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PLEASE NOTE: The following transcript is a portion of the official hearing record of the Committee on Transportation and Infrastructure. Additional material pertinent to this transcript may be found on the web site of the Committee at [http://www.house.gov/transportation]. Complete hearing records are available for review at the Committee offices and also may be purchased at the U.S. Government Printing Office.







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OCTOBER 30, 1997

Printed for the use of the

Committee on Transportation and Infrastructure


BUD SHUSTER, Pennsylvania, Chairman

THOMAS E. PETRI, Wisconsin
HOWARD COBLE, North Carolina
JOHN J. DUNCAN, Jr., Tennessee
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JAY KIM, California
STEPHEN HORN, California
BOB FRANKS, New Jersey
JOHN L. MICA, Florida
SUE W. KELLY, New York
RAY LaHOOD, Illinois
FRANK RIGGS, California
CHARLES F. BASS, New Hampshire
JACK METCALF, Washington
ROY BLUNT, Missouri
JOSEPH R. PITTS, Pennsylvania
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JOHN R. THUNE, South Dakota
CHARLES W. ''CHIP'' PICKERING, Jr., Mississippi
JON D. FOX, Pennsylvania
J.C. WATTS, Jr., Oklahoma

NICK J. RAHALL II, West Virginia
ROBERT A. BORSKI, Pennsylvania
ROBERT E. WISE, Jr., West Virginia
BOB CLEMENT, Tennessee
ELEANOR HOLMES NORTON, District of Columbia
PAT DANNER, Missouri
JAMES E. CLYBURN, South Carolina
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BOB FILNER, California
FRANK MASCARA, Pennsylvania
GENE TAYLOR, Mississippi
BILL PASCRELL, Jr., New Jersey
JAY W. JOHNSON, Wisconsin
JAMES P. McGOVERN, Massachusetts
TIM HOLDEN, Pennsylvania

Subcommittee on Coast Guard and Maritime Transportation
WAYNE T. GILCHREST, Maryland, Chairman
FRANK A. LoBIONDO, New Jersey, Vice-Chairman
HOWARD COBLE, North Carolina
BUD SHUSTER, Pennsylvania
(ex officio)
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BOB CLEMENT, Tennessee
JAY W. JOHNSON, Wisconsin
ROBERT A. BORSKI, Pennsylvania
(ex officio)


    Chambliss, Carr, Vice President, Marine Safety Systems, Inc., accompanied by Penn Johnson, President and Owner, Penn Engineering, Inc. and Member, Board of Directors, Marine Safety Systems

    North, Robert C., Rear Admiral, Assistant Commandant for Marine Safety and Environmental Protection, U.S. Coast Guard

    Pence, George D., representing Mo Husain, President, MH Systems Inc


    Chambliss, Carr

    North, Robert C
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    Pence, George D


Chambliss, Carr, Vice President, Marine Safety Systems, Inc., accompanied by Penn Johnson, President and Owner, Penn Engineering, Inc., and Member, Board of Directors, Marine Safety Systems:

Central Ballast Tanker Design, report and diagram

Responses to questions

North, Robert C., Rear Admiral, Assistant Commandant for Marine Safety and Environmental Protection, U.S. Coast Guard:

Response concerning the heated oily water separation tank system

Responses to questions

Pence, George D., representing Mo Husain, President of MH Systems:

MH Systems reply to ''American Underpressure System-Unresolved technical issues and funding history''

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Responses to questions


    Bjorkman, B. Anders, statement

    DeLay, Hon. Tom, a Representative in Congress from Texas

Gray, William O., President, Gray Maritime Company:


In Pursuit of the Green Tanker'', article, Lloyd's Shipping Index: Green Tanker Guide

International Association of Independent Tanker Owners, INTERTANKO, U.S. Port & Terminal Safety Study, a discussion paper, September 1996

Mitsubishi Heavy Industries, Ltd., Skaarup Oil Corporation, abstract, Tanker Design for Pollution Prevention, April 1993

Society of Naval Architects and Marine Engineers, A Framework for Assessing the Environmental Performance of Tankers in Accidental Groundings and Collisions, abstract

    Packard, Hon. Ron, and Hon. Jerry Lewis, Representatives in Congress from California, joint statement
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    Shuster, Hon. Bud, of Pennsylania, talking points




House of Representatives,

Subcommittee on Coast Guard and Maritime Transportation,

Committee on Transportation and Infrastructure,

Washington, DC.

    The subcommittee met, pursuant to notice, at 10:13 a.m., in Room 2253, Rayburn House Office Building, Hon. Wayne T. Gilchrest (chairman of the subcommittee) presiding.

    Mr. GILCHREST [presiding.] The hearing will come to order. I want to thank everybody for coming this morning. I apologize for being late. I guess that's the nature of the political institution in the democratic process in the great country of the United States and we all are running behind.

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    But we're here and I appreciate the attendance of everyone and we look forward to the testimony to try to understand the nature of different systems enhancing double holes and whether or not the Coast Guard should pursue testing them. And I understand we're going to have some other proposals here—not necessarily proposals, but other ideas. It's always been my frame of mind that seek and you never know what you're going to find. So, if we understand the different opinions about the process here this morning, I think we as sometimes informed and sometimes uninformed members of Congress will better able to make a judgement on this particular issue.

    And, Admiral North, we appreciate your coming this morning. I went to a board of visitors earlier this morning on the Senate side with the Naval Academy to discuss some of those issues and when I came up to the door where the meeting was, I said, ''Is this where the Coast Guard meeting is?'', and they laughed and they said, ''This is where the real seamen are.'' Now, I defended the Coast Guard, though, I can tell you.


    Without a doubt—and they didn't report that when I defended the Coast Guard.

    At any rate, Admiral North, thank you very much for being here this morning and we look forward to your testimony.

    And Mr. Clement is going to be here in just a few minutes, he said.

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    Mr. Johnson, did you want to say anything?

    Mr. JOHNSON OF WISCONSIN. No, just nice to have a Coast Guard Commander here, just—I'm an Army person myself so representing one of the other Services and we haven't had a lot of spills, thank goodness, to deal with on the Great Lakes but, obviously, it's a concern everywhere and I'm happy to hear about this. Thank you.

    Mr. GILCHREST. Thank you, Mr. Johnson. Admiral North.


    Admiral NORTH. Good morning, Mr. Chairman and members of the subcommittee. I'm Admiral Bob North, the Coast Guard's Assistant Commandant for Marine Safety and Environmental Protection. Thank you for the invitation to appear before the subcommittee today to testify about the Coast Guard's pollution prevention program. I have submitted a written statement for the record and would like to present an oral statement at this time.

    The Coast Guard's pollution prevention program is based on a regulatory regime for vessel and facility design and equipment, operations and operational practices, as well as waterways management, navigation safety and the human element. Within the last decade, the Coast Guard has instituted a variety of initiatives to fulfill its environmental protection mission. These initiative include both mandatory and voluntary actions in the areas that I mentioned previously.
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    Our broadest effort, especially from a regulatory standpoint, has been the Oil Pollution Act of 1990. This is the largest marine safety task the Coast Guard has ever received as a regulatory project and resulted in sweeping changes in the way oil and chemical transportation is conducted in the United States and perhaps throughout the world. OPA 90 required over 90 individual implementing actions and more than 40 rules. Most of these provisions focused on prevention, including new construction, manning, and licensing requirements. The Coast Guard has completed all of the non-rulemaking initiatives and 88 percent of the rulemakings. The remaining 12 percent of rulemakings have been identified in the Department of Transportation Regulatory Plan and Regulatory Agenda.

    I would like to point out that these rulemakings have been developed in a climate of extremely high public interest and diversity of opinion. OPA 90 was truly an imposing task. It required changes in virtually every aspect of oil transportation, including new construction and operations, response planning, licensing, manning and spill liability.

    The most prominent pollution prevention standard, perhaps, in OPA 90 are the requirements for new double hulls and the phase-out of existing single hull tank vessels. The Coast Guard evaluated various alternative concepts to the double hull design but, as stated in our 1992 Report to Congress, the double hull was unmatched in preventing the majority of oil spills due to groundings, when compared to the other alternatives. None of the other alternatives could match the performance of the double hull regarding the key measure of probability of zero oil outflow, the key measure, in our view.

