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Senator Roth. Yes, Mr. Chairman. That is what I am proposing. Delaware, of couse, to the extent it has authority, has ruled out superports. But I would propose that the Federal Government give a voice to the State to the extent that it has jurisdiction.
So I would go beyond the 3-mile limit, up to the 10 miles you suggest.
Senator HOLLINGS. Very good, sir. We appreciate your statement here and your contribution to this particular problem, and you are welcome to sit with us if you have time later on.
Our next witness is Mr. William Moody, Administrator of the
Dr. White could not be with us today. He will appear at a subsequent hearing.
Mr. Moody, welcome. Good to see you. Are you for a superport?
STATEMENT OF O. WILLIAM MOODY, ADMINISTRATOR, MARITIME
TRADES DEPARTMENT, AFL-CIO
Mr. Moody. Yes, sir. We are for superports.
Senator HOLLINGS. We would like to hear from you because you can see right now it is going to be tough getting one.
Mr. Moody. Mr. Chairman, we appreciate the opportunity to present our views on this question which is of great concern to all of us for different reasons, I am sure.
I am the administrator of the AFL-CIO Maritime Trades Department, which is a constitutional arm of the AFL-CIO and is composed of 44 unions representing some eight million American workers.
We are pleased to have this opportunity to testify before the Senate Commerce Committee on S. 80, a bill that will significantly aid in the development of deepwater terminals off the coasts of the United States.
We congratulate you, Mr. Chairman, and the other distinguished Senators who have cosponsored this legislation. S. 80 represents a farsighted and bold step toward the start of construction of deepwater port complexes on alī the coasts of the United States.
S. 80 deals with what is possibly the most controversial and critical aspect of deepwater terminals, their operational safety and environmental effects. In the past, a number of States and communities have voiced their concern about offshore projects.
These matters are also of deep concern to the AFL-CIO Maritime Trades Department. The MTD represents thousands of shoreside workers and seafarers, many of whom will work or dock their vessels at these ports once they are certified and built.
Both as workers and as citizens, these MTD affiliated union members have a vital stake in insuring that these ports are environmentally sound.
Senator HOLLIXGS. Just as a matter of personal interest, these large Japanese 400,00 tonners, they are all supposedly automated and unloaded in an automated fashion. Does this really require an increase of maritime trades employment to actually handle these? They sort of brag openly that they more or less operate themselves.
You are experienced in this. Tell us about it. Would there be many workers involved in these supertankers, docking?
Mr. Moody. Well, supertankers, as you know, Senator, represent automation in our field. But insofar as the American seaman is concerned, he is not operating the small tankers in foreign commerce anyway. They are all foreign flag ships which are built in foreign yards, not subject to the tighter safety requirements that we have, and not manned by seamen who we think are as skilled as our seamen and who are under the control of the U.S. Government. So we think in the long haul, from the standpoint of jobs, environmental safety, the price to the consumer of this source of energy; that the superport would permit large tankers of this kind of tonnage to approach our shores and would be a benefit to all concerned.
Senator HOLLINGS. Mostly to the consumers, then, rather than to the maritime unions; AFL-CIO Maritime Trades Department?
Mr. Moody. You see, we are not going to be able to get into this business of building supertankers if we don't have ports that can accommodate them. We believe the Congress in its wisdom is going to at some point say that it just doesn't make any sense for us to depend upon foreign sources for a great part of this energy source, oil, and not have any transportation capability in that field.
We believe Congress is going to say that we must develop transportation capability and that a certain portion of petroleum must be carried in American flag ships.
But if we are going to be able to do that, if Congress is going to be able to become convinced that that is what we ought to do, then we think we have to meet the economic objections and the only way you can meet the economic objections is by the scale reduction that the larger ships would enable you to bring about in cost of transportation.
Senator HOLLINGS. The Maritime Administration has 30 to 40 under construction now, 10 a year
Mr. Moody. That is what is envisioned by the Merchant Marine Act of 1970.
Senator HOLLINGS. How many have been built?
Mr. Moony. Off the top of my head I can't tell you. But I would say it has been less than a dozen. There are others that are now under construction but, to my knowledge, there is only one supertanker, the type we are talking about, under construction in a U.S. urd. And as far as I know the contract for only two has been aproved,
Senator HOLLINGS. Where is that one being built at the present ime?
Mr. Moody. It is being built in New York in what was the old Brooklyn Navy Yard..
Senator HOLLINGS. All right. You may proceed.
Mr. Moony. For this reason we are encouraged by the steps that S. 80 takes toward the creation of superports in the United States.
By establishing a standard environmental procedure for all offshore facilities, whether a deepwater terminal or a powerplant, the legislation before us allows operational planning to begin for these fa ilities.
We are convinced that only through this kind of advance planning and careful analysis can the dream of an efficient and safe deepwater port become a reality.
In the past the MTD has strongly supported the creation of superports to serve the needs of the United States. These ports are a first priority if the present and ever-increasing petroleum shortage facing the United States is to be overcome. At the present time the United States is consuming over 15 million barrels of petroleum a day.
It has been variously estimated that by 1985 from 50 percent to as much as 65 percent of U.S. oil consumption will come from foreign sources. Much of this oil will be transported from the far distant Persian Gulf.
