Consumer Price Index Adjustments of Oil Pollution Act of 1990 Limits of Liability–Vessels, Deepwater Ports and Onshore Facilities
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Notice of proposed rulemaking.
CFR Part: "33 CFR Parts 138, Subpart B"
RIN Number: "RIN 1625-AC14"
Citation: "79 FR 49206"
Document Number: "Docket No. USCG-2013-1006"
Page Number: "49206"
"Proposed Rules"
SUMMARY: The
DATES: Comments and related material must be submitted on or before
ADDRESSES: You may submit comments identified by Docket No. USCG-2013-1006 using any one of the following methods:
(1) Online: http://www.regulations.gov.
(2) Fax: 202-493-2251.
(3) Mail: Docket Management Facility (M-30),
(4) Hand delivery: Same as mail address above,
To avoid duplication, please use only one of these four methods. See the "Public Participation and Request for Comments" portion of the SUPPLEMENTARY INFORMATION section below for instructions on submitting comments.
FOR FURTHER INFORMATION CONTACT: For information about this document call or email
SUPPLEMENTARY INFORMATION:
Table of Contents for Preamble
I. Public Participation and Request for Comments
A. Submitting Comments
B. Viewing Comments and Documents
C. Privacy Act
D. Public Meeting
II. Abbreviations
III. Basis and Purpose
IV. Background and Regulatory History
A.
B. Prior Regulatory Inflation Adjustments to the OPA 90 Limits of Liability in 33 CFR Part 138, Subpart B
C. Statutory and Regulatory History Respecting the OPA 90 Edible Oil Cargo Tank Vessel and Oil Spill Response Vessel Exceptions
V. Discussion of Proposed Rule
A. Regulatory Inflation Adjustments and Statutory Updates to the Limits of Liability for Vessels, Deepwater Ports and Onshore Facilities
B. Clarifying Amendments Respecting Edible Oil Cargo Tank Vessels and Oil Spill Response Vessels
C. Section-by-Section Discussion
VI. Regulatory Analyses
A. Regulatory Planning and Review
B. Small Entities
C. Assistance for Small Entities
D. Collection of Information
E. Federalism
F. Unfunded Mandates Reform Act
G. Taking of Private Property
H. Civil Justice Reform
I. Protection of Children
J. Indian Tribal Governments
K. Energy Effects
L. Technical Standards
M. Environment
I. Public Participation and Request for Comments
We encourage you to participate in this rulemaking by submitting comments and related materials using the instructions below. All comments received will be posted without change to http://www.regulations.gov and will include any personal information you have provided.
A. Submitting Comments
If you submit a comment, please include the docket number for this rulemaking (USCG-2013-1006), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. We recommend that you include your name and a mailing address, an email address, or a phone number in the body of your document so that we can contact you if we have questions regarding your submission.
To submit your comment online, go to http://www.regulations.gov, and follow the instructions of that Web site. If you submit your comments by mail or hand delivery, submit them in an unbound format, no larger than 81/2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope.
We will consider all comments and material received during the comment period and may change this proposed rule based on your comments.
B. Viewing Comments and Documents
To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, and follow the instructions on that Web site. If you do not have access to the internet, you may view the docket online by visiting the Docket Management Facility in Room W12-140 on the ground floor of the
C. Privacy Act
Anyone can search the electronic form of comments received into any of our dockets by the name of the individual submitting the comment (or signing the comment, if submitted on behalf of an association, business, labor union, etc.). You may review a Privacy Act notice regarding our public dockets in the
D. Public Meeting
We do not now plan to hold a public meeting. But, you may submit a request for one to the docket using one of the methods specified under ADDRESSES. In your request, explain why you believe a public meeting would be beneficial. If we decide to hold a public meeting, we will announce its time and place in a later notice in the
II. Abbreviations
Annual CPI-U The Annual "Consumer Price Index--All Urban Consumers, Not Seasonally Adjusted, U.S. City Average, All Items, 1982-84=100"
CPI-1 Rule The
CFR Code of Federal Regulations
COFR Certificate of Financial Responsibility
COFR Rule The
CPI Consumer Price Index
DPA Deepwater Port Act of 1974, as amended (33 U.S.C. 1501-1524)
DRPA The Delaware River Protection Act of 2006, Title VI of the
E.O. Executive Order
Fund
IRFA Initial Regulatory Flexibility Analysis
LNG Liquefied natural gas
LOOP Louisiana Offshore Oil Port
NPFC National Pollution Funds Center
NPRM Notice of proposed rulemaking
OPA 90 The Oil Pollution Act of 1990, as amended (33 U.S.C.
SEC Section symbol
U.S.
U.S.C. United States Code
III. Basis and Purpose
In general, under Title I of the Oil Pollution Act of 1990, as amended (OPA 90) (33 U.S.C.
FOOTNOTE 1 See 33 U.S.C. 2701(29) and (37) (definitions of public vessel and vessel) and 33 U.S.C. 2702(c)(2) (public vessel exclusion). END FOOTNOTE
In instances when a limit of liability applies, the responsible parties may, but are not required to, incur direct removal costs or reimburse third-party claims for OPA 90 removal costs and damages in excess of the applicable limit of liability. The responsible parties may, moreover, seek reimbursement from the
FOOTNOTE 2 See 33 U.S.C. 2708. A more comprehensive description of the Fund can be found in the
To prevent the real value of the OPA 90 limits of liability from depreciating over time as a result of inflation and preserve the "polluter pays" principle embodied in OPA 90, 33 U.S.C. 2704(d)(4) requires that the OPA 90 limits of liability be adjusted "by regulations issued not later than 3 years after
FOOTNOTE 3 Executive Order (E.O.) 12777, Sec. 4, 3 CFR, 1991 Comp., p. 351, as amended by E.O. 13638 of
In this notice of proposed rulemaking (NPRM) the
IV. Background and Regulatory History
A.
In 2008, the
B. Prior Regulatory Inflation Adjustments to the OPA 90 Limits of Liability in 33 CFR Part 138, Subpart B
The Coast Guard published an NPRM on
FOOTNOTE 4
The CPI-1 Rule was the first set of inflation adjustments to the OPA 90 limits of liability for vessels and deepwater ports. The CPI-1 Rule, however, deferred adjusting the statutory limit of liability in 33 U.S.C. 2704(a)(4) for onshore facilities.
