[Congressional Record Volume 142, Number 15 (Monday, February 5, 1996)]
[Extensions of Remarks]
[Page E153]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    DEEPWATER PORT MODERNIZATION ACT

                                 ______


                          HON. JAMES A. HAYES

                              of louisiana

                    in the house of representatives

                       Thursday, February 1, 1996

  Mr. HAYES. Mr. Speaker, I am proud to rise today with my Louisiana 
colleagues, both Democrats and Republicans, to introduce the Deepwater 
Port Modernization Act--legislation to amend the Deepwater Port Act of 
1974. Our efforts go to the heart of the battles this year in Congress 
to change the anticompetitive, overregulatory approaches of the past 
and streamline and focus Government's role overseeing American 
businesses.
  Clearly, when this legislation originally passed Congress over two 
decades ago, the oil industry faced markedly different challenges than 
the industry encounters today. There was much concern that the 
efficiency and environmental advantages offered by deepwater ports 
would so eclipse the market that they would monopolize the bulk of oil 
transportation to shore.
  To the contrary, in the 22 years since this legislation passed 
Congress, there is only one licensed deepwater port, the Louisiana 
Offshore Oil Port or LOOP. Unfortunately, despite Congress' original 
miscalculation on the ability of deepwater ports to control the market, 
the burdensome environmental regulations of the seventies remain in 
place.
  First of all, our legislation would promote the efficient 
transportation of crude oil from the outer continental shelf [OCS] of 
the Gulf of Mexico, which is currently not listed as one of the 
priorities of the act. New technologies have resulted and will continue 
to undoubtedly result in increased production of OCS oil. Without a 
more cost effective and environmentally sound means of getting the oil 
to market, expanding production of our domestic resources in the gulf 
will occur more slowly to the detriment of the consumer. Deepwater 
ports will allow us to utilize the increased OCS production and 
capitalize on the estimated 15 billion barrels untapped in the 
deepwater of the gulf.
  Second, our bill would repeal the antitrust provisions of the 1974 
act and clarify the intent of the 1984 amendments in order that 
deepwater ports may better respond to market conditions to set rates, 
terms, and conditions. Deepwater ports are highly regulated due to the 
aforementioned belief that monopolies would form. But, nothing could be 
farther from the truth. Deepwater ports have many strong competitors 
that can constantly and instantly adjust their own rates. Our bill will 
level the playing field to encourage competition by providing deepwater 
ports such as LOOP with the same rate structure as their competitors.

  Additionally, our legislation would simplify the regulatory framework 
under which deepwater ports function. The bill replaces the three-
tiered system of requirements on deepwater ports--overlapping Federal 
regulations, licensure provisions, and operations manual--with the 
requirement that a port comply with the published guidelines of the 
Secretary of Transportation for a facilities operations manual. 
Furthermore, a licensee's operations manual, and proposed changes to 
the manual, shall be approved and reviewed by the Coast Guard.
  LOOP currently pumps approximately $32.7 million in direct and 
indirect revenues in Louisiana's economy, not to mention additional 
impacts from other economic multipliers and benefits from a more 
environmentally safe transportation system. Because LOOP is only 
operating at about 63 percent of capacity, there is clearly room for 
expansion and for construction of more such deepwater facilities.
  We, accordingly, must correct the provisions within the current law 
which are stifling market usage of deepwater ports and burying with 
archaic government regulations what would be another efficient 
transportation source. Mr. Speaker, my Louisiana colleagues in the 
House and the Senate join me in requesting that Congress take action to 
clarify the intent of the 1974 act to promote the usage of deepwater 
ports by eliminating duplicate and unnecessary licensure and other 
requirements. It is clear that, while the market has changed, the 
conclusion of the seventies that deepwater ports can bring sustantial 
financial and environmental savings to oil transportation remains true. 
We must act responsibly this year to ensure that deepwater ports are 
allowed to operate in the future in a way to maximize competition and 
minimize unnecessary regulatory barriers which prevent efficient, 
environmentally protective commerce in this country.

                          ____________________