Revision of LNG and LHG Waterfront Facility General Requirements, 29420-29427 [2010-12680]

Agencies

• Coast Guard
• DEPARTMENT OF HOMELAND SECURITY

[Federal Register Volume 75, Number 101 (Wednesday, May 26, 2010)]
[Rules and Regulations]
[Pages 29420-29427]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-12680]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 127

[Docket No. USCG-2007-27022]
RIN 1625-AB13


Revision of LNG and LHG Waterfront Facility General Requirements

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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SUMMARY: In this final rule, the Coast Guard revises the requirements 
for waterfront facilities handling liquefied natural gas (LNG) and 
liquefied hazardous gas (LHG). The revisions bring the regulations up 
to date with industry practices and Coast Guard policy implemented due 
to increased emphasis on security since the events of September 11, 
2001. These revisions harmonize the Coast Guard's regulations for LNG 
with those established by the Federal Energy Regulatory Commission 
(FERC), the agency with exclusive authority to approve or deny an 
application for the siting, construction, expansion, or operation of an 
LNG facility located onshore or within State waters. This rulemaking 
does not affect LNG deepwater ports.

DATES: This final rule is effective June 25, 2010. To the extent this 
rulemaking affects the collection of information in 33 CFR 127.007, we 
will not enforce the revised collection requirements until the 
collection is approved by the Office of Management and Budget (OMB). 
When OMB approves, we will publish notification in the Federal 
Register.

ADDRESSES: Comments and material received from the public, as well as 
documents mentioned in this preamble as being available in the docket, 
are part of docket USCG-2007-27022 and are available for inspection or 
copying at the Docket Management Facility (M-30), U.S. Department of 
Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., 
Monday through Friday, except Federal holidays. You may also find this 
docket on the Internet by going to https://www.regulations.gov, 
inserting USCG-2007-27022 in the ``Keyword'' box, and then clicking 
``Search.''

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule, 
call or e-mail Commander Patrick Clark, CG-5222, U.S. Coast Guard; 
telephone 202-372-1410, e-mail Patrick.W.Clark@uscg.mil. If you have 
questions on viewing the docket, call Renee V. Wright, Program Manager, 
Docket Operations, telephone 202-366-9826.

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Abbreviations
II. Regulatory History
III. Background
    A. Basis and Purpose of the Final Rule
    B. Discussion of FERC Regulations With Regard to LNG
IV. Discussion of Comments and Changes
    A. General Comments
    B. Comments on the Letter of Intent
    C. Comments on Waterway Safety, and the Waterway Suitability 
Assessment
    D. Comments on Frequency of Shipments
    E. Comments on Evaluating the Density and Character of Marine 
Traffic
    F. Comments on the Letter of Recommendation
    G. Comments on Timely Issuance of the Letter of Recommendation
    H. Comments on the Differences Between LNG and LHG
    I. Other Changes
V. 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. Abbreviations

CFR Code of Federal Regulations
COTP Captain of the Port
DHS Department of Homeland Security
FERC Federal Energy Regulatory Commission
FR Federal Register
LHG Liquefied hazardous gas
LNG Liquefied natural gas
LOI Letter of Intent
LOR Letter of Recommendation
NEPA National Environmental Policy Act of 1969
NTTAA National Technology Transfer and Advancement Act
NPRM Notice of proposed rulemaking
NVIC Navigation and Vessel Inspection Circular
OMB Office of Management and Budget
U.S.C. United States Code
WSA Waterway Suitability Assessment

II. Regulatory History

    On April 28, 2009, we published in the Federal Register a notice of 
proposed rulemaking entitled ``Revision of LNG and LHG Waterfront 
Facility General Requirements'' (74 FR 19159). We received four letters 
commenting on the proposed rule, containing a total of 38 comments. No 
public meeting was requested and none was held.

III. Background

A. Basis and Purpose of the Final Rule

    Over the last decade, the worldwide production and transportation 
of liquefied natural gas (LNG) has increased substantially. Currently, 
the United States consumes about 25 percent of the world's annual 
natural gas production. Over the next 20 years, U.S. natural gas 
consumption is projected to increase. Should domestic gas production 
not meet this demand, increased marine LNG imports may be needed to 
help resolve this likely shortfall. Currently, there are nine 
waterfront LNG facilities in the United States: eight are import 
facilities, and one is an export facility. To meet rising demand, the 
energy industry has submitted dozens of proposals to build LNG import 
facilities along our coasts, and an unspecified number of proposals are 
in the early planning stages.
    We have not seen, and do not expect, a similar increase in the 
production and transportation of liquefied hazardous gas (LHG). 
Although LNG and LHG facilities and the cargoes they handle are 
different in nature, we believe the vessels that transport these 
cargoes pose similar risks to the waterway environment and the area 
surrounding the marine transfer area of the facility when transfer 
operations are underway.
    Safety and security of our ports and waterways have become 
paramount concerns since the events of September 11, 2001. Currently, 
the owner or operator intending to construct, modify, or reactivate an 
LNG or LHG facility must submit a Letter of Intent (LOI) to the Coast 
Guard. Information obtained in the LOI enables the Coast Guard to 
provide specific input, in a Letter of Recommendation (LOR), to an 
agency having jurisdiction for siting, construction, and operation. The 
LOR serves as the Coast Guard's recommendation to the jurisdictional 
agency as to the suitability of the waterway for LNG or LHG marine 
traffic on the waterway associated with the

