Segment 2 Of 2 Previous Hearing Segment(1)
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THE OIL POLLUTION ACT OF 1990
Wednesday, March 24, 1999
U.S. House of Representatives, Subcommittee on Coast Guard and Maritime Transportation, joint with the Subcommittee on Water Resources and
Environment, Committee on Transportation and Infrastructure, Washington, D.C.
The subcommittees met, pursuant to notice, at 10:12 a.m. in Room 2167, Rayburn House Office Building, Hon. Wayne T. Gilchrest [chairman of the Subcommittee on Coast Guard and Maritime Transportation] presiding.
Mr. GILCHREST. Joint hearing, Water Resources and Coast Guard and Maritime Administration. The hearing will come to order.
We will, if it's all right with everybody, limit opening remarks to myself, Mr. DeFazio, Mr. Boehlert, and Mr. Borski. Other members may submit their opening remarks for the record.
We would like, during the hearing today, for the witnesses, to the extent that it is possible, to limit your remarks to about five minutes, but we realize some people have come halfway around the world, so we'll be a little bit lenient on that score.
Today is the 10th anniversary of the EXXON VALDEZ oil spill. We look back now and see something that was described to me by Adm. Loy just a few minutes ago, that ''Never again,'' to use his words, ''should we ever be complacent.''
I think what we will hear today is that the 10 years since the EXXON VALDEZ happened, that certainly has not been the case.
On August 18, 1990—President Bush signed the first major oil spill liability and compensation law, the Oil Pollution Act of 1990. Congress realized the need for comprehensive oil spill legislation and had been working to develop similar legislation since 1975.
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Since the Oil Pollution Act was signed into law, congressional committees have held regular oversight hearings as the Coast Guard and other agencies have implemented the requirements of the Oil Pollution Act.
Today we will hear the reports of the success of the Oil Pollution Act from federal agencies, vessel operators, and environmental representatives involved in implementing the law. Although we cannot completely prevent oil spills, we have been working together for nearly 10 years to ensure that oil is transported in U.S. waters, and in international waters, in an environmentally safe manner.
This will not be the last hearing we hold on oil pollution prevention and response. As we have monitored the progress of the Oil Pollution Act for nearly 10 years, we will continually reassess our oil spill system in the future, to ensure that we are doing everything within our creative powers to protect the environment from oil spills.
Over 50 percent of the goods transported over the oceans by vessels is considered hazardous. Now, if you consider the fuel oil, ballast water, and a number of other things, when we transport things across the ocean, there is always hazardous material on board in one way or another, so it is up to us as responsible adults to do two things, and I think that the Oil Pollution Act has been remarkably successful over the last 10 years, and we have to continue to ensure that success, and we must continue to become better and better and better at it.
That is, to reassess, re-evaluate, redo the management systems, the response systems, the preventive systems from offshore facilities, vessels moving across the sea, on-shore facilities, that we find the way to limit, on a continuing basis, the amount of oil or hazardous material that is spilled in our oceans.
The world continues to get smaller, and we have to continue, I think now more than ever, to realize that to some extent, if we're going to be a little bit philosophical, we are marooned on Planet Earth with limited resources and a growing human population. We have noplace else to go.
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As responsible adults, if we're going to leave a legacy for our children, we have to use every bit of creative energies that our mind has to ensure that we use these resources wisely.
I look forward today, and I look forward to future hearings on this issue, to those that came to give testimony.
At this point, I will yield to the gentleman from Oregon, Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman. It was 10 years ago that, as a relatively new Member of Congress, I flew to Alaska with Chairman Miller of the then Interior Committee, to witness the attempts to mitigate the horrible damage caused by the EXXON VALDEZ. That was a wakeup call to America; and finally Congress, after dallying for some period of time, in fact, after that disaster, passed the Oil Pollution Act.
I think it is totally appropriate that, a decade later, we review the act and see whether it's oriented toward the continuing threats to our coastal environment. I think an honest assessment is, we're almost where we were with EXXON VALDEZ 10 years ago.
Congress needs to take further action to protect our coastal resources against new threats, and I'm hoping that we don't have to have an unmitigated disaster to wake up and take that action.
I appreciate the fact the chairman is moving proactively here today with a review, and I hope that out of this hearing, and the witnesses, come proposals to better safeguard our resources.
I'll key in on a few areas:
One is, there are new threats. Today, a large freighter can carry up to a million gallons of fuel oil for its own purposes. That is the size of a small tanker a quarter of a century ago. That is a potential for a tremendous spill.
I didn't, I've got to admit honestly, as a new member of this committee, realize until recently that we have done nothing in the areas of safeguarding the design of those ships, because a ship went aground in my district, the NEW CARISSA, just in the last couple of months.
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The first word I got was: ''Well, it's a newer ship, so don't worry. The tanks will be double tanks,'' et cetera, et cetera.
Well, now it turns out it's not that way at all. In fact, on many of these modern freighters, the fuel tanks are at the waterline and they're single hull.
What is the first place that gets pierced when a ship goes aground or goes onto the beach? Guess what? It's at the waterline. So we have a new threat from these freighters in the potential for a large spill.
The NEW CARISSA was not unique. We had, in Alaska, the Kuroshima, on November 26, 1997, 39,000 gallons; the MV Kure boat carrier, November 5, 1997, in California; and back in 1991, the Tenyo Maru in Washington State.
This is a new threat that I believe the committee must deal with, both in terms of liability and design.
We have intentional pollution of our waters, that has been documented through prosecution by the cruise ship industry. That's got to stop.
I don't think too many Americans taking these wonderful cruises and vacations would be thrilled to know that two of the largest operators have been prosecuted by the Justice Department for intentionally bypassing systems on their ships and dumping oil pollution in the ocean.
We were lucky enough that they violated some laws within our territorial waters and the Coast Guard was able to catch them and we were able to prosecute them, but polluting is common practice outside our territorial waters, and when we file complaints with the phony enforcement agencies in the flag-of-convenience countries, they just laugh at the United States.
Two of 111 complaints to flag-of-convenience countries have actually seen some action; 109 haven't. That's got to stop.
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There are also actions being taken in states like mine. California, West Coast states, and Canada are moving with additional measures, and we need to learn about those strategies and determine whether or not the strategies they're adopting would be suitable as national strategies.
I know we're going to hear from some in the industry who want to preempt the states and not allow them to have stricter standards. I've got to tell you, don't bother to raise that argument with me, and I would assume that that won't go over very well with my states' rights friends on the other side of the aisle.
We have a number of challenges before us today. We can't be complacent. I'm pleased the Chair has chosen to call these hearings and indicated, for his part, he does not feel complacent about these issues.
Mr. GILCHREST. Thank you, Mr. DeFazio. The chairman of the Water Resources and Environment Subcommittee, Mr. Boehlert.
Mr. BOEHLERT. Thank you, Mr. Chairman.
The waters in Prince William Sound run deep, and so do the emotions. Ten years ago, a ''worst case'' scenario unfolded, as 11 millon gallons of oil poured into the pristine waters off Alaska. Environmental, economic, and emotional scars remain, as do stories of healing and rejuvenation.
While some might have wanted this hearing to focus on the scars and the healing in Prince William Sound, I think there is a bigger story to tell and investigation to pursue. It's the effectiveness and implementation of the Oil Pollution Act of 1990, the landmark legislation Congress enacted in the wake of the EXXON VALDEZ spill.
The real sad part of it is, we take a disaster to motivate us to get action, but the fact of the matter is, we did it.
The 1990 Act made dramatic changes to oil spill law, strengthening prevention, response, liability and compensation, and research provisions.
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The oil industry, insurance, vessel and facility owners/operators, and others in the regulated community, faced significant new prevention and preparedness requirements, as well they should have, as well as expanded penalties and liabilities—once again, as well they should have.
The good news is that it's working, at least according to the federal agencies entrusted with its implementation. The nation spills less oil than it used to, even though it consumes more oil than it used to. OPA's spill prevention and response measures, such as double hull mandates and contingency plans, are reaping real benefits to the environment.
Of course, all is not perfect. This is not an Alice in Wonderland story. Controversies and lawsuits will continue to unfold as the nation moves into the next decade of implementing OPA.
For example, there continues to be legitimate and healthy debate over whether a well-intended natural resource damages program can sometimes results in more litigation than actual restoration. That's one we are going to wrestle with for some time to come.
There are also various issues over criminal liability and the jurisdictional reach of U.S. laws to international organizations.
Even with these concerns, and with the lingering disputes over the EXXON VALDEZ oil spill, it is important to remember one basic point: something good did, in fact, result from the 1989 spill. There was so much that was negative about it, but the good thing that resulted was OPA.
It's a good law, and it's been successful in reducing spills and protecting the environment. Its continued success, I think, will depend on continued cooperation among all parties and vigorous oversight by Congress.
That's one of the most important responsibilities we have, our oversight responsibility. Sometimes we're so anxious to forge ahead and come up with new solutions to old problems that we ignore the solutions we have already advanced and we don't take the time to see if they're working as intended.
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That's our job here today, Mr. Chairman, and I'm glad to see this, both committees, the Water Resources and the Environment Committee, and then your committee, of course.
Before you go, I have one other thing. We're going to lose a valuable resource on this staff. Let me tell you something. If you think the Congresspeople run the Congress, you're absolutely wrong.
The people who run it are the dedicated professional staff who, day in and day out, work countless hours in the background. They are oftentimes not recognized. I would like to recognize one today.
Lee Forsgren is leaving this staff on the 1st of April to go downtown and do some other things that are going to challenge his talents. He has been a valuable resource to this full committee, not just the subcommittee. He helped write the original OPA legislation.
Depending on who you ask, he wrote the provisions that are working or he wrote the provisions that are failing miserably.
[Laughter.]
Mr. BOEHLERT. I would like to give well-deserved recognition on the part of all of us to Lee, not just because of his outstanding work, but he represents the dedication and commitment that you see in the professional staff that stands behind us and sits behind us, and whispers in our ear, and tells us what we really need to know.
These are people for whom I have the utmost respect, and Lee, today is your day. Please stand and be recognized.
[Applause.]
Mr. BOEHLERT. Mr. Chairman, with pleasure, I yield back the balance of my time.
Mr. GILCHREST. Thank you very much, Mr. Boehlert. That was very nice of you, to do that. We do have a great staff on both sides of the aisle here.
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I would now like to recognize the ranking member of the Water Resources Subcommittee, Mr. Borski.
Mr. BORSKI. Thank you very much, Mr. Chairman.
Let me start by totally agreeing with my chairman, Chairman Boehlert, on his outstanding remarks for Lee Forsgren.
Lee has been an outstanding contributor to all the work we do here. He has been particularly active in oil pollution, and of course, national resources damages issues, and he's been a tough competitor, but one who we appreciate very much, and I wish him all the best, and again join with Chairman Boehlert in wishing him every good wish.
I want to start by welcoming our distinguished guests to this joint subcommittee hearing on the effectiveness of the Oil Pollution Act of 1990. As has been noted, today marks the 10th anniversary of one of the worst environmental disasters of the 20th Century, the grounding of the EXXON VALDEZ upon Bligh Reef.
Ten years ago today, an obscure oil pipeline facility along the southern coast of Alaska was instantaneously thrust into the limelight as the world learned of the massive damages from an 11-million-gallon oil spill.
Inadequate resources, coupled with lack of suitable preparation for a spill of this magnitude, hampered the abilities of the containment and cleanup crews, and resulted in what remains one of the most environmentally damaging and costly oil spills in history.
In the aftermath of the EXXON VALDEZ incident, Congress passed the Oil Pollution Act of 1990. This monumental legislation attempted to ensure that this nation would never again be caught off-guard for such a massive oil spill.
This legislation required the strengthening of safety procedures and the modernization of oil transportation facilities and vessels. It also required those involved in the shipment of oil to demonstrate adequate financial resources to cover a worst-case spill.
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In the nine years since the enactment of this legislation, there has been a remarkable decline in the number and extent of oil spills in this country, and that is obviously encouraging news. However, now is not the time to relax the improvements that we have made.
As the recent situation in Oregon has demonstrated, we must continue to work with our colleagues in both the public and private sector to minimize the number and impact of oil spills, no matter what the source. It should be the goal of this committee to work towards a zero-tolerance policy for oil spills, nationwide.
Finally, Mr. Chairman, even though this is the 10th anniversary of the EXXON VALDEZ incident, we are conducting a hearing that will only marginally address the actual impacts of the spill in Alaska's Prince William Sound community. As recent press reports indicate, these impacts are severe and continuing.
Each of my distinguished colleagues who preceded me at the microphone has mentioned and talked about the EXXON VALDEZ, and perhaps it would be beneficial for us to schedule additional hearings which directly address the environmental, economic, and social repercussions of the EXXON VALDEZ spill, and attempt to determine the successes and failures of cleanup and recovery efforts in that region.
Once again, Mr. Chairman, I welcome our guests and I look forward to hearing their testimony.
Mr. GILCHREST. Thank you, Mr. Borski. We now welcome Mr. Sheehan, Adm. Loy, and Rear Adm. North.
Just one comment. We appreciate the efforts that the Coast Guard has made in implementing OPA 1990. It hasn't been easy, with limited resources at your disposal, but we appreciate your mighty effort to that end.
Adm. Loy, we look forward to your testimony. You may begin, sir.
TESTIMONY OF ADMIRAL JAMES M. LOY, COMMANDANT, U.S. COAST GUARD, ACCOMPANIED BY REAR ADM. ROBERT C. NORTH, ASSISTANT COMMANDANT FOR MARINE SAFETY AND ENVIRONMENTAL PROTECTION, AND DANIEL SHEEHAN, DIRECTOR, U.S. COAST GUARD NATIONAL POLLUTION FUNDS CENTER
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Adm. LOY. Thank you very much, Mr. Chairman. Good morning, Chairman Gilchrest, Chairman Boehlert, and distinguished members of the Subcommittees. It is my honor to appear before you today to discuss the Oil Pollution Act of 1990.
Today is, as we have heard already, a very, very sobering anniversary. I would offer that, up front, our thesis in the Coast Guard at the moment is very simple: good progress so far, lots of work yet to be done.
It should give us all great pause to just ponder for a moment the events of March 24, 1989. Several weeks ago, anticipating this hearing, I called and spoke to Adm. Paul Yost, U.S. Coast Guard (retired), my predecessor, who was Commandant on that occasion. I was his Executive Assistant at the time.
I asked Paul what he would want the Committee to know on this 10th anniversary. He thought for a moment, and said: ''Tell the Committee to remember the word 'complacency.''' I will come back to that word, Mr. Chairman, to close my remarks.
Mr. Chairman, I am honored to have with me this morning two warriors, if you will, in the OPA 90 effort.
Rear Admiral Bob North, who is the Coast Guard's Assistant Commandant for Marine Safety and Environmental Protection, is perhaps the most knowledgeable officer on the full range of the law's scope, and has spent virtually all of the past decade making OPA 90 come alive for America.
Mr. Dan Sheehan is the Director of our National Pollution Funds Center, specified in the law. Dan manages the Oil Spill Liability Trust Fund and is the Coast Guard's authority on liability and compensation issues. Dan also has been at work on these issues for the past decade.
Mr. Chairman, I would like to first recognize the prescient role played by the Congress in this landmark legislation. As we heard earlier, it was literally since the mid-1970s that efforts had been underway in the Congress to deal with oil spills.
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An enormous amount of research and effort on the part of principals and staffs produced legislation that truly did rewrite the way the nation does business with respect to the transportation of oil.
This bill passed the 101st Congress by a vote of 535 to zero. I don't know that that has ever occurred before or since. I'm not that good a student of the Congress, but that said an awful lot to me. It was superior legislation then, and in my mind, it remains so today.
Broadly speaking, the public policy objectives of OPA 1990 are pretty straightforward: the prevention of oil spills wherever possible and the provision of a comprehensive response regime to clean them up if they occur, and the assessment of appropriate penalties and liabilities to ensure that polluters pay for the damages they cause and are punished when and if appropriate.
By any measure, I believe OPA 1990 is truly a legislative success story. It fundamentally and profoundly impacted the domestic international oil transportation system that serves the United States, and the results speak for themselves.
Mr. Chairman, I've brought two charts with me this morning, just to allow you to check out the scope of the line. Roughly three-quarters of the oil in the water comes from those spills of greater than 10,000 gallons.
The first chart, that furthest to the left—my left, your right—shows the slope of the line going in the desired direction. It suggests that we have cut by approximately two-thirds the number of such spills occurring annually.
[The chart follows:]
[insert here]
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The ''we'' I speak of is not the Coast Guard. The ''we'' I speak of is the collective effort on the part of industry and many other agencies in the Federal system, as well as state and local government efforts.
The second chart depicts the raw data of total gallons spilled per million gallons shipped. Again, the slope of the line offers evidence of good things happening. Obviously, if you look at 1989, the long yellow bar has everything to do with EXXON VALDEZ and Prince William Sound.
[The chart follows:]
[insert here]
If you aggregate five or six-year segments of that and look across a decade, you will see again about a 64 percent reduction, and, Mr. Chairman, there have been no spills of over 1 million gallons in U.S. waters since 1990, although there have been several around the world.
Our preparedness is at an all-time high. The liability and compensation regime serves as, I think, a very strong deterrent. We can immediately fund appropriate responses. The unified command structure just has proven its mettle again in the NEW CARISSA spill off Oregon.
We recognize and exercise a ''spill of national significance level'' in this protocol, and we have engaged industry, states, and the environmental community in what I believe have become very strong and productive relationships. We have breathed life into OPA 90.
Mr. Chairman and members, I have left two reference pieces at your place, a small brochure and a table that displays a ''then and now'' description of Prince William Sound, and I just would leave that to your attention.
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[The brochure and chart follows:]
[insert here]
Mr. Chairman, if I may, I will borrow a couple of Admiral North's minutes and a couple of Mr. Sheehan's minutes, because they're not going to have an opening statement. May I proceed?
Mr. GILCHREST. Yes, sir.
Adm. LOY. Mr. Chairman, a final reference from me to EXXON VALDEZ. I made many trips with Admiral Yost to that traumatized paradise. I watched villages suffer. I walked impacted beaches. I remember the plastic bags of waterfowl and sea otter carcasses. I remember soiled bald eagles.
I remember the fumes, so powerful on a southerly breeze that, even if you were in your hotel, you could smell it. It was on your food, it was in your clothes, it was everywhere.
I remember working for three days to help design an organization that could cope with this event. 11 million gallons remains an almost unbelievable statistic, to me. I realized, as I watched empty tankers line up coming into Prince William Sound in Anchorage, just how dependent this great nation had become on oil.
It was a national tragedy, this spill. The story was so powerful it almost seemed an aberration, but it was very real, and the result 10 years later, thanks to this law, is very real progress, not only in Prince William Sound, but in every port and waterway of this nation.
Of that, the Congress and the nation can be very proud. Our work, although not nearly finished, has been very good, to this point in time.
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For the Coast Guard, OPA 90 became the single most impacting piece of legislation in our 209-year history. Over 90 implementing actions and 40 major regulatory projects grew from it. We divided our work into five major areas.
Your questions will go to many of those activities, so allow me, if I may, just to skim the highlights.
With respect to prevention:
Double hull requirements: A phase-out schedule between 1995 and 2015 for all single-hull tank vessels.
Operational mandates for single-hull vessels focused on training, watchstanding, surveys, and under-keel clearance requirements.
Access by the Coast Guard to the National Drivers Register and criminal records reviews that offer us a new part of our licensing and documentation issuing processes.
Preparedness: National response plan strengthening, area contingency plans, vessel and facility response plans, exercise requirements all offer better preparedness than then.
With respect to response:
The Coast Guard clearly designated as the agency to ensure appropriate responses in coastal zone spills; an incident command system that has bred a process whereby current organizational efforts to deal with these eventualities are robust; a unified command structure refined to current state; the National Strike Force reinforced; an additional Strike Team put on watch.
Response resource inventories and databases compiled so that we know instantly where all such activities and equipments are around the world; oil spill removal organization classification efforts, so that we can tell would-be users of those systems just how good they are, where they are, and in what category they are; and prepositioned Coast Guard equipment in 22 very carefully selected sites around the nation.
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With respect to liability and compensation:
The establishment of the NPFC; clear funding from the Oil Spill Liability Trust Fund; a $50 million emergency fund available for Dan to deal with these spills.
Claims protocols: Clear direction, third party-claims, and natural resources damages—all issues of great consequence to us as an organization, and obviously, to Dan as the Director of the NPFC.
With respect to liability, sir: We have raised limits, you have raised limits, from $150 per ton under the Clean Water Act to $1,200 per gross ton under OPA 90; it actually removes limits for gross negligence or willful misconduct; and specifically allows the states to set limits beyond the Federal—all keyed to deterrence effect, which has, in fact, worked well.
Certificates of financial responsibility: COFRs guarantee the identity of the responsible party and their financial ability to meet their objectives. This has often been identified as perhaps the single most impacting provision of the law.
With respect to R&D:
Mr. Chairman, I think it probably that area that has received the least attention, principally as a result, perhaps, of not meeting the annual funding that has been focused on by the bill.
A described 20 million or so annual funding level has never quite materialized. But there have been approximately 30 significant Coast Guard-funded R&D initiatives, all the way from absorbent booms to a Vessel of Opportunity Skimming System, to organizational innovations that have resulted due to those R&D efforts.
Mr. Chairman, I will close by coming back to Adm. Yost's charge, that we remember the word ''complacency.''
I'm enormously proud of the role the Coast Guard has played in bringing OPA 90 to life. However, as Secretary Slater said, and as many of you have said already this morning, now is not the time to relax. It's the time to build from strength to strength.
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My first district visit as Commandant was to Alaska. I visited the VTS office in Valdez, and I personally spoke to every watchstander there about complacency.
I will release today a general message to the Coast Guard at large, charging them each to reject complacency and to be alert while they are on watch. They must be alert, for they never know when the next challenge will be theirs.
I also look to the future, Mr. Chairman, and see that we have a lot of work still to do. As Mr. DeFazio has mentioned, spills from non-tankers is an issue for us on the table. Alternatives to double hulls is an issue.
You have already held hearings, Mr. Chairman, on our Marine Transportation System initiative, with the Secretary. Many of the aspects of that blend together with OPA 90. We are doing port and waterway safety assessments around the nation.
Admiral Jim Card created a thought process called ''Prevention Through People'' that allows us to recognize fully 80 percent of the accidents that occur have something to do with human behavior, not equipment.
There is a lot of work yet to be done, sir, including four yet-to-finish regulatory projects from OPA 90, two of which focus on hazardous materials. We have tools to perfect. R&D can help us do that, if adequately funded.
We watched in situ burning occur on the NEW CARISSA. I was delighted to watch that occur. We've watched dispersants become part of regional response plans.
There are still things yet to be thought about. Bioremediation agents are yet to be dealt with, and I think it's time for us to do that.
Because there is much yet to do, Mr. Chairman, I ask the Congress to recognize the importance of this work and to guarantee, by adequate appropriation, the Coast Guard's readiness to continue this record of progress. Our goals are identically as they were when OPA 1990 was enacted: safety and environmental protection in our marine environment.
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We are honored to be here, Mr. Chairman. We are looking forward to your questions.
Mr. GILCHREST. Thank you, Adm. Loy. Once again, we appreciate the enormous effort that the Coast Guard has undertaken in the past 10 years to deal with this issue.
I have a series of questions, in which I'm going to ask you to be as succinct as you can.
Adm. LOY. Will do, sir.
Mr. GILCHREST. I know that we can get together and discuss many issues outside the hearing process.
Do you see any issue at all relating to hazardous material or oil spills being complicated by the Y2K problem?
Adm. LOY. The Y2K problem clearly offers us a challenge. There are thousands of chips on supertankers as they ply the waters of the world, sir.
We have made a concerted effort to reach out to the maritime industry from the Coast Guard's desk, if you will, with respect to Y2K. Most directly, we have just completed a conference in London that produced a product that I think will take us a long way in that direction. There is absolutely no doubt that we should be as concerned about Y2K in this industry as we would be in any other.
Mr. GILCHREST. I would like to carry that conversation further, beyond the hearing, if there is anything that we can do, any process that we can undertake, any oversight hearing that you think, in particular, would be necessary, whether domestic or internationally.
I raised an issue, as well as Mr. DeFazio. Oil tankers coming into U.S. waters, I assume, now, as a result of OPA 90, must show response plans.
