PORTS AND WATERWAYS SAFETY ACT OF 1972

TUESDAY, 2 MARCH 1976

U.S. SENATE,

COMMITTEE ON COMMERCE,

Washington, D.C.

The committee met at 9:35 a.m., in room 5110 of the Dirksen Senate Office Building. Hon. Warren Magnuson, (Chairman of the committee) presiding.

OPENING STATEMENT BY THE CHAIRMAN

The CHAIRMAN. The committee will come to order.

I was hopeful we would have two or three more interested Senators here, but they may be on their way..

This happens to be a busy morning; as far as committees are concerned. I have a very short statement which I would like to read for the record.

This meeting, is of course, in the nature of an oversight hearing on the Ports and Waterways Safety Act of 1972. This bill has now been in effect about 32 years, and we thought it was time we find out just what is happening in the administration of the act.

Nearly 312 years ago when this Committee was considering the bill which led to the Ports and Waterways Safety Act-it was indicated by Senator Ernest Hollings, who chaired the opening day of hearings on the bill that tankers had been designed and built prior to that date almost exclusively for the economic benefit of the vessel's owners. Little consideration was given to the protection of the marine and coastal environment in which those tankers must operate.

In 1972, we stood at the opening of the age of the supership. It was clear to all that legislation was urgently required to focus attention on the dangers of these new ships and other tanker problems, too. And legislation was obviously needed to bring about enhanced protection of the marine environment.

With the approval of the Alaska pipeline. the importance of this legislation was once again underscored. For the first time, large amounts of domestic crude oil would be moved from production areas to consumption areas by means other than large pipelines.

The Alaska pipeline requires a large increase in U.S. flag tankers— 35 ships averaging around 100,000 deadweight tons in size. For my home State of Washington; the additional increase in tanker traffic from Alaska means the possibility of one or two major pollution accidents with perhaps up to 430,000 gallons being spilled in the Staff member assigned to these hearings: James P. Walsh.

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Puget Sound area. Many other States throughout the country, particularly those with major ports that are already taxed to capacity, are faced with similar difficulties.

Oil pollution caused by tankers is attributable to two major sources: (1) from tanker accidents which result in rupture and spillage; and (2) from what is often referred to as "normal tanker operations" involve tank cleaning and deballasting and other intentional discharges at sea.

It is estimated that over a million tons of oil is dumped into the ocean each year as a consequence of "normal tanker operations." In addition, approximately 200,000 tons of oil per year is spilled by tanker casualties. One might conclude from this that the real problem is "normal tanker operations." However, oil from this activity is spread throughout the tanker lanes of the world. On the other hand, an accidental spill is usually concentrated in one local area and often involves considerably larger volumes than the smaller discharges made intentionally; as bad as they are.

While it is clear that this Nation must continue to rely on the ocean transportation of petroleum, we must be mindful, in establishing a tanker policy, of the other uses of our marine environment, namely, recreation, fishing, and the variety of other uses which make our coastal zone so valuable.

We must fairly balance the pollution risk among the owners of vessels; consumers of the oil, and the general public. In my view, the risks of oil pollution should be borne by the owners of oil-those who benefit from it-and the consumers of oil-those who use it. Shorefront property owners, fishermen, and the public should not bear the highest risk of oil transportation.

The basic congressional intent behind the Ports and Waterways Safety Act is to bring the risk of oil pollution from vessels to the lowest point possible. Although vessel construction is an international as well as a national problem, Congress obviously indicated in the act that we must be concerned, first and foremost, with the safety of our own waters and the protection of our marine environment.

Our hearings today will examine the various aspects of the Ports and Waterways Safety Act. Title I addresses the question of traffic control in the Nation's ports and waterways. Title II addresses the question of safe operation and construction of vessels carrying polluting substances in bulk. The act provides broad authority to the United States Coast Guard to implement congressional intent, as it is the main Federal Agency charged with the safety of our navigable waterways and the vessels which operate in it. The actions of the USCG constitute the single most important Government policies on this subject.

During these hearings, we will also be receiving the views of individual States which are now attemtping to cope with increased vessel traffic in their waters. It has been the constitutional practice of this Nation that States and the Federal Government generally share concurrent power over activities in navigable waters, although in certain areas, this must be remembered, the Federal Government has sole authority. Consequently, the interest of our coastal States must be accommodated in any national policy on vessel safety.

There is no doubt that the Ports and Waterways Safety Act has international implications. But the act also has important implications for the relationship between the Federal and State Governments in regard to navigable waters. Since the States have considerable authority under their police powers to regulate port siting, cleanup and so on, failure to strike an adequate balance between the concerns of the State and the Federal Government can lead to conflict, great difficulty and impasse. One such example of this possibility is the legislation recently passed by the Washington State Legislature, regulating tanker operations in Puget Sound, which is a vast sea with large amounts of coastline.

I firmly believe, however, that if the State of Washington had confidence that the USCG would protect its interests, no such legislation would have been enacted. However, in passing this law, the legislature has expressed its strong doubts about whether the Federal Government has adequately evaluated State and local concerns in recent regulatory actions, or may I say lack of actions, under the Ports and Waterways Safety Act.

Consequently, we are here today to find out how Ports and Waterways Safety Act is being implemented and whether in fact the USCG has followed closely congressional intent as expressed in that act and related documents.

