Reassessment of the Marine Salvage Posture of the United States (1994)

The international marine salvage industry has undergone significant changes in the past two decades. Dwindling numbers of trained salvors and declining dedicated salvage resources worldwide cause the most concern. The demand for long-distance international tows, once a primary alternative source of income for the salvage industry, also has dropped dramatically with the development of specialized heavy-lift vessels and changes in world trade.

While the need for traditional salvage services has declined significantly—particularly dedicated, on-call salvage tugs—alternative uses of commercial equipment for salvage have increased. High-horsepower tugs and supply vessels normally employed in offshore oil fields have been used for salvage and firefighting. Conventional tugs, accompanied by a specialized salvage vessel, successfully towed the Exxon Valdez¹ from Alaska to California. The Mega Borg was salved through the use of specially equipped tugs and supply vessels normally engaged in the offshore oil and gas industry. It is important to note, however, that salvage operations in both incidents were directed by experienced salvage masters.

The general approach to salvage in the United States is in a state of flux. Historically, salvors have directed salvage response efforts, but now vessel casualty salvage response is likely to be jointly managed. Vessel owners are assuming a greater role in salvage response management, including in some instances contracting directly for specialized salvage needs, rather than relying on a single salvage company. This evolution has been accompanied by the development of service industries that provide specialized salvage equipment and services, such as pumps and fenders for cargo transfer and lightering and marine fire fighting. The federal government, acting through the U.S. Coast Guard, has become proactive in handling vessel casualties that involve actual or threatened pollution. The Coast Guard provides oversight and direction and often actively participates in response efforts. The salvor often is relegated to a consulting position, with no direct input into decision making.

The salvage industry has also been affected by advances in technology. The development of portable, fly-away salvage-related systems, such as those in the areas of firefighting and lightering, has had significant impact on the structure of the salvage industry. Worldwide, single-lift crane capacity now exceeds 14,000 tons. Salvage recovery using remotely operated vehicles (ROVs) has been demonstrated successfully by the U.S. Navy in water as deep as 20,000 feet. Commercial recovery using ROVs is now done routinely in water over one mile deep. Diving, especially deep saturation diving, is safer and more productive than ever in salvage situations. Saturation dives at depths of 1,000 feet are not uncommon. Advanced information technologies, such as stability programs that can be run on portable computers and

remote sensing techniques, provide salvage personnel with information that can improve decision making. Economic and incident response decision-making constraints, not technology, are the limiting factors in salvage today.

With the high capital cost of dedicated salvage equipment, the use of fly-away salvage units is rising in the United States. These are equipment packages that can be transported by commercial air freight and typically contain pumping, firefighting, and basic salvage tools and spill response equipment. The fly-away concept involves rapid deployment of response equipment and personnel within hours of a casualty. Although the concept has been well publicized, to fully realize the benefits of fly-away capability the physical presence of significant seagoing assets also is needed.

The government continues to maintain a salvage response capability, but these resources are limited—usually from the U.S. Navy Supervisor of Salvage. They are made available for commercial use only when commercial assets are not available. The Navy Office of the Supervisor of Salvage still relies heavily on its commercial salvage contractors (three at this writing) to carry out actual operations and to provide salvage engineering and related technical assistance beyond the Navy's own capability. The Coast Guard, by expanding its strike team concept, has increased the number of people and equipment capacity available to respond to spill and salvage incidents. The Coast Guard's equipment and procedures closely parallel that of salvor and/or oil spill response organizations, although it has not been directly tasked to include salvage response as one of its missions. Recently, both the Navy and the Coast Guard have been heavily involved in salvage situations, particularly those involving extensive pollution or the threat of it. Traditionally, however, the government has participated in commercial salvage only as a salvor of last resort.

Two additional factors have influenced the marine salvage industry since 1982. First, those responding to a salvage situation historically were concerned with saving the hull and cargo, and salvage decisions were made solely by the salvor and shipowner. Today, when pollution is involved, the response is highly regulated, and the outcome is determined by a consensus-based decision-making process involving the salvor, shipowner, and federal and state governments. Second, exceedingly high liability and cleanup costs of an environmental casualty have underscored the importance of adequate salvage response in preventing severe economic repercussions to the owner and underwriter. Significantly, tank vessel contingency plans required by the Oil Pollution Act of 1990 (OPA 90) require vessel operators to certify that adequate salvage capability is available, through either contract or other approved means (33 CFR 155.1035).

