The United States Coast Guard Rear Admiral Paul Thomas recently penned an article for the Marine News magazine, February 2016 edition, highlighting the Coast Guard’s “priorities” for 2016. The article is available at the Coast Guard’s Maritime Commons blog, as well as at the Marine News website.
The article discusses the Coast Guard’s intent to focus on environmental enforcement, cyber risk management, and modernization of aids to navigation and electronic charts, as well as a somber end-note regarding the recently commenced public hearings on the tragic sinking of the EL FARO. In addition, for purposes of this post, Rear Adm. Thomas’s article discusses several topics that have been featured regularly here on Striding the Quarterdeck, and gives some indications that the Coast Guard is aware that industry is looking for guidance, if not clear answers, in these areas.
Coast Guard/BSEE – The Evolving OCS Regulatory Venn Diagram
As a prime example, the article notes that despite the current downturn in the price of oil, and the resulting slowdown in the offshore services industries, the Coast Guard’s authority in the offshore oil and gas space will remain a primary regulatory focal point. In particular, Rear Adm. Thomas expressly stated that industry “can expect continued tight strategic and tactical coordination with the Bureau of Safety and Environmental Enforcement [BSEE] on regulations and field operations on the Outer Continental Shelf (OCS).” As we have reported in numerous posts, the unsettled (and unsettling) overlap between the Coast Guard and BSEE’s respective regulatory jurisdictions remains a problem for industry, both in terms of simply complying with regulations that may or may not apply and the costs (direct and hidden) inherent in that uncertainty.
To this point, the Coast Guard and BSEE entered another Memorandum of Understanding (the seventh in a series that commenced with increased regulatory action in the wake of the DEEPWATER HORIZON incident) on January 28, 2016 regarding non-vessel/MODU Floating OCS Facilities (i.e. buoyant, moored floating facilities or dynamically positioned facilities). The MOU provides (as have several of the prior facility/operation-specific MOUs) a chart that identifies the lead agency for certain specific operations/systems. However, as with some of the past MOUs, the plain black and white lines of the chart may not always play out so clearly in the field. For example, under the MOU, station-keeping systems for Floating OCS Facilities – and specifically “[o]peration of dynamic positioning systems” – fall within the joint regulatory authority of the Coast Guard and BSEE, with BSEE “[r]esponsible for criteria for shut-in and disconnect when out of the watch circle” and the Coast Guard “mandat[ing] all other operational criteria.” However, as previously reported on this blog, BSEE has issued regulations – including “best available and safest technology” or BAST regulations – that may apply to DP systems more broadly than the MOU indicates, and notwithstanding the Coast Guard’s “operational criteria” authority over DP systems in general.
Ongoing “Can’t Beat’em, Join’em” Effort Toward Coast Guard SEMS Regulations
Perhaps implicitly recognizing one of the biggest potential areas of regulatory overlap, Rear Adm. Thomas further notes the Coast Guard’s point of emphasis in 2016 to develop “regulations that require Safety Management Systems [i.e. the equivalent of the SEMS rules formulated by BSEE] for vessels working on the OCS in a manner that compliments, but does not conflict with or duplicate, existing . . . BSEE [SEMS] requirements.” As we have pointed out, the Coast Guard previously issued a notice of public rulemaking in the fall of 2013 (in an apparent “can’t beat’em, join’em” response to BSEE SEMS rules) regarding a Coast-Guard-specific set of SEMS regulations applicable to vessels operating on/over the OCS. The focus on a Coast Guard version of SEMS could potentially bring some much-needed clarity to vessel operators who currently may or may not fall under the BSEE SEMS framework depending on the type of vessel and operation involved – that is, assuming the Coast Guard SEMS seamlessly aligns with BSEE’s. While there will obviously be costs to industry for deploying a Coast Guard SEMS requirement, the resulting peace of mind as to regulatory compliance will hopefully be worth it.
Subchapter M, like Christmas, is Coming
As a final note for this post, Rear Adm. Thomas also emphasized that the more-than-a-decade-long effort toward finalizing rules for inspection of all inland towing vessels should bear real fruit in 2016 with the finalization of the Subchapter M regulations. The draft final rule was submitted by the Coast Guard to the Office of Management and Budget – the last administrative stop (albeit one that takes several months) before publication of a final rule – in early February 2016. Thus after years of fits and starts, it appears Subchapter M will become reality in 2016.
