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

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.

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 threestep 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 81⁄2 by

11 inches, suitable for copying and

electronic filing. Persons wanting

acknowledgment of receipt of comments

should enclose a stamped, selfaddressed 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
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 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) protectivelylocated 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 nonpetroleum 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
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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 § 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 preMARPOL vessels. In this assessment, it

took into account whether the preMARPOL 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 § 157.410(a) in the NPRM
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 67229

as it applies to the provision of side or

bottom protection. The comment

indicated that under a strict

interpretation of the provisions of

§ 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
67230 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

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 ‘‘hydrostaticbalanced 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
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 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 phasein 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.
67232 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

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
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 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, thirdparty 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
67234 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

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-ofmagnitude (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 preMARPOL 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.

BILLING CODE 4910–10–M

BILLING CODE 4910–14–C

To develop the baseline fleet and its

characteristics, several designs were

considered. It was assumed that the preMARPOL 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,
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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 preMARPOL, MARPOL 73 and MARPOL

78 models, and the 40,000 dwt preMARPOL 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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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 costbenefit 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 pervessel 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 (preMARPOL, 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
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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
67246 Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules

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, preMARPOL 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
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Damage,’’ published in 1971 (NO. SSC220). A 100 percent effectiveness ratio

for operational spills, applicable to the

PL/CBT and HBL measure on preMARPOL 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 preMARPOL 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
Federal Register / Vol. 60, No. 249 / Thursday, December 28, 1995 / Proposed Rules 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-ofinformation 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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