Exports of Alaskan North Slope Crude Oil; Establishment of License Exception TAPS

DEPARTMENT OF COMMERCE

Bureau of Export Administration

15 CFR Parts 754, 758, and 762

[Docket No.960523147-01]

RIN 0694-AB44

Exports of Alaskan North Slope Crude Oil; Establishment of

License Exception TAPS

AGENCY: Bureau of Export Administration, Commerce

ACTION: Final rule.

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SUMMARY: The Bureau of Export Administration is amending the short

supply provisions of the Export Administration Regulations to modify

the restrictions on exports of Alaskan North Slope crude oil and

establish License Exception TAPS authorizing such exports, with certain

conditions. License Exception TAPS is based on: 1) Public Law 104-58,

which allows for the export of crude oil transported by pipeline over

right-of-way granted pursuant to section 203 of the Trans-Alaska

Pipeline Authorization Act (TAPS); 2) the President's April 28, 1996

determination that exports are in the national interest; and 3) the

President's direction to the Secretary of Commerce to issue a License

Exception with conditions for export of TAPS crude oil.

EFFECTIVE DATE: May 28, 1996.

FOR FURTHER INFORMATION CONTACT: Bernard Kritzer, Office of Chemical

and Biological Controls and Treaty Compliance, Bureau of Export

Administration, Department of Commerce, Telephone: (202) 482-0894.

SUPPLEMENTARY INFORMATION:

Background

Section 7(d) of the Export Administration Act of 1979, (50 U.S.C.

app. 2406) restricts exports of crude oil transported over right-of-way

granted pursuant to section 203 of the Trans-Alaska Pipeline

Authorization Act (43 U.S.C. 1652), with certain exceptions, unless the

President makes certain findings, recommends exports to the Congress on

the basis of those findings, and the Congress then agrees to the

recommendation by joint resolution enacted into law. Although the

Export Administration Act (EAA) expired on August 20, 1994, the

President invoked the International Emergency Economic Powers Act and

continued in effect, to the extent permitted by law, the provisions of

the EAA and the EAR in Executive Order 12924 of August 19,

[[Page 27256]]

1994, and notice of August 15, 1995 (60 FR 42767).

On November 28, 1995, the President signed into law Public Law 104-

58, which created a new section 28(s) of the Mineral Leasing Act (30

U.S.C. 185). Public Law 104-58 allows exports of oil transported over

right-of-way granted pursuant to section 203 of the Trans-Alaska

Pipeline Authorization Act (43 U.S.C. 1652), ``notwithstanding any

provision of this Act or any other provision of law (including any

regulation),'' unless the President finds that such exports are not in

the national interest.

To address the economic and environmental issues identified in

Public Law 104-58, the National Economic Council and the Council on

Environmental Quality working with the Department of Commerce's Bureau

of Export Administration, coordinated an intensive interagency review

of the effects of lifting the export ban on oil transported over right-

of-way granted pursuant to section 203 of the Trans-Alaska Pipeline

Authorization Act (TAPS oil). After extensive public hearings, the

review of public comments, and analytical evaluation, the interagency

working group found that the exports are not likely to pose a

significant impact to the economy or the environment.

On April 28, 1996, the President determined that, subject to

certain conditions described below, exports of crude oil transported

over right-of-way granted pursuant to section 203 of the Trans-Alaska

Pipeline Authorization Act (TAPS) are in the national interest. The

President found that such exports:

(1) Will not diminish the total quantity or quality of petroleum

available to the United States;

(2) Will not pose significant risks to the environment with the

imposition of a series of measures to further ensure the safety of the

environment; and

(3) Are not likely to cause sustained material oil supply shortages

or sustained oil price increases above world market levels that would

cause sustained material adverse employment effects in the United

States or that would cause substantial harm to consumers, including

those located in noncontiguous States and Pacific territories.

The President directed the Secretary of Commerce to issue a License

Exception, authorizing exports of TAPS oil, subject to certain

conditions designed to preserve the environment.

This final rule amends part 754 of the Export Administration

Regulations (EAR) by establishing a new License Exception TAPS. License

Exception TAPS authorizes exports of oil transported over right-of-way

granted pursuant to section 203 of the Trans-Alaska Pipeline

Authorization Act (42 U.S.C. 1652) provided that the transaction meets

the following conditions:

(1) The TAPS oil is transported by a vessel documented under the

laws of the United States and owned by a citizen of the United States

(in accordance with section 2 of the Shipping Act, 1916 (46 U.S.C. app.

802));

(2) All tankers involved in the TAPS oil export trade use the same

route that they do for shipments to Hawaii until they reach a point 300

miles due south of Cape Hinchinbrook Light and then turn toward Asian

destinations. After reaching that point, tankers in the TAPS oil export

trade must remain outside of the 200 nautical mile Exclusive Economic

Zone, as defined in 16 U.S.C. 1802(6). Tankers returning from foreign

ports to Valdez, Alaska must abide by the same restrictions, in

reverse, on their return route. This condition shall not be construed

to limit any statutory, treaty or Common Law rights and duties imposed

upon and enjoyed by tankers in the TAPS oil export trade, including,

but not limited to, force majeure and maritime search and rescue rules;

(3) The owner or operator of a tanker exporting TAPS oil shall:

(a) Adopt a mandatory program of deep water ballast exchange (i.e.,

at least 2,000 meters water depth). Exceptions can be made at the

discretion of the captain only in order to ensure the safety of the

vessel and crew. Specified records shall be maintained and made

available for audit by government officials.

