Page 69: of Maritime Reporter Magazine (July 1990)

Congressional Conferees

Near Compromise

On Double-Hull Tanker Phase-In

U.S. Yards Could Gain $6.6 Billion In Retrofit Work

Maritime Reporter Staff

The Congressional legislative bat- tle over double-hull/double-bottom tankers appears to be drawing to a conclusion. According to reports,

House and Senate conferees are cur- rently working on compromise legis- lation as part of the pending oil spill liability and compensation bill which would gradually phase-in double hull tankers starting in 1995.

The compromise is expected to be similar to a program recently out- lined by attorney Charles B. An- derson of the New York law firm

Haight, Gardner, Poor & Havens, at a forum held in New York by the

World Trade Institute. According to

Mr. Anderson, whose firm repre- sents tanker owners and insurers, all tankers in excess of 40 years old would be required to have double bottoms by 1995, while all tankers more than 25 years old would be required to have double hulls by 2005.

The compromise differs from the current proposal by the House of

Representatives, which would make double hulls mandatory on oil tank- ers calling at U.S. ports by the year 2005. The House proposal would also require all new construction tankers to be built with double hulls, effective on the date that the legislation is enacted. Inland barges would be required to be built with double hulls by 2015, while existing barges would have until that time to be retrofitted.

The Senate version, on the other hand, provides the administration with much more freedom in deter- mining which ships would be re- quired to have double skins and when the legislation would be im- plemented.

The Bush Administration, which, for quite some time, resisted the inclusion of mandatory double- hull tanker legislation as part of the oil spill bill, recently announced its support for a gradual phase-out of single-skin tankers beginning in the year 2000.

In a letter sent to key House mar- itime leaders, Secretary of Trans- portation Samuel K. Skinner de- tailed the administration's plan. "The administration generally supports requiring double hulls on new construction of oceangoing tank vessels, if consistent with the findings in the National Academy of

Sciences report that double hulls are safe and afford a better protec- tion to the environment than other design features. We believe that ex- isting single-skin, oceangoing tank vessels should be phased out after they are 25 years old (beginning in the year 2000)."

According to Mr. Skinner's let- ter, the phase-out would also in- clude single-skin vessels utilized in lightering operations in the U.S. 200-mile exclusive economic zone.

However, the administration did provide an exemption for vessels operating at deepwater ports.

Secretary Skinner said in his letter: "On the basis of the Louisia- na Offshore Oil Port's (LOOP) dis- tance from land and excellent re- cord, we do not object to an exemp- tion for vessels servicing a deepwat- er port licensed under the Deepwa- ter Port Act of 1974, until the year 2015, provided that such an exemp- tion would end when and if before that date an international double- hull standard is implemented."

With regard to tank barges servic- ing the inland waterway system and tank vessels operating exclusively on the Great Lakes, the administra- tion supports double-hull require- ments beginning in 2015. The ad- ministration based its decision on the fact that freshwater vessels have generally longer service lives than oceangoing vessels. The administra- tion sees this as an inducement to owners to build only double-hulled inland barges and Great Lakes tank vessels.

If mandatory double-hull legisla- tion is passed by the government, it would be a tremendous boost as well as a challenge to U.S. shipyards.

According to the Washington,

D.C.-based American Petroleum In- stitute, it would cost about $30 mil- lion to retrofit a tanker with a dou- ble bottom, while a tank barge ret- rofit would cost about $1.1 million.

Based on API projections, the 153

U.S.-flag tankers could be retrofit- ted at a total cost of $4.6 billion, while the cost of retrofitting the some 1,800 tank barges operating in

U.S. waters would be about $2 bil- lion.

In addition, since the legislation would affect all tankers entering

U.S. ports, between 400 to 500 for- eign flag ships would also have to be retrofitted. The cost of retrofitting these vessels, according to API, would be about $10 billion.

The $16.6 billion cost of retrofit- ting does not include any new tank- er or tank barge construction.

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