As explained in the
FOOTNOTE 5 E.O. 12777, Sec. 4, also delegated various other liability limit adjustment and reporting authorities in 33 U.S.C. 2704. END FOOTNOTE
This division of responsibilities complicated the CPI adjustment rulemaking requirement, particularly in respect to the three sub-categories of onshore facilities. Interagency coordination was, therefore, needed to avoid inconsistent regulatory treatment.
The decision to defer adjusting the onshore facility statutory limit of liability for inflation also permitted the
On
FOOTNOTE 6 Similarly, the authority to make CPI adjustments to the limit of liability for offshore facilities in 33 U.S.C. 2704(a)(3) remains with the Secretary of the Interior (see, e.g., 79 FR 10056,
On
C. Statutory and Regulatory History Respecting the OPA 90 Edible Oil Cargo Tank Vessel and Oil Spill Response Vessel Exceptions
Section 2(d) of the 1995 Edible Oil Regulatory Reform Act, Public Law 104-55,
The Coast Guard Authorization Act of 1998, Public Law 105-383, title IV, section 406,
Oil spill response vessels are, therefore, also classified as a matter of law to the "any other vessel" category in 33 U.S.C. 2704(a)(2), and subject to the resulting lower OPA 90 limit of liability and evidence of financial responsibility requirements.
The special treatment accorded by OPA 90 to edible oil tank vessels and oil spill response vessels is not reflected in the current regulatory text of 33 CFR part 138. The
V. Discussion of Proposed Rule
A. Regulatory Inflation Adjustments and Statutory Updates to the Limits of Liability for Vessels, Deepwater Ports and Onshore Facilities
In accordance with 33 U.S.C. 2704(d)(4) and 33 CFR part 138, subpart B, we propose to increase the OPA 90 limits of liability for vessels and deepwater ports, set forth in
We also propose increasing the OPA 90 limit of liability for onshore facilities in 33 U.S.C. 2704(a)(4) for inflation. This would be the first inflation increase to the onshore facility limit of liability. The inflation-adjusted onshore facility limit of liability would be set forth in
1. What formula will be used to adjust the vessel, deepwater port and onshore facility limits of liability for inflation?
The proposed limit of liability adjustments have been calculated using the inflation adjustment methodology established by the CPI-1 Rule, set forth in
FOOTNOTE 7 A detailed discussion of the
FOOTNOTE 8 See also 33 CFR 138.240(a) (proposed 33 CFR 138.240(b)). END FOOTNOTE
2. What current period values would be used for this set of inflation adjustments to the vessel, deepwater port and onshore facility limits of liability?
To keep the limits of liability current, the inflation adjustment methodology established by the CPI-1 Rule, at
FOOTNOTE 9 See Table 24 on page 68 of the BLS document "CPI Detailed Report--Data for
In the final rule stage of this rulemaking we will calculate the adjustments using the most recently published Annual CPI-U available at that time. Therefore, if the 2014 Annual CPI-U or another more recent Annual CPI-U is available for calculating the current period value when we are at the final rule stage of this rulemaking, the limit of liability values would change marginally from those proposed today.
3. What previous period values would be used for this set of inflation adjustments to the vessel, deepwater port and onshore facility limits of liability?
Applying the inflation adjustment methodology at
FOOTNOTE 10 The 2008 Annual CPI-U was used as the current period value for the CPI-1 inflation adjustments because of the time lag for BLS publication of the Annual CPI-U and the time it takes to promulgate regulations. END FOOTNOTE
For onshore facilities, we propose adjusting the OPA 90 statutory limit of liability in 33 U.S.C. 2704(a)(4) to reflect significant increases in the Annual CPI-U since 2006. This is the baseline year, or previous period, established by the CPI-1 Rule for calculating the first inflation adjustments to the statutory limits of liability in 33 U.S.C. 2704(a), including the statutory limit of liability for onshore facilities. /11/
FOOTNOTE 11 See 74 FR at 31361. END FOOTNOTE
As explained during the CPI-1 Rule development, /12/ we proposed using 2006 as the previous period date for the first set of adjustments to the OPA 90 statutory limits of liability for all source categories. There were no adverse comments on that approach. We, therefore, established the 2006 Annual CPI-U value of 201.6 as the previous period value for adjusting the statutory limits of liability for all source categories delegated to the
FOOTNOTE 12 See 73 FR at 55000-55001; 74 FR at 31361. END FOOTNOTE
We are, however, considering whether to use the 1990 Annual CPI-U previous period value to adjust the onshore facility limit of liability, and whether to also recalculate the CPI-1 Rule adjustment to the deepwater port general limit of liability using a 1990 previous period value. /13/ This issue is discussed further in subsection 5, below.
FOOTNOTE 13 We are not revisiting the CPI-1 Rule adjustments to the vessel and LOOP limits of liability. This is because the 2006 and 1995 "Previous Periods" used, respectively, for those adjustments were based on the date the vessel statutory limits of liability were amended by DRPA and the date LOOP's facility-specific limit of liability was established by regulation under OPA 90 (33 U.S.C. 2704(d)(2)(C)). END FOOTNOTE
4. What would the adjusted limits of liability be?
Inserting the estimated percent changes in the Annual CPI-U into the adjustment formula would result in the following proposed new limits of liability for vessels and deepwater ports (using the 2008 Annual CPI-U previous period), and onshore facilities (using the 2006 Annual CPI-U previous period), and rounding all limits of liability to the closest $100:
Source category Previous limit of Proposed new limit liability of liability S. 138.230 (a) Vessels (1) For a single-hull tank vessel the greater of the greater of greater than 3,000 gross tons, other$3,200 per gross$3,500 per gross than a vessel excluded under 33 U.S.C. ton or ton or 2704(c)(4) (i.e., an edible oil tank$23,496,000 $25,422,700 . vessel or oil spill response vessel) (2) For a tank vessel greater than the greater of the greater of 3,000 gross tons, other than a vessel$2,000 per gross$2,200 per gross referred to in (a)(1) or a vessel ton or ton or excluded under 33 U.S.C. 2704(c)(4)$17,088,000 $18,489,200 . (i.e., an edible oil tank vessel or oil spill response vessel) (3) For a single-hull tank vessel less the greater of the greater of than or equal to 3,000 gross tons,$3,200 per gross$3,500 per gross other than a vessel excluded under 33 ton or$6,408,000 ton or U.S.C. 2704(c)(4) (i.e., an edible oil$6,933,500 . tank vessel or oil spill response vessel) (4) For a tank vessel less than or the greater of the greater of equal to 3,000 gross tons, other than$2,000 per gross$2,200 per gross a vessel referred to in (3) or a ton or$4,272,000 ton or vessel excluded under 33 U.S.C.$4,622,300 . 2704(c)(4) (i.e., an edible oil tank vessel or oil spill response vessel) (5) For any other vessel, including the greater of the greater of any edible oil tank vessel and any oil$1,000 per gross$1,100 per gross spill response vessel ton or$854,400 ton or$924,500 . S. 138.230 (b) Deepwater ports that are subject to the DPA (1) For a deepwater port that is$373,800,000 $404,451,600 . subject to the DPA, other than the Louisiana Offshore Oil Port (LOOP) (2) For LOOP$87,606,000 $94,789,700 . S. 138.230 (c) Onshore facilities$350,000,000 $404,600,000 .