    Another major prevention aspect of OPA 90, in addition to double hull requirements, was the requirement in section 4115 for existing single hull tank vessels to comply with structural and operational requirements that the Secretary may determine will provide a substantial protection to the environment as economically and technologically feasible. These are requirements for existing single hull vessels. The development of these complex regulations has been both time-consuming and contentious but, I'm pleased to report, that the final rules have been issued.
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    To implement these requirements, the Coast Guard used a three-prong rulemaking approach. Part one required onboard emergency lightering equipment and foreign flag vessels to report vessel information in their advance notice of arrival. That was completed in 1994 in August. Part two focused on implementing operational measures to reduce the risk of a grounding, collision, or fire/explosion on single hull tank vessels. We accomplished that with the publication of final rules on July 30, 1996 and following again on September 23, 1997. The third and final part was a final rule published on January 10, 1997 which analyzed the potential impact of implementing structural measures to reduce accidental oil outflow from existing single hull tank vessels.

    OPA 90 stipulated that any measures required for existing vessels in this interim period must be both economically and technologically feasible. We examined alternatives, submitted in response to a structural measures supplemental notice of proposed rulemaking. We gathered estimates for costs associated with the retrofitting of vessels, used spill data from 1991 through 1994 to estimate oil that might be spilled from these vessels through the phase-out year, which is 2015, and estimated benefits to be gained from these structural changes. We found that, although technologically feasible, structural measures were not economically feasible through our study, and, therefore, no measures were imposed for those single hull vessels. We chose to impose operational measures only.

    The Coast Guard has completed work on a host of other regulations addressing prevention issues required by OPA 90. In order to assess the full impact of the double hull regulations, the Coast Guard requested the advice of the National Research Council, NRC. They convened a committee under the auspices of the Marine Board and their report, entitled ''Double Hull Tanker Legislation: An Assessment of the Oil Pollution Act of 1990,'' is scheduled for release to the public on November 6, 1997. The Coast Guard intends to review the committee's recommendations for Coast Guard actions. This review should be completed by early next year.
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    Some data already in hand indicated OPA 90 is having a positive impact. The average number of oil spills over 10,000 gallons in the United States has dropped by nearly 50 percent from pre-1991 levels. In addition, the average annual amount of oil spilled in the United States from 1986 to 1990, before OPA 90 was enacted, was 6.2 million gallons. Post-OPA 90 figures for 1991 through 1995 show this average value has dropped to 1.4 million. The value of tank ship oil spills in the United States peaked in 1989, the Exxon Valdez, and has remained below 200,000 gallons since 1991.

    Not only has prevention improved, but so has response to oil spills. The development of commercial capabilities to respond to spills as required by OPA 90, introduction of Coast Guard and International Maritime Organization-required response plans, strategic placement of federally-owned response equipment, a mandate for spill exercises and designation of qualified individuals have dramatically improved the timeliness of spill response as well as the magnitude and quality of response efforts. The Coast Guard recently held the first exercise for our new Spill of National Significance response organization in Philadelphia and in Washington. A Spill of National Significance is defined as a large spill of Exxon Valdez magnitude or impact that exceeds regional response capability and requires a true national response effort. The Spill of National Significance exercise was well attended by industry and government and was considered a success in raising a number of national-level issues involving response and funding for response, particularly when we have high levels of oil being spilled, and will then better help us prepare for that type of event, were it to occur again.

    While many OPA 90 regulations cited here focus on engineering fixes, some of them, such as the licensing regulations, focus on the human element or the people involved in the process. It's widely accepted that about 80 percent of all vessel casualties and the resulting pollution are related to the human element. The Coast Guard believes that the most important initiatives for enhancing safety and pollution prevention for the next few years and beyond will be cooperative industry and government partnerships that address the human element and the Coast Guard has led the way in both the national and the international fronts to emphasize the human element. The Coast Guard has initiated a Prevention Through People, PTP, program to address the human element. It addresses everyone in the process; government agencies, mariner organizations, port authorities, classification societies, and the industry.
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    It's not a Coast Guard effort alone. Industry and government are forming partnerships with the Coast Guard to pursue this initiative. We have formal partnerships with four industry associations; the American Waterways Operators, the Passenger Vessel Association, the United States Chamber of Shipping and the American Petroleum Institute, and the International Council of Cruise Lines. And these partnerships have already yielded positive non-regulatory pollution prevention action, including an analysis of causes of spills associated with tank barge cargo transfers and the initiation of risk management programs. Our partnerships are not limited to formal agreements with industry. We're working with other government agencies, such as the Maritime Administration, to develop a national reporting system to enable us to capture information on near-casualties and near-miss incidents.

    Another area of critical importance to pollution prevention which is high on the Coast Guard's agenda is the improvement of our country's ports and waterways infrastructure to improve navigation safety which we see as another, I'll call it best, investment for the future—preventing pollution from vessel groundings and collisions through navigation safety activities. Our port infrastructure is more than wharves and piers and warehouses. It includes the waterways and the coastal zone to the berth. An increase in volume into the 21st century that we will experience in United States ports and waterways requires that our infrastructure be able to meet that challenge in preventing pollution incidents and marine casualties.

    One of the Coast Guard's key efforts in this area is being carried out under the Ports and Waterways Safety System project—vessel traffic services for ports that don't have those today. The Coast Guard is working closely with local, state, and other federal government agencies, waterway users, and public interest groups, all stakeholders to conduct port assessments in the United States to focus on risk factors such as traffic density and patterns, available activities to offset those risks, such as traditional aids to navigation or traffic separation schemes, and accident history rates. Then, we'll draw some comparisons and conclusions concerning relative safety, including pollution threats and individual ports, and those efforts will ultimately allow us to then focus on solutions to offset the risks that we find. First, looking to traditional aids to navigation and traffic control measures, and then, in those areas where we still have, after those activities, unacceptable vessel traffic management and safety problems, vessel traffic services.
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    In summary, the Coast Guard has worked hard to improve maritime safety and protect the environment. There is still much work to be done. While we will continue to seek engineering improvements, like OPA 90 regulations, and continue to look for alternatives to double hulls, we see large gains to be made, as I said, in the future through the human element and safety of navigation. This offers the greatest potential, we feel, for real-world improvements in pollution prevention. We'll also continue to explore non-regulatory solutions to problems, such as the partnerships that I mentioned earlier. Thank you, sir, for the opportunity to discuss this important topic with you today. I'd be pleased to answer any questions that the committee—subcommittee may have.

    Mr. GILCHREST. Thank you, Admiral North. I just have a couple of questions and I'm assuming from what you just said that the important issue in dealing with oil spills, in particular, is that we do two significant things; one is the transition into double hulls and two is to stay on top of the human factor.

    Admiral NORTH. Right. And I would add this navigation safety issue, as well.

    Mr. GILCHREST. And pardon?

    Admiral NORTH. Navigation safety as a third issue.

    Mr. GILCHREST. Okay, navigation and safety.

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    Admiral NORTH. Navigation safety.

    Mr. GILCHREST. Now, does that mean that the Coast Guard, to some extent, has closed the door on other innovative or new technological engineering designs to add to the double hulls?

    Admiral NORTH. No, sir; it does not. We will continue to explore or examine other alternatives to double hulls, as we're required to do.

    Mr. GILCHREST. How do you go through the process in determining what other engineering design is important or legitimate or feasible enough to pursue beyond just the concept of it?

    Admiral NORTH. If you looked at our—let me just start by saying that as kind of a baseline the United States has a no discharge policy, as stated in the section 311 of the Federal Work Pollution Control Act. So, the premise is we don't want to see discharges occur so our approach to pollution prevention is just that, to minimize—to prevent discharges, as opposed to minimizing the amount of discharge. So, starting with double hulls, as required by OPA 90, if you look at, historically, the types of accidents that have occurred in the United States involving tank ships, double hulls have the most probability of not having an oil outflow, the probability of zero outflow, which is consistent with the concept of a no discharge policy.

