[Federal Register Volume 64, Number 76 (Wednesday, April 21, 1999)]
[Notices]
[Pages 19575-19578]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9899]


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DEPARTMENT OF TRANSPORTATION

Coast Guard
[USCG-1998-4620]


Oil Pollution Act of 1990 (OPA 90) Phase-Out Requirements for 
Single Hull Tank Vessels

AGENCY: Coast Guard, DOT.

ACTION: Notice of policy.

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SUMMARY: In a notice published on November 16, 1998, the Coast Guard 
requested comments on whether a single hull tank vessel, converted to 
include double sides or a double bottom, should be accepted as a 
different hull design when applying the tank vessel phase-out dates 
under the Oil Pollution Act of 1990 (OPA 90). This notice discusses the 
comments received and the Coast Guard's determination. The Coast Guard 
has decided that changing the hull configuration of an existing single 
hull tank vessel to a single hull tank vessel with double sides or a 
double bottom, after August 18, 1990, will not result in a change to 
the tank vessel's originally scheduled phase-out date as required by 46 
U.S.C. 3703a.

DATES: This policy is effective April 21, 1999.

ADDRESSES: Unless otherwise indicated, documents referred to in this 
notice are available for inspection or copying at the Docket Management 
Facility, (USCG-1998-4620), U.S. Department of Transportation, Plaza 
level, room PL-401, 400 Seventh Street SW, Washington DC 20590-0001, 
between 9 a.m. and 5 p.m., Monday through Friday, except Federal 
holidays. The telephone number is 202-366-9329. You may also access 
this docket on the Internet at http://dms.dot.gov.

FOR FURTHER INFORMATION CONTACT: For questions on this policy, please 
contact Mr. Bob Gauvin, Project Manager, Office of Operating and 
Environmental Standards, Commandant (G-MSO-2), U.S. Coast Guard 
Headquarters, telephone 202-267-1053. For questions on viewing material 
in the docket, contact Dorothy Walker, Chief, Dockets, Department of 
Transportation, telephone 202-366-9329.

SUPPLEMENTARY INFORMATION: The Coast Guard published a request for 
comments (63 FR 63768) on November 16, 1998. The notice encouraged 
interested persons to provide written comments, information, opinions 
and arguments on whether single hull tank vessels that were altered 
with double sides or a double bottom should be considered a different 
hull configuration for

[[Page 19576]]

determining their OPA 90 phase-out date. The comment period ended on 
January 15, 1999, and there were 32 submissions to the docket.
    The Coast Guard held no public meeting on this request for 
comments. Two comments did request a public meeting, but the Coast 
Guard determined that the written comments in the docket adequately 
addressed the issues and that a public meeting would not be helpful in 
acquiring additional information.

Background

    Section 4115 of the Oil Pollution Act of 1990 (Pub. L. 101-380, 
August 18, 1990) (OPA 90) amended title 46, United States Code, by 
adding a new section 3703a. This section contains the double hull 
requirements and phase-out schedule for single hull tank vessels 
operating in U.S. waters. It requires an owner to remove a single hull 
tank vessel from bulk oil service on a specific date, depending on a 
vessel's gross tonnage, build date, and hull configuration. The phase-
out schedule allows more years of service for single hull tank vessels 
configured to include double sides or a double bottom than for single 
hull tank vessels without these hull configurations.
    The OPA 90 timetable for double hull requirements and phase-out 
schedule for single hull tank vessels are implemented in 33 CFR part 
157, Appendix G. Both OPA 90 and our implementing regulations are 
silent on if, or when, a vessel owner can convert a single hull tank 
vessel to include double sides or a double bottom to qualify for a 
later phase-out date. As a result, some vessel owners have asked the 
Coast Guard to clarify the types of vessel conversions permitted and 
their associated phase-out dates.
    In 1997, the Vessel Compliance Division replied to a question 
asking if a single hull tank vessel with wing cargo tanks reconfigured 
as segregated ballast tanks or void spaces to create double sides would 
qualify for a different OPA 90 phase-out date. They indicated that this 
type of conversion and an associated later phase-out date was 
acceptable provided that the modified tanks meet the double side 
dimension requirements applied to new tank vessels in 33 CFR 
157.10d(c)(1). Converted double side segregated ballast tanks must also 
provide protection to the full extent of a vessel's cargo tank length. 
In 1998, we received another inquiry from the same source asking if 
hull conversions completed after a single hull tank vessel's original 
phase-out date qualified the vessel to reenter bulk oil service with a 
later phase-out date.
    Recent inquiries by the maritime industry indicate a continued 
interest in the possibility of converting single hull tank vessels to 
include double sides or a double bottom to increase a vessel's 
operational life past its original OPA 90 phase-out date. In our 
November 16, 1998, request for comments, we asked for information to 
help us develop a clear policy on phase-out dates.

