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The original documents are located in Box 8, folder "Deepwater Ports, 1974 (2)" of the
Glenn R. Schleede Files, 1974 - 1977 at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 8 of the Glenn R. Schleede Files, 1974 - 1977 at the Gerald R. Ford Presidential Library
93d Congress
2d Session
}
COMMITTEE PRINT
DEEPWATER PORT
POLICY ISSUES
A STAFF ANALYSIS
PREPARED AT THE REQUEST OF
HENRY M. JACKSON, Chairman
COMMITTEE ON INTERIOR AND
INSULAR AFFAIRS
UNITED STATES SENATE
PURSUANT TO
S. Res. 45
A NATIONAL FUELS AND ENERGY
POLICY STUDY
Serial No. 93-42 (92-77)
Printed for the use of the
Committee on Interior and Insular Affairs
U.S. GOVERNMENT PRINTING OFFICE
24-935
WASHINGTON : 1974
For sale by the Superintendent of Documents, U.S. Government Printing Office
Washington, D.C., 20402 . Price $1.10
FORD & LIBRARY GERALD
SENATE RESOLUTION 45
NATIONAL FUELS AND ENERGY POLICY STUDY
This publication is a background document for the National Fuels and Energy
Policy Study authorized by Senate Resolution 45, introduced by Senators
Jennings Randolph and Henry M. Jackson on February 4, 1971, and considered,
amended, and agreed to by the Senate on May 3, 1971.
The resolution authorized the Senate Interior and Insular Affairs Committee,
and ex officio members of the Committees on Commerce and on Public Works and
the Joint Committee on Atomic Energy, to make a full and complete investigation
and study of National Fuels and Energy Policies.
Subsequently, on March 1, 1974, in the furtherance of the purposes of Senate
Resolution 45 (92d Congress), the Senate approved the addition of ex officio
members from the Committees on Finance, on Foreign Relations, on Government
Operations, and on Labor and Public Welfare, also.
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS
HENRY M. JACKSON, Washington, Chairman
ALAN BIBLE, Nevada
PAULJ. FANNIN. Arizona
FRANK CHURCH, Idaho
CLIFFORD P. HANSEN, Wyoming
LEE METCALF, Montana
MARK 0. HATFIELD, Oregon
J. BENNETT JOHNSTON, JR., Louisiana
JAMES L. BUCKLEY, New York
JAMES ABOUREZK, South Dakota
JAMES A. McCLURE, Idaho
FLOYD K. HASKELL, Colorado
DEWEY F. BARTLETT, Oklahoma
GAYLORD NELSON, Wisconsin
HOWARD M. METZENBAUM, Ohio
JERRY T. VERKLER, Staff Director
WILLIAM J. VAN NESS, Chief Counsel
HARRISON LOESCH, Minority Counsel
Ex OFFICIO MEMBERS FOR NATIONAL FUELS AND ENERGY POLICY STUDY
Committee on
Senators
COMMERCE
WARREN G. MAGNUSON, Washington,
Chairman
NORRIS COTTON, New Hampshire
FINANCE
RUSSELL B. LONG, Louisiana, Chairman
WALLACE F. BENNETT, Utah
FOREIGN RELATIONS
CLAIBORNE PELL, Rhode Island
CLIFFORD P. CASE, New Jersey
GOVERNMENT OPERATIONS
ABRAHAM RIBICOFF, Connecticut
CHARLES H. PERCY, Illinois
LABOR AND PUBLIC WELFARE
WILLIAM D. HATHAWAY, Maine
PETER H. DOMINICK, Colorado
PUBLIC WORKS
JENNINGS RANDOLPH, West Virginia,
Chairman
PETE V. DOMENICI, New Mexico
ATOMIC ENERGY [JOINT]
JOSEPH M. MONTOYA, New Mexico
HOWARD H. BAKER, JR., Tennessee
WILLIAM J. VAN NESS, Chief Counsel
GRENVILLE GARSIDE. Special Counsel and Study Coordinator
RICHARD D. GRUNDY, Executive Secretary and Professional Staff
DANIEL A. DREYFUS, Professional Staff and Engineering Consultant
ABLON R. TUSSING, Chief Economist
GREGG ERICKSON, Staff Economist
C. SUZANNE REED, Professional Staff Member
DAVID STANG, Deputy Director for Minority
(II)
GERALD FORD LIBRARY
MEMORANDUM OF THE CHAIRMAN
To Members and ex officio members of the Senate Committee on Interior
and Insular Affairs' National Fuels and Energy Policy Study
(S. Res. 45):
The advent of the supertanker has produced a corresponding need
for port facilities adequate to handle vessels of unprecedented size.
At the present time, the United States has no deepwater ports
designed for this purpose. However, as our dependence on imported oil
grows, the possible use of supertankers to carry these imports becomes
increasingly significant.
Legislation is now pending before the Congress which would
authorize the construction of deepwater ports under public or private
sponsorship. Congressional action is required because most potential
deepwater port sites are outside U.S. territorial limits, where only
the Federal government can exercise authority.
The selection of sites for deepwater ports, their construction and
operation raise a number of basic economic, environmental and
political issues which should be carefully explored before Congress
takes final action on deepwater port legislation.
With this in mind, I have asked that this background paper on
Deepwater Port Policy Issues be prepared for the use of Senators
participating in the National Fuels and Energy Policy Study. The
paper, which was prepared by C. Suzanne Reed of the Committee
staff, not only describes the relevant issues but also suggests the
possible outlines of Federal deepwater port policy. I believe that all
Members of the Senate will find this analysis helpful in considering
legislation on this subject.
HENRY M. JACKSON, Chairman.
(III)
FORD & LIBRARY GERALD
CONTENTS
Page
Memorandum of the Chairman
III
Introduction
1
Chapter 1.-Economics of supertankers
3
Chapter 2.-Environmental impacts
7
Chapter 3.-Secondary growth impacts
11
Chapter 4.-Coastal State response
17
Chapter 5.-The need for U.S. deepwater ports
19
Chapter 6.-International and domestic legal implications
25
Chapter 7.-Institutional aspects of deepwater ports
35
Chapter 8.-Federal Government response
43
Chapter 9.-Overview
45
APPENDIXES
Appendix A
Offshore deepwater terminal designs
57
Appendix B
Executive communications
59
Appendix C
United States of America: Draft articles for a chapter on the rights and
duties of States in the coastal seabed economic area
61
Appendix D
Onshore secondary impacts of deepwater terminal facility development
65
Appendix E
Legislation before the Senate in the 93d Congress relating to the devel-
opment of offshore deepwater ports
91
Appendix F
Areas requiring futher investigation
99
(V)
FORD is LIBRAR GERALD
1
DEEPWATER PORT POLICY ISSUES
A Staff Analysis
PREPARED BY
C. SUZANNE REED
Professional Staff Member
AT THE REQUEST OF
SENATOR HENRY M. JACKSON, Chairman
COMMITTEE ON INTERIOR AND INSULAR AFFAIRS
UNITED STATES SENATE
PURSUANT TO S. RES. 45
A NATIONAL FUELS AND ENERGY POLICY STUDY
JULY 1974
(VII)
FORD LIBRARY s GERALD
INTRODUCTION
As a nation which has become increasingly reliant on imported
petroleum to meet national energy demands, the United States is now
confronted with several major policy decisions regarding current
trends in the world petroleum distribution and transportation system.
In 1972, petroleum supplied 46 percent of total U.S. energy demand.¹
Of the 16.7 million barrels a day (MMB/D) of petroleum used in that
year, 4.7 MMB/D or 28 percent were imported from foreign sources.
As domestic energy demands continued to increase and domestic oil
production declined, the volume of U.S. petroleum imports climbed
until, in November, 1973, oil arriving from foreign sources amounted
to over 7.1 MMB/D.²
In 1973 about one-fifth of U.S. petroleum imports was transported
overland by pipeline from Canada, while the remaining four-fifths
were carried by tankers from foreign sources overseas.
The average size of tankers used to transport petroleum supplies
to the United States is 30,000-35,000 deadweight tons (dwt).
However, on a world scale the need to transport ever larger volumes
of oil over long distances between petroleum producing and con-
suming nations has led to the development and increasing use of very
large crude carriers (VLCC's) which range in size from 200,000 to
500,000 deadweight tons.
Commonly called "supertankers" these vessels can transport large
volumes of oil on a long haul voyage at a lower cost than tankers of
a smaller size.
Supertankers require substantial water depths in order to maneuver,
and many foreign nations have developed deepwater ports to accom-
modate the growing number of such vessels in use today. Deepwater
ports may be naturally deep or dredged areas close to shore, or they
may take the form of unloading structures located in naturally deep
waters some distance offshore.
While there are several proposals to construct deepwater ports in
the United States, none has been built, primarily because a Federal
policy to authorize and regulate the construction, operation and use
of such facilities does not yet exist.
Furthermore, although there is still considerable interest in building
deepwater ports, changes in U.S. energy policy precipitated by the
Middle-East oil embargo of late 1973 and early 1974 have altered
some of the basic presumptions upon which plans to develop such
facilities in the United States were originally based.
As we enter a period of transition in national energy policies and
practices, there is some question over the need for deepwater ports
in the United States, as well as opposition to the adoption of a Federal
policy which would encourage their development. Before such mat-
ters can be resolved, several complex issues must be addressed.
1 United States Petroleum Statistics, Independent Petroleum Association of America, 1973.
3 on and Gas Journal, November 12, 1973.
8 Deadweight ton identifies a ship's total carrying capacity including internal provisions at saltwater
summer load line immersion. Actual cargo capacity is slightly less. To derive approximate oil cargo capacity
in barrels multiply the deadweight tonnage of a tanker by 7.4.
(1)
GERALD FORD LIBRARY
CHAPTER 1.-ECONOMICS OF SUPERTANKERS
Supertankers today represent a substantial portion of the total
deadweight ton capacity in the world tankship fleet, and their numbers
and size continue to increase. While only 10 percent of the 4,336
vessels operating in the world tankship fleet have capacities greater
than 100,000 dwt, they represent almost 40 percent of the fleet's
total deadweight ton capacity. Of these vessels 276 are between 200,000
deadweight tons and 500,000 deadweight tons in size.
The average size of vessels under construction in world ship yards
increased from 116,300 deadweight tons in 1970 to 147,200 dead-
weight tons in 1973. Of the 792 vessels under construction as of October,
1973, 335 were in the 200,000-500,000 deadweight ton class range.
Nine vessels ranging from 225,000-265,000 deadweight tons are being
constructed in U.S. yards under the Merchant Marine subsidy pro-
gram administered by the Maritime Administration. Additional
applications to construct more than 50 tankers ranging up to 425,000
deadweight tons under the program have been received for 1974.
It is primarily the cost advantages of supertankers which have led to
their increasing use in the world petroleum transporation system.
The costs per deadweight ton of building and operating supertankers
are considerably less than for smaller tankers. According to a study
prepared for the September 1973 Intersociety Transportation Con-
ference:
***
the capital component in the cost of carrying oil
decreases as tanker size increases.
There are several reasons for the reduction in capital cost
per deadweight ton. The hull weight does not increase pro-
portionally with cargo capacity; furthermore, auxiliary
equipment, pumps, and piping systems are relatively insensi-
tive to size. Accommodation cost is a function of the ship's
complement, and since manning is nearly constant for tankers
50,000 to 500,000 dwt, this cost per deadweight ton also
decreases with an increase in tanker size.²
These economies of scale reduce the cost of transporting large
volumes of crude petroleum on a long-haul voyage.⁸ (See figure 1.)
3 Porricelli, Joseph D. and Keith, Virgil, "Tankers and the U.S. Energy Situation-An Economic and
Environment Analysis." For presentation at the Intersociety Transportation Conference of the Inter-
society Committee on Transportation, Sept. 24-27, 1973, p. 042. (Referred to hereafter as Porricelli and
Keith). Total tanker transportation costs also depend on such variable factors as labor wages and allow-
ances; the costs of equipment and supplies for operation, maintenance and repair; and expenses for fuel,
insurance and tax. (For a more complete discussion of such factors see Porricelli and Keith, pp. 037-059.)
While such costs may increase in the future, the Corps of Engineers U.S. Deepwater Port Study notes that
certain cost increases may be offset by new technological or engineering advances which could effectively
reduce both tanker construction and operating expenses: and that such advances might well result in re-
duced labor and crew requirements, efficiences in fuel utilization and reduced in-port, turnaround and in-
ballast time (Vol. V, pp. 149-156).
3 There is little reason to expect that the transportation of petroleum products by supertankers will ever
become an economically justifiable practice. The design specifications which would be required to carry a
variety of products aboard one vessel, or to pump a diversity of products through the same pipeline, and the
need to deliver various products among widely distributed destinations are all factors supporting this con-
tention. Furthermore, if the United States remains dependent on such nearby foreign refining centers as the
Caribbean or Canada, the relatively short distance between these locations and the United States would
operate against the economic advantages of supertanker transportation which result in part from a long-haul
voyage.
(3)
FORD LIBRARY & GERALD
4
COST PER
BARREL OF OIL TRANSPORTED
(DOLLARS)
2.00
1.50
10,000 NAUTICAL MILES - ONE WAY
$,500 NAUTICAL MILES
5,000 NAUTICAL MILES
1.00
3,000 NAUTICAL MILES
1,500 NAUTICAL MILES
500 NAUTICAL MILES
.50
o
O
100
200
300
400
500
600
700
800
VESSEL DEADWEIGHT TONS
(THOUSANDS)
Source: Cooke, Robert, Malara Concepts of Other Trans crtation 0: Petrolaum,
American Society - Methanical Engineera, August 2907.
FIGURE 1.-The relationship between vessel size, transportation cost and route
length.
In the United States, where a growing reliance on more distant
sources of petroleum supplies such as the Middle East has spurred
substantial interest in transporting petroleum imports by supertanker,
major oil ports are too shallow for supertankers to enter. Because there
are no deepwater ports in the United States the transportation cost
saving which might be achieved by carrying oil imports in supertankers
will depend in part on the cost of building deepwater ports along U.S.
shores.
The cost of building U.S. deepwater ports could range from $150
million for a terminal buoy located in naturally deep water off the
coast and connected by pipeline to shore, to over $1 billion for dredging
and maintaining a conventional harbor and channel system. The cost
of other types of deepwater ports such as artificial islands or fixed piers
falls somewhere within this range depending on the complexity, size,
location, and throughput of the facility envisioned.
The economic feasibility of building a deepwater port depends on
moving large volumes of oil through the facility on a sustained basis.
Estimates of cost savings in petroleum transportation which could be
realized through deepwater port development in the United States
range from $0.02 to $0.50 per barrel of oil delivered depending upon
the size of the supertankers carrying the oil and on the size, location,
throughput and lifetime of the facility involved. Among all the various
deepwater port designs and locations evaluated, the lowest volume
throughput for which any facility would be feasible is 600,000 barrels of
oil a day.
Based on oil import projections published before the Middle-East
oil-embargo which began in October of 1973, the Corps of Engineers
4 See for example, statement of Dr. William Johnson, Energy Advisor to the Deputy Secretary of Treasury,
Hearings, before Senate Special Joint Subcommittee on Deepwater Ports Legislation, 93d Cong., 2d Sess.
Serial No. 93-59.
FORD i LIBRARY GERALD
5
U.S. Deepwater Port Study predicted that using supertankers to
transport U.S. oil imports instead of using the maximum size vessels
now able to enter U.S. ports could yield average annual cost savings
as high as $1.7 billion by the year 2000. However, the study also states
that:
"The extent to which these savings would accrue to the
U.S. economy and how they would be distributed within
the economy cannot be predicted with confidence." 5
Historically, tanker transportation costs have represented a small
fraction of the price of finished petroleum products. Furthermore,
with recent increases in the cost of a barrel of oil, transportation costs
have even less influence on the final petroleum product price. The
American consumer could, therefore, expect little, if any, reduction
in the price, for example, of a gallon of gasoline, to result from the use
of supertankers and development of U.S. deepwater ports. Thus,
rather than citing direct benefits to the consumer, those promoting
deepwater port development in the United States argue that super-
tankers are environmentally as well as economically preferable to
tankers of conventional size and that U.S. deepwater ports will
generate a variety of secondary economic growth benefits in adjacent
coastal areas.
s Corps of Engineers, U.S. Deepwater Port Study, Aug., 1972, Vol. 1, pg. 10.
FORD LIBRARY & 0ERALD
CHAPTER 2.-ENVIRONMENTAL IMPACTS
Many sources have concluded that certain environmental advan-
tages can result from using supertankers to transport petroleum
supplies. It is often pointed out that for a given level of imports the use
of supertankers would reduce the risks of tanker groundings, collisions,
and oil spills by reducing the number of ships operating in U.S.
harbors and ports. For example, one Government source reports that:
In 1970 there were approximately 4,000 ship calls or
unloadings to handle petroleum imports to the United States.
These ships averaged 30,000 dwt. If forecast 1985 imports
arrive in this same average ship size, traffic would increase to
approximately 21,000 ship calls. If the ships averaged 80,000
dwt, which is about the largest size currently handled by the
deeper U.S. ports, approximately 8,000 port calls would be
required. If imports could arrive in a 320,000 dwt
VLCC, total activity could be reduced to less than 2,500
annual port calls each year. This assumes the increase in im-
ports can be brought in as crude oil to a refinery-such a
reduction in ship calls does not appear practical if imports are
brought in as products to widely scattered terminals.¹
One analysis of tanker related oil spills based on U.S. Coast Guard
statistical data revealed that, from a viewpoint of tanker casualties
and subsequent pollution, tankers larger than 80,000 dwt can trans-
port a given quantity of oil over a given distance some seven times
more safely than tankers below 80,000 dwt.²
In spite of such findings however, there are some characteristics of
supertankers which pose particular problems for their operation and
use. The sheer length, beam, and draft of a supertanker require it
to have a much greater maneuvering area and stopping distance than a
tanker of conventional size. While a tanker of 60,000 dwt may be 731
feet long and 105 feet wide with a 43-foot draft, a 250,000 dwt tanker
may be 1,143 feet in length, 170 feet in width and draw almost 70 feet
fully loaded. In addition, supertankers may carry 6 to 10 times as
much oil as a tanker of conventional size, thus the potential for
environmental damage from oil pollution in the event of a single
supertanker casualty far exceeds that presented by a tanker of smaller
capacity.³
Offshore Deepwater Ports
The substantial water depths (70 to 100 feet) required for super-
tankers to operate has thus far inhibited their use to transport petro-
1 Porricelli and Keith, p. 086.
3 Porricelli and Keith, pp. 072, 073.
8 For example, a 250,000 dwt tanker may carry 1.8 million barrels of oil as compared to 440,000 barrels
earried by tankers 60,000 dwt in size.
(7)
FORD
GERALD
LIBRARY
8
leum imports directly to U.S. ports. American ports located close to
the major petroleum import demand centers are too shallow to receive
tankers larger than 80,000 dwt and most ports are restricted to tankers
half that size.
When tankers of greater size carry oil supplies destined for the
U.S. market they may land their cargo at a nearby foreign deepwater
port location such as the the Virgin Islands from which oil is trans-
shipped by smaller tankers to U.S. ports. Alternatively, a large
capacity vessel may anchor in a deepwater location offshore and off-
load its cargo to smaller barges and vessels until it has been sufficiently
lightered to maneuver in shallow waters. The transportation cost and
risk of oil spills increases each time cargo is transferred, making
transshipment and lightering less desirable than shipping oil directly
to U.S. ports.
Existing channels, harbors, and ports could be dredged to depths
sufficient for supertanker operations, a course pursued by some foreign
nations and supported by some local U.S. port authorities. However,
in many U.S. harbors, dredging would involve the removal and subse-
quent disposal of as much as 35 feet of bottom material. Past experi-
ences with dredging in America and reports of foreign experience indi-
cate that such operations are not only costly but can also be highly
damaging to the marine and coastal environment. In addition, as
previously discussed, there is substantial reason for concern over the
risks of operating supertankers close to shore.
It is generally agreed that offshore supertanker terminals offer the
greatest environmental as well as economic advantage of any deep-
water port design.
There is a wide range of offshore terminal designs.⁴ However, the
one which appears to be most widely used and which has been pro-
posed for installation off U.S. shores, is a monobuoy structure known
as the single point mooring buoy (SPM).
At over one hundred foreign locations, monobuoys are used to load
and unload supertankers with reported success. Such facilities usually
consist of pumping buoys which are anchored to the ocean bottom
and feed into a submarine pipeline connected to shore.
One advantage of this type of facility is that locating supertanker
terminals offshore reduces tanker casualty risks. U.S. Coast Guard
figures reveal that tanker accidents such as collisions, rarely occur on
the open sea. Rather, ship oil spills generally occur in near-shore areas
where traffic congestion is the heaviest and, where the maneuvering
of ships is restricted by narrow winding channels.⁵
As illustrated in Table 1, comparing the incidents of oil pollution
which might result from importing a given volume of crude oil using
supertankers and offshore deepwater ports as opposed to conventional
tankers and ports demonstrates that over a 20-year period, 80,000 dwt
tankers using inner-harbor terminals would have a greater number of
oil spills resulting in a higher total loss of crude oil than 250,000 dwt
tankers using offshore terminals.
6 See Appendix A.
5 Porricelli and Keith, p. 087.
FORD LIBRARY & GERALD
9
TABLE 1.-COMPARATIVE TANKER CASUALTIES OVER 20 YEARS
Assumptions:
Throughput of 2 million barrels per day in both cases.
Case 1=0il transported to conventional ports in tankers averaging 50,000 deadweight tons (DWT).
Case 2-Oil transported to offshore terminals in supertankers averaging 250,000 deadweight tons; transshipment to
shore via pipelines.
Number of incidents
Number of tons of oil spilled
Range of spills (in long tons)
Case 1
Case 2
Case 1
Case 2
to 150
24.0
3.0
1,680.0
186.0
151 to 500
8.5
.65
3,306.5
250.3
501 to 3,000
3.8
.44
4,674.0
514.8
3,001 to 14,000
1.4
.21
11,144.0
1,577.1
14, 000+
.17
8,364.0
Total
37.87
4.3
29,168.5
2,528.2
Source: Council on Environmental Quality.
While emphasizing the benefits of reduced tanker traffic, those
promoting offshore deepwater port concepts state that the use of such
facilities to receive supertanker-borne petroleum imports would also
reduce the potential for oil spill related damage in coastline areas. For
example, the U.S. Army Corps of Engineers has commented that:
Estuaries and coastal wetlands are the most biologically
productive areas of the marine ecosystem, also the most sen-
sitive to damage from construction and oil spill effects. At
inshore sites, such damage would be unavoidable. At off-
shore sites, however, construction effects are minimized and
the probability that spilled oil will enter sensitive estuarial
areas is much reduced. In addition, the weathering of oil
that could take place in route to an estuarine area would
tend to remove the most immediately toxic and lethal frac-
tions of the oil. The consensus of the researchers was that
far offshore locations minimized the potential for environ-
mental damage.⁷
According to those favoring the development of offshore deepwater
ports an added factor in their favor is that, as currently proposed for
the United States, the transfer of oil cargo from terminal to shore
would be accomplished by means of underwater pipeline rather than
by transshipment vessels. A U.S. Department of Commerce report on
offshore terminal facilities concluded:
The most desirable type of connection between an offshore
petroleum terminal and onshore refineries, from the economic
and environmental points of view, is a pipeline. Because
there would be no vessels involved, the risk of pollution
from ship grounding, collision, and cargo transfer would not
exist. Generally there would be considerably less handling
of the oil, with no need for onshore refinery marine terminals,
hence less pollution risk.⁸
Other discussions of pipeline connections between offshore terminals
and land-based facilities emphasize that waterbottom disturbance
T "North Atlantic Regional Study, Preliminary Report", pg. 24.
# Offshore Terminal Systems Concepts, Soros Associates, Inc. U.S. Dept. of Commerce, September 1972,
vol. 2, p. 4.
24-935-74-2
GERNLO FORD LIBRARY
10
caused by laying a pipeline would be neither permanent nor severe
and that the possible risks of oil discharge from pipeline damage would
be reduced by burying the pipeline beneath the ocean floor. In this
regard, Porricelli and Keith state:
Extensive experience has shown pipelines to be relatively
safe. According to data published by the Corps of Engineers,
95 percent of the underwater pipeline spills which occurred
during the interval of 1967 and 1972 were caused by ships'
anchors damaging the line. The Corps concluded that burying
the pipeline would definitely mitigate these accidents and that
pipelines not damaged in this manner operate with spill rates
less than half a barrel per million barrels throughput.
In spite of these findings some environmentally concerned individ-
uals and groups count as severe the permanent disturbance and
destruction of wetlands, wildlife habitats, and other coastal environ-
ments caused by connecting pipelines to storage and transfer facilities
onshore. Furthermore, pipelines connecting offshore terminals to shore
will be of a type and size not widely used in the United States. Dis-
satisfaction with the U.S. Government's current pipeline monitoring
capabilities have led some to question unflinching assertions of pipe-
line safety.
In general, however, industry has reported highly favorable results
with the use of offshore monobuoy structures. According to owners
and operators, the structures have handled large volumes of oil with
relatively few operational difficulties or damage to the environment.¹⁰
Terminal owners and operators have, however, recognized the need to
resolve problems resulting from both tanker and terminal equipment
designs and practices. These problems have stimulated the industry
to establish the Single-Point Mooring Forum, under the auspices of
the Oil Companies International Marine Forum, in an effort to im-
prove tanker mooring and cargo transfer engineering and operation
practices.
Continuous efforts to improve the design, construction and operation
of tankers, and of navigation and related petroleum transportation
systems can prevent many of the adverse impacts associated with
waterborne movements of petroleum. Such improvements will be
required on both the domestic and international front regardless of
what policy the United States adopts toward the development of
deepwater ports or of the size of tankers used to import U.S. petroleum
supplies.
9 Pg. 094.
10 Mascenik, John, "Offshore Deepwater Crude-Oil Terminals." Oil and Gas Journal, vol. 21, pp. 91-110,
March 5, 1973. In addition to industry reports Porricelli and Keith state that: "A common ecological mis-
giving that is attributed to monobuoys is that a monobuoy as opposed to an offshore island or structure
has no facility such as a boom to contain small spills in light seas. This is in fact true. However, the spill
rate associated with monobuoys does not support this concern. Moreover, portable booms could be deployed
under favorable weather conditions" (p. 003).
In contrast, however, a National Science Foundation funded technology assessment of outer continental
shelf oil and gas operations reported that, "There was no effective capability for containing and cleaning up
oil on the OCS before Union's blowout at Santa Barbara, California. Subsequent crash efforts by industry
and government have produced only limited capability even now. In fact, wave heights, wind velocities, and
currents on much of the U.S. OCS exceed designed capabilities at least a third of the time.
"Containment and clean-up on the OCS itself may be an illusory goal since, as a practical matter, there is
an upper limit on sea conditions beyond which neither is possible. Although the primary effort should be to
prevent accidents. it will never be possible to prevent all accidents and there must be some adequate means
for responding when an accident does occur. Consequently, efforts should continue to be made to improve
the performance of containment and clean-up devices. However, the primary development effort should
be to achieve a capability to deal effectively with oil spills which threaten to come ashore." (Emphasis sup-
plied.) Energy Under the Oceans: A Summary Report of a Technology Assessment of OCS Oil and Gas Opera-
tions. University of Oklahoma, 1973, pg. 13.
FORD
GERALD
LIBRARY
CHAPTER 3.-SECONDARY GROWTH IMPACTS
Deepwater port development is commonly associated with both
beneficial economic, and adverse environmental secondary growth im-
pacts. However, it is important to emphasize that the impacts of
petroleum transportation, processing and distribution activities will
increase as a result of the overall increase in total energy demand and
use nationally, and may not properly be attributed solely to construct-
ing U.S. deepwater ports. Nevertheless, a number of sources agree
that, in the absence of specific controls, deepwater port development
could cause a concentration of such impacts to occur. In areas which
have already experienced significant industrial development, the in-
cremental burdens placed on the environment by land requirements
and effluents associated with petroleum-related industrialization could
be particularly severe.
