CG/LA Infrastructure
March 5, 2019
Federal Docket Management System (FDMS)
http://www.regulations.gov
Docket Number: MARAD-2018-0114
Attention: Mr. Roddy C. Bachman, USCG, Roddy.C.Bachman@uscg.mil
Mr. Wade Morefield, MARAD, Wade.Morefield@dot.gov
Subject: MARAD-2018-0114. Request for inclusion in the public record and comments
regarding EPA Proposed Procedures
Dear Sirs:
The Blueprint 2025 coalition recently became aware of the attached correspondence between
the United States Environmental Protection Agency (EPA), Region 6, and the United States
Coast Guard pertaining to the procedures and legal analyses that EPA Region 6 proposes to
follow in its participation in the licensing process for the Texas Gulf Coast Terminals, Inc.
Deepwater Port Project. We believe the regulatory approach described by the EPA Region 6 in
this letter is unsupported by any grant of authority in the Deepwater Port Act, the Clean Air Act
or the outer Continental Shelf Lands Act and is directly contrary to the clearly announced policy
of this Administration as well as our Country’s national interest and the public interests of
adjacent coastal States. For that reason, as well as to provide a minimal level of transparency
and administrative due process, we are requesting that this letter be included in the docket and
made available for public comment.
Regarding the basis for this outreach and by way of background, Blueprint 2025 is a
collaboration among infrastructure professionals, leading infrastructure development
companies and public sector project managers, which advances and supports plans and policies
to restore the U.S. position as the country with the world’s best, most efficient and most
productive infrastructure. Over the past few years, Blueprint 2025 has commented on a
number of executive branch regulatory reform initiatives, presented related congressional
testimony, hosted major leadership conferences addressing infrastructure and related
regulatory reform issues, produced independent studies evaluating the worthiness of, and
existing impediments to, large scale nationally-significant projects, and published detailed
suggestions for improvement of the permitting process. 1 In this regard, Blueprint 2025 takes
1 CGLA Infrastructure/Blueprint 2025 hosts annual events both in Washington, D.C. and in major cities throughout
North America, attended by high-level government officials and top infrastructure/major project professionals to
great, non-partisan interest in assuring that the permitting process being applied to projects of
major domestic and global significance, such as this Deepwater Port Project, will conform to
applicable legal requirements and this Administration’s clearly enunciated policies, which are
forward looking and encourage thorough but expeditious consideration of major projects.
Permitting or licensing processes should never hinder infrastructure development by
duplicative and unnecessary review that falls outside of statutory authority.
The benefits and importance of this and similar Deep Water Port Projects in the Gulf of Mexico
cannot be overstated. This project is one of a number of gulf coast deepwater port
infrastructure initiatives critical to the development of oil and gas infrastructure opportunities
in the region and the nation as a whole. In short, these gulf projects:
Reduce overall VOC emissions by displacing uncontrolled emissions from onshore terminals
loading at levels less than the 100 million bpd threshold, emissions beyond limits of control
technology for large onshore sources and emissions from reverse lightering operations in
the Gulf;
Reduce fuel use and stack emissions from reverse lightering operations;
Further reduce prospects for exceedances of NAAQS and health based limits by moving the
reduced emissions offshore;
Reduce risks of accidents and spills from near shore traffic congestion;
Provide the most cost-effective and safe access to VLCC and ULCC tankers capable of
carrying up to two million barrels per trip and enabling effective competition with exporters
in Russia and the Middle East;
Support tens of thousands of very high quality jobs;
Maintain oil and gas export competitiveness and domestic economic growth by providing
VLCC and ULCC loading capacity estimated to exceed six million barrels per day within the
next five years;
Directly address the need for efficient access to VLCC’s and ULCC’s without the major
dredging required at alternative onshore ports;
Allow the U.S.-based oil and gas industry to compete effectively in a highly competitive
international marketplace.
Blueprint 2025 is concerned that the licensing approach outlined in the above-referenced EPA
correspondence, in a number of respects, appears to be based on both erroneous
interpretations of the applicable law and disregard of Executive Order 1383 that clearly
articulates this Administrations’ intent “to promote clean and safe development of our Nation’s
encourage public/private sector dialogue and to share real-world data with those responsible for approving and
overseeing such development.
vast energy resources, while at the same time avoiding regulatory burdens that unnecessarily
encumber energy production, constrain economic growth, and prevent job creation.”
