Segment 2 Of 2     Previous Hearing Segment(1)

SPEAKERS       CONTENTS       INSERTS    
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OVERSIGHT HEARING ON THE REQUIREMENT FOR DOUBLE HULLS UNDER THE OIL POLLUTION ACT OF 1990

Tuesday, June 29, 1999
House of Representatives, Subcommittee on Coast Guard and
Maritime Transportation, Committee on Transportation and Infrastructure, Washington, D.C.

    The subcommittee met, pursuant to call, at 10:00 a.m., in room 2167, Rayburn House Office Building, Hon. Wayne Gilchrest [chairman of the subcommittee] presiding.
    Mr. GILCHREST. The Subcommittee on Coast Guard and Maritime Administration will come to order.
    The Subcommittee hearing today will hear testimony on the requirement for double hulls under the Oil Pollution Act of 1990. We will limit opening statements to the Chairman and Ranking Minority Member.
    The hearing is a continuation of a hearing the Subcommittee held in March on the effectiveness of the Oil Pollution Act of 1990. At that hearing, the Subcommittee learned that the Oil Pollution Act has been very successful in reducing oil spills in U.S. waters. According to the Coast Guard, the average number of oil spills over 10,000 gallons has dropped about 50 percent from 1991 levels. Also, the average number of gallons spilled per million gallons of oil shipped in the U.S. has been reduced by 64 percent.
    This success is due to the comprehensive system of oil spill prevention, response, liability, and compensation, as well as research and development programs established by the Oil Pollution Act. The phaseout of single hull oil tankers and barges is part of this environmental protection system.
    If there is one thing I hope we can accomplish today, it is to put to rest the rumor that the single hull phaseout schedule under the Oil Pollution Act is under attack. Support for the phaseout of single hull tankers is strong in the United States Congress. I am aware of no organization or industry that is asking for an amendment to the phaseout schedule under the Oil Pollution Act.
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    Of course, the Oil Pollution Act does not require any company to build a new oil tanker. A tanker owner will base a decision on whether to build a new tanker on market conditions existing at the time when a decision must be made, including the price of oil and the price of a new oil tanker.
    One of the main purposes of this Committee is to ensure that the marine ecosystem improves. And one of the main purposes for this hearing is to understand the success of the Oil Pollution Act of 1990 and to ensure that what we do as members of Congress has a significant impact in the improvement of the environmental standards for shipping oil and other hazardous cargo across the ocean.
    That isn't to say that we are going to be static in our understanding of minimal standards. We will continue to pursue based on our knowledge about how we can significantly improve those minimal standards. And so we look forward to the testimony of these expert witnesses to help us in that endeavor.
    So at this point, I will yield to my colleague from Oregon,—I will get that probably by the end of the session—my good friend, who did not come under the weather in Amsterdam, Mr. DeFazio.
    Mr. DEFAZIO. Thank you, Mr. Chairman. You are a trooper, Mr. Chairman. You maintain, despite not being well.
    A number of reflections on this. You know, as a member of the Resources Committee I went to Alaska after the Exxon Valdez accident about five days later. That was an extraordinary tragedy, a real mess. And a number of us resolved that we would take all effective and practical steps to see that it never happened again.
    I think we have made some progress with the OPA Act. And the question is: Are we making progress as quickly and in as determined a basis as possible?
    We are going to review today the issue of double hull vessels. And there are those who believe there are other alternative technologies out there for my cursory review. Not being a new member of the committee, I don't believe there are other feasible technologies, but I will be interested to hear about them.
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    There are other issues that we need to deal with. I believe in revisiting OPA in terms of liability limits. There are things that go far beyond OPA that we were talking about in Amsterdam that go to the training and competency of crews and condition of ships. And then, finally, of course, very large cargo carriers and other new freighters carry enough bunker fuel to become basically major oil spills themselves. So I believe we are going to have to also look at those vessels and see how it might be possible to prevent significant spills from cargo carriers other than tankers. And we will hope that that can be subject of a future hearing.
    So I look forward to the testimony, Mr. Chairman, and thank you, as always, for your leadership in these areas.
    Mr. GILCHREST. Thank you, Mr. DeFazio.
    Mr. Bateman, any opening comments?
    Mr. BATEMAN. Thank you, Mr. Chairman.
    I am an interested interloper this morning and here primarily to listen but certainly to indicate my continued support now for the double hull tanker provisions that we wrote into the law in 1990, when I was a member of the old Merchant Marine and Fisheries Committee.
    I think what we sought to do then represented sound public policy, and I believe that public policy should be adhered to and the standards and requirements that were asserted then should be maintained.
    Mr. GILCHREST. Thank you, Mr. Bateman.
    You are never an interloper on this Committee. Your valued experience is always considered highly here, and we hope some day to revitalize the old Merchant Marine Fisheries Committee.
    Mr. Rodney Frelinghuysen from the great State of New Jersey. Thank you for coming this morning, Rodney. We also value your expertise in this particular area of double hulls. And you may begin.
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TESTIMONY OF HON. RODNEY FRELINGHUYSEN, A REPRESENTATIVE IN CONGRESS FROM NEW JERSEY

    Mr. FRELINGHUYSEN. Thank you, Mr. Chairman. Good morning to you and to Ranking Member Mr. DeFazio and to Mr. Bateman.
    Thank you for allowing me to testify on the importance of maintaining the double hull provision contained in the Oil Pollution Act of 1990.
    I believe that it is important for Congress to continue its unequivocal support for double hull tankers, which Congress very correctly mandated when it enacted OPA 90.
    Mr. Chairman, I support double hulls because they do and will do the most to protect the coastal environment of the United States and its thousands of miles of shoreline. I am sure this hearing will lead to the reaffirmation of the value of double hulls and result in the strict enforcement of the phaseout of aging single hull tankers in accordance with the law.
    The scientific body of evidence that existed in 1990 clearly proved that the double hull technology would reduce the risk of a catastrophic oil spill. It would ensure that an environmental nightmare such as the one that occurred when the Exxon Valdez grounded would never happen again.
    As all of us know, the Exxon Valdez spill was the worst spill in U.S. history, resulting in over 11 million gallons of oil being discharged into the ecosystem and ruining thousands of miles of Alaskan shoreline, some of which is still scarred today.
    That same scientific evidence used when Congress developed the double hull standard has been validated over the last nine years by the fact that no grounding of a double hull tanker has ever resulted in a major oil spill. In fact, to the best of my knowledge, Mr. Chairman, these groundings resulted in no oil being spilled at all, I repeat, no oil spills.
    Double hulls have a proven track record. To their credit, Mobil and ARCO have begun to make the commitment to double hulls. However, it is an issue of grave concern that not a single new double hull tanker has been introduced into the Alaskan domestic oil trade since the Exxon Valdez oil spill, more than ten years ago.
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    This seeming defiant indifference creates the potential for additional environmental catastrophes. This Subcommittee needs to keep in mind that the average age of the U.S. domestic tanker fleet today is older than it was when OPA 90 was enacted and is older than the average age of tankers that are scrapped in the international market. In short, each of the old single hull tankers that are approaching their mandatory phaseout dates to my mind is a potential disaster waiting to happen.
    Those potential disasters can and should be avoided. Congress must send a clear message that double hull tankers and only double hull tankers should be plying our waters.
    As members of Congress, we have a responsibility to every American to protect, to preserve our environment. That is why I support the double hull requirement. And that is why I urge all of my colleagues in the Congress to do the same.
    Just as freedom is a perishable commodity, so, too, are the tranquil and majestic shorelines and waters that frame the world we live in. We must do everything possible to protect those shorelines and our environment from another disastrous oil spill.
    Scientifically validated double hulls will do just that. That is why it is incumbent upon Congress to demand that oil companies renew their sense of accountability for protecting the environment from catastrophic oil spills. We must insist that they act with urgency to ensure that the single hull tankers being used today are replaced with modern, state-of-the-art, environmentally safe double hulls.
    Our message in Congress is short and simple, Mr. Chairman: Use double hull tankers, and don't look to Congress to modify the current phaseout schedule contained in OPA 90. Abide by the law. Don't circumvent it.
    I thank you, Mr. Chairman.
    Mr. GILCHREST. Thank you, Mr. Frelinghuysen.
    Mr. Bateman?
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    Mr. BATEMAN. Mr. Chairman, I have no questions. I will offer the comment that I think we are all intended to Mr. Frelinghuysen for the interest that he has taken in this issue. His leadership on it I think is very important and bodes well for our continuing the sound public policy underlying the double hull requirement.
    Mr. GILCHREST. Mr. Coble?
    Mr. COBLE. I just came in at the very end of your comments. I concur with what Mr. Bateman said. I think some sort of balance, Mr. Chairman, is going to have to be struck emphasizing safety, on the one hand, and not turning a blind eye to what could be excessive cost, on the other. And I think we need to be aware of both of those features of the equation.
    I thank you, Mr. Chairman.
    Mr. GILCHREST. Thank you, Mr. Coble.
    Mr. Frelinghuysen, just one quick question. Could you give us some idea of—you made a comment about defiance and indifference in the industry. Can you point your finger at a particular industry where there is defiance?
    Mr. FRELINGHUYSEN. I don't need to name names, but I do know that some companies have made the financial investment and others have deliberately not made that financial investment. And, from my point of view, there has been I think an intention on some people's part to basically circumvent the law through a variety of means and mechanisms, sort of redesigning and recasting existing tankers.
    But I think the Congress' mandate was clear. They ought to be obey the law. And I think the scientific basis in 1990 is just as strong today.
    Mr. GILCHREST. Thank you very much.
    Mr. FRELINGHUYSEN. Thank you very much.
    Mr. GILCHREST. Have a good day, Rodney. See you up there.
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    Our next witness is I think I will say the honorable Rear Admiral, should be Admirable, Robert C. North of the great Eastern Shore of the State of Maryland, a globetrotter of the most high regard, bouncing around the world, leading the U.S. discussion on a variety of topics when it deals with the marine global environmental issues and international shipping issues.
    So, Admiral North, we look forward to your testimony. Thank you for coming this morning.
TESTIMONY OF REAR ADMIRAL ROBERT C. NORTH, ASSISTANT COMMANDANT FOR MARINE SAFETY AND ENVIRONMENTAL PROTECTION, UNITED STATES COAST GUARD

    Rear Admiral NORTH. Sir, good morning, Mr. Chairman and distinguished members of the Subcommittee. It is good to see you looking well, sir, today.
    I am Rear Admiral Bob North, Assistant Commandant for Marine Safety and Environmental Protection for the United States Coast Guard. I am pleased to appear before you today to discuss the requirement for double hulls under the Oil Pollution Act of 1990.
    The 1989 grounding of the tanker EXXON VALDEZ in Prince William Sound, which resulted in the largest oil spill in U.S. waters, led to the passage of the Oil Pollution Act of 1990.
    A significant pollution prevention standard in the Oil Pollution Act of 1990 is the requirement for new tankers to be of double hull construction. OPA 90 also required that existing single hull tank vessels be retrofitted with a double hull or, beginning in 1995, be phased out of operation by the year 2015.
    OPA 90 also required the Coast Guard to determine if other structural and operational tank vessel tank requirements would provide protection for the marine environment equal to or greater than a double hull design and to report those findings to Congress.
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    Accordingly, in a 1992 report to Congress, the Coast Guard evaluated various alternative concepts based on our interpretation of congressional intent as outlined in the Federal Water Pollution Control Act.
    Our interpretation is that the double hull requirements were mandated to prevent, as far as practicable, any spills from occurring in U.S. waters. That was based on the Federal Water Pollution Control Act, which states, and I quote, ''The Congress hereby declares that it is the policy of the United States that there should be no discharges of oil or hazardous substances into or upon the navigable waters of the United States.''
    Our 1992 report concluded that the double hull was unmatched in preventing the majority of oil spills when compared to the proposed alternatives at that time. None of these alternatives or the alternatives evaluated since can match the superior performance of the double hull regarding the key performance measurement of probability of zero oil outflow for both collisions and groundings.