Summary of Comments

    The comments fell into two clearly opposed groups on whether a 
single hull tank vessel could, after August 18, 1990, add double sides 
or a double bottom and use that alteration to change the vessel's 
category under Sec. 3703a and thus have a later phase-out date.
    The comments generally urged that the Coast Guard either--
     NOT ALLOW a single hull tank vessel converted with double 
sides or a double bottom after August 18, 1990, to be considered under 
a different category in Sec. 3703a to result in later phase-out dates; 
or,
     ALLOW single hull tank vessels converted with double sides 
or a double bottom after August 18, 1990, to be considered under a 
different category in Sec. 3703a that would result in a later phase-out 
date or a return to operation after the vessel's phase-out date.
    Conversion to add double sides or a double bottom SHOULD NOT be 
allowed to change the phase-out date under OPA 90.
    Nineteen comments stated that no change or extension of a single 
hull tank vessel phase-out date is allowed by OPA 90. These comments 
came from members of the U.S. Senate, U.S. House of Representatives, 
MARAD, the U.S. shipbuilding industry and associations, major ship 
companies and associations, environmental groups and individual 
citizens. One individual's comment included eighty (80) signatures 
supporting the ``* * * replacement of single hull oil tankers by double 
hull oil tankers * * *'' as scheduled by OPA 90. This group of nineteen 
comments offered the following reasons for their position:
     Congress intended OPA 90 to protect the environment from 
the increased risk of oil spills that were specifically linked to older 
single hull tank vessels.
     The phase-out schedule of Sec. 3703a was deliberate and 
designed to ensure balance between the environment and the interests of 
the vessel owners. When developing the phase-out schedule, Congress 
took into account economic conditions; owner capital investment 
concerns; national oil transportation needs; shipbuilding resources 
availability; existing vessels and need for tank vessels which would 
operate in U.S. trade after OPA 90 became effective.
     The phase-out schedule was liberal, but, as with all of 
OPA 90, it does not provide for equivalence, waivers, or exemptions to 
its requirements.
     OPA 90 was intended to protect the environment from 
operational or accidental discharge of oil by removing older single 
hull tankers from service, as soon as possible, and by constructing new 
double hull tankers with the latest technology, design, and materials 
for safer operations, reducing damage to the environment.
     Allowing the continued operation of existing single hull 
tank vessels for longer periods of time than established by the OPA 90 
schedule is not acceptable or fair to owners who have invested in the 
building of new double hull vessels.
    Conversion to add double sides or a double bottom SHOULD be allowed 
to change the phase-out date under OPA 90.
    Thirteen comments supported allowing a change of phase-out date 
after a single hull tank vessel converts to either double sides or a 
double bottom. These thirteen comments came from ship owners, oil 
companies, a shipyard company, a marine terminal company, and a 
licensed U.S. merchant mariner. This group of thirteen comments offered 
the following reasons for their position:
     There is no language in OPA 90 or U.S. regulations that 
prohibits a conversion of a single hull tank vessel to add double sides 
or a double bottom from being considered under a different category in 
Sec. 3703a for the additional operating years allowed for that hull 
configuration.
     If Congress had intended not to allow such a conversion of 
single hull tank vessels to be considered, they would have used the 
words ``vessels built with double sides or a double bottom,'' instead 
of ``vessels equipped with double sides or a double bottom.'' Not 
defining when the vessel had to be equipped with double sides or a 
double bottom, allows it to occur after the statute became effective 
(August 18, 1990).
     The acceptance of the alteration of an existing vessel's 
design is not considered a major conversion under 33 CFR 157.03. This 
also allows the ``natural action'' of single hull tank vessels, or a 
single hull tank vessel originally built with double sides or a double 
bottom, to be converted to a