(b) Be equipped with satellite-based communications systems that

will enable the Coast Guard independently to determine the tanker's

location;

(c) Maintain a Critical Area Inspection Plan for each tanker in the

TAPS oil export trade in accordance with the U.S. Coast Guard's

Navigation and Inspection Circular No. 15-91 as amended, which shall

include an annual internal survey of the vessel's cargo block tanks;

and

(4) The exporter files with BXA a Shipper's Export Declaration

covering the export not later than 21 days after the export has

occurred.

This final rule also makes other conforming changes in the short

supply provisions of the EAR by revising part 754 concerning TAPS oil

exports, the export clearance provisions of part 758 regarding the

requirement to submit the Shippers' Export Declaration (SED) to the

Bureau of Export Administration, and the recordkeeping requirements of

part 762.

The Export Administration Regulations (EAR) have been totally

amended by an interim rule published on March 25, 1996 (61 FR 12714),

which provides for a transition period within which exporters can take

advantage of both the old rules and the new rules until November 1,

1996. This rule permits exports of TAPS oil pursuant to a License

Exception. Exporters can make exports of TAPS oil under this exception

as of the effective date of this rule. Accordingly, the old rule is not

being revised.

Rulemaking Requirements

1. This final rule has been determined to be significant for the

purpose of Executive Order 12866.

2. Notwithstanding any other provision of the law, no person is

required to respond to, nor shall any person be subject to a penalty

for failure to comply with a collection of information, subject to the

requirements of the Paperwork Reduction Act, unless that collection of

information displays a currently valid Office of Management and Budget

Control Number. This rule contains a collection of information subject

to the Paperwork Reduction Act, which is cleared by the Office of

Management and Budget under existing OMB Control Number 0694-0027. The

public reporting burdens for the new collections of information are

estimated to range between 5 and 10 minutes for the Shipper's Export

Declaration requirement, and 30 minutes per voyage for the Ballast

Water Exchange collection. These estimates include the time for

reviewing instructions, searching existing data sources, gathering and

maintaining the data needed, and completing and reviewing the

collections of information. Send comments regarding these burden

estimates or any other aspect of these collections of information,

including suggestions for reducing the burden, to Bernard Kritzer,

Office of Chemical and Biological Controls and Treaty Compliance,

Bureau of Export Administration, Department of Commerce, Room 2705,

14th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20230.

3. This rule does not contain policies with Federalism implications

sufficient to warrant preparation of a Federalism assessment under

Executive Order 12612.

4. This rule is being issued without notice of proposed rulemaking

and opportunity for comment because Public Law 104-58: (1) provides

that the administrative action under this Act is

[[Page 27257]]

not subject to sections 551 and 553-559 of the Administrative

Procedures Act (5 U.S.C. 551, 553-559); and (2) requires these

regulations to be issued within 30 days of the President's national

interest determination.

5. Under 8 U.S.C. 808(2), there is good cause that notice and

public procedure thereon are unnecessary and contrary to the public

interest. Notice and public procedure are unnecessary because Public

Law 104-58 exempts rulemaking under this Act from the notice and

comment requirements of the Administrative Procedures Act and requires

regulations to be issued within 30 days of the President's national

interest determination. Notice and public procedure are contrary to the

public interest because they would delay allowing the exports that the

President, as authorized by Public Law 104-58, has determined are in

the national interest.

List of Subjects

15 CFR Part 754

Exports, Foreign trade, Forests and forest products, Petroleum,

Reporting and recordkeeping requirements.

15 CFR Part 758

Administrative practice and procedure, Exports, Foreign trade,

Reporting and recordkeeping requirements.

15 CFR Part 762

Administrative practice and procedure, Business and industry,

Confidential business information, Exports, Foreign trade, Reporting

and recordkeeping requirements.

1. The authority citation for 15 CFR part 754 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

10 U.S.C. 7420; 10 U.S.C. 7430(e); Sec. 201, Pub. L. 104-58, 109

Stat. 557 (30 U.S.C. 185(s)); 30 U.S.C. 185(u); 42 U.S.C. 6212; 43

U.S.C. 1354; 46 U.S.C. app. 466c; E.O. 12924, 59 FR 43437, 3 CFR,

1994 Comp., p. 917; Notice of August 15, 1995 (60 FR 42767, August

17, 1995).

2. The authority citation for 15 CFR part 758 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995).

3. The authority citation for 15 CFR part 762 continues to read as

follows:

Authority: 50 U.S.C. app. 2401 et seq.; 50 U.S.C. 1701 et seq.;

E.O. 12924, 59 FR 43437, 3 CFR, 1994 Comp., p. 917; Notice of August

15, 1995 (60 FR 42767, August 17, 1995).

