[Federal Register Volume 60, Number 249 (Thursday, December 28, 1995)]
[Proposed Rules]
[Pages 67226-67251]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-31371]




[[Page 67225]]

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Part III





Department of Transportation





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Coast Guard



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33 CFR Part 157



Structural Measures To Reduce Oil Spills From Existing Tank Vessels 
Without Double Hulls; Proposed Rule

  Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / 
Proposed Rules  
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[[Page 67226]]


DEPARTMENT OF TRANSPORTATION

Coast Guard

33 CFR Part 157

[CGD 91-045]
RIN 2115-AE01


Structural Measures To Reduce Oil Spills From Existing Tank 
Vessels Without Double Hulls

agency: Coast Guard, DOT.

action: Supplemental notice of proposed rulemaking.

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summary: The Coast Guard solicits comments on structural measures for 
certain existing tank vessels of 5,000 gross tons (GT) or more that do 
not have double hulls. This supplemental notice of proposed rulemaking 
(SNPRM) responds to comments received on the notice of proposed 
rulemaking, presents a summary of a regulatory assessment for various 
structural measures, notifies the public of the availability of this 
assessment, and solicits comments on the economic feasibility of the 
measures. This SNPRM represents the third step in the Coast Guard's 
three-step effort to establish structural and operational measures, 
that are economically and technologically feasible for reducing the 
threat of oil spills from tank vessels without double hulls, as 
required by the Oil Pollution Act of 1990 (OPA 90). It analyzes a 
number of measures and describes the results of extensive cost and 
benefit research on those measures deemed technologically feasible. No 
regulatory text is introduced in this SNPRM; however, comments received 
on this SNPRM will enable the Coast Guard to assess the economic 
feasibility for structural measures.

dates: Comments on this notice must be received on or before March 27, 
1996.

addresses: Comments may be mailed to the Executive Secretary, Marine 
Safety Council (G-LRA/3406) (CGD 91-045), U.S. Coast Guard 
Headquarters, 2100 Second Street SW., Washington, DC 20593-0001, or may 
be delivered to room 3406 at the same address between 8 a.m. and 3 
p.m., Monday through Friday, except Federal holidays. The telephone 
number is (202) 267-1477.
    The Executive Secretary maintains the public docket for this 
rulemaking. Comments will become part of this docket and will be 
available for inspection or copying in room 3406, U.S. Coast Guard 
Headquarters, between 8 a.m. and 3 p.m., Monday through Friday, except 
Federal holidays.

for further information contact:  LCDR Suzanne Englebert, Project 
Manager, Standards Evaluation and Development Division, at (202) 267-
6490. This number is equipped to record messages on a 24-hour basis.

supplementary information:

Request for Comments

    The Coast Guard encourages interested persons to participate in 
this rulemaking by submitting written data, views, or arguments. 
Persons submitting comments should include their names and addresses, 
identify this rulemaking (CGD 91-045) and the specific section of this 
proposal to which each comment applies, and give the reason for each 
comment. Please submit two copies of all comments and attachments in an 
unbound format, no larger than 8\1/2\ by 11 inches, suitable for 
copying and electronic filing. Persons wanting acknowledgment of 
receipt of comments should enclose a stamped, self-addressed postcard 
or envelope.
    The Coast Guard will consider all comments received during the 
comment period. It may change this proposal in view of the comments.
    The Coast Guard plans to hold a public meeting concerning this 
SNPRM. A notice of public meeting will be published in the Federal 
Register to announce the date, time, and location of the meeting.

Regulatory History

    Section 4115(b) of the Oil Pollution Act of 1990 (OPA 90) (which 
appears as a statutory note following 46 U.S.C. 3703a) directs the 
Coast Guard to develop structural or operational requirements for tank 
vessels of 5,000 gross tons or more without double hulls to serve as 
regulations until 2015, when all tank vessels operating in U.S. waters 
are required to have double hulls under section 4115(a) of OPA 90 (46 
U.S.C. 3703a). Regulations issued under the authority of section 
4115(b) must provide as substantial protection to the environment as is 
economically and technologically feasible.
    On November 1, 1991, the Coast Guard published an advance notice of 
proposed rulemaking (ANPRM) (56 FR 56284) which discussed structural 
and operational measures intended to meet the requirements of section 
4115(b) of OPA 90. The ANPRM included a request for data on the 
technical and economic feasibility of those measures for use on vessels 
covered by section 4115(b). Eighty-eight comments were received by the 
close of the extended comment period, which ended on January 30, 1992 
(57 FR 1243).
    After reviewing the comments, the Coast Guard published an NPRM 
entitled ``Structural and Operational Measures to Reduce Oil Spills 
from Existing Tank Vessels Without Double Hulls'' (existing Vessels) on 
October 22, 1993 (58 FR 54870). The Coast Guard issued two subsequent 
correction notices on November 19, 1993 (58 FR 61143), and December 14, 
1993 (58 FR 65298), which made technical corrections to the NPRM. In 
response to several comments received on the NPRM, the Coast Guard 
published, on December 16, 1993, a notice of public meeting and 
extension of comment period (58 FR 65683).
    The Coast Guard held a public meeting on January 20, 1994, to 
obtain information from the public on the proposed regulations. Topics 
addressed by speakers included applicability, differences between tank 
barges and tankships, exemptions, and economic and technical 
feasibility of the proposed regulations. Some of the basic assumptions 
of the proposed regulations related to certain structural measures were 
also discussed, particularly their reliance on Regulation 13G of Annex 
I of the International Convention for the Prevention of Pollution from 
Ships, 1973, as modified by the Protocol of 1978 (MARPOL 73/78). 
Information on the public meeting is available for public review at the 
address under ADDRESSES.
    In light of the comments received at the public meeting and in 
response to the written comments received on the NPRM, the Coast Guard 
conducted an extensive review of its regulatory plan for this 
rulemaking. To expedite the implementation of section 4115(b) of OPA 
90, the Coast Guard developed a three-pronged approach which 
encompassed three separate rulemaking projects. First, the Coast Guard 
issued a final rule on August 5, 1994, requiring the carriage of 
emergency lightering equipment and the inclusion of the vessel's 
International Maritime Organization (IMO) number in the advance notice 
of arrival report (59 FR 40186); second, it issued a supplemental 
notice of proposed rulemaking (SNPRM) on November 3, 1995, (60 FR 
55904) regarding additional operational measures; and third, it is 
issuing this SNPRM to describe its analysis of the technological 
feasibility and cost effectiveness of imposing various structural 
requirements.
    Comments received on most of the structural measures proposed in 
the regulatory text of the Existing Vessels NPRM (58 FR 54870) were 
negative. As a result, the Coast Guard is no longer proposing any of 
the structural 

[[Page 67227]]
measures it proposed in the NPRM. Instead, the Coast Guard is 
reexamining the economic and technological feasibility of imposing 
certain structural requirements in light of the findings contained in 
the revised regulatory assessment. The Coast Guard also intends to 
carefully consider all comments received from the public on this 
analysis of the revised regulatory assessment, and determine whether 
any structural measure is both economically and technologically 
feasible.

Background and Purpose

    The Coast Guard recognizes that operational and structural measures 
perform unique and important functions to prevent oil pollution. The 
second phase of the Coast Guard's three-phase effort to establish 
measures for existing tank vessels addresses reducing the risk of a 
grounding, collision, or fire. Many pollution incidents from tank 
vessels can be prevented by applying operational measures. Common 
failure modes which lead to pollution incidents include personnel 
error, navigation problems, and improper maintenance practices. A 
separate SNPRM entitled ``Operational Measures to Reduce Oil Spills 
From Existing Tank Vessels Without Double Hulls'' (Operational Measures 
SNPRM) (60 FR 55904; November 3, 1995) proposes requirements for bridge 
resource management training, vessel specific training, rest hour 
minimums, enhanced structural surveys, maneuvering performance 
capability requirements, and other requirements aimed at reducing the 
risk of accidents involving existing tank vessels.
    The Coast Guard's third phase of this effort to reduce oil 
pollution from certain existing tank vessels addresses mitigation of 
pollution if an accident occurs. The Coast Guard evaluated those 
structural measures that would reduce the oil outflow on various 
existing vessel designs. This analysis included measures such as 
fitting double bottoms or sides, requiring hydrostatic-balanced loading 
(HBL) for all vessel configurations, and fitting segregated ballast 
tanks (SBTs) or clean ballast tanks (CBTs) on those vessels presently 
without them.

Discussion of Comments and Changes

    Background information on proposals for structural measures for 
existing vessels without double hulls is provided in the preambles to 
the ANPRM and NPRM. These proposals focus on measures to reduce oil 
outflow after a collision or grounding has occurred.
    The Coast Guard received 132 comments on the Existing Vessels NPRM. 
Thirty of these comments related to the operational measures phase of 
this rulemaking project while the remaining 102 comments discussed 
issues related to reducing the oil outflow on an existing tank vessel 
after an accident occurs. The following discussion summarizes the 
comments received on the NPRM and is divided by topic: (1) 
applicability and treatment of existing double hull or double bottom 
vessels, (2) consistency with international standards, (3) 
protectively-located spaces (PL/spaces), (4) hydrostatic-balanced 
loading (HBL), (5) protectively-located segregated ballast tanks (PL/
SBT) requirements, (5) alternative measures, (6) phase-in alternatives 
and economic incentives, (7) regulatory assessment--general, (8) 
regulatory assessment--costs, and (9) regulatory assessment--benefits.

