[Federal Register Volume 79, Number 229 (Friday, November 28, 2014)]
[Proposed Rules]
[Pages 70943-70994]
[FR Doc No: 2014-27594]

Vol. 79

Friday,

No. 229

November 28, 2014

Part III

Department of Homeland Security

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Coast Guard

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33 CFR Parts 140, 143, and 146

46 CFR Parts 61 and 62

 Requirements for MODUs and Other Vessels Conducting Outer Continental
Shelf Activities With Dynamic Positioning Systems; Proposed Rule

Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 /
Proposed Rules

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 140, 143, and 146

46 CFR Parts 61 and 62

[Docket No. USCG-2014-0063]
RIN 1625-AC16

Requirements for MODUs and Other Vessels Conducting Outer
Continental Shelf Activities With Dynamic Positioning Systems

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to establish minimum design,
operation, training, and manning standards for mobile offshore drilling
units (MODUs) and other vessels using dynamic positioning systems to
engage in Outer Continental Shelf activities. Establishing these
minimum standards is necessary to improve the safety of people and
property involved in such operations, and the protection of the
environment in which they operate. This notice of proposed rulemaking
would decrease the risk of a loss of position by a dynamically-
positioned MODU or other vessel that could result in a fire, explosion,
or subsea spill, and supports the Coast Guard's strategic goals of
maritime safety and protection of natural resources.

DATES: Comments and related material must be submitted to the online
docket via http://www.regulations.gov or reach the Docket Management
Facility on or before February 26, 2015. Comments sent to the Office of
Management and Budget (OMB) on collection of information must reach OMB
on or before February 26, 2015.

ADDRESSES: Submit comments using one of the listed methods, and see
SUPPLEMENTARY INFORMATION for more information on public comments.
     Online--http://www.regulations.gov following Web
site instructions.
     Fax--202-493-2251.
     Mail or hand delivery--Docket Management
Facility (M-30), U.S. Department of Transportation, West Building
Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC
20590-0001. Hand delivery hours: 9 a.m. to 5 p.m., Monday through
Friday, except Federal holidays (telephone<PHONE_NUMBER>).
    Collection of Information. Submit any comments on the collection of
information discussed in section VI.D. of this preamble both to the
Coast Guard's docket and to the Office of Information and Regulatory
Affairs (OIRA) in the White House Office of Management and Budget. OIRA
submissions can use one of the listed methods.
     Email<EMAIL_ADDRESS>(include
the docket number and ``Attention: Desk Officer for Coast Guard, DHS''
in the subject line of the email).
     Fax--202-395-6566.
     Mail--Office of Information and Regulatory Affairs, Office
of Management and Budget, 725 17th Street NW., Washington, DC 20503,
ATTN: Desk Officer, U.S. Coast Guard.
    Viewing material proposed for incorporation by reference: Make
arrangements to view this material by calling the Coast Guard's Office
of Regulations and Administrative Law at<PHONE_NUMBER> or by emailing
<EMAIL_ADDRESS>
FOR FURTHER INFORMATION CONTACT: For information about this document,
call or email Lieutenant Jeff Bybee, Coast Guard; telephone 202-372-
1357, email<EMAIL_ADDRESS>For information about viewing or
submitting material to the docket, call Cheryl Collins, Program
Manager, Docket Operations, telephone<PHONE_NUMBER>.

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
    A. Basis
    B. Purpose
IV. Background
V. Discussion of Proposed Rule
VI. Incorporation by Reference
VII. 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 submit comments (or related material) on this
rulemaking. We will consider all submissions and may adjust our final
action based on your comments. Comments should be marked with docket
number USCG-2014-0063 and should provide a reason for each suggestion
or recommendation. You should provide personal contact information so
that we can contact you if we have questions regarding your comments,
but please note that all comments will be posted to the online docket
without change and that any personal information you include can be
searchable online (see the Federal Register Privacy Act notice
regarding our public dockets, 73 FR 3316, Jan. 17, 2008.
    Mailed or hand-delivered comments should be in an unbound 8\1/2\ x
11 inch format suitable for reproduction. The Docket Management
Facility will acknowledge receipt of mailed comments if you enclose a
stamped, self-addressed postcard or envelope with your submission.
    Documents mentioned in this notice, and all public comments, are in
our online docket at http://www.regulations.gov and can be viewed by
following the Web site's instructions. You can also view the docket at
the Docket Management Facility (see the mailing address under
ADDRESSES) between 9 a.m. and 5 p.m., Monday through Friday, except
Federal holidays.

D. Public Meeting

    We plan to hold a public meeting and will announce the time and
place in a later notice in the Federal Register.

II. Abbreviations

ANSI American National Standards Institute
ASOC Activity Specific Operating Criteria
CAMO Critical Activity Mode of Operation
DHS Department of Homeland Security
DP Dynamic Positioning
DP-1 Equipment class 1
DP-2 Equipment class 2
DP-3 Equipment class 3
DPO Dynamic Positioning Operator
DPOQ Dynamic Positioning Operator, Qualified
DPSAO Dynamic Positioning System Assurance Organization
DPVAD Dynamic Positioning Verification Acceptance Document
FMEA Failure Modes and Effects Analysis
FR Federal Register
GT ITC Gross tonnage as measured under 46 U.S.C. 14302, Convention
Measurement System
IEC International Electrotechnical Commission
IMCA International Marine Contractors Association
IMO International Maritime Organization
MERPAC Merchant Personnel Advisory Committee
MISLE Marine Information for Safety and Law Enforcement
MODU Mobile Offshore Drilling Unit

MOU Mobile Offshore Units
MSC Marine Safety Center
MTS Marine Technology Society
NOSAC National Offshore Safety Advisory Committee
NPRM Notice of proposed rulemaking
OCMI Officer in Charge, Marine Inspection
OCS Outer Continental Shelf
OCS NCOE Coast Guard Outer Continental Shelf National Center of
Expertise
OMB Office of Management and Budget
OSV Offshore Supply Vessel
Sec.  Section symbol
SMS Safety Management System
STCW Standards for Training Certification and Watchkeeping
U.S.C. United States Code
VSL Value of a statistical life
WSOC Well Specific Operating Criteria

III. Basis and Purpose

A. Basis

    Several sections of the Outer Continental Shelf Lands Act (OCSLA)
(43 U.S.C. 1331-1356a) provide ``the Secretary of the Department in
which the Coast Guard is operating'' with rulemaking authority. The
Secretary's authority under all these sections is delegated to the
Coast Guard through Department of Homeland Security Delegation No.
0170.1, paragraph II(90).
    43 U.S.C. 1333(d)(1) gives the Secretary ``authority to promulgate
and enforce such reasonable regulations with respect to lights and
other warning devices, safety equipment, and other matters relating to
the promotion of safety of life and property on the artificial islands,
installations, and other devices referred to in subsection (a) \1\ of
this section or on the waters adjacent thereto, as [the Secretary] may
deem necessary.'' The Coast Guard interprets section 1333(d)(1) as
conferring authority to regulate any Outer Continental Shelf (OCS)
vessel or facility (collectively referred to as ``OCS unit'') attached
to the OCS seabed or engaged in OCS activity to support such a unit.\2\
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    \1\ 43 U.S.C. 1333(a) extends the Constitution, laws and civil
and political jurisdiction of the United States to, among other
things, all artificial islands, and all installations and other
devices permanently or temporarily attached to the seabed, which may
be erected thereon for the purpose of exploring for, developing, or
producing resources therefrom, or any such installation or other
device (other than a ship or vessel) for the purpose of transporting
such resources.
    \2\ OCS activity is defined in 33 CFR 140.10 to mean ``any
offshore activity associated with exploration for, or development or
production of, the minerals of the Outer Continental Shelf.''
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    Section 1347(c) requires promulgation of ``regulations or standards
applying to unregulated hazardous working conditions related to
activities on the [OCS] when . . . such regulations or standards are
[determined to be] necessary'' and authorizes the modification ``from
time to time'' of ``any regulations, interim or final, dealing with
hazardous working conditions on the [OCS].'' Section 1348(c) requires
promulgation of regulations for onsite scheduled or unscheduled
inspections of OCS facilities ``to assure compliance with . . .
environmental or safety regulations.'' Additionally, section 1356 calls
for regulations requiring, with limited exceptions, all OCS units to be
manned by U.S. citizens or resident aliens and to comply with ``such
minimum standards of design, construction, alteration, and repair'' as
the Secretary or the Secretary of the Interior establishes.

B. Purpose

    Dynamic Positioning (DP) systems typically use computers to
automate control of vital power and propulsion systems to maintain a
vessel's position using a position referencing system. Mobile offshore
drilling units (MODUs) engaged in deepwater drilling and vessels
engaged in other operations that require station-keeping adjacent to
MODUs or production platforms now routinely use DP systems for cargo,
personnel, or fuel transfers where conventional mooring is not
practical. Coast Guard regulations have not kept pace with these new
technological developments.
    A DP incident that results in a loss of position \3\ on a MODU or
other vessel engaged in Outer Continental Shelf (OCS) activities is a
system safety failure that may result in serious consequences for human
safety and the environment during certain critical operations. For
example, a loss of position on a MODU during well-control operations
could result in a subsea spill that is difficult to contain.\4\ A
logistics vessel could lose position and strike a floating or fixed
facility, thereby causing damage to the gas export riser, which may
result in an explosion, a loss of life, or an environmental event.\5\ A
project/construction vessel could lose position while conducting diving
operations, risking the lives of the divers.\6\
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    \3\ As defined in a MODU's Well Specific Operating Criteria
(WSOC) or the Activity Specific Operating Criteria (ASOC) for a
vessel other than a MODU. WSOC and ASOC are defined in proposed 46
CFR 62.10-1.
    \4\ When a MODU performs an emergency disconnect from a well
during critical activities involving hydrocarbon pressure, the
Blowout Preventer (BOP) is the last line of defense to shut in the
well and prevent a subsea spill and/or an uncontrolled fuel source
from potentially feeding a fire on the MODU. The potential for
failure of the BOP was illustrated during the DEEPWATER HORIZON
casualty. The Coast Guard has received multiple voluntary reports of
DP system failures that caused a loss of position and an emergency
disconnect, including failures during critical activities when the
BOP was the only thing preventing a catastrophic spill. Because
there is no mandatory reporting requirement, the Coast Guard
believes that emergency disconnects during critical activities are
much more prevalent than indicated by voluntary reports.
    \5\ In one example from voluntary reporting, a dynamically-
positioned MODU on the U.S. OCS suffered a loss of position during
critical activities while attached to a well in April 2010, and the
subsea gear was damaged when the MODU performed an emergency
disconnect. Another example occurred in July 2005, when the
dynamically-positioned logistics vessel SAMUDRA SURAKSHA suffered a
loss of position while attempting a personnel transfer and collided
with the MUMBAI HIGH NORTH (MHN) platform. The collision severed at
least one gas riser, causing a massive fire that destroyed the MHN
platform within 2 hours and killed 22 people.
    \6\ For example, in September 2012, the dynamically positioned
project/construction vessel BIBBY TOPAZ suffered a loss of position
that severed the umbilical of a diver. Similar incidents involving
the severing of diver umbilicals have resulted in diver fatalities.
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    To reduce the likelihood of a DP incident causing loss of position
and the resulting consequences, many large offshore lease-holding
corporations require MODUs and other vessels using DP systems while
performing Critical OCS Activities \7\ on their leases to meet a
minimum DP system design standard.\8\ Additionally, they require these
vessels to implement operating guidelines and employ procedures and
decision-support tools to ensure the DP system is operated within its
design limits. They also require Dynamic Positioning Operators (DPOs)
and other essential personnel to be well trained.
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    \7\ A Critical OCS Activity is defined in 33 CFR 140.305 of this
NPRM, in part, as ``OCS Activities where maintaining station is
critical because a loss of position could cause a personal injury,
environmental pollution, or catastrophic damage.'' Section 140.305
also contains non-exhasutive lists of examples of activities that
meet the definitions of Critical OCS Activities on a MODU and
Critical OCS Activities on Vessels Other than MODUs. The Coast Guard
would provide the DP system industry advance notice and an
opportunity to provide input before determining that additional
activities meet either of the latter two definitions.
    \8\ Based on teleconferences with industry that took place in
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
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    We are proposing DP standards for MODUs and other vessels that use
DP to engage in OCS activities because of the risks described above;
the ongoing trend of more operators moving further offshore for mineral
exploration and production; the expanded use of DP, which is driven in
part by the trend of moving operations further offshore and resultant
mooring challenges; the difficulty of responding to incidents further
offshore, as illustrated by the 2010 DEEPWATER HORIZON incident; the
need to update outdated or outmoded Coast Guard regulations to align
with changes in the technology

and operations that have transpired since these regulations were last
updated; and the need to establish appropriate measures that
consistently assess DP system capabilities and improve DP system
reliability for each OCS activity. These DP standards include
operation, design, training, manning, and watchkeeping components.