According to the Department of the Interior:
16*
* * location of deepwater port facilities in areas where
there are existing refineries and petrochemical industries
might only initially require expansion of existing storage,
handling, and refining facilities to process the incoming
crude. The essence of the situation lies in the fact that
even minor incremental refinery production could add pollut-
ants to an environment that may already be stressed to its
limits by previous industrial and commercial activity. For
example, concentration of a high level of oil imports through
one site in the highly developed and densely populated Mid-
Atlantic area could be expected to result in significant
environmental impacts.¹
Petroleum related industrialization generated by a deepwater port
may increase employment and yield additional revenues and other
economic benefits in some areas. However, the anticipated environ-
mental impacts of such growth include:
1. Increased land requirements for petroleum storage facility,
refinery, and petrochemical industry sites;
2. Degradation and despoilation of wetlands, estuarine areas,
wildlife habitats and recreation values;
3. Increased burdens on water supply from both industrial
and residential growth;
4. Increased industrial and municipal discharge of polluting
effluents into waterways and a subsequent decline in water
quality;
5. Increased polluting emissions into atmosphere and subse-
quent decline of air quality;
6. Increased pressures for land development to provide
roadways, housing, and municipal services such as schools and
1 U.S. Department of the Interior, Draft Environmental Impact Statement: Deepwater Ports, June 1973,
pp. IV-87.
(11)
FORD LIBRARY s GERALD
12
hospitals to accommodate population increases induced by
industrial growth.
The estimated magnitude of secondary growth impacts varies from
source to source and depending upon the locality and basic assump-
tions under which impacts are assessed. For example, the Council on
Environmental Quality projected secondary growth impacts of various
deepwater port locations at different levels of imports as indicated in
Figures 2, 3, and 4.2
1985
2000
2
Leyand:
Employment
(1970 7,425,0001
Baseline Growth
//////
Baseline plus Low Option
1985
2000
1985
2000
Baseline plusHigh Option
Income
2
(1970 $81,576 million dollars)
1905
2000
1985
2000
Per Capita Income 2
(1970 $4,160 dollars)
NAME
1985
2000
1985
2000
Population
2
/////////////////////////
(1970 19,510,000)
(ves
2000
1905
2000
2
Population Density
(1970 355 residents/square mile)
1985
2000
192
2000
1905
2000
Water
2000
(1970 4,240 million gellons/day)
2000
1945
2000
1905
2000
1915
7000
3941
Water Pollution³ (aco)⁵
2600
19#5
2000
(1970 - 1,010,000 pounds/day)
IVES
2000
1905
2000
1985 2000
Land Use
3
'1970 - 1,300,000 acres developed
///////
1985 2000
2
3
4
5
0
,
Growth Multiple
Total Import includes premary, supplier and inducad,
2
Entire Mid Atlantic (legian,
3Partsming to the Mul Allantic Bell companed of new thein Delaware, essern Pennsylvania, and nurthers, contral, and southern New Jersey,
"Fresinater equival.nt.
Upper of law pairs James full explication of advanced waste treatment sufficient to meet 1903 effivent standards
Fort available"). lower of bar paids assumes full application of "bost practical technology (1977 standards).
6 issumes full secondary treatment ("best practical") by 1970.
Source: Arthur D. Little, Inc.
FIGURE 2.-Mid-Atlantic region 1985/2000: Selected measures of estimated
total relative refinery and petrochemical-based economic and environmental
impacts.
3 Potential Onshore effects of Deepwater Oil-Terminal Related Industrial Development, Report to the Council
on Environmental Quality by Arthur D. Little, Inc., Vol. 1, pp. 1-26, 1-43, 1-51 (1973).
FORD LIBRARY i GERALD
13
1985
moo
Legard:
Reseling
Grand?
Employerent
FIRES 1,771,000
/////////////
1111.
Binefine Granch with Law Option Reduction
Univer Cometh with lingh
198%
[
$1370 $11,120 million dellars)
2090
1985
2020
PM Cente Income³
$1970 $3,055 dollars)
Propertion3
6:978 3,641,0001
1995
zone
Pepulation
Denity
$1970 81 rewdents/square mile)
////////////
2000
1985
7000
2000
Water
$1370 1,072 million gallens/Jay)
2000
7500
1985
7689
Water
Pollution
7
254,700
UI,
IDS
1985
2000
Land
$1970 555,000 service developed
2
1
4
5
6
Greath Multip's
STatel Impact includes primary. supplier and infored
BACKETTES - department revenued at any for - alrong the Golf
STatal State
Leursuns GuM Coast,
Spresh
water
of has - full stum of of naste speciment with was In man 1983 citizens standards,
l'beat
available
E
-
ml
be
main
I
last
against
of
has
le
a
including
11977
Assume
1
less
&
19/0
Source: Arthur D. Little, Inc
FIGURE 3.-Louisiana: 1985/2000: Selected measures of estimated total
relative refinery and petrochemical-based economic and environmental impacts.
The justifiability of expectations that secondary growth and land-
side environmental impacts will result from the development of
deepwater ports has been supported by several other Government
and independent studies.³ Most sources agree that while not necessarily
required from a technological point of view, there is significant
economic incentive to locate petroleum transportation, processing
and related facilities in areas where such facilities or access to such
facilities already exist. Without certain institutional controls to
encourage dispersion of deepwater ports and related industrialization,
many foresee a tendency for these patterns of development to intensify
and increase as deepwater ports become incorporated into the petro-
leum supply and distribution system.
Suitable controls might be designed so that inland demand centers
are supplied by pipeline with crude oil rather than with products
3 For a more complete discussion of secondary growth impacts see Appendix D.
FORD
&
GERALD
LIBRARY
14
1285
Legend:
Baseline Growth
(1970-4,247,000)
//////
Bestme with Luar Option Reduction
1755
Bowling with High Cption
1111
Income
11970 39,469 million dollars)
Yes
Capita
$1970 $3,525
///////////
Papulation³
11970 11,197,000)
//////////////
1985
7000
Population Density
3
(1970 43 residents/square miles
<<<<<<<<<<<<<<<<<<<<<<<<<
Water
4,5,6
(1970 2,200 million gellons/day)
1995
rone
1985
8.8
Water
Pollution
(SOD)
(1970 $14,600 pounds/day)
1/1.
2004
1985
Land Use
<<<<<<<<<<<<
11070 $10,000 acres developed)
I
Total impart includes primary, and
Growth Mutriple
-
-
desponsible
terminal
at
any
location
the
Gull,
3state
intel,
Tran
finall
Card
regina,
-
repolvations
Suppre of Pater unles insures full application of trgatment difficult to must 1203 - standards
Thest - of the pairs first of "Trest Instructions (1977 standard
Assumes full promitely transmone (bese in 1370.
Source: Arthur D. Little, Inc.
FIGURE 4.-Texas: 1985/2000: Selected measures of estimated total relative
refinery and petrochemical-based economic and environmental impacts.
refined at locations nearby a deepwater port, thus encouraging the
development of refineries and petrochemical industries away from land
areas adjacent to terminal sites.
For example, the results of a U.S. Department of Transportation
study suggest that refining deepwater port throughput at inland sites
would be tenable and perhaps even preferable, from an economic point
of view.
DOT investigations led them to conclude that:
In terms of transportation costs, refinery location is a
significant factor affecting the least cost superport location.
However, superport location does not affect the least cost refinery
location. (Emphasis added)
The transportation cost savings offshore attributable to
a superport can be more than offset by the dissaving due
to uneconomical location of refineries.⁴
4 Hearings, Senate Special Joint Subcommittee on Deepwater Ports Legislation, 93d Cong., 2d Sess.,
Berial No. 93-59.
FORD & LIBRARY GERALD
15
While current industry proposals call for the development of
deepwater ports with throughputs as high as 3 or 4 million barrels
per day, economic analysis has demonstrated that a reasonable rate
of return could be realized by operating terminals at a much lower
throughput capacity of around 1 million barrels per day.⁵ It might
therefore, be feasible to limit the throughput allowed at any one ter-
minal. Such action would operate to reduce pressure for refinery and
petrochemical industrial development in the adjacent land area.
At high U.S. crude oil import levels, throughput limitations or
other dispersion policies could result in locating deepwater ports
adjacent to areas which have not previously experienced either
extensive port or refinery and petrochemical industrial development
and which would benefit most from economic growth.
Although it has been argued that the secondary economic benefits
of deepwater port development outweigh the risks of adverse secondary
environmental impacts, some studies of the secondary economic
impacts of deepwater port development suggest that the cost of
providing additional public services required by accelerated growth
may, in some cases, render the relative benefits of new industrialization
to State and local governments only marginal. Conceivably this could
reduce the incentive for a State to welcome deepwater port develop-
ment off its shores. In this regard many States have been actively
seeking the establishment of adequate environmental and economic
safeguards at the Federal level and assurances that State interests
will be given full consideration in any federally administered deepwater
port licensing and regulation program.
Furthermore, in light of a developing concern for improved protec-
tion and management of the coastal zone, industry proposals to con-
struct offshore deepwater ports have prompted many coastal States
to enact legislation which will significantly influence the future of
such development in the United States.
5 Dr. William Johnson, Hearings before Senate Special Joint Subcommittee on Deepwater Ports, 93d Cong.,
2d Sess., Serial No. 93-59.
GERALD FORD LIBRARY
CHAPTER 4.-COASTAL STATE RESPONSE
In general, the Gulf Coast States favor deepwater port development
and hope to benefit from the associated secondary growth impacts.
Most attractive to these States is the anticipated increase in em-
ployment and revenue generated by refineries and petrochemical
industries which may locate onshore to process crude oil moving
through an offshore terminal. The prospect of such benefits has resulted
in the establishment of the Offshore Terminal Commission in Texas
and the Deep Draft Harbor and Terminal Authority in Louisiana.
The States of Mississippi and Alabama have joined forces to create
the Ameraport Corporation and are seeking to formalize their activities
pursuant to a Federally approved interstate compact. While such
entities vary with respect to organization and statutory authority,
each has as its objective to promote the development of a deepwater
port off its parent State's shores.
In the course of evaluating and formulating policies toward deep-
water port development, these States have conducted numerous studies
to assess potential port-generated economic and environmental im-
pacts. In most cases such studies have concluded that substantial
economic benefits will accrue to the States if environmental and
secondary growth impacts can be effectively controlled. Some State
authorities view public ownership of deepwater ports as the only
means of exercising such control. This belief has led the Texas
Offshore Terminal Commission to propose building a State-owned
deepwater port in order to guarantee that the facility will be regulated
in a manner fully consonant with State interests.¹ As a corollary to
efforts promoting deepwater port development, Gulf Coast States
have also strengthened their coastal zone management and environ-
mental protection laws.
On the East Coast, environmental quality is of primary concern and
there is considerable opposition to refinery siting and petrochemical
industrial development. Strong coastal zone protection laws with the
effect of prohibiting or severely limiting the development of deep-
water ports have been proposed or enacted in several Northeastern
States, including Delaware, New Jersey, and Maine.
Nevertheless, Atlantic Coast States have continued to assess the
potential benefits of offshore deepwater ports. Maine is currently
weighing the possible economic growth advantages of a supertanker
terminal and refinery siting proposal against its potential adverse en-
vironmental impacts. Delaware has completed a study considering the
possibility of constructing a State-controlled deepwater port offshore
to eliminate the need for lightering operations and the risks of oil
pollution in the Delaware Bay. New Jersey is considering legislation to
create a State agency which would build, own and operate a deepwater
port. In spite of such proposals public opposition to deepwater ports and
1 Texas Offshore Terminal Commission, Plan for Development of a Texas Deepwater Terminal, Jan. 24, 1974.
(17)
FORD LIBRARY & GERALD
18
related industrial expansions along the Atlantic Coast will most likely
remain strong enough to block or substantially delay any such develop-
ment.
On the West Coast expectations are that shipments of Alaska
North Slope oil will require accommodations for tankers ranging up to
150,000 dwt at three main ports; Puget Sound, San Francisco, and
Los Angeles/Long Beach. Unlike the Gulf and Atlantic Coasts, some
of the major West Coast port complexes are not constrained from re-
ceiving deep draft tankers by insufficient water depths. While a 150,000
dwt tanker is not properly classified as a "supertanker" it is capable of
earrying close to 900,000 barrels of oil in one haul. Officials and resi-
dents of West Coast States have begun to express concern over having
these tankers operating close to shore. There is, therefore, growing sup-
port for building deepwater ports offshore along the West Coast to
receive tankers carrying Alaskan oil.
The pressures of increasing petroleum transportation activities on
the West Coast have also resulted in accelerated efforts to improve
vessel traffic monitoring and control systems. Such efforts are in addi-
tion to those promoting the enactment and implementation of coastal
zone management and protection, and land-use planning programs.²
Responding in particular to West Coast concerns, the Congress, in
1973, acted to provide safeguards against possible adverse impacts of
moving large volumes of Alaskan oil in coastwise trade. Thus, the
measure authorizing the Trans-Alaskan Pipeline 3 accelerated the
deadline, as applied to vessels in coastwise trade, by which the U.S.
Coast Guard would exercise its authority under the Ports and Water-
ways Safety Act of 1972 4 to require marine transport safeguards such
as advanced communication and traffic control systems, double
bottoms and segregated ballast.
In general, deepwater port development on the West Coast will
hinge on the movement of oil from the Trans-Alaska pipeline.
Even though deepwater ports could be developed at nearshore loca-
tions, growing sentiment on the West Coast appears to favor deep-
water port development offshore.
2 California, for example, has enacted the Coastal Zone Conservation Act which established planning
standards and strict regulation over all development in the State's Coastal zone. The San Francisco Bay
Conservation and Development Commission has also been established to regulate non-marine related
development activities.
$ PL 93-153.
4 33 U.S.C. 1321-1322.
FORD LIBRAR i GERALD
CHAPTER 5.-THE NEED FOR U.S. DEEPWATER PORTS
When deepwater port development was first proposed in the United
States, the need for such facilities was based on projections of un-
precedented increases in United States petroleum import demands.
Accordingly, industry and government sources associated a failure to
build deepwater ports in the United States with excessive petroleum
transportation costs, the exportation of refinery capacity, loss of
employment and revenue, adverse impact on U.S. balance of pay-
ments, and congestion of U.S. port and harbor facilities accompanied
by increasing risks of environmental degradation.
The argument for deepwater port development has lost some force
over the last year as changes in national policies and programs reflect
a growing concern for reducing U.S. reliance on imported petroleum
supplies. Some opponents of deepwater port development have even
suggested that there is no longer a need for U.S. deepwater ports and
that a Federal program authorizing their development might inhibit
the achievement of newly established energy policy goals by creating
an infrastructure wholly dependent on the continuation of petroleum
imports. There are two reasons why, however, considerable interest in
deepwater port development continues in the United States.
First, according to current plans, oil produced on Alaska's North
Slope will be carried to West Coast ports by tankers ranging up
to the 150,000 dwt class. While a 150,000 dwt tanker is not properly
considered a "supertanker," it can carry close to 900,000 barrels of oil.
Even though ports on the West Coast are deep enough to accommo-
date 150,000 dwt tankers, officials and residents of West Coast States
have expressed growing concern over unloading large volumes of oil
close to shore. There is a popular view on the West Coast that offshore
deepwater ports should be used to unload oil transported from the
Alaskan North Slope.
Second, although future U.S. demand for petroleum imports will
depend on several highly variable and unpredictable factors including
the success of efforts to promote energy conservation and curtail
growth in energy demand, and to develop domestic energy supplies
including alternative energy forms, such demands will probably
remain high at least through the next decade. This would be a long
enough period to allow the owners of a deepwater port to recover
their original investment in the facility.
It is assumed, in spite of the political uncertainties involved, that
imported petroleum supplies will originate from the Middle East
where over 80% of proven world petroleum reserves are located. If
demand for petroleum imports remains high then the United States
could recognize significant environmental and economic advantages if
imports from the Middle East could be transported directly to U.S.
deepwater ports as crude petroleum rather than being shipped as
refined products from nearby foreign refining centers.¹ The number of
1 As stated previously, the cost dvantages of supertankers depend on transporting large volumes of crude
petroleum over long distances. The transshipment of products from nearby foreign refining sites is more
costly than shipping crude oil directly to the United States. In addition the greater number of ships required
and the added disadvantage that petroleum products are considered more toxic to the environment than
crude petroleum make transshipment of products less desirable than the transportation of crude petroleum
by supertankers from an environmental point of view.
(19)
FORD
&
GERALD
LIBRARY
20
U.S. deepwater ports which may be required depends on such factors
as overall national energy demand, the availability of domestic energy
supplies and the growth in U.S. refinery capacity.
NATIONAL ENERGY DEMAND
Although projections about the level of growth in national energy
demand varied, there was little dispute prior to the Middle East oil
embargo which began on October 17, 1973, that demand for petroleum
products in the United States would at least double over the next
decade. Energy forecasters predicted that petroleum import demands
would, therefore, double by 1980, and that a major portion of these
imports would be crude oil from the Middle East.
For the year preceding the Middle East oil embargo, it appeared
that such projections would probably prove correct as patterns of U.S.
energy consumption demonstrated a rapid growth in oil import levels
and a shift towards greater reliance on Middle East oil supplies. For
example, in 1972 major sources of U.S. crude oil imports were Mideast/
Africa (867.7 thousand barrels per day (MB/D)), Canada (854.4
MB/D), and Latin America/Caribbean (501.5 MB/D). By September
of 1973 the average annual totals of crude petroleum imports by major
source were: Mideast/Africa, 1494.6 MB/D; Canada, 1146.9 MB/D;
Latin America/Caribbean, 639 MB/D.
As events during the embargo demonstrated, however, high growth
in national energy demand and increasing reliance on imported petro-.
leum supplies need not continue indefinitely.
During the Middle East oil embargo, the United States substantially
reduced energy consumption. Although energy demands increased
after the oil embargo was lifted, conservation of energy continues to
be espoused as a national goal. How successful energy conservation
efforts are in the future depends on what national policy directives are
put into force. At the very least, however, the higher cost of energy
should continue to result in more productive and efficient use of energy
supplies which will reduce the rate of growth in national energy demand
below pre-embargo oil import projections. Nevertheless, there is little
dispute, that even though the rate of growth is slowed, overall U.S.
energy demands will continue to increase. What portion of these
demands are met by petroleum imports depends on the availability of
domestic energy supplies.
DOMESTIC ENERGY SUPPLY
During the Middle East oil embargo, achieving national energy
self-sufficiency emerged as a high priority national goal. As $ result,
programs to increase oil and gas production on the Outer Continental
Shelf, accelerate the production and use of coal, and develop alternative
energy forms such as nuclear power, geothermal steam, solar energy,
and gas and liquid fuels from coal, moved ahead with added momen-
tum. However, in spite of the new commitment to national energy
self-sufficiency, most forecasters agree that the time when the United
States can rely on its own energy resources lies some distance in the
future.
GERALD FORD LIBRARY
21
For example, one Government source has estimated that, even
under an accelerated program to develop alternative domestic energy
forms and curtail energy demands, a significant volume of crude
petroleum imports (possibly as great as 4.4 million barrels a day) will
be required into the next decade.² If such projections are correct,
the need to import substantial quantities of petroleum will continue
for some time to come.
Furthermore, insofar as energy self-sufficiency is concerned, the
President's announced objective for "Project Independence" (the
official Administration watchword for the national energy self-
sufficiency goal) is to achieve a "capacity" for self-sufficiency. Accord-
ing to an Administration spokesman, such a "capacity of self-suf-
ficiency
does not necessarily mean zero imports. If by 1980
world conditions are sufficiently stable and world sources of oil
sufficiently diverse, it may well be in the national interest to continue
the importation of some limited amounts of crude oil." 3
According to this view, it would appear that a policy directed
towards obtaining a capacity for energy self-sufficiency by the be-
ginning of the next decade does not mean that the United States will
discontinue petroleum imports. Furthermore, even though successful
development of alternative domestic energy forms should reduce
future import levels to below original pre-embargo forecasts it is still
anticipated that import demands will be high enough to warrant the
development of U.S. deepwater ports if such imports are in the form
of crude petroleum as opposed to petroleum products.
U.S. REFINERY CAPACITY
Because it is not economically feasible to transport refined petro-
leum products by supertankers, the need for deepwater ports in the
United States depends on what volume of petroleum imports arrive
as crude oil. It is the availability of domestic refinery capacity which
determines what portion of petroleum imports arrive as crude oil as
opposed to refined products.
Refinery expansion in the United States has been at a virtual
standstill over the last decade. During this period, environmental
concerns, siting controversies, and uncertainties about crude oil
supplies caused by the Mandatory Oil Import Program led to an
exporting of refinery capacity to foreign sites where tax advantages
and lack of environmental controls favor such development.
Following revocation of the Mandatory Oil Import Program and
prior to the Middle East embargo, crude oil was imported to the United
States in sufficient volume to offset the difference between domestic
crude oil production and domestic refinery capacity. Additional
imports in the form of petroleum products arrived in quantities suf-
ficient to make up the difference between U.S. refinery output and
the national demand for petroleum products. Thus, in late 1973,
U.S. refinery capacity stood at about 13.6 million barrels a day
(MMB/D) exceeding domestic crude oil production by 3 MMB/D.
U.S. petroleum products demand equalled 17 MMB/D with the dif-
ference between domestic demand and refinery output (2.4 MMB/D)
being met by petroleum products imports.
2 The Oil and Gas Journal (March 18, 1974), Federal Energy Office estimate.
3 Reprinted in Appendix B of this report.
FORD LIBRARY i GERALD
22
In spite of early 1973 Administration pronouncements and changes
in policy designed to encourage domestic refinery construction,
subsequent gains in refinery capacity were the result of expanding
existing facilities or completing projects already underway at the
time that Federal policy changes were announced. Since there is no
Federal refinery siting policy per se, a mix of State and local policies,
Federal environmental controls, various technological factors, and
prospects for reliable crude oil supplies will continue to determine
the rate at which new domestic refinery capacity is brought on line.
Furthermore, leaving policy considerations aside, actually construct-
ing a new refinery can take anywhere from 2 to 3 years.
Until such time as the gap between demand for petroleum products
and U.S. refinery capacity is closed, further increases in petroleum
import demands will most likely be met by refined products rather
than crude oil. This would appear to be true even though domestic
crude oil production declined almost 10% over the last year, from
10.8 MMB/D in 1972 to 9.8 MMB/D in 1973. It would seem that the
decline in domestic petroleum production rates would precipitate
an increase in crude oil imports, and that the Middle East with its
vast oil reserves might be the largest source of supply. However,
oil produced in the Middle East as well as in most other foreign nations
is sour (high sulfur content) crude petroleum, while most American
refineries are designed to process the sweet (low sulfur content)
crude petroleum produced in the United States. Supplies of sweet
crude in the world market are tight, vet both technological and
environmental factors prevent the use of the more widely available
sour crude oil in American refineries until they are properly refitted
to process sour crude and remain in compliance with air quality stand-
ards. Even with some relaxation of air quality standards as recom-
mended by oil industry spokesmen, retrofitted refineries and new
refineries equipped to handle high sulfur crude oil will be required if
the United States expects to increase substantially the volume of
crude oil supplies imported from the Middle East.
The relationship between deepwater port development and U.S.
refinery expansion leads to A discussion reminiscent of the controversy
over "what came first, the chicken or the egg?" Industry representa-
tives repeatedly assert that domestic refinery expansion will not
progress at a rapid rate without assurances of secure crude oil supplies.
In the industry's view, such assurances inevitably involve a commit-
ment to the development of U.S. deepwater ports which will allow
them to plan on transporting crude oil in the most economic means
possible.
However, unless there is sufficient domestic refinery capacity
available, few deepwater ports will be needed in the United States
since nearby foreign refining centers will supply the United States
with petroleum products.
Because it is generally agreed that the United States will need to
import petroleum supplies from foreign sources for some time to come,
industry spokesmen and Federal officials warn against forcing the
United States to rely on foreign refinery capacity by failing to enable-
4 See ch. 1, Note 3. supra.
FORD
i
GERALD
LIBRARY
23
the development of U.S. deepwater ports. Industry and government
studies have concluded that the United States economy would lose
potential investment and employment opportunities as industry
turned to foreign refinery sites. Furthermore, the economic and en-
vironmental advantages of supertanker transportation would be lost
to the United States as greater numbers of conventional tankers were
used to transport petroleum products to American ports.
In summary, there appears to be a need to build deepwater ports on
the West Coast soon, in order to facilitate the transportation of oil
from Alaska's North Slope. Furthermore, as far as the need to build
deepwater ports off other U.S. coastal areas is concerned, those who
have considered the prospects of reducing United States energy demand
and increasing domestic energy supplies feel that future import levels
will warrant the development of at least a few deepwater ports in the
very near future. Accordingly, it is argued that the failure to establish
a Federal program enabling U.S. deepwater port development to
proceed soon, will result in continued exportation of refinery capacity
accompanied by economic loss, and an incremental increase in burdens
on U.S. port and harbor facilities to a point where both economic and
environmental costs are being borne unnecessarily by the United
States because it has no deepwater ports.
FORD LIBRARY i GERALD
CHAPTER 6.-INTERNATIONAL AND DOMESTIC LEGAL
IMPLICATIONS
At the present time, there is no Federal agency specifically and
exclusively empowered to authorize and oversee the construction, op-
eration, and use of deepwater ports.
Development of deepwater terminal facilities at near shore sites
(within U.S. territorial limits) would require a number of different
Federal, State and local authorities to exercise their jurisdiction with
respect to: (1) siting, constructing and operating the various structures
and facilities involved; (2) insuring compliance with standards of
environmental quality and land use; and (3) assuring that operational
and navigation safety standards are met. Development of such near
shore facilities is therefore subject to a whole range of permit pro-
cedures and standards of compliance implemented by a complex inter-
face of Federal, State, local and possibly interstate government
entities. For example, in addition to whatever standards of develop-
ment are imposed by State, regional or local authorities, deepwater
port development within territorial waters would require the grant of
a permit by the Corps of Engineers, pursuant to its authority under
the Rivers and Harbors Act, over dredging and erecting structures in
navigable waters; approval from the U.S. Coast Guard under its
authority to regulate navigation and transportation of hazardous
materials; and the concurrence of other Federal agencies with environ-
mental protection functions. Approval of deepwater port development
by any Federal agency would undoubtedly be considered a "major
Federal action" and as such would require the preparation of an en-
vironmental impact statement pursuant to Section 102(2)(C) of the
National Environmental Policy Act. However, by virtue of their juris-
diction over landside activities, and because the Federal Government
has conveyed certain rights to the States under the Submerged Lands
Act, the States are viewed as having dominant control over deepwater
port development in territorial waters.
In spite of the fact that sufficient legal authority exists to enable
deepwater port development within the three-mile territorial limit,
the availability of natural deepwater sites within these boundaries is
limited. Thus, while there is still some pressure to dredge existing U.S.
ports to provide sufficient depths for supertanker operations, industry
has responded to the opportunities for more economic petroleum
transportation by joining in consortia which propose to construct and
operate offshore deepwater ports. Two such proposals involve siting
four or five single point mooring terminal buoys in a cluster, about 25
miles off the U.S. gulf coast, that is, beyond U.S. territorial limits. The
facilities would be linked by buried submarine pipeline to shore-based
storage, pipeline, refining, and processing facilities.
(23)
21-035-74-3
FORD i LIBRARY GERALD
26
The United States has no clearly defined legal framework by which
to authorize and regulate deepwater port construction and operation
in international waters. Before such activities can proceed it will be
necessary to resolve both the international and domestic legal issues
involved.