These values would change marginally if the 2014 Annual CPI-U or another more recent Annual CPI-U is used as the current period value when we are at the final rule stage of this rulemaking.
5. What would the estimated adjusted limit of liability for onshore facilities and deepwater ports generally be using a 1990 previous period?
As mentioned in subsection 3, above, we are considering whether to use a 1990 previous period to adjust the onshore facility limit of liability, and whether to recalculate the CPI-1 Rule adjustment to the deepwater port general limit of liability using a 1990 previous period value. There are several reasons why we are considering doing this:
* First, in respect to the onshore facility limit of liability,
FOOTNOTE 14 On
* In addition, DOI is proposing a rule that would adjust the offshore facility limit of liability for inflation since OPA 90 was enacted, because there have not been intervening adjustments to that limit of liability (as compared to the vessel limits of liability, which have been adjusted both by statute and regulation), and because the damages in the 2010 Deepwater Horizon spill of national significance have far exceeded the offshore facility limit of liability. /15/
FOOTNOTE 15 79 FR at 10059. The DOI otherwise plans to adopt a methodology for future adjustments similar to
* Moreover, DRPA did not change or expressly address the onshore facility and deepwater port statutory limit of liability at 33 U.S.C. 2704(a)(4). /16/
FOOTNOTE 16 OPA 90 (33 U.S.C. 2704(a)(4)) sets forth a common statutory limit of liability for onshore facilities and deepwater ports of
Therefore, although onshore facility spills have not historically (with the one exception previously mentioned) exceeded the statutory limit of liability in 33 U.S.C. 2704(a)(4) and there currently are no deepwater ports in operation that are subject to the generally-applicable limit of liability for deepwater ports, we believe that the Nation's recent experience with costly oil spills--although exceptional--warrants revisiting whether to use the 1990 Annual CPI-U as the previous period (instead of the 2006 previous period established by the CPI-1 Rule) for the first inflation adjustment to the statutory limit of liability in 33 U.S.C. 2704(a)(4), which applies to both onshore facilities and deepwater ports.
Considering whether to use a different previous period for adjusting the onshore facility limit of liability is appropriate because the CPI-1 Rule did not adjust the onshore facility limit of liability for inflation. In addition, although deepwater ports may pose a very low risk of discharge as compared to other modes of oil transportation, /17/ reconsidering our use of the 2006 previous period for the CPI-1 Rule's deepwater port limit of liability adjustment is appropriate given our better understanding of the potential costs arising from oil spill incidents in offshore areas. We, therefore, invite the public to comment on this issue.
FOOTNOTE 17 See 1993 Deepwater Ports Study and Report to
If we were to adopt a 1990 previous period, we would adjust the onshore facility and deepwater port statutory limit of liability in 33 U.S.C. 2704(a)(4) using the 1990 Annual CPI-U value of 130.7 as the previous period. This would be instead of the 2006 Annual CPI-U previous period value of 201.6 and the 2008 Annual CPI-U previous period value of 215.3, used to calculate, respectively, the adjusted limit of liability values for onshore facilities and deepwater ports reflected in the regulatory text of this proposal.
If, after considering any public comment on this NPRM, we decide to adjust the onshore facility and deepwater port generally-applicable limit of liability using the 1990 Annual CPI-U of 130.7 as the previous period value (i.e., instead of the 2006 Annual CPI-U value of 201.6 for onshore facilities, and the 2008 Annual CPI-U value of 215.3 for deepwater ports), the estimated percent change in the Annual CPI-U would be 78.2 percent. Inserting this estimated percent change in the Annual CPI-U into the adjustment formula would result in the following new limits of liability for onshore facilities and deepwater ports generally, after rounding the limits of liability to the closest $100:
Source category Statutory Alternative previous new limit of limit liability of liability (1990 previous period) S. 138.230(b)(1) For a deepwater port that is$350,000,000 $623,700,000 subject to the DPA, other than LOOP S. 138.230(c) For onshore facilities 350,000,000 623,700,000
These values would also change marginally if the 2014 Annual CPI-U or another more recent Annual CPI-U is used as the current period value when we are at the final rule stage of this rulemaking.
6. How does the
We are proposing a simplified regulatory procedure at proposed new paragraph
Under this proposed procedure, the Director, NPFC, would continue to determine future inflation adjustments to the limits of liability using the significance threshold and adjustment methodology in
FOOTNOTE 18 As provided in
Because the adjustment methodology was established by the CPI-1 Rule, and the simplified procedure will be established by this rulemaking, publication of an NPRM would not be necessary for these future mandated inflation adjustments. The public would, however, be able to contact the person listed in the
Under this simplified procedure, unless otherwise specified in the
The Director would use this simplified regulatory procedure to update
Because any new statutory limits of liability normally would supersede the prior regulatory limits of liability, any such new limits of liability would take effect for purposes of determining a responsible party's liability in the event of an incident on the date of enactment unless another effective date is specified in the amending law. As provided in
The simplified regulatory procedure described in proposed
B. Clarifying Amendments Respecting Edible Oil Cargo Tank Vessels and Oil Spill Response Vessels
The Coast Guard is also proposing amendments to the vessel limits of liability in
C. Section-by-Section Discussion /19/
FOOTNOTE 19 The
Heading. The heading for 33 CFR part 138 would be amended by adding the words "ONSHORE FACILITY".