IV. Background

A. General

    The U.S. Coast Guard, within the U.S. Department of Homeland
Security, is responsible for, among other things, protecting the marine
environment and promoting the safety of life and property on the OCS.
Under OCSLA, Title 46 United States Code, 33 CFR chapter I subchapter
N, and 46 CFR chapter I subchapter I-A, the Coast Guard regulates OCS
facilities, MODUs, and other vessels engaged in OCS activities,
including, but not limited to, tank vessels, offshore supply vessels,
and other vessels involved in OCS activities.
    The Bureau of Safety and Environmental Enforcement (BSEE), within
the U.S. Department of Interior, is responsible for managing the
nation's gas, oil, and other mineral resources on the OCS in a safe and
environmentally sound manner. Under the OCSLA and Title 30 CFR, BSEE
regulates activities such as oil and gas well exploration, drilling,
completion, development, production and servicing, as well as pipeline
transportation and storage activities under its jurisdiction. BSEE also
grants rights-of use and easements to construct and maintain facilities
and rights of way for sub-sea pipelines, umbilicals and other
equipment. Among other BSEE regulations applicable to oil, gas, and
sulfur operations on the OCS, 30 CFR part 250, subpart S, requires
covered units to maintain a Safety and Environmental Management System,
and 30 CFR part 250, subpart D, sets minimum requirements for blowout
preventers to reduce the likelihood and impact of process safety
failures.
    Under a Memorandum of Agreement \9\ between the Coast Guard and
BSEE, the Coast Guard is responsible as the lead agency for regulation
of DP system design, and all aspects of DP system operation except
criteria for well shut-in and disconnect when out of the watch
circle.\10\
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    \9\ Memorandum of Agreement Between the Minerals Management
Service--U.S. Department of the Interior and the U.S. Coast Guard--
U.S. Department of Homeland Security (MMS/USCG MOA: OCS-04), dated
28 February 2008, Annex I, Items 4.c and 4.d. The Minerals
Management Service has since been renamed the Bureau of Safety and
Environmental Enforcement. See also, the Memorandum of Understanding
Between the Bureau of Safety and Environmental Enforcement--U.S.
Department of the Interior, and the U.S. Coast Guard--U.S.
Department of Homeland Security, dated 27 November 2012. The MOA and
MOU are available on the docket by following the instructions under
the ``Viewing comments and documents'' section of this preamble.
    \10\ Watch circles show critical distances between the wellhead
and the MODU, and are used to define when a MODU must take certain
actions during a loss of position incident to disconnect and
separate from the BOP without damage to the MODU or well, injury to
the crew, or an environmental event. Watch circles are also used in
a similar way by vessels other than a MODU to avoid the adverse
effects of a loss of position.
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B. Operation and Design Standards

    We initially addressed DP systems in the Coast Guard Eighth
District policy letter 01-2003, dated January 22, 2003, ``Use of
Dynamic Positioning by Offshore Supply Vessels for Oil and HAZMAT
Transfers'' (available in the docket by following the instructions in
the ``Viewing comments and documents'' section above). That policy
letter provided guidance for certain Offshore Supply Vessels (OSVs)
engaged in certain operations in the Gulf of Mexico, and is consistent
with International Maritime Organization (IMO) Maritime Safety
Committee Circular 645 (MSC/Circ.645), ``Guidelines for Vessels with
Dynamic Positioning Systems,'' June 6, 1994, which divides DP system
equipment into classes based on reliability levels designated as
equipment class 1, 2, or 3. Equipment class 1 (DP-1) is the least
reliable and equipment class 3 (DP-3) is the most reliable.
    These DP system equipment classes are used today, and IMO MSC/
Circ.645 is the foundation for the proposed regulations in this notice.
DP system technologies and industry experience, however, have advanced
since IMO MSC/Circ.645 was published. Consequently, there is a
significant performance disparity among DP systems that have the same
equipment class rating, because system configuration, operational, and
maintenance decisions may effectively degrade DP systems rated as
equipment class 2 (DP-2) or DP-3 to the extent that they perform as if
they were rated DP-1. For example, degradation can occur when an
operator of a vessel with a DP-2 system chooses to operate with closed
bus ties and minimize the number of generators online in order to save
fuel and avoid wear and tear on equipment. By doing so, the redundancy
afforded by DP-2 may be compromised.
    To address this performance disparity, we propose to incorporate
IMO MSC/Circ.645 into regulations as mandatory provisions. We also
propose to adopt in regulations DP guidance issued by the Marine
Technology Society (MTS) \11\ as mandatory provisions to provide owners
or operators of DP MODUs and other vessels essential information on how
to meet some of the requirements in this notice of proposed rulemaking
(NPRM).\12\
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    \11\ MTS is an international organization incorporated in 1963
to give members of academia, government and industry a common forum
for the exchange of information and ideas. Its purpose is to promote
awareness, understanding, advancement, and application of marine
technology. The MTS Dynamic Positioning Committee was established in
1996 to promote a greater international understanding of DP and
related issues, and to provide a forum for the exchange of
information about technology, training and education, improvement of
reliability, development of guidelines, and other pertinent issues
to facilitate incident-free DP System operations.
    \12\ ``DP Operations Guidance'' (Marine Technology Society, Part
1, Oct. 2010; Part 2, App. 1, March 2012; Part 2, App. 2, July 2012;
Part 2, App. 3, July 2012). These documents are available in the
docket for this rulemaking by following the instructions in the
``Viewing comments and documents'' section of this NPRM.)
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    Additionally, in March 2010, we tasked the National Offshore Safety
Advisory Committee (NOSAC) with developing recommendations for DP
system design, engineering, and operation standards. The NOSAC provided
its recommendations in June 2010 (available in the docket by following
the instructions in the ``Viewing comments and documents'' section
above), and we have considered them in developing this NPRM. A key
feature of the NOSAC recommendations is the risk-based approach of
applying higher DP equipment class requirements to higher risk
operations. As part of its recommendations, the NOSAC also submitted a
draft revision of the DP operations guidance developed by MTS. This
draft guidance, which was issued by the Dynamic Positioning Committee
of the MTS, also linked DP equipment class to operations.
    After receiving the MTS draft guidelines as part of the NOSAC
recommendation, we published a draft policy letter, ``Dynamically
Positioned Mobile Offshore Drilling Unit Critical Systems, Personnel
and Training,'' in the Federal Register on December 29, 2011 (76 FR
81957). The MTS was among those that submitted public comment on the
draft letter, and we participated in several DP conferences sponsored
by MTS. Also, in a ``Notice of Recommended Interim Voluntary Guidance''
published in the Federal Register on May 4, 2012 (77 FR 26562), we
recommended that owners or operators of DP MODUs voluntarily follow the
guidance provided in the

MTS DP Operations Guidance (MTS DP Operations Guide), Part 2, Appendix
1, on MODUs (March 2012). Subsequently, we published a follow-up
``Notice of Recommended Interim Voluntary Guidance'' in the Federal
Register on October 12, 2012 (77 FR 62247), which recommended that
owners or operators of DP vessels other than MODUs \13\ that conduct
OCS activities on the U.S. OCS follow the 2012 MTS DP Operations Guide,
Part 2, Appendix 2, on project construction vessels (July 2012), or
Appendix 3, on logistics vessels (July 2012), as appropriate.
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    \13\ Throughout this NPRM, references to ``vessels other than
MODUs'' that conduct certain activities or possess certain design
characteristics are intended to mean vessels that conduct such
activities or possess such characteristics and are not MODUs.
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    This NPRM would require new and existing MODUs, and new vessels
other than MODUs, that engage in Critical OCS Activities using a DP
system, to comply with certain provisions of IMO MSC/Circ.645 and the
MTS DP operations guidance documents listed in the preceding
paragraph.\14\ These documents outline a process for determining the
design limits of a DP system and operating within those limits. The MTS
DP Operations Guide provides guidance on determining a DP system's
worst-case failure, which is the critical design parameter that drives
how the system should be operated. The worst-case failure is used to
determine the Critical Activity Mode of Operation (CAMO), which is
defined in the MTS DP Operations Guide and in Sec.  140.305 of this
NPRM. The DP system's CAMO is then incorporated into the Activity
Specific Operating Criteria (ASOC) or Well Specific Operating Criteria
(WSOC) \15\ covering Critical OCS Activities; those criteria must
clearly state when a specific OCS activity is a Critical OCS Activity.
Operating a DP system within an ASOC or WSOC appropriate to the
specific OCS activity and in its CAMO during Critical OCS Activities
helps ensure that the DP vessel is operated within its design limits
and reduces the likelihood of a loss of position.
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    \14\ See the discussion of ``Standard DP Requirements (Critical
OCS Activities)'' in Section V of this preamble.
    \15\ ASOC and WSOC are defined in proposed 46 CFR 62.10-1 and
are similar to the Activity Specific Operating Guidelines (ASOG) and
Well Specific Operating Guidelines (WSOG) in the MTS DP Operations
Guide. With Coast Guard concurrence, the content of the ASOC and
WSOC may differ from the recommendations in the Operations Guide,
and vessels would be required by the proposed regulations to operate
within their ASOC or WSOC.
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    In this NPRM, we propose design and operational standards for DP
systems used on MODUs and other vessels. As discussed below in Section
V of this NPRM and depicted in Chart A on page 33, we structured these
proposed requirements using a risk-based approach tied to the type and
size of the MODU or other vessel and whether a Critical OCS Activity is
conducted. We are proposing the regulations below after considering the
NOSAC recommendations, the MTS and IMO guidance, the current and
expected use of DP technology, and the risks associated with loss of
position while using DP systems to engage in Critical OCS Activities.

C. Training, Manning and Watchkeeping Standards

    The increased use of DP provides significant new challenges for the
operators and crews of MODUs and other vessels operating on the U.S.
OCS. Properly qualified DP system operators and on-watch personnel must
have an in-depth knowledge of these positioning systems, be able to
constantly and consistently monitor them, and, when appropriate, take
manual control to maintain the safety of the vessel, its personnel and
the environment. Casualty investigations and anecdotal information
regarding near misses due to DP failures have highlighted the need for
regulations that address training, manning, and watchkeeping
requirements in support of DP systems. The DEEPWATER HORIZON casualty
investigation, in particular, highlighted DP operational concerns,
including competence, communications, and handling of emergencies, and
recommended that we develop operational requirements for vessels fitted
with DP.\16\
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    \16\ DEEPWATER HORIZON--FINAL REPORT available at https://homeport.uscg.mil/mycg/portal/ep/contentView.do?contentId=323899&pageTypeId=13489&contentType=EDITORIAL.
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    We do not yet have any operational training standards specifically
for DP systems, nor do we have manning or watchkeeping requirements
that take into account operations using DP systems. Furthermore, the
existing manning and watchkeeping requirements in 46 CFR part 15 apply
only to U.S. vessels, including MODUs. To address these gaps, we
propose minimum training, watchkeeping, and manning standards for U.S.
and foreign MODUs and other vessels using DP systems to engage in OCS
activities on the U.S. OCS. We developed these proposed standards after
considering internationally accepted standards and input from the
industry.
    The regulations proposed in this NPRM were developed, in part,
based on the recognition that, under applicable law, any MODU or other
vessel operating solely with a DP system is a self-propelled motor
vessel and is considered to be underway. 46 CFR 10.107 defines ``self
propelled'' as ``propelled by machinery'' and ``mechanically
propelled.'' Additionally, 46 U.S.C. 2101, paragraph (16), defines
``motor vessel'' as ``a vessel propelled by machinery other than
steam.'' Because any vessel operating solely with a DP system is
propelled by machinery, such vessels are self-propelled. Similarly,
because any vessel operating solely with a DP system is propelled by
machinery other than steam, such vessels are motor vessels. Further,
such vessels are self-propelled motor vessels regardless of whether the
machinery involved is used for the vessel to make way (transiting) or
to maintain a fixed position.
    Self-propelled motor vessels, which include MODUs operating solely
with a DP system, are subject to the Standards for Training
Certification and Watchkeeping (STCW) Convention. Under Article III,
the STCW Convention applies to seafarers serving on board seagoing
ships, including self-propelled MODUs, and existing requirements in 46
CFR 15.1101 specify that a ``seagoing vessel means a self-propelled
vessel in commercial service that operates beyond the Boundary Line
established by 46 CFR part 7. It does not include a vessel that
navigates exclusively on inland waters.'' Because MODUs and other
vessels operating solely with a DP system on the U.S. OCS are self-
propelled motor vessels operating beyond the Boundary Line, they are
seagoing ships for purposes of the STCW Convention. Consequently, the
STCW Convention watchkeeping and hours of rest provisions and the
training requirements for personnel standing watches apply to mariners
serving on MODUs and other vessels using a DP system to engage in OCS
activities on the U.S. OCS.
    Additionally, MODUs and other vessels operating solely with a DP
system are considered to be underway. ``Underway'' is defined in 46 CFR
10.107 as--

    A vessel . . . not at anchor, made fast to the shore, or
aground. When referring to a mobile offshore drilling unit (MODU),
underway means that the MODU is not in an on-location or laid-up
status and includes that period of time when the MODU is deploying
or recovering its mooring system.