Over the past 20 years, significant changes in the maritime industry and the world at large have prompted alterations in long-standing principles of salvage. The primary force driving these shifts has been increasing interest in environmental protection. This interest was sparked by major oil spills, beginning in 1967 with the loss of the Torrey Canyon off the coast of England, and continuing with the 1978 Amoco Cadiz spill near France, the 1989 Exxon Valdez spill in Alaska, and more recently the Aegean Sea spill in 1992 off Spain and the 1993 Braer spill in Scotland.

Continuing pressure from environmental concerns and coastal interests resulted in major changes in the regulatory regime of the marine transportation industry since 1982. The traditional principles of salvage law were modified in the International Salvage Convention (ISC) of 1989. This convention, ratified by the United States but not yet in force internationally, specifically identifies the salvor's duty to protect the environment and authorizes a special compensation award to promote it. Prior to these modifications, the ISC of 1910 provided that the salvor's award would depend on the voluntary nature, difficulty, and especially the success of the salvage

efforts; salvage compensation was awarded solely for success in saving vessels or cargo in distress by those under no legal obligation to do so. If the cargo or vessel were lost despite the best efforts of the salvor, no award was made—thus, the adage ''no cure, no pay,'' which was reflected in contracts for salvage services such as Lloyd's Open Form (LOF).

The LOF was modified in 1980 following the Amoco Cadiz casualty to provide for reimbursement of expenses incurred by salvors to minimize or prevent pollution, even if the salvor was eligible for no other award. In 1990, reflecting the Salvage Convention of 1989, the LOF was again modified to reward salvors' efforts to prevent or minimize pollution. The salvor's skill and efforts in preventing and minimizing pollution were added to the criteria for fixing the reward. Additionally, the 1990 changes provided that the salvor was entitled to special compensation, up to 130 percent of the salvor's expenses (200 percent in special circumstances) for efforts to prevent or minimize pollution in the event that the salvor's award otherwise would be less than the special compensation. An award for a salvage operation undertaken under an LOF 90 has already been granted. This was in the case of the 1991 grounding of the Yinka Folawayo off the coast of Spain. Salvors were paid under the contract for their salvage and pollution prevention efforts; compensation was granted despite the total loss of the vessel.

Although U.S. salvage companies tend to be more willing than foreign salvors to work under terms other than the LOF, the philosophy that produced the changes in the LOF will have an effect on all future salvage contracts, even in the United States.

In the United States, environmental and coastal concerns led to passage of OPA 90 and related state statutes. OPA 90 imposes new and expanded responsibilities on the oil-carrying vessels of the marine transportation industry to prevent, plan for, and respond to oil spills. Regulations stemming from the act also require oil-carrying vessels to make response plans that identify and plan for salvage resources. In addition, port-area contingency plans must identify and plan for deployment of salvage resources. Thus, OPA 90 fosters increased awareness of the role of salvage in pollution prevention and mitigation, presumably a positive influence on the future of salvage resources in the United States. The terms "salvor" and "salvage resources" in the regulations have yet to be defined.

The 1982 NRC report, Marine Salvage in the United States, contains various conclusions and recommendations. Those recommendations and related changes enacted to date are shown in Table 2-1.

Conclusions in the 1982 NRC report, Marine Salvage in the United States, reflected various regional concerns about salvage capability. These concerns are summarized below.

East Coast

• Major salvage incidents in this region were too infrequent to justify maintenance of a dedicated commercial salvage ship.

• Salvage was expected to continue to involve improvised assemblies of assets on an incident-by-incident basis.

• Actions taken to stabilize distressed vessels, such as flooding control and dewatering (removing water from cargo tanks), were in regular use using state-of-the-art equipment.

• Fire fighting technology, systems, and level of training were inadequate for handling most shipboard fires, and there were few specialized firefighting systems or crews.

• No offshore firefighting vessels were available.

