What we are suggesting is that a better regulatory framework might provide for an initial certification for construction and then an operational permit or certification which would be issued at that stage of development.

Similarly, in connection with the operation of deepwater port facilities, we believe that the bill as presently drafted is perhaps too narrowly focused on the effects of the structure itself rather than effects of the operation of ships in or near the structure. If a terminal is indeed located at a distance from bays or estuaries where there will not be substantial dredging or spoil disposal, oil spills and oil pollution of the seas will undoubtedly be the major impact from any such offshore development.

Similarly, in focusing on large-scale offshore structures, the bill may inadvertently subject to a lesser degree of regulation other types of deepwater port terminals such as a monobuoy system, that is, a system involving only one floating buoy to which a tanker would moor itself. As we understand it, the plan for Louisiana at present is to develop single monobuoys rather than a large offshore island. Those monobuoys themselves might not pose significant environmental problems but the effects of operation of tankers in or near monobuoys might.

Two other points should be made in closing. First, and this point is again derived from the general principles that we have presented, there should be provision in the statute for State participation, subject to appropriate conditions, in the decisionmaking process and for State approval of the ultimate decision to site, construct and operate a superport.

Second, and this really is itself a general principle, the statute should not, as it presently does in section 303, exclude offshore drilling operations. We do not believe such exclusion is justified. Offshore drilling poses immediate effects of oil pollution from breaks of lines and such, as well as creating substantial secondary impacts on landside development. In point of fact, offshore drilling does not represent a significantly different environmental problem than that of other kinds of offshore development. The major disasters in the last 5 or 6 years off the U.S. coasts have been from oil rigs rather than from tankers. There were two major disasters off the Louisiana coast in 1970 and 1971 and, of course, the Santa Barbara Channel spill had a devastating effect upon the California coast. Consequently, we believe drilling rigs should be covered in any comprehensive scheme of offshore regulation.

That concludes my specific comments.

Senator HOLLINGS. Very good. Mr. Borelli, do you have anything you wish to add?

Mr. BORELLI. I had one brief remark, Senator, with regard to the agency. I think this is at this point a difficult question for us to address ourselves to, as it was a difficult question for the chairman to address himself to. The primary reason for this is that there is need for some Federal agency to be involved in this field and I think your bill rightfully addresses itself to this need.

In our testimony for example, we list the number of agencies that we presently foresee having some expertise in this field: Coast Guard, EPA, NOAA, the FPC, FMC, Corps, the Bureau of Land

Management, the Bureau of Sport Fisheries and Wildlife and the U.S. Geological Survey.

I think that, without begging the question, we really are referring at this point to some sort of interagency coordination. Whether that coordination should be in the form of a separate agency or whether it should be in the form of a working task force, I am not sure.

I would like also to comment briefly on the need for this coordination at this time and further support our position in calling for a moratorium of development. We have been involved in the past few years in developments in the States of Maine, Massachusetts, New Jersey, and Delaware. We have seen presentations and initiatives taken by private industry and government similar to the presentation you saw before you today by the State of Louisiana, where while we are in no position to comment on the sincerity or quality or expertise that has gone into these plans, both financial and environmental and political planning, it is quite clear to us that there is no coordination at a regional and certainly not at a national level. Each of the States apparently is going its own way and, in many instances, we have corporations going their own way.

In a related problem not having to do with superports but relating to your legislation, in the field of nuclear power plants, we have the unfortunate situation in the State of New Jersey last year of a major utility which announced for the first time in a press conference that it had intentions of floating two nuclear power plants on barges off the New Jersey coast. There was no coordination, no local coordination, no referendum of the people, no Federal permits pending. Now, there are permits that will be required in this development, but as we understand from recent communications with CEQ, at this point, the field is wide open to offshore coastal development of floating power plants and we are presently faced with a proposal in Florida for the construction by a joint Tenneco-Westinghouse operation, as I am sure you are aware, of the mass production of floating power plants that we may see floating along our East Coast in the coming years.

It is clear that without some Federal direction, without some action from Congress, and without some administrative coordination by the Federal Government, we are in very serious trouble in the years ahead. We are talking about not only the coastal zone for which we have some legislation; we are talking about the land area surrounding these coastal zones. We are talking about the high seas and we are talking about the Outer Continental Shelf.

While I agree with your sentiments as expressed earlier, that we cannot wait for the millennium for all of these things to come together in a neat little package, we certainly should take every step that is available to us today by way of coordinating what efforts do exist and by expediting what legislation may be pending to avert what could be a very serious problem.

I think we are going to be greatly deceiving ourselves if we think we can control the coastal zone or the outer continental shelf or the land areas in our coastal States if we allow these major developments to proceed before we take sufficient congressional action.

Senator HOLLINGS. Then, when you do take action, like the Coastal Zone Management Act, you see what happens?