Authorities. We propose to update the authorities citations for part 138 to reflect the amendments to the delegations in E.O. 12777, Sec. 4, by E.O. 13638 of
As discussed in section V.A.2, the limits of liability proposed in
In addition, as discussed above in section V.A.3 and 5, the new limit of liability for deepwater ports and onshore facilities generally may differ from the amounts shown in
Finally, we have added new subsection
We also propose editorial revisions, such as dividing
VI. Regulatory Analyses
We developed this proposed rule after considering numerous statutes and executive orders (E.O.s) related to rulemaking. Below we summarize our analyses based on these statutes or E.O.s.
A. Regulatory Planning and Review
Executive Orders 12866 ("Regulatory Planning and Review") and 13563 ("Improving Regulation and Regulatory Review") direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility.
This proposed rule is not a significant regulatory action under section 3(f) of E.O. 12866 as supplemented by E.O. 13563, and does not require an assessment of potential costs and benefits under section 6(a)(3) of E.O. 12866.
1. Regulatory Costs
There are two regulatory costs that are expected from this proposed rule. Regulatory Cost 1: Increased Cost of Liability. Regulatory Cost 2: Increased cost of establishing vessel evidence of financial responsibility. /20/
FOOTNOTE 20 It should be noted that from an economic perspective, CPI adjustments are actually neutral in that they maintain the cost and benefit impacts of the limits of liability constant in real dollar terms. Not adjusting the limits of liability would, by comparison, allow inflation to erode the value of the limits of liability in real terms. END FOOTNOTE
a. Discussion of Regulatory Cost
This proposed rule could increase the dollar amount of OPA 90 removal costs and damages a responsible party of a vessel (other than a public vessel), /21/ deepwater port, or onshore facility must pay in the event of a discharge, or substantial threat of discharge, of oil into or upon the navigable waters or adjoining shorelines or the exclusive economic zone of
FOOTNOTE 21 See footnote 1. According to
i. Affected Population--Vessels
Coast Guard data, as of
ii. Affected Population--Deepwater Ports
This proposed rule could affect the responsible parties of any port licensed under the DPA that is subject to OPA 90 (i.e., any such port, including its associated pipelines, that meets the OPA 90 definition of "facility"). /22/ Currently there are two ports in operation that are licensed under the DPA--LOOP and Northeast Gateway. Northeast Gateway, however, is a liquefied natural gas (LNG) port and, as currently designed and operated, it does not meet the OPA 90 definition of "facility". Therefore--although a vessel visiting or servicing Northeast Gateway could become the source of a discharge, or substantial threat of discharge, of oil for which the vessel responsible parties would be liable under OPA 90--it is highly unlikely that Northeast Gateway or any similarly-designed and operated LNG port would be the source of an oil discharge, or substantial threat of discharge. /23/ We therefore, do not include LNG ports in this analysis.
FOOTNOTE 22 33 U.S.C. 2701(6) defines "deepwater port" as "a facility licensed under the Deepwater Port Act of 1974 (33 U.S.C. 1501-1524)" [emphasis added]. 33 U.S.C. 2701(9) defines "facility" to mean "any structure, group of structures, equipment, or device (other than a vessel) which is used for one or more of the following purposes: exploring for, drilling for, producing, storing, handling, transferring, processing, or transporting oil. This term includes any motor vehicle, rolling stock, or pipeline used for one or more of these purposes[.]" END FOOTNOTE
FOOTNOTE 23 Several other LNG ports were mentioned in the regulatory analysis for the CPI-1 Rule. But they have either not become operational, or are no longer in operation. For example, on
To date, LOOP (the only port licensed under the DPA that is in operation and meets the OPA 90 definitions of "deepwater port" and "facility") has not had an OPA 90 incident that resulted in removal costs and damages in excess of LOOP's previous limit of liability of
iii. Affected Population--Onshore Facilities
This proposed rule could affect any responsible party for an onshore facility (including onshore pipelines). The impact would, however, only occur if the incident resulted in OPA 90 removal costs and damages in excess of the previous limit of liability.
Because of the large number and diversity of onshore facilities, it is not possible to predict which specific types or sizes of onshore facilities might be affected by this proposed rule.
FOOTNOTE 24 See footnote 12. END FOOTNOTE
The Enbridge Pipeline incident indicates that the previous limit of liability for an onshore facility, although high, can still be exceeded by a low frequency, but high consequence oil spill. Therefore, for the purposes of this analysis, we assume one onshore facility incident would occur over the 10-year analysis time period that would result in OPA 90 removal costs and damages in excess of the onshore facility previous limit of liability.
iv. Cost Summary Regulatory Cost 1
(a) Vessels
We estimate the greatest cost to a vessel responsible party entitled to a limit of liability under OPA 90, for purposes of this analysis, by assuming that the average annual cost from the historical incidents analyzed would remain constant throughout the analysis period (2014-2023). The average annual increased cost of liability for the analysis time period (2013-2024) is estimated by calculating the difference between the previous limit of liability and the proposed new limit of liability for each of the 62 historical incidents. These values were totaled and then divided by the number of years of data (22 years). The average annual cost resulting from the three estimated vessel incidents per year is estimated to be
(b) Deepwater Ports
We estimate the greatest cost to a deepwater port responsible party entitled to a limit of liability under OPA 90, for purposes of this analysis, by assuming that the cost of the incident would be equal to the proposed new limit of liability. As mentioned above, LOOP has never had an incident with OPA 90 removal costs and damages in excess of its limit of liability. Therefore, given the lack of any deepwater port historical data, we rely on the historical data available for vessel incidents with costs in excess of LOOP's previous limit of liability of
Specifically, we assume that the LOOP responsible parties would make OPA 90 removal cost and damage payments for the one hypothetical incident, over the course of 10 years after the incident date. /25/ In addition, for the purposes of this analysis, we assume that the payments would be spread out in equal annual amounts over the 10-year analysis period (2014-2023). Applying these assumptions, the average annual cost resulting from the one hypothetical LOOP OPA 90 incident is estimated to be
FOOTNOTE 25 Based on
FOOTNOTE 26 The only deepwater port affected by this rulemaking, LOOP, has a facility-specific limit of liability first established in 1995 under 33 U.S.C. 2704(d)(2)(C), and adjusted for inflation by the CPI-1 Rule. END FOOTNOTE
There would be no increase to Regulatory Cost 1 resulting from the proposed adjustment to the generally-applicable deepwater port limit of liability adjustment, including if, after considering any public comment, we decide to re-calculate the CPI adjustment to the deepwater port statutory limit of liability in 33 U.S.C. 2704(a)(4), using the 1990 Annual CPI-U value of 130.7 as the previous period, instead of the 2008 Annual CPI-U value of 215.3 that we have used for purposes of this proposal. This is because, as previously mentioned, there are no deepwater ports in operation that are subject to the generally-applicable OPA 90 limit of liability for deepwater ports.