• No designated safe havens were available.

• No commercial vessels designed or operated specifically for complex salvage operations were available.

• A significant number of vessels capable of rescue towing were available on the East Coast, although none was built or crewed specifically for offshore salvage, and most had design constraints that limited salvage performance.

Gulf Coast

• Marine casualties were too infrequent to sustain commercial interest in salvage.

• Many vessels and considerable specialized marine equipment were available, due to extensive offshore oil and gas development.

• There was a scarcity of dedicated or purpose-built rescue tugs, shoreside stores of salvage gear, and specialized craft such as pulling vessels, heavy-lift vessels, or lightering barges. General-purpose vessels and gear were abundant throughout the Gulf.

• Although firefighting technology was more advanced in the Gulf than elsewhere, several improvements were needed to improve response to shipboard fires. Equipment was not standardized, most vessels were not equipped with up-to-date technology, and personnel were not trained in shipboard firefighting techniques.

Pacific Coast

• Physical capabilities and salvage assets, except those needed to fight fires, generally were adequate. Also needed were trained firefighters and technology for dealing with hazardous cargoes.

• Rescue towing coverage generally was adequate, although there were deficiencies in time-critical response in certain areas, such as remote Alaska.

• Safe havens existed, but their availability was questionable due to the difficulty of obtaining approval to enter these areas.

The committee used three types of information sources to assess salvage readiness and capability in the three regions of the United States. First, a comprehensive questionnaire was developed and sent to the various segments of the salvage industry, as well as to individuals, organizations, and government agencies with an interest in the industry. The results of the questionnaire (respondents are listed in Appendix C) were reviewed by the committee to ascertain areas of interest for future investigation. Second, regional assessment meetings were held on each coast (attendees are listed in Appendix D). These meetings featured invited presentations and open discussions; and issues identified in the review of the questionnaires, as well as additional issues that surfaced, were addressed. Third, the committee analyzed, through desk audits and tabletop exercises, what the salvage industry's response would be in today's environment to the same basic accident scenarios used in the 1982 report (NRC, 1982). (The scenarios are presented in Appendix G.) The results of all these efforts are summarized for the three regions in the following subsections.

Salvage capability in several areas along the East Coast either has increased or is increasing. In 1982, no dedicated salvage vessel was present on the East Coast; since then, an offshore supply vessel has been acquired and modified for salvage and emergency response. The vessel is based in the New York region, and although available for other commercial work, is primarily tasked to support salvage efforts.

Firefighting resources were limited in 1982 to fire boats and to a few tugs equipped with fire monitors. The number of tugs with fire monitors has increased. Purpose-built firefighting equipment, prepackaged for air, truck, and water deployment, is maintained at various locations on the East Coast. Plans call for predesignated personnel to meet with the equipment at accident locations. Marine firefighting teams have been organized. The analysis of the salvage scenarios suggested that sufficient fire fighting equipment could be brought to the scene of an incident anywhere on the East Coast and begin operation within 12 hours.

In 1982, many of the accident scenarios developed by the NRC committee relied on foreign salvage masters and salvage companies. Today, at least two U.S. companies provide full-service salvage response throughout the East Coast (and elsewhere) using company-owned and/or contractually provided, prepositioned response resources. U.S. divisions of the international salvage companies also are still available, although without assets on the East Coast.

Tugs designed, equipped, and crewed for ocean rescue towing continue to be scarce. Although the number of tugs with greater than 3,000 horsepower has increased from approximately 70 to about 140, they are not designed, equipped, or crewed for rescue towing. However, various towing companies remain willing to come to the rescue of a distressed vessel, and they expressed confidence in their ability to "control" such a vessel, thereby limiting its potential impact on shorelines, while waiting for other assets to arrive for long-range rescue towing. With the exception of the Florida Straits, sufficient equipment for control could be on-site within six hours in all of the exercises undertaken. The Florida Straits presents a special problem, in that the timing of assistance to a disabled ship would depend on the tug/barge traffic transiting those waters at the time of the incident. The extent of this traffic varies, but initial investigations suggested a response time of 12 hours.