Addressing Administration policy and Executive Order 1383 first, it is important to note that
Region 6’s seven-page letter references dozens of federal statutes and regulations, more than a
half dozen overlapping federal jurisdictional entities, and a host of proposed new actions it is
pursuing regarding exercise of jurisdictional oversight, yet gives no consideration to the
questions of whether these unilateral actions create an “undue burden,” or unduly “encumber
energy production, constrain economic growth, and prevent job creation.” In fact, nothing in
the overall docket suggests directly, or even indirectly, that the burdens created by a new
independent federal agency role in this project have been considered by any federal regulator
as part of the design of their licensing approach. Furthermore, the Region’s justification for
adding new layers of regulatory burden and considerable expense, does not mention or
recognize the primary role of state law and state regulators in addressing the potential impacts
of the project.2
Just as important, the process outlined in the Region 6 letter deviates, in important respects,
from the procedure mandated by the Deepwater Port Act and, further, relies on erroneous
legal conclusions regarding the scope and applicability of EPA regulatory authority in the
Central and Western Gulf of Mexico. These issues are briefly discussed below:
1. The Region 6 proposed procedures are a departure from the “one window” process
mandated by the DWPA. The DWPA was enacted contemporaneously with the
groundbreaking legislation which continues to serve as the foundation for our Nation’s system
of environmental regulation—NEPA, the Clean Air Act, the Clean Water Act and others. It was
drafted and enacted by the same Members of Congress that passed these landmark
environmental laws and, as a result, is effectively harmonized and coordinated within that body
of law. Since the ports were to be located beyond territorial jurisdiction, the enactors were
completely free to determine the extent to which domestic law would be applicable3 and the
manner in which domestic regulatory authority would apply. They exercised this freedom
through the establishment of a “one window” licensing process in which concerned agencies4
2 In addition to the U.S. Coast Guard, five other federal agencies are copied on the EPA correspondence but no
state law entity has been afforded a copy of the letter which would, in effect, take away their authority to oversee
critical aspects of the project.
3 An exception to this is the Clean Water Act, pursuant to which EPA has jurisdiction to issue permits from sources
subject to U.S. jurisdiction into the Ocean. The NPDES permit for an ocean discharge is the only environmental
permit issued in the licensing process for the one existing port.
4 Agencies having “expertise concerning or jurisdiction over any aspect of the construction or operation of
deepwater ports….” (33 U.S.C. 1504 (e)
were required to participate, rather than conducting their own procedures. At the conclusion
of this process, the participating agencies, rather than issuing their own permits or
authorizations, were required to make recommendations, based on legal considerations within
their areas of responsibility, regarding any conditions necessary to bring the port into
compliance with any applicable laws and regulations. EPA participated in this process and
submitted recommendations that appear to be reflected in the conditions of the only crude oil
deepwater port license that has been issued to date. DWPA licenses, unlike permits under the
Clean Air and Clean Water Acts or other comparable laws, require both continuous monitoring
of environmental effects and continuous technology assessment to assure continuous upgrades
in the “best available technology” standards which the ports are required to have in place. The
DWPA thus provides superior environmental protection while avoiding redundant and
potentially conflicting procedures which could unduly burden the development of critical
energy resources. Both the law and this Administration’s clearly enunciated policy would thus
appear to require rigorous adherence to, rather than departure from, the DWPA’s “one
window” process.
2. EPA has no direct Clean Air Act authority in the Central and Western Gulf and the Clean Air
Act is not the federal law applicable to air emissions from deepwater ports. Contrary to
Region 6’s assertion, neither the DWPA nor OCSLA make the Clean Air Act directly applicable to
deepwater ports but, instead, designate the law of the nearest adjacent coastal state as the
“federal law” applicable to the deepwater port.5 Further, consistent with international treaty
requirements, neither law asserts jurisdiction over the “superjacent airspace” of ports or OCS
structures but limits the clean air related regulatory scope to that which is necessary to protect
ambient air quality in the adjacent coastal areas.6 Thus, the Court of Appeals’ Kleppe7 decision
made clear that, at that time, the Secretary of Interior’s Clean Air Act related authority on the
outer Continental Shelf was exclusive and EPA had no jurisdiction.