PART 754--[AMENDED]

4. In Sec. 754.2 the following changes are made:

a. in paragraph (a), the phrase ``Reserves paragraph (i) of this

section for a License Exception for certain shipments of samples.'' is

revised to read ``Reserves, paragraph (i) of this section for a License

Exception for certain shipments of samples, and paragraph (j) of this

section for a License Exception for exports of oil transported by

pipeline over right-of-way granted pursuant to section 203 of the

Trans-Alaska Pipeline Authorization Act (43 U.S.C. 1652).''.

b. paragraph (c)(1)(i) is amended by adding the following sentence

at the end: ``The President made a determination on April 28, 1996.'';

and

c. a new paragraph (j) is added to read as follows:

Sec. 754.2 Crude oil.

* * * * *

(j) License Exception for exports of TAPS Crude Oil. (1) License

Exception TAPS may be used to export oil transported over right-of-way

granted pursuant to section 203 of the Trans-Alaska Pipeline

Authorization Act (TAPS), provided the following conditions are met:

(i) The TAPS oil is transported by a vessel documented under the

laws of the United States and owned by a citizen of the United States

(in accordance with section 2 of the Shipping Act, 1916 (46 U.S.C. app.

802));

(ii) All tankers involved in the TAPS export trade use the same

route that they do for shipments to Hawaii until they reach a point 300

miles due south of Cape Hinchinbrook Light and then turn toward Asian

destinations. After reaching that point, tankers in the TAPS oil export

trade must remain outside of the 200 nautical mile Exclusive Economic

Zone, as defined in 16 U.S.C. 1802(6). Tankers returning from foreign

ports to Valdez, Alaska must abide by the same restrictions, in

reverse, on their return route. This condition shall not be construed

to limit any statutory, treaty or Common Law rights and duties imposed

upon and enjoyed by tankers in the TAPS oil export trade, including,

but not limited to, force majeure and maritime search and rescue rules;

and

(iii) The owner or operator of a tanker exporting TAPS oil shall:

(A) Adopt a mandatory program of deep water ballast exchange (i.e.,

at least 2,000 meters water depth). Exceptions can be made at the

discretion of the captain only in order to ensure the safety of the

vessel and crew. Records must be maintained in accordance with

paragraph (j)(3) of this section.

(B) Be equipped with satellite-based communications systems that

will enable the Coast Guard independently to determine the tanker's

location; and

(C) Maintain a Critical Area Inspection Plan for each tanker in the

TAPS oil export trade in accordance with the U.S. Coast Guard's

Navigation and Inspection Circular No. 15-91 as amended, which shall

include an annual internal survey of the vessel's cargo block tanks.

(2) Shipper's Export Declaration. In addition to the requirements

of paragraph (j)(1) of this section, for each export under License

Exceptions TAPS, the exporter must file with BXA a Shipper's Export

Declaration (SED) covering the export not later than 21 days after the

export has occurred. The SED shall be sent to the following address:

Manager, Short Supply Program, Department of Commerce, Office of

Chemical and Biological Controls and Treaty Compliance, Bureau of

Export Administration, Room 2075, Washington, D.C. 20230.

(3) Recordkeeping requirements for deep water ballast exchange. (i)

As required by paragraph (j)(1)(iii)(A) of this section, the master of

each vessel carrying TAPS oil under the provisions of this section

shall keep records that include the following information, and provide

such information to the Captain of the Port (COTP), U.S. Coast Guard,

upon request:

(A) The vessel's name, port of registry, and official number or

call sign;

(B) The name of the vessel's owner(s);

(C) Whether ballast water is being carried;

(D) The original location and salinity, if known, of ballast water

taken on, before an exchange;

(E) The location, date, and time of any ballast water exchange; and

(F) The signature of the master attesting to the accuracy of the

information provided and certifying compliance with the requirements of

this paragraph.

(ii) The COTP or other appropriate federal agency representatives

may take samples of ballast water to assess the compliance with, and

the effectiveness of, the requirements of paragraph (j)(3)(i) of this

section.

5. Section 758.3 is amended by revising paragraph (d)(2) that was

formerly reserved to read as follows:

Sec. 758.3 Shipper's Export Declaration (SED).

(d) * * *

(2) You are required under the provisions of Sec. 754.2(j)(2) of

the EAR.

[[Page 27258]]

PART 762--[AMENDED]

6. Section 762.2 is amended by:

a. Redesignating paragraphs (b)(26) through (b)(34) as (b)(27)

through (b)(35) respectively; and

b. adding a new paragraph (b)(26).

Sec. 762.2 Records to be retained.

* * * * *

(b) * * *

(26) Section 754.2(j)(3), Recordkeeping requirements for deep water

ballast exchange.

* * * * *

Dated: May 28, 1996.

Iain S. Baird,

Deputy Assistant Secretary for Export Administration.

[FR Doc. 96-13708 Filed 5-28-96; 2:33 pm]

BILLING CODE 3510-DT-P