. I could 
probably afford it. But if I don't get my keel laid by July 
1st, 2012, I probably won't do it. And there will be some jobs 
that were lost.
    I don't know if you read the papers, but New Bedford, they 
just built a brand-new scalloper for a guy last winter. And 
they pretty much did it to make sure the town stayed employed, 
to make sure the riggers all got a little bit of work putting 
stays together, building--the painters, you know, the small-
town stuff. I mean, Fairhaven Shipyard is a fairly small--it is 
a fairly small town, and every little bit helps. And I am sure 
in Louisiana and Alabama and Florida they are all looking for 
the same thing, to pick up a boat or two to build. I am sure it 
would help.
    But my concern is with the July 1st, 2012, date. I am 
concerned about it, and I will be putting my brain in gear here 
the next couple weeks after this hearing and put something 
together, I think. Thank you.
    Mr. LoBiondo. Sure. We want to continue to keep working on 
this.
    Mr. Gutowski, I have one more question on the ballast water 
and incidental discharge standards. The EPA recently announced 
its new Small Vessel General Permit, which would apply to most 
commercial fishing vessels.
    I believe you noted in your testimony that the VGP may 
require unsafe practices or require the master to violate 
fishing regulations. Could you talk a little bit about that?
    Mr. Gutowski. Sure.
    As far as ballast water, typically our vessels don't take 
ballast water on and then discharge that at some point. We 
fuel, and we catch scallops, and typically there is a tradeoff 
for fuel consumption and scallop production. So the load of the 
vessel stays pretty constant throughout the trip.
    However, water discharge--a lot of our vessels are cooling 
their generator systems with seawater. So that discharge, if 
that now becomes an issue, is a problem.
    I mean, if you look at fleets, if you look at what has 
happened to the industry with very stringent guidelines, cut 
days at sea, rotational areas, we have lots of steel tied up to 
docks. So they are 2, 3, 4, 5, sometimes 10 deep. To get to 
your boat, you have to cross 10 scallopers in certain ports.
    So you need to have electric. In the winter, you need to 
heat your boat so it doesn't freeze. But more importantly, we 
are required to have a vessel monitoring system. So that is the 
piece of equipment that speaks with our Government agency, 
National Marine Fisheries, 24/7. If my vessel monitoring system 
goes out for a period of more than 20 minutes, I get a 
telephone call, no matter what time of day, to get that back 
online or find out what the problem is.
    So if we are not able to keep that electric going, I don't 
know how we are going to be able to keep these vessel 
monitoring systems going in between trips. And I think there 
would be violations.
    Mr. LoBiondo. OK. Thanks.
    Mayor Larson, do you have anything you wanted to add to 
that?
    Mr. Larson. On the small vessel permit, yes, I find that 
all my boats, personally, are under 79 feet. And I don't 
believe I would be able to hold the greywater they require. I 
don't believe I would be able to, at this point, unload my 
fishing boat with a fishhold full of fish juice and not pump it 
overboard, at this point. I am sure, you know, in the future 
years that the marinas and the docks would have setups where 
you could flip a switch and pump into the sewer system of the 
town.
    But there is also the issue of large volumes of ice, maybe 
10, 15, 20 tons of ice, that is all used up on a boat. I don't 
know what we would do with that, whether we would put it in 
containers and let it melt and then pump it down the sewer 
system.
    I think there are a lot of things that the EPA did not 
think of when they were thinking of the fishing industry. They 
might have needed a couple more experts in there to be, like 
Mr. Landry said, to be practical and--just to be practical 
about the whole thing. You know what I mean?
    So thank you for letting me speak.
    Mr. LoBiondo. OK. Thank you.
    Mr. Larsen?
    Mr. Larsen. Thanks, Mr. Chairman.
    Mr. Koch, with regards to the misdeclared container 
weights, I agree it presents some serious safety concerns. It 
appears it has been a problem for many years. And while it has 
not gone unnoticed, it has not drawn any concerted effort by 
IMO, it seems, to address the problem.
    So what factors have inhibited IMO from gaining any 
traction on pushing through a practical universal regulatory 
requirement?
    Mr. Koch. The complexities with the problem are that the 
majority of containers have correctly declared weights, or at 
least they are not significantly off. So what you are dealing 
with is a subset of the containers that are tendered to the 
carrier that are the problem.