    Mr. GILCHREST. So, double hulls have the probably of no outflow?
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    Admiral NORTH. Have the highest——

    Mr. GILCHREST. ——under most—has the highest——

    Admiral NORTH. Have the highest probability

    Mr. GILCHREST. ——under most circumstances.

    Admiral NORTH. ——of zero outflow.

    Mr. GILCHREST. Based on all spills or all accidents?

    Admiral NORTH. Based on the typical accident that we have had in the United States.

    Mr. GILCHREST. Would double hull have protected the Exxon Valdez situation?

    Admiral NORTH. An analysis of the Exxon Valdez by our staff showed that there would be some penetration of the inner hull but probably less penetration in terms of the number of tanks affected than we had with a single hull case.

    Mr. GILCHREST. What does that mean, there would have been less oil spilled?
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    Admiral NORTH. We would supposition but I would say there would have been less oil spilled with the double hull because there would have been less penetration, less tanks penetrated——

    Mr. GILCHREST. Is there——

    Admiral NORTH. ——all things being equal.

    Mr. GILCHREST. And I'll just ask one more question. We have a vote and then I'd like, if it's alright, Admiral North, if you could stay here in case there are any other questions from any of the other members.

    I would assume that when you have double hulls, in many instances they are going to protect the inner cargo——

    Admiral NORTH. Correct.

    Mr. GILCHREST. ——but on catastrophic incidents that do occur around the world, such as the Exxon Valdez or other incidents where there's been hundreds of thousands or millions of gallons of oil spilled, the double hulls don't do the job, especially if they're ripped apart at the bottom.

    Admiral NORTH. Well——

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    Mr. GILCHREST. So, is there anything that can be added—two things, I guess. Is there anything that can be added to the double hull to significantly reduce the outflow under certain catastrophic situations? Or, is there anything that can be done in an engineering to single hull vessels to reduce those catastrophic incidents?

    Admiral NORTH. I would start by saying that, with an extreme incident or catastrophic incident, there's probably no design, including double hull, that would prevent an oil spill.

    Mr. GILCHREST. I'm not sure—I mean, preventing the oil spill but reducing the outflow.

    Admiral NORTH. Potentially, we would have to look at other types of solutions to add to a double hull but double hull, by its nature, is a passive process. And some of the alternatives we have examined have also been passive in the sense that one doesn't have to do anything, there are no moving parts, the double hull is there as part of the structure. Other alternatives, there are mechanical systems or machinery of some sort that would have to operate for the system to function properly. Other systems——

    Mr. GILCHREST. Could a vessel use other—I mean, as long as a vessel has double hull and meets the standards of OPA 90, but want to pursue something a little bit further, are they free to do that?

    Admiral NORTH. Yes, and we have not—we have no studies that show that additions to double hulls of some other device would improve performance. We have not looked at that.
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    Mr. GILCHREST. Thank you. I'll yield to Mr. Clement.

    Mr. CLEMENT. Thank you, Mr. chairman. I ask that my statement be accepted into the record as is read.

    Mr. GILCHREST. Without objection, so ordered.

    Mr. CLEMENT. Admiral North, the agreement between the Maritime Administration and MH Systems provided that a test would be conducted on two or three tanks on a tanker in order to obtain more information on the safety and operational requirement for full-scale use on a tanker. Why should MARAD allow this test to using two or three tanks to be performed?

    Admiral NORTH. First of all, this is—what we're talking about is a concept test what, essentially, is a paper system at this point and the concept is to see how the system would work in an oil atmosphere and resolve certain safety concerns about pulling a vacuum on a tank that's full of crude oil. At this point, given the information that's been presented to MARAD and through MARAD to the Coast Guard or the information presented to DARPA or the agencies involved in this concept test, bearing in mind that in the concept test, this project that's being done by DARPA Maritech that the basic premise is that this is being looked at as an alternative to double hulls. You go back to our initial criteria of zero outflow and with the information we have today, although the testing has not been done, one could strongly question the effectiveness of that system from a zero outflow perspective.

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    And, when you look at the use of public funds to continue the process through what's called phase III, which is the actual testing, the technical review team, which consists of Coast Guard and MARAD representatives, recommended to MARAD that given—I'll say, an evaluation of data today, again, there's a very strong concern that the system will not meet what we view to be an important factor which is a high probability of zero outflow. So, we don't—we recommended, then, not continuing to put public money into the process to go through the test which would cost something in the neighborhood of $4.5 million.

    Mr. CLEMENT. Admiral North, did the Coast Guard do the same type of full-scale testing of heated oily water separator tank systems being built into the new buoy tenders that you're requiring of MH Systems for their underpressure system? And if so, would you please submit to the subcommittee the report on the full-scale test of these heated oily water tank systems?

    Admiral NORTH. I don't know that we did a full-scale test or not but if we did I will submit the report.
    [The information received follows:]

    [Insert here.]

    Mr. CLEMENT. Alright. Admiral North, do you believe that the emergency transfer system developed by MSSI could decrease the amount of oil spilled in the grounding or collision of a single hull tanker? If the emergency transfer system proves to significantly reduce the amount of oil spilled from a single hull tanker, would the Coast Guard require this type of system to be installed on all single hull tankers entering the United States?
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    Admiral NORTH. The MSSI system is another alternative to a double hull. And to retrofit that on a single hull vessel, you would have to install a double bottom and central ballast tanks. It would be, essentially, rebuilding the vessel. So, it's fundamentally not applicable to an existing single hull installation.

    Mr. CLEMENT. Well, no, I was referring to the emergency, rather than the single ballast.

    Admiral NORTH. Could you repeat your question?

    Mr. CLEMENT. Okay. Do you believe that the emergency transfer system, developed by MSSI, could decrease the amount of oil spill of a grounding or collision of a single hull tanker?

    Admiral NORTH. Again, that system isn't applicable to a single hull tanker. By its nature, it's a double bottom vessel. Now, it has single sides and a ballast tank in the center. So, it's not a system that you would take and install on an existing ship but when you build a ship of that design whether it would reduce the oil outflow would depend upon whether you had bottom damage, whether you had side damage, or a combination.

    Mr. CLEMENT. Admiral North, do you believe it is possible that the MH Systems proposal or the MSSI proposal may decrease the amount of oil spilled from a single hull tanker in a collision or grounding?

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    Admiral NORTH. Well, again, an analysis of—by their technical review team of the MH Systems project would say it would not be as good as a double hull. MSSI system we have not tested. We don't have any test data on it. We know we're going to get some additional information from them but again, whether or not it would reduce the amount of outflow would depend on whether it was side or bottom damage. It's somewhat equivalent to a double hull——

    Mr. GILCHREST. I'm sorry, we're going to have to run, Admiral. We're going to miss the vote. But if you could stay right there, we'll be back as soon as we can. So, we're going to take a recess right now. Thank you.


    Mr. GILCHREST. The hearing will come to order. Mr. Johnson, any questions for our witness?

    Mr. JOHNSON OF WISCONSIN. Thank you, Mr. chairman. I wonder, Admiral North, if you think that the emergency transfer system developed by MSSI would decrease, perhaps, the amount of oil spilled in the grounding or collision of a single hull tanker?

    Admiral NORTH. I'm not familiar with the emergency transfer system. The system we evaluated was the central ballast tank system.

    Mr. JOHNSON OF WISCONSIN. Let's go back to the testing questions. I think, and I haven't—the chairman and I were talking, and I think there's a letter from the Secretary of Transportation about regarding the testing or not testing of these alternatives. What's the view of the Department of Transportation?
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    Admiral NORTH. This is in regard to the testing of MH System? There are some concerns about testing that system in that we need additional details about the system which have not come forth. And then, there are concerns over data involving structural integrity of the tank to which the system applies, fire safety in that tank, since the system is designed to work on a cargo tank that normally has an inert gas blanket over it. The system has to function within this inert gas generator system and exactly how the inert gas blanket is maintained, from a fire safety perspective. This is information we need to know and have concerns over the interaction, again, of crude oil and crude oil vapor with the process that would provide the vacuum on the tank. So, there are technical safety and operational concerns over this system and a lack of what we would call an operating system to date. Again, we're dealing with, fundamentally, theory and testing is needed to validate that, although basic physics—heads of water versus heads of oil, and vacuum on top of the tank will give you some answers. Exactly what happens relative to other systems on the vessel is a question.

