BILL ANALYSIS
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| SENATE COMMITTEE ON NATURAL RESOURCES AND WATER |
| Senator Fran Pavley, Chair |
| 2009-2010 Regular Session |
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BILL NO: AB 234 HEARING DATE: June 29, 2010
AUTHOR: Huffman URGENCY: No
VERSION: June 23, 2010 CONSULTANT: Marie Liu
DUAL REFERRAL: No FISCAL: Yes
SUBJECT: Oil spill prevention and response: transfer of oil.
BACKGROUND AND EXISTING LAW
The Lempert-Keene-Seastrand Oil Spill Prevention and Response
Act (commencing with 8670.1 of the Government Code) gives the
primary authority to direct prevention, removal, abatement,
response, containment, and cleanup efforts of marine oil spills
to the administrator of the Office of Oil Spill Prevention and
Response (administrator, OSPR).
The Oil Spill Prevention and Response Administration Fund
(OSPAF), created by 8670.38, funds OSPR's implementation of the
Lempert-Keene-Seastrand Act as well as the oil spill prevention
programs at the State Lands Commission, Coastal Commission, and
the San Francisco Bay Conservation and Development Commission.
OSPAF is funded through a fee on each barrel of crude oil or
petroleum product delivered to a marine terminal that is not to
exceed 5-cents. The administrator must set the fee, within this
5-cent cap, according to a three year fiscal plan.
The administrator, under 8670.41, is required to charge a fee
on nontank vessels in order to fund the administrator's costs
incurred in the regulation of nontank vessels. The maximum fee
was last set in 2002 at $2,500.
"Bunkering" is defined in 14 CCR 790 as an operation where one
vessel loads another vessel with fuel or lubricants.
"Lightering" is defined by that same regulation as the transfer
of oil as cargo from one vessel to another.
PROPOSED LAW
This bill would require the administrator to adopt regulations
that would require boom to be deployed before all bunkering or
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lightering operations unless this prebooming is determined not
to be safe and effective. This bill would also raise fees.
Specifically, this bill would:
Define "transfer unit" as a vessel involved in a bunkering or
lightering operation.
Require the administrator to adopt regulations that:
o Include minimum boom amounts that the vessel
must have access, boom positioning and adjustment
requirements, and alternatives to prebooming when
prebooming is determined not to be safe and effective.
o Oblige a transfer unit to develop a safe and
effective determination report, that subject to review
and approval by OSPR. The report shall include
thresholds based on personnel safety, wave height,
currents, and wind speed that the transfer unit will
use in determining when it is safe and effective to
preboom.
o Require the transfer unit to notify OSPR when
prebooming did not occur and a course of action when
the transfer unit did not preboom but it was safe and
effective to do so.
Require the regulations to be periodically revised.
Raise the per barrel assessment for the OSPAF to $0.06 and
allow the administrator to increase the fee up to $0.10 if the
increase is based on inflation.
Set the nontank vessel fee at $3,000 per vessel.
ARGUMENTS IN SUPPORT
According to the author, "On October 30, 2009, the Dubai Star
spilled between 400 to 800 gallons of bunker oil into the San
Francisco Bay within six miles of the Alameda coastline,
devastating local wildlife and aquaculture. The results of the
investigation are still pending, but reports have cited
investigators for the Office of Spill Prevention and Response
(OSPR) as saying the Dubai Star oil spill occurred when one of
the ship's massive fuel tanks overfilled during an early morning
refueling stop and crew members failed to notice until oil had
already seeped into the bay."
"The Dubai Star did not pre-boom prior to the oil transfer, but
did have the appropriate equipment on board the vessel.
According to OSPR, by the time workers realized there was a
leak, it was too late to contain by deploying the booms. Had the
Dubai Star pre-boomed prior to beginning the oil transfer, it
could have prevented a vast majority of the oil leaking into the
bay from contaminating the vast swath of bay that it did and
prevented economic hardships for the fisheries that had to be
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closed."
"The Dubai Star spill shed light on the deficiencies of our
current practices. Because it is not required, oil transfers
occurring at anchor in S.F. Bay rarely pre-boom. The Dubai Star
spill highlighted an opportunity for greater preparedness of
personnel and equipment during risky transfers. Our valued beaches
and associated economy is entitled to better protective measures.
Prevention is the key to protecting the environment from any
harm that an oil spill may cause. Pre-booming prior to an oil
transfer can effectively retain a significant amount of oil
under oil spill conditions, providing precautions for maximum
possible containment."
ARGUMENTS IN OPPOSITION
The Department of Fish and Game (DFG) is opposed to the bill
because it feels this bill is unnecessary. DFG points out that
OSPR has recently convened a public meeting with a broad
spectrum of oil-spill response stakeholders in order to discuss
for changes to the existing regulations on oil transfers. DFG
adds, "OSPR is committed to completing this process this year,
culminating with the adoption of regulatory improvements, as
warranted.
The Pacific Merchant Shipping Association (PMSA), in opposition
to the bill, states, "By requiring pre-booming of all transfers
or prohibiting such transfers, the bill will make fuel transfers
unfeasible in certain areas of California where regular high
currents render containment boom unsafe and ineffective." PMSA,
as well as other opponents of the bill, agree with DFG that "the
existing and proposed, strengthened regulations from OSPR, when
properly enforced, provides environmental protection. Scenarios
where pre-booming is not effective or unsafe are better dealt
with through increased preparedness and prevention, and an
immediate and full response in event of a spill."
