Florida Denied Adjacent Coastal State Status in Gulf Deepwater Ports Decision

Secretary of Transportation William Coleman refused on March 25, 1976, to designate Florida and Mississippi as "adjacent coastal states" under the Deepwater Port Act of 1974,¹ thereby effectively denying those states a right to delay or to veto the Secretary's ultimate decision on the applications of Louisiana Offshore Oil Project (LOOP), Inc., and SEADOCK, Inc., to construct and operate deepwater port facilities off the coasts of Louisiana and Texas.² Instead, the Secretary promised to "give the fullest consideration" to concerns expressed by the states of Florida and Mississippi about possible adverse environmental impacts to their coastal areas from oil spills caused by the two ports.³

LOOP and SEADOCK submitted applications on December 30, 1975 — one year after enactment of the Deepwater Port Act and less than two months after promulgation of regulations implementing the statute — in which they sought licenses to construct and operate single point mooring facilities in 110 feet of water, 18 miles off the Louisiana coast (LOOP)⁴ and 26 miles off the texas coast (SEADOCK).⁵ The proposed facilities would be connected to shore by large diameter underwater pipelines⁶ and would open the United States to very large crude carriers (VLCC's), popularly denoted supertankers.

The Deepwater Port Act of 1974 was designed to provide a regulatory framework balancing economic and environmental interests within which decisions to construct such terminals for the importation of oil via supertankers at various points along the United States coast could be made.⁷ The Act vests licensing authority in the Secretary of Transportation⁸ but requires him to perform detailed environmental analyses⁹ and to obtain antitrust opinions¹⁰ before exercising the power to grant a license.

Section 9 of the Act vests power amounting to a veto over licensing decisions in adjacent coastal states:

… The Secretary shall not issue a license [to own, construct, or operate a deepwater port facility] without the approval of the Governor of each adjacent coastal state….¹¹

Whenever the Secretary publishes notice of a license application,¹² he must designate as adjacent coastal states those states directly connected by pipeline to the facility and states within 15 miles of the facility.

Other states may request adjacent coastal state status within 14 days of the Secretary's published notice.¹³ Under this alternative the Secretary, in consultation with the National Oceanic and Atmospheric Administration (NOAA), may designate an adjacent coastal state "if he determines that there is a risk of damage to the coastal environment of such State equal to or greater than the risk posed to a State directly connected by pipeline to the proposed deepwater port."¹⁴

Despite the glaring ambiguity of this statutory language, the regulations implementing the Act do no more than to repeat this text verbatim and specify that the governor's letter should include analyses to substantiate the state's request.¹⁵

On February 4, 1976, Governor Askew of Florida wrote a letter "requesting 'adjacent coastal state' designation for the State of Florida in both [the LOOP and SEADOCK] applications."¹⁶ Pointing to Florida's "world-renowned … white sandy beaches" and "sport [6 ELR 10124] fishing," which are vital to Florida's tourist industry, as well as to "mangrove and marsh shorelines, coastal fisheries and estuaries,"¹⁷ Askew asserted that oil spills or discharges from tankers in transit to or from the proposed deepwater ports would constitute a major threat to these resources.

Secretary Coleman did not dispute the basic validity of this assertion, but nonetheless decided against designating Florida an "adjacent coastal state." In his view, dangers arising from tankers in transit to and from deepwater port facilities were beyond the scope of the risk calculations required under the Act, and in any event were not changed as a result of merely switching operations from existing harbors to deepwater ports, unless there was an increase in the total shipping tonnage.

The statutory provision for a comparison of risks raises three basic issues. First, what area of the coastal environment should be considered? Second, what is the definition of risk of damage? And finally, in the universe of all possible risks, which ones should be included in the calculation?

Faced with a lack of guidance in the Act itself as to how these questions should be answered, the Coast Guard sought help from a consultant.¹⁸ The resulting study noted the ambiguous aspects of the Act's definition of "coastal environment"¹⁹ and decided that the risk of damage should be evaluated with respect to "that portion of the State included within the boundaries of the Coastal Zone delineated by said State pursuant to Section 305(b)(1) of the Coastal Zone Management Act of 1972…."²⁰ The definition of risk was even more easily disposed of: "risk is defined by combining the consequences of a damaging event with its probability of occurrence."²¹

As to the scope of the risks to be assessed, it is obvious that any shipment of oil poses some risk to the coastal environment of every state by which the tanker passes. The practical question here is how to limit the area of spill origination that is to be subjected to risk calculation. One approach would examine only risks geographically proximate to the deepwater port facility or to the facility-to-shore pipeline. Another approach would consider risks originating within the ocean basin along routes to and from the port.

The Secretary, in his preliminary decision on risk analysis methodology, opted for the former. Because oil spill trajectory analysis of spills near LOOP and SEADOCK shows virtually no danger to the coastal environment of Florida, the request by Florida could only involve ships passing through the Straits of Florida, on the outer fringe of the area designated by the consultant's report to the Coast Guard.

NOAA had calculated "that an oil spill along the tanker route inside the axis of the Gulf Stream between Biscayne Bay and Key West will impact the coast 50 [percent] of the time with an average transit time of 3 days."²² Although NOAA had followed the methodology of the consultant's study²³ and analyzed "risks imposed by tank vessels enroute to (or from) deepwater ports … while they are in the Territorial Seas or Contiguous Zone of the United States, or within fifty miles of the nearest land, or while they are in waters overlying the Continental Shelf or Slope of the United States, whichever distance is greatest,"²⁴ the Secretary rejected the agency's conclusions. The Coast Guard, on the other hand, used shipping statistics which showed no substantial increase in "volume of oil imported and arriving at Gulf ports" to recommend that Secretary Coleman reject NOAA's calculations because "NOAA [had] failed to show that these risks [from tankers in transit] would be attributable to the creation of deepwater ports."²⁵

The Secretary also noted the insensitivity of "NOAA's conclusions … to measures of risk and to minor factual differences as to vulnerability…."²⁶ However, this reliance on volume data ignores any chance of risk as a result of changed shipping technology. While it is true that deepwater ports will reduce the number of smaller tankers plying inshore ports, loaded VLCC's with low maneuverability negotiating narrow straits pose considerable oil spill risks to states along such straits.

