[Federal Register: May 26, 2010 (Volume 75, Number 101)]
[Rules and Regulations]
[Page 29420-29427]
[DOCID:fr26my10-3]

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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Part 127

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

Revision of LNG and LHG Waterfront Facility General Requirements

AGENCY: Coast Guard, DHS.

ACTION: Final rule.

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

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

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

FOR FURTHER INFORMATION CONTACT: If you have questions on this rule,
call or e-mail Commander Patrick Clark, CG-5222, U.S. Coast Guard;
telephone<PHONE_NUMBER>, e-mail<EMAIL_ADDRESS>If you have
questions on viewing the docket, call Renee V. Wright, Program Manager,
Docket Operations, telephone<PHONE_NUMBER>.

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Abbreviations
II. Regulatory History
III. Background
    A. Basis and Purpose of the Final Rule
    B. Discussion of FERC Regulations With Regard to LNG
IV. Discussion of Comments and Changes
    A. General Comments
    B. Comments on the Letter of Intent
    C. Comments on Waterway Safety, and the Waterway Suitability
Assessment
    D. Comments on Frequency of Shipments
    E. Comments on Evaluating the Density and Character of Marine
Traffic
    F. Comments on the Letter of Recommendation
    G. Comments on Timely Issuance of the Letter of Recommendation
    H. Comments on the Differences Between LNG and LHG
    I. Other Changes
V. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Abbreviations

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

II. Regulatory History

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

III. Background

A. Basis and Purpose of the Final Rule

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

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

B. Discussion of FERC Regulations With Regard to LNG

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

IV. Discussion of Comments and Changes

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

A. General Comments

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

B. Comments on the Letter of Intent

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

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

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

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

D. Comments on Frequency of Shipments

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

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

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

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

F. Comments on the Letter of Recommendation

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

G. Comments on Timely Issuance of the Letter of Recommendation

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

H. Comments on the Differences Between LNG and LHG

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

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

I. Other Changes

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

V. Regulatory Analyses

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

A. Regulatory Planning and Review

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

B. Small Entities

    Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have
considered whether this rule would have a significant economic impact
on a substantial number of small entities. The term ``small entities''
comprises small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields,
and governmental jurisdictions with populations of less than 50,000.
    In the NPRM, we certified under 5 U.S.C. 605(b) that the proposed
rule would not have a significant economic impact on a substantial
number of small entities. We received no public comments that would
alter our certification in the NPRM. We have found no additional data
or information that would change our findings in the NPRM.
    Large corporations own the nine existing waterfront LNG facilities
and we expect this type of ownership to continue in the future. This
type of ownership also exists for the approximately 159 LHG facilities
operating in the United States. Therefore, the Coast Guard certifies
under 5 U.S.C. 605(b) that this rule will not have a significant
economic impact on a substantial number of small entities.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement
Fairness Act of 1996 (Pub. L. 104-121), we offered to assist small
entities in understanding the rule so that they could better evaluate
its effects on them and participate in the rulemaking. The Coast Guard
will not retaliate against small entities that question or complain
about this rule or any policy or action of the Coast Guard.
    Small businesses may send comments on the actions of Federal
employees who enforce, or otherwise determine compliance with, Federal
regulations to the Small Business and Agriculture Regulatory
Enforcement Ombudsman and the Regional Small Business Regulatory
Fairness Boards. The Ombudsman evaluates these actions annually and
rates each agency's responsiveness to small business. If you wish to
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR
(1-888-734-3247).

D. Collection of Information

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

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

E. Federalism

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

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538)
requires Federal agencies to assess the effects of their discretionary
regulatory actions. In particular, the Act addresses actions that may
result in the expenditure by a State, local, or tribal government, in
the aggregate, or by the private sector of $100,000,000 (adjusted for
inflation) or more in any 1 year. Though this rule will not result in
such an expenditure, we do discuss the effects of this rule elsewhere
in this preamble.

G. Taking of Private Property

    This rule will not cause a taking of private property or otherwise
have taking implications under Executive Order 12630, Governmental
Actions and Interference with Constitutionally Protected Property
Rights.

H. Civil Justice Reform

    This rule meets applicable standards in sections 3(a) and 3(b)(2)
of Executive Order 12988, Civil Justice Reform, to minimize litigation,
eliminate ambiguity, and reduce burden.

I. Protection of Children

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

J. Indian Tribal Governments

    This rule does not have tribal implications under Executive Order
13175, Consultation and Coordination with Indian Tribal Governments,
because it does not have a substantial direct effect on one or more
Indian tribes, on the relationship between the Federal Government and
Indian tribes, or on the distribution of power and responsibilities
between the Federal Government and Indian tribes.

K. Energy Effects

    We have analyzed this rule under Executive Order 13211, Actions
Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use. We have determined that it is not a ``significant
energy action'' under that order because it is not a ``significant
regulatory action'' under Executive Order 12866 and is not likely to
have a significant adverse effect on the supply, distribution, or use
of energy. The Administrator of the Office of Information and
Regulatory Affairs has not designated it as a significant energy
action. Therefore, it does not require a Statement of Energy Effects
under Executive Order 13211.

L. Technical Standards

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

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

M. Environment

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

List of Subjects in 33 CFR Part 127

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

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

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

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

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

Sec.  127.001  [Amended]

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

Sec.  127.007  Letter of intent and waterway suitability assessment.

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

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

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4. Revise Sec.  127.009 to read as follows:

Sec.  127.009  Letter of recommendation.

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

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