COMMENTS
When is booming effective? The supporters and opponents of this
bill have different perspective on both 1) the water conditions
which booming can be effective and 2) what defines successful
booming. On the first point, opponents contend that boom looses
effectiveness at currents over 0.7 knots, a condition frequently
exceeded in the San Francisco Bay at Anchorage 9 where currents
exceed 1.0 knots 67% of the time. Supporters counter that
prebooming can occur safely, even in swift currents, and point
to examples such as in the Columbia River where 80% of operators
pre-boom despite currents that exceed 1 knot. Additionally,
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supporters point to more technologically advanced boom used in
Norway that can be pulled in currents at 3-5 knots.
As to what defines successful booming, supporters claim that any
amount of oil that is contained by the boom in a spill is a
success, even if the amount is a small percentage of what was
spilled. Therefore, prebooming is advantageous even in
less-than-ideal booming conditions. Opponents counter that if
conditions are poor for booming, it is better to focus on
preparedness and prevention rather than spend the effort
deploying boom.
Current and proposed OSPR regulations on oil transfers : Existing
regulations (14 CCF 840 - 845.2) require a transfer unit to
either provide 1) prebooming of the water surrounding a
transfer operation or 2) stand-by booming, which is the ability
to deploy at least 600 feet of boom within 30 minutes of
discovering a spill. In both situations, the transfer unit must
have access to an additional 600 feet of boom that can be
deployed within one hour in the event of a spill. Last month,
OSPR held a public meeting to discuss changes to the oil spill
transfer regulations. The proposed changes would restrict the
stand-by booming option to transfer units that have successfully
completed a boom deployment drill.
In a recent conversation with staff, Steve Edinger, the OSPR
administrator, indicated his intention to direct OSPR staff to
stop and restart the current regulation amendment process so
that OSPR can reconsider the possibility of adding a requirement
for prebooming oil transfers. Amending the regulations will
likely take a year or more to complete. While this revised
effort may ultimately make this bill redundant, the author
contends that without this bill, there is no guarantee that
OSPR's proposed regulations will ultimately include prebooming
requirements.
Past attempts to raise the per barrel fee for the OSPAF: SB 849
(Torlakson) Chapter 514, Statutes of 2002, increased the maximum
oil spill fee from $0.04 per barrel set in 1990 to $0.05 per
barrel. According to the California Research Bureau at that
time, the inflation-adjusted value of the $0.04 fee declined by
over 20% since 1990 so that the fee was now only worth slightly
more than $0.03. The Research Bureau also noted that OSPR
responsibilities had increased significantly, noting in
particular the contingency plan requirements for nontank vessels
and review of those plans (where the number of nontank vessels
exceeded tankers by four or five times). Based on these
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increased responsibilities, AB 849 increased the maximum fee to
$0.05 per barrel. Early versions of the bill had proposed to
automatically adjust the maximum fee based on changes to the
Consumer Price Index (CPI), but these provisions were ultimately
removed.
Last session, the Legislature passed AB 2032 (Hancock, 2008),
which would have increased the maximum fee to $0.08. This
increase was proposed in order to raise additional funds for a
potential loan to the General Fund for the 2008-09 budget and to
provide funds to meet the costs of implementing legislation
adopted that year in response to the Cosco Busan incident. The
$0.08 increase represented a CPI adjustment of the existing
$0.05 maximum. AB 2032 was ultimately vetoed by the Governor
claiming that OSPR's fiscal needs did not justify the increase.
Is an increase in the maximum fee to the OSPAF needed? OSPR's
responsibilities have increased since the last fee increase in
1990, most notably because of the legislation in 2008 in
response to the Cosco Busan incident. The requirements in this
bill would also additionally add cost pressures to the OSPAF -
one-time costs to develop new regulations and ongoing costs to
implement the enhanced regulations. The committee may note that
while there is a considerable balance in the OSPAF, the
administrator has been following a multi-year plan to spend down
the balance. The committee may wish to consider whether OSPR's
recent and proposed responsibility increases justify raising the
maximum OSPAF fee.
Should the maximum fee be adjusted according to the CPI? This
bill would allow the OSPR administrator to adjust the maximum
fee to the CPI, but only up to $0.10. It is unclear why an
inflation adjustment should be subject to a ceiling. The
committee may wish to remove the $0.10 limit. [see amendment 1]
Should the nontank vessel fee be increased? The current $2,500
nontank vessel fee was set in 2002. This amount, adjusted by the
CPI, is $3,080 in today's dollars. The committee may wish to
find that this bill's increase to $3,000 is thus consistent with
inflation.
The committee should note that this bill slightly changes the
structure of the nontank vessel fee. Current law requires that
the fee be based on the administrator's costs but should not
exceed the $2,500 maximum. This bill would instead propose to
set the fee exactly at $3,000.
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SUGGESTED AMENDMENTS
AMENDMENT 1
On page 4, line 37, delete "However, the administrator may
increase" and delete from page 4, line 28 through page 5,
line 3, inclusively and insert:
"The administrator may annual adjust the fee for inflation, as
measured by the California Consumer Price Index."
SUPPORT
To previous versions of the bill:
Blue Frontier Campaign
Center for Biological Diversity
Crab Boat Owners Association of San Francisco
Defenders of Wildlife
East Bay Bird Advocates
Environment Defense Center
Friends of the Earth
Natural Resources Defense Council
Ocean Conservancy
Oceana
Pacific Environment
Richmond Shoreline Citizen Response
Surfrider Foundation
Turtle Island Restoration Network
Waterways Restoration Institute
OPPOSITION
To previous versions of the bill:
Department of Fish and Game
Matson Navigation Company
Pacific Merchant Shipping Association
Sailors' Union of the Pacific
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