    Mr. JOHNSON OF WISCONSIN. So, the view is more testing is needed.

    Admiral NORTH. In order for us to consider this system beyond where it is today, that's correct. But we're concerned about if the system is being designed to be used as an alternative to double hull, there's enough data to say, reasonably well, that the probability of zero oil outflow is less with this system than it is with a double hull. So, we would not recommend it at this point as an alternative and feel that we have enough information that's significant enough in that area that we would—we're recommending against a continual use of public funding or our technical review team has recommended against the continuing use of public funding beyond this point for further testing. But we will be happy, if private funding were to conduct the tests, to look at the results and consider the results.
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    Mr. JOHNSON OF WISCONSIN. So, you're suggesting if there should be further testing of these proposals, that it should be private funding-tested and then the tests submitted to the Coast Guard?

    Admiral NORTH. I'm suggesting that we don't think that it warrants further public money. If private testing was done, we would certainly consider the results.

    Mr. JOHNSON OF WISCONSIN. And your overall concern is that they continue to move forward toward double hull?

    Admiral NORTH. Our overall concern is that we look at alternatives that have equal or better probability of zero oil outflow so that we're consistent with our approach that—our philosophy and our policy of no discharge.

    Mr. JOHNSON OF WISCONSIN. That's all the questions I have, Mr. chairman.

    Mr. GILCHREST. Thank you, Mr. Johnson. Admiral, if—I'm going to have a few more questions so if we want to go around again, feel free to do so. It is your understanding that the MH System is being tested for the purpose of an alternative to double hulls as opposed to an additional safety measure with double hulls? And, I'm assuming that the reason that you don't want to spend any more public money on the MH System is because one, you don't see it as an alternative to double hulls, and two, I'm going to ask this question, it's going to sound like a statement but it's a question, the MH System with double hulls provides—enhances the danger of the double hulls? I guess what I'm saying is the MH System with double hulls wouldn't work very well.
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    Admiral NORTH. We have not done any testing or have any data on the MH System applied to a double hull in some damage scenario.

    Mr. GILCHREST. So, you're saying——

    Admiral NORTH. The MH System——

    Mr. GILCHREST. What is that——

    Admiral NORTH. The MH System, as we understand it, as being applied to a single hull.

    Mr. GILCHREST. And the main reason of your objection to spending public funds is that the MH System on single hulls is not as adequate as simple double hulls.

    Admiral NORTH. We see it, the very high likelihood that it's less effective or not as effective as double hulls.

    Mr. GILCHREST. Do you see—do you think the MH System is better than—would the MH System—let's just say we didn't have double hulls. Let's say for some reason we didn't have that law and it couldn't be done. Would the MH System work better, work well with single hulls?

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    Admiral NORTH. The MH System, again, presents certain safety problems that need to be evaluated. You have an inert gas blanket on cargo tanks that the MH System is going to, I'll say, violate because it's going to draw a vacuum on that tank. Normally, you create—you keep a positive pressure on the surface of the tank of inert gas so that you don't have the possibility of fire explosion. By evacuating the surface of that tank or the area above the liquid in the tank, you are pulling out that blanket and without replacing that blanket, you are also lowering the pressure in that tank so that light ends of the crude oil will then vaporize and you'll have more oil vapor in that atmosphere under a vacuum than you would were you not under a vacuum. Now, under the MH proposal, the theory is that that will continue. Inert gas will continue to be generated and pumped into that tank. Normally, when a tank is inerted, you don't have a continuous flow of gas to the tank all the time. If the tank is inerted and, as gas, the pressure bleeds off, gas is added. This becomes a much more dynamic process of continually inerting the tank and pulling out the gas that you're using to try to make the tank safe.

    Mr. GILCHREST. Is this some of the additional information, the additional data, that you need?

    Admiral NORTH. Yes. Exactly how the system is put together and some more theory on how that would work is a question.

    Mr. GILCHREST. So, you're saying, Admiral North, that even if you used—we have a period of time before everyone has to have double hulls. So, there's a lot of single hull vessels out there.

    Admiral NORTH. Right.
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    Mr. GILCHREST. Would you say it would be worth pursuing this testing to put in the interim on the single hull vessels before everybody has to comply with the double hulls?

    Admiral NORTH. The MH System, then, would have to meet the single hull interim criteria of technological and economic feasibility.

    Mr. GILCHREST. So, you don't know if it'll do either one of those.

    Admiral NORTH. We would need more information from a technological standpoint as a structural measure, in a sense.

    Mr. GILCHREST. Does the MH—are the MH people aware of the additional data that you require in order to make a decision to go on with the testing?

    Admiral NORTH. We have communicated with them a lot and we've had numerous meetings and I think the data that we have looked—asked for is on the record. And it's been consistent over the time that we've dealt with the system.

    Mr. GILCHREST. You're saying you consistently don't get the data?

    Admiral NORTH. No, what we've asked for has been—what we're looking for has been consistent with what we asked for.
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    Mr. GILCHREST. But you haven't received the——

    Admiral NORTH. We have not received it all. Correct.

    Mr. GILCHREST. If you received it all, would it be then your recommendation to proceed with the test to see if it's technologically feasible and economically feasible to put on the single hull vessels in the interim?

    Admiral NORTH. Let me separate tests for a second. The test that—the process currently in progress with DARPA and Maritech, the testing progress or the work that's going on to date, to get through two of a three phase process for testing is being done by DARPA on the premise that it's a double hull replacement, not a structural measure. So, DARPA has gone on record to say they would not do this, were it being offered as a single hull structural measure type of approach. They're only doing this as a double hull alternative. And that's the concept test.

     We have $200,000 in funding that has to be matched by $500,000 from some other source by MH Systems to do a full-scale test and prior to a full-scale test, involving an overview, a whole vessel, and integrating the MH Systems approach with the inert gas system to see how all this works, there would have to be a concept test to show that it's feasible—that it's, I'll say on the first blush, technologically feasible. It still might not be technologically feasible after a full-sized test—full-scale test and then one would have to look again at the economic feasibility that's specified in rulemaking—or in our direction for that rulemaking.

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    So, there would be a great deal of work to be done to determine technologically—technological feasibility and, if that were determined, whether it would not be done with a government-funded concept test because that wasn't the premise under which that money was allocated by DARPA. It would have to be done in some other way.

    Mr. GILCHREST. You're saying that—I just, this will be my last question. DARPA is pursuing this as an alternative technology to double hulls?

    Admiral NORTH. The premise is that DARPA and Maritech concept test that's being funded by DARPA at the moment, or had been funded to date by DARPA, and would be matching funding by MH Systems so far in the form of their patent value was based on the premise that it was a double hull replacement.

    Mr. GILCHREST. So, when you say a double hull replacement, you're talking about a technology that could be used on a single hull vessel?

    Admiral NORTH. As an alternative to double hull.

    Mr. GILCHREST. As an alternative to double hulls.

    Admiral NORTH. But not——

    Mr. GILCHREST. And the Coast Guard has a strong position against moving away from the double hull regulation concept?

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    Admiral NORTH. The information we have to date would tell us that the likelihood of this being as effective as a double hull, in terms of zero oil outflow——

    Mr. GILCHREST. What if we didn't take zero outflow? What if we just said, I'm going to move—if we didn't use zero outflow as a measure. Zero outflow is pretty minimal.

    Admiral NORTH. Yes.

    Mr. GILCHREST. If we didn't use zero outflow, if we looked for a technology that would be useful under an occasional catastrophic event, where you're never going to have zero outflow? That concept isn't considered by the Coast Guard?

    Admiral NORTH. Well, our basis of pollution prevention has been no discharge since 1970, at least.