1. Applicability and Treatment of Existing Double Hull or Double Bottom 
Vessels

    The Coast Guard received one comment that inquired about the 
lightering zones referred to in section 4115 of OPA 90. The comment 
questioned how the lightering zones would impact the vessels that are 
required to comply with structural requirements for existing tank 
vessels. The Coast Guard issued a final rule on August 29, 1995, 
entitled ``Designation of Lightering Zones'' (60 FR 45006), which 
established four lightering zones in the Gulf of Mexico. Under the 
provisions of the final rule, tank vessels without double hulls may 
lighter in the Exclusive Economic Zone (EEZ) in these zones, including 
the existing vessels affected by this rulemaking. These vessels would 
be allowed to continue conducting lightering operations in these zones 
after they are phased out of service under the provisions of section 
4115(a) of OPA 90 until 2015. However, under section 4115(b) of OPA 90, 
these vessels would also be required to meet any structural and 
operational measures for tank vessels without double hulls.
    Another comment indicated that States should not attempt to preempt 
this proposed Federal regulation. The Coast Guard works closely with 
local and State governments and encourages them to actively participate 
in its regulatory process. There should be no conflict between State 
and Federal law; however, to the extent there is such a conflict, 
Federal law remains supreme (U.S. CONST. art. VI, cl. 2).
    On comment stated that the more limited definition of oil used in 
this rulemaking, which excludes animal fats and vegetable oils, should 
apply to all OPA 90 regulations. Other comments requested the exemption 
of vessels which carry non-persistent oils. The NPRM specifically 
excluded vessels carrying only animal fats and vegetable oils because 
the proposed structural requirements were believed to be too costly for 
vessels carrying only non-petroleum oils. Additionally, the exemption 
was proposed in an effort to be consistent with the international 
structural measures for existing vessels established in MARPOL 73/78. 
The Coast Guard has determined that the application of some of the 
structural measures presented in this SNPRM is technologically feasible 
for all existing tank vessels. Comments on the economic feasibility of 
imposing structural measures on vessels that carry only non-petroleum 
oils are solicited. The Coast Guard also requests comments on the 
benefits that may result from structural requirements. It should be 
noted that the Operational Measures SNPRM (60 FR XXXX; date) proposes 
the application of operational measures to all existing tank vessels, 
including non-petroleum oil carriers.
    Several comments requested clarification on whether the proposed 
rulemaking would apply to vessels operating in the U.S. EEZ and to 
vessels that carry cargo to foreign destinations. One comment asked 
whether the rulemaking would apply to vessels that unload cargo at 
deepwater ports or that engage in lightering in U.S. waters. The Coast 
Guard determined that any operational or structural measures 
reulemaking implementing section 4115(b) would be consistent with the 
applicability section 4115(a) of OPA 90 which requires certain existing 
tank vessels without double hulls to be phased out of operation by 
2015. Therefore, this SNPRM would apply to vessels unloading cargo at 
deepwater ports or engaging in lightering in U.S. waters. It would also 
apply to any other existing tank vessel without a double hull that is 
required to be phased out under section 4115(a) of OPA 90.
    The Coast Guard rulemaking implementing section 4115(a) entitled 
``Double Hull Standards for Vessels Carrying Oil in Bulk'' (CGD 90-051) 
(60 FR 13318; March 10, 1995) added 33 CFR 157.10(d), which applies the 
regulations to certain tank vessels carrying oil in bulk as cargo 
operating in U.S. waters, including vessels unloading oil as cargo at 
deepwater ports and lightering in established lightering zones more 
than 60 miles from the territorial sea baseline. The regulations also 
apply to non-dedicated oil spill response vessels (OSRVs). The 
Navigation and Inspection Circular (NVIC) 10-94, ``Guidance for 

[[Page 67228]]
Determination and Documentation of the Oil Pollution Act of 1990 (OPA 
90) Phase-out Schedule for Existing Single Hull Vessel Carrying Oil in 
Bulk,'' provides a detailed explanation of the applicability of section 
4115(a). Without conclusively resolving all the complex interplay 
between the Oil Pollution Act and the Law of the Sea, the Coast Guard 
presently intends that operational and structural requirements would 
not apply to foreign tankships engaged in innocent passage on U.S. 
navigable waters, which includes the territorial sea of the United 
States and the EEZ.
    One comment requested clarification on whether structural measures 
would apply to Floating Production and Storage Off-loading (FPSO) 
Systems, Floating Production Systems (FPS), and Mobile Offshore 
Drilling Units (MODUs). FPSO systems and FPS are tank vessels; however, 
they would be excluded from this rulemaking if they are less than 5,000 
GT, are not engaged in the movement of petroleum oils, and are not used 
in lightering operations. MODUs are not included under the definition 
of tank vessel in OPA 90. Therefore, they would not have to comply with 
structural measures.
    One comment asked why the NPRM differentiated between crude 
tankships of 20,000 deadweight tons (dwt) or more and product carriers 
of 30,000 dwt or more. The NPRM reflected the distinction in vessel 
size made by Regulation 13G of Annex I of MARPOL 73/78. This 
distinction was continued in the regulatory assessment in this SNPRM to 
enable those companies operating vessels on international routes to 
compare estimated cost and benefit results.
    The Coast Guard received several comments which objected to the 
imposition of structural measures on tank barges. The regulatory 
assessment in this SNPRM reviewed several technologically feasible 
measures that could be implemented on barges to reduce oil outflow. 
Comments are solicited on the economic feasibility of these measures.
    The Coast Guard received one comment on the double hull 
requirements proposed in Sec. 157.410(a) of the NPRM. The comment 
recommended the immediate construction of double hull vessels in lieu 
of retrofitting existing vessels with structural measures. Section 
4115(a) of OPA 90 establishes a phase-in schedule for double hull 
requirements for all existing tank vessels. These section 4115(a) 
provisions establish a schedule that balances environmental safety with 
the overall impact on the U.S. economy, worldwide U.S. shipping 
capability, and oil availability to U.S. consumers. The Coast Guard 
does not have the authority to change the phase-out schedule of section 
4115(a); rather, it is tasked with issuing interim regulations to 
protect the marine environment until all vessels are required to be 
equipped with double hulls under section 4115(a).

2. Consistency With International Standards

    The Coast Guard received several comments which expressed support 
for the development of regulations that are equivalent to Regulation 
13G of Annex I of MARPOL 73/78. Another comment stated that for 70 
percent of the fleet that it applied to, the NPRM duplicated the 
requirements of the proposed Regulation 13G of Annex I of MARPOL 73/78. 
The comment further stated that the Coast Guard has neglected its 
responsibility to make an independent decision to designate the 
strongest feasible antipollution measures. As previously stated, the 
Coast Guard's goal is to implement its statutory mandates in 
regulations that are consistent with international regulations wherever 
doing so is lawful, appropriate, and practical. Based on comments from 
the NPRM, the Coast Guard has reevaluated various pollution prevention 
measures. Accordingly, the Coast Guard conducted an extensive cost and 
benefit analysis of structural measures that are both consistent with 
international standards and that exceed current international 
agreements. The regulatory assessment in this SNPRM reflects the 
structural measures deemed technologically feasible for existing tank 
vessels.
    One comment recommended that product tankships from 20,000 dwt to 
30,000 dwt be exempted from further rulemaking action because they 
presently comply with MARPOL 73/78 and the Port and Tanker Safety Act 
of 1978. The comment contended that these tankers would already be in 
compliance with the provisions of the published NPRM. The above 
statements are accurate; however, the Coast Guard also considered 
requirements above those of MARPOL for the regulatory assessment in 
this SNPRM and has continued to include this group of vessels to ensure 
it reflects accurate cost benefits.

3. Protectively-located Spaces (PL/Spaces)

    The Coast Guard received several comments on the proposed 
requirements for PL/spaces. In the NPRM, a PL/space includes any tank 
or void space that is not used for the carriage of cargo, cargo 
residue, slops, dirty ballast or fuel oil. The protectively-located 
(PL) qualifier refers to the distribution of these spaces along the 
length of the vessel's hull as described in Appendix C to 33 CFR 157. 
One comment stated that a requirement for oil-free spaces has already 
been in effect under international rules and corresponding U.S. law 
that covers all vessels except for small tank vessels built since 1979; 
thus, the comment contends, the proposed requirement for PL/spaces 
would provide no additional improvement for nearly 30 percent of the 
world's single hull tanker fleet. Another comment contended that 
approximately 75 to 80 percent of the world fleet of crude carriers 
consists of tankers that are not fitted with SBT or CBT (pre-MARPOL 
tankers). The comment indicated that HBL with a safety factor of 1.0 or 
less, as used in Regulation 13F of MARPOL, is more economical and 
technically viable in the case of groundings than the originally 
proposed PL/spaces for these vessels.
    The Coast Guard focused its analysis for this SNPRM on determining 
what would happen if various PL/space requirements were applied to pre-
MARPOL vessels. In this assessment, it took into account whether the 
pre-MARPOL vessels are fitted with SBT or CBT. This SNPRM summarizes a 
revised regulatory assessment and solicits comments on the economic 
feasibility of requiring pre-MARPOL tank vessels to be fitted with PL/
spaces as compared to HBL.
    One comment stated that requiring PL/spaces on non-SBT tankships 
would lead to greater oil outflow in a grounding or collision. Another 
comment indicated that, based on recent calculations performed by the 
oil tanker industry on ships of different sizes, PL/spaces are capable 
of achieving an improvement in estimated oil outflow reduction, 
provided certain operating conditions are maintained. The Coast Guard 
agrees with both comments. When PL/spaces are used in such a way that 
they result in an increased freeboard, oil outflow in groundings could 
be expected to increase. However, the use of PL/spaces, in such a way 
that the operational freeboard is essentially unchanged (by ballasting 
the PL/spaces), will result in reduced oil outflow. As suggested by 
several comments, the Coast Guard modified its original assessment and 
considered the implementation of PL/spaces made in conjunction with 
HBL.
    One comment questioned whether ships that are fitted with SBTs in 
accordance with the provisions of Regulation 13E of Annex I of MARPOL 
73/78 would be accepted as meeting the provisions of Sec. 157.410(a) in 
the NPRM 