[[Page 29421]]

proposed facility or modification to an existing facility.
    In the case of LNG waterfront facilities regulated by FERC, the LOI 
has been augmented by a Waterway Suitability Assessment (WSA). The WSA 
is an applicant-prepared risk-based assessment designed to document and 
address all safety and security concerns related to the movement of LNG 
for a particular U.S. port or waterway. As discussed below, since 2005, 
FERC regulations have required prospective applicants for FERC 
authorization to site, construct, and operate LNG facilities to submit 
WSAs to the Coast Guard. The Coast Guard's Office of Operating and 
Environmental Standards (CG-5222) maintains guidance on preparation and 
submission of WSAs to the Coast Guard. Contact details are located 
under the section heading FOR FURTHER INFORMATION CONTACT.
    In April 2009, the Coast Guard proposed a rule that would establish 
the WSA requirement in Coast Guard regulations, better aligning the 
regulations of the Coast Guard and FERC with regard to LNG. Although 
FERC generally does not regulate LHG facilities, the Coast Guard 
proposed to establish the WSA requirement for both LNG and LHG 
facilities because of the similarities between those cargoes.

B. Discussion of FERC Regulations With Regard to LNG

    FERC regulates LNG import facilities located onshore or in State 
waters, but generally does not regulate facilities receiving marine 
deliveries of LHG. This section provides background information 
specific to FERC-regulated LNG facilities. The Coast Guard provided 
this information in the NPRM; we repeat it here for the convenience of 
the reader.
    On October 18, 2005, FERC published a final rule in the Federal 
Register (70 FR 60426) implementing the Energy Policy Act of 2005 and 
creating procedures for the review of LNG terminals and other natural 
gas facilities. The FERC final rule amended 18 CFR parts 153 and 157 by 
requiring LNG facility owners and operators to submit WSAs to the Coast 
Guard as part of the FERC pre-filing process. Although FERC 
regulations, not Coast Guard regulations, require the WSA, the Coast 
Guard considers the applicant's WSA in developing its LOR.
    FERC requires applicants seeking FERC's authorization to site, 
construct, and operate new LNG facilities, and some applicants seeking 
authority to make modifications to an existing or approved LNG 
facility, to make an initial filing to FERC and, concurrently, submit 
an LOI and a Preliminary WSA to the Coast Guard. After the submission 
of the initial filing, the Director of FERC's Office of Energy Projects 
(Director) determines whether the applicant may begin the pre-filing 
process. If the applicant meets the requirements to begin the pre-
filing process, the Director will issue a notice that begins the pre-
filing process.
    During the pre-filing process, the applicant must satisfy several 
requirements, including the requirement in 18 CFR 157.21(f)(13) that an 
applicant ``[c]ertify that a Follow-on WSA will be submitted to the 
U.S. Coast Guard no later than the filing of an application with the 
Commission (for LNG terminal facilities and modifications thereto, if 
appropriate). The applicant shall certify that the U.S. Coast Guard has 
indicated that a Follow-On WSA is not required, if appropriate.''
    The applicant must wait at least 180 days after the commencement of 
the FERC pre-filing process before starting the FERC filing process. 
Thus, the FERC regulations result in the LOI being submitted at least 
180 days before the applicant files an application for authorization to 
construct the facility with FERC, even though the Coast Guard 
regulations for new and modified facilities only require the LOI to be 
submitted at least 60 days before construction begins.

IV. Discussion of Comments and Changes

    The Coast Guard received letters from four commenters, containing a 
total of 38 comments on the NPRM. All comments received are available 
in the public docket for this rulemaking, where indicated under 
ADDRESSES. Below, we respond to all comments received, and describe 
changes made in response to specific comments.

A. General Comments

    The Coast Guard received multiple comments expressing support for 
the proposed rule. In general, comments supported clarification of the 
existing regulatory regime for LNG and LHG marine transfer facilities. 
Specifically, the Coast Guard received one comment expressing general 
support for the proposed rule, one comment urging the Coast Guard to 
implement the proposed revisions of its regulations, one comment 
indicating the commenter ``strongly supports'' the Coast Guard's 
efforts to reconcile its regulations with FERC regulations, and one 
comment acknowledging the ``importance of, and the Coast Guard's desire 
for, a coordinated, clearly-defined review process'' resulting in a 
recommendation to the permitting authority. Additional supportive 
comments are discussed below. The Coast Guard appreciates these 
supportive comments.
    Some commenters made reference to the role the LOI, WSA, and LOR 
may play in other agencies' environmental review of LNG or LHG 
projects. The Coast Guard understands that a permitting agency may use 
a variety of documents, including the LOI, WSA, or LOR, to aid in the 
development of its environmental analysis. These documents may contain 
environmental data: for example, Sec.  127.007 requires the LOI to 
include charts identifying environmentally sensitive areas. 
Nonetheless, maritime safety and security concerns, rather than 
environmental review, are the primary drivers in creation of the LOI, 
WSA, and LOR, and the Coast Guard encourages Federal, State, and local 
agencies to view these documents in that context.
    Finally, one commenter noted that the NPRM did not expressly state 
that the revised regulations would become effective on a prospective 
basis. For clarity, the Coast Guard confirms that the revised 
regulations will become effective upon the date indicated in the DATES 
section above.