INTERNATIONAL LEGAL IMPLICATIONS
As far as can be determined, a U.S. deepwater port constructed
in international waters would be the first such facility located outside
a nation's territorial limits anywhere in the world. While a nation
exercises absolute jurisdiction over its territorial waters by virtue of
the International Convention on the Territorial Sea and Contiguous
Zone,¹ the freedom of all nations to make certain recognized uses of
waters beyond territorial boundaries is guaranteed by the International
Convention on the High Seas.2 In addition, the Convention on the
Continental Shelf 3 authorizes a coastal nation to erect structures on
its continental shelf for the purpose of exploring and exploiting the
mineral and non-!iving resources, and sedentary living species on or
under the seabed.
No existing international law, treaty, or agreement specifically
recognizes the construction and operation of deepwater ports as a
permissible use of international waters. Absent such authority, the
United States could possibly wait and hope for clarification of per-
tinent international legal issues by the 1974 Law of the Sea Con-
ference before authorizing the development of deepwater ports.
However, in view of the time element involved, both with respect to
reaching international agreement and the number of years required
to plan and construct an offshore terminal facility, many believe that
pursuing this course would place unnecessary and costly burdens of
uncertainty on the deepwter port development process.
It is also conceivable that a nation wishing to use the high seas in
a manner not specifically authorized by international law might
unilaterally extend its territorial jurisdiction for this purpose. How-
ever, official and non-official sources alike regard such action by the
United States as inappropriate in view of this nation's desire to seek
limitations during the Law of the Sea Conference on unilateral ex-
tensions of territorial jurisdiction. Furthermore, those who favor
1 Adopted by the United Nations Convention on the Law of the Sea, April 20, 1958 (U.N. Doc. A./Conf.
13/L. 52). According to article 1 of the Convention "The sovereignty of a State extends, beyond its land
territory and its internal waters, to a belt of sea adjacent to its coast, described as the territorial sea." His-
torically, a majority of nations (including the United States) claimed three miles as the extent of their
territorial limits although claims to wider margins of six and twelve miles were also made. Recently, how-
ever, many nations have asserted jurisdiction over much larger areas in a manner commonly described as
"creeping jurisdiction" to protect fishing or other economic and environmental interests. It is anticipated
that the 1974 Law of the Sea Conference will establish twelve miles as the acceptable maximum limit for
extension of territorial jurisdiction.
2 Adopted by the United Nations Convention on the Law of the Sea, April 29, 1958 (U.N. Doc. A/Conf.
13/L. 53) article 2 of the Convention provides that: "The high seas being open to all nations, no state may
validly purport to subject any part of them to its sovereignty. Freedom of the high seas is exercised under
the conditions laid down by the articles and by the other rules of international law. It comprises, inter atia,
both for the coastal and noncoastal States:
(1) Freedom of navigation;
(2) Freedom of fishing;
(3) Freedom to lay submarine cables and pipelines; and
(4) Freedom to fly over the high seas.
These freedoms, and others which are recognized by the general principles of international law, shall be
exercised by all states with reasonable regard to the interests of other states in their exercise of the freedom of
the high seas."
a Adopted by the United Nations Conference on the Law of the Sea, April 29, 1958 (U.N. Doc. A/CONF.
13/L. 55). Article 1 of the Convention defines "continental shelf" as the seabed and subsoil of the sub-
marine areas adjacent to the coast but outside the area of the territorial seas, to a depth of 200 metres or,
beyond that limit, to where the depth of the superjacent waters admits of the exploitation of the natural
resources of the said areas;" and
the seabed and subsoil of similar submarine areas adjacent to the
coasts of islands."
FORD
GERALD
27
developing U.S. deepwater ports maintain that sufficient authority
to exercise Federal jurisdiction on the high seas for that purpose may
be inferred from the existing international regime.
For example, it has proved tempting to search the Convention on
the Continental Shelf for authority to construct and operate deep-
water ports. However, this approach has been consistently rejected
by both government and academic sources on the grounds that the
Continental Shelf Convention supports only those activities which
are related to the exploration and exploitation of the OCS seabed
resources, a use for which deepwater ports are not intended.
Some sources have also suggested that deepwater ports might fall
into the category of roadsteads, water areas "used for the loading. un-
loading and anchorage of ships" which according to Article 9 of the
Convention on the Territorial Sea and Contiguous Zone,⁴ when they
"would otherwise be situated wholly or partly outside the outer limit
of the territorial sea, are included in the territorial sea." In general,
however, analogizing deepwater ports to roadsteads, or to artificial
islands, vessels or any other structures or activities specifically
governed by international accord is regarded as inconsistent with the
meaning and intent of international law.
The most widely supported belief is that constructing and operating
deepwater ports beyond a nation's territorial limits constitutes a
"reasonable use" as contemplated by Article 2 of the Convention on
the High Seas.⁵ Thus, under the authority of this Convention a nation
might properly exercise jurisdiction on the High Seas in order to
license and regulate such facilities. Proponents of this interpretation
find support for their view in the phrase inter alia which implies that
the authors of the Convention on the High Seas foresaw a need to
permit a broader range of uses than those four specified in Article 2.
This interpretation has been actively promoted by the U.S. Depart-
ment of State and other Executive agencies.
However, although they consider development of deepwater port
facilities to be a reasonable use of the high seas under international
law, the State Department also feels it is necessary to continue to
seek multilateral agreement on a coastal State's exclusive right to
authorize and regulate such facilities within a designated "Coastal
Seabed Economic Area."
For this reason, the United States Delegation attending the Third
International Conference on the Law of the Sea has been working to
clarify international regulation of deepwater ports by proposing draft
treaty articles concerning the construction, operation and use of off-
shore installations affecting a coastal States' economic interests.⁶
The Department of State has also reported that there are nine inter-
national conventions to which the United States is party which could
bear directly on the development and implementation of a national
deepwater port policy. These include:
1. Convention on the Territorial Sea and Contiguous Zone (establishes
sovereignty over territorial waters and guarantees rights of innocent
passage).
6 See note 1. supra.
8 See note 2. supra.
0 United States of America; Draft Articles for 0 chapter on the Rights and Duties of States in the Coastal Seated
Economic Area, reported in Appendix c.
FORD i LIBRARY GERALD
28
2. Convention on the High Seas (assuring freedom of navigation, of
fishing, to lay submarine cables and pipelines, and to fly over the high
seas).
3. Safety of Life at Sea Convention (SOLAS) (pertaining to ship
construction, equipment and operational standards affecting the safety
of passengers and crew).
4. International Convention on Load Lines (pertaining to the con-
trol of certain operational aspects of ships docked in foreign ports).
5. Internatonal Regulations for Preventing Collisions at Sea (volun-
tary rules of the road).
6. International Convention for the Prevention of Pollution of the
Sea by Oil (as amended) (directed towards the reduction of intentional
and nonintentional discharges of oil into the sea).
7. International Convention Relating to Intervention on the High
Seas in Cases of Oil Pollution (not yet in effect).
8. International Convention on Civil Liability for Oil Pollution
Damage.
9. Convention on the Establishment of an International Fund for
Compensation for Oil Pollution Damage (not yet in effect).
In the State Department's view, some amendments to these
international agreements may be necessary in order to accommodate
deepwater port development. Accordingly, a statement submitted to
the Senate Special Joint Subcommittee on Deepwater Ports Legisla-
tion discussed these admendments as follows:
The Convention for Safety of Life at Sea (1960) and the
International Convention on Load Lines (1966) both
establish systems whereby the presence of certain certificates
may be checked and the requirements of the convention
enforced in foreign ports by the port state. Amendment of
these conventions may be necessary to assure their applica-
tion to superports. Potential amendment to the multilaterally
developed International Regulations for Preventing Col-
lissions at Sea may provide a possible basis for particularizing
rules of the road for superport areas. Some provisions of the
International Convention for the Prevention of Pollution of
the Sea by Oil, in particular the 1971 amendment to this
Convention, would also apply to superports. The Inter-
national Convention Relating to Intervention on the High
Seas in cases of Oil Pollution Casualties would appear to
apply to superports when it comes into effect. Finally, the
International Conventions on Civil Liability for Oil Pollution
Damage (1969) and on Establishment of an International
Fund for Compensation for Oil Pollution Damage (1971)
might apply to superports, if amended.⁷
Regardless of the authority under which the U.S. Federal Govern-
ment describes its jurisdiction over offshore deepwater ports, the
facility must be constructed and operated in a manner which will
not unduly interfere with the rights of other nations under inter-
national law or with authorized uses of the oceans in which the United
States or its citizens may be involved, such as Outer Continental
Shelf resource exploitation, fishing, or scientific research, and marine
environmental protection.
7 Hearings before Senate Special Joint Subcommittee on Deepwater Ports Legislation, 93d Cong., 2d Sess.,
Serial No. 93-59.
FORD i LIBRARY
29
DOMESTIC LEGAL IMPLICATIONS
Without some formal provision to that effect the laws of the United
States would not automatically extend to a deepwater port facility
constructed beyond territorial waters. The manner in which these
laws are applied will depend upon the basis in international law by
which the United States describes its jurisdiction over facilities con-
structed on the high seas and the institutional arrangement designed
to administer U.S. deepwater port policy.
The development and operation of deepwater ports whether they are
within or outside U.S. territorial waters, involves a broad range of
national concerns including energy resource supply, environmental
quality, navigational safety, and economic viability. As will be dis-
cussed in Chapter 7, responsibility for these matters resides in a
number of Federal agencies, offices and bureaus. Those Federal
Laws which might be particularly applicable to deepwater ports and
their associated facilities are those regulating tanker operations, the
erection of structures and environmental quality in navigable waters;
leasing on the Outer Continental Shelf, pipeline safety, air and water
quality, and management of the coastal zone. Some of the major laws
effecting these policies include:
Rivers and Harbors Act (33 U.S.C. 540 et seq.).
Ports and Waterways Safety Act (33 U.S.C. 1221-1222).
Federal Water Pollution Control Act as amended (33 U.S.C.
1251 et seq.).
Marine Protection, Research and Sanctuaries Act of 1972
(86 Stat. 1052; 33 U.S.C. 1401-1421).
Outer Continental Shelf Lands Act (43 U.S.C. 1331-1346).
Clean Air Act (42 U.S.C. 1857 et. seq.).
National Environmental Policy Act (42 U.S.C. 4321 et seq.).
Coastal Zone Management Act (16 U.S.C. 1451-1464).
In addition, the Federal Government has conveyed certain rights
within territorial limits to the States under the Submerged Lands
Act (67 Stat. 29, 43 U.S.C. 1301 et seq.).
The body of law governing activities within U.S. territorial bound-
aries and in navigable waters could if applied to deepwater port
development on the high seas, provide basic environmental and navi-
gational safeguards. However, some of the unique aspects of deep-
water port construction, operation and use require that additional
and more specific protection be devised. For example, questions on,
whether existing U.S. law is sufficient to fully regulate port facilities
on the high seas were raised during 1973 hearings before the Senate
Special Joint Subcommittee on Deepwater Ports.
State Department response to the question,
"
what specific
further actions, including additional studies or investigations, do you
recommend the Federal Government undertake with respect to the
development of deepwater ports?" was as follows:
The State Department believes that more detailed con-
sideration should be given to questions such as shipping and
navigational safety requirements, storage and transshipment,
environmental requirements, the customs laws and civil and
criminal jurisdiction as related to the operation of deepwater
GERALD FORD LIBRARY
30
port facilities. Such consideration could provide inputs for
further decisions on regulatory and licensing policies."
1
A number of independent and government sources have emphasized
a need to meet environmental protection and navigation safety con-
cerns related to deepwater port development by providing the legisla-
tive authority necessary to:
Establish site quality evaluation criteria which include con-
sideration of both direct marine, and secondary landside environ-
mental impacts;
Establish specific engineering design, equipment and operating
standards for deepwater ports and their associated pipeline and
storage facilities;
Develop standards for vessel operation and for cargo transfer,
oil spill prevention and oil spill containment systems.
In addition, an interagency Study Group formed by the White
House to examine the legal issues involved in deepwater port develop-
ment reported on two matters of particular interest.
First, with respect to licensing pipelines on the Outer Continental
Shelf the study group pointed out that the Department of Transpor-
tation has clear authority to regulate the safety of pipelines carrying
natural gas pursuant to 49 U.S.C. Chapter 24. On the other hand,
Department of Transportation authority to regulate pipelines carry-
ing petroleum or other hazardous substances in interstate commerce
(18 U.S.C. Chapter 39; 49 U.S.C. §§ 1655(e)(4)) applies neither to
pipelines located on the United States Outer Continental Shelf or to
storage facilities located on land.
The OCS Lands Act (43 U.S.C 1334(c)) authorizes the Secretary
of the Interior to license pipeline construction on the Outer Conti-
nental Shelf and, in consultation with the Interstate Commerce
Commission and the Federal Power Commission, to assure that
they are operated without discrimination against any potential
shipper of oil, gas, or other mineral products gathered from the
shelf. The OCS Act does not, however, provide the the enforce-
ment of safety requirements. According to the White House Legal
Study Group it is, therefore, uncertain whether the Department of
Interior or the Department of Transportation is responsible for reg-
ulating the safety of pipelines on the Outer Continental Shelf. The
Study Group recommended that deepwater port legislation clarify
authority to regulate the safety of pipelines and storage facilities as-
associated with deepwater ports both to assure that no regulatory
vacuum exists and to avoid overlapping jurisdiction among Federal
agencies.
Second, the study group reported a need to extend the Customs
Laws of the United States over a deepwater port with special regard
for whether the port was a fixed structure with storage facilities or
simply a pumping buoy. In the case of the former, according to the
Study Group, there would be a need to conduct customs activities on
the facility itself, while customs regulation of a pumping buoy strue-
ture would be better handled onshore. Furthermore, the Study Group
recommended that coastwise trade, (which is controlled by the Bureau
of Customs) with U.S. deepwater ports, be limited to American
vessels.
a Hearings before Senate Special Subcommittee on Deepwater Ports, 93d Cong., 2d Sess., Serial 98-59. For a
complete list of responses to this question by other Federal agencies see Appendix F of this report.
FORD
GERALD
LIBRARY
31
The importance of assuring that U.S. deepwater port development
proceeds in a manner fully consistent with national and international
laws and policies pertaining to navigational safety and both marine and
landside environmental quality has been discussed in a broad body of
literature on the subject of deepwater ports. However, one area of
considerable importance which has not received such careful attention
is the possible anticompetitive implications of deepwater port
development.
Principles of preserving competition in the American economy are
embodied in several laws and a long history of case law in antitrust.
Briefly, the major provisions of Federal laws designed to preserve
competition in the American economy are the Sherman Act (15 U.S.C.,
Sec. 1-7), the Clayton Act as amended by the Robinson-Patman Act
(15 U.S.C., Sec. 12-27), and the Federal Trade Commission Act
(15 U.S.C., Sec. 41-59).
The Sherman Act makes illegal every contract, combination, or
conspiracy in restraint of trade or commerce among the several States
or with foreign nations, and makes it illegal for any person to monopo-
lize or to combine or conspire with any other person to monopolize
any part of such commerce.
The Clayton Act prohibits price discrimination (except when
based on grade, quality or quantity; or made in good faith to meet
competition; or where only due allowance for difference in the cost
of selling or transportation is made) where the effect of such dis-
crimination may be substantially to lessen competition or tend to
create a monopoly in any line of commerce. Section 7 of the Clayton
Act forbids mergers in any line of commerce where the effect may be
substantially to lessen competition or tend to create a monopoly.
The Federal Trade Commission Act states that unfair methods of
competition and unfair or deceptive acts or practices in commerce
are unlawful.
In addition, while not properly considered an antitrust law, the
Interstate Commerce Act (49 U.S.C., Sec. 1-1301), which regulates
the operation of railroads and water carriers in interstate commerce,
also assures that common carrier oil pipelines will be operated without
discrimination against any oil shipper.
Pursuant to these statutes, the Department of Justice, the Federal
Trade Commission and the Interstate Commerce Commission all
have functions related to preserving competition in the U.S. economy.
In spite of the protection afforded by these laws, however, it has
been suggested that legislation authorizing the development of deep-
water ports should provide specific assurances against the possible
anti-competitive impacts of such development.
In testimony during Senate committee hearings on legislation
authorizing the development of offshore deepwater port facilities, the
Director of the Federal Trade Commission's Bureau of Competition
stated the Commission's concern that the owners of such facilities
would effectively control the entry and distribution of crude oil for
significant areas of the country. The potential for abuse of such power,
in the Commission's view, warrants the establishment of vigorous
license application review procedures and permit conditions.³ Possible
3 Hearings, Senate Joint Subcommittee on Deepwater Ports Legislation, 93d Cong., 2d sess., Serial No.
98-59.
GERALD FORD VIBRARY
32
abuses suggested in Federal Trade Commission testimony included
the potential for port owners to engage in exclusionary or discrimin-
atory behavior and to influence the location of future refinery ca-
pacity and petrochemical industries.
Further testimony presented by the Justice Department's Anti-
Trust Division emphasized that deepwater ports must be operated in
a manner which would provide "reasonable and nondiscriminatory
access to other competing firms." According to the Anti-Trust Di-
vision testimony, even though an installation could ostensibly be
operated as a "common carrier" (along the lines described by the
Interstate Commerce Act), certain characteristics of deepwater port
facilities might permit reasonable access to be denied as a practical
matter by sizing or routing the facility and pipeline in such a way as
to make it impractical or uneconomic for some potential customers to
use, or by imposing tariff requirements which could not be met by
potential users.
While the Justice Department viewed as unnecessary any ban on
joint activities by oil companies in the construction and operation of
deepwater ports they testified further that:
An argument can be made that large scale joint ventures
are unnecessary in these offshore facilities. The usual reason
given for prevalence of joint ventures in the petroleum
industry is that situations presenting considerable risks and
very large capital requirements make necessary sharing of
both risk and investment.
But in construction of large pipeline systems, for example,
petroleum companies have followed the 90-10 practice; 10
percent of capital requirements are met by direct investment
and 90 percent by outside financing.
If the total costs estimated for [deepwater ports off the
Gulf Coast] range from $390-400 million, then the capital
investment, after outside financing, might run $39-40 mil-
lion. This is not an inordinate sum for one of the major oil
companies and might not be insurmountable for
smaller
companies.
And a sharing-the-risk argument-often used to justify
joint interests in exploration and drilling-does not seem
applicable to this situation.
The demand for imported oil,' which will be steady and
growing over the foreseeable future, would seem to insure
against any significant financial risk in the construction and
operation of such an offshore facility.
Bank financing should be no problem, and indeed, a
deepwater port would seem such a good financial opportunity
that one need not assume it would be attractive only to those
already in the petroleum industry.
According to Justice Department testimony, deepwater port devel-
opment could be made subject to a "commodities clause" prohibiting
a company which owned a deepwater port from using the facility to
transport any commodity which it owns in whole or in part or in
which it has any interest. The commodities clause was added to the
Ibid.
FORD & LIBRARY GERALD
33
Interstate Commerce Act by amendment in 1906 and currently applies
only to railroads. However, such a provision might serve as an appro-
priate safeguard against the possible anti-competitive impacts of
deepwater port development.
The Justice Department did not favor applying a "commodities
clause" provision to deepwater port development. They did feel,
however, that an application to construct a deepwater port should be
subjected to their review prior to its approval.
The Federal Trade Commission testified that Federal policy should
require that the FTC be consulted on the anti-competitive implications
of a deepwater proposal before authorization was granted.
The Justice Department, Federal Trade Commission, and the Inter-
state Commerce Commission all felt that it was important to assure
that deepwater ports and their associated pipelines would be regulated
as "common carriers" by the Interstate Commerce Commission.
While, it is not certain what, in practice, the anti-competitive im-
pacts of deepwater port development might be, it is possible that any
potential for lessening competition through deepwater port develop-
ment could be effectively reduced if appropriate controls were applied.
Those who lack confidence in this approach, however, suggest that
some form of public ownership of deepwater ports is the ultimate solu-
tion to the problem of potential anti-competitive abuse.
FORD i LIBRARY GERALD
CHAPTER 7.-INSTITUTIONAL ASPECTS OF
DEEPWATER PORTS
Legislation to authorize and regulate deepwater ports must describe
an institutional arrangement to carry out Federal deepwater port
policy and coordinate that policy with the policies and programs ad-
ministered by other Federal government entities. In addition, be-
cause the technical aspects and secondary growth impacts of deep-
water port construction and operation will involve the environmental
and economic policies of the coastal States, regulation of deepwater
port development will also require the coordination of Federal ac-
tivities with those of State and local government.
FEDERAL RESPONSIBILITY
Before considering what institutional arrangement would be most
suitable for administering Federal deepwater port policy it is useful
to consider what government policies which have some relationship to
deepwater port development are being carried out under existing law.
Several Federal agencies have responsibilities and expertise re-
lating to the development of deepwater ports. They are as follows:
DEPARTMENT OF TRANSPORTATION
DOT has overall research, planning and coordination responsibility
with respect to the economic, social and environmental interplay be-
tween domestic and international transportation systems and es-
tablished policies, regulations and laws.
DOT also has authority to establish regulations for the safe trans-
portation of hazardous materials, petroleum, and petroleum products
in offshore areas and by pipelines and other carriers in interstate or
foreign commerce.
Additional DOT authority includes:
Responsibility in the anti-pollution area relating to water
quality in navigable waters;
Inter-face of authority over non-transportation related oil
facilities with EPA and Department of the Interior; and
Jurisdiction over transportation of natural gas under Natural
Gas Pipeline Safety Act of 1968 (49 U.S.C. 1671 et seq.).
Those offices or entities within DOT which have functions especially
related to deepwater ports include:
U.S. Coast Guard.-U.S.C.G. is the Federal Maritime Law enforce-
ment agency. It is, therefore, the Coast Guard's function to:
Maintain a system of rescue vessels, aircraft, and lifeboat
stations to protect life and safety in navigable waters;
Enforce Federal laws on the High Seas;
Prevent, detect and control pollution on and adjacent to the
navigable waters of the United States;
(35)
FORD & LIBRARY GERALD
36
Maintain ocean stations to provide meteorological information
to ships, aircraft and to the Weather Bureau;
Collect oceanographic data and furnish navigation information
to ships and aircraft;
Maintain merchant marine safety through inspection and
regulation of vessels;
Investigate and review marine casualties and acts of incom-
petency;
Maintain aids to navigation; and
Enforce rules and regulations governing the security of ports
and anchorage and movement of vessels in U.S. waters.
National Transportation Safety Board.-NTSB has responsibility
for surface transportation accident cause determination and safety
promotion.
DEPARTMENT OF THE INTERIOR
Interior Department responsibilities include administration of
public lands; conservation and development of mineral and water
resources; conservation, development of fish and wildlife resources;
and coordination of Federal and State recreation programs.
Offices or entities within the Department which have functions
particularly relevant to deepwater ports include:
Bureau of Land Management.-The BLM administers programs
and policies on Federal Lands including leasing mineral deposits on
the Outer Continental Shelf.
Office of Oil and Gas.-The 00G functions relate to petroleum
policy, programs and problems. It provides a channel of communication
between the Federal Government, petroleum industry, petroleum
producing States and the public.
Geological Survey.-USGS is responsible for the classification of the
public lands and the examination of the geological structure, mineral
resources and products of the national domain including those of the
Outer Continental Shelf.
Other offices within the Department of the Interior which have
some functions which may relate to deepwater port development
include the Office of Water Resources Research, the Office of Land
Use and Water Planning, the U.S. Fish and Wildlife Service, and the
Bureau of Sport Fisheries and Wildlife.
DEPARTMENT OF COMMERCE
The Commerce Department is responsible for promoting the United
States international economic position, fostering the development of
the U.S. merchant marine and for protecting and promoting the de-
velopment of marine fisheries.
Offices or entities within the Department which carry out functions
relating to deepwater port development include:
National Oceanic and Atmospheric Administration.-In addition to
assimilating information and data on the ocean environment and
living marine resources, NOAA also:
Administers and directs the National Sea Grant Program by
providing grants to institutions for oceanographic and marine
environmental studies; and
GERALD FORD LIBRARY
37
Has authority over the Coastal Zone Management Program,
the National Weather Service, the Marine Mammals Protection
Act; and the Marine Protection, Research and Sanctuaries Act.
Maritime Administration.-MARAD administers programs to aid
in the development, promotion and operation of the U.S. merchant
marine and implements the Merchant Marine Subsidy Program.
CORPS OF ENGINEERS (DEPARTMENT OF THE ARMY)
Pursuant to the Rivers and Harbors Acts and the Refuse Act the
Corps regulates rivers to improve water quality and enhance fish and
wildlife; protect shores, oceans and lakes and to protect and prevent
the obstruction of U.S. navigable waters. In carrying out these re-
sponsiblities the Corps issues permits for dredging, discharging effluents
and erecting structures in navigable waters.
The Corps is also involved in overall regional planning for water re-
sources management, and in the development and construction of
projects in the nation's ports and waterways.
OTHER AGENCIES
Other Federal agencies or entities which administer programs or
policies especially relevant to deepwater port development include:
The Environmental Protection Agency.-EPA is responsible for air
and water quality programs including oil pollution control, and en-
forces among other laws, the Federal Water Pollution Control Act
and the Clean Air Act.
The Council on Environmental Quality.-CEQ is responsible for
assessing trends in, and recommending policies concerning, the quality
of the environment.
Federal Maritime Commission.-The Commission carries out regula-
tory authorities under the Shipping Act, the Merchant Marine Acts
and the Intercoastal Shipping Act, in addition to certain provisions of
the Water Quality Improvement Act. The Commission, therefore, ap-
proves or disapproves agreements filed by common carriers including
cooperative working agreements between common carriers, terminal
operators, freight forwarders and other persons subject to the shipping
laws.
Interstate Commerce Commission.-ICC regulates freight forwarders,
water carriers and oil pipelines subject to the Interstate Commerce
Act. In carrying out its functions the ICC assures that common carrier
oil pipelines will be operated without discrimination against any
shipper.
Federal Trade Commission.-FTC was created to promote free and
fair competition in interstate commerce.
Justice Department.-The Justice Department is charged with
responsibility for administering the anti-trust laws of the United
States.
Department of State.-The State Department represents U.S.
interests in international affairs.
In addition to those listed above, other Federal entities such as the
Bureau of Customs in the Department of the Treasury and various
offices, bureaus and administrations within the Department of Labor,
have particular authority which could be brought to bear on the con-
struction and operation of deepwater ports.
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38
STATE INTERESTS
States have significant and understandable interest in both the
economic and environmental impacts within their boundaries, of
deepwater ports off their shores. States have the power of approval
over construction of onshore port-related facilities and pursuant
to the Submerged Lands Act, over offshore pipelines within their
territorial waters. A State's enthusiasm for or opposition to a deep-
water port requiring landside facilities in its territory thus becomes a
significant factor in authorizing and regulating such offshore tanker
terminals.
The Federal government has legitimate interest in activities within
State territorial waters under the Commerce clause of the Constitution.
By virture of its authority over interstate and foreign commerce, the
Federal government could conceivably preempt State and local
jurisdiction in territorial waters for the purpose of regulating deep-
water ports and their associated components. Regardless of whether
or not the Federal government establishes a deepwater port authoriza-
tion and regulatory process which covers facilities within as well as
outside U.S. territorial waters, administering deepwater port policy
will require close coordination of State and Federal activities from the
early stages of planning deepwater ports through the regulation of their
operations. In addition, the inclusion of private, industrial and public
interests in these decisionmaking processes is essential to achieving
fully effective planning and enironmental management goals.
Uncertainty over the State role in 8 Federal deepwater port authori-
zation process has led some States and their elected representatives to
seek a policy allowing State governments to veto Federal approval of
deepwater port development affecting their coasts. Federal officials
who oppose State veto power assure that State governments would be
consulted in the Federal deepwater port authorization process, and
that the Federal Government does not have sufficient authority to
exercise the right of eminent domain for the purpose of siting deep-
water port related facilities within State controlled waters thereby
overriding a State's decision not to grant the necessary permits to
complete connections between a deepwater port and the shore.
