Controlling Hydrocarbon Emissions from Tank Vessel Loading (1987)

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APPENDIX C LEGAL ISSUES AFFECTING REGULATION OF VESSEL CARGO VAPOR EMISSIONS Austin P. Olney and Laurie A. Frost Widespread failure of most of the nation's urban areas to meet air quality standards mandated by air pollution control laws, especially for ozone, has catapulted concern about future strategies for controlling sources of air pollution to the top of the priority list for federal, state, and local officials, health groups, and environmentalists. Areas that fail to meet the statutory deadline of December 31, 1987, set by Congress for meeting the federal ozone standard, face stiff economic sanctions, such as loss of federal highway funds, bans on new construc- tion, and loss of sewage treatment grants. Metropolitan areas across the country are considering new air pollution control measures targeted at smaller industrial sources, such as dry cleaners and automotive body shops, as well as automobiles and other mobile sources, such as marine vessels, in an effort to comply or to show progress toward compliance with the ozone standard by the statutory deadline. These additional sources emit volatile organic compounds, the primary precursors of ozone. This paper discusses the statutory and regulatory framework affecting marine vessel emissions resulting from loading and unloading crude oil and petroleum products. The discussion is divided into two parts. The first section presents a general review of the structure of air pollution control laws, and marine pollution and safety laws and regulations. The second section describes how these laws and regula- tions interact, and how they may affect the ability of states and the federal government to regulate emissions from marine vessels. SURVEY AND STRUCTURE OF LEGAL AUTHORITIES The Clean Air Act The Clean Air Act (CAA),1 as the federal air pollution laws are commonly called, is the product of a series of major legi21ative initia- tives from Congress, including the Clean Air Act of 1963, the Air The authors are affiliated with the law firm of LeBoeuf, Lamb, Leiby & MacRae, Washington, D.C. 166

167 TABLE C-1 Federal Air Pollution Legislation Legislation Public Law Air Pollution Control Act Air Pollution Control Act Extension Motor Vehicle Exhaust Study Act of 1960 Air Pollution Control Act Clean Air Act of 1963 Motor Vehicle Air Pollution Control Act Clean Air Act Amendments of 1966 Air Quality Act of 1967 Clean Air Act Amendments of 1970 (with technical amendments in the Comprehensive Health Man power Training Act of 1971) Clean Air Act Extension Energy Supply and Environmental Coordination Act of 1974 Clean Air Act Amendments of 1977 (with technical amendments in the Safe Drinking Water Act of 1977) National Commission on Air Quality Steel Industry Compliance Extension Act Department of Housing and Urban 98-45 7/12/83 Development Appropriation Act, 1984 Statutory Date Designation 84 - 159 6/14/55 86 - 365 9/22/59 86 -493 87 - 761 10/9/62 88 - 206 12/17/63 86 - 272 10/20/65 89 - 675 90 - 148 91-604 93 - 15 4/9/73 93 - 319 6/24/74 95 - 95 96 - 300 7/2/80 97 - 23 7/17/81 69 Stat. 3221 73 Stat. 646 6/8/60 74 Stat. 162 76 Stat. 760 77 Stat. 392 79 Stat. 954 10/15/66 80 Stat. 954 11/21/67 81 S tat. 485 12/31/70 84 Stat. 1676 87 Stat. 11  88 S tat. 246 91 Stat. 685 94 Stat. 831 95 Stat. 139 97 Stat. 219 Quality Act of 1967,3 the Clean A5r Act Amendments of 1970,4 and the Clear Air Act Amendments of 1977. A chronology of the various federal clean air laws is shown in Table C-1. The Clean Air Act Amendments of 1970 created a cooperative framework for federal and state enforcement of a rigorous and comprehensive pro- gram to control air pollution by dividing responsibility between federal agencies and the states to meet nationwide air quality goals. One objective was ''to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and productive capacity of its population.''6 To accomplish this purpose, Congress directed that National Ambient Air Quality Standards (NAAQS) be esta- blished (in the form of maximum concentration levels) for certain

168 criteria pollutants. Congress wanted the air to be clean without providing a definition of what clean was; Congress left the definition of clean to be determined by the Environmental Protection Agency (EPA). Congress also stated that pollution emissions from new sources should be constrained' but again, the degree of constraint was left up to EPA. The Clean Air Act Amendments of 1977 retained the basic structure of the 1970 law, but added new compliance dates and enforcement mecha- nisms. EPA was directed to set and enforce the regulations required by the CAA. EPA developed the criteria and set primary and secondary standards for certain pollutants deemed detrimental to public health, based on scientific and technical data, while the states were respon- sible for formulating and implementing a state plan to achieve, main- tain, and enforce the federal standards. The C M established three regulatory schemes: one for pollution emissions from existing stationary sources, the second for emissions from future or "new" stationary sources, and the third for hazardous pollutants. The CAA applies to both major stationary sources, such as industrial plants or facilities, and mobile sources, such as automobiles and airplanes. In addition, indirect sources, such as parking lots and highways, which do not emit pollutants but which attract mobile sources are subject to regulation under the State Implementation Plan (SIP). The CAA does not expressly provide the authority to regulate marine vessel emissions. Air Quality Control Regions Section 107 requires each state to divide the area within its borders into smaller regions called Air Quality Control Regions (AQCRs) so that the regulations for air pollution control can be specified on a source-specific basis [42 USC § 74073. These regions are listed in 40 C.F.R. Part 81 (1986~. EPA regularly publishes data indicating which AQCRs are in compliance with primary and secondary standards, and which are not. Once the ambient concentrations of pollutants in an AQCR are determined, the region is placed into one of two classes: 1. Attainment areas, in which the ambient air concentration is below that specified in the NAAQS; and 2. Nonattainment areas, in which the ambient air concentration is above that specified in the NAAQS. Air Quality Criteria Section 108 directs EPA to publish, and to periodically revise, a list of air pollutants that "may reasonably be anticipated to endanger public health or welfare" t42 USC § 7408(a)~1~(A)~. Under this provi- sion, EPA needs to show a reasonable basis for its determination that there is a risk of harm to the public, rather than evidence of actual harm, before regulating a pollutant. In 1971, standards were initially promulgated for six so-called criteria pollutants: sulfur dioxide

169 (SO2), particulate matter or dust (PA), nitrogen oxides Knox), carbon monoxide (CO), photochemical oxidants or "ozone," and hydro- carbons.8 In 1978, standards for another pollutant--lead--were added. After a pollutant is listed, EPA is required by section 108(a)~2) to publish air quality criteria for that pollutant, reflecting the latest scientific knowledge useful in indicating its identifiable effects on public health or welfare [42 USC § 7408(a)~2~. National Ambient Air Quality Standards Based on the criteria established for each pollutant listed under section 108, section lO9 (a) directs EPA to promulgate NAAQS for each pollutant [42 USC § 7409(a). The NAAQS are only minimum standards. Section 116 permits the states to set more rigorous standards under their SIPs t42 USC § 74164. The NAAQS are not directly enforceable; all emission limitations are established to meet the NAAQS. It is the emission limits which are enforceable. Two standards are to be set for each pollutant. Primary ambient air quality standards are standards the attainment and maintenance of which are necessary to protect the public health t42 USC § 7409(b)~1~. Secon- dary ambient air quality standards are standards the attainment and maintenance of which are necessary to protect the public welfare from known or anticipated adverse effects associated with the presence of the corresponding pollutants in the ambient air t42 USC § 7409(b)~2~. Achievement of these uniform standards throughout the country forms the primary goal of the CAA. The NAAQS appear in 40 C.F.R. Part 50. The standard for ozone is found in 40 C.F.R. § 50.9. EPA is not required to consider factors such as technology or costs of compliance in setting ambient standards. Nor may such factors be used to justify a failure to attain the standards. It is the need to achieve the primary standards that is causing the states to consider regulating marine vessel emissions. State Implementation Plans The CAA places primary responsibility for attaining and maintaining the NAAQS with the states through development and adoption of a SIP that targets specific emission sources and sets limits on their emissions at levels that let the state meet the nationally set air quality stan- dards. Section llO(a) specifies that each state must develop and submit to EPA a SIP that provides a control strategy for the attainment, main- tenance, and enforcement of the NAAQS by that state in each air quality control region within its boundaries [42 USC § 7410(a)~1~. EPA must approve or disapprove the state plans within 4 months after submission of the proposed plan t42 USC § 7410(a)~2~. The administrator may approve a state plan only if the plan meets the requirements of section llO(a)~2), which include, among other things, commitments to implement pollution-reduction programs pursuant to enforceable timetables t42 USC § 7410(a)~2~.

170 Each SIP describes the air quality in each AQCR in the state, sets forth emission inventories of all sources that emit the criteria pollu- tants, and establishes emission limitations and compliance schedules for each source. A state, through its SIP, may order particular factories and other sources of pollution to reduce emissions to a target level by a certain date. These emission limitations are applicable only to existing sources; EPA has preempted emission standards for new sources. In addition, each SIP contains procedures for granting permits for new sources under new source review systems, as well as procedures for reporting, monitoring, and enforcement. The 1977 CAA Amendments also require the states to classify the state's regions according to whether they are in compliance with air quality standards. The consequences of this designation are described below. SIPs are the keystone of EPA's air pollution control effort. Once approved by EPA, a SIP becomes part of the fedegal/state cooperative framework and must be carried out by the state. It can be enforced by either the state or EPA. Congress recognized that a state may need to revise its SIP to reflect changed local needs, new technology, or other developments. Accordingly, the CAA provides that a state may propose periodic revisions of its SIP to EPA. As with original pro- posals, EPA must approve revisions that satisfy the requirements listed in section 110(a)~2) t42 USC § 7410(a)~2~. Section 110 of the CAA also requires EPA to notify a state and to set a time limit for revision of the state's SIP when available information indicate the SIP is inadequate to achieve a NAAQS by the statutory deadline t42 USC § 7410(a)~2~; (c)(l)(C). Industry challenges to the technological and economic feasibility of the emission limitations in a SIP 1 lay be heard only at the state level when a SIP is under consideration. The same is true of challenges to the allocation among various sources of the burden imposed by emis- sion limitations in a SIP.12 Therefore, early involvement by regu- lated industries in state proceedings for the adoption and revision of SIPs is essential to preserving rights to challenge the technological or economic features of a SIP regulation. Standards of Performance for New Stationary Sources The CAA directs EPA to establish new source performance standards (NSPS) under section 111 for new stationary sources and major modifica- tions of existing stationary sources in particular industrial cate- gories. These standards establish national limits for emissions from each category of sources, to keep new pollution at a minimum while emissions from existing sources are reduced to meet air quality goals. The NSPS differ from ambient standards in that they are developed for particular sources of pollutants rather than to air quality gene- rally. They target specific pollutants from specified industries. They are designed to allow limited industrial growth. Because they are esta- blished at a national level, they preclude any state from becoming a "pollution haven" and attracting industry by lenient air quality stan- dards. The NSPS must reflect the "best system of continuous emissions

171 reduction which (taking into account the cost of achieving such emission reduction . . .) the Administrator determines has been adequately demon- strated" t42 USC § 7411(a)~1~(C)~. This "best technology" requirement recognizes that it is usually more economical to build emission controls into new sources than to retrofit existing sources. The standards are minimums; states may impose more stringent standards. As of July 1, 1986, NSPS had been promulgated for more than 51 source categories. These are published in 40 C.F.R. § 60.16 (1986~. If it is not feasible to establish an emission standard, EPA may instead prescribe a design, equipment, work practice, or operation standard. The work practice regulation must be converted to a numerical emission limit as soon as it is practicable to establish such limits. Operators subject to NSPS must undergo preconstruction and prestart-up review and must demonstrate compliance. EPA authority can be delegated to states pursuant to section lilac) (42 USC § 7411(c). In addition, if EPA sets a NSPS for a source cate- gory, then states must regulate nonhazardous pollutant emissions not covered by air quality criteria from existing sources in that category t42 USC § 7411(d). Waivers are provided for new sources that use ''innovative technology" t42 USC § 7411 (j ~ ~ . Hazardous Air Pollutants Under section 112 of the CAA, EPA is required to control hazardous pollutants discharged into the air [42 USC § 7412~. A "hazardous air pollutant" is defined as one that "causes, or contributes to, air pollution which may reasonably be anticipated to result in an increase in mortality" or "serious irreversible, or incapacitating reversible, illness," and for which no ambient air quality criteria or standards have been promulgated pursuant to section 108 or 109 t42 USC § 7412(a)~1~. EPA is authorized to promulgate such national emission standards for hazardous air pollutants (NESHAPS) for both new and exist- ing stationary sources. These pollutants are deleterious to health, but are not produced in large enough quantities to justify imposition of full NSPS programs. Implementation and enforcement of NESHAPS may be delegated to the states pursuant to section 112(d) similar to the delegation of authority for NSPS pursuant to section lll~c) t42 USC § 7412(d). NESHAPS are published in 40 C.F.R. Part 61 (1986) for beryllium, asbestos, mercury, vinyl chloride, benzene, coke oven emissions, inorganic arsenic, radio- nuclides, and radon-222 emissions. Prevention of Significant Deterioration The 1977 amendments put in place a program for the "prevention of significant deterioration'' (PSD), a concept developed by EPA to deal with new industrial growth in areas of the country that had attained NAAQS to ensure that economic growth will not degrade existing clean air resources. The PSD program is intended to preserve the attainment

172 status of AQCRs that already meet the NAAQS t42 USC §§ 7470-74913. All PSD areas in a state are designated as Class I, Class II, or Class III areas, reflecting the amount of industrial growth and resulting dimi- nution of air quality that will be allowed in each area. Class I areas are the most pristine areas, such as large national~parks and wilderness areas. The amendments in section 163(b) presently set out the maximum increases allowed in the concentrations of sulfur dioxide and parti- culate matter t42 USC § 7473(b). EPA is directed to extend the appli- cability of PSD increment requirements to other pollutants as soon as possible. For pollutants other than sulfur dioxide and particulates, the maximum allowable concentration may not exceed the NAAQS t42 USC § 7473(b). Preconstruction Review The PSD program calls for rigorous precon- struction review of new sources and modifications to existing sources, including a permit system for imposing emission limitations and technology requirements on specific sources. Each state's SIP is to require the review of such sources. A new source must undergo precon- struction review if it is a "major emitting facility," defined as a stationary source falling into one of 28 categories of sources that emit, or have the potential to emit, 100 or more tons per year of any air pollutant, or any other stationary source with the potential to emit 250 or more tons per year of any air pollutant t42 USC § 7479~1~. The source categories are published at 40 C.F.R. § 52.21(b) (2~(iii). A modification of an existing major stationary source that creates a "significant" net increase in emissions of a pollutant regulated under the CAA is also subject to preconstruction review requirements t40 C.F.R. § 52.21(b)~293. The purpose of this "new source review," as it is called by EPA, is to provide a broad overview of a proposed project before construction begins, to ensure compliance with all requirements. Generally, the review applies to permits and procedures that are required before a plant commences construction. Technological Compliance A proposed major source or modification of an existing source in PSD areas must apply the best available control technology (BACT) for each pollutant regulated under the CAA that would emit in greater than de minimus amounts. BACT is defined as "an emis- sion limitation based on the maximum degree of reduction of each pollutant . . . emitted from or which results from any major emitting facility, which the permitting authority . . . determines is achievable for such facility'' t42 USC § 7473~3~. BACT is determined on a case-by- case basis by EPA or by states with approved PSD revisions to their SIPs. Congress has stipulated that factors such as cost, available technology, energy consumption, and other non-air environmental impacts be taken into account in establishing BACT in PSD regulations. Thus, BACT will establish the effective NSPS in PSD areas.