B. Comments on the Letter of Intent

    Two commenters made comments regarding Sec.  127.007(a), which 
discusses LOIs.
    First, one commenter noted slightly different language between 
Sec. Sec.  127.007(a) and (e), in that the proposed Sec.  127.007(a) 
required an LOI for construction expanding or modifying terminal 
(facility) operations, while Sec.  127.007(e) required a WSA for any 
new construction. Although the Coast Guard did not intend any 
substantive difference in the wording of these two provisions, we agree 
that the differing language could result in confusion. The commenter 
recommended that Sec.  127.007(e) read the same as Sec.  127.007(a), to 
make this point clearer. The Coast Guard agrees that the two provisions 
should be consistent and has revised the proposed Sec. Sec.  127.007(a) 
and (e) for clarity and consistency. The text of the final rule 
reflects this change.
    Second, the same commenter recommended that Sec.  127.007(a) be 
changed to trigger the LOI requirement when construction ``would change 
the conditions reported in the last WSA'' or, in the alternative, when 
the construction ``also requires filing a permit request with the 
Federal Energy Regulatory Commission (FERC).'' Although the Coast Guard 
finds these

[[Page 29422]]

recommendations too narrow, it concurs with the broader point that the 
LOI requirement is triggered when an applicant files with a permitting 
agency having jurisdiction. Section 127.007(a) applies to facilities 
not regulated by FERC--for example, LHG facilities--and facilities that 
do not yet have a WSA. For that reason, the Coast Guard declines to 
adopt the commenter's recommendations as written. As stated in the 
proposed regulatory text, however, the deadline for submitting the LOI 
is based on the owner or operator's decision to file with the 
permitting agency having jurisdiction. The Coast Guard does not require 
an LOI if the owner or operator does not file with a permitting agency 
having jurisdiction. In the unlikely event that no permitting agency 
has jurisdiction or no filing is required, the Coast Guard will not 
require an LOI or issue an LOR; however, the COTP retains his or her 
authority to ensure the maritime safety and security of the waterway.
    The commenter noted that Sec.  127.007 would require an LOI 1 year 
prior to the terminal (facility) improving its moorings by increasing 
hook or bollard capacity, modifying a gangway to improve access, or 
adding mooring monitoring systems. The Coast Guard concurs with this 
characterization if such expansion or modification of the marine 
transfer area of the facility requires the owner or operator to file 
with the permitting agency having jurisdiction over the facility and 
the expansion or modification results in an increase in the size and/or 
frequency of the LNG or LHG marine traffic on the waterway associated 
with the facility. Accordingly, the Coast Guard has modified the text 
of Sec. Sec.  127.007(a) and (e) to specify that an LOI is required for 
construction, expansion, or modification that would increase the size 
and/or frequency of the LNG or LHG marine traffic on the waterway 
associated with the proposed facility or modification to an existing 
facility.
    The commenter implied that it is undesirable to require an LOI 1 
year prior to the type of improvements listed. However, such advance 
notice is necessary to the Coast Guard's maritime safety and security 
missions. If an owner or operator submits an LOI for a modification 
that does not require 1 year to review, the Coast Guard expects to 
issue the LOR within a shorter timeframe.
    Separately, a different commenter stated that requiring an LOI 1 
year prior to construction is not a FERC requirement and therefore 
``appears inconsistent with the goals of harmonizing'' and aligning 
Coast Guard regulations with FERC regulations. Aligning Coast Guard 
regulations with FERC regulations is one goal of this rulemaking; the 
1-year period between LOI and construction is designed to work with the 
FERC pre-filing process in which the LOI must be submitted at least 180 
days before the applicant files its application for authorization to 
construct the facility with FERC. However, Coast Guard regulations must 
be broader and encompass more situations than FERC's regulations, in 
part because they apply to facilities FERC does not regulate. The Coast 
Guard requires the LOI at least 1 year prior to construction in order 
to allow adequate time for risk assessment.
    Finally, to improve clarity, the Coast Guard added language to 
Sec.  127.007(c)(2) specifying that the LOI must include the name, 
address, and telephone number of the Federal, State, or local agency 
having jurisdiction ``for siting, construction, and operation.''

C. Comments on Waterway Safety, and the Waterway Suitability Assessment

    Two commenters commented on issues involving the WSA.
    One commenter suggested Sec.  127.007(g) be changed to require that 
WSAs contain a detailed analysis of the elements listed in Sec. Sec.  
127.007(f)(2) and 127.009(e) of this part. The commenter expressed 
concern that the proposed regulation required the Follow-on WSA to 
contain a detailed analysis of the elements the Coast Guard will 
consider in issuing the LOR but, as proposed, did not require a 
detailed analysis of the elements listed in the Preliminary WSA. The 
commenter correctly pointed out that this omission conflicted with our 
explanation of the proposed rule in the preamble to the NPRM, in which 
we indicated that the ``Follow-on WSA would contain a detailed analysis 
of the topics in the Preliminary WSA, and a detailed analysis of any 
other safety or security impacts to the port and waterway identified by 
the Captain of the Port.'' The Coast Guard has modified the text of the 
final rule to include Sec.  127.007(f)(2) as well as Sec. Sec.  
127.009(d) and (e).
    A different commenter made general comments about the waterway 
suitability assessment process. This commenter said risk to the 
waterway must be adequately assessed, and that ``leaving such an 
important review as voluntary'' would be inadequate. The Coast Guard 
concurs that assessment of the waterway is vital. The owner or 
operator's WSA and the Coast Guard's review of that document are key 
elements of the risk management process. Coast Guard review ensures 
that the owner or operator has adequately assessed potential risks 
associated with vessel transit in the context of waterway safety and 
security as part of the Coast Guard's cooperation with the permitting 
agency. Because of the importance of this process, FERC regulations 
have made WSAs mandatory since 2005 for LNG facilities located onshore 
and in State waters. This rule will align Coast Guard regulations with 
existing FERC regulations for the mandatory assessment of the waterway, 
and will extend waterway suitability assessment measures to LHG 
facilities as well.
    Additionally, the commenter sought ``any data we can get from a 
Waterway Suitability Assessment'' and, specifically, the ``proponent's 
chart identifying what they consider environmentally sensitive.'' The 
Coast Guard strives to fully involve all port-level stakeholders in the 
Coast Guard's review of an applicant's WSA. When feasible, those 
stakeholders include those local and State entities with jurisdiction 
over a proposed facility. This rulemaking does not alter that process. 
Similarly, this rulemaking does not alter the availability of data 
submitted to the Coast Guard in the owner or operator's WSA.