    Three studies were used as a basis for our 1992 report: one study by the Marine Board; a second by the International Maritime Organization; and a third study, for which the Coast Guard contracted with Herbert Engineering to evaluate several possible hull designs.
    The Herbert Engineering report confirmed the results of the Marine Board and IMO studies. The double hull design was most effective in low-energy casualties, while the mid-deck design was most effective in high-energy casualties.
    Double hull performance is borne out in casualty data. There have been 15 double hull tanker casualties in the U.S. since the enactment of OPA 90. Nine of those 15 were OPA 90 double hull tankers. The remaining six were built prior to passage of OPA 90. None of those casualties resulted in any oil spilled. And in some cases, the spills had they occurred would likely have been major spills.
    Also, in the 1989–1990 time frame, at least four major spills that did occur from single hull vessels occurred that likely would not have occurred or would have been very, very much minimized had they been double hulls.
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    Presently, there are two studies examining the issue of double hulls. In 1998, Congress directed the Secretary of Transportation, in cooperation with the Marine Board, to initiate a new study of double hull alternatives so as to establish an equivalency evaluation procedure that maintains the high standard of environmental protection while encouraging innovative ship design.
    The Marine Board has been given free rein to follow any course it sees fit. They are not limited by the Coast Guard's policy or interpretation of the law or any methodology or our understanding of the Federal Water Pollution Control Act. Specifically, the board is tasked with: first, developing a generalized spill cost database based on historical cost data; second, examining the latest available historical damage statistics and research on crash-worthiness to define damage extent scenarios for analyses; third, to developing an approach for calculating an environmental index to assess overall out-of-flow performance; and, fourth, to applying that index to the double hull and alternatives.
    The Marine Board held a kickoff meeting for this study on June 17th of this year. And the Coast Guard fully endorses the Marine Board as a valuable, independent, and knowledgeable resource. And we eagerly await the results of their study.
    Secondly, the Coast Guard, through the Coast Guard-chaired Ship Structure Committee and the Society of Naval Architects and Marine Engineers, has initiated a study regarding double hull design and oil outflow.
    Double hulls have been used for many decades. We are going to evaluate their performance from a technical engineering standpoint to complement anecdotal evidence of their performance.
    The study will focus on the safety of double hull tanker operations with regard to crash-worthiness, maintenance, inspection, and operations. Of particular interest is the issue of fire and explosion hazards within the double hull space.
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    The study will also determine the influence of structural design in oil tanker outflow and damage stability in collisions and groundings. Crash-worthiness of tankers is not considered in present regulations because it has not at this point been sufficiently understood.
    Since the passage of OPA 90, questions have arisen about the phaseout schedule in section 4115 for vessels that carry oil and bulk as cargo. The three controlling parameters that are provided by the statute to determine a tank vessel's phaseout date are: the vessel's date of build; its gross tonnage; and its hull configuration, whether it is single hull, single hull with double sides, or a double bottom. The Coast Guard has not granted any waivers or exemptions to the OPA 90 phaseout schedule for existing single hull tank vessels operations in the United States.
    The first questions received after the passage of OPA 90 concerned the specific phaseout date for every tank vessel operating in U.S. waters. The Coast Guard published policy to ensure consistency in the determination of those dates and documenting them on a U.S. vessel's certificate of inspection or a foreign vessel's tank vessel examination letter, a specific date when that specific vessel must be withdrawn from service so that there is no question.
    A second question arose regarding a tank vessel's gross tonnage determination and whether a tanker owner could convert a cargo tank into a ballast tank to reduce the vessel's gross tonnage, altering the vessel's phaseout date based on that parameter. On July 30th, 1997, the law was amended to state that measurement could no longer affect a tank vessel's phaseout under OPA 90.
    A third question arose regarding altering of a single hull tank vessel's hull configuration to include either a double side or a double bottom. The OPA 90 phaseout schedule allows a maximum of five additional years of service life for a single hull tank vessel with double sides or a double bottom. OPA 90 did not discuss the option of adding either of these features to a single hull.
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    After completing review of such a policy, the Coast Guard published a determination of policy on this issue in the Federal Register on the 22nd of April of 1999. The policy stated that the Coast Guard would only accept the service life extension for single hull tank vessels fitted with double sides or a double bottom as of the adoption of OPA 90. In other words, you could not add a double bottom or double sides at this point and get an additional five years.
    The Coast Guard also initiated a study by the Marine Board and the National Research Council to assess the full impact of the double hull regulations and related requirements of OPA 90 on the marine environment and marine oil transportation industry.
    The report was released to the public in late 1998. On March 1st of this year, the report was forwarded to Congress along with the Coast Guard's response to the recommendations by the Marine Board.
    Regarding the double hull design, the Marine Board found that the probablistic outflow analysis of existing vessel designs indicates that the conversion to double hulls is expected to result in significantly improved protection of the marine environment. Reductions are anticipated in both the number of spills and the volume of oil spilled.
    Also, according to the Marine Board, representatives of the tanker industry generally believe that double hull tankers can be operated safely, albeit with more resources and attention perhaps than needed for single hull tankers.
    In summary, the Coast Guard has worked actively to improve maritime safety to protect the environment through the implementation of the double hull requirements and to seek alternatives that are equal to or greater than the double hull design and the zero probability of oil outflow characteristics.
    There is still work to be done. We will continue to seek engineering improvements where appropriate. However, double hulls and their equivalents are really a secondary preventive measure that seeks to prevent or minimize a spill after something else has gone wrong, usually a human factor issue. Therefore, we see large gains to be made, primarily in pollution prevention, in the future through the human element and safety of navigation in marine operations.
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    Future initiatives to improve maritime safety and protect the environment will focus on using a formal, risk-based approach, considering probability as well as the consequences of accidents. Our efforts will center on minimizing the probability of an accident while continuing to maintain our response capability so as to be able to minimize the consequences when accidents occur. This balanced approach offers great potential for continuous improvement in pollution prevention and response.
    Thank you, sir, for the opportunity to discuss this important topic with you this morning. I would be pleased to answer any questions that the panel may have.
    Mr. GILCHREST. Thank you, Admiral North.
    Admiral North, it has been almost ten years since OPA 90. And a number of things have been implemented to reduce hazardous spills and protect the environment. One was a series of measures for single hull tankers that were not part of the U.S. policy in the past and a part of the safety procedures on those tankers in the past. So that was a positive improvement.
    The next one was the conversion from single hull to a number of ships that now have double hulls. So that was a positive improvement.
    As we move along into one phase after another phase—I am not going to say there are three phases to protect the environment because each new generation faces new problems and tries to improve on the previous generation.
    Taking a snapshot of the waterborne oil distribution system today, where should the next dollar of public or private investment go to maximize environmental protection: to double hull construction, electronic charting, vessel traffic systems, some other technology, or in some capacity all of the above?
    Rear Admiral NORTH. I would say in some capacity all of the above. I think they are all very important issues depending on what part of the prevention spectrum you want to start at.
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    As I mentioned at the end of my comments, I will say primary preventive efforts are preventing the early causal factors in what ultimately becomes an oil spill, which might be a human element failure, or a loss of vessel control, to the degree that you have a collision or a grounding or an allision. And then when you get to that point, the double hull is another measure that, after having an accident, perhaps will prevent an oil spill from occurring or minimize it.
    You really want to go back to the beginning of that chain of events and try to prevent the accident from occurring in the first place and then, accordingly, if they do, ensure that you have incorporated measures so that you again further minimize the likelihood of an oil spill.
    You really need to require a spectrum of things that allow vessels to operate safely in the channel away from each other and do their business. And then if an accident does occur, there are systems and measures that will further act to prevent an oil spill.
    Mr. GILCHREST. Admiral, do you see the double hull policy that we have as a prescriptive standard or a performance standard?
    Rear Admiral NORTH. Well, certainly the statute as it is worded is a prescriptive standard in the sense that it mandates the double hull or allows us to look at equivalents. On the other hand, I think our approach using the probability of zero outflow as an important factor or the principal factor is, on the other hand, a performance standard in the sense that what we are really after in the long run is the probability of zero outflow.
    Now, currently double hulls are prescribed to do that. And one of the issues is: Are there alternatives that may do the same thing?
    Mr. GILCHREST. One of the witnesses will testify later today that double hulls should be a minimum performance standard while we continue to improve a whole range of other possibilities. What would your comment be to that?
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    Rear Admiral NORTH. Well, my comment would be that I would look back at the history of double hulls to this point and what they have shown their value to be, which from my perspective is very high in terms of creating the situation where you have a very high likelihood of zero outflow of oil.
    I have been involved over my career in the field in a lot of oil spills involving vessel groundings and collisions and so forth. And my perspective is that the double hull has worked very well.
    I would tell you that if you go back a number of years to when we started requiring double hulls on tank barges that carry chemicals in the Western river system and you had an accident at night some distance from our location, where we covered over about a 400-mile stretch of the river system, the first question that we asked was: What is the configuration of the hull? Is it a single hull or a double hull?
    And if it was a double hull, we breathed a sigh of relief to start with because the experience generally was that with very, very few exceptions—and I can't even hardly think of one—there might have been some damage to the vessel, but there was no product in the water. If it was a single hull, almost invariably there was.
    Mr. GILCHREST. I guess, then, following that line of thinking, your phase-in approach to improved environmental standards would be to continue the process of the phase-in of double hulls and the cost and the benefits that will be incurred from that. And then would you pursue vigorously electronic charting, integrative navigational systems along with VTS, which some have said would be—in fact, if I might use Dr. Hauke Kite-Powell's comment from his testimony, both the electronic charts and VTS systems appear clearly superior on this criteria based on benefit cost analysis to double hulls.
    Rear Admiral NORTH. Well, I think we are pursuing both concurrently. It is not a question of doing double hulls first and then trying to make navigation safety improvements. As we move into the phase-in of double hulls, we will look at alternatives to double hulls through the Marine Board process.
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    We are at the same time developing transponder-based vessel traffic services. We are working with NOAA to further improve navigation safety, of which electronic charting is a part of that. We have a Navigation Safety Advisory Committee for the Coast Guard that is exploring today with NOAA the value and the improvements that can be made to navigation safety through electronic charting as well as some of the pitfalls that are out there today with some of the electronic charting systems that exist. There is great potential there to improve navigation safety, but if misused in terms of the wrong software or the wrong hardware, you can create more problems than you solve.
    So there is a lot to be done at the same time that we are looking at the phase-in of double hulls and those kinds of measures. So you are looking at primary preventive measures in the sense of safe navigation, keeping vessels in the channel and away from each other, as well as looking at the secondary measures, such as double hulls or alternatives, so if there is an accident, you have another barrier, so to speak; in this case, a physical barrier between the oil and the water.
    Mr. GILCHREST. Thank you very much, Admiral North.
    Mr. DeFazio?
    Mr. DEFAZIO. Thank you, Mr. Chairman.
    Admiral North, do you happen to have the figures on how many tankers and/or tank barges have been phased out under OPA 90?
    Rear Admiral NORTH. Not in my hand. I could tell you how many double hulls are coming in. I do have those figures. I could provide them to you, sir.
    [Information follows:]

    [insert here]

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    Mr. DEFAZIO. Sure. You mentioned something about waiver authority. I was a little puzzled by that because I am not sure that the law provides that.
    Rear Admiral NORTH. It does not from our perspective.
    Mr. DEFAZIO. OK. That was in your testimony. So I was a little uncertain.
    I am wondering on some of the issues I raised during my opening statement. We are focusing on design, and that is good. Design can to some extent mitigate problems created by bad seamanship.
    There are other issues, as you know,—you were at the Amsterdam conference, too—that are very important in terms of preventing accidents.
    Rear Admiral NORTH. Yes, sir.
    Mr. DEFAZIO. I am wondering if you think we need new authority in those areas, whether Congress needs to act. Are you satisfied that we are getting there or are going to get there real soon by dealing with the IMO?