Nonattainment of the NAAQS Designation of Nonattainment The 1970 Act anticipated attainment of national primary ambient air quality standards by mid-1977. However, at the time the 1977 Amendments were passed, it was clear that despite deadlines, many areas of the country did not meet this target. Conse- quently, Congress adopted Part D of the 1977 CAA Amendments, which deals with nonattainment of the NAAQS. Areas that did not achieve the NAAQS were designated as nonattain- ment areas for the various pollutants. Once an area was so designated, certain rules were triggered, including rules on new source review and offsets. Triggering of these rules has prompted states with nonat- tainment areas to seek reductions in new and existing sources of pollutants. Section 172 provided that reasonably available control technology (RACT) was required for existing sources t42 USC § 75023. Attainment was to be achieved "as expeditiously as practicable," with December 31, 1982 as the deadline for most criteria pollutants, but with December 31, 1987 as the deadline, under specified conditions, for CO and ozone t42 USC § 7502(a)~1) and (2~. PSD and nonattainment require- ments are not mutually exclusive: a region may be considered PSD for some pollutants and nonattainment for others. New Source Review The 1977 Amendments set up a new source review program for nonattainment areas similar to the one set up under the PSD program for attainment areas. Prior to these amendments, attainment of the NAAQS was a precondition for construction and/or modification of sources in nonattainment areas. Consequently, a literal reading of EPA's regulations would have prohibited all new industrial growth. EPA developed a concept referred to as the ''emissions offset" requirement to allow limited industrial growth in nonattainment areas. This concept was adopted by Congress in the 1977 amendments. Any major source or major modification of an existing source in a state that would cause or contribute to a violation of a NAAQS within a designated nonattainment area is subject to preconstruction review [Section 1733. A major source is defined as a source that emits, or has the potential to emit, 100 tons per year or more of any pollutant sub- ject to regulation under the CAA t40 C.F.R. § 51.18(j)~1~(iv)~. A major modification is defined as a physical change or change in the method of operation of a major source that would result in a significant emission, increase of any pollutant subject to regulation under the CAA t40 C.F.R. § 51.18(j)~1~(v)~. Technological Compliance Section 173 provided that a proposed new source or modified major existing source must use emission control technology based on the lowest achievable emission rate (LAER) [42 USC § 7503~2~. LAER is defined as "that rate of emissions which reflects the most stringent emission limitation which is contained in the imple- mentation plan of any State for such class or category of source,)' or ''the most stringent emission limitation which is achieved in practice by

174 such class or category of source, whichever is more stringent" [42 USC § 7501~3~. This means that each time a newer, more stringent standard is achieved anywhere for a particular source, it becomes the new LAER standard for that source for the entire country, unless an owner or operator of a facility can demonstrate that such a limitation is not achievable by him. Applicable NSPS are the effective maximum emission allowances for LAER in nonattainment areas. There is no stipulation that factors such as cost, available technology, energy consumption, and other environ- mental impacts must be taken into account in determining LAER in nonattainment regulations. Thus, the LAER standard is the effective NSPS in nonattainment areas for all new sources. Emissions Trading Policy As more experience was gained dealing with air quality regulations and emissions control technologies, it became apparent to EPA that the total quantity of pollutants emitted by a plant is more important than the amounts emitted by individual point sources within a plant, at least in terms of the public health effect. Emissions trading refers to several alternatives to traditional emission control regulations, including bubbling--a concept that allows existing facilities that emit air pollution to treat two or more emission points as if they were under a giant bubble. Plants can then control pollution less where the cost of emission reductions are high, in exchange for extra controls where costs are low, as long as the resulting emission levels are equal to or better than under the original standards. An interim emissions trading policy was published in 198213 to encourage states to use emissions trades to achieve more flexible and rapid attainment of the NAAQS. This policy incorporla4ed EPA's offset policy and bubble policy, originally issued in 1979, and initiated a program for the use and banking of emission reduction credits (ERCs). This program allowed industry to make reductions and bank them for later use in a trade, or to meet a standard for a new source. These strate- gies, as well as ''netting"--a scheme that may exempt plant expansions from new source review (NSR) (but not from applicable NSPS) if they can demonstrate there will be no "significant net increase" in plantwide emissions--were recently addressed in EPA's final emissions trading policy, published in December 1986.15 In general, emission trades must be for the same air pollutant and must be provided for in a state SIP. The final Emissions Trading Policy allows use of trades in areas not complying with CAA ambient standards, and in areas of a state which lacks a demonstration to show that its SIP in those areas will eventually attain the standard. The "baseline" for these trades Is stipulated as actual emissions levels, or SIP-allowable emissions levels, whichever is lower. The baseline for a given source is that level of emissions below which any additional reductions may be credited for use in trades. In addition, emission reduction "credits" from state efforts to control mobile sources may be used to meet SIP requirements applicable

175 to existing stationary sources, provided such reductions are surplus, permanent, quantifiable, and enforceable. All such trades must be implemented as case-by-case SIP revisions.16 Interstate trading is permitted, but also requires case-by-case SIP revisions. Firms applying for trades in these areas may not rely on banked reductions made before their applications for trading were submitted. State assurances that efforts to meet an ambient standard will not be impaired by a proposed bubble are required for the first time for all trades taking place in primary nonattainment areas lacking demonstration plans to meet CAA standards. In such areas, a net air quality benefit that will produce extra interim environmental progress must be demon- strated. One problem is that most large industrial pollution sources already are tightly regulated, and many future reductions (under the trading policy) will have to come from small emissions sources, such as dry cleaners and auto body shops. For a new marine terminal, or a major modification to an existing marine terminal, the availability of emis- sions trading may cause the terminal owner or operator to seek emissions reductions from marine vessels planning to utilize that terminal, as a means of ensuring compliance with NSPS, BACT, or LAER under a state's NSR program. The Bubble Concept In 1979, EPA promulgated what has become known as the "Bubble Policy" as an alternative emission reduction option. This approach, which imposes controls on an entire plant rather than on each individual source, is designed to promote innovations in pollution con- trol by allowing use of less costly techniques for achieving a given amount of pollution reduction. The bubble concept places an imaginary bubble over an entire plant, and all emissions are measured as coming out of a single hole in the bubble. The bubble concept is merely an extension of the offset policy in that it allows internal offsets within a plant. By permitting an owner or operator to place higher levels of emissions control on selected point sources, with lower marginal control cost, the bubble concept achieves more flexibility in air pollutant reduction and encourages emissions reduction in a more cost-efficient manner. Use of the bubble has been held to be proper policy with respect to existing sources in PSD and nonattainment areas, but new sources are not permitted to bubble with existing sources to mitigate the requirements of NSPS in either PSO or nonattainment areas. Use of the bubble is only permitted if it does not result in any increase in applicable net base- line emissions 7 in any area, whether attainment or nonattainment, except under stringent conditions. Bubbles in primary ozone nonattain- ment areas are permitted, but must use the lowest of actual SIP- allowable or RACT-allowable emissions baseline for each source involved in the trade, and also must contribute to progress toward attainment by providing a 20 percent net reduction in emissions remaining after application of the baseline to all sources involved in the trade.l8

176 Offset Policy Section 173~1~(A) of the 1977 Amendments put in place an offset system that allows construction of new sources or expansion of existing sources in nonattainment areas, only if emissions from such new or expanded sources are offset by emission reductions at existing facili- ties in the area t42 USC § 75031A. This system allows incremental growth while progress is still being made toward achievement of the NAAQS. The offset policy requires that any major new source construc- tion or modification in nonattainment areas be accompanied by corre- sponding surplus decreases in emissions elsewhere to more than offset their emissions, so that the total emissions in the AQCRs do not increase, and the ambient pollutant concentration in the air does not increase . Netting Netting may exempt modifications of existing major sources from certain preconstruction review requirements under NSR, provided there is no net emissions increase within the major source. By "netting out," the modification is not considered major and is therefore not subject to all preconstruction review requirements under 40 C.F.R. Part 51. Net- ting's scope is determined by the definition of source, for review of major modifications. In PSD areas, a single, plantwide definition may be used which allows actual emission reductions anywhere in a contiguous plant to compensate for potential emission increases at individual point sources within the plant. In nonattainment areas, the plantwide definition may be used, or a dual definition, in which emission increases at either the plant as a whole or individual emitting sources will trigger NSR. Banking of Emission Reduction Credits When an owner or operator of an existing industrial plant reduces the emissions of a particular pollu- tant beyond the baseline level required in the SIP through control technology or by closing down a portion of a plant, he gets a credit for the excess emission reduction. Banking of these credits has become a standard procedure, and a market in these credits has rapidly devel- oped. In effect, an owner or operator can accumulate reduction credits for sale or later use for new construction. An emission reduction credit is not synonymous with a simple emis- sion reduction or offset. The credit extends only to that portion of the reduction which is in excess of what is required, and which is made enforceable by the state at the time it is banked.20 The emission reduction credit (ERC) is an asset of the firm and can be bought by, or sold to, other sources. Under EPA's final emissions trading policy, reduction credits will only be granted for use in bubbles for those reductions occurring after an application to bank or trade credit (whichever is earlier) has been made. 1

177 Deadlines for Attainment The 1970 version of the CAA had mandated attainment of the primary NAAQS by mid-1975. No deadline was set for secondary standards, other than a requirement of achievement within a reasonable time. Section 110 imposed deadlines for submission of state plans and for compliance by sources [42 USC § 7410(a)~1~. Only EPA had authority to grant exten- sions of the time for compliance with a NAAQS for certain pollutants [42 USC § 7410(a)~2~(A)~.22 While some modest efforts were made toward the 1975 goal, the deadline was not met in many parts of the country, including almost all major urban areas. 1987 Extension for Ozone and CO In the 1977 CAA Amendments, Congress extended the attainment deadline for the NAAQS to December 31, 1982, in section 172(a)~1) t42 USC § 7502(a)~1~. Congress set December 31, 1987 as the final deadline for all areas of the country to reduce ozone and CO to no more than the national standard, if a state were able to demon- strate that attainment by the end of 1982 was not possible, despite the implementation of all RACT [42 USC § 7502(a)~2~. The approach adopted by Congress was to require SIP revisions incorporating EPA's emission offset policy, as revised and expanded in Part D of the CAA. SIP Revisions to Show Attainment by 1987 States that received the deadline extension were to submit revised SIPs by July 1, 1982. These SIPs were to provide for the attainment of the NAAQS for ozone in all nonattainment areas by December 31, 1987 t42 USC § 7502(c). Such revisions must include programs for (1) conducting stringent cost/ benefit analyses as part of the preconstruction review for any proposed source, and (2) inspection and maintenance (I/M) for motor vehicles. If the ozone standard is not attained by the statutory deadline, imposition of sanctions, such as a cutoff of federal highway funds and a ban on construction, may be triggered. VOC Emissions: Ozone Unlike other air pollutants such as sulfur dioxide, ozone is not emitted from any point source that can be fitted with control equipment designed to remove it. Ozone is formed in the air as a result of photochemical reactions when hydrocarbons (such as gasoline vapors, paint fumes, or dry-cleaning fumes from solvents) combine with nitrogen oxides (that do come directly out of individual smokestacks and automobile tailpipes), oxygen, and sunlight. Ozone is a product of weather conditions, yet current knowledge of atmospheric chemistry is very limited. For example, there is a seasonal pattern to volatile organic compound (VOC) emissions, since a marked increase in VOCs occurs in summer months as heat caus2e3s gasoline and other hydro- carbon liquids to evaporate more quickly. At high concentrations, ozone--or smog as it is colloquially called--can adversely affect human health, agricultural crops, forests and other materials.

178 EPA has established a primary standard to protect public health of 0.12 ppm (1-hour average)2 or 235 micrograms/m not to be exceeded more than 1 day per year. Currently, EPA is reviewing available scien- tific and technical information to determine whether this standard is adequate to protect human health and welfare. Some evidence suggests that even attainment of the existing standard fO2r5Ozone will not protect public health with an adequate margin of safety. Other scientific analyses suggest that increases in ultraviolet-B radiation (caused in part by depletion of stratospheric ozone) may in- crease the rate of tropospheric (ground-level) ozone formation in urban areas. If these analyses are confirmed, it would appear likely that, in the future, more cities and regions may violate the ambient air standard for ozone, and that more restrictive measures to control hydrocarbons and nitrog26 oxides may be required in order to comply with current standards. States now regulate ozone indirectly by trying to reduce hydrocar- bons in the air. VOCs--the reactive or nonmethane hydrocarbons--are one of the primary precursors of ozone, along with nitrogen oxides. There- fore, to meet the 1987 deadline for attainment of the ozone standard, states must find ways to reduce the emissions of both VOCs and NOx. EPA, on occasion, has published Control Techniques Guidelines (CTG) that set forth RACT requirements for most stationary sources of VOCs. No CTG on marine terminals or marine vessels have been issued. EPA Proposed Ozone Strategy Between 70 and 75 areas in this country will likely fail to meet the 1987 deadline for attainment of the ozone standard. The administrator of EPA, Lee M. Thomas, has proposed a strat- egy for dealing with these noncompliance areas. The strategy includes a four-part proposed policy: (1) improving enforcement of existing laws; (2) possibly placing new controls on gasoline marketing and other sources of VOCs, whether at the refinery, on the fuel pump, or on motor vehicles; (3) establishing a 3-year plan for bringing noncompliance areas into attainment; and (4) establishing a sustained progress program for the estimated 25 areas with the worst ozone problems. Under the fourth part, states would consider additional controls based on advances in technology. The fact that between 70 and 75 areas of this country will still likely fail to attain the ozone standard by the second congressionally extended deadline, seems to suggest that the problem overshadows the issue of emissions controls for ships and barges. In areas with the most intractable nonattainment problem, such as the New York City and Los Angeles metropolitan areas, drastic control measures, with enormous adverse social and economic impacts, would likely be necessary to bring about attainment. Use of Economic Sanctions to Compel Compliance The major force behind the drive to meet the 1987 compliance deadline is the threat of sanctions; however, EPA is still debating its policy with regard to sanctions for areas which fail to meet the 1987 deadline. The mere