    A vessel operating with DP is underway when it is not: At anchor,
made fast to the shore or ocean bottom, aground, or in a laid-up or on-
location

status.\17\ Because MODUs and other vessels operating solely with a DP
system are considered to be underway, the regulations in 46 CFR subpart
B that implement STCW Convention watchkeeping and hours of rest
provisions and the training requirements for personnel standing watches
also apply to mariners serving on MODUs and other vessels using a DP
system to engage in OCS activities on the U.S. OCS.
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    \17\ 46 CFR 10.107 defines ``on-location'' as ``a mobile
offshore drilling unit [that] is bottom bearing or moored with
anchors placed in the drilling configuration.
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    Further, those regulations are consistent with IMO Resolution
A.1079(28), entitled ``Recommendations for the Training and
Certification of Personnel on Mobile Offshore Units (MOUs),'' and dated
December 4, 2013, which defines a self-propelled MOU as ``a MOU fitted
with a mechanical means of propulsion to navigate independently,'' \18\
and specifies that all maritime crew members on self-propelled MOUs
should meet the requirements of the STCW Convention, as amended.\19\
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    \18\ IMO Resolution A.1079(28), para. 2.
    \19\ Id. at para. 4. This document is available in the docket
for this rulemaking by following the instructions in the ``Viewing
comments and documents'' section of this NPRM.
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    The 2010 amendments to the STCW Convention contain guidance on the
training, experience, and professional competence of personnel who
operate DP systems. The guidance specifies the content of the training
such personnel should receive and the experience they should possess.
We considered the STCW Convention guidance in developing the
operational training, manning, and watchkeeping standards in this NPRM.
    Additionally, in November 2011, we tasked the NOSAC with developing
recommendations for safe standards for personnel operating vessels
using DP systems on the OCS. The NOSAC provided its recommendations in
November 2012 (available in the docket by following the instructions in
the ``Viewing comments and documents'' section above). The NOSAC also
submitted reports containing recommended practices for MODUs and other
vessels operating DP systems on the U.S. OCS from each of the three
main groups of NOSAC stakeholders; specifically, the owners or
operators of: (1) OSVs and small vessels; (2) MODUs; and, (3) manned
and unmanned barges.
    In March 2012, we tasked the Merchant Personnel Advisory Committee
(MERPAC) with reviewing the safe operation of dynamically positioned
vessels operating on the U.S. OCS. MERPAC provided its recommendations
in September 2012 (available in the docket by following the
instructions in the ``Viewing comments and documents'' section above).
    We considered the recommendations from both advisory committees in
developing the training, manning, and watchkeeping standards in this
NPRM. Both committees supported the three key recommendations
summarized as follows:
    Recommendation 1. DPOs should be credentialed but not necessarily
``licensed.'' If the DPO is not a licensed officer, a licensed officer
of the navigation watch shall be provided, if required.
    Recommendation 2. Minimum training should meet the standards found
in the International Marine Contractors Association's ``The Training
and Experience of Key DP Personnel'' (International Marine Contractors
Association (IMCA) M 117, Rev. 1, February 2006); and IMO Maritime
Safety Committee Circular 738, ``Guidelines for Dynamic Positioning
System (DP) Operator Training'' (MSC/Circ.738/Rev. 1, July 2006). In
addition to meeting these training standards, further training and/or
competency assessments should be required to ensure the proper
performance of duties, and should be the responsibility of companies
based on the DP system, vessel type, and service/activities.
    Recommendation 3. Operational measures, including DP system and
crew competency requirements, manning, and watch protocols should be
based on risk assessments performed under a Safety Management System
(SMS).
    We agree with the first recommendation that the DPO must be a
credentialed mariner, but need not be licensed. The DPO can also be the
officer in charge of a navigational watch, provided the DP system and
the navigational equipment are collocated, and the person is a
qualified DPO who also holds the appropriate mate or officer
endorsement.
    We fully agree with the second recommendation.
    Regarding the third recommendation, we agree with the adoption of
operational measures, including the risk-based approach to DP system
and crew competency requirements. Additionally, we partially agree with
the recommendation that manning and watch protocols be risk based.
Because a vessel operating under DP is considered to be underway, MODUs
and other vessels using DP must comply with existing laws, regulations,
and international requirements on manning and watchkeeping. However,
the process to determine watchkeeping and manning protocols should
account for the capabilities and limitations of each DP system and the
nature of the operations of the vessel, including MODUs. Manning and
watch protocols incorporating a risk-based approach would improve the
safety of navigation on the U.S. OCS.
    Regarding the training requirements of personnel who stand watch on
MODUs, we are cognizant that the competency requirements in STCW for
masters and officers in charge of the navigational watch may exceed
what is required for a MODU. The STCW Convention, however, already
permits the issuance of limitations based on vessel types after
identifying the competencies that are not applicable. In addition, some
flag states already issue certificates of competency for masters
restricted to MODUs that would be acceptable for the operation of MODUs
using a DP system to engage in OCS activities on the U.S. OCS.
    The existing training, watchkeeping, and hours of rest provisions
in 46 CFR part 15 applicable to U.S. MODUs and other vessels are
consistent with STCW requirements. Furthermore, foreign vessels
operating on the U.S. OCS are obligated to comply with STCW
requirements because they are seagoing vessels under the STCW
Convention. As a party to the STCW Convention, we are proposing changes
in this proposed rule to address the gap with respect to the
application of STCW requirements to non-U.S. MODUs using a DP system to
engage in OCS activities on the U.S. OCS by extending the application
of the Convention requirements to them.
    Application of the STCW provisions to these MODUs is consistent
with the guidance in IMO Resolution A.1079(28), ``Recommendations for
the Training and Certification of Personnel on Mobile Offshore Units,''
which specifies that crew members on self-propelled mobile offshore
units should meet the requirements of the STCW Convention, as
amended.\20\ The Dynamic Positioning Operator, Qualified (DPOQ) must
have a thorough knowledge of the CAMO and either the ASOC or WSOC, and
must be familiar with the vessel's Failure Modes and Effects Analysis
(FMEA) so that he or she understands the vessel's capabilities and can
anticipate the vessel's movements in the event of DP system failure or
other reduced operating capacity. Although we recognize that mariners
working on board MODUs and other vessels should

also have additional knowledge and understanding of the industrial
mission, as provided in IMO Resolution A.1079(28), such a requirement
is outside the scope of this rulemaking.
---------------------------------------------------------------------------

    \20\ IMO Resolution A.1079(28), para. 4.
---------------------------------------------------------------------------

D. Classification, Plan Review, and Certification

    This NPRM proposes to require any MODU that uses a DP system to
engage in Critical OCS Activities, or any other vessel that uses a new
DP system to engage in Critical OCS Activities, to obtain a DP notation
equivalent to IMO MSC/Circ.645 equipment class DP-2 or higher from a
classification society recognized under 46 CFR 8.230. The
classification society must possess DP system rules that are aligned
with IMO MSC/Circ.645 and meet the requirements of proposed 46 CFR
61.50-3 and the MTS DP Operations Guide provisions applicable to the
vessel being classed. The Coast Guard Outer Continental Shelf National
Center of Expertise (OCS NCOE) would determine whether the
classification society is recognized under 46 CFR 8.230, whether its DP
system rules are aligned with IMO MSC/Circ.645 and the MTS DP
Operations Guide provisions applicable to the vessel being classed, and
whether the notations are equivalent to DP-2 or higher. Under proposed
Sec.  61.50-20, actions of the OCS NCOE would be appealable to the U.S.
Coast Guard Deputy Commandant for Prevention.
    Obtaining a classification society notation of DP-2 or higher
mitigates the risk of MODUs and other vessels losing position during DP
operations on the U.S. OCS. A DP-2 notation from a classification
society serves as a fundamental building block for safe DP operations
by ensuring a minimum level of reliability for a DP system, but the
notation does not consider the mission of the vessel, nor does it
address operations. The MTS DP Operations Guide further enhances safe
DP operations by ensuring the MODU or other vessel is operated within
the design limits of the DP system for the industrial mission it must
carry out.
    As we discuss further in section V. of this preamble, different
levels of risk are associated with different vessels and missions. In
general, we are proposing a risk-based approach tied to the type of
vessel and whether the vessel conducts Critical OCS Activities. In
addition, we propose to distinguish between vessels other than MODUs
based on vessel size. For the lower risk category of vessels that
conduct Critical OCS Activities, meeting IMO MSC/Circ.645, obtaining
surveys from a DP system assurance organization (DPSAO), meeting DP
personnel and system training requirements, and following the MTS
guidance is sufficient to ensure a satisfactory safety level.
    Accordingly, we do not propose to require such vessels to obtain
plan review from a DPSAO and obtain a DP notation equivalent to IMO
MSC/Circ.645 equipment class DP-2 or higher from a classification
society for the purpose of determining compliance with Coast Guard DP
requirements. Instead, we would rely on the DPSAO to verify compliance
with the provisions of this NPRM and be able to provide evidence of
this to the Coast Guard upon request.
    This NPRM would require more oversight on MODUs and other larger
vessels that use a DP system to engage in Critical OCS Activities.
These higher-risk vessels would be required to obtain plan review and
surveys from a DPSAO \21\ in accordance with Sec.  61.50-3 of this
NPRM.
---------------------------------------------------------------------------

    \21\ Dynamic Positioning System Assurance Organizations are
described in Sec.  61.50-3 of this NPRM.
---------------------------------------------------------------------------

    To qualify for Coast Guard authorization to conduct surveys and
verify compliance with the provisions in this NPRM, a DPSAO must
demonstrate competency and effectiveness in vessel plan review and
survey. Some of the criteria the Coast Guard currently uses to
recognize classification societies under 46 CFR 8.230 are also
applicable to DP system assurance organizations, such as having quality
systems based on industry standards, and financial independence from
MODU and other vessel owners and builders. Additional criteria would
include a documented history of providing FMEA and survey services on a
wide variety of MODUs and other vessels with various industrial
missions, and a minimum amount of documented history of providing high
quality, effective DP assurance, such as recommending enhancements to
design or operational measures.
    In developing the classification, plan review, and certification
provisions of this NPRM, we consulted with organizations that currently
conduct DP assurance on MODUs and other vessels on the U.S. OCS, and
leaseholders who require MODUs and other vessels with which they
contract to follow the MTS DP Operations Guide. Based on this feedback
and our experience with classification societies and DPSAOs, we are
proposing criteria for DP system assurance organizations that are
highly qualified in DP system assurance.
    Classification societies and other DPSAOs that are highly qualified
in DP system assurance would need to be accepted by the Coast Guard
after demonstrating they meet our proposed criteria. After acceptance
by the Coast Guard, classification societies and other highly qualified
organizations would be eligible to conduct the DP plan review and
surveys that would be required on MODUs and other large vessels.