    Rear Admiral NORTH. Well, I would say in terms of the human factors issue, which you and I both mentioned, Standards of Training Certification and Watchkeeping (STCW) '95 amendments, which are in the process of implementation, and will be completed by the year 2002, have great potential to improve the human factors side of the equation. And we are heavily in the midst of implementing those standards in all sectors of the maritime industry.
    We are also looking at working with the domestic industry, where those standards nominally are going to apply, at the human factors issue and issue of alertness of crew members and how to improve alertness and ensure that we deal with the human factors in that side as well.
    I believe that given STCW, as it is called, with the '95 amendments and our existing authority in the work that we are doing with the industry to look at crew alertness and other factors in that area, that we have sufficient authority to deal with that part of the equation.
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    Mr. DEFAZIO. Yes. Again, I know more about aviation, where we have gone to strict mandates on crew duty time and those sorts of things. Fatigue, as we downsize the size of crews, is becoming a factor, particularly if ships are operating in difficult conditions or heavy weather and with the demands being placed upon the one or two people still on the ship. I am being a little bit facetious,——
    Rear Admiral NORTH. Yes, sir.
    Mr. DEFAZIO. —but it is not a lot better than that on some of these ships. And you think, then, that these are going to be effectively addressed by these international standards?
    Rear Admiral NORTH. Yes, sir, I believe they are.
    Mr. DEFAZIO. OK. Well, I am hopeful and will continue to monitor the undertaking there. I am particularly concerned about flags of convenience. In Amsterdam it was interesting to meet a person who was the new Liberia and a person who was Panama.
    It just brought home to me the absurdity of this flag of convenience issue that these people essentially purchase lucrative franchises and then endeavor to market them. And to market them, obviously a lot of people don't want to have to meet these higher standards. So I am hopeful that somehow we are going to deal effectively with that.
    Obviously with the U.S. fleet, there are different issues.
    Rear Admiral NORTH. That is right.
    Mr. DEFAZIO. And that is primarily what we are looking at here.
    Do you have any thoughts on the issue of bunker fuel. With freighters getting larger and larger and the potential for spills there, is this becoming somewhat catastrophic?
    Rear Admiral NORTH. I will give you several thoughts. First, there is presently some work in IMO dealing with the liability issue in the Legal Committee, where there are some holes, so to speak, that need to be filled in the liability regime dealing with bunker fuel, no matter what type of vessel it comes from. So that is one avenue.
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    Second, if you look at the oil spill statistics, although one could say that bunker fuel, although statistically significant, is in the low end in terms of the source of spills, when you compare it to on-shore pipelines, for example, or tank barges, as cargo ships grow and trade grows, we need to continue to look at what the risk is from that source.
    And I think that as part of the larger spectrum of oil spill sources, as OPA 90 continues to move ahead and double hulls are implemented and the tank vessel spill rate hopefully continues to decline and the tank barge spill rate continues to decline as we work with the sources of those spills, what then becomes the principal source? And where is the risk? Where has the risk shifted? And what does that, then, tell us in terms of prevention measures?
    So I think what is in order—and we are in the process of beginning that—is a risk assessment, as we look into the first quarter of the twenty-first century, of what do we see happening in terms of the sources of oil spills and the movement of the risk from one area to another, and what does that tell us in terms of prevention measures.
    If we deem that bunker fuel, whether it is from a freight ship or a tanker, because tankers don't have protection to get on bunker fuel tanks either, if bunker fuel is now becoming a prominent source of spill or it looks to be, then one has to look at what preventive measures need to be developed and the cost-benefit of that and what response measures might be modified to deal with that as well.
    So it is really a continuous effort to assess risk, to look at how it might be changing, and to adjust your strategy to deal with it accordingly, so as to stay ahead of the problem, rather than using reactive approaches, as we had to do with the EXXON VALDEZ.
    So I see it as a risk. It may grow. All indications are that it probably will because of the growth in trade and the size of the ships. And we need to assess how much that risk is worth to us and deal with it in a way that is appropriate.
    Mr. DEFAZIO. Thank you. Thank you, Admiral.
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    Mr. GILCHREST. Thank you, Mr. DeFazio.
    Mr. Bateman?
    Mr. BATEMAN. Thank you, Mr. Chairman.
    Admiral North, if I have garnered your position correctly, it is substantially that you are pursuing and will continue to pursue vigorously things which will prevent the kind of oil spills and damages to the environment that are the focus of our concern. And I commend you for that. And certainly I don't think there is anyone in the room who would suggest it should be otherwise.
    Rear Admiral NORTH. Yes, sir.
    Mr. BATEMAN. But at the end of the day, doing all that you can do there and assessing the risk, I also read you as saying that the Coast Guard will be more comfortable as more petroleum products are carried in double-hulled tankers, as opposed to continuance or extension of single hull tankers. Is that an accurate characterization?
    Rear Admiral NORTH. Our assessment would be that that would reduce the risk to spillage. Yes, sir.
    Mr. BATEMAN. Thank you.
    Mr. GILCHREST. Thank you, Mr. Bateman.
    Mr. Baird?
    Mr. BAIRD. Thank you, Mr. Chairman.
    I would like, Admiral, to return to the question of the bunker fuel.
    Rear Admiral NORTH. Yes, sir.
    Mr. BAIRD. Of course, with NEW CARISSA grounding off our coast, it is relevant to us.
    Given the long—we have a long turnaround time, I guess, once we pass a law because we have got existing fleets. If a manufacturer is making a ship right now and is dealing with the issue of bunker fuel, are there any financial incentives for them to try to add to the safety of the bunker fuel protection?
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    Rear Admiral NORTH. I really couldn't answer that question, sir.
    Mr. BAIRD. Do you envision that the Coast Guard will be undertaking some future study about the potential hazards of a bunker fuel spill and cost-benefits of that?
    Rear Admiral NORTH. In looking at development of our business plan for the next five years, we are certainly considering the spectrum of sources of oil spills and what we need to do to deal with that. And certainly bunker fuel is a part of it.
    If you make an assessment that there is a risk and you want to develop a risk abatement measure beyond what we have today, then in order to implement a new regulatory approach or otherwise, you would need to do a cost-benefit analysis and see what that tells you.
    Mr. BAIRD. Let me go back, then, to a somewhat different subject. The Coast Guard, as I understand it, determined that a retrofit of an existing single hull tanker is not an acceptable alternative and that they need to be phased out. Is that accurate?
    Rear Admiral NORTH. Retrofit of an existing single hull what?
    Mr. BAIRD. Of an existing single hull tanker that you could put—as I understand it, it sounds like a retrofit to put an existing—retrofit it so it is effectively like a double hull.
    Rear Admiral NORTH. Well, there is nothing to prohibit retrofitting a single hull tanker to a full double hull. And that would be acceptable so long as it met the double hull standard in terms of the spacing and the structural requirements, basically the regulatory standard and the IMO standard.
    Mr. BAIRD. So that is an acceptable alternative?
    Rear Admiral NORTH. That is what we had ruled out, adding a double side or a double bottom to get five more years at this point. We did not rule out a full double hull. That is in accordance with the regulation.
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    Mr. BAIRD. OK. That is the distinction I was after. Why did you rule out the double side or the double bottom?
    Rear Admiral NORTH. Because we felt that it took a single-hulled vessel and extended its life beyond what the law had contemplated. And it was prudent to do it.
    Mr. BAIRD. Was it deemed that that would provide inadequate protection or just that it was——
    Rear Admiral NORTH. Well, the intent is to move ahead with the schedule for single hull replacement with double hulls, as provided for in OPA 90. And that would interfere with that placement schedule, as we saw the proposal. That is why we deemed that you were what you were as of the implementation of the law.
    Mr. BAIRD. OK. Thank you very much.
    Mr. GILCHREST. Thank you, Mr. Baird.
    Mr. Coble?
    Mr. COBLE. Thank you, Mr. Chairman. Admiral North, good to have you with us this morning.
    Admiral North, one of your principal objections—strike that. It is my interpretation that one of your principal objections to double hull alternatives, such as the American under pressure system and the central ballast tanker, are that they are not passive systems; that is, that they require special operator actions to ensure safety. Now, am I correct so far?
    Rear Admiral NORTH. That would be a concern of ours. Yes, sir.
    Mr. COBLE. My follow-up question is: Does not the double hull fall into this same category in that special procedures would be required to safely load and off-load cargo from what would probably be a less stable design?
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    Rear Admiral NORTH. In the event of damage to the vessel?
    Mr. COBLE. Sir?
    Rear Admiral NORTH. In the event of damage to the vessel?
    Mr. COBLE. Well, just generally.
    Rear Admiral NORTH. The issue of stability for double hull vessels was addressed both by the Coast Guard and IMO some time ago. There were concerns early on about stability, and modifications were made to the structural requirements that we believe make stability of those vessels not a problem.
    I also believe that when we take a look at the Ship Structure Committee study that we have chartered, that structural performance, including stability, will again be looked at.
    So I would not agree, sir, with your statement in the sense that I don't see double hulls certainly in normal operations today taking any different care perhaps than many other tank vessel types.
    The passivity comes into the fact that when your basic assumption is you are having an oil spill because a tanker is damaged and it is aground or it has been in a collision with another vessel or something of that sort, that if at that point one has to depend upon a power source were the crew to act when the crew might be trying to save their lives and that may be more important at that point and you have a damaged vessel, the power source may not be operable and the crew may leave the ship.
    So a passive approach, from our perspective, is preferred for that reason. We don't see other downsides to that in the process.
    Mr. COBLE. Let me shift gears, Mr. Chairman.
    Just for my information, Admiral, I have heard and read various reports, some inflated, some wildly inflated, some reflecting accuracy, I think, concerning the amount of oil that has been spilled since EXXON VALDEZ.
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    I am told that approximately 300 billion gallons of oil were consumed in the United States in 1997 and that the amount of oil spilled in United States waters from all sources was less than one percent. Can you refute or confirm that?
    Rear Admiral NORTH. Well, if you took the oil spill compendium, which is a——
    Mr. COBLE. Admiral, will you pull that—in my advancing age, I don't hear like I did years ago.
    Rear Admiral NORTH. If you took the oil spill statistics since OPA 90 and you looked at the volume of all spills and you added it up, that would answer your question.
    I believe that if you took a look at maritime sources, it is about 22. I think the answer is 22 million gallons, but I am not sure. I would have to do some arithmetic.
    Mr. COBLE. Could you get that to me?
    Rear Admiral NORTH. Yes, sir.
    Mr. COBLE. I would like to know that.
    Rear Admiral NORTH. Yes, sir.
    Information received follows:]

The data contained in the Coast Guard Headquarters Office of Marine Safety and Environmental Protection Business Plan from 1990 through 1998 indicates a total volume of 22 million gallons of oil spilled from regulated vessels and marine transportation related facilities. This figure excludes non-marine transport sources and non-regulated vessels (e.g., tank farms, pipelines, U.S. Navy vessels). There was one spill of more than 1 million gallons in 1990 (3.9 million gallons).

    Mr. COBLE. Thank you, sir.
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    Thank you, Mr. Chairman.
    Mr. GILCHREST. Thank you, Mr. Coble.
    Just one quick follow-up question, Admiral, that you may or may not be able to answer right now, but I thought I would ask it. Is there any way to predict the number of Jones Act vessels in this trade over the next 15 years that will still be in the trade?
    Rear Admiral NORTH. Not by me.
    Mr. GILCHREST. Thank you very much, Admiral. We enjoyed your testimony.
    Rear Admiral NORTH. Thank you. I enjoyed being here, sir.
    Mr. GILCHREST. Good to see you back in the States.
    Rear Admiral NORTH. Likewise.
    Mr. GILCHREST. Our next witness is Ms. Cynthia Brown, President, American Shipbuilding Association. Welcome, Ms. Brown.
    Ms. BROWN. Thank you, Mr. Chairman. I am glad to see that you are well and back in the saddle, so to speak.
    Mr. GILCHREST. Tiptop shape, thanks to Mr. DeFazio's recommendations.
    It is good to have you here this morning, Ms. Brown, and we look forward to your testimony. You may begin.