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Adm. LOY. That is correct, sir.
Mr. GILCHREST. Now, that doesn't affect a bulk carrier, cargo ship, containers ships, or so on, that may have 500,000 gallons of fuel oil or maybe even up to a million gallons of fuel oil, or even carrying hazardous material, I would suspect.
Do you have, at this point, an idea whether that would be useful to undertake, burdensome to undertake? Would it benefit the Coast Guard, make things a little bit more complicated, to have ships with a certain number of gallons of fuel oil to come up with a response plan?
Adm. LOY. Mr. Chairman, there are currently, under the IMO requirements, response plans for those vessels. There is no doubt in my mind that is an issue that needs to be up front on our table, to think very carefully about whether or not to extend the response—
Mr. GILCHREST. So you're saying that all ships, at least ships whose states are members of the IMO, whether they're tankers or containers or cargo or bulk carriers, have response plans for potential oil spills, even if it's fuel oil?
Adm. LOY. That is my understanding, sir, that those response plan requirements exist. My challenge, I think, is to bring them onto our table, and look at them very carefully, to see if they rise to the level that OPA 1990 mandates for tankers.
Mr. GILCHREST. It's not a part of OPA 90, it's not a part of a U.S. statute.
Adm. LOY. That's correct, sir.
Mr. GILCHREST. Since these ships have response plans, how does the Coast Guard react to those response plans? Do they ask if they have them?
Adm. LOY. The simple answer, sir, is that as part of our Port State Control initiative, it is part of the review process, when that foreign flag tanker approaches the United States waters, to be asked as to whether or not they have complied with SOLAS and MARPOL regulations, in addition to the issue with respect to this response plan question you're asking. That is a routine query associated with their approach to the shores of the United States.
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Mr. GILCHREST. This is probably something that we should continue to look into, to see what the IMO standards are, see what the U.S. standards are, and continuing to move in this direction.
Adm. LOY. I absolutely agree, sir. We should be doing that with the Congress.
Mr. GILCHREST. The Oil Spill Liability Trust Fund has somewhere over $1 billion in it now. It was raised basically with that five cent tax a barrel on oil. That has now ended.
Adm. LOY. That's correct, sir.
Mr. GILCHREST. There is still well over $1 billion in there. I'm not sure how, other than an appropriations process, we would continue to fund that.
Would you have any recommendation to us about this trust fund? Do you think it can operate off the interest it makes on the money? Should we initiate another penny-a-barrel, a five-cent-a-barrel, just to continue to build up that trust fund?
Adm. LOY. As you know, sir, the President's budget, as it came to the Hill, suggests that we reopen the fund so as to grow it.
The thought process is that, with respect to a major oil spill with a Spill of National Significance, we will first of all exhaust the $50 million emergency fund, probably within days, and potentially even the OSLTF.
There have been two Spills of National Significance exercises. Findings from both of those exercises pointed us with concern in that direction.
Mr. GILCHREST. Do you think—this will be my last question, because I'm getting pressure from my colleagues up here.
[Laughter.]
Mr. GILCHREST. A little over $1 billion. The administration recommends $5 billion.
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Would you say an increase of somewhere between that, if not, in fact, $5 billion, would be a useful thing, not only for the response, not only for the cleanup, but for the years of natural resource damage that could be remediated? Does the Coast Guard have a position on whether the standard $1 billion is fine, or that amount should be increased?
Adm. LOY. If I may, sir, let me turn that question over to Dan, who has to actually run that front.
Mr. SHEEHAN. Thank you, Mr. Chairman.
We certainly would support the President's initiative to increase it to $5 billion.
Mr. GILCHREST. That's a bold statement.
Mr. SHEEHAN. Yes, sir.
[Laughter.]
Mr. SHEEHAN. What leads us to that conclusion has been the two Spills of National Significance exercises that we ran through, when we went through and looked at the potential, we call it ''burn rate,'' of how much we would have to spend in an EXXON VALDEZ-type of spill that the Federal Government had to fund.
Increasing the size of the Oil Spill Liability Trust Fund, and in fact the emergency fund, would appear to us to be a warranted approach, basically, to prevent us from becoming complacent and to plan ahead.
Whether it was necessary to exercise and utilize that, we would hope it wouldn't be, but it would provide us the tools to do so if we were faced with that eventuality, sir.
Mr. GILCHREST. I see. Thank you very much. I guess the next joint hearing will have to include the Ways and Means Committee.
Mr. DEFAZIO. Thank you, Mr. Chairman. Admiral, I just want to clarify your response.
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When you said that all ships are required or have oil spill response plans, what you meant is, under federal law, the tanker vessels are required to have an approved plan, and so far as you know, all other ships have some sort of a plan, but it's not something that has been reviewed or it's not under federal law; is that correct?
Adm. LOY. That's correct, sir.
Mr. DEFAZIO. We would have no idea whether it's sufficient or not?
Adm. LOY. That's correct, sir, not under U.S. law.
Mr. DEFAZIO. Right.
Adm. LOY. Under the international convention.
Mr. DEFAZIO. Right. But we do have some states which have required plans for non-tank vessels, including my state?
Adm. LOY. They have, sir.
Mr. DEFAZIO. In that case, we have some higher level of assurance that the plan might actually have some impact if a spill occurs. I mean, that's our position as a state.
Just given all the other problems we have with flag-of-convenience ships—for example, ships registered in Liberia, who do we complain to in Liberia if we find that their plan wasn't adequate? There isn't even a government.
I think that this is an aspect of law we need to look at very carefully, whether or not the plans should be required. You would agree, wouldn't you, that with these new, larger freighters spilling—in the case of the NEW CARISSA, 70,000 gallons were spilled, as far as we know, and then maybe more.
Adm. LOY. Yes, sir.
Mr. DEFAZIO. But the ship had 400,000 on board.
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Adm. LOY. Yes, she did.
Mr. DEFAZIO. That's, these days, pretty small—I mean, it's like a mid-size kind of freighter.
Adm. LOY. I agree with you, sir. We must review those.
Mr. DEFAZIO. Yeah. And also the issue when it first went aground, I was talking to people, who said: ''Well, it's a newer ship. It probably has double-wall fuel tanks.''
It turns out that, in fact, apparently the design of the NEW CARISSA, which is routine to bulk carriers, is that not only it doesn't have a double wall, it carries the fuel at the waterline, and they're single-hull, and the outer plates of the hull constitute the outer plates of the fuel tank. That's a pretty common practice in design?
Adm. LOY. It is.
Mr. DEFAZIO. Wouldn't you think that that's also an area that we should be looking at? Isn't that a particularly vulnerable area of a ship, generally, if it goes aground, the waterline area?
Adm. LOY. The whole issue of collisions and groundings is all focused on that hull, yes, sir.
Mr. DEFAZIO. Okay. Thank you. Admiral, I have concerns about the coordinated command structure which is mandated by OPA, and whether or not we should be reviewing that. I think I related to you my experience when I first showed up on the Tuesday after the grounding, being new to the committee and new to these issues.
Adm. LOY. Yes, sir.
Mr. DEFAZIO. I was given a flyover by the Coast Guard, and then ushered into a room with Coast Guard personnel and other, as far as I knew, agency people, and someone who did say they were representing the owner, and a woman proceeded to give us a briefing and tell us what we were to say at the upcoming press conference. That was on a Tuesday.
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It was very rosy. It was going to come off, no problem, just tow it right out of there.
There was a state legislator there, and myself, and we had both had the briefing and said: ''You know, this thing, it's breached in three places. We don't think this thing is coming off the bar. This seems kind of an odd attitude in a message.''
I thought the woman worked for the Coast Guard, and I found out later she, in fact, worked for a public relations firm which worked for the, at that point, anonymous owners of the ship, who wouldn't even say who they were.
I've got to question the appropriateness of, and the effectiveness of this coordinated command structure. I want to be assured at every step of the way that we're doing everything we can as a sovereign nation to protect our national resources and natural resources, and that we're not giving deference to anonymous shipowners who are flagging their ships in flags of convenience countries to save money and abuse international standards, or capability of cutting corners on cleanups.
Are you confident that there is no jeopardy here, that this is the best way to handle this? I mean, should we be looking at federalizing? They can certainly be at the table, and we'll tell them what to do.
I'm really concerned that they're involved in the decision making, they've got someone trying to shape the message. I didn't say what the woman wanted me to say. I don't normally do that no matter who is telling me what to say.
But I noticed that the Coast Guard and other people were very close to her message in this case, and I have a concern, because the message turned out to be overly optimistic. We didn't even talk about burning the ship or the fact it couldn't come off, and the next day I get a call saying, ''We can't get the ship off, and everything that was said yesterday was inaccurate and we're going to have to burn it.''
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Adm. LOY. Sir, I can give you a thought or two on that.
First of all, the law is very clear that the charge you have just placed is, for coastal zone spills, is on the Coast Guard. There is no doubt as to who is in command of that particular process.
It's not a unified committee, it's a unified command with the Coast Guard clearly in charge.
Having said that, I think there has proven to be great value to a process whereby all of the players that can possibly be at the table are part of a very dynamic process as it runs its course to decision after decision after decision.
Frankly, with respect to the NEW CARISSA spill, I was very pleased with the manner in which that unified command held itself together and made good decisions and made them with consensus along the way.
That's not always going to be the case. There will be very difficult times. There were difficult decisions to be made in the course of the NEW CARISSA spill, sir, as you know, and we chatted about on the telephone through the course of it.
But yes, I am pleased that the law is very clear. The Coast Guard is in charge of that coastal spill, and as necessary, can fall back on a very military-like command process to get the job done.
Mr. GILCHREST. Thank you, Mr. DeFazio. Mr. Boehlert.
Mr. BOEHLERT. Thank you very much, Mr. Chairman.
Admiral, how successful has the Coast Guard's National Pollution Funds Center been in recovering costs and damages from oil spills of responsible parties?
Adm. LOY. I can give you just a rough gauge, sir, and I'll ask Dan to amplify.
When we have a responsible party identified, roughly a 60-cents-on-the-dollar recovery on closed cases. Open cases, of course, continue on. If you add a certificate of financial responsibility into the mix, the recovery is nearly 100 percent.
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Dan, would you amplify that?
Mr. SHEEHAN. That's correct.
Mr. BOEHLERT. That's pretty good. This is a good news day. How are you coming on developing your near miss reporting system? Particularly, I'm anxious to learn how you're going to address, or are addressing, the liability and privacy concerns that we've heard a number of our friends in industry complain about.
Adm. LOY. It's a very real issue. First of all, I think we need to acknowledge that's the case, sir. In lots of boardrooms around the maritime industry, the criminal liability is very much on the table.
I think there almost was a coincidental impact piece when the Rhode Island spill was actually dealt with in the fashion that it was by the U.S. Attorney. It almost coincided with the Coast Guard putting out guidance with respect to our Captains of the Port around the nation, as to how to deal with the criminal liability aspect of spills.
I think there was almost a cause and effect relationship perceived by an awful lot of folks. That is unfortunate.
Frankly, in the aftermath, we focus on maybe one in 800 such incidents that would, on the Coast Guard's cognizance, press toward some kind of criminal liability engagement, but the connection is made in a lot of minds, nonetheless, and it is clearly something, sir, that we have to put on the table and grapple with, like, as I was offering with Mr. DeFazio, we have to grapple with non-tanker spill potential.
Mr. BOEHLERT. Thank you. We have heard about some institutional barriers to the use of innovative technologies for oil spill cleanup, particularly the bio-based products.
I understand you guys have seen the light, the Coast Guard, you're using them. What has been your experience and what are you doing to get the message out, so that others will begin to appreciate it?
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Let me say, parenthetically, that I'm going to ask the question of the EPA a little bit later on, because I understand that there is some expression of doubt on their part, while you guys seem to examine the products and think they work very well.
Adm. LOY. Not only the bio-agents, sir. I think there are three tools in the quiver that have been part of regional response plan thinking over the course of the decade.
One is in-situ burning, which you watched do us a great favor in the NEW CARISSA case; but the reluctance on the part of local and regional response teams to use it has been there over the course of time.
Dispersant use is another that has found its way towards more acceptance inside regional response plans, in prearranged decisions made in that regard; and the bio-agents, as well.
As I mentioned in my opening remarks, sir, if there's an R&D path for us to go down, that is certainly one of them, as it relates to the tools of the trade to actually be used in response, and I would certainly hope we would encourage the explorations necessary to come to closure.
Mr. BOEHLERT. Chairman Gilchrest and I had separate briefings on this thing, but I was fascinated with this bio-sock that someone demonstrated to me and told me about all the great things it does.
I said, ''Well, you're a salesman and you've got a product to sell.'' He said, ''Wait a minute; the Coast Guard is using it and they recognize it.'' That was pretty good testimony, to me.
Adm. LOY. Yes, sir.
Mr. BOEHLERT. Finally, out of curiosity, I'm sure you read the Washington Post story of yesterday?
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Adm. LOY. I did, sir.
Mr. BOEHLERT. What is your reaction to it? Do you think it was basically a very accurate story?
Adm. LOY. I'm sorry?
Mr. BOEHLERT. A very accurate story?
Adm. LOY. Oh, I think it was, yes, sir. I think it is an accurate story.
The trauma in Prince William Sound has not totally healed. There's no doubt about that, whether it's in Cordova, in the fishing village, or whether it's in the native villages, whether it's with respect to occupational paths that had to change, you know, as a result of the incident.
On the other hand, I think the balance also in that article reflected that there was an enormous amount of healing that had taken place. Lots of scientists over lots of years yet to come will help us understand the lessons to be learned from the spill at large.
Our focus, internal to the Coast Guard, sir, is to press on with the obligations provided to us in the law, and to check, as several of your colleagues have mentioned already, where do we go from here, what is yet to be done, and how do we grapple with our responsibilities in that regard.
Mr. BOEHLERT. That's exactly the purpose of this hearing. We want to learn and we want to thank you for the good work you're doing, and I want to thank Adm. North and Mr. Sheehan for being valuable resources for the committee.
Thank you, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Boehlert. Mr. Borski.
Mr. BORSKI. Thank you, Mr. Chairman. Mr. Sheehan, let me get back to the increase of the fund, if I may, with you. I very much appreciated your explanation of the need to increase the size of the oil liability trust fund.
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Later in today's testimony it will be clearly demonstrated, in my view, that the liability limits of OPA 90 and the requirements for certificates of financial responsibility have been a significant factor in reducing the number and amounts of oil spills, but those limits are not 10 years old.
If we need a larger fund to reflect today's expenses response costs, and if the limits are to remain effective, liability limits, should they be adjusted for inflation?
Mr. SHEEHAN. I would respond this way, that looking at the history over the past 10 years, we have only had four incidents out of 4,000 where the limits of liability have been exceeded. Three of those were tank barges and one was a tank ship.
At this stage in time, I don't think that we could provide the information about the spread of all of the cases, but it appears to us, for example, that the burn rate for the emergency fund has been caused primarily not by inflation, but by greater use on smaller spills. We have had a larger number of smaller spills and larger use by EPA of that emergency fund.
We're at the stage now where we're spending almost $50 million a year on a regular basis.
Mr. BORSKI. Just so I understand it, if we had an accident similar to the EXXON VALDEZ, we would need more money in the fund, but the liability we have would currently cover?
Mr. SHEEHAN. No, sir. The liability limit for a ship the size of the EXXON VALDEZ would probably be, I think, in the range of $145 million, based on its gross tonnage today.
If it was able to maintain those limits, and if the responsible party decided not to continue funding, the Federal Government would have to spend the money over and above that, and that would be the primary reason for the increase that would be necessary.
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Mr. BORSKI. Why shouldn't the shipowner's liability also go up?
Mr. SHEEHAN. That, sir, is a decision that certainly should be yours. It's one of how high you actually make those. The current limits have served as a very good deterrent, to our mind, in terms of preventing spills.
You could do away with the liability caps altogether, but I think that the tradition and the history has been, in U.S. law, that there are set limits and they are periodically tested.
Mr. BORSKI. Thank you. Adm. Loy, one of the key elements of OPA 90, and one of the most contentious, was the phaseout of single-hull tankers. Does the administration contemplate any changes to that schedule?
Adm. LOY. Sir, I don't imagine that there will be any changes to the schedule as offered in OPA 90. As you well know, there are a couple of specific issues around double-hull tankers that are part of the scene at the moment, if you will.
One of them has to do with whether existent single-skin tankers can extend their phaseout date by certain adjustments that they would make. We have had in the Federal Register for comment, and have accrued all the comments, and will make judgments on that here in the very near future.
We will post that decision in the Federal Register and probably go toward a rulemaking to make certain that it finds its way into regulation.
[The information received follows:]
The Coast Guard published a Notice of Policy titled 'Oil Pollution Act of 1990 (OPA 90) Phase-Out Requirements for Single Hull Tank Vessels' on April 21, 1999 in the Federal Register (64 FR 19575).
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The second is a study that the Marine Board is just undertaking at the moment to explore whether the current criteria that we have used, which is traced back to the Clean Water Act of 1972—i.e., a zero outflow—is the right criteria for us to be using in the future, in terms of alternatives to double hulls that might meet the same safety specifications that were in the minds of the Congress when the law was enacted.
Both of those things are at work, but at the moment, sir, I see no reason to adjust the phaseout periods in the law.
Mr. BORSKI. Admiral, since new ships are double-hulled, aren't we better off with new ships, rather than trying to extend the life of single-hulled ships?
Adm. LOY. Absolutely. That thought process is very real. Just a couple of quick statistics.
There are about 3,300 tankers in the world today. About 876 of those are double hulls. The interesting thing comes in terms of when they came into service.
726 of those 876 have been built after OPA 1990 was on the books. There are 503 of them that came into service just in the last four years. Currently on order around the world are some 470 double-hulled tankers, 244 of which are scheduled to be delivered this year.
If you detect a trend with respect to those numbers, it's because industry at-large and the transportation-of-oil community at-large have recognized the reality of the phaseout dates.
Mr. BORSKI. So why are we considering extending single-hulled ships?
Adm. LOY. There was just a number of thoughts that suggested that that might be a good thing to do, and the dialogue associated with it, I think, is properly considered, and we are now considering that, and we'll make a judgment, sir, in the next couple of weeks, and we will publish that judgment in the register.
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[The information received follows:]
The Coast Guard published a Notice of Policy titled 'Oil Pollution Act of 1990 (OPA 90) Phase-Out Requirements for Single Hull Tank Vessels' on April 21, 1999 in the Federal Register (64 FR 19575).
Mr. BORSKI. Thank you. Thank you, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Borski. Mr. Bateman.
Mr. BATEMAN. Thank you, Mr. Chairman. The questions that I would have posed to Adm. Loy and his associates have already been asked.
I just want to make this observation, and it's not based upon the fact that I think anyone on the witness list is inappropriately on the list, because they're all outstanding people with a great deal to contribute to our discussion.
I would comment, however, on the absence of anyone from the shipbuilding industry, who have an enormous stake in OPA 90, for instance, someone from Harvard Marine, which has undertaken the enormous economic investment of purchasing five double-hulled tankers from Newport News Ship in my district, in compliance with OPA 90, in order to engage in the Jones Act trade.
There's no one from that company or anyone else in the shipbuilding industry, and I think we would have been sell-served if we had heard from our shipbuilders with reference to—
Mr. GILCHREST. If the gentleman will yield?
Mr. BATEMAN. Yes.
Mr. GILCHREST. Mr. Bateman, we discussed that issue, Mr. Boehlert and I, and the ranking members. This will not be the only hearing on OPA 90.
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This hearing, we felt, was specifically designated to understand and to gauge the response, as far as oil spills prevention was concerned, from the Coast Guard and the other industries concerned about oil spills in particular.
We will have a hearing, I can assure you, on the specific issue of double hulls, the time frame, single-skinned hulls, and so on, and have the industry represented at that hearing.
Mr. BATEMAN. There's very reassuring, and very desirable.
Mr. GILCHREST. Mr. Taylor.
Mr. TAYLOR. Thank you, Mr. Chairman. If I may, I would like to begin by asking unanimous consent that we have two letters entered into the record.
One is from Mr. Gordon Spencer, the legislative director of the American Maritime Officer Service; and another from Mr. Michael McKay, the president of the American Maritime Officers.
These two letters voice support for the Oil Pollution Act of 1990 and opposition to any change in OPA 1990's double-hull requirements.
Mr. GILCHREST. Without objection.
[The information follows:]
[insert here]
Mr. TAYLOR. Thank you. Mr. Chairman, Commandant, I thank you very much, and Adm. North and Mr. Sheehan for being here today. I would like to ask two questions in particular, since we have gotten very much into the double- hull requirements.
I remember attending a dinner of people who owned and operated tankers not long after the passage of OPA 90. I remember a very wise—well, smart-aleck—remark on the part of one of these people when I asked them what their response was to OPA 90.
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He said, in effect: ''Well, we'll just charter a dummy corporation in the Bahamas or some Third World country, and we'll put their name on our certificate of financial responsibility, and then when you try to levy those big fines against us, they'll find that there's nothing there.''
Again, it's been a little while since he made that remark, but it certainly struck me. What really caught my attention was that everyone at the table kind of said, ''Yes, that's what we're going to do, also.''
So one question would be, to what extent does the Coast Guard research these certificates of financial responsibility, to realize that that name there is more than just a dummy corporation?
A follow-up question would be—and again, this comes from the same dinner—that several people amongst this group expressed the opinion that they were not going to act on double hulls, and that since America was so vulnerable to imported oil, and we have gotten even more so since then, and we've now got to where more than half the oil that is used in this country is imported, that they simply weren't going to do anything, and then when it got to the deadline, they were going to come to Congress and say: ''Whoops, we forgot; we need an extension, and you can't possibly get all the oil that you need to run your economy with just the few double hulls that are out there.''
So, Mr. Chairman, I, number one, want to compliment you for having this hearing, and I hope that we can use this hearing as an opportunity to tell those people that ''We're onto your scenarios and we don't buy them, and there won't be an extension.''
Because, Adm. Loy, I hate to show how old I am, but I remember attending the Coast Guard Port Security School in 1971, when one of the instructors told me then that Congress was going to pass double-hull requirements any day now. Congress didn't get around to it until 1990.
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I sure as hell don't think we ought to be backing down now, since the industry has had warning at least since 1971 that this is what Congress had on their minds.
Adm. LOY. Yes, sir.
Mr. TAYLOR. Can you talk about the certificate of financial responsibility and what confidence you have that those corporations are for real, and that the insurance companies will actually pay up on those claims, should there be claims?
Adm. LOY. Sir, if I may, I will defer that to Dan, who is really the expert on it, and grappled through what was a very, very difficult period, where the truth behind the COFR issue was all of a sudden a brand new set of players that, in fact, emerged to actually solidify that for us.
I'll defer that one to him and go back to your second question, sir, and state unequivocally that your thought process is right on.
This is a terrific opportunity here, at the 10-year point, on the way to a 25th game finality, that we reinforce. The Congress has the opportunity to make that statement and make that statement very clearly, through this series of hearings and in whatever fashion.
Mr. TAYLOR. The third question, while I have my time, Mr. Sheehan, I have been informed by some operators of offshore supply boats that they are now what are referred to as super crew boats, that are, in many instances, twice as large as even the second generation offshore supply boats, and because of the licensing on the crew boats, they're actually carrying as much liquid cargo as earlier generations of offshore supply boats, but they're able to do so without a licensed tankerman, with a much lower tonnage certificate.
And the people who are trying to live by all the rules feel like they are put at a financial disadvantage by living by the rules, by actually having a tankerman on board, by having a higher-ton license on board, and that the Coast Guard is ignoring this practice.
I have written the Coast Guard on that, and have not, to date, received a reply. I would hope that you could look into that and get me a reply in the near future.
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Mr. SHEEHAN. Your last question, sir, is one which I think would be appropriately under the purview of Adm. North.
[The information received follows:]
[insert here]
The COFR issue is one which, as you know, is a very controversial one with respect to OPA 1990, and the question was, at the time, how do we make sure that there is solid financial backing behind the folks who guarantee a COFR?
When we put that regulation—
Mr. TAYLOR. Mr. Sheehan?
Mr. SHEEHAN. Yes, sir.
Mr. TAYLOR. Can I get you to just say ''certificate of financial responsibility,'' for the folks back home?
Mr. SHEEHAN. Yes. ''COFR'' is a shorthand acronym for certificate of financial responsibility, and that certificate of financial responsibility program is one which I run.