    Mr. GILCHREST. Right. And I think that's a good concept. I just wonder if it's——

    Admiral NORTH. The double hull, in 80—if you look at history in terms of the kinds of things that have happened to tank ships in United States waters, double hull protects against about 80 percent of those. Alternative measures that we've looked at to date protect against about 6 percent of those casualties.

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    Mr. GILCHREST. If we compare, though, looking at those statistics, if we compared the amount of oil that was actually spilled in those incidents compared to those very few incidents where they were catastrophes, where millions of gallons were spilled, is that a good ratio?

    Admiral NORTH. The incidents that double hull has protected against, or could have protected against over the last few years, and I'll go back to 1989 and 1990 around the Exxon Valdez time, there were four spills that we would characterize as major spills by our definition of over 100,000 gallons, four spills totalling about a million gallons that double hulls would have prevented. So, we're not talking about small spills only with double hulls. Double hulls protect against major spills, as well.

    Mr. GILCHREST. I see. Thank you, Admiral North. Mr. Clement?

    Mr. CLEMENT. Admiral North, I understand that the Coast Guard conducted a simulation of a collision between two double hull tankers on the Delaware Bay. Is it true that approximately 13 millions gallons would have been spilled and did the simulation indicate that we should do more to prevent oil discharges from double hull tankers under this type of a collision?

    Admiral NORTH. Of course, the simulation was designed to maximize the discharge. But I would say under the simulation, the same concept. I don't know that there's any configuration of hull that would have been more successful, given that particular scenario. It was the extreme case and then magnified somewhat to give us oil to deal with.

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    Mr. CLEMENT. Thank you.

    Mr. GILCHREST. Mr. Johnson? Admiral North, we appreciate your testimony this morning. This is, without a doubt, an important issue, complicated issue, and we had the hearing this morning to begin, for us as members which authorize these things, to understand the nature of the issue and to try to understand your judgment. So, we appreciate you coming this morning. Thank you very much.

    Admiral NORTH. You're welcome. Thank you, sir.

    Mr. GILCHREST. Our two other witnesses this morning will be Carl Chambliss, Vice President, Marine Safety Systems Incorporated, and George Pense, representing MH Systems, Incorporated. If you have anybody you want to bring up to the table with you, consultants, advisors, friends, relatives? You can bring them.

    Mr. CHAMBLISS. Yes, sir; I'm bringing Penn Johnson——

    Mr. GILCHREST. Mr. Johnson.

    Mr. CHAMBLISS. ——on our board of directors——

    Mr. GILCHREST. That's fine.

    Mr. CHAMBLISS. ——and a practicing Marine Engineer some 40 years or longer.
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    Mr. GILCHREST. Thank you. We'll start with Mr. Chambliss, as soon as you get settled and drink—I might have a little water, myself.

    Gentlemen, thank you for traveling to meet with us this morning. We look forward to your testimony.

    When you're ready, Mr. Chambliss.

    Mr. Johnson, welcome. Mr. Pence, welcome. Usually, Mr. Pence was on the other side, a few years ago, telling us how to run the international steamship operation.

    Mr. Chambliss?


    Mr. CHAMBLISS. Thank you, sir, Mr. Chairman.

    This is a first opportunity for us to sit before your committee. We're glad to be here.

    I am vice president of Marine Safety Systems. I'm also a board member of Marine Safety Systems. Mr. Penn Johnson is on our board, and is an independent marine engineer of some long standing in south Texas and president of Penn Ebgineering, Inc., of Orange, Texas.
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    Marine Safety Systems is a Texas corporation and we have developed a concept to provide a superior alternative design for oil tankers. This design is in response to OPA 90 and its provisions for consideration of alternative design. We are confident that our design is a design for economy and safety as well as for protection of the marine environment. My purpose in addressing this subcommittee is to point out that all consideration of equivalent or alternative designs to a double hull are presently, in our opinion, dead in the water.

    The United States participated fully in work that brought the best minds in the world together at IMO—International Maritime Organization—to discuss the benefits of the double hull and equivalent designs to protect the marine environment. This, not withstanding, the United States flagrepresentative, the Coast Guard, has refused to accept the outcome of those considerations, namely the criterion that was established for assessing various alternative designs.

    Under current law, only double hull tankers will be allowed to enter United States waters. Many naval architects around the world, and particularly in the United States, have simply stopped work; the technology has stopped with respect to designs that indeed may be superior to that which we've known of for 5 years or longer.

    The incentive to invest in, to consider, or to even discuss designs within the industry, with owners, with yards, with investors, has disappeared. There is no incentive to do that now. The same is true, for the most part, in Europe, with very few exceptions. They all look to the United States and some feel that what they receive is negativity.

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    Without the incentive, technology in this field is frozen. It's a dead issue. The clock has stopped.

    We would call on Congress and the Coast Guard to open the process for consideration of alternatives. When that is done, advances in technology will naturally follow. We believe that this is the intent of Congress and the intent of OPA 90. And, we believe that the environment will benefit from this.

    The events of 1989 forced the issue of oil tanker design as a double hull concept mandated by Congress. This was supported by public pressure and by some who were sure that the end result would be a bonanza for American shipyards. There has been no bonanza; only minimal tanker construction, largely supported by the American taxpayer.

    In addition, the United States Coast Guard has been given the heavy burden of defending decisions in oil tanker design that were not of its making, that is, the double hull.

    There is potential for oil tanker construction over the next 20 years that may reach a total of $400 billion. The American ship building industry will not share in this with current technology; that is the technology of 1990. We prefer that an American alternative design have its place with American ship builders. The leadership for this can begin here.

    In closing, Mr. Chairman, I'd like to submit documents for the record: a statement by Mr. Booth Strange, founder and chairman of Marine Safety Systems—he would rather be sitting right here talking to you all day long on the subject of our design and alternatives and proper consideration of alternatives; a paper written by Joel D. Sipes, Rear Admiral, Coast Guard, retired, a board member of Marine Safety Systems, on the differences between the IMO approach to alternatives and that taken, or not taken, within the United States; a brief on Marine Safety Systems central ballast tanker—that is our alternative design intended for a new building, intended for conversion of existing tankers, and intended as a double bottom tanker, for the obvious benefit in soft grounding incidents that are prevalent in United States waters. In that sense, it joins with the double hull proponents in that it can allow a margin for zero out-flow in soft grounding incidents. We also have a Marine Safety Systems brief on the ship-borne emergency damage location and oil containment system. This is a self-help system intended as a retrofit for existing tankers. The purpose of the transfer system is to move oil from a damaged tank to a safe tank—move it away from a hole in the ship. This is not a threat to large yards; it would be a boon to area yards; to yards that are not in the business of trying to build for the military and who are not able to build very large crude carriers, VLCCS.
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    I thank you, Mr. Chairman, for allowing us to be here. We'll be glad to answer any questions we can answer.

    Mr. GILCHREST. Thank you very much, Mr. Chambliss.

    Mr. Pence?

    Mr. PENCE. Thank you, Mr. Chairman, members of the committee.

    I am George Pence, and I'm here representing Mo Husain, the president of MH Systems. Mr. Husain is recovering from recent bypass surgery and regrets that he is unable to attend.

    At the outset, let me state that the intent of the American underpressure system concept validation tests, as clearly stated in the cooperative agreement, is to modify the subject vessel to allow the use of two or three tanks. The goal of the test is to validate the concept and allow the Coast Guard to have sufficient operation information to set criteria and requirements for an operational tanker—a first-of-class—which would obviously be subjected to further testing and monitoring in an operational setting.

    Without criteria and requirements set by the Coast Guard, a vessel can not be fully modified. Given the Coast Guard's history of objection to any new proposal without criteria and requirements set by the Coast Guard, funding can not be obtained in the private sector.
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    There never has been any desire by MH Systems to have the Government pay for the development of a fully-modified vessel, despite the misleading statements of the Coast Guard.

    The American underpressure system is a scientifically-sound, United States-patented, dynamic system which draws a slight vacuum in each cargo tank by computer-controlled mechanisms. Concept testing has been broadly supported. The system has applicability on large and small vessels, as an interim measure for single hulls, as an additional measure for double hulls, and, although we are not pursuing it at present, as an alternative to double hulls.