TESTIMONY OF CYNTHIA L. BROWN, PRESIDENT, AMERICAN SHIPBUILDING ASSOCIATION

    Ms. BROWN. Thank you very much for the opportunity to testify on the necessity of double hulls in preventing oil spills and the status of the replacement of the U.S. flag single hull fleet with double hull tankers.
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    The American Shipbuilding Association, or ASA for short, represents the six largest shipbuilders in the United States. They are: Bath Iron Works of Maine, Electric Boat of Connecticut, Newport News of Virginia, Ingalls Shipbuilding of Mississippi, Avondale Industries of Louisiana, and National Steel and Shipbuilding Company of California.
    Just by way of description, these six shipbuilders, employ over 90 percent of all workers engaged in ship construction in the United States and they are the largest private employers in five states. We build large oceangoing double hull tankers amongst other commercial ships as well as all the Navy's capital ships.
    In 1990, Congress mandated double hulls on all newly constructed oil tankers and specified a precise retirement date for all single-hulled tankers based on their age and weight at the time of enactment of the law.
    American shipbuilders and environmentalists strongly supported the double hull mandate. This oil pollution prevention law is one example of where the interests of the environment and industry are joined. Although the shipbuilding industry benefits from the business of building double-hulled tankers, my industry is extremely proud of its record and commitment to protecting the environment.
    We work closely with the Environmental Protection Agency. And we are the only major manufacturing industry in this country that has never sued EPA. Because of our commitment to building the safest ships and building them in a manner which is environmentally safe, ASA is registered as 'Partners in Pursuit of Pollution Prevention' under U.S. trademark law.
    Double hulls have demonstrated time and again their effectiveness in preventing and minimizing oil spills. The technology is superior to any other, and it is proven.
    In 1997, a barge collided with a double-hulled tanker in the Port of Lake Charles. Although the double-hulled tanker had a 400 square foot gash in its side, not one drop of her oil spilled.
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    In 1996, a double-hulled tanker off the coast of France ran aground. And although her outer hull was punctured in many places, none of her cargo was spilled.
    Examples abound demonstrating the effectiveness of double hulls. And I have attached to my statement a list of various studies demonstrating the effectiveness of this technology.
    It took the March 24th, 1989 catastrophic spill of the Exxon Valdez in Prince William Sound to move for new environmental law to be enacted in the transportation of our oil. In the aftermath of this tragedy, the late Congressman Dean Gallo from New Jersey and Congressman Bob Torricelli joined forces and sponsored an amendment on the floor mandating double hulls.
    The day after the conferees were appointed on the oil pollution legislation, the single-hulled AMERICAN TRADER ran over her own anchor off the coast of Huntington Beach, California, spilling 400,000 gallons of oil. It was February 8th, 1990.
    Later that year Congress acted to minimize and prevent future oil spills by mandating the phaseout of old single-hulled ships based on their age and weight and requiring that all ships have double hulls by 2015. Supporters of double hulls sought a 15-year phaseout. Opponents sought no phaseout or a very long phaseout.
    Opponents argued that there was not enough shipbuilding capacity in the United States to replace the Jones Act fleet. U.S. shipbuilders responded with data showing that we could replace the entire Jones Act fleet at that time, which was 150 ships, within 8 years. A compromise was struck. It was a 25-year phaseout.
    Almost immediately following enactment of OPA 90, some oil companies and tanker operators have sought to undermine the law. Some owners have creatively remeasured their ships by stating, for example, that the engine rooms or certain ballast tanks should not be measured to determine the weight of a tanker for its phaseout schedule since oil would not be carried in these spaces. Congress stopped this scheme in 1997 through the enactment of Congressman Frelinghuysen's amendment.
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    The latest effort to usurp the phaseout schedule involved a proposal by Exxon and others to segregate and not carry oil in their side ballast tanks under the premise that this would make that vessel a double-sided ship and it should then be granted an additional five years of operating life.
    I would like to point out that these ships have already phased out under the OPA 90 schedule. In April, as the Coast Guard already mentioned, the Coast Guard ruled that this would be contrary to the letter and intent of OPA 90.
    Certain companies, Mobil, Hvide Marine, American Heavy Lift, have demonstrated their commitment to the environment and to the law. Since OPA 90, these three companies have collectively taken delivery of ten double-hulled tankers built by ASA shipyards. And we are building three more today for ARCO.
    These environmentally compliant companies are, however, being placed at a competitive disadvantage with other companies that are not replacing their fleets with new, safe, double-hulled tankers.
    There are 66 U.S. flag tankers that will be phased out of service between now and 2015. The charts to my right and left—I don't know whether you can see them—show the phaseout schedule according to the best available data that we have.
    The average age of the fleet is 25 years. Some of those tankers have reached 54 years of age. In comparison, the normal economic useful life of a tanker is 20 years. And these old tankers are the ones that pose the greatest risk to America's coastlines, marine environment, and wildlife, and should be replaced sooner, rather than later.
    Since 1990, many of the shipyards that were building double-hulled tankers, or had the capability to build double-hulled tankers, have gone out of business or have been forced into ship repair only.
    I would like to state, however, that there exists today more than sufficient shipbuilding capacity to replace the entire U.S. Jones Act fleet ahead of the OPA 90 phaseout schedule, but it is, as the Chairman mentioned in his opening remarks, up to the oil companies and tanker operators to place the orders for the double-hulled ships, and the clock is ticking.
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    As you can see by this chart, within the next two years if those orders are not placed, we are concerned that there may not be sufficient eligible tankers in the U.S. flag fleet to meet the U.S. oil transportation needs by the year 2005.
    Some oil companies are purposely delaying replacing their ships, hoping that the shipbuilding industry will shrink even further. Their strategy includes waiting until the last minute to place an order, demanding an unachievable delivery date, and then using the shipbuilding industry's inability to meet that unrealistic schedule as an excuse for you, Congress, to give them relief from the law.
    As the number of eligible tankers to meet our domestic oil transportation declines, Congress will come under increasing pressure to follow this strategy. Delay by the oil companies poses a greater risk to our environment.
    The road to double hulls was long and overdue. In 1976, President Jimmy Carter then directed the Coast Guard to go before the IMO and make double hulls the international standard. It was Exxon then that led the campaign to defeat double hulls before the International Maritime Organization.
    Ten years after the Exxon Valdez oil spill, Exxon has yet to introduce one double-hulled new tanker into the American fleet. Instead, it is seeking to bring back the single-hulled Valdez into Alaskan waters—this ship has been renamed the Mediterranean—and continues to seek waivers to the OPA 90 phaseout schedule.
    Congress should not let them, or anyone, get away with it. There is no reason for any oil company to be allowed to usurp the most important pollution prevention measure of OPA 90.
    You, Congress, can use your voice and your pen to publicly demand that these companies do what is right for America's environment and her citizens. I urge you to make these public calls today and every day until the entire fleet plying American waters is equipped with a double hull.
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    I also would recommend that the Coast Guard report to you on a regular basis the progress of tanker operators in replacing their single-hulled ships with double hulls.
    Thank you very much, Mr. Chairman.
    Mr. GILCHREST. Thank you, Ms. Brown.
    I think you can be fairly assured that this Committee will follow the letter of the law in OPA 90, that anybody that wants to stretch that law or stretch the word of the law will not be successful.
    We understand that smaller American shipyards are building double-hulled barges to replace product tankers phased out by OPA 90. Has your organization done any market analysis of the oil transportation industry that includes this development?
    Ms. BROWN. Not specifically on that development. That has been a trend that has been underway for some years in certain trades. We have done a market analysis as far as what the replacement requirement for the single hull oceangoing fleet would be.
    Of course, it would not be a one-for-one replacement. Our industry has anticipated that over the next 10 to 12 years, that a replacement of 40 40,000 deadweight ton equivalent tankers would replace the existing fleet that you see on this chart to my right and left.
    Mr. GILCHREST. Has your organization—well, I guess you just explained your market analysis that focuses on the Jones Act tankers for the future. Now, you say you will probably replace about 44 of the 66 tankers. The 66 tankers that are single hull right now will be replaced by your market analysis by 44 double hull tankers?
    Ms. BROWN. Forty.
    Mr. GILCHREST. Forty?
    Ms. BROWN. Forty, 40 tankers with equivalent of 40,000 deadweight tons. Yes, sir.
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    Mr. GILCHREST. Is there an estimate when that will be complete?
    Ms. BROWN. That estimate is between now and ten years from now, so over the next ten-year period.
    Mr. GILCHREST. Does your analysis show that there will continue to be a demand for those 40 double-hulled tankers?
    Ms. BROWN. Yes, sir, it does because it takes into consideration the reduced demand for the transportation of oil in the coast-wise trade. For example, today there is equivalent, I believe, of about six million deadweight tons of tonnage to carry U.S. oil.
    Now, all of those ships are not presently carrying oil, and there are market shifts and trends that will impact on demand. So the amount of tonnage that we would be talking about would be significantly less than the current existing amount of tonnage engaged in oil to take into consideration, reduced demand; for example, if there is reduced oil coming out of Alaska, et cetera.
    Mr. GILCHREST. So are you assuming there will be reduced oil coming out of Alaska?
     Ms. BROWN. There will be in the out-years if future oil exploration does not take place.
    Mr. GILCHREST. So the number of U.S. tankers will go from 60-some to about 40. Will this have any impact on the marine transportation infrastructure as a whole, this reduction in U.S. tankers?
    Ms. BROWN. Not any that I would know of, Mr. Chairman. No, sir.
    Mr. GILCHREST. Will it have any impact on the defense readiness of the country or the delivery of oil to the Northeast or just the overall general infrastructure, going from 66 down to 44?
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    Ms. BROWN. Of course, in any market, you have trends to where one is flat at a time. All transportation today, for example, is not at its peak. It is low. It is depressed here in the United States.
    There are other times depending on weather conditions, depending on the transportation of refined product and the trade routes, where there is greater demand for oil. So there are fluctuations.
    We anticipate based on just the trend that we have seen over the last decade of reduction in the amount of oil demand on a regular, consistent, constant basis that there would not be a one-for-one replacement. That is not to say that there would not be the tonnage there to meet the U.S. transportation needs. It is a reflection of changes in the transportation patterns of our oil, the pipelines, other things.
    Mr. GILCHREST. You say the reduction of oil demand?
    Ms. BROWN. Well, there has been a drop in demand. There has also been a reduction in our tanker transportation of oil. This is in part due to the fact that we have had rather warm winters to date.
    So there has been also a reduction in transportation of oil to the Northeast, yes.
    Mr. GILCHREST. How many oil tankers have you—have many double-hulled tankers have you built up to this point?
    Ms. BROWN. American shipbuilders, ASA shipbuilders, have built ten double-hulled tankers since OPA 90. And we are building three more today.
    Mr. GILCHREST. Where are they being built?
    Mr. GILCHREST. They are being built in Avondale Industries in Louisiana.
    Mr. GILCHREST. I see. Well, my time is up. Thank you, Ms. Brown.
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    Mr. DeFazio?
    Mr. DEFAZIO. Thank you, Mr. Chairman.
    Ms. Brown, I was particularly concerned and interested in following the Chairman's line of questioning about capacity. I am trying to see when or if we hit the wall here, and that is not clear to me. Your statements about the oil companies purposely delaying replacement or significant reconstruction is in order to sort of force the issue and come to Congress and ask for some sort of an extension or delay I assume. What do you have to sort of document this?
    Ms. BROWN. Let me also make it clear that it is not all.
    Mr. DEFAZIO. Right. Well, I guess——
    Ms. BROWN. We have those examples of very environmentally compliant and responsible companies and others. Primarily what we are doing, we get that from the pattern of behavior, so to speak, Congressman. If we look at—first of all, the efforts to have ships remeasured to have a different weight category deemed to those vessels to extend their phaseout, is one example of an effort, an intentional effort, to delay the phaseout of those ships.
    The second is just the recent remeasuring or actually reconfiguration of old single hull tankers that had already indeed been phased out of schedule to try to bring them back if the Coast Guard would have granted such a waiver by segregating the side ballast tanks and thereby treating it as a double-sided ship.