One of the things that we do with that program is, we absolutely hold the individuals and the corporations that certify and guarantee those certificates of financial responsibility, we make sure that they are appropriate incorporated insurance companies or holders of surety bonds, or that if they utilize the self-insurance provisions, that they provide annual, audited financial statements.
In the 25-plus-year history of that certificate of financial responsibility program, we have never had a failure. The certificate of financial responsibility providers have always stepped up to the plate. We routinely review all of their financials on an annual basis. We are in constant contact with them to make sure of their financial viability.
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The issue may have been that sometimes a vessel owner may have a corporation somewhere in the islands, but that is the value of the certificate of financial responsibility program, because we always have the guarantee from that COFR provider up to their limit of liability.
So that program has worked very well, and we are very well assured of the financial stability of those organizations that underwrite the certificates.
Mr. TAYLOR. Mr. Chairman, a quick follow-up, if I may. What percentage of them do you actually audit on an annual basis?
Mr. SHEEHAN. We currently have 18,000 certificates out there. We renew about a third of those a year. We review all of the underlying organizations, such as the Water Quality Insurance Syndicate, First Line, Shore Line. Those are done on an annual basis.
We basically go and look at all of their financials every single year. It's required by our regulations.
Mr. TAYLOR. You have a high degree of confidence that there is no fraud in this program, that if someone were to run aground off of Pensacola, Mobile, New Orleans, the mouth of the Mississippi River today—
Mr. SHEEHAN. We have a high degree—
Mr. TAYLOR. —or have a major spill, that—
Mr. SHEEHAN. Yes, we do have a high degree of confidence, and that is a condition of port entry and port exit, that you have a valid certificate on board. That is jointly enforced by the Coast Guard and by Customs.
If we find that there is an invalid certificate on board for one reason or another, that vessel is detained in port. It's subject to very strict penalties, up to seizure of the vessel and forfeiture of the vessel.
Mr. GILCHREST. Thank you, Mr. Taylor.
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Mr. TAYLOR. Thank you, Mr. Chairman.
Mr. GILCHREST. Mr. Young.
Mr. YOUNG. Thank you, Mr. Chairman. First, I will ask unanimous consent to submit, for the record, my opening statement.
Mr. GILCHREST. Without objection.
[The prepared statement of Hon. Don Young follows:]
[insert here]
Mr. YOUNG. First, let me say to the Coast Guard, because of OPA 90, you do now have the authority to be in command.
That's one thing that happened to the EXXON VALDEZ. There were three commanders, of which no one knew what the hell the other one was doing, and we did put this in OPA 90, so now it's your responsibility for that. I'm quite pleased.
I have one question on it that sort of concerns me, because we discussed this when we created OPA.
The shipowners provide what, $1,200 a ton for liability, up to $300 million; is that correct?
Mr. SHEEHAN. If it's a tanker, it's required to have coverage of $1,200 a gross ton. If it's a non-tanker, it's $600 a gross ton.
Mr. YOUNG. The reason I'm asking this, we have a $1 billion per incident cap. Is that correct?
Mr. SHEEHAN. That's correct.
Mr. YOUNG. If we go below that $1 billion, the taxes kick back in. That's correct?
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Mr. SHEEHAN. At this point, sir, the tax actually expired on December 31, 1994.
Mr. YOUNG. Because you already have the money?
Mr. SHEEHAN. It had a sunset provision in it.
Mr. YOUNG. Okay.
Mr. SHEEHAN. So we no longer have the authority to collect the tax that we instituted.
Mr. YOUNG. The question is, because this concerns, of course, our state revenues, why are you asking for $5 billion and not lifting the cap? What are you going to do with the rest of the money?
It really appears to me to be a budget gimmick game, to me. You're not going to spend the money on any oil-type recovery. You said you've had four incidents, and that's all you've had.
Mr. SHEEHAN. That's correct, sir. I would suggest that we, in fact, would prefer to raise and uncap the limit, because you could clearly end up with a situation where you spent more than $1 billion per incident. That was one of the SONS exercises.
Mr. YOUNG. If I have anything to say about this, if we raise this to $5 billion, it's going to be earmarked for oil spill response. It's not going to be used to balance the budget, by this administration or anybody else, because that's not the intent of OPA 90, nor the intent of myself.
I hope everybody on this committee agrees with that. The money has to be, if it's collected, has to be set aside specifically for oil spill response, oil spill equipment, et cetera, et cetera, and cleaning up a spill, not for a gimmick to balance the budget. I hope everybody is in agreement with that.
One other thing that concerns me somewhat is, you've been pursuing what is occurring around the different regions. Would you, in your own opinion, think that we have advanced the oil spill response capability through the technologies available to about as far as we can go, or are you constantly requesting more efforts to meet that challenge?
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Adm. LOY. I don't think we've exhausted that effort, sir. As I mentioned a little bit earlier, we need some research and development associated with things like dispersants and in-situ burning and bioremediation agents and that kind of thing, as response agents, as well as just a constant concern to continue to improve the basic equipment that we have prepositioned to deal with whatever spill occurs when it happens.
Mr. YOUNG. On the question of burning, what happened in EXXON VALDEZ, the state wouldn't allow you to do. What is the time period when a tanker has a breach—and especially with natural gas, not refined product—what is the time period in which you can burn?
Adm. LOY. Bob, do you have a good answer?
Adm. NORTH. Sir, that would vary, according to the type of product. I mean, there are some products—
Mr. YOUNG. I'm talking about crude oil.
Adm. NORTH. Crude oil? Probably just, depending on the weather conditions, if it's cold, you may be able to have a longer time period.
Mr. YOUNG. If it's hot, it should be touched right away?
Adm. NORTH. Yes, sir, because the vapor, the higher ends will go away, and you will have less capability to burn.
Mr. YOUNG. Will you make that decision, Admiral, or will somebody on the field make the decision?
Adm. NORTH. Sir, somebody in the field, a Federal on-scene coordinator, would make that decision, along with the—
Mr. YOUNG. How fast would that response be? Is he aware that he has that short window of time?
Adm. NORTH. Yes, sir.
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Mr. YOUNG. He is trained in that?
Adm. NORTH. Sir, this would be a decision that would be vetted with the state, the other agencies involved, the regional response team. That's why we like to try to do those kinds of things beforehand, and get preapproval, like we have with dispersants. So we need to look more at that.
Mr. YOUNG. I'm just going back to old history.
Adm. NORTH. Yes, sir.
Mr. YOUNG. If we had done what we should have done, which I advised the admiral at that time to do, but he was precluded from doing it because the Coast Guard didn't have the authority, I don't want the Coast Guard dragging its feet, saying, ''We've got to consult with somebody,'' because that's what decision-making is all about, because you only have a very short window.
If you lose that window, then you end up with a very serious, heavy tar problem, and it will not burn.
Adm. NORTH. Yes, sir. Today you have to do consultation in areas, in some areas, and not in others.
Mr. YOUNG. Okay.
Adm. NORTH. We need to look for more preapproval.
Mr. YOUNG. Thank you, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Young. We would want that $5 billion spent on prevention.
Mr. Baird.
Mr. BAIRD. Thank you, Mr. Chairman. I wanted to follow up briefly on the issue of the distinction between the $5 billion into the trust fund versus the question of prevention.
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Has there been a relative cost-benefit analysis, in terms of where the additional $4 billion to be allocated directly and applied to preventive efforts, the relative merits and efficacy of that, as opposed to post hoc, after the fact recover of damages.
Adm. LOY. I can't say that there's been a direct cost-benefit analysis of prevention versus the response piece, if that's where you're going, Mr. Baird. We could certainly do that.
Mr. BAIRD. I would think it would be helpful in this committee's decision-making process of whether or not to support an increase and if there were some increased funds to be expended, or charge, where those should best go, into a general fund revenue pool or into direct applicable—
Adm. LOY. Or research and development or any of the other categories that OPA 90 offers to begin with.
[The information received follows:]
The Coast Guard has not done a cost-benefit analysis. The benefit of the additional $4 billion from the Coast Guard's perspective is greater assurance the Nation will be able to promptly respond to a catastrophic spill and to fund associated damage claims. The Coast Guard's participation in the recent Spill of National Significance exercise has clearly demonstrated to us that the $1 billion fund would be insufficient to clean up a major spill.
Mr. BAIRD. Two other quick questions. I was just back in my state, and mentioned to a state legislator that we would be having this hearing, and she expressed a concern, feeling that, on occasion, the Coast Guard in the Puget Sound area, they have had some difficulty working with the Coast Guard under OPA 90, as the state explores ways it can protect the waters within its own boundaries along the Puget Sound area.
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Any comment on the interface between Coast Guard regulations under OPA 90 and state efforts to protect?
Adm. LOY. Yes, sir. Let me make a general comment, and ask Adm. North to join in, because he has been intimately involved in the issue.
The preemption issue is a very real one. It is complicated even to a greater degree in that particular corner of the world, because of the commitments that we have and the partnerships, if you will, with Canada on an international level, as well as just the state and the difference between national standards.
Then, the third dimension remains the effort that the Coast Guard leads on a multiple opportunities a year basis to go to IMO and attempt to raise the threshold internationally.
If we are taking with us the image of 50 different protocols that are being used in the United States, not a single national standard, that is a very much more complicated thought process to attempt to sell internationally when we're literally trying to raise the standards around the world.
Those are very real issues for us. Adm. North probably has some commentary on this, too.
Adm. NORTH. Yes, sir. In terms of some specific OPA 90 regulations versus state regulation, as you know, we're involved in a lawsuit, and I have to stay clear of some of that, but I will tell you that, looking at the overall level of safety and environmental protection capability in that area, I think we've worked very well with the state in the last few years.
We're in the process, or beginning the process, to work with the state on developing a long-term risk assessment management plan for that area, and partner together on a study that will look at some of the issues that are prominent there today.
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I think we're pleased with that level of cooperation between us and the state, and hopefully amongst all the other stakeholders out there, as well. So I see that proceeding ahead in a good fashion, at this point.
Mr. BAIRD. So from your perspective, the interaction is going relatively well and the discussions are of mutual benefit?
Adm. NORTH. Yes, sir. Outside of the lawsuit, the rest of it seems to be going well.
[Laughter.]
Adm. NORTH. Everything else we do with the state, there, I'm happy with.
Mr. BAIRD. Let me ask one final question. I'm gravely concerned about the general issue of the increasing dependence of our country on foreign shippers, both because I think it's got security implications, economic implications, as well, but in the case that we're discussing today, and it's been mentioned before, about the whole issue of OPA 90 applicability to foreign shippers.
Do we have adequate means of monitoring the preparation and prevention measures of foreign shippers? Are their ships substandard in terms of the qualities that might prevent a spill?
Adm. LOY. My reaction to that, sir, is that that's what our Port State Control effort is all about.
You might perceive it as an umbrella under which we were all a number of different things, not only the SOLAS and MARPOL international standards that we certainly want all the ships of the world to meet, but also the International Convention on Standards of Certification, Training Certification, and Watchkeeping for Seafarers, 1978, our convention, and the International Safety Management code.
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All of those things find their way under the check process associated with that vessel, as it approaches the United States, and has to be dealt with in Port State Control.
I feel very good about the way that is going. It offers us opportunities to check a number of different things.
For example, the Chairman asked earlier about Y2K. One of the aftermaths of this effort that we undertook in London was to potentially pull a Y2K check inside the Port State Control umbrella so that we have a single vehicle carrying multiple checks for us against these issues that are very, very real.
The last comment that I would make, sir, again, we have testified before Chairman Gilchrest's committee before that the Marine Transportation System initiative that Secretary Slater is pushing allows us to grapple with these things on a much more visible plane than we have ever had before.
It's enormously important that the nation realize that the marine transportation dimension is every bit as important as the aviation dimension and the terrestrial dimension to the national transportation system overall.
We need to raise the visibility of that, and allow those challenges to be on the table and get well discussed.
Mr. BAIRD. One last follow-up, if I may, Mr. Chairman.
Has there been an incident in the last few years where the Coast Guard has assessed an incoming foreign vessel and said, ''We are going to not allow you to enter our waters or dock at a port because you're not meeting standards''? There have been those incidents?
Adm. LOY. Absolutely. The latest case that I can recall was a motor vessel with a Panamanian flag, stopped in Hampton Roads, as it was entering to traverse Chesapeake Bay on its way to deliver a load of iron ore to Baltimore.
The great challenge we found there was that they were out of standard with respect to SOLAS, MARPOL, the ISM code, et cetera.
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They were held for weeks without the delivery of that iron ore to Baltimore, and finally, after they got their act together, they were allowed to do that. That engaged not only the flag state, but the classifications societies involved with their operation.
Bob, how many on an annual basis do we deal with?
Adm. NORTH. The last year's statistics were about 400-and-some-odd vessels.
I would say that the trend is that a vessel detained, if you look at the numbers of vessels or the specific vessels detained in a given year, and you look at those that return that are detained a second time, only about 10 percent are detained a second time, so what we see is a short-term improvement in the standard of those vessels.
I would also add that only about one-third of them return, so a lot of them don't come back.
Mr. BAIRD. Thank you, Admiral. Thank you, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Baird. I would also like to comment on that issue, and that is, a vessel cannot enter U.S. waters unless it meets U.S. standards, so whether it's flying a Panamanian flag, a Chinese flag, or they're from Denmark, they have to meet not only U.S. standards regarding the construction and design and all of the liability that is required, but the crew.
The U.S. is working with the IMO to ensure that crews, internationally, are trained up to a certain specific standard.
Mr. Sherwood.
Mr. SHERWOOD. Thank you, Mr. Chairman. I realize it's going to be addressed later, but one of the things that was on my mind was double-hull technology. I'm afraid that we're not being taken seriously enough in the law on that, and we're going to come down to a crisis, but we can get to that in our next hearing.
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Would you explain to me the raise of the $1 billion to $5 billion? What is that going to do for spill prevention or cleanup?
Mr. SHEEHAN. Thank you, Congressman. It will provide us the additional capability to respond to a major Spill of National Significance.
Currently, we have a $1 billion cap on a per-incident basis, and based on our spill of national significance exercises that we have run, we have found that we could run through that $1 billion in a relatively short period of time.
It would be principally aimed at providing us additional response capabilities and the wherewithal to effectuate a comprehensive and good response.
Certain portions of that, as they are today, are available for appropriation for prevention research and development. We do have a number of appropriations against the Oil Spill Liability Trust Fund on the prevention side of the effort.
Thank you, sir.
Mr. SHERWOOD. But you expect that that money would be available to the Coast Guard to continue your work in preventing and cleaning up spills?
Mr. SHEEHAN. Yes, sir.
Mr. SHERWOOD. That doesn't seem as clear to the members of the panel as it does to you folks. But thank you for your answer.
Mr. GILCHREST. Thank you, Mr. Sherwood. I don't see anybody on my left side. Mr. Horn.
Mr. HORN. Thank you, Mr. Chairman. I simply want to associate myself with those that have raised questions on the double hull. I can't understand why we can't set a date, maybe a decade from now or less, where every tanker that goes into an American port would have to be double-hulled. I hear that you want to hold a hearing on that.
Mr. GILCHREST. If the gentleman would yield, there is a date, and it's 2015. It's from 2010 to 2015.
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Mr. HORN. Does it include foreign-registered tankers?
Mr. GILCHREST. Yes. Everybody that enters U.S. waters—
Mr. HORN. Everybody?
Mr. GILCHREST. —is going to have to be double-hulled.
Mr. HORN. Okay. Then the question would be, should we move it up to 2010?
Mr. GILCHREST. Well, it actually starts in 2010, over a certain formula, and the last one, the last date is 2015.
The question arises once in a while whether we should extend it from 2015, and personally, I don't want to extend it, and I don't think anybody on the committee or the Natural Resources Committee is inclined to do that.
Mr. HORN. Good. Well, the sooner the better.
Mr. GILCHREST. Thank you, Mr. Horn. Mr. Ehlers.
Mr. EHLERS. Thank you, Mr. Chairman. I apologize for being late and not hearing the testimony, but I was in another subcommittee meeting where my presence was required.
I just have to say I'm delighted to see those charts and to see how we are reducing the amount of oil that is spilled. That is certainly encouraging.
As you reduce the amount spilled from those tankers that are designed to ship this, tankers and barges, then we have to start looking at the other sources.
Could you give me some feeling for how this—for example, the spill we had off Oregon this past week. We have a number of cases like that, where oil gets spilled in accidents, or we have cases where wells leak some oil, offshore drilling, et cetera.
How does the amount of that compare to the amount that is spilled in the shipping industry, the oil tanker shipping industry?
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Adm. LOY. My sense is that alternate sources, as you were describing, sir, are about a third of the oil spilled on the water, on an annual basis. Bob? Close?
Adm. NORTH. Yes, sir. I would say that, if you look at the tank barges and tank ships. Vessels that we regulate, they're about a third. It depends on what year you look at, and if you want to get down into great detail.
Pipelines are a large proportion of oil spills, maybe about 20 percent plus, depending on the given year. Some of those pipelines are pipelines to platforms in the Gulf, for example, that are under the water. Some of those pipelines are terrestrial pipelines that leak oil into a waterway.
We have a MOU with the Minerals Management Service to look at those pipelines in the Gulf that are involved in that type of activity, to improve prevention there.
Then you have other sources that are non-tank vessel, non-tank barge, cargo ships, and miscellaneous vessels, and things of that sort, which are again roughly about 20 percent.
We have programs for prevention in those vessels, as well, but it's been pointed out here that there are some areas that we might look to.
So all of our programs that deal with maritime sources attempt to prevent oil spills from occurring and to respond to those that do. However, in the case of tankers and tank barges, they're probably more robust, in most areas.
Adm. LOY. I think that was the concentration focus of the original law, sir. In order for us, as you point out, to keep those in the right direction, we need to address these other sources.
Adm. NORTH. Yes, sir.
Mr. EHLERS. I think it's very important, and it's clear you've reached the point where you have to have a very broad-based program, rather than just concentrating on the tankers. Thank you very much.
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Mr. GILCHREST. Thank you, Mr. Ehlers. I have an additional question, and I think Mr. DeFazio has one or two more.
Admiral, it's my understanding that a large portion of the oil spilled or released in the United States occurs in the Gulf Coast area and the lower Mississippi River.
Could you just tell us what the Coast Guard is doing in response to that, what the Coast Guard is doing basically because of OPA 90, in response to that, and can that be reduced? What causes those leaks and those spills?
Adm. LOY. Yes, sir. Part of the reason is the simple notion that that's where an awful lot of our product comes into the country, so the statistical balance is tilted in the direction of the Gulf Coast and the Mississippi waterway.
There are a number of things, sir, that we've undertaken in addition to the standard prevention response efforts that you have itemized in OPA 90.
Adm. North just mentioned that pipelines through that area are a significant issue, and we are working very hard with the RSPA in the Department of Transportation to deal with the pipeline end of that.
Mr. GILCHREST. Now, are the leaks or the spills from the pipeline on the lower Mississippi because they're old, they're not maintained properly? Are there, in fact, large leaks from these pipelines?
Adm. LOY. I think about a third of the spillage in that particular corner of the nation, sir, is as a result of pipeline spills, so that is something that we need to grapple with again.
Mr. GILCHREST. Where along the pipeline do you get the spills, the initial hookup, at the oil rig, from the refinery?
Adm. LOY. They have occurred in a number of different locations, at the refinery end, literally underwater in a run from the offshore terminal itself, the—
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Mr. GILCHREST. Are they large volumes, or just so many of them?
Adm. LOY. They potentially have large volumes associated with them, yes, sir. Again, as I say, about a third of the total.
Mr. GILCHREST. The liability issue would come into play with them, as well as it does with any oil tanker?
Adm. LOY. Yes, sir. The other thing is, a wonderful partnership has emerged with the American Waterways Operators. I think perhaps Mr. Allegretti will talk about that briefly during his panel.
There is a concerted effort to acknowledge that, in that particular corner of the world, also, tank barges are often the vehicles that we are dealing with, so to engage the people that are plying the waters more aggressively as a part of the solution to the future.
As you know, we are installing a vessel traffic control system known as the Ports and Waterways Safety System on the Mississippi, from literally the head to Baton Rouge, again, as a contribution to the safety of the waterway overall.
So there are a number of significant events, significant projects focused on the reality you point out, sir, that a considerable portion of the spillage occurs—
Mr. GILCHREST. Is there some type of strategy plan with a time frame attached to it, to significantly reduce the amount of oil that has leaked in this region of the country?
Adm. LOY. We don't have a named operation, sir, that is pulling all of these things together, but a good number of these projects are focused directly on the challenge of the Gulf area and the Mississippi area, to do a better job, noting, as you have noted, that's where a considerable amount of the spillage occurs.
Mr. GILCHREST. I haven't said anything to either members or staff about this, but it sounds like an issue that we might want to have a hearing on to focus very specific attention to those kinds of things, not only in the Gulf and the lower Mississippi, but wherever there are pipelines and masses of oil transported.
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I don't suppose the Chesapeake Bay could withstand much of that type of leakage and stay viable for very long.
Adm. LOY. I would agree, sir.
Mr. GILCHREST. The gentleman from Oregon, Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman. On the issue of the certificates of financial responsibility, which we've gone into at some length, and there was discussion about inflation, I guess I come at it from a different perspective, which is, we established a per-ton charge.
I look at the NEW CARISSA, experience is a good teacher sometimes. Their certificate of financial responsibility was $21 million, and they spilled approximately one-sixth of their fuel, and I think we're going to reach $21 million.
Adm. LOY. I think we are at around 17 million, yes.
Mr. DEFAZIO. Yeah. But there's additional and ongoing costs, and we haven't removed the stern or even figured out what to do with it yet.
Adm. LOY. Yes, sir.
Mr. DEFAZIO. It seems that that brings to question whether the $600 per ton is adequate in terms of a certificate of financial responsibility, in that one case, and I would assume I can generalize from that, given the amount of oil fuel these ships are carrying.
Adm. LOY. As you say, sir, we often learn lessons from specific cases, and as I said at the beginning of my comments, that very much needs to be on the table, as we look to the future to focus on non-tanker issues.
Mr. DEFAZIO. Mr. Sheehan, OPA 1990 provides some emergency response funding. Could you address that briefly, and the amounts that are available there?
Mr. SHEEHAN. Yes, sir. The Oil Spill Liability Trust Fund, as we have spoken earlier, is set at $1 billion at this point in time, and $50 million of that is available on an annual basis for emergency response. That is essentially the checkbook that we control to provide funds to both EPA and Coast Guard Federal On-Scene Coordinators.
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Our experience has been, in the last several years, that we are now spending at a rate of about $50 million a year without major oil spills, and so that is one of the reasons that we are taking a hard look at how we would deal with a situation where we could be at the end of a fiscal year, not have a lot of money left in the bank account, and Congress is out of session.
It's a concern to us. It's one which was highlighted in the SONS exercise, and we're wrestling with that issue.
Mr. DEFAZIO. How do you access the remaining portion of funds?
Mr. SHEEHAN. We would have to come back, at this point in time, for a supplemental appropriation, sir.
Mr. DEFAZIO. Really? Just to go over $50 million?
Mr. SHEEHAN. Just to go over $50 million.
Mr. DEFAZIO. Okay. So if we have an emergency situation, and Congress isn't in session, we've kind of got a problem here.
Mr. SHEEHAN. We could have a problem, yes, sir.
Mr. GILCHREST. Would the gentleman yield?
Mr. DEFAZIO. Yes.
Mr. GILCHREST. Would it be your recommendation, until we figure out whether $1 billion is enough, or we should have $5 billion, or whether we should tax every barrel of oil, should we raise that threshold to $100 million?
Mr. SHEEHAN. I would think that would be an appropriate figure, or find some mechanism that we could do a fast-track appropriation, or some way that we could access the rest of the fund, until such time as Congress came back to provide us authority to do that.
We have looked at the spend rates in a potential large spill, and they run anywhere from $5 million to $15 million a day, and so that doesn't give you a lot of time, in terms of being able to come back and ask for more money.
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Mr. DEFAZIO. Okay. Thank you. I don't have any further questions.
Mr. GILCHREST. I'll just use a little more of Peter's time. That $50 million, has that been standard since OPA 1990?
Mr. SHEEHAN. Yes, sir.
Mr. GILCHREST. So it hasn't been raised at all since?
Mr. SHEEHAN. It has not been raised.
Mr. GILCHREST. And you say about $15 million can be used up?
