WHATEVER HAPPENED TO
DEEPWATER POR~S?
Russell Brooks
Energy Regulations
Summer 1981
First Session

In the early 1970's Americans were using petroleum products in everincreasing quantities. In 1973 the United states was importing thirty percent of the oil being used in this country.
1 in 1973 arrived four-fifths by tankers.
2
The imports
The Middle East was a major supplier of United States imported oil. The pro-superport faction in the United States saw this increasing demand as an excellent opportunity to develop the super-tankers and superports necessary to handle this increased demand.J
A superport is a facility that is capable of handling the docking and unloading of the large supertankers being developed to transport petroleum across the oceans. These large ships are over three times the size of present day small tankers.
4
These huge ships are over twelve stories high and are over three football fields in length.5 The large ships will be able to carry 200,000-500,000 dead weight tons as compared to the average sized tanker which carries Jj,OOO dead weight tons.
6
One of these Very Large Crude Carriers (VLCC) traveling at a speed of sixteen knots takes over three miles to stop. 7 It requires approximately twenty-one minutes to complete the stop.
8
These tankers, which require a port be of a depth of ninety to one hundred feet
9 to handle the eighty foot draft of the ship, are used for several reasons.
The cost of operating the one supertanker is less than the cost of operating the total amount of smaller tankers that would be necessary to transport an equivalent amount of petroleum products.
10
There is, in fact, a proposed savings of ten to fifty cents a barrel from the use of supertankers.
11
Cost is not the only reason advanced by the prosuperport/supertanker faction. The group claims that by using the
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supertankers fewer ships will be on the seas. The fewer the number of ships the less chance for collision and the less likelihood of an oil spill.
12
Also, with the fewer number of ships there will be a less number of times that the petroleum products are transferred. Presently, there are only two ports in the United States which can accommodate the supertankers. These two ports are both on the West Coast.
1
J The greatest amount of refining capability is located along the Gulf Coast in Texas and Louisiana.
14
The petroleum now used by these facilities is imported to them from supertankers by two methods. The supertankers unload their petroleum at a superport in the Carribean.
1
5 The petroleum is then transferred from the supertanker to the smaller ships.
16
The process of transfer used in the Gulf takes six to fifteen days. By using the superports the supertankers will be able to unload in thirtysix to forty-eight hours.
1
7
There are certain handicaps encountered in the use of the supertankers. There is still not sufficient data available on the supertankers' ability to survive severe stor.ms at sea.
18
There is also a question concerning their vulnerability during wartime.
19
Their large size will make them prime targets for attack.
There have been offered several solutions to the needs of the supertanker for deepwater terminals to unload their cargo. The three alternatives most frequently discussed are artificial islands, dredging of existing ports, and offshore deepwater terminals. They are not all, however, considered viable alternatives.
The alternative seen as the least attractive is the construction of artificial islands off the now existing coastline. 20 The cost alone is enough to doom these islands if they were ever under consideration.