    And the present law--the SOLAS Convention--requires only 
the shipper's cargo declaration to deal with the issue, period. 
Our approach has been to recommend that the IMO amend SOLAS so 
that there is a regulatory obligation on the terminal operator 
handling the box to make sure that it has a verified weight 
before loading onto a ship.
    Mr. Larsen. So, on the outgoing.
    Mr. Koch. Yeah. That has been shown to work in the U.S. 
under the applicable OSHA regs. It hasn't impaired efficiency. 
We think that that ought to be looked at as an international 
rule, as well.
    The terminal operator industry has some concerns about 
that, and we hope they can be worked out in the IMO 
discussions.
    Mr. Larsen. Are there discussions at IMO on this issue?
    Mr. Koch. There are lots of discussions going on with 
Governments, with other industries----
    Mr. Larsen. Is there any action taking place?
    Mr. Koch. Not yet.
    Mr. Larsen. OK. All right.
    Mr. Marcus, talk a little bit more about watch standards. 
We heard from the Coast Guard with regards to the STCW Code for 
seafarers, that there are training requirements, there is 
certification, there are all these standards that are supposed 
to be in place to deal with watch standards, to deal with 
fatigue, to deal with all the issues you brought up. What is 
not going on?
    Capt. Marcus. Well, I think it gets down to what Chairman 
LoBiondo said a little earlier: common sense.
    And it is one thing to establish rest requirements, where 
you limit, in theory, operations to a 91-hour workweek, and 
possibly in certain situations for up to 2 weeks allow a 98-
hour workweek. But the Coast Guard has given us no guidance on 
the implementation of these rules.
    To say that there is a 10-hour required period of rest that 
is required every day and to say that it can be split into two 
different periods, one that must be 6 hours, and that these two 
periods of rest must be within 14 hours of each other, is not 
realistic. The problem with setting these standards is that the 
duties of getting a ship from A to B exceed the number of hours 
available to do the work, number one. And, number two, there 
literally are not enough responsible officers and crew who are 
charged with these duties and held to criminal standards to do 
these duties. You need enough people to do the work.
    So to have rest hours and not have enough people to do the 
work and expect the ship to get from A to B within these rules 
is incongruous. It doesn't make sense.
    Mr. Larsen. So in your testimony--I believe in your 
testimony you have called for Congress to study this, to do a 
study, to bring in--how did you put it? Have an objective study 
be done of this issue?
    Capt. Marcus. We are looking for Congress to task the 
United States Coast Guard to review the manning levels on board 
merchant ships that come in and out of U.S. ports. Because we 
believe, number one, even if there are logs of hours worked, 
the real test of efficiency and whether the crew are getting 
rest is determining how many crewmembers are there.
    And we think the Coast Guard needs to do the study using 
independent human-factor specialists, to verify and set manning 
levels and to audit safe manning documents on U.S. and foreign 
vessels that come into the States to see that, in fact, the 
crew can do the job within the rest periods that they say they 
are honoring.
    Mr. Larsen. Has anything like that been done before by the 
Coast Guard?
    Capt. Marcus. To my knowledge, not by the Coast Guard. 
There are certificates of inspections currently on the ship 
that set absolute minimum manning. These levels have been set 
for 40 years, during a period of time when regulatory tasks and 
duties have doubled or tripled.
    Mr. Larsen. OK.
    Mr. Cozza, with regards to the recommendation to pull the 
ECA back to 50 miles based upon a certain size of vessel, the 
obvious question I have is, in your view, how many vessels or 
how much volume of traffic would be impacted by that?
    Mr. Cozza. In our view, sir, we think it would be quite a 
substantial amount of volume, especially on the basis of what 
is going to be coastwise shipping or short sea shipping. We 
know for us alone, we are a small portion of it, but it would 
be about 40 million tons of cargo would be affected as well. 
And, again, this is mostly in construction-industry-type of 
work that we do.
    Mr. Larsen. OK. So your standard of vessel would be at 
20,000 tons? No, I am sorry, the----
    Mr. Cozza. Yes, sir.
    Mr. Larsen. Could you just review it for me, please?
    Mr. Cozza. What we are requesting is that, for 2015, that 
it would be, from the distance from 50 miles to 200 miles, 
vessels less than 20,000 horsepower would have this 
modification.
