Towing Industry Changes Since OPA90

Foss Maritime tug

A Foss tug and double-hull barge provide bunkers to an Evergreen containership at the Port of Oakland. Photo courtesy of Foss Maritime Co.

The 1989 grounding of the Exxon Valdez and the spill of more than 11 million gallons of crude oil into Alaska's Prince William Sound was an environmental disaster – and perhaps one of the best things to ever happen to the US towboat industry.

It took less than 18 months for Congress to pass the 1990 Oil Pollution Act (OPA90) in response to the Exxon Valdez disaster. The essence of the act was to require the Coast Guard to strengthen its regulations on oil tank vessels and oil tank owners and operators.

The impact of OPA 90 went much further than legislators or the towboat industry could have anticipated when the law was passed.

"OPA 90 has been a very effective law for reducing oil spills and encouraging environmental stewardship in the industry in a number of ways," said Charles Costanzo, Vice President - Pacific Region for American Waterways Operators, the national advocate for the US tugboat, towboat and barge industry. "It's gone a long way towards changing the safety culture of the industry as well."

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The biggest and most obvious impact on the towboat and barge industry has been the near-total conversion to double hulls. "The industry is ahead of schedule on the conversions to double hulls," said Costanzo. "My understanding is that there are no more single-hulled oil barges in regular use in the coastwise Pacific market. And the deadline for conversion is still a year away."

Another direct result of the Exxon Valdez and OPA 90 is the Coast Guard's Vehicle Traffic Service. The VTS first came into use as a direct result of the January 18, 1971, collision of the tankers Arizona Standard and Oregon Standard under the Golden Gate Bridge. The Coast Guard began to establish VTS in critical, congested ports, starting with San Francisco and Seattle in 1972.

These operations were curtailed in 1988 due to budgetary restraints. It took the Exxon Valdez disaster to bring them back on-line – the Coast Guard was mandated by the Oil Pollution Act of 1990 to make participation mandatory at existing and future VTS.

"OPA 90 helped the industry focus on the problem," said Susan Hayman, Vice President, HSQE and External Affairs for Foss. "More than 99 percent of the oil that is transported is done without a spill – and the industry continues to improve – but until we get to zero we're not where we need to be."

Zero may not be attainable anytime in the near future. "We have to report everything," said Hayman. "Even if it's a spray – that is not a measureable amount – as long as it hits the water" it is required to be reported.

In any case, less and less oil has been hitting the water since OPA 90 became law.

"There has been a significant reduction both in numbers and quantity of oil spills since the passage of OPA 90," said Steve Scalzo, COO of Foss Marine Holdings. "The prevention side in particular has minimized future risk."

The numbers in the Coast Guard Polluting Incident Compendium support Hayman's and Scalzo's statements.

Coast Guard statistics for 1994 show that there were 5,251 oil spill incidents by tankships, tankbarges and other vessels in US waters – the total oil spilled that year was 807,180 gallons.

Most of that oil was spilled when the tank barge Morris J. Berman, which was being towed by the M/V Emily S, went aground near San Juan, Puerto Rico, spilling approximately 750,000 gallons of heavy fuel oil into the Atlantic Ocean.

Non-vessel sources spilled double the amount of oil as vessels that same year – 1, 682,543 gallons of oil versus the 807,180 gallons spilled by vessels.

Fast forward to 2011 – Coast Guard statistics show that the total oil spilled in US waters that year –vessel and non-vessel – was 210,270 gallons from 3,065 spills. Half of those spills – 1,532 spills totaling 107,393 gallons of oil – were from tankships, tanks barges, and all other vessels.

The major part of the marine vessel category was due to non-tankship/tankbarge vessels – 90,109 gallons of oil – 29,000 gallons of which were diesel fuel discharged when the towing vessel Aries flooded and sank in the Bering Sea.

The winner of the largest single oil spill in 2011 belongs to the Coast Guard Compendium's "Facilities" category – approximately 42,000 gallons of crude oil overflowed from a storage tank during an onsite transfer of oil at a waterfront facility and flowed into the Mobile River near Mobile, Alabama.

"The Exxon Valdez incident and the OPA 90 rules that followed it provided a wake-up call to petroleum shippers and carriers alike," said Costanzo. "Since OPA 90 those industries have pushed the envelope in developing robust safety management systems and self-assessment programs while demanding redundancy and higher standards for on-water equipment.