Mr. BORELLI. Senator, for the record, I assure you that all the organizations represented here today support your observations on the funding of the Coastal Zone Management Act 100 percent.

Senator HOLLINGS. Well, I appreciate that very much. Maybe we can build up some sentiment and get it moving. This is the only way to turn the public's attention to the myriad of problems and considerations that you have expressed here. It is an excellent paper and I have been glancing over it as you have been testifying. You have covered almost every subject except I would like to have a bill at the end of it on how you propose to do it.

How would you do it, Mr. Hallman? Suppose you were a Senator. What bill, after reading all this and I understand and agree and appreciate it and everything else-then what do I do?

Mr. HALLMAN. I think you ought to have your very able staff sit down and perhaps draft a more comprehensive, policy-oriented bill. Senator HOLLINGS. They are like you. They will give me two more stacks like this. I think, though, we first have to start with an Energy Policy Council, which I think you folks are supporting, and then see if we can get some licensing and certification agency of the Government that will encompass every one of the considerations that you have outlined.

We appreciate very much your appearance here today. Is there anything you would like to say in addition? As I look over this, I might have some written questions if you don't mind.

Mr. HALLMAN. We would be more than happy to respond to any questions that you have orally or in writing.

Senator HOLLINGS. We thank all three of you here today for your presentation.

[The statement follows:]

STATEMENT OF ROBERT M. HALLMAN AND ELDON V. C. GREENBERG ON BEHALF OF SIERRA CLUB, ENVIRONMENTAL DEFENSE Fund, Natural RESOURCE DEFENSE COUNCIL, NATIONAL PARKS AND CONSERVATION ASSOCIATION, ENVIRONMENTAL POLICY CENTER, AND FRIENDS OF THE EARTH

The basic positions set forth in the testimony are as follows:

(1) Offshore development of deep water ports, powerplants and airports, should not be permitted to proceed (a) until fundamental questions of need and environmental effects are resolved and (b) until a coordinated policy approach to development of the coastal zone is established;

(2) Any deep water port development which is undertaken should proceed cautiously and perhaps be limited to a pilot project in the first instance;

(3) Since only a limited number of deep water port facilities appear ripe for consideration within the near term, it may be appropriate to have specific legislative approval for each facility, rather than leaving this determination to

an agency;

(4) There should be overall planning and coordination, through a single federal agency, of deep water port development;

(5) State and regional authorities should be involved in the planning process and any deep water port project should be subject to their approval on land use planning and environmental grounds;

(6) There should be a uniform scheme of regulation of deep water port development applicable to such development whether it occurs within the territorial sea or on the Outer Continental Shelf;

(7) Financing, ownership and charges for use of deep water port facilities should be subject to governmental regulation;

(8) Authority to regulate vessel design and provide for vessel traffic services and port systems should be extended to deep water port facilities constructed outside the territorial sea;

(9) Deep water port facilities should be located off shore and at a substan tial distance from bays and estuaries; and

(10) Transport of oil from offshore terminals must be accomplished by buried pipelines rather than small tankers and barges.

In light of these positions, we then evaluate and criticize S. 80, Most importantly, we suggest, among other matters, that NOAA may not have the capability to evaluate design and construction standards for offshore terminals, that the bill does not focus effectively on operational hazards from deep water port facilities, that the bill focuses too narrowly on environmental effects on the marine environment and does not provide for evaluation of landside secondary impacts, that it fails to provide for meaningful participation by state and local authorities, that it excludes without justification offshore oil drilling facilities from the scope of its regulation, and that the standards which it establishes for certification may, by implying a balancing standard, undercut the statute's primary purpose of environmental protection.

We appreciate the invitation to appear before the Committee today to provide the advice of the Sierra Club, the Environmental Defense Fund ("EDF"), the Natural Resources Defense Council ("NRDC"), the Environmental Policy Center ("EPC") and friends of the Earth ("FOE") with respect to S. 80. We have acted as counsel to these groups on environmental matters in the past, and we have been asked by them to coordinate the presentation to this Committee today of their views on the important issues of national environmental policy raised by S. 80.1 The bill proposes to authorize the Secretary of Commerce acting through the National Oceanic and Atmospheric Administration ("NOAA") to certify the environmental soundness of the site selection, construction and operation of certain offshore, artificial structures. We will focus our attention on S. 80's application to deep water ports because we understand that the marine pollution problems posed by the development of such facilities are of particular concern to this Committee and a major object of the proposed legislation.

The environmental groups which we represent are all national organizations deeply concerned about the preservation and protection of the marine and coastal environment. With the exception of EPC, which is an independent, privately financed group located in Washington, D.C. that provides policy analysis and research assistance to state and local environmental organizations, all the environmental groups are non-profit membership organizations with a combined membership exceeding 250,000 persons throughout the United States and abroad. The membership of each group includes a substantial number of persons who reside in coastal areas which are likely to be directly affected by offshore development, as well as scientists who have conducted and intend to continue to engage in research in coastal and estuarine areas and the marine environment.

