Background:

Modes of Oil Transportation.

Oil, including crude oil and refined petroleum products, is sometimes transported by vessel, pipeline, or train between the point of extraction, processing facilities, and other destinations. The types of vessels used to transport oil include oil tankers and tank barges towed by tugs.

Certain vessel design features may affect the spill risks associated with overwater transportation of oil. Some oil transportation vessels are designed with double hulls, so as to reduce the risk of spillage if the outer hull is compromised. Likewise, certain oil transportation vessels are equipped with backup systems to steer or power the vessel in the event of systemic failure.

Tug Escorts.

Tug escorts can be a tool to assist vessels in distress that have lost control of their power or steering. Tug escorts may help a distressed vessel by applying corrective forces to the sides or rear of the vessel. Assistance to a distressed vessel may involve either pushing directly against the vessel, or using a tethered line to pull the vessel. In routine escort circumstances where the escorted vessel is not in distress, tugs are sometimes tethered to the escorted vessel for part or all of the duration of the escort.

In 1975 the Legislature imposed certain limitations on the activities of oil tankers in Puget Sound. The 1975 law limited the size of laden oil tankers in Puget Sound to 125,000 deadweight tons, and created certain oil tanker vessel design safety requirements for oil tankers entering Puget Sound which could be avoided if an oil tanker was under the escort of a tug. In 1978 the United States Supreme Court ruled in Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978) that much of the 1975 state law was preempted by the federal Ports and Waterways Safety Act of 1972, which had alternately directed and given authority for the U.S. Coast Guard to promulgate various vessel and marine safety requirements. In particular, the court ruled that the state's prohibition on 125,000 ton oil tankers was preempted, as were the state's vessel safety design standards. However, the Ray court decision preserved the state's ability to establish tug escort requirements for specific geographic areas in absence of the adoption of conflicting federal tug escort requirements. Washington law currently requires oil tankers entering Puget Sound to have one tug escort with a minimum horsepower equivalent to 5 percent of the deadweight tonnage of the vessel the tug is escorting.

Other Federal Requirements.

Subsequent to the 1978 Ray decision, federal law was amended to prohibit oil tankers larger than 125,000 deadweight tons from entering Puget Sound.

Federal law also requires that single-hulled oil tankers above 5,000 gross tons entering Puget Sound be escorted by two tugs. However, single-hulled oil tankers are scheduled to be entirely phased out of use in American waters by 2015.

United States Coast Guard regulations issued pursuant to the federal Ports and Waterways Safety Act establish requirements for the manning of vessels, including the manning standards for tugs that tow oil barges.

Other State Programs Related to Oil Transportation.

State law requires that oil tankers operating in Puget Sound and the Columbia River be piloted by a state-licensed pilot. Certain cargo vessels operating in Grays Harbor and Willapa Bay must also be piloted by a state-licensed pilot. Pilotage requirements have been established by rule by the state Board of Pilotage Commissioners.

The Washington Department of Ecology (DOE) administers an oil spill preparedness, prevention and response program. Among other statutes administered by DOE's oil spills program, state law directs oil refinery, terminal, pipeline, and vessel operators to put in place oil spill contingency plans. The Puget Sound Partnership, with input from the DOE and other maritime stakeholders, recently completed a vessel traffic risk assessment study of spill risks associated the movement of vessels in Puget Sound under various scenarios.

Penalty Provisions.

Violation of oil tanker escort requirements is a gross misdemeanor, and may also trigger civil penalties of up to $10,000 per day. Civil penalties may be sought by a county prosecutor or the Washington Attorney General upon the request of the state Board of Pilotage Commissioners.

Oil spills in state waters are subject to civil penalties of up to $10,000 per day per violation, plus additional criminal penalties for willful violations. State law also requires parties responsible for oil spills to pay natural resource damages associated with the spill according to either a prescribed schedule or based on an assessment of the damages to natural resources.

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Summary of Substitute Bill:

Emergency Preparedness Study.

Washington State University (WSU) is directed to consult with state agencies to study the state's preparedness and capacity to recover from an accident involving railcars transporting oil. The study must contain several components, including:

an examination of projected future volumes of oil transportation by rail;
a preliminary identification of communities at greatest risk of an oil train accident; and
the potential impacts to transportation networks and critical infrastructure from an oil train accident.

The WSU must report its findings to the Legislature by December 1, 2014.

Oil Transportation Information.