    As part of it, sir, is we believe that what happened is 
that the EPA did one-size-fits-all approach when they set the 
standard in place that might make sense for the total 
population, but when you look at smaller vessels and the 
emissions that we have on our ships, it does not as much apply.
    Mr. Larsen. I just reviewed the study, and I know you 
looked at emissions of SOX and NOX and 
CO2. Did you look at any relationship between the 
diesel engine standards that are going into place, the 1 
percent and the 0.1 percent, and how that plays into, you know, 
if it is a 0.1 percent standard, it can be 50 miles, if it is 1 
percent, it can be 51 miles, or whatever it is. Did you look at 
that relationship at all?
    Mr. Cozza. We did, sir. Actually, interesting enough, we 
found when you go away from the coast in even the current 
standard, beyond 50 miles there is really not an appreciable 
effect. So even taking it to more stringent on fuel, that would 
not change. That would not change.
    Mr. Larsen. Yeah. All right. Thanks.
    That is what I have right now, Mr. Chairman. Thank you.
    Mr. Landry. [presiding.] Thank you.
    Mr. Harris, the gentleman from Maryland?
    Dr. Harris. Thank you very much, Mr. Chairman.
    Let me just follow on, Mr. Cozza, with the questions about 
the Emissions Control Area. Because, you know, we have seen 
this from the EPA before. I mean, in their testimony--I am 
sorry I wasn't hear for the EPA testimony, but, you know, they 
say you could save $270 billion if all do you is this thing. 
And I think they can eliminate all our healthcare costs at the 
EPA, actually, if you extrapolate all their figures. You know, 
30,000 deaths in 2030 alone. I mean, we hear this every time 
from the EPA. It is usually based on pretty unscientific 
evidence. And I am glad that you have a study here.
    There was a comment in the testimony from the EPA that 
various other ideas about how to work around this ECA 
requirement, because it is financially burdensome, might 
include the idea of, for instance, taking into account how 
close to a population area you are. Because I take it, for 
instance, the current recommendation is that when you are 39 
miles off of New York with 15 million people in the 
metropolitan area, you have the same standard as 39 miles off 
rural South Carolina.
    Mr. Cozza. Yes, sir, that is correct.
    Dr. Harris. OK, so--which makes no scientific sense 
whatsoever. I mean, if there is some mile limit beyond which or 
within which you ought to be operating at a low-sulfur fuel, I 
don't understand why you wouldn't take population into account 
at all.
    But let me just get into some of the mechanics. So I take 
it your vessels would have two different fuel tanks, and you 
would be switching from one to the other as you crossed the 
boundary.
    Mr. Cozza. Yes, sir.
    Dr. Harris. Give me the idea of the cost difference between 
the 2.6 percent sulfur now, the 1 percent, and the 0.1 percent.
    Mr. Cozza. To give you an idea, Congressman, I will give 
you a real basis. We carry gypsum rock from Halifax down into 
Savannah. This is for National Gypsum. This is to go into the 
wallboard industry for construction. The costs for them at the 
0.1 percent in 2015--and this is conservative--will increase 
their transportation costs, total transportation costs, by 29 
percent. This is a very low-margin business. This is a very 
low-margin type of commodity. So it is huge.
    In actual costs for the fuel itself, we are forecasting it 
could be about a 40 to 50 percent increase in fuel price. 
Again, this is on the 0.1 percent sulfur side. On the 1 percent 
sulfur, it is not quite as extreme.
    Dr. Harris. And is there--because I know in vehicles the 
concern is that, as you go to low sulfur, there is actually an 
effect on the engine itself. Is that true in the engines that 
you are----
    Mr. Cozza. There is some. We run these very low-speed 
diesel engines. We are doing this right now on the west coast, 
off the State of California. We do feel it is not onerous. We 
do have to make some changes, but we are ready to take that on 
on the basis of foreign environmental guidelines.
    Dr. Harris. So 0.1 would be all right in terms of that.
    Just to give me an idea, if we changed it to 50 miles, 
let's say, you know, someone at the EPA realized one size 
really doesn't fit all and that you really should look 
scientifically at what the value of that falloff is--because to 
say, you know, well, we saved $270 billion in health care, 
well, about if we changed it to 50 miles? I mean, do we save 
only $269 billion in health care? And, you know, that billion 
is the most expensive?
    What percent of your company's journeys are in that 50- to 
200-mile range?
