
[Federal Register Volume 79, Number 229 (Friday, November 28, 2014)]
[Proposed Rules]
[Pages 70943-70994]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-27594]



[[Page 70943]]

Vol. 79

Friday,

No. 229

November 28, 2014

Part III





Department of Homeland Security





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Coast Guard





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33 CFR Parts 140, 143, and 146

46 CFR Parts 61 and 62





 Requirements for MODUs and Other Vessels Conducting Outer Continental 
Shelf Activities With Dynamic Positioning Systems; Proposed Rule

  Federal Register / Vol. 79, No. 229 / Friday, November 28, 2014 / 
Proposed Rules  

[[Page 70944]]


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DEPARTMENT OF HOMELAND SECURITY

Coast Guard

33 CFR Parts 140, 143, and 146

46 CFR Parts 61 and 62

[Docket No. USCG-2014-0063]
RIN 1625-AC16


Requirements for MODUs and Other Vessels Conducting Outer 
Continental Shelf Activities With Dynamic Positioning Systems

AGENCY: Coast Guard, DHS.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Coast Guard proposes to establish minimum design, 
operation, training, and manning standards for mobile offshore drilling 
units (MODUs) and other vessels using dynamic positioning systems to 
engage in Outer Continental Shelf activities. Establishing these 
minimum standards is necessary to improve the safety of people and 
property involved in such operations, and the protection of the 
environment in which they operate. This notice of proposed rulemaking 
would decrease the risk of a loss of position by a dynamically-
positioned MODU or other vessel that could result in a fire, explosion, 
or subsea spill, and supports the Coast Guard's strategic goals of 
maritime safety and protection of natural resources.

DATES: Comments and related material must be submitted to the online 
docket via http://www.regulations.gov or reach the Docket Management 
Facility on or before February 26, 2015. Comments sent to the Office of 
Management and Budget (OMB) on collection of information must reach OMB 
on or before February 26, 2015.

ADDRESSES: Submit comments using one of the listed methods, and see 
SUPPLEMENTARY INFORMATION for more information on public comments.
     Online--http://www.regulations.gov following Web 
site instructions.
     Fax--202-493-2251.
     Mail or hand delivery--Docket Management 
Facility (M-30), U.S. Department of Transportation, West Building 
Ground Floor, Room W12-140, 1200 New Jersey Avenue SE., Washington, DC 
20590-0001. Hand delivery hours: 9 a.m. to 5 p.m., Monday through 
Friday, except Federal holidays (telephone 202-366-9329).
    Collection of Information. Submit any comments on the collection of 
information discussed in section VI.D. of this preamble both to the 
Coast Guard's docket and to the Office of Information and Regulatory 
Affairs (OIRA) in the White House Office of Management and Budget. OIRA 
submissions can use one of the listed methods.
     Email (preferred)_oira_submission@omb.eop.gov (include 
the docket number and ``Attention: Desk Officer for Coast Guard, DHS'' 
in the subject line of the email).
     Fax--202-395-6566.
     Mail--Office of Information and Regulatory Affairs, Office 
of Management and Budget, 725 17th Street NW., Washington, DC 20503, 
ATTN: Desk Officer, U.S. Coast Guard.
    Viewing material proposed for incorporation by reference: Make 
arrangements to view this material by calling the Coast Guard's Office 
of Regulations and Administrative Law at 202-372-3870 or by emailing 
HQS-SMB-CoastGuardRegulationsLaw@uscg.mil.

FOR FURTHER INFORMATION CONTACT: For information about this document, 
call or email Lieutenant Jeff Bybee, Coast Guard; telephone 202-372-
1357, email Jeff.B.Bybee@uscg.mil. For information about viewing or 
submitting material to the docket, call Cheryl Collins, Program 
Manager, Docket Operations, telephone 202-366-9826.

SUPPLEMENTARY INFORMATION:

Table of Contents for Preamble

I. Public Participation and Request for Comments
    A. Submitting Comments
    B. Viewing Comments and Documents
    C. Privacy Act
    D. Public Meeting
II. Abbreviations
III. Basis and Purpose
    A. Basis
    B. Purpose
IV. Background
V. Discussion of Proposed Rule
VI. Incorporation by Reference
VII. Regulatory Analyses
    A. Regulatory Planning and Review
    B. Small Entities
    C. Assistance for Small Entities
    D. Collection of Information
    E. Federalism
    F. Unfunded Mandates Reform Act
    G. Taking of Private Property
    H. Civil Justice Reform
    I. Protection of Children
    J. Indian Tribal Governments
    K. Energy Effects
    L. Technical Standards
    M. Environment

I. Public Participation and Request for Comments

    We encourage you to submit comments (or related material) on this 
rulemaking. We will consider all submissions and may adjust our final 
action based on your comments. Comments should be marked with docket 
number USCG-2014-0063 and should provide a reason for each suggestion 
or recommendation. You should provide personal contact information so 
that we can contact you if we have questions regarding your comments, 
but please note that all comments will be posted to the online docket 
without change and that any personal information you include can be 
searchable online (see the Federal Register Privacy Act notice 
regarding our public dockets, 73 FR 3316, Jan. 17, 2008.
    Mailed or hand-delivered comments should be in an unbound 8\1/2\ x 
11 inch format suitable for reproduction. The Docket Management 
Facility will acknowledge receipt of mailed comments if you enclose a 
stamped, self-addressed postcard or envelope with your submission.
    Documents mentioned in this notice, and all public comments, are in 
our online docket at http://www.regulations.gov and can be viewed by 
following the Web site's instructions. You can also view the docket at 
the Docket Management Facility (see the mailing address under 
ADDRESSES) between 9 a.m. and 5 p.m., Monday through Friday, except 
Federal holidays.

D. Public Meeting

    We plan to hold a public meeting and will announce the time and 
place in a later notice in the Federal Register.