D. Comments on Frequency of Shipments

    One commenter submitted comments regarding the requirement that 
each LOI contain information on the frequency of LNG or LHG shipments 
to or from the facility. Specifically, the commenter described the 
requirement as ``unprecedented in regulation'' and ``impossible to 
reliably assess.'' The commenter stated that the ``frequency and number 
of vessels has no bearing on'' waterway suitability, and recommended 
rewording Sec.  127.007(c)(6) to exclude mention of the frequency of 
shipments. The Coast Guard disagrees with these comments and 
recommendation.
    The requirement that the LOI contain ``the frequency of LNG 
shipments to or from the facility'' was present in the 1988 final rule 
that created Sec.  127.007, and has remained in place since that date 
(53 FR 3370). When the requirement was extended to LHG in 1995, the 
preamble to that final rule, published in the Federal Register on 
August 3, 1995, stated that the ``purpose of the `Letter of Intent' is 
to give the [Captain of the Port] general notice of both the type and 
estimated number of LHG vessels that may call at the facility and the 
size of shipments. This information can easily be obtained from the 
facility-design specifications'' (60 FR

[[Page 29423]]

39788). Every LOI provided by an owner or operator to the Coast Guard 
has included information on the frequency of shipments. With the 
exception of re-numbering the paragraph and re-ordering the terms 
``LNG'' and ``LHG,'' the NPRM did not propose changes to this 
requirement, and the Coast Guard intends no change to the current 
methods of compliance.
    For all these reasons, the Coast Guard does not believe that the 
frequency of shipments is impossible to assess. As discussed in more 
detail below, the Coast Guard's mission of public stewardship requires 
that we consider activity in the waterway, and the impact of LNG and 
LHG vessel traffic, when evaluating waterway suitability. Therefore, 
the Coast Guard believes it necessary to include this information in 
the LOI.

E. Comments on Evaluating the Density and Character of Marine Traffic

    One commenter submitted several comments on whether the Coast Guard 
should consider the density and character of marine traffic in a 
waterway when evaluating the suitability of the waterway for LNG or LHG 
vessel transit. Specifically, the commenter recommended deleting Sec.  
127.009(b) because the commenter feels that considering other marine 
traffic favors existing waterway uses to the detriment of new or 
expanding waterway uses not subject to a waterway suitability 
assessment requirement, and ``puts the Coast Guard in a position of 
determining which waterway user should have usage rights and which 
should not.''
    Contrary to the commenter's statement that these are ``Commerce 
issues beyond the intended purpose of the Coast Guard,'' the Coast 
Guard engages daily in managing the safe and secure movement of 
vessels, particularly vessels in interstate commerce, and in balancing 
the needs of many different waterway users. To clarify, however, the 
LOR does not ``determine which waterway user should have usage 
rights''; rather, the LOR is the Coast Guard's recommendation to the 
jurisdictional agency as to the suitability of the waterway for LNG or 
LHG marine traffic.
    The commenter notes that port management plans and safety and 
security zones are tools the Coast Guard uses to manage competing 
waterway priorities; other tools include notices of arrival and 
departure, regulated navigation areas, navigational ``rules of the 
road,'' and COTP orders. To take the latter example, under the 
authority of the Ports and Waterway Safety Act or the Maritime 
Transportation Security Act of 2002, the Coast Guard COTP may order any 
vessel, whether a recreational craft or an LNG vessel, to make way for 
another when necessary for waterway safety and security. Such plans, 
zones, and orders take place pursuant to their own administrative 
processes, separate from the waterway suitability assessment or LOR. 
The LOR, by contrast, serves as the Coast Guard's recommendation to the 
agency having jurisdiction over siting, construction, and/or operation 
on whether the Coast Guard considers the waterway associated with a 
proposed facility or modification to an existing facility suitable for 
the LNG or LHG marine traffic. Additionally, the LOR often contains 
information helpful to the jurisdictional agencies for improving safety 
and security of the waterway for LNG or LHG marine traffic.
    Input based solely on whether the vessel could physically transit 
the waterway would not serve the Coast Guard's missions or the needs of 
the agencies to which the LOR is issued, and would needlessly withhold 
the Coast Guard's expertise in waterway management. The Coast Guard's 
evaluation of waterway suitability necessarily includes evaluation of 
maritime safety and security risks posed by and to other vessels. 
Therefore, the Coast Guard declines the commenter's recommendation that 
we delete Sec.  127.009(b).

