2002 Amendments to Deepwater Port Act of 1974

Description

The Deepwater Port Act (DWPA) authorizes the Secretary of Transportation to issue a license to own, construct, and operate a deepwater port. This can be either a floating or manmade structure, other than a vessel, located beyond state seaward boundaries. The original legislation (1974) applied only to facilities storing, transporting, or handling oil, and was enacted to allow deep-draft oil tankers to unload offshore because many U.S. ports were too shallow to receive such large ships. In 2002, however, Section 106 of the Maritime Transportation Security Act amended the DWPA to include the storage, transportation, and handling of natural gas. This amendment has provided the natural gas industry the means to pursue the construction of offshore terminals for receiving liquefied natural gas (LNG).

The amendment provisions also transferred the regulatory oversight of offshore natural gas terminals from the Federal Energy Regulatory Commission (FERC) to the Maritime Administration (MARAD) within the Department of Transportation (DOT) and the U.S. Coast Guard, which moved from DOT to the Department of Homeland Security in 2003. In addition, licensing procedures were streamlined, and licensees can have exclusive rights to the terminal's capacity rather than being subject to open access requirements.

In June 2003, the Secretary of Transportation delegated the authority to license deepwater ports to the MARAD Administrator. The license application process is administered jointly between MARAD and the Coast Guard, with MARAD primarily responsible for project financial reviews and the Coast Guard primarily responsible for project engineering, operations, safety, and environmental reviews, which include compliance with the National Environmental Policy Act (NEPA). The license review process, including a decision on the license application, must be completed within 356 days of the filing of an application.
In order for MARAD to approve a deepwater port license application, approval must be obtained from the governor of each adjacent coastal state. The governor can veto the project, however if the governor does not respond within 45 days after the final public hearing on the license application, approval is deemed given under the DWPA.
Deepwater ports for natural gas are not subject to open access provisions. Owners can utilize the entire capacity of the port and storage facilities or can make unused capacity available to others.

Impact

After the passage of the 2002 Amendments to the DWPA, there were a number of license applications for new offshore facilities in 2003 and 2004. As of November 2004, the Coast Guard and MARAD had received eight applications and approved two of the applications.