Salvage capability is increasing, with the availability of fly-away marine firefighting systems, including predeployed units on the East Coast and the owners inclusion of firefighting capability in vessel modifications and new buildings. However, the new level of resources has yet to be tested in real-life situations. Contingency planning for the various ports and areas has not yet incorporated the availability of fly-away marine firefighting systems and personnel, and local assets required for fast response needs of special situations such as passenger vessels are still limited.

There continue to be significant numbers of tugs and barges on the East Coast to assist in a marine casualty, with availability dependent on their employment at the time of the casualty. Traditionally, these vessels have been supplied quickly for use in salvage response. Throughout the study, tug owners reported to the committee that they would provide vessels for salvage, releasing them from other duties where necessary and possible because it is in the response vessel owner's best interest, both

economically and politically. Owners explained that they must serve the companies that normally employ their vessels; that they have a traditional responsibility to come to the aid of any distressed vessel; and that they have an interest in protecting the environment and the marine transportation system from disastrous incidents that may result in additional regulatory and economic burdens, such as more complex liability regimes and increased insurance costs.

Lightering activities are centered in Delaware Bay, and to a much lesser extent in New York Harbor. In these areas, lightering assets are available at very short notice. In other areas, resources are found at the various marine liquid cargo terminals. In the tabletop exercises undertaken by the committee, sufficient lightering assets were able to be marshalled at the casualty site within 12 hours.

The Gulf Coast area, from an overall perspective, has sufficient salvage resources and personnel to respond to a vessel casualty requiring salvage.

Rescue towing for very large crude carriers (VLCCs) is the biggest challenge in the Gulf of Mexico. This class of vessel trades normally within the area, utilizing the Louisiana Offshore Oil Port (LOOP) and the offshore lightering areas, and requires large tugs with horsepower in excess of 3,400 shaft horsepower (SHP) for towing and/or control in the event of a disabling incident with loss of power and/or steering. There remain a significant number of large, powerful tugs, including rig-moving and anchor-handling supply boats with horsepower of 4,200 to 13,000 in the Gulf. The rig-moving vessels (maximum horsepower of about 7,200 SHP) normally are equipped with towing winches, towing wire, and bridles. These vessels normally are employed on short charter contracts and are available for hire between jobs. The anchor-handling vessels have superior horsepower but are not ideal for rescue towing because of their design. Availability of these vessels is subject to international drilling activity.

In view of the availability of tugs capable of towing large vessels, in the committee's judgment, rescue towing capability in the Gulf is adequate.

Firefighting assets, while more significant in the Gulf than on other U.S. coasts, still are limited. Fire monitors of greater than 5,000 gallons per minute (gpm), capable of providing assistance in an offshore fire, are found on approximately 14 vessels in the Gulf. These vessels are employed primarily in the offshore oil and gas industry, and their availability for salvage depends on other assignments. Significant fly-away firefighting equipment has been developed and deployed in the region, with foam stockpiled at various locations along the Gulf, including Florida, with a corresponding increase in the marine firefighting response capability. In general, the firefighting capability in the Gulf can be said to be better than in 1982. Numbers of experienced firefighters are limited but adequate for projected needs.

There continue to be no dedicated salvage vessels in the U.S. Gulf. The salvage industry continues to rely on vessels of opportunity. The Gulf has significant vessel resources due to the offshore oil and gas industry that could provide emergency towing and other assistance for salvage response. The salvage effort for the Mega

Borg, for example, had six vessels on-site within 36 hours, with the capability of providing 67,500 gpm of firefighting water, at least two of which were capable of performing any rescue towing assistance needed.

Lightering assets—tankers, fenders, hoses, and support vessels—are readily available throughout the Gulf, and ship-to-ship offshore lightering is very common.

A major concern in the Gulf is channel blockage. From a salvage perspective, the key issue is availability of equipment to remove channel obstructions resulting from casualties. To a greater degree than on other coasts, the marine transportation system in the Gulf depends on the use of narrow ship channels. Casualties such as the Duval 2 sulfur barge collision and sinking in the Houston Ship Channel can have a major effect on shipping in the affected port and consequently on the economy. Significant heavy-lift assets are available in the Gulf, but they are located in areas where they can be employed in the marine construction industry, not necessarily near the scene of a casualty. In the Duval 2 incident, salvage assets deployed from New Orleans were delayed by fog and did not arrive on the scene for several days.