Accordingly, deepwater port development would not be authorized off
the coast of a State where substantial objection exists. However,
officials of the States involved remain unconvinced and feel that the
pressures for expanding petroleum related industrialization and the
subsequent impacts at the State level are sufficient to justify allowing
the final deepwater port siting decision to rest with the affected States.
A possible remedy to this dilemma which has been recommended
is to require that each deepwater port proposal be congressionally
approved following an appropriate agency review process. Those pro-
moting this approach believe that requiring congressional approval of
deepwater port projects would provide for representation of States'
interests through their elected officials. Many also feel that congres-
sional review of deepwater port proposals would allow decisions to be
made within the context of the circumstances and conditions of energy
resource development and supply which existed at the time the
proposal was reviewed.
GERALD FORD LIBRARY
39
ALTERNATIVE INSTITUTIONAL ARRANGEMENTS
Several institutional mechanisms have been suggested for coordinat-
ing the functions and responsibilities of the various government
authorities concerned with deepwater ports. These proposed institu-
tional arrangements logically fall into two rough categories, those
providing a modified continuation of existing authorities, and those
requiring the creation of a new Federal entity. Such alternatives can
be described as follows:
A. Extension of existing authority
The functions and responsibilities of all Federal agencies as previ-
ously described could be extended to deepwater port facilities con-
structed off the coasts of the United States. This action could result in
requiring a party proposing to construct a deepwater port to obtain a
permit from some established Federal agency. Such an agency might
be the Corps of Engineers, which has authority to grant permits for the
construction of structures in navigable waters or the Department of
Interior which grants permits for the construction of oil and gas drilling
platforms and pipelines on the Outer Continental Shelf; the Depart-
ment of Transportation with its broad mandate to coordinate national
transportation policies or the Department of Commerce with its in-
volvement in maritime affairs and matters of commerce. Extending
the authority of an existing Federal agency over deepwater port
development might result in creating a new bureau or office of deep-
water port policy administration within a department, or in expanding
the functions of some existing bureau or office within the designated
agency.
The party proposing to construct the deepwater port under this
regulatory framework would have to meet the requirements of other
Federal agencies and obtain such additional permits and licenses as
may be necessary to construct pipelines and operate the facility.
Deepwater port legislation would also need to provide whatever
additional authority would be necessary to cover those actions unique
to the construction or operation of deepwater ports which are not
sufficiently covered by existing Federal law.
However, in the interest of providing a more unified application
review and approval process and to facilitate the coordination of
Federal agency responsibilities it may be desirable to establish a
deepwater port authorization procedure which would eliminate the
need to file multiple applications for the various Federal authoriza-
tions required to construct and operate a deepwater port. This could
be accomplished by any of the institutional arrangements described
below.
B. Lead coordinating agency
The Federal Government could authorize and oversee the develop-
ment of offshore supertanker terminals by designating one Federal
agency and empowering it with the necessary authority to serve as
the lead coordinating agency for U.S. deepwater port development.
Under this arrangement an application for deepwater port authori-
zation filed with the lead agency, would constitute the application
for all Federal authorizations which might be required to construct
and operate the port. The head of the lead agency would then consult
FORD & LIBRARY GERALD
40
with the heads of other Federal agencies to assure that the application
met the requirements of all other Federal laws.
As discussed previously, there are several Federal agencies with
functions and responsibilities directly related to the development
of deepwater ports. Almost every one has been suggested by some
source, as the agency best suited to assume the lead in the adminis-
tration of a U.S. Deepwater Port policy. For example, the Depart-
ment of the Interior, the U.S. Coast Guard and the Department
of Commerce are each designated by different legislative proposals
pending before the 93d Congress, as the principal licensing authority
for the construction of offshore deepwater ports. Those who view
deepwater port development as primarily an "energy" issue with
broad implications for land use favor the Department of the Interior
with its wide range of functions in these areas as the lead agency for
deepwater port development.
The Department of the Interior is the focus of a government
reorganization proposal transferring almost all functions of that
department together with some of the energy and natural resource
management functions of other Federal agencies to a new Department
of Energy and Natural Resources. This proposal, now pending before
the 93d Congress, has been offered as one justification for placing
deepwater port policy anministration functions in the Department of
the Interior.
The view that deepwater ports should be administered primarily
as navigation or transportation facilities which have significant
impact on the marine environment has led some to recommend that
deepwater port development be placed under the auspices of an agency
or department with navigation and/or transportation related functions
such. as the Department of Transportation, the U.S. Coast Guard,
the Corps of Engineers, the Maritime Administration, the Depart-
ment of Commerce or the National Oceanic and Atmospheric Admin-
istration. The latter has been recommended especially because of
its jurisdiction over both marine environmental affairs and the Coastal
Zone Management Program.
In addition to a lack of agreement over which Federal agency is
best suited to serve as the lead coordinating agency for deepwater
port development there is also considerable disagreement over the
degree of authority which a lead agency should have and the manner
in which such authority should interrelate with or possibly supersede
the authority of other Federal agencies.
For example, Congressional attention has in some cases focused
not on designating an agency to authorize deepwater port develop-
ment but on assuring that such development will not conflict with the
functions carried out or policies promoted by other Federal agencies.
Several measures pending before the 93d Congress propose to define
the roles which agencies such as the Environmental Protection Agency
or the National Oceanic and Atmospheric Administration must play
should some other Federal agency authorize the development of deep-
water ports, by requiring these agencies to grant express certification
of permit applications and plans for construction and operation.
The extent to which the advantages of providing a focus for the
administration of deepwater port policy in one lead agency could be
GERALD FORD LIBRARY
41
realized depends in large measure on the success of those procedures
established to coordinate the functions of the various Federal agencies
concerned. It is possible that enactment of a Federal reorganization
plan consolidating many of the energy and natural resource related
functions within one agency would eliminate at least some of the
administrative difficulties involved in coordinating such a broad range
of actions and functions required to oversee the development and
operation of deepwater ports.
C. Interagency task force or commission
Creating an interagency task force or commission to authorize
deepwater port development could provide an effective means of
coordinating Federal responsibilites relating to deepwater port policy.
The interagency task force or commission would consist of the heads
of those Federal agencies with a broad range of expertise and authority
applicable to deepwater port development. One of its members would
serve as Chairman.
This group could be authorized to establish rules and regulations
governing the application review process and to consider applications
and grant permits for the construction of deepwater ports in accord-
ance with Federal law. These responsibilities could be carried out in
consultation with the heads of Federal agencies who are not members
of the group, but who have a particular interest in one or more aspects
of deepwater port development.
In practice, interagency task force membership might include the
Secretaries of the Department of the Interior, the Department of
Commerce, the Department of the Army (acting on behalf of the Corps
of Engineers) and the Administrator of the Environmental Protection
Agency, with the Secretary of the Department of Transportation
serving as Chairman. Applications could be reviewed and licenses
granted or denied in consultation with the Council on Environmental
Quality, the Department of State, and the Department of Justice.
Once a deepwater port proposal had been authorized, the construe-
tion and operation of the facility, its associated pipelines and other
components could be regulated by the various Federal agencies with
relevant expertise and appropriately expanded legal authority. This
arrangement of shared responsibility would be similar to that govern-
ing Outer Continental Shelf resource development.
D. Federal ownership
Providing for Federal ownership of deepwater ports might result in
the creation of a single-purpose Federal deepwater port development
agency patterned after the Tennessee Valley Authority (TVA) to
undertake the siting and development of deepwater ports. TVA was
created for the sole purpose of producing electric power in the Tennes-
see Valley, and to implement programs relating to the social and
economic impacts of carrying out this mission. TVA dams and power
plants are thus federally owned and operated facilities. It is possible
that deepwater ports could be similarly constructed as Federal prop-
erty, the proceeds of their operation reverting to the Federal treasury
as do the revenues from TVA power sales. This alternative has been
repeatedly discarded with the argument that substantial private
24-935-74-1
FORD i LIBRARY GERALD
42
industry interest in developing deepwater ports renders public funding
unnecessary. However, if Government ownership is considered desir-
able, direct public subsidy could be supplanted by a guaranteed loan
program whereby initial Federal expenditures are recovered from
revenues generated by the deepwater port, or the publicly owned
corporation could be empowered to seek financing in the private sector
from the outset.
FORD & LIBRARY GERALD
CHAPTER 8.-FEDERAL GOVERNMENT RESPONSE
Of the agencies with expertise and interest in the area of deepwater
port development, many have formally addressed themselves to the
issues raised in this report. The Maritime Administration, the Corps
of Engineers, and the Council on Environmental Quality have all con-
ducted, or are in the process of completing studies related to the devel-
opment of deepwater ports.
The Maritime Administration within the Department of Commerce
has pursued investigations of deepwater port facilities with the
objective of promoting the development of such facilities offshore.
A MARAD contract awarded to the consulting engineering firm of
Soros Associates "in an effort to stimulate the development of deep
draft marine terminals in the United States" resulted in the publica-
tion of a three part study entitled "Offshore Terminal System
Concepts" in September 1972.
At the time it was published, the Maritime Administration report's
assessment of pressures on U.S. ports and harbors that would result
from increasing volumes of U.S. petroleum imports was generally re-
garded as sound. However, the conclusions of the report were the
subject of considerable concern for two reasons. The report recom-
mended that a deepwater port facility be constructed off the Delaware
coast where opposition to such development is especially strong. It
also assumed that the major portion of east coast energy demand
would be met by importing crude petroleum from the Middle East,
and that refinery capacity sufficient to process this crude would be
built on the Atlantic Coast where, due to localized opposition, petrole-
um related industrial expansion is unwelcome.
Further promotion of U.S. deepwater port development has
resulted from efforts to reinstate the United States with a major
role in the world tanker market pursuant to the U.S. Merchant
Marine Act of 1970. Prior to 1970 the MARAD program to assist in
the construction of bulk cargo carriers was extremely limited. In
1972, oceangoing bulk carriers transported about 85 percent of U.S.
foreign commerce, yet American-flag vessels carried less than 4 percent
of the 408 million tons of bulk commodities that moved in this trade.
Since the economics of U.S. tanker construction and operation have
militated against significant U.S. participation in the world tanker
market, the construction differential subsidy and operating differential
subsidy provisions of the Merchant Marine Act of 1970 are designed
to reduce the cost differences between U.S. and foreign-flag vessels.
As of November 1973, 9 contracts to subsidize the construction of
U.S. supertankers had been granted under the Merchant Marine Act
and 50 more applications have been filed for 1974. All of these contracts
are for VLCC's ranging in size from 225,000 deadweight tons to 425,-
000 deadweight tons.
1 Offshore Terminal System Concepts, U.S. Department of Commerce, Maritime Adminis-
tration, September 1972 (p. 1 and generally).
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44
Regardless of whether or not the U.S. Merchant Marine Act is being
implemented with the express intent of promoting deepwater port
development in the United States, the prospect of operating American
owned deep draft vessels in world trade frequently serves as an argu-
ment for those who favor constructing deepwater ports off U.S.
coasts.
Other Federal agencies investigating the issues related to deepwater
ports include the Corps of Engineers in the Department of the Army
which has undertaken the task of examining various aspects of deep-
water port development through its Institute of Water Resources
(IWR). In addition, through its regional offices, the Corps has also
carried out studies to determine the needs and potential sites for deep-
water port development on the Atlantic, Gulf and Pacific coasts pursu-
ant to congressional authorization under the Rivers and Harbors
Act. The results of these studies are detailed reports of the environ-
mental, engineering, economic and sociological aspects of deepwater
port development on each of the United States coasts.
Early in 1972, the Council on Environmental Quality was charged
with the responsibility of conducting an interagency study of the en-
vironmental impacts of deepwater ports. The scope of the study ex-
tends to both the primary effects of constructing and operating deep-
water ports and to the landside secondary impacts associated with
deepwater port facilities.
The study of primary environmental impacts assessed in detail the
potential adverse consequences of oil tanker casualties at various
locations, assuming both low level and high volume cargo loss. The
study of secondary growth impacts reported on what expansion of
refinery and related industrial facilities and subsequent environmental
impact could be expected to result from deepwater port development
at various locations along the U.S. coasts.
The CEQ studies led to recommendations for developing deepwater
port terminal buoys of limited throughput far offshore in order to
minimize both adverse secondary growth impacts and the potential
for environmental damage to the coastline in case of a spill.
In addition to these Federal agency activities, an interagency task
force coordinated at the White House level was formed to study the
economic, legal, and environmental aspects of deepwater port de-
velopment. Following the interagency review, the Administration
proposed and recommended the enactment of S. 1751, "The Deepwater
Port Facilities Act of 1973," authorizing the Secretary of the Interior
to grant licenses subject to certain conditions, for the development of
offshore deepwater port facilities beyond the territorial waters of the
United States. This measure was jointly referred to the Senate Com-
mittees on Interior and Insular Affairs, Commerce and Public Works.
A special joint subcommittee composed of five members from each of
the three full Committees was formed to consider this legislation.
In addition to the Administration's proposal over fifteen other
measures relating to deepwater port development were introduced in
the 93d Congress.2
2 See Appendix E for a summary of deepwater port legislation pending before the Senate in the
93d Congress.
GERALD FORD LIBRARY
CHAPTER 9.-OVERVIEW
Throughout the world, large capacity deep draft vessels known as
"supertankers" are being used to transport oil between petroleum
producing and consuming nations. However, supertankers cannot de-
liver their cargo directly to the United States because most American
ports are too shallow for the deep draft vessels to enter.
While existing U.S. ports could be dredged to create deepwater
ports, monobuoy pumping facilities located in naturally deep water
offshore are considered the most desirable type of supertanker
terminal, both from an economic and environmental point of view.
Because most potential offshore deepwater port sites are located out-
side U.S. territorial limits where only the Federal government exer-
cises authority (albeit limited), Congress must enact legislation to
authorize and regulate the construction and use of these deepwater
ports.
Proposals to develop deepwater ports in the United States were
originally based on projections that this country would soon depend
heavily on the Middle East nations for increasing volumes of crude
petroleum imports. Accordingly, it was argued that:
1. Deepwater ports offer a cheaper means of transporting imported
petroleum supplies and can stimulate beneficial economic growth in
adjacent coastal areas;
2. Offshore deepwater ports and supertankers are environmentally
preferable to the use of conventional tankers, harbors and ports at a
given level of imports;
3. Failure to build deepwater ports in the United States would
encourage the construction of refinery capacity at foreign sites. This
"exportation" of refinery capacity would result in an adverse impact
on U.S. balance of payments and reliance on the more costly and
environmentally hazardous practice of transshipping petroleum in
smaller vessels from foreign deepwater ports. It could also lead to a
loss of employment and other economic benefits associated with
domestic deepwater ports, refineries, and petrochemical industrial
development.
However, circumstances have changed since deepwater port devel-
opment was first proposed in the United States. As a result of the Arab
oil embargo, which began in October of 1973, and continued to March,
1974, reducing the United States' reliance on foreign petroleum
supplies and attaining domestic energy self-sufficiency have emerged
as high priority national goals. This has created some uncertainty
over the future of U.S. demand for petroleum imports over the long-
term. This uncertainty, coupled with doubts about the rate at which
domestic refinery capacity will expand, has raised questions as to the
need to develop U.S. deepwater ports.
Even though a number of economic and environmental benefits are
associated with deepwater ports, the risks involved are great enough to
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FORD & LIBRARY GLRALD
46
warrant asking whether establishing a Federal policy authorizing
deepwater port development is consistent with the economic and
environmental interests of the United States.
For example, it has been suggested that deepwater port and related
development may actually inhibit the transition to domestic energy
self-sufficiency by creating an infrastructure which must be sustained
by continued petroleum imports.
There are, however, different interpretations of what the term "U.S.
energy self-sufficiency" means. Some view the self-sufficiency goal as
one of achieving total reliance on domestic energy supply, therefore
advocating that we turn our efforts toward conserving energy, develop-
ing alternative energy forms, and accelerating the exploitation of re-
sources on the United States Outer Continental Shelf in order to
achieve this goal. Others argue that energy self-sufficiency is a matter
of attaining the capability to be totally reliant on domestic energy
supplies but continuing to rely on energy imports as long as it is
economically and politically feasible to do so. If the latter interpre-
tation is accepted, then U.S. deepwater port development could be
viewed as consistent with the energy self-sufficiency goal.
In any event, all available evidence suggests that the United States
will need to import substantial quantities of oil for the next decade at
least. As a result, State and Federal government interest in deepwater
port development has remained strong. In addition, on the West
Coast, several officials of State government and a number of indi-
viduals and interest groups have expressed their preference for using
offshore deepwater ports to unload oil supplies arriving from Alaska's
North Slope. To meet the need for deepwater ports on the West
Coast, and enable deepwater port development on the Gulf and
Atlantic Coast as the need arises, it would, therefore, seem desirable
for Congress to enact legislation specifying the conditions which
must be met if deepwater ports are to be built. The number of such
ports and the timing of their development can then be determined
by subsequent events.
Ultimately the form of legislation authorizing and regulating deep-
water port development will depend on the manner in which several
major policy issues are resolved. These include: a determination of the
international legal justification for the construction and operation
of deepwater ports; a decision as to the institutional arrangements
for administering Federal deepwater port policy; and a decision as to
the nature and extent of Federal participation in the siting and regu-
lation of deepwater ports. Congress must, therefore, address the
following questions:
Question 1. What are the international legal implications of U.S.
deepwater port development?
Several proposals to build U.S. deepwater ports involve siting
monobuoy facilities in naturally deep water several miles offshore.
Such deepwater ports would be located beyond U.S. territorial
limits, in waters known under international law as the high seas.
According to available evidence, there is no express precedent in
international law for a nation to exercise jurisdiction over the high
seas in order to authorize and oversee the development and operation
of deepwater ports. Absent such precedent or established interna-
GERALD FORD LIBRARY
47
tional legal principle, a nation wishing to develop and regulate deep-
water ports beyond its recognized territorial limits might pursue one
of three courses of action:
(a) Unilaterally extend its territorial jurisdiction over such facilities;
(b) Find residual authority for such action within the existing
body of international law; or
(c) Seek clarification of and agreement on the deepwater port issue
by the international community prior to exercising such jurisdiction.
Official and non-official American sources alike argue against
unilateral extension of territorial jurisdiction on the grounds that such
action would disadvantage the United States' position vis-a-vis the
current Law of the Seas negotiations, where this nation is seeking
limitations on unilateral extensions of maritime boundaries. These same
sources also feel that while the United States should unquestionably
seek clarification of the deepwater port issue at the 1974 International
Law of the Sea Conference, to await final agreement by the interna-
tional community would involve a significant loss of time and re-
sources. Prior international accord is unnecessary, it is argued,
because there is residual authority within the existing body of inter-
national law for a nation to use the high seas for the purpose of
developing deepwater ports. By far the most compelling argument
in this regard is that the construction and operation of deepwater
port facilities constitutes a "reasonable use" as contemplated by
Article 2 of the Convention on the High Seas.
Question 2. What institutional arrangements should be established
to administer U.S. deepwater port policy?
The expertise and authority which could be applied to the regulation
of deepwater port development now reside in a number of Federal
agencies while no one agency has sufficient authority to issue a permit
or otherwise allow such development to begin. Thus, in addition to
extending Federal jurisdiction over U.S. deepwater port development
on the high seas, legislation to authorize and regulate deepwater
ports must also establish an institutional arrangement to carry out
deepwater port policy and coordinate that policy with other govern-
ment policies and programs.
The goal in establishing an institutional arrangement to administer
deepwater port policy should be to provide the greatest possible
coordination of Federal government functions and achieve maximum
utilization of Federal expertise.
The most practical means of achieving this goal would be to:
(a) Authorize an existing Federal agency to act as the lead co-
ordinating agency for administering deepwater port development; or
(b) Create a Federal interagency task force or commission to
license and oversee the regulation of deepwater ports.
If a single Federal entity rather than an interagency or joint insti-
tutional organization were authorized to license deepwater port
development the licensing process should be carried out in consulta-
tion with other Federal agencies having relevant expertise. Once a
deepwater port was licensed whether by a lead agency or an inter-
agency task force or commission, various aspects of deepwater port
development could then be regulated by different Federal agencies
with relevant expertise and appropriately extended jurisdiction.
GERALD FORD LIBRARY
48
For example, once a deepwater port was licensed, its construction
might be regulated by the Department of Interior or the Corps of
Engineers. Pipeline saftey would be regulated by the Department of
Transportation and navigational safety and oil spill prevention by
the U.S. Coast Guard. The National Oceanic and Atmospheric
Administration and the Environmental Protection Agency would
oversee certain aspects of deepwater port development to assure
compliance with environmental quality laws. In addition, the Inter-
state Commerce Commission, the U.S. Bureau of Customs, and the
Department of State would carry out their responsibilities with respect
to deepwater development.
Such a regulatory scheme would operate in much the same way
as the Outer Continental Shelf Oil and Gas Leasing Program.
Question 3. Should the Federal Government establish a single licensing
and regulatory procedure to cover deepwater port development within as
well as beyond U.S. territorial limits?
As far as constructing deepwater ports within U.S. territorial
waters is concerned, the States, by virtue of their rights under the
Submerged Lands Act and authority over landside activities, are
viewed as having dominant control over deepwater port development.
Nevertheless, the Federal government retains authority over matters
of interstate and foreign commerce, flood control, dredging, environ-
mental quality, and navigational safety in territorial waters. Even
though state authorized deepwater port development must also meet
the requirements of these Federal laws, the procedure for licensing-
and in some cases, regulating-such facilities, would be different
from that established for facilities beyond U.S. territorial waters
unless new legislation provided otherwise.
There is little dispute that deepwater ports involve interstate and
foreign commerce. Congress may, on this basis, wish to bring deep-
water port authorization within territorial waters under direct Federal
control by establishing a single Federally administered licensing and
regulatory process to cover all deepwater port development regardless
of location. If it was concluded that the Federal government should
be the principal licensing authority for all deepwater ports within as
well as outside territorial waters, it would be necessary to establish
criteria to determine what, in fact, constitutes a deepwater port.
Such criteria might be based on the throughput capacity of the
facility or on the size of the tankers which it serves.
Question 4. What role should the Federal Government play in selecting
deepwater port sites?
Questions of controlling the direct and secondary environmental
impacts of deepwater port development lead to a consideration of
what role the Federal government should play in selecting deepwater
port sites. At a minimum, the Federal government must prescribe
standards necessary to assure that a deepwater port facility will be
constructed and operated with a minimum of risk to the environment
and without interfering with other authorized uses of the Continental
Shelf and its overlying waters.
However, it may be desirable for the Federal government to exer-
cise a more decisive role in the deepwater port site selection process.
Federal investigations concerning deepwater port development,
GERALD FORD LIBRARA
49
especially those conducted by the Corps of Engineers and Council
on Environmental Quality, have produced a substantial body of data
and information which could serve as the basis of Federal deepwater
port siting decisions.
Beginning with a determination of those market areas which might
be beneficially served by deepwater port facilities, potential deep-
water port sites could be evaluated to determine those sites which
might be developed with a minimum impact on the marine and coastal
environment, where navigational safety can be assured, and where
such development would not interfere with other uses of the oceans
including marine resource development and scientific research.
A Federal system of designating potential deepwater port sites
prior to the time that applications for Federal authorization are
received could be used to:
(1) Assure that deepwater ports are located in areas where the
potential for environmental degradation is at a minimum;
(2) Control the number of deepwater ports developed; and
(3) Encourage the development of refineries and petrochemical
industries. in those adjacent coastal areas which can best bear
industrial expansion in an environmental sense and which might
benefit from accelerated economic growth.
In addition, by pre-determining deepwater port sites, the Federal
government could establish a time frame within which applications to
develop deepwater ports serving a particular market area would be
received, reviewed, and compared with one another.
Those who argue for limited Federal involvement in deepwater port
site selection feel that those entities which will ultimately build and
operate deepwater ports are best equipped to determine, from an eco-
nomic and environmental point of view, where such ports should be
built. Furthermore, the proponents of limited Federal involvement in
deepwater port development feel that market forces will determine
the number of deepwater ports developed while existing Federal and
State laws will operate to control the secondary landside development
generated by such ports.
Depending on the extent of involvement desired, alternative Fed-
eral government roles in the deepwater port site selection process
include the following:
(a) Establishing standards for site selection to assure that deepwater
port construction and operation proceeds with minimum environ-
mental risk and without interfering with other authorized uses of the
Continental Shelf and its overlying waters;
(b) Designating those areas off the coast of the United States which
are suitable for development as deepwater sites. The Federal deep-
water port licensing authority could establish a time frame within
which applications to develop deepwater ports in designated areas
would be received. The basis for approving an application would de-
pend on the objectives desired. For example, the basis of determination
could be strictly environmental and could include consideration of
what secondary development might be involved in a proposal. Deep-
water port ownership might also be considered, e.g., a proposal by a
State government might be preferred over one involving integrated
oil companies or some other form of private ownership; and
GERALD FORD LIBRARY
50
(c) The Federal government could identify those areas which, either
because of vulnerability to direct environmental impacts or because
deepwater port development could be expected to produce particularly
severe impacts on the adjacent coastal areas, are unsuitable as deep-
water port sites. Applications involving such areas would auto-
matically not be considered.
Question 5. What type of controls are needed to safeguard against the
direct environmental impacts of deepwater port development?
The unique characteristics of deepwater port development will
require the U.S. to utilize, and in some cases to improve, regulatory
and monitoring abilities with respect to the construction and operation
of submarine pipleines, petroleum transport and transfer facilities, and
oil spill prevention and containment systems.
Those Federal laws which are designed to prevent environmental
degradation from platform and pipeline construction and operation or
from vessel operations and cargo transfers in navigable waters include
the Outer Continental Shelf Lands Act, the Rivers and Harbors Acts,
the Ports and Waterways Safety Act, the Federal Water Pollution
Control Act and the National Environmental Policy Act. However,
there is some uncertainty as to the manner in which these laws would
apply to deepwater port development beyond U.S. territorial limits.
In order. to minimize the environmental risks involved and assure
the most complete coverage of deepwater port facilities and super-
tanker operations, those Federal agencies with appropriate functions
and expertise such as the Department of the Interior, the Department
of Commerce, or the Department of Transportation, the Environ-
mental Protection Agency, the Coast Guard, and the Corps of En-
gineers, should be authorized to impose and enforce certain conditions
with respect to supertanker design and operation, and deepwater port
terminal facility and pipeline siting, design, construction, and use.
Such conditions should include:
(a) Specific engineering design, construction and operation criteria
for deepwater port facilities including pipelines and storage tanks;
(b) Such specific design, construction and operation criteria for
vessels utilizing deepwater ports, including double bottoms, segregated
ballast, advanced navigation systems, and manning requirements as
may be necessary to minimize the risk of tanker collision and opera-
tional or accidental spills (deepwater port use could be limited to only
those vessels which comply with standards of construction and design
as may be prescribed by deepwater port legislation); and
(c) Such requirements and criteria for oil spill prevention and con-
tainment systems and equipment as may be necessary to provide the
greatest possible safeguard against oil pollution damage to the marine
and coastal environment.
Legislation should also establish some form of liability to provide
compensation for any persons injured as a result of oil pollution dam-
age resulting from the operation of a deepwater port.
Question 6. What types of controls are needed to safeguard against
the secondary environmental impacts of deepwater port development?
Secondary envionmental impacts which result from expanded re-
finery and petrochemical development in coastal areas adjacent to
FORD & LIBRARY GERALD
51
deepwater port sites can be equally or more severe than the direct en-
vironmental impacts of deepwater port construction and use.
In general, the greater the volume throughput of a deepwater port
facility, the greater the potential for adverse secondary environmental
impacts to result from its development. It may be argued that if oil
import levels are high, operating a number of deepwater ports of
limited throughput, and dispersing them at various locations along
the coast is preferable to operating a limited number of facilities with
high throughput capacities.