The DOE must post a quarterly report on the terrestrial and maritime transportation of oil on its website. The report must include information currently collected by the DOE under existing programs related to oil transportation and spills, as well as information collected by federal agencies. In addition, the DOE's report must include information to be submitted by oil refineries and certain oil storage, handling, and transfer facilities about their weekly arrivals and departures of oil. The information submitted to the DOE by oil refineries and other facilities must include:

the number of tank vessels and rail cars that transferred or delivered oil at the facility each week;
the volume and type of oil that arrived at the facility and its mode of arrival and departure; and
the route taken by oil arriving at the facility by rail car.

Facilities must submit this information to the DOE by February 1, May 1, August 1, and November 1 of each year, beginning November 1, 2014. Prior to posting the oil transportation report online, the DOE must aggregate information if such a disclosure would result in unfair competitive disadvantage to facility owners or operators. The DOE is prohibited from making public certain facility-specific, unaggregated information.

Tug Escorts for Oil Tankers.

The DOE is directed to submit a report to the Legislature by December 1, 2014, with recommendations as to whether new tug escort requirements are needed for state waters. The DOE must consult with stakeholders in developing the rule-making recommendations included in the report. Unless the 2015 Legislature acts to repeal rule-making authority granted to the DOE, the DOE may adopt rules to require tug escorts for oil tankers larger than 40,000 deadweight tons in Grays Harbor and the Columbia River.

The DOE is given rule-making authority to require that escort tugs possess sufficient capacity for safe escort.

The DOE may also adopt rules requiring additional safeguards for oil tankers based on specific spill risks based on type of oil, geographic location, season, and weather. The DOE may not adopt rules requiring additional safeguards for oil tankers with redundant systems. Redundant systems are defined as two separate propulsion and steering systems designed to ensure that a fire or flood affecting one system does not affect the second steering or propulsion system.

The rule-making process that the DOE must follow prior to and in adopting any new tug escort rules is specified to require outreach to stakeholders, the consideration of the findings from the 2014 vessel traffic risk assessment, and consideration of the weather, vessel traffic, and geographic differences between the Puget Sound, Grays Harbor, and the Columbia River.

The DOE's authority to initiate rule-making related to tug escorts begins July 1, 2015, and expires January 1, 2020.

Oil Barges Towed by Tugs.

A penalty of between $1,000 and $1,500 dollars per gallon of oil spilled is established for certain oil spills from oil barges which:

involve an oil barge towed by a tug;
occur in Puget Sound, near the mouth of Grays Harbor or Willapa Bay, near the mouth of the Columbia River, or upriver on the Columbia River; and
result from a tug owner or operator's recklessness or negligence, as determined by the DOE. The DOE may not determine that the owner or operator of a tug acted recklessly or negligently for the purposes of assessing penalties if there were two qualified individuals in the control bridge of the tug.

This penalty is in addition to existing Clean Water Act penalties and natural resource damages assessed for oil spills.

Other Provisions.

After July 1, 2014, rule-making authority pertaining to oil tanker tug escorts is transferred from the Board of Pilotage Commissioners to the DOE. The DOE may issue penalties of up to $10,000 per day for oil tankers that violate tug escort requirements. Penalties are appealed to the Pollution Control Hearings Board.

Provisions that established oil tanker design standards that were ruled to be preempted in the Ray decision are removed from statute.

A severability clause is included.

Substitute Bill Compared to Original Bill:

The substitute bill moves primary responsibility for the oil train accident preparedness study from the Office of Financial Management to the WSU. An emergency clause is added to make the section authorizing the oil train accident preparedness study take effect immediately.

The substitute bill prevents the DOE from releasing nonaggregated, facility-specific information that oil facilities must submit about the volumes and frequencies of arrivals and departures of crude and refined oil products. This information must instead be treated as confidential.

The substitute bill changes several components of the bill that address tug escorts for oil tankers. The size threshold for oil tankers entering Puget Sound that require a tug escort is restored from 5,000 gross tons to 40,000 deadweight tons. The requirement that oil tankers entering Grays Harbor and the Columbia River receive a tug escort is made contingent upon rule-making by the DOE. The DOE's rule-making authority pertaining to tug escorts for oil tankers is delayed until July 1, 2015, and is made to expire on January 1, 2020.

Prior to adopting geographic or circumstantial tug escort rules, the DOE must report back to the Legislature by December 1, 2014, with recommendations as to whether there would be merit to the DOE adopting additional tug escort rules. The rule-making process that DOE must follow prior to and in adopting any new escort rules is also specified to require outreach to stakeholders, the consideration of the findings from the 2014 vessel traffic risk assessment, and a consideration of the weather, vessel traffic, and geographic differences between the Puget Sound, Grays Harbor, and the Columbia River.