Our first witness today will be Emilio Daddario, direct of the Office of Technology Assessment.

At the request of the Senate Commerce Committee, the Office of Technology Assessment prepared a report entitled "Oil Transportation by Tankers: An Analysis of Marine Pollution and Safety Measures" for the committee's use in these hearings. I wish to thank Mr. Daddario for his effort and indicate that this report has been extremely useful in our preparation for these hearings.

At this point, I want to insert the testimony of the Governor of the State of Washington on this matter. He has some statements in there regarding the Coast Guard, which I want to underline, and we will put it in the record, and then we will hear from you, Mr. Daddario.

[The statement follows:]

STATEMENT OF HON. DANIEL J. EVANS, GOVERNOR, STATE OF WASHINGTON

Mr. Chairman, members of the committee: Since the signing of the Ports and Waterways Safety Act in 1972, we in Washington and the citizens of our sister States of the Pacific Coast have seen a steady erosion of its purposes, coupled with a compounding of the underlying problems it was intended to address, both occurring largely through the actions of Federal agencies. About the only good news since then is the fact that this Committee is exercising its powers of oversight, with the intent of correcting deficiencies in implementation of certain mandates established by the Act.

The Act itself is a good one. A Federal agency, the Coast Guard, in Title II is directed to develop high standards of tank vessel design, operation and reduction of oil loss in the case of accident, all of which you in Congress and we in the affected areas considered minimal steps in preparing for the huge volumes of Alaskan oil destined for West Coast ports. The Coast Guard said all the right things, including the announcement shortly afterward (38FR2467) that it was "considering" the segregated ballast-double bottom requirement for the new Jones Act vessels in the Alaskan trade. You will recall that with the Ports and Waterways Safety Act in place, and Coast

Guard seemingly prepared to implement its purposes, there was a considerable relaxation of concerns in the coastal states.

I will only briefly summarize adverse events since then affecting our own State of Washington, but I ask that you bear in mind that many of these points also apply to the other states directly involved in the oil shipments, whose long coastlines are just as exposed, and just as vulnerable as our own coastal and inland waterways.

After the 1973 embargo, Canada announced an end to crude exports in the mid-1980's, later moving the date up to 1980. This impacts Washington more than any other state, since all four of the major refineries historically receive the great bulk of their crude via pipeline from Canada.

Then early this year, FEA announced and implemented regulations for allocation of the dwindling Canadian supply to other states. Our projected cutoff now comes early next year, in 1977.

In Washington, as elsewhere in the world, we see the effect of a global surplus of tankers, most operating under foreign flags of convenience. Costs must be cut and operating standards reduced in order to secure any charter, and the vessels themselves, many designed and built speculatively, are aging quickly.

At the same time, the average size of vessels is increasing, but with comparable decreases in maneuverability and stopping capability. And even the Jones Act vessels destined for the Alaskan trade, while probably better than the world average, are in fact mostly larger replicas of old, minimum-cost designs. Many are newer, but not safer, larger and more risky in the event of any deviation from nominal transit conditions in our restricted Puget Sound waters.

Finally, and this goes to the heart of the matter, the Coast Guard has steadily retreated from its 1973 position, and has now turned into an advocate for "economic" considerations. I am unaware that Congress had ever given them this advocacy role, and in this specific case, I ask that Congress carefully examine all their pertinent statements and actions since 1972. If it appears that Coast Guard has used those years to "buy time" for the industry it should be regulating, for example, in getting minimum-coast vessels "grandfathered" into the Alaskan oil trade, then I believe corrective action would be in order.

To some extent, the damage is done. The protection we were assured of in the 1972 Act does not exist; the Alaska fleet is mostly operating, or in construction, to far lower standards of safety than I believe Congress envisioned in 1972. While Congress can, and I hope will correct the situation for the future, we and our sister states will have to bear the exposure and the damages which are sure to come.

I should point out that we are not opposing the use of very large new tankers under certain conditions, nor do we ask that the present Alaska fleet be scrapped. If the clear intent of the 1972 Act had been followed, the present fleet would be a better one, but we can prepare to live with the outcome. That is what I want to talk about now, preparing for the future.

First, obviously, Congress must ensure that the intent of the 1972 Act will be carried out henceforth, and that any existing obstacles to its implementation be removed, either administratively or via additional legislation.

Second, Congress should keep after the difficult, but increasingly critical problem of standards for non-Alaskan tankers discharging cargoes in U.S. waters. International agreements are not presently adequate because all the present incentives work the other way, and we must move unilaterally to protect our own waters and shores. The world tanker fleet is aging and deteriorating, and its owners and operators have no impetus to upgrade to the standards Congress has set out to apply to our own vessels.

Further, Congress should aid the coastal states directly, and massively in some cases, to prepare for increases and shifts in the oil and LNG trade of the country as a whole. In Washington, we can handle the regional share of the Alaskan and other oil trade with reasonable safety and reasonable economy, if we consolidate the terminal operations at a single point outside the most restricted and sensitive areas. If necessary, from the standpoint of national interest, we could also probably accommodate a pipeline terminal for the benefit of inland refiners in the Northern Tier states, and the resultant economies of scale would make the consolidated terminal development increasingly more feasible.