(c) Onshore Facilities
We estimate the greatest cost to an onshore facility responsible party entitled to a limit of liability under OPA 90, for purposes of this analysis, by assuming that the cost of the incident would be equal to the proposed new limit of liability. Based on NPFC's experience with onshore facility incidents, we assume that the onshore facility responsible parties would be making OPA 90 removal cost and damage payments for the one estimated incident, over the course of 10 years after the incident date. /27/ We further assume that the payments would be spread out in equal annual amounts over the 10-year analysis period (2014-2023). /28/ Applying these assumptions, the average annual cost resulting from the one estimated onshore facility OPA 90 incident over 10 years is estimated to be
FOOTNOTE 27 The per-incident duration of payments was determined by comparing the incident date and the completion date of each onshore facility incident occurring since enactment of OPA 90 with incident removal costs and damages (in 2013 dollars) greater than or equal to
FOOTNOTE 28 Based on
If, after considering any public comment, we decide to calculate the CPI adjustments to the onshore facility limit of liability using the 1990 Annual CPI-U value of 130.7 as the previous period (i.e., instead of the 2006 Annual CPI-U value of 201.6, established by the CPI-1 rule that we have used for purposes of this proposal), the average annual cost resulting from the one estimated onshore facility OPA 90 incident over 10 years would be
v. Present Value of Regulatory Cost 1
The 10-year present value of Regulatory Cost 1, at a 3 percent discount rate, is estimated to be
FOOTNOTE 29 The sum of the annual costs for the three source categories over the ten-year analysis period (i.e.,
FOOTNOTE 30 The sum of the annual costs for the three source categories over the ten-year analysis period (i.e.,
If, after considering any public comment, we decide to calculate the CPI adjustments to the onshore facility limit of liability and the generally-applicable limit of liability for deepwater ports using the 1990 Annual CPI-U value of 130.7 as the previous period, the present value estimates would be as follows. The estimated 10-year present value of Regulatory Cost 1, at a 3 percent discount rate, would be
FOOTNOTE 31 The sum of the annual costs for the three source categories over the ten-year analysis period (
FOOTNOTE 32 The sum of the annual costs for the three source categories over the ten-year analysis period (
FOOTNOTE 33 As previously mentioned, there are no deepwater ports in operation that are subject to the generally-applicable limit of liability for deepwater ports. Therefore, re-calculating the CPI adjustment to the deepwater port statutory limit of liability in 33 U.S.C. 2704(a)(4), using the 1990 Annual CPI-U value of 130.7 as the previous period, instead of the 2008 Annual CPI-U value of 215.3 used for purposes of this proposal, would not result in any Regulatory Cost 1 impacts. END FOOTNOTE
b. Discussion of Regulatory Cost 2
OPA 90 (33 U.S.C. 2716) requires that the responsible parties for deepwater ports and certain types and sizes of vessels establish and maintain evidence of financial responsibility to ensure that they have the ability to pay for OPA 90 removal costs and damages, up to the applicable limits of liability, in the event of an OPA 90 incident. /34/ Therefore, because the regulatory changes contemplated by this proposed rule would increase those limits of liability, vessel and deepwater port responsible parties may incur additional costs establishing and maintaining evidence of financial responsibility as a result of this rulemaking.
FOOTNOTE 34 OPA 90 does not impose evidence of financial responsibility requirements on onshore facilities. END FOOTNOTE
Specifically, the proposed rule could increase the cost to vessel and deepwater port responsible parties associated with establishing OPA 90 evidence of financial responsibility in two ways:
[ ] Responsible parties using Insurance as their method of demonstrating financial responsibility could incur higher Insurance premiums.
[ ] Some responsible parties currently using the
i. Affected Population--Vessels
Vessel responsible parties may establish evidence of financial responsibility using any of the following methods: Insurance,
FOOTNOTE 35 See 33 CFR 138.80(b). Currently, however, there are no vessel responsible parties using the Surety Bond method of financial responsibility, and, based on historical experience, NPFC does not expect any responsible parties will use this method during the analysis period (2014-2023). In addition, there currently are no vessel responsible parties using other methods of demonstrating financial responsibility approved by Director, NPFC, and, based on historical experience, NPFC does not expect any responsible parties will use any other method during the analysis period (2014-2023). END FOOTNOTE
ii. Affected Population--Deepwater Ports
As previously discussed (see Affected Population--Deepwater Ports, above under Regulatory Cost 1), LOOP is the only operating deepwater port that would be affected by this proposed rule. Currently LOOP uses a Director-approved method of establishing financial responsibility. Specifically, the Director, NPFC, accepts the following documentation as evidence of financial responsibility for LOOP:
* LOOP's insurance policy issued by
* Documentation that LOOP operates with a net worth of at least
* Documentation that the total value of the OIL policy aggregate plus LOOP's working capital does not fall below
iii. Affected Population--Onshore Facilities
None. Onshore facilities are not required to establish and maintain evidence of financial responsibility under 33 U.S.C. 2716.
iv. Cost Summary Regulatory Cost 2
(a) Vessels
Increases to Vessel Insurance Premiums. The calculation of Insurance premium rates are dependent on many constantly changing factors, including: market forces, interest rates and investment opportunities for the premium income, the terms and conditions of the policy, and underwriting criteria such as vessel age, loss history, construction, classification details, and management history. As calculated above, the proposed percent change in the limits of liability for vessels is 8.2%. Based on estimates received from Insurance companies, /36/ it is assumed that an 8.2% increase in the limits of liability would cause, on average, a 6.0% increase in Insurance premiums charged across all vessel types.
