[Federal Register Volume 61, Number 106 (Friday, May 31, 1996)]
[Rules and Regulations]
[Pages 27255-27258]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13708]



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DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 754, 758, and 762

[Docket No.960523147-01]
RIN 0694-AB44


Exports of Alaskan North Slope Crude Oil; Establishment of 
License Exception TAPS

AGENCY: Bureau of Export Administration, Commerce

ACTION: Final rule.

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SUMMARY: The Bureau of Export Administration is amending the short 
supply provisions of the Export Administration Regulations to modify 
the restrictions on exports of Alaskan North Slope crude oil and 
establish License Exception TAPS authorizing such exports, with certain 
conditions. License Exception TAPS is based on: 1) Public Law 104-58, 
which allows for the export of crude oil transported by pipeline over 
right-of-way granted pursuant to section 203 of the Trans-Alaska 
Pipeline Authorization Act (TAPS); 2) the President's April 28, 1996 
determination that exports are in the national interest; and 3) the 
President's direction to the Secretary of Commerce to issue a License 
Exception with conditions for export of TAPS crude oil.

EFFECTIVE DATE: May 28, 1996.

FOR FURTHER INFORMATION CONTACT: Bernard Kritzer, Office of Chemical 
and Biological Controls and Treaty Compliance, Bureau of Export 
Administration, Department of Commerce, Telephone: (202) 482-0894.

SUPPLEMENTARY INFORMATION:

Background

    Section 7(d) of the Export Administration Act of 1979, (50 U.S.C. 
app. 2406) restricts exports of crude oil transported over right-of-way 
granted pursuant to section 203 of the Trans-Alaska Pipeline 
Authorization Act (43 U.S.C. 1652), with certain exceptions, unless the 
President makes certain findings, recommends exports to the Congress on 
the basis of those findings, and the Congress then agrees to the 
recommendation by joint resolution enacted into law. Although the 
Export Administration Act (EAA) expired on August 20, 1994, the 
President invoked the International Emergency Economic Powers Act and 
continued in effect, to the extent permitted by law, the provisions of 
the EAA and the EAR in Executive Order 12924 of August 19,

[[Page 27256]]

1994, and notice of August 15, 1995 (60 FR 42767).
    On November 28, 1995, the President signed into law Public Law 104-
58, which created a new section 28(s) of the Mineral Leasing Act (30 
U.S.C. 185). Public Law 104-58 allows exports of oil transported over 
right-of-way granted pursuant to section 203 of the Trans-Alaska 
Pipeline Authorization Act (43 U.S.C. 1652), ``notwithstanding any 
provision of this Act or any other provision of law (including any 
regulation),'' unless the President finds that such exports are not in 
the national interest.
    To address the economic and environmental issues identified in 
Public Law 104-58, the National Economic Council and the Council on 
Environmental Quality working with the Department of Commerce's Bureau 
of Export Administration, coordinated an intensive interagency review 
of the effects of lifting the export ban on oil transported over right-
of-way granted pursuant to section 203 of the Trans-Alaska Pipeline 
Authorization Act (TAPS oil). After extensive public hearings, the 
review of public comments, and analytical evaluation, the interagency 
working group found that the exports are not likely to pose a 
significant impact to the economy or the environment.
    On April 28, 1996, the President determined that, subject to 
certain conditions described below, exports of crude oil transported 
over right-of-way granted pursuant to section 203 of the Trans-Alaska 
Pipeline Authorization Act (TAPS) are in the national interest. The 
President found that such exports:
    (1) Will not diminish the total quantity or quality of petroleum 
available to the United States;
    (2) Will not pose significant risks to the environment with the 
imposition of a series of measures to further ensure the safety of the 
environment; and
    (3) Are not likely to cause sustained material oil supply shortages 
or sustained oil price increases above world market levels that would 
cause sustained material adverse employment effects in the United 
States or that would cause substantial harm to consumers, including 
those located in noncontiguous States and Pacific territories.
    The President directed the Secretary of Commerce to issue a License 
Exception, authorizing exports of TAPS oil, subject to certain 
conditions designed to preserve the environment.
    This final rule amends part 754 of the Export Administration 
Regulations (EAR) by establishing a new License Exception TAPS. License 
Exception TAPS authorizes exports of oil transported over right-of-way 
granted pursuant to section 203 of the Trans-Alaska Pipeline 
Authorization Act (42 U.S.C. 1652) provided that the transaction meets 
the following conditions:
    (1) The TAPS oil is transported by a vessel documented under the 
laws of the United States and owned by a citizen of the United States 
(in accordance with section 2 of the Shipping Act, 1916 (46 U.S.C. app. 
802));
    (2) All tankers involved in the TAPS oil export trade use the same 
route that they do for shipments to Hawaii until they reach a point 300 
miles due south of Cape Hinchinbrook Light and then turn toward Asian 
destinations. After reaching that point, tankers in the TAPS oil export 
trade must remain outside of the 200 nautical mile Exclusive Economic 
Zone, as defined in 16 U.S.C. 1802(6). Tankers returning from foreign 
ports to Valdez, Alaska must abide by the same restrictions, in 
reverse, on their return route. This condition shall not be construed 
to limit any statutory, treaty or Common Law rights and duties imposed 
upon and enjoyed by tankers in the TAPS oil export trade, including, 
but not limited to, force majeure and maritime search and rescue rules;
    (3) The owner or operator of a tanker exporting TAPS oil shall:
    (a) Adopt a mandatory program of deep water ballast exchange (i.e., 
at least 2,000 meters water depth). Exceptions can be made at the 
discretion of the captain only in order to ensure the safety of the 
vessel and crew. Specified records shall be maintained and made 
available for audit by government officials.
    (b) Be equipped with satellite-based communications systems that 
will enable the Coast Guard independently to determine the tanker's 
location;
    (c) Maintain a Critical Area Inspection Plan for each tanker in the 
TAPS oil export trade in accordance with the U.S. Coast Guard's 
Navigation and Inspection Circular No. 15-91 as amended, which shall 
include an annual internal survey of the vessel's cargo block tanks; 
and
    (4) The exporter files with BXA a Shipper's Export Declaration 
covering the export not later than 21 days after the export has 
occurred.
    This final rule also makes other conforming changes in the short 
supply provisions of the EAR by revising part 754 concerning TAPS oil 
exports, the export clearance provisions of part 758 regarding the 
requirement to submit the Shippers' Export Declaration (SED) to the 
Bureau of Export Administration, and the recordkeeping requirements of 
part 762.
    The Export Administration Regulations (EAR) have been totally 
amended by an interim rule published on March 25, 1996 (61 FR 12714), 
which provides for a transition period within which exporters can take 
advantage of both the old rules and the new rules until November 1, 
1996. This rule permits exports of TAPS oil pursuant to a License 
Exception. Exporters can make exports of TAPS oil under this exception 
as of the effective date of this rule. Accordingly, the old rule is not 
being revised.