Salvage capability and readiness on the Pacific Coast continues to be generally adequate, with some exceptions. The presence of major towing and tug companies on the Pacific Coast continues to be a strong force in salvage readiness and response. The introduction of powerful tractor tugs equipped with firefighting monitors for tanker escort service in Puget Sound (also anticipated in California waters) has added significantly to the salvage capabilities and readiness on the Pacific Coast. This region also has the only dedicated salvage vessels in the United States.

Given the current level of salvage activity, there does not seem to be sufficient salvage work to keep the dedicated vessels gainfully employed (presently even these vessels rely on on-call crews). Without more activity or new revenue streams, the capacity level in this region may decline as one or more companies leave the field.

The availability of vessels capable of rescue towing is of less concern on the Pacific Coast than in other areas. This is mainly due to the accessibility of large commercial ocean-going tug fleets and the U.S. Navy presence in the mid-Pacific. However, there are significant gaps in coverage in remote areas of Alaska and in some areas of Northern California and Oregon, due to the long distances between ports.

Firefighting capability remains the major concern in the Pacific region. Little traditional firefighting capability exists within the coastal port areas, and the interface between local authorities and the marine industry may not be adequate. The capability is increasing with the addition of required escort tugs for oil tankers in Puget Sound and those anticipated in California. These tugs are being equipped with fire monitors with over 5,000-gpm capability. The planned prepositioning of fly-away marine firefighting systems in the region will add significantly to the response capability. As in other areas, the added capabilities have not been incorporated in port and area contingency planning.

The West Coast has the only dedicated salvage vessels in the United States. Located in Astoria, Oregon, and Seattle, Washington, these vessels offer excellent salvage work platforms and workshops. Due to the low level of salvage activity, the vessels have skeleton crews and rely on on-call personnel for on-scene salvage. The continued availability of these vessels, in the light of current economic conditions and their specialized use, is unlikely.

On the West Coast, with its deep-water ports, lightering is not a primary activity. The major towing and tug companies in the region provide significant resources to support lightering needs in the event of a casualty. The substantial tanker traffic on the coast adds to the availability of emergency storage and offloading capability.

In general, the salvage capability and readiness of the United States appears to have improved in the decade since 1982, accelerated as a result of OPA 90 and related state and industry actions. The improvement has not taken the form of a resurgence of the traditional salvage industry, with large salvage vessels, permanent stores of equipment, and a cadre of trained personnel. Rather, the increased capability stems mainly from the availability of fly-away and prepositioned stockpiles of equipment and the development of networks of salvage equipment and expertise. Also of note is the aggressive role the Coast Guard now assumes to ensure timely response to major accidents. As was evident in the response to the 1993 accident in Tampa Bay, Florida, the Coast Guard is not reticent about taking charge and participating actively in salvage when, in the opinion of agency officials, other action is not proceeding at a level adequate to address the risk involved.

Current resources, which were not available in the 1980s, include strategically deployed response assets provided by oil spill responders. These assets include dedicated response vessels and barges. Although they are not designed to perform salvage, they can provide assistance quickly due to their prepositioning near major shipping areas.

The level of salvage activity in the United States continues to be insufficient to support traditional salvage companies economically. As a result, salvage has become a secondary business for salvors and other marine contractors. The recent development of a system of retainers would improve the financial status of some salvage providers, but by itself may not provide enough incentive for companies to maintain dedicated vessels and crews awaiting offshore casualties. Moreover, companies that can afford such investments may be reluctant to have often-unemployed assets that produce only a limited return. In other words, with marine casualties in the United States occurring at a historic low rate, there is not enough salvage activity to make salvage a paying proposition for dedicated companies or to encourage investment in dedicated salvage equipment and facilities. Furthermore, the level of salvage activity is not sufficient to attract and train future salvors.

In sum, although the salvage industry in the United States appears to be on an upswing—at least temporarily and in part as a result of OPA 90—the long-term prognosis may still be bleak, unless ways can be found to train salvors and stimulate salvage-related business activity.