    In the experience of MH Systems, the Coast Guard's attitude toward affording a fair and reasonable analysis of the system has varied from ambivalence in the best case, to outright antagonism. While there has been publicly-stated openness by a number of high-ranking officials, it is clear that there is a distinct biased against our system and a general bias against any technology other than the scheduled phase-out of single hulls.

    For example, in July 1993, the Coast Guard formally submitted plans, at the insistence of Congress, from the industry for testing and analysis of the American underpressure system. Privately, however, they were unenthusiastic and hoped no one would respond, as was reported on the front page of Lloyd's list on July 26, 1993. This is hardly the attitude one would expect from an agency carrying out responsibilities given to them by Congress.

    In 1995, funding became available in the Maritech program, under the Department of Defense Advance Research Project Agency program administered by MARAD in the Department of Transportation. The Department of Transportation continued, in a less than helpful and honest manner. Phase I required 3 months to complete and 8 months to discuss. The second phase required 4 months to complete and, again, 8 more months for review and discussion. The successful conclusion of the first two phases was followed by a recommendation from the Coast Guard to MARAD, and from MARAD to DARPA, that funding for phase III, the actual testing, not be continued. This, despite a meeting held on May 22, 1997, and a series of subsequent correspondences for which MERAD's stated purpose was to provide a mechanism and schedule for resolving any remaining issues in an expeditious and fair and reasonable manner. I have attached a detailed chronology as part of my submissions for the records.
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    The only conclusion which can be drawn from these documents is that the Department of Transportation deliberately violated their own promises of fairness in writing. They clearly inferred that there were no outstanding issues, thus precluding a response from MH Systems. They then based their recommendation on unresolved issues and concerns. Their actions were callous and deliberate. In short, the Coast Guard recommended the cut-off in funding for phase III largely because the results and tests and analysis scheduled to be done during phase III, were not available prior to phase III—a real catch 22. The safety——

    Mr. GILCHREST. Can you say that again? I didn't catch it.

    Mr. PENCE. The Coast Guard based its recommendation largely on the fact that the results of the tests and analysis scheduled to be done in phase III were not already available: the safety issues, the fire issues, the operation with the inert gas system, those kinds of things that Admiral North discussed. They wanted—those are scheduled to be analyzed during the concept test. And because they said we don't have the answers to those, we shouldn't go forward with the funding.

    A very detailed set of responses has also been available both to the Secretary's letter of September 5 as well as the Coast Guard document dated October 10.

    In particular, let me address two issues: first of all, prototype—full-size vessel. As I said, we don't intend to ask for any funding for that and never have intended to. The Coast Guard has never required a full-scale prototype test of any pending technology. Way back, even before I was on the committee, we constructed liquid natural gas tankers—an inherently much scarier technology than what we're talking about here. If MH Systems fails—if a system fails—we go back to what the existing single hull vessel would be. They never required a prototype test for the LNGs. They haven't required a prototype test for any alternative technology. This is the first time they have ever asked for it. And we're willing to do it as part of a first-of-class operational schedule.
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    In addition, the effectiveness—or the potential effectiveness—of the system has been called into question. MH Systems has repeatedly shown in a number of international meetings that the proposed system is, on average, about as effective as the double hull, without adverse comment. This is using a technique known as probablistics outflow analysis. It was accepted by a Coast Guard contractor, although he noted that it was not validated—that is, it was not separately validated—in determining that the system was the most cost effective alternative available.

    The Coast Guard refuses to accept those analysis based on what it refers to as quote ''the latest MARAD, Coast Guard detailed review.'' This review has not been published, has not been peer-reviewed, and has never been made available for public or private scrutiny. I suspect it is not a comparison of the probablistics outflow of any system.

    Even if, as the Coast Guard would have you believe, the potential effectiveness of the system is only 40 percent, as opposed to the 60 or 70 percent that we feel it is, isn't that reason enough to continue now for an interim measure?

    We believe that the American underpressure system offers an opportunity to significantly decrease the risk of potentially disastrous oil spills from existing single tankers.

    I was surprised by Admiral North's discussion of the probability of zero oil outflow. In an example of a grounding, which is about 60 percent of the incidents which cause oil spills, the Coast Guard admits that this being the most favorable situation for our system, our system is nearly 100 percent effective. In that instance, the most probable of accidents, 20 percent of the time a double hull will fail. So clearly they're not talking about a probability of zero outflow.
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    The Coast Guard has a responsibility to complete the concept validation and develop criteria and requirements for a first-of-class vessel. We hope that after considering the materials that are submitted at this hearing, that you would agree to support a provision supporting the completion of our testing in a conference on the current Coast Guard Authorization Act.

    I thank you, Mr. Chairman.

    Mr. GILCHREST. Thank you, Mr. Pence.

    Mr. Young?

    Mr. YOUNG. Mr. Chairman, thank you, and I apologize for being late, I'm also involved in another committee markup right now. I want to thank you for having this hearing.

    My interest—I want to submit for the record my written statement—my interest in this is to try to address the issue of oil spills and the best way to solve the problem. And for the record, I have never been one who supported the double bottom concept. I'm one of the few people who spoke out against it as a maritime individual. I happen to know that the possibility of danger of a double hull is much greater than even in a single hull. And this has been argued in the Coast Guard and for many years they agreed with me. And then they finally bought the concept of the double hull.

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    But I don't think we ought to be locked into a position of accepting only one method to avoid spills. We ought to be able to be in a position to accept any future technology, or present technology, and to investigate, and to study, and to try to develop a better system than the double hull. I am one that believes that we have to continue this concept of protection because most spills do occur either by man-error, or by the striking of the vessel's hull upon an object or the beach-head of itself. And, if we can figure out a better way to keep the oil contained within the vessel, then that's what we should be addressing.

    And so, my goal here today—and I do compliment you, because there is a lot of controversy, a lot of discussion on the methods by which we are addressing this—but for some reason we got locked into the double hull concept. And I think that's very inappropriate, because what we're really trying to do here is protect the environment, especially our waterways, from potential oil spills.

    If I may continue, Mr. Chairman, the potential of oil spill becomes greater every day. Not from domestic production, but importation of oil from foreign countries. We are now at 57 percent of oil products are coming into our shores by some vessels, I believe, are totally inadequate. And, it will probably go to 60 percent if we continue this appetite which we have for fossil fuels.

    So I think we must continue to look for new ideas, new concepts; study those, develop them, and not be locked into a single position for the safety of our waters.

    And, I thank you, Mr. Chairman. If I do leave you, don't feel offended, it's not because of you. Thank you, Mr. Chairman.
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    Mr. GILCHREST. That's all right. I'll probably be joining you in a few minutes, Mr. Young.

    Mr. Clement?

    Mr. CLEMENT. I have no statement at this time. I'm listening to the testimony. Was Mr. Johnson going to testify too, or just the two of them?

    Okay. Well, I'll go on and ask some questions, because I did have some. We'll start with Mr. Chambliss, first. Do you believe that the Congress should change the law to allow for alternatives to double hull tankers for designs that will be more effective at protecting the marine environment?

    Mr. CHAMBLISS. Yes, sir. Well, OPA 90 does give us the option of looking for alternatives. What changes would be required is to restate that as the intent of Congress for the leadership of the Coast Guard, for leadership of the private community. That would certainly be helpful. We have prepared a document which we think would be useful relative to Congress acting on the central ballast tanker alternative concept.

    We're not seeking an act of Congress saying that our design must be accepted. But, just as Congress originally acted in favor of the double hull concept, we think that it would open the door if a statement were made that alternatives such as the central ballast tanker concept are valid.

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    We have gone through various studies by ABS which were favorable. We had a study earlier on by the National Institute of Science and Technology relative to transfer systems, as opposed to the specific design of the central ballast tanker. We have already contracted for a risk analysis of the entire central ballast tanker design. And, our staff, including Mr. Johnson, have done the highly techincal work with probablistics with respect to the IMO guidelines, not accepted by the Coast Guard but, accepted by IMO.