V. Discussion of Proposed Rule

    This NPRM would set standards for MODUs and other vessels that use
a DP system for OCS activities, but would not require vessels to be
equipped with a DP system. These standards would not prevent owners or
operators from choosing to meet a higher standard or seeking approval
of equivalent safety measures.
    In this NPRM, we took potential economic impact into consideration
by phasing in certain vessels, other than MODUs, with existing DP
systems. We also propose a risk-based approach tied to the type and
size of the MODU or other vessel and the category (critical or non-
critical) of OCS activity the DP system is used to conduct. This
approach is depicted in Chart A.
BILLING CODE 9110-04-P

[GRAPHIC] [TIFF OMITTED] TP28NO14.000

BILLING CODE 9110-04-C
    The chart depicts five levels of DP requirements (none, minimum,
intermediate, standard, and enhanced) that MODUs and other vessels that
use a DP system for OCS activities must satisfy depending on the level
of risk. The requirements would be progressive; a MODU or other vessel
that is subject to the enhanced DP system requirements would need to
meet the standard, intermediate, and minimum requirements as well.
    When developing these proposed requirements, we considered the
risk-based approach of the MTS DP Operations Guide. The MTS DP
Operations Guide, in Part 1 of section 4.1, recommends various DP
equipment classes based on the type of OCS activity the DP system is
used to conduct. A similar approach is taken in

section 4.4, which recommends different numbers and types of position
reference sensors based on the OCS activity.
    The MTS DP Operations Guide also distinguishes between critical and
non-critical activities and recommends more stringent operational
requirements for critical activities. The proposed regulations reflect
the risk-based approach in the guide by adjusting the DP system
reliability standard and level of oversight depending on the size of
the vessel and the OCS activity the MODU or other vessel is designed to
perform. This NPRM would require owners or operators of DP MODUs and
other vessels to follow the MTS DP Operations Guide, which provides
essential information to support compliance with some of the
requirements proposed in this NPRM.
    Primarily, this NPRM would distinguish between MODUs and other
vessels that use DP systems to engage in Critical OCS Activities and
those that do not by requiring higher DP standards and more robust
oversight for Critical OCS Activities. For example, because a MODU has
a higher risk profile than a logistics vessel under the MTS DP
Operations Guide, this NPRM would require a MODU to meet higher DP
standards and be subject to more robust oversight than a logistics
vessel.
    This NPRM would also distinguish between the sizes of vessels other
than MODUs that use a DP system for OCS activities. A primary risk from
such vessels is a loss of position that results in a collision with
another structure. The consequences of such a collision increase with
the size of the vessel. For this reason, we propose to require a higher
DP standard for the largest vessels other than MODUs with new DP
systems, which are those greater than 6000 GT ITC.
    For the same reason, we also propose a phase-in for existing
vessels other than MODUs, where the largest such vessels are required
to comply first and the smallest--those of 500 GT ITC or less (500 GRT
if GT ITC not assigned)--are required to comply only with the minimum
DP requirements of this NPRM. The NPRM would require vessels other than
MODUs, greater than 500 tons but less than 900 tons, equipped with
existing DP systems, to comply with the intermediate requirements
within 9 years after publication of the final rule; vessels of at least
900 tons but less than 1900 tons to comply within 6 years after
publication of the final rule; and vessels of 1900 tons or more to
comply within 3 years after publication of the final rule. The
decisions to phase in vessels other than MODUs and apply minimum
requirements to the smallest of them are also discussed in the
regulatory analysis section of this NPRM. Those proposed provisions are
intended to reduce economic impact by providing industry time to
transition to the new requirements. A detailed discussion of the top
four levels of Chart A follows.

Minimum DP Requirements (Non-Critical OCS Activities)

    This NPRM would require vessels, other than MODUs, that use an
existing DP system to engage in non-critical OCS activities or are 500
GT ITC or less to meet minimum DP requirements. For example, a vessel
500 GT ITC or less that uses an existing DP system to engage in
Critical OCS Activities would be required to meet minimum DP
requirements, as would a vessel greater than 500 GT ITC that uses an
existing DP system to engage in non-critical OCS activities.
Additionally, vessels, other than MODUs, that use a new DP system to
engage in non-critical OCS activities, and MODUs that use a new or
existing DP system for the same purpose, would be required to meet
minimum training and DP system requirements. There are no DP incident
reporting requirements for MODUs and vessels other than MODUs subject
to only Minimum DP System Requirements.
    Proposed 33 CFR 140.330 and 46 CFR 62.40-3 would require the DP
system controls to be designed and operated in a manner that reduces
the probability of adverse events such as a drive-off or drift-off
after a DP system failure. The DP system would be required to be
equipped with audible and visual alarms that notify the DPO of DP
system failure and independent controls immediately available to the
DPO that function after the failure.
    Proposed 33 CFR 140.315 would establish minimum requirements for
DPO and DPOQ training that ensure they are appropriately trained in the
use and limitations of the DP system. Both DPOs and DPOQs would be
required to be familiar with the CAMO, and either the ASOC or WSOC of
their MODU or other vessel, and to demonstrate a fundamental
understanding of the specific DP system's FMEA.
    Under proposed Sec.  140.325, MODUs and other vessels would be
required to have a vessel-specific DP system operating manual on board
and readily available to the DPO. Additionally, MODUs and vessels
conducting vessel-to-vessel transfer operations using DP systems would
need to ensure clear communication and appropriate emergency
preparedness between the two vessels, which may have differing DP
system capabilities and operating procedures.

Intermediate DP Requirements

    In addition to meeting the minimum DP requirements described above,
proposed 33 CFR 140.335 would require vessels, other than MODUs,
greater than 500 GT ITC (500 GRT if GT ITC not assigned) that use a DP
system installed before [30 DAYS AFTER DATE OF PUBLICATION OF THE FINAL
RULE] to engage in Critical OCS Activities, to develop and adhere to
their CAMO and ASOC. A Critical OCS Activity is defined in proposed 33
CFR 140.305 as an activity on the OCS in which the accuracy and
consistency of the vessel's position is a major factor in the safety of
personnel, property, and the environment. For the reasons stated in
section III.B. of this preamble, we believe that the risk of an injury,
collision, or spill incident is higher when a DP system is used to
engage in Critical OCS Activities and should be subject to a higher
safety requirement.
    Additionally, 33 CFR 140.335 would require MODUs that use a DP
system to engage in Critical OCS Activities to develop and adhere to
their CAMO and WSOC. The CAMO, ASOC, and WSOC would ensure each DP
system is operated within its design limits for the specific operation.
Owners or operators would also be required to report DP system
incidents involving a reactive change from ``green'' to ``yellow'' or
``red'' as defined by the ASOC or WSOC. The reporting requirement would
apply to DP system incidents that occur at any time, not just those
that occur during Critical OCS Activities.
    Proposed 46 CFR 61.50-2 would require DP system surveys to be
completed by a DPSAO. In addition, the MODU or vessel owner or operator
would be required to provide the Coast Guard with at least 30 days
advance notice of these surveys, which would enable the Coast Guard
oversight needed to strike a balance between ensuring that third
parties are adequately performing delegated functions on the Coast
Guard's behalf, and reducing visits to the vessel by the Coast Guard.
    The surveys under proposed 46 CFR 61.50-5 through 61.50-15 are
based on those described in IMO MSC/Circ.645 and the MTS DP Operations
Guide, and would consist of an initial survey, an annual survey that
ensures the DP system remains in good working order, and periodic
surveys that fully test all systems at least once every 5 years. The
specific tests to be conducted during the surveys and the documentation
that

would be required are discussed in detail in proposed part 61 of this
NPRM.
    Proposed 46 CFR 61.50-3 creates requirements that each DPSAO must
meet to receive approval from the OCS NCOE to conduct the surveys
described above. These provisions include requirements for DPSAOs to
produce documents showing they have a history of providing DP assurance
to MODUs and vessels other than MODUs, and have adequate resources and
experience that demonstrate they are highly qualified to provide DP
system oversight.
    Proposed 46 CFR 61.50-4 requires an annual report to be submitted
by each DPSAO to the OCS NCOE. The annual report must contain each
investigation summary reported to the DPSAO under proposed 33 CFR
140.335(i). The annual report would provide valuable feedback and allow
the Coast Guard to verify that the FMEA, WSOC, ASOC and CAMO are being
updated with lessons learned that address the cause(s) of each
incident, thereby reducing the likelihood that future incidents will
occur. Additionally, the OCS NCOE may periodically audit the records of
DPSAOs to determine whether they are continuing to provide the DP
system oversight necessary to verify that DP system are in compliance
with the applicable requirements of this NPRM.
    Proposed 46 CFR 62.40-15 through 62.40-25 would require MODUs and
other vessels to which Sec.  140.335 applies to conduct testing based
on the FMEA to determine the CAMO for the DP system. The purpose of the
testing is to uncover failure modes. For example, failure modes that
could be transmitted through a bus tie should be included in the CAMO.
For this type of failure mode, the CAMO should require electrical
isolation during Critical OCS Activities to prevent the failure from
resulting in a complete power loss and subsequent drift off.
    Compliance with these provisions of this NPRM would be documented
on the Dynamic Positioning Verification Acceptance Document (DPVAD)
issued by a DPSAO under proposed 33 CFR 140.335.

Standard DP Requirements (Critical OCS Activities)

    In addition to meeting the minimum and intermediate DP requirements
described above, proposed 33 CFR 140.340 and 46 CFR 62.25-40 and 62.40-
5 would require vessels other than MODUs, of 6000 GT ITC or less, that
use a new DP system to engage in Critical OCS Activities, to comply
with IMO MSC/Circ.645 and the environmental type testing provisions of
International Electrotechnical Commission Standard 60092-504
``Electrical Installation in Ships'', and would require that such
vessels meet the provisions of the applicable MTS DP Operations Guide.
Because Critical OCS Activities consist of relatively high-risk
activities, including those where loss of position on a vessel could
strike the production riser of a floating or fixed facility, which may
result in an explosion, a loss of life, and/or an environmental event
similar in magnitude to that of the DEEPWATER HORIZON, Critical OCS
Activities should be subject to a higher safety requirement.
    DP systems on these vessels would, at a minimum, be required to
comply with the provisions of IMO MSC/Circ.645 and the MTS DP
Operations Guide (incorporated by reference, see Sec.  62.05-1)
relevant to equipment class 2 (DP-2) or higher. The applicable
provisions of IMO MSC/Circ.645 are the following paragraphs:
    1.1 Purpose and Responsibility;
    1.3 Definitions;
    2 Equipment Classes;
    3 Functional Requirements; and
    4 Operational Requirements.
    As discussed in the ``Background'' section above, IMO MSC/Circ.645
and the MTS DP Operations Guide contain recommendations. Circular 645,
however, is a mature, performance based document with wide industry
acceptance, and we propose to incorporate it into regulations as
mandatory provisions. The proposed regulations would also include a
survey and certification scheme different from that in the Circular.
Specifically, we propose to require the initial survey to include a
Failure Modes and Effects Analysis (FMEA) proving test, and require the
Critical Activity Mode of Operation (CAMO) to be identified.
    Development of a CAMO and ASOC or WSOC would also be required for
each vessel and well, which have different characteristics and risks.
Because of these differences, the proposed regulations cannot prescribe
in detail the content of these documents. Such regulations would be
extremely lengthy, in a constant state of change as DP technology
evolves, and prone to overbroad misapplication of standards that should
be tailored to each vessel and well.
    Instead, we propose to require that owners or operators consult the
applicable portions of the MTS DP Operations Guide as a method of
drafting these documents and complying with the other mandatory
provisions of the regulations. The MTS DP Operations Guide contains
principles for the development of these documents that address the
risks experienced by today's modern DP vessels. The Guide also contains
highly useful examples that will be applicable to a large majority of
vessels and wells.
    We anticipate that the examples in the MTS DP Operations Guide will
be used by industry largely without change. However, some vessels will
employ solutions to obtain DP reliability that vary from the examples
in the Guide, and will have the option to request the use of
alternative guidance from the Coast Guard Office of Design and
Engineering Standards (Commandant (CG-ENG)). Where this occurs, the
OCMI, the vessel owner or operator, the classification society, and the
DPSAO will apply the relevant principles of the MTS DP Operations Guide
to ensure the ASOC or WSOC and CAMO provide a sufficient level of DP
reliability to meet the DP-2 performance standard in IMO MSC/Circ.645,
paragraph 2.2.2.
    Owners or operators would also be required under proposed 46 CFR
62.40-10 to obtain an equivalent class notation from a classification
society possessing DP system rules that are aligned with IMO MSC/
Circ.645 and meet the requirements of proposed 46 CFR 61.50-3 and the
MTS DP Operations Guide provisions applicable to the vessel being
classed. These other vessels would also need to meet the environmental
design requirements of proposed 46 CFR 62.25-40. That section is
modeled after a standard promulgated by the International
Electrotechnical Commission (IEC) to ensure critical equipment is
appropriately designed to withstand the marine environment.\22\
---------------------------------------------------------------------------