FOOTNOTE 36 Data was requested from 9 of a possible 14 Insurance companies. Four responded with their current premium rates and their best estimates of the increase in premium rates resulting from the proposed regulatory change. These four Insurance companies represent approximately 93% of vessels that use the Insurance method of financial responsibility. END FOOTNOTE
Estimated costs were calculated by multiplying the number of vessels by vessel category for each year of the analysis period (2014-2023) by the Expected Average Increase in Premium for that particular vessel type. The annual cost associated with increased Insurance premiums is estimated to be between
Migration of vessel responsible parties currently using the
Based on the financial documentation received from vessel responsible parties using the
(b) LOOP
An increase in the LOOP limit of liability of the magnitude proposed by this rulemaking is not expected to increase the cost to the LOOP responsible parties associated with establishing and maintaining LOOP's evidence of financial responsibility. This is because the LOOP responsible parties provide evidence of financial responsibility to the
The Coast Guard, therefore, does not expect this action to change the terms of the OIL policy, to result in an increased premium for the OIL policy, or to require LOOP to have higher minimum net worth or working capital requirements.
v. Present Value of Regulatory Cost 2
The 10-year present value, at a 3 percent discount rate, is estimated to be
FOOTNOTE 37 The sum of the annual costs for the two subcategories of Regulatory Cost 2 over the ten-year analysis period (ranging from
FOOTNOTE 38 The sum of the annual costs for the two subcategories of Regulatory Cost 2 over the ten-year analysis period (ranging from
Present Value of Total Cost = Regulatory Cost 1 + Regulatory Cost 2
The 10-year present value, at a 3 percent discount rate, is estimated to be
FOOTNOTE 39 This is the sum of Regulatory Cost 1 (
FOOTNOTE 40 This is the sum of Regulatory Cost 1 (
If, after considering any public comment, we decide to calculate the CPI adjustments to the onshore facility limit of liability and the generally-applicable limit of liability for deepwater ports using the 1990 Annual CPI-U value of 130.7 as the previous period, the present value estimates would be as follows. The estimated 10-year present value, at a 3 percent discount rate, would be
FOOTNOTE 41 This is the sum of Regulatory Cost 1 (
FOOTNOTE 42 This is the sum of Regulatory Cost 1 (
2. Regulatory Benefits
a. Regulatory Benefit 1: Ensure that the OPA 90 limits of liability keep pace with inflation.
OPA 90 (33 U.S.C. 2704(d)(4)) mandates that limits of liability be updated periodically to reflect significant increases in the CPI to account for inflation. The intent of this requirement is to ensure that the real values of the limits of liability do not decline over time. Absent CPI adjustments, the responsible parties ultimately benefit because they pay a reduced percentage of the total incident costs they would be required to pay with inflation incorporated into the determination of their limit of liability. Requiring responsible parties to internalize costs by adjusting their limits of liability for inflation ensures that the appropriate amount of cleanup, response and damage costs are borne by the responsible party.
b. Regulatory Benefit 2: Ensure that the responsible party is held accountable.
Increasing the limits of liability to account for inflation ensures that the appropriate amount of removal costs and damages are borne by the responsible party and that liability risk is not shifted away from the responsible party to the Fund. This helps preserve the "polluter pays" principle as intended by
c. Regulatory Benefit 3: Reduce and deter substandard shipping and oil handling practices.
Increasing the limits of liability serves to reduce the number of substandard ships in U.S. waters and ports because insurers are less likely to provide Insurance to, and Financial Guarantors are less likely to guaranty, substandard vessels at the new levels of OPA 90 liability. Maintaining the limits of liability also helps preserve the deterrent effect of the OPA 90 liability provisions for Self Insurers.
With respect to oil handling practices, the higher the responsible parties' limits of liability are, the greater the incentive for them to operate in the safest and most risk-averse manner possible. Conversely, the lower the limits of liability, the lower the incentive is for responsible parties to spend money on capital improvements and operation and maintenance systems that will protect against oil spills.
B. Small Entities
Under the Regulatory Flexibility Act, 5 U.S.C. 601-612, we have considered whether this proposed rule would have a significant economic impact on a substantial number of small entities. The term "small entities" comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000.
An Initial Regulatory Flexibility Analysis (IRFA) discussing the impact of this proposed rule on small entities is included in the Regulatory Analysis that is available in the docket. A summary of the IRFA follows.
There are two potential economic impacts to small entities that would result from this proposed rule:
Regulatory Cost 1. Increased Cost of Liability
Regulatory Cost 2. Increased Cost of Establishing Evidence of Financial Responsibility.
1. Regulatory Cost 1: Increased Cost of Liability
As explained in Part IV.A. of this preamble and in the Regulatory Analysis for this proposed rule, Regulatory Cost 1 would only occur if there was an OPA 90 incident that had removal costs and damages in excess of the existing limits of liability.
a. Vessels
This proposed rule could affect the responsible parties of any vessel, other than a public vessel, /43/ from which oil is discharged, or which poses the substantial threat of a discharge of oil, into or upon the navigable waters or adjoining shorelines or the exclusive economic zone of the
FOOTNOTE 43 See 33 U.S.C. 2701(29) and (37) (definitions of public vessel and vessel) and 33 U.S.C. 2702(c)(2) (public vessel exclusion). According to
The vessel population encompasses dozens of North American Industry Classification System (NAICS) codes. It, therefore, would not be practical to predict which specific type or size of vessel might be involved in the three hypothetical incidents assumed to occur per year, or whether they would involve small entities.
Incident cost data show that the average cost of an incident that exceeds the current limit of liability is approximately
b. Deepwater Ports
As discussed in Part IV.A. of this preamble, and in the Regulatory Analysis for this rulemaking, the only deepwater port affected by this proposed rule is LOOP. LOOP, however, does not meet the
FOOTNOTE 44 LOOP is a limited liability corporation (NAICS Code: 48691001) owned by three major oil companies:
c. Onshore Facilities
As discussed in Part IV.A., of this preamble, and in the Regulatory Analysis for this rulemaking, this proposed rule could affect any responsible party for an onshore facility. /45/ Since the enactment of OPA 90, however, the 2010 Enbridge Pipeline spill in
FOOTNOTE 45 OPA 90 (33 U.S.C. 2701(9)) defines "facility" as "any structure, group of structures, equipment, or device (other than a vessel) which is used for one or more of the following purposes: exploring for, drilling for, producing, storing, handling, transferring, processing, or transporting oil. This term includes any motor vehicle, rolling stock, or pipeline used for one or more of these purposes". OPA 90 (33 U.S.C. 2701(24)) defines an "onshore facility" as "any facility (including but not limited to, motor vehicles and rolling stock) of any kind located in, on, or under, any land within
FOOTNOTE 46 Reliable supporting estimates of the OPA 90 removal costs and damages resulting from incident are not currently available. END FOOTNOTE
The onshore facility population encompasses dozens of NAICS codes representing diverse industries. /47/ It, therefore, would not be practical to predict which specific type or size of onshore facility might be involved in the one hypothetical incident assumed to occur over the 10-year analysis period, or whether it would involve a small entity. However, in the event a small entity onshore facility was to have an incident with OPA 90 removal costs and damages of this magnitude, it would likely have a significant economic impact.