179 threat of sanctions is forcing states to find new sources of VOCs whose emissions can be controlled. There are strong arguments that economic sanctions are not available to EPA for areas for which EPA approved ozone SIPs, but which nonethe- less remain in violation of the NAAQS after December 31, 1987. A key fact is that some states failed to meet the original 1982 deadline, and have not obtained EPA approval of a revised ozone SIP. EPA may be forced to disapprove these state SIPs in total, impose economic sanc- tions, and promulgate SIPs for those states. Existing Enforcement Options The enforcement programs now being developed by EPA to gain cities' compliance with air quality stand27ds could be subject to challenge, according to EPA's general counsel. The agency's Sustained Progress Program (SPP) and Reasonable Extra Efforts Program (REEP) are designed to give cities more time to comply with national ambient air quality standards, rather than impose "Draco- nian" sanctioned such as construction bans or an embargo on federal highway funds. The REEP is being implemented in California, and has been viewed by EPA for some time as the forerunner of a broader agency policy designed to29eal with persistent violation of the ozone NAAQS by many large cities. Other EPA Regulatory Options EPA has a variety of options available to control hydrocarbon emissions--fuel volatility limits, on-board refuel- ing controls, and service station controls (Stage II controls)--but so far has not imposed any of them. The automobile industry and the oil industry are often at odds over which option is likely to produce the greatest benefits in air quality by reducing vapors. The relative pros and cons of each option are beyond the scope of this paper. Regulation of Gasoline Volatility EPA has been studying the need for a national volatility standard because of the disparity between the Reid Vapor Pressure (RVP)--a measure of volatility--of gasoline used to certify vehicle air pollution controls (9 pounds per square inch tpsi]), and gasoline in the marketplace (as high as 11.5 psi). This dispari- ty is causing excess evaporative emissions that are a prime cause of ozone pollution. 1 This condition increases the level of hydrocarbons evaporating into the atmosphere during refueling. EPA recently sent the Office of Management and Budget (OMB) a draft proposal to control the volatility of gasoline through seasonal and regional limits of RVP beginning in 1988. Stage II Controls EPA is also considering establishing nationwide controls on gasoline vapor emissions from the refueling of motor vehi- cles through the use of Stage II controls. These controls are vapor recovery systems installed on gasoline station fue\3pumps and hoses recover vapors emitted during refueling. Stage II controls ha-ye been imposed for some years in California and the District of Colum- b:ia. 34 Allegedly because of pressure from the oil incus try, EPA is reluctant to make Stage -HI gas station pump controls man~latory for

180 nonattainment areas by designating Stage II as RACT, along with issuance of a CTG. At the same time, the auto industry contends that ozone nonattainment is a regional problem and that nationwide controls, such as on-board canisters, are unnecessary and not cost-effective. More- over, many state air management officials believe a regional volatility standard will be more cost-effective in reducing ozone than Stage II controls or on-board vehicle canisters to control automotive evaporative emissions. EPA's current approach appears to be proposing all three options. On-Board Vehicle Controls An EPA proposal now under final review _ . , at OMB, would require all new motor vehicles to include equipment to trap gasoline fumes during refueling. The vapor recovery system in- volves enlarging small canisters now required to trap carburetor emis- sions, and would control evaporative emissions of VOCs that normally escape during refueling.35 EPA would provide a 2-year lead time. Litigation Involving Ozone Attainment Several states are already facing suits by environmental interest groups for failure to implement controls, such as Stage II controls, designed to enable the state to attain the ozone standard by the dead- line, which are included in their SIPs. These suits, in general, allege that a particular SIP is not adequate to enable the state to meet the ozone deadline, and that EPA has failed to order the state to correct inadequacies with its ozone control strategy. In January 1987, the Natural Resources Defense Council (NRDC) and other environmental and health groups filed complaints against EPA and the states of New York and New Jersey, claiming that the SIPs of these states are inadequate to ac3hieve attainment of the ambient ozone and carbon monoxide standards. 6 In the suits, NRDC and the other health groups are claiming that neither New York nor New Jersey are living up to promises, made in their SIPs, that certain controls would be placed on VOC emissions, and that EPA must require new SIPs from these states to ensure compliance with the CAA. A California trade group filed suit against EPA in an effort to keep the agency's REEP for attaining air quality standards from being put into practice in Los Angeles and several other areas in the state.37 A California environmental group, the California Clean Air Condition, filed suit on December 22, 1986 claiming California has failed to submit a prodder plan that will enable the state to attain the ozone stan- dard. On October 9, 1986, the governor of Wisconsin authorized the state attorney general to prepare a lawsuit against Illinois, Indiana, and EPA to compel egnforcement of the CAA over the issue of attaining the NAAQS for ozone.3 Wisconsin believes air pollution from the other two states, particularly from the Chicago metropolitan area, is responsible for Wisconsin's failure to attain the ozone standard in an area surround

181 ing Milwaukee. Wisconsin wants EPA to set timetables for compliance by Illinois and Indiana to meet the ozone attainment deadline. The Conservation Law Foundation is threatening to sue the Common- wealth of Massachusetts and EPA, because Massachusetts allegedly is not properly controlling high levels of ozone in its air.40 Clean Air Act Treatment of Vessel Emissions Sources of Air Pollutant Emissions Emissions from vessels result prima- rily from (1) fuel combustion in the vessel propulsion engines and boilers and in the cargo pumping engines, and (2) evaporation and subse- quent displacement of liquid cargo during loading, unloading, ballast- ing, or purging. During loading or unloading at marine terminals, vessels operate engines to maintain power for basic services and to run pumps and other cargo equipment. Emissions from the operation of engines and boilers may include criteria pollutants such as NOx, SO2, CO, and particulates, as well as VOCs. In addition, emissions occur as organic vapors in empty cargo tanks are displaced to the atmosphere by cargo being loaded into the tanks. These vapors may be formed in the empty tank by evaporation of residual cargo from previous loads, or generated in the tank as new product is loaded. Emissions may also occur during ballasting, as vapors in empty cargo tanks are displaced to the atmosphere by ballast water being pumped in. Coast Guard regulations currently require large tankers with crude oil washing systems, discussed below, to contain the organic vapors at marine terminals t33 C.F.R. § 157.1664. Ballasting of cargo tanks is also occurring with less frequency as a result of changes in interna- tional and domestic law, discussed below. Emissions Control Authority There is no federal legislation explicitly authorizing the control of emissions from vessels. Although vessel emissions were covered in the original Senate version of the 1970 amendments concerning mobile sources, the power to control vessel emissions was omitted in the final bill that emerged from conference. The legislative history implies this provision was deleted because Congress did not consider vessel emissions significant enough to be included.41 Therefore, while states may enforce air emission standards, it is debatable whether they may prescribe equipment or direct controls for tank vessels as mobile sources to achieve those standards, especially since the concepts of federal preemption and the prohibition on interference with interstate commerce would apply. Aircraft and automobiles, on the other hand, are the only mobile sources which are expressly regulated, and emissions standards for both are set on a national basis.4 Section 233 prohibits any state or political subdivision from adopting or enforcing any aircraft emission

182 standard unless such standard is identical to the federal standard [42 USC § 75733. Section 209(a) prohibits any state or political subdivi- sion from adopting or attempting to enforce any standard relating to the control of emissions from new motor vehicles t42 USC § 75433.4 Regulation Under the NRDC Case Indirect Source Controls In the 1970s, EPA attempted to force the states to regulate indirect sources of air pollution through a program called indirect source review.44 Indirect sources are facilities, such as parking lots, which are not themselves significant sources of pollution but which attract, or may attract, substantial numbers of mobile pollution-emitting sources t42 USC § 7410(a)~5~(C)~. One diffi- culty presented to EPA was that nowhere in the statute was the term mobile source defined. Congress reacted negatively and vigorously to EPA's attempt to mandate indirect source review. In the 1977 CAA Amendments, Congress made it clear that the states could not be required, although they were permitted, to regulate indirect sources of pollution.45 The 1977 amendments stated that, in determining whether a new or modified source qualifies as major or significant and, therefore, subject to new source review, EPA may not require any indirect source review program as a condition of approval of a SIP. EPA can approve and enforce an indirect source review program that a state chooses to adopt and submit as part of its SIP. However, EPA cannot include, nor require the states to include, emissions from mobile sources located at a stationary source with the emissions from that stationary source [42 USC § 7410(a)~5~(A)~. The EPA regulation of indirect sources to which Congress acted so decisively concerned only facilities that attracted automobiles. No attention was focused on the problem of emissions from vessels docked at marine terminals. In 1980, EPA revised its regulations.46 The revision, which applied to all proposed major stationary sources, and to major modifi- cations to existing sources, expressly stated that the term stationary source is intended ''to encompass the activities of a marine terminal and only those dockside activities that would serve the purposes of the terminal directly, and would be under the control of its owner or operator."47 The process of loading and unloading vessels docked at marine terminals may contribute various quantities of air pollution in harbor areas. Also, pollutants emitted as a vessel approaches and leaves a marine terminal may contribute to the poor air quality of many harbors. Recognizing this potential source of air pollution, EPA promulgated regulations under which those activities engaged in by a vessel while docked at a terminal were considered activities of the terminal subject to air pollution controls. EPA also ascribed to marine terminals the emissions of vessels coming to and from terminal (Id. at 52,7373. EPA took the position that vessels were not mobile sources ''within the meaning of § 110(a)~5) of the Act, the provision restricting indirect source review" bid. at 52,696~. Thus, pursuant to the revised regulations, both dockside and

183 to-and-fro vessel emissions48 were to be taken into account in regu- lating the construction and operation of new marine terminals, or the modification of existing terminals. The effective date of these regulations was August 7, 1980. EPA revoked these requirements in 1982, after they were judicially challenged by GATX Terminals Corporation. The revocation deleted requirements for (1) the inclusion of vessel emissions in determinations of whether a proposed new source or modification would emit a pollutant in significant or major amounts; and (2) the inclusion of mobile source emissions as secondary emissions in assessments of the air quality impacts of proposed new sources and modifications.49 EPA's rationale for the revocation, as set forth in its notice of proposed revocation, was that "the Clean Air Act bars it from requiring the inclusion of vessel emissions in any determination in the preconstruction review of new sources and modifications."5 EPA thus agreed with GATX and the industry that vessels are mobile sources, and that it had no authority to ascribe any vessel emissions to marine terminals because of the congressional ban on51andatory state indirect source review programs [Id. at 61,614-615]. The EPA's final rule was then challenged by the Natural Resources Defense Council (NRDC) and the State of California. yessed Emissions Attributable to Stationary Sources In NRDC v. EPA 725 F.2d 761 (D.C. Cir. 1984), the court was confronted with EPA's reversal of position, in which EPA first promulgated, then withdrew, regulations under which dockside vessel emissions, and to a limited extent, to-and-fro vessel emissions, were attributed to marine terminals. The court agreed with EPA's conclusion that vessels are mobile sources for purposes of the ban on indirect source review, and also agreed that vessel to-and-fro emissions should not be attributed to marine terminals for purposes of new source review t725 F.2d at 7713. However, the court ruled that the ban on indirect source review did not automatically bar EPA from attributing any dockside vessel emissions to marine terminals for purposes of new source review, absent an attempt to identify the various vessel emissions, and the way they are discharged into the atmosphere. The court suggested that EPA should have examined the nature of specific interactions between a vessel and a marine terminal to deter- mine which categories of emissions can (as a matter of statutory authority) and should (as a matter of policy) be attributed to the terminal as a stationary source. Accordingly, the court vacated EPA's blanket repeal of the dockside component from the attribution rules t725 F*2d at 771]. The court ordered EPA, in reformulating its vessel emis52on regula- tions, to (1) apply its '"control and proximity" regulations to define which emissions from dockside activities of marine vessels are "stationary source" emissions of the marine terminal, and (2) develop attribution rules to determine which, if any, of the emissions defined above cannot be assigned to the terminal because to do so would be to violate the ban on indirect source review [Id.~. The court made it

184 clear it was not suggesting that EPA must conclude that some dockside vessel emissions are necessarily attributable to marine terminals because these emissions are under the control of their terminal owner and directly serve his purposes. The court recognized that EPA's con- trol and proximity regulations may already adequately divide responsi- bility for dockside vessel emissions between the vessel and the terminal. Thus, EPA is not under judicial mandate to ascribe some vessel emissions to marine terminals. Rather, EPA must decide if it is appropriate to do so. Future Regulation of Vessels by EPA EPA's final rule is back before the agency on remand from the D.C. Circuit. The import of the court's decision in the NRDC case is that EPA cannot approve any SIP provision regarding marine terminal review until it undertakes the examination, either through new rulemaking or adjudication, of vessel emission mandated by the NRDC court. EPA is in the process of determining which, if any, vessel emissions should be attributed to marine terminals. Presumably, in making this determination, EPA is following the instruc- tions of the NRDC court, which directed EPA to apply the same general approach it employed in developing the bulk gasoline terminal regula- tions. In addition, even though NRDC court's decision was directed to EPA's PSD regulations, it appears likely that the court's rationale for its decision would apply as well to EPA's nonattainment regulations. Direct Regulation of Vessels by States Vessels as Sources of VOC Emissions Because states must revise their SIPs to provide for the attainment of the NAAQS for ozone no later than December 31, 1987, the states are searching for VOC sources whose emissions can be reduced. Most of the obvious, larger sources of VOCs are already being regulated, yet the emission reductions resulting from their regulation are not sufficient to meet the air quality standard for ozone in the major urban air quality regions. Therefore, several states are targeting the more difficult to control or smaller sources, and thus are proposing that ships or barges that load VOCs be fitted with vapor control equipment. The states have broad discretion as to which VOC sources they choose to regulate, and they are under no mandate to choose vessels. However, because section 116 permits the states to adopt emission standards or limitations that are more stringent than the federal standards, the states may go beyond attributing dockside vessel emissions to marine terminals and may decide to regulate to-and-fro emissions, absent restrictions on this authority under the supremacy and commerce clauses of the U.S. Constitution, discussed below. Extraordinary Controls The states are required to adopt certain 'minimum control measures," specifically set out by EPA, in exchange for having received the 1987 extension for ozone. The states must adopt regulations to apply RACT to major stationary sources, and to implement vehicle inspection and maintenance programs, and transportation pro

185 grams. If these minimum control measures are not adequate to demon- strate attainment by December 31, 1987, the state must adopt "additional measures."5 EPA has not specified what additional measures the states must adopt, but instead has merely given examples of measures that could be introduced. These examples include requiring the control of all major stationary sources to levels more stringent than RACT, and extending controls to other stationary sources. Control of marine vessel emissions is not a minimum control measure, and there is no RACT in place for vessel emissions control. Such con- trol is not even thought of as an additional measure. Vessel emissions control is often referred to by the states as an extraordinary measure, and is seen as a further step the states can take to reduce VOC emis- s ions . State Activity Pursuant to the CAA In general, two differing kinds of state air quality programs that affect marine vessels are being proposed or implemented. One is designed to regulate marine vessels directly by controlling emissions from such vessels: either engine emissions or displaced VOC vapors occurring as a result of the loading of cargo into vessels. The development of this kind of program is a result of the need of various states to attain the ozone standard by December 31, 1987. Thus, the primary impact of this program will fall on vessels carrying gasoline and crude oil, since vapors from these cargoes contribute to ozone formation. States such as California, Pennsylvania, and New Jersey fall into this category because they are searching for additional sources of VOC emissions that can be reduced to meet the statutory deadline for ozone. The second kind of program indirectly regulates marine vessels by specifying that marine vessel emissions must be calculated and included in the calculation of a marine terminal's emissions for purposes of new source review. The calculation of marine vessel emissions would include not only VOC emissions, but also emissions of other criteria pollutants as well. This program is being considered as a result of the NRDC case. However, under the terms of the NRDC case, the actual regulation of vessel emissions is not a foregone conclusion since compliance could be achieved without resorting to direct vessel regulation. Those state programs that propose to regulate marine vessels directly are perhaps most important, because they may affect vessel design, construction, and operation, in the near term. Programs that indirectly regulate marine vessels may be important only to the extent that a marine terminal may require vapor recovery onboard a vessel as a requirement of doing business at the terminal. There are indications that some states will refrain from implementing new vessel emission controls in the near future. Other states, such as New Jersey, feel that the time constraints imposed by the CAA in attaining the ozone standard do not permit them to await the results of the Marine Board study.