J
The amount needed to construct the island amounted to $1,500 million in 1975.
21
This figure would now be much greater due to the large amount of inflation encountered in the six years since 1975. The costs of the island at that time exceeded other alternatives by over $1,000 million. There were other considerations to take into account. The environmental effect of the islands on coastal marine life was unknown.
22
The next alternative for deep water ports was one that did not involve an offshore facility. The plans called for the dredging out of existing ports. The United States is the only major power which does not have the capability to accommodate most existing supertankers in her existing ports.
2
J It is also not feasible to dredge out those ports.
24
When dredging there are various factors which become involved to determine feasibility and costs. There are available two different sizes of machinery capable of dredging harbors.
25
The smaller of the two is the only one available for use in the United States. To be allowed to use the larger, more economical equipment would require an act of Congress.
26
The material that is dredged from the ports also must be disposed of. This is an additional cost and creates another environmental problem. 2 7 The dredged material will contain many chemicals from years of ships going in and out of the harbors. fhe environmentalists are also concerned with the effect that the large amounts of material which must be dredged will have on the current existing marine life.
28
The large amounts of dredging necessary will cause the water to be constantly in a state of turmoil and will be clouded.
29
There is one present project in the development stage to try and construct a deep water channel in Texas. The Pelican Terminal Corporation PELCO)
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4 is being promoted as the total solution to the refiner's import and storage needs.JO It has been lining up the required licenses since
1977 but still has not been started. The total cost of the project was estimated at $J50 million. The Port of Galveston is to contribute $125 million which is to be paid back from revenues. The Federal government will sponsor seventy-five percent of the project if PELCO can show that the fifty-five foot deep channel will be an economic plus to the area.Jl
PELCO is developing the channel as more than an oil port. The channel is a prerequisite for the development of a coal exporting terminal along the Gulf Coast.
32
This added feature to the channel has already won the support of the Department of Energy which wants to encourage development of badly needed coal facilities.JJ
The last and most favored alternative discussed is the offshore deep water tezminal using a pipeline and some type of mooring system to transfer the petroletml to storage tanks on land. (See Appendix 1)
The design most favored in the United States is the single point mooring system (SPM).J4 The SPM system consists of a flat cylindrical buoy with its axis vertical. It is held in place with chains anchored to piles driven into the ocean floor.J5 The SPM system is used as a terminal whereby the petroleum is transferred from the midship pumping manifold of the tanker into the pipeline.J6 The hoses of the SPM system usually are allowed to swing free in the water and are brought to the tankers by tender launches.J7 There have been newly designed hoses to reduce the damage from adverse weather and the supertanker's maneuvering.
The new hoses are equipped with baffles which close automatically when the hose sink to the bottom of the buoy.JB
The hoses are on a swivel at the buoy. This allows the hoses to

5 turn )60 degrees to allow free movement. The petroleum is pumped through flexible hoses to also allow for the free movement encountered in wave and tidal action.J9 The ship is moored to the buoy by two lines. The two lines are both attached to the bow of the ship and then to the buoy. The method of mooring the supertanker is to allow for movement resulting from a change in currents, winds, or wave forces.
This allows a minimum of force to be transferred to the moorings and prolongs the life of the buoys.
40
Each buoy must have at least a 4,000 feet radius of clear area surrounding it.
41
The large amount of distance is necessary to safely turn the supertankers around.
The SPM system is quite well developed for the petroleum industry.
42
The number of SPM systems in use worldwide total over 100, but none are in use in the United States. The SPM system is designed for operations conducted in areas with severe weather. They are designed to withstand waves fifteen to twenty feet in height.
4
J The complete port in Louisiana is designed to withstand seventy foot waves.
44
The problems that exist physically with the SPM system are the same as those of any other machinery operated in the elements and at sea. There must be regular maintenance of the hoses, buoys, chains, and anchors. The hoses have to be replaced and the buoys d2'ydocked every three to five years to be refitted.
4
5 The launches that are necessary to handle the hoses cannot operated in severe weather. The supertankers can only dock during periods of relative calm. The large ships can either remain moored or leave the buoy at any time.
46
The deepwater terminals are all designed to be great distances from the coast and will require additional pumping power to get the petroleum on shore. The pumping platfonn that holds the pump is also able to