The environmental groups have made substantial efforts to improve the quality of the marine and coastal environments by means of litigation, testimony, policy analysis, and educational programs. For example, in the litigation field, EDF, NRDC and NPCA recently achieved a settlement with the Commerce Department under which it agreed to prepare environmental impact statements in connection with its program to subsidize the construction of United States oil tankers. And NRDC, the Sierra Club and FOE were successful in requiring the Department of Interior to consider all reasonable alternatives, and their environmental impacts, to its offshore oil and gas lease sales. In the area of international regulation of marine pollution, EDF, NRDC and the Sierra Club have taken an active role in commenting upon the proposed 1973 Convention for the Prevention of Pollution from Ships. These groups have also been actively involved in presentation of testimony on this subject. Thus, during th last session of Congress, EDF and the Sierra Club submitted comments to this Committee on the Ports and Waterways Safety Act of 1972; and the Sierra Club submitted comments on deep water port policy at hearings held by the Interior Committee last April and at congressional hearings held in 1970 regarding the development of a proposed deep water port at Machiasport, Maine, as well as at recent hearings held by the Corps of Engineers related to its current deep water port studies.

1 Substantial assistance in preparation of this written testimony was provided by Edward L. Strohbehn, Jr. of NRDC and Peter Borelli of the Sierra Club.

I. THE PROBLEM OF DEEP WATER PORT DEVELOPMENT

The United States is on the verge of deciding whether to develop deep water port capacity. Interest in deep water port development is based on several factors: Anticipated increased demand for petroleum products coupled with a projected inadquacy of domestic reserves to meet those demands over the short and medium terms, lack of existing deep draft port facilities in the United States, the view widely held in industry that there are substantial economic benefits to be achieved by transporting petroleum products in deep draft oil tankers with huge carrying capacities, the spectacular increase of investment in and growth of a world fleet of such "supertankers", and development of deep water ports in other parts of the Western Hemisphere, particularly in the maritime provinces of Canada and the Caribbean. Based on these factors, pressure for deep water port development is rapidly increasing. As you may be aware, proposals currently exist (and are shrouded in substantial controversy) for the development of such facilities off the New Jersey, Delaware, Louisiana and Texas coasts. Despite the numerous studies that have been recently undertaken, including those of the Maritime Administration, the Corps of Engineers and the Council on Environmental Quality, the economic, environmental, political and social interests which must be evaluated and balanced in determining whether or not to develop deep water terminals at all have not been fully explored.

At the heart of any proposal to develop deep water ports lie the threshold issues of: (1) whether the United States needs additional energy supplies of the magnitude contemplated, particularly in the form of imported petroleum— which depends in large measure on the shape of our national energy policies; (2) whether, if substantial increases in petroleum imports are necessary, the use of deep water ports in providing for reception of such imports is economically justifiable; and (3) whether, if deep water ports are economically justifiable, their development is environmentally acceptable in light of existing or potential alternatives. These issues cannot be dealt with intelligently and responsibly on a case-by-case, or port proposal-by-port proposal basis, such as is provided for in general licensing legislation like S. 80.

In terms of energy policy, the need for deep water port development is premised on vast increases in oil imports at least during the next 10 to 15 years. These projections, as well as the extent of reliance on oil imports over the longer term, are subject to debate and depend upon what energy policy strategies are assumed. Thus, a policy which emphasized reducing the rate of growth of energy demand and/or increasing availability of other energy resources, such as deep-mined low sulphur coal and gas and oil from such coal, could substantially reduce the need for increases in oil imports. The point is that national long-term energy requirements and methods for meeting them are critical factors in deciding whether to develop deep water port facilities in the United States, particularly in light of the severe environmental risks which they pose. Moreover, it is not clear that, even if needs for oil imports rise substantially, deep water ports make economic sense, in view of competition from foreign transshipment facilities and the costs of their construction and operation in or near U.S. waters, including costs for environmental protection, such as traffic controls and oil spill containment systems. Finally, given the substantial environmental risks posed by deep water port development-risks which have been extensively outlined elsewhere, such as in the Corps of Engineers and Council on Environmental Quality studies, and which need not be detailed here-it may be that reliance on transshipment facilities in, for example, Canada or the Caribbean, or the development of a fleet of shallow draft tankers, or even an increase in size of the conventional tanker fleet, coupled with appropriate vessel traffic and the design controls, is environmentally preferable to development of deep water port facilities in U.S. coastal waters.

Not only are fundamental issues concerning the need for deep water ports unresolved, but the magnitude and complexity of the problems inherent in constructing and operating deep water ports and in regulating such activities cannot be over-emphasized. Construction of an artificial island capable of berthing supertankers might cost well in excess of half a billion dollars, and possibly only one or two such ports can sensibly be developed. These facts raise difficult questions with respect to the financing and ownership of such a monopoly.