Rulemaking Requirements

    1. This final rule has been determined to be significant for the 
purpose of Executive Order 12866.
    2. Notwithstanding any other provision of the law, no person is 
required to respond to, nor shall any person be subject to a penalty 
for failure to comply with a collection of information, subject to the 
requirements of the Paperwork Reduction Act, unless that collection of 
information displays a currently valid Office of Management and Budget 
Control Number. This rule contains a collection of information subject 
to the Paperwork Reduction Act, which is cleared by the Office of 
Management and Budget under existing OMB Control Number 0694-0027. The 
public reporting burdens for the new collections of information are 
estimated to range between 5 and 10 minutes for the Shipper's Export 
Declaration requirement, and 30 minutes per voyage for the Ballast 
Water Exchange collection. These estimates include the time for 
reviewing instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collections of information. Send comments regarding these burden 
estimates or any other aspect of these collections of information, 
including suggestions for reducing the burden, to Bernard Kritzer, 
Office of Chemical and Biological Controls and Treaty Compliance, 
Bureau of Export Administration, Department of Commerce, Room 2705, 
14th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20230.
    3. This rule does not contain policies with Federalism implications 
sufficient to warrant preparation of a Federalism assessment under 
Executive Order 12612.
    4. This rule is being issued without notice of proposed rulemaking 
and opportunity for comment because Public Law 104-58: (1) provides 
that the administrative action under this Act is

[[Page 27257]]

not subject to sections 551 and 553-559 of the Administrative 
Procedures Act (5 U.S.C. 551, 553-559); and (2) requires these 
regulations to be issued within 30 days of the President's national 
interest determination.
    5. Under 8 U.S.C. 808(2), there is good cause that notice and 
public procedure thereon are unnecessary and contrary to the public 
interest. Notice and public procedure are unnecessary because Public 
Law 104-58 exempts rulemaking under this Act from the notice and 
comment requirements of the Administrative Procedures Act and requires 
regulations to be issued within 30 days of the President's national 
interest determination. Notice and public procedure are contrary to the 
public interest because they would delay allowing the exports that the 
President, as authorized by Public Law 104-58, has determined are in 
the national interest.

List of Subjects

15 CFR Part 754

    Exports, Foreign trade, Forests and forest products, Petroleum, 
Reporting and recordkeeping requirements.

15 CFR Part 758

    Administrative practice and procedure, Exports, Foreign trade, 
Reporting and recordkeeping requirements.

15 CFR Part 762

    Administrative practice and procedure, Business and industry, 
Confidential business information, Exports, Foreign trade, Reporting 
and recordkeeping requirements.

    1. The authority citation for 15 CFR part 754 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
10 U.S.C. 7420; 10 U.S.C. 7430(e); Sec. 201, Pub. L. 104-58, 109 
Stat. 557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42 U.S.C. 6212; 43 
U.S.C. 1354; 46 U.S.C. app. 466c; E.O. 12924, 59 FR 43437, 3 CFR, 
1994 Comp., p. 917; Notice of August 15, 1995 (60 FR 42767, August 
17, 1995).

    2. The authority citation for 15 CFR part 758 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August 
15, 1995 (60 FR 42767, August 17, 1995).

    3. The authority citation for 15 CFR part 762 continues to read as 
follows:

    Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.; 
E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August 
15, 1995 (60 FR 42767, August 17, 1995).