    So, it's not as though we're walking in off the street and saying, ''We've got an idea and we'd like for you to legislate on it.'' The problem is, without a statement as to the intent of Congress—I've heard it from IMO, to the Middle East, to Scandinavia, to London, to all over the United States—''why do you want to talk about alternatives; we can't consider them. It has become a fact that the only alternative to a double hull—is a double hull.'' So, there is presently no room for alternatives. Technology has indeed been frozen.

    So, yes, sir; action by Congress would be most appreciated.

    Mr. CLEMENT. Mr. Pence, we miss you around here; but good to have you back.

    Mr. PENCE. I miss you all, too, sometimes.


    Mr. CLEMENT. Sometimes. I agree with that, too.

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    Mr. Pence, I understand that the Coast Guard believes that a prototype test is necessary. Has MH Systems requested funding for such a test, and where would funding for such a test come from, and why don't you just conduct the prototype test now?

    Mr. PENCE. The Coast Guard has clearly stated that they feel such a test is necessary, as I said. I'm not sure why. They've never required it in any other instance, but, so be it.

    MH Systems has never request Federal funding for that—Government funding for that. They would intend to fund the first-of-class, the fully modified vessel, with private funding. That funding is not available, and will not be available until the Coast Guard can develop criteria and requirements that such a vessel would have to meet.

    The vessel, presumably, would be a vessel which would be modified and then used in an operational concept while being fully evaluated and monitored, I'm sure, 18 ways from Christmas. But, in order to get a true prototype test, it would have to be used in an operational context—that is, it would have to be put into the trade and utilized. The funding we would get once there is criteria and requirements available from the Coast Guard, in other words, once the Coast Guard said, ''This is what your vessel has got to be able to do,'' then we can get funding from outside sources.

    Mr. CLEMENT. Thank you.

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    Mr. GILCHREST. Thank you, Mr. Clement.

    Mr. Johnson?

    Mr. JOHNSON OF WISCONSIN. Thanks, Mr. Chairman.

    So, I guess I want to get back to the what you were just talking about in terms of the privately funded testing that was brought up. You heard us ask Admiral North about that, that suggested not using Federal dollars for this right now, suggesting private funding will be an alternative. But you're suggesting that that won't be available, it won't be—people won't invest until they have technology or standards to meet?

    Mr. PENCE. That's absolutely correct. I agree with Mr. Chambliss. The single most stifling occurrence of the development of innovative tank vessels was the passage of OPA 90 and the Coast Guard's objection to considering any alternatives. And, its been sort of a fairly obvious objection to considering any other alternatives besides those stated in fact in the law.

    No one in their right mind will invest money simply to test a concept in hopes that, you know, if it tests so well that they'll be able to change the Coast Guard's mind. Without a beforehand statement of what performance requirements will be in order that a vessel can be built, as I say as a first-of-class, and operated to see whether or not in fact everything works as its advertised to do, gives you more information than is available from the concept testing—which will address the safety issues, those sorts of things—you can't get private funding. That's why there are—I mean world wide—there is relatively nobody doing——
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    Mr. JOHNSON OF WISCONSIN. So the broad concept your asking here really is beyond just asking the Coast Guard to use this money for testing, but the broad concept you're asking for is to maybe make some changes in terms of the 1990 law that was passed that would be more open in suggesting alternatives?

    Mr. PENCE. I believe that that might be useful. However——

    Mr. JOHNSON OF WISCONSIN. That sounded like what Mr. Chambliss suggested.

    Mr. PENCE. ——that would depend as well on the willingness of the Coast Guard to look at alternatives. I mean the law gave ample——

    Mr. JOHNSON OF WISCONSIN. The Coast Guard and the Congress.

    Mr. PENCE. Yes, well, the law gave ample authority to the Coast Guard to look at interim measures for single hulls. They chose not to accept any. They've been sued on that. It does not give them the authority to unilaterally approve an alternative to the double hull. It would have to come back to Congress. And I think it would be useful, yes, for Congress to make a statement that they will look at alternatives which are equivalent, and perhaps give some guidelines to the Coast Guard as to how to determine equivalency if the Coast Guard is not willing to accept the guidelines that IMO has developed.

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    Mr. JOHNSON OF WISCONSIN. Mr. Chambliss, your reaction to that same issue that we were talking about?

    Mr. CHAMBLISS. I think we agree on this, and


    Mr. CHAMBLISS. Unless there's—unless the intent of Congress is clarified since the enactment of OPA 90, with their Coast Guard Report to Congress of 1992 which is still the primary reference by the Coast Guard, I believe—unless instructions are given, private industry is stymied; technology is stymied; there will be no development. And as I say, this runs from the small yards in this area to the International Maritime Organization, who all say, ''We really want to talk about this, because the only double hull alternative at present is another double hull.'' That's not the way——

    Mr. JOHNSON OF WISCONSIN. Mr. Johnson, you wanted to say something it looked like?

    Mr. PENN JOHNSON. It has been our experience that——

    Mr. GILCHREST. Could you move the mic over, please.

    Mr. PENN JOHNSON. I'm sorry.

    It has been our experience that the Coast Guard has completely rejected the probablistics approach as recommended by IMO. They, to our great surprise in a meeting last summer, informed us, ''Oh, well, we don't adhere, or we don't agree, with the IMO coefficients in the probability study.'' And, this needless to say, caught us by great surprise since we were told initially, here is the criteria, here is the procedure; you meet this, and we'll discuss it. Well, we performed the probablistics study, which is a very involved mathematical procedure. We had the University of Oklahoma Energy Center working with us on this thing. And, we thought everything was going great until the last 5 minutes of the meeting, when we were told, ''Oh, you don't seem to know that we don't agree with the coefficients offered by IMO.'' When this happened, you know, the balloon popped. Our trip was for naught. Our study was for naught. We firmly believe that the Coast Guard, first, didn't think that we could perform the probabilistic analysis, which we did, and second, never in their wildest imagination, did they think that the Central Ballast System would come out with better numbers (LESS OVERALL OUTFLOW) than their beloved DOUBLE HULL. It was at this point that they huddled, and came out with their (just conceived) revisions to the coefficients of ''1.00'', ''0'', and ''0'' for the three areas of consideration in the Probabilistic Study. Incidentally, the USCG told us that they couldn't remember what their coefficients were, but that they would Fax them to us the next day. It took about 2 weeks for them to tell us that the coe fficients had to be ''1.00'', ''0'', and ''0''.
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    We don't feel like this is fair to the American public, fair to American industry, fair to the Congress. And we really were quite disappointed when they waited until the last 5 minutes and then said, ''Oh, by the way, we don't subscribe to this.''

    Mr. JOHNSON OF WISCONSIN. Your conclusion right now is, as things stand, that there is a continual disincentive, Mr. Chambliss, to invest. It's all disappeared now, because—and it would take a change, not just in this, but a change in the original law that would change the sense of Congress? Is that what you're suggesting?

    Mr. CHAMBLISS. Yes, sir. We'd be eager to point out: the double hull started out with legislation relative to the concept. That's all we want. We have, we think, substantial backup by independent sources to warrant that sort of consideration. Without that, the only answer I've experienced, almost around this world, with people who operate tankers or who build tankers is, why think about it—with very few exceptions.

    Mr. JOHNSON OF WISCONSIN. Although, I heard Admiral North's testimony saying we continue to look at alternatives for double hulls.

    Mr. CHAMBLISS. I'm not aware of that. In our experience we have found that the Coast Guard staff personnel responsible for evaluating alternative designs have based their decisions on probabilistic analyses so weighted as to preclude any alternative to the double hull design. This action has frozen technology to the detriment of American shipyards and exposes the marine environment to calamitous risks.

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    Mr. JOHNSON OF WISCONSIN. I mean, he testified—he said that this morning.

    Mr. PENCE. Sir, if you could review their research and development report to Congress in April, there is no research and development going on on any vessel design, with the exception of the American underpressure system which they later on that month recommended canceled—or several months later recommended canceled. The Coast Guard is undertaking no research.