    \22\ IEC 60092-504, Third Edition 2001-03, Electrical
Installations in Ships--Part 504: Special Features--Control and
Instrumentation, Clause 5.
---------------------------------------------------------------------------

Enhanced DP Requirements (MODUs and New DP Systems on Large Vessels)

    In addition to meeting the minimum, intermediate, and standard DP
requirements described above, proposed 33 CFR 140.345 and 46 CFR 62.20-
2 would require vessels other than MODUs, greater than 6000 GT ITC,
that use new DP systems to engage in Critical OCS Activities, and MODUs
that conduct Critical OCS Activities, to obtain plan review and surveys
from a DPSAO, which would be subject to oversight by the Coast Guard.
    The enhanced DP requirements are intended to improve DP designs to
support the industrial mission of the MODU or large vessel, and are
necessary because, as discussed in the Background section of this
preamble, a significant performance disparity exists in various

DP systems rated DP-2. For example, a DP-2 system on one vessel could
consist of a power system with two large generators, two switchboards,
and a bus tie; a DP-2 system on another vessel could consist of four
smaller generators, four switchboards, and four bus ties. All other
things being equal, a bus failure on the first power system would
result in a 50 percent reduction in power and thrust, while a bus
failure on the second would result in a 25 percent reduction.
    For these reasons, and particularly because of the higher risk
profile of these vessels when they are engaging in Critical OCS
Activities with a DP system, more rigorous safety standards are
necessary.

Dynamic Positioning Verification Acceptance Document (DPVAD)

    Proposed 33 CFR 140.335 would create a new document for vessels
other than MODUs of at least 500 GT ITC, and MODUs that use a DP system
to conduct Critical OCS Activities.
    A DPVAD would document compliance with the requirements of this
NPRM. This document would need to be renewed every 5 years, and would
be issued by a DPSAO after verifying that the vessel has met the
applicable DP requirements in this NPRM.

Training

    Operating a DP system requires such familiarity with the system
that the industry and international community have developed the term
DPO to describe a person qualified to operate a vessel in DP system
mode. This NPRM proposes to adopt that term, as well as the related
concept of a qualified trainee, called a DPOQ. Both terms are defined
in proposed 33 CFR 140.305.
    We propose to require that when using a DP system to maintain
station, a DPO must either operate the DP system or supervise a DPOQ
who is operating the DP system. A DPOQ, if present, may operate the DP
system if the DPO and the vessel's master have endorsed the DPOQ in
writing. Both the DPO and DPOQ must be mariners holding credentials as
a rating forming part of the navigational watch, able seafarer-deck,
operational-level deck officer, chief mate, master, a rating forming
part of the engineering watch, able seafarer-engine, operational-level
engineer officer, second engineer, or chief engineer, and must have
completed the applicable DP system training set out in proposed 33 CFR
140.315.
    The training requirements for the DPO and DPOQ are based on
international standards: Section B-V/e of the STCW Code; IMCA M 117
Rev.1, ``The Training and Experience of Key DP Personnel''; and IMO
MSC/Circ. 738, ``Guidelines for Dynamic Positioning System (DP)
Operator Training''. There are several training facilities in the
United States that are certified by the Nautical Institute, which has
established industry-accepted standards meeting the IMO and IMCA
guidance. Mariners who receive the training specified in proposed 33
CFR 140.315, and familiarize themselves with the specific system to be
operated on a particular vessel, are qualified to operate that MODU or
other vessel in DP mode.
    A DPOQ, by contrast, is a trainee qualified to operate a DP system
when directly supervised by a DPO. The DPOQ must complete training that
provides an introduction to the functions and use of a DP system, as
well as 30 days of training on board any DP system-equipped vessel, and
must demonstrate understanding of the specific vessel's system he or
she would operate such that the DPO and the vessel's master give
written endorsements of the DPOQ's qualifications. This training
sequence is based on IMCA M 117, and is in keeping with current
industry practices.
    Because DP systems vary widely, qualifying as a DPOQ is vessel
specific; a DPOQ from one vessel would still require familiarization to
qualify as another vessel's DPOQ. The DPOQ must be familiar with the
specific vessel's DP system, including the generation, distribution,
and management of power. The DPOQ also must have a thorough knowledge
of the CAMO and either the ASOC or WSOC, and must be familiar with the
vessel's FMEA so that he or she understands the vessel's capabilities
and can anticipate the vessel's movements in the event of DP system
failure or other reduced operating capacity. Although we recognize that
mariners working on board MODUs and other vessels should also have
additional knowledge and understanding of the industrial mission, as
provided in IMO Resolution A.1079(28), ``Recommendations for the
training and certification of personnel on mobile offshore units
(MOUs),'' such a requirement is outside the scope of this rulemaking.
    All records of training for the DPO and DPOQ must be maintained by
that individual and the owner or operator of the vessel. The Coast
Guard would accept company letters, course completion certificates from
a training institution, letters or course completion certificates from
the DP system manufacturer, or certifications from an industry-accepted
organization as proof that the seafarer received training.

Manning and Watchkeeping

    We also propose to include a definition of DP system in 33 CFR
140.305 and 46 CFR 62.10.1 to make clear that a vessel using a DP
system is a vessel ``underway.'' As discussed above in the
``Background'' section of this preamble, a vessel using a DP system is
underway when it is not at anchor, made fast to the shore or ocean
bottom, aground, or in an on-location or laid-up status. Clarifying
that a vessel conducting DP operations is underway would ensure that
appropriate manning, training, certification, and hours of rest
requirements apply.
    To address the application of the STCW Convention to MODUs and
other vessels using a DP system to engage in OCS activities on the U.S.
OCS, we propose manning requirements in 33 CFR 140.320 that meet the
training, certification, and watchkeeping provisions of the STCW
Convention. The specifics of these requirements are discussed below.
    We propose a risk-based approach using a performance standard in 33
CFR 140.310 to determine the number of DPOs and DPOQs necessary for the
safe operation of the DP system. The performance standard includes
compliance with STCW hours of rest, conditions for the operation with a
DPO and DPOQ, use of the officer of the watch as the DPO, and
consideration of the nature of the DP operations and the DP system.
This approach provides the flexibility to use different configurations
when operations or the DP system may require additional personnel, in
order to enhance navigational situational awareness.
    To ensure proper navigation and adequate operational oversight of
DPOs, we are proposing a requirement in 33 CFR 140.320 that any MODU or
other vessel using a DP to engage in OCS activities on the U.S. OCS
must be under the command of a master and maintain navigational
watches.
    These proposed requirements are necessary for the safety of the
vessel and its personnel in the event of a loss of position that
requires the use of manual control, and when other navigational issues
arise that are beyond the duties and responsibilities of the DPO. Even
when maintaining a fixed position using a functional DP system, a
situation may arise, such as avoiding a collision with a vessel, that
would be outside of the scope of a DPO's training, authority, and skill
level, and require a qualified master and navigational watch.
Additionally, these proposed

requirements are consistent with STCW training, certification, and
watchkeeping provisions, as well as the requirements in 46 CFR part 15,
that are applicable to U.S. MODUs and other vessels.
    To address the concern that the requirements in the STCW tables of
competency for masters and officers in charge of the navigational watch
exceed what is required in these proposed regulations for a MODU, the
STCW Convention permits the issuance of limitations based on vessel
types after identifying the competencies that are not applicable.
Although the proposed requirements do not refer to specific STCW
regulations or identify the appropriate competencies (specifically,
knowledge, understanding, and proficiency) applicable to MODUs, the
Coast Guard will address any differences through the issuance of
exemptions and limitations to the credential in accordance with 46 CFR
11.301(f). We may also consider developing policy to identify any
differences based on MODU type, if appropriate.
    In addition, we propose to include a requirement in 33 CFR 140.320
that the master and officers meet hours of rest requirements in
Regulation VIII/1 of the International Convention on Standards of
Training, Certification and Watchkeeping for Seafarers, 1978, as
amended, and Section A-VIII/1 of the Seafarers' Training, Certification
and Watchkeeping Code. These provisions would ensure that the
watchkeeping personnel and the watches on board MODUs and other vessels
are arranged to protect personnel from impairment because of fatigue.
These proposed requirements are consistent with the existing
regulations in 46 CFR part 15 as applicable to U.S. MODUs and other
vessels.
    We are also proposing a requirement in 33 CFR 140.310 to ensure
that the DPO and the officer of the watch are in direct communications
during DP system operation. Nothing in this NPRM, however, is to be
interpreted as removing or decreasing the responsibility of the master
and watchstanding officers for the safe navigation and operation of the
vessel. Changes to the authority of the master and crew on a MODU,
including matters relating to a MODU's industrial mission, are outside
the scope of this NPRM.
    Lastly, we propose to include a requirement in 33 CFR 140.320 that
each MODU be issued a manning document identifying the personnel
complement necessary to maintain watches and meet the hours of rest
requirements. Furthermore, a provision similar to existing 46 CFR
15.520 would permit the flag state to also consider the specialized
nature of each MODU, including the limitations and capabilities of the
DP system, when determining the minimum manning complement.

VI. Incorporation by Reference

    Material proposed for incorporation by reference appears in 33 CFR
140.7, 46 CFR 61.03-1, and 46 CFR 62.05-1. See ADDRESSES for
information on viewing this material. Copies of the material are
available from the sources listed in 33 CFR 140.7, 46 CFR 61.03-1, and
46 CFR 62.05-1. Before publishing a binding rule, we will submit this
material to the Director of the Federal Register for approval of the
incorporation by reference.

VII. Regulatory Analyses

    We developed this NPRM 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 NPRM is not a significant regulatory action
under section 3(f) of E.O. 12866.
    Accordingly, this NPRM has not been reviewed by the Office of
Management and Budget. A preliminary Regulatory Analysis (RA)
discussing costs, benefits, and alternatives considered is available in
the docket by following the instructions in the ``Viewing comments and
documents'' section of this preamble above.
    Table 1 summarizes the impacts of this NPRM.

      Table 1--Summary of Affected Population, Costs, and Benefits
------------------------------------------------------------------------
             Category                   Notice of proposed rulemaking
------------------------------------------------------------------------
Applicability.....................  U.S.- and foreign-flag vessels that
                                     use an existing or new DP system.
Affected population over 10-year    583 existing OSVs, 53 existing
 period.                             MODUs, and 43 existing crewboats.
                                    322 future OSVs, 57 future MODUs,
                                     and 20 future crewboats.
Industry Costs (7% discount rate).  $20.180 million (annualized).
                                    $141.733 million (10-year).
Benefits (7% discount rate).......  Monetized, avoided property damage
                                     and loss of production:
                                    $8.812 million (annualized).
                                    $61.895 million (10-year).
                                    Non-quantified:
                                    Reducing the risk of injuries, loss
                                     of life, and environmental damage
                                     due to a loss of position resulting
                                     from a DP failure.
Breakeven Analysis................  One incident of the magnitude of the
                                     SAMUDRA SURAKSHA disaster would
                                     need to be prevented every 48 years
                                     for the benefits to equal the
                                     costs.
------------------------------------------------------------------------
* Please refer to the Regulatory Analysis in the docket for details.