[[Page 19577]]

complete double hull and meet the OPA 90 requirements. It provides an 
incentive to completely double hull an existing vessel and has been 
used by U.S. tanker and barge owners to convert their tank vessels to 
be compliant with the double hull standards.
     One comment pointed out that section 3606 of Pub. L. 105-
85 halted the industry practice of reducing gross tonnage to extend the 
phase-out date. This comment suggested that if the Congress did not 
approve of a Coast Guard position to allow double sides or a double 
bottom modification, then they could take legislative action once 
again.
     Given the current market conditions and expectations for 
needs of transportation and supply of oil to the U.S., this issue will 
not effect an increase of shipyard orders for new double hull tank 
vessels, specifically built in U.S. shipyards for the Jones Act trade. 
The cost to build a U.S. Jones Act tanker is approximately three times 
the cost to build the same tanker in the foreign shipyard market.
     There may be short periods within the next five to ten 
years when there will be an insufficient number of tankers available to 
transport the Alaska North Slope (ANS) crude. ANS crude transportation 
needs are slowing on a schedule from approximately 1.3 million barrels 
a day in 1999, to approximately 460,000 barrels a day in 2015. Due to 
this slowing schedule for ANS crude, the phasing out of the existing 
tankers in the ANS operation (23 in service at this time) will shrink 
until only nine to eleven tank vessels will be needed to sustain ANS 
crude delivery to the west coast of the U.S. Many single hull tankers, 
or single hull tankers with double bottoms only, will phase-out in ANS 
trade and will not be replaced. The ability to extend a single hull 
tank vessel for up to five years will allow coverage of possible 
tonnage shortages during the reduction of the fleet and reduction of 
oil to be transported from Alaska.
     There is no increase of risk to the environment in 
allowing such conversions. Statements in the Congressional Record 
during the OPA 90 Congressional Conference and studies completed for 
the Coast Guard, support that double sides provide protection from a 
collision and a double bottom provides protection from a grounding.

