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DOT Proposes Policy for Licensing Deepwater Ports for Oil and Gas Exports

Thursday, October 16, 2014
Sandler, Travis & Rosenberg Trade Report

The Department of Transportation’s Maritime Administration is seeking no later than Dec. 15 public comment on its proposed policy to accept, evaluate and process license applications for the construction and operation of offshore deepwater port facilities for the export of oil and natural gas from the United States to foreign markets and to use the existing deepwater port license regulations (33 CFR Parts 148, 149 and 150) for such purposes. The amended Deepwater Port Act defines a deepwater port, in part, as any fixed or floating manmade structure other than a vessel, or any group of such structures, that are located beyond state seaward boundaries and that are used or intended for use as a port or terminal for the transportation, storage or further handling of oil or natural gas for transportation to or from any state.

Under the proposed policy, any proposed deepwater port involving the export of oil or natural gas from domestic sources within the U.S. would require the submission of an export-specific comprehensive license application conforming to all established and applicable deepwater port licensing requirements and regulations. MARAD states that the considerable technical, operational and environmental differences between import and export operations for oil or natural gas projects are such that any licensed deepwater port facility, or any proponent of a deepwater port that has an application in process, that proposes to convert from import to export operations would be required to submit a new license application (including application fee) and conform to all licensing requirements and regulations in effect at such time of application. For licensed deepwater ports, an application to convert from import operations to export operations would require the following at a minimum: (1) approval from the Department of Energy or other approval authority to export oil or natural gas to free trade and/or non-free trade agreement countries, (2) a new or supplemental environmental impact analysis (environmental impact statement or environmental assessment – finding of no significant impact) pursuant to the National Environmental Policy Act that assesses the significance of the environmental impact of the proposed change in operations, and (3) a revised operations manual that fully describes the proposed change in port operations.

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