II. Abbreviations

ANSI American National Standards Institute
ASOC Activity Specific Operating Criteria
CAMO Critical Activity Mode of Operation
DHS Department of Homeland Security
DP Dynamic Positioning
DP-1 Equipment class 1
DP-2 Equipment class 2
DP-3 Equipment class 3
DPO Dynamic Positioning Operator
DPOQ Dynamic Positioning Operator, Qualified
DPSAO Dynamic Positioning System Assurance Organization
DPVAD Dynamic Positioning Verification Acceptance Document
FMEA Failure Modes and Effects Analysis
FR Federal Register
GT ITC Gross tonnage as measured under 46 U.S.C. 14302, Convention 
Measurement System
IEC International Electrotechnical Commission
IMCA International Marine Contractors Association
IMO International Maritime Organization
MERPAC Merchant Personnel Advisory Committee
MISLE Marine Information for Safety and Law Enforcement
MODU Mobile Offshore Drilling Unit

[[Page 70945]]

MOU Mobile Offshore Units
MSC Marine Safety Center
MTS Marine Technology Society
NOSAC National Offshore Safety Advisory Committee
NPRM Notice of proposed rulemaking
OCMI Officer in Charge, Marine Inspection
OCS Outer Continental Shelf
OCS NCOE Coast Guard Outer Continental Shelf National Center of 
Expertise
OMB Office of Management and Budget
OSV Offshore Supply Vessel
Sec.  Section symbol
SMS Safety Management System
STCW Standards for Training Certification and Watchkeeping
U.S.C. United States Code
VSL Value of a statistical life
WSOC Well Specific Operating Criteria

III. Basis and Purpose

A. Basis

    Several sections of the Outer Continental Shelf Lands Act (OCSLA) 
(43 U.S.C. 1331-1356a) provide ``the Secretary of the Department in 
which the Coast Guard is operating'' with rulemaking authority. The 
Secretary's authority under all these sections is delegated to the 
Coast Guard through Department of Homeland Security Delegation No. 
0170.1, paragraph II(90).
    43 U.S.C. 1333(d)(1) gives the Secretary ``authority to promulgate 
and enforce such reasonable regulations with respect to lights and 
other warning devices, safety equipment, and other matters relating to 
the promotion of safety of life and property on the artificial islands, 
installations, and other devices referred to in subsection (a) \1\ of 
this section or on the waters adjacent thereto, as [the Secretary] may 
deem necessary.'' The Coast Guard interprets section 1333(d)(1) as 
conferring authority to regulate any Outer Continental Shelf (OCS) 
vessel or facility (collectively referred to as ``OCS unit'') attached 
to the OCS seabed or engaged in OCS activity to support such a unit.\2\
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    \1\ 43 U.S.C. 1333(a) extends the Constitution, laws and civil 
and political jurisdiction of the United States to, among other 
things, all artificial islands, and all installations and other 
devices permanently or temporarily attached to the seabed, which may 
be erected thereon for the purpose of exploring for, developing, or 
producing resources therefrom, or any such installation or other 
device (other than a ship or vessel) for the purpose of transporting 
such resources.
    \2\ OCS activity is defined in 33 CFR 140.10 to mean ``any 
offshore activity associated with exploration for, or development or 
production of, the minerals of the Outer Continental Shelf.''
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    Section 1347(c) requires promulgation of ``regulations or standards 
applying to unregulated hazardous working conditions related to 
activities on the [OCS] when . . . such regulations or standards are 
[determined to be] necessary'' and authorizes the modification ``from 
time to time'' of ``any regulations, interim or final, dealing with 
hazardous working conditions on the [OCS].'' Section 1348(c) requires 
promulgation of regulations for onsite scheduled or unscheduled 
inspections of OCS facilities ``to assure compliance with . . . 
environmental or safety regulations.'' Additionally, section 1356 calls 
for regulations requiring, with limited exceptions, all OCS units to be 
manned by U.S. citizens or resident aliens and to comply with ``such 
minimum standards of design, construction, alteration, and repair'' as 
the Secretary or the Secretary of the Interior establishes.