FOOTNOTE 47 Examples of onshore facilities include, but are not limited to: onshore pipelines; rail; motor carriers; petroleum bulk stations and terminals; petroleum refineries; government installations; oil production facilities; electrical utility plants; mobile facilities; marinas, marine fuel stations and related facilities; farms; fuel oil dealers; and gasoline stations. END FOOTNOTE
2. Regulatory Cost 2--Increased Cost of Establishing Evidence of Financial Responsibility
i. Vessels
Regulatory Cost 2 would only apply to vessel responsible parties required to provide evidence of financial responsibility under OPA 90 (33 U.S.C. 2716) and 33 CFR part 138, subpart A. As of
Using a random number generator, we then randomly selected the 315 entities from the population for analysis. Of the sample, 309 were businesses, 0 were not-for-profit organizations, and 6 were governmental jurisdictions.
For each business entity, we next determined the number of employees, annual revenue, and NAICS Code to the extent possible using public and proprietary business databases. The SBA's publication "U.S. Small Business Administration Table of Small Business Size Standards Matched to North American Industry Classification System codes effective
FOOTNOTE 48 http://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf. END FOOTNOTE
Of the sampled population, 220 would be considered small entities using the SBA criteria, 72 would not be small entities, and no data was found for the remaining 23 entities. /49/ If we assume that the entities where no revenue or employee data was found are small entities, then small entities make up 77 percent of the sample. /50/ We can then extrapolate the entire population of entities from the sample using the following formula, where "X" is the number of small entities within the total population.
FOOTNOTE 49 The 6 governmental jurisdictions were a subset of the 23 entities where no data was found. END FOOTNOTE
FOOTNOTE 50 The data show that small entities are often responsible parties for multiple vessels. END FOOTNOTE
(X small entities in the total population divided by 1,744 total entities in the population) = (243 small entities in the sample/315 total entities in the sample)
Solving for X, X equals 1,345 small entities within the total population.
As discussed in the Regulatory Analysis, the proposed rule could increase the cost to vessel responsible parties associated with establishing OPA 90 evidence of financial responsibility in two ways:
(1) Responsible parties using the Insurance method of financial responsibility could incur higher Insurance premiums.
(2) Some responsible parties currently using the
As calculated in the Regulatory Analysis, the average annual per vessel increase in Insurance premium for responsible parties using the Insurance method of establishing evidence of financial responsibility is
Based on review of financial data of entities using the
The increased cost of establishing evidence of financial responsibility for each small entity is calculated by:
1. Multiplying the number of vessels using the Insurance Method by the Average Increase in Premium (
2. Adding the product of the number of vessels using the
For example, for a hypothetical small entity using the Insurance Method for three vessels and having to change from the
(3 vessels using Insurance Method x
This calculation was conducted for each small entity and the value was then divided by the annual revenue for the small entity and then multiplied by 100 to determine the percent impact of this proposed rule on the small entities' annual revenue. The figure below shows the economic impact to vessel small entities of Regulatory Cost 2.
Percent of annual Extrapolated Percent of small revenue number of small entities entities 1 to 2 54 4 <1 1,291 96
ii. Deepwater Ports
Because there are no small entity deepwater ports, there would be no Regulatory Cost 2 small entity impacts to Deepwater Ports.
iii. Onshore Facilities
As stated in the Regulatory Analysis for this rulemaking, onshore facilities are not required to establish and maintain evidence of financial responsibility under 33 U.S.C. 2716. There would therefore be no Regulatory Cost 2 small entity impacts to Onshore Facilities.
If you think your business, organization, or governmental jurisdiction qualifies as a small entity and that this rule would have a significant economic impact on it, please submit a comment to the Docket Management Facility at the address under ADDRESSES. In your comment, explain why you think it qualifies and how and to what degree this rule would economically affect it.
C. Assistance for Small Entities
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996, Public Law 104-121, we want to assist small entities in understanding this proposed rule so that they can better evaluate its effects on them and participate in the rulemaking. If the proposed rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please consult
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the
D. Collection of Information
This proposed rule would call for no new collection of information under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501-3520.
E. Federalism
A rule has implications for federalism under E.O. 13132 ("Federalism") if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this proposed rule under that Order and have determined that it is consistent with the fundamental federalism principles and preemption requirements described in E.O. 13132. This proposed rule makes necessary adjustments to the OPA 90 limits of liability to reflect significant increases in the CPI, establishes a framework for such future CPI increases, and clarifies the OPA 90 limits of liability for certain vessels. Nothing in this proposed rule would affect the preservation of State authorities under 33 U.S.C. 2718, including the authority of any State to impose additional liability or financial responsibility requirements with respect to discharges of oil within such State. Therefore, it has no implications for federalism.
The Coast Guard recognizes the key role that State and local governments may have in making regulatory determinations. Additionally, for rules with federalism implications and preemptive effect, E.O. 13132 specifically directs agencies to consult with State and local governments during the rulemaking process. If you believe this rule has implications for federalism under E.O. 13132, please contact the person listed in the FOR FURTHER INFORMATION CONTACT section of this preamble.
F. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of
G. Taking of Private Property
This proposed rule would not cause a taking of private property or otherwise have taking implications under Executive Order 12630 ("Governmental Actions and Interference with Constitutionally Protected Property Rights").
H. Civil Justice Reform
This proposed rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988 ("Civil Justice Reform"), to minimize litigation, eliminate ambiguity, and reduce burden.
I. Protection of Children
We have analyzed this proposed rule under Executive Order 13045 ("Protection of Children from Environmental Health Risks and Safety Risks"). This rule is not an economically significant rule and would not create an environmental risk to health or risk to safety that might disproportionately affect children.