[[Page 67229]]
as it applies to the provision of side or bottom protection. The 
comment indicated that under a strict interpretation of the provisions 
of Sec. 157.410(a) of the NPRM, these vessels would not be in 
compliance with the proposed requirement. The intent of the NPRM 
proposal was that any vessel in compliance with Regulation 13E of Annex 
I of MARPOL 73/78 would also be in compliance with proposed 157.410(a) 
of the NPRM.
    One comment recommended that existing tank vessels be fitted with 
PL/spaces that protect 100 percent of the cargo tank length 
encompassing the full depth of each side. The comment suggested that 
the benefits would include a significantly reduced likelihood of oil 
outflow and greater use of surplus tonnage for pollution control. The 
comment stated that this would also accelerate a replacement program 
with double hull tankers as freight rates rise and estimated that 
existing tankers would have about the same operating cost as a new 
double hull tanker. The Coast Guard analyzed the retrofit of full 
double sides, which may be interpreted as fitting PL/spaces along the 
length of the vessel, and presents the results in the regulatory 
assessment in this SNPRM. Comments on the economic feasibility of this 
measure for existing tankships are solicited.
    One comment stated that both the preamble and proposed rule 
explicitly state that PL/spaces must either protect 30 percent of each 
side or 30 percent of the bottom of the vessel. The comment stated that 
more consideration should be given to all around protection, especially 
in cases where a vessel falls short of the NPRM's proposed PL/space 
requirement. The NPRM proposed PL/spaces in this proportion because 
doing so is consistent with existing international standards. The Coast 
Guard continued to consider this arrangement in the regulatory 
assessment of this SNPRM, and also considered more stringent variations 
of PL/space protection.
    One comment questioned whether a non-SBT tank vessel would be able 
to use its full cargo carrying capacity when trading outside the U.S. 
EEZ, and whether it would be accepted as meeting the proposed 
provisions of the NPRM if certain cargo tanks are simply left empty 
when trading in U.S. waters. The comment suggested that tanks that are 
normally used for carrying cargo during worldwide trading could be 
converted to void spaces for U.S. trading if adequate crude oil 
washing, full gas freeing, and blanking of pipelines leading to the 
tanks are accomplished. According to the comment, these operations 
could be witnessed by a classification society which could issue voyage 
certificates listing the tanks as void or SBT spaces. Blanks could be 
removed for resuming worldwide trading. For non-SBT tank vessels, 
simply leaving certain cargo tanks empty is one of the measures 
considered in the regulatory assessment in this SNPRM. As explained in 
the discussion on applicability, there are also certain circumstances 
in which a non-SBT tank vessel could be able to carry a full cargo load 
and engage in U.S. trade. While it is technologically feasible to take 
tanks out of service and reduce oil outflow, comments are solicited on 
the economic feasibility of this practice. Comments that propose 
enforcement mechanisms for this type of measure are also requested.
    One comment recommended that PL/spaces be required to protect 
against collisions by permanently filling them with ballast water. The 
Coast Guard has focused this phase of the rulemaking on reducing oil 
outflow after an accident. The regulatory assessment in this SNPRM 
evaluated PL/spaces in unballasted, HBL, and full-ballast states to 
determine the effects on oil outflow. While oil outflow is reduced when 
the vessel is completely ballasted down, the practice also causes cost 
increases due to possible port draft restrictions and may compound a 
vessel's grounding risk. Comments are solicited on this SNPRM's 
assessment of the different ballast states as they are combined with 
PL/spaces and the economic feasibility of such combinations.
    One comment stated that locating all PL/spaces forward could lead 
to unacceptable levels of trim or stress on some ships. On most tank 
vessel designs, the most technologically feasible place to install PL/
spaces is in the tankship's midbody; however, due to unique design 
considerations and the need to vary a vessel's draft or cargo carrying 
capacity based on the route traveled, the Coast Guard does not intend 
to require PL/spaces be located in a particular part of a ship.

4. Hydrostatic-Balanced Loading (HBL)

    The Coast Guard received several comments concerning the HBL option 
proposed in the NPRM. Two comments stated that the NPRM must require 
HBL as a minimum measure to effectively provide ``as substantial 
protection to the environment as is economically and technologically 
feasible.'' The Coast Guard recognizes HBL as an effective outflow 
reduction measure and included it in several forms for the regulatory 
assessment in this SNPRM. The assessment considers HBL as a 
technologically feasible measure for all existing tank vessels, even 
those presently meeting MARPOL 73/78 requirements. Comments on the 
economic feasibility of HBL requirements are solicited.
    The Coast Guard received one comment stating that requiring 
specific structural or operational measures like HBL, which force ships 
to change loading or operational practices from one trade to another, 
are unsafe because of an increase in the opportunity for human error. 
The concerns expressed in the comment are valid; however, the degree of 
human error that would be introduced into the vessel's procedures 
depends on several factors. An example could be a poorly worded loading 
procedure which complicates loading and increases accident risk to a 
tank vessel. The Operational Measures SNPRM (60 FR 55904; November 3, 
1995) attempts to mitigate the risk of human error that could be 
incurred by complex or confusing loading instructions. In contrast, the 
regulatory assessment in this SNPRM assumes that adequate operational 
measures are in place to mitigate this type of potential human error 
and only considers HBL for its potential oil outflow reduction 
capabilities. The Coast Guard solicits comments on quantifying the 
negative effect that HBL could cause due to frequent loading 
adjustments.
    Several comments expressed concern that the Coast Guard is imposing 
measures, such as HBL, on ships for which they were not designed and 
could be introducing hull bending stresses which exceed classification 
society standards. The Coast Guard studied the structural consequences 
of the measures proposed in the NPRM, in terms of hull bending moments, 
and concluded in the regulatory assessment for this SNPRM that, in 
general, excessively high global stress levels due to HBL should not be 
a problem. The technical feasibility of HBL is assumed based on hull 
bending stresses and sloshing loads. However, in some cases, 
unacceptably high local stresses may be created due to HBL. The Coast 
Guard solicits comments on specific cases in which local stresses would 
exceed maximums set by recognized classification societies.
    One comment stated that the formula for HBL presented in the NPRM 
was based on the draft guidelines for alternatives required under 
Regulation 13G of Annex I of MARPOL 73/78. The comment stated that use 
of the formula for HBL results in a high loss of cargo carrying 
capacity. Further, the comment states that the original formula was 
based on the height of an intermediate 

[[Page 67230]]
oil-tight deck on a tankship fitted with double sides, and may not be 
suitable for application to the definition of HBL in the context of 
existing tankers. The Coast Guard believes that the definition of 
``hydrostatic-balanced loading'' used in the NPRM should not be used. 
The IMO has finalized the guidelines concerning the implementation of 
HBL and modified the original definition. A factor of 1.0 replaced the 
original factor of 1.1. Consequently, the Coast Guard has used the 
definition of ``hydrostatic-balanced loading'' that is consistent with 
the guidelines developed by the IMO for the regulatory assessment in 
this SNPRM.
    Another comment suggested the use of HBL combined with PL/spaces as 
an alternative to applying HBL to all tanks. The Coast Guard presents 
several combinations of PL/space and HBL in the regulatory assessment 
for this SNPRM and solicits comments on them.
    One comment stated that 50 percent of all tankship collision damage 
is located above the waterline only; therefore, vessels should be 
required to load their side tanks only to the waterline level. The 
comment stated that if side tanks were filled using HBL procedures, and 
40 percent of the cargo was carried in the side tanks, all spills due 
to grounding would be reduced by 40 percent in the case of a grounding. 
The Coast Guard's probabilistic oil outflow analyses, as described in 
``Interim Guidelines for the Approval of Alternative Methods of Design 
and Construction of Oil Tankers Under Regulation 13F(5) of Annex I of 
MARPOL 73/78'' (IMO Marine Environmental Protection Committee's 
Resolution MEPC 37/14; December 23, 1994), of various measures, 
including HBL, is assessed in this SNPRM. Comments are solicited on the 
oil outflow reduction estimates achieved through HBL and the resulting 
costs associated with the reduction.
    One comment suggested that the Coast Guard place a notation in 33 
CFR 157, subpart G, that states that structural increases or 
modifications to the cargo area of a vessel may be necessary to apply 
HBL when a vessel receives cargo. Another comment stated that the high 
tensile steel used in some ships may not be suitable for the fatigue 
effects that could result from HBL. Other comments expressed concerns 
about using HBL because of the possibility of sloshing. The Coast Guard 
recognizes that when employing HBL, in some cases, it may be necessary 
to retrofit swash bulkheads or modify the vessel's structure to reduce 
the effects of fatigue. Prior to applying HBL, the owner or operator of 
a loading tankship would have to evaluate the effects of HBL on a 
tankship's cargo tanks and structure to determine if swash bulkheads or 
other modifications are necessary. The regulatory assessment in this 
SNPRM did not consider shipyard cost for the modifications needed to 
accommodate HBL. Comments are solicited on specific structural 
modifications and their anticipated added shipyard cost, if any, for 
HBL measures.
    One comment expressed concern that HBL may raise the risk of 
spillage due to an increase in total sailings resulting from reduced 
unit cargo loading. The oil outflow benefit analyses summarized in this 
SNPRM does not directly account for the effects of increased traffic 
due to reductions in cargo carrying capacity. Another comment stated 
that the benefits for all structural measures were overestimated 
because they did not reflect the added risk of an accident due to an 
increase in traffic volume. Historical accident data was used to 
estimate how much oil is spilled annually as a result of accidents. 
Estimated cargo shutout from measures similar to Regulation 13G of 
Annex I of MARPOL 73/78 reveal that the resultant increase in tank 
vessel traffic would be 12 percent. While this traffic increase could 
also increase accident risk, it represents approximately a 2 percent 
increase in the total U.S. port deep draft traffic volume. It is 
reasonable to assume that this small increase in traffic volume would 
be offset by the accident reduction measures implemented through the 
Coast Guard's proposed Operational Measures (60 FR 55904; November 3, 
1995.
    One comment inquired as to whether a load line would be necessary 
to enforce the use of HBL. The Coast Guard did not propose any changes 
to the International Convention on Load Lines, 1966, within the NPRM. 
If an HBL requirement is deemed economically feasible, it could be 
enforced using a number of methods. A tankship's master could be 
required to ensure that the ullage measurement reports or other tank 
gauging reports are recorded, kept in the Oil Record Book, and 
available for examination. Additionally, a visual inspection of draft 
marks should be sufficient to determine if a vessel has employed HBL 
loading procedures. The Coast Guard requests comments on the best way 
to determine whether a vessel is in compliance with its HBL loading 
plans.
    One comment stated that, for ultra large crude carriers (ULCCs) and 
very large crude carriers (VLCCs) operating at offshore terminals, the 
risk of grounding is limited; however, collision is the most likely 
accident to occur. The comment proposed that, for these vessels, a very 
safe method of operation would be to HBL only the side cargo tanks. The 
Coast Guard disagrees. For collisions, the use of PL/spaces is 
necessary to reduce oil outflow. HBL provides added oil outflow 
protection only in groundings. If a collision were to cause the side of 
a large tankship to be pierced and a cargo tank to be ruptured, the 
hydrostatic head, which acts in balance with the seawater, would be 
lost; thus, oil would flow out of the tank.