    So there are specific examples that make that assumption not just a mere assumption, but one could deduct a pattern of behavior. Also, there have been times to where companies put out on the street a solicitation to get bids on either doing a new forebody, which is quite acceptable,—it is the equivalent of new construction. And then the company goes away, and you don't hear from them again for maybe several years, and then they go back on the street with the same proposal.
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    Yet, the date for those tankers to be phased out is rapidly approaching. And you do need lead time to build a new double-hulled ship in the United States, especially if it is based on a new design. If you are building a current design and you are just going to tack on additional ships onto that line, you don't need that much of a lead time. The companies know when those ships are going to be phased out, and some of them are waiting until the last minute.
     Mr. DEFAZIO. Do you see those who are advocating alternative technology as being part of this same attempt?
    Ms. BROWN. I think, Congressman, in all practicality, I think most people who are recommending other technologies do so really in a way to be complimentary to double hulls. I think that most of the community as a whole fully understands or appreciates that double hulls are far superior to any other technology available.
    Mr. DEFAZIO. OK. Then you would see their efforts to be something that could be added to a double hull. Well, I think your concerns certainly should and have been heard by this Committee.
    I just think back to one very bad precedent that was set. Actually, I think it was the Reagan administration on the subject of fleet fuel economy standards when Chrysler invested a whole lot of money in GM and Ford didn't. And then Chrysler was producing fuel-efficient cars at the time people didn't want to buy them. And GM and Ford didn't. Then they got to the deadline, and they got an extension. And so Chrysler was at that point put in a very difficult circumstance.
    So just as one member of Congress I want to say that I stand by the deadlines that were set, and I really do not detect any, very few, members of Congress, maybe some in the far interior of the country but certainly none of the coastal members, who are willing to play Russian roulette with our national resources and extraordinary constituent concern and anger over spills by cutting them that kind of slack.
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    So I think if they are going down that path, they had better recalculate. And if they are going to be having a capacity problem because they are delaying, they had better get on the stick and start building or rebuilding. That is just a reflection on what you said.
    Ms. BROWN. Thank you, Mr. DeFazio. We thank you for your leadership on this Committee and the Chairman for making sure that the environment and the law are abided by. Thank you.
    Mr. DEFAZIO. Thank you.
    Mr. GILCHREST. Thank you, Mr. DeFazio.
    Mr. Bateman?
    Mr. BATEMAN. Thank you, Mr. Chairman.
    You mentioned, Ms. Brown, that a number of carriers had proposed remeasuring and various other devices as a means to avoid or evade the double hull requirements. They ultimately were rejected, were they not, these efforts?
    Ms. BROWN. There were several remeasurements that took place before Congress took action to close that loophole.
    Mr. BATEMAN. That one we had to close and did.
    Ms. BROWN. Right.
    Mr. BATEMAN. Others were tried which the Coast Guard has up until now ruled were unacceptable.
    Ms. BROWN. Absolutely. The Coast Guard——
    Mr. BATEMAN. Is there a problem with how long it takes to get a ruling on these efforts to avoid or evade the double hull requirements?
    Ms. BROWN. I don't believe so. And I believe that what—quite frankly, with the Coast Guard's last ruling in April, I think the Coast Guard has made it very clear that exceptions such as these will not be approved.
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    Mr. BATEMAN. Well, you mentioned in your statement a number of companies that were doing a very good job of bringing themselves in position to be fully compliant. You make reference to the fact that some companies are not.
    I think fair is fair, and maybe it would be fair and appropriate to identify some of the companies that appeared not to be putting themselves in a position to comply within the time that the law requires. Can you do that for the Committee, if not today, furnish it?
    Ms. BROWN. And that is one of the reasons, Mr. Chairman, where I think that it would be helpful. We have put together our charts based on what we know, the owners of the tankers listed on this chart, and what their ages are and their phaseout dates.
    We could do that. I think I would feel more comfortable with having the Coast Guard provide that specific data to make sure that our data, in fact, collaborates or is correct with the Coast Guard's assessment. And then certainly I would be happy to provide you with the names of companies that may be approaching their phaseout date and running very close.
    Mr. BATEMAN. The object of my question is not to embarrass anyone. The object of my question is to make sure that we in the Congress have a feel for whether or not there is going to be the compliance that I think everyone that I know in the Congress feels like should be insisted upon.
    Does the Coast Guard have the data by company and by the fleet of each company that participates in the trade?
    Ms. BROWN. Yes, sir, Mr. Bateman. I have been advised by Admiral North that the Coast Guard does have that data, does know exactly the phaseout dates. I believe he mentioned that, and I am sure that the Coast Guard would be happy to provide that to you. And that would be a good track record.
    Mr. BATEMAN. Mr. Chairman, I would suggest that we seek that information from the Coast Guard since apparently they have the data and it would be the official source that would give it the presumption of correctness that I think would be useful.
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     Mr. GILCHREST. Mr. Bateman, we will ask the Coast Guard for that information this afternoon.
    Mr. BATEMAN. Thank you. That is all, Mr. Chairman. Thank you.
    Mr. GILCHREST. Thank you, Mr. Bateman.
    Mr. Baird?
    Mr. BAIRD. Thank you, Mr. Chairman. Mr. Bateman actually asked the very question I was intending to ask. I, too, would be very interested in that.
    Let me ask you a question. How long does it take, the time frame? Let us say I have got a ship that is coming up to its deadline and I am going to need to replace that. What is the time frame from inception to construction that I can reasonably expect?
    Ms. BROWN. That is a very good question. If you are doing a new design and you are going to have as a shipbuilder to design that ship and get to detailed design, meaning that the design is at a mature stage to actually begin construction, you could be looking and, of course, then the size and the complexity of the ship, anywhere from two and a half to three years.
    However, to give you another example, if you are currently building a tanker and you have used a design—and I will give the example of Newport News right now. The last double hull tanker that they delivered they built in less than a year.
    So it is based on whether the individual shipbuilder has expertise in one design, has built several to tack them on, or how much time is spent in the detailed design area.
    Mr. BAIRD. Now, let us say that there is a one-year—let us say somebody gets close to their deadline and they say, ''All right. We don't have time to go with a new ship design. We are going to go with an old design.'' Would it be reasonable to expect a backlog? In other words, is there some point wherein those who have waited will just run into a waiting list and not be able to get replacement vessels?
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    Ms. BROWN. That could certainly be a potential problem. We hope it will not be, but it could be.
    Mr. BAIRD. What in your experience and judgment do you think a company would do under those circumstances, a company that currently ships a fair bit of oil?
    Ms. BROWN. Well, I believe if I were an oil company and I were shipping oil in my ships that I currently had or multiple vessel, was going to be phased out, and I had waited until the last minute, until the eleventh hour, to place an order and I couldn't get my ship delivered in the time before my other fleet went out, I would be back up here asking you for an extension.
    Mr. BAIRD. I wouldn't be surprised to see that visit. You know, I——
    Ms. BROWN. And I would blame it on that shipbuilder, too.
    Mr. BAIRD. I was intrigued by the list of some of the companies you identified. And I am looking forward to the list Mr. Bateman requested and the Chairman assured us we will get.
    As I drive by the gas pumps of these various companies, I don't see that much difference in price. Are the companies that have done the right thing under the law and are replacing on schedule just somehow eating that price?
    You don't see the competitive advantage. What is behind that in your thoughts?
    Ms. BROWN. Well, I am not in the oil-shipping business. So I am not an expert. But there are freight rates that are driven by what the market is. And that rate is what you as a tanker operator bring in on your daily hire.
    The advantage for those who have not replaced their ships with new double-hulled tankers is the capital cost of their ships has already been amortized. So they have none of that cost versus the owner who has taken delivery of a new ship who has very high capital cost, which is normal. So that is the competitive advantage or disadvantage that the environmental-compliant company is put under.
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    You do not see it in the reflection at the pump. And, actually, when the double hulls were debated, it was determined then by the industry that there is a variation of a 15 percent increase from single hull construction in cost over to double hull construction. And that would equate to less than a penny at the pump.
    Mr. BAIRD. A penny a gallon?
    Ms. BROWN. Right.
    Mr. BAIRD. Thank you, Mr. Chairman.
    Thank you, Ms. Brown.
    Mr. GILCHREST. Thank you, Mr. Baird.
    And thank you very much, Ms. Brown, for your——
    Ms. BROWN. Thank you, Mr. Chairman.
    Mr. GILCHREST. —for your testimony.
    What we are going to do since the next panel will probably be an hour or more is to be somewhat—I mean, an hour from the time you get up here to the time you finish your testimony and have all of the questions, it will be about an hour. So we are going to have a humane ten-minute break so you can get a glass of water or use the restroom. We will be back in ten minutes.
    [Recess.]
    Mr. GILCHREST. The subcommittee will come to order.
    Panel number four. We have Dr. Alan Brown, Professor of Aerospace and Ocean Engineering at Virginia Polytechnic Institute; Dr. Hauke D. Kite-Powell, Research Specialist, Marine Policy Center, Woods Hole Oceanographic Institute.
    I hope I did not butcher your name too badly, sir.
    And Steve Hillyard, Manager of Government and Public Affairs, Chevron Shipping Company, representing American Petroleum Institute.
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    Gentleman, it is a pleasure to have you here this afternoon. We look forward to your testimony.
    And Dr. Brown, you may go first.
TESTIMONY OF DR. ALAN BROWN, PROFESSOR OF AEROSPACE AND OCEAN ENGINEERING, VIRGINIA POLYTECHNIC INSTITUTE; DR. HAUKE L. KITE-POWELL, RESEARCH SPECIALIST, MARINE POLICY CENTER, WOODS HOLE OCEANOGRAPHIC INSTITUTE; STEVEN HILLYARD, MANAGER OF GOVERNMENT AND PUBLIC AFFAIRS, CHEVRON SHIPPING CO., ON BEHALF OF THE AMERICAN PETROLEUM INSTITUTE

    Mr. BROWN. Chairman Gilchrest, honorable members of the subcommittee, it is a pleasure and my first opportunity to speak, and I appreciate the invitation very much.
    I would like to make a few brief points or a few comments. I would refer you to the written testimony for the technical details. I am going to try to avoid that a little bit, if I can.
    First point, performance standards provide design flexibility necessary for the application of new technologies, innovation and cost effective optimization. But performance standards must be effective and complete without loopholes.
    The development of performance standards really does give a ship designer the flexibility to do things that we cannot do under the constraint of specific, prescriptive standards.
    As new technologies are generated, as the economics of shipbuilding changes and issues related to costs of operation and other things change, performance standards can give you the flexibility to adapt to that so that the industry sort of automatically finds the most cost effective types of alternatives and responses to changing economic and technology types of conditions.
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    The real difficulty with performance standards is that they do not just represent a threshold or a level of a requirement, but you have to include in a performance standards methodologies for evaluating performance of different alternatives, and then you compare that evaluated performance to the defined thresholds.
    And that is the difficult part of the process that can have loopholes, can have limitations in scope if you are not able to sort of up front imagine the different possibilities that ultimately might need to be evaluated.
    So there is a certain risk and a certain difficulty in putting together a performance standard that really does not exist when you are building a prescriptive rule-based standard, and you have to be careful about that.
    Although there is probably a difference of opinion on this, but one of the real positive things that came out of the U.S.'s unilateral action requiring double hull was a performance standard that was generated at IMO in response to the U.S.'s position, IMO wanting to propose something that went beyond the position that was taken by the U.S.
    As a result, they created these guidelines which were really the first methodology for evaluating outflow performance of tankers. Two significant issues with that methodology though remain. First, because we didn't have the technology at the time to evaluate it and still are developing it and do not, they just prescribed an extent of damage that is used in this analysis that is the same for all ships regardless of their structural design.
    Same size hull is the bottom line. And then based on the size of this standard, probablistic hull, then we calculate oil outflow from that point on. What this fails to do—and the standard was based primarily on single hull data.
