*See detail sheets in Technical Report for reduced costs if breakwater and dredging are Federally financed or subsidized.

damaged by oil pollution, (2) compliance with existing or anticipated laws, and (3) the modification of existing statutes to permit the operation and/or control of petroleum transfer activities. Agreements, laws, and regulations which may affect this situation exist, or are being considered, at the international, national, regional, state, county, and local levels.

(a) International

At the international level, the Intergovernmental Maritime Consultive Organization (IMCO) has developed two conventions respecting oil pollution damage and liability for such damages. Neither of these conventions has been ratified by the United States; however, they are now before the U.S. Senate and ratification appears likely.

It should be noted that international treaties are the "Supreme Law of the Land." Accordingly, ratification of the conventions would pre-empt all state laws and prevent remedial measures from being taken by state legislatures in matters covered by the conventions. There are substantial opinions that the provisions of the conventions are inadequate to provide for appropriate compensation to individuals and local government injured by oil spills.

(b) Federal

It will be necessary for any construction in the Bay to comply with the requirements of the Federal Water Quality Act. This will mean the preparation of an environmental impact statement and the public examination of that statement. All construction, or placement of floating obstructions, in a navigable waterway requires a permit from the U.S. Army Corps of Engineers.

The Federal Water Quality Improvement Act of 1970 provides for fines and extensive liability in connection with the discharge of oil, harmful to public health and welfare, into navigable waterways, adjoining shorelines, and waters of the contiguous zone. Additional provisions of this act are given in Chapter 2 of this report in the sub-section concerned with cleanup responsibility. Jurisdiction over terminals constructed and operated outside of state and federal territorial waters on the continental shelf is not adequately defined. A presidential task force has been formed recently to clarify this matter and recommend appropriate federal legislation. Their report is expected in the spring or summer of 1973.

(c) Regional

The Delaware River Basin Commission (DRBC) has authority over construction in the Bay which will affect water quality. Accordingly, it is anticipated that DRBC approval would be required for the construction and operation of a fixed terminal inside the Bay as defined by a line which connects Cape Henlopen and Cape May.

A second agency, the bi-state Delaware River and Bay Authority (DRBA) involves both New Jersey and Delaware. Its charter is specific in giving that agency control over marine transportation facilities in the Bay. It is unclear whether such transportation facilities must be partly in each state for the DRBA to control. Projects undertaken by the DRBA can be vetoed by either state.

(d) State

The State of Delaware controls all public subaqueous lands within its boundaries through the Water and Air Resources Commission and the Governor.

Environmental standards are administered by the State Department of Natural Resources and Environmental Control (DNREC). A permit would be required from DNREC to proceed with any project involving dredging or the construction of fixed facilities.

The Coastal Zone Act is administered by the State Planning Office. The construction of a fixed terminal facility is forbidden by the act. The construction of a pipeline, either subaqueous or on shore, is not forbidden. If a fixed terminal facility were to be built in the Coastal Zone, it would be necessary to amend the Coastal Zoning Act to allow the facility.

(e) County

County zoning ordinances vary with respect to an offshore terminal, a tank farm, and a pipeline. Kent County has no zoning category for such facilities. Sussex county considers recreational interest, at all times, paramount to industrial interests. New Castle county still has a substantial amount of unused land zoned for industrial development. A further attempt to restrict the use of land in the state "Coastal Zone" was recently defeated in the County Council. There is no current prohibition with respect to utility transmission and distribution lines.

(f) Local

No local ordinances were discovered in the course of the Committee's work which specifically related to petroleum transfer facilities or operations.

(g) Private

Protection for private individuals damaged by oil pollution is at present covered by the 1970 Water Quality Improvement Act. It is the opinion of some legal authorities that the rights of private citizens are inadequately covered by the federal act. This means that special state legislation should be enacted to protect private rights. Otherwise, the only recourse available to a private citizen is at common law such as nuisance, trespass, or in admiralty law under 1850 federal legislation. In this matter Delaware citizens with property exposed to the potential of oil spills are quite vulnerable.

National Defense

The Committee sought but did not receive assistance of the Department of Defense in evaluating national defense aspects of oil transport. No national defense studies or policies concerning deepwater ports were found to exist. Five conclusions have resulted from consideration of this matter.

1. The most vulnerable part of a crude oil transportation system which would include a deepwater port, are the large tankers. These could be easily sunk on the long ocean voyage from the Persian Gulf, Africa, or South America.

2. It would seem unwise to concentrate all deepwater crude importation in a single East Coast terminal. Such a terminal could be put out of commission by direct attack or by scuttling a ship in the terminal or approach channel.

3. A national plan for the location of new refineries and deepwater terminals based on defense considerations does not now exist. Such a plan should be prepared and should be used in planning new facilities.

4. Delaware is not the sole deepwater terminal location on the East Coast. Not all crude oil will be coming by supertankers. Some will come from less distant ports in conventional tankers or new "restricted-draft vessels" that can enter many existing ports. Other terminal sites can be located in protected waters and in less critical areas.

5. Concern has been expressed to the Committee by Delaware residents that the location of a deepwater terminal in Delaware Bay or offshore would make Delaware a target for foreign attack in time of war.

Regional Economic Considerations

In the near-term little economic impact on consumer prices would be expected in the Delaware Valley regardless of what course the State of Delaware chooses to follow. This is because petroleum companies have other economically viable alternatives which are outside of Delaware control. Examples include refining or transhipment in the Bahamas or Canada, or, the expansion of refining capacity in the Gulf area with products supplied by pipeline.

In the longer term it is possible that if Delaware does not allow the construction of a deepwater crude oil terminal few if any new refineries will be built in the Delaware Valley. Due to air pollution standards now in effect it would be difficult to increase refining capacity in the industrialized part of the Delaware Valley without exceeding allowable pollution limits. This could have the effect of reducing refining activity in the valley over the next two or three decades.

95-564 O 73 - 20