Specific Questions

    Comments, both supporting and opposing phase-out date changes, 
responded to the four specific questions in our November 16, 1998, 
Federal Register notice. The answers not already included in the 
general comments summary are enclosed below.
    1. If the Coast Guard does not allow single hull tank vessels to 
qualify for later OPA 90 phase-out dates by converting the single hulls 
to single hulls with double sides or a double bottom, what would be the 
effect on U.S. oil transportation and supplies?
     There would be little to no effect on oil transportation 
in the U.S. as there were more than a sufficient number of tankers 
available and planned, to meet U.S. demands.
     Any extensions of the phase-out schedule would slow down 
the demand by owners to build new U.S. double hull tankers.
     Shortages of tanker tonnage may occur in the specialty 
class U.S. tramp tanker trade within the clean product market. This 
will raise tanker rates and the cost of oil to the consumer. Extensions 
of the phase-out schedule will moderate charter tanker rates and meet 
the shortages for tank vessels during these periods.
    2. If single hull tank vessels which have passed their initial 
phase-out date could qualify for later phase-out dates, and reenter 
service by converting their single hulls with double sides or a double 
bottom, what would be the effect on U.S. oil transportation and 
supplies?
     There will be no impact on U.S. oil transportation or 
supplies.
     There will be a sufficient number of tankers for U.S. oil 
transportation.
     Older single hull tank vessels would become heavily relied 
upon, if their phase-out dates are extended, and no ready replacements 
of new double hull vessels would be built or be available, should the 
older converted single hull tank vessels be abruptly lost from service.
     There would not be enough tankers in the Jones Act trade 
and the population would be reduced from the 49 in operation now to 21. 
Allowing this small period of extension (5 years maximum), could be 
used by vessel owners to ensure that no shortfalls of needed tonnage 
would occur and moderate tanker charter rates.
     A phased out single hull tank vessel could be laid up, if 
not needed. If a future transportation need occurred, the vessel could 
be converted and brought back into trade until the transportation need 
subsided or the converted single hull tank vessel with double sides or 
a double bottom reached its changed phase-out date or January 1, 2015, 
which ever comes first. This option would be beneficial in the ANS 
trade.
    3. If single hull tank vessels could qualify for later phase-out 
dates through these types of hull conversions, what would be the effect 
on the conversion of the tank vessel fleet to double hull tank vessels? 
Would there be an adverse impact on the marine environment?
     The U.S. environment would be adversely impacted by 
vessels not complying with the original OPA 90 phase-out schedule for 
single hull tankers.
     Allowing extension of the phase-out dates for converted 
single hull tank vessels reduces the incentive for double hull new 
buildings and slows the building of double hulls, advancing the average 
age and reducing the levels of safety in the existing tank vessel 
fleet.
     Allowing extensions of the phase-out dates would 
indefinitely delay the environmental benefit of the double hull tank 
vessels anticipated by Congress and the U.S. population, who have 
advocated the need for double hull tankers for twenty-five (25) years.
     The older converted single hull tank vessels use more 
fossil fuels than the newer double hull tank vessels, increasing the 
amount of hazardous air pollutants emitted into the atmosphere.
     Overall double hull conversions in the U.S. would be 
modestly impacted, with no impact to the environment. A converted 
single hull tank vessel offers a sensible alternative for short-term 
periods (5 years) of U.S. tonnage needs.
     Owners of vessels will naturally wait until the deadline 
before considering a double hull because at this time the economic 
situation does not support the cost involved.
     A single hull tank vessel having its side cargo tanks 
converted to segregated ballast tanks would provide a larger double 
side spacing than required of new double hulls, providing more 
protection to the environment.
    4. Are there any other concerns regarding whether we should 
recognize a single hull tank vessel converted to include double sides 
or a double bottom as a different hull design when applying the vessel 
phase-out dates under OPA 90?
     Depending on the type of conversion to a single hull 
tanker, it could effect the gross tonnage of the tank vessel, imparting 
a change to the vessel's phase-out due to reduction of the vessel's 
gross tonnage from original admeasurement. This would extend the tank 
vessel's phase-out even later (possibly 7 to 8 years) from its original 
phase-out per Sec. 3703a.
     The reconfiguration of oil cargo tanks could pose new 
operational risks; ballast tanks experience high corrosion rates 
accounted for in the design of new double hull tank vessels.
     The average age of the U.S. tanker fleet would increase. 
Older single hull