B. Purpose

    Dynamic Positioning (DP) systems typically use computers to 
automate control of vital power and propulsion systems to maintain a 
vessel's position using a position referencing system. Mobile offshore 
drilling units (MODUs) engaged in deepwater drilling and vessels 
engaged in other operations that require station-keeping adjacent to 
MODUs or production platforms now routinely use DP systems for cargo, 
personnel, or fuel transfers where conventional mooring is not 
practical. Coast Guard regulations have not kept pace with these new 
technological developments.
    A DP incident that results in a loss of position \3\ on a MODU or 
other vessel engaged in Outer Continental Shelf (OCS) activities is a 
system safety failure that may result in serious consequences for human 
safety and the environment during certain critical operations. For 
example, a loss of position on a MODU during well-control operations 
could result in a subsea spill that is difficult to contain.\4\ A 
logistics vessel could lose position and strike a floating or fixed 
facility, thereby causing damage to the gas export riser, which may 
result in an explosion, a loss of life, or an environmental event.\5\ A 
project/construction vessel could lose position while conducting diving 
operations, risking the lives of the divers.\6\
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    \3\ As defined in a MODU's Well Specific Operating Criteria 
(WSOC) or the Activity Specific Operating Criteria (ASOC) for a 
vessel other than a MODU. WSOC and ASOC are defined in proposed 46 
CFR 62.10-1.
    \4\ When a MODU performs an emergency disconnect from a well 
during critical activities involving hydrocarbon pressure, the 
Blowout Preventer (BOP) is the last line of defense to shut in the 
well and prevent a subsea spill and/or an uncontrolled fuel source 
from potentially feeding a fire on the MODU. The potential for 
failure of the BOP was illustrated during the DEEPWATER HORIZON 
casualty. The Coast Guard has received multiple voluntary reports of 
DP system failures that caused a loss of position and an emergency 
disconnect, including failures during critical activities when the 
BOP was the only thing preventing a catastrophic spill. Because 
there is no mandatory reporting requirement, the Coast Guard 
believes that emergency disconnects during critical activities are 
much more prevalent than indicated by voluntary reports.
    \5\ In one example from voluntary reporting, a dynamically-
positioned MODU on the U.S. OCS suffered a loss of position during 
critical activities while attached to a well in April 2010, and the 
subsea gear was damaged when the MODU performed an emergency 
disconnect. Another example occurred in July 2005, when the 
dynamically-positioned logistics vessel SAMUDRA SURAKSHA suffered a 
loss of position while attempting a personnel transfer and collided 
with the MUMBAI HIGH NORTH (MHN) platform. The collision severed at 
least one gas riser, causing a massive fire that destroyed the MHN 
platform within 2 hours and killed 22 people.
    \6\ For example, in September 2012, the dynamically positioned 
project/construction vessel BIBBY TOPAZ suffered a loss of position 
that severed the umbilical of a diver. Similar incidents involving 
the severing of diver umbilicals have resulted in diver fatalities.
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    To reduce the likelihood of a DP incident causing loss of position 
and the resulting consequences, many large offshore lease-holding 
corporations require MODUs and other vessels using DP systems while 
performing Critical OCS Activities \7\ on their leases to meet a 
minimum DP system design standard.\8\ Additionally, they require these 
vessels to implement operating guidelines and employ procedures and 
decision-support tools to ensure the DP system is operated within its 
design limits. They also require Dynamic Positioning Operators (DPOs) 
and other essential personnel to be well trained.
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    \7\ A Critical OCS Activity is defined in 33 CFR 140.305 of this 
NPRM, in part, as ``OCS Activities where maintaining station is 
critical because a loss of position could cause a personal injury, 
environmental pollution, or catastrophic damage.'' Section 140.305 
also contains non-exhasutive lists of examples of activities that 
meet the definitions of Critical OCS Activities on a MODU and 
Critical OCS Activities on Vessels Other than MODUs. The Coast Guard 
would provide the DP system industry advance notice and an 
opportunity to provide input before determining that additional 
activities meet either of the latter two definitions.
    \8\ Based on teleconferences with industry that took place in 
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
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    We are proposing DP standards for MODUs and other vessels that use 
DP to engage in OCS activities because of the risks described above; 
the ongoing trend of more operators moving further offshore for mineral 
exploration and production; the expanded use of DP, which is driven in 
part by the trend of moving operations further offshore and resultant 
mooring challenges; the difficulty of responding to incidents further 
offshore, as illustrated by the 2010 DEEPWATER HORIZON incident; the 
need to update outdated or outmoded Coast Guard regulations to align 
with changes in the technology

[[Page 70946]]

and operations that have transpired since these regulations were last 
updated; and the need to establish appropriate measures that 
consistently assess DP system capabilities and improve DP system 
reliability for each OCS activity. These DP standards include 
operation, design, training, manning, and watchkeeping components.

IV. Background

A. General

    The U.S. Coast Guard, within the U.S. Department of Homeland 
Security, is responsible for, among other things, protecting the marine 
environment and promoting the safety of life and property on the OCS. 
Under OCSLA, Title 46 United States Code, 33 CFR chapter I subchapter 
N, and 46 CFR chapter I subchapter I-A, the Coast Guard regulates OCS 
facilities, MODUs, and other vessels engaged in OCS activities, 
including, but not limited to, tank vessels, offshore supply vessels, 
and other vessels involved in OCS activities.
    The Bureau of Safety and Environmental Enforcement (BSEE), within 
the U.S. Department of Interior, is responsible for managing the 
nation's gas, oil, and other mineral resources on the OCS in a safe and 
environmentally sound manner. Under the OCSLA and Title 30 CFR, BSEE 
regulates activities such as oil and gas well exploration, drilling, 
completion, development, production and servicing, as well as pipeline 
transportation and storage activities under its jurisdiction. BSEE also 
grants rights-of use and easements to construct and maintain facilities 
and rights of way for sub-sea pipelines, umbilicals and other 
equipment. Among other BSEE regulations applicable to oil, gas, and 
sulfur operations on the OCS, 30 CFR part 250, subpart S, requires 
covered units to maintain a Safety and Environmental Management System, 
and 30 CFR part 250, subpart D, sets minimum requirements for blowout 
preventers to reduce the likelihood and impact of process safety 
failures.
    Under a Memorandum of Agreement \9\ between the Coast Guard and 
BSEE, the Coast Guard is responsible as the lead agency for regulation 
of DP system design, and all aspects of DP system operation except 
criteria for well shut-in and disconnect when out of the watch 
circle.\10\
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    \9\ Memorandum of Agreement Between the Minerals Management 
Service--U.S. Department of the Interior and the U.S. Coast Guard--
U.S. Department of Homeland Security (MMS/USCG MOA: OCS-04), dated 
28 February 2008, Annex I, Items 4.c and 4.d. The Minerals 
Management Service has since been renamed the Bureau of Safety and 
Environmental Enforcement. See also, the Memorandum of Understanding 
Between the Bureau of Safety and Environmental Enforcement--U.S. 
Department of the Interior, and the U.S. Coast Guard--U.S. 
Department of Homeland Security, dated 27 November 2012. The MOA and 
MOU are available on the docket by following the instructions under 
the ``Viewing comments and documents'' section of this preamble.
    \10\ Watch circles show critical distances between the wellhead 
and the MODU, and are used to define when a MODU must take certain 
actions during a loss of position incident to disconnect and 
separate from the BOP without damage to the MODU or well, injury to 
the crew, or an environmental event. Watch circles are also used in 
a similar way by vessels other than a MODU to avoid the adverse 
effects of a loss of position.
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B. Operation and Design Standards