Laws such as the Coastal Zone Management Act; the Marine Pro-
tection, Research and Sanctuaries Act; the Clean Air Act; the Federal
Water Pollution Control Act and the National Environmental Policy
Act afford some protection against environmental degradation of land
and water resources. Another measure, pending before the 93rd Con-
gress, which could offer some means of controlling environmental
degradation in coastal areas adjacent to a deepwater port site is S.
268, the Land Use Policy and Planning Assistance Act. However,
there is some feeling that, rather than leaving secondary environmental
impacts to be controlled solely by existing laws, legislation to authorize
the development of deepwater ports might provide additional safe-
guards against adverse secondary environmental impacts by:
(a) Making Federal approval of deepwater port projects contingent
upon a determination that the project is consistent with the land use,
coastal zone management or environmental protection policies and
programs of the adjacent coastal states;
(b) Requiring that the coastal state adjacent to a proposed deep-
water port site have in force a Coastal Zone Management Program;
(c) Requiring the adjacent coastal state to produce an environ-
mental protection plant specifically designed to control the secondary
environmental impacts of deepwater port development;
(d) Limiting the throughput capacity of deepwater ports to en-
courage the dispersion of secondary environmental impacts.
Question 7. What form of State, Local and public participation is
needed in the deepwater port authorization process?
States and localities will ultimately experience economic and en-
vironmental impacts as a result of deepwater port development. While
some states expect to benefit from such impacts, others believe that
their economic and environmental interests will be adversely affected
by deepwater port development and, therefore, oppose the location of a
deepwater port off their coasts. It has been suggested that in order to
prevent an unwilling state from being forced to accept deepwater port
development off its shores, the coastal state adjacent to a proposed
deepwater port site should have final say over whether a Federal
license to build the port will be granted. Thus a state could prevent a
port which met all other requirements of Federal law from being built,
even though the port would be located beyond U.S. territorial
waters-i.e., in an area of exclusive Federal jurisdiction.
Those arguing against state veto power believe that:
(1) State land use and environmental controls including
Coastal Zone Management Programs, should be the vehicle for
dealing with secondary growth;
FORD i LIBRARY GERALD
52
(2) The Federal government would not, as a matter of policy,
authorize a deepwater port over the objection of the adjacent
coastal state; and
(3) The State could effectively prevent deepwater port devel-
opment off its coast by denying piepline and other permits for
deepwater port facilities located within state jurisdiction.¹
However, many officials and residents of coastal states are not
reassured by these arguments. Regardless of whether or not states
are given the power to veto deepwater port proposals, the farreaching
impacts of deepwater port development make ample provision for
state, local, and public participation in the deepwater port authoriza-
tion process desirable to assure that such development proceeds in a
manner consistent with state economic and environmental interests.
Legislation to authorize and regulate deepwater port development
could provide for state, local, and public participation by any one, or
combination of the following means:
(a) Requiring that a public hearing be held at the locality nearest
to a proposed deepwater port site before license approval is granted;
(b) Requiring consultation with the affected state or states, prior to
granting Federal approval for any deepwater port project, and em-
powering the state or states to require modifications in such a proposal
prior to its approval;
(c) Requiring an application for Federal authorization of a deep-
water port project to be accompanied by all necessary state authori-
zations and permits;
(d) Providing for preferential treatment of deepwater port project
proposals in which the state is directly involved. Under this system, a
state meeting certain requirements could be granted "first option"
over deepwater port development off its shores in anticipation that
the state would ultimately join in or lend its support to some private
entity's deepwater port project proposal. Alternatively a state might,
on its own or in cooperation with an adjacent state or states, undertake
to construct, own, and operate a deepwater port facility.
Question 8. What action is necessary to protect against the anticom-
petitive implications of deepwater port development?
Even though deepwater ports would be subject to the antitrust
laws and regulated by the Interstate Commerce Commission as "com-
mon carriers," there is reason to believe that additional safeguards
are needed to protect against the anticompetitive implications of
deepwater port development. For example:
(1) Deepwater ports will be similar, in some respects, to the
pipelines which transport oil supplies in interstate commerce.
They will be relatively few in number and strategically placed in
relation to the petroleum distribution and supply system;
(2) If, as has been proposed, deepwater ports are owned by
joint-venture corporations formed by integrated oil companies,
these corporations will enjoy some manner of control over both
the deepwater port facilities and the refineries and pipelines
which corporate shareholders own individually or jointly in the
adjacent coastal areas; and
1 There is a possibility that such a denial could be challenged on the grounds that the state was placing
unreasonable burdens on interstate and foreign commerce or as exceeding the authority granted to the
States by the Federal Government under the Submerged Lands Act of 1953.
FORD & LIBRARY GERALD
53
(3) The FTC, the Antitrust Division of the Department of
Justice, and the ICC have all testified in Congressional hearings
that there is considerable potential for deepwater port owners to
increase their control over the oil market even if all antitrust
laws and regulations are applied to deepwater port development.
Officials representing FTC, ICC, and the Department of Justice
testified that the potentially anticompetitive characteristics of deep-
water port development might be eliminated by:
(a) Requiring the appropriate Federal agencies to conduct a
thorough review of deepwater port project proposals before a license
is granted to certify that such proposals would not violate antitrust
laws or tend to create a monopoly;
(b) Applying a "commodity clause" feature to deepwater port
development whereby a deepwater port owner and operator could not
handle any commodities in which he has direct or indirect interest; or
(c) Prohibiting "joint venture" involvement by integrated oil
companies in deepwater port development by allowing only single
oil companies or companies completely independent of the petroleum
industry to own and operate deepwater ports. (The investment
required to build deepwater ports is not high enough to make joint-
venture efforts absolutely necessary on financial grounds).
State governments and industrial interests outside the integrated
oil companies are prepared to undertake deepwater port development
on their own. Thus, a prohibition against joint-venture involvement
would not cause significant delay in bringing deepwater ports on line.
However, an alternative to prohibiting joint-venture involvement in
deepwater port development would be to encourage state governments
on their own or in contract with companies of their choosing to build
and operate deepwater port facilities. The objective of such an ap-
proach would be to provide for public representation, whatever the
deepwater port ownership arrangement, to assure that the facility
was operated in a manner consonant with the public interest.
Another approach would be to grant licenses to construct deepwater
ports on a priority basis. For example, consider a situation where only
one deepwater port is needed to serve a particular market area, and
several applications to construct such a facility are received by the
Federal agency with deepwater port licensing authority. Applications
would then be considered on the following scale of priority:
(1) Application in which a state is directly involved;
(2) Application by a firm independent of the oil industry;
(3) Proposal by an individual company affiliated with the oil
industry; or
(4) Proposal by a joint-venture corporation with integrated oil
companies among its members.
Question 9. Is some form of financial payment necessary to compensate
adjacent coastal states for burdens incurred as a result of deepwater port
development?
The need to supply additional services and provide for the protection
of environmental values as a result of deepwater port development
may place increased burdens on the financial resources of adjacent
coastal states. It has, therefore, been suggested that states should
receive financial payments to compensate for such burdens. Proponents
FORD i LIBRARY GERALD
54
of this recommendation feel that a suitable compensation scheme could
act as an incentive for states to approve deepwater port development
off their coasts and undertake the actions necessary to protect their
environmental interests.
Other sources argue, however, that the secondary growth stimulated
by deepwater port development should generate sufficient revenues to
compensate an adjacent coastal state for any burdens which might
also be imposed.
If some form of compensation to state governments were deemed
appropriate, such compensation could be provided by one of the follow-
ing means:
(a) Where a program such as the Coastal Zone Management Act,
the Federal Water Pollution Control Act, or the proposed National
Land Use Policy and Planning Assistance Act provides payments to
the states in support of environmental planning programs, the
amounts of funds granted could be increased by a certain percentage
for states affected by the development and operation of deepwater
ports and their associated components; or
(b) A per-barrel charge could be placed on deepwater port through-
put. Revenues generated by such a charge could be used to establish
a fund from which states adjacent to or affected by a deepwater port
received payment in support of environmental protection programs
designed to provide such additional services as may be required to
meet the pressures of deepwater port development.
How A FEDERAL DEEPWATER PORT PROGRAM MIGHT BE
ORGANIZED AND ADMINISTERED
In light of the foregoing discussion, deepwater port policy might
be organized and administered in the following way:
DEEPWATER PORT FACILITIES LICENSING BOARD
A Deepwater Port Licensing Board would be formed by the heads
of the following agencies, one of whom would serve as Chairman:
Department of the Interior;
Department of Transportation (Coast Guard);
Department of Commerce;
Department of the Army, acting through the Corps of Engi-
neers; and
Environmental Protection Agency.
The Licensing Board would be authorized to:
Determine the number of deepwater ports required and identify
possible sites;
Establish rules and regulations governing the application
review process;
Receive applications;
Conduct hearings;
Approve, disapprove or require revisions in deepwater port
license applications;
Grant licenses for deepwater port development;
Prepare a single, detailed Environmental Impact Statement
and circulate it for review;
FORD & LIBRARY 97V839
55
Coordinate the promulgation of rules and regulations governing
deepwater port construction, operation and use;
Collect and serve as a central clearing house for information
and data relevant to deepwater port development; and
Maintain an overview of deepwater policy administration with
particular emphasis on the manner in which deepwater port
policy interrelates to other Federal policies concerning energy
resource supply, environmental quality and economic viability.
The Licensing Board would carry out its responsibilities in consulta-
tion with other Federal agencies with a particular interest in one or
more aspects of deepwater port development. Such agencies would
include, the Department of Justice, ICC, FTC, Council on Environ-
mental Quality, and the Federal Maritime Commission.
APPLICATION REVIEW PROCESS
The Deepwater port license application review process would operate
as follows:
1. The application would be filed in the office of the Chairman
of the Licensing Board. This office would house a permanent pro-
fessional staff drawn from the Licensing Board member agencies.
2. An application would constitute the application for all Fed-
eral authorizations which might be required to build a deepwater
port.
3. The application would be accompanied by all State permits
which might be required to complete landside installation of deep-
water port facilities.
4. The application would be circulated for comment to all
Federal agencies with review functions and to the adjacent or
affected states.
5. An official of the adjacent State would be enlisted as an ad
hoc member of the Licensing Board.
6. All review agency views and the views of the adjacent and
affected coastal states would be considered.
7. A hearing would be held at a location in proximity to the
application as they deemed appropriate.
8. A single detailed Environmental Impact Statement con-
cerning a license proposed to be issued would be prepared by the
Commission and circulated for review.
APPLICATION APPROVAL
A deepwater port license application would be approved and a
license granted if:
1. The application met all the requirements of the Deepwater
Port Act;
2. All Licensing Board member agencies certified that the ap-
plication met the requirements of the laws they administer;
3. The Department of Justice and Federal Trade Commission
certified that the proposal would not tend to violate the antitrust
laws; and
4. The adjacent coastal state certified that the deepwater port
proposal was consistent with the environmental protection and
land use management programs of the state.
FORD & LIBRARY 9ERALD
56
REGULATION OF DEEPWATER PORT FACILITIES
Once a deepwater port proposal was authorized, its construction,
operation, and use would be regulated as follows:
USGS, Corps of Engineers: engineering and structural aspects
of deepwater port facility.
Coast Guard: safety, equipment, vessel transportation and
accidents.
Coast Guard, EPA, NOAA: marine environmental quality, oil
spill prevention and containment.
Office of Pipeline Safety (DOT), USGS: offshore pipeline design
and performance standards.
ICC: pipeline regulation, reasonable access, rates, tariffs.
Department of Labor, Coast Guard, State Government: civil and
criminal law.
EPA, NOAA, State Government: Coastal and land based envi-
ronment concerns.
FORD i LIBRARY GERALD
57
APPENDIX A
OFFSHORE DEEPWATER TERMINAL DESIGNS* *
SINGLE BUOY
MOORING FACILITY
DISCHARGING LOADING
TANKER
MOND MOORING HUDY
PLOATING
HOSES
CONTROL
VALVE
CONCRETE
CLUMPS
HOBES
MJORNS
CHAINS
ANCHORS
PINELINES TO SHORE TANK FORM
CONVENTIONAL
BUOY MOORING
SURMARINE PIPELINES
MOORING
ANCHORS
BUOYS
SHIPS
ANCHORS
CHAINS
MARKER BUDY
ANOMOR
*Source: U.S. Army Corps of Engineers
24-935-74-5
FORD is LIBRARY 074830
58
SINGLE POINT MOORING PIER
SWIVEL
PLOATING BOOM
PICED
PIPLINE
STRUCTURE
ARTIFICIAL ISLAND WITH SEA ISLAND ASRTH
we TRANSSHIPMENT
TANN PAPK
FORD i LIBRARY CERALA
APPENDIX B
EXECUTIVE COMMUNICATIONS
U.S. DEPARTMENT OF THE INTERIOR,
OFFICE OF THE SECRETARY,
Washington, D.C., January 24, 1974.
Hon. JOSEPH R. BIDEN, Jr.,
U S. Senate,
Washington, D.C.
DEAR SENATOR BIDEN: This replies to your letter of November 30,
1973 asking for updated projections of U.S. reliance on Persian Gulf
petroleum supplies reflecting the President's announced goal of U.S.
energy self-sufficiency by 1980. You also ask whether these updated
projections will affect the need or economic feasibility of deepwater
ports.
"Project Independence", in our view, does not aim at eliminating
U.S. imports of petroleum after 1980. The goal is to achieve the
capability of self-sufficiency in energy by that date so that disruption
in foreign supplies will not cause serious economic repercussions or
jeopardize national security. It is freedom from dependence on foreign
fuel supplies that we are seeking.
Project Independence has two basic thrusts: To develop alternate
domestic fuel sources and to reduce wasteful and unnecessary con-
sumption. It is clear that the United States, with six percent of the
world's population, cannot continue to consume one-third the world's
energy output. Most Americans realize that the era of cheap energy
is over and have already begun to adjust to this fact in their con-
sumption patterns. Further adjustments will undoubtedly be required
in the future. Therefore, it is extremely difficult to project with any
accuracy the demand levels and import levels over the next several
decades. Historical trends will hopefully not be indicative of future
demand. We would defer to the Federal Energy Office for the most
up-to-date projections.
We feel, therefore, that petroleum imports will continue through the
1980's in sufficient quantities to justify the development of deepwater
ports. The Administration's proposal does not identify the location
or number of ports we expect to license. That decision is to be made
by the industry. The Administration's proposal is intended to create
a licensing authority in the Federal Government so that such ports
can be developed under full environmental safeguards and other
regulations if the economics warrant it. We hope the Congress will
continue to treat this legislation with high priority.
Sincerely yours,
JOHN C. WHITAKER,
Under Secretary of the Interior.
I Note. S. 1751, "Deepwater Port Facilities Act of 1973".
(59)
FORD & LIBRARY 07/1/20
60
EXECUTIVE OFFICE OF THE PRESIDENT,
OFFICE OF MANAGEMENT AND BUDGET,
Washington, D.C., December 26, 1973.
Hon. HENRY M. JACKSON,
Chairman, Committee on Interior and Insular Affairs, U.S. Senate,
Washington, D.C.
DEAR MR. CHAIRMAN: The President has asked me to reply to your
letter of December 7, 1973, seeking the current Administration
position regarding the "Deepwater Port Facilities Act of 1973"
vis-n-vis "Project Independence."
While the President has called for the capacity of self-sufficiency,
this does not necessarily mean zero imports. If by 1980 world conditions
are sufficiently stable and world sources of oil sufficiently diverse, it
may well be in the national interest to continue the importation of
some limited amounts of crude oil.
In the meantime, we most surely will want to continue importing
some part of our total crude oil supplies, availability permitting.
Since the payback period of a deepwater port facility for crude oil
can be as short as two years, it is entirely possible that private
interests might wish to construct such a facility. In the President's
view, the Nation might well benefit from the flexibility and cost
advantage of having such facilities.
There is also the possibility that private interests might wish to
construct a deepwater port facility for some commodities other than
oil. For these reasons, the President still strongly supports S. 1751,
which you introduced.²
We thank you for the opportunity to explain our position on this
bill in view of recent events. We deeply appreciate your cooperation
to date, and count on your vital support on this matter in the future.
With warmest regards,
Sincerely,
Roy L. AsH, Director.
2 Note. S. 1751, "The Deepwater Port Facilities Act of 1973" was introduced by Sen. Jackson and others
by request.
QERALO FORD LIBRARY
APPENDIX C
UNITED STATES OF AMERICA: DRAFT ARTICLES FOR A CHAPTER ON
THE RIGHTS AND DUTIES OF STATES IN THE COASTAL SEABED
ECONOMIC AREA 1
ARTICLE 1
1. The coastal State shall have the exclusive right to explore and
exploit and authorize the exploration and exploitation of the natural
resources of the seabed and subsoil in accordance with its own laws and
regulations in the Coastal Seabed Economic Area.
2. The Coastal Seabed Economic Area is the area of the seabed
which is:
(a) seaward of -; and
(b) landward of an outer boundary of -
3. The coastal State shall in addition have the exclusive right to
authorize and regulate in the Coastal Seabed Economic Area or the
superjacent waters:
(a) the construction, operation and use of offshore installations
affecting its economic interests; and
(b) drilling for purposes other than exploration and exploitation of
resources.
4. The coastal State may, where necessary, establish reasonable
safety zones around such offshore installations in which it may take
appropriate measures to protect persons, property, and the marine
environment. Such safety zones shall be designed to ensure that they
are reasonably related to the nature and function of the installation.
The breadth of the safety zones shall be determined by the coastal
State and shall conform to international standards in existence or to
be established pursuant to Article 3.
5. (a) For the purposes of this Chapter, the term "installations"
refers to all offshore facilities, installations, or devices other than those
which are mobile in their normal mode of operation at sea.
(b) Installations do not possess the status of islands. They have
no territorial sea or Coastal Seabed Economic Area of their own,
and their presence does not affect the delimitation of the territorial
sea of the coastal State.
6. The coastal State may, with respect to the activities set forth in
this Article, apply standards for the protection of the marine environ-
ment higher than those required by applicable international standards
pursuant to Article 2.
7. The coastal State may, with respect to the activities set forth
in this Article, take all necessary measures to ensure compliance
with its laws and regulations subject to the provisions of this Chapter.
11 This Chapter deals with seabeds resources, and does not deal W 1th fisheries. The proposal of the United
States with respect to fisheries beyond the territorial sea was introduced in Subcommittee Il on 4 August 1972
(A/AC.1S8/SC.1I/SR.40) (Official Records of the General Assemby. Twenty-secenth session. Supplement No. 21,
A/8781).
(01)
FORD i LIBRARY GERALD
62
ARTICLE 2
The coastal State, in exercising the rights referred to in Article 1,
shall ensure that its laws and regulations, and any other actions it
takes pursuant thereto in the Coastal Seabed Economic Area, are
in strict conformity with the provisions of this Chapter and other
applicable provisions of this Convention, and in particular:
(a) the coastal State shall ensure that there is no unjustifiable
interference with other activities in the marine environment, and shall
ensure compliance with international standards in existence or
promulgated by the Authority or the Inter-Governmental Maritime
Consultative Organization, as appropriate, to prevent such inter-
ference;
(b) the coastal State shall take appropriate measures to prevent
pollution of the marine environment from the activities set forth
in Article 1 and shall ensure compliance with international standards
in existence or promulgated by the Authority or the Inter-Govern-
mental Maritime Consultative Organization, as appropriate, to prevent
such pollution;
(c) the coastal State shall not impede, and shall co-operate with
the Authority in the exercise of its inspection functions in connection
with subparagraph (b) above;
(d) the coastal State shall ensure that licenses, leases, or other
contractual arrangements which it enters into with the agencies or
instrumentalities of other States, or with natural or juridical persons
which are not nationals of the coastal State, for the purpose of explor-
ing for or exploiting seabed resources are strictly observed according to
their terms. Property of such agencies, instrumentalities or persons
shall not be taken except for a public purpose, on a non-discriminatory
basis, nor shall it be taken without the prompt payment of just
compensation. Such compensation shall be in an effectively realizable
form and shall represent the full equivalent of the property taken and
adequate provision shall have been made at or prior to the time of the
taking to ensure compliance with the provisions of this paragraph;
(e) the coastal State shall make available in accordance with the
provisions of Article such share of revenues in respect of mineral
resource exploitation from such part of the Coastal Seabed Economic
Area as is specified in that Article.
ARTICLE 3
1. All activities in the marine environment shall be conducted with
reasonable regard to the rights of the coastal State referred to in
Article 1.
2. States shall ensure compliance with international standards in
existence or to be promulgated by Inter-Governmental Maritime
Consultative Organization in consultation with the Authority:
(a) regarding the breadth, if any, of safety zones around offshore
installations;
(b) regarding navigation outside the safety zones, but in the
vicinity of offshore installations.
GERALD FORD LIBRARY
63
ARTICLE 4 2
Nothing in this Chapter shall affect the rights of freedom of naviga-
tion and overflight and other rights to carry on activities unrelated
to seabed resource exploration and exploitation in accordance with
general principles of international law, except as otherwise specifically
provided in this Convention.
ARTICLE 5
Any dispute with respect to the interpretation or application of
the provisions of this Chapter shall, if requested by either party to
the dispute, be resolved by the compulsory dispute settlement pro-
cedures contained in Article -, , of Chapter -.
2 It is assumed that the general articles of the Law of the Sea Convention will contain an article such as
Article 4 applicable to all areas beyond the territorial sea. Such an article would obviate the need for several
articles making the same point here and in other chapters of the Convention:
GERALD R FORD LIBRARY
APPENDIX D
ONSHORE SECONDARY IMPACTS OF DEEPWATER TERMINAL FACILITY
DEVELOPMENT
(Prepared by Jean March, Environmental Policy Division, Library of
Congress at the Request of Senator Henry M. Jackson, Chairman,
Senate Interior and Insular Affairs Committee)
SUMMARY
A major controversy surrounding the development of deepwater
terminal facilities concerns the landside impacts from induced refining
and petrochemical industrial growth. Studies of the landside effects of
deepwater terminal development have concluded that if induced
industrial growth is concentrated in the vicinity of a terminal, un-
planned and uncontrolled development could have serious environ-
mental, social, and economic effects. In this Federal system, the
authority and responsibility for governing much of this industrial
growth resides in the State and local governments.
A major factor in decisions to permit deepwater terminal facility
development may be the readiness and ability of State and local
jursidictions to prepare and carry out comprehensive planning for
land use and economic development in order to minimize any possible
adverse economic and environmental effects of secondary growth.
INTRODUCTION
The construction of deepwater ports or terminals off the coast of
the United States for receiving supertanker traffic has been advocated
by the present Federal Government Administration and by oil in-
dustry representatives as a means of reducing the transportation cost
of importing increasing quantities of foreign oil to meet the nation's
burgeoning energy demands. Because no existing United States
harbor is adequately developed to accommodate the largest super-
tankers in worldwide use, one or more methods (including dredging
existing channels, and developing offshore terminal systems) might
have to be relied on to provide U.S. unloading facilities for super-
tankers.
The case has been made that use of supertankers and deepwater
facilities for oil importation will provide certain advantages such as
significant economies in transportation costs, reduction of the risks of
ship collision and grounding, and reduction of oil pollution probubili-
ties. By contrast, arguments have been advanced by opponents of
deepwater facilities that, directly or indirectly, use of supertankers
will generate serious negative impacts on the marine and coastal en-
vironment. The critics of a policy of rapid deepwater terminal facility
(65)
GERALD FORD LIBRARY
67
(4) a four-fold increase in air pollutant emission from the new indus-
trial sources.
In contrasting testimony, General J. L. Kelly, Deputy Director of
Civil Works, Corps of Engineers contended that "development of
deepwater port facilities in the North Atlantic region need not entail
industrial development in the immediate vicinity of the facilities."
General Kelly expressed his belief that proper land use planning is
needed to determine if industrial expansion would be desirable and, if
so, where the development should occur.
Testimony at subsequent Senate hearings 4. 5 demonstrated that
many State and local officials feel that the potential landside impacts
from deepwater port-generated secondary growth must be analyzed
more fully to minimize possible adverse effects.
II. TYPES OF POTENTIAL SECONDARY GROWTH IMPACTS
So far there has been no development of a deepwater terminal
facility in this country, and no existing U.S. ports handle the volume
of oil imports projected for proposed deepwater terminal facilities.
Most predictions about resultant secondary growth rely, therefore, on
information stemming from foreign experience.
Experience abroad
In 1971, Arthur D. Little, Inc. (ADL) under contract to the Army
Corps of Engineers, Institute for Water Resources, completed a study
of the development and operations experience of selected foreign
deepwater ports.⁶ The report focused on problems which might be
relevant to deepwater terminal facility planning in the United States,
including secondary growth effects.
The researchers found that there had been a "visible trend of move-
ment of heavy manufacturing facilities to deepwater coastal industrial
zones" in Europe. After deep port construction, there had been an
increased migration of petroleum refining, petrochemical, chemical,
steel, alumina and power plants to the coastal region.
However, this industrial movement was in part due to the fact that
the ports had been designed as "integrated" ports used for the transfer
of bulk cargo as well as petroleum, rather than as the "monoport"
type, used solely for the transfer of petroleum.
ADL also reported that deepwater port-associated land require-
ments were often much greater than anticipated. For example, in
Dunkirk, France, deepwater port planners eliminated proposed green-
belts (open space buffers) due to the unexpected heavy demand for
future industrial sites. In Rotterdam, Netherlands, heavy demand for
industrial sites near the deep port was anticipated but industrial land
requirements nevertheless exceeded the supply of available land.
Enterprises which could have been sited further inland demanded
space near the deepwater industries. Petrochemical producers pre-
ferred to locate in close proximity to the refineries, and petroleum
4 U.S. Congress. Senate. Committee on Commerce. Offshore Marine Environment Protection Act of
1973. Hearings, 93d Congress, 1st session. Washington, U.S. Govt. Print. Off., 1973. 335 p. Serial No. 93-20.
Hearings held March 5, 6, and 12, 1973.
$ U.S. Congress, Senate. Special Joint Subcommittee of the Committees on Interior and Insular Affairs,
Commerce and Public Works. Joint hearings to consider deepwater port facilities legislation. Washington,
1973. Hearings held July 23, 24, 25; August 1. 1973: October 2 and 3, 1973.
6 de Frondeville, Bertrand L., and others. Foreign deepwater port developments-a selective overview
of economics, engineering and environmental factors. by Arthur D. Little, Inc. Alexandria, Virginia, Army
Engineer Institute for Water Resources. (1971) (Institute for Water Resources report 71-11).
GERALD FORD LIBRARY
68
refiners in turn chose to reduce transportation costs by locating near
the port. Local officials indicated that due to their underestimation of
industrial land requirements, residential areas had been sandwiched
in between industrial zones. Rotterdam and Antwerp port officials
reported that in building deepwater ports "you always need twice the
land acreage you originally planned.'
These experiences indicate that even if planners anticipate second-
ary growth requirements, but lack adequate mechanisms for planning
enforcement, undesirable effects may be induced by growth pressures.
Other landside impacts which the ADL researchers found abroad
included:
(1) industrial expansion which engulfed existing communities and
destroyed their value as residential environments;
(2) noise intrusion from refineries and other plants;
(3) water pollution, particularly from refinery and petrochemical
discharges;
(4) degradation of air quality from emissions of new industrial and
residential development; and
(5) difficulties in finding for employees of ancillary industry new or
relocation housing sites which would result in both acceptable com-
muting distances and acceptable residential environments.
Transfer value in predicting U.S. deepwater terminal facility (DWTF)
impacts
Caution should be exercised in extending the ADL landslide
impact findings to deepwater development elsewhere for a number
of reasons.