    Mr. CHAMBLISS. I would add, that all of this is prefaced by the Coast Guard statement, ''and this is the intent of Congress.'' Presumably defined in the Coast Guard Report to Congress of 1992. We would like to know what is the intent of Congress, whether there is interest in alternatives. We haven't heard that it is from our contacts with the Coast Guard.

    Mr. JOHNSON OF WISCONSIN. That's all the questions that I have.

    Mr. GILCHREST. Thank you, Mr. Johnson.

    The intent of Congress is to get reelected.


    Just kidding. Strike that from the record.
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    I couldn't help but say that.

    No, it's to do the Nation's business. That's the intent of Congress.

    I'm interested in the coefficient situation at this meeting, the last 5 minutes. The Coast Guard disagreed with your coefficients. What does that mean? They disagreed with the mathematical conclusion? You put these mathematical formulas together and you came up with a number? What was—I don't understand that, Mr. Johnson.

    Mr. PENN JOHNSON. In the probablistics study, they have several different categories and the IMO jointly agreed, save the Coast Guard, that this group—or this situation—has a weighting—excuse me—a weighting coefficient of some number. This other—the second group or area that was to be investigated has a weighting of a number and the third group has a weighting of a number. These three groups pertain to ''Zero Outflow'', ''Mean Outflow'', and ''Extreme Outflow'', which were given coefficients of ''0.5'', ''0.4'', and ''0.1'', respectively, by International Maritime Organization (IMO) which the USCG is a member. And using these weightings for the making the computation, the Coast Guard now says that zero outfall should be 100 percent and everything else zero. In other words, if you spill one gallon of oil out of—because a tug boat bumped into you and poked a little-bitty hole in you—that is a much more important occurrence than if you have a grounding where you would have major outflow and the ability to transfer oil to mitigate or reduce the outflow. The reduction of outflow doesn't count at all. It's only—the only thing that counts is not ever letting that first drop of oil get to the water.
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    Mr. GILCHREST. Was there anybody—any other nation in IMO that agrees with the Coast Guard?

    Mr. PENN JOHNSON. On this——

    Mr. GILCHREST. On this issue of double hulls versus other technology? Is there any other nation?

    Mr. PENN JOHNSON. The other nations think okay, double hulls is a measure, but they do not say that double hulls is the only answer. They say that there is—there should be investigation of other methods. Because double hulls have Achilles heels also.

    Mr. GILCHREST. Does anybody else in the IMO use this same analysis of zero outflow, zero discharge?


    Mr. GILCHREST. If we continue to use zero discharge, than we are the only nation that uses that as a measurement? And, then, if you use zero discharge, does that always draw you to the same conclusion, that double hulls is the best way to go?

    Mr. PENN JOHNSON. Yes.

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    Mr. GILCHREST. So, that's interesting. So, is there, if you don't use—what does IMO use? If they don't use zero discharge, what do they use? What's their formula?

    Mr. PENCE. Basically, looking at it effectively—using the volume of oil spilled.

    Mr. GILCHREST. As opposed to the number of oil spills?

    Mr. PENCE. The Coast Guard, as I understand it, and I'm not sure because I've never seen their detailed analysis, but their goal is to have the most number of incidents that have no outfall. Whereas IMO's goal is to have the least total volume spilled. So, you may have more incidents where a little bit of oil is spilled, but you avoid bigger spills. They look at the overall effectiveness in terms of reduction of oil spilled.

    Mr. GILCHREST. So, those are on parallel courses that will never meet and there will never be an agreement on that, unless there is some——

    Mr. PENCE. Not necessarily, yea, they're two different criteria.

    Mr. GILCHREST. Yes, sir.

    Mr. CHAMBLISS. I would just mention that probablistics, as mysterious as it is to all of us—to most of us—is truly a good and proper method of predicting things such as tanker design. I used probablistics in predicting the sport of blackjack one summer in graduate school.
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    Mr. GILCHREST. Did it work?

    Mr. CHAMBLISS. I don't play blackjack.


    Mr. GILCHREST. Oh.

    Mr. CHAMBLISS. While in our own experience—and this is what we're hearing from people who are more knowledgeable about this than we are, that is our mathematician from the University of Oklahoma, Mr. Johnson and others—probablistics are fine but the probablistic analyses that have been developed by an organization in the United States and used by the Coast Guard to evaluate double hull alternatives, the study itself does not reach conclusions saying, ''Therefore, you will go out and play blackjack, or therefore, this design is the best.''

    Equally important to the probablistic study itself, which is very intimidating, is the interpretation of the probablistics analysis. The weighting that one gives to probablistic analysis. That's rather subjective in that you can see the study which is fact, it's mathematics. But then you say, what does it mean? And, if you put emphasis on zero outflow rather than give consideration of mean outflow or extreme outflow, then you are always assured of the answer you want, and you always get the design you want—the Double Hull. That's not fraud, it's just rather subjective and it fails to look at the overall picture.
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    As we understand it, IMO, and all nations connected with IMO, take exactly this same view. They recognize zero, mean, and extreme outflow. It's been suggested that zero outflow means we're worried about a thousand gallon spill, equally as much as we're worrying about a 13 million gallon spill, that small spills are just as important as a catastrophic spill.

    The Coast Guard worked with IMO, and worked with the nations of the world to develop guidelines, and they still hold at IMO. But the interpretation and weighting by the Coast Guard has been changed in favor of one element, zero outflow, and the double hull design.

    May I give one example?

    Mr. GILCHREST. Yes, sir.

    Mr. CHAMBLISS. The Diamond Grace, a Japanese-owned tanker, went aground in Tokyo bay earlier this year it lost reportedly, 4 million gallons—a huge amount was dumped into Tokyo bay. As embarrassing to them as with Delaware bay, or Chesapeake bay would be to us. After a few days, the Japanese authorities were able to say, by lucky coincidence, in the grounding, a bulkhead split between the cargo tank and a ballast tank, most of the oil flowed into ballast and so our loss has been reduced by 90 percent. By happy circumstance, the Japanese had a 90-percent reduction in loss of cargo.

    That's what the central ballast tanker is all about. We present outflow on purpose. We can't do that if the interpretation continues—persists—to think only of zero outflow, as opposed to zero, and mean, and extreme. That's where the real world lies, that's what IMO believes. The Coast Guard is all alone in this respect. But is awfully strong in persuading other people to do as the Coast Guard wants them to do. IMO and others don't like it, but they're going to do some things that they might not do using their good common sense in evaluating alternative tanker designs.
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    Mr. GILCHREST. Thank you very much, gentlemen. We have enjoyed your testimony this morning. It has been enlightening and informative.

    In defense of the Coast Guard, I think, I believe that they're doing what they think is the best thing for the coastal waters of the United states. In defense of the tradition of the United States, we are as successful as we are because we continue to pursue curiosity, the unknown, the innovative; we don't get tied like a rock to the past.

    So, we will—this committee will—starting today, pursue this issue aggressively. We'll probably talk to you further; we'll talk to the Coast Guard further. My sense is that innovative technology must relentlessly be pursued in order for us to continue to be at the cutting edge to provide the best for the public. And the only way to do that is to give incentives so that the brightest will have the initiative to continue to pursue those technologies.

    This has been intriguing. I know, George has talked to us a month, or 2 months ago, now, about this. And, we've met with the Coast Guard on a number of occasions. I feel that we can all—I hate to use this cliche—sit down and reason together.


    At this point, I am not angry with anybody, the IMO, or the Coast Guard, or anybody in this room. I'm happy that we've had this hearing, today. I think the best way to pursue this process is the way we've started it today, is just exchanging information, with a sense of tolerance for other's people's opinions. But I think, innovative technology will probably prevail, if we allow it to happen.
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    I don't have any conclusions to draw right at this particular moment, but, I've really enjoyed your testimony. I think all of us have been very enlightened this morning. And we want the United States to be at the cutting edge of technology, not behind the curve, that's for sure.

    Thank you very much.

    The meeting's adjourned.

    [Whereupon, at 11:56 a.m., the subcommittee was adjourned subject to the call of the Chair.]

    [Insert here.]