5. Alternative Measures

    The Coast Guard received several comments which encouraged it to 
adopt alternative systems to reduce oil outflow. These include 
emergency rescue and emergency transfer systems, resilient membranes, 
vacuum and underpressure systems, independent tanks, and intermediate 
oil tight decks. Alternative measures to prevent oil outflow are viable 
in some applications. For the regulatory assessment in this SNPRM, 
specific alternative measures were not researched. Cost assessments for 
alternative measures vary greatly. While there are indications that 
some of these measures could be less costly than PL/spaces or HBL, they 
were not included in the regulatory assessment because none of them 
meet the benchmark equivalency for alternative compliance found in 
``Guidelines For Approval of Alternative Structural or Operational 
Arrangements as Called for in Regulation 13G(7) of Annex I of MARPOL 
73/78,'' Resolution MEPC.64(36) adopted on November 4, 1994. These 
guidelines include oil outflow criteria that must be met for certain 
damage assumptions and general operational and safety points such as 
exposure of the tanker to stress, creation of fire or explosion 
hazards, stability considerations, and loading requirements. The Coast 
Guard solicits comments on these alternative measures. Specifically, 
the Coast Guard requests comments on whether they meet or exceed the 
IMO guidelines, whether they have been submitted and approved by IMO's 
Marine Environment Protection Committee (MEPC), and whether they are 
economically and technologically feasible.
    Four comments recommended that the Coast Guard include provisions 
for using alternative systems to provide flexibility in complying with 
the requirements for structural measures. One comment suggested that 
the Coast Guard adopt the recommendations of the National Research 
Council report entitled ``Tanker Spills: Prevention by Design,'' which 
encourages the adoption 

[[Page 67231]]
of multifaceted measures such as a combination of PL/spaces and HBL. 
Another comment stated that the regulation should provide an owner or 
operator with a choice of equivalent measures so that the owner or 
operator may select the best arrangement for each ship in his or her 
fleet. The third comment stated that the NPRM should describe the 
results that a system should achieve, or quantitative measures of 
effectiveness, instead of mandating a single structure measure. The 
fourth comment stated that the proposed alternative oil outflow 
prevention measure provision grants total discretion to the Coast Guard 
without providing any criteria for the alternative measure, such as 
ensuring that it is at least as environmentally protective as the 
specified measure for the type and size of tankship under review.
    The regulatory assessment in this SNPRM analyzes multifaceted 
measures such as combining PL/spaces with HBL and SBT with HBL. The 
Coast Guard still considers alternatives to, or choices between 
measures viable and solicits comments on the measures that should be 
deemed equivalent and their economic feasibility. Additionally, the 
Coast Guard is reviewing the performance criteria in the IMO 
alternative guidelines and encourages comment on them. The Coast Guard 
views the following safety requirements as key in this type of system 
equivalency evaluation: the human interface required by the operator to 
control the system: the operational complexity and increased burden 
placed on the operating crew as a result of working with an inherently 
complex system that would increase the probability of a spill due to 
human error; the added potential for fire and explosion, including the 
performance of the inert gas and vapor recovery systems (if installed) 
once the alternative measure has been installed; the adverse impact on 
intact and damage stability; the adverse impact the installed 
alternative measure has on structural strength, including sloshing 
loads and the need to fit large structural fixtures in existing tank 
structures; and the overall consideration of the operational history of 
the alternative and its components.
    The Coast Guard received several comments which suggested that 
response systems be fitted as alternative measures to the ones proposed 
in the NPRM. These systems have already been evaluated in ``Discharge 
Removal Equipment for Vessels Carrying Oil'' (58 FR 67988; December 22, 
1993). The alternatives considered in this SNPRM are passive pollution 
prevention systems, not spill response systems which require human or 
machine intervention following a collision or grounding. The Coast 
Guard has implemented several response oriented requirements including 
Vessel Response Plans (58 FR 7424; February 5, 1993) and the discharge 
removal requirements and believes that the structural measures intended 
by section 4115(b) should be addressed through vessel design or passive 
protection.

6. Phase-in Alternatives and Economic Incentives

    The Coast Guard received several comments regarding the 3-year 
phase-in provision that was proposed in the NPRM. One comment stated 
that the 3-year phase-in period would result in the acceleration of 
shipyard schedules, higher costs, and tonnage restraints. The comment 
contended that the 3-year phase-in schedule would be economically 
overburdensome on the tankship owner because it would require many 
vessels to be removed from normal service to perform the modifications 
required by the proposed rulemaking. The assessment for this SNPRM 
reflects cost estimates associated with removing the vessel from 
service for an extended shipyard period. However, no shipyard 
scheduling constraints were considered. Comments on this phase-in cost 
and specific shipyard availability constraints are solicited.
    Many comments expressed concern that the original proposed 3-year 
phase-in period was too generous. One comment expressed concern that no 
action would be taken by industry and the Coast Guard to reduce oil 
spills and pollution during this period. Other comments stated that the 
proposed phase-in period penalizes operators who have already invested 
in modern double hull vessels because it reduces the cost of single 
hull vessel operation. One comment contended that a vessel should be 
required to retrofit during the regularly scheduled drydocking period 
which immediately follows the issuance of the final rule.
    The Coast Guard has taken action to implement interim measures for 
existing tank vessels by issuing regulations for emergency lightering 
equipment and advanced notice of arrival requirements (59 FR 40186; 
August 5, 1994) and proposing regulations for operational measures (60 
FR 55904; November 3, 1994; STD). These two efforts will reduce the 
risk of oil discharges from existing tank vessels that do not have 
double hulls, regardless of the outcome of the feasibility assessment 
for structural measures. Since a tank vessel on an ocean or 
international route is required by its flag administration or 
classification society to drydock twice every 5 years, the 3-year 
phase-in schedule proposed in the NPRM reflected an implementation 
period comparable to one for the regularly scheduled drydocking period 
immediately following the issuance of the final rule. The Coast Guard 
requests comments on the economic feasibility of the 3-year phase-in 
period versus a 5-year period or a 1-year period. Comments are also 
requested on an appropriate phase-in period for those measures that do 
not require drydocking. The regulatory assessment for this SNPRM 
estimates that a 60,000 dwt pre-MARPOL vessel's annualized value and 
cost is $273,000 less for its estimated 5 remaining years than its 
counterpart double hull vessel which can operate indefinitely.
    One comment stated that the 3-year phase-in schedule for Regulation 
13G is flawed. The comment contended that newer vessels should be 
allowed a longer time period to comply with the proposed structural 
requirements. The comment stated that for these vessels, the risk to 
the environment should be commensurately lower, provided the vessels 
have been properly maintained. Oil outflow can be reduced even on newer 
single hull vessels meeting MARPOL 73 or MARPOL 78 requirements as 
shown by the regulatory assessment in this SNPRM. While it is true that 
the oil outflow reduction benefits presented in this SNPRM for vessels 
fitted with SBT or CBT are less than for pre-MARPOL tankers, they 
exist. Comments are requested on possible phase-in periods for vessels 
fitted with SBT or CBT that, in light of the benefit analysis presented 
in this SNPRM, would be economically feasible.
    One comment contended that the phase-in period would place U.S. 
vessels at a significant disadvantage in relation to foreign vessels. 
The comment stated that U.S. vessels were required to retrofit SBTs in 
accordance with the Port and Tanker Safety Act of 1978, and would 
already be in compliance with the proposed SBT requirements of the 
NPRM. The comment indicated that the proposed phase-in period would 
provide foreign vessels with additional time to retrofit SBTs. Section 
4115(b) of OPA 90 requires the Coast Guard to issue this rulemaking so 
that it is economically feasible for both U.S. and foreign tank 
vessels. The Coast Guard solicits comments on the economic feasibility 
of a phase-in period for foreign tank vessels that is shorter than 3 
years.

[[Page 67232]]

    One comment expressed concern that the NPRM does not provide 
incentives to tanker owners for pursuing and adopting new technologies. 
The comment stated that shipowners' budgets generally do not include 
monies for pure research, and without clear incentives to embrace new 
technologies, there is a small chance that vessel owners will use them. 
The comment urged the Coast Guard to amend the proposed rule to include 
specific incentives to encourage the industry to develop and adopt such 
technologies. Another comment stated that many vessel owners already 
are operating with double hull vessels and/or SBTs. The comment stated 
that companies using these vessels should receive pollution credits. 
Additionally, the comment contended that pollution credits should be 
issued to owners who build new tankers or significantly upgrade 
existing tankers. The comment stated that these credits could be traded 
for debits to continue using existing tankers with little modification. 
Similarly, another comment stated that owners who build new tankers 
should receive tax credits. Issuing monetary incentives for company 
research, granting pollution credits to a company to support uneven 
implementation of oil outflow reduction measures among their fleet, or 
granting tax credits for companies that comply with requirements are 
beyond the authority and scope of this rulemaking.

7. Regulatory Assessment--General Comments

    Several comments questioned the assumptions made in the Regulatory 
Impact Analysis (RIA) performed by Mercer Management Consulting, Inc. 
for the NPRM. One comment stated that the RIA for the NPRM does not 
take into account the barrels of oil saved from spillage by other OPA 
90 rules. The Coast Guard has developed a wide range of regulations 
mandated by OPA 90 to implement provisions pertaining to spill 
prevention, mitigation, cleanup, and liability. To facilitate the 
rulemaking process, the Coast Guard has divided rulemaking requirements 
into relatively small, individual rulemaking projects and has prepared 
regulatory, environmental, regulatory flexibility, and paperwork 
analyses for each project. To expedite effective rulemaking, the Coast 
Guard analyzed each project as a stand alone rulemaking. Recognizing 
that there are interactive effects of the suite of OPA 90-derived 
regulations, the Coast Guard has begun a programmatic regulatory 
assessment for the OPA 90 rulemaking projects.
    One comment stated that the RIA for the NPRM assumed that all the 
work for structural modifications can be done during a normal 
drydocking period. The comment contended that this is not correct 
because the cleaning for hot work entails a much higher degree of 
cleaning and more lost service time. The Coast Guard recognizes that 
additional cleaning and gas freeing would be necessary to perform 
structural modifications and has included the cost of an extended 
drydock in the regulatory assessment for this SNPRM.
    One comment disagreed with the assumption that some existing ships 
will be replaced rather than converted. The results of the assessment 
conducted for this SNPRM indicate that no vessels are expected to be 
replaced early as a result of the measures researched.
    One comment disputed the size of the international vessel 
population assumed in the RIA. The comment stated that the 
international fleet affected by the NPRM would range from 1,500 to 
2,000 vessels, not the 300 or 400 assumed in the RIA. The regulatory 
assessment in this SNPRM revises the NPRM vessel population numbers, 
based on the number of tankships applying for a Certificate of 
Financial Responsibility, excluding certain tankships such as double 
hull tankships. The RIA for this SNPRM estimates that there are a total 
of 1,085 existing tankships likely to be affected by this SNPRM.
    Several comments stated that the assumption made in the NPRM RIA 
that newer vessels that comply with MARPOL Regulation 13G will be 
allocated to U.S. trades in the same proportion as non-complying 
vessels is inaccurate. The comments went on to state that the number of 
newer vessels operating in the U.S. trade is higher because of the Port 
and Tanker Safety Act of 1978. The comments contend that the existing 
fleet of vessels meeting either MARPOL PL/SBT standards or having 
double hulls is already sufficient to carry all U.S. cargo. One comment 
stated that the NPRM proposals would have a devastating impact on the 
product tanker market. Another comment stated that there was no 
consideration in the NPRM for a company's ability to secure adequate 
capital to replace existing vessels with double hull vessels. The 
vessel population and U.S. coastal trade population affected by this 
rulemaking were reconsidered for the regulatory assessment in this 
SNPRM. Build dates were also researched and correlated with trade 
estimates. Neither the ability of the existing fleet of double hull or 
MARPOL PL/SBT tankers to meet U.S. import needs nor a company's ability 
to secure funding is influential for this rulemaking. Comments are 
solicited on the specific economic feasibility of these measures on 
product tankers.