Mr. SHEEHAN. We are spending now at a rate of about $50 million per year.
Mr. GILCHREST. $50 million a year?
Mr. SHEEHAN. Yes, sir. We went back to OMB early on in the process and said, ''If we had any money left over at the end of the year, could we roll it over for next year?''
Mr. GILCHREST. What did they say?
Mr. SHEEHAN. And they said we could. That has helped us in, particularly, I think it was 1994, when we had the Burman spill, where we spent over $80 million in a single year. If we hadn't had that cushion, we would have had a very difficult time doing that.
Mr. GILCHREST. If you don't have a figure right now, could you—not that we want to add to the burden of your workday, but do you think you could get back to us with a reasonable figure that you think, a higher number, $70 million, $100 million?
Adm. LOY. for the emergency fund, sir?
Mr. GILCHREST. For the emergency fund, that you could withdraw without authorization from Congress.
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Adm. LOY. Yes, sir.
Mr. SHEEHAN. We can do that, sir.
[The information received follows:]
The Coast Guard will continue to review the adequacy of the Emergency Fund.
Mr. GILCHREST. Well, gentlemen, I appreciate your testimony. I'm going to follow what Adm. North will recognize as a more humane process during the day, which we have experienced at the IMO in London, where they actually break for lunch.
If everyone agrees, we could be back here at 1 o'clock. We will recess until 1 o'clock. Thank you.
[Recess.]
Mr. GILCHREST. The subcommittee will come to order. Hopefully, we will be able to get through a panel or two before the next vote, but I suspect we might have another vote in about 45 minutes. The other members will probably trickle in as the day moves along.
For our second panel, we have Elaine Davies, Deputy Director, Office of Emergency and Remedial Response, Environmental Protection Agency—welcome, Ms. Davis—and David Kennedy, Director, Office of Response and Restoration, National Ocean Service, National Oceanic and Atmospheric Administration—NOAA. Welcome, Mr. Kennedy.
Mr. KENNEDY. Thank you.
Mr. GILCHREST. Ms. Davis, you may begin.
TESTIMONY OF ELAINE DAVIES, DEPUTY DIRECTOR, OFFICER OF EMERGENCY AND REMEDIAL RESPONSE, U.S. ENVIRONMENTAL PROTECTION AGENCY; AND DAVID KENNEDY, DIRECTOR, OFFICE OF RESPONSE AND RESTORATION, NATIONAL OCEAN SERVICE, NATIONAL OCEANIC AND ATMOSPHERIC ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE
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Ms. DAVIES. Thank you. Chairman Gilchrest, members of the subcommittee, thank you for inviting the Environmental Protection Agency today to talk about the implementation of the Oil Pollution Act, especially today—
Mr. GILCHREST. Ms. Davies, is your mike on? Could you move it a little closer? I'm not sure if you're technically responsible for the—
Ms. DAVIES. Hello?
Mr. GILCHREST. No.
Ms. DAVIES. This is after my husband got me down from nine minutes to five, this morning.
[Laughter.]
Mr. GILCHREST. Is your husband here this afternoon?
Ms. DAVIES. Thank you, Mr. Chairman, for inviting the Environmental Protection Agency to testify today on the implementation of the Oil Pollution Act, especially today, on the 10th anniversary of the grounding of the EXXON VALDEZ and the resulting environmental damage.
If there are no objections, I will just submit my written testimony for the record. It has a lot of information on the history of the EPA oil spill program, on the national response system, and on the mandates given to us by OPA.
Mr. GILCHREST. That will be just fine.
Ms. DAVIES. I'll just summarize, then.
Oil definitely is an important commodity in the United States, and there certainly is a lot of it in use. Over 250 billion gallons of oil and petroleum products are used every year, in addition to non-petroleum products.
That is important, because if these are spilled in significant amounts, they can contaminate our drinking water, they can kill fish, birds, animal life, and they can truly disrupt and affect our commercial and recreational use of our waterways.
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Every year, up to 20,000 oil spill notifications are received by the Federal Government. About half of those are the responsibility of the Environmental Protection Agency, because we have jurisdiction in the inland zone, as Coast Guard has jurisdiction in the coastal zone.
If you look at larger spills, those over 10,000 gallons, I think you're going to find that, every year, more than the volume of the EXXON VALDEZ spill contaminates our waters every year.
That's why we feel, in EPA, that it is important to have an integrated approach, a holistic approach to oil spill programs, and that includes that we have to have an effective response program and we have to be prepared. We have to have a program, better yet, to prevent accidents from occurring.
We have a very strong oil spill response program that goes back to 1968, when the first national contingency plan was issued, and that is our federal blueprint for response. That system has been revised a few times, but for 30 years, it's held its sway and it has been very good.
The last revision was to incorporate OPA amendments, and one of the things we talked about this morning, the unified command, which is a management framework, was one of the changes that was added into the national contingency plan at that time, with the federal on-scene coordinator always still in charge.
Every year, EPA responds to between 200 and 300 oil spills. We either direct the monitor or directly respond, have direct action.
We also provide a lot of technical assistance to states and local communities, because most of the oil spills are responded to by them; and when Coast Guard is in charge of an oil spill, we provide technical support. We have an environmental response team of experts who are available, and we also chair the regional response team.
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Recently, in the NEW CARISSA, we were both involved in operations. We provided air monitoring support and we chaired the regional response team which was used to look at the in-situ burning.
Under our spill prevention, control, and countermeasure program, which is under the Clean Water Act, we regulate 450,000 facilities that house up to 2 million tanks. They have to have prevention requirements, control, and cleanup requirements.
And just a real quick success:
In 1997, in September, a bulk storage facility in San Jose, California was vandalized. 300,000 gallons were released out of a 440,000 tank. None of that got to U.S. waters, because there were spill prevention measures in place. It was all captured and cleaned up.
OPA gave us a lot of new authorities. I won't repeat what Adm. Loy talked about this morning. He went through most of them. In terms of what helped us most was a much enhanced preparedness program, as well as the national response infrastructure.
We are very happy to be able to have the oil spill liability fund, where we were now given the ability to direct spills, and we could do it knowing that funding would be available.
We had a number of actions, if I could just take one more minute. We led the revisions to the national contingency plans. Those came out in September of 1994. We established the EPA facility response plan regulation in July of 1994. We regulate 5,000 large facilities. 2,500 of those have highest risk, and we approved all of the 2,500 plans by the deadline of August 1995.
Since then, we've been looking at those plans again, reviewing, visiting facilities, and we find, for the most part, they're in fairly good condition, although improvements can always be made to the facility response plan.
Contingency planning has always been a big part of the national response system, but we are very happy to have the concept of area contingency planning and area planning committees.
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While there are planning committees in each of the areas, right now, there is a wonderful wealth of work being done, working with industry, with local and state responders, to go and look at specific geographic areas, incorporate environmentally sensitive areas, and really build some partnerships.
I was speaking yesterday with a planner from the West Coast who said we have such a good partnership going in some areas we're down to already laying out the decisions of where we would put booms, if there was an accident that did occur, and that will help us have a more effective response.
I won't talk about exercising. The program set out by OPA is very helpful. There are about 20 large area exercises a year, five to six in the inland area, for which we're responsible.
In conclusion, let me just say that we have a lot of responsibility under the Clean Water Act and under OPA, and we have emphasized this integrated approach of emergency response preparedness and prevention, but if we look at the history of notifications, and we look at emerging trends, we know that oil spills are going to continue to happen.
Last night, when I was looking at the 1990 report from the national response team, which followed the EXXON VALDEZ report, there was a sentence that really struck me, and I wanted to read it to you. It said: ''The EXXON VALDEZ incident provided a graphic example of how time and complacency have limited the system's ability to address such spills.''
It's 10 years later. I think we're still very, very vigilant, and we must continue to be vigilant. We must continue to have a very strong federal response program and work very closely with our partners and states and local governments. Thank you.
Mr. GILCHREST. Thank you, Ms. Davies.
Mr. Kennedy.
Mr. KENNEDY. Thank you, Mr. Chairman. My remarks, too, formal remarks, I would like to include in the record, if I could, and I will be summarizing today, as well.
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Ten years ago this afternoon, on this date, I was in a small airplane circling the EXXON VALDEZ in Prince William Sound. I had been called earlier that morning and asked to fly up. I have been a part, for the last 20-some years, of the oil spill response group. I was asked to go up and do an initial assessment.
Flying over the accident and looking down at the oil, and seeing the ant-like skimmers that were biting away at the edges, I was first of all struck by the incredible problems that we were going to be looking at over the next few months, I thought. It turns out I invested the next about three years of my life in this event.
The other thing that struck me, too, and it goes back to a comment that Adm. Loy made. Right before we had this event, we had our international oil spill conference. It's held every two years.
It's where all of the major players from any and all parts of the industry and response, federal, state, and local as well as international folks, come together to discuss issues surrounding oil spills.
At that conference, the attendance was so low, the issues had been beaten to death. There did not appear to be any enthusiasm. Those of us that had been around and doing that for a long time felt that, if that trend continued, there really was no need to have any further oil spill conferences.
This was right before the EXXON VALDEZ. That complacency was really in place at that point.
To go back to that same international oil spill conference two years later, in 1991, and to look at the change, is a good indication of what, unfortunately, this disaster precipitated in this country and the world.
Today, I'm going to talk just very briefly, give you a review of NOAA's responsibilities and roles as it relates to OPA.
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I'm going to kind of break it down into prevention, preparedness, response, and restoration, which is the way OPA works, and at least start by suggesting that even though this is not necessarily significant OPA work under the prevention side, NOAA is actively involved in preventing accidents through charting realtime tides and currents and accurate weather forecasts.
Under preparedness, we play, I think, some very significant roles there. Preparedness has really advanced over the last 10 years as a report of OPA and the accident.
We are the scientific advisors to the federal on-scene coordinator for coastal events. The role is a scientific support coordinator, and we actually are placed co-located with the U.S. Coast Guard offices regionally around the country.
We are also very active in preparation of contingency plan development, drills, training, development of guidance materials, including leading the preparation of the fish and wildlife annexes, which are required by OPA.
For instance, in this last year, NOAA participated in 28 drills, and these are drills that have been referred to already, industry, state, and federally sponsored. Not only do we participate, but we also help design a number of the drills and actually prepare the scenarios that are used.
In this arena, research and technology development is also an area that we are actively participating in, and as has been mentioned here already today several times, research and technology development is absolutely key to making all this work and for us to progress and get better. It is also an element of OPA, Title VII.
We have developed multiple tools and conducted applied research to improve preparedness for the next response. We have just a new tool that has come out that we are installing around the country, a trajectory analysis planner, the ability to, before a spill, in any body of water, sink a ship with an quantity of oil, and then watch where that oil is going to go over time, and in the process, be able to estimate where you need response equipment supplies.
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That has been made available to federal, state and local. In fact, we just entered into an agreement with the Navy supervisor of salvage, providing the same kind of service.
In response, we have been active since, I guess, 1976, in response, and do provide technical assistance in a variety of different forms. The services provided include spill trajectory analysis, the modeling where the oil is going to go, behavior and toxicity, shoreline cleanup techniques.
One of the things we have certainly found over the years is that you can't necessarily just expect someone to go out and clean up every drop of oil. In the process of doing that, quite often it causes much injury, and sometimes more than leaving the oil alone.
So we spend a lot of time researching some of those techniques and how damaging they, in and of themselves, can be to the environment.
Identifying sensitive environments, evaluation of alternative response measures, certainly the alternative measures being chemical dispersants, in-situ burning—we, too, were deeply involved in the NEW CARISSA—and then bioremediation. I hope maybe we will have a chance to talk about that for a moment, later.
Restoration. This is an area where NOAA has played a very significant role, and obviously OPA requires that there be damage assessment. In particular, NOAA has been the responsible agency to develop the regs governing damage assessment.
NOAA has developed the regulations to represent a fundamental—and we are representing a fundamental change, I think, in the way we do damage assessment, from, I think, some of the perception that has been out there, and it's based upon a cost for the environment, the environmental restoration.
I think this is different than a lot of people's perception of what goes on.
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The regs were finalized in 1996, I think became formal in February. And earlier damage assessment procedures emphasized determining a monetary value for the loss of use of the injured resources.
NOAA'S regulations under OPA require the responsible party that spills the oil to return the injured natural resource and services to their pre-spill condition and compensate the public for the losses that occur from the time of the spill until restoration is complete.
I think the damage assessment process promoted by NOAA'S regulations emphasizes expedited and cost-effective restoration, once again, provides an opportunity for the responsible party to cooperate in the assessment—this is something that was not done in the past, but we have encouraged, and have been working very closely with industry to promote and get them engaged—and then promotes an open process that involves the public.
Damage assessment activities are restoring coastal resources and habitats. NOAA, working with states, federal, and tribal trustees, has recovered from those responsible for harming public resources more than $45 million in about 20 oil spills since 1990.
Damage assessment and restoration activities have provided the following benefits: made responsible parties more aware of the detrimental impacts of oil spills on the nation's coastal resources; provides incentives to the private sector to prevent injury; and makes the polluter pay and take responsibility for restoring public resources.
Damage assessment activities under OPA have benefitted the nation by restoring public resources and enhancing awareness among the general public of coastal stewardship.
That concludes my remarks. Thank you, sir.
Mr. GILCHREST. Thank you, Mr. Kennedy. I guess, on a scale of 1 to 10, 10 being excellent and 1 being poor, where are we in 1999, as far as oil spill prevention, response, and cleanup is concerned, to where we were in 1989? Just give me a number.
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Ms. DAVIES. A number?
Mr. GILCHREST. I have a number of follow-up questions.
Ms. DAVIES. I think it's hard to give a number.
Mr. GILCHREST. In other words, where, compared to 1989, where are we today, and given the fact that we use some 250 billion gallons of oil a year in the U.S., and about 1 percent of that, in your testimony, is spilled, which is a pretty big amount, where are we—5, 4, 7?
Mr. KENNEDY. 7.
Ms. DAVIES. I was going to say between 7 and 8.
Mr. GILCHREST. Between 7 and 8?
Ms. DAVIES. Because I think there's been a tremendous amount of planning that's done. In fact, yesterday, when I talked with one of our responders on the West Coast, I said, ''What's the big difference between 10 years ago and now?''
And he said: ''Ten years ago, we each had our own little piece of the pie and we kept it. Now, we know how to work together as a team, and that helps for a more effective response.''
So I think we're coming along. We're not there yet.
Mr. KENNEDY. I would echo that. We've made an awful lot of progress. I was mentioning this conference in 1989. There is such heightened awareness and so much work that has gone into the last 10 years, that we've made a lot of improvement, but I think there are things still to be done.
Mr. GILCHREST. So the mind-set that was prevalent in 1989, in the international community, would you say that has significantly changed in the years since 1990?
Mr. KENNEDY. No question in my mind. The OPA made a statement and included, incorporated a number of new requirements and issues that, regardless of whether anyone wanted to have ignored them, can't, and the awareness is much, much greater.
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Mr. GILCHREST. Both of you mentioned this new mindset is a collaborative effort, from a number of different federal agencies, state agencies, the private sector, oil tanker executives, oil producers, on-shore oil facilities, and so on.
Ms. Davis, you talked oil spill prevention, control, and countermeasures, which is an EPA system of collaboration to work on the problem of prevention and then cleanup.
I have a specific question, though, in that way. We learned in the previous panel that I think they said two-thirds of the oil spills in the United States occur in the Gulf of Mexico and the lower Mississippi River, and much of that, I'm not sure where it comes from, but that's the volume of oil used in this country, so I guess you can expect that to be a problem.
Given the fact that you're on shore facilities, the Coast Guard is offshore facilities, the Department of Transportation deals with pipelines, is there a plan, a collaborative plan with the Coast Guard, with the Department of Transportation, with EPA, with NOAA, with state agencies and the private sector, is there a way to reduce significantly the volume of oil leaked in that region of the country? Is there a plan to do that?
Ms. DAVIES. I can't hand you a piece of paper today that says there's a plan, but there's a lot of interaction that's going on.
Specific to that area, I don't think so, but we have all the mechanisms in place to do that. We have the national response team with the 16 agencies who have jurisdiction to be able to work on that.
Mr. GILCHREST. Do we know where the oil is leaking from or being spilled from? Why would the testimony say that two-thirds of the oil spill in the United States occurs in the Gulf of Mexico and the lower Mississippi River?
Is there a handle on where it all comes from? Is it so dispersed that it's extremely difficult?
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Ms. DAVIES. I think it probably comes from a number of sources. When you said the SPC ruled, that is really a prevention rule. Those establish requirements for several facilities, where they will have to have, as they design their plan, as they operate, as they maintain it, have to have certain measures that were taken.
Other parts of the Government have very, very similar type of prevention requirements, and they all work together, and we all communicate and coordinate together, and perhaps, as I heard Adm. Loy say this morning, we need to put a little bit more emphasis together on the problem in the south of the United States, and we'll just have to do that.
Mr. GILCHREST. I will have some follow-up questions, but I see my red light is on, and I will go to Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman. I assume—were you two both here during the earlier panel?
Ms. DAVIES. Yes, we were.
Mr. DEFAZIO. Okay. Did you hear the concerns? Since you were both involved in emergency response, do you see the $50 million cap on emergency response funds as a potential problem, impeding a response to a future major oil spill, either one of you?
Mr. KENNEDY. Obviously, we don't watch that fund and we don't call up and check to see how much is in it regularly, but given the sophistication and engagement, if you will, in any pollution event, and listening to the discussion this morning, it seems certainly likely that if we happened to have a busier year, that that fund could get tapped, because spills cost a lot of money to respond to and take care of.
I don't think it's at all out of the question, given some of the costs that we've seen associated with other spills, for that to potentially be an issue, yes.
Ms. DAVIES. I think I would agree. We are users of that fund, and it could be as high as 20 or 25 a year, but if there was a big one, I think we would have a problem.
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Mr. DEFAZIO. Could either of you comment on alternative technologies? Most of what I observed is, so far, both when I went to Alaska and most recently my district, is very primitive.
I recently had a demonstration from some folks who are developing some bioremediation techniques, in this case something that could be used—oh, Wayne apparently has examples of it here. Perhaps he'll wax eloquent about the examples.
It was interesting to me, both that it could be used to contain oil and bilgewater, but also the substance could be spread on oil.
Is there any research ongoing? Because what I'm seeing so far is guys out there with shovels, rakes, and that kind of stuff.
Mr. KENNEDY. Do you want me to do it?
Ms. DAVIES. You can start, and I can follow.
Mr. KENNEDY. I think both the NOAA and EPA have been looking at alternative technologies, along with the Coast Guard and others, for a long time, and I think most of us would readily admit that we think response technology is fairly primitive, and so I think we're always looking for the silver bullet.
As Adm. Loy mentioned this morning, I know there has been a lot of effort spent on better understanding dispersants. They have been very controversial, adding more chemicals to the water, on top of a pollutant that's already there. It certainly is an issue that you've got to look at very carefully.
In-situ burning, the same thing, the smoke plume, and how toxic is it, and what are the effects.
And bioremediation. Bioremediation I listened to very carefully this morning, and I was hoping we might have the chance to talk about that for a moment, because both agencies have done a lot of research in looking at this, especially since the EXXON VALDEZ, when it was touted as being possibly the savior of that spill.
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Bioremediation, in one form or another, has been around for a long time, in the aspect of land farming, but to apply to a spill in a coastal zone was somewhat unique.
I think what we found is that it may have its place in this quiver, or arsenal, as we've been discussing, but it has a very specific limited place, and I think that one has to be very careful about that, because what we've seen is vendors claiming to come to a spill, have come to a spill, and claimed that if we apply their product onto a fresh oil spill, that that might take care of the problem.
That is not the case, and we have enough research within my own organization, I think, to say categorically that if you're going to use bioremediation, it's kind of a polishing agent, a last step in a process where you would use many other techniques before you got to it. So I think that does need clarification.
Other than the technologies mentioned, we continue to look, but there are no silver bullets that we've found.
Mr. DEFAZIO. Well, perhaps we can have a future panel or discussion on this.
True, it was someone who had an interest in the technology that came to me, but they showed photographs which went to oil spilled on a beach area, and basically time lapse photos of what happened.
I certainly take everybody's presentation with a grain of salt, but I'm not sure that they might not be on to something here, and as we learn more and more about genetically engineering microbes and so on and so forth, developing a better appetitive for crude oil, that there may be promise.
Because what we're doing now does not work, except in very simple sorts of situations, where you have to be accessible and cleanable and that, and when you got into Alaska, with the rocks and all that, it didn't work very well. You can still find oil up there.
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I would urge the agencies to continue to try and do some testing and keep an open mind on this, and perhaps the chairman will further move us down that path at some point. Thank you.
Ms. DAVIES. If I may comment on it, also, I think there is a place for bioremediation and alternative technologies. We use them ourselves. We recently used bioremediation at an oil refinery spill in Wyoming. But it's on a case-specific basis, and we do really support some additional research in the area.
When you're looking, for example, at dispersants, in fresh water, they may not be applicable in certain situations as well as they would in a marine situation, and so we would really look forward to seeing more work done in that area.
Mr. DEFAZIO. Thank you. Thank you, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. DeFazio. We would like to pursue that in subsequent hearings.
Our next member is Chairman of the Water Resources and Environmental Subcommittee, champion of the environment, our own Mr. Boehlert.
Mr. BOEHLERT. Thank you, Mr. Chairman. I'm sorry for the disruption earlier. We can't figure out how to operate this chair, and I was almost ejected into outer space by our learned counsel here.
[Laughter.]
Mr. BOEHLERT. Ms. Davies, we've got some testimony that's been submitted for the record, and it essentially says that EPA has developed a higher bar for bio-based technologies evaluation, and it goes on to say—well, let me just read portions of it:
''The use of bioremediation at the EXXON VALDEZ spill was a double-edged sword. On the one hand, bioremediation was brought to the forefront, but on the other hand, because it was a research endeavor, testing and evaluation standards which resulted presented an unwritten higher bar for bio-based technologies.''
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It goes on to say: ''EPA, due to a lack of agreement in methodology between their regulatory and scientific communities, never defined standard methods for the evaluation.''
Could you address that? I don't want to be unfair to you. If you feel you have to do it subsequently in writing, that's fine, but give me a quick gut reaction.
Ms. DAVIES. Well, one, you're talking about 10 years ago and the EXXON VALDEZ incident, are you not? I think we've come a way, a long way, since then. There are bioremediation products on our product list, and they are being used.
I certainly will supplement my remarks, and I would—
Mr. BOEHLERT. What about the higher bar allegation, that you have one standard for the other products and another standard for this approach?
Ms. DAVIES. That, I personally cannot answer. I would have to go back and get some additional information on that.
Mr. BOEHLERT. I would appreciate that.
Ms. DAVIES. I will be happy to do that.
Mr. BOEHLERT. I will share it with all of my colleagues.
Mr. Kennedy, let me ask you this. You guys have been following this, the whole 10-year study on the impact of EXXON VALDEZ. What do you think of some of the high-profile news accounts of recent days?
Mr. KENNEDY. I'm happy to comment on it, actually. It's a little bit of a loaded question, and I'm asked this question a lot. I have been, over the last couple of weeks, by a lot of media folks.
I think one of the first things I say is, when you look at those that are giving you the responses, one, look at their technical capability and experience to be able to make some of the comments and statements they're making; two, do they have any sort of an agenda that they may be wanting to promote; then I guess three really is, have they put their comments in a context?
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What I have seen of a fairly significant amount of the coverage is it doesn't meet those standards. There is an agenda.
There is not the technical capability and understanding, appreciation, experience that goes with being able to make some of the statements that are made, and certainly there are some very significant agendas, for instance the $6 billion that is still outstanding in the suit between industry and the fishermen.
So I think there is a middle road there, and I think that without putting those qualifications on a lot of what has been presented, you're getting a bias.
Mr. BOEHLERT. I understand that. In the Congress, we expect that. We know we're victims of it, on occasion.
The typical Member of Congress is not right here. I mean, we've got two of us here right now. Most of my colleagues, in dealing with OPA and EXXON VALDEZ and the 10th anniversary read yesterday's Washington Post with a great deal of interest.
I happened to think that that was a fairly balanced, well-done article. Is that a view you might share? I'm not hustling. I don't even know who wrote it, who was the author. So it's not a personal friend, I'm trying to get him plaudits.
But I thought that was a pretty good article, and provided a pretty good balance.