    We initially addressed DP systems in the Coast Guard Eighth 
District policy letter 01-2003, dated January 22, 2003, ``Use of 
Dynamic Positioning by Offshore Supply Vessels for Oil and HAZMAT 
Transfers'' (available in the docket by following the instructions in 
the ``Viewing comments and documents'' section above). That policy 
letter provided guidance for certain Offshore Supply Vessels (OSVs) 
engaged in certain operations in the Gulf of Mexico, and is consistent 
with International Maritime Organization (IMO) Maritime Safety 
Committee Circular 645 (MSC/Circ.645), ``Guidelines for Vessels with 
Dynamic Positioning Systems,'' June 6, 1994, which divides DP system 
equipment into classes based on reliability levels designated as 
equipment class 1, 2, or 3. Equipment class 1 (DP-1) is the least 
reliable and equipment class 3 (DP-3) is the most reliable.
    These DP system equipment classes are used today, and IMO MSC/
Circ.645 is the foundation for the proposed regulations in this notice. 
DP system technologies and industry experience, however, have advanced 
since IMO MSC/Circ.645 was published. Consequently, there is a 
significant performance disparity among DP systems that have the same 
equipment class rating, because system configuration, operational, and 
maintenance decisions may effectively degrade DP systems rated as 
equipment class 2 (DP-2) or DP-3 to the extent that they perform as if 
they were rated DP-1. For example, degradation can occur when an 
operator of a vessel with a DP-2 system chooses to operate with closed 
bus ties and minimize the number of generators online in order to save 
fuel and avoid wear and tear on equipment. By doing so, the redundancy 
afforded by DP-2 may be compromised.
    To address this performance disparity, we propose to incorporate 
IMO MSC/Circ.645 into regulations as mandatory provisions. We also 
propose to adopt in regulations DP guidance issued by the Marine 
Technology Society (MTS) \11\ as mandatory provisions to provide owners 
or operators of DP MODUs and other vessels essential information on how 
to meet some of the requirements in this notice of proposed rulemaking 
(NPRM).\12\
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    \11\ MTS is an international organization incorporated in 1963 
to give members of academia, government and industry a common forum 
for the exchange of information and ideas. Its purpose is to promote 
awareness, understanding, advancement, and application of marine 
technology. The MTS Dynamic Positioning Committee was established in 
1996 to promote a greater international understanding of DP and 
related issues, and to provide a forum for the exchange of 
information about technology, training and education, improvement of 
reliability, development of guidelines, and other pertinent issues 
to facilitate incident-free DP System operations.
    \12\ ``DP Operations Guidance'' (Marine Technology Society, Part 
1, Oct. 2010; Part 2, App. 1, March 2012; Part 2, App. 2, July 2012; 
Part 2, App. 3, July 2012). These documents are available in the 
docket for this rulemaking by following the instructions in the 
``Viewing comments and documents'' section of this NPRM.)
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    Additionally, in March 2010, we tasked the National Offshore Safety 
Advisory Committee (NOSAC) with developing recommendations for DP 
system design, engineering, and operation standards. The NOSAC provided 
its recommendations in June 2010 (available in the docket by following 
the instructions in the ``Viewing comments and documents'' section 
above), and we have considered them in developing this NPRM. A key 
feature of the NOSAC recommendations is the risk-based approach of 
applying higher DP equipment class requirements to higher risk 
operations. As part of its recommendations, the NOSAC also submitted a 
draft revision of the DP operations guidance developed by MTS. This 
draft guidance, which was issued by the Dynamic Positioning Committee 
of the MTS, also linked DP equipment class to operations.
    After receiving the MTS draft guidelines as part of the NOSAC 
recommendation, we published a draft policy letter, ``Dynamically 
Positioned Mobile Offshore Drilling Unit Critical Systems, Personnel 
and Training,'' in the Federal Register on December 29, 2011 (76 FR 
81957). The MTS was among those that submitted public comment on the 
draft letter, and we participated in several DP conferences sponsored 
by MTS. Also, in a ``Notice of Recommended Interim Voluntary Guidance'' 
published in the Federal Register on May 4, 2012 (77 FR 26562), we 
recommended that owners or operators of DP MODUs voluntarily follow the 
guidance provided in the

[[Page 70947]]

MTS DP Operations Guidance (MTS DP Operations Guide), Part 2, Appendix 
1, on MODUs (March 2012). Subsequently, we published a follow-up 
``Notice of Recommended Interim Voluntary Guidance'' in the Federal 
Register on October 12, 2012 (77 FR 62247), which recommended that 
owners or operators of DP vessels other than MODUs \13\ that conduct 
OCS activities on the U.S. OCS follow the 2012 MTS DP Operations Guide, 
Part 2, Appendix 2, on project construction vessels (July 2012), or 
Appendix 3, on logistics vessels (July 2012), as appropriate.
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    \13\ Throughout this NPRM, references to ``vessels other than 
MODUs'' that conduct certain activities or possess certain design 
characteristics are intended to mean vessels that conduct such 
activities or possess such characteristics and are not MODUs.
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    This NPRM would require new and existing MODUs, and new vessels 
other than MODUs, that engage in Critical OCS Activities using a DP 
system, to comply with certain provisions of IMO MSC/Circ.645 and the 
MTS DP operations guidance documents listed in the preceding 
paragraph.\14\ These documents outline a process for determining the 
design limits of a DP system and operating within those limits. The MTS 
DP Operations Guide provides guidance on determining a DP system's 
worst-case failure, which is the critical design parameter that drives 
how the system should be operated. The worst-case failure is used to 
determine the Critical Activity Mode of Operation (CAMO), which is 
defined in the MTS DP Operations Guide and in Sec.  140.305 of this 
NPRM. The DP system's CAMO is then incorporated into the Activity 
Specific Operating Criteria (ASOC) or Well Specific Operating Criteria 
(WSOC) \15\ covering Critical OCS Activities; those criteria must 
clearly state when a specific OCS activity is a Critical OCS Activity. 
Operating a DP system within an ASOC or WSOC appropriate to the 
specific OCS activity and in its CAMO during Critical OCS Activities 
helps ensure that the DP vessel is operated within its design limits 
and reduces the likelihood of a loss of position.
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    \14\ See the discussion of ``Standard DP Requirements (Critical 
OCS Activities)'' in Section V of this preamble.
    \15\ ASOC and WSOC are defined in proposed 46 CFR 62.10-1 and 
are similar to the Activity Specific Operating Guidelines (ASOG) and 
Well Specific Operating Guidelines (WSOG) in the MTS DP Operations 
Guide. With Coast Guard concurrence, the content of the ASOC and 
WSOC may differ from the recommendations in the Operations Guide, 
and vessels would be required by the proposed regulations to operate 
within their ASOC or WSOC.
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    In this NPRM, we propose design and operational standards for DP 
systems used on MODUs and other vessels. As discussed below in Section 
V of this NPRM and depicted in Chart A on page 33, we structured these 
proposed requirements using a risk-based approach tied to the type and 
size of the MODU or other vessel and whether a Critical OCS Activity is 
conducted. We are proposing the regulations below after considering the 
NOSAC recommendations, the MTS and IMO guidance, the current and 
expected use of DP technology, and the risks associated with loss of 
position while using DP systems to engage in Critical OCS Activities.