6 house radar, sonar, and other navigational and safety aids.
47
The platform will also be able to contain oil spill containment and fire fighting equipment available on a continuous standby basis.
48
The buoys will be connected to refineries and storage facilities on land by pipelines buried in the ocean floor. These pipelines will vary in diameter from forty-eight to sixty inches.49
As the need arose for the offshore deep water terminals, it became apparent that there was not sufficient Federal legislation to regulate these ports. Congress enacted the Deep Water Port Act of 1974.50 Their purpose was to establish a licensing and regulatory program governing offshore deep water ports being developed beyond the territorial limits and off the coast of the United States.5l One of the first decisions that had to be made by Congress was which department should have the authority to grant the license to construct the ports. The Coast Guard was chosen as the logical choice since they would have the duty of enforcing regulations and policing the platforms.5
2
The Coast Guard was also an excellent choice because they have their own oceanographic unit which is capable of evaluating the probable marine environmental impacts.5J
The Congress, though, did not feel it right that only one agency, the
Department of Transportation, should be able to control the granting of licenses just because the Coast Guard happened to be operating out of that particular department. Therefore, jurisdiction was granted in the
Department of the Interior, the Department of Commerce, the Environmental
Protection Agency, and the Corps of Engineers to be allowed input into the license granting process.54
Congress saw the same advantages as the pro-superport faction as to why the deep water terminals should be built. Congress felt that
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7 the cheaper transporting costs of imports, the economical benefits to coastal zones, reduced oil spills, and the increased refining capacity made deep water ports very attractive.55
The c·heaper transportation cost& would result in savings to the petroleum industry. There are estimates that over $241 million per year could be saved by constructing an offshore deep water port in the
Gulf area.5
6
This results from cheaper costs of operating the supertankers and savings of the lightering costs. (Cost incurred by transferring petroleum from one ship to another.)
One of the drawbacks with the act passed by Congress is that it was regulating and authorizing construction in an area it has no control over. The offshore facilities that have been proposed would be built outside the territorial limits of the United States. These would be the first such facilities built.5? At the present time there exists no international law, treaty, or agreement that specifically recognizes the construction and operation of offshore deep water terminals.58 The closest agreement which covers any facet is the International Convention of the High Seas. The Convention allows any "reasonable" use of the seas. Congress considers the construction of the deep water ports reasonable.59
The authority is also given to adjacent coastal states where a s~erport might be built to delay or even prevent construction of the port. An adjacent coastal state is one which would be or is connected by pipeline to a deep water port, located within 15 miles of the port, or faces a substantial environmental risk because of prevailing winds and currents from a deep water port.6o
Congress did consider the anticipated environmental impacts from

8 the deep water terminals. They felt that there would be affects in the land requirements for petroleum storage facilities and pipelines. The committees also reported impacts from: (a) degradation and despoilation of wetlands, estuarine, and wildlife and recreation area; (b) an increased burden on the water supply; (c) an increased potential for air and water pollution; and, (d) the increased pressures for development of roads, schools, and housing.
61
These environmental impacts will not hold back development. Congress was confident that sound planning and management could assure that the economic benefits of the deep water ports would not be nullified by adverse sociological and environmental effects which can be avoided.
62
The large investment and technology that are necessary to build an offshore deep water terminal is available only to a few corporations.
Congress realized that mainly petroleum companies would be involved in the construction and operation of the terminals so they placed in the
Act a section dealing with anti-trust review.
6
J Congress wanted to prevent the oil companies from tightening their grip on their already heavy vertical hold in the energy industry.
64
The petroleum corporations already own
7o% of the natural gas in the United States, one-half the uranium, and are rapidly leasing the coal fields.
65
Congress requires that all applications for licenses be submitted to the Attorney General for anti-trust review.
66
The priorities for licensing under the Act is licenses first to State governments, then non-oil firms, and then to oil companies. Realistically, only the oil companies are able to finance the estimated $400 million cost of building a port.
67
Oil spills are always a factor in the transportation of petroleum products. Congress found that the present laws were not sufficient to oooc~

9 provide adequate coverage for damages resulting from a spill at a superport. They did limit the liability to spills from the port itself and from the safety zone surrounding the port.
68
The damages are to be paid from a fund created by placing a surcharge of 2¢ on each barrel of oil that is transferred through the port.
69
There is no mention made, however, of what is to be done if an oil spill occurs before enough oil has been pumped to create a large enough fund to fully cover the damages.
When deep water ports were first proposed, there was a demand on both the East coast and Gulf coast for them. Hearings were conducted along the East coast which resulted in the shelving of proposals concerning deep water ports there.
70
The Gulf coat offered a contrast.
They recognized America's appetite for energy while realizing the importance of maintaing the environment.7
1
Two projects were proposed and licenses obtained. They were the Louisiana Offshore Oil Port and
Seadock (Texas) projects.
The Louisiana Offshore Oil Port (LOOP) is the only offshore port completed in the United States. LOOP was first suggested in 1971.
72
The original estimated cost to construct LOOP was $500 million. 7 J The port when finished was to be designed to handle ).4 million barrels of oil a day. The total cost of the project has now reached $995 million and the projected amount of petroleum will probably never flow through
LOOP.7
4
LOOP began the project with thirteen investors and by the time it was finished they numbered only five. The paperwork on the license application alone weighed over several hundred pounds and required a truck to deliver it.75 Once the license was granted and the decision made to go ahead the problems did not end for LOOP. The rising costs