Mr. KENNEDY. Unfortunately, I did not read that. In fact, at the break, I was talking to some folks, ''God, I didn't read the article,'' so I can't comment on it.
But I'll tell you what. I have read two or three very good articles that do, I think, provide that balance. There are some out there.
I guess me being in the middle of it, I get upset when I see some of the statements that make the headlines on some of the stories that are being written, and they concern me greatly because I think they distort the public image beyond—
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Mr. BOEHLERT. That's a view we share from this side of the podium, too.
Mr. KENNEDY. Okay.
Mr. BOEHLERT. Ms. Davies, your statement, near the end, it talks about the challenges of the future, and you talk about challenges in the oil industry relating to the low price of oil, aging infrastructure—I would assume you're concerned about oil leakage because of the aging infrastructure—and large corporate mergers.
Do you want to embellish that a little bit?
Ms. DAVIES. Certainly. I can talk about some of the things that we're hearing from the field, these days.
There is some concern that, as there are large mergers, facilities that are not productive might be sold off to smaller corporations, which may not be able to put money in to keep up environmental protection, so there is some concern that there will be leaks coming from those.
I think there are some concerns about abandoned wells, abandoned pits, that people will not be able to close them properly and they will cause an environmental hazard.
We're trying to track that now, work with our regional offices to see the kinds of things that they're seeing, and to see how many more responses we're doing in those areas.
Mr. BOEHLERT. I think, speaking for me, and I think I can speak for my neighbor and good friend, Mr. Gilchrest, that's the type of thing that I would like to see highlighted more in testimony.
I think EPA has done a very good job dealing with OPA over the years, and I'm one of these Republicans who says I think EPA is a pretty darn good agency. I'm glad you're there, and I think for the most part you do good work.
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Now, some of my colleagues on my side of the aisle would not share that point of view, and I suppose there are some Democrats that wouldn't share that point of view.
Your testimony was rather general, and in essence, the message I got from your testimony is, ''It's good legislation and we're doing a pretty good job of implementing it, and as a result, we're making the progress that was designed when the legislation was written initially.''
That's great, as far as it goes, but then I want to get into, with a little more specificity, some of the challenges ahead, not to try to get you in a corner or nail you in any way, but in order to get a feel for some of the things that we have to look for in the future, and maybe get your suggestions on how we responsibly deal with it.
Not everything requires a legislative solution. Maybe you have the existing authority to do what you want to do, for example, with abandoned wells or with the small companies, and you can't stop commerce.
But as you go back and reflect and talk with the staff about your testimony today, you might think about how you might embellish commentary on some of the challenges that lie ahead, and if you have any specific recommendations.
I want to know if there is something more we need to do, or if you feel you've got the authority you need to do what you need to do, then that's fine, too.
Mr. Chairman, with that, let me say thanks to both witnesses. Very good resources, and I really do appreciate your testimony.
Mr. GILCHREST. Thank you, Mr. Boehlert. Mr. Baird.
Mr. BAIRD. I want to thank the witnesses for your input. I overheard the chairman ask a question, and I must have misheard. I hope I misheard, but I'm afraid I didn't.
I think you said that there are 250 billion gallons, 250 billion gallons of oil used in the United States each year, and we spill 1 percent of that?
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Ms. DAVIES. That was the figure that I had in my testimony, yes.
Mr. BAIRD. So we spill 2.5 billion gallons of oil a year?
Ms. DAVIES. It was actually—it was far less. My staff has informed me it was considerably less than 1 percent. We were pulling statistics from a number of different sources. It's still a big amount of oil.
Mr. BAIRD. 2.5 billion gallons of oil?
Ms. DAVIES. The figure that I did use in my remarks was that we spill more than what was spilled in EXXON VALDEZ every year. Now, that's 11 million gallons.
Mr. BAIRD. Okay. I'm not trying to put you on the spot. It's just that orders of magnitude become significant, and 2.5 billion gallons is a fair spill each year.
Ms. DAVIES. Right. I will be more than happy to go back for the record and document all of our statistics for you, but 11 million, I'm more—
Mr. BAIRD. I'm not happy with 11 million, but I'm a whole lot happier when we're talking millions rather than billions.
Ms. DAVIES. I'm more confident with that number.
Mr. BAIRD. Okay. As you heard earlier, I hail from Washington State, where we've got some issues about Puget Sound oil pollution.
One of our concerns is that the unique qualities of the Puget Sound may not lend a very good flushing. If we do have a spill there, it tends to go out, come back in, go out, and come back in. That is relevant to the earlier discussion today about international standards for oil spills.
I just wonder if you have any thoughts about the legitimacy and merit of perhaps location-specific standards—I understand there would be treaty problems, et cetera— the possible need for location-specific standards, given unique ecosystem concerns.
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Mr. KENNEDY. That's a loaded question, too.
Mr. BAIRD. It's not meant to be. I'm just curious, in your research experience, if—
Mr. KENNEDY. I just moved from Seattle. I have a home in San Juan Islands.
Mr. BAIRD. I see why it's a loaded question.
Mr. KENNEDY. So I have some very strong feelings about that kind of an issue.
I think that there are ecosystems that are unique enough, that require some special consideration, but I would hope that, that being the case, that the appropriate authorities that have to oversee and build those regulations could all work together to see that happen.
There's no question in my mind that Puget Sound, and many other places, do have some very unique requirements that go beyond the normal standards you might expect.
Mr. BAIRD. One final question is, earlier I alluded to asking the question of, there was discussion about whether we should increase the disaster response trust fund to $5 billion, and I raised the question about spending money for recovery versus prevention. In other words, do we sock the money away in a trust fund, or do we spend it?
If we're going to spend it, is it better spent on actual materials or infrastructure to prevent the oil spill in the first place?
Could your data, in terms of the impact—the biological impact, the economic impact of a major spill—help inform that discussion?
Mr. KENNEDY. Yes, I think so. It's kind of an ongoing question for us and we do document pretty carefully, and have a lot of economics involved in evaluation of spills, and to some degree, yes. It's a very difficult question.
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I think certainly our agency would say prevention preparedness is what we've got to make sure is top notch. Once the thing has happened, then we've all lost,
On the other hand, obviously, we're very, very concerned and interested in the restoration phase, and feel that since we know there are going to be spills, you've got to have the best techniques and technology available. It's a balancing game, there's no question.
Mr. BAIRD. I asked the Coast Guard if they would consider the cost-benefits of that issue, and they said they might be willing to do so. I had hoped you would work in concert with them.
Mr. KENNEDY. We certainly will.
Mr. BAIRD. Thank you. Thank you, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Baird.
I just have one follow-up question, and I guess I could pose it to both of you. It deals with, at the heart of NOAA, as far as OPA 1990 is concerned, and determining when restoration is complete, of a region, your comment earlier, Mr. Kennedy, was that restoration will be complete when it's restored to pre-spilled conditions.
I would assume, then, that NOAA and EPA, working in this collaborative effort, based on the structure of the Act, would have some handle, understanding, especially as a result of the charting and those kinds of things that are done, some handle as to what Prince William Sound was or is right now, what the Chesapeake Bay is right now, what the Gulf of Mexico along the coast is right now, what the lower Mississippi River is right now.
Now, I would assume that you would base, if there was a catastrophic oil spill, or even not a catastrophic oil spill, even the cumulative impact of leaking over years, how that restoration would be done, and then complete, and say, ''It is restored.''
I would guess that you would have some strong sense in Prince William Sound, a pretty healthy sense in the Chesapeake Bay. But given the previous panel's comments and this panel's comments on the Gulf of Mexico and the lower Mississippi Rover, I'm not so sure if you have a handle what is going on right now.
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Two thirds—and I hate to keep coming back to the Gulf of Mexico, but this surprised me so much today. If you go to restore the Chesapeake Bay after an oil spill, you're not going to restore it to 1630. You'll restore it to something like it is today.
You're not going to restore Prince William Sound to pre-Vitus Bering days. You're going to restore it to the 1990s.
But the Gulf of Mexico and the lower Mississippi River, that has this relentless assault of leaking, or however else the two-thirds of the oil spills or leaks in the United States occur there, every single day is worse than the previous day, so do you restore it to a year ago or do you restore it to 20 years ago, or 50 years ago?
I guess my question is—I'm sorry for rambling here—you probably have a pretty good plan for the Valdez area. You probably, I hope, have a pretty good plan for Mr. DeFazio's area, or for Boston Harbor, where you have identified all the potential shore facilities, transportation facilities, pipeline facilities.
Is the problem in the Gulf of Mexico and lower Mississippi River more than you have the resources to complete now, so that you can put on a map Alabama, Mississippi, Louisiana, West Coast of Florida, part of Texas, and pinpoint every single shore facility, every offshore facility, every pipeline, every transportation route, where you could put a pin there and say, ''This is where the facilities are, this is where the leaks are occurring, and this is what we're going to do to stop it''?
How do we get to that point?
Ms. DAVIES. In terms of area planning, that planning is going on, where you would look at where the facilities are, the potential types of discharges. So I think there's a fair amount going on all across the United States, to identify facilities and be ready to respond if there is an issue.
On the restoration issue, from a process standpoint, EPA, when there is a spill, will work very closely with NOAA and trustee agencies. We will certainly make sure that they're informed of the spill and will work with then so that if there is some action we can be taking with them, it would be worthwhile.
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Dr. Kennedy has a much firmer handle on the restoration angle, and I would just defer to him.
Mr. KENNEDY. When we do a restoration, we have a number of different avenues that we pursue to look at where we need to restore things back to.
Obviously, both EPA, our agency, and a number of other federal and state and local agencies all have monitoring plans of some sort or another, which are continually looking at that set of parameters that we would need to have in our hip pocket to say, ''Okay, this is where we want to get to.'' We use those programs very extensively.
Another avenue is, once you've had an event in a particular area, you find a like area and use it as a control, if you will, to gauge against, to then try and restore the area that's been impacted.
No question, though, that we're looking to restore to what the pre-existing condition was, and I don't think that I can categorically say that I am at all confident that we have all the data and the information required to do the kind of job we would like to do. We don't.
Monitoring the environment—
Mr. GILCHREST. Excuse me. Is that because OPA 1990 doesn't cover that kind of problem that exists in that region of the country?
Mr. KENNEDY. Not that region of the country. In fact, I would point out that obviously, your characterization of the Gulf environment possibly changing more dramatically because it's being influenced by more pollutants, this problem is true any and everyplace in the country.
We have had spills where there is no monitoring, no science that has been conducted, and did not have a very good idea of what the environment was like that we wanted restored. I've had to use a lot of—
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Mr. GILCHREST. Is that prior to OPA 1990—
Mr. KENNEDY. No.
Mr. GILCHREST. —or is occurring now?
Mr. KENNEDY. It's occurring now.
Mr. GILCHREST. I understood from—though, I want to say something about this, too, I guess. I've been abandoned by my colleagues. There's not a vote on, is there?
I guess what I'm trying to get, now, EPA has 13 different regions that they have plans for?
Ms. DAVIES. We have regional response teams for 13 areas, in our area plans, and—
Mr. GILCHREST. So that covers the United States?
Ms. DAVIES. Right.
Mr. GILCHREST. Alaska and Hawaii?
Ms. DAVIES. Alaska and Hawaii.
Mr. GILCHREST. Would there be any areas within those 13 regions that do not or have not been studied yet?
Ms. DAVIES. It's the degree to which they're studied. That's what I tried to say in my opening remarks. There's a lot more work that has to be done to go down to specific geographic areas, and we are doing that.
We are looking at environmentally sensitive areas, we're looking at points where there could be discharges, but it's time and resource-intensive to do that, and it will take us longer. That's why I think we didn't say there's a 10, a number 10. I mean, we still have a lot of work to do.
Mr. GILCHREST. Now, EPA has 13 different regions.
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Ms. DAVIES. Regional response teams, and that means that various agencies sit on those regional response teams.
Mr. GILCHREST. Does NOAA sit on that?
Mr. KENNEDY. Yes.
Ms. DAVIES. NOAA is a member of that.
Mr. GILCHREST. You have 13 different regional response teams.
Ms. DAVIES. Correct.
Mr. GILCHREST. How does that coordinate with areas of the country to be—
Ms. DAVIES. Those are area planning committees, correct? So there would be an area contingency plan. But it's really much more important to get down to the sub-areas. The trend that I see today, having just done a round robin of all of our regions, we are down there into the sub-areas. But it's time-intensive. It takes a lot of work.
Mr. GILCHREST. So the response to a catastrophic spill in the Chesapeake Bay and the cleanup techniques and the damage done, and then the determination of restoration would be, I would guess, very different from what you might find in Boston Harbor or Seattle or San Diego, or even Lake Michigan?
Ms. DAVIES. And the people responding would be different, too. Part of area planning is to build those relationships so that you all work together very closely.
Mr. GILCHREST. I mean the actual physical damage that would be done to an estuary that is shallow, like the Chesapeake Bay, compared to the deep water of Valdez or Seattle.
Mr. KENNEDY. No question about it. The earlier discussion about Puget Sound being unique, environmental ecosystem unique, is true of all those places you mentioned, and each one, depending, of course—you've got a wide variety of products, and the different kinds of products that come into the different parts of the country vary a lot.
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On top of that, yes, the ecosystems themselves are quite different, and as a result, if you had a spill of some kind in each of those areas, you would have a very unique set of issues and problems.
Mr. GILCHREST. Would you like to see anything changed in OPA 1990 that would help facilitate your ability to prevent or clean up oil spills?
Ms. DAVIES. We haven't really had an opportunity to take a close look at it. I think there's been a lot of success with OPA, but we certainly would be happy to go back and take another look.
Mr. KENNEDY. I think a couple of quick things. One, we've referred to the research. So much of what we do when we respond to a spill, it would be wonderful to have some of the research dollars to look very carefully at how we did what we did, look more specifically at bioremediation.
All of the discussion we've had about bioremediation, in-situ burning, all of the research has been conducted through funds other than OPA. I don't believe OPA has had funds to allocate to do any research.
Mr. GILCHREST. Do you have a figure on the research that would be reasonable on an annual basis?
Mr. KENNEDY. I have a big weight on my shoulder here. There's all sorts of folks behind me saying—I really don't.
Mr. GILCHREST. They're all smiling, though.
Mr. KENNEDY. Yeah.
Mr. GILCHREST. They all seem very pleasant.
Mr. KENNEDY. Yeah. I really don't. But it would be a significant number.
Mr. GILCHREST. $100 million?
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Mr. KENNEDY. $100 million. $100 million is what sticks in my mind, and that is absolutely off the top of my head, so I'll probably be crucified for that.
Mr. GILCHREST. $100 million is thrown around here a lot.
Mr. KENNEDY. Yeah. $100 million would be a heck of a lot more than we've had to date. We did, in the early stages of OPA, develop a research plan to address the myriad of issues that we felt needed more discussion. That plan is out there somewhere, and I don't remember what the dollar figure was. But it was developed, and then there were not funds available, as Mr. Sheehan was saying.
Mr. GILCHREST. Thank you. I'll pretty much close now. I'm not going to say the name of the company, mainly because I can't remember the name of the company.
Some people came into my office, and probably came into Mr. DeFazio's and Mr. Boehlert's, as well. I'm not sure if they got into Mr. Baird's office. But they showed us a dispersant. The reason this is dry now is because it was filled with water, and it evaporated.
The oil that they put in there is at the bottom. I was told it's a very typical dispersant that is used to disperse oil, but the oil is still there.
The other jar, they had also filled with water. They put in this little stuff that hasn't crawled out yet, but it's a cross between something that's alive and something that's not alive, some bioremediation organic thing.
Anyway, the oil is gone. This stuff is left. I guess the oil was absorbed and then, in some way, evaporated.
It just seems like there's a lot of fascinating things out there. It's pretty easy to fool me. I still believe that a magician can pull a rabbit out of a hat, I guess.
[Laughter.]
Mr. GILCHREST. Anyway, we certainly appreciate your testimony, and we will look forward to a follow-up, perhaps with a hearing, dealing with this aspect of OPA 1990, and maybe we can sit down in my office to further discuss some of these issues.
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Mr. KENNEDY. I'll be happy to.
Ms. DAVIES. I'll be happy to.
Mr. GILCHREST. Mr. Baird, any follow-up questions?
Mr. BAIRD. No.
Mr. GILCHREST. Thank you very, very much.
Ms. DAVIES. Thank you.
Mr. GILCHREST. Panel number three. It's almost lunch time, isn't it?
[Laughter.]
Mr. GILCHREST. Robert Malone, president and CEO of Alyeska Pipeline Service Company; Thomas Moore, president, Chevron Shipping Company, also representing the American Petroleum Institute and the International Association of Independent Tanker Owners; Mr. Joseph Cox, president, Chamber of Shipping of America; Thomas A. Allegretti, president, The American Waterways Operators; Cynthia Colenda, president, International Council of Cruise Lines, accompanied by Captain Ted Thompson, U.S. Coast Guard (retired) and ICCL, vice president of International Operations.
Ladies and gentlemen, thank you all very much for coming.
Mr. GILCHREST. We can start with Mr. Malone.
Welcome, sir.
TESTIMONY OF ROBERT MALONE, PRESIDENT AND CEO, ALYESKA PIPELINE SERVICE COMPANY; THOMAS R. MOORE, PRESIDENT, CHEVRON SHIPPING COMPANY, ON BEHALF OF THE AMERICAN PETROLEUM INSTITUTE AND THE INTERNATIONAL ASSOCIATION OF INDEPENDENT TANKER OWNERS; JOSEPH J. COX, PRESIDENT, CHAMBER OF SHIPPING OF AMERICA; THOMAS A. ALLEGRETTI, PRESIDENT, THE AMERICAN WATERWAYS OPERATORS; AND CYNTHIA A. COLENDA, PRESIDENT, INTERNATIONAL COUNCIL OF CRUISE LINES, ACCOMPANIED BY CAPT. TED THOMPSON, U.S. COAST GUARD (RETIRED) AND ICCL VICE PRESIDENT, INTERNATIONAL OPERATIONS
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Mr. MALONE. Thank you, Mr. Chairman, and members of the subcommittees. My name is Bob Malone and I am the president and chief executive officer of Alyeska Pipeline Service Company.
I would like to thank you for the invitation to be here with you today to provide comments on the Oil Pollution Act of 1990. I have submitted my formal comments for the record and I would like to highlight some of those if I could today.
Alyeska is owned by seven oil companies. In our almost 22 years of existence now, the Trans Alaska Pipeline and the marine terminal have transported 12.5 billion barrels of oil and we have loaded almost 16,000 tankers. Even today, we are transporting 1.2 million barrels a day, which is approximately 20 percent of the nation's domestic oil production.
As has been said on a number of occasions today, this is the tenth anniversary of the EXXON VALDEZ oil spill. It was a tragic event and is probably the darkest chapter in the history of Alaska oil development. So I am not here today to ask for changes to OPA 90.
What I am here to say is that it has been a good law and that it has made a significant contribution to the improvements in the safe transportation and movement of oil in Prince William Sound.
Mr. Chairman, if you would allow, I would like to use some charts, if I might, and stand to deliver the rest of my presentation.
Mr. GILCHREST. Yes, sir.
Mr. MALONE. Thank you.
A big state requires a big map and this is Prince William Sound. It is 15,000 square miles. It is larger than the state of Vermont. Our tankers enter from the Gulf of Alaska in through Hinchinbrook Entrance.
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Through Hinchinbrook Entrance, an empty tanker will make a 70-mile journey into Port Valdez. Traffic lanes have been set up by the United States Coast Guard. We have both an inbound and an outbound tanker lane. As the inbound tanker transits the Sound, there are two locations where tractor tugs move out into the Sound and stand ready in the event that there is a problem with an inbound tanker.
Once they arrive in Port Valdez, they go through deballast, they are loaded and before they sail—that takes 18 to 24 hours—before they sail, there is a pre-meeting with the Coast Guard and with Alyeska.
At that meeting, we talk about conditions in Prince William Sound, wind, ice conditions, weather conditions.
Before the tanker sails, after it leaves the berth—and we have a photo here—we tether to the stern of that tanker a tug.
That tug that you see here is approximately a 6000-horsepower tug tethered to the stern.
In addition, there is a second vessel which will accompany that tanker the entire transit, 70 miles out of Prince William Sound. It stays with it the entire time.
The first 25 miles leaving Port Valdez is a narrow area of Prince William Sound, so from Port Valdez near Bligh Reef, that tanker is at the stern. It is tethered there to make sure that if there is a loss of steering or power that we will be able to stabilize that tanker.
Once it arrives 25 miles out, the tethered tanker drops but stands ready and the tanker continues its journey, followed by that escort vessel.
As it makes the transit through the Sound, those two tankers that I spoke about earlier move out towards the Sound and they stand ready to join that escort vessel in the event that a power steering or other emergency takes place.
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As it enters back through Hinchinbrook Entrance, there is what is called a rescue tug that is based there. As the tanker enters this narrow area, it joins that ERV and accompanies it through the narrow area near Hinchinbrook Entrance.
As the tanker enters the Gulf of Alaska, the second vessel drops and returns and that rescue tug stands ready in the Gulf of Alaska until the tanker is 17 miles out to sea.
Alyeska, through its ship escort and response vessel system, is responsible for prevention and response in Prince William Sound and also on behalf of marine shippers for 200 miles out into the Gulf of Alaska.
Our focus has been on prevention. I have often said that the easiest spill to clean up is the one that never happens, but nobody can assure you that there is no risk, nor can anybody assure you that it cannot happen again. We have to be prepared to respond in the event that oil does end up in the water.
What we have done, and I would like to use this picture, on the response side, 10 years ago, we could clean up 27,000 barrels of oil in 72 hours. Today, we meet the planning standards of 300,000 barrels of oil in 72 hours.
This shows during a training exercise the majority of the equipment or some of the equipment that we use at Prince William Sound.
You see two tugs in front. Those are those escort vessels that you have seen. We have 11 of those. They are both there for prevention and response.
The barges that you see in the middle, we have eight of those and they can hold 800,000 barrels of oily water.
The boom which is encircling that barge, we now have 35 miles of various types of boom.
You cannot see it in this photo, but there is a skimming device that is within that boom. We have five skimming vessels. We have over 70 skimming devices. They can clean up 50,000 barrels of oil an hour.
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We also have fishing vessels. There are 350 fishing vessels on contract in the event of a spill. Of those 350, 50 are in our core fleet, but all do training and exercise with us.
In addition, we have roughly 200 SERVS and Alyeska employees that are trained to respond in the event of a spill.
All of this has come with a price. We have spent approximately $550 million in operation and maintenance of this system in the last 10 years. We have spent $100 million in capital and our operating budget is between $60 million and $70 million a year. But we have been going beyond OPA 90 in pushing the frontier on new technology.
I am very proud to show you today a new vessel that has just arrived and was just christened in Prince William Sound. This is the Nanuq.
The Nanuq is a 10,200 horsepower cyclonial drive tractor tug. It was built for Crowley Marine in Anacortes, Washington. It is capable with the cyclonial drive of revolving 360 degrees. It can put equal force in any direction.
We have one of those presently in Prince William Sound and it is serving as that tether tug. We have another that will arrive next month and we have also just placed an order for three additional similar vessels that will have the C-drive, the same 360 degree equal force, but we can use those in shallower waters. So we will have five new vessels, a commitment of about $150 million in new vessels.
Mr. Chairman, if you will allow, I have just a 30-second video that shows this new tug.
[Videotape is played.]
Mr. MALONE. This is an actual exercise that you will see. This is a fully laden oil tanker.
That is a fully laden oil tanker, it is an exercise that we did soon after the Nanuq arrived. It was tethered to the stern of that vessel. What it is doing is slowing that tanker down and, as you will see, the maneuverability of that vessel as it puts its propulsion system on the cable on the stern of that vessel.
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Now watch it turn in just a moment and it will be applying that force. It is just revolving 180 degrees. At the same time, it is pulling on the cable and if you watch closely, you can see that tanker movement, it is pulling it back and stabilizing it in the shipping lane. These are amazing vessels. As I said, we will have five of them.
This particular exercise, that tanker was a 265,000 dead weight ton tanker, fully loaded. It was going 6 knots. This tug stopped the tanker and stabilized it in less than three minutes and that is what new technology is doing for us today.
In closing, Mr. Chairman, and thank you for the additional time, we have been working with the technology, we have been working with training. We have a good law, a good federal law, and we have a good state law. We have good regulation, strong regulation, both state and federal. We have citizens' input and we have community input.