J. Indian Tribal Governments
This proposed rule does not have tribal implications under Executive Order 13175 ("Consultation and Coordination with Indian Tribal Governments"), because it would not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
K. Energy Effects
We have analyzed this proposed rule under Executive Order 13211 ("Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use"). We have determined that it is not a "significant energy action" under that order because it is not a "significant regulatory action" under Executive Order 12866 and is not likely to have a significant adverse effect on the supply, distribution, or use of energy.
L. Technical Standards
The National Technology Transfer and Advancement Act, codified as a note to 15 U.S.C. 272 directs agencies to use voluntary consensus standards in their regulatory activities unless the agency provides
This proposed rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
M. Environment
We have analyzed this proposed rule under
List of Subjects in 33 CFR Part 138
Hazardous materials transportation, Financial responsibility, Guarantors, Insurance, Limits of liability, Oil pollution, Reporting and recordkeeping requirements, Surety bonds, Water pollution control.
For the reasons discussed in the preamble, the
PART 138--FINANCIAL RESPONSIBILITY FOR WATER POLLUTION (VESSELS) AND OPA 90 LIMITS OF LIABILITY (VESSELS, DEEPWATER PORTS AND ONSHORE FACILITIES)
1. The authorities citation for part 138 is revised to read as follows:
Authority: 33 U.S.C. 2704, 2716, 2716a; 42 U.S.C. 9608, 9609; 6 U.S.C. 552; E.O. 12580, Sec. 7(b), 3 CFR, 1987 Comp., p. 193; E.O. 12777, Sec. 4, as amended by E.O. 13638 of
2. Revise the heading to part 138 to read as set forth above.
3. Revise Subpart B to read as follows:
Subpart B--OPA 90 Limits of Liability (Vessels, Deepwater Ports and Onshore Facilities)
Sec.
138.200 Scope.
138.210 Applicability.
138.220 Definitions.
138.230 Limits of liability.
138.240 Procedure for updating limits of liability to reflect significant increases in the Consumer Price Index (Annual CPI-U) and statutory changes.
This subpart sets forth the limits of liability under Title I of the Oil Pollution Act of 1990, as amended (33 U.S.C.
This subpart applies to you if you are a responsible party for a vessel, a deepwater port, or an onshore facility, unless your liability is unlimited under OPA 90 (33 U.S.C. 2704(c)).
(a) As used in this subpart, the following terms have the meanings set forth in OPA 90 (33 U.S.C. 2701): deepwater port, facility, gross ton, liability, oil, offshore facility, onshore facility, responsible party, tank vessel, and vessel.
(b) As used in this subpart--
Annual CPI-U means the annual "Consumer Price Index--All Urban Consumers, Not Seasonally Adjusted, U.S. City Average, All items, 1982-84=100", published by the
Current period means the year in which the Annual CPI-U was most recently published by the
Director, NPFC means the person in charge of the
Edible oil tank vessel means a tank vessel referred to in OPA 90 (33 U.S.C. 2704(c)(4)(A)).
Oil spill response vessel means a tank vessel referred to in OPA 90 (33 U.S.C. 2704(c)(4)(B)).
Previous period means the year in which the previous limit of liability was established, or last adjusted by statute or regulation, whichever is later.
Single-hull means the hull of a tank vessel that is constructed or adapted to carry, or that carries, oil in bulk as cargo or cargo residue, that is not a double hull as defined in 33 CFR part 157. Single-hull includes the hull of any such tank vessel that is fitted with double sides only or a double bottom only.
(a) Vessels. The OPA 90 limits of liability for vessels are--
(1) Limits of liability for tank vessels, other than edible oil tank vessels and oil spill response vessels.
(i) For a single-hull tank vessel greater than 3,000 gross tons, the greater of
(ii) For a tank vessel greater than 3,000 gross tons, other than a single-hull tank vessel, the greater of
(iii) For a single-hull tank vessel less than or equal to 3,000 gross tons, the greater of
(iv) For a tank vessel less than or equal to 3,000 gross tons, other than a single-hull tank vessel, the greater of
(2) Limits of liability for any other vessels. For any other vessel, including an edible oil tank vessel or an oil spill response vessel, the greater of
(b) Deepwater ports. The OPA 90 limits of liability for deepwater ports are--
(1) For deepwater ports generally, and except as set forth in paragraph (b)(2) of this section,
(2) For deepwater ports with limits of liability established by regulation under OPA 90 (33 U.S.C. 2704(d)(2)):
(i) For the Louisiana Offshore Oil Port (LOOP),
(ii) [Reserved].
(c) Onshore facilities. The OPA 90 limit of liability for onshore facilities,
(d) Offshore facilities. The OPA 90 limit of liability for offshore facilities, including any offshore pipeline, is set forth at 30 CFR 553.702.
(a) Update and publication. The Director, NPFC, will periodically adjust the limits of liability set forth in
(b) Formula for calculating a cumulative percent change in the Annual CPI-U. (1) The Director, NPFC, calculates the cumulative percent change in the Annual CPI-U from the year the limit of liability was established, or last adjusted by statute or regulation, whichever is later (i.e., the previous period), to the most recently published Annual CPI-U (i.e., the current period), using the following escalation formula:
Percent change in the Annual CPI-U = [(Annual CPI-U for Current Period - Annual CPI-U for Previous Period) / Annual CPI-U for Previous Period] x 100.
(2) This cumulative percent change value is rounded to one decimal place.
(c) Significance threshold. Not later than every three years from the year the limits of liability were last adjusted for inflation, the Director, NPFC, will evaluate whether the cumulative percent change in the Annual CPI-U since that date has reached a significance threshold of 3 percent or greater. For any three-year period in which the cumulative percent change in the Annual CPI-U is less than 3 percent, the Director, NPFC, will publish a notice of no inflation adjustment to the limits of liability in the
(d) Formula for calculating inflation adjustments. The Director, NPFC, calculates adjustments to the limits of liability in
New limit of liability = Previous limit of liability + (Previous limit of liability x percent change in the Annual CPI-U calculated under paragraph (b) of this section), then rounded to the closest
Dated:
Acting Director, National Pollution Funds Center,
[FR Doc. 2014-19314 Filed 8-18-14;
BILLING CODE 9110-04-P
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