8. Regulatory Assessment--Costs

    Comments on the Existing Vessels NPRM and from the public meeting 
expressed concern about the accuracy of the costs and benefits stated 
in the Regulatory Impact Assessment (RIA). The comments indicated that 
the costs, in some cases, were not fully developed. Comments included 
concern over using only two ship sizes to calculate the cost, the 
assumption that there will be minimal cargo capacity loss across the 
fleet, the gross underestimate of compliance costs for tank barges, the 
potential adverse costs to vessels which carry non-persistent oils, and 
the 3-year phase-in costs as compared to following the MARPOL 73/78, 
Regulation 13G schedule. After reviewing the comments, the Coast Guard 
redirected its approach, expanded the vessel models used in the cost 
analysis, and revised its assessment to reflect these comments.
    The Coast Guard received several comments regarding the economic 
feasibility of the regulations. One comment stated that Congress made 
it clear that all regulations should be economically feasible. The 
comment stated that requiring industry to spend $573 million over a 3-
year period for unknown environmental benefits would be pressing the 
intent of Congress. Another comment stressed that a requirement that a 
measure be economically feasible does not mean that it must be the 
least expensive. Pollution prevention benefits are measured as a ratio 
of cost per barrel of oil not spilled. The most desirable measures 
would be those that prevent the spillage of the greatest number of 
barrels of oil at the lowest cost. The Coast Guard recognizes that a 
measure can be costly; however, if it provides a significantly improved 
degree of protection in terms of barrels of oil not spilled, it may 
still be cost effective. The Coast Guard solicits comments on the cost 
effectiveness of the measures presented in this SNPRM.
    One comment noted that when retrofitting PL/spaces on vessels in 
the 80,000 dwt to 300,000 dwt range, there is a loss of approximately 
15 percent of the cargo volume. The comment further stated that for an 
80,000 dwt vessel without SBT, there is a loss of approximately 29 
percent of the cargo volume. A tank vessel owner commented that if the 
company's VLCCs were required to be converted to PL/SBT or PL/spaces, 
the company 

[[Page 67233]]
would lose more than $1 million of revenue per year, and that a medium 
size crude carrier could have a $500,000 reduction in revenue per year. 
The comment stated that this would change the economic formulas for the 
company's fleet and would force the company to lay up or sell half of 
its fleet because it would no longer be economically feasible to 
operate the vessels. Another comment stated that the capital costs and 
lost cargo capacity costs for dedicated PL/spaces or HBL would be much 
higher for most ships than the amount estimated in the NPRM RIA because 
many existing vessels would be required to have their cargo 
compartments structurally refit to accommodate a 30 percent PL/Space 
requirement of the NPRM. The Coast Guard recognizes this argument and 
includes a revised cargo shutout estimate in this SNPRM assessment. 
Comments on the regulatory assessment for this SNPRM and the economic 
feasibility of the measures within it are solicited.
    The Coast Guard received several comments on the economics of 
requiring HBL for existing tank vessels. One comment stated that 
requiring HBL would be economically burdensome. Four comments 
questioned the NPRM's statement that HBL was not economically feasible. 
Three comments stated that HBL could be implemented without costly 
structural modifications. One comment added that the most costly 
structural modification would be the installation of swash bulkheads; 
however, the comment stated that it has been demonstrated that swash 
bulkheads are not necessary in most cases. Two of the comments stated 
that HBL is economically feasible because the reduced cargo carrying 
capacity requires more trips to be made. The comment contended that as 
a result of the need to make more voyages to haul a given amount of 
cargo, more revenue would be generated and the market demand for 
tankers would increase. Cargo shutout and structural refit needs for 
HBL implementation were revised and are presented in the regulatory 
assessment in this SNPRM. Comments on the economic and technological 
feasibility of the different HBL measures discussed within this SNPRM 
are solicited.
    One comment stated that the NPRM RIA's estimate of $4 billion for 
the present value of total compliance for HBL over 20 years could 
readily be financed by the major oil companies out of annual profits. 
The comment stated that, traditionally, the oil industry has passed on 
a doubling or even a tripling of the price of crude oil, as well as the 
price of its transportation, and could do so for this rulemaking. 
Section 4115(b) tasked the Coast guard with implementing interim 
structural and operational measures that were technologically and 
economically feasible. The definitions of these two qualifiers were not 
developed within OPA 90 or its associated documents. The Coast Guard 
has researched structural measures deemed technologically feasible and 
is publishing this SNPRM assessment in order to receive comments on 
their economic feasibility. After the comment period for this SNPRM has 
closed, an assessment of the economic feasibility for structural 
measures will be done and further action will be taken accordingly. 
Specific comments justifying why a measure is either economically 
infeasible or how it could be feasible are solicited.

9. Regulatory Assessment--Benefits

    The Coast Guard received several comments questioning the accuracy 
of the benefit estimates presented in the NPRM. Many comments stated 
that, in general, the benefits specified in the NPRM RIA were 
overstated. Four comments stated that the effectiveness estimates were 
not accurate. One comment specifically indicated that projected 
effectiveness for PL/spaces, the Underpressure System (UPS),the 
Emergency Rapid Transfer System (ERTS), and the Emergency Rescue System 
(ERS) were extremely optimistic. Other comments stated that the 
estimated effectiveness of SBT was correct as presented in the tables 
but underestimated within the NPRM text. Another comment stated that 
the benefits associated with PL/spaces were significantly understated 
in the NPRM because the costs for cleanup, third-party claims, and 
damage to natural resources were not included.
    The Coast Guard reviewed the NPRM RIA and has revised the benefit 
assessment for certain measures presented in the NPRM. It has also 
added benefit analysis on other structural measures and presents a 
summary in this SNPRM. The costs associated with third-party cleanup 
and damage to natural resources were not considered because the Coast 
Guard reviews benefits as the amount of oil not spilled rather than a 
dollar value. Details on the extensive work the National Oceanic and 
Atmospheric Administration has done on this subject can be found in its 
NPRM entitled, ``Natural Resources Damage Assessments; Proposed Rule'' 
published on August 3, 1995 (60 FR 39804). Comments are solicited on 
the revised benefits assessment for this SNPRM.
    Other comments argued that PL/spaces would not reduce oil outflow 
by 30 percent in collisions as assumed in the RIA. The comment 
contended that the reduction in oil outflow would be considerably less 
because collisions do not occur uniformly along the side-shell of a 
vessel. At the public meeting held on January 20, 1994, a speaker 
presented his company's conclusions about oil outflow from PL/spaces 
based on probabilistic investigations and analyses, as described in 
``Interim Guidelines for the Approval of Alternative Methods of Design 
and Construction of Oil Tankers Under Regulation 13F(5) of Annex I of 
MARPOL 73/78'' (IMO Marine Environmental Protection Committee's 
Resolution MEPC 37/14; December 23, 1994). The results indicated that 
PL/spaces, when retrofitted on a non-SBT tankship, would result in a 
higher oil outflow when compared to the outflow of the same tankship 
that has not been fitted with PL/spaces. The speaker indicated that 
retrofitting PL/spaces on a non-SBT tankship would create a higher 
freeboard, which would result in greater oil outflow if the vessel's 
hull were to become damaged. The Coast Guard agrees that the 
effectiveness of PL/spaces as assumed in the NPRM RIA may have been 
overstated. The Coast Guard has conducted further studies to obtain 
more accurate estimates of the effectiveness of PL/spaces. A summary of 
the revised benefit estimates for PL/spaces is contained in the 
regulatory assessment for this SNPRM.
    One comment stated that an IMO sponsored model of oil outflow 
indicated that, for any unprotected tank configuration, it is not 
possible to attain 100 percent effectiveness in a grounding scenario. 
The comment contended that within the structural limitations of most 
existing ships, the UPS system will be substantially less than 100 
percent effective and that the NPRM overestimated its effectiveness. 
The Coast Guard has revised its estimates for the measures presented in 
this SNPRM. The UPS was not analyzed further; however, the Coast Guard 
is willing to analyze alternative oil outflow prevention measures if 
they meet international alternative standards, including safety 
assessments.
    One comment stated that the RIA for the NPRM did not analyze 
historical incidents. Two comments stated that, without accurate 
estimates of the number of oil spills and the volume of oil spilled, it 
is impossible to accurately quantify environmental benefits and costs. 
The Coast Guard reviewed the 

[[Page 67234]]
historical data used for the NPRM RIA and revised it for the regulatory 
assessment for this SNPRM. Comments on the revised data are solicited.

Assessment

    The methodology for completing the regulatory assessment for this 
SNPRM employed a two phase process. First, a screening analysis was 
conducted to evaluate the effectiveness, efficiency, and technological 
feasibility of certain structural measures on a baseline of analytical 
tank vessel models. The screening analysis included an estimation of 
the onetime expense associated with refitting the vessel at a shipyard, 
called a rough order-of-magnitude (ROM) estimate; the cost of losing 
cargo carrying capacity due to implementing a measure that would not 
allow cargo carriage in certain tanks or above certain levels, called 
cargo shutout; and other costs such as loss of revenue during the 
shipyard period, called opportunity costs. It also included an estimate 
of the potential reduction in accidental oil outflow and operational 
oil outflow for certain measures. For this assessment, operational oil 
outflow is the oil prevented from being discharged by pre-MARPOL 
vessels if, instead of being allowed to discharge dirty ballast water, 
they are fitted with SBT or CBT and are not permitted to discharge 
dirty ballast water. Vessels are not allowed to discharge dirty ballast 
water in U.S. navigable waters; however, in accordance with 
international conventions they may do so in certain areas outside of 
these waters.
    The second phase of this regulatory assessment consists of a 
detailed analysis conducted to estimate the costs and benefits of those 
measures which were deemed not only technologically feasible, but also 
appeared to be the most effective at reducing oil outflow on the 
affected existing single hull tank vessel fleet. The detailed analysis 
included a breakdown in costs, benefits, and a cost-benefit analysis 
over the 19-year period this rule is expected to be in effect.