But at the end of the day, it is people that are making a difference in Prince William Sound. Working with the regional citizens advisory council and the Coast Guard, the shippers, producers, SERVS, we have been able to improve oil transportation in Prince William Sound and we believe have the safest oil transportation system in the world right now.
Thank you.
Mr. GILCHREST. Thank you very much, Mr. Malone.
Mr. Moore?
Mr. MOORE. Thank you, Chairman Gilchrest, committee members. I am pleased and I appreciate the opportunity to address the committee.
My name is Tom Moore. I am president of Chevron Shipping Company. I manage a fleet of over 70 tankers, about half of which we directly own and operate ourselves.
I am providing testimony on behalf of the American Petroleum Institute and INTERTANKO; thus, I represent nearly all of the oil cargo and tanker interests that are subject to OPA 90 in the United States.
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OPA 90 was enacted to reduce the risk of and improve the response to oil spills in U.S. waters. We believe that it has been successful. The data shows the results.
The 1990s will end up being the decade of the century with the lowest incidence and impact from oil spills in the U.S. If you were to superimpose tanker-specific spills on top of the chart that Adm. Loy showed this morning, the trend would be even more dramatically improved from all spills to U.S. waters.
This was not fully attributable to OPA 90, but this legislation and the U.S. Coast Guard's regulatory and enforcement role were strong contributors to the improved performance. There have been no large spills from tankers in the U.S. since 1991.
So what worked well? I will comment in three specific areas: prevention, response and liability.
On prevention, the double hull design provision is good. Double hulls are an improvement over single hulls and the worldwide tanker fleet will meet the deadlines established by OPA and IMO for the full replacement of single hull tankers with double hulls. But I caution about double hull complacency. Double hulls do not keep ships off the rocks and double hulls are not a panacea. There may be some common misperceptions about this.
If a vessel is in a serious collision or grounding, double hull can actually aggravate and worsen the oil pollution consequences. I believe this would have been the case had the EXXON VALDEZ been a double hull design.
People are the biggest factor in casualty avoidance, people making good judgments about navigation and ship management. Virtually every major ship casualty can be linked to bad judgment somewhere along the chain, and fatigue is a factor in making good judgments.
OPA 90 set a good, reasonable upper boundary for work hour limitations. It actually helped us run our business. A good law.
On response, the planning standards and the requirement for all vessels to have a pre-approved spill response plan with cited approved contractors is very good and so is the requirement for a named available qualified individual who has the authority and availability to execute those response plans. Again, a very good law.
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The U.S. now has more oil spill response equipment than any other place in the world, by far. Fortunately, most of it remains idle except for drills and training.
There is now a global oil spill response industry throughout the world. It is a robust industry and the U.S. components are the industry leaders.
OPA 90 provided for the dollars to pay for this response to oil spills, both with the removal costs and the compensation for damage; three elements: higher liability limits, the evidence of financial responsibility for every tanker calling at U.S. ports, and the Oil Spill Liability Trust Fund.
Now, on liability, the strict liability regime of OPA 90 is also good. The value here is that people can be compensated promptly without taking the time to litigate or adjudicate.
This principle of prompt payment follows the voluntary international regimes that the oil and tanker industries set up over 30 years ago, the CRISTAL and ITOPF contracts, which have recently been superseded by international conventions.
The good feature of this strict liability is that it is capped in OPA 90 at reasonably high levels. Hence, we have strict liability with upper limit caps. They go hand in hand.
The fundamental concerns that we have with OPA 90 also relate to the liability issues and there are two specifics. Because OPA 90 did not preempt them, most coastal states have enacted their own OPA 90s, often going beyond federal standards, in many cases creating unlimited liability regimes. So now we have strict liability with no upper limit. Because you cannot insure this risk, many good, prudent, respected and responsible vessel owners and operators elect not to trade to the U.S. and they can do so because they have a choice.
The corollary to this is that these vessels are being replaced in U.S. waters by ones that may carry less commitment to protecting people and the environment.
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Perhaps more onerous, however, is the current criminal liability atmosphere.
OPA 90 established criminal liability for oil spills following the test of negligence, albeit simple negligence, but prosecutors have invoked other statutes that apply a strict criminal liability standard. That is, if you spill oil without regard to circumstances, there are de facto criminal consequences involving fines and jail for those involved.
There is good evidence of this practice and there is good evidence of the consequences. It has caused responsible management to distance itself from direct involvement in tanker operations in the U.S.
There is no reason to bypass the basis of OPA 90. We have people who are trying to do the right thing, but may find themselves in an unfortunate situation involving oil spills without intent or negligence. They are not criminals.
In closing, there are many stakeholders in oil spills and their prevention. I cannot think of anyone who has more focus and commitment to avoiding oil spills than I do and who has more at stake if they are involved in one. I include the sailors on my ships in this category. We all share that same environmental commitment.
I can tell you that every aspect of my management direction is aimed at providing incident-free operation of our vessels. Our company's performance for the past 10 years, for the past 20 years, has been impeccable. But the downside is huge and I bear that burden. The cost of failure is intolerable to my company and to me.
Some say that we are rolling the dice, betting the company every time we bring a loaded tanker into a West Coast port. Possibly, but it is an essential part of our business and it is an essential requirement for the country's energy supply.
The problem is that there are not more people like me in this business. I apologize if this sounds egotistical, but the unlimited and criminal liability regimes have had that effect. Do we really want a higher percentage of financially weaker risk takers trading their tankers to the United States replacing those historically strong committed operators who attempt to manage the risks of the business appropriately and prudently?
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In summary, the oil spill performance results have been very good since OPA 90 and we will have a better chance of sustaining and improving them if we can correct the liability issues I discussed.
Thank you.
Mr. GILCHREST. Thank you very much, Mr. Moore.
Mr. Allegretti?
Mr. ALLEGRETTI. Good afternoon, Mr. Chairman, Mr. DeFazio, Mr. Baird. On behalf of the 375 member companies of the American Waterways Operators, we want to thank you for holding this important hearing today.
Ten years later, the spill in Prince William Sound is still a sobering reminder of the inherent risks of oil transportation and the need for constant vigilance in managing those risks and minimizing them.
I am not here to tell you that OPA 90 has eliminated those risks, but I am pleased to say that the passage of the law has launched a process that has worked to reduce spills and to significantly reduce the risk of spills. Today, the maritime industry is moving oil more safely than ever before.
The record of the last 10 years is an encouraging one. Oil spills in the United States are today at a historic low and the trend line is pointing in the right downward direction. Tank barge operators spilled 83 percent less oil in 1997 than they did in 1990. But perhaps even more encouraging is the story that is behind the numbers.
Companies in the oil transportation business today have put in place a comprehensive array of safety improvements and spill prevention measures which have not only produced a safer oil transportation system, but, as importantly, one which offers the promise of continuing progress toward the goal of zero spills. Consider the following:
First, today vessels are safer as a matter of design, operation and maintenance. For example, only 20 percent of the U.S. tank barge fleet remains single hulled.
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Second, crews are better trained and they are better prepared to do their job safely. Both the industry and the Coast Guard have recognized that operational competence means more than simply obtaining a Coast Guard license and passing a Coast Guard exam. New regulations now require a practical demonstration of operational proficiency as a prerequisite to that license.
Third and perhaps most significantly in terms of the changes that have occurred is the degree to which companies have embraced comprehensive safety management systems. The tugboat, towboat and barge industry has been a leader in that transformation through the establishment of AWO's Responsible Carrier Program and the vote of our members last year to make compliance with that program a condition of membership in the trade association.
And finally is a changed relationship between industry and government. Today, both industry and the Coast Guard know that we are bound together by the common goal of improved marine safety and environmental protection.
Today's hearing should help all of us understand how we can build on that encouraging record of the last decade and accelerate our future progress.
Oil spills simply are not acceptable. They are not acceptable to Congress, they are not acceptable to the Coast Guard, they are not acceptable to American citizens and they are not acceptable to us. There is more that can be done by the industry, by the Coast Guard and by the Congress.
For the oil transportation industry, our next steps are to proceed from the base line recognition that oil transportation has inherent risk and it is our daily challenge and our daily responsibility to manage and minimize those risks. Programs like the Responsible Carrier Program and the ISM code help to provide a framework for doing that. Therefore, safety management and spill prevention are a never-ending imperative for us.
For the Coast Guard, the most significant challenge lies ahead in the enforcement realm, targeting its enforcement resources on those operators whose actions threaten the marine environment.
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And for the Congress, we see an important challenge ahead as well. The OPA 90 blueprint of oil spill prevention, response and restitution has become blurred by the specter of strict criminal liability statutes that draw no distinction between willful and negligent conduct and simple accidents which occur despite responsible operations.
These strict liability laws, the Refuse Act and the Migratory Bird Treaty Act, mean that any operator involved in a spill, no matter the circumstance, no matter the level of his environmental prudence, is subject to criminal liability if oil enters the water or if a seabird is harmed.
This undiscriminating regime has negative consequences, both for the Coast Guard/industry cooperation in the aftermath of a spill and for the industry's ability to attract and retain the best qualified mariners to move environmentally sensitive cargos.
Congressional action is needed to solve this problem.
Thank you for the opportunity to testify today. We look forward to working with the committee and the Coast Guard toward a safer marine transportation system.
Mr. GILCHREST. Thank you, Mr. Allegretti.
Mr. Cox?
Mr. COX. Thank you, Mr. Chairman, and good afternoon, Mr. DeFazio and Mr. Baird. It is certainly a pleasure to be testifying before your committees today.
Sir, you have heard a lot about the improvements that have occurred over the years since the spill and I am not going to reiterate those except to say that I think that the industry cooperated very greatly in the development of the requirements that result in the lessening of those spills.
I would like to comment on two areas where I think the Congress may want to consider some action to improve things. I am going to reiterate my two previous colleagues' concerns with the criminal liability arena, certainly my experience with my member companies, and I represent American companies which own, operate and charter ships, ships of all types, both tankers and dry cargo container ships, RoRos.
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The aspect of criminal liability within OPA 90 for spills is something that when you read through the act contains adequate requirements for taking action against criminal activity. There is a negligence test and in the licensing area where we are talking about inspections and load line inspections and that, there are criminal sanctions for violating those. I think those are all acceptable. That is something that every good operator has to live with every day. It is the strict liability that lay outside of OPA 90 that is the major concern for the executives within our industry.
The second area where I would think that there should be some debate within Congress is with respect to the Water Resources Subcommittee perhaps and that is the natural resource damage assessment arena where we are talking about a tertiary method of non-contingency valuation. Dave Kennedy, and he and I have had some friendly discussions. We certainly disagree, however, the methods we are talking about, the valuation methods, are tertiary methods which he contends do not happen all that often and I respond to him that the fact that they exist creates a problem and a concern for industry and we feel that that is something that should be addressed.
Mr. Chairman, I think that I would like to drop to the bottom part of my testimony which is about the other improvements that our industry has formulated and gone through, particularly with respect to the International Maritime Organization.
There have been some major changes which are reflected in the reduction of spills. One of the primary ones is one that is probably not as well accepted by most people as perhaps those of us involved in the industry and that is we had a change in SOLAS a couple of years ago which gave any port state the opportunity to inspect a vessel beyond its certificates.
Previously, you were limited in the fact that if a ship had a valid certificate, unless there was something totally obviously wrong to you, you could not get involved in the operational aspects of the ship. That has been changed by the IMO and a port state now has the opportunity to get into the operational measures of a vessel and ask for indications of—they want opportunities to show that the crew and the ship can meet the operational requirements.
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That came along about the same time as the ISM code, which I will not get into very much except to say that when we tie that back to the criminal liability aspect, it is a very important connection because within the ISM code, where we are now trying to tie the shore to the ship directly so that we know that the people on shore are knowledgeable about what is going on about the ship, we are at the same time throwing a criminal liability aspect in there which we feel deters from the actions that we are trying to take to create that link between ship and shore.
STCW tightened the rules. We have heard about work hours. ILO Convention 147 contained work hours which tightened it further for crew members other than those covered by STCW. The IMO air pollution standards and the ballast water standard are presently being worked—they are very involved in this country especially ballast water issues, as you know, Mr. Chairman. We are certainly working on those.
With the perhaps 30 seconds I have left, I wanted to mention a couple of things I heard this morning. I think I would like to have the opportunity to perhaps discuss in question further comments about the response plans that we heard for non-tank vessels that are contained in IMO. I think there is a little bit of information there that we ought to discuss. And the whole aspect of protecting the fuel tanks is something that I think should be discussed.
Thank you very much, Mr. Chairman.
Mr. GILCHREST. Thank you, Mr. Cox.
Ms. Colenda?
Ms. COLENDA. Hi, Mr. Chairman and members of the committee. Thank you for inviting me. I am Cindy Colenda from the International Council of Cruise Lines and accompanying me is Ted Thompson, retired Coast Guard captain, and my Vice President of International Operations.
The International Council of Cruise Lines represents 17 member lines and we operate 92 vessels around the world. Last year, we carried almost 5.5 million passengers.
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I would like to address three key points in my testimony today.
The first point is our industry is highly regulated. We are governed by a strict set of international regulations that address environmental protection as well as passenger, crew and vessel safety. The U.S. Coast Guard, our flag states and class societies are part of this comprehensive international safety net that oversees our performance and our operations.
The cruise industry secondly has a strong environmental record and is constantly striving to improve its environmental performance. The executives of the cruise industry are committed to protection of the environment, not only in principle, but also because we have a vested interest in maintaining the beauty of the oceans. Quite frankly, our future depends upon clean water and clean beaches and that is a very important point that I would like to make.
The cruise industry is committed to continuous improvement. The recently enacted International Safety Management Code will require passenger vessels to establish comprehensive programs which will further enhance environmental efforts.
Mr. Chairman, IMO has issued comprehensive and far reaching regulations that are dynamic, rigorous, detailed and stringent. The environmental regulations which most significantly impact cruise vessels are found in MARPOL Annex I and V. We in the cruise industry go to great lengths to comply with international requirements. We have comprehensive programs in place and have invested millions of dollars in state of the art environmental technologies.
As of July of last year, MARPOL Annex I implemented stricter discharge limits that require all cruise vessels to have equipment installed on board that limits the discharge of oil into the ocean to 15 parts per million, as well as an alarm and an automatic stopping device when that limit is exceeded.
During normal ship operations, waste oil is produced from a number of sources and mixes with water in ship's bilge. In the past, oily water separators which treated this mixture were inefficient and difficult to maintain. However, recent technology supported by research from several of our ICCL member companies has resulted in substantial improvements in separator efficiency and reliability. In fact, one such system discharges water at least three times purer than the legal limit or 5 parts per million.
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Also in 1998, the International Management Code for the Safe Operation of Ships and for Pollution Prevention came into force. This new initiative requires all vessel operators to clearly delineate shore-side and shipboard responsibilities as they relate to an established safety management system.
The ISM code has had and will continue to have a profoundly positive effect on ship safety and protection of the marine environment. Both the cruise industry and the Coast Guard are strong supporters of this initiative.
ICCL member lines have established comprehensive environmental programs and have incorporated crew training and passenger education as a component of shipboard environmental procedures.
One such program established by an ICCL member line was the first in the cruise industry to receive the prestigious William Benkert Award for excellence in marine environmental protection.
Management of shipboard-generated waste is a challenging issue for all ships at sea. A strategy of source reduction, waste minimization and recycling has been employed by the cruise industry to significantly reduce shipboard waste. In fact, this strategy has reduced by nearly half over the past 10 years the amount of waste on board our vessels.
To assure compliance with both safety and environmental regulations, the U.S. Coast Guard exercises port state authority over foreign flag cruise ships operating from U.S. ports. The Coast Guard examines each cruise ship that calls on U.S. ports quarterly for structure and operation of on board safety equipment under the control verification program.
I am sorry, I am running a few minutes over.
The relationship between the cruise industry, ICCL and Coast Guard continues to be very strong. In March of 1997, the ICCL and the Coast Guard signed a formal partnership agreement to advance our mutual goals of passenger safety, security and environmental protection. Because the Coast Guard is one of the leading maritime experts, we are very proud of this formalized relationship.
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In addition to the partnership, ICCL has taken a very active role through our member lines to highlight environmental issues. Our standing Committee on Technical and Safety Matters which is chaired by Ted Thompson meets regularly throughout the year and discusses industry best practices on a host of operational, safety, health and environmental issues. In fact, in the last year, the ICCL in conjunction with the Coast Guard conducted three oil response exercises, two in Alaska and one in Port Everglades.
In conclusion, Mr. Chairman, today the cruise industry is a leader in environmental programs and partnerships. We have a strong environmental record and will continue to aggressively improve our performance.
We, too, are committed to protect the beauty of the oceans where our vessels are privileged to sail. As I said before, our future depends on the maintenance of clean waters and clean beaches because our passengers depend on seeing that when they go on a cruise vacation.
Thank you very much, Mr. Chairman.
Mr. GILCHREST. Thank you, Ms. Colenda.
I think we will start with the gentleman from Alaska, Mr. Young.
Mr. YOUNG. Thank you, Mr. Chairman. I do apologize. This has gone on a little longer and I had other meetings to go to. I have some questions for Mr. Malone.
You talked about the human factor. We all know that humans make errors such as the EXXON VALDEZ was a human error. What are you and Alyeska doing to minimize the accidents caused by human error?
Mr. MALONE. Mr. Chairman, there are quite a few activities that we have. We recognize the price of complacency and, first of all, we have individual training, drill exercises, that go on on a continuous basis. This allows us to continually remind people and push the edge to make sure that they remain trained and alert to safe oil transportation.
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We are also working right now a culture change, we call it an open business environment, where we are encouraging our employees to raise any issues they have to their supervisor so that any safety concerns, anything that may be of concern for safe oil transportation can make it to the supervisor. We also encourage them to go anywhere to raise those issues. And that has allowed us to create a culture that does not allow for people to get complacent with what they are doing.
Mr. YOUNG. Well, you know, there have been some comments made in the press by your regulators that you have failed recent oil drills, despite the fact that the regulators officially graded your performance as satisfactory.
Is there something wrong with your training? Is there something we can do with the law to improve the quality of drill performance?
Mr. MALONE. Chairman Young, I was disappointed with the press reports on those drills. Both were satisfactory. We were working closely with the agencies on that and the characterization of them as failures, they were not.
What concerns me, and you asked the question, one we may want to think about, drills are the opportunity that we have to, as we said, avoid complacency and I have a fear that the drills and practice exercises are beginning to be you have to make an A plus and I want to be able to use drills as an opportunity to have people try new systems, to be tested, to gain that experience, so then I do not have to rely on the A team each and every time, I have the A, the B and the C team.
And right now, there is a general feeling, particularly these two drills are an example, where you have to have an A plus or it is a failure and I think that is a frightening place to go when it comes to drills and exercises.
Mr. YOUNG. Along those lines, though, Mr. Malone, what is Alyeska doing to stay on top of the latest technology with regard to oil spill response equipment such as the skimmers, boom, storage, removal of oil water, et cetera, et cetera?
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Mr. MALONE. Chairman Young, we showed today the new tractor tugs, one in Alaska and another will be up next month, which is state of the art technology. Those are the largest cyclonial drive tractor tugs in the world.
On the prevention side, we continue to look at that new technology. On the response side, I have heard a couple of people comment today that there has been slow movement, but we have been able to work in a couple of areas. One is with new booming techniques.
Also, we are working with the Norwegians right now on a new type of boom and it is in tests with the Coast Guard that may aid in the response side. So we have people to go to seminars, to training. They participate with others in our industry in looking at the newest response techniques and prevention techniques.
Mr. YOUNG. You know, I had a chance to ride or actually pilot the new tractor tug this last summer and it is a marvelous piece of machinery and it will be beneficial as far as the tankers go.
What about the—what is Alyeska doing to stay on top of the latest technology and science regarding the rehabilitation of oiled wildlife? Hopefully, that does not occur, but what are you doing if something happens?
Mr. MALONE. And I hope it does not as well, Mr. Chairman.
Mr. GILCHREST. Could I interrupt just for a second? If the gentleman from Alaska would yield to me?
Mr. YOUNG. Yes.
Mr. GILCHREST. I did not catch that question.
Mr. MALONE. Well, technology and science regarding the rehabilitation of oiled wildlife in case it did occur. Say there was an accident, is Alyeska working to have a program, is what I was saying.
Mr. GILCHREST. I see. Thank you.
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Mr. MALONE. We have available to us now a mobile cleaning system for wildlife and for birds that is based right now in Valdez, but it is mobile, that we can move as close as we can in the event that a spill occurs. It is the latest equipment in wildlife rehabilitation.
What we have for our response side for wildlife is that we have on contract a number of veterinarians throughout Alaska but as well as in the lower 48 and they are at all the major symposiums and sessions where new technology for wildlife cleaning takes place, and they are there each and every time picking up the newest techniques used.
Mr. YOUNG. All right. Thank you, Mr. Chairman.
Thank you, Mr. Malone. My time is up.
Mr. GILCHREST. Thank you, Mr. Young.
Mr. Baird?
Mr. BAIRD. Thank you, Mr. Chairman.
I want to compliment you all for the good work you have done to try to improve your capacity to deal with oil spills, but I just have to share with you I have a grave concern that has emerged as I have looked at some of the numbers and let me just share it with you and get your response, because maybe there is something I do not understand.
I am reading, Mr. Malone, and we spoke the other day, as you know, but I am reading over, the capacity we have now to deal with spills and when I first read it, I was encouraged, I thought the numbers sounded good. Seven barges to receive the oily water with over 800,000 barrels total storage capacity, five specialized oil skimming vessels, more than 70 oil skimming systems, a total capacity of 50,000 barrels an hour.
Those are all encouraging numbers, but then I move to the data about the EXXON VALDEZ disaster and read that over 11 million gallons of oil were already in the water just 10 hours after the accident.
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So my concern is that is 11 million gallons of oil can enter the water in just 10 hours and our capacity is 800,000 barrels of oily water removal over 72 hours, it seems to me that we are really not capable of handling a comparable spill. Or we could at best—at best, in three days recover only a tenth of the oil that was spilled in just 10 hours on the EXXON VALDEZ.
Mr. MALONE. I am sorry, Congressman Baird, I may not have been clear. The EXXON VALDEZ spill was, as you know, 260,000 barrels and we have the capabilities for 300,000 barrels of oil in 72 hours.
Mr. BAIRD. Oh, that is reassuring.
Mr. MALONE. Yes, sir. We are capable of a spill larger than the EXXON VALDEZ. That is our planning standard.
Mr. BAIRD. I feel much better. Those numbers were a little troubling. So what I need to do is multiply my numbers by 55, right? Because when I am referring to—you are referring to barrels and I am referring to gallons.
Mr. MALONE. Yes, Congressman.
Mr. BAIRD. Thank you very much. I feel better.
Let me ask a somewhat different question. We tend to prepare in life for what happened last time and we always get surprised by what happens next time.
What are some scenarios—I can think of one, and I am not asking you to put yourself on the spot here, but I can think of some scenarios that might complicate the situation we might deal with.
Let us suppose, for example, that we had a fire on board a ship and now our oil recovery efforts are complicated by that factor. In other words, we have burning oil leaking. I do not know the probabilities of that event, but what I am getting at is first of all that specific scenario and what other scenarios have we not prepared for that could complicate the situation?
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Let me give you an example. After the fact, we discovered that little O-rings that shrink in cold weather can cause a problem for a space shuttle launch, after the fact, after we lost a bunch of people and after all the tragedy of that.
What are you doing or what is being done to say, okay, what are—I am not just sort of fantasizing here, but what are scenarios that we may not have considered that could happen?
In other words, I do not want to be here 10 years from now saying, oh, look what a great job we have done recovering from a disaster we had not anticipated.
Mr. MALONE. Congressman Baird, one of the benefits we have and one of the points I was making in my statement was that if you can get the involvement of people in the communities to work together as well as state and federal regulators, you can usually begin to brainstorm a lot of different scenarios.
For example, in Prince William Sound, one of the areas that we had not spent enough focus on was glaciers; as they cap into the sound, you get icebergs that occasionally move into the traffic lanes. And thankfully an inbound empty tanker struck one of those icebergs and from that we were able to create a scenario on how we can guard against that where we literally have pilot vessels out front. We call them ice guards, as they will move in front of the tankers.