California Current Regulations All coastal air quality management districts in California have regulations governing stack emissions that attribute dockside vessel emissions to marine terminals for purposes of new source review, although the extent of enforcement is uneven. California law permits local air pollution control authorities to take independent action to control emissions. Proposed Regulations In June 1984, the California Air Resources Board presented its "Report to the California Legislature on Air Pollutant Emissions from Marine Vessels." The report concluded that any future vessel emissions control measures should explicitly subordinate regula- tory requirements to Coast Guard safety requirements, and excuse vessel operatO5r4 from compliance when necessary to secure the safety of a vessel. Following the submission of that report, the Air Resources Board began developing, as part of its suggested control measures, a proposal that will cover emissions from ballasting and housekeeping operations. The Air Resources Board believes that reductions in ballasting and house- keeping emissions can be achieved without the installation of control equipment. The suggested control measures have no force in law, but have been sent to the South Coast, Bay Area, Santa Barbara County, and Ventura County air quality management districts for consideration and adoption. County of Santa Barbara Santa Barbara regulates emissions from the loading of organic liquid cargo (oil) into marine vessels. The regula- tions require the installation of vapor recovery systems or the employment of emission control practices and apply to both tankers and terminals. Regulations controlling vessel emissions during loading have been in place for several years. When the courts invalidated an earlier version of the regulations because they were unenforceable, Santa Barbara redrafted the regulations. Santa Barbara adopted the present version on December 16, 1985. Under the new regulations, if a vessel or terminal was equipped with control equipment before January 1, 1986, it must use such control equipment after January l, 1986. If a vessel or terminal did not have control equipment on January 1, 1986, it must be in final compliance with the new regulations by July 1, 1987, unless compliance would impair the safety of the vessel. Emissions attributable to stationary sources include displaced vapors into the atmosphere, fugitive emissions, combustion emissions in district waters; and emissions from the loading and unloading of cargo. Santa Barbara faces sanctions from EPA because its ozone levels exceed federal standards. South Coast Air Quality Management District The South Coast Air Quality Management District (SCAQMD) has no specific regulations directly addressing vessel hydrocarbon emissions, but it does require

187 control of hydrocarbon emissions as part of its new source review program. This program requires that all new sources be equipped with BACT. A new source would include any new land-based bulk liquid transfer operation. The district also proposed a rule requiring ships to "cold iron" their power plants; that is, use onshore electrical power sources while docked in port to reduce engine emissions. According to SCAQMD, the proposed rule would help reduce the level of NOx in the Los Angeles area. The feasibility of such a rule was strongly contested by the marine industry.5 Bay Area Air Quality Management District The Bay Area Air Quality Management District (BAAQMD) regulated marine vessel emissions under its new source review regulations by treating marine vessels as a part of a stationary source when this source is a facility used to load cargo onto, or unload cargo from, marine vessels. Accordingly, the vessel emissions resulting from these cargo transfer operations, as well as the storage and processing of cargo, are attributed to the stationary source for new source review purposes. Only those vessel engine emissions occurring while the vessel is in the district's waters are included as attributable emissions. In December 1986, the BAAQMD staff, in a report to the district's commissioners, recommended that a permit to load organics, including crude oil and gasoline, for a bulk liquid storage terminal should be denied because of the terminal's failure to impose BACT for organic emissions from the proposed terminal modification. (When cargo carriers are tied to the docks9 they become a part of the stationary source for purposes of BACT review.) The BAAQMD staff concluded that there is an effective emission control device or technique that is applicable to the Lands ea marine terminal and, therefore, that BACT in the form of vapor recovery is required for the loading of organic liquids onto tankers at that facility. The staff also determined that imposition of a vapor recovery requirement on Landsea's proposed organic loading operations, a major modification to an existing stationary source, would not compromise vessel safety since some control systems, such7as the ARGO Jovelan barge, have been approved by the Coast Guard. Florida State regulations provide that VOCs may not be stored, processed, loaded, or unloaded, gnless known and existing vapor control devices on systems are applied.5 This regulation applies to bulk gasoline plants and bulk gasoline terminals. To date, this regulation has not been applied to ships or barges.

188 Illinois The Illinois EPA has proposed an amendment to the state's new source review rules that would include dockside vessel emiss ions within the definition of stationary source. The Illinois proposal attributes dock- side vessel emissions to marine terminals for purposes of determining whether a new source or modification is major and therefore subject to new source review. The Illinois EPA believes that failing to include vessel emissions will jeopardize federal EPA approval of Illinois' revised SIP. The proposal would not directly impose equipment or vapor recovery requirements on vessels, but instead would be a means of indirectly controlling emissions by requiring terminal owners to account for dock- side vessel emissions and presumably control these emissions. Enforce- ment actions would be brought against terminal operators, but would not directly affect vessel owners. The proposal has two parts. The first attributes emissions directly caused by the handling of material to the marine terminal. The second attributes to the terminal emissions associated with the transfer of material, including, but not limited to, idling of propulsion engines; operation of engines to provide heat, refrigeration, or lighting; operation of auxiliary engines for pumps or cranes; and transfer of materials from hold to hold or tank to tank. Maryland In March 1986, the director of the Air Management Administration of the Maryland State Office of Environmental Programs proposed to the Air Quality Control Advisory Council that Maryland state regulations be amended to require emissions controls on gasoline barges loading gaso- line. The proposed amendment was based on 1980 baseline data indicating that barge loading in the Baltimore area resulted in 4.5 tons of VOC emissions each day. Maryland is facing a 10-ton per day shortfall in 1987, due mainly to ambient air quality in the Baltimore area. Conse- quently, barge emissions became an attractive control source and the proposal to regulate and reduce these VOC emissions was introduced. Soon afterward, the proposal was dropped because incorrect baseline data was utilized, and because of industry concerns about safety and competition from uncontrolled terminals. Maryland is in the process of identifying potential new sources of regulation; no marine sources are being considered. New Jersey In 1983, New Jersey submitted a revised SIP, which EPA proposed to approve, including a commitment to adopt sufficient ''extraordinary measures" to provide the emission reductio59 required to demonstrate attainment of the NAAQS for ozone by 1987. One of these extra- ordinary measures was control of emissions of gasoline vapors at barge

189 loading facilities. The state anticipated requiring a 90 percent reduction in emissions. EPA approved the revised SIP an6d0conditionally approved the marine vessel emission control strategies. EPA stated that before adopting any vessel emission requirements, however, New Jersey would have to ensure that it has adequate legal authority to regulate these sources, consult with the Coast Guard in developing its barge and tanker control regulation to ensure that the requirements do not conflict with Coast Guard regulations, and consider the cost, safety, and technological feasibility of the requirements.61 The New Jersey Department of Environmental Protection is in the process of finalizing a report presenting the potential for regulation of marine emissions, which will provide the foundation for further evaluation within the department. Ohio Ohio is currently examining the feasibility of controlling emissions from the loading of barges. No final decision has been made about whether such emissions will be regulated, or about the format of any regulations that might be promulgated. Pennsylvania In 1985, the Pennsylvania Department of Environmental Resources, after studying the feasibility of regulating emissions from the off-loading of barges and from vessel ballasting, drafted proposed regulations to control vapor emissions during barge loading at marine terminals that have VOC emission potentials greater than 100 tons per year. These draft regulations were circulated for public comment. However, the department has suspended consideration of these regulations owing to the concerns about federal/state relations, and about the safety implications of such regulations. Texas Current Regulations Texas has in place requirements that apply to marine vessels in the same manner as to And-based sources. Excessive visible emissions from ships are prohibited except during reasonable periods of startup. Limits are imposed on ground level concentrations of particulate matter and sulfur dioxide. Emissions that cause or contribute to a condition of air pollution, as defined in the Texas Clean Air Act,62 are prohibited. As a result of a decision of the Texas Court of Appeals, Texas may not attribute vessel emissions to marine terminals for purposes of new source review. The court of appeals held that under the Texas Clean Air Act, vessels are not property of a crude oil unloading terminal so as to be considered part of the facility, and vessel emissions cannot be 3on- sidered in the review of a permit application for such a facility.6

190 Proposed Regulations The Texas Legislature amended the Texas Clean Air Act to create a Clean Air Study Committee to study the regulation of emissions into the air from vessels directly, and indirectly under the new source review program,64 and to make recommendations on whether or not to regulate vessel emissions under the Texas Clean Air Act.65 The committee submitted a report to the legislature on December 1, 1986. The committee found that vessel emissions accounted for 1.7 to 5.9 percent of the countywide VOC emissions in the five port coun- ties. The committee also found that the control of these emissions presents technical, legal, and economic difficulties if not done on a national basis to provide consistency and enforceability. The committee therefore recommended that the legislature adopt a resolution supporting national review, and stated that action on the regulation of ship emissions would not result in any immediate changes in air quality. Virginia Virginia regulations provide that vessel emissions should not be attributed to marine terminals for purposes of new source review. EPA has told Virginia that these regulations are not acceptable as a result of the NRDC case. EPA has been unable to tell Virginia precisely what new regulations the state needs to adopt, since EPA has not yet finalized its policy on which vessel emissions should be attributed to marine terminals, if any. Other States Some states have considered imposing hydrocarbon controls on vessels, but for various reasons declined to require such controls. Louisiana, for example, found emission controls would be too expensive and potentially dangerous absent nationwide controls. Connecticut, at one time, considered controlling hydrocarbon emissions from ships and barges, but dropped a proposal from consideration because of perceived interference with interstate commerce. Connecticut favors regulating these emissions at the federal level. An emissions control proposal was considered in Kentucky, but was dropped because of insufficient data upon which to regulate. No current action is pending. Washington considered adopting vapor recovery requirements for barge loading of gasoline, but found that the Coast Guard has not approved generic vapor recovery systems for barges, and decided the institutional obstacles were too great. Washington will seriously consider requiring vapor recovery for barge loading if it is found to be technically feasible. Domestic Marine Safety Laws Coast Guard Statutory Authority The U.S. Coast Guard has extensive statutory authority to regulate marine vessels in the interest of ensuring merchant marine safety and

191 environmental protection. Section 2 of Title 14 of the United States Code provides that the Coast Guard ''shall administer laws and promulgate and enforce regulations for the promotion of safety of life and property on and under the high seas and waters subject to the jurisdiction of the United States covering all matters not specifically delegated by law to some other executive department." Section 2103 of Title 46 provides that the Coast Guard, by delegation from the secretary of Transporta- tion, "has general superintendence over the merchant marine of the United States and of merchant marine personnel in so far as the enforce- ment of the subtitle [Subtitle II - Vessels and Seamen] is concerned." Many sections of Titles 33 and 46 of the United States Code also grant specific authority to the Coast Guard, including authority to regulate masters, ships' officers, and crew members; authority over the design, construction, and maintenance of vessels, their gear, and equip- ment; authority to regulate cargo carriage, vessel documentation, and certification; and authority to prevent pollution of the marine environ- ment. The Port and Waterways Safety Act of 1972 t8WSA),67 as amended by the Port and Tanker Safety Act of 1978 (PTSA), reaffirmed existing Coast Guard marine safety authority over tank vessels and expanded that authority by authorizing the Coast Guard to specify mandatory design and construction requirements for tank vessels carrying crude oil and petroleum products to protect against hazards to life and property. The process of Coast Guard regulation of a vessel begins prior to actual construction and continues through the vessel's life. The proposition that Congress intended the Coast Guard to be primari- ly responsible for maritime safety is supported by the legislative history of the recent recodification of Title 46 of the United States Code.7 The Coast Guard has Promulgated extensive regulations imple- menting this broad authority. The Coast Guard's comprehensive regulations provide an integrated approach, for both domestic and international requirements, to govern the safety of the whole maritime industry, and the protection of the marin72environment, even to the exclusion of other federal agen- cies. There have also been some recent cases confirming the Coast Guard's exclusive jurisdiction over working conditions on vessels, in spite of the broad powers given to a sister agency--the Occupational Safety and Health Administration.73 Because the Coast Guard is predominantly responsible for promoting and implementing almost all aspects of marine safety, the agency has developed the expertise neces- sary to evaluate all marine safety requirements. The Coast Guard has recognized the potential problems involving uni- formity and safety presented by individual state initiatives t74regulate vessel emissions. The Towing Safety Advisory Committee (TSAC) has also brought to the Coast Guard's attention its concerns about marine safety and about the disadvantages of nonuniform regulation that might result from individual state action in this area. TSAC Resolution 44 recommended that the Coast Guard study the need for safety standards uniformity and requirements in applying air quality standards to marine VF=SSe1 emissions.

192 The analysis and discussion of the Coast Guard's regulatory author- ity will concentrate on those provisions applicable to vessels that carry flammable or combustible liquid cargo in bulk as cargo, since state proposals for VOC vapor recovery involve cargo loading or unload- ing operations. The relevant statutory provisions are found in Chapter 37 of Title 46; they apply to self-propelled tank vessels (tankers) and to nonself-propelled tank vessels (tank barges). The provisions of Chapter 37 of Title 46 and its implementing regulations constitute most of the marine safety laws governing vessel design and equipment of the types of vessels that would be subject to the vapor recovery regulations proposed by several states. In addition to the marine safety laws, several statutes deal with marine pollution and liability for damages and clean-up costs resulting from marine pollution;75 these statutes will not be addressed as they do not directly affect the relation between federal marine safety laws and state vapor recovery activities. We note in passing, however, that vessel owners operate in a strict liability regime for pollution caused by a vessel, and, unlike land-based industries, vessel owners operate in a virtually absolute liability regime for personal injury to seamen and crew members occurring on board a vessel. With respect to the legal consequences of mandating vapor control equipment that may pose safety hazards, serious legal dilemmas can arise for vessel owners if such equipment causes a pollution incident or personal injury.76 Port and Tanker Safety Act of 1978 The PTSA (codified at 33 USC §§ 1221-31 and Chapter 37 of Title 46 USC) reaffirmed existing Coas7t7Guard marine safety authority over tank vessels, dating back to 1936, and in several instances broadened and expanded that authority by more explicitly specifying certain mandatory design and construction requirements for tank vessels carrying crude oil and petroleum products to reduce the hazards associated with handling these cargoes. Regulatory Authority for Tank Vessels With respect to the general regu- latory authority, the Coast Guard is directed to "prescribe regulations for the design, construction, alteration, repair, maintenance, opera- tion, equipping, personnel qualification, and manning of vessels . . . that may be necessary for increased protection against hazards to life and property, for navigation and vessel safety, and for enhanced protection of the marine environment" [46 USCA § 3703(a). This section further provides that the regulations shall include requirements for t46 USCA § 3703 Gail: · superstructures, hulls, cargo holds or tanks, fittings, equipment, appliances, propulsion machinery, auxiliary machinery, and boilers;