While U.S. oil import needs have thus been increasing prodi. giously, at the same time the transportation system to bring this oil to the United States has become seriously outmoded.
Today there are no east or gulf coast ports than can handle a tanker larger than 80,000 tons. Oil importers have thus been forced to charter increasing numbers of small 40,000 to 60,000 ton tankers.
Heavy foreign traffic, in terms of small tankers carrying our oil import cargoes, coupled with heavy domestic coastwise oil traffic, has created hazardous congestion in harbors and sealanes leading to conventional discharge facilities.
The absence of any U.S. deepwater terminals and the subsequent U.S. dependence on small tankers has cost the Nation heavily in terms of higher fuel costs and greater dangers to the U.S. environment.
It costs up to 50 percent more to use smaller tankers to import U.S. oil needs than it would to use larger tankers of 200,000 tons or more. These large tankers would allow U.S. consumers to gain the advantages of the economies of scale supertankers produce.
Not only does it cost the consumer more for his oil when it moves on small tankers, but it also increases the deficit in the U.S. balance of payments.
At the present time almost all oil imported into the United States is carried aboard non-U.S. flag tankers. Most of these tankers are American owned runaway flag vessels registered in Liberia or Panama. As a result, the higher costs involved in using smaller foreign flag tankers means the outflow on the balance of payment increases.
The large deficit in the transportation sector of the balance of payments is due almost entirely to the foreign flag tanker traffic to the United States carrying imported oil. In 1970 the tanker outflow alone totaled $393 million. Had this outflow not occurred the transportation sector would have shown a $332 million surplus.
The large numbers of small foreign flag tankers using U.S. ports have also created a safety and environmental hazard that may already be greater than the future navigational dangers envisioned by the authors of S. 80.
Trade routes along the coast of the United States are severely congested with tanker's serving U.S. oil needs. While these tankers are smaller than the supertankers of 200,000 tons or more that now efficiently serve other nations, these foreign vessels are also generally older and less safe than more modern supertankers.
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The best solution to this situation is to buid a number of deepwater terminale along the coasts of the United States.
On the guli cast the oil refineries of Lonisiana provide an excelLent rorption point for a portion of V.S. crude oil imports. The State of Louisiana fully supports a deepwater port and has established a State body to encourage such ports.
In addition, a group of C.S. oil companies have formed a consortium called the Lousiana Offshore Oil Port (LOOP) to build their own terminal.
On the east coast the need for imported oil is even more pressing: While a number of States have expressed their reservations about the location of a port, we are convinced that once adequate safepuards and a sound environmental plan are developed for the propuxad deepwater terminal that this opposition will largely disappear,
The west coast is the only area of the nation that presently has porte do penough to accept vessels of over 100,000 tons. Yet even here the port capacities are limited; and if large tankers are to serve this area of the Nation, then deepwater terminals will be a necessity. Otherwise the narrow confines of west coast harbors will severely restrain the ability of supertankers to maneuver or avoid collisions.
Deepwater terminals would produce numerous benefits for the United States. They would allow the introduction of larger tankers to serve U.S. ports, thus allowing economies of scale in U.S. oil trades.
Deepwater ports could be built without the severe ecological destruction associated with port dredging and deepening.
Deepwater ports would halt the flight of U.S. refinery capacity to the Bahamas and other nearby foreign areas. By providing U.S. refineries with a steady flow of competitively priced oil, the U.S. refiners would be encouraged to expand their American operations.
The U.S. flag merchant marine would be stimulated by the ability to use larger vessels to serve U.S. oil needs. These larger vessels would be better able to compete more effectively with foreign flag vessels and could thus increase the U.S. flag merchant marine's share of oil import cargoes, which are presently carried almost exclusively by foreigners. Both U.S. shipbuilding and shipping and, of course, the U.S. economy would be stimulated by the jobs and investment this development would produce.
And, finally, a deepwater port could save U.S. consumers 50 cents or more per barrel of oil over the cost of petroleum shipped through the Bahamas. The balance of payments outflow for oil shipments could thus be significantly reduced.
These and other advantages would all result from the construction of deepwater terminals in the United States.
S. 80, by setting up specific environmental criteria and plans for a deepwater port terminal, will take a necessary step toward the realization of this goal.
We are particularly pleased that the National Oceanographic and Atmospheric Administration (NOAA) was chosen under S. 80 as the agency to administer the environmental criteria for deepwater terminals.
NOAA has both the expertise in maritime matters and the deep concern for the ocean environment that is needed to effectively carry out the mandate of S. 80.
We feel that once a deepwater port terminal plan is certified by
Thank you, Mr. Chairman, for hearing our views on this subject.
Mr. Moody, you always present a very cogent statement to this committee on maritime affairs and today is no exception. We appreciate it very much and we will be working on it. It is going to be an evolving question I can see right now.
Tomorrow we have the Governor of Louisiana who is in a footrace with the Governor of Texas to get the first superport constructed. And we will see exactly how this problem develops.
You were very, very helpful on our coastal zone bill, in trying to protect the coastal environment, and getting the necessary votes to allocate this particular responsibility as well as our oil pollution, the ocean dumping bill.