    So what that fails to do is it fails to take into consideration the additional crashworthiness that a particular structural design might have. And in particular, double hulls are, among the different alternatives that we know of today, particularly crashworthy structural designs.
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    So when you make comparisons between different alternatives, the present regulation does not give any advantage or benefit to crashworthiness, and that is a very important weakness that exists because we still do not have a really good method to do that calculation.
    The second thing in the existing performance standard from IMO is the metric for measuring performance. Because there were two alternatives that IMO sort of wanted to bless—one was an intermediate oil type deck and the other was double hull—they formulated an environmental index that basically made those two alternatives equal, but it has not had any real basis fundamentally in risk analysis.
    So those are the two problems with what is a very good start in terms of having a performance standard. We have been doing analysis looking at crashworthiness for a number of years. And although not quite ready, certainly the double hull, as we get better at analysis, looks better and better.
    When you consider the crashworthiness of the double hull and not just the subdivision of a double hull, it really is able to resist damage and reduce outflow from that point of the calculation.
    So, the bottom line and the action that I would like to recommend and ask to Congress would be that we should continue to support the development of performance standards because they really are, in the final analysis, the way that we should evaluate alternatives—cost effective alternatives.
    But until the time that we have that, I really feel that the double hull alternative, which we have unilaterally prescribed, is an excellent standard, prescriptive standard, and does provide protection which, as we become better at our analysis, that continues to look better and better relative to other alternatives.
    And I think the double hull, as we define a performance standard, could become sort of the yardstick for setting the level of risk or safety within the definition of the performance standard as we develop it.
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    That is the end. I am happy to answer any questions.
    Mr. GILCHREST. Thank you very much, Dr. Brown.
    Next, Dr. Kite-Powell?
    Mr. KITE-POWELL. Kite-Powell, yes.
    Mr. GILCHREST. Kite-Powell.
    Mr. KITE-POWELL. Thank you, Mr. Chairman,——
    Mr. GILCHREST. Yes, sir.
    Mr. KITE-POWELL. —for the opportunity to testify here today.
    My name is Hauke Kite-Powell. I'm a researcher at the Marine Policy Center of the Woods Hole Oceanographic Institution. The Marine Policy Center applies economics and other scientific disciplines to policy problems involving the human use of the oceans.
    With my colleagues at Woods Hole and elsewhere, I have worked for several years now on risk factors in maritime transport and on economically efficient means to reduce these risks. I will speak briefly today about some work we did on the economics of modern navigation systems and their potential to reduce environmental damage from ship accidents.
    First, let me say that marine transportation system, in my view, and the accidents it produces are complex systems that we cannot model with complete accuracy. So in discussing policies to govern these systems, we always have to deal with uncertainty with what statisticians call random events and with probabilities.
    It is not possible to predict exactly how these systems will respond to policy measures like double hulls, but it is possible to construct models that predict, with some accuracy, the probability of accidents and expected damage costs in the future.
    In 1996, my colleagues and I developed one such model to compare the cost effectiveness of three technologies designed to prevent accidents or reduce their consequences: double hulls; vessel traffic service, or VTS, systems; and computerized, onboard navigation systems, which I'll refer to simply as electronic charts.
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    Our model suggests that if accident rates remain roughly at constant levels from the 1980's, we can expect more than 10,000 groundings, collisions and rammings involving commercial vessels in U.S. waters over the next decade.
    Most of these will be relatively minor incidents, of course, but many have the potential for serious consequences. The average expected economic losses associated with these casualties we estimate to be on the order of $2 billion dollars per year to the nation.
    More than one-third of these casualties are what I call navigational in nature. That is, they result from a navigation failure and not from some structural or mechanical failure. And as such, they are potentially preventable with better navigation tools like electronic charts.
    Even at a moderate—a conservative level of effectiveness, our model indicates that electronic charts could help avoid more than 2,000 accidents in U.S. waters over the next decade. And because of their relatively low cost, electronic charts produce benefit cost ratios that range from five to seven, and that compares quite favorably with, for example, the benefit cost ratios estimated for VTS systems, which run around four, and the benefit cost ratios—economic benefit cost ratios of double hulls, which have been estimated to be on the order of one for tankers in the Alaska trade and which are probably less than one for tankers in U.S. waters generally.
    In conclusion, I want to emphasize that I do not think double hulls are a bad idea. I think though that they are probably not the most cost effective way to achieve our goal of safer marine transport.
    In the interest of economic efficiency, I believe we should give greater priority than we have in the past to improving our navigation infrastructure, and particularly to providing the official databases needed for the complete use of electronic chart systems.
    Responsible oil transport operators that I am aware of have been pushing for improved navigation systems for years, and I am sure they know better than any model I can build how to improve the safety of marine oil transport.
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    That concludes my prepared statement. Thank you again for the opportunity to testify.
    Mr. GILCHREST. Thank you, Dr. Kite-Powell.
    Mr. Hillyard.
    Mr. HILLYARD. Thank you, Mr. Chairman and members.
    My name is Steve Hillyard. I am Manager of Government and Public Affairs for Chevron Shipping Company. Chevron operates 36 oil tankers throughout the world, and we have a similar number of third party tankers under charter at any particular time moving Chevron oil.
    Today I am testifying on behalf of the American Petroleum Institute. API is a national trade association representing 400 companies involved in the petroleum industry. Of course, OPA'90 has had a profound effect on API members.
    This law, along with the Coast Guard's regulatory and enforcement activities and the industry's commitment to change, have produced an outstanding environmental record. There have been no large oil spills from tankers in the U.S. since 1990.
    Moreover, since 1990, the total amount of oil spilled from tankers has decreased dramatically. My written testimony contains a chart showing this record.
    But this hearing is about OPA'90's marine tanker requirements. The single hull phase out and double hull provisions of OPA'90 have significantly changed the industry both here and abroad. Following U.S. lead, the international community adopted similar requirements.
    Industry is complying with the letter and the spirit of these laws and the fleet is converting to double hulls. According to the International Association of Independent Tanker Owners, 27% of the fleet has double hulls now, and over 50% will have double hulls by 2002.
    Last week, Chevron christened another tanker, which brings to 13 the number of double hull tankers in our fleet. This new tanker is the third in a series of four very large crude carriers that will transport crude oil to Chevron's refineries in Mississippi and California.
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    Mobil, BP Amoco, Shell, Conoco, Texaco, Eviti, Keystone, Maritrends, OMI, Ocean Ship Holders are among the API members that now operate double hull vessels. In America, as you have heard, ARCO is constructing three new crude carriers in Avondale Shipyard in New Orleans.
    These are specifically designed to carry Alaskan crude oil. These ships will be delivered in 2000, 2001 and 2002. ARCO, it has not been mentioned, but I believe also has options for two additional tankers in that series.
    A fleet of 23 Jones Act tankers currently transports ANS crude oil to the lower 48 states and Hawaii. Three have double hulls. Three more double hulls will be added by the ARCO new buildings.
    At the same time, according to the Alaska Department of Natural Resources, production of ANS crude oil is expected to decline. Assuming the Alaska forecast is accurate, the total number of Jones Act tankers dedicated to the ANS trade will likely decline.
    Therefore, even with the single hull vessels phasing out, the capacity of the fleet should remain roughly in balance with requirements until the middle of next decade. At that time, additional new tankers may be needed.
    This assumes continued current utilization of new and existing tankers and planned new oil production in Alaska. In the south, about 55 product tankers move oil from the Gulf of Mexico to the Atlantic coast.
    Nineteen of these are double hulls. However, tankers have moved less Gulf production since 1980 due to the increased use of pipelines, product imports from the Caribbean, and the increased use of tank barges in the coastal trade.
    This product tanker trade will remain under tremendous competitive pressure. When Congress enacted OPA'90, it recognized that double hull transition must occur in an orderly fashion and without a condemnation of substantial investments many ship owners had in the existing tanker fleet.
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    This was a risk-based decision that balanced economic and supply chain considerations with the oil spill risk reduction potential of double hulls. Two reports by the National Research Council reaffirmed that double hulls, when properly designed, can significantly reduce oil outflow after an incident.
    However, hull design alone is not the entire answer. As Admiral North mentioned, more important than hull design are good fleet management, proper maintenance and correct navigational decisions. This fact is demonstrated by the dramatic reduction in oil spills during this period of a gradual transition to double hulls.
    In conclusion, over the past ten years, the oil and tanker industries have demonstrated that they can safely supply America with petroleum. This oil fuels our transportation systems, heats our homes, powers our industry and contributes substantially to America's high standard of living.
    By the year 2015, the tanker fleet colony in the United States will be double hulled and no additional action by Congress is necessary to ensure that conversion takes place.
    Thank you.
    Mr. GILCHREST. Thank you very much, Mr. Hillyard.
    Dr. Brown,——
    Mr. BROWN. Yes, sir.
    Mr. GILCHREST. —your comments about performance standards and prescriptive standards were intriguing in that you had—or you mentioned you had two criticisms of the performance standards from IMO.
    We are looking in this committee to determine the safest way to transport oil, and the conclusion up to this point basically is that vessels entering U.S. waters should have double hulls. By the year 2015, everybody should have double hulls.
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    And yet, there is—I do not think the U.S. has ever been a country that has never sought a strong sense of curiosity to assume new knowledge to make things relentlessly better. I am trying to understand your recommendation.
    As far as the prescriptive standards of double hull, you are saying at this point is the best way to go in lieu of an alternative performance standard that might improve on double hulls. So, at some point in the future, I would guess that whether it be 2015—well, maybe I will put it this way.
    I assume that you are recommending that we continue to look at alternatives to double hulls to improve maybe, in fact, on the double hulls after they are in effect, or at some point find some alternative to double hulls, in certain conditions use a single skin tanker?
    Mr. BROWN. I think a very healthy thing has happened as a result of IMO following up on OPA'90. The U.S. has continued to be very much engaged in the process. The chairman of the working group, and I have been involved in it as well, are right in the middle of working on and improving IMO's performance standard for evaluating oil—probablistic oil outflow performance of different vessels.
    At the same time, the U.S. has maintained that until we have the capability to do that well and fairly and with some confidence about the results of our performance analysis, that we feel that the double hull alternative is an excellent alternative that protects our interest, protects our waters until such time as we have the technological ability to evaluate fairly and accurately other alternatives.
    So the U.S. is very much engaged in that, which is terrific. Even though we have taken exception to the regulation that is actually looking at that, we're very much engaged in improving it.
    Mr. GILCHREST. Who is engaged in improving those performance standards?
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    Mr. BROWN. Keith Mitchel, who is Herbert Engineering Corporation, is the chairman of the working group at IMO that is attempting to harmonize and incorporate the probablistic methodology into the entirety of the IMO double hull regulation—oil outflow regulations.
    And I have been participating on that working group as well for the last five meetings of that working group, too. So both of us are very much involved in that, supporting the Coast Guard and the United States.
    Mr. GILCHREST. Well, I think there was some—depending on which side of the fence you sit, there was some concern, at least some academic concern, that there was no further research or development in improving oil transport because we had double hulls and there was no other alternative or addition to being considered.
    So what you just described——
    Mr. BROWN. There are a few things that are happening. The Ship Structures Committee, which Admiral North mentioned, Society of Naval Architects both have committees, working groups and a small amount of funding that are working on improving those performance standards.
    And now the Marine Board has convened another study specifically to look at those deficiencies that I mentioned in terms of improving and going in the right direction relative to performance standards.
    So there are some—definitely some good things happening in the area. Slowly. Can always use more research support.
    Mr. GILCHREST. That is hardly news.
    Mr. BROWN. But we are headed in the right direction, I believe.
    Mr. GILCHREST. Dr. Powell, you mentioned in your—and I hope it was all right if I quoted you earlier to Admiral North. But you did mention in your testimony that based on your criteria of cost benefit analysis, that both EC, INS and VTS appear clearly superior on this criterion to double hulls.
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    And I guess you feel that way at this particular point. Would you agree with Dr. Brown's analysis that we ought to—that we should stick strongly with double hulls until there is some other newly performance standard where there is no loopholes?