193 · the handling or stowage of cargo, the manner of handling or stowage of cargo, and the machinery and appliances used in the handling or stowage; 0 equipment and appliances for lifesaving, fire protection, and prevention and mitigation of damage to the marine environment; · the manning of vessels and the duties, qualifications, and training of the officers and crew; · improvements in vessel maneuvering and stopping ability and other features that reduce the possibility of marine casualties; · the reduction of cargo loss if a marine casualty occurs; and · the reduction or elimination of discharges during ballasting, deballasting, tank cleaning, cargo handling, or other such activity. The implementing regulations for these statutory provisions, found at 33 C.F.R. Parts 151, 155, and 157, and 46 C.F.R. Subchapters D and O. comprehensively regulate all aspects of vessel design, construction, and operation, including detailed design specification and stability require- ments, manning levels for officers and crew, and licensing procedures for officers and crew members.7 The stated objective of these stan- dards is promotion of merchant marine safety, but the resulting improve- ments in vessels' structural integrity also enhance environmental protection by preventing accidents that cause pollutant releases. Tank Ve.~.~:~1 F.~;r~m~nt Rabbi r~ment.c: The PTSA cli r~rt~cl the lit (~rr1 to require, on new and existing tank vessels, of specified size categories, certain design and equipment features to minimize or eliminate opera- tional pollution and to reduce the possibility of accidental releases of cargo due to collisions, groundings, rammings, or structural failure t46 USCA §§ 3704-3706~. These protections were achieved through three requiregments: segregated ballast tan~k2 (SBT); crude oil washing (COW); 1 and inert gas systems (IGS). The regulations governing SBT, COW, and IGS are found at 46 C.F.R. Part 32 and 33 C.F.R. Part 157. These regulations may have a direct impact on proposals to control hydrocarbon emissions from tank vessels, depending on the size and age of the vessel. The SBT, COW, and IGS requirements for new and existing vessels are set out in Tables C-2 to C-4. These technologies were incorporated in the PTSA in anticipation of the coming into force of the MARPOL 73/78 Convention,83 discussed below, which, with a few exceptions, is mirrored by the 1978 Act. Together these technologies represent international agreement on how best to eliminate operational pollution caused by ballasting and tank cleaning at sea. In addition to SBT, COW, and IGS, Coast Guard regulations currently contain other equipment requirements, including standards for navigation equipment, alarm systems, boilers and machinery, electrical installa- tions, pumps, piping and hoses for cargo handling, bilge systems, venti- lation and venting, and structural fire protection measures. The significance of these Coast Guard requirements is manifold. The requirements evidence extensive, existing regulation of tank vessel design, equipment, and operations and a consistent pattern of

194 TABLE C-2 Requirements for U.S. Tank Vessels in Domestic Trade Crude Oil Product Category DWT Range Carrier Carrier Date Required . 20,000 DWT or PL/SBTa IGS Upon delivery above but COW less than IGS 30,000 DWT 30,000 DWT PL/SBTa PL/SBTa Upon delivery or above COW IGS IGS B1 20,000 DWT or IGS (1) IGS (2) (1) 6/1/83 above but (2) 6/1/83, only if less than SBT SBT high tank washing 40,000 DWT or (3) or (3) machines are used COW CBT (3) 1/1/86 or when the tanker is 15 yrs. old, whichever is later 40,000 DWT or IGS (19~2) IGS (1~2) (1) 6/1/83 above but (2) On comb. carriers less than SBT SBT of 50, 000 DWT or 70,000 DWT CBT(3) or (5) above with keel or COW CBT laid after 12/31/74, IGS required by 2/26/76 SBT (3) 6/1/81 until or (4) 6/1/85 COW (4) After 6/1/85 (5) 6/1/81 70,000 DWT IGS (11~2) IGS (11~2) (1) 6/1/81 or above (2) On tank vessel of PL/SBTb (3) PL/SBTb (3) 100,000 DWT or above with keel laid after 12/31/74, IGS required by 2/26/76 (3) Upon delivery C1 20,000 DWT or above but less than 40,000 DWT Same as Category B1 for this deadweight range

195 TABLE C-2 Continued Crude Oil Product Carrier Category DWT Range Carrier Date Required C1 40,000 DWT or above but less than 70,000 DWT 70, 000 DWT IGS (1) (a) or above D1 20,000 DWT or above but less than 40,000 DWT 40, 000 DWT or above but less than 70,000 DWT 70,000 DWT or above NOTES: Same as Category B1 for this deadweight range IGS (1~2) SBT (3) SBT (3) (1) 6/1/81 (2) On tank vessel of 100,000 DWT or above with keel laid after 12/31/74, IGS required by 2/26/76 (3) Upon delivery Same a Category B1 for this deadweight range Same as Category B1 for this deadweight range  IGS (1~2) SBT CBT (3) or COW SBT (4) or COW IGS (1~2) SBT or (1) CBT (1) 6/1/81 (2) On tank vessels 100,000 DWT or above with keel laid after 12/31/74, IGS required by 2/26/76 (3) 6/1/81 until 6/1/83 (4) After 6/1/83 1. The numbers in parentheses under the "Crude Oil Carrier" and "Product Carrier" columns correspond to the numbers in parentheses under the 'irate Required" column for each particular category. To determine when the equipment is required, read the corresponding number in paren- thesis under the "Date Required" column.

196 TABLE C~2 Notes continued 2. Definition of categories: A1 - A tank vessel that: a. is contracted for after June 1, 1979; or b. in the absence of a building contract, has the keel laid or is at a similar stage of construction after January 1, 1980; or c. is delivered after June 1, 1982; or d. has undergone a major conversion that is contracted for after June 1, 1979, or has begun the conversion after January 1, 1980, or has completed the conversion after June 1, 1982. B1 - A tank vessel that is contracted for after January 7, 1976, BUT DOES NOT COME UNDER CATEGORY A1. C1 - A tank vessel that: a. IS b. in is or . C. IS d. has contracted for after December 31, 1974; or the absence of a building contract, has the keel laid or at a similar stage of construction after June 30, 1975; delivered after December 31, 1977; or undertone a major conversion that is contracted . _ _ for after December al, lY74, or has begun the conversion after June 30, 1975, or has completed the conversion after December 31, 1977; BUT e. DOES NOT COME UNDER CATEGORIES A1 or B1. D1 - A tank vessel that DOES NOT COME UNDER CATEGORIES A1, B1, or C1 SOURCE: U.S. Coast Guard Navigation and Inspection Circular No. 1-81, Change 1 (July 14, 1986~.

197 TABLE C-3 Requirements for U.S. Tank Vessels in Foreign Trade Category DWT Range Crude Oil Carrier Product Carrier Date Required 20,000 DWT or above but less than 30,000 DWT 30,000 DWT or above B2 20,000 DWT or above but less than 40,000 40,000 DWT or above but less than 70,000 DWT 70,000 DWT or above C2 20,000 DWT or above but less than 40,000 DWT PL/SBTa COW IGS PL/SBTa COW IGS IGS (1) SBT or (3) COW IGS (1)(2)  SBT CBT (3) or COW SBT or (4) COW IGS Upon delivery PL/SBTa Upon delivery IGS IGS (2) SBT or (3) CBT IGS (1)~2) SBT or (5) CBT IGS (1~2) IGS (1~2) PL/SBTb (3) PL/SBTb (3) (1) 6/1/83 (2) 6/1/83, only if high tank washing machines are used (3) 1/1/86 or when the tanker is 15 yrs. old, whichever is later (1) 6/1/83 (2) On comb. carriers of 50,000 DWT or above with keel laid after 12/31/74, IGS required by 2/26/76 (3) 6/1/81 until 6/1/85 (4) After 6/1/85 (5) 6/1/81 (1) 6/1/81 (2) On tank vessel of 100,000 DWT or above with keel laid after 12/31/74, IGS required by 2/26/76 Upon delivery 3) Same as Category B2 for this deadweight range

198 TABLE C-3 Continued Crude Oil Product Category DWT Range Carrier Carrier Date Required C2 40,000 DWT or above but less than 70,000 DWT 70,000 DWT or above D2 20,000 DWT or above but less than Same as Category B2 for this deadweight range IGS (1~2) IGS (1~2) SBT (3) SBT (3) (1) 6/1/81 (2) On tank vessel of 100,000 DWT or above with keel laid after 12/31/74, IGS required by 2/26/76 (3) Upon delivery Same as Category B2 for this deadweight range 40,000 DWT 40,000 DWT or Same as Category B2 for this deadweight range above but less than 70,000 DWT 70,000 DWT IGS (11~2) IGS (1~2) (1) 6/1/81 or above (2) On tank vessels SET SBT 100,000 DWT or CBT (3) or (1) above with keel or COW CBT laid after 12/31/74, IGS SBT (4) required by or COW 2/26/76 (3) 6/1/81 until 6/1/83 (4) After 6/1/83 NOTES: 1. The numbers in parentheses under the "Crude Oil Carrier" and "Product Carrier" columns correspond to the numbers in parentheses under the "Date Required" column for each particular category. To determine when the equipment is required read the corresponding number in paren- thesis under the "Date Required' column.

199 TABLE C-3 Notes continued 2. Definition of categories: A2 - A tank vessel that: is contracted for after June 1, 1979; or in the absence of a building contract, has the keel laid or is at a similar stage of construction after January 1, 1980; or c. is delivered after June 1, 1982; or d. has undergone a major conversion that is contracted for after June 13 1979, or has begun the conversion after January 1, 1980, or has completed the conversion after June 1, 1982. B2 - A tank vessel that is contracted for after March 31, 1977, BUT DOES NOT COME UNDER CATEGORY A2. C2 - A tank vessel that: a. is contracted for after December 31, 1975; or b. in the absence of a building contract, has the keel laid or is at a similar stage of construction after June 30, 1976; or c. is delivered after December 31, 1979; or d. has undergone a major conversion that is contracted for after December 31, 1975, or has begun the conversion after June 30, 1976, or has completed the conversion after December 31, 1979; BUT DOES NOT COME UNDER CATEGORIES A2 or B2 D2 - A tank vessel that DOES NOT COME UNDER CATEGORIES A2, B2, or C2. SOURCE: U.S. Coast Guard Navigation and Inspection Circular No. 1-81, Change 1 (July 14, 1986).

200 TABLE C-4 Requirements for Foreign Tank Vessels Entering U.S. Waters for Commercial Service Crude Oil Product Category DWT Range Carrier Carrier Date Required Al 20,000 DWT or PL/SBTa IGS 1/1/80 above but COW less than IGS 30,000 DWT 30,000 DWT PL/SBTa PL/SBTa 1/1/80 or above COW IGS IGS B3 20,000 DWT or IGS (1) IGS (2) (1) 6/1/83 above but (2) 6/1/83, only if less than SBT SBT high tank washing 40,000 DWT or (3) or (3) machines are used COW CBT (3) 1/1/86 or when the tanker is 15 yrs. old, whichever is later 40,000 DWT or IGS (1) IGS (1) (1) 6/1/83 above but (2) 6/1/81 until less than SBT SBT 6/1/85 70,000 DWT CBT (2) or (4) (3) After 6/1/85 or COW CBT (4) 6/1/81 SBT or (3) COW 70,000 DWT IGS (1) IGS (1) (1) 6/1/81 or above PL/SBTb (2) PL/SBTb (2) (2) 4/1/77 C3 20,000 DWT or above but less than 40,000 DWT 40,000 DWT or above but less than Same as Category B3 for this deadweight range Same as Category B3 for this deadweight range 70,000 DWT 70,000 DWT IGS (1) IGS (1) (1) 6/1/81 or above SBT (2) SBT (2) (2) 4/1/77

201 TABLE C-4 continued Crude Oil Product Category DWT Range Carrier Carrier Date Required D3 NOTES: 20,000 DWT or above but less than 40,000 DWT 40,000 DWT or above but less than 70,000 DWT 70,000 DWT or above Same as Category B3 for this deadweight range Same as Category B3 for this deadweight range IGS (1) IGS (1) (1) 6/1/81 (2) 6/1/81 until 6/1/83 (3) After 6/1/83 SBT SBT CBT (2) or (1) or COW CBT SBT (3) or COW 1. The numbers in parentheses under the "Crude Oil Carrier" and 'product Carrier" columns correspond to the numbers in parentheses under the "Date Required" column for each particular category. To determine when the equipment is required, read the corresponding number in parenthesis under the "Date Required" column. 2. Definition of categories: AS - A tank vessel that: a. is contracted for after June 1, 1979; or b. in the absence of a building contract, has the keel laid or  is at a similar stage of construction after January 1, 1980; or c. is delivered after June 1, 1982; or d. has undergone a major conversion that is contracted for after June 1, 1979, or has begun the conversion after January 1, 1980, or has completed the conversion after June 1, 1982. B3 - A tank vessel that is contracted for after March 31, 1977, BUT DOES NOT COME UNDER CATEGORY A3.

202 TABLE C-3 Notes continued C3 - A tank vessel that: is contracted for after December 31, 1975; or b. in the absence of a building contract, has the keel laid or is at a similar state of construction after June 30, 1976; or e. 1 is delivered after December 31, 1979; or has undergone a major conversion that after December 31, 1975, or has begun the conversion after June 30, 1976, or has completed the conversion after December 31, 1979; BUT DOES NOT COME UNDER CATEGORIES AS or B3. contracted for D3 - A tank vessel that DOES NOT COME UNDER CATEGORIES Al, B3, or C3. 3. Foreign tank vessels must meet the applicable requirements when the vessel enters U.S. waters for commercial service after the date the equipment or construction standard is required. SOURCE: U.S. Coast Guard Navigation and Inspection Circular No Change 1 (July 14, 1986~. . 1-81,

203 congressional delegation of marine safety jurisdiction to the U.S. Coast Guard. Because these regulations apply to U.S. vessels in the domestic and foreign trades, as well as to foreign tank vessels entering U.S. waters for commercial service, the design and equipment requirements for all vessels need to be addressed at the federal and international levels through the authorities most knowledgable about marine safety issues. Otherwise, there could be significant impacts on maritime interstate and foreign commerce if nonuniform and piecemeal state-by-state regulations are implementated. Regulation of Vapor Recovery Systems While the Coast Guard does not have authority to establish or enforce air emission standards for vessels, it does have authority to ensure that the marine equipment and requirements for meeting such standards are safe. Owing to limited state implementation of emission standards in the past, the Coast Guard has not promulgated a generic regulatory scheme. Therefore, although a few vapor recovery systems are in existence, the Coast Guard has no regulations that deal specifically with collection, recovery, or treatment of emissions generated during cargo loading. Vapor recovery systems (VRS) for vessels, to the extent they have been used, are inspected under the general inspection authority set out at 46 C.F.R. Subpart 31.10. These regulations include mandatory review and approval by the Coast Guard of plans and specifications for the hull, cargo tanks, and machinery, and inspection during construction and upon completion [46 C.F.R. § 31.10-53. In fact, the Coast Guard's cur- rent policy with regard to a landside facility's vapor recovery equip- ment is that such equipment will not be plan-reviewed, nor will design approval be given. However, the Coast Guard has the authority to stop an operation should an unsafe condition be identified during an inspec- tion of the facility. The Coast Guard will review vessel modifications to enable use of VRS on a case-by-case basis, taking into account general safety hazards and concerns. Coast Guard involvement in such reviews so far has been minimal. As interest in these systems increases, this case-by-case review will no longer be appropriate. Vessel Operations The Coast Guard requires regularly scheduled drydock- ing of inspected vessels so that hull plating and frames can be thorough- ly inspected. The cargo tanks must be gas-freed to enable physical inspection of the tank spaces t46 C.F.R. § 31.10-20~. There is concern about how gas-freeing will be accomplished while vapor emissions are restricted. Further, each tank vessel must meet stability requirements, 46 C.F.R. § 31~10-30, and be assigned a load line if it is engaged in coastal or ocean voyages to ensure sufficient freeboard to be seaworthy (46 C.F.R. Part 423. The addition of vapor control equipment on board a vessel may require recalculation of both the stability and load line of - a vesse .