    A summary of the RA follows.
    During interactions with industry at National Advisory Committees,
DP conferences, and industry training seminars in DP design and
operations, industry expressed the need for a uniform DP standard from
the United States as a Coastal State. In response, we have developed
this NPRM, which would provide MODUs and other vessels that engage in
OCS Activities while using a DP system on the U.S. OCS a uniform
standard that addresses design, construction, and operation of DP
systems. This standard would aid

owners or operators in safely meeting energy market demands and
pursuing offshore energy ventures that are farther offshore and in
deeper waters.
    To minimize the costs to industry, we have based our proposed
standards and requirements on established guidelines used by today's DP
industry, specifically IMO MSC/Circ.645 and the MTS ``DP Operations
Guide.'' We have also limited the application of the DP system design
standards to existing and new MODUs, and to new vessels other than
MODUs (e.g., OSVs and crewboats) that engage in Critical OCS Activities
while using a DP system. Vessels other than MODUs, with existing DP
systems that conduct Critical OCS Activities, would be
``grandfathered'' from complying with the DP systems design standards,
which are the most costly requirements of this NPRM, and would be
permitted to phase-in operating standards, such as developing and
maintaining an FMEA, CAMO, and ASOCs, reporting and investigating DP
incidents, and conducting DP Surveys, according to the applicable date
listed in Table 2.

                 Table 2--Phase-In Schedule for Vessels (Except MODUs) With Existing DP Systems
----------------------------------------------------------------------------------------------------------------
                                          Date requirements
  Tonnage of vessel other than MODU           effective               Number of OSVs and crewboats affected
----------------------------------------------------------------------------------------------------------------
At least 1,900 GT ITC................  Date of Final Rule + 3   224 OSVs and 0 Crewboats.
                                        years.
At least 900 GT ITC..................  Date of Final Rule + 6   183 OSVs and 0 Crewboats.
                                        years.
Greater than 500 GT ITC..............  Date of Final Rule + 9   85 OSVs and 1 Crewboat.
                                        years.
----------------------------------------------------------------------------------------------------------------

    This flexibility in the phase-in schedule is expected to minimize
costs for the population of vessels most likely to not be in compliance
with the provisions of this NPRM by date of publication of a final
rule. Further, by extending the phase-in timeline, we have reduced the
possibility that DP testing providers would be overwhelmed by any
sudden increase in demand for their services. Therefore, although a
less lengthy phase-in schedule would lead to an earlier accrual of
benefits, it may not lead to lower costs overall, if indirect costs
(such as a lower quality of service, longer delays between testings,
and higher prices in the short-term) are also taken into account.
    When properly designed and operated within design limits, DP
systems provide industry with an ability to safely maintain position,
using these rapidly evolving, computerized systems to stay within
meters of their desired location even in the face of wind, wave, and
current forces. However, these systems are not immune from failures
and, because MODUs and other vessels in this industry perform high-
hazard industrial missions, including drilling for oil and gas,
conducting personnel transfers, and handling large quantities of oil
and hazardous materials, a loss of position could result in an incident
with significant loss of life or large spill of oil or hazardous
materials. Establishing minimum standards for DP systems used to
conduct OCS activities would promote the safety of people and property
engaged in such operations. While this NPRM would impose no carriage
requirements nor require use of DP, it would require that minimum
design, operation, manning, personnel, and training requirements be met
if the vessel is using DP.
    This NPRM would also require vessels engaged in certain critical
situations (e.g., transfer of personnel and/or hazardous materials) to
meet DP-2 design standards to ensure that a single failure of a primary
component does not lead to catastrophic consequences.
    Additionally, the provisions required of MODUs and other vessels
engaged in Critical OCS Activities enhance the capability of a DP
system beyond what it would achieve by obtaining a DP equipment class 2
or 3 notation from a classification society with DP rules aligned with
IMO MSC/Circ.645. The enhanced capability enables a MODU or other
vessel to more safely perform its industrial mission because the DP
system is more fault-tolerant and fault-resistant, and has greater
capability to maintain position after a worst-case failure than a
vessel operating with DP equipment class 1. Further, these additional
provisions would require owners or operators to develop and implement
operational measures and decision-support tools (ASOC or WSOC, and
CAMO) to operate a DP system within its design limits, mitigating the
severity of a DP system failure in the event that one occurred.
Reason for Coast Guard Action
    MODUs and other vessels that use DP to engage in OCS activities
that operate with lower safety standards may cause harm or increased
risk of harm to human safety and the environment. The costs of these
lower safety standards (increased risk) are not completely borne by the
OSV or MODU owners or operators, so they are external to the business
decisions of these owners or operators. The crew, which may face
increased risk from lower safety standards, may not have any say in
safety-related decisions. Since the crew may be adversely affected by
business decisions which it may not be able to mitigate through
increasing its price (labor cost), it absorbs the cost of the
externality (increased risk from lower safety standards), which is a
market failure. Oil spills that result from OSV or MODU accidents also
impose an externality in the forms of environmental damage and clean-up
costs that are not borne directly by the OSV and MODU owners.
Affected Population
    Based on the Coast Guard's Marine Information for Safety and Law
Enforcement (MISLE) data, we estimate that 583 existing OSVs (460 U.S.-
flag), 53 existing MODUs (2 U.S.-flag), and 43 existing crewboats (42
U.S.-flag) would be affected by this NPRM. Using historical population
data from MISLE, we forecast that over the 10-year period of this
analysis, 322 future OSVs (which include OSVs less than 6,000 GT ITC
and OSVs of at least 6,000 GT ITC), 579 future MODUs, and 20 future
crewboats would be affected by this NPRM.\23\
---------------------------------------------------------------------------

    \23\ Of this, 255 future OSVs, 2 future MODUs, and 16 future
crewboats are expected to be U.S.-flag.

                                                                             Table 3--Summary of Affected Population
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Future     Existing    Phased-in
                                                                Future     Existing    Phased-in  OSVs of at  OSVs of at  OSVs of at
                            Year                               OSVs less   OSVs less   OSVs less     least       least       least      Future     Existing     Future     Existing    Phased-in
                                                              than 6,000  than 6,000  than 6,000   6,000 GT    6,000 GT    6,000 GT      MODUs       MODUs     crewboats   crewboats   crewboats
                                                                GT ITC      GT ITC      GT ITC        ITC         ITC         ITC
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Base........................................................  ..........         563  ..........  ..........          20  ..........  ..........          53  ..........          43  ..........
1...........................................................          22  ..........           0           5  ..........           0           6  ..........           3  ..........           0
2...........................................................          46  ..........           0          10  ..........           0          14  ..........           6  ..........           0
3...........................................................          54  ..........           0          15  ..........           0          20  ..........          10  ..........           0
4...........................................................          77  ..........         224          20  ..........          20          27  ..........          12  ..........           0
5...........................................................         102  ..........           0          25  ..........           0          33  ..........          14  ..........           0
6...........................................................         128  ..........           0          30  ..........           0          38  ..........          15  ..........           0
7...........................................................         159  ..........         183          35  ..........           0          43  ..........          16  ..........           0
8...........................................................         195  ..........           0          40  ..........           0          48  ..........          17  ..........           0
9...........................................................         233  ..........           0          45  ..........           0          53  ..........          18  ..........           0
10..........................................................         272  ..........          85          50  ..........           0          57  ..........          20  ..........           1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    This NPRM would create design, operating, manning, and safety
standards by adding or amending regulations in the following
categories:
Minimum DP System Requirements
    DPO and DPOQ Personnel and Training \24\ (33 CFR 140.310 and
140.315)--would establish the minimum number of DPOs and DPOQs
necessary for the safe operation of the DP system, as well as minimum
training and experience requirements that a DPO or DPOQ must meet prior
to operating a DP system on the U.S. OCS. A DPO or DPOQ must
demonstrate thorough knowledge of the vessel's DP system components,
operational manuals, and the CAMO and ASOC or WSOC. We expect no
additional cost to be incurred by industry as a result of these manning
requirements and training procedures, because industry contracts
currently require these standards.\25\ In addition to incorporating
these standards into this NPRM, we would also require company letters,
course completion certificates from a training institution, letters or
course completion certificates from the DP system manufacturer, or
certification from an industry-accepted organization as proof of
completion of training requirements. We estimate that it would cost
industry $14.30 per DPO or DPOQ to have this documentation made
available for review by a Coast Guard official during an inspection (6
minutes x $143.00 per hour). This cost would be incurred by an owner or
operator each time a new DPO/DPOQ is hired.
---------------------------------------------------------------------------

    \24\ In year 1, we expect that 585 OSVs less than 6,000 GT ITC,
25 OSVs of at least 6,000 GT ITC, 59 MODUs, and 46 crewboats would
incur costs as a result of this provision. Over the 10-year study,
1,078 vessels would incur costs.
    \25\ Based on teleconferences with industry that took place in
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
---------------------------------------------------------------------------

    DP Manning Requirements (33 CFR 140.320)--would require all
applicable MODUs and other vessels using a DP system to engage in OCS
activities on the U.S. OCS to be under the command of a master and have
an adequate number of mates or navigational watches to meet the hours
of rest requirements in Regulation VIII/1 of the STCW and Section A-
VIII/1 of the ``Seafarers' Training, Certification and Watchkeeping
Code.'' By providing some flexibility in the minimum number of required
masters and navigational watches, we expect that all but six vessels
would comply with this requirement prior to the issuance of a final
rule in order to compete in international markets that already require
this standard.\26\ We estimate that if a vessel would not have complied
with this requirement in the absence of a final rule, then at most it
would incur an annual cost of $1,193,920. This maximum cost would be
incurred if a vessel did not meet the minimum number of mates and
navigational watches as required in this proposed provision. We
estimate that each of the six non-compliant MODUs would need to hire
two new masters and six new navigational watches in order to comply
with the hours of rest requirements in STCW.\27\
---------------------------------------------------------------------------

    \26\ After examining all applicable vessels' Minimum Safe
Manning Certificates, we found only six existing U.S. OCS MODUs that
would not comply with this requirement. All six of these MODUs are
owned by a single entity and are flagged by Liberia, which considers
these MODUs non-self-propelled.
    \27\ The Coast Guard assumes that these positions would operate
under current industry practices: A master and navigational watch
would work a 28-day on/off schedule, with each work day consisting
of an 8-hour shift; the master would then be on call for the
remainder of the day, while three navigational watches would rotate
8-hour shifts throughout the day. We also expect that two masters
and six navigational watches would alternate 28-day on/off rotations
throughout the year in order to keep that MODU operational year
round. As a result, one crew, which consists of three navigational
watches and one master, would work seven rotations per year, while
the other group would work six rotations per year.
---------------------------------------------------------------------------

Intermediate DP System Requirements
    FMEA and FMEA Proving Test Document \28\ (33 CFR 140.335, 46 CFR
62.40-15 and 62.40-20)--would require all applicable vessels that use a
DP system while engaging in Critical OCS Activities to complete and
maintain an FMEA and an FMEA proving test document. An FMEA would test
a vessel's DP system to establish design and operational limits, which
could then be used to develop a CAMO and ASOC or WSOC. With these
support tools, operators would have criteria for deciding when to cease
operations to prevent a worst-case failure from occurring.
---------------------------------------------------------------------------

    \28\ In year 1, we expect that 12 OSVs under 6,000 GT ITC, and 2
crewboats would incur costs as a result of this provision. Over the
10-year study, 390 OSVs under 6,000 GT ITC and 14 crewboats would
incur costs.
---------------------------------------------------------------------------

    Based on roundtable discussions that included a majority of the
owners and operators of MODUs operating on the U.S. OCS,\29\ we expect
that all existing and future MODUs would comply with this requirement
even in the absence of this NPRM in order to compete in international
markets. However, similar roundtable discussions with OSV and crewboat
owners and operators indicated that roughly 50 percent of current
vessels would not be in compliance with this proposed requirement.
Owners and operators of OSVs and crewboats further indicated that it is
likely that a similar percentage of future vessels would also not be
compliant with these proposed requirements in the absence of a rule.
Through statements given by FMEA testing providers, we estimate that it

would cost an owner or operator of a OSV or crewboat a one-time payment
of $275,000 per vessel to comply with this proposed requirement.
---------------------------------------------------------------------------

    \29\ During the development of this NPRM, the Coast Guard held
three roundtable discussions with representatives from various
industry segments. Participants and summaries from these discussions
are available at http://www.uscg.mil/hq/cg5/cg521/ cg521/.
---------------------------------------------------------------------------