PART 754--[AMENDED]

    4. In Sec. 754.2 the following changes are made:
    a. in paragraph (a), the phrase ``Reserves paragraph (i) of this 
section for a License Exception for certain shipments of samples.'' is 
revised to read ``Reserves, paragraph (i) of this section for a License 
Exception for certain shipments of samples, and paragraph (j) of this 
section for a License Exception for exports of oil transported by 
pipeline over right-of-way granted pursuant to section 203 of the 
Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1652).''.
    b. paragraph (c)(1)(i) is amended by adding the following sentence 
at the end: ``The President made a determination on April 28, 1996.''; 
and
    c. a new paragraph (j) is added to read as follows:


Sec. 754.2  Crude oil.

* * * * *
    (j) License Exception for exports of TAPS Crude Oil. (1) License 
Exception TAPS may be used to export oil transported over right-of-way 
granted pursuant to section 203 of the Trans-Alaska Pipeline 
Authorization Act (TAPS), provided the following conditions are met:
    (i) The TAPS oil is transported by a vessel documented under the 
laws of the United States and owned by a citizen of the United States 
(in accordance with section 2 of the Shipping Act, 1916 (46 U.S.C. app. 
802));
    (ii) All tankers involved in the TAPS export trade use the same 
route that they do for shipments to Hawaii until they reach a point 300 
miles due south of Cape Hinchinbrook Light and then turn toward Asian 
destinations. After reaching that point, tankers in the TAPS oil export 
trade must remain outside of the 200 nautical mile Exclusive Economic 
Zone, as defined in 16 U.S.C. 1802(6). Tankers returning from foreign 
ports to Valdez, Alaska must abide by the same restrictions, in 
reverse, on their return route. This condition shall not be construed 
to limit any statutory, treaty or Common Law rights and duties imposed 
upon and enjoyed by tankers in the TAPS oil export trade, including, 
but not limited to, force majeure and maritime search and rescue rules; 
and
    (iii) The owner or operator of a tanker exporting TAPS oil shall:
    (A) Adopt a mandatory program of deep water ballast exchange (i.e., 
at least 2,000 meters water depth). Exceptions can be made at the 
discretion of the captain only in order to ensure the safety of the 
vessel and crew. Records must be maintained in accordance with 
paragraph (j)(3) of this section.
    (B) Be equipped with satellite-based communications systems that 
will enable the Coast Guard independently to determine the tanker's 
location; and
    (C) Maintain a Critical Area Inspection Plan for each tanker in the 
TAPS oil export trade in accordance with the U.S. Coast Guard's 
Navigation and Inspection Circular No. 15-91 as amended, which shall 
include an annual internal survey of the vessel's cargo block tanks.
    (2) Shipper's Export Declaration. In addition to the requirements 
of paragraph (j)(1) of this section, for each export under License 
Exceptions TAPS, the exporter must file with BXA a Shipper's Export 
Declaration (SED) covering the export not later than 21 days after the 
export has occurred. The SED shall be sent to the following address: 
Manager, Short Supply Program, Department of Commerce, Office of 
Chemical and Biological Controls and Treaty Compliance, Bureau of 
Export Administration, Room 2075, Washington, D.C. 20230.
    (3) Recordkeeping requirements for deep water ballast exchange. (i) 
As required by paragraph (j)(1)(iii)(A) of this section, the master of 
each vessel carrying TAPS oil under the provisions of this section 
shall keep records that include the following information, and provide 
such information to the Captain of the Port (COTP), U.S. Coast Guard, 
upon request:
    (A) The vessel's name, port of registry, and official number or 
call sign;
    (B) The name of the vessel's owner(s);
    (C) Whether ballast water is being carried;
    (D) The original location and salinity, if known, of ballast water 
taken on, before an exchange;
    (E) The location, date, and time of any ballast water exchange; and
    (F) The signature of the master attesting to the accuracy of the 
information provided and certifying compliance with the requirements of 
this paragraph.
    (ii) The COTP or other appropriate federal agency representatives 
may take samples of ballast water to assess the compliance with, and 
the effectiveness of, the requirements of paragraph (j)(3)(i) of this 
section.
    5. Section 758.3 is amended by revising paragraph (d)(2) that was 
formerly reserved to read as follows:


Sec. 758.3  Shipper's Export Declaration (SED).

    (d) * * *
    (2) You are required under the provisions of Sec. 754.2(j)(2) of 
the EAR.

[[Page 27258]]

PART 762--[AMENDED]

    6. Section 762.2 is amended by:
    a. Redesignating paragraphs (b)(26) through (b)(34) as (b)(27) 
through (b)(35) respectively; and
    b. adding a new paragraph (b)(26).


Sec. 762.2   Records to be retained.

* * * * *
    (b) * * *
    (26) Section 754.2(j)(3), Recordkeeping requirements for deep water 
ballast exchange.
* * * * *
    Dated: May 28, 1996.
Iain S. Baird,
Deputy Assistant Secretary for Export Administration.
[FR Doc. 96-13708 Filed 5-28-96; 2:33 pm]
BILLING CODE 3510-DT-P