F. Comments on the Letter of Recommendation

    First, to improve clarity, the Coast Guard added language to Sec.  
127.009 specifying that the LOR is issued to the Federal, State, or 
local agency having jurisdiction ``for siting, construction, and 
operation.''
    In addition, one commenter made comments regarding the LOR.
    Specifically, the commenter urged the Coast Guard to ``provide for 
contemporaneous notice'' of the LOR to the owner or operator. The Coast 
Guard had intended that owners or operators receive a copy of the LOR, 
and we agree that the regulation should reflect that practice. 
Accordingly, the final rule specifies that the owner or operator will 
receive a copy of the LOR at the same time the Coast Guard sends the 
LOR to the government agency having jurisdiction for siting, 
construction, and operation.
    The same commenter ``believes that the applicant should have an 
opportunity to seek clarification or reconsideration of provisions 
contained in the LOR at the time of its issuance to other 
jurisdictional agencies.'' Recommendations expressed in the LOR 
represent the Coast Guard's professional input and are provided in the 
context of the Federal, State, or local jurisdictional agency's 
proceedings, which provide for participation and public comments. 
Therefore, additional information may be submitted by the owner or 
operator, the public, or the Coast Guard, to the Federal, State, or 
local agency with jurisdiction. To the extent the comment addresses a 
process for clarifying or reconsidering the recommendation contained in 
a particular LOR, such a process is outside the scope of this 
rulemaking. This rule aligns FERC and Coast Guard regulations with 
regard to the timing and content of submissions under 33 CFR 127.007, 
and clarifies the recipients of the LOR under Sec.  127.009.

G. Comments on Timely Issuance of the Letter of Recommendation

    One commenter recommended modifying Sec.  127.009 to include a 
timeline for Coast Guard review of the WSA and issuance of the LOR. The 
Coast Guard shares the commenter's desire for timely review of LOIs and 
WSAs, and strives to issue LORs promptly. Current policy states that 
the COTP should issue the LOR before the permitting agency completes 
its environmental review. However, the Coast Guard does not intend to 
restrict the COTP in his or her review, especially given the 
possibility of changing circumstances, and does not intend to establish 
a right to a response in a specified time.

H. Comments on the Differences Between LNG and LHG

    One commenter submitted comments on the differences between LNG and 
LHG. The commenter did not object to applying similar regulatory 
requirements to both LNG and LHG vessels, but asked the Coast Guard to 
``recognize and maintain the important factual distinctions between LNG 
and LHG.'' Specifically, the commenter urged that ``regulatory 
requirements that may be appropriate to the regulation of LHG may not 
be appropriate or necessary for transfer operations concerning LNG.''
    The Coast Guard understands the commenter's concern. We recognize 
that the chemical properties of LNG differ from those of LHG, and that 
the risk of transporting these materials does vary. We also 
acknowledge, as we have done in the past, the well-documented safety 
record associated with LNG vessel transport. At this time, the Coast 
Guard finds no reason to apply different waterway suitability 
methodologies to these materials. However, the results of

[[Page 29424]]

a waterway suitability assessment are always specific to the commodity 
and waterway being evaluated.

I. Other Changes

    33 CFR 127.005 defines a facility as ``either a waterfront facility 
handling LHG or a waterfront facility handling LNG.'' These terms are 
clearly defined to mean any structure capable of being used to transfer 
LNG or LHG, in bulk, to or from a vessel. For consistency, and to avoid 
redundancy, the Coast Guard has modified the text of the final rule to 
use the term ``facility'' instead of ``waterfront facility.''

V. Regulatory Analyses

    We developed this rule after considering numerous statutes and 
executive orders related to rulemaking. Below we summarize our analyses 
based on 13 of these statutes or executive orders.