    It seems, at least in part, your testimony suggested that in the complex issue of transporting hazardous material on the many circumstances, the cost benefit analysis shows double hulls as not the—not always the right thing to do.
    Mr. KITE-POWELL. I think it is not always the most cost effective thing to do. Double hulls buy you a different kind of insurance than the other technologies that I investigated. Electronic charts and VTS are designed to keep ships from having accidents in the first place.
    They will not do anything for you if the accident happens anyway. So it is a fundamentally different target there, in a way, than there is in the double hull or the alternatives to double hulls that Professor Brown was talking about.
    I would agree with his assessment for design issues, that double hulls, in the absence of a better performance standard, a better way of evaluating alternatives, that double hulls are the safest way to go at present.
    But I think that from a larger perspective, we are missing an opportunity by not taking full advantage of some of the other ways we have available to us to keep ships from having the accidents in the first place.
    Mr. GILCHREST. I see.
    Last question. Dr. Brown, have you—or would it be helpful to take Dr. Powell's analysis into consideration?
    Mr. BROWN. We were both at MIT together for a period of time. We are old friends and colleagues. And to some extent, I have worked a little bit in the area that he is working on.
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    The issue of risk is difficult because it is the product of the probability of occurrence of an accident and then the consequence of the two. And it is not always as simple when you are looking to take care of the public good just to really reduce risk.
    Because sometimes for these low probability, high consequence events, I think the custom—the public's interest may be that that high consequence event cannot be of extremely high consequence.
    And what the double hull does is it effectively reduces the consequence even though it may not be the most cost effective overall methodology for reducing risk. And I think that the Marine Board—and it is addressing this metric issue as one of the issues.
    And one of the things they are going to have to grapple with is how do you measure risk. And then once you are able to quantify it, is that the best way to determine cost effectiveness? Should risk be your definition of effectiveness for which you trade off cost?
    That is not a simple issue in the public arena, I do not think.
    Mr. GILCHREST. Thank you very much.
    Mr. DeFazio.
    Mr. DEFAZIO. Thank you, Mr. Chairman.
    Just, sir, following up on that, I have got to express some concerns about applying the cost effectiveness measure here. I have long had concerns about the application with the Federal Aviation Administration where they place a value on a life.
    Well, of course, it is not their own life. And when we are talking about accidents and when I have asked the administrators, I say well, I understand your concerns about promulgating this rule because your standard for the value of a life, but what if it was your life?
    And of course they have a different standard. And again, if we are looking at the public good or an external dichotomy, whatever we are going to call it, the fact is I think these two things are complementary, but I do not think we should, in any way, be looking at them as mutually exclusive.
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    That is really where I am headed. So in that spirit, I would like to know, Dr. Powell, if you have looked at what is being proposed by the Coast Guard for the transponder-based automated information system and how that would fit into some of the work you have done here. What benefits that might provide?
    Mr. KITE-POWELL. I am aware of that work. At the time when we did this study which I spoke about here, we did not include that as one of the alternatives that we explicitly investigated.
    My sense is that what that will do is improve the effectiveness of a hypothetical computer navigation system in helping ships avoid collisions as well as groundings because they will have a better sense of where they are and where they will be in relation to other vessels.
    So I think it is a development in the right direction.
    Mr. DEFAZIO. Great.
    Again, this is a concern I raised in my opening remarks. I am curious about work that you might be aware of, or if there is any work being done particularly in the design side that goes to the concerns I raised about freighters and the potential magnitude of spills with freighters getting larger and larger as they carry more and more fuel as they become larger.
    Mr. BROWN. A nice thing about—if we had a performance standard, the good thing about a performance standard is we could apply it also to alternatives that are not necessarily tankers and cargo ships to really quantify and assess the relative risk and hopefully require the same level of risk for bunker and fuel type carriage, as well as cargo type carriage.
    So that is a nice thing about performance standards is it does allow you to apply those calculation methodologies to alternative applications, and from that gain insight possibly into how—what the relative risks of the two alternatives are and whether or not regulation in regard to bunker would be worthwhile.
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    And, to some extent, we could do that today as well. At least apply performance methodologies as we have them today to analyze that case. So there may be some connection between the performance standards and that alternative application.
    Mr. DEFAZIO. OK.
    Mr. BROWN. Might shed some light.
    Mr. DEFAZIO. Great, OK.
    I have no further questions, Mr. Chairman.
    Mr. GILCHREST. Thank you, Mr. DeFazio.
    I have just one quick follow up question to Mr. Hillyard. In your testimony, Mr. Hillyard, you said that, if I read it correctly, that a double hull—if the Exxon Valdez were a double hull, it would not have materially reduced the amount of oil that was spilled. Can you make a further comment on that?
    Mr. HILLYARD. Yes, sir. I guess it—I will have to get technical where that is not my particular expertise. But it was such a high impact grounding that the stubble hull would, of course, been opened up and probably the internal hull would have been opened up as well.
    But the—what happens is, is that in one of these kinds of heavy—or high impact groundings is that the buoyancy that is provided by the double hull is eliminated by the grounding, and therefore the vessel could sink down harder onto the ground making it more difficult to take it off.
    Mr. GILCHREST. Can anybody on the panel suggest even if—let us say were a double hull, was there something else on the ship that could have reduced the spillage?
    Mr. BROWN. Do you want to address the double hull question first?
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    Mr. GILCHREST. Yes, sure.
    Mr. BROWN. If you apply today's performance methodology as we have it in IMO, for instance, it does not appear that a double hull would have made a difference.
    But I think that—and as we go further with our development of a performance standard, if you can properly consider the additional crashworthiness, energy absorption of a double hull structure versus the single hull structure, that that very well may have made a difference in Exxon Valdez.
    And I——
    Mr. GILCHREST. So a double hull structure may have made a difference?
    Mr. BROWN. I believe that a double hull structure may have made a different in Exxon Valdez. And we are getting very close now to being able to properly consider the additional crashworthiness that results from a double hull structure.
    Mr. GILCHREST. So you are saying that there may have been less oil spilled if it were a double hull?
    Mr. BROWN. All the analysis done today pretty much assumes that the damage penetrated to the same distance that it would in a single hull ship in the double hull ship. And then they evaluated what the outflow would be. And in that case, there does not seem to be a whole lot of improvement that you would have derived from a double hull.
    But had the damage not been as extensive as a result of the additional energy absorption of the double hull structure, that could have substantially reduced the overall extent of outflow.
    So double hull gives you sort of a two—it gives you an excellent barrier in the case of low energy damage. Where if you just break through that outer skin, you do not lose any oil. The probability of zero outflow is high.
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    But it also—and heretofore, we have not assigned this advantage. It gives a second advantage which is the energy absorption capability of a double hull which can also reduce that extent of damage, and therefore reduce the overall outflow as well.
    So I am not quite prepared to make that statement about Exxon Valdez. And I think in a year or so that would be a—for everybody's illumination an excellent case study to do——
    Mr. GILCHREST. Thank you very much.
    Mr. BROWN. —is to evaluate that.
    Mr. GILCHREST. Just a quick one now.
    Dr. Powell, if there had been electronic charting on the Exxon Valdez, given the human factor, and I know you cannot get inside—you know, wave your magic wand and see inside somebody's neurons. But given your discussion of electronic charting and integrated navigational systems and those kinds of things, if that had been present on the bridge, do you think that would have made a difference, the human factor, the fewer number of crew?
    Mr. KITE-POWELL. I think it would have. And I think most people who have looked at electronic charts consider the Exxon Valdez grounding sort of a classic example of the kind of accident that can be avoided with a better navigation system.
    There was a failure of the crew to recognize where the ship was and where it was heading. And this is the kind of thing that can be detected by a computerized navigation system and appropriate warnings issued and so on.
    So I think the answer is very much yes.
    Mr. GILCHREST. Thank you very much.
    Gentlemen, we appreciate your testimony. It has been very helpful to us this afternoon. We have—I have—I think many of us have numerous follow up questions, and what we would like to do in the coming weeks is to either engage you by phone, fax, e-mail, letter, all those modern electronic things.
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    Gentlemen, thank you very much. Your testimony has been very helpful.
    Our next panel, Panel V, is Captain Edward Roe, a Director of Marine Safety Systems, Inc., accompanied by Carr Chambliss, Vice President and Director, Marine Safety Systems, Inc.; and Mr. Mo Husain, President, MH Systems, Inc.
    Gentlemen, thank you for coming this afternoon.
TESTIMONY OF CAPTAIN EDWARD K. ROE (USCG, ret.), DIRECTOR, MARINE SAFETY SYSTEMS, INC. ACCOMPANIED BY CARR CHAMBLISS, VICE PRESIDENT AND DIRECTOR, MARINE SAFETY SYSTEMS, INC.; MO HUSAIN, PRESIDENT, MH SYSTEMS, INC.

    Capt. ROE. Mr. Chairman, committee members, thank you for the opportunity to come before the subcommittee today. Clearly, the Oil Pollution Act of 1990 requires that after a certain date, only tankers constructed with double hulls will be allowed to operate in U.S. waters.
    Acceptance of any other design requires the approval of Congress. The double hull design is easily understood. It is popular for its simplicity. In principle, no argument can be posed that would be contrary to the very specific requirements of OPA'90.
    Why? Because however faulty people may think that approach is, OPA'90 does provide, in principle, for bringing designs forward that would allow an equivalent or even superior degree of protection for the environment.
    Until very recently, all work had stopped on consideration of any methodology for evaluating alternative designs. At IMO, guidelines were developed that were supposed to provide a probablistic approach to comparing all alternate designs to the double hull.
    Through the process of negotiation involving representatives of the 60 or more governments, the guidelines were skewed to allow one particular existing design to be acceptable. I suspect this agreement also was intended as a signal to the U.S. that our foreign colleagues were not to be bullied backlash.
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    The U.S., of course, could not accept the IMO guidelines even though members of the U.S. delegation to IMO participated in their development. Domestically, the U.S. Coast Guard, in good faith, took the meaning of OPA'90 literally.
    Only vessels fitted with double hulls would be allowed to operate in U.S. waters. They often justify their approach by quoting the national goal stated in the Clean Water Act, ''no discharge of oil into the waters of the United States.''
    For that reason, they established a zero discharge policy. The double hull reportedly satisfies that policy because the vast majority of spills caused by tankers in U.S. waters are minor in nature.
    As you are no doubt aware by now, two alternative designs have been approved by IMO using the guidelines approved by that body. Marine Safety Systems also has an alternative that, in concept, meets the IMO criteria. It has an oil outflow index greater than one. However, a ship is unlikely to be built to any alternate standard because it cannot operate in U.S. waters, the largest tanker market in the world. Our conceptual design cannot be accepted because there is no mechanism in the U.S. for evaluating tanker designs, no mechanism for implementing the provisions of OPA'90.
    As it stands now, Naval architects and other related disciplines have no incentive to put the time or effort into new, innovative designs. You no doubt will hear from builders today who are totally committed to selling only that design which is approved, the double hull design.
    Predictably, they are interested in maintaining the status quo. Owners and operators of tankers must take the only path they know open to them. Government takes a position that there is nothing more needed until such time as the law is amended.
    The path we have taken as a nation with the adoption of the double hull standard is not a bad one. After many years of trying to tighten the standards for the design and construction of tank vessels both internationally and domestically, we took the decision in 1990 to act alone in order to protect our vast marine resources.
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    After taking such a giant step forward, we stopped all forward progress. It is simply not logical that we should rest on the accomplishments of the 1990 Act and not show any progressive interest in newer, innovative designs.
    Until very recently, that is exactly the posture we had adopted. We should constantly be looking for designs which might provide a greater level of protection than the one we have adopted as the standard.
    Recently we were honored to be invited to make a presentation to the first meeting of the new National Academy of Science Marine Board Committee on Evaluating Alternate Tanker Designs. Need for such a committee was called for in the Coast Guard Authorization Act of 1998.