    CAMO and ASOC or WSOC \30\ (33 CFR 140.335)--would require all
applicable vessels to include in the vessel's DP Operations Manual a
defined CAMO and, depending on whether the vessel is a MODU or vessel
other than a MODU, a ASOC or WSOC. A vessel's CAMO is developed after
conducting an FMEA to determine a DP system's worst-case failure. The
CAMO will tabulate how to configure the vessel's DP system, including
power generation and distribution, propulsion, and position reference
systems, so that the DP system, as a whole is fault tolerant and fault
resistant. The vessel's CAMO is then used to develop an ASOC or WSOC
that will provide criteria on the operational, environmental, and
equipment performance limits considered necessary for safe DP system
operations while operating on a well. These tools are supplements to a
DP-2 or higher class system, which would further decrease the
probability that a worst-case failure could occur.
---------------------------------------------------------------------------

    \30\ In year 1, we expect that 15 OSVs, and 2 crewboats would
incur costs as a result of this provision. Over the 10-year study,
390 OSVs under 6,000 GT ITC, 40 OSVs of at least 6,000 GT ITC, 35
MODUs (only the cost of a CAMO), and 14 crewboats would incur costs.
---------------------------------------------------------------------------

    Based on roundtable discussions with MODU owners and operators, all
existing and future MODUs are expected to comply with the requirement
that a MODU must have a WSOC, although only 70 percent of existing and
future MODUs have--or are expected to have--developed a CAMO in the
absence of this proposed rule.\31\ Similar conversations with owners
and operators of OSVs and crewboats indicated that approximately 50
percent of current vessels would not be compliant with either of these
requirements. Owners and operators of OSVs and crewboats further
indicated that it is likely that a similar percentage of future vessels
would also not be compliant with these requirements in the absence of a
rule. Through statements provided by industry, we estimate that it
would cost an owner or operator a one-time payment of $9,120 per vessel
to develop a CAMO and ASOC or WSOC simultaneously (160 hours x $59.00
per hour), or $4,560 to develop a CAMO or ASOC or WSOC separately (80
hours x $59.00 per hour).
---------------------------------------------------------------------------

    \31\ Based on teleconferences with industry that took place in
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
---------------------------------------------------------------------------

    Report Reactive Change of DP Status \32\ (33 CFR 140.335)--would
require all applicable vessels to report to an authorized DPSAO any
incident in which the vessel experiences a reactive change of the DP
system's status from green to yellow and/or red. Neither the Coast
Guard nor the IMO or MTS currently require vessels that use DP systems
to report changes in status. The Coast Guard reviewed documents
compiled by the International Marine Contractors Association (IMCA),
which is an international trade association that represents offshore,
marine, and underwater engineering companies. The IMCA documents
compile Dynamic Positioning station-keeping incidents voluntarily
reported by IMCA members. Although the documents do not specifically
note whether an incident results in a change in status (i.e., green to
red or yellow), IMCA notes that an activated red DP alert status would
classify as an incident. We use the IMCA incident rate per vessel as
the best available data on the change in status from green to red.
---------------------------------------------------------------------------

    \32\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur
costs as a result of this provision. Over the 10-year study, 764
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110
MODUs, and 21 crewboats would need to report DP incidents.
---------------------------------------------------------------------------

    Based on a review of IMCA station keeping incident reports from
2004 through 2010 (which is the last year the report was available
publically), we estimated that a vessel would experience a reactive
change of the DP system's status from green to red an average of 1.45
times per year.\33\ Based on subject matter expert input from Coast
Guard personnel in the Office of Design and Engineering Standards, we
assume that vessels would incur a similar number of reactive changes of
the DP system's status from green to yellow, and therefore estimate
that an owner or operator would need to report an average of 2.90
incidents per year per vessel. The rate of DP incidents per vessel may
decrease over time as a result of other requirements in this proposal.
We assess the impact of the decreased incident rate in the Benefits
section of this document.
---------------------------------------------------------------------------

    \33\ These reports can be purchased through the IMCA Web site
at: http://www.imca-int.com/.
---------------------------------------------------------------------------

    Because this proposed requirement would be new, we anticipate
creating new burdens for industry. We estimate that it would cost an
owner or operator $47.67 per change in DP status to comply with this
proposed requirement (20 minutes x $143 per hour). Further, we estimate
that it would cost the authorized DPSAO $13.67 per change in DP status
to review and record the information, which we assume would be passed
on to the owner or operator through the form of the DPSAO charging
higher prices for its services (20 minutes x $41.00 per hour).\34\
---------------------------------------------------------------------------

    \34\ According to a Coast Guard Subject Matter Expert, it would
take an owner or operator 20 minutes to report a DP status change to
a DPSAO--which is expected to be done via email, and that it would
take an employee from the DPSAO an additional 20 minutes to read and
respond to this report.
---------------------------------------------------------------------------

    DP Incident Investigations \35\ (33 CFR 140.335)--would require all
applicable MODUs and other vessels to conduct a DP incident
investigation for every reported DP status change from green to red or
yellow, and then to submit a summary report of the investigation's
findings to the authorized DPSAO. As every DP incident would require a
DP investigation, we estimate that an average of 2.90 DP incident
investigations would need to be conducted per year per vessel.
---------------------------------------------------------------------------

    \35\ In year 1, we expect that 12 OSVs under 6,000 GT ITC, 3
OSVs of at least 6,000 GT ITC, and 3 crewboats would incur costs to
conduct DP investigations. Additionally, 22 OSVs under 6,000 GT ITC,
5 OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would
incur costs to submit DP investigation reports to the DPSAO during
the first year. Over the 10-year study, 383 OSVs under 6,000 GT ITC,
35 OSVs of at least 6,000 GT ITC, and 21 crewboats would incur costs
to conduct DP investigations, and 895 OSVs under 6,000 GT ITC, 70
OSVs of at least 6,000 GT ITC, 110 MODUs, and 21 crewboats would
need to submit DP investigation reports.
---------------------------------------------------------------------------

    After conducting roundtable discussions with owners and operators
of MODUs and other vessels, we determined that all existing MODUs and
50 percent of existing OSVs are currently conducting DP investigations
following a DP incident, despite not being required to do so.\36\
Through these same roundtable discussions, we determined that no owners
or operators of crewboats currently conduct an investigation following
a DP incident. For owners or operators that do not, or would not,
conduct a DP incident investigation in the absence of a rule, we
estimate that it would cost $570 per DP incident to conduct the
investigation (10 hours x $57.00 per hour).\37\
---------------------------------------------------------------------------

    \36\ Based on teleconferences with industry that took place in
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
    \37\ According to a Coast Guard Subject Matter Expert, it would
take 10 hours on average for a ship engineer employed by the owner
or operator to conduct a DP incident investigation.
---------------------------------------------------------------------------

    In addition to the costs that would be incurred to conduct DP
incident investigations, all owners or operators using DP while
conducting Critical OCS Activities would experience new costs to submit
the summary report of the DP investigation to the authorized DPSAO.

As this is a new reporting requirement, it is not expected that any of
the affected population would be compliant with this part of the
provision in the absence of this NPRM. Consequently, we estimate that
it would cost an owner or operator $119.10 per DP incident
investigation to write the summary report and then submit it to the
authorized DPSAO ((2 hours x $57.00 per hour) + $5.10 shipping
fee).\38\ Further, we estimate that it would cost an authorized DPSAO
$82.00 per report to review and record the information, which we assume
would then be passed on to the owner or operator through the form of
the DPSAO charging higher prices for its services (2 hours x $41.00 per
hour).\39\
---------------------------------------------------------------------------

    \38\ According to a Coast Guard Subject Matter Expert, it would
take a ship engineer 2 additional hours to write a DP investigation
summary and then submit it to the DPSAO. Also included in this
estimate is the time it would take on average to make changes to the
vessel's CAMO and ASOCs/WSOCs.
    \39\ According to a Coast Guard Subject Matter Expert, it would
take a DPSAO employee 2 hours on average to read through the report
and respond if necessary.
---------------------------------------------------------------------------

    Annual DP Incident Investigation Report \40\ (46 CFR 61.50-4)--
would require a DPSAO to submit an annual report containing a summary
of each DP incident investigation conducted throughout the year for all
vessels using its services. Because this would be a new requirement, we
anticipate new burdens for industry and estimate that it would cost an
owner or operator $169.10 per year to have the DPSAO file the annual
report ((4 hours x $41.00 per hour) + $5.10 shipping fee).\41\ Further,
we estimate that it would cost the Government $150.00 per report to
review the information provided and respond if necessary (2 hours x
$75.00 per hour).
---------------------------------------------------------------------------

    \40\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur
costs as a result of this provision. Over the 10-year study, 764
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110
MODUs, and 21 crewboats would need to submit annual DP investigation
reports.
    \41\ According to a Coast Guard Subject Matter Expert, it would
take a DPSAO employee 4 hours on average to prepare the Annual DP
Incident Investigation Report on behalf of the owner or operator.
---------------------------------------------------------------------------

    Emergency Disconnects and Serious Marine Incidents Resulting from a
DP Status Change from Green to Red (33 CFR 140.335)--would require all
applicable vessels to report to the cognizant OCMI any incident in
which the vessel initiates an emergency disconnect or experiences a
serious marine incident (as defined by 46 CFR 4.03-2) after
experiencing a reactive change of the DP system's status from green to
red. Based on a review of IMCA documents from 2004 through 2010, we
estimated that a vessel would need to initiate an emergency disconnect
19 percent of the time it experiences a DP change in status. Further,
based on the same industry documents, a serious marine incident (as
defined by 46 CFR 4.03-2) would occur 5 percent of the time a vessel
experiences a reactive change of the DP system's status from green to
red. Because this is a new requirement, we anticipate creating new
burdens for industry. We estimate that it would cost an owner or
operator $47.67 per status change resulting in either an emergency
disconnect or serious marine incident to comply with this requirement
(20 minutes x $143.00 per hour). Further, we estimate that it would
cost the government $25.00 per report to review and record the
information (20 minutes x $75.00 per hour).
    Dynamic Positioning Verification and Acceptance Document (DPVAD)
\42\ (33 CFR 140.335)--would create a new document for MODUs and
applicable vessels, other than MODUs, that use a DP system to conduct
Critical OCS Activities. This document would be issued by the
authorized DPSAO that performed the vessel's DP surveys, and would need
to be renewed once every 5 years.
---------------------------------------------------------------------------

    \42\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur
costs as a result of this provision. Over the 10-year study, 764
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110
MODUs, and 21 crewboats would need to receive a DPVAD.
---------------------------------------------------------------------------

    According to a Coast Guard Subject Matter Expert, it is expected
that it would take an additional 15 minutes for a DPSAO surveyor to
complete the DPVAD, as the DPVAD would be issued by the same DPSAO that
conducted the vessel's DP surveys. As a result, we estimate that it
would cost an owner or operator $10.25 once every 5 years to comply
with this provision (15 minutes x $41.00 per hour).
    DP Surveys \43\ (46 CFR 61.50-2, 61.50-5, 61.50-10, and 61.50-15)--
would require all applicable vessels to have a DPSAO conduct DP system
surveys on an initial, periodic, and annual basis. The organization
could be the classification society that issues the DP notation under
62.40-5, because the NPRM would require that the classification society
issuing the DP notation be highly qualified in DP system assurance.
During the initial survey, and again during the periodic survey 5 years
later, a full FMEA test must be performed. Based on roundtable
discussions with owners and operators of MODUs and other vessels, of at
least 6,000 GT ITC, we have determined that all existing vessels are
currently in compliance with this requirement and that all future
vessels would also be in compliance with this requirement.\44\ However,
this provision would also require a DPSAO to notify the cognizant OCMI
at least 30 days in advance of the time and location of these DP
surveys. Because this is a new requirement, we anticipate new burdens
for industry. We estimate that it would cost an owner or operator $4.10
per year to comply with this requirement (6 minutes x $41.00 per
hour).\45\ Further, we anticipate that the OCMI would be present during
most DP surveys. However, as we anticipate that these surveys would
occur in conjunction with another Coast Guard inspection, the cost
incurred by the Coast Guard to attend DP surveys would be minimized. We
estimate that it would cost the Government an additional $607.50 per
survey as a result of this NPRM ((6 minutes to record the time and
location of survey + 8 hours to attend the survey) x $75.00 per
hour).\46\
---------------------------------------------------------------------------