We also put some restrictions in on the kinds of visibility and weather in which we will let a tanker sail, or the Coast Guard will let a tanker sail.
You are correct, there are those things that we have not thought about and icebergs were one.
Mr. BAIRD. Let me raise another possibility that occurs to me that could happen in this region. Earthquake. This is by no means an improbable scenario, at least as I understand it. Earthquake and subsequent tsunami. We know that happens in this neck of the woods from time to time. What are those implications?
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Mr. MOORE. Congressman, let me deal with that question, but first just address your earlier one about scenario planning. It is a tool—you caught me off guard with regard to oil spill response, but I want to say that it is a most effective tool. We use it widely in our business, but in the area of, again, incident avoidance, casualty avoidance.
Our crews are conditioned on a regular basis to play the what if game and think ahead, what could go wrong on my voyage plan, what could go wrong and how would we deal with that. So that forward thinking is built into our management processes.
With regard to oil spills, I would not say we do not try to think about that, but I am trying to address your question, that they are so unusual and they are so site-specific that it is hard to envision all of the complications, but I can tell you that in our spill drills the creativity of many minds of the people that we put together in our spill drills, we have had some of the most complicated toxic materials, hazardous situations, and very, very enlightened scenarios. So our drill scenarios do drive us to think of this.
Your second question, excuse me, again was?
Mr. BAIRD. Well, tsunamis and earthquakes.
Mr. MOORE. Yes. Thank you. I think I have to say a ship on the water is probably one of the safest places to be during an earthquake.
Mr. BAIRD. Yes, but you will have ships docked.
Mr. MOORE. And ships docked likewise.
Mr. BAIRD. And transporting oil.
Mr. MOORE. Most of our systems are fairly fluid between the mountings between ship and shore. With regard to oil tankers, there is fluid motion, relative motion available either between ships and arms or hoses that allow for tidal motions of the ship or regular motions of the ship.
Now, when you talk about tsunamis or tidal waves, we actually have—when we have the knowledge of an incident somewhere on the globe with regard to major earthquake, we actually build into our plans the likely impact of where that could happen and we have been known to actually keep our ships out of port when we feel that that could happen, so we deal with that.
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But the earthquakes, with regard to marine assets, it is probably a much smaller consideration than with regard to fixed assets of business, such as refineries and pipelines.
Mr. BAIRD. My concern there would be if a fixed asset breaks and ruptures somehow a significant amount of oil could enter the water nevertheless. Do we have adequate shutoff valves? Has that scenario been reviewed?
Mr. MOORE. There are spill prevention facilities on all the facilities and this is required, again, under a number of regulations existing, whether they are OPA 90 or not. Both storage tanks that are impounded and pipelines, again, that have the stop valves that can isolate a certain volume of oil, such response is available. But there are regulations requiring that, yes.
Mr. BAIRD. Thank you, Mr. Chairman.
Mr. COX. Mr. Chairman, if I could just say something.
Mr. Baird, you realized you asked an interesting question when we all jumped forward to grab the mike to give an answer to it. But, sir, I think that having thought about it a little bit, I mentioned the STCW a little earlier, I think when you get into a situation where you have a choice of response to make, a fire there, there is a spill there, there may be people injured, at that point, you are going to have to rely, according to the way I would think, on the professional judgment of the people who are on scene.
The STCW, of course, begins to identify specific levels of knowledge which you have to have as you rise up the ladder of control on board the vessel. Ostensibly, you are going to have a group on board the ship who can confer with each other and say what must we do now and what training do we have available to us in terms of personnel that we can react to this situation and what do we do, do we put the fire out first, do we rescue people, do we try and mitigate the spill going out.
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I think those are all professional judgments that are going to have to be made in the event. And hopefully we have trained our mariners to make those judgments in the best way they can.
Mr. GILCHREST. Thank you, Mr. Cox.
I just have a few questions. We will stay on that end of the table, I guess, Mr. Malone, if you do not mind the hot seat for a little bit longer. Just two or three quick questions.
One, could you name the different countries that use the facilities in Valdez? Are there more than just the United States that load there?
Mr. MALONE. No. The vessels that call, and I may turn to my colleague here from Chevron, but the fleet is all U.S. flagged, Jones Act vessels, if I am correct, although they may sail to other ports with the lifting of the ban, but my understanding is they are all U.S.-flagged vessels.
Mr. MOORE. The Congress set the establishment when they approved the permit for the Alyeska pipeline that all the oil be moved on U.S. flagged tankers.
Mr. GILCHREST. Thank you. Mr. Malone, you talked about a drill that you recently received a particular grade that was reported as failing. Who evaluated the drill?
Mr. MALONE. It was the Alaska Department of Environmental Conservation. It was a state drill.
Mr. GILCHREST. It was a state drill?
Mr. MALONE. Yes, sir.
Mr. GILCHREST. The overall evaluation, did they give it—was it A, B, C, how did they evaluate it?
Mr. MALONE. There were two drills, satisfactory on one but with a number of findings, and the other one, the major purpose of the drill was achieved, but there was some concern around—there was a drill, Mr. Chairman, on how many people will show up for a response drill.
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We had the correct number of people show up and they were all trained in their given responsibility, but our plan also called that they be trained in all areas and we had a few people who did not have, for example, helicopter slinging training and they are a skimmer operator. So we had it in our plan, they should have been trained, but they were trained and had their certification on skimming operation, as an example.
Mr. GILCHREST. Now, the drill was—how long ago was the drill?
Mr. MALONE. This was about two months ago.
Mr. GILCHREST. And so the drill was for the purpose of evaluating your response to some type of oil spill and then after the drill to evaluate how you performed to help improve the performance for the future.
Mr. MALONE. That is correct. It was a test as well as to check performance, both cases. Yes, sir.
Mr. GILCHREST. Is there any way the committee can get the evaluation? I know it was a state test, but I think it would be useful for our purposes.
Mr. MALONE. Absolutely. We would be happy to get that for the committee.
Mr. GILCHREST. Thank you. The $60 million that you mentioned that you spend per year for prevention and response programs, that is $60 million annually to prevent oil spills, respond to oil spills. That was $60 million last year, $60 million this year, so it is a number around $60 million on an annual basis?
Mr. MALONE. That is correct, 60 to 70 million dollars. The budget varies. I think—there are approximately $560 million that has been spent in operation and maintenance since the 1989 spill and annually it is approximately 60 to 70 million, is the budget, for both prevention and response.
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Mr. GILCHREST. Do you feel that is a wise use of that amount of money?
Mr. MALONE. I do. I do, Mr. Chairman.
Mr. GILCHREST. Do you reach a threshold so that the actual operating of that plan would be 40 million and you could use 20 million for something else, research or—or is it always the operating expenses of your prevention and response program is somewhere in the neighborhood of 60 to 70 million dollars?
Mr. MALONE. And it will vary, too. Some of our costs are fixed. For example, our charter of our tugs, some of which you saw today, we will renegotiate those contracts, but they are essentially fixed. The other part is for training, personnel, and it also has the expense that we have on some replacement equipment, as we update that equipment.
In addition, we have a capital budget for new equipment each year, not replacement, but new every year. And we also participate in research in various locations, including with the regional citizens advisory council.
Mr. GILCHREST. Thank you.
Mr. Moore, a number of witnesses have mentioned this afternoon the problems of strict criminal liability. You mentioned that OPA 90, as a result of criminal liability concerns, has encouraged some of the better tanker operators to be wary, if not discouraged, from operating in the U.S.
Could you tell us which operators opt not to operate in the U.S. because of this strict liability regime?
Mr. MOORE. Yes. I guess I am reluctant to go into the business tactics of some, however, there are two companies that are well known that shortly after OPA 90 have made it clear and they publicized their intent do so and have continued to follow through with that today and so I will mention their names. I have knowledge of others as well, I do not want to have that on the record.
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Mr. GILCHREST. Sure.
Mr. MOORE. But shortly after the Valdez spill, Shell Petroleum declared that they would not bring their tankers carrying black oil into the United States with the exception of LOOP, meaning far offshore, and similarly Maersk, AP Moehler, a very credible, this is an INTERTANKO company, an independent operator, very credible, said that they would not bring their tankers into United States ports.
So there are two examples of companies that I have respect for that fall into that—what we will call high commitment mode of trying to do the right thing and putting the resources to managing their business prudently.
Mr. GILCHREST. And so they have not brought their tankers into U.S. waters since the inception of this statute?
Mr. MOORE. I believe that is correct. You would have to ask them to verify that, but I am reporting what I have read, what was in the public record, and what I understand to be the case with regard to their owned and operated tankers.
Mr. GILCHREST. You continue to do so.
Mr. MOORE. Yes, but I would also go on record saying that if—and there have been cases of Chevron, where we have surplus tonnage and particularly in double hull tonnage, our fleet, my tanker fleet, is about one-third double hull right now.
We have a rather modern fleet and, in fact, just two weeks ago, I was in Korea receiving the delivery of our newest tanker, named appropriately after one of your retired Senate colleagues, Senator Johnston from Louisiana who is on the board of Chevron.
If it happens from time to time where we have a tanker out of position that does not have a Chevron system requirement, we will out charter it.
We do not plan our tanker fleet to do that, that is not what my business is. I am to take care of our Chevron system business, but we do utilize our assets and I have choices. And the choices would be to carry a cargo to the United States or to not. And I invariably make that choice to not bring that tanker to the U.S. if I have a choice for some other business.
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Mr. GILCHREST. Have you had a bad experience with strict liability?
Mr. MOORE. Personally, no. Our company, no.
Mr. GILCHREST. Mr. Cox, you mentioned—no, not Mr. Cox, I am a little ahead of myself now. I am going to go to Mr. Allegretti first.
Mr. Allegretti, you mentioned in regards to this strict liability regime the problems with the Migratory Bird Treaty Act and Refuse Act. Could you be specific about those two statutes and do you have an example of where they have been a problem with your operators?
Mr. ALLEGRETTI. Sure. Be happy to, Mr. Chairman. You can understand the concern of an industry executive or a vessel operator with the application of strict criminal liability and, of course, that is what promotes our bringing the issue to your attention. But from the congressional perspective and for today's hearing, I think what is especially noteworthy is that these laws actually undermine the policy objectives of OPA 90.
The policy objectives of OPA 90 were to encourage responsible operators and responsible mariners to move cargo in the United States. They were to ensure cooperation and open communication between the Coast Guard and the industry in the aftermath of a spill and the application of these strict criminal liability statutes works at odds with those policy objectives of OPA 90.
If you consider for a second what a responsible operator does on advice of defense counsel in the aftermath of a spill, where the advice of defense counsel is not to communicate, if he follows that defense counsel advise, then he is not fulfilling the OPA 90 policy objective of open communication.
Similarly, if we do not allow a responsible operator to manage his risk, and a good operator looks to manage risk, he does that by conducting his operations prudently and purchasing appropriate levels of insurance, these laws say that you cannot insure your risk against going to jail. And so we have a created a huge disincentive, a huge disincentive for the responsible operator to stay in the business of oil transportation.
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The record of the hearing you held, Mr. Chairman, in May as to the application of these laws provided five or six specific examples, going back to 1998 in an Ashland spill. These laws were also applied in the EXXON VALDEZ spill, they were applied in a spill that Shell Oil had in the early 1990s, and most recently they were applied in the Eklof Marine spill in Rhode Island.
So these are not theoretical concerns that the industry has, but they stem from the actual utilization of these laws by federal prosecutors.
Mr. GILCHREST. Thank you. Thank you very much.
Mr.COX. if you could comment—I want to try to finish this panel before we have to go. I guess he is going to vote now.
Could you comment—you mentioned in a number of avenues the threat of strict liability, criminal liability, as a problem. And the Coast Guard reports a significant drop in oil spills over the last several years, an accomplishment for which your members really need to be given some credit.
What do you see as the primary driver behind the improved environmental safety record?
So, if you could, just quickly the strict liability and the primary driver behind the environmental safety record.
Mr. COX, I would disassociate the strict liability issue from the increased attention that we are paying to not having oil spills. I think one of the results of OPA 90 was to heighten not just the financial concerns of cleaning up a spill, but the public relations concern for the companies which are involved in the business. And I think that the strict liability—trying to tie strict liability into the lowering of the number of oil spills would be not really a good—
Mr. GILCHREST. I realize they are two separate issues.
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Mr. COX. Two separate issues.
Mr. GILCHREST. They were two separate issues. I did not want to tie them together.
Just a quick follow-up for Mr. Moore and Mr. Allegretti and, actually, just that one question and then I am going to turn it over to Peter before we have to vote.
Mr. COX. Great. Because I did have a comment about the emergency response plans and I think it came from Mr. DeFazio this morning.
Mr. Chairman, someone did fax to me a copy of an article from the Portland Oregonian which appeared on March 11th and it does indicate that the owners of the NEW CARISSA were told by their attorneys not to come into this country because of concerns with criminal liability and also that the captain is reported, once again, not to have testified at the hearing on the same advice from his defense attorney, that there was criminality involved and criminal implications.
I certainly submit this for the record. I cannot vouch for the veracity of the article, but I think it highlights, if there is any truth to it at all, to whatever extent, it highlights what we are testifying to here today.
Mr. GILCHREST. Thank you very much, Mr. Cox.
I will yield to Mr. DeFazio.
Mr. DEFAZIO. Thank you, Mr. Chairman. Mr. Chairman, I am sorry I had to run to the Rules Committee to try and offer a budget alternative. I am sorry I missed some of the testimony. I understand questions I had of Alyeska were asked about the problems with the drill reported in the Wall Street Journal, so I will not go to those.
From the prepared testimony, I had a question for Ms. Colenda. In your testimony you state ''We are governed by a strict comprehensive set of international requirements that address environmental protection as well as passenger, crew and vessel safety. Compliance with international laws is assured by the owner, master, flag state, class society and port state.''
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I would like to inquire as to the environmental protection enforcement and the system of justice followed by Liberia.
Ms. COLENDA. I think, Mr. DeFazio, that you will find that Liberia is a major flag state that has offices both here in Reston, Virginia and in New York. What I think is an important point is that the industry has a strict and comprehensive set of regulations that are set down by the International Maritime Organization.
Mr. DEFAZIO. Ms. Colenda, not to be impolite, but let me just go to something else. In 1992, the State Department reviewed 111 cases of accusations of cruise ships dumping garbage overboard and they referred the cases to flag countries. Receipt was acknowledged from 35, penalties in two.
And then we go to the fact that the State Department does not even bother to send complaints to Liberia any more because of their lack of response.
The Nordic Empress was in international waters when it was discovered discharging oil. The matter was referred to Liberia and Liberia accepted their claim that no dumping occurred. Even after Royal Caribbean admitted lying, Liberia decided no action was necessary.
So this is the strict adherence to international law and the strong mailed fist of the Liberian government that we are feeling here?
Ms. COLENDA. I think what you need to look at, Mr. DeFazio, really is the fact that the situation that you are talking about occurred in 1994 and what I would like to point to is the fact that the industry since that time has had an enormous wake-up call and has improved its procedures and that company in particular has put a lot of effort into—
Mr. DEFAZIO. I appreciate that and I applaud them. I applaud them on the waste reduction and all those things, but that is voluntary, essentially. I just object to your saying that we have gone to one of these non-existent or barely existent nations to get a flag of convenience and that we are strictly monitored and enforced. The State Department does not even bother to forward complaints to these nations any more.
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I realize the industry since its customer base is based in the United States is doing what the values of their passengers are, which is they would rather not have oil dumped on the water that they are enjoying as they are out there on the cruise ship and they would like to see these other things that they are used to, but let us not say that this is because this is this strict enforcement by these flag of convenience countries.
Let us say that the industry is responding to public concerns and outrage and meeting some of those concerns. But it is not because the big fist of Liberia came down on them.
Ms. COLENDA. The other component that I want to point out, it is not just the flag state that is involved. There is the flag state, there is the class society and the class societies and surveyors that look over our vessels include the American Bureau of Shipping, DNV, these are class societies that are used by the U.S. Coast Guard to do their own inspections and, in addition, the final safety net is the port state enforcement authority, which is the United States Coast Guard, and they are on our ships four times a year. They inspect us—
Mr. DEFAZIO. I understand that, since you are using U.S. ports, that the Coast Guard does those things. But I am going back to your statement. Flag of convenience countries are used because they do not enforce much of anything. Let us just not pretend anything else.
Now, you are certainly complying with a whole host of other laws and regulations imposed by the United States of America, and I am just telling you I would be a lot more comfortable and I think a lot of other people would be a lot more comfortable if we saw some cruise ships flagging under U.S. flags and people probably would pay a little more to take the cruise knowing that they have U.S. law enforcement, they have U.S. military if they are in an accosted situation, they have U.S. compliance with U.S. environmental laws, food safety laws and all the other things that come with U.S. oversight, plus the crews are generally trained under and understood to be complying with U.S. laws.
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I understand what you are saying, this flag of convenience thing is just absolutely an outrage and to say that it brings strict enforcement, it does not. There are other ways we manage to put some enforcement on your industry and other flags of convenience, but it ain't because the flag of convenience countries are doing anything.
So thank you very much. Sorry that that was a speech, but I am having a bad day and I have to go.
Mr. GILCHREST. We should have had a longer lunchtime.
Mr. DEFAZIO. Yes.
Mr. GILCHREST. Thank you, Mr. DeFazio.
And, ladies and gentlemen, thank you for your testimony. We will recess now for the vote, but we will be back, I hope, within 15 minutes.
We are in recess.
[Recess.]
Mr. GILCHREST. The subcommittee will come to order.
Ladies, though there are few of us left in the room, we will listen very intently and certainly take everything you tell us into great consideration. And we appreciate your coming all this way to be with us this afternoon.
Ms. Sally Lentz is from Ocean Advocates and Ms. Jean Cameron, Executive Coordinator, the States/British Columbia Oil Spill Task Force.
Ladies, thank you for traveling across the country to the nation's capital to give us your advice and heart-felt testimony on how to make things better.
Ms. Lentz, you may go first.
TESTIMONY OF SALLY ANN LENTZ, ON BEHALF OF OCEAN ADVOCATES, BLUEWATER NETWORK, FRIENDS OF THE EARTH, NATURAL RESOURCES DEFENSE COUNCIL, AND TRUSTEES FOR ALASKA; AND JEAN R. CAMERON, EXECUTIVE COORDINATOR, THE STATES/BRITISH COLUMBIA OIL SPILL TASK FORCE
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Ms. LENTZ. Thank you, Mr. Chairman. I really did not come very far. I am based in Maryland. I am just down the street in Columbia.
Mr. GILCHREST. Oh, in Maryland?
Ms. LENTZ. But thank you for inviting me to testify today.
I come before you on behalf of Ocean Advocates, Blue Water Network, Friends of the Earth, Natural Resources Defense Council, Trustees for Alaska and the Alaska Wilderness League.
We bring much of the same message as I delivered to you last July. Simply put, the Coast Guard has not done its job in implementing OPA 90.
Mr. Malone was right. OPA 90 has been successful in improving the situation in Alaska. But outside of Alaska, our coastal waters remain largely at risk from spills both large and small and, as so tragically demonstrated over the past month, by the failed attempt to save the NEW CARISSA. Our response capability remains woefully inadequate.
I was particularly appalled, I must admit, at Adm. Lloyd's delight in watching the NEW CARISSA burn. An in situ burn is not a preferred response option in situations such as that existed with the NEW CARISSA. Rather, it was an act of desperation, resulting from a series of failed responsibility to respond in a timely manner to the spill.
The Coast Guard's failure to fully and aggressively implement OPA is graphically presented in the performance report we have issued today. If your child brought home such a report card, you would not be pleased.
A detailed analysis on each of these subjects is provided in our written submission. I will touch upon each of them briefly for you now.
First, with regard to the double hull mandate, we gave the Coast Guard a B. While they generally have supported this mandate, the Coast Guard has in recent years succumbed to industry fabricated loopholes to extend the lives of single hull ships. These interpretations of OPA are unjustified.
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The liberal phase-out schedule adopted by Congress constituted a major concession to industry at the expense of environmental protection. There is no more wiggle room.
Tonnage is plentiful and those who have made the investment in double hull ships will be placed at an economic disadvantage if some single hull ships are permitted to extend their phase-out date. If anything, the Coast Guard should be looking for ways to accelerate the shift to a double hull fleet.
Second, OPA directed the Coast Guard to establish interim measures for single hull ships. After much delay, the Coast Guard determined that none of the proposed measures are economically feasible, this despite the fact that the international community accepts hydrostatic balanced loading as a means to minimize spills and industry now admits that operating with empty wing tanks is a viable option.
We have been suggesting that for years and we find it ironic that industry and the Coast Guard rejected the use of empty wing tanks as impractical for purposes of pollution prevention, but quite acceptable as a means to extend the life of a single hull ship. So on this subject, the Coast Guard receives the grade of F.
Third, OPA instructed the Coast Guard to require the use of leak detection devices on ships. This has yet to be done. Failed again.
The Coast Guard did promulgate salvage and fire fighting regulations, including a 24-hour response time for salvage efforts, but they recently suspended that requirement for three years because of industry confusion over what constitutes salvage. Another failure.
Mr. GILCHREST. I was writing down leak detection devices.
Ms. LENTZ. Yes?
Mr. GILCHREST. Could you start from there. I did not get that last couple of sentences.
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Ms. LENTZ. Sure. OPA instructed the Coast Guard to require the use of leak detection devices on ships and this has yet to be done. They failed again.
The Coast Guard promulgated salvage and fire fighting regulations, which included a 24-hour response time for salvage efforts. Makes a lot of sense. If they had responded within 24 hours for the NEW CARISSA, we would not have had the problems that we did. But they recently suspended that requirement for three years to study it because of industry confusion over what constitutes salvage. That is another failure.
The shipowner's ability to respond to a spill was slated to increase over time and, again, the Coast Guard has suspended this requirement.
Next, Congress instructed the Coast Guard to require on board emergency response equipment and we spoke about this last July. This is critical, given that 90 percent of the oil would be lost in the first few hours of a spill. Yet the Coast Guard issued a report on your request stating that while it was technically feasible for ships to carry and utilize this equipment for practical reasons it was economically and technically unfeasible, so they contradicted themselves in their conclusion.
The Coast Guard's analysis of this issue is seriously flawed and requires further consideration. Yet another failure.
OPA directed the Coast Guard to identify coastal areas in need of special protection afforded by double tug escorts. However, the Coast Guard has endorsed a so-called tug of opportunity system for Puget Sound that relies upon chance that a tug will be available to respond in an emergency.
It is simply absurd that no other coastal areas have been identified as being in need of special protection. Failed again.
Something must be done to address what appears to be bureaucratic complacency in implementation of OPA. There has been a lot of talk about complacency today and avoiding complacency, but I can tell you that complacency is alive and well in the Coast Guard.
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The failure to move forward with these regulatory initiatives in the face of clear statutory mandates is impermissible and intolerable given the serious risks involved.
To make matters worse, the Department of Justice at the behest of the Coast Guard has joined with international tanker owners to challenge the authority of Washington state to issue its own tanker safety regulations.
As you surely recall, the non-preemption of states rights was a key provision of OPA, so here we have the Coast Guard failing on its own to issue the regulations and at the same time they are opposing the state's rights to take that initiative.
OPA recognized that the shipping industry must be more thoroughly regulated. It is time the Coast Guard recognizes it, too, and allows the states to step in where they have refused to do so.
In a more positive light, we would like to call your attention to two other provisions of OPA. Things are not perfect in Alaska, but the level of prevention efforts there far surpasses that which exist in any other part of the country and we attribute this in large part to the success of the regional citizen advisory committees in Alaska whose vigilance has provided a major catalyst for rigorous standards for pollution prevention and spill response.
These so-called RCACs should serve as a model and be duplicated on all of our coasts.
On this tenth memorial of the EXXON VALDEZ spill, we call upon you to establish a nationwide network of RCACs to assure public vigilance at every high-volume port in this country.
And, finally, I bring you back to the issue of funding. Congress wisely established the Oil Spill Liability Trust Fund to provide funding for both prevention and cleanup efforts. One billion dollars was allocated to the fund for this purpose and, as we heard earlier, one month after OPA was enacted, the Budgetary Reconciliation Act seriously handcuffed the fund so only $50 million is available annually for cleanup costs. That could easily be exhausted in the event of a major spill.
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Agencies are discouraged from tapping into the fund for other purposes because for every dollar they extract from the fund, a dollar is deducted from their existing budget.