C. Training, Manning and Watchkeeping Standards

    The increased use of DP provides significant new challenges for the 
operators and crews of MODUs and other vessels operating on the U.S. 
OCS. Properly qualified DP system operators and on-watch personnel must 
have an in-depth knowledge of these positioning systems, be able to 
constantly and consistently monitor them, and, when appropriate, take 
manual control to maintain the safety of the vessel, its personnel and 
the environment. Casualty investigations and anecdotal information 
regarding near misses due to DP failures have highlighted the need for 
regulations that address training, manning, and watchkeeping 
requirements in support of DP systems. The DEEPWATER HORIZON casualty 
investigation, in particular, highlighted DP operational concerns, 
including competence, communications, and handling of emergencies, and 
recommended that we develop operational requirements for vessels fitted 
with DP.\16\
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    \16\ DEEPWATER HORIZON--FINAL REPORT available at https://homeport.uscg.mil/mycg/portal/ep/contentView.do?contentId=323899&pageTypeId=13489&contentType=EDITORIAL.
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    We do not yet have any operational training standards specifically 
for DP systems, nor do we have manning or watchkeeping requirements 
that take into account operations using DP systems. Furthermore, the 
existing manning and watchkeeping requirements in 46 CFR part 15 apply 
only to U.S. vessels, including MODUs. To address these gaps, we 
propose minimum training, watchkeeping, and manning standards for U.S. 
and foreign MODUs and other vessels using DP systems to engage in OCS 
activities on the U.S. OCS. We developed these proposed standards after 
considering internationally accepted standards and input from the 
industry.
    The regulations proposed in this NPRM were developed, in part, 
based on the recognition that, under applicable law, any MODU or other 
vessel operating solely with a DP system is a self-propelled motor 
vessel and is considered to be underway. 46 CFR 10.107 defines ``self 
propelled'' as ``propelled by machinery'' and ``mechanically 
propelled.'' Additionally, 46 U.S.C. 2101, paragraph (16), defines 
``motor vessel'' as ``a vessel propelled by machinery other than 
steam.'' Because any vessel operating solely with a DP system is 
propelled by machinery, such vessels are self-propelled. Similarly, 
because any vessel operating solely with a DP system is propelled by 
machinery other than steam, such vessels are motor vessels. Further, 
such vessels are self-propelled motor vessels regardless of whether the 
machinery involved is used for the vessel to make way (transiting) or 
to maintain a fixed position.
    Self-propelled motor vessels, which include MODUs operating solely 
with a DP system, are subject to the Standards for Training 
Certification and Watchkeeping (STCW) Convention. Under Article III, 
the STCW Convention applies to seafarers serving on board seagoing 
ships, including self-propelled MODUs, and existing requirements in 46 
CFR 15.1101 specify that a ``seagoing vessel means a self-propelled 
vessel in commercial service that operates beyond the Boundary Line 
established by 46 CFR part 7. It does not include a vessel that 
navigates exclusively on inland waters.'' Because MODUs and other 
vessels operating solely with a DP system on the U.S. OCS are self-
propelled motor vessels operating beyond the Boundary Line, they are 
seagoing ships for purposes of the STCW Convention. Consequently, the 
STCW Convention watchkeeping and hours of rest provisions and the 
training requirements for personnel standing watches apply to mariners 
serving on MODUs and other vessels using a DP system to engage in OCS 
activities on the U.S. OCS.
    Additionally, MODUs and other vessels operating solely with a DP 
system are considered to be underway. ``Underway'' is defined in 46 CFR 
10.107 as--

    A vessel . . . not at anchor, made fast to the shore, or 
aground. When referring to a mobile offshore drilling unit (MODU), 
underway means that the MODU is not in an on-location or laid-up 
status and includes that period of time when the MODU is deploying 
or recovering its mooring system.

    A vessel operating with DP is underway when it is not: At anchor, 
made fast to the shore or ocean bottom, aground, or in a laid-up or on-
location

[[Page 70948]]