The Secretary of Interior’s exclusive jurisdiction regarding air emissions on the OCS continued
until 1990, at which time the Congress, at the instigation of East Coast, Eastern Gulf and West
Coast states, passed section 328 of the Clean Air Act8 which essentially reversed Kleppe for the
East Coast, Eastern Gulf and West Coast by providing EPA with clear authority to establish
regulations and permitting procedures, and otherwise control emissions from “OCS sources” in
those areas. With respect to the Central and Western Gulf, however, Interior’s authority
remains essentially unchanged; it remains the exclusive Clean Air Act authority for OCS
emissions and is to consult with EPA and potentially affected states to coordinate regulation of
5 43 U.S.C.1333 (a) (2); 33 U.S.C. 1518 (b)
6 33 U.S.C. 1501 (b) 1518; 33 U.S.C. 1518; 43 U.S.C. 1333.
777 9 ELR 20661 (9th Cir. 1979).
8 Id
offshore and onshore emissions. EPA’s authority in the Central and Western Gulf is limited to
consultation with the Secretary of Interior in connection with the exercise of the Secretary’s
authority to assure coordination of air control regulation for outer Continental Shelf emissions
and for emissions in adjacent onshore areas.9
This conclusion is given further weight by the Supreme Court’s ruling in RJR Nabisco, Inc. v.
European Community, which held that “Absent clearly expressed congressional intent to the
contrary, federal laws will be construed to have only domestic application.” 10 While Section
328 does establish such a clear intent with respect to the East Coast, Eastern Gulf and West
Coast, its carve out of the Central and Western Gulf clearly enunciates exactly the opposite
intent with respect to that geographic area. The Region 6 assertion of jurisdiction to support its
proposed regulatory approach in the Central and Western Gulf is contrary to applicable law.
3. A deepwater port is not a “new source” as defined in the Clean Water Act.
As noted above, the Clean Water Act, unlike the Clean Air Act, is supported by a clear
expression of intention that the NPDES permit program is extraterritorially applicable to
discharges to the ocean from sources, other than vessels, which are otherwise subject to U.S.
jurisdiction. Thus EPA’s jurisdiction to issue permits for the largely inconsequential point source
discharges into the oceans from deepwater ports is not in question. In its letter, however,
Region 6 takes the position that, because Section 1506 (9) (d) of the DWPA provides that a
deepwater port “shall be considered a ‘new source’ for purposes of the … Federal Pollution
Control Act…” the issuance or reissuance of such permits will always be subject to NEPA. While
this may seem to be an issue of little consequence, it will put this and future EPAs in the
position of deciding, based on environmental factors, whether or not a facility may continue to
operate, unless it can eliminate water discharges to the ocean. The contingency created by this
interpretation, while perhaps remote, could significantly affect the financing of some projects.
Such a result would not be in the national interest nor can it be supported by any reasonable
interpretation of either the DWPA or the Federal Pollution Control Act
At the time the DWPA was enacted, the CWA, in 33 U.S.C. section 1316, defined “new source”
as follows:
The term “new source” means any source, the construction of which is
commenced after the publication of proposed regulations prescribing a standard
of performance under this section which will be applicable to such source, if such
standard is thereafter promulgated in accordance with this section [emphasis
added].
9 42 U.S.C 7627
10 579 U.S. (2016); 136 S. Ct. 2090 (June 20, 2016.)
CG/LA Infrastructure
And provided, in section 33 U.S. C. 1376 that:
Except for …I issuance of a permit under section 1342 of this title for the discharge of
any pollutant by a new source as defined in section 1316 of this title, no action of the
Administrator taken pursuant to this chapter shall be deemed a major Federal action
significantly affecting the quality of the human environment within the meaning of the
National Environmental Policy Act of 1969 [emphasis added].
Obviously, since no standards of performance for deepwater ports were proposed at that time
(nor have they been at any time since), a deepwater port could never have been a “new
source” as defined in the FWPCA, and the issuance of a permit for a port could have never been
deemed a major federal action significantly affecting the quality of the human environment.
The DWPA language suggesting that deepwater ports should be “considered” a new source for
purposes of the FWPCA must be read, at most, as a suggestion to consider adoption of new
source performance standards. EPA, over a period of forty plus years, has consistently taken
the position that water discharges from deepwater ports are not sufficiently significant to merit
the adoption of new source performance standards. In this context, it would clearly be unfair
and contrary to common sense to subject a deepwater port, which is clearly “existing” in every
commonly understood sense of the word, to the consequences of retroactive designation as
“new”. The agency cannot be allowed to leverage a simple expression of congressional concern
into an every five year life or death decision over projects which will cost in the billions. The
distinction between “shall be considered “and “defined as” must be recognized, taken into
account and fully implemented. The idea that somehow the renewal of permits for these
insignificant discharges triggers a need for a facility wide environmental review every five years
is counterproductive and detrimental to both our economy and the environment.