    Mr. Cozza. For the routes that we do right now, sir, we are 
about 80 to 90 percent of our journeys are within that 200-mile 
range.
    Dr. Harris. But how much within 50?
    Mr. Cozza. Within 50 it would be much less. It would be 
somewhere about 10 to 15 percent.
    Dr. Harris. Because you are just basically getting out of 
port and then coming into port with it.
    So, overall--and, again, getting to this population-based 
idea, you know--because your testimony points it out, if you 
discourage short sea shipping, you are going to replace it with 
something.
    Mr. Cozza. True.
    Dr. Harris. Trucks might be the most logical. And I can 
just imagine, you know, increasing truck traffic in and out of 
New York because you have done something to short sea shipping 
certainly wouldn't be good for the environment. Because this 
will really be a disincentive to short sea shipping if you are 
now at a 29 percent price differential because of the 
transportation costs.
    Mr. Cozza. Yes. That is not a question.
    Dr. Harris. What do you think--and I take it from your 
testimony, the best way to relieve this issue is go to the 50-
mile differentiation.
    Mr. Cozza. Well, our recommendation is, Congressman, is 
that it would be from the 50 to 200 miles for the 20,000-
horsepower or less ships.
    Dr. Harris. OK.
    Mr. Cozza. Because that is what we see as the basis of what 
makes sense. And, again, on the study that we have provided is 
that beyond--it is actually 39 miles, there is not an 
appreciable benefit.
    Dr. Harris. And why is this differentiation for the 20,000 
horsepower?
    Mr. Cozza. It is really the size of the engine, actually, 
makes this, as you can imagine, is the amount of the emissions.
    Dr. Harris. Right. But why would that make a difference as 
to--you know, why should we differentiate in the size of the 
engine? I mean, this pollution travels or it doesn't. If you 
are saying it is 39 miles, just because it is a little bigger 
engine, you know, then it is----
    Mr. Cozza. Honestly, Congressman, if it was 50 miles, we 
would be very fine with that. That would work, if it was in 
total.
    Dr. Harris. OK.
    Mr. Cozza. We were trying to present something that was a 
little bit of a balance with the current regulations.
    Dr. Harris. OK. No, thank you very much.
    And thank you very much, Mr. Chairman. Those are all the 
questions I have.
    Mr. Landry. Thank you, Mr. Harris.
    Mr. Lafont, you mentioned that Callais and Sons experienced 
a great deal of difficulty securing some medical credentials 
for two of your captains. What is the status of those 
applications?
    Mr. Lafont. Thank you, Mr. Landry. Thanks to you and your 
office, they both have their licenses now.
    Mr. Landry. So, at the end of the day, they were declared 
medically fit to work in a wheelhouse.
    Mr. Lafont. About 9 months after they went to renew.
    Mr. Landry. And so how long did it take?
    Mr. Lafont. You see, your license is good for 5 years. And 
your last year of your 5, after the 1 year left you can start 
applying. And both of those individuals started with the 1 year 
left. Their license expired. They lost their home, their car, 
all the goodies. And then they end up getting their license, 
fortunately, thanks to your office.
    Mr. Landry. And so, again, the process took them how many 
months?
    Mr. Lafont. About 13 months.
    Mr. Landry. And you said in your testimony that you 
believed that there is, I guess, a breakdown in the 
communication, that the doctors and the Coast Guard aren't 
speaking on the same language.
    Mr. Lafont. That is correct.
    Mr. Landry. Could you just elaborate on that for us?
    Mr. Lafont. It is so bad right now that Terrebonne General, 
who is known to be about the second-best heart place in the 
country--they got a pretty good reputation--the heart doctors 
are refusing to write medical letters to the Coast Guard 
because they claim they just don't even listen to them.
    Mr. Landry. So, in other words, we have doctors in the 
district--and then that would go for the rest of the country, 
in districts all around the country----
    Mr. Lafont. Correct.
    Mr. Landry [continuing]. Who specialize in cardiology, 
and----
    Mr. Lafont. That is correct.
    Mr. Landry [continuing]. The Coast Guard is basically not 
adhering to their recommendations?
    Mr. Lafont. It seems like the doctors from, I guess it is 
Louisiana--that is where most of my people are--are putting too 
many verbs in their letters. Because if they be honest--it 
don't look good, the letter, but in the Coast Guard's eyes, 
they spit them all back.