status.\17\ Because MODUs and other vessels operating solely with a DP 
system are considered to be underway, the regulations in 46 CFR subpart 
B that implement STCW Convention watchkeeping and hours of rest 
provisions and the training requirements for personnel standing watches 
also apply to mariners serving on MODUs and other vessels using a DP 
system to engage in OCS activities on the U.S. OCS.
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    \17\ 46 CFR 10.107 defines ``on-location'' as ``a mobile 
offshore drilling unit [that] is bottom bearing or moored with 
anchors placed in the drilling configuration.
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    Further, those regulations are consistent with IMO Resolution 
A.1079(28), entitled ``Recommendations for the Training and 
Certification of Personnel on Mobile Offshore Units (MOUs),'' and dated 
December 4, 2013, which defines a self-propelled MOU as ``a MOU fitted 
with a mechanical means of propulsion to navigate independently,'' \18\ 
and specifies that all maritime crew members on self-propelled MOUs 
should meet the requirements of the STCW Convention, as amended.\19\
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    \18\ IMO Resolution A.1079(28), para. 2.
    \19\ Id. at para. 4. This document is available in the docket 
for this rulemaking by following the instructions in the ``Viewing 
comments and documents'' section of this NPRM.
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    The 2010 amendments to the STCW Convention contain guidance on the 
training, experience, and professional competence of personnel who 
operate DP systems. The guidance specifies the content of the training 
such personnel should receive and the experience they should possess. 
We considered the STCW Convention guidance in developing the 
operational training, manning, and watchkeeping standards in this NPRM.
    Additionally, in November 2011, we tasked the NOSAC with developing 
recommendations for safe standards for personnel operating vessels 
using DP systems on the OCS. The NOSAC provided its recommendations in 
November 2012 (available in the docket by following the instructions in 
the ``Viewing comments and documents'' section above). The NOSAC also 
submitted reports containing recommended practices for MODUs and other 
vessels operating DP systems on the U.S. OCS from each of the three 
main groups of NOSAC stakeholders; specifically, the owners or 
operators of: (1) OSVs and small vessels; (2) MODUs; and, (3) manned 
and unmanned barges.
    In March 2012, we tasked the Merchant Personnel Advisory Committee 
(MERPAC) with reviewing the safe operation of dynamically positioned 
vessels operating on the U.S. OCS. MERPAC provided its recommendations 
in September 2012 (available in the docket by following the 
instructions in the ``Viewing comments and documents'' section above).
    We considered the recommendations from both advisory committees in 
developing the training, manning, and watchkeeping standards in this 
NPRM. Both committees supported the three key recommendations 
summarized as follows:
    Recommendation 1. DPOs should be credentialed but not necessarily 
``licensed.'' If the DPO is not a licensed officer, a licensed officer 
of the navigation watch shall be provided, if required.
    Recommendation 2. Minimum training should meet the standards found 
in the International Marine Contractors Association's ``The Training 
and Experience of Key DP Personnel'' (International Marine Contractors 
Association (IMCA) M 117, Rev. 1, February 2006); and IMO Maritime 
Safety Committee Circular 738, ``Guidelines for Dynamic Positioning 
System (DP) Operator Training'' (MSC/Circ.738/Rev. 1, July 2006). In 
addition to meeting these training standards, further training and/or 
competency assessments should be required to ensure the proper 
performance of duties, and should be the responsibility of companies 
based on the DP system, vessel type, and service/activities.
    Recommendation 3. Operational measures, including DP system and 
crew competency requirements, manning, and watch protocols should be 
based on risk assessments performed under a Safety Management System 
(SMS).
    We agree with the first recommendation that the DPO must be a 
credentialed mariner, but need not be licensed. The DPO can also be the 
officer in charge of a navigational watch, provided the DP system and 
the navigational equipment are collocated, and the person is a 
qualified DPO who also holds the appropriate mate or officer 
endorsement.
    We fully agree with the second recommendation.
    Regarding the third recommendation, we agree with the adoption of 
operational measures, including the risk-based approach to DP system 
and crew competency requirements. Additionally, we partially agree with 
the recommendation that manning and watch protocols be risk based. 
Because a vessel operating under DP is considered to be underway, MODUs 
and other vessels using DP must comply with existing laws, regulations, 
and international requirements on manning and watchkeeping. However, 
the process to determine watchkeeping and manning protocols should 
account for the capabilities and limitations of each DP system and the 
nature of the operations of the vessel, including MODUs. Manning and 
watch protocols incorporating a risk-based approach would improve the 
safety of navigation on the U.S. OCS.
    Regarding the training requirements of personnel who stand watch on 
MODUs, we are cognizant that the competency requirements in STCW for 
masters and officers in charge of the navigational watch may exceed 
what is required for a MODU. The STCW Convention, however, already 
permits the issuance of limitations based on vessel types after 
identifying the competencies that are not applicable. In addition, some 
flag states already issue certificates of competency for masters 
restricted to MODUs that would be acceptable for the operation of MODUs 
using a DP system to engage in OCS activities on the U.S. OCS.
    The existing training, watchkeeping, and hours of rest provisions 
in 46 CFR part 15 applicable to U.S. MODUs and other vessels are 
consistent with STCW requirements. Furthermore, foreign vessels 
operating on the U.S. OCS are obligated to comply with STCW 
requirements because they are seagoing vessels under the STCW 
Convention. As a party to the STCW Convention, we are proposing changes 
in this proposed rule to address the gap with respect to the 
application of STCW requirements to non-U.S. MODUs using a DP system to 
engage in OCS activities on the U.S. OCS by extending the application 
of the Convention requirements to them.
    Application of the STCW provisions to these MODUs is consistent 
with the guidance in IMO Resolution A.1079(28), ``Recommendations for 
the Training and Certification of Personnel on Mobile Offshore Units,'' 
which specifies that crew members on self-propelled mobile offshore 
units should meet the requirements of the STCW Convention, as 
amended.\20\ The Dynamic Positioning Operator, Qualified (DPOQ) must 
have a thorough knowledge of the CAMO and either the ASOC or WSOC, and 
must be familiar with the vessel's Failure Modes and Effects Analysis 
(FMEA) so that he or she understands the vessel's capabilities and can 
anticipate the vessel's movements in the event of DP system failure or 
other reduced operating capacity. Although we recognize that mariners 
working on board MODUs and other vessels should

[[Page 70949]]

also have additional knowledge and understanding of the industrial 
mission, as provided in IMO Resolution A.1079(28), such a requirement 
is outside the scope of this rulemaking.
---------------------------------------------------------------------------

    \20\ IMO Resolution A.1079(28), para. 4.
---------------------------------------------------------------------------