A central tenet of Blueprint 2025’s policy is the recognition that reform of the permitting
process for major infrastructure projects is absolutely essential if the U.S. is to modernize its
infrastructure in time to allow development of the new technologies which will enable us to
keep pace with the modernization programs of our major global competitors.
The deepwater port projects provide case studies for evaluation of the success of national
regulatory reform efforts. We assume that there will be agreement that all stakeholders are
entitled to permitting processes which are efficient, realistic, transparent and consistent, and
also which conform to applicable laws and provide reasonable certainty. Efficiency and fairness
of the federal permitting process are critical for realization of critical Gulf Coast infrastructure
projects and all critical infrastructure projects throughout the United States.
CG/LA Infrastructure
This experience with the DWPA demonstrates that, absent strong policy leadership and a strong
sense of direction, even the most efficient permitting process will have a tendency to lose its
way and fall into disrepair. We strongly urge restoration of the consultative processes which
led to the early successes of the DWPA program and, we would hope, to broader application of
key elements of that process, such as the “one window” approach and firm time limitations,
which made it successful.
We appreciate your consideration of these comments. Our intention is to continue monitoring
this and similar proceedings and to participate as necessary to assure efficiency and fairness.
Thank You.
Best Regards,
Norman F. Anderson
Chief Executive Officer
CG/LA Infrastructure
Founder, Blueprint 2025
ATTACHMENTS: Letter from Mr. Robert D. Lawrence, Senior Policy Advisor, Energy Issues; EPA
Region 6 to Mr. Roddy C. Bachman, USCG regarding EPA Authority Over Construction and
Operation Texas Gulf Terminals Inc. Deepwater Port Act Project
729 15th St NW Suite 600, Washington, DC 20005; Tel: +1 202.776.0990; Email: isaac@cg-la.com
7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
REGION 6
1445 ROSS AVENUE, SUITE 1200
DALLAS, TX 75202-2733
July 26, 2018
Mr. Roddy C. Bachman
U.S. Coast Guard (CG-OES-2)
Vessel and Facilities Operating
2703 Martin Luther King, Jr. Avenue S.E.
Washington, DC 20593-7509
Subject: EPA Authority Over Construction and Operation
Texas Gulf Terminals Inc. Deepwater Port Act Project
Dear Mr. Bachman:
EPA Region 6 received a copy of the deepwater port license application package for Texas Gulf
Terminals Inc. (TOTI) crude oil export terminal on July 13, 2018, and provides these comments
to assist the United States Coast Guard/ Maritime Administration (USCG/ MARAD) and their
contractors as the agencies determine the administrative completeness of the Deepwater Port Act
(DPA) license application package and initiate scoping for the Environmental Impact Statement
(EIS) under the DPA and the National Environmental Policy Act (NEPA). The overall project
will consist of three distinct, but interrelated components: 1) the “offshore” component, 2) the
“inshore” component, and 3) the “onshore” component.
The proposed deepwater port (offshore component) would be located approximately 12.7
nautical miles off the coast of North Padre Island (Kleberg County, Texas) and consist of 14.71
miles of two (2) new parallel 30-inch diameter crude oil pipelines, which terminate at a single
point mooring (SPM) buoy. The SPM buoy system would be positioned in water depths of
approximately 93 feet and consist of a pipeline end manifold, catenary anchor leg mooring
system, and other associated equipment.
The inshore components associated with the proposed project includes 5.74 miles of two (2) new
30-inch diameter crude pipelines and onshore valve station used to connect the onshore project
components to offshore project components. The inshore portions of the proposed pipeline
infrastructure cross the Laguna Madre bay complex, the Gulf Intracoastal Waterway, and extend
across North Padre Island to the mean high tide line located at the interface of North Padre Island
and the Gulf of Mexico. Additionally, the inshore project components include the installation of
an onshore valve station on North Padre Island to allow for the isolation of portions of the
proposed pipeline infrastructure for servicing, maintenance, and inspection operations.
Onshore components associated with the proposed project include the construction and operation
of an onshore storage terminal facility (OSTF), booster station, and approximately 6.36 miles of
two (2) new 30-inch diameter parallel crude pipelines with Nueces and Kleberg counties, Texas.
The OSTF would occupy approximately 150 acres in Nueces County, and would consist of all
necessary infrastructure to receive, store, measure, and transport crude oil through the proposed
Internet Address (URL) • http://www.epa.gov
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