    And this guy, Dr. Stagg, who I virtually almost threatened 
to write me a decent letter without some of these verbs, and it 
still didn't work. But then we end up, thanks to your office 
again--and I am not trying to promote you here, but you really 
did help us--you know, we got it done. But it is not good. It 
is, like, really bad.
    Mr. Landry. Could you maybe just take a moment and explain 
to some of the Members that are here what you see as the 
overall problem? The type of burden that this particular issue 
is placing not only on you, but I am guessing it is affecting 
all of the boat owners up and down the bayou in Louisiana.
    Mr. Lafont. Well, first of all, most of your good mariners, 
you know, they are all on their fourth, fifth, and sixth 
renewal, and they all are going to have medical. Right now it 
is popping up color blindness. Sleep apnea, for heaven's sake, 
that is all over the place. Don't say you have diabetes 
because, you know, they are going to mark you. You know, people 
that never had color blindness in their life, it is coming up 
now.
    And it is a 3-year process now to get a license to run a 
boat, with the time, and if you go from apprentice mate on and 
then all the stages. You know, the good guys, we need these, 
that is the safe operators, and they are just--the only, I 
guess, criticism I would have with the Coast Guard is on the 
medical side. It is bad. It ain't good.
    Mr. Landry. So we basically have experienced mariners out 
there----
    Mr. Lafont. That is correct.
    Mr. Landry [continuing]. Who are being denied for--either 
denied or the ability for them to renew their license is being 
dragged out, which takes them, our experienced mariners, out of 
the wheelhouse.
    Mr. Lafont. That is correct.
    Mr. Landry. And these are good-paying jobs.
    Mr. Lafont. Yes. All our people at the wheel average a 
little better than $100,000 a year.
    Mr. Landry. And you don't have to have a college degree for 
this job.
    Mr. Lafont. We hope you don't. We would rather have 
experience.
    Mr. Landry. And I guess that is the point, is that out 
there we have the ability to give Americans good-paying jobs, 
jobs that put them in the top 25 percent of wage earners in 
this country. And we don't have to send them to college to 
guarantee them these kind of jobs. We just have to ensure that 
the process that has been going on--I mean, how long have you 
been in the business?
    Mr. Lafont. My father-in-law has owned this company 50 
years.
    Mr. Landry. OK. And so, in that timeframe, would you say 
that the ability to achieve a mariner certificate, to get 
behind the wheelhouse, has only become more complicated or less 
complicated?
    Mr. Lafont. Oh, Lord, like night and day difference, 
harder.
    You know, I am not no economist, but if you listen to every 
one of these gentlemen at this table over here, it is all about 
the regs. I mean, we are getting regulated to death. I mean, 
you know, all I haven't seen yet is a toenail on the medical 
side, and that is coming. But it is, like, really unfair.
    And you hear subchapter M that is coming down. That is 
going to be a killer for our industry. I don't want to--heaven 
knows what is going to come down there. But, you know, it is 
almost like the guy who was fishing the scallops; you know, you 
got to lay the keel now, because in 5 years from now you can't 
build nothing new no more. If you build anything new by regs, 
you can't go out and earn it. You are not going to pay it back, 
you are going to go bankrupt. The regulations are killing us.
    Mr. Landry. One final question. What impact does that have 
on the ability for you to create jobs?
    Mr. Lafont. It is tough. I mean, you know, you got to go, 
you got to fight, you got to be there every day. And thanks to 
you again, you know, and your office--and, you know, there is 
no mariner that has a valid license that should have to go 
through a Congressman or a Senator to get his license back 
unless it is really bad.
    But, you know, like this one particular mariner who had 
three bypasses 20 years ago and they pulled it finally this 
last time, and he had seen a doctor once a year, and he was on 
no medication for the last 5 years, and they held up his 
license for 13 months. It is kind of ridiculous.
    Mr. Landry. Well, I agree with you. I want you to know that 
I don't think you should have to go through the congressional 
offices to get this process going.
    I appreciate your time.
    Mr. Lafont. Thank you.
    Mr. Landry. Mr. Larsen?
    Mr. Larsen. No more.
    Mr. Landry. This committee hearing is now adjourned. Thank 
you all.
    [Whereupon, at 10:58 a.m., the subcommittee was adjourned.]
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