"The vetting that oil majors are requiring of tank vessel operators has ratcheted up considerably under the law and that's had very positive results for the industry and the environment," he said.

That vetting includes one of the least popular parts of applying for a job.

"Mandatory drug testing and zero tolerance are two of the primary impacts on the industry," said Rob Rich, Vice President of Marine Services for Shaver Transportation Company. "I don't remember if it was the tanker companies or the Coast Guard that came out first for 100 percent drug testing, but it is definitely one of the major impacts."

Mandatory drug testing has worked so well that the Coast Guard no longer requires 100 percent annual testing of a company's covered crewmembers.

The Coast Guard lowered the calendar year 2013 minimum drug testing rate to 25 percent of covered crewmembers, down from 50 percent in 2012. The lower rate became effective January 1, 2013, and runs through December 31.

The Commandant of the Coast Guard has the authority to lower the minimum drug testing rates following two consecutive years of positive random testing rates of less than 1 percent – he exercised that option for 2013.

The Coast Guard continuously monitors both the rate of positive drug tests and the quality of testing data submitted. If the positive drug test rate rises above 1 percent, or if the Coast Guard cannot determine the positive rate based on the quality of the data submitted, then the Commandant may return the minimum drug-testing rate to 50 percent.

"Most marine accidents are 80% human," said Foss' Steve Scalzo. "OPA 90 has put a significant emphasis on the human factor – in addition to drug testing there is a real focus on the human element overall... and a hard look at safety management."

The human factor and safety management are codified in OPA 90 in the strict liability provisions of the act.

"Under OPA 90, when a pollution incident occurs, the responsible party (RP) will be strictly liable for all response and removal costs, as well as third-party damages caused by the spill," said George Chalos, an attorney who specializes in cases involving OPA 90. The RP is usually the owner of the vessel or facility from where the oil leaked, but the actual language of the statute is much broader and an RP can include not only vessel owners, but also vessel operators and bareboat (or demise) charterers.

"What this means is – if you spill oil or merely cause a significant threat of an oil spill into the navigable waters of the US, you pay to respond and clean it up – no matter what," Chalos said.

"The good part of OPA 90's strict liability provision is that if the spill is due to mere negligence and does not involve careless or reckless conduct, you can limit your liability. In some circumstances, you can even be completely exonerated.

"In the ordinary accidental spill event, whatever you spend above the limits as outlined in OPA 90, you can make a claim on the Oil Spill Liability Trust and get some of your money back. If you are exonerated, you get it all back."

OPA 90 sets out both potential criminal fines and civil penalties, said Chalos, but cautions that the spectrum of potential criminal charges is not limited just to OPA. An aggressive prosecutor may also elect to pursue charges under other statutes – such as the Ports & Waterways Act, the Rivers & Harbors Act, the Migratory Bird Treaty Act and the Refuse Act – which can form the basis for criminal liability provisions, even in the case of an accidental discharge.

"If you have a spill, be 100 percent honest with any and all authorities," he said.

"Report the spill as promptly and as accurately as possible. If you choose to talk with investigators, tell the truth and never try to hide anything as the punishment for a 'cover up' is often much worse than for the underlying issue. Prosecutors can and often do charge both seafarers and their employers with serious felonies such as obstruction of justice, false statements and other criminal charges.

"For sure, when a pollution incident occurs, it is critically important to seek assistance from a lawyer who is familiar with more than just the civil aspects of OPA 90. The neighborhood maritime lawyer is usually not the right person for the job."

The high costs of oil spill accidents and cleanups, not to mention the potential civil and criminal liabilities, have spawned a whole industry of service and consulting firms that help owners, operators and mariners navigate the labyrinth of laws, regulations and court rulings waiting 'round the bend for anyone unlucky or careless enough to sail into causing an oil spill.

These service firms and consultants offer everything from advising on OPA 90 compliance to safety and response plan and program development plus there are companies that respond in the event of a spill or other emergency.

The focus of the industry has become one of prevention and strict compliance with the law, regulations and rulings stemming from OPA 90 and its subsequent modifications.

The results of that focus are visible in the actions of companies like Foss – with one of the largest fleet of double-hull petroleum barges on the west coast – and its proactive installation of vapor recovery systems on all its operating barges in Los Angles and Long Beach, acting in advance of regulatory mandates

"Anything that carries oil for Foss is double hull," said Susan Hayman. "We converted to double hulls years before the compliance date."