Screening Analysis

1. General

    There were five steps to the screening analysis phase of this 
assessment. First, baseline analytical tank vessel models were 
developed that represented the existing single hull tank vessel fleet. 
Second, selected measures were imposed on four of these analytical tank 
vessel models and the resultant oil outflow reductions were calculated. 
Third, cargo shutout, operating costs, and onetime ROM refit costs were 
developed. Then cost-effectiveness ratios were developed and the 
results of each measure were correlated with selected baseline 
analytical tank vessel models. Finally, the ratios were used to rank 
the measures and identify those combinations of measures and vessel 
categories that resulted in the lowest cost per barrel of oil not 
spilled. Table 1 summarizes the combinations of vessels and measures 
researched for this screening analysis.

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    To develop the baseline fleet and its characteristics, several 
designs were considered. It was assumed that the pre-MARPOL tank vessel 
had crude oil washing capabilities but no other required MARPOL 
features. MARPOL 73 tank vessels were assumed to be fitted with SBT, 
and MARPOL 78 tank vessels were assumed to have PL/SBT. As part of the 
process of ensuring that the design of the baseline models was 
appropriate, the baseline tank vessels were investigated for intact 
stability, longitudinal bending stresses, shear stresses, and sloshing 
frequencies. It was also assumed that the vessels were constructed to 
comply with the prevailing American Bureau of Shipping rules when the 
vessels were built; specifically, the still water bending moment, 
bending stress, and shear stress values. The resulting average shear 
stresses and bending moments were satisfactory. The fill depth level to 
tank depth level ratio for all loading conditions of the vessels 
investigated did not fall below 75-80 percent, 

[[Page 67235]]
meaning that the sloshing frequencies were not near the roll or pitch 
periods of the vessels. Resonance can occur in longitudinal modes for 
liquid level ratios in the range of 30-45 percent, which are well below 
normal oil cargo levels and well below levels resulting from the 
application of HBL in this assessment. Another important consideration 
in developing the analytical tank vessel models was to ensure that they 
were, in general, reasonable representations of tank vessels serving 
the U.S. An analysis was conducted to determine the representativeness 
of the model tank vessels with respect to the existing fleet. The 
70,000 dwt and 264,000 dwt pre-MARPOL, MARPOL 73 and MARPOL 78 models, 
and the 40,000 dwt pre-MARPOL model were compared to data on existing 
tank vessels obtained from ``The Tanker Register,'' Clarkson Research 
Studies, 1994. Information on the number of center and wing tanks, and 
on the cargo and ballast capacity, for existing vessels was analyzed. 
This analysis confirmed that the key vessel characteristics associated 
with the model vessels were within the distributions found on existing 
tank vessels.
    The four deadweight categories (two tankship categories and two 
tank barge categories) selected for this screening represent a 
significant portion of tank vessels that are affected by section 
4115(b) of OPA 90. Due to the nature of the measures and baseline tank 
vessels examined, certain of the baseline vessel and pollution 
prevention combinations were not analyzed because the tank vessel model 
already substantially meets the specification of the measure. For 
example, the MARPOL 78 baseline model tank vessel already substantially 
meets (and exceeds) PL/Space specifications. Additionally, because 
analyses of the pre-MARPOL baseline tank vessels and tank barges 
indicated that they generally operate at close to an HBL condition, the 
MARPOL 73 tank vessel models were selected to analyze the benefits of 
the measures employing HBL.
    The measures researched in this screening have the following 
parameters:
    Measure 1.a. reflects a measure that includes PL/Spaces covering 30 
percent of the projected area of the sides or the projected area of the 
bottom of the vessels. For this measure, additional bulkheads were 
assumed to be installed to provide the minimum width of the PL/Spaces.
    Measure 1.b. reflects a measure for PL/Spaces covering 30 percent 
of the projected area of the sides or the projected area of the bottom 
of the vessels; however, the vessels were also required to include 
water ballast in the wing tanks selected as PL/Spaces to provide the 
maximum feasible draft in the load condition. It was assumed additional 
ballast piping and pumping capability would be required.
    Measure 1.c. reflects a measure for PL/CBT or PL/Spaces covering 30 
percent of the projected area of the sides or the projected area of the 
bottom of the vessels; however, the vessels were also configured to 
carry ballast to the maximum extent possible in lieu of other spaces, 
with no new pumps or piping being refit. Exiting cargo wing tanks were 
assumed to remain as empty as possible with trim and longitudinal 
bending moment considerations.
    Measure 2.a. reflects a measure for HBL which is incorporated in 
all cargo tanks.
    Measure 2.b. reflects a measure for HBL which is incorporated only 
to the extent necessary for compliance with Regulation 13G of Annex I 
of MARPOL 73/78.
    Measure 3 reflects a measure for a combination of HBL and PL/Spaces 
covering 30 percent of the projected area of the sides or the projected 
area of the bottom of the vessels; however, they were also configured 
to carry ballast to the maximum extent possible in lieu of other 
spaces, with no new pumps or piping being refit.
    Measure 4 reflects a measure to refit a double bottom that has the 
minimum required depth of B/15 or 2 meters (6.56 feet) installed to 
cover the full length of the cargo tanks.
    Measure 5 reflects a measure to refit double sides that have a 
minimum width of 2 meters to cover the full length of the cargo tanks.
    Measure 6 reflects a measure to fit PL/Spaces covering 30 percent 
of the projected area of the sides or the projected area of the bottom 
of the vessels on tank barges. For this measure, additional bulkheads 
were assumed to be installed to provide the minimum width of the PL/
Spaces.
    Measure 7 reflects a measure to have PL/Spaces covering 30 percent 
of the projected of the projected area of the sides or the projected 
area of the bottom of the tank barge; however, the barges were also 
configured to carry ballast to the maximum extent possible in lieu of 
other spaces, with no new pumps or piping being refit. Existing cargo 
wing tanks were assumed to remain as empty as possible with trim and 
longitudinal bending moment considerations.

2. Costs

    Table 2 summarizes the estimates of the cargo shutout, the onetime 
refit ROM costs, and the operating and voyage costs as a result of 
implementing the measure on the tank vessel models. Cargo shutout was 
calculated as the difference between the cargo capacity (98 percent) of 
the unmodified vessel and the cargo capacity after the measure was 
applied. It is expressed in both the volumetric difference and as a 
percentage of the cargo capacity of the baseline model.

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[[Page 67237]]


3. Benefits

    Benefits were developed by estimating the total annual expected 
accidental and operational oil outflow avoided as a result of each 
measure. The estimate the annual reduction in the number of barrels 
spilled as a result of the measures, the total annual accidental and 
operational oil outflow was estimated both before and after the measure 
was implemented. The accidental oil outflow estimates for grounding and 
collisions were annualized using historical spill data provided in the 
regulatory assessment for the NPRM and verified through an independent 
calculation using worldwide casualty data. Lloyd's Maritime Information 
Services Casualty Information System was analyzed for a sample of tank 
vessels drawn from Clarkson's Tanker Register to estimate the per-
vessel annual probability of having grounding and collisions. The 
analysis resulted in annual grounding and collision probabilities of 
0.026 and 0.017, respectively, for an existing tank vessel moving oil 
through U.S. waters in 1990.
    The accidental oil outflow estimates are also presented using both 
Regulation 13F and 13G calculations. The Regulation 13F calculations 
are based on a probabilistic methodology, described in ``Interim 
Guidelines for the Approval of Alternative Methods of Design and 
Construction of Oil Tankers Under Regulation 13F(5) of Annex I of 
MARPOL 73/78'' (IMO Marine Environmental Protection Committee's 
Resolution MEPC 37/14; December 23, 1994), which uses currently 
available accident damage statistics for tank vessels. To obtain the 
total accidental oil outflow, the average bottom outflow estimate was 
combined with the average collision outflow estimate by using a weight 
of 0.6 for grounding damage and a weight of 0.4 for collision damage. 
The Regulation 13G calculations are more deterministic, as described in 
MEPC Resolution 64(36) entitled, ``Guidelines for Approval of 
Alternative Structural or Operational Arrangements as Called for in 
Regulation 13G(7) of Annex I of MARPOL 73/78.'' Both calculations take 
into account hydrostatic pressure from the cargo oil and the outside 
sea water in the case of bottom damage. They also allow for 50 percent 
capture by double bottom tanks in cases where bottom damage extends 
through these tanks. To estimate the reduction in the expected annual 
oil outflow as a result of the measures, the annual oil outflow for the 
vessel after the measure was implemented was subtracted from the total 
oil outflow of the baseline tank vessel. Table 3 summarizes the 
estimated oil outflows after implementation of each measure.

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4. Cost-benefits

    To estimate the cost-effectiveness ratio for each combination of 
tank vessel model and measure, an annualized cost of compliance 
calculation was divided by the annualized total expected oil outflow 
avoided. Because operating and voyage costs differ significantly 
depending on whether the tank vessel is deployed in the international 
or U.S. coastal fleet, cost-effectiveness ratios were developed 
separately for the tank vessel models by these fleet categories. These 
ratios were also developed assuming the tank vessels have another 5 
years of remaining service life; however, the ranking of the results of 
the analysis do not change if a longer remaining service life is 
assumed. Table 4 summarizes the cost-effectiveness ratios attained in 
this screening analysis.