D. Classification, Plan Review, and Certification

    This NPRM proposes to require any MODU that uses a DP system to 
engage in Critical OCS Activities, or any other vessel that uses a new 
DP system to engage in Critical OCS Activities, to obtain a DP notation 
equivalent to IMO MSC/Circ.645 equipment class DP-2 or higher from a 
classification society recognized under 46 CFR 8.230. The 
classification society must possess DP system rules that are aligned 
with IMO MSC/Circ.645 and meet the requirements of proposed 46 CFR 
61.50-3 and the MTS DP Operations Guide provisions applicable to the 
vessel being classed. The Coast Guard Outer Continental Shelf National 
Center of Expertise (OCS NCOE) would determine whether the 
classification society is recognized under 46 CFR 8.230, whether its DP 
system rules are aligned with IMO MSC/Circ.645 and the MTS DP 
Operations Guide provisions applicable to the vessel being classed, and 
whether the notations are equivalent to DP-2 or higher. Under proposed 
Sec.  61.50-20, actions of the OCS NCOE would be appealable to the U.S. 
Coast Guard Deputy Commandant for Prevention.
    Obtaining a classification society notation of DP-2 or higher 
mitigates the risk of MODUs and other vessels losing position during DP 
operations on the U.S. OCS. A DP-2 notation from a classification 
society serves as a fundamental building block for safe DP operations 
by ensuring a minimum level of reliability for a DP system, but the 
notation does not consider the mission of the vessel, nor does it 
address operations. The MTS DP Operations Guide further enhances safe 
DP operations by ensuring the MODU or other vessel is operated within 
the design limits of the DP system for the industrial mission it must 
carry out.
    As we discuss further in section V. of this preamble, different 
levels of risk are associated with different vessels and missions. In 
general, we are proposing a risk-based approach tied to the type of 
vessel and whether the vessel conducts Critical OCS Activities. In 
addition, we propose to distinguish between vessels other than MODUs 
based on vessel size. For the lower risk category of vessels that 
conduct Critical OCS Activities, meeting IMO MSC/Circ.645, obtaining 
surveys from a DP system assurance organization (DPSAO), meeting DP 
personnel and system training requirements, and following the MTS 
guidance is sufficient to ensure a satisfactory safety level.
    Accordingly, we do not propose to require such vessels to obtain 
plan review from a DPSAO and obtain a DP notation equivalent to IMO 
MSC/Circ.645 equipment class DP-2 or higher from a classification 
society for the purpose of determining compliance with Coast Guard DP 
requirements. Instead, we would rely on the DPSAO to verify compliance 
with the provisions of this NPRM and be able to provide evidence of 
this to the Coast Guard upon request.
    This NPRM would require more oversight on MODUs and other larger 
vessels that use a DP system to engage in Critical OCS Activities. 
These higher-risk vessels would be required to obtain plan review and 
surveys from a DPSAO \21\ in accordance with Sec.  61.50-3 of this 
NPRM.
---------------------------------------------------------------------------

    \21\ Dynamic Positioning System Assurance Organizations are 
described in Sec.  61.50-3 of this NPRM.
---------------------------------------------------------------------------

    To qualify for Coast Guard authorization to conduct surveys and 
verify compliance with the provisions in this NPRM, a DPSAO must 
demonstrate competency and effectiveness in vessel plan review and 
survey. Some of the criteria the Coast Guard currently uses to 
recognize classification societies under 46 CFR 8.230 are also 
applicable to DP system assurance organizations, such as having quality 
systems based on industry standards, and financial independence from 
MODU and other vessel owners and builders. Additional criteria would 
include a documented history of providing FMEA and survey services on a 
wide variety of MODUs and other vessels with various industrial 
missions, and a minimum amount of documented history of providing high 
quality, effective DP assurance, such as recommending enhancements to 
design or operational measures.
    In developing the classification, plan review, and certification 
provisions of this NPRM, we consulted with organizations that currently 
conduct DP assurance on MODUs and other vessels on the U.S. OCS, and 
leaseholders who require MODUs and other vessels with which they 
contract to follow the MTS DP Operations Guide. Based on this feedback 
and our experience with classification societies and DPSAOs, we are 
proposing criteria for DP system assurance organizations that are 
highly qualified in DP system assurance.
    Classification societies and other DPSAOs that are highly qualified 
in DP system assurance would need to be accepted by the Coast Guard 
after demonstrating they meet our proposed criteria. After acceptance 
by the Coast Guard, classification societies and other highly qualified 
organizations would be eligible to conduct the DP plan review and 
surveys that would be required on MODUs and other large vessels.

V. Discussion of Proposed Rule

    This NPRM would set standards for MODUs and other vessels that use 
a DP system for OCS activities, but would not require vessels to be 
equipped with a DP system. These standards would not prevent owners or 
operators from choosing to meet a higher standard or seeking approval 
of equivalent safety measures.
    In this NPRM, we took potential economic impact into consideration 
by phasing in certain vessels, other than MODUs, with existing DP 
systems. We also propose a risk-based approach tied to the type and 
size of the MODU or other vessel and the category (critical or non-
critical) of OCS activity the DP system is used to conduct. This 
approach is depicted in Chart A.
BILLING CODE 9110-04-P

[[Page 70950]]

[GRAPHIC] [TIFF OMITTED] TP28NO14.000

BILLING CODE 9110-04-C
    The chart depicts five levels of DP requirements (none, minimum, 
intermediate, standard, and enhanced) that MODUs and other vessels that 
use a DP system for OCS activities must satisfy depending on the level 
of risk. The requirements would be progressive; a MODU or other vessel 
that is subject to the enhanced DP system requirements would need to 
meet the standard, intermediate, and minimum requirements as well.
    When developing these proposed requirements, we considered the 
risk-based approach of the MTS DP Operations Guide. The MTS DP 
Operations Guide, in Part 1 of section 4.1, recommends various DP 
equipment classes based on the type of OCS activity the DP system is 
used to conduct. A similar approach is taken in