The substitute bill removes the provisions that increased natural resource damages associated with oil barge spills involving recklessness or negligence. Instead, the substitute bill establishes a new penalty of between $1,000 and $1,500 dollars per gallon of oil spilled from an oil barge towed by a tug that the DOE determines to have acted recklessly or negligently. The DOE may not determine that the owner or operator of a tug acted recklessly or negligently for the purposes of assessing penalties if there were two qualified individuals in the control bridge of the tug. This penalty is in addition to clean water act penalties and natural resource damages assessed for oil spills.

Staff Summary of Public Testimony:

(In support) In light of the many new terminal facilities which have been proposed in Washington, and new methods of oil extraction in North America, there is a rapidly changing local environment for the transportation of oil. We need to take a close look at the gaps in terms of emergency response and preparedness, and also need more information about the movement of oil. We need to know about the risks that these oil trains pose to our communities. We used to collect much of the oil transportation information that this bill would require disclosure of, but those reports were discontinued years ago. State laws generally do a good job of preventing marine casualties, but there are some gaps because some of these laws were enacted decades ago, and need to be updated to reflect a more modern understanding of risks. We have had lots of near misses, and are overdue for an accident. Even small spills can have devastating environmental impacts. Double-hulled oil tankers are not a fail-safe. Our safety regime has decreased while risks have increased. This bill will allow the DOE to update their standards by rule to cover more areas and require more tug escorts for oil tankers, and will incentivize good behavior by oil transporters. The bill is tailored to avoid federal preemption issues. We are not wed to all of the changes that were included in the original bill. Successful action in this area will require collaboration with industry partners.

(Other) We have a strong program here in Washington, but this bill lays out some good protective measures. We can't support the bill because of its fiscal impacts.

(With concerns) There should be a study prior to the adoption of any new regulations. Some of the language in the bill isn't clear. Requiring facilities to submit oil transportation information must be accompanied by a meaningful mechanism for avoiding the public disclosure of information that should remain confidential. There should be no additional rule development until existing rule updates are completed by the DOE, and we are concerned about how the rule-making authorities in the bill would work. The Columbia River has a lot of unique characteristics, and should be treated differently than other water bodies. Tug escorts in poor weather are a safety concern and could induce a collision. Pilotage requirements are already in place in most state waters, and require the navigation of tankers by pilots with local knowledge, which averts a lot of the spill risk. This bill did not sufficiently incorporate stakeholder feedback or seek to reach out to existing forums, the United States Coast Guard, Oregon, and others with technical expertise and a role in the maritime oil transportation system. Without proper analysis, many of the changes in the bill would not be effective risk mitigation tools.

(Opposed) A lot of the information that the bill would require oil facilities and transporters to report is proprietary in nature and sensitive because of public safety concerns. The safety of rail tank cars is the primary issue in this debate, and is an issue that we are already working with the federal government to resolve. The Columbia River is a unique environment, unlike Puget Sound and other state waters, and shouldn't be subject to the same tug escort requirements. Tug escorts on the Columbia River would do more harm than good by interfering with navigational safety. It would be unprecedented to require a tug escort along an inland waterway. Some of the polices this bill seeks to enact are preempted by federal law. Having two people in the wheelhouse of a tug doesn't enhance the safety of the operation of the vessel. The strength of the existing maritime transportation system is founded on the collaboration of industry and other stakeholders, and the development of this bill did not incorporate the input of those stakeholders.

Persons Testifying: (In support) Representative Farrell, prime sponsor; Clifford Traisman, Washington Conservation Voters and Washington Environmental Council; Eric De Place, Sightline Institute; Bruce Wishart, Puget Sound Keeper Alliance; Mike Doherty, Clallam County Commissioner; Ben Stuckert, Spokane City Council; Jerry Joyce, Seattle Audubon; Chad Bowechop, Makah Tribe; Naki Stevens, Sound Action; Phil Johnson, Jefferson County Commissioner; Fred Felleman, Friends of the Earth; John Pennington, Washington Emergency Managers Association; Darcy Nonemacher, Washington Environmental Council; and Todd Hass, Puget Sound Partnership.

(Other) Denise Clifford, Department of Ecology.

(With concerns) Frank Holmes, Western States Petroleum Association; Rick Wickman and Liz Wainwright, Maritime Fire and Safety Association; Mike Titone, Columbia River Seaship Operators Association; Gerry O'Keefe, Washington Public Ports Association; Gary Lewin and Dan Jordan, Columbia River Bar Pilots; Jonathan Ward, Puget Sound Pilots; and Paul Amos and Anne McIntyre, Columbia River Pilots.

(Opposed) Johan Hellman, BNSF Railway Company; Charles Costanzo, American Waterways Operators; Sven Christensen, Harley Marine Services; Carol Bua, Tidewater Bargelines; and Dick Lauer, Sause Bros.