A. Regulatory Planning and Review

    This rule is not a ``significant regulatory action'' under section 
3(f) of Executive Order 12866, Regulatory Planning and Review, and does 
not require an assessment of potential costs and benefits under section 
6(a)(3) of that Order. Accordingly, OMB has not reviewed it under that 
Order.
    Public comments on the NPRM are summarized in Part IV of this 
publication. We received no public comments that would alter our 
assessment of the impacts discussed in the NPRM.
    In this rule, the Coast Guard seeks to revise the requirements for 
waterfront facilities handling LNG or LHG. For LNG waterfront 
facilities, this rulemaking aligns the Coast Guard's submission 
deadlines with those of FERC. This rulemaking aligns the Coast Guard's 
submission deadlines for LHG waterfront facilities with those of LNG 
waterfront facilities. The Coast Guard believes it is necessary to 
require a WSA for both types of facilities and to provide consistency 
with FERC regulations regarding LNG facilities. This rule also provides 
consistency for other Coast Guard regulations that address both LNG and 
LHG facilities.
    As noted above, the LOI and WSA are not new requirements for LNG 
facilities. Starting in 2005, FERC regulations required that LNG 
facility owners and or operators submit the LOI earlier than required 
by the Coast Guard regulations, and submit a Preliminary and Follow-on 
WSA to the Coast Guard. The procedure for the owner or operator to 
submit a WSA to the Coast Guard is not new for the LNG industry because 
LNG facility owners and operators have been submitting WSAs to the 
Coast Guard since 2005. As of December 2009, we have received 19 WSAs 
for LNG waterfront facilities with only one submittal since July 2008.
    We expect that new waterfront LNG facilities that become 
operational in the future will not incur additional costs over and 
above existing waterfront LNG facilities as a result of this rule, 
because the LNG industry has been conducting WSAs as a common industry 
practice. We also expect existing LNG facilities to continue to operate 
according to industry standards and similarly to not incur additional 
regulatory costs. The rule eliminates industry confusion as the Coast 
Guard aligns its regulations with those of FERC.
    As noted above, the submission of an LOI is not a new requirement 
for LHG facilities. However, the submission of a WSA for LHG facilities 
is a new requirement, but will apply only to new LHG facilities or 
existing facilities that seek to expand or modify operations that 
result in an increase in the size and/or frequency of LHG marine 
traffic on the waterway associated with a proposed facility or 
modification to an existing facility. Only one LHG facility has 
submitted a proposal to the Coast Guard to expand operations; this 
proposal currently is under review with regulatory authorities pursuant 
to existing regulations. In the future, the Coast Guard expects only 
one to two new or existing LHG facilities per year may become 
operational or may seek to expand or modify maritime operations.
    Additionally, the Coast Guard contacted several industry 
representatives and obtained cost estimates for completing a WSA. The 
estimates varied greatly and are a function of the waterway environment 
and the geographic location and uniqueness of each facility. Cost 
estimates were between $80,000 and $1.2 million per WSA. We believe 
that these costs will have minimal effect on an LHG facility owner or 
operator's decision to expand operations.
    Finally, this rule benefits the economy by ensuring the proposed 
waterway is suitable for the safe and secure navigation of LNG or LHG 
vessels and the transfer of these cargoes.
    The collection of information burden associated with this rule is 
discussed in section V.D., below.

B. Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have 
considered whether this 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.
    In the NPRM, we certified under 5 U.S.C. 605(b) that the proposed 
rule would not have a significant economic impact on a substantial 
number of small entities. We received no public comments that would 
alter our certification in the NPRM. We have found no additional data 
or information that would change our findings in the NPRM.
    Large corporations own the nine existing waterfront LNG facilities 
and we expect this type of ownership to continue in the future. This 
type of ownership also exists for the approximately 159 LHG facilities 
operating in the United States. Therefore, the Coast Guard certifies 
under 5 U.S.C. 605(b) that this rule will not have a significant 
economic impact on a substantial number of small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small 
entities in understanding the rule so that they could better evaluate 
its effects on them and participate in the rulemaking. The Coast Guard 
will not retaliate against small entities that question or complain 
about this rule or any policy or action of the Coast Guard.
    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 Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

D. Collection of Information

    This rule will call for the collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5 
CFR 1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other, similar 
actions. The title and description of the information collections, a 
description of those who must collect the information, and an estimate 
of the total annual burden follow. The estimate covers the

[[Page 29425]]

time for reviewing instructions, searching existing sources of data, 
gathering and maintaining the data needed, and completing and reviewing 
the collection.
    This rule modifies one existing OMB-approved collection, 1625-0049. 
The summary of the revised collection follows:
    Title: Waterfront Facilities Handling Liquefied Natural Gas (LNG) 
and Liquefied Hazardous Gas (LHG).
    OMB Control No.: 1625-0049.
    Summary of the Collection of Information: The Coast Guard requires 
the submittal of a Letter of Intent (LOI) for LNG and LHG facilities 
that plan new construction or intend to expand existing operations to 
alert the Coast Guard of transfers of LNG or LHG, in bulk. In addition, 
a waterway suitability assessment will be required for a facility that 
intends new construction, expansion or modification of an existing 
facility, which results in an increase in the size and/or frequency of 
LNG or LHG marine traffic on the associated waterway.
    Need for Information: The LOI is needed to alert the cognizant 
Coast Guard Captain of the Port (COTP) that a facility plans to conduct 
transfers of LNG or LHG, in bulk. It also provides a point of contact 
at the facility. Once the Coast Guard receives the letter, the COTP can 
direct the necessary enforcement activity to ensure that the operator 
complies with all of the requirements in 33 CFR part 127. The LOI also 
provides some of the information used by the COTP to determine the 
suitability of the waterway associated with a proposed facility or 
modification to an existing facility for LNG or LHG marine traffic. 
Changes to the information in the LOI are required to be submitted 
whenever they occur.
    Use of Information: This information is required to ensure COTPs 
learn of the opening or reopening of a facility handling LNG or LHG far 
enough in advance to allocate resources and to plan enforcement 
strategies. COTPs will also have the information necessary to properly 
evaluate the suitability of a waterway for vessels carrying LNG or LHG.
    Description of the Respondents: Respondents are the facilities 
themselves.
    Number of Respondents: The existing OMB-approved number of 
respondents is 107. Based on our data, this rule will increase that 
number by 61 respondents to a total of 168 respondents.
    Frequency of Response: The existing OMB-approved number of 
responses is 3,059 annually. This rule will increase that number by 
1,936. The total number of responses will be 4,995.
    Burden of Response: The existing OMB-approved burden of response is 
the same for the rule. We have maintained our estimates of the 
frequency of response for each item in the collection based on industry 
information, and we have added information regarding a WSA.
    Estimate of Total Annual Burden: The existing OMB-approved total 
annual burden is 2,838 hours. This rule will increase that number by 
6,666 hours, which includes 4,928 hours for the addition of a WSA to 
the collection of information, and 1,738 hours to account for a change 
in the number of respondents. The estimated total annual burden will be 
9,504 hours.
    As required by the Paperwork Reduction Act of 1995 (44 U.S.C. 
3507(d)), we have submitted a copy of this rule to OMB for its review 
of the collection of information. OMB has not yet completed its review 
of this collection. Therefore, the Coast Guard will not enforce the 
revisions this rule makes to information collection requirements at 33 
CFR 127.007 until the collection is approved by OMB. We will publish a 
document in the Federal Register informing the public of OMB's decision 
to approve, modify, or disapprove the collection.
    You are not required to respond to a collection of information 
unless it displays a currently valid OMB control number.