10 and the defection of investors made it necessary to seek outside funds.
The investors still a part of LOOP and the Louisiana Offshore Tenninal
Authority offered $450 million tax exempt bonds to investors. This was described as the largest industrial revenue bond issue ever. The bonds are to be paid off using revenues generated by the use of the port.7
6
The builders of LOOP had to return to a shaky market in 1980 to raise another $125 million to finish LOOP. 77 The first tanker was expected to off load at the port in February or March of 1981.7
8
Not neaily so fortunate as LOOP was the Texas project titled
Seadock. Seadock was an offshore deep water port that was first conceived in the early 1970's. There originally was a consortium of nine oil companies who planned to build the port thirty-one miles off the
Texas coast at Freeport.79 At its inception Seadock was to cost only
$400 million, but by 1975 the cost was close to $900 million.
80
The investors in Seadock claim that Federal regulations were the reasons that the project would never be completed. The Department of Transportation rules which require minute reports to be filed on all phases of the operation put the whole project in serious jeopardy.
81
In 1977
Seadock met with officials of the Carter administration who told Seadock investors that the present administration must stand firm on the regulations and could not rescind them in any way.
82
Seadock officials made the argument that the regulations tended to discourage construction instead of encourage it. They felt they would be unable to continue with the project because of problems presented by the Federal licenses required.8J The oil companies had spent $14-15 million on the Seadock project and had come up with nothing. They could not find enough users who would guarantee they would use the facility to make it pay for it-
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11 self. The Seadock project was dropped. The State of Texas took over.
The State of Texas, however, faired no better in its search for customers. They could find only nine companies that would ship 517,000 barrels a day, a far cry from the 2.5 million which was needed to make the port pay.
84
A Deepwater Port Authority was formed and a report commissioned along with an Environmental Impact Statement. The taxpayer's money was wasted when not any of the information was used.
8
5
The idea of an offshore deep water port in Texas is one that is hard to kill off. In November of 1980 a new consortium formed Texas
Oil Port.
86
The new project is one the consortium feels will succeed.
The new port will be designed to handle only 500,000 barrels of petroleim a day. The port has also been moved closer to the shore. It pro-
87
The storage of the petroleum on shore was one of the concerns for the areas that were not already engaged in refining and storage did not exist. The LOOP project found what they believe to be a very workable solution. The petroleum will be stored in salt domes.
88
They will be capable of storing 56,000,000 barrels of oil. There is no danger of the oil escaping as oil does not dissolve salt. The salt domes are considered much safer because they are located underground and are not exposed to severe weather or the danger of explosions.
89
There were in effect several reasons for the demise of offshore deep water ports. Although the projected oil imports have been reached and exceeded ( 1 977 247 MBBL actual imports in 1980)
90 the rising cost of consturction has outgrown the gain. The cost of the LOOP project doubled in just over three years, the cost of Seadock more than doubled.
The environmentalists were also able to win victories. Their