    The stated purpose of the committee is to establish an equivalency evaluation procedure that maintains a high standard of environmental protection while encouraging innovative ship design. We were privileged to sit through the first day of presentations and deliberation of the committee.
    Several things impressed us favorably. The makeup of the committee is remarkable. Well known and highly respected members from industry, classification societies, engineering firms, academia and other related disciplines have volunteered their valuable time over the next 18 months to participate in consideration of the problem before them.
    They seem determined to develop a way forward. Not to get around the law as written, but to recommend a methodology by which all tanker designs can be measured. If what we heard is true, I believe a solution may be at hand for the U.S. that gets us around the dilemma of having no incentive to make further progress in designs that would minimize oil spills from tankers.
    Certainly the opportunity we have been seeking is before us. We came away from the committee meeting with the positive impression that whatever they develop will be fair and based on good science.
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    We at Marine Safety Systems believe that we have developed a conceptual design that may be worthy of further consideration. We have every intention of continuing our work to prove its relative value. All we would ask is that a methodology be developed in the United States that would allow us to test our approach with the idea that ultimately it might be adopted both in the United States and internationally.
    Finally, in the end, if we should agree that the National Academy of Science truly has developed a useful methodology for evaluating alternate designs in the U.S., then I believe we have an obligation in good faith to work with IMO for its final adoption.
    In that respect, the U.S. would, once again, show its leadership in solving maritime problems that are global in nature.
    Thank you, Mr. Chairman.
    Mr. GILCHREST. Thank you, Captain Roe.
    Mr. Husain.
    Mr. HUSAIN. Mr. Chairman and members of the subcommittee, I would like to thank you for inviting me to this hearing. I am Mo Husain, a Naval architect and President of MH Systems in San Diego, California.
    I am the inventor of the American under pressure system, a system that can be retrofitted to selected, existing tankers to reduce or eliminate oil spills. The American under pressure system is a dynamic system which creates a slight vacuum, two to four pounds per square inch, in each cargo tank.
    This vacuum, assisted by the outside hydrostatic pressure of the surrounding water, prevents or minimizes cargo loss in the event of hull rupture. In case of a bottom rupture caused by grounding, nearly all of the cargo can be protected.
    In the case of side hull damage, cargo below the level of the damage will be lost, while cargo above the damage level will be protected. Using mean or average fractional cargo loss per incident as a figure of merit, the under pressure system is roughly equivalent in effectiveness to the double hull and to other arrangements that have been proposed.
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    It can be retrofitted to many existing tankers at a small fraction of the cost of new construction and requires only a small out of service time to install and test. In addition, this system might be profitably considered for use as an enhancements to double hull vessels or as a cargo loss prevention measure in tank vessels or barges operating in inland waterways.
    The Oil Pollution Act of 1990 specifically provides for research, development and demonstration of new technologies which promise to protect the environment by preventing or reducing oil discharges and refer specifically to entering measures for the protection of the current fleet.
    MH Systems initiated the development of the American under pressure system in 1990, but has been unable to implement it because it requires additional rule making by the Coast Guard. Coast Guard has required that certain tests to be conducted to provide a basis for formulating appropriate regulations.
    The test called for in the legislation represents the third attempt by the Congress to secure completion of the required test program so that the capabilities of the system can be properly evaluated and the necessary regulation can be drawn up.
    In the most recent action, the Defense Appropriation Act, PL 105262 in September 1998, provided $2.4 million dollars, and I quote, ''to complete testing of the potential interim solution to remediate potential damage resulting from oil spills from existing tank vessels such as the American under pressure system. The conferees believe that this system may have significant defense applications and may also provide environmental safeguards for tank vessels,'' end of quote.
    We believe that the American under pressure system will significantly minimize pollution from the accidental spillage of oil from existing tankers until they are phased out under open deadline of 2015.
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    We are grateful for this opportunity provided by the recent legislation to complete the final phase of the test of the American under pressure system, and we welcome and seek the support of this committee in our endeavor.
    Finally, in response to Chairman Gilchrest's opening statement about minimal safety standards and his desire to raise the bar, I would submit that our technology, combined with double hulls, will drastically increase the effectiveness of oil spill prevention.
    Second, in response to concerns about bunker fuel, I want to point out that our technology could easily be adapted to bunker fuel tanks, thus providing oil spill prevention to vessels not required to double hulls.
    Thank you, Mr. Chairman and members of the committee. I look forward to your questions.
    Mr. GILCHREST. Thank you, Mr. Husain.
    I guess my first question would be to both or all three of you. Dr. Brown made a comment in his earlier testimony about performance standards and that, in the IMO performance standards that exist at this moment, he showed two loopholes or two discrepancies in their performance standards that he felt needed to be improved.
    I think I got the understanding that Dr. Brown preferred performance standards to prescriptive standards. But the loopholes he described in the IMO performance standards, can you comment on that in light of your alternatives or additions to double hulls?
    Mr. HUSAIN. You're directing the question to me, sir?
    Mr. GILCHREST. Whoever wants to answer it.
    Mr. HUSAIN. OK, to start out with, I will make a generalized comment about the standards. If we think that the environmental damage is proportional to the oil spill, then I would say the fractional cargo loss of mean average is the best standard.
    The probability of zero outflow—that means a vessel would not ever outflow—the probability of that is unrealistic. And although it does have a meaning in academic community, I understand that, but it also places the emphasis of a gallon of oil spill is equal to the same type of emphasis placed in the Exxon Valdez accident.
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    Mr. GILCHREST. I think what I—to clarify that a little bit, one of the loopholes he saw in the IMO performance standard was the model or methodology used as far as the type of crash that would be incurred and how much oil would be spilled using some of the alternative methods of double hulls.
    So is there a comment on that specific loophole that Dr. Brown saw in the performance standards of IMO? You don't necessarily have to have an argument with that because maybe your method of preventing oil spills used a variety of scenarios.
    Mr. HUSAIN. We have used IMO as well as the U.S. Coast Guard scenario. And we believe that—our result shows that we meet the performance criteria in either case.
    Mr. GILCHREST.Mr. Husain, you said that your system would be used on selected tankers.
    Mr. HUSAIN. That is correct.
    Mr. GILCHREST. What does that mean, the larger tankers, midsized tankers?
    Mr. HUSAIN. That means—I'm sorry, sir, for interrupting you. That means that tankers structurally falling apart is not a candidate for this type of system.
    Mr. GILCHREST. So a new tanker——
    Mr. HUSAIN. New tanker definitely, but the tankers who are structurally adequately could be repaired——
    Mr. GILCHREST. I see.
    Mr. HUSAIN. —could go onto there.
    Mr. GILCHREST. A tanker that was structurally sound?
    Mr. HUSAIN. Structurally sound.
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    Mr. GILCHREST. Now, are you looking at a tanker that is structurally sound with a single skin or a double skin or both?
    Mr. HUSAIN. Both. Single skin interim measure is—yes, double skin as an enhancement.
    Mr. GILCHREST. What would your system have done with the Exxon Valdez situation?
    Mr. HUSAIN. I would believe that it would have saved about 95% of the oil that has been spilled out.
    Mr. GILCHREST. Pretty significant.
    Mr. HUSAIN. That is correct, sir.
    Capt. ROE. Mr. Chairman, if I could comment on the refer to loopholes in the IMO guidelines. I think we at Marine Safety Systems would like to see a performance standard. I do not know as I would call it a loophole as it is one of many potential shortcomings in the IMO approach.
    As I said, we have run our calculations and we come out superior to the double hull with the IMO criteria. That does us little good at this point. If, in fact, energy absorption was used as one of the criteria for developing a standard, then we would certainly be willing to live with whatever that standard was, as long as it was fair and as long as it is based on good science.
    Mr. GILCHREST. Captain Roe, do you see your systems eventually being used on double hull vessels?
    Capt. ROE. I would doubt if they would be used on double hull vessels. And the reason would be the cost. You would incur the cost of the construction of the double hull vessel and, additionally, the cost of installing the ballast tank on the center.
    So when you put in more bulkheads, the cost goes up. And industry, I think, being competitive, would go with the means that is going to meet their needs in the most cost effective way.
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    Mr. GILCHREST. What would your system have done with the Exxon Valdez?
    Capt. ROE. The calculations we have made show that it would save between two-thirds and three-fourths of the cargo lost.
    Mr. GILCHREST. Do you see your system not being effective unless there is a change in the law for double hulls?
    Capt. ROE. I see that our system—unless there is a method developed by which alternate standards can be considered and approved, then no one in industry or ship construction business, would be interested in pursuing an alternate,——
    Mr. GILCHREST. So there is no——
    Capt. ROE. —whether it is our alternate or anyone else's.
    Mr. GILCHREST. There is no foreign investors looking at your—or either one of your systems, vessels that may not travel to the United States?
    Capt. ROE. Because the tanker market is global in nature and although a tanker may be built for one trade, two years later it could be involved in a totally different trade. They are not going to build a tanker to a standard which would prohibit it trading with the largest market in the world.
    Mr. GILCHREST. Thank you, gentlemen.
    Mr. DeFazio.
    Mr. DEFAZIO. Thank you, Mr. Chairman.
    Mr. Husain, I am just curious about it. The technology of dealing with the inert gas, at the same time creating a negative pressure, is this fully developed?
    Mr. HUSAIN. Well, it is very—could I explain that?
    Mr. DEFAZIO. I am curious.
    Mr. HUSAIN. Nowadays, of course, the inert gases put under positive pressure. So what we do first, we load the tank with inert gas under positive pressure. Then we exhaust the inert—the same mixture of the inert gas exhausted out.
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    But this way, we reduce the pressure. At the same time, the inert gas under negative pressure remains the same. And then our control system—our sensors detect there is an oxygen inhalation. Then we add more inert gas and maintain the under pressure system.
    So the inert gas ratio does not recognize whether it is under positive pressure or is under negative pressure. It sees simply a new ratio. So you make sure that inert gas is done to five percent or whatever have you, and then we exhaust it.
    And that way we maintain that inert gas ratio at all times.
    Mr. DEFAZIO. This whole system works off auxiliary power, I assume?
    Mr. HUSAIN. No, it has its own power. It is a self contained system.
    Mr. DEFAZIO. OK. And then Captain, your system, and whereas Mr. Husain's requires some monitoring—although I assume it is automated, but it is still something that requires some monitoring.
    Yours is basically design based, is that correct?
     Capt. ROE. Ours is design based, you know, by relocating the ballast tank to the center of the vessel and in providing with a means to gravity flow the oil from a damaged section into that ballast tank. The monitoring and control system is such that the system could either operate automatically by detection of ruptured metal or be operated manually from the bridge of the ship.
    Mr. DEFAZIO. OK. All right, thank you.
    No further questions, Mr. Chairman.
    Mr. GILCHREST. Thank you, Mr. DeFazio.
    The gentleman from Mississippi.
    Mr. TAYLOR. Mr. Chairman, thank you for holding this hearing and apologize for running late as account of USAir having some problems out of New Orleans this morning.
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    I just want to commend you for having the hearing. I hope that the thrust of it has been that there will be no backsliding on the part of Congress as far as the double hull requirements. I think that what Congress did in 1990 was very, very long and overdue.
    And again, I can only hope that whatever alternatives were offered were done in a constructive manner rather than trying to give people an opportunity to get around the law.
    Again, I apologize for being late, but it certainly was not intentional.
    Mr. GILCHREST. Thank you, Mr. Taylor.
    Gentlemen, I guess we have pretty much exhausted the questions we have at this point and maybe people are ready to go to lunch. What we would like to do though is to continue to stay in touch with you, if that is possible, via the modern age of technology: phone, fax, e-mail, pony express, 33 cent stamp, things like that.
    But we appreciate your time and your effort and your input as we move along to try to find better ways to improve the environment of transporting hazardous material across our precious oceans.
    Gentlemen, thank you very much.
    Capt. ROE. Thank you, Mr. Chairman.
    Mr. GILCHREST. This subcommittee hearing is adjourned.
    [Whereupon, at 12:47 p.m., the subcommittee was adjourned.]

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