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We hope to complete the project within a year of the commencement of actual construction. It is estimated that by the end of the first year of operation, the pipeline will have an annual throughput capacity of in excess of 600 million barrels of oil.

IV. A deepwater port facility, such as the one proposed by Intercontinental, is badly needed. As the Corps of Engineers pointed out in its report of November 29, 1972, and reiterated in its report of January 8, 1973, energy, and particularly petroleum, requirements of the United States are increasing at a high rate while a decline in domestic exploration and production is being projected for the not too distant future.

Petroleum will be the major, and will probably remain the most desirable, source of energy for the United States for some years to come. Imports of petroleum have been increasing and will continue to increase. Imports will come primarily from the Middle East and North Africa and, out of economic necessity, will be carried on the new supertankers whose transport costs per ton are much less than those of the smaller tankers now in general use.

As the size of the tankers has increased, from the standard pre-1960, 16,600 ton tanker, to the modern supertanker of 200–300,000 tons, to the 540,000 ton tankers presently being constructed, so has their draft. The 540,000 ton supertanker will require 93.5 feet of water, more than three times the draft of the 16,600 ton tanker. At the present time, there is no United States harbor with either the facilities or the natural depth to handle the very large crude carriers that have been constructed and used since the early 1960's. The almost prohibitive costs and enormous adverse environmental consequences involved eliminate the dredging of existing harbors to the necessary depth as an acceptable solution of the problem.

At the present time oil is imported into our harbors in a great number of smaller tankers, or in supertankers which anchor outside of our harbors and transfer their cargo, at great risk of spillage and collision, in a fleet of smaller lighters. As the Corps of Engineers points out in its report dated November 29, 1972, unless some sort of deepwater port facility is developed, the problems of the present system may become insurmountable : "Beyond the increased harbor congestion, every vessel to vessel transfer carries with it the danger of a spill. Our projected North Atlantic imports for 1980 are 2,000,000 barrels per day. This would require a fleet of 637–40,000 ton vessels but only 98-250,000 ton ships, lessening [by a simple decrease in numbers] the chance of collision, and consequently, of accompanying oil spills.". Page 2, Fact Sheet, Corps of Engineers.

That an increase in oil import requirements is now with us is substantially beyond dispute. Thus, the issue is not whether imports of crude oil will increase in the Northeast but rather how that increase can best be effected with the least environmental impact; it is: how best the environment can be preserved and, indeed, upgraded, while at the same time statisfying the needs of the residents of the North Atlantic area for energy at reasonable cost.

V. There are good reasons for installing a deepwater port facility in the area proposed by Intercontinental. First of all, there must be a deepwater facility servicing the North Atlantic states, since this area is a major user of petro. leum and contains a number of refineries. Secondly, the present method of importing petroleum into this area is inadequate, is rapidly becoming obsolete, and, even more importantly, is dangerous from an environmental point of view.

The Corps of Engineers, after studying the feasibility of a deepwater facility at various places on the Atlantic Coast, determined that the two locations with the greatest economic and environmental feasibility appear to be either off Long Branch in Northern New Jersey or off the Cape May-Cape Henlopen

We believe that of these two locations, the best place for such a deepwater port is off Cape Henlopen, primarily because this location is not in the congested maritime traffic present in Northern New Jersey while still being accessi. ble to a number of refineries. Moreover, overland pipeline right-of-ways and tank farm acreage is more readily available for immediate acquisition. However, if it is ultimately determined that an installation off Northern New Jersey is economically and environmentally preferable, we are able and prepared to install our deepwater port system there.

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spills but there can be no dispute that the likelihood of damage, especially to coastal areas, diminishes when more time is available to take remedial

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It is our view, and I believe this view is shared by the Corps of Engineers, that the single buoy mooring system is far and away the most environmentally satisfactory and economically sound system. The other available systems are infinitely more expensive, thus requiring government participation, and have far more immediate impact on the environment because of the required traumatic dredging and other extensive marine construction. Further, they do not eliminate the possibility of oil spills in harbor areas.

Deepwater port facilities have been under study by a variety of governmental agencies for the last ten years. A useful bibliography of these studies can be found in the Hearings before the Committee on Interior and Insular Affairs of the United States Senate (Ninety-Second Congress—April 25, 1972). None of these studies reports unfavorably on the single buoy mooring system or its actual operation from an environmental viewpoint.

It is interesting to note a discussion of proposed offshore facilities in an article appearing in the June 19, 1972 edition of the Oil and Gas Journal entitled “API Urging National Superport Policy”. Reporting on the testimony of the American Petroleum Institute before the Senate Interior Committee, the article states :

“In the Gulf [of Mexico], API said, there are several projects which plan to use monobuoy systems for unloading. This type of facility is favored for its safety, flexibility, low investment, economy of operation, short construction lead time, and minimum effect on the environment.

"Installation would be near the 100-ft. contour in the Gulf, with pipelines moving crude to shore.

"Several monobuoy systems could be deployed strategically for the same investment required for a single artificial island superport, the industry analysis stated."

Recent news reports have authoritatively stated that a single buoy mooring system is to be recommended in the Gulf of Mexico off either the coast of the State of Louisiana or the State of Texas. These states, which have had substantial experience over the years with offshore oil operations, are actually considering undertaking installation and operation of these systems themselves in behalf of their respective states. Surely this must indicate the total satisfaction of the authorities of these states that the system can be operated on an environmentally satisfactory basis.