204 Licensing and Certification of Tankermen The Coast Guard administers a rigorous licensing program to guarantee base levels of knowledge, demonstrated competence, and expertise for licensed deck officers and engineers. It issues licenses corresponding to licensees' skills and experience, and limits those licenses to vessels of specific size and type and to routes to be traversed. The licenses are graded to indicate varying levels of responsibility and skill. The safe operation of tank vessels requires a complement of skilled, trained individuals. Tank barges that carry crude oil or petroleum products must have on board special crew members, called tankermen, to load and unload the cargo, ensuring that barges are not overloaded or ruptured. VRS requirements may impose new demands on these personnel, and may add a more complex operational function that may compound the possibility of human and mechanical error. Tankermen may require retraining to handle the VRS equipment, or in the alternative, a new841ass of personnel may be required solely to handle the VRS equipment. International Marine Safety and Pollution Conventions The International Maritime Organization (IMO) has sponsored interna- tional conventions and codes, many of which have been adopted by the United States. EPA is frequently represented on U.S. delegations that advise IMO on international environmental measures affecting vessels. The Role of IMO in U.S. Maritime Law International harmony in marine transportation is essential. Accordingly, many U.S. marine safety and environmental protection laws have developed in conjunction with numerous international maritime agreements over the years. The IMO has sponsored international conven- tions and codes with applicable regulations to implement these conven- tions, and codes which have been signed and ratified by the United States. The IMO's standing committees, on a continuing basis, monitor the implementation of existing conventions, issue guidelines, and develop new initiatives. The IMO has no enforcement authority over either treaties, or regulations developed to implement these treaties; enforcement is left to the administering countries. Many of these conventions and codes have been incorporated into domestic laws.85 Domestic laws in several instances have been enacted or amended to implement these international treaties. Other conven- tions86 have not been ratified by the United States, but nonetheless impact marine vessel operation. These conventions and codes represent an integrated, international response to maritime safety and environmen- tal protection. A summary description of some of these IMO initiatives follows. Safety of Life at Sea (SOLAS) The 1974 SOLAS Convention contains safety standards and procedures. SOLAS applies to ships engaged on interna

205 tional voyages and governs inspection and maintenance of ships; subdivi- sion and stability of vessels; machinery and electrical installations; fire protection, detection, and extinction; lifesaving equipment; radio communications equipment; navigation safety; and carriage of dangerous goods. SOLAS entered into force on May 25, 1980. In June 1983, as part of its ongoing regulatory responsibilities, the IMO Maritime Safety Committee adopted the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk, and the International Code for the Construction and Equipment of Ships Carrying Liquified Gases in Bulk. These codes have become manda- tory under 1983 SOLAS amendments. The Coast Guard is in the process of drafting regulations to implement these codes. These codes address emis- sions control for toxic products not for air quality considerations, but rather for personnel protection and toxicity. Standards for Training, Certification, and Watchkeeping (STCW) The STCW Convention establishes improved threshold requirements for training, cer- tification, and watchkeeping for licensing masters, officers, and certain crew members of seagoing commercial vessels. These mandatory, minimum requirements are designed to provide highly qualified personnel on board vessels to reduce maritime casualties, protect the marine environment, and promote maritime safety. The standards vary according to size and type of vessel and class of seamen. Annex I, Chapter V of the convention contains special requirements for training and certification of seamen involved in loading, discharging, and care in transit of cargo on oil tankers, chemical tankers, and liquefied gas tankers. Although the United States has not yet ratified STOW, the Coast Guard is revising its licensing and training requirements to conform to these international standards.87 Ratification seems likely to follow adoption of these regulations. Marine Pollution (MARPOL) MARPOL 73/78 was established to prevent pollu- tion of the marine environment by discharging harmful substances or ef- fluents containing such substances into the sea from ships. To achieve its aim, MARPOL 73/78 contains five annexes in which detailed regula- tions are given with respect to the handling on board and the discharge into the sea of five main groups of harmful substances, that is, Annex I (oils), Annex II (noxious liquid substances carried in bulk), Annex III (harmful substances carried in packaged forms), Annex IV (sewage), and Annex V (garbage). For purposes of the Marine Board Study, only Annexes I and II are relevant. MARPOL 73/78 was ratified by the United States on August 12, 1980. Annex II allows removal of cargo residues by tank ventilation. Appendix C of Annex II specifies that, with regard to safety aspects, the operational requirements for cargo tank openings in the Interna- tional Bulk Chemical Code, the Bulk Chemical Code, and the ventilation procedures in the ICS Tanker Safety Guide (chemicals) should be consulted.

206 International Vapor Recovery Activity United States Paper On November 26, 1980, the United States submitted an information paper to the IMO Subcommittee on Bulk Chemicals concern- ing Hydrocarbon Vapor Emission Control (BCH/59~. The Coast Guard was considering the need for regulations concerning vessel emissions control, because emissions standards would be applied to both foreign and domestic vessels in United States ports. The U.S. solicited comments from all IMO nations and requested details concerning similar national plans. Other Nations In 1983, the Netherlands Ministry of Housing, Physical Planning, and Environment commissioned a study on vapor-handling systems for the transfer of liquids between sources such as ships, inland barges, rail tank cars, and taint trucks, for use as technical background to permit issuing authorities. Following the study on vapor control technology in 1984, the Netherlands government proposed legislation that would require the use of vapor recovery systems in Rotterdam when load- ing marine vessels with ethylene dichloride, epichlorohydrin, benzene, or acrylonitrile. Because of the international character of marine bulk transporta- tion, efforts by states to impose restrictions requiring equipment and operational modifications may conflict directly with the international regulation of marine vessels, and may interfere directly with interna- tional commerce. ANALYSIS OF OVERLAPPING INTERESTS The Relation Between Coast Guard and EPA Authority The Coast Guard does not exercise authority over vessel emissions insofar as air quality considerations are concerned. However, the use of on-board control equipment may present significant safety hazards by, among other things, increasing the risk of harm to personnel or the possibility of tank rupture and explosions, or introducing a source of ignition in a vessel. Consequently, the Coast Guard does exercise jurisdiction over measures designed to control air emissions to the extent those measures affect the design, construction, or operation of marine vessels. EPA has recognized on several occasions that safety, technological, and economic issues must be taken into account in the development of marine vessel emission control strategies and has deferred action on marine vessel regulations that would ascribe vessel emissions to marine terminals for purposes of new source review. Also, the Coast Guard and EPA have sponsored joint studies on the feasibility of controlling vessel emissions. In 1974, control of vapor emissions from gasoline loading was being considered in the Houston-Galveston area. Potential safety problems associated with recovery of hydrocarbon vapors possibly in the flammable

207 range were brought to the attention of the Coast Guard. The Coast Guard considered adding regulations to the PWSA regulations in 33 C.F.R. Subchapter P to establish a new Part 166 containing safety equipment requirements for VRS and operational requirements concerning the use of VRS equipment during vessel cargo loading and unloading at waterfront facilities. The Coast Guard solicited public comment through an Advance Notice of Proposed Rulemaking t41 Fed. Reg. 14,391 (April 5, 1976~. All comments received expressed apprehension over the hazards inherent in collecting and transferring flammable vapors. The Coast Guard never took further formal action on the VRS proposal, but instead transmitted comments to EPA concerning the potential safety hazards associated with VRS. The Coast Guard also sponsored a series of research studies includ- ing, for example, a study on devices to suppress detonations in pipe- lines transferring flammable vapors. These research studies are listed later in~ghis appendix in the section, Coast Guard Sponsored Research Studies. Recognizing at an early stage that vessel emission controls would be stymied until the safety issues were resolved, EPA decided to delay promulgating marine vapor control regulations pending further research into safety and economic issues. With Coast Guard support and partici- pation, EPA initiated a barge vapor control demonstration project in 1979 to consider the economics, performance, and general suitability of the control of emissions from barges during gasoline loading. Budget cuts in the early 1980s curtailed the program. With respect to the legislative authority delegated to EPA and to the Coast Guard, the control of air emissions was not specifically addressed in the CAA or in the Coast Guard's regulatory authority. Consequently, the statutes themselves do not establish guidance other than a clear delegation to the Coast Guard of exclusive jurisdiction over matters pertaining to marine safety. The Relation Between EPA and State Authority The Clean Air Act: Silent on Vessels As discussed previously, there is no federal legislation permitting the control of emissions from ships, barges, or other vessels. EPA's authority to require states to include in their SIPs transportation control plans for reducing pollution from motor vehicles generated tremendous controversy. In addition, EPA's authority to promulgate regulations requiring ''indirect source review" was never clearly esta- blished. The CAA provisions on moving sources cover only automobiles and aircraft because Congress was primarily concerned with prohibiting EPA regulation of motor vehicles and parking facilities. To the extent that states have proposed SIP modifications to regu- late vessels, EPA has taken the position that the exercise of state environmental authority over marine vessels is open to question, especially in light of Coast Guard jurisdiction over marine safety. Since there is no specific mandate to regulate vessel emissions in the

208 CAA or other federal law, the states exercise discretion with respect to those sources which they select for regulation under their SIPs. Conditional EPA Approval: Jurisdictional Doubts Although it is unclear whether EPA may require states to regulate marine vessel emissions indirectly, the CAA does not preclude the states from voluntarily doing so. Any EPA approval of a SIP providing for the regulation of marine vessel emissions will have to be conditional, since the CAA does not confer authority on EPA to regulate marine vessel emissions directly. In fact, in its proposed approval of the revised New Jersey SIP, EPA stated that New Jersey would have to ensure that it has adequate legal authority to regulate marine sources, thus suggesting that New Jersey's authority to regulate marine vessels is independent and would not derive from EPA's authority pursuant to the CAA. Furthermore, since EPA has not formulated regulations concerning the attribution of marine vessel emissions to marine terminals, EPA cannot affirmatively approve SIP provisions governing marine terminals for new source review purposes. EPA only partially approved SIP amendments concerning PSD regulations proposed by Kansas, bout expressly retained authority to issue permits for marine terminals. 1 EPA deferred action on Kansas's proposed exclusion of vessel activities in its definition of stationary source. While EPA cannot require a state to include an indirect source review program in its SIP, a state, insofar as the CAA is concerned, may require such a program on its own pursuant to section 116, which pro- vides that nothing in the CAA ''shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution" [42 USC § 74163. Uncertainties about state authority to regulate vessels and the safety of the equipment the vessels would be forced to install will remain until EPA takes affirmative regulatory action. The Relation Between Coast Guard and State Authority Compliance with state regulation of vapor emissions from marine vessels may require significant design modifications to vessels, whether the control equipment is placed on-board the vessel or onshore at a marine terminal. Such state regulation may be preempted by federal law granting the Coast Guard exclusive authority over vessel design and construction, or by constitutional provisions limiting the ability of states to impose burdens on interstate commerce. The Supremacy Clause The supremacy clause of the U.S. Constitution92 elevates federal law above state law in the event of inconsistency or conflict. This is

209 known as the preemption doctrine. Under the preemption doctrine, regula- tory authority over maritime activities by state and local governments must not interfere with the comprehensive system of regulation enacted by the federal government. 3 The preemptive effect of a federal stat- ute and implementing regulations may be established in several ways. First, acting pursuant to the supremacy clause, Congress may expressly provide in a statute that a state law that is inconsistent with the federal law is preempted or that the federal law preempts all state laws addressing the same subject, even if not inconsistent. Second, absent an explicit expression in the statute of congres- sional intent to preempt state authority, such intent will be inferred where Congress has created a federal regulatory scheme so pervasive that it leaves no room for state action, or where the federal interest is so predominant, and the need for uniformity so great, that the federal system will be assumed to preclude enforcement of state laws on the same subject. 5 Third, even where Congress has not entirely displaced state regulation in a specific area, state law will be preempted when "compliance with6both federal and state regulations is a physical impossibility," or where state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Preemption of Vessel Design Requirements Congress has enacted a compre- hensive federal regulatory system governing marine vessels and maritime activities, discussed previously. Under authority granted by the PWSA and PTSA, the Coast Guard has promulgated extensive rules and regula- tions governing the design, construction, alteration, repair, crew train- ing, maintenance, and operation of certain vessels. The Coast Guard was specifically authorized to set stricter standards for vessels engaged in domestic trade. Although the PWSA and PTSA do not contain an explicit expression of congressional intent to preempt state law regulating vessel design and construction, the Supreme Court has held that Congress intended to preempt the field of vessel design and construction. Ray v. Atlantic Richfield Co., 435 U.S. 151 (1978~. In Ray v. ARCO the Court, in striking down a Washington State statute requiring certain design safety features for tankers, held that Congress had entirely preempted the field as to tanker design requirements. The Court stated: This statutory pattern shows that Congress, insofar as design characteristics are concerned, has entrusted to the Secretary the duty of determining which oil tankers are sufficiently safe to be allowed to proceed in the navigable waters of the United States. This indicates to us that Congress intended uniform national standards for design and construction of tankers that would foreclose the imposition of different or more stringent state requirements. [435 U.S. at 163 (emphasis added)]

210 The Court found that Washington's "design requirements, standing alone ? are invalid in light of the PWSA and its regulatory implemen- tation" tId. at 160-613. The basis for the Supreme Court's decision in Ray v. ARCO was recently applied in Chevron v. Hammond, 726 F.2d 483 (9th Cir. 1983), where the Court of Appeals for the Ninth Circuit upheld an Alaska statute prohibiting oil tankers from discharging ballast from oil cargo tanks into the territorial waters of Alaska against a challenge on preemption grounds. The Court distinguished the Alaska statute from the Washington statute at issue in Ray v. ARCO on the grounds that the Alaska statute did not address a vessel design requirement, but rather implemented the Clean Water Act Of 197798 by regulating the discharge of a pollutant into navigable waters. However, the Court noted that the state regulation, despite its validity under the Clean Water Act, could still be challenged on the ground that it is preempted by the PWSA and PTSA [726 F.2d at 4913. With regard to the PWSA and PTSA, the Court stated: While design standards need to be uniform nation- wide so that vessels do not confront conflicting requirements in different ports and so that the Coast Guard can promote international consensus on design standards, there is no corresponding domi- nant national interest in uniformity in the area of coastal environmental regulation. Rid. at 492] The court also noted the following: Although national uniformity and international consensus are critical concerns in the establish- ment of tanker design standards, those concerns are not essential in the regulation of pollutant dis- charges into coastal waters. Once a ship is con- structed, it cannot meet new or different design requirements in various ports. A ship's discharge of pollutants can, however, be varied according to environmental standards and conditions in different jurisdictions. [Id. at 492-93] Thus, the Court's holding that the Alaska statute regulating the discharge of pollutants into state territorial waters is not preempted by the PWSA and PTSA was based on the fact that the law did not require any design or construction modifications on the marine vessel. In sum, it is well established that the PWSA and PTSA preempt state laws and regulations relating to vessel design and construction require- ments, and that state laws enacted for environmental purposes are likely to be preempted if such laws require vessel modifications. Nondesign Requirements: Need for National Uniformity The preemptive effect of federal law on state laws that would impose nonde sign require