The Secretary's decision, then, means that a risk far removed geographically from the deepwater port does not create a cognizable interest in the decision on a deepwater port application. To be sure, the standards established by the Act, that the risks be at least equal to the hazard to a "State connected by a pipeline to the deepwater port,"²⁷ reflects a presumption that geographical proximity is the more important factor in adjacent coastal state designation.

The practical effect of the Secretary's denial of Florida's "adjacent coastal state" application is to reduce the state's influence in the final decision on the two permit applications from nearly a veto to at best the opportunity to be heard. The Secretary explicitly conceded that his promise of "the fullent consideration" grants to Florida and Mississippi no more influence over the application decision than "[a]ny other interested state"²⁸ already has.

[6 ELR 10125]

The other main effect of the Secretary's decision is to establish a precedent in determining risks to the coastal environment under the Act. The decision suggests that if shipping (measured in number of ships or by cargo tonnage) increases in the area of the proposed deepwater port, then consequent risks are to be included; but if the character of shipping changes while the volume remains constant, those risks are to be omitted.

The residual question is, where does the Secretary's decision leave Florida and other states that are concerned about possible deepwater port-related oil spills on their coastlines? Though still technically involved in the decision to approve or disapprove these two applications, Florida's role is now undefined and subject to the Secretary's desire to listen. Moreover, Florida's recourse to the courts is uncertain. The judicial review section of the Act grants standing to persons who are "adversely affected or aggrieved by the Secretary's decision [on] a license,"²⁹ and a Florida-initiated lawsuit thus appears available as a last resort. A lack of standing defense can be anticipated, however, on the ground that Florida is not adversely affected because it will suffer no greater risk than before since the volume of shipping will not increase. The standing question aside, Florida might seek review under the theory that the Secretary's decision was "arbitrary" and "capricious"³⁰ because it went against NOAA's recommendation, but such a suit would be difficult to win since, although subject to technical questions, the Secretary's rejection of NOAA's conclusion is based on apparently thorough study and is written to deal with specific problems in the risk calculations.

In Secretary Coleman's estimation, the problem alleged in the Florida application lacked not supporting data but legal relevance. The Secretary's decision makes clear that objections to deepwater ports based on risks originating at points far removed from the coastal environment of a proposed adjacent coastal state are not likely to succeed within the administrative forum. The courts, however, may soon have their turn at interpreting the statute.

1. 33 U.S.C. §§ 1501 et seq., ELR 41705 (1975).

2. Secretary's Decision Respecting the Request by the State of Florida for Status as an "Adjacent Coastal State" under the Deepwater Port Act of 1974 in Respect of the Applications thereunder of LOOP, Inc., and SEADOCK, Inc. [hereinafter Decision], at 6.

3. 40 Fed. Reg. 52540 (Nov. 10, 1975).

4. U.S. Department of Commerce, Deepwater Ports Project Office, Analysis of the Risk of Damage to the States of Florida and Louisiana from the LOOP, Inc., Proposed Deepwater Port, at 3 (Mar. 25, 1976) [hereinafter LOOP Risk Analysis].

5. U.S. Department of Commerce, Deepwater Ports Project Office, Analysis of the Risk of Damage to the States of Florida and Texas from the SEADOCK, Inc., Proposed Deepwater Port, at 3 (Mar. 25, 1976).

6. Id.

7. 33 U.S.C. §§ 1501 et seq., ELR 41705.

8. 33 U.S.C. § 1503(a), ELR 41705.

9. 33 U.S.C. § 1505, ELR 41707.

10. 33 U.S.C. § 1506, ELR 41707.

11. 33 U.S.C. § 1508(c), ELR 41708.

12. 33 U.S.C. § 1504(c), ELR 41706.

13. 33 U.S.C. § 1508 (a)(2), ELR 41708.

14. Id.

15. 33 C.F.R. § 148.217, 40 Fed. Reg. 52540, 52559 (Nov. 10, 1975).

16. See Letter from Governor Askew to Rear Admiral Price, U.S. Coast Guard, Fed. 4, 1976, at 1.

17. Id. at 2.

18. Arthur D. Little, Inc., Methodology for Designation of Adjacent Coastal State, Final Report, C-78784-20 (Dec. 1975) [hereinafter Little Report].

19. 33 U.S.C. § 1502(6), ELR 41705.

20. Little Report, supra note 18, at 4.

21. Id. at 5.

22. LOOP Risk Analysis, supra note 4, at 30. Cf. Environmental Assessment of LOOP, on file with the Coast Guard.

23. Section 9 of the Deepwater Port Act, 33 C.F.R. § 148.217, and this methodology fully delineate the scope of our approach to such a determination and pending receipt of an actual petition for ACS status, we can add nothing further.

Letter transmitting Little Report, supra note 17, from Capt. K. G. Wiman, U.S. Coast Guard, to Dr. Dail W. Brown, U.S. Department of Commerce, Deepwater Ports Project Office (Jan. 20, 1976).

24. Little Report, supra note 18, at 4-5.

25. Decision, supra note 2, at 3.

26. Id. at 4.

27. 33 U.S.C. § 1508(a)(2), ELR 41708.

28. Decision, supra note 2, at 6.

29. 33 U.S.C. § 1516, ELR 41709.

30. 5 U.S.C. § 706(2)(A) (1966).