Impacts of U.S. environmental controls upon ocean tankers

Abstract

We live in a world that continues to be increasingly dependent upon petroleum. There are long distances between major petroleum sources and petroleum markets and large ocean-going vessels, known as tankers, carry this petroleum and its products. Tankers have increased in size and some are huge. Very Large Crude Carriers (VLCCs) weigh between 200,000 and 300,000 deadweight tons (dwt); ultra-large crude carriers (ULCCs) can reach 500,000 dwt. (ULCCs are about 50 times as large as World War II-era T-2 tankers.) Mostert said that tankers: Are the biggest ships that have ever been, their dimensions being one of the technological audacities of the century.... They were the harbingers of that new manifestation of global strategy and national self-interest, the energy crisis.... (1) Petroleum tankers provide about one half of the capacity of the world's merchant fleet. (2) The phrase economies of scale certainly applies to large tankers. However, from an environmental protection standpoint, another applicable phrase is carrying all of one's eggs in a single basket. If and when there is a spill incident involving a large tanker, the quantity of oil spilled is so great that it overwhelms whatever man-made or natural defenses there may be to protect the environment from damage. In the United States, the public called for action following the grounding and spill of the Exxon Valdez in Alaska's Prince William Sound. Congress responded by passing the Oil Pollution Act of 1990 (OPA90). Here is a summary of OPA90 as applied to the maritime industry. The law (1) required tankers in U.S. waters to have a Certificate of Financial Responsibility (COFR) with essentially unlimited liability; (2) required all new tankers be built with double-hulls, accompanied by a size and age phase-out of existing tankers beginning in 1995 and ending in 2010; (3) mandated that the Coast Guard tie into the National Driver Register to detect drunk driving convictions; (4) increased Coast Guard authority to deny or revoke licenses and merchant mariners' documents; (5) authorized the removal of incompetent masters; (6) increased the Coast Guard's authority to deny entry to the United States of those foreign vessels with deficient manning standards; (7) limited work hours on tankers to 15 hours per day, but no more than 36 in any 72 hour period; and, (8) required the Coast Guard to designate areas where two licensed personnel are required to navigate a vessel, as well as where tug escorts are necessary. (3) The two requirements upon which this paper shall focus are the Certificates of Financial Responsibility, and double-hulls for tankers. CERTIFICATES OF FINANCIAL RESPONSIBILITY (COFR) The COFR requirement for unlimited liability caused great concern within the tanker insurance industry, which consists of Protection and Indemnity (PI the PI Few small tanker owners have been able to obtain their certificates of financial responsibility, but large tanker owners with substantial financial resources continue to find ways to certify their fleets. (4) Recently, a handful of new companies have come into being hoping to make policies available that will meet the COFR requirements. INTERTANKO (the International Association of Independent Tanker Owners) feels that: No satisfactory solution to the question of Certificates of Financial Responsibility is available for the majority of tanker owners wanting to trade to the United States. …