211 meets on marine vessels (e.g., standards for inspection, regulation, smoke abatement, or discharge of ballast in state territorial waters) is less clear. As a general rule, however, state laws that impose non- design requirements on marine vessels are preempted if they (a) directly conflict with any express provision of federal law or regulation; or (b) intrude into an area where the federal interest is so predominant, and the need for national uniformity so great, that such lawsggnd regulations are precluded--even where Congress has not acted. In Huron Portland Cement Co. v. City of Detroit, 362 U.S. 440 (1960), the Court held that a Detroit smoke abatement code limiting vessel emissions during loading and unloading was not preempted by federal law because there was ''no overlap between the scope of the federal ship inspection laws and that of the municipal ordinance" i362 U.S. at 446~. The Court found that the sole aim of the Detroit ordinance was the ''elimination of air pollution, to protect the health and enhance the cleanliness of the local community," while the federal regulatory scheme was designed to ensure "seagoing safety of vessels subject to inspection" [Id. at 4454. The continuing validity and precedential effect of this decision is subject to debate. Although the case has never been overruled, it must be emphasized that it was decided prior to the enactment of the CAA, PWSA, and PTSA. Moreover, the Court expressly noted that its considera- tion of the Detroit ordinance was limited to the enforcement of criminal provisions for violation of the smoke emission regulations, and did not encompass a review of the validity of the inspection sections of the ordinance [Id. at 442, n.l]. The Court also stated that a state "may not impose a burden which materially affects interstate commerce in an area where uniformity of regulation is necessary'' Lid. at 4463. In sum, state laws affecting marine vessels or maritime affairs are preempted by federal law if they infringe on an area that is the subject of federal regulation because uniformity of regulation is essential, even where the state laws do not conflict directly with a federal requirement or where the congressional intent to preempt is not clear. The Commerce Clause The commerce clause,l°° by its terms, confers power on Congress to regulate interstate and foreign commerce. Even in the absence of an affirmative congressional exercise of the commerce power, however, the states may not Enact laws that unduly restrict the free flow of inter- state commerce. 01 The analysis of the validity of a state law under the commerce clause is distinct and independent from such an analysis under the supremacy clause. Thus, if a state or local law or regulation affecting maritime activities is not preempted by federal law or regula- tions, it may still be invalid if it creates an undue burden on inter- state or foreign commerce. If a state law discriminates against out-of-state verbals or foreign vessels, it is per se invalid under the commerce clause. If a state or local law or regulation affecting marine vessels or maritime activities does not discriminate against out-of-state vessels, the

212 courts employ a balancing test to determine its validity under the commerce clause. Pursuant to the test set forth in Pike v. Bruce Church, Inc.. 397 U.S. 137, 142 (1970), if a state law or regulation is nondiscriminatory, effectuates a legitimate local purpose, and has only an incidental effect on interstate commerce, the law or regulation will be upheld, unless the burden imposed on interstate commerce is clearly excessive in relation to the putative local benefits. In short, the court must balance the relative burden imposed on interstate or foreign commerce against the putative local benefit. In conducting this balancing test, the court must determine whether the local safety benefits advanced by the state are real or illu- sory.103 In addition, the court should not view the state or local law in isolation, but rather should consider the cumulative effect on commerce of numerous, and often conflicting, state laws addressing the same subject. Using the Pike v. Bruce Church analysis, a court could likely find that a state law restricting dockside vessel emissions is in violation of the commerce clause, in view of the Coast Guard's existing comprehen- sive regulation of vessels. Of course, the provisions of each state law will vary, and such laws must be considered individually in terms of both their effect on commerce and the local benefits likely to be achieved. As an initial matter, it should be noted that in Babcock & Wilcox Co. v. Township of Parks, Armstrong County. Pa.. Cir. Action No. 85-3035 (W.D. Pa. May 14, 1986), the court considered the interaction of section 116 of the CAA and the commerce clause. Section 116 of the CAA, discussed previously, preserves the rights of states to adopt or enforce more stringent air emissions standards or limitations and abatement or control measures. Upon consideration of this provision, the court held that it did not support the inference that Congress intended to exempt any action taken the states pursuant to the CAA from the reach of the commerce clause. The mandatory use of VOC control equipment on vessels may entail significant costs and risks. State requirements that result in design modifications and retrofitting of vessels may conflict with federal law. Moreover, if vessels do not have required equipment on board, they may be denied entry to certain ports or subjected to fines and criminal penalties for failing to adhere to state laws. This problem may be exacerbated if many states enact laws governing VOC emissions that require different modifications. Structural changes to a vessel to accommodate a terminal in one state may render the vessel incompatible with a terminal in another state. Thus, state laws may impose a significant burden on interstate commerce. With respect to the local benefits to be achieved by state laws governing dockside vessel emissions, the factual record to date does not appear to support the conclusion that VOC equipment will enhance safety and reduce pollution in light of attendant risks. More- over, if vessel emissions could be reduced, the efficacy of such reduc- tions in improving overall state air quality may not be sufficient to justify the significant burden on commerce imposed thereby.

213 International Considerations Regulation of Foreign Commerce: More Rigorous Scrutiny There is a heightened federal interest in occupying a field through uniform federal regulation when the area of law involves international relations t Chevron v. Hammond. 726 F.2d at 4833. Very often, the ves- sels loading or unloading at marine terminals are foreign-flag vessels subject to the jurisdiction of foreign nations as well as to IMO treaties. In some cases, the foreign-flag vessels are the national property of foreign governments, such as Poland or the Soviet Union. Efforts to impose unilaterally the federal, state, and local laws and regulations governing vessel emissions may adversely affect diplomatic relations between the United States and such nations. CONCLUS ION The specific delegation of marine safety responsibilities to the U.S. Coast Guard is clear and comprehensive. The extent of federal and state air quality jurisdiction over marine vessels is far from clear. A review of the authorities and cases suggests that air quality regulation of vessels is circumscribed by the presence of federal marine safety and environmental regulations. To the extent the air quality regulations intrude on the interests protected by marine safety and pollution laws, the marine laws will prevail. In addition, issues of national unifor- mity and deference to international regulation of vessels and the marine environment further limit the extent to which states may regulate marine vessels. NOTES 242 USO §§-7401-7642 (1982 & Supp. III 1985). Pub. L. No. 88-206, 77 Stat. 392. 3Pub. L. No. 90-148, 81 Stat. 485. 4Pub. L. No. 91-604, 84 Stat. 1676. 5Pub. L. No. 95-95, 91 Stat. 685. 6Clean Air Act Amendments of 1970, § 101(b)~1), 42 USC § 7401. 7In 1979, EPA changed the chemical designation in the standard for photochemical oxidants to ozone, thereby excluding about 10 percent of the compound oxidants, previously covered [44 Fed. Reg. 8202 (Feb. 8, 19793]. EPA revoked both the primary and secondary standards for hydrocarbons because the regulations were found to be technically inadequate. EPA also found that hydrocarbons, as a class, do not cause adverse health or welfare effects at or near ambient levels [48 Fed. Reg. 628 (Jan. 5, 1983~. 9Friends of the Earth v. Carey 535 F.2d 165 (2d Cir. 1976). 1uSection llO(a)(3) does not specify how long EPA has to accept or reject a proposed revision, but courts have generally held that EPA must

214 act on proposed revis ions within 4 months, the same time given for rulings on original proposals . American Cyanamid v. EPA. 25 E . R. C . 1585 (5th Cir. 1987~; Council of Commuter Organizations v. Thomas. 799 F. 2d 879, 888 (2d Cir. 1986); Ducluesne Light Co. v. EPA. 698 F.2d 456, 471 (D. C. Cir 1983); but see United States v. National Steel Corp., 767 F.2d 1176, 1182 n.1 (6th Cir. 1985) (4-month rule applies only to genelll s tate plans and not to revis ions). Union Electric Co. v. EPA. 427 U. S. 246 (1976) . 1 ~ retrain Or. NRDC, Inc., 421 U. S. 60 (1975) . 13EPA, "Interim Emissions Trading Policy Statement,'' 47 Fed. Reg. 15,076 (Apr. 7, 1982). 1444 Fed. Reg. 71,779 (Dec. 11, 1979). 15EPA, "Emissions Trading Policy Statement; General Principles for Creation, Banking and Use of Emission Reduction Credits," 51 Fed. Reg. 43, 8~4 (Dec. 4, 1986~. 6EPA intends to issue a separate "mobile source bubble policy.' See Inside EPA Weekly Report, "Final EPA Bubble Policy Clarifies Toxics, Fugilive Dust Trades," at 11 (Nov. 21, 1986~. 7The baselines for sources participating in a bubble must take into account three factors relevant to total emissions: emission rate, capacity utilization, and hours of operation. 51 Fed. Reg. at 43,815. 1 51 Fed. Reg. at 43,816. See Chevron U.S.A., Inc. v. NRDC 467 U.S. 837 (1984). 20The credits are not federally enforceable until used. 2~51 Fed. Reg. at 43,82S. 23See NRDC v. EPA, 475 F.2d 968 (D. C. Cir. 1973) . EPA is planning to regulate ozone-forming hydrocarbon emissions from motor vehicles through a combination of gasoline volatility controls and more stringent on-board vehicle emission recovery system requirements (Stage II controls). Refueling emissions can be captured by installing either Stage II nozzles or other special equipment on gasoline pumps, or special emissions control canisters in cars. 24The standard is attained when the expected number of days per calendar year with maximum hourly average concentrations above 0.12 ppm is e,5a1 to or less than 1 t40 C.F.R. § 50.93. See, e.g., Enact Rep., Current Developments (BNA), "Tightening of Ambient Ozone Standards Recommended By EPA Air Office Staff Paper," at 2155 (Apr. 4, 1986~. 26See EPA, "Risk Assessment of Stratospheric Ozone Depletion,'' Stafi7Report at Chapter 14, Nov. 1986. "Memorandum from EPA General Counsel to Administrator on Legality of Sustained Progress Program for Ozone Under Air Act," Nov. 25, 1986. 28Id 29EPA is planning to publish a Federal Register notice in late May 1987 describing the agency's course of action on municipal nonattainment of the ozone standard. See Env't Policy Alert, at 21 (Mar. 25, 1987~. EPA will also initiate review of 20 SIPs that have yet to be approved which contain provisions on ozone attainment. 30EPA, 'iStudy of Gasoline Volatility and Hydrocarbon Emissions from Motor Vehicles " Office of Mobile Sources, Nov. 21, 1985.

215 31Vehicle evaporative control systems are designed to meet hydrocarbon standards when the vehicle is fueled with certification test gasoline, which has a typical RVP of 9 psi. Evaporative emissions are significantly greater with fuels of higher volatility; therefore, evaporative emissions from motor vehicles operating on commercial gasoline are well above certification standards. See Inside EPA Weekly Report, "EPA Sends OMB Proposal for On-Board Vehicle Gas Marketing Controls" at 1, 9 (Mar. 20, 19879. The current evaporative emissions of gasoline can be reduced either through commercial RVP controls or vehicle modifications; both approaches have the potential for significant VOC reductions. Because commercial fuel content has an immediate impact on the entire motor vehicle fleet (unlike strategies that affect only new vehicle design), greater short-term emission reductions are achievable via this strategy. One EPA official predicts that limiting summertime gasoline RVP to 9 psi could reduce motor vehicle hydrocarbon evaportive emissions by 53 percent in 1988. See Env't Rep. (BNA) Current Developments, "EPA Sends Vapor Recovery Proposal to OMB, Includes Onboard, Fuel Volatility Controls," at 1995 (Mar. 27, 1985~. EPA already regulates bulk gasoline deliveries from tank trucks, which is known as Stage I control. 34A proposed New Jersey regulation would require installation of vapor recovery systems on gasoline pumps by December 31, 1987 at gasoline stations that pump more than 40,000 gallons a month, and by December 31, 1988 at stations that pump 10,000 to 40,000 gallons monthly. See Env't Rep. (BNA), Current Developments, '"Petroleum, Auto Industries Differ Over N.J. Vapor Recovery Plan for Gas Pumps," at 1020 (Oct. 31, 1986~. New Jersey officials contend that the regulation, when fully implemented, will reduce VOCs by 12,950 tons per year and save 4 million gallons of gasoline annually. In addition, all gasoline stations on the Missouri side of the St. Louis metropolitan area must be equipped with a vapor recovery system by the end of 1987 under a regulation adopted in 1986. 5See Env't Rep. (BNA), Current Developments, "Safety Issue Clouds Vapor Recovery Plan as Dingell, Insurers Question EPA Proposal," at 3 (May 1, 1987~. 36See Env't Rep. (BNA), Current Developments, "NRDC notifies New York, EPA of Intent to Sue to Force Air Act Standard Attainment," at 979 (Oct. 24, 1986~; Inside EPA Weekly Letter, "Environmentalists Sue EPA, New jersey, New York Over No Ozone Controls," at 1-3 (Jan. 30, 1987~. 7The suit was filed on November 18, 1986 by the Los Angeles-based Western Oil and Gas Association. See Western Oil and Gas Association v. EPA, CV 86-7530TJH TX (C.D. Cal.~. See also Env't Rep. (BNA), Current Developments, "Oil Industry Group Challenges EPA Program for Meeting Air Quality Standards in California," at 1303 (Dec. 5, 1986~. 8Abramowitz v. EPA. Civ. No. 84-7642 (9th Cir.~. Abramowitz filed suit in 1984, followed by negotiations with California and EPA over modifications to the SIP to attain standards in the South Coast Air Basin. After California and EPA trial to carry out an agreement on the reasonable extra efforts program, Abramowitz asked the court to allow him to continue to prosecute his challenge of the program. See Env' t

216 Rep. (BNA), Current Developments, '"California Plan Inadequate to Meet Ambi3egt Air Quality Standards, Suit Charges," at 1620 (Jan. 23, 1987~. See Enact Rep. (BNA), Current Developments, "Wisconsin Begins Preparing Suit Against EPA, Illinois, Indiana over Ozone Attainment Issue " at 979 (Oct. 24, 1986~. resee Env't Rep. (BNA), Current Developments, "New England Legal Group Threatens Suit Over Ozone Compliance By Massachusetts," at 1497 (Jan 2, 1987~. 41Conf. Rep. No. 1783, reprinted in 1970 U.S. Code Cong. & Admin. News 5381. 42See Title II, Emission Standards for Moving Sources, 42 USC § 7535 - 7574. 43However, California has obtained a waiver permitting it to set automobile emissions standards that are different from the national standards. 44An indirect source review program is a facility-by-facility review program to take necessary measures to ensure that a new or modified indirect source will not attract mobile sources of air pollution, the emissions from which would cause or contribute to air pollution concentrations t42 USC § 7410(a)~5~(D)~. 45See Pub. L. No. 95-95, 91 Stat. 685, 695-96 (1977~. 4645 Fed. Reg. 52,676 (Aug. 7, 19801. Id. at 52,695-696. 48These are emissions of vessels occurring when the vessels are moving to or leaving from marine terminals. 4947 Fed. Reg. 27,554 (June 25, 1982~. 5046 Fed. Reg. 61,613 (Dec. 17, 1981) (emphasis in original). 51At the same time, the Coast Guard and the Maritime Administration were cooperatively developing a proposal for a preemptive statutory treatment for vessel emissions similar to that in the CAA for aircraft emissions. 52The factors of "proximity" and "control" are applied in deciding whether to combine a particular pollutant-emitting activity with other activities in defining what is a stationary source. See 45 Fed. Reg. 6803551980). 46 Fed. Reg. 7182 (1981). 54See letter from Jananne Sharpless, secretary of environmental affairs, State of California, to Secretary Elizabeth Dole, U.S. Depart- ment55f Transportation, Washington, D.C., May 8, 1986. District Rule 327, "Organic Liquid Cargo Tank Vessel Loading''; Rule 205.C, "New Source Review (NSR)/Prevention of Significant Deterioration (PSD)." 56Recently, the California state senate voted to prevent air quality management officials from ordering marine vessels to shut off their engines while docking under the proposed rule. See "Smog Rule Barred in Calif.," Journal of Commerce, at 1B (May 18, 19879. 57See Summary of Engineering Analysis, Lands ea Oil Company, BAAQMD Staff~Report, Nov. 3, 1986. 59Rule 17-2. 650~1) (f)9 and 10. 48 Fed. Reg. 36, 139 (Aug. 9, 1983~. 6048 Fed. Reg. 51,472 (Nov. 9, 19839.