Crowley is another company that has taken the spirit of OPA 90 compliance to heart – the company has built double hull barges to service its remote Alaska village market – even though service to those villages is specifically exempt from the double hull requirements of OPA 90.

"We did not have to build double hulls to service those villages," said Rocky Smith, who heads up Crowley's petroleum distribution and Marine Services. "We did it because it was the right thing to do.

Crowley built their first double hull, the Crowley 180-1 for the remote Alaska trade in 2005 – its capacity was 12,000 bbl. The most recent barges, the DBL 165-1 and DBL 165-2, were designed and built specifically for the shallow draft and rocky bottom conditions encountered in Alaska.

The barges were designed by Crowley's in-house marine architecture and engineering subsidiary, Jensen Maritime, and built by Dakota Creek Industries of Anacortes.

"It would have cost less to build single hull," said Smith. "Plus there is the perception that you get less cargo on a double hull. The fact is, we don't cut our loads to the limit – the amount you can carry depends on so many other factors – it's probably more important which way the wind blows or the snow melt that determines the draft in a given location at a given time."

The design of the new double hulls benefitted from the fact that Jensen's offices are in the same building as Crowley. "We were able to create a synergy from Jensen's presence – the operations and design teams were together – we have mariners with 60 years' experience serving those Alaska villages, they could review the plans and refine the designs."

OPA 90 has had an impact on the boat building industry that goes beyond the construction of double hull barges.

"The impact of OPA 90 on our business has been positive," said Matt Nichols, CEO of Nichols' Brothers. "We are building nine tractor tugs – all for vessel assists of double hull ships and barges carrying petroleum. We have probably built 22 or 23 tractor tugs that can be traced in one way or another to OPA 90."

One of the biggest challenges facing the tanker, tug and towboat industry is getting the new towing vessel inspection rule published before the current term of the current Coast Guard Commandant, Admiral Robert J. Papp, Jr., ends next year.

AWO president Thomas A. Allegretti addressed the House subcommittee on Coast Guard and Maritime Transportation on the urgency to push the Coast Guard to finish its work on Subchapter M rulemaking.

"We are very concerned that the Coast Guard will finish its work on the Subchapter M rulemaking, only to have it languish at the department," Allegretti said, referring to DHS, which has authority over the Coast Guard.

The AWO and its members "are especially frustrated because the benefits of action are so great, the consequences of inaction are so severe, and our industry is asking to be regulated," he said. "This is not a hypothetical concern; the notice of proposed rulemaking on towing vessel inspection was sent to DHS in early 2009 and was not published in the Federal Register until August 2011 – more than two years later! We cannot afford a delay of that magnitude again."

"The towboat industry needs one regulatory agency like the aviation industry has with the FAA," said an industry consultant, who asked not be identified.

"What you have right now is that any state with an interest in oil spill regulation is exploring the weak spots of federal law to assert their authority," he said. He cited the Washington State Department of Ecology as an example of this regulatory creep, referring to the case of Intertanko vs. Locke.

The case dealt with Washington's creation of a new agency after the passage of OPA 90, directing it to establish standards to provide the "best achievable protection" (BAP) from oil spill damages. That agency promulgated tanker design, equipment, reporting, and operating requirements.

The International Association of Independent Tanker Owners (Intertanko), a trade association of tanker operators, brought suit against the state of Washington seeking declaratory and injunctive relief against state and local officials responsible for enforcing the BAP regulations.

Intertanko argued that Washington's BAP standards invaded areas long occupied by the Federal Government and imposed unique requirements in an area where national uniformity was mandated. Intertanko further contended that if local political subdivisions of every maritime nation were to impose differing regulatory regimes on tanker operations, the goal of national governments to develop effective international environmental and safety standards would be defeated.

Washington prevailed all the way up to the Supreme Court, where the state lost in a 9-0 decision.

"We need a single standard to shoot for," said the consultant. "The multi-headed hydra of multiple state agencies looking for weak spots in OPA 90 means conflicting and confusing rules and regulations. The law can change depending on which side of the Columbia River you are on."

Delta Kathryn

Delta Kathryn is one of more than 20 tugs completed to date by Nichols Bros. to meet OPA 90 regulations. Photo courtesy of Nichols Bros. Boat Builders.

Foss Capt. Kevin FreeseFoss Maritime tugDelta Kathryn

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