E. Federalism

    A rule has implications for federalism under Executive Order 13132, 
Federalism, if it has a substantial direct effect on State or local 
governments and would either preempt State law or impose a substantial 
direct cost of compliance on them. We have analyzed this rule under 
that Order and have determined that it does not have implications for 
federalism.

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 $100,000,000 (adjusted for 
inflation) or more in any 1 year. Though this rule will not result in 
such an expenditure, we do discuss the effects of this rule elsewhere 
in this preamble.

G. Taking of Private Property

    This rule will 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 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 rule under Executive Order 13045, Protection 
of Children from Environmental Health Risks and Safety Risks. This rule 
is not an economically significant rule and does not create an 
environmental risk to health or risk to safety that may 
disproportionately affect children.

J. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order 
13175, Consultation and Coordination with Indian Tribal Governments, 
because it does 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 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. The Administrator of the Office of Information and 
Regulatory Affairs has not designated it as a significant energy 
action. Therefore, it does not require a Statement of Energy Effects 
under Executive Order 13211.

L. Technical Standards

    The National Technology Transfer and Advancement Act (NTTAA) (15 
U.S.C. 272 note) directs agencies to use voluntary consensus standards 
in their regulatory activities unless the agency provides Congress, 
through the Office of Management and Budget, with an explanation of why 
using these standards would be inconsistent with applicable law or 
otherwise impractical. Voluntary consensus standards are

[[Page 29426]]

technical standards (e.g., specifications of materials, performance, 
design, or operation; test methods; sampling procedures; and related 
management systems practices) that are developed or adopted by 
voluntary consensus standards bodies.
    This rule does not use technical standards. Therefore, we did not 
consider the use of voluntary consensus standards.

M. Environment

    We have analyzed this rule under Department of Homeland Security 
Management Directive 023-01 and Commandant Instruction M16475.lD, which 
guide the Coast Guard in complying with the National Environmental 
Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have concluded 
that this action is one of a category of actions which do not 
individually or cumulatively have a significant effect on the human 
environment. This rule is categorically excluded under section 2.B.2, 
figure 2-1, paragraph (34)(a) of the Instruction. This rule involves 
regulations which are editorial or procedural, such as those updating 
addresses or establishing application procedures. An environmental 
analysis checklist and a categorical exclusion determination are 
available in the docket where indicated under ADDRESSES.

List of Subjects in 33 CFR Part 127

    Fire prevention, Harbors, Hazardous substances, Natural gas, 
Reporting and recordkeeping requirements, and Security measures.

0
For the reasons discussed in the preamble, the Coast Guard amends 33 
CFR part 127 as follows:

PART 127--WATERFRONT FACILITIES HANDLING LIQUEFIED NATURAL GAS AND 
LIQUEFIED HAZARDOUS GAS

0
1. Revise the authority citation for Part 127 to read as follows:

    Authority: 33 U.S.C. 1231; 46 U.S.C. Chapter 701; Department of 
Homeland Security Delegation No. 0170.1.


Sec.  127.001  [Amended]

0
2. Amend Sec.  127.001:
0
A. In paragraph (c), by removing the words ``Sections 127.007(c), (d), 
and (e)'' and adding in their place the words ``Sections 127.007(b), 
(c), and (d)''.
0
B. In paragraph (e), by removing the words ``Sections 127.007(c), (d), 
and (e)'' and adding in their place the words ``Sections 127.007(b), 
(c), and (d)''.
0
3. Revise Sec.  127.007 to read as follows:


Sec.  127.007  Letter of intent and waterway suitability assessment.