12 ability along the Eastern coast shows that there is concern for the environment placed ahead of warmth. The unknown factors relating to the damages and affects of an oil spill by one of the supertankers is enough to cause concern. After all, we do know the consequences of a small tanker spill.
The Federal government also did its fair share, along with ad.jacent coastal states. The amount of paperwork and red tape was enough to cancel one deep water port and was almost enough to end the only port completed in the United States. The conservation effort in the
United States has helped to reduce the reliance on imported oil in this country. But an ever-growing economy and population will require more energy and new means of generating that energy are not swiftly forthcoming. The need for the deep water ports are there. Soon it may be more economical or energy efficient to ship other things besides petroleum products on supertankers.
The success of the Louisiana project was attributed to the pro industry attitude prevalent in Louisiana at the time the project was begun.9l The people of the State felt they recognized the hazards of chemicals but they realized the project was necessary. Ideas and attitudes do change. The government of Louisiana wants to diversify its industries but they also want to deveop the financial structure of their state.9
2
As long as they are hungry for the economical benefits, the environmental impacts will place second.
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FOOTNOTES
1. A Look at
2. S. REP. NO. 931217, 9Jd Cong.; 2d Sess. ___ , reprinted in (1974)
0. S. CODE CONG. & AD. NEWS 7529, 7529.
J. Barrett, speech delivered before Rotary Club of Gulport, Miss., reprinted in, 40 VITAL SPEECHES, Sept. 15, 1974, at 71J.
4. Petrow, Our First 'oil port' will go to Sea, 1..50 ~. MECH., Aug.
1978, at 74.
5. Id.
6. S. REP. NO= 9)1217, 9Jd Cong.; 2d Sess. ___ , reprinted in (1974)
0. s. OODE
CONG. & AD. NEWS 7529, 75JJ.
7. Sisyphos, Oil for the Senate's Lamps, 101 Commonweal, Nov. 22, 1974, at 182.
8. Id.
9. S. REP. NO. 931217, 9Jd Cong.; 2d Sess. ___ , reprinted in (1974)
0. S. CODE CONG.
& AD. NEWS 7529, 75J+.
10. Whatever Happened to ••. Superports for Oil Tankers, 79 U. S. NEWS,
Oct. lJ, 1975, at 88.
11. Id.
12. S. REP. NO. 931217, 9Jd Cong.; 2d Sess. ___ ,reprinted in (1974)
0. s.
CODE CONG_. & AD. NEWS 7529, 75]+. lJ. Barrett, speech delivered before Rotary Club in Gulfport, Miss., reprinted i_!!, 4o VITAL ~CHE;2_, Sept. 15, 1974, at 714.
14. Once Again, a Plunge into de~ water oil ports, BUS. WEEK, Dec. 22, 1980, at 79.
15. A go-ahead at last for an Oil Superport, BUS. WEEX, Aug. 15, 1977, at JB.
16. Id.
17. Bonds Save the First U.S. Offshore Port, BU3. WEEK, May 5, 1980, at 38.

18. Barrett, speech delivered before Rotary Club of Gulfport, Miss., reprinted in, 40 VITAL SPEECHES, Sept. 15, 1974, at 71J.
19. Id.
20. TEXAS OFFSHORE TERMINAL COMMISSION, 6)d LEGISLATURE OF TEXAS, PLAN
F'OR DEVELOPMENT oF A 1EXAS DEEP wATER TERMINAL 46 (1974).
21. Id.
22. Id. at 41.
2J. Barrett, speech delivered before Rotary Club of Gulfport, Miss., reprinted_in, 40 VITAL SPEECHES, Sept. 15, 1974, at 714.
24. Id.
25. TEXAS
F'OR
OFFSHORE TERMINAL COMMISSION, 6)d LEGISLATURE OF TEXAS, PLAN
DEVELOPMEA'f OF' A TEXAS DEEP WA'rER 'rERMINAL j6 (19'74).
26. Id.
27. Id. at J7.
28. Id.
29. A Look at
JO. Once again, a Plunge into deep water oil ports, BUS. WEEK, Dec. 22, at 79.
1980,
Jl. Id.
)2. Id.
JJ. Id.
)4. 'IEXAS OFFSHORE TERMINAL COMMISSION, 6)d LEGISLATURE OF TEXAS, PLAN
F'OR
DEVEWPM~N'l'
OF A 'l'EXAS DEEP WATER TfGlffiiNAL
46 (19'74). =
J5.
)6.
Id.
Id.
37.
JB.
Id. at 47.
Id.
J9. Id.
4o. Id.