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Detailed Analysis

1. General.

    The results from the screening analysis cost-effectiveness phase 
indicated that for tank vessels in both the international and U.S. 
coastal fleets, the appropriate measures to analyze in depth included: 
(1) pre-MARPOL vessels with a combination of PL/CBT and HBL (measure 
3), and (2) for both MARPOL 73 vessels and MARPOL 78 vessels, an HBL 
measure on certain tanks (measure 2.b.). Although MARPOL 78 model tank 
vessels were not analyzed in the screening analysis, these vessels are 
similar to MARPOL 73 vessels in terms of oil outflow and related 
characteristics.
    The screening analysis measure 3, pre-MARPOL vessels with a 
combination of PL/CBT and HBL, was chosen over measures 1.b and 1.c 
because of its overall cost-effectiveness and accidental oil outflow 
mitigation characteristics. In general, implementation of measure 1.c. 
results in higher oil outflow when bottom damage occurs. The cost 
effectiveness of measure 1.b and measure 3 may be considered to be 
roughly equivalent, however, the accidental oil outflow cost 
effectiveness for pre-MARPOL 264,000 dwt tankers in 34 percent greater 
for both international and U.S. coastal tank vessels.
    To analyze the measures further, four steps were taken. First, the 
affected vessel population was determined and categorized by the three 
vessel categories. Second, a cost analysis was conducted including per 
vessel and total cost estimates. Then a benefit estimate was developed 
based on an expanded range of analytical tank vessel models developed 
with the same assumptions and criteria used for the screening analysis. 
Finally, a cost-benefit analysis was developed along with an 
effectiveness analysis.
    Data on the world tanker fleet was obtained from several sources, 
including Lloyd's Maritime Information Services, Clarkson Research 
Studies Limited, Coast Guard Marine Safety Management System, and 
industry. Vessels that are expected to comply with this rulemaking were 
identified based on whether the vessel had complied with current 
financial responsibility regulations as implemented under OPA 90 and 
the Comprehensive Environmental Response, Compensation, and Liability 
Act (CERCLA), as amended. All oil tankers in the world fleet that 
complied with the Coast Guard's financial responsibility final 
rulemaking (59 FR 34210) requirements to obtain a Certificate of 
Financial Responsibility (COFR) as of April 30, 1995, were used as a 
baseline tank vessel population for this assessment. A check of the 
COFR database was completed to update the tank vessel numbers and make 
them reflect COFRs issued as of August 30, 1995. An alternative 
approach was also developed to assess the accuracy of using COFRs to 
define the baseline fleet. Port call data from 1991 to 1993 was 
obtained for U.S. ports, including the Louisiana Offshore Oil Port 
(LOOP). This data was matched with the worldwide tanker database to 
estimate the number of annual port calls to and from the U.S. for tank 
vessels in the international fleet.
    Once the affected fleet was identified, vessels were categorized 
into one of the three vessel categories: pre-MARPOL, MARPOL 73, and 
MARPOL 78. Because the measures vary depending on vessel category, 
total fleet compliance costs and the number of barrels of spilled oil 
avoided as a result of the measure vary significantly depending on the 
distribution of the existing tank vessel fleet by vessel category. This 
categorization was based primarily on the vessel's delivery date, 
deadweight tonnage, and type (product or crude carrier). Vessels 
permitted to engage in U.S. coastal trade are commonly referred to as 
Jones Act vessels and are required to be built and flagged in the 
United States. These vessels must, in general, be serviced and repaired 
in the United States, and were designated to be in the U.S. coastal 
trade. Because not all U.S. flag vessels qualify as Jones Act tankers, 
U.S. flag tankers that operate on routes to international ports were 
included in the international fleet. Analysis of port call data 
confirmed that these vessels are engaged in international trade.

2. Costs

    The incremental costs for existing single hull tank vessels to 
comply with the proposed measures were estimated for eight 
international tank vessel models and six U.S. coast tank vessel models, 
and for three vessel categories: pre-MARPOL. MARPOL 73, and MARPOL 78. 
To estimate total costs, the baseline fleet of existing single hull 
tank vessels was projected from 1996 to 2015 based on the double hull 
rulemaking phaseout schedule. Once the regulated baseline fleet are 
defined and projected from 1996 to 2015, total costs were estimated by 
multiplying the number of vessels projected to be in operation in a 
given year by the appropriate per-vessel compliance cost estimates. 
Table 5 summarizes the estimated fleet categorization and the phaseout 
of tank vessels affected by this rulemaking.

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    General assumptions for this phase of the regulatory assessment 
included: (1) a vessel owner or operator will begin to comply with this 
rulemaking starting in 1999 and the entire fleet of tank vessels will 
be in compliance with the proposed measures by 2002; (2) one-third of 
the fleet would be in compliance with the rulemaking each year between 
1999 and 2001 until the entire fleet is in full compliance by the 
beginning of 2002; (3) pre-MARPOL tank vessels would require physical 
modifications to implement PL/CBT and the number of days the tank 
vessel would be laid up was estimated by deadweight tonnage; (4) MARPOL 
73 and 78 vessels would have no disruption in service since HBL would 
not require steel work or other physical modifications; (5) all tank 
vessels were assumed to be in full compliance with all applicable 
existing U.S. laws; and (6) prior compliance with HBL on MARPOL 73 or 
MARPOL 78 vessels was assumed to be zero.
    The incremental compliance costs as a result of the measures were 
estimated by deadweight and vessel category for the international and 
U.S. coastal fleets. The categories for compliance costs were estimated 
as: (1) cost of operating or voyage inefficiency due to cargo shutout 
as a result of implementing the proposed measures; (2) cost to retrofit 
the existing tank vessel; and (3) cost associated with the time the 
vessel is expected to be out of service (i.e., opportunity costs) while 
the vessel is being retrofitted with the measure.
    For each modeled tank vessel (pre-MARPOL, MARPOL 73, and MARPOL 
78), the percentage of cargo shutout was estimated by dividing the 
change in cargo capacity before and after the proposed measure was 
implemented by the cargo capacity of the baseline vessel. Although the 
cargo shutout percentage varies depending on the characteristics of the 
tank vessel, an averaged effectiveness ratio was used for the several 
tank vessels that were modeled. Table 6 summarizes the cargo shutout 
estimates for the affected vessels.

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    Retrofit cost estimates were developed by vessel category to 
conform to the structure of the proposed measures. The measure 
researched for pre-MARPOL tankers required implementation of PL/CBT 
using existing cargo wing tanks. These vessels would incur costs 
associated with converting the cargo tanks to ballast tanks and 
modifying the cargo piping and related systems. Cost differences were 
included in this analysis for the disparity between foreign and U.S. 
shipyards. MARPOL 73 and MARPOL 78 vessels, however, would not incur a 
onetime cost because the measure researched for these vessels required 
implementation of HBL. A structural analysis of the analytical tank 
vessel models determined that, in general, HBL could be implemented on 

[[Page 67245]]
these vessels without having to reinforce bulkheads and related 
structures.
    Opportunity costs were estimated to account for the onetime cost 
tank vessels would be out of service as a result of being retrofitted. 
This cost was estimated by subtracting from the daily time charter rate 
the daily operating cost that would be saved as a result of being out 
of service as well as crew cost savings if the retrofit would take more 
than two weeks since crews would be flown home. For pre-MARPOL vessels, 
the number of days the tank vessel would be laid up was estimated by 
deadweight ton range. A summary of the onetime costs and opportunity 
costs for the measures is presented in Table 7. For MARPOL 73 and 
MARPOL 78 vessels, no disruption in service was assumed. Therefore, no 
opportunity costs were considered.

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    The affected fleet was also analyzed to determine whether a vessel 
owner or operator would replace the vessel with a double hull vessel 
rather than implement the measures researched in this regulatory 
assessment. The key consideration underlying the decision about whether 
to ``replace'' or ``retrofit'' depends on whether the amortized costs 
to purchase and operate a double hull tank vessel are less than the 
annualized incremental cost for a single hull vessel to comply with the 
proposed measure. The existing single hull tank vessel is assumed to be 
replaced if the amortized cost of purchasing and operating a new double 
hull vessel earlier than required is less expensive than retrofitting 
the existing tank vessel with the proposed measure. This analysis 
dependent on several factors, including the onetime retrofit costs of 
the measures; the annual costs related to cargo shutout; the number of 
years remaining until the existing single hull vessel must be replaced 
by a double hull vessel; the price the vessel owner would receive if 
the single hull vessel was replaced (scrap or secondhand price); and 
the capital costs and operating costs of a double hull vessel. The 
analysis indicated that none of the fleet of existing single hull 
vessels would be replaced early by double hull vessels due to the 
measures in this phase of the regulatory assessment. The primary reason 
for this outcome is that the compliance costs for the measures, 
including the onetime capital costs, are relatively low in comparison 
to the annualized cost to purchase and operate double hull vessels.

3. Government Costs

    The majority of tank vessels owned or operated by the Federal 
Government, such as oil tank vessels used by the U.S. Navy, qualify as 
public vessels under OPA 90 and are not subject to this rulemaking. The 
National Defense Reserve Fleet/Ready Reserve Force (NDRF/RRF) currently 
does not qualify for the public vessel exemption and has ten tank 
vessels available for service that would be affected by this 
rulemaking. Because the NDRF/RRF is composed of vessels similar to 
those used in this analysis, costs and benefits would be similar. 
However, there is legislation being discussed that would exempt these 
vessels from the OPA 90 double hull phase-in requirements. Because 
these vessels may not be subject to this rulemaking and no specific 
regulatory language is proposed in this SNPRM, this analysis did not 
include costs to the NDRF/RRF.
    The burden of implementing structural measures may require the 
Coast Guard to conduct plan review for those vessels refitting their 
tanks or 

[[Page 67246]]
spend time inspecting vessels for compliance; however, since specific 
regulatory language is not proposed in this SNPRM, no government cost 
is associated with it.

4. Benefits

    The incremental reduction in the volume of oil spilled as a result 
of the measures was determined by estimating the difference in the 
accidental oil volume spilled and operational discharges for the 
baseline fleet before and after the measures were implemented on the 
analytical tanker models. This benefit analysis was completed in three 
steps. First, accidental oil spill volumes and operational discharges 
for the baseline fleet over time by vessel category and deadweight ton 
ranges were completed. Second, the effectiveness of the measures to 
reduce accidental spill volumes and operational discharges on the 
applicable portions of the baseline fleet was determined. Third, the 
effectiveness ratios were used to estimate the reduction in oil spill 
volumes as a result of each measure.
    The volume of oil spilled due to accidents by the baseline fleet 
was estimated based on an analysis of historical oil spill data in both 
U.S. waters and international waters. This analysis was similar to the 
accident analysis done for the screening phase of this regulatory 
assessment. Historical data taken from the regulatory assessment done 
for the NPRM was adjusted using worldwide spill data to fully account 
for the effectiveness of the measures in reducing oil spills for the 
international fleet. Additionally, annual spill rates were estimated 
based on oil movement projections and an annualized estimate of the 
adjusted accidental spill data. The volume of oil moved in any year 
after 1995 was estimated by reducing the volume of oil moved by the 
baseline fleet by the proportion of existing single hull tank vessels 
projected to be in operation for each year between 1996 and 2015. 
Accidental oil spill volumes were estimated by applying the spill rates 
to the volume of oil moved by the baseline fleet in future years. These 
spill volumes were estimated by deadweight ton range and vessel 
category for tank vessels in the international and U.S. coastal fleets.
    The benefits also included estimates on the difference in the 
operational discharges for the baseline fleet before and after the 
proposed measures would be implemented. Assumptions made for the 
benefits of the measures for reducing operation discharges included: 
(1) for the operational discharge analyses, only pre-MARPOL tank 
vessels have operational discharges because these vessels are not 
equipped with sufficient SBT or CBT capacity; (2) pre-MARPOL tank 
vessels in the U.S. coastal fleet were assumed to have no operational 
discharges because they spend the majority of their time in U.S. 
waters; however, the pre-MARPOL tank vessels in the international fleet 
were estimated to have operational discharges when outside U.S. waters; 
(3) for the operational discharge analyses, pre-MARPOL tank vessels 
were assumed to meet MARPOL 73 requirements and discharge no more than 
1/15,000 of their cargo per voyage; and (4) annual operational 
discharge volume varies proportionately with the estimated number of 
U.S. voyages. Projected accidental and operational discharges for the 
baseline fleet with no measures implemented were estimated over the 
period of this rulemaking and are summarized in Table 8.