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THE PIPELINE

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Two 48" submarine pipelines will run under the ocean floor and the bed of the Bay for approximately 70 miles from the mooring facility to the tank farm at Bayside. Our engineers have already investigated and charted a course for them which will skirt existing oyster grounds and will not come closer to Cape May than 248 miles. The pipelines are not expected to cross navigable channels in the river and bay area and in the event of a new channel or other navigational project, Intercontinental Pipeline has agreed to appropriately modify the pipelines.

The pipelines will be of welded steel and will be buried under the ocean floor or river bed with a minimum of four feet of cover. The dredging and backfilling of the pipeline trench will be performed in compliance with the strictest environmental protection considerations. In this connection, I also want to emphasize that the submerged pipelines will have automatic shut-off valves which will simultan ly shut down the pumps in the event of trouble. Other modern safety devices such as automatically activated booms are available for installation. We have reviewed a substantial number of reports on oil spillage in connection with pipelines, including the Corps of Engineers report, and in all cases the experience with pipelines in this regard has been exceptionally good.

Substantial experience supports the Corps of Engineers's conclusion in its
November 29 report, prepared in connection with this hearing that,

"Whichever type of [deep-water port] facility is chosen, the oil will have to be moved ashore, and the most efficient and environmentally sound way to move the oil is by pipeline.”

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THE TANK FARM

The tank farm will be constructed at Bayside in Cumberland County. The 200-acre site has already been selected and is locally zoned for industrial purposes,

The oil will leave the tank farm by pipeline, over existing, and largely abandoned, railroad rights-of-way, to refineries in the Philadelphia and New York area. We have already approached the railroads on this, and they have indicated interest in the proposal.

We have absolutely no intention of constructing either a refinery or petrochemical facility now, or in the future. It is our judgment that existing refineries can more than absorb the throughput of the proposed pipeline facility. Moreover, even if this were not so, we do not regard South Jersey as an appropriate location for such a facility. Should anyone else think so, the state and local authorities have ample power to deal with the situation.

VII. Intercontinental Pipeline will comply fully with all environmental requirements imposed by Federal, State or local government. Without such compliance we know we will not be permitted to proceed. We are now in the process of completing a definitive environmental impact study for public review by the Corps of Engineers and the other governmental agencies involved, which we think will show that our proposal will not have an adverse effect on the environment of this area. Let me just say here that, based on a number of reports, chances of oil spillage are much less with a deep-water port and submerged pipeline than with any other alternative, including the present system used in the Delaware Bay area.

VIII. Legal Liability-Intercontinental Pipeline is determined to construct and operate its facilities so as to insure, as far as technology permits, that there will be no discharge of oil or accidental spillage from its facilities. This determination is based on the concern we share with environmental groups for the protection of marine ecology ; indeed, enlightened self-interest tells us that our operations must be so conducted as to reduce existing pollution hazards, rather than increase them. As I have already stated, this goal can and will be achieved through the use of the SBM system.

Those who receive expressions of corporate concern regarding the environment with considerable scepticism may be perhaps more reassured to know that we are also keenly aware of the existence of strict federal laws regarding the discharge of oil into the navigable waters of the United States and adjoining shorelines. Under existing legislation (Section 1321 of Title 33 of the United States Code) the owner or operator of an offshore facility such as ours is liable to the United States for the actual costs of removal of oil discharged from such a facility, up to an amount of $8 million. If the discharge is the result of willful negligence or misconduct within the privity and knowledge of the owner, the liability is unlimited in amount. Moreover, when an actual or threatened discharge of oil from an offshore facility presents an imminent and substantial threat to public health, fish, shellfish or public or private property, shorelines and beaches, the United States may secure such equitable relief in the Federal courts as may be necessary to abate such threat. I wish to point out that this relief is in addition to any other action taken by a state or local government and that the law expressly provides that civil liability to the United States does not in any way modify the liability of the owner or operator of an offshore facility to any person for damages to any public-owned or privately-owned property resulting from a discharge of any oil from the facility or from the removal of any such oil. In addition to provisions regarding civil liability, existing federal legislation also provides for stiff penalties. Any illegal discharge of oil in harmful quantities would subject the owner or operator of an offshore facility to a penalty of up to $5,000 for each offense, each violation being a separate offense. Similarly, each violation of the regulations concerning procedures, methods and equipment to prevent the discharge of oil from offshore facilities would entail a penalty of up to $5,000 for each violation.

The Federal Water Pollution Control Act also imposes a duty to report immediately to the Government any discharge of oil in harmful quantities. Any person in charge of an offshore facility who is convicted of failing to notify the Government was soon as he has knowledge of any [unlawful] discharge of oil” from such facility may be fined up to $10,000 or imprisoned for

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not more than one year, or both. In face of such heavy criminal liability, the person in charge of an offshore facility is not likely to let spillage go unreported.

IX. In conclusion, I would like to submit that Intercontinental Pipeline's proposal should be accepted because :

1. It will alleviate and avoid environmental hazards and problems which now exist and will increase in the area in the near future, and it creates no ecology problem;

2. It will create much needed tax revenues and job opportunities in Southern New Jersey, while bypassing Cape May so completely as to avoid any aesthetic or environmental problems in that area ;

3. It will insure the availability in Southern New Jersey of inexpensive fuel for use by local residents and industry, as well as tourists who want to visit this area; and

4. It will be a major help to the United States and the Atlantic Coast in relieving the growing energy crisis.

Senator HOLLINGS.—The committee will be in recess until Monday, March 12.

(Whereupon, at 1:30 p.m., the committee was adjourned, to be reconvened Monday, March 12, 1973, at 10:30 a.m.)

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