First, their findings apply primarily to shoreside, integrated indus-
trial ports, which contain both dock facilities and industrial sites. The
ADL researchers concluded that the adverse landside impacts they
found would not be generated by a well designed transshipment
deepwater terminal facility unless it were allowed to develop into an
integrated port complex. In the absence of industrial growth, the
terminal would not substantially increase employment and population.
It is industrial expansion and the population growth it generates
which can result in negative environmental landside impacts. (See
Fig. 1.)
Second, several foreign nations had encouraged deepwater port
industrial growth as deliberate public policy. Development of deep-
water terminals in many foreign locations was undertaken with the
aim of creating coastal industrial complexes. National objectives is
be served by such development ranged from promotion of regional
development to dispersal of population from congested urban centers.
A policy of deepwater terminal development for reasons other than
fostering industrial growth might generate less severe landside impacts
than most of the foreign ports studied. For example, construction and
operations at Bantry Bay, Ireland, a transshipment terminal, were
found to have caused negligible landside impacts.
Finally, it should be noted that the impacts described are not created
by the deepwater terminal facility or reliance on supertankers for oil
transport. As long as increased fuel needs increase the level of a region's
oil imports and production, negative landside impacts could result.
The types of fuels used (i.e. clean or dirty fuels), the cost of inputs to
FORD & LIBRARY
69
DEEP WATER TERMINAL FACILITIES
TRANSPORTATION
INDUSTRIAL CONCENTRATION
COMMERCIAL &
LINKAGES
(port related refineries,
ECONOMIC
petrochemicals
CONCENTRATION
POPULATION AND ECONOMIC EXPANSION
OUTPUTS
INPUTS
WATER POLLUTION
WATER SUPPLY DEMANDS
AIR POLLUTION
DEMANDS FOR LAND
NOISE POLLUTION
SOLID WASTE DISPOSAL DEMANDS
SEWERAGE DISPOSAL DEMANDS
EMERGY DEMANDS
DEMANDS FOR INCREASED PUBLIC
SERVICES
FIGURE 1.-Secondary impacts which an integrated industrial deepwater terminal
facility (DWTF) may generate. If a DWTF is not allowed to induce industrial
concentration, it does not substantially increase local demands for water
supply, sewerage disposal, energy or solid waste management. Nor does it
cause significantly increased air, water or noise pollution. However, a DWTF
may still increase demands for public services and land somewhat, but the
magnitude of these demands will be much smaller than those which could have
resulted from industrial concentration.
the production process (i.e. land, water, energy), and the nature and
extent of State and local comprehensive planning can affect the
severity of landside impacts associated with increased oil imports
and production. The development of deepwater terminal facilities
does affect to some extent how and where these impacts will be dis-
tributed, however.
Potential Landside Impacts of U.S. Deepwater Terminal Facilities
Other studies conducted for the Army Corps of Engineers and
several State studies 8,9,10 have also warned against the adverse
shoreside impacts which could result from U.S. deepwater terminal
facility development.
As well as the impacts cited in the ADL study of foreign deepwater
ports, these reports cite the following potential problem areas:
(1) processing facilities' requirements for waste product disposal;
(2) excessive demands of new industry and new population on area
water and power supplies and transportation and service delivery
systems;
(3) pressures to critical coastal areas for conversion of land to
industrial and residential use; and
: U.S. Corps of Engineers,' U.S. deepwater port facilities study, V. I-V. Alexandria, Virginia, Army
Engineer Institute for Water Resources. (1972). (Institute for Water Resources report 72-8).
$ Delaware. Governor's Task Force on Marine and Coastal Affairs. The constal zone of Delaware: a
plan for action in Delaware. Newark, Delaware, College of Marine Studies, University of Delaware, 1972.
1 Maine. Governor's Task Force on Energy, Heavy Industry, and the Maine Coast. Report. Augusta,
Maine. 1972.
10 Louisiana State University. Center for Wetlands Resources. Louisiana superport studies, preliminary
recommendations and data analysis, report 1. Baton Rouge, Louisiana, 1972. (Louisiana State University
Sea Grant report 72-03).
FORD & LIBRAR 07683
70
(4) increased disaster hazards (e.g. hurricane or flood damage)
posed by intense use of fragile coastal environments.
Several studies pointed out that there will be threats to the coastal
zone absent any deepwater terminal facility development. The rele-
vant question posed in most coastal States was not whether coastal
development would occur but rather what type of coastal develop-
ment was preferable and ought to be encouraged. An outright ban
on deepwater port and industrial development would not assure wise
use of coastal resources. The Allagash Group Report to the Gover-
nor's Task Force on Energy in Maine 11 explored the consequences of
excluding all heavy industry from the Maine coast. The report's
findings can be summarized as follows:
(1) there is no inherent incompatibility between heavy industries
and high quality coastal resources if heavy industry is clustered in a
few coastal locations and is strictly regulated; and
(2) even excluding heavy industry from the coast, the shore would
experience heavy economic, social and environmental consequences
from rapid growth in the tourist and recreational sectors over the next
twenty years. Without careful planning and enforcement mechanisms,
the magnitude of environmental demands posed by tourism may be
equally as severe as those associated with industrial growth. Recrea-
tion demands pose particularly severe environmental problems, the
report notes, because they occur in seasonal patterns which place
high peak stresses on all natural resources and public services.
The Allagash Group pointed out that:
Choosing a future for the Maine Coast which excludes
heavy industry does not eliminate the problem of maintain-
ing environmental quality. Given the incremental, decentral-
ized nature of this nonindustrial constal development, it is
not even clear that the problem is made easier by banning
heavy industry. Demands on resources by large industries are
at least easily detected
the dispersion of recreation busi-
nesses and second homes makes monitoring and enforcement
quite expensive.
Solutions to these coastal zone problems are compounded by
multiple State and local jurisdictions. Even if coordination mecha-
nisms could be established, inequities would likely occur. In deep-
water port development, some jurisdictions could be the recipients of
most of the adverse landside impacts and costs and others would reap
the benefits. Policies designed to protect the coastal zone alone from
secondary development might create industrial sprawl at non-pro-
tected areas further inland or in an adjacent unrestricted locality. In
some cases, such as a proposed Louisiana deepwater port facility, crude
oil would be piped more than 100 miles through pipeline to inland
refineries. In this instance, a decision to construct a deepwater facility
off the coast of one jurisdiction could pose serious problems of
induced growth for other jurisdictions hundreds of miles inland. State
reports indicated a need to deal with such impacts at both State and
interstate levels.
11 Maine, op. cit. The Allagash Group (now named the Allagash Environmental Institute affiliated with
the University of Maine Center for Re seare 1 and Advanced Study) is a non-profit organization performing
environmental research on the edge of impl ementation. It has been in existence for roughly three years.
GERALD FORD LIBRAR
71
III. MAGNITUDES OF POTENTIAL SECONDARY GROWTH IMPACTS
The magnitude of the secondary growth problems associated with
deepwater terminal facility development is dealt with in recent
reports of the Council on Environmental Quality. CEQ is directing
interagency studies of environmental impacts of deepwater develop-
ment which should provide some estimates of landside impacts for
various terminal locations described by different parameters. During
the period of this study, the results of the completed CEQ landside
impact studies, contracted to Arthur D. Little, were not yet available.
Pending public release of the CEQ studies, other estimates of shoreside
effects must, therefore, be relied upon.
Landside impact studies
The CEQ landside study (referred to above) examines various
deepwater terminal facility proposals for several locations including
the coast of Maine, the Mid-Atlantic Coast and the Gulf Coast.
Although no other study has examined these alternatives simul-
taneously, partial data can be accumulated by examining existing
studies which pertain to various different DWTF proposals and
locations.
Mid-Atlantic Estimates of Secondary Impacts: Preliminary esti-
mates for one hypothetical set of deepwater terminal facility con-
ditions were developed for the CEQ and subsequently served as a
basis for the Army Corps of Engineers Atlantic Coast Regional Study
of Deepwater Port Facilities, authorized by the Senate Public Works
Committee. 12 The results of the Corps of Engineers' study for the
Mid-Atlantic were based on the following assumptions: by year 2000
the North Atlantic demand for oil products will reach 9.9 million
barrels per day (b/d). To supply this amount, approximately 6.6 million
b/d of crude and residual fuel oil must be imported from overseas; 13
approximately 3 million b/d crude must be refined elsewhere and
brought by pipeline to the East. Existing refineries will be able to
expand capacity from a present 1.4 million b/d to 2.5 million b/d;
an additional 4.5 million b/d crude will be refined within the North
Atlantic region, but will require construction of at least 10 additional
refineries which could achieve capacities of 400-450,000 b/d each
by year 2000.
Another basic assumption of the CEQ-Corps study (and of most
other studies concerned with deepwater port secondary growth im-
pacts) is that in the future petrochemical plants will increasingly
locate where petroleum refining capacity is expanding. Presently
petrochemical production is based on obtaining natural gas liquids
for producing chemical intermediate hydrocarbons. By 1980, however,
it is estimated that a short supply of natural gas liquids will dictate
an increased reliance on petroleum-bused feedstocks for petrochemical
12 U.S. Corps of Engineers, Philadelphia District, op. cit.
13 The Corps considered three alternative crude oil import levels for year 2000. The high projection, 6.6
million h/d, which the Corps relied on for the landside impact estimates, is based on an Office of OII and
Gas, Department of the Interior projection of the maximum North Atlantic refinery capacity attainable
by year 2000. The high projection assumes no stimulation of U.S. oil and gas production and assumes ex-
pansion of East Coast refinery capacity to 50 percent of the area's petroleum requirements by year 2000.
A medium projection. 4.0 million b/d, which assumes maximum expansion of existing refinery capacity in
the North Atlantic but no new refinery growth or production of crude oil in the region. was not examined
by the Corps in terms of landside impacts. A third alternative, a low projection of 1.0 million b/d, based on
no refinery expansion in the region even at existing sites, was also rejected by the Corps.
GERALD FORD VIBRARY
72
production. Between 1970 and 1980, use of heavy oils in production of
ethylene and propylene is expected to increase from 130 million b/d to
780 million b/d in the United States. Few new petrochemical plants
utilizing natural gas liquids will probably be constructed and some
existing plants may have to convert to use of heavy oils from refineries.
Because of increased petrochemical demands, new refineries are ex-
pected to be designed to have a larger feedstock capacity than existing
refineries. Thus, petrochemical growth will most likely occur in areas of
refining growth where needed supplies of feedstocks for petrochemical
production could be obtained.
The CEQ-Corps figures were also based on a "worst case" situation
in which all the oil imports to the region would enter at one deepwater
terminal creating a throughput there of 6.6 million b/d. Approximately
85 percent of these imports were assumed to be refined in the Mid-
Atlantic area and the other 15 percent at other locations on the East
Coast. For a deepwater terminal based on these assumptions and
located off the Delaware Bay 14 the following estimates of Mid-
Atlantic impacts were determined for year 2000:
(1) Approximately 45,000 acres of land would be diverted to refinery,
crude oil storage and petrochemical uses. An additional 63,470
acres of land would be required merely to house the persons directly
employed in terminal, refinery and petrochemical operations. Including
land needs for population growth due to increased indirect employ-
ment, a total residential land requirement of over 250,000 acres was
estimated. None of these figures include land required for provision
of community facilities due to increased population or land needed
by induced commercial growth.
In deriving the land required for new population growth, the
researchers apparently did not examine how much natural population
growth would have occurred in the region by year 2000 even without
a deepwater terminal. In all the CEQ-Corps landside impact estimates,
year 2000 projections are compared with existing 1972 conditions.
No comparison of n deepwater port option versus a no-deepwater
port option for the region in year 2000 was made. The analysts
apparently did not consider the effect which existing or future State
and local planning and controls could have in minimizing negative
secondary impacts. Thus, these estimates represent "worst case"
landside estimates for a "worst case" Delaware deepwater port option.
(2) Water needs of new refineries and petrochemical plants would
be approximately 1 billion gallons per day. This figure does not
include water requirements of other new industry or of residential
or associated commercial growth.
(3) Biochemical oxygen demand (BOD) from plant effluent would
be equivalent, even using advanced treatment, to the BOD of raw
untreated sewage of 250,000 people. Without upgraded treatment by
year 2000, the BOD would be almost three and a half times greater.
The BOD analysis apparently did not take into account the require-
ments of the Federal Water Pollution Control Act Amendments of
1972 (P. L. 92-500). The figures seem to presume that, in spite of con-
14 Tais location was studied by the Corps despite State of Delaware opposition to such a facility since the
oil industry was giving strong consideration to a Delaware Bay location as a potential site for deepwater
terminal operations. The Delaware location appears to be the most favored East Coast site by B consortium
of fifteen major oil companies known as the Delaware Bay Transportation Company Project.
BEERALO FORD LIBRARK
73
straints imposed by water quality standards enforcement, there will
be little or no improvement in waste treatment technology by year
2000.
(4) Even using favorable assumptions (low sulfur, low ash fuels,
or control equipment) potential air pollution loads would be over
four times as great as their 1972 levels. The effect which State imple-
mentation plans under the Clean Air Act Amendments of 1970 (P.L.
91-604) might have in limiting such emissions is not discussed.
The results of the final CEQ landside studies reportedly do not ap-
pear as severe as the preliminary data from the CEQ-Corps' study
since the earlier study was based on a "worst case" scenario for high
throughput at a single location. The Corps of Engineers recently
published an interim report on the Atlantic Coast Deepwater Port
Facilities Study 15 which did not contain detailed information about
secondary impacts. However, the Corps did revise the original as-
sumptions on which the impacts were based. The Corps revised down-
ward their estimate of the most likely year 2000 North Atlantic level
of crude oil imports. Based on the assumption that in the future local
and State opposition would limit refinery growth to areas with existing
refineries and petrochemical plants, the Corps determined that their
original estimate of 6.6 million b/d was too high and that the medium
projection, 4.0 million b/d, was the most likely year 2000 crude oil
import level. With reduced levels of regional oil imports and produc-
tion, one could expect the magnitude of induced landside impacts to
decrease.
If the new assumptions were used, the Mid-Atlantic landside im-
pacts appear to be less severe than estimated in the original Corps of
Engineers report.
Comparison of East Coast Sets of Data: Several sources, including
the CEQ-Corps study, were used for partial data to calculate secondary
impacts magnitudes of a North Atlantic deepwater terminal. To in-
sure comparability, the calculated impact magnitudes were all based
on the CEQ-Corps "worst case" assumptions. A comparison of results
is presented in Table 1.
Gulf Coast Estimates of Secondary Impacts: Because the levels of
fuel demand and the nature and extent of present industrialization are
quite different on the Gulf Coast, the East Coast estimates do not
apply and separate Gulf Coast studies must be examined to obtain
reliable data on landside impacts. (West Coast impacts have not been
examined as thoroughly as Atlantic and Gulf Coast impacts, primarily
because the oil industry has favored Atlantic and Gulf Coast locations
for such facilities in the short-term and because major U.S. fuel deficit
areas are on the East Coast and in the Mid-West.)
One report, prepared by the Lower Mississippi Valley Division,
Corps of Engineers,16 contains the best Gulf Coast data directly
comparable to the Mid-Atlantic landside impact estimates. The final
Corps report on Gulf Coast Deepwater Port Facilities, released in
June 1973, contains an analysis of landside impacts from secondary
growth for 7 combinations of possible monobuoy deepwater port
locations and five alternative cases of refinery capacity distribution.
18 U.S. Corps of Engineers. Philadelphia District. North Atlantic Division. Interim report, Atlantic
Coast deepwater port facilities study, Eastport, Maine to Hampton Roads, Virginia. Philadelphia, Penn-
sylvania, 1973.
It U.S. Corps of Engineers. Lower Mississippi Valley Division. Report on Gulf Coast deepwater port
facilities, Texas, Louisiana, Mississippi, Alabama and Florida. Vicksburg, Mississippi, 1973.
21-935-74-6
FORD i LIBRARY
74
TABLE 1.-MAGNITUDE OF SECONDARY IMPACTS OF MID-ATLANTIC DEEPWATER PORT DEVELOPMENT, BASED
ON CEQ-CORPS "WORST CASE" ASSUMPTION FOR YEAR 2000, SELECTED SOURCES
CEQ-Army
Oil and Gas
App. I, Maine
Georges Bank
Corps
Journal 2
coast 3
petroleum study 4
Land requirements (acres):
Refineries and some petrochemicals on
refinery sites
30, 200-'70, 000
Refineries and all petrochemicals
45,000
Water needs (million gallons per day):
Refineries
36
'95-500
Refineries and all petrochemicals
1,000
BOD load (lbs. per day):
Refineries
$ 80, 000-$
Refineries and all petrochemicals
10 143,650
Air pollutant emissions (pounds per day):
Refineries:
Particulates
475,000
SO
2,097,000
NOx
1,425,000
All sources:
Particulates
1,173,000
SO
2,388,400
NOx
3,684,000
Electricity requirements (kilowatt hours
per year): Refineries
8, 000, 000, 000
Employment (people):
Refineries
,900
700
Refineries and petrochemicals
139,000
1 U.S. Corps of Engineers, Philadelphia District, op. cit.
1 Nelson, W. L. "How much land investment needed for grass-roots refineries?" Oil and Gas Journal. Dec. 4, 1972:
pp. 56-57.
a Veazie, Carl E. app. 1. "Heavy Industry on the Maine Coast", in report of the Governor's task force on energy, heavy
industry, and the Maine Coast. Augusta, Maine, 1972.
4 Offshore oil task group. The Georges Bank petroleum study: V. I, impact on New England real income of hypothetical
regional petroleum developments: V. 11, impact on New England environmental quality of hypothetical regional petroleum
developments; summary. Cambridge, Mass., Massachusetts Institute of Technology, 1973. (MIT sea grant report 73-5).
5 Based on 100,000 barrels per day capacity refineries (1970) which could be expanded to handle 400,000 barrels per day
by year 2000.
6
Based on historical land use acquisition averages of the oil industry and existing capabilities.
7
Represents oil industry's "optimistic" projection.
$
Represents average of most recent refineries' reported figures.
I
Average of high and low data points.
10 Computed from Corps' population equivalents for BOD content and per capita figures for an average domestic sanitary
sewer.
Combining different strategies of monobuoy siting and refinery loca-
tions, the Corps considered 15 choices of facility alternatives for Gulf
Coast deepwater port facilities and ranked these alternatives for a
variety of impacts. (Although the Corps examined such deepwater
port alternatives as dredged channels and artificial islands as well as
monobuoys, they performed quantitative environmental analyses for
only the monobuoy alternatives.) Only one of the Corps alternatives
(D7-monobuoy off Sabine Pass, bordering Texas and Louisiana, with
a year 2000 throughput of over 11 million b/d in one location and no
change in historical patterns of refining capacity distribution) repre-
sented an option of developing only one port facility with a high-
volume throughput. All other fourteen alternatives examined com-
binations of several low-volume monobuoy systems at several locations
to achieve the requisite level of oil throughput.
Gulf Coast environmental landside impacts: All of the Corps al-
ternatives were based on a Gulf Coast year 2000 crude oil throughput
of 11,380,000 b/d. They arrived at this projection based on the assump-
tion that PAD III will need to continue meeting its own fuel needs and
also continue supplying crude oil' and products for PADs I and II as
their fuel demands mount. PAD refers to Petroleum Administration
for Defense districts. (The United States is divided into five major
GERALD FORD LIBRARY
Y
75
regions for which petroleum data are regularly reported by the Bureau
of Mines. PAD I includes the entire East Coast, including Florida.
PAD II is roughly the Mid-West plus Kentucky, Tennessee and
Oklahoma. PAD III is the Gulf Coast plus New Mexico. For the pur-
poses of the Gulf Coast study, the Corps treated Florida as a part of
PAD III instead of PAD I.) Gulf Coast refinery capacity was projected
to grow from 4,818,000 b/d (1972) to 15,175,000 b/d by year 2000. Us-
ing historical trends and information on planned future expansion of
existing pipelines, the Corps allocated all projected crude oil imports
among 10 coastal refining complexes up to 1980. The ten complexes are:
Panama City, Florida; Pensacola, Florida; Mobile, Alabama; Pas-
cagoula, Mississippi; Baton Rouge, Louisiana; Lake Charles, Louisi-
ana; Beaumont-Port Arthur, Texas; Galveston-Houston Area, Texas,
and Corpus Christi, Texas. By 2000, however, they predicted that an
additional 1,695,000 b/d of coastal refinery capacity will be required in
excess of what could be obtained by expanding existing pipelines. They
assumed that a new pipeline would be required to provide this capacity
and that the requisite refinery expansion could occur anywhere on the
Gulf. (See Table 2 for a summary of the location of refining capacity.
The year 2000 figures do not include the additional 1,695,000 b/d.)
TABLE 2.-PROJECTED COASTAL REFINERY CAPACITY, PAD III
[Barrels per day times 1000
Coastal complex
1972 Capacity 1980
2000
Panama City
Pensacola
Mobile
18
19
23
Pascagoula
270
519
707
Baton Rouge
585
1,334
1,847
New Orleans
548
872
1,270
Lake Charles
306
438
770
Beaumont-Port Arthur
1,291
1,915
3,333
Galveston-Houston area
1,460
3,160
4,434
Corpus Christi
340
805
1,096
Total
4,818
9,062
13,480
1 Year 2000 figures do not include an extra 1,695,000 barrels per day required by PAD I beyond PAD I's year 2000 allo-
cation of 7,300,000 barrels per day from the Gulf Coast. Thus, year 2000 figures are short by 1,695,000 barrels per day.
The Corps then investigated five alternative cases of refinery dis-
tribution for the additional 1,695,000 and these cases were used in the
impact analyses. (See Table 3, footnotes, for a description of the
assumptions used by the Corps for Cases I-V for future refining
capacity distribution). The Corps used the coastal refinery capacities
to allocate the 11,380,000 b/d imported crude oil among refining
complexes. All the oil was assumed to be free to be used on the Gulf
Coast with no prior commitment of oil to refineries located outside
PAD III.
BERALD FORD LIBRARY
TABLE 3.-SUMMARY OF CORPS ESTIMATES OF ONSHORE IMPACTS FROM GULF DWTF DEVELOPMENT
Year 2000 impacts
Water pollution (BOD
Air pollution (particulates
Year 2000
in thousands of pounds
in thousands of pounds
crude oil
Land requirements (acres) Water requirements (mg/d)
per day)
per day)
throughput,
Monobouy alternative
barrels per
Petro-
Petro-
Petro-
Petro-
and refinery location
DWTF locations
calendar days
Impact location
Refineries
chemical
Refineries
chemical
Refineries
chemical
Refineries
chemical
DI-Case III a
Panama City
2,208,000
Louisiana 4
6,223
20,731
311.00
2,073.00
15.0
93.30
466.40
1,762.00
Southwest Pass
3,035.000
Texas $
15,215
27,271
709.00
4,727.00
34.0
212.70
76
1,063.60
4,018.00
Sabine Pass
6,137,000
Gulf Total 6
28,252
80,401
1,206.00
8,040.20
57.9
361.90
1,809.00
6,834.20
D2-Case II ,
Pensacola
852,000
Louisiana
8,055
23,446
351.70
2,344.60
16.9
105.50
527.50
1,992.90
Bayou Lafourche
3,374,000
Texas
18,265
51,787
776.80
5,178.80
37.3
233.10
1,165.20
4,402.00
Freeport
7,154,000
Gulf Total
28,612
80,935
1,214.00
8,093.60
58.3
364.20
1,821.00
6,879.00
D3-Case III a
Mobile-Pascagoula
2,208,000
Louisiana 0
6,223
20,731
311.00
2,073.00
15.0
93.30
466.40
1,762.00
Bayou bafourche
3,035,000
Texas 5
15,215
27,271
709.00
4,727.00
34.0
212.70
1,063.60
4,018.00
Freeport
6,137,000
Gulf Total 0
28,252
80,401
1,206.00
8,040.20
57.9
361.90
1,809.00
6,834.20
D4-Case I
Mobile-Pascagoula
608,000
Louisiana
8,743
24,464
367.00
2,446.40
17.60
110.10
550.40
2,079.40
Bayou LaFourche
3,435,000
Texas
18,455
52,071
781.00
5,270.00
37.60
234.30
1,171.60
4,426.00
Freeport
7,337,000
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
D5-Case I 0
Mobile-Pascagoula
4,043,000
Louisiana
8,743
24,464
367.00
2,446.40
17.60
110.10
550.40
2,079.40
Freeport
7,337,000
Texas
18,455
52,071
781.00
5,270.00
37.60
234.30
1,171.60
4,426.00
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
D6-Case I @
Bayou LaFourche
4,043,000
Louisiana
8,743
24,464
367.00
2,446.40
17.60
110.10
550.40
2,079.40
Freeport
7,337,000
Texas
18,455
52,071
781.00
5,270.00
37.60
234.30
1,171.60
4,426.00
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
D7-Case 1 I
Sabine Pass
11,380,000
Louisiana
8,743
24,464
367.00
2,446.40
17.60
110.10
550.40
2,079.40
Texas
18,455
52,071
781.00
5,270.00
37.60
234.30
1,171.60
4,426.00
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
GERALD
D8-Case V 0
Mobile-Pascagoula
5,243,000
Louisiana
6,223
20,731
311.00
2,073.00
15.00
93.30
466.40
1,762.00
Freeport
6,137,000
Texas
15,215
47,271
709.00
4,727.00
34.00
212.70
1,063.60
4,018.00
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
D9-Case III B
Mobile-Pascagoula
5,243,000
Louisiana 6
6,223
20,731
311.00
2,073.00
15.0
93.30
466.40
1,762.00
FORD
Freeport
6,137,000
Texas 5
15,215
27,271
709.00
4,727.00
34.0
212.70
1,063.60
4,018.00
Gulf total 8
28,252
80,401
1,206.00
8,040.20
57.9
361.90
1,809.00
6,834.20
LIBRARY
D10-Case III 8
Bayou LaFourche
5,243,000
Louisiana
1
6,223
20,731
311.00
2,073.00
15.0
93.30
466.40
1,762.00
Freeport
6,137,000
Texas 5
15,215
27,271
709.00
4,727.00
34.0
212.70
1,063.60
4,018.00
Gulf total #
28,252
80,401
1,206.00
8,040.20
57.9
361.90
1,809.00
6,834.20
D11-Case V*
Mobile-Pascagoula
2,208,000
Louisiana
6,223
20,731
311.00
2,073.00
15.00
93.30
466.40
1,762.00
Bayou LaFourche
3,035,000
Texas
15,215
47,271
709.00
4,727.00
34.00
212.70
1,063.60
4,018.00
Freeport
6,137,000
Gulf total
28,613
80.935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
D12-Case IV
Bayou LaFourche
5,243,000
Louisiana
12,325
29,771
446.60
2,977.00
21.50
134.90
669.80
2,530.40
Freeport
6,137,000
Texas
15,215
47,271
709.00
4,727.00
34.00
212.70
1,063.60
4,018.00
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
365.10
1,821.00
6,879.40
013-Case V 1
Mobile-Pascagoula
2,208,000
Louisiana
6,223
20,731
311.00
2,073.00
15.00
93.30
466.40
1,762.00
Bayou LaFourche
3,035,000
Texas
15,215
47,271
709.00
4,727.00
34.00
212.70
1,063.60
4,018.00
Freeport
5,330,000
Guif total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
Corpus Christi
798,000
D14-Case III 3
Mobile-Pascagoula
2,208,000
Louisiana 4
6,223
20,731
311.00
2,073.00
15.0
93.30
466.40
1,762.00
Bayou LaFourche
3,035,000
Texas à
15,215
27,271
709.00
4,727.00
34.0
212.70
1,063.60
4,018.00
Freeport
5,339,000
Gult total 6
28,252
80,401
1,206.00
8,040.20
57.9
361.90
1,809.00
6,834.20
Corpus Christi
798,000
D15-Case I
Mobile-Pascagoula
608,000
Louislana
8,743
24,464
367.00
2,446.40
17.60
110.10
550.40
2,079.40
Bayou LaFourche
3,435,000
Texas
18,455
52,071
781.00
5,270.00
37.60
234.30
1,171.60
4,426.00
Freeport
6,314,000
Gulf total
28,613
80,935
1,214.00
8,093.40
58.30
364.20
1,821.00
6,879.40
Corpus Christi
1,023,000
1 All refinery capacity except additional 1,695,000 barrels per day required Fby year 2000 is allo-
6 Gulf total equals the sum of the Louisiana and Texas totals plus the impacts determined by the
cated using historical trends and information on planned future expansions. See table 2 for a listing
Corps for the rest of the Gulf, namely: Panama City, Pensacola, and Mobile-Pascagoula.
of how this capacity is allocated. The excess 1,695,000 barrels per day Is allocated according to five
7 Under case = it is assumed that a gradual shift eastward in refining capacity occurs due to the
hypothetical cases, case I-V.
demand of PAD 1. Twenty percent of the 1,695,000 capacity is distributed among each of the following:
77
2 Barrels per calendar day is essentially the same unit as barrels per day (b/d). It is an expression
Panama City, Pensacola, Mobile, and Pascagoula; Baton Rouge and New Orleans; Lake Charles
of the operating capacity of a refinery, generally with an allowance over a period for downtime.
and Beaumont-Port Arthur; Galveston-Houston area; Corpus Christi.