    \43\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur
costs as a result of this provision. Over the 10-year study, 764
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110
MODUs, and 21 crewboats would need to report the time and location
of the DP Survey.
    \44\ Based on teleconferences with industry that took place in
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
    \45\ According to a Coast Guard Subject Matter Expert, it would
take a DPSAO employee 6 minutes on average to notify the OCMI on the
time and location of the DP Survey.
    \46\ According to a Coast Guard Subject Matter Expert, a DP
Survey would take approximately 8 hours to conduct.
---------------------------------------------------------------------------

Standard DP System Requirements
    DP System Equipment and Notation Requirements \47\ (46 CFR 62.40-
5)--would require all applicable vessels that use a DP system while
engaging in Critical OCS Activities to use, at a minimum, a DP-2 class
system and to obtain, at a minimum, a DP-2 class notation.
    Based on vessel specification sheets made publicly available by
MODU owners and operators, all existing MODUs comply with this proposed
requirement, even in the absence of this NPRM, in order to compete in
international markets.\48\ The same cannot be said about vessels other
than MODUs that use DP, however. After

examining existing OSV's and crewboat's vessel specification sheets, we
have determined that only 60 percent of existing OSVs and 70 percent of
existing crewboats that use DP would comply with the DP-2 equipment
requirement. Because of the mechanical and structural demands
associated with DP-2 systems or higher that are not feasible to satisfy
in older vessels, the Coast Guard proposes to make the existing
population of OSVs and crewboats exempt from the DP-2 equipment
requirements of this NPRM.
---------------------------------------------------------------------------

    \47\ In year 1, we expect that 12 OSVs under 6,000 GT ITC, and 3
crewboats would incur costs to obtain DP-2 class notation. Over the
10-year study, 143 OSVs under 6,000 GT ITC, and 20 crewboats would
incur costs as a result of this requirement.
    \48\ We assume that owners and operators of MODUs will continue
to follow this practice in the future.
---------------------------------------------------------------------------

    Our research indicates, however, that offshore oil and gas entities
are starting to require that all new, contracted OSVs be equipped with
DP-2 systems or higher.\49\ This same request is not yet being made for
all new, contracted crewboats though. As a result, we estimate that in
the years 1 through 3 following the passage of a final rule, one, newly
constructed crewboat per year would incur costs in order to comply with
the DP-2 equipment requirement. In later years though, all crewboats
are expected to be equipped with a DP-2 classed system even in the
absence of this proposed rule.
---------------------------------------------------------------------------

    \49\ Tollefsen, Sveinung. ``DP systems in the OSV Industry,''
May 2010. http://dspace.mit.edu/bitstream/handle/1721.1/64580/727052552.pdf?sequence=1.
---------------------------------------------------------------------------

    In addition to determining the percentage of existing OSVs and
crewboats that would comply with the equipment standard in this
proposed rule, we also determined through looking at vessel
specification sheets that only 50 percent of existing OSVs and 0
percent of existing crewboats would comply with the class notation
requirement. We have found that although this NPRM would grandfather
certain vessels (other than MODUs) that use a DP system installed prior
to issuance of any rule from this provision, owners or operators of
OSVs and crewboats have pointed out during roundtable discussions that
it is likely that a similar percentage of future vessels would also not
be compliant with this requirement in the absence of a proposed rule.
    We estimate that it would cost an owner or operator $876,237 per
vessel to comply with the requirement that a vessel using DP to engage
in Critical OCS Activities must use a DP-2 class system or higher, and
an additional one-time payment of $64,250 per vessel to obtain a DP-2
class notation.
Enhanced DP System Requirements
    DP System Plans \50\ (46 CFR 62.20-2)--would require all MODUs and
other vessels, of at least 6,000 GT ITC, that use a DP system installed
on or after the effective date of a final rule to submit their DP
system plans to a DPSAO for approval. The organization could be the
classification society that issues the DP notation under 62.40-5,
because the NPRM would require that the classification society issuing
the DP notation be highly qualified in DP system assurance. As
proposed, these plans must include a system description, specifications
of position reference and environmental monitoring sensors or systems,
the location of thrusters and control system components, details of the
DP system monitoring and alarm system, FMEA proving test documents and
annual survey documents, the vessel's CAMO, and the DP system
designer's or manufacture's self-certification of the DP system control
equipment to the environmental design standards.
---------------------------------------------------------------------------

    \50\ In year 1, we expect that 5 OSVs of at least 6,000 GT ITC,
and 59 MODUS would incur costs to submit their DP system plans to
the DPSAO. Over the 10-year study, 50 OSVs of at least 6,000 GT ITC,
and 110 MODUs would incur costs as a result of this proposed
requirement.
---------------------------------------------------------------------------

    Based on roundtable discussions with owners and operators of MODUs
and other vessels, of at least 6,000 GT ITC, we have determined that
all vessels currently would be in compliance with this requirement in
the absence of a rule.\51\ However, this provision would also require
the DPSAO to submit the plans to the Coast Guard Outer Continental
Shelf National Center of Expertise (OCS NCOE). Because this is a new
requirement, we anticipate new burdens for industry. We estimate that
it would cost a DPSAO $25.60 ((30 minutes x $41.00 per hour) + $5.10
shipping fee) to submit a vessel's DP system plan.\52\ Further, we
estimate that it would cost the Government $2,700.00 (36 hours x $75.00
per hour) to review a DP system plan.
---------------------------------------------------------------------------

    \51\ Based on teleconferences with industry that took place in
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
    \52\ According to a Coast Guard Subject Matter Expert, it would
take 30 minutes for a DPSAO to prepare and submit a vessel's DP
system plan to the Coast Guard.
---------------------------------------------------------------------------

Other
    Dynamic Positioning System Assurance Organization Application
Process (46 CFR 61.50-3 and 62.40-5)--would require a DPSAO (for the
purposes of conducting DP surveys under 61.50) to apply to the Coast
Guard for acceptance to provide these services. This provision provides
guidelines as to who should apply, as well as what information the
applicant should provide in the application. We estimate that it would
cost a DPSAO $1,235.10 to prepare and submit each application ((30
hours x $41.00 per hour) + $5.10 shipping fee). Further, we estimate
that it would cost the Government $600.00 per application to review
each document and reach a decision (8 hours x $75.00 per hour).
Request for Comment
    We would appreciate additional comments on our cost assumptions,
including rates of current compliance. Information is specifically
requested on the following:
    (1) Fraction of current MODUs, OSVs and crewboats using DP-1, DP-2,
or DP-3.
    (2) Fraction of newly built MODUs, OSVs and crewboats being
equipped with DP-1, DP-2, or DP-3.
    (3) Frequency of changes in DP status from green to red and green
to yellow.
    (4) Costs to develop an FMEA and WSOC/ASOC.
    (5) Additional cost to equip a newly built vessel with DP-2 instead
of DP-1.

Please submit all comments and related material according to the
instructions given in the DATES, ADDRESSES, and Public Participation
and Request for Comments sections of this preamble above.
Costs
    We estimate the total average costs of this NPRM to industry for a
10-year period as summarized in Table 4.\53\
---------------------------------------------------------------------------

    \53\ We document the costs at a 7- and 3-percent discount rate
as set forth by guidance in the Office of Management and Budget's
(OMB) Circular A-4.

                                      Table 4--Total Industry Cost of NPRM
                                                   [Per year]
----------------------------------------------------------------------------------------------------------------
                                                                                Discounted costs
                           Year                               Undiscounted   -----------------------------------
                                                                  costs              7%                3%
----------------------------------------------------------------------------------------------------------------
1.........................................................       $13,295,128       $11,612,479       $12,531,933

2.........................................................        13,583,758        11,864,581        12,803,995
3.........................................................        10,900,925         8,898,402         9,975,891
4.........................................................        44,460,494        33,918,698        39,502,573
5.........................................................        12,960,131         9,240,394        11,179,523
6.........................................................        12,958,982         8,635,117        10,852,943
7.........................................................        40,540,725        25,246,726        32,963,320
8.........................................................        15,177,650         8,833,530        11,981,377
9.........................................................        15,965,539         8,684,195        12,236,256
10........................................................        29,112,460        14,799,299        21,662,405
                                                           -----------------------------------------------------
    Total.................................................       208,955,792       141,733,422       175,690,215
                                                           -----------------------------------------------------
Annualized................................................  ................       $20,179,651       $20,596,253
----------------------------------------------------------------------------------------------------------------

    The 10-year discounted present value cost to industry of this NPRM
is approximately $141.733 million ($73.239 million to domestic owners
or operators), based on a 7-percent discount rate, and $175.690 million
($91.389 million to domestic owners or operators), based on a 3-percent
discount rate. The annualized cost to industry is $20.180 million
($10.428 million to domestic owners or operators), based on a 7-percent
discount rate, and $20.596 million ($10.714 million to domestic owners
or operators), based on a 3-percent discount rate.
    Table 5 summarizes the total 10-year present value cost to industry
of this NPRM by risk profile and requirement.

                 Table 5--Total Marginal and Annualized Industry Costs for NPRM by Risk Profile
----------------------------------------------------------------------------------------------------------------
                                                   10-year cost                             Annualized
           Requirement           -------------------------------------------------------------------------------
                                   Undiscounted         7%              3%              7%              3%
----------------------------------------------------------------------------------------------------------------
                                         Minimum DP Manning Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Provide Proof of                $467,996        $332,365        $400,855         $47,321         $46,992
 Training.......................
Cost to Comply with DP Manning        71,635,200      50,313,567      61,106,279       7,163,520       7,163,520
 Requirements...................
                                 -------------------------------------------------------------------------------
    Total.......................      72,103,196      50,645,932      61,507,133       7,210,841       7,210,512
----------------------------------------------------------------------------------------------------------------
                                       Intermediate DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Complete FMEA and FMEA       111,100,000      74,383,054      92,903,263      10,590,474      10,891,097
 Proving Test Document..........
Cost to Develop CAMO and ASOC or       4,208,880       2,858,478       3,540,664         406,983         415,074
 WSOC...........................
Cost to Report DP Status Changes         905,587         565,296         734,721          80,485          86,132
 from Green to Red or Yellow....
Cost to Conduct DP Incident            6,591,592       4,081,179       5,329,997         581,068         624,838
 Investigations.................
Cost to Submit Annual DP                 860,550         537,146         698,162          76,478          81,846
 Incident Investigation Report..
Cost to Report Emergency                  28,791          18,548          23,667           2,641           2,774
 Disconnect and Serious Marine
 Incidents......................
Cost to Obtain a DPVAD..........          14,719           9,594          12,159           1,366           1,425
Cost to Report DP Surveys.......          20,865          13,024          16,928           1,854           1,984
                                 -------------------------------------------------------------------------------
    Total.......................     123,730,983      82,466,319     103,259,560      11,741,349      12,105,171
----------------------------------------------------------------------------------------------------------------
                                         Standard DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Obtain DP-2 System             2,628,711       2,299,523       2,478,534         327,400         290,560
 Equipment......................
Cost to Obtain DP-2 Class             10,472,750       7,119,161       8,803,142       1,013,608       1,031,997
 Notation.......................
                                 -------------------------------------------------------------------------------
    Total.......................      13,101,461       9,418,684      11,281,676       1,341,009       1,322,557
----------------------------------------------------------------------------------------------------------------
                                         Enhanced DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Submit DP System Plans..           4,096           3,222           3,670             459             430
                                 -------------------------------------------------------------------------------
    Total.......................           4,096           3,222           3,670             459             430
----------------------------------------------------------------------------------------------------------------

    We also expect that the Government would incur labor costs to
review DPO/DPOQ training certificates, annual DP investigation reports,
notices of Emergency Disconnects or Serious Marine Incidents that
resulted from a DP failure, DPSAO applications, and DP system plans, as
well as to attend DP surveys. Table 6 summarizes the 10-year costs of
this NPRM to the Government.

                                     Table 6--Total Government Cost of NPRM
                                                   [Per year]
----------------------------------------------------------------------------------------------------------------
                                                                                Discounted costs
                           Year                               Undiscounted   -----------------------------------
                                                                  costs              7%                3%
----------------------------------------------------------------------------------------------------------------
1.........................................................          $286,068          $267,353          $277,735
2.........................................................           153,180           133,793           144,387
3.........................................................           165,220           134,869           151,200