41. Id. at
49 .
42. Id. at 49.
4J. Id.
44. Petrow, Our First
Aug. 1978, at
154.
1 oil port 1 will go to Sea, 150 POP. MECH. ,
45. TEXAS OFFSHORE TERMINAL COMMISSION, 6)d LEGISLATURE OF TEXAS, PLAN
}UH DEVELOPMENT OF' A TEXAS DEEP wA1ER miiMINAL 49 (f974).
46. Id.
47. Id. at 50.
48. Id.
49. A go-ahead at last for an Oil Superport, BtB. WEEK, Aug. at
JB.
15, 1977,
50. Deep Water Port Act of 1974, Pub. L. No. 9)-627, 88 Star. 2126 et seq. (1974).
51. S. REP. NO. 9.31217, 9Jd Cong.; 2d Sess. _ ,
~printed in (1974)
0. s. CODE
CONG. & AD. NEWS 7529, 7529.
52. Id. at 75.36.
5J. Id.
54.
Id.
55. Id. at 75'J4-.
56.
Barrett, speech delivered before Rotary Club of Gulport, Miss., reprinted in, 40 VITAL SPEECHES, Sept. 15, 1974, at 71J.
57. S. REP. NO. 9)1217, 9Jd Cong.; 2d Sess. ___ , reprinted in (1974)
U. S. CODE CONG. & AD. NEWS 7529, 75J5.
58.
Id.
59. Id.
60. Id. at 75J7.
61. Id. at 75.38.
62. Id. at 75J9.
6;. Id. at 7.541.
Of10~.--

64. Sisyphos, Oil for the Senate's Lamps, 101 Commonweal, Nov. 22, 1974, at 182.
6.5. Id.
66. S. REP. NO. 931217, 9J Cong.; 2d Sess. ___ , reprinted in (1974)
0. S. CODE CONG. & AD. NEWS 7529, 7541.
67. Sisyphos, Oil for the Senate's Lamps, 101 Commonweal, Nov. 22, 1974, at 182.
68. S. REP. NO. 931217, 9J Cong.; 2d Sess. , reprinted in (1974)
0. S. CODE OONG. & AD. NEWS 7529, 754).-
69. Id.
70. Barrett, speech delivered before Rotary Club of Gulfport, Miss., reprinted in, 40 VITAL SPEECHES, Sept. 15, (1974), at 71J.
71. Id.
72. Once again, a Plunge into deep water oil ports, BUS. WEEK,
Dec. 22, 1980, at 79. - -
7J. Whatever Happened to ... Superports for Oil Tankers, 79 U.S. NEWS,
Oct. lJ, 1975, at 88.
74. Oil Importers await a superport signal, BUS. WEEK, Dec. 8, 1975, at 28.
75.
76.
Id.
A Tax-emempt issue backed_by Oil, ~s. WEEK, Aug. 28, 1978, at 92.
77. Bonds Save the first U.S. Offshore Port, m!?· WEEK, May 5, 1980, at )8.
78. Id.
79. Whatever Happened to ...
Oct. lJ, 1975, at 88.
Superports for Oil Tankers, 79 U. S. NEWS,
80. Id.
81. Id.
82. Seadock says its doomed by 'overregulation~·
Aug. 1, 1977, at
2S.
75 Oil & Gas J.,
8J. Id.
84. How Slack Oil Demand Doomed a Texas Port, BUS. WEEK, Apr. 7, 1900, at )4.
8.5. Id.

86. Once again, a Plunge into deeE !'~ter oil ports, BUS. W.S.6]{,
Dec. 22, 1980, at 79.
87. Id.
88. Petrow, Our First 'oil port' will ~o to Sea, 150 POP. MECH.,
Aug. 1978, at 152.
89. Id. at 1,54.
90. U. S. DEPAR'IMENT OF COMMERCE
EhlffiT & IMPORT 1'RAbE
9
BUREAU OF CENSUS! HIG~IGH'IS OF U. S.
920
(I 60) • -
91. Flanigan, Louisiana is Knocking Texas for a LOOP,
Oct. 1, 1979, at 57.
124 FORBES,
92. Id.
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