Another unit used to measure refinery capacity, b/sd, measures the capacity of a refinery in barrels
8 Under case I, it is assumed that the historical pattern would continue. Each complex capacity
per day during the time the refinery is operating or "on stream."
was determined using the ratio of its base capacity (1972) to the base capacity for the entire coastal
3 Under case 111, the external demand of PAD I is assumed to shift the 1,695,000 barrels per day
region (1972) and multiplying by 1,695,000 barrels per day.
eastward. It is assumed that It will be refined at Pascagouia, Mobile, Pensacola, and Panama City
0 Under case V, it is assumed that the 1,695,000 barrels per day capacity would shift to the Missis-
with 25 percent of the capacity at each of these locations,
sippi-Alabama coast and be distributed equally between Pascagoula and Mobile,
1 Louisiana total equals the combined Corps impacts for Baton Rouge-New Orleans and Lake
Charles.
Under case IV, it is assumed that the 1,695,000 capacity would shift to the Mississippi River
and be distributed equally between New Orleans and Baton Rouge.
5 Texas total equals the combined Corps impacts for Beaumont-Port Arthur, Galveston-Houston,
and Corpus Christi.
GERALD
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On the basis of these assumptions, the Corps performed their en-
vironmental analyses on the 15 alternative systems and then applied
subjectively derived weighting factors to determine an environmental
ranking for the alternatives. As a result, the port system offshore of
Sabine Pass was deemed to have the least potential environmental
impact. The Sabine Pass alternative was one of the least desirable from
the standpoint of onshore impacts (land and water requirements, air
and{water pollution), but it had an excellent offshore environmental
rating. Even though onshore impacts were weighted 50 percent more
than offshore impacts, Sabine Pass' offshore values outweigh its
negative onshore impacts. This result points up a serious problem in
trying to locate a DWTF with minimal environmental risks. Whereas
one high-volume offshore facility may be environmentally preferable
when considering marine impacts of the terminal itself (i.e. risk of
collisions, risk of oil spills reaching coastal areas and estuaries), an
alternative to a massive concentrated landside area would be several
smaller ports and dispersal of associated refining capacity in smaller
units. This alternative may be environmentally preferable in terms of
landside impacts (i.e. secondary growth demands and landside pollu-
tion potential).
The Corps estimates of onshore impacts for all 15 alternatives are
summarized n'Table 3 for the entire Gulf. Land requirements were
calculated by the Corps on the following bases: 900 acres of land re-
quired per each 250 million b/d refinery; 200 acres of land per each 1-
billion lb. (37,550 b/d) ethylene-based petrochemical complex. Existing
refinery capacities were considered and a 50 percent future expansion
of existing refineries was assumed. Water resource calculations were
based on the following: 8 million g/d water needs per each 100,000 b/d
refinery; 20 million g/d water needs per each 1 billion lb. ethylene-
based petrochemical complex; 960 lb./d BOD (using "advanced
technology") per 250,000 b/d refinery; and 900 lb./d BOD (with "ad-
vanced technology") per each 1 billion lb. petrochemical complex. Air
pollutant loads were calculated assuming 30,000 lb./d particulate emis-
sions per 250,000 b/d refinery and 17,000 lb./d emissions per 1 billion
lb. petrochemical complex. The analysis did not indicate what air and
water quality standards and controls, if any, were assumed.
The Corps data appear to be based solely on impacts from petroleum
and petrochemical industrial growth. Estimates of additional land and
water needs and pollution which could be generated by induced com-
mercial and residential growth are not examined. In addition, the
Corps data appear to be based on technical criteria alone.
In fact, the overriding factor in predicting landside impacts, accord-
ing to the Corps analysis, would be the assumptions made about
future expansion of refining capacity rather than the choice of individual
deepwater port locations or throughput. For all alternatives sharing
the same assumptions about refining growth, the magnitudes of a
range of landside impacts were identical (see Table 3; i.e., impacts of
monobuoy alternative, D1-D3-D9-D10-D14; D4-D5-D6-D7-D15;
D8-D11-D13).
The question ought to be asked whether or not all of the combina-
tions of deepwater port locations and refining patterns examined by
the Corps are realistic. No assumptions apparently were made of the
effect which the port location(s) might have on location of new refinery
FORD
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79
capacity. Instead, the Corps treated the two types of location deci-
sions as separate events. For example, landside impacts for the one
high-throughput port alternative off Sabine Pass were calculated based
on the same assumptions about refinery capacity that were used to
calculate the impacts for four multiple-terminal alternatives. The
landside impacts at all Gulf Coast locations were found to be identical
for all Case I alternatives, including an alternative with 4 DWTF
locations spread out across the Gulf Coast (1 off Mississippi-Alabama,
1 off Louisiana, 2 off Texas).
Based on the Corps assumptions, one can say little about the effect
which various deepwater port locations might have on Gulf Coast
landside impacts.
Gulf Coast socio-economic landside impacts: Other landside
impacts which the Corps Gulf Study discussed were various social
and economic effects, including: effects on population, employment,
total personal income, per capita income, total earnings and earnings
per worker; and effects on housing, transportation, educational Sys-
tems and public facilities. For each monobuoy alternative, D1-15,
the Corps attempted to predict Gulf Coast socio-economic conditions
with the port alternative and compare them with conditions which
would exist without deepwater terminal development.
Depending on which monobuoy alternative and refining distribution
case was examined, the year 2000 predicted total employment increase
in the Gulf Region generated by deepwater port development ranged
between 854,357 and 929,528; predicted year 2000 population growth
attributable to DWTF development ranged between 1,123,808 and
1,272,112 (these figures are based on the same assumptions discussed
previously in regard to environmental landside impacts). The Corps
used essentially the same methodology for this analysis as they used
to determine environmental impacts (see Gulf Coast Environmental
Landside Impacts section).
The Corps estimated that in the long run the positive economic
effects, such as increased total personal income and per capita income,
would outweigh negative social effects, such as overcrowding of hous-
ing, transportation, education systems and public facilities, which
might result in the short-run from rapid population increases.
The Corps found once again that distribution of additional refining
capacity was a major determinant of the severity of landside impacts.
The assumption made about refinery capacity distribution determined
a monobuoy system's social and economic ranking. Case III alterna-
tives, for which refinery capacity was assumed to shift eastward and
be divided equally among Pascagoula, Mobile, Pensacola and Panama
City, were found to have the most positive landside social and eco-
nomic impacts. Alternatives which would result in greater concentra-
tions of refinery expansion in already developed or industrialized
areas were found to be less desirable with regard to these impacts.
Gulf Coast economic impact studies: Two other studies have been
completed which provide partial data on secondary impacts from
DWTF construction off the Gulf Coast. These are a report prepared
for the Louisiana Superport Task Force, Loop Inc. 17 and others to
17 In 1972, Governor Edwards of Louisiana appointed a high-level Louisiana Superport Task Force to
push for and coordinate efforts to build a deepwater terminal off the Louisiana coast. At the same time a
group of major oil companies were planning to construct a deepwater oil terminal in the Louisiana Gulf.
This private consortium of thirteen oil companies is known as Loop Incorporated.
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year 2000 if a DWTF were operating by 1977. (The number of em-
ployees per 1000 b/d refined has been declining in Louisiana from 16.4
in 1961 to 7.9 in 1971. New refineries are being built to be even more
highly automated than existing plants. New refineries average from
2.5-3.5 employees/1000 b/d. Also, the trend toward subcontracting
of maintenance operations has reduced the employee ratio. Kaiser
and Gulf South Research Institute assumed that these trends would
continue, but with a decreasing rate.) Projected growth in petro-
chemical employment was based on an observed relationship during
1965-71 between refining and petrochemical growth. For every re-
fining job generated over this period, 2.3 jobs were created in the
petrochemical industry. This multiplier was expected to hold for the
area affected by the deepwater port. The analysis assumes this figure
to be conservative. The offshore oil terminal was estimated to initially
employ 315 people with a small increase in employment beyond this
level possible at a later date. However, secondary employment is
expected to be much greater. See Table 4 for a chronology of port-
generated direct employment.
TABLE 4.-ESTIMATED DIRECT EMPLOYMENT GAIN IN LOUISIANA STEMMING FROM AN OFFSHORE OIL
TERMINAL (DWTF)
Item
1980
1990
2000
Construction employment:
Offshore terminal
707
294
Refineries
2,179
1,538
5,142
Potrochemical plants
823
748
1,340
Total
3,709
2,580
6,482
Operating employment:
Offshore terminal
315
Refineries
2,848
5,456
6,837
Petrochemical plants
6,550
10,300
22,900
Total
9,713
15,756
29,737
Total direct employment gain
13,422
18,336
36,219
Source: Taken from H. J. Kaiser Co. and Gulf South Research Institute, op. cit., p. 48.
The total employment gain Louisiana would experience from the
deepwater port was determined using OBERS 22 projections to
calculate the induced employment stimulated by DWTF-generated
direct employment increases. Table 5 shows these gains through year
2000. These gains were derived by means of a computer program which
calculated induced increase in employment in all remaining industries
resulting from employment increases in the petroleum industry.
The population increases resulting from these employment gains in
Louisiana were estimated to be 99,135 in 1980 and 303,733 by year
2000. The analysis did not estimate how much of the increase would be
in the vicinity of the deepwater port. The computer program used to
calculate induced employment was also used to produce these popula-
tion growth estimates. The above projections of increase in population
actually attributable to the deepwater port were obtained based on
projections of natural population growth which would occur even
without deepwater port construction and on assumed labor participa-
tion rates.
22 U.S. Water Resources Council. OBERS projections of regional activity in the United States, V. 1-.5
Washington, 1972.
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TABLE 5.-DIRECT AND INDUCED EMPLOYMENT GAINS GENERATED IN LOUISIANA BY AN OFFSHORE OIL TER-
MINAL (DWTF)
Item
1980
1990
2000
Direct employment gain:
Construction
3,700
2,600
6,500
Manufacturing:
Refining
2,800
5,400
6,800
Chemical
6,600
10,300
22,900
Total
13.100
18.300
36,200
Induced employment
21,970
39,720
76,170
Total net gain
35,070
58,020
112,370
Source: Taken from H. J. Kaiser Co. and Gulf South Research Institute, op. cit., p. 52.
The labor participation rate reflects the ratio of total employment
to total population. A ceiling was imposed on this ratio so that if em-
ployment increases substantially, it becomes necessary ultimately to
specify that the increase in labor participation cannot be satisfied by
natural regional population growth, and this labor demand must be
met by in-migration to the region.
Impacts on local and State governments: The Louisiana study con-
cluded with a benefit-cost analysis of secondary growth caused by
Louisiana offshore oil port construction from the viewpoint of State
and local government. Impacts on local and State government reve-
nues and expenditures resulting from development stimulated by an
offshore deepwater port over a 24-year period were measured and
compared.
Categories included individual taxes, corporate taxes, and operating
and capital costs for State and local services (such as higher education,
schools, police, highways and others). The resulting revenues and
expenditures were compared to determine a benefit-cost ratio from the
viewpoint of the affected governments. See Table 6 for a summary of
these results.
TABLE 6.-IMPACT OF AN OFFSHORE OIL TERMINAL ON GOVERNMENT REVENUE AND EXPENDITURES
[In millions]
Present
value
Revenues:
Individual
$194.3
Corporate
284.9
Total revenue
479.2
Costs:
Cepital costs:
7.9
1
25.9
Total
33.8
Operating cash:
141.5
Lack
264.1
Total
405.6
Total costs
439.4
Revenue-cost ratio
1.09:1
Source: Taken from H. J. Kaiser Co. and Gulf South Research Institute, op. cit., p. 73.
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The resulting ratio, 1.09:1, indicates that, at the end of the 24-year
period, for every dollar governmental entities have had to expend on
services as a result of deepwater port induced growth, they will have
received 1.09 dollars in revenues. This ratio is not highly favorable
inasmuch as the discovery of a small estimating or projection error
could easily reduce the ratio below the break-even point (i.e. it does
not appear that State and local environmental protection costs have
been accounted for). Also, no breakdown of State versus local benefits
and costs is given, so it is not clear that the division of benefits and
costs would be equitable among all governmental entities. Lastly, the
benefits and costs are aggregated for the 24-year period which does not
permit analysis of how costs and benefits will be distributed over time.
Governments could be required to provide services and incur costs at
an early state of DWTF development and wait for a number of years
before increased revenues begin to balance these costs.
Texas Impacts: Daniel Bragg and James Bradley 23 estimated in
1972 the economic impact on the State of Texas of a deepwater port
which would have by 1985 a throughput of 3.5 million b/d. Such a
throughput level is approximately equal to the 1985 throughput pro-
jected for a Louisiana port.
Most of the economic and other impacts of a deepwater port were
projected to occur in the Texas coastal zone, partly because of the
tendency which industrv would have to achieve economies by cluster-
ing around such a facility. In addition, Bragg and Bradley expect
future refinery growth to occur where refinery capacity already exists,
for reasons previously cited in connection with the Louisiana study,
and Texas' coastal region already contains almost 90 percent of the
refining capacity in the State.
Employment Impacts: Using input-output models developed for
Texas, future gains in employment statewide from deepwater port
construction and operation were calculated to be 336,770 by 1985, of
which nearly 40,000 would be in oil refining.
The total increase in State employment from offshore oil port
development was determined by applying the input-output model's
State labor multiplier to projected growth in oil refinery output. 24 See
Table 7 for a chronology of deepwater port impacts on employment.
TABLE 7.-NEW JOBS RESULTING FROM TEXAS DEEPWATER TERMINAL
Source
1975
1980
1985
Oil refining industry
8,498
22,595
39,266
Total in State (including refining)
72,887
193,789
336.770
Source: Taken from Daniel M. Bragg and James R. Bradley, op. cit., p. 43.
These employment figures were substantially greater than those
calculated for the same years in the Louisiana study for an offshore
port with a similar volume of throughput. One possible explanation
for this difference is that deepwater terminal facility construction
was projected to expand Texas refinery capacity from 3 million b/d
n Bragg and Bradley, op. cit.
20 Growth In port-related activities such as ship repair, chandlering, and bunkering. tug and towboat
services, pilotage and longshore labor was not calculated by Bragg and Bradley. Though these activities
would be affected by operation of the terminal the total impact of this growth was not expected to be sig-
nificant compared to refinery growth.
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85
Unfortunately, none of the landside impact studies adequately
identified what standards (either technological or legal) were used to
determine landside impacts. No study discussed assumptions made for
all of the factors cited by the NPC as influencing environmental im-
pacts. Without this information, it is difficult to determine if the
magnitudes cited refer to "worst case", "optimistic" or "most likely"
projections. Comparison of results of several studies is hampered unless
all underlying assumptions are known.
IV. CONTROLS FOR MANAGING SECONDARY GROWTH AND MINIMIZING
IMPACTS
Deepwater terminal-related activities abroad are developed and
regulated through diverse institutional arrangements, with the national
governments taking the initiative in planning for and controlling the
development. In this country, control over port economic activity has
traditionally been with the States and local governments. In some of
the 30 coastal States (including the Great Lakes States) a single
statewide authority develops, improves, and regulates ports. In
North Carolina both coastal and inland ports and related facilities
are under the jurisdiction of n single agency, the North Carolina Port
Authority. However, this is not the case in the majority of constal
States. Most coastal States have a number of agencies, State, regional
and local, which have port planning, development, construction or
regulatory functions. Statutory authority to control ports or other
coastal development also varies widely from State to State. In some
States both statutory and constitutional autonomous or semi-autono-
mous local ports, port parishes or port districts regulate port activities.
In other coastal States, various regional or interstate compacts and
commissions have responsibility, advisory or administrative, for some
aspects of port-related activity. Local political jurisdictions along the
coastline share these responsibilities through their exercise of police
powers and general governmental functions.
The Federal Government also divides responsibility with the States
and localities for port regulation. For coastal ports, the Department of
Transportation, through the Coast Guard and Office of Pipeline
Safety, has responsibility for navigational and vessel safety, for spill
prevention and cleanup, and for pipeline configuration and operation.
The Army Corps of Engineers has responsibility for the maintenance
and protection of navigable waters. The Department of Commerce,
through the National Oceanic and Atmospheric Administration,
administers the Coastal Zone Management Act (P.L. 92-583) although
this Act has not yet been fully funded by the Administration. The
Department of the Interior, through the Office of Oil and Gas, issues
import licenses for and allocates imports of crude oil and, through the
Bureau of Sport Fisheries and Wildlife, is involved in the management
of wildlife resources including protection of wetlands in the coastal
zone.
If deepwater terminals were to be constructed offshore outside State
territorial waters (in most cases State control extends to the 3-mile
limit), the Federal Government would have to assume new responsi-
bilities for port terminal regulation and control, but the major respon-
sibility for control and planning of onshore, landside facilities would
still remain with the States and localities.
GERALD FORD (IBRAB)
86
State action
Over the last ten years, increasing concern over protection for rare
or unprotected natural resources has led the coastal States to take a
more active role in planning and controlling land use. Most of the
early State programs for coastal areas focused either on wetlands
preservation or protection of public beach access. Later, some coastal
States took the initiative in regulating power plant siting and the
locating of industrial and large-scale residential development. More
recently, partly in response to the Coastal Zone Management Act of
1972 (P.L. 92-583), coastal States have become active in the areas of
shoreline zoning and coastal planning and management.
The Atlantic Coast States have generally focused on programs of
wetlands protection. Going beyond this type of critical areas protec-
tion, Maine, Delaware, New Jersey and Florida have enacted innova-
tive legislation to control or direct development along their coastlines.
Gulf Coast States have tended to approach coastal zone management
by regulating some, but not all, landside activities having environ-
mental impacts. Unusual recent coastal activity among these States
includes the Texas 1969-1973 moratorium on sale, leasing or alteration
of State-owned submerged lands pending completion of a statewide
comprehensive study, and creation of authorities with specific responsi-
bility for phases of deepwater terminal planning or construction. In
general, the Pacific Coast States have been most active in comprehen-
sive coastal regulation and planning. California, Oregon and Washing-
ton have taken inventive legislative or administrative steps to oversee
management of their coastal resources.
State actions with the greatest bearing on possible secondary
development from deepwater terminal facilities include the following:
(1) Delaware's Coastal Zone Act of 1971, which barred new develop-
ment of oil refineries, paper and steel mills and petrochemical com-
panies in coastal regions and established State permitting authority
over new industrial development in the coastal region. In April Gover-
nor Sherman introduced environmental legislation to: (a) supplement
the State Coastal Zone Act with a State Coastal Zone Management
Act which would provide for regulation of residential and commercial
coastal zone development of greater than local impact (this bill has
gone to committee but has not yet been enacted); and (b) provide for
statewide regulations over private and public wetlands and marshes.
The Wetlands Bill has been passed by the General Assembly.
(2) Maine's Site Location Regulation Act requires n permit to
undertake any large-scale industrial or residential development.
Maine's Mandatory Zoning and Subdivision Control Law gives the
State zoning control over any shoreline areas lacking local zoning
control. Legislative proposals to create a Maine Development Corpo-
ration and limit heavy industry and port or harbor development to
specific constal zones were proposed but not passed in 1973.
(3) California's Coastal Conservation Act involves planning for
and regulating all development in the State's coastal region.
(4) Creation on the Gulf Coast of two State political subdivisions
(Louisiana Deep Draft Harbor and Terminal Authority; Texas
Offshore Terminal Commission) and one corporation (Ameraport
Corporation, Alabama) with responsibility for deep port planning
and/or development; and
FORD i LIBRARY 07V839
87
(5) Enactment of the New Jersey Coastal Area Facility Review
Act on June 20, 1973. An earlier environmental package submitted by
Governor Cahill included a ban, later compromised to a 4-year
moratorium, on deepwater port development within the New Jersey
3-mile zone and a ban in this same zone on off-shore nuclear generating
stations. No legislation dealing directly with deepwater ports was
enacted but provisions strictly regulating offshore nuclear facilities
waste disposal were incorporated into a modified Coastal Area
Facility Review Act which was passed. (In the modified version of
the Act which was enacted, certain already industrialized coastal
areas, including the Delaware River refining complex, were excluded
from the zone and thus from control.) The Act gives the New Jersey
Department of Environmental Protection permit authority over all
major construction within a defined zone (to the 3-mile limit and a
1,380 square mile zone landward), and requires the preparation of
environmental statements for all major proposed development.
In terms of secondary impacts, Maine may have the most interesting
set of existing and proposed legislation for deepwater terminal facility
planning. Other States have taken action which would either: (1) help
prevent undesirable port activities or industrial development on or off
shore but would not help determine where and how such development
might be acceptable or provide mechanisms which could guide and
implement desirable development, or (2) have established institutional
mechanisms which could facilitate deepwater development while leav-
ing the major initiative in terms of siting of facilities in the hands of
private enterprise.
Maine's existing law is aimed at preventing negative impacts from
unplanned large-scale development, which would clearly impose con-
straints on landside deepwater port development. As a result of the
recommendations of the Governor's Task Force on Energy, Heavy
Industry and the Maine Const, however, legislation 27 was proposed in
the last legislative session which, had it passed, would have permitted
the State to take the initiative in deepwater port siting. The bills
would have created two coastal zones in which heavy industrial
development would be permitted, one of which could be used for deep-
water oil terminal related activities. These zones were chosen on the
basis of a mix of economic, environmental and other factors. The pro-
posed legislative package included a plan to create a Maine Develop-
ment Corporation with authority to facilitate development of refineries
and pipelines and other facilities in the coastal zone, or to oversee the
development of private industrial proposals in the zone. Requirements
for economic impact statements, analogous to the statements required
under the Section 102(2) (c) provision of the National Environmental
Policy Act of 1969, to be filed on all major developments were also
contained in the Maine proposals.
The bills will be reintroduced in the next session as they were
defeated in both the Maine legislative chambers by narrow margins.
The proposals' rejection apparently was due in part to the pending
proposal of the Pittston Company to construct a $350 million oil
refinery at Eastport, a location not included in the two-zone proposal.
The Gulf Coast deepwater port authorities are also innovative in-
stitutions, but their mandates are not aimed at secondary landside
27 Maine. Laws, 1973, Legislative documents 1663, 1759.
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impacts or regulation. The Louisiana Deep Draft Harbor and Ter-
minal Authority enabling legislation 28 does call for the establishment of
an Environmental Protection Plan which must state how the design
of the deepwater port will control long-term terminal development so
that growth and additions to the terminal do not result in random
growth or environmental degradation, but it does not specify compara-
ble requirements with respect to the secondary growth and industrial
development induced by the deepwater port. The Texas Offshore
Terminal Commission is required by law 29 to have as part of its plan a
proposal for environmental protection and an analysis of the benefit-
cost ratio of a proposed facility. Again, no specific instructions to plan
for or control landside development are contained in the legislation.
V. CONCLUSIONS
All studies examined agree that major landside impacts from deep-
water port construction will follow if uncontrolled refinery and petro-
chemical concentration is allowed to occur in adjacent coastline areas.
The argument is made in the Department of the Interior's Legisla-
tive Draft Environmental Statement that dispersion of deepwater
facility-induced refinery and petrochemical growth would be preferable
to concentration of capacity in a few locations. Although some new land
would be industrialized with dispersal of capacity, the total effect was
estimated to be less severe than if all new capacity were located in a
heavily industrialized area. The Interior statement does not contain
concrete proposals to achieve such dispersion. Other Administration
sources also support dispersal of refining capacity and deepwater
facilities. Governor John A. Love, former Director of the Energy Policy
Office, testified on October 3, 1973, before the Special Joint Subcom-
mittee of the Senate Interior and Insular Affairs, Commerce and
Public Works Committees to the effect that:
Both the economic incentives and our environmental pref-
erences should heavily favor dispersion of deepwater port
facilities, in other words a reasonable number of these facil-
ities somewhat evenly distributed over our const
For
environmental reasons, both onshore and offshore, I
favor a larger number of ports and thus dispersion of the
ship traffic, operating spills and associated refinery
development.
Governor Love expressed his belief that between the Coastal Zone
Management Program and the National Land Use Program, the
effects of landside secondary development could be controlled and
dispersed.
Most studies conclude that the major industrial growth would
probably occur, particularly for an Atlantic Coast deepwater terminal,
in the political jursidictions adjacent to the terminal and its support
activities. No available studies measure the potential for controlling
this growth through application of additional planning controls.
The findings regarding secondary growth are supported and con-
strained by the following factors:
= Lousiiana Laws, 1973, Act 444, regular session. (Louisiana revised statutes title 35, section 3101 et seq.)
29 Texas Laws, 1972, Vernon's Texas statutes and codes annotated. Water code, sections 12.001-12.003,
12.011-12.027, 12.061-12.007. West Publishing company.
30 U.S. Congress, Senate, Special Joint Subcommittee, op. cit.
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employment generated would amount to nearly 1 million. The
magnitude of this second "induced" growth would depend on the
region in question. In an already highly urbanized region such as the
Mid-Atlantic with a high regional multiplier most of the induced
growth to service direct employment would be likely to be captured
by the region and the "induced" impact would be significant. In a
less highly urbanized region, current economic theory holds that this
would be less true, with more of the "induced" economic growth
occurring outside the region. Yet for a region with a relatively small
economic base and low population density, even an induced growth
of small absolute magnitude could produce significant effects.
Role of planning
Perhaps the most important conclusion to be drawn from studies of
deepwater port secondary impacts is that narrowly conce. policies
directed soiely at advancing or halting such port development alone
cannot produce an optimal plan for coastal zone resource allocation.
Planning to direct and control heavy industry growth may be a neces-
sary policy for coastal States as the projected year 2000 high level of
oil throughput will cause pressures for industrial expansion even
without deepwater port development. Given pressures on the constal
zone from non-industrial growth, however, industrial controls alone
will probably not be sufficient to protect the coastal environment.
If U.S. public policy is shaped with a disregard for past deepwater
port experience overseas. particularly the results of dealing with such.
development separately from other demands for coastal zone resources,
predictable adverse landside effects may be the result. A major factor
in decisions to permit superport operations may be the readiness and
ability of State and local jurisdictions to prepare and carry out a
comprehensive plan for land use and economic development so as to
keep undesirable effects within bounds. It appears that the nature,
extent, and timing of secondary impacts associated with deepwater
terminal facility development may be controliable to some extent.
In this Federal system, the authority and responsibility for governing
much of this secondary development resides in the State and local
governments or perhaps in special regional bodies.