    (a) An owner or operator intending to build a new facility handling 
LNG or LHG, or an owner or operator planning new construction to expand 
or modify marine terminal operations in an existing facility handling 
LNG or LHG, where the construction, expansion, or modification would 
result in an increase in the size and/or frequency of LNG or LHG marine 
traffic on the waterway associated with a proposed facility or 
modification to an existing facility, must submit a Letter of Intent 
(LOI) to the Captain of the Port (COTP) of the zone in which the 
facility is or will be located. The LOI must meet the requirements in 
paragraph (c) of this section.
    (1) The owner or operator of an LNG facility must submit the LOI to 
the COTP no later than the date that the owner or operator files a pre-
filing request with the Federal Energy Regulatory Commission (FERC) 
under 18 CFR parts 153 and 157, but, in all cases, at least 1 year 
prior to the start of construction.
    (2) The owner or operator of an LHG facility must submit the LOI to 
the COTP no later than the date that the owner or operator files with 
the Federal or State agency having jurisdiction, but, in all cases, at 
least 1 year prior to the start of construction.
    (b) An owner or operator intending to reactivate an inactive 
existing facility must submit an LOI that meets paragraph (c) of this 
section to the COTP of the zone in which the facility is located.
    (1) The owner or operator of an LNG facility must submit the LOI to 
the COTP no later than the date the owner or operator files a pre-
filing request with FERC under 18 CFR parts 153 and 157, but, in all 
cases, at least 1 year prior to the start of LNG transfer operations.
    (2) The owner or operator of an LHG facility must submit the LOI to 
the COTP no later than the date the owner or operator files with the 
Federal or State agency having jurisdiction, but, in all cases, at 
least 1 year prior to the start of LHG transfer operations.
    (c) Each LOI must contain--
    (1) The name, address, and telephone number of the owner and 
operator;
    (2) The name, address, and telephone number of the Federal, State, 
or local agency having jurisdiction for siting, construction, and 
operation;
    (3) The name, address, and telephone number of the facility;
    (4) The physical location of the facility;
    (5) A description of the facility;
    (6) The LNG or LHG vessels' characteristics and the frequency of 
LNG or LHG shipments to or from the facility; and
    (7) Charts showing waterway channels and identifying commercial, 
industrial, environmentally sensitive, and residential areas in and 
adjacent to the waterway used by the LNG or LHG vessels en route to the 
facility, within at least 25 kilometers (15.5 miles) of the facility.
    (d) The owner or operator who submits an LOI under paragraphs (a) 
or (b) of this section must notify the COTP in writing within 15 days 
of any of the following:
    (1) There is any change in the information submitted under 
paragraphs (c)(1) through (c)(7) of this section; or
    (2) No LNG or LHG transfer operations are scheduled within the next 
12 months.
    (e) An owner or operator intending to build a new LNG or LHG 
facility, or an owner or operator planning new construction to expand 
or modify marine terminal operations in an existing facility handling 
LNG or LHG, where the construction, expansion, or modification would 
result in an increase in the size and/or frequency of LNG or LHG marine 
traffic on the waterway associated with a proposed facility or 
modification to an existing facility, must file or update as 
appropriate a waterway suitability assessment (WSA) with the COTP of 
the zone in which the facility is or will be located. The WSA must 
consist of a Preliminary WSA and a Follow-on WSA. A COTP may request 
additional information during review of the Preliminary WSA or Follow-
on WSA.
    (f) The Preliminary WSA must--
    (1) Be submitted to the COTP with the LOI; and
    (2) Provide an initial explanation of the following--
    (i) Port characterization;
    (ii) Characterization of the LNG or LHG facility and LNG or LHG 
tanker route;
    (iii) Risk assessment for maritime safety and security;
    (iv) Risk management strategies; and
    (v) Resource needs for maritime safety, security, and response.
    (g) The Follow-on WSA must--
    (1) Be submitted to the COTP as follows:
    (i) The owner or operator of an LNG facility must submit the 
Follow-on WSA to the COTP no later than the date the owner or operator 
files its application with FERC pursuant to 18 CFR parts 153 or 157, or 
if no application to FERC is required, at least 180 days before the 
owner or operator begins transferring LNG.

[[Page 29427]]

    (ii) The owner or operator of an LHG facility must submit the 
Follow-on WSA to the COTP in all cases at least 180 days before the 
owner or operator begins transferring LHG.
    (2) Contain a detailed analysis of the elements listed in 
Sec. Sec.  127.007(f)(2), 127.009(d), and 127.009(e) of this part.
    (h) Until the facility begins operation, owners or operators must:
    (1) Annually review their WSAs and submit a report to the COTP as 
to whether changes are required. The deadline for the required annual 
report should coincide with the date of the COTP's Letter of 
Recommendation, which indicates review and validation of the Follow-on 
WSA has been completed.
    (2) In the event that revisions to the WSA are needed, report to 
the COTP the details of the necessary revisions, along with a timeline 
for completion.
    (3) Update the WSA if there are any changes in conditions, such as 
changes to the port environment, the LNG or LHG facility, or the tanker 
route, that would affect the suitability of the waterway for LNG or LHG 
traffic.
    (4) Submit a final report to the COTP at least 30 days, but not 
more than 60 days, prior to the start of operations.

0
4. Revise Sec.  127.009 to read as follows:


Sec.  127.009  Letter of recommendation.

    After the COTP receives the Letter of Intent under Sec.  127.007(a) 
or (b), the COTP issues a Letter of Recommendation as to the 
suitability of the waterway for LNG or LHG marine traffic to the 
Federal, State, or local government agencies having jurisdiction for 
siting, construction, and operation, and, at the same time, sends a 
copy to the owner or operator, based on the--
    (a) Information submitted under Sec.  127.007;
    (b) Density and character of marine traffic in the waterway;
    (c) Locks, bridges, or other man-made obstructions in the waterway;
    (d) Factors adjacent to the facility such as--
    (1) Depths of the water;
    (2) Tidal range;
    (3) Protection from high seas;
    (4) Natural hazards, including reefs, rocks, and sandbars;
    (5) Underwater pipelines and cables;
    (6) Distance of berthed vessel from the channel and the width of 
the channel; and
    (e) Other safety and security issues identified.

F. J. Sturm,
Acting Director of Commercial Regulations and Standards, U.S. Coast 
Guard.
[FR Doc. 2010-12680 Filed 5-25-10; 8:45 am]
BILLING CODE 9110-04-P