[[Page 19578]]

tankers would not be maintained, and become unsafe as they got older 
and closer to the extended phase-out date, making them a greater risk 
to the environment.
     Allowing the extension of the phase-out schedule by 
recognizing the conversion of single hull tank vessels under OPA 90 
could be of strategic value to the U.S. in certain national security 
scenarios.
     Eliminating the conversion of single hull tank vessels 
could possibly reduce, rather than increase, shipyard activity in the 
U.S.
     For the U.S. tanker industry to succeed it is essential 
that the companies involved know that the rules and standards are 
clear, inherently stable and likely to stay that way for the 
foreseeable future. With investment decisions reaching out over 20 
years, we should not make changes to the ground rules which could have 
catastrophic effects.
     Examination of this issue has been couched as an 
evaluation by a federal agency of the economics of the U.S. flag 
market. Such decisions should be left up to the Congress.
     There would be increasing difficulty in hiring qualified 
U.S. merchant seaman. When crew members lose jobs due to the phase-out 
of their vessels, their tendency is to migrate to fields outside the 
maritime field and not to return. Extensions of the phase-out schedules 
could assist keeping these seamen employed until vessel replacement is 
completed.

Discussion

    OPA 90 and our implementing regulations in 33 CFR 157 require that 
tank vessels either convert to full double hull configuration or be 
removed from the carriage of oil in bulk service by the dates set out 
in 46 U.S.C. Sec. 3703a. We have not, before today, established a 
policy on whether a single hull tank vessel could alter its hull 
configuration with a double bottom or double sides in order to change 
its OPA 90 phase-out date.
    Previously, we had interpreted OPA 90 as not specifically 
precluding a change in phase-out date for tank vessels that reduced 
their gross tonnage. However, in section 3606 of Pub. L. 105-85, 
enacted on November 18, 1997, Congress added a new paragraph (e) to 
Sec. 3703a. It effectively stopped the industry practice of using 
protectively located segregated ballast tanks to reduce a tank vessel's 
gross tonnage and change its phase-out date under OPA 90.
    After a vessel's phase-out date, OPA 90 allows tank vessels without 
double hulls to continue to deliver oil until January 1, 2015, either 
to a deepwater port or in one of the four lightering zones we 
established in the Gulf of Mexico. (See 33 CFR 156.300.)
    Many vessel owners, including American Heavy Lift, Maritrans, and 
Bouchard Transportation Services, have already modified, or are in the 
process of modifying, existing single hull tank barges or tankers with 
double hulls to meet the requirements of OPA 90.
    Although a number of comments discussed possible shortages of 
tankers in the Alaska North Slope (ANS) crude trade, the Department of 
Energy does not anticipate such shortages in ANS operations. Further, 
there are Jones Act trade vessels currently trading foreign that could 
be employed in ANS operations, if needed.
    While the comments contained a variety of responses both for and 
against a policy of allowing vessels to change their phase-out dates 
based on conversions after the effective date of OPA 90, most of these 
issues were considered by Congress when developing OPA 90. No comments 
cited immediate operational problems or pressing need to allow vessels 
to operate beyond their currently scheduled phase-out date.
    The OPA 90 double hull requirements were intended to protect the 
environment from oil spills. The only amendment Congress has made to 
the OPA 90 phase-out schedule in Sec. 3703a stopped the change of 
phase-out dates resulting from reductions in gross tonnage. By 
enactment of Pub. L. 105-85, Congress demonstrated its unwillingness to 
delay the OPA 90 schedule for the double hull requirement.

Policy

    Based on all of the reasons set out above, the Coast Guard has 
decided that its policy should be consistent with the plain language of 
Sec. 3703a and the intent of OPA 90. Therefore, changing the hull 
configuration of an existing single hull tank vessel to a single hull 
tank vessel with double sides or a double bottom, after August 18, 
1990, will not result in a change to the tank vessel's originally 
scheduled phase-out date as required by Sec. 3703a. This policy is 
effective immediately and applies to all tank vessels.
    The Coast Guard will shortly open a rulemaking to make appropriate 
changes to the double hull regulations in 33 CFR part 157 and will 
revise Navigation and Vessel Inspection Circular No. 10-94 consistent 
with this policy.

    Dated: April 15, 1999.
James M. Loy,
Admiral, U.S. Coast Guard Commandant.
[FR Doc. 99-9899 Filed 4-20-99; 8:45 am]
BILLING CODE 4910-15-P