217 6~48 Fed. Reg. at 51,478. Tex. Rev. Civ. Stat. Ann. art. 4477-5 (Vernon 1976 & Supp. 1986~ Scurry v. Texas Air Control Board, 622 S.W. 2d 155 (Text Civ. App. Austin 1981, writ ref'd n.r. e . ~ . 64Section 7 . 05 ~ a) ~ 3 ~ . Section 7 .05 (b) . 66Report of the Clean Air Study Committee to the 70th Legislature, Nov. 1986. 67Pub. L. No. 92-340, 86 Stat. 424. 68Pub. L. No. 95-474, 92 Stat. 1471. 69Most VOC emissions from marine vessels involve bulk carriage of organic liquids by tank vessels, including self-propelled tankers and nonself-propelled tank barges. Organic liquids such as crude oil, gasoline, petroleum products, and petrochemicals all contribute VOC emissions in varying degrees depending on volatility, loading rates, and temperature. 70See H.R. Rep. No. 338, 98th Cong., U.S. Code Cong. & Admin. News 924. 7 1 ~rid ~ r ~ cow 1st Sess., reprinted in 1983 - see, For example, "o UREA 99 J3U ~ - ~ ~ (governing inspection of veSs7els ) ~ See, generally, 33 C.F.R. Subchapter O (Pollution): Part 155 (Oil Pollution Prevention Regulations for Vessels) and Part 157 (Rules for the Protection of the Marine Environment Relating to Tank Vessels Carrying Oil in Bulk); 46 C.F.R. Subchapter D (Tank Vessels): Part 30 (General Provisions), Part 31 (Inspection and Certification), Part 32 (Special Equipment, Machinery, and Rule Requirements); Subchapter F Marine Engineering): Part 56 (Piping Systems and Appurtenances), Part 57 (Welding and Brazing), Part 61 (Periodic Tests and Inspections), and Part 64 (Marine Portable Tanks EMPTY; 46 C.F.R. Subchapter I (Cargo and Miscellaneous Vessels): Part 91 (Inspection and Certification), Part 92 (Construction and Arrangement), Part 93 (Stability)' Part 96 (Vessel Control and Miscellaneous Systems and Equipment), Part 97 (Operations), and Part 98 (Special Construction, Arrangement, and Other Provisions for Certain Dangerous Cargoes in Bulk); 46 C.F.R. Subchapter O (Certain Bulk Dangerous Cargoes): Part 150 (Compatibility of Cargoes and Operational Requirements for Bulk Liquid Hazardous Waste Cargoes) and Part 153 (Safety Rules for Self-propelled Vessels Carrying Hazardous Liquids); 46 C.F.R. Subchapter ~ (Equipment, Construction, and Materials: Specifications and Approval): Part 159 (Approval of Equipment and Materials), Part 161 (Electrical Equipment), Part 163 (Construction), and Part 164 (Materials); and 46 C.F.R. Subchapter S (Subdivision and Stability): Part 170 (Stability Requirements for All Inspected Vessels), Part 172 (Special Rules Pertaining to Bulk Cargoes), Part 173 (Special Rules Pertaining to Vessel Use), and Part 174 (Special Rules Pertaining to Specific Vessel Types). Donovan v. Texaco. Inc., 720 F.2d 825 (5th Cir. 1983) ("OSHA regulations do not apply to working conditions of seamen on vessels in navigation . . ."; Dillingham Tug & Barge Corp.. 10 O.S.H. Cas. (BNA) 1859 (1982~. But cf. In re Inspection of Norfolk Dredging Co., 785 F.2d 1526 (llth Cir. 1986) (OSHA's jurisdiction over working conditions on

218 uninspected vessels is not preempted); Donovan v. Red Star Marine Services, Inc., 739 F.2d 774 (2d Cir. 1984). i4TSAC is an advisory committee to the secretary of Transporta- tion, authorized by the Towing Safety Advisory Committee Act, Pub. L. No. 96-380, 94 Stat. 1521 (1980) (codified at 33 USCA § 1231a). 75The Comprehensive Environmental Response, Compensation, and Liability Act? Pub. L. No. 95-510, 94 Stat. 2767 (1980), as amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613 (1986~; the Federal Water Pollution Control Act, Pub. L. No. 92-500, 86 Stat. 816 (1972), as amended by the Clean Water Act of 1977, Pub. L. No. 95-217, 91 Stat. 1566 (1977~; the Outer Conti- nental Shelf Lands Act Amendments of 1978, Pub. L. No. 95-372, 92 Stat. 629 (1978~; the Deepwater Port Act of 1974, Pub. L. No. 93-627, 88 Stat. 2126 t1975~. 7 See Merchant Marine Act of 1920, 41 Stat. 1007 (1920) (codified at 46 USCA § 688 and commonly referred to as ''the Jones Acted. 7 7 " See Tank Vessel Act of 1936, Pub. L. No. 74-765, 49 Stat. 1889 (1936) (extending manning, inspection and safety laws to encompass all vessels, including tank barges, whether self-propelled or not, which transport inflammable, explosive, or dangerous cargo). See also Moran Maritime Associates. Inc. v. Coast Guard 526 F. Supp. 335 (D.D.C. 19813g aff'd, 679 F.2d 61 (D.C. Cir. 1982). See H.R. Rep. No. 1384, 95th Cong., 2d Sess. 4, reprinted in 1978 g.S. Code Cong. & Admin. News 3270, 3271. 7 These latter topics are important because changes in vessel design and equipment imposed to accomplish states' vessel emissions reduction goals may necessitate increased personnel to operate the equipment and/or further training in the operation or use of such equipment. If additional training is required, licenses would have to be appropriately endorsed to reflect that training. Certain tank vessels take in seawater to ballast the vessel (to deepen draft and achieve proper trim), after cargoes have been dis- charged. Prior to the advent of international marine regulation, this ballast was normally drawn into cargo tanks, where seawater mixed with cargo residues. Ballasting often took place in port, so that the vapors in off-loaded cargo tanks were displaced into the atmosphere by the incoming seawater. Mandatory segregated ballast tanks, where required, are now dedicated to ballasting; consequently, the intake of seawater dispilces no vapors, and the discharged ballast is uncontaminated. Crude oil washing (COW) systems are related to segregated bal- last tanks, and obviate the need for using seawater to clean cargo tanks. COW uses the solvent properties of oil from cargo tanks in a closed system, spraying crude oil at very high pressure to strip cling- ing cargo from tank walls and structural supports. 82An inert gas system is a system that supplies to the cargo tanks a gas or mixture of gases so deficient in oxygen content that combustion cannot take place in the tanks. The inert gas may be supplied by a tank vessel's boiler or by an inert gas generator. This gas is pumped into the cargo tanks via deck piping to displace the air in the tank that has an oxygen content sufficient to allow combustion. As the cargo is

219 pumped out during off-loading, inert gas is introduced at an equal or greaser volume rate, with excess inert gas vented to the atmosphere. MARPOL 73/78 in turn was implemented by the Act to Prevent Pollution from Ships of 1980, Pub. L. No. 96-478, 94 Stat. 2297 (1980) (codified at 33 USC §§ 1901-1911). The Coast Guard is in the process of establishing new, stiffer requirements for certifying individuals engaged in the carriage and transfer of petroleum and other dangerous cargoes in bulk. "Qualifica- tions of the Person in Charge of Oil Transfer Operations, Tankerman Requirements,'' Docket Nos. COD 79-116 & 116a, Notice of Proposed Rule- maki8~, 45 Fed. Reg. 83,290 (December 18, 1980~. These include the following: (1) the International Convention on Safety of Life at Sea, 1974 (SOLAS); (2) the Officers' Competency Certificates Convention, 1936; (3) the International Convention for the Prevention of Pollution from Ships, 1973, and the Protocol of 1978 ("MARPOL 73/78"~; (4) the International Convention on Load Lines, 1966; (5) the International Convention Relating to Intervention on the High Seas in Cases of Oil Pollution Casualties, 1969; (6) the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Materials, 1972 (known as the London Dumping Convention); (7) the Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (BCH Code) (adopted as amendments to MARPOL 73/78~; (8) the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk, 1983 (IBC Code) (adopted as an amendment to SOLAS); the International Code for the Construction and Equipment of Ships Carrying Liquified Ha.. in Bulk 1983 (adopted ~.~ amendment to SOLA§) ._, ~--r - for example, the International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers, 1978 (STCW). 87"Licensing of Maritime Personnel," Docket No. COD 81-059, Supplemental Notice of Proposed Rulemaking, 50 Fed. Reg. 43,316 (Octal 24, 1985~. 8Rapport Studieproject Dampretoursystemen, Proj. No. VROM LB 671001, Proj. No. Badger B.V.: BN-3580, 1984. Ministry of Housing, Physical Planning, and Environment, Dokter v.d. Stamstraat 2, 2260 MB Leid~cghendam, The Netherlands. At the same time, the Coast Guard and the Maritime Administra- tion were developing a proposal for a preemptive statutory treatment for vessel emissions similar to that in the CAA for aircraft emissions. 48 Fed. Reg. at 51,478. 9149 Fed. Reg. 48,185 (Dec. 11, 1984). U.S. Const., art. VI, cl. 2. 93Kelly v. Washington. 302 U.S. 1 (1937). Jones v. Rath Packing Co.. 430 U.S. U.S.~9~25 (1977). 519, 525, rein. denied, 431 >'Pacific Gas and Electric Co. v. State Energy Resources Conservation & Dev. Comm'n. 461 U.S. 190, 203-04 (1983); Ray v. Atlantic Richfield Con 435 U.S. 151, 163 (1978); Rice v. Santa Fe Elevator Corp.. 331 U.S. 218, 230 (1947). 95Florida Lime & Avocado Growers Inc. v. Paul. 373 U.S. 132, 142-43 (1963).

220 97Hines v. Davidowitz, 312 U.S. 52, 67 (1941). 98Pub. L. No. 95-217, 91 Stat. 1566 (1977), amending the Federal Water Pollution Control Act, Pub. L. No. 92-500, 86 Stat. 816 (1972) (codified at 33 USC § 1321 et seq.~. Romero v. Int'1 Terminal Co., 358 U.S. 354, 357 (1959~; Just v. Chambers, 312 U.S. 383, 389-90 (1941~; Kelly v. Washington. 302 U.S. 1, 8-14 66937~. 1 U.S. Const.' art. I, § 8, cl. 3. 10iGreat Atlantic & Pacific Tea Co. v. Cottrell, 424 U.S. 366, 370-~82(1976~. Philadelphia v. New Jersey, 437 U.S. 617 (1978~. Kassel v. Consolidated Freightways Corp.. 450 U.S. 662 (1981). 104See, for example, Browning-Ferris, Inc. v. Anne Arundel County, Maryland, 292 Md. 136, 438 A.2d 269 (1981). See also Norfolk Southern Corp. v. Oberly, 632 F. Supp. 1225 (D. Del. 1986), in which the court held that the congressional power to consent to otherwise impermissible state regulation of interstate commerce must be exercised expressly. Although specific language need not be expressly included in the statute or legislative history, intent must be clear. GLOSSARY OF TERMS AQCR Air Quality Control Region ARGO Atlantic Richfield Company BAAQMD Bay Area Air Quality Management District BACT best available control technology BNA Bureau of National Affairs CAA Clean Air Act CFR Code of Federal Regulations CO carbon monoxide COW crude oil washing CTG Control Techniques Guidelines EPA Environmental Protection Agency ERC emission reduction credit IGS inert gas system I/M inspection and maintenance IMO International Maritime Organization LAER lowest achievable emission rate MARPOL International Convention for the Prevention of Pollution from Ships MPT marine portable tank NAAQS National Ambient Air Quality Standards NESHAPS national emission standards for hazardous air pollutants NOX nitrogen oxides NRDC Natural Resources Defense Council NSPS NSR OMB OSHA new source performance standards new source review Office of Management and Budget Occupational Safety and Health Administration

221 Ozone photochemical oxidants PA particulate matter ppm parts per million PSD prevention of significant deterioration PTSA Port and Tanker Safety Act of 1978 PWSA Port and Waterways Safety Act of 1972 RACT reasonably available control technology REEP Reasonable Extra Efforts Program RVP Reid Vapor Pressure SBT segregated ballast tanks SCAQMD South Coast Air Quality Management District SIP State Implementation Plan SO2 sulfur dioxide SOLAS International Convention on Safety of Life at Sea SPP Sustained Progress Program STOW International Convention on Standards of Training, Certification, and Watchkeeping for Seafarers TSAC Towing Safety Advisory Committee USC United States Code USCA United States Code Annotated VOC volatile organic compounds VRS vapor recovery systems COAST GUARD SPONSORED RESEARCH STUDIES Bjorklund, R. A. and P. R. Ryason. 1980. Detonation-Flame Arrester Devices for Gasoline Cargo Vapor Recovery System. U.S. Coast Guard Technical Report, NTIS No. AD A086 061. Washington, D.C.: U.S. Government Printing Office. Crowley, D. P. and R. P. Wilson. 1978. Experimental Study of Flame Control Devices for Cargo Venting Systems. U.S. Coast Guard Technical Report, CG-D-70-78, NTIS No. AD A063 008. Washington, D.C.: U.S. Government Printing Office. Gross, S. S. 1984. Demonstration of Vapor Control Technology for Gasoline Loading of Barges. EPA Contract No. 68-02-3657. Swanek, R. 1978. Evaluation of Liquid Cargo Tank Overpressure. U.S. Coast Guard Technical Report, CG-D-71-78, NTIS No. AD A062 941. Washington, D.C.: U.S. Government Printing Office. Wilson, R. P. and S. Attalah. 1975. Design Criteria for Flame Control Devices for Cargo Venting Systems. U.S. Coast Guard Technical Report, NTIS No. AD AO15 822. Washington, D.C.: U.S. Government Printing Office. Wilson, R. P. and D. P. Crowley. 1978. Performance of Commercially Available Flame Arresters for Butane/Air and Gasoline/Air Mixtures. U.S. Coast Guard Technical Report, CG-D-72-78, NTIS No. AD A062 948. Washington, D.C.: U.S. Government Printing Office. Wilson, R. P. and P. K. P. Raj. 1977. Vent System and Loading Criteria for Avoiding Tank Overpressurization. U. S. Coast Guard Technical Report, CG-D-59-77, NTIS No. AD A045 791. Washington, D.C.: U.S. Government Printing Office.