Whether in the future the secondary effects of deepwater port
development discussed in this analysis will be acceptable to society
will depend greatly upon the vigor and quality of the land use planning
and control of industrial deve.opment which is in the hands of the
local and State governments.
as The Corps derived the total employment projection from the direct employment Increase based on
a regional multiplier of 4 (e.g. each oi! refining and petrochemical job created will create 4 other jobs). The
Louisiana study was based on & multiplier of 2.677 in 1980, rising to 3.171 by 1990 and then leveling off to
3.107 by year 2000. In the Texas study, a direct employment increase of 39,266 by 1985 was projected to
create & total employment increase of 336,770. This implies a multiplier of over 7.5.
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APPENDIX E
LEGISLATION BEFORE THE SENATE IN THE 93D CONGRESS RELATING
TO THE DEVELOPMENT OF OFFSHORE DEEPWATER PORTS
Eleven legislative proposals related to U.S. deepwater port policy
have been introduced in the 93d Congress. In order of their dates
of introduction, bills pending in the Senate and House are sum-
marized as follows:
S. 80, Mr. Hollings, Mr. Magnuson, Mr. Kennedy, Mr. Stevens, and
Mr. Roth.- bill to amend the Ports and Waterways Safety Act of
1972 to provide for authority to be placed in the National Oceanic
and Atmospheric Administration for the evaluation and certification
of the environmental soundness of the site selection, construction,
and operation of offshore artificial structures for ports and terminals,
powerplants, airports, and other such facilities to be located in
coastal waters.
The statement of findings and purposes of S. S0 indicates that there
is a nationwide need to oversee the planning, construction, and opera-
tion of such facilities to prevent damage to coastal navigable waters,
the coastal zone, and the resources therein. These resources include
but are not limited to fish, shellfish, and wildlife; marine and coastal
resources; and scenic values.
S. 80 authorizes the Secretary of the Department of Housing and
Urban Development, and the Director of the National Oceanic and
Atmospheric Administration, to ascertain and certify that a proposal
for the construction and operation of offshore facilities covered by the
Act "does not pose unreasonable threat to the integrity of," and that
"all possible precautions have been taken to minimize adverse impact.
on" the marine environment.
The Act requires the Secretary to establish criteria and consult
with officials of Federal, State and local government entities having
relevant jurisdiction or expertise and to hold public hearings prior to
granting certification for the development and operation of offshore
facilities. Offshore facility projects which have not reached the
construction stage by the effective date of the Act are also subject to
the certification process. Such certification is based on an examination
and evaluation of project plans which must be submitted to the
appropriate authority at least two years in advance of the anticipated
date of beginning construction.
The measure also authorizes the Secretary of the Department in
which the Coast Guard is operating to promulgate and enforce "such
reasonable regulations with respect to lights and other warning devices,
safety equipment, and other matters relating to the promotion of
safety of life and property on artificial structures" covered by the Act.
Additional provisions provide for a penalty of $50,000 to $200,000
for violation of the Act and empowers the Secretary to initiate injunc-
tive proceedings to halt the uncertified construction or operation of
any artificial structure subject to the Act.
(91)
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S. 80 is now pending before the Committee on Commerce.
S. 180, Mr. Williams, Mr. Hathaway, Mr. Inouye.-To amend the
Federal Water Pollution Control Act in order to require the approval
of adjacent coastal States prior to the construction of certain offshore
facilities.
Essentially the same as a measure introduced in the 92d Congress by
Senator Boggs as S. 3844, this measure, entitled "The Coastal Environ-
ment Protection Act" is proposed as an assertion that "coastal States
have clear authority to approve or disapprove nuclear power generators
which are to be built off their coast in the ocean."
Senator Williams summarized the provisions of his bill as follows:
My bill provides that a Federal department or agency
which is considering the construction, licensing or approval
of any facility beyond the territorial sea off the coast of the
United States must submit a complete report on the facility
to the Administrator of the Environmental Protection
Agency who will forward the report to the Governor of each
adjacent coastal State which might be adversely affected by
pollution from such a facility. Then, those Governors have
90 days to evaluate the report and disapprove if they choose
to. If a Governor does disapprove it, the facility cannot be
licensed or constructed. 1
S. 180 excludes facilities constructed under leases pursuant to the
Outer Continental Shelf Lands Act.
The measure was referred for consideration to the Committee on
Public Works.
S. 568, Mr. Tower.-To amend the Outer Continental Shelf Lands
Act by providing authority for the issuance of permits to construct,
operate, and maintain port and terminal facilities.
This measure is identical to S. 4092, introduced by Senator Tower
in the 92d Congress. Entitled the "Outer Continental Shelf Ports and
Facilities Amendments of 1972," the measure authorizes the Secretary
of the Interior to issue permits "for the construction, operation, and
maintenance of port and terminal facilities on the submerged lands of
the Outer Continental Shelf."
Pursuant to S. 568, the Secretary must promulgate rules and regula-
tions and, in granting port and terminal facility permits, take into
consideration the need for, environmental impact of, and alternatives
to, the construction of such facilities. He must in addition provide
for public hearings.
S. 568 was referred for consideration to the Committee on Interior
and Insular Affairs.
S. S36, Mr. Case.-To amend the Federal Water Pollution Control
Act in order to require specific approval by the Congress and by
adjacent coastal States prior to the construction of certain offshore
facilities.
This bill would amend that Act by adding a new section at the end
of Title IV, "Specific Congressional and State Approval of Certain
Ocean Facilities."
Paragraph A of the proposed new section sets forth Congressional
findings that offshore construction of deep draft oil docking, electric
Congressional Record, January 4, 1973, p. S. 167.
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generating plants and oil drilling facilities may cause massive pollu-
tion problems for neighboring states. An additional finding provides
that all such construction must be specifically reviewed and approved
by Congress and the adjacent States.
Paragraph B prohibits any Federal department or agency from
constructing, approving or licensing the construction of any facility
in or beyond the territorial waters off the coast of the United States
except under certain specific conditions. First, the bill would require
the department or agency to file a complete report on the proposed
facility with the Administrator of the Environmental Protection
Agency, which he must then forward together with his own views to
the Governor and legislative leaders in each adjacent coastal State
that might be adversely affected by the facility. Secondly, Congress
must pass a law approving such construction and the Governor of
each affected State must file a notice of State approval with the
Administrator.
Failure by the Governor to file a notice of approval or disapproval
of construction within ninety days after receiving the Administrator's
report is considered an action of approval under the Act.
S. 836 is pending before the Committee on Public Works.
S. 1316, Mr. Biden and Mr. Muskie.-To amend section 311 and
section 509 of the Federal Water Pollution Control Act.
Section I adds definitions of deepwater development and adjacent
State to section 311 (a) of the Act. Deepwater development is defined as
any man-made structure either fixed or floating, or dredging activities
related to such structure, which is located in or may affect the navi-
gable waters of the United States or the water of the contiguous zone,
and which is intended for such uses as: a port or terminal for the
loading or unloading of cargoes; or a site for powerplant or airport
development, or for solid waste disposal.
S. 1316 further amends the Federal Water Pollution Control Act
by prohibiting any Federal agency from permitting the construction
or operation of a deepwater development until the Administrator of
the Environmental Protection Agency has certified that such develop-
ment meets certain criteria of site selection, method and type of
construction, and environmental protection.
The Act provides that any person desiring to construct or operate
a deepwater development shall at the time of application for approval
from any Federal agency submit, in accordance with regulations
promulgated by the Administrator, detailed plans of such development
within two vears prior to the expected date of the beginning of con-
struction. Those deepwater developments which are not in the con-
struction phase on the date of enactment of the Act but which will
reach the construction phase at any time within two years after the
date of enactment must submit plans to the Administrator "as soon
as possible."
Copies of such materials as may be required under the Act in con-
nection with a permit application must be submitted to the Governor
of each adjacent State, and made available for public inspection at a
place to be designated by the Administrator.
The Administrator may certify a deepwater development only
after he has received the concurrence of the Governor of the adjacent
State or States; held a public hearing in accordance with the Ad-
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generating plants and oil drilling facilities may cause massive pollu-
tion problems for neighboring states. An additional finding provides
that all such construction must be specifically reviewed and approved
by Congress and the adjacent States.
Paragraph B prohibits any Federal department or agency from
constructing, approving or licensing the construction of any facility
in or beyond the territorial waters off the coast of the United States
except under certain specific conditions. First, the bill would require
the department or agency to file a complete report on the proposed
facility with the Administrator of the Environmental Protection
Agency, which he must then forward together with his own views to
the Governor and legislative leaders in each adjacent coastal State
that might be adversely affected by the facility. Secondly, Congress
must pass a law approving such construction and the Governor of
each affected State must file a notice of State approval with the
Administrator.
Failure by the Governor to file a notice of approval or disapproval
of construction within ninety days after receiving the Administrator's
report is considered an action of approval under the Act.
S. 836 is pending before the Committee on Public Works.
S. 1316, Mr. Biden and Mr. Muskie.-To amend section 311 and
section 509 of the Federal Water Pollution Control Act.
Section I adds definitions of deepwater development and adjacent
State to section 311 (a) of the Act. Deepwater development is defined as
any man-made structure either fixed or floating, or dredging activities
related to such structure, which is located in or may affect the navi-
gable waters of the United States or the water of the contiguous zone,
and which is intended for such uses as: a port or terminal for the
loading or unloading of cargoes; or a site for powerplant or airport
development, or for solid waste disposal.
S. 1316 further amends the Federal Water Pollution Control Act
by prohibiting any Federal agency from permitting the construction
or operation of a deepwater development until the Administrator of
the Environmental Protection Agency has certified that such develop-
ment meets certain criteria of site selection, method and type of
construction, and environmental protection.
The Act provides that any person desiring to construct or operate
a deepwater development shall at the time of application for approval
from any Federal agency submit, in accordance with regulations
promulgated by the Administrator, detailed plans of such development
within two years prior to the expected date of the beginning of con-
struction. Those deepwater developments which are not in the con-
struction phase on the date of enactment of the Act but which will
reach the construction phase at any time within two years after the
date of enactment must submit plans to the Administrator "as soon
as possible."
Copies of such materials as may be required under the Act in con-
nection with a permit application must be submitted to the Governor
of each adjacent State, and made available for public inspection at a
place to be designated by the Administrator.
The Administrator may certify a deepwater development only
after he has received the concurrence of the Governor of the adjacent
State or States; held a public hearing in accordance with the Ad-
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ministrative Procedure Act; and determined that the location, con-
struction, and operation of the proposed deepwater port facility will
not cause or contribute to environmental degradation or cause viola-
tions of this Act, the Clean Air Act or any other Act administered by
the Environmental Protection Agency.
The Act provides for the Administrator to set a reasonable appli-
cant's fee sufficient to cover the cost of processing applications. It
further provides that constructing a deepwater development without
prior certification by the Administration shall result in a minimum
fine of $50,000 per day for each day that construction continues after
notice of the violation.
Also under the Act, a State Governor's right to concur in certifi-
cation may be waived after two years unless such State has adopted
and had approved by the Administrator, an environmental permit
plan applicable to areas affected by deepwater port facilities.
The Act requires such a plan to include the following provisions:
"(A) public or private development will be permitted only if in the
process of development, and in the completed project, the development
will not result in violation of emission or effluent limitations, standards,
or other requirements of the Clean Air Act and this Act;
(B) industrial, residential, or commercial development will not
occur where it would exceed the capacity of existing systems for
power and water supply, waste water collection and treatment, solid
waste disposal and resource recovery, or transportation, unless such
systems are planned for expansion and have adequate financing to
support operation and expansion as necessary to meet the demands
of the new development without violation of the emission or effluent
limitations, standards, or other requirements of the Clean Air Act or
this Act at any place where such expansion of such systems or any
activities relating thereto may occur;
(C) industrial or commercial development shall occur only where
there exist adequate housing opportunities, on a nondiscriminatory
basis and within a reasonable distance of any such development, for
all persons who are or may be employed in the operation of such
development;
(D) development shall be prohibited on water saturated lands such
as marshlands, swamps, bogs, estuaries, salt marshes, and other
wetlands;
(E) there shall be no further commercial, residential, or industrial
development of the flood plains of the navigable waterways in the
State;
(F) those responsible for making less permeable or impermeable
any portion of the landscape will be required to hold or store runoff
from such lands so that it does not reach natural waterways during
storm conditions or times of snowmelt;
(G) to the extent possible, upland watersheds will be maintained
for maximum natural water retention;
(H) utilities, in locating utility lanes, shall make maximum possible
multiple use of utility rights of way; and
(I) any major residential development will include open space areas
sufficient to provide recreational opportunities for all residents of the
proposed developments."
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The final provision of S. 1316 asserts that nothing in the Act shall
be interpreted as allowing the construction or operation of deepwater
developments against a State or local government's will.
The Act also amends Sec. 509(b) of the Federal Water Pollution
Control Act in order to make it consistent with the other changes in
the Act.
S. 1316 has been referred to the Committee on Public Works.
S. 1558, Mr. Roth.-To amend the Federal Water Pollution Control
Act in order to require the filing of certain environmental impact
reports and the approval of affected coastal States with respect to
the construction of offshore docking facilities for vessels transporting
petroleum or petroleum products.
This measure amends Title IV of the Federal Water Pollution
Control Act by adding a new section 406 entitled "Reports and State
Approval of Certain Offshore Docking Facilities."
Paragraph A provides that no Federal department or agency shall
construct, license or approve the construction or operation of any
offshore docking facility within the territorial seas, the .contiguous
zone or the ocean unless three specific conditions have been met:
First, such department or agency must file with the Administrator
of EPA a complete report on the environmental and land use impacts
of such facility. Secondly, the Administrator must forward copies of all
reports with respect to such a facility (including reports prepared by
the Administrator pursuant to this section) to the Governor and the
legislature of each coastal State which may be significantly affected
by pollution or land use problems as a result of the construction or
operation of such facility. Following receipt of such reports, each
State has 120 days to approve or disapprove the construction of such
facility.
Paragraph B of the proposed Sec. 406 stipulates that the Governors
of the affected States may submit, with any notice of approval,
recommendations concerning the location, construction, operation or
use of the proposed facility. The Federal department or agency author-
izing the facility is directed to heed those recommendations to the
greatest extent possible under Federal law.
The Bill provides no definition of the terms used therein.
S. 1518 was referred to the Committee on Public Works.
S. 1751: Mr. Jackson, Mr. Baker, Mr. Cotton, Mr. Fannin, Mr.
Johnston, and Mr. Randolph (by request).-A bill to amend the Outer
Continental Shelf Lands Act and to authorize the Secretary of Interior
to regulate the construction and operation of deepwater port facilities.
As proposed by the Administration, the "Deepwater Port Facilities
Act of 1973" amends the Outer Continental Shelf Lands Act to
authorize the Secretary of the Interior to prescribe rules and regula-
tions necessary to coordinate activities for the exploration and ex-
ploitation of the oil and gas and other mineral resources of the OCS
with the construction and operation of deepwater port facilities.
Title I of S. 1751 sets forth Congressional findings that onshore port
facilities are increasingly congested and inadequate for large vessels;
that the national interest in terms of resources, environniental pro-
tection, transportation safety, world trade and security is best served
by the use of larger vessels and development of deepwater ports to
accommodate them; that construction of such facilities would be a
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reasonable use of the high seas in accordance with international law;
and that such actions should be subject to Federal license and regula-
tion and closely coordinated with the regulation of exploration and
exploitation of offshore resources.
Under the measure a deepwater port is a "facility constructed off
the coast of the United States, and beyond three nautical miles from
such coast, for the principal purpose of providing for the transshipment
of commodities between vessels and the United States. It includes all
associated equipment and structures beyond three nautical miles
from such coast, such as storage facilities, pumping stations, and
connections to pipelines, but does not include pipelines."
The Secretary of the Interior is authorized to grant to any citizen
of the United States; any State or political subdivision of a State, or
any private, public or municipal corporation meeting criteria of finan-
cial responsibility, a license to construct and operate a deepwater port
facility. Such authorization is conditioned on a finding by the Secre-
tary that the facility will not unreasonably interfere with navigation
or otherwise violate international obligations of the United States; and
that the facility will be constructed and operated in a manner to
minimize or prevent any adverse impact on the marine and coastal
environment.
Additional provisions require the Secretary to consult with the
Governor of any State off whose coast the facility will be constructed
and to consult with "all interested or affected Federal agencies".
Application filed under S. 1751 would constitute an application for
all Federal authorizations required for construction of the port. The
Secretary of the Interior must be notified by the appropriate Federal
agencies that the application meets the requirements of the laws they
administer prior to granting a permit. In granting a license pursuant
to the Act, the Secretary is required to file a single detailed environ-
mental impact statement pursuant to Section 102(2)(c) of the Na-
tional Environmental Policy Act which will serve as the environmental
impact statement for all Federal authorizations required to construct
the port.
The Deepwater Port Facilities Act of 1973 sets forth an administra-
tive process for consideration of deepwater port project proposals
including public notification, hearing and judicial review procedures.
Additional provision of S. 1751 authorize the Secretary to include
in a deepwater port license such conditions as he deems necessary to
comply with international legal obligations; prevent or minimize pol-
lution in surrounding waters; assure that operation of the facility will
not "substantially lessen competition or tend to create a monopoly,"
and to assure that upon expiration or revocation of a license, the
deepwater port licensee will render the facility harmless to navigation
and the environment.
S. 1751 establishes civil and criminal penalties for violations of the
Act and extends the Constitution and the laws and treaties of the
United States over deepwater port facilities insofar as they are con-
sistent with international law. Additional provisions set forth judicial
procedures for enforcing compliance with laws governing the facility.
Pursuant to the measure deepwater ports would be regulated in the
same manner as though they were located within the navigable waters
of the United States. Foreign flag vessels utilizing the facility are
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97
deemed to consent to the jurisdiction of the United States for the pur-
pose of the Act which also extends the civil and criminal laws of the
nearest coastal State over the facility.
Final provisions of the bill authorize the Secretary to promulgate
rules and regulations governing the health and welfare of persons using
deepwater port facilities and further, to consult with appropriate
Federal agencies and seek appropriate international measures regard-
ing navigation in the vicinity of the port.
S. 1751 was jointly referred to the Senate Committees on Interior
and Insular Affairs, Commerce and Public Works. A special joint sub-
committee composed of five members from each Committee was estab-
lished to consider the bill.
S. 2232, Mr. Hollings and Mr. Magnuson.-A bill to promote
commerce and protect the environment by establishing procedures
for the siting, construction, and operation of deepwater port facilities
off the coast of the United States.
Entitled the "Offshore Marine Environmental Protection Act of
1973" S. 2232 amends the Ports and Waterways Safety Act of 1972.
The bill sets forth Congressional findings that deepwater port facilities
are proposed for construction off the coast of the United States and
that a uniform Federal regulatory mechanism is required to oversee
their development and use. S. 2232 also finds a need to insure that
each coastal state has an approved coastal zone management program
to assure that the marine and coastal environment will be effectively
protected and managed.
A deepwater port facility as defined by the bill is "any manmade
structure, either fixed or floating, located in the navigable waters of
the United States more than five hundred feet to the seaward of the
mean low-water mark or located beyond the territorial sea of the
United States and which is intended for use as a port or terminal for
transportation of goods and commodities from vessels to shoreside."
The bill authorizes the Secretary of the Department in which the
Coast Guard is operating to issue a license to construct and operate
a deepwater port facility if he determines that the applicant is finan-
cially responsible, that the facility will not unreasonably interfere
with navigation or other uses of the high seas; threaten the integrity
of the marine environment or infringe upon any international legal
obligations of the United States. S. 2232 also established conditions
for transfer, modification, revocation or suspension of a license.
A license pursuant to the Act may not be granted until the Secre-
tary of the Department of Commerce through the National Oceanic
and Atmospheric Administration has certified that the adjacent State
or States has an approved coastal zone management program in
accordance with the Coastal Zone Management Act of 1972. In
addition, The Administrator of the Environmental Protection Agency
and the Secretary of the Department of Interior must certify that the
deepwater port project proposal is consistent with the policies and
programs they administer. The Secretary of Commerce through
NOAA is authorized to establish and apply criteria pertaining to the
quality and use of the marine environment and its resources for
reviewing and evaluating decpwater port project proposals, and to
recommend such license conditions as he deems necessary to protect
the marine and coastal environment.
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The bill requires that detailed plans for a deepwater port be sub-
mitted to the Secretary, the Secretary of the Department of Com-
merce, the Administrator of the Environmental Protection Agency
and the Secretary of the Interior at least two years prior to the pro-
posed commencement of construction. Submission and approval
of the application as specified by the Act constitutes an application
and approval for all Federal authorizations which may be required
for construction and operation of the facility.
S. 2232 requires a public hearing to be held at a location in the
vicinity of a proposed deepwater port site as part of the application
review process. Upon issuance of a license, the Secretary, Secretary
of Commerce, Administrator of the Environmental Protection Agency
and Secretary of the Interior must jointly prepare and circulate for
review, a detailed environmental impact statement pursuant to
Sec. 102(2)(C) of the National Environmental Policy Act.
Further provisions of S. 2232 establish standards of record-keeping
and maintenance, inspection, public access to information, and crimi-
nal and civil judicial proceedings together with penalties for violation
of the Act. The bill also establishes an Advisory Council for Deepwater
Port Policy composed of members representing shipping, labor, petro-
leum industry and scientific interests and both Federal and State
government officials. According to the Act, the Council would be
supported by staff provided by various Federal agencies with interest
and expertise relating to deepwater ports.
Finally the bill establishes the procedures for civil action to obtain
injunctive relief, and authorizes appropriations for administration of
the Act. S. 2232 also mandates an interagency task force study to
prepare plans for development and protection of the offshore marine
environment of the United States to be submitted to Congress two
years after enactment of the Act.
S. 2232 was referred to the Committee on Commerce.
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APPENDIX F
AREAS REQUIRING FURTHER INVESTIGATION
Executive Departments identified specific further actions, including
additional studies or investigations, concerning U.S. deepwater port
development which, in their view, the Federal Government should
undertake, as follows:
THE COUNCIL ON ENVIRONMENTAL QUALITY
First, of course, we recommend passage of the Administration bill
S. 1751. The Department of the Interior should develop a comprehen-
sive and effective licensing program that will require applicants to
conduct detailed studies of the proposed port sites and alternatives
and will assure the selection of port locations and the operation of
ports in a manner that will minimize or avoid significant adverse
environmental impacts.
THE DEPARTMENT OF STATE
Although development of deepwater port facilities is a reasonable
use of the high seas within international law, the State Department
feels it is important to continue to seek multilateral agreement on an
exclusive coastal State right to authorize and regulate such facilities
within its Seabed Economic Area. In this connection, we have intro-
duced the proposals discussed in question 2. Because legislation is
required to ensure adequate federal licensing and regulatory authority
over deepwater port facilities, the Department of State supports the
enactment of S. 1751, the Deepwater Port Facilities Act of 1973. The
Department of State believes, however, that more detailed considera-
tion should be given to questions such as shipping and navigational
safety requirements, storage and transshipment, environmental re-
quirements, customs laws and civil and criminal jurisdiction as related
to the operation of deepwater facilities. Such consideration could
provide input for further decisions on regulatory and licensing policies.
THE U.S. ARMY CORPS OF ENGINEERS
An important area of further study remains if deepwater ports are
to be constructed in a timely fashion, and if their environmental and
economic characteristics are to be compatible with the public interest.
This is the area of the specific design, equipment, and operating criteria
to apply to the delivery system of which the offshore terminal would
be a part. If the system is to operate in the public interest, there must
be scientifically determined and publicly accepted determinations of
anticipated environmental an operating performance. Whether the
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terminal and/or other parts of the system are to be privately or pub-
licly built and operated, the Federal government must develop the
capability to initiate or to evaluate relevant design, equipment and
operating standards. Additionally, environmental studies will be re-
quired for any specific site location(s) for which a permit application
is received.
THE DEPARTMENT OF INTERIOR
(a) The Department of the Interior will complete a final environ-
mental impact statement.
(b) Development of detailed institutional and organizational re-
lationships between the Interior Department and the other various
public agencies which will have management, technical advisory, or
review roles.
(c) Development of licensing system including specific deepwater
port regulations to fully implement the legislative authority.
(d) In cooperation with sister departments, continue necessary and
related environmental and economic studies including siting criteria,
pollution dispersal and related containment measures, and regional
and local economic impacts.
NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION
(U.S. DEPARTMENT OF COMMERCE)
Information on coastal zone and port related subjects is still being
produced by the Sea Grant Program, but at a slower rate than an-
ticipated. Over 1,200 reports have been issued under the Program's
sponsorship during its SIX and one-half years of existence; well over
a third relate to coastal zone topics.
In addition, much of the information needed for deepwater port
siting decisions is being collected under direct NOAA programs.
These include biological studies of the National Marine Fisheries
Service; tides and currents measurements and nautical mapping
activities of the National Ocean Survey; meteorological studies of
the National Weather Service; studies of ocean and atmospheric
processes by the Environmental Research Laboratories; and other
NOAA programs. We believe that these programs represent a sig-
nificant capability and nucleus of effort for providing information
required to assess the environmental impacts of deepwater ports,
and we would anticipate that much of the necessary information will
stem from these ongoing efforts. In addition, however, it would be
necessary to extend and strengthen the present programs to assess
fully the environmental issues associated with location of specific
deepwater ports as these are considered in the future.
DEPARTMENT OF TRANSPORTATION
The most urgent action for the Federal Government is to enact
legislation giving the responsibility of licensing deepwater port
construction and operation to a Federal Agency.
Additional studies are needed in the environmental area on opera-
tional and technological aspects to reduce potential oil spills and to
improve existing methods in containment and recovery of oil spills.
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In the economic area additional investigations are needed to deter-
mine the overall impact to the national economy of alternative loca-
tions and the transportation and distribution system requirements of
deepwater port development. Also on-shore environmental and
secondary economic impacts of deepwater port development need
further study.
U.S. COAST GUARD (U.S. DEPARTMENT OF TRANSPORTATION)
Based on general knowledge of the numerous studies and reports
made on the subject, the Coast Guard feels that an adequate federal
statute dealing with the development and operation of deepwater port
facilities is required. The requirements established by this federal
legislation, in all probability, will lead to the identification of topics
which must be studied by a number of federal, state and local agen-
cies. The Coast Guard, because of its responsibilities in maritime law
enforcement, port safety, merchant vessel safety, aids to navigation
and marine environmental protection as well as search and rescue, will
be vitally interested and involved in any federal actions planned in
connection with deepwater port facilities. Details of this projected
involvement are discussed in response to Question 8, below.
Question 8. What role would you view for your department, agency
or office in the accomplishment of such further actions? (Refer to
previous responses whenever applicable.)
Response 8. Throughout all the responses to the questions above,
the Coast Guard has identified program responsibility in maritime
law enforcement, port safety, merchant vessel safety, aids to naviga-
tion, marine environmental protection and search and rescue. Assum-
ing that any federal statute would include provisions which would
make applicable the existing federal laws of the United States to the
deepwater port facility, the Coast Guard program responsibilities
listed above and including, in certain cases, the Bridge Administration
program, would reflect considerable Coast Guard involvement.
Although any request for the establishment of a deepwater port
facility will undoubtedly include the rationale for site selection and
the complete plans for site development and operation, for purposes of
clarity, the deepwater port facility concept can be reviewed in three
functional stages: site selection, site development, and facility
operation.
Site selection
The evaluation of deepwater port facility sites should include con-
sideration of the safety, environmental and security elements of U.S.
national interests. Safety and environmental factors must be balanced
with other considerations in site selection. Navigational patterns,
feasibility of establishing aids to navigation, vessel maneuvering
characteristics, necessity for maritime pilots, vessel traffic control
patterns, etc., also are some of the necessary ingredients to a proper
site evaluation.
With respect to safety and environmental factors, the Coast Guard
should be consulted in the review of site selection so as to ensure
minimal navigational interference in approaches, sea lanes and pos-
sible structures in the vicinity, fishing, and other uses, as well as
hazards to the environment.
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