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    Effectiveness ratios were developed based on the results of the oil 
outflow analyses conducted on the analytical tank vessel models. In 
addition to developing the effectiveness ratios for the existing single 
hull tank vessel fleet, ratios were also developed for potential 
``early phase-in'' of double hull tank vessels with comparable carriage 
capacity. Accidental oil spill incident effectiveness ratios were 
developed for three of the five incident categories: groundings, 
collisions, and structural failures. The measures were not expected to 
directly affect oil outflow in the event of fires or explosions or oil 
spills that occur during cargo transfer operations. Effectiveness 
ratios for groundings and collisions were developed based on the oil 
outflow estimates using the guidelines for Regulation 13F and 13G of 
Annex I of MARPOL 73/78. Structural failure ratios were developed based 
on an analysis of casualty incidents as reported in a Ship Structural 
Committee report entitled ``A Limited Survey of Ship Structural 

[[Page 67247]]
Damage,'' published in 1971 (NO. SSC-220). A 100 percent effectiveness 
ratio for operational spills, applicable to the PL/CBT and HBL measure 
on pre-MARPOL tank vessels, was used for this analysis because it was 
assumed they would use the CBTs, thereby avoiding the need to discharge 
dirty ballast from cargo tanks. Effectiveness ratios for each measure 
and a comparison between comparable deadweight ton double hull design 
are summarized in Table 9.

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    The estimated incremental benefits of the measure in terms of the 
number of spilled barrels avoided was calculated by multiplying the 
effectiveness ratios by the accidental oil spill and operational 
discharge volumes estimated for the baseline fleet. As the existing 
single hull tank vessel fleet is phased out over time, the benefits are 
projected to decrease to zero at the beginning of 2015. The present 
value and annualized value of the number of barrels spilled that would 
be avoided were also estimated using a real discount rate of seven 
percent. Table 10 summarizes the number of spilled barrels avoided in 
selected years starting in 1999, by vessel category, for the 
international and U.S. coastal fleets. It also includes a break down of 
benefits by fleet categories. For this section of the table, small 
vessels are defined as all international and U.S. coastal tank vessels 
less than 30,000 dwt and large vessels are defined as all international 
and U.S. coastal tank vessels that are greater than or equal or 30,000 
dwt. The Jones Act fleet numbers represent both small and large vessels 
numbers. Therefore, these three categories are not mutually exclusive.

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5. Cost-benefits

    The estimated cost per barrel of unspilled oil is categorized by 
international and U.S. coastal fleets in Table 11. These cost-
effectiveness estimates were developed using a 7 percent real discount 
rate. The table also includes a breakdown of estimated cost per barrel 
of unspilled oil for small vessels, large vessels and Jones Act 
vessels. These fleet categories are not mutually exclusive. As shown in 
Table 11, there is a difference in the estimated cost-benefit for pre-
MARPOL international tank vessels as compared to the U.S. coastal tank 
vessel fleet. The primary reason for this difference is that the 
measure reduces both accidental and operational oil outflow for the 
pre-MARPOL international fleet. The retrofit costs for these vessels to 
implement the measures are also greater for U.S. coastal tank vessels 
of a given deadweight tonnage because they would be required to have 
the retrofit work performed at U.S. shipyards, which historically have 
charged higher rates than foreign shipyards.

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    The present value cost of the measures researched in this 
assessment was estimated over a 19-year time period (1996 to 2015). 
Using a 7 percent real discount rate, the present value cost would be 
$1.41 billion. The annualized value is approximately $133 million. The 
present and annualized value of the number of barrels of spilled oil 
avoided is estimated to be about 131,000 barrels and 12,300 barrels, 
respectively.
    This SNPRM is an economically significant regulatory action under 
section 3(f) of Executive Order 12866 and has been reviewed by the 
Office of Management and Budget under that order. It requires an 
assessment of potential costs and benefits under section 6(a)(3) of 
that order. It is significant under the regulatory policies and 
procedures of the Department of Transportation (DOT) (44 FR 11040; 
February 26, 1979).
    Because the Coast Guard wishes to provide the public with an 
opportunity to comment on the economic feasibility of this assessment, 
no regularity text is introduced in this SNPRM. Comments received on 
this SNPRM will enable the Coast Guard to further evaluate the economic 
feasibility for structural measures and determine whether additional 
regulations are appropriate to implement section 4115(b) of OPA 90.

Notice of Availability

    The Coast Guard solicits comments on the regulatory assessment for 
this SNPRM. Copies of the regulatory assessment, entitled ``Regulatory 
Assessment of Supplemental Notice of Proposed Rulemaking on Structural 
Measures for Existing Single Hull Tankers'' are available for 
inspection at U.S. coast Guard Headquarters or can be ordered through 
the National Technical Information Service (NTIS), Springfield, 
Virginia, 22161 by requesting report number PB96-119086. Orders can 
also be placed by calling NTIS at (703) 487-4650 or (800) 553-6847.

Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq., ), the 
Coast Guard must consider whether this proposal, if adopted, will have 
a significant economic impact on a substantial number of small 
entities. ``Small entities'' may include (1) small businesses and not-
for-profit organizations that are independently owned and operated and 
are not dominant in their fields and (2) governmental jurisdictions 
with populations of less than 50,000.
    This rulemaking considered small business impact for vessels 
privately held by independent companies with an estimated capital 
investment value of less than $500 million or companies with that have 
less than 500 employees. State and local governments, which altogether 
own less than a dozen tank vessels, will not be significantly affected. 
Not-for-profit organizations do not engage in the transportation of oil 
in bulk by water.
    There are a number of companies meeting the definition of a small 
business operating tank vessels. Of the 190 U.S. tankships affected by 
this rulemaking, 16 are owned by 6 small businesses. Many of these 
company's tankships are over 30 years old, have less cargo carrying 
capacity than their competition, and are laid up due to market or 
company financial conditions. Six small businesses own or operate 32 of 
the affected U.S. tank barge population. No foreign small businesses 
own or operate foreign tank vessels that would be affected by this 
rulemaking.
    If structural measures were imposed on the small businesses that 
own or operate tank vessels, an economic impact is unavoidable, as the 
statue clearly targets existing vessels of 5,000 GT or more that carry 
oil in bulk as cargo and that do not have double hulls. A complete 
review of this impact on small entities would be done if the Coast 
Guard proposes specific structural requirements.
    This SNPRM responds to comments received on the NPRM, presents a 
summary of a regulatory assessment for various structural measures, 
notifies the public of the availability of this assessment, and 
solicits comments on the economic feasibility of the measures. This 
SNPRM does not propose specific regulatory text. Therefore, the Coast 
Guard certifies under 5 U.S.C. 605(b) that this SNPRM will not have a 
significant economic impact on a substantial number of small entities. 
If you think that your business or organization qualifies as a small 
entity and the NPRM cost assessment, as modified by the discussions and 
data provided in this document, will have a significant economic impact 
on your business or organization, please submit a comment (see 
ADDRESSES) explaining why you think it qualifies and in what 

[[Page 67251]]
way and to what degree this proposal will economically affect it.

Collection of Information

    Under the Paperwork Reduction Act (44 U.S.C. 3501, et seq., ), the 
Office of Management and Budget (OMB) reviews each proposed rule that 
contains a collection-of-information requirement to determine whether 
the practical value of the information is worth the burden imposed by 
its collection. Collection-of-information requirements include 
reporting, recordkeeping, notification, and other similar requirements. 
This proposal contains no collection of information requirements.

Federalism

    The Coast Guard has analyzed this proposal under the principles and 
criteria contained in Executive Order 12612 and has determined that 
this proposal does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment.

Environment

    The Coast Guard has considered the environmental impact of this 
supplemental notice of proposed rulemaking under COMDTINST M16475.1B. 
Although this SNPRM proposes no Federal regulations and therefore does 
not amount to the type of major Federal action typically subject to 
analysis under the National Environmental Policy Act (NEPA), the Coast 
Guard solicits comments on its analysis of structural measures. An 
Environmental Assessment (EA) from the notice of proposed rulemaking 
(NPRM) is available in the docket for copying and inspection as 
indicated in the ``ADDRESSES'' section of this preamble.
    By the year 2015, all tank vessels (with certain exceptions) over 
5,000 dwt operating in U.S. waters will be equipped with double hulls. 
In the interim, the Coast Guard has been given wide latitude under OPA 
90 section 4115(b) to set structural and operational standards for 
single hull vessels for the purpose of reducing the amount of oil 
spilled into the marine environment.
    Sound structural design and efficient operational procedures, when 
combined with other requirements of OPA 90, should contribute to 
increased environmental protection and human safety. The impact of 
section 4115(b), however is not expected to result in significant 
impact on the quality of human environment, as defined in the NEPA.
    Although no regulatory text is introduced in this SNPRM, the public 
is encouraged to comment on the technological and economic feasibility 
of the structural measures discussed in this SNPRM. Comments received 
on this SNPRM will enable the Coast Guard to assess the economic and 
technological feasibility of structural measures to reduce the risk of 
oil outflow from existing tank vessels and effectively implement 
section 4115(b) of OPA 90.

    Dated: December 21, 1995.
A.E. Henn,
Vice Admiral, U.S. Coast Guard, Acting Commandant.
[FR Doc. 95-31371 Filed 12-22-95; 2:10 pm]
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