Licensing Process and Requirements
In response to both the nation’s growing energy and security needs, Congress accelerated the deepwater port licensing process to promote the importation of oil and natural gas to offshore energy receiving facilities as well as the export of oil and natural gas to offshore energy transfer facilities. The rigid timeline of the Deepwater Port Act requires significant pre-application development on the part of an applicant to meet license requirements and avoid a suspended review that can significantly delay processing activities. The Maritime Administration and U.S. Coast Guard work with applicants to meet rigorous review requirements and the expectations of State regulators and the general public in the licensing process.
The Pre-Application Process
The pre-application stage gives potential applicants the opportunity to confer with the Maritime Administration and the U.S. Coast Guard to provide an overview of their proposed project, discuss the intricate details of the Federal and State application and licensing process, introduce key personnel and discuss specific financial requirements mandated by the Deepwater Port Act. Applicants are encouraged to conduct similar meetings with State and local agencies to review and discuss State requirements and interests.
The project milestones of the application process have mandatory deadlines and operate on a 356-day ‘clock’ that begins when the applicant submits a deepwater port license application and ends when the Maritime Administration issues a Record of Decision.
The Maritime Administration, the U.S. Coast Guard and other Federal and State agencies evaluate a newly submitted application for completeness. This process takes 26 days (Step 1) and results in either a Notice of Application published in the Federal Register or a formal rejection by the Maritime Administrator.
The table below represents a typical timeline, assuming there are no clock stoppages to get additional information.
The National Environmental Policy Act process takes up approximately two-thirds (240 days, Steps 2 to 3d) of the application review timeline and begins when the Notice of Application is issued. During this time, the Maritime Administration and the U.S. Coast Guard, in collaboration with other agencies, ensure that a thorough Environmental Impact Statement is developed. Any gaps in information may require a suspension of the timeline. The Maritime Administration and the U.S. Coast Guard will suspend an application review because of a lack of adequate information necessary to the application decision-making process. Examples of issues that have triggered “stop clocks” (or suspended reviews), include but are not limited to:
- Inadequate information regarding project financing
- Proposed re-gasification and liquefaction technologies
- Fisheries analysis
- Air quality review
- Endangered species
- Marine habitats
- Cultural resources
Along with the National Environmental Policy Act review process, the Maritime Administration has its own approval criteria that must be met before a license may be issued.
Once the application has made it through the Federal and State review process (Step 4) and has reached the Record of Decision stage (Step 5), the Maritime Administrator will render a final decision based on the applicant’s ability to meet and comply with the following nine criteria as set forth in the Deepwater Port Act of 1974, as amended and in accordance with other applicable laws and regulations. Further, the official Record of Decision will describe the Maritime Administration’s decision to approve, approve with conditions, or deny the application.
Nine License Requirements/Criteria
1: Financial Responsibility
Applicants must be financially able to construct, own and operate the deepwater port, and must provide a financial guarantee or bond sufficient to meet all costs for complete removal of all components of the deepwater port upon revocation or termination of the license and/or facility. Further, applicants must be able to meet the requirements of the Oil Pollution Act of 1990 (33 U.S.C. § 2701 et seq.) as they relate to the Deepwater Port Act.
2: Compliance with Relevant Laws, Regulations, and License Conditions
Applicants must comply with relevant laws, regulations and license conditions and must state their intention to do so in writing.
3: National Interest
The construction and operation of the deepwater port must be in the national interest and consistent with national security, energy sufficiency, environmental quality and other national policy goals and objectives.
4: International Navigation
The deepwater port should not interfere with international navigation or other reasonable uses of the high seas, as defined by treaty, convention, or customary international law.
5: Impact on the Marine Environment
The deepwater port will be constructed and operated using the best available technology to prevent or minimize adverse environmental impact, in accordance with environmental review criteria.
6: National Environmental Laws
The deepwater port will comply with national environmental laws. The application must properly address all relevant provisions of the Clean Air Act, as amended, the Federal Water Pollution Control Act and the Marine Protection, Research and Sanctuaries Act, as well as other applicable Federal and State environmental laws.
7: Consultation with the Secretaries of the Army, State and Defense
The Secretary of the Army, the Secretary of State and the Secretary of Defense must be consulted and must express their views on the adequacy of the application and its effect on programs within their respective jurisdictions.
8: Approval of the Governor of the Adjacent Coastal State
Pursuant to 33 U.S.C. § 1508 of the Deepwater Port Act, the Governor of the Adjacent Coastal State or States must approve the issuance of a deepwater port license. Silence on this issue denotes approval.
9: Consistency with Coastal Zone Management Program
An applicant for a deepwater port license must demonstrate consistency with the Coastal Zone Management Plan of the Adjacent Coastal States, per the Coastal Zone Management Act of 1972.
For information on how to apply for a Deepwater Port License and what to include in your application, see: Deepwater Ports: General (33 CFR § 148.105) in the “Laws Related to the Deepwater Port Licensing Process” section.