We support the President's request that the fund be increased to $5 billion. However, unless this spending freeze is lifted, these funds will not be put to their intended use. Such funding is sorely needed and can be used not only for response, but for a wide variety of prevention efforts, as foreseen under OPA, including the establishment of RCACs, state initiatives, such as strategic stationing of dedicated rescue tugs, and research and development to enhance safety and pollution prevention.
In conclusion, the regulatory infrastructure and legal authority is already in place to improve oil spill prevention. OPA saw to that. Need we wait for the next major spill before we move ahead?
Congress must not allow the Coast Guard to undermine its good intentions. We urge you to expressly direct the Coast Guard to carry out the mandates which were so wisely and carefully crafted under OPA.
Thank you.
Mr. GILCHREST. Thank you very much, Ms. Lentz.
Ms. Cameron?
Ms. CAMERON. Yes, Mr. Chair. Thank you for the opportunity and the honor of addressing you today as you review the status of our spill prevention preparedness and response in the United States.
My organization, the States/British Columbia Oil Spill Task Force, is one with a long name and no handy acronym, but it represents the environmental agencies on the West Coast and their spill programs. It was established 10 years ago this year when the governors of Oregon, Washington, California, Alaska and the premiere of British Columbia signed a memorandum of agreement and tasked the directors of their spill programs to work cooperatively.
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Over the 10 years that they have been working together and providing, I should add, protection for more than 55,000 miles of coastline on the West Coast, they have addressed a number of issues of common concern. Three of those I bring to you today because we think they would be important at a national level as national initiatives.
The first of those you have already heard some about today and that is addressing the issue of oil spill risk from non-tank vessels, which we describe as vessels not designated or designed to carry oil as cargo but carry bulk cargo and containers and freights. In the case of cruise ships, they carry tourists as cargo. But, as you have heard from Representative DeFazio, they are also capable of carrying up to a million gallons of oil as fuel and, as he is keenly aware, capable of oil spill incidents on our coasts.
Now, the U.S. Coast Guard is also keenly aware of these incidents from non-tank vessels, since they get involved in response to oil spills caused by such vessels. What they are not assured of dealing with is an owner and operator with a response plan in place that is as comprehensive as the plans we require from tankers.
Those plans guarantee the availability of response equipment, as well as trained personnel that are specifically designed to respond to the environment where the spill occurs.
Oregon, Washington and soon the state of California after September of this year will be requiring—Oregon and Washington already require and California will be requiring contingency plans equivalent to what they require of tank vessels from non-tank vessels. And so that level of protection exists in those three jurisdictions.
We think it is worthwhile to require that level of protection throughout the U.S. coastal states and therefore recommend that you task the Coast Guard to begin a process of developing regulations to address that. And I would add that in the three states on the West Coast where contingency plans are required of non-tank vessels we address that through response cooperatives that exist in the high volume ports and therefore there is not necessarily a need for a plan from each individual vessel, but I will answer more questions about that later if you are interested.
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A second recommendation has to do with addressing the risk of drift groundings from traffic offshore the United States. In a recent project in which the U.S. Coast Guard and NOAA cooperated with stakeholders involved in looking at traffic risks associated with the Monterey Bay National Marine Sanctuary, there was a development of recommendations on routing of vessels that grew out of looking at the drift rate trajectories, if you would, based on a worst case storm event scenario and where that merged with the response time of available tugs and drawing the lines there.
And we are beginning in partnership with the U.S. Coast Guard as well as the Canadian Coast Guard to do a similar project on the West Coast that would run from Cook Inlet in the north to San Diego in the south. We would recommend that similar projects be looked at for the Gulf of Mexico and the East Coast as well.
Our third recommendation is simply targeting local expertise on improving the navigation safety in local ports. One of the things that I have heard that troubles me as I have listened to the records from the investigation of the NEW CARISSA spill is the fact that pilots serving the Port of Coos Bay were aware of problems with that anchorage ground during winter conditions and had not communicated that to NOAA with regard to changing of those charts.
If you create what we recommend as port or harbor safety committees, you get technical expertise focused on looking at local port navigation safety issues.
My written testimony provides more detail on all these recommendations and I will answer questions about that when you are ready.
I would like to simply close with a quick citation of facts. I heard from a speaker at the International Oil Spill Conference this year that 81 percent of the public polled think that oil spills are a threat and 85 percent believe that the government is not doing enough to deal with that threat.
I would add my own raw statistic, which is that I believe that 90 percent of the public thinks that any time oil is spilled it is a tanker. I heard repeatedly that when the NEW CARISSA grounded on the Oregon coast it was a tanker aground, but we know that non-tank vessels cause spills, as the NEW CARISSA did, and if the public thinks the government is not doing enough to address it, then perhaps it should.
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Another fact I would ask you to keep in mind with regard to the navigation safety issue is that vessel traffic serving U.S. ports is predicted to triple in the next 20 years and the other fact is that currently, one out of every hundred vessels coming into a U.S. port experiences steering or propulsion problems and those sorts of problems can certainly lead to drift groundings, collisions, and subsequent oil spills.
So does OPA 90 need fixing? I think it has done a pretty good job in dealing with the oil spill risk posed by tankers, tank barges, oil handling facilities and pipelines, but I would suggest that the missing piece is non-tank vessels, and I would suggest that there are initiatives that could be taken with regard to spill prevention that focus on navigation safety offshore and in ports.
With that, I thank you again for the opportunity to address you and submit testimony and I would be happy to answer questions.
Mr. GILCHREST. Thank you, Ms. Cameron.
Ms. Lentz, I am not aware of anybody in the House that is even thinking about extending the deadline for double hulls.
Can you give us some insight as to your understanding that there is some information out there that leads you to believe that the Coast Guard is looking at that issue seriously?
Ms. LENTZ. Yes, sir. The Coast Guard made a request for comments last year, the deadline for submitting comments on that was January 15th. They were requesting comments on inquiries made by industry to essentially extend the life of single hull vessels, some of which have already been taken out of service, but which would be retrofitted with either a double side or a double bottom so as to put them in a separate class, because you may recall that under OPA those ships originally were given a slightly longer phase-in period.
So now what the industry is asking for the Coast Guard to kind of go back to that and look at ships which have already been taken—these are single hull ships that have been taken out of service.
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They are saying, well, now if we put a double side on it, can we bring them back into service and extend their useful life.
This is not what was intended by OPA and the Coast Guard is seriously considering this and has put out a request for comments from the public.
Mr. GILCHREST. Well, we will have to take a close look at that.
Could both of you comment on the concept that each state be allowed to come up with their own standards for prevention and response, particularly prevention, in light of the international community being somewhat confused, concerned or whatever, over 50 different—and I think it is unlikely that there would be 50 different protocols because there are not 50 coastal states—but a different protocol for each coastal state?
And comment on it in the light that, Ms. Lentz, you said that the situation in Prince William Sound is improved immeasurably since 1990 and is perhaps the best example of what can be done in any area of the United States and is probably better than any other area in the lower 48.
Do you think that the states of Washington or Oregon or California need to go beyond the framework of OPA 90 to achieve the same standard that Prince William Sound has achieved?
Ms. LENTZ. If you will let me get this off my chest—
Mr. GILCHREST. Yes.
Ms. LENTZ. In my view, if the Coast Guard had implemented all of these requirements that were set out in OPA and set high enough standards for each of those requirements, there would be little need for the states to take action, at least extensively. But that has not been the case, and so you have the case where the state of Washington said, hey, we need to protect our natural resources and this is what we are going to do.
They worked with the Coast Guard, the Coast Guard was on the advisory committee that came up with the regulations, they invited industry to participate. Some parts of industry did, some did not. But they came up with their own regulations.
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It is absolutely necessary that the states have the authority to do that because they have special situations and you are not going to find one solution that is going to address all those concerns. The beauty of what has happened in Alaska is that first of all you had some specific statutory mandates for Prince William Sound.
You had a tug escort requirement, for example, and you had the establishment of the RCAC, which, as I said, has been a tremendous catalyst in bringing together—in maintaining the vigilance that brings together all of those parties, industry, governments, both state and national, to the issues of concern there.
Mr. GILCHREST. Can the West Coast come up with the RCAC, regional citizens advisory committees, without any legislation up here? Can they do that on their own? Or is that something that we need to add as an amendment to OPA 90?
Ms. LENTZ. Well, I think the most efficient way to address it is to set up a nationwide system through an amendment to OPA 90. It would not absolutely be necessary, especially if you are talking about a regional approach. I suppose you could have state legislatures enact their—
Mr. GILCHREST. This would be something modelled after what they have in Alaska?
Ms. LENTZ. Yes.
Mr. GILCHREST. And there is nothing like that in the lower 48 now?
Ms. LENTZ. Well, the only thing that comes close to it is what are known as harbor safety committees, which Jean referred to. Those exist, I know, for example, in the state of California. But those are not the same kind of independent body that the RCAC is.
A harbor safety committee is—if you look at the composition of the committee, it is very much industry focused, the members are from industry, and the focus is more on technical aspects of navigation safety that are very specific to a particular harbor.
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The RCAC is more of a regional organization. It is independent. It has a guaranteed source of funding which helps to maintain that independence and it is composed of real citizens, you know, local officials and real people, fishermen, and they are the ones who have a vested interest in those resources and that is what makes it, I think, so effective.
Mr. GILCHREST. You make a good point and I think we will take some time to take a look at the regional citizens advisory committee in Alaska to see how it can be best replicated.
Ms. LENTZ. And if I could just say with respect to the concern about international resistance to having a variety of regimes on our coasts, we do not have uniformity now, we have not had for any time, so that uniformity is something that in the long term perhaps we can achieve, but in the short term we need to be concerned about protecting specific resources. And if you go to Europe, they go from Greece to Turkey to Italy, they have to deal with different regimes in every one of those countries. This is no different, just because it is a singular country.
Ms. CAMERON. May I respond?
Mr. GILCHREST. Yes, ma'am.
Ms. CAMERON. I see two questions. You asked us to respond in terms of addressing these prevention issues in the framework of OPA 90.
I would point out that it is in the framework of OPA 90 that states are not preempted from adopting regulations more stringent than those adopted at the federal level. And from a state perspective, protection of the marine environment is environmental policy and environmental policy has traditionally been delegated to states in the Clean Water Act and the Clean Air Act, so states do not see it a whole lot different.
There is another issue involved here, however, and that is the fact that when a spill occurs it is a very local issue. The people of Coos Bay will tell you that, the people of Prince William Sound will tell you that. And to preclude people who are significantly impacted and traumatized, actually, as you can still see based on the responses in Prince William Sound 10 years later, from access to the policy decision-making, it would be a very difficult and probably unwise thing to do.
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There is a perception, whether it is accurate or not, that that access is easier at the state legislative level than it is at the Federal Government level and certainly at the international government level which convenes in London, a world away.
So I think they are questions of politics and perceptions, but they are also questions of legal precedent with regard to non-preemption clauses in the Clean Water Act that were echoed in OPA 90.
The issue of local participation that I hint at when I talk about those politics is—
Mr. GILCHREST. Ms. Cameron, if I could just interrupt, I am going to stay, but Mr. DeFazio has to leave, so if it is all right with you, I will yield to him for the couple of questions he may have and then we can get back to your response.
Ms. CAMERON. Certainly. Thank you.
Mr. DEFAZIO. It is actually along the same line. You heard the earlier testimony, the gentleman from Chevron saying that these state laws are deterring the better operators from coming to those states and we will be left with the less responsible operators, that they are afraid to participate in hearings and that sort of things. How would you respond to his arguments in those areas?
Ms. CAMERON. I have a little trouble understanding how raising the goalpost so to speak means that you have a less competent athlete succeeding.
Mr. DEFAZIO. Well, he said that because of the strict liability that—
Ms. CAMERON. No, I understand what he is implying, but I am implying that those that continue to operate in U.S. waters, whether it is state or federal regulations that are stringent are being held accountable to more stringent regulations, so what is the problem?
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I think you have heard today about stringent port state control inspections on the part of the Coast Guard. I know the states are certainly enforcing their regulations, so I cannot understand why there would be a lesser level of protection for our waters to have more stringent regulations.
Mr. DEFAZIO. Well, I just wanted to have a response. I found his remarks real extraordinary, too. I guess the ultimate argument is people would not sell the United States things, they would sell them instead—take them to Brazil and exchange them for rials instead of dollars.
Ms. CAMERON. Well, as we are well aware, not only is the market in the United States quite attractive, but so are our dollars.
Mr. DEFAZIO. Right. Right. So it is just something that I just wanted to try to emphasize and clarify.
The umbrella—the approach that you are talking about that exists on the West Coast versus the Coast Guard umbrella plan, could you just go and briefly—
Ms. CAMERON. Sure. My point was that when I have spoken with folks in the Coast Guard about this issue of non-tank vessel regulation and requiring contingency plans, one of the responses I have gotten is a concern that simply the number of non-tank vessels entering U.S. ports is much greater than the number of tankers and so the number of contingency plans that would have to be reviewed by their staff would be much higher and we know with cutbacks and all that would present a problem.
The way it is dealt with in Washington, Oregon and will be dealt with in California is that cooperative response organizations that are already serving those major ports to serve the oil handling facilities and the tankers are now also there and available through cooperative contingency plans submitted to the states for approval to deal with non-tank vessel issues as well.
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So a non-tank vessel entering, let us say, the Port of Puget Sound would simply give advance notice and their agents would sign them up for coverage under this plan during the time that they are in those waters. And the Puget Sound cooperative covers the Washington coast down to Grays Harbor. The Columbia River cooperative covers the Columbia River, obviously, and the northern Oregon coast and Coos Bay has a small cooperative and regulation is now going into place in California to cover San Francisco, L.A., Long Beach and San Diego with various response resources and contracts and the cost that California has projected to vessels entering the ports for this type of coverage is, I believe, $175 per vessel per entry, which might sound like a lot out of my pocketbook, but is a small percentage of their operating costs.
Mr. DEFAZIO. $175 for a large vessel? That sounds—
Ms. CAMERON. For a non-tank vessel to receive coverage for the cooperative plan in that port as it enters. And the thing is the states now review those cooperative plans and assure that they are capable of meeting the response standards, the Coast Guard could do the same thing for cooperative plans in other major ports around the country and perhaps delegate to the West Coast states that already have this program in place for the reviews.
Mr. DEFAZIO. So as far as we are concerned, we just do not want to be preempted, but you do not think we need additional federal regulation in that area.
Ms. CAMERON. No, I am suggesting that for the nation as a whole the need exists. Yes.
Mr. DEFAZIO. But for our region—
Ms. CAMERON. Right.
Mr. GILCHREST. Okay. So we could either say that states could establish approved plans or the Federal Government would mandate such—
Ms. CAMERON. Well, that would be one approach to it. I am suggesting that the Federal Government mandate non-tank vessel responsibility for oil spill response and that one approach to that, they do not have to preclude individual owner-operators from having their own fleet plans, but one approach is approved umbrella cooperative plans in major ports that they could just sign up with. That is a model that has worked for us on the West Coast.
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Mr. DEFAZIO. Okay. Thank you very much. I am sorry I have to run. Thank you.
Mr. GILCHREST. Thank you, Mr. DeFazio.
Mr. Blumenauer?
Mr. BLUMENAUER. Thank you, Mr. Chairman. I was very interested in the line of inquiry that you both pursued in terms of the preemption and I appreciate it being addressed. I appreciate the people's patience, coming here at the end of the panel.
I hope at some point there is a way to get some of the citizen activists to testify towards the start of the hearing. We tend in our sessions to leave citizen comment for the end. The citizen activists do not get a chance to interact with some of the people at the front end and someday it would make it kind of fun to mix them up a little bit.
Mr. GILCHREST. The next hearing, we will have Ms. Cameron and Ms. Lentz testify first.
Mr. BLUMENAUER. Well, I would suggest it would be nice to integrate the panels.
Mr. GILCHREST. And have a real debate.
Mr. BLUMENAUER. To not have a debate necessarily, but be able to pose the same line of inquiries and have people answer the same questions. And I appreciate your courtesy but I could only choose a portion of the hearing and I am glad that I chose the end of it today. Thank you very much.
Ms. CAMERON. Representative Blumenauer is my representative, so I am glad he chose to attend as well.
Mr. BLUMENAUER. Entirely coincidental, Jean.
Ms. CAMERON. If I could get back to the question of harbor safety committees versus regional citizen advisory councils, I want to warn you that the issue of region citizen advisory councils will be a controversial one.
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It has worked quite well in Prince William Sound and reasonably well in Cook Inlet. They are mandated by OPA 90, but there is nothing precluding states, I suppose, from doing the same thing except some of the arguments of state initiatives and the fact that the reason OPA 90 mandates the RCACs in Alaska is that they require funding from industry and that will be the controversial part of that. And that is one reason why I am suggesting harbor safety committees.
I would disagree with Ms. Lentz that in California where they have proved beneficial, that they are heavily weighted in terms of industry; I think you see port authorities and industry there, but you also see environmental representatives where they exist and are active on these issues and pilots should be involved as well.
The principal point is that there needs to be funding from someone to convene and maintain support for these committees so that they are able to operate and continue to focus on navigation safety issues specific to that port.
The state of California has the wherewithal to do that. Other states do not. And, again, the RCAC model in Alaska was funded and created by OPA 90 mandating industry funds for it. So there are several models out there but the important thing is that it is a function that needs to exist in all major ports.
So as you move forward, I hope you do not lose sight of that and get bogged down in some of the controversy over whether it should be industry funding or federal funding or state.
Mr. GILCHREST. But you would both agree that something of that nature would be a positive tool.
Ms. CAMERON. Yes.
Mr. GILCHREST. Nationwide.
Ms. CAMERON. Even INTERTANKO has produced reports, I think, several years old now, pointing to their concerns over local navigation risks in harbors and waterways and they feel that tanker operators can do only so much. They can make sure their own operations are risk free, hopefully, but there are other issues with regard to dredging or pilotage or even the safety of piers that were designed 40 years ago and no longer provide safe hookups for vessels built today. So there are a number of issues out there, as I said, that are best dealt with by local people.
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Mr. GILCHREST. I would agree with you and a look down the road more than just a couple of years would be beneficial as well, especially if you are dealing with dredging issues and pilotage issues and things of that nature.
Would you—I asked this before, I just wanted to get some sense so that we can begin the process of actually looking into the reality of this, the RCAC committee in Alaska you would say is a good model.
Now, the funding may vary from region to region, but the makeup of the participants and what they look into and how they have acted over the past so many years would be a good thing to look at.
Ms. CAMERON. I would definitely agree that it is important to get balanced participation in that sort of forum and therefore the RCAC has been a good model of that and they have certainly been very proactive in terms of prevention focus in Prince William Sound.
Obviously, they were burned once and do not want that to happen again, so we should not wait for that to happen in every port.
Mr. GILCHREST. I have one more question for both of you. EPA was here along with NOAA and they discussed a whole host of issues. EPA naturally is responsible for the OPA provisions dealing with onshore facilities.
Do you feel that EPA—I know you do not have a report card for EPA, but do you have any sense of EPA's role in the last seven or eight years dealing with onshore facilities as mandated to them by OPA 90?
Ms. LENTZ. I am afraid I am really not in a position to comment on that. It is not really my area of expertise.
Mr. GILCHREST. That is fine.
Ms. LENTZ. I have not really dealt with that.
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Mr. GILCHREST. That is fine.
Ms. Cameron?
Ms. CAMERON. The States/British Columbia Oil Spill Task Force focus has been defined as marine and oil, rather than inland and hazardous materials, but in our current draft strategic plan we are intending to focus more on inland issues and the agencies that are members of the task force certainly deal with a variety of spill events beyond oil and marine waters.
What I have heard from them, and I can get you more details, I do not have it with me, is that EPA has not been as aggressive a player as the Coast Guard in terms of spill response and I think that has more to do with limited resources and a different structure.
The Coast Guard is more military in its structure, there is more command and control, whereas each region of EPA, as I understand it, functions somewhat independently from EPA headquarters here in Washington. But I would say that in terms of response presence and aggressive initiatives on spill prevention, I would not say that they have come up to the standard that I would like to see.
Mr. GILCHREST. I see. One other, I just thought of something. I held up a couple of jars earlier in the day, I do not know if you saw them.
Also part of your effort, Ms. Cameron, is to look into new and innovative ways not only for prevention but response as well?
Ms. CAMERON. The task force is—
Mr. GILCHREST. And I was going to ask if you had any information about this kind of thing, where you use a traditional dispersant and you still have oil and you use some other technology and little bugs eat it under certain conditions, I guess.
Ms. CAMERON. Yes, sir, Mr. Chairman. I do have a comment. The task force agencies, with the exception again of California because they have a lot of resources there, do not engage in individual R&D activities. There has been dispersant R&D in California.
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The task force has, however, for several years endorsed getting as many response tools in the tool box as possible and that means within the political context of each West Coast state establishing policies that allow quick decision making on the use of in situ burning or dispersants.
The bioremediation issue has not been one that we have addressed. I think I would agree with Mr. Kennedy from NOAA that his primary use in the cleanup of oiled shorelines after the fact, I do not know that especially in the colder West Coast waters it would work particularly well to simply sprinkle it on oil on the water.
I would like to comment that I appreciated your questions earlier about the need for what I call baseline data so that you can understand to what point you need to restore. It is also important simply in making environmental tradeoff decisions once oil is spilled. As was said earlier, once the genie is out of the bottle, the damage is done, it is really just a question of which response tools make the least damage.
If you skim, traditionally you only get 20 percent of the oil, that means some is going to get on the shoreline. If you disperse, you might protect the shoreline but then you impact whatever lives in the first 20 centimeters of the water column and you need to know what is in the water column. And if you burn, then you need to know what the downwind impacts are going to be.
So the need for baseline data is very important in making those decisions on which response technology to use, but we are trying to get them all in the tool box.
Mr. GILCHREST. If we can ever get them in the tool box.
Yes, ma'am?
Ms. LENTZ. If I might, Mr. Chairman, just add that from the perspective of the environmental community, we are very concerned about the use of in situ burning and dispersants because they have tremendous drawbacks, both in terms of their effectiveness in actually doing the job they are intended to do, but also the obvious tradeoffs in terms of environmental consequences. And we sort of view them in a way as an attempt by some to use a sort of out of sight/out of mind approach to spill response, so it is almost like if the oil does not come up on the beach, then we have been successful, but from an environmental perspective, that is not necessarily the case.
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If the oil is sunk in a ship off the coast or if the oil has been burned and we have the emissions in the air or if we have dispersants used that contribute even more toxics to the marine environment, then we have not really been successful.
Mr. GILCHREST. I know the hour is late and I would ask you to make a quick 30-second response to the next question. Some of the staff have children they have to pick up from school, I think.
Strict liability. We have heard some members saying that it actually reduces the responsible actions on the part of—I know you said if you raise the bar to an athlete, well, you know, he can get over it, but do you have just a quick response to the strict liability part of this and how it might relate to something like the Migratory Bird Treaty Act?
Ms. CAMERON. Well, there were two issues that were being raised there. One is the question of strict liability for spills, another is criminal investigation liability, which has the industry quite concerned right now.
If I could respond to both of them very quickly, number one, I think strict liability has been as strong a prevention effect of OPA 90 as any other part of that law and I would definitely encourage you to leave it in place.
With regard to criminal investigations and liability, I do not believe that the Federal Government has overstepped their boundaries on that. I know both the U.S. and Canadians work hard to enforce obvious examples of pollution.
The tank vessel COMMAND off the West Coast when it released oil in the water after leaving San Francisco Bay, was spotted by aerial surveillance and denied that they had done anything, but the records are there and it is illegal to dump oil in U.S. waters. And I do not think it has been abused. I think it is used when necessary and both go a long way in protecting our environment.
Ms. LENTZ. I would just like to say that strict liability is a key part of the polluter pays principle and it is a necessary part of that principle and it is the cost of doing business when you are engaged in a hazardous activity. In terms of criminal liability, I would have to agree with Jean that clearly there are circumstances that warrant criminal liability.
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Mr. GILCHREST. Well, ladies, thank you very much for your tolerance and your patience, and we enjoyed your testimony, and you probably ought to get that young man something to eat.
Ms. CAMERON. Thank you for the opportunity and your perseverance.
Mr. GILCHREST. Yes, ma'am. The hearing is now adjourned.
[Whereupon, at 4:42 p.m., the subcommittees were adjourned.]
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