[[Page 70951]]

section 4.4, which recommends different numbers and types of position 
reference sensors based on the OCS activity.
    The MTS DP Operations Guide also distinguishes between critical and 
non-critical activities and recommends more stringent operational 
requirements for critical activities. The proposed regulations reflect 
the risk-based approach in the guide by adjusting the DP system 
reliability standard and level of oversight depending on the size of 
the vessel and the OCS activity the MODU or other vessel is designed to 
perform. This NPRM would require owners or operators of DP MODUs and 
other vessels to follow the MTS DP Operations Guide, which provides 
essential information to support compliance with some of the 
requirements proposed in this NPRM.
    Primarily, this NPRM would distinguish between MODUs and other 
vessels that use DP systems to engage in Critical OCS Activities and 
those that do not by requiring higher DP standards and more robust 
oversight for Critical OCS Activities. For example, because a MODU has 
a higher risk profile than a logistics vessel under the MTS DP 
Operations Guide, this NPRM would require a MODU to meet higher DP 
standards and be subject to more robust oversight than a logistics 
vessel.
    This NPRM would also distinguish between the sizes of vessels other 
than MODUs that use a DP system for OCS activities. A primary risk from 
such vessels is a loss of position that results in a collision with 
another structure. The consequences of such a collision increase with 
the size of the vessel. For this reason, we propose to require a higher 
DP standard for the largest vessels other than MODUs with new DP 
systems, which are those greater than 6000 GT ITC.
    For the same reason, we also propose a phase-in for existing 
vessels other than MODUs, where the largest such vessels are required 
to comply first and the smallest--those of 500 GT ITC or less (500 GRT 
if GT ITC not assigned)--are required to comply only with the minimum 
DP requirements of this NPRM. The NPRM would require vessels other than 
MODUs, greater than 500 tons but less than 900 tons, equipped with 
existing DP systems, to comply with the intermediate requirements 
within 9 years after publication of the final rule; vessels of at least 
900 tons but less than 1900 tons to comply within 6 years after 
publication of the final rule; and vessels of 1900 tons or more to 
comply within 3 years after publication of the final rule. The 
decisions to phase in vessels other than MODUs and apply minimum 
requirements to the smallest of them are also discussed in the 
regulatory analysis section of this NPRM. Those proposed provisions are 
intended to reduce economic impact by providing industry time to 
transition to the new requirements. A detailed discussion of the top 
four levels of Chart A follows.

Minimum DP Requirements (Non-Critical OCS Activities)

    This NPRM would require vessels, other than MODUs, that use an 
existing DP system to engage in non-critical OCS activities or are 500 
GT ITC or less to meet minimum DP requirements. For example, a vessel 
500 GT ITC or less that uses an existing DP system to engage in 
Critical OCS Activities would be required to meet minimum DP 
requirements, as would a vessel greater than 500 GT ITC that uses an 
existing DP system to engage in non-critical OCS activities. 
Additionally, vessels, other than MODUs, that use a new DP system to 
engage in non-critical OCS activities, and MODUs that use a new or 
existing DP system for the same purpose, would be required to meet 
minimum training and DP system requirements. There are no DP incident 
reporting requirements for MODUs and vessels other than MODUs subject 
to only Minimum DP System Requirements.
    Proposed 33 CFR 140.330 and 46 CFR 62.40-3 would require the DP 
system controls to be designed and operated in a manner that reduces 
the probability of adverse events such as a drive-off or drift-off 
after a DP system failure. The DP system would be required to be 
equipped with audible and visual alarms that notify the DPO of DP 
system failure and independent controls immediately available to the 
DPO that function after the failure.
    Proposed 33 CFR 140.315 would establish minimum requirements for 
DPO and DPOQ training that ensure they are appropriately trained in the 
use and limitations of the DP system. Both DPOs and DPOQs would be 
required to be familiar with the CAMO, and either the ASOC or WSOC of 
their MODU or other vessel, and to demonstrate a fundamental 
understanding of the specific DP system's FMEA.
    Under proposed Sec.  140.325, MODUs and other vessels would be 
required to have a vessel-specific DP system operating manual on board 
and readily available to the DPO. Additionally, MODUs and vessels 
conducting vessel-to-vessel transfer operations using DP systems would 
need to ensure clear communication and appropriate emergency 
preparedness between the two vessels, which may have differing DP 
system capabilities and operating procedures.

Intermediate DP Requirements

    In addition to meeting the minimum DP requirements described above, 
proposed 33 CFR 140.335 would require vessels, other than MODUs, 
greater than 500 GT ITC (500 GRT if GT ITC not assigned) that use a DP 
system installed before [30 DAYS AFTER DATE OF PUBLICATION OF THE FINAL 
RULE] to engage in Critical OCS Activities, to develop and adhere to 
their CAMO and ASOC. A Critical OCS Activity is defined in proposed 33 
CFR 140.305 as an activity on the OCS in which the accuracy and 
consistency of the vessel's position is a major factor in the safety of 
personnel, property, and the environment. For the reasons stated in 
section III.B. of this preamble, we believe that the risk of an injury, 
collision, or spill incident is higher when a DP system is used to 
engage in Critical OCS Activities and should be subject to a higher 
safety requirement.
    Additionally, 33 CFR 140.335 would require MODUs that use a DP 
system to engage in Critical OCS Activities to develop and adhere to 
their CAMO and WSOC. The CAMO, ASOC, and WSOC would ensure each DP 
system is operated within its design limits for the specific operation. 
Owners or operators would also be required to report DP system 
incidents involving a reactive change from ``green'' to ``yellow'' or 
``red'' as defined by the ASOC or WSOC. The reporting requirement would 
apply to DP system incidents that occur at any time, not just those 
that occur during Critical OCS Activities.
    Proposed 46 CFR 61.50-2 would require DP system surveys to be 
completed by a DPSAO. In addition, the MODU or vessel owner or operator 
would be required to provide the Coast Guard with at least 30 days 
advance notice of these surveys, which would enable the Coast Guard 
oversight needed to strike a balance between ensuring that third 
parties are adequately performing delegated functions on the Coast 
Guard's behalf, and reducing visits to the vessel by the Coast Guard.
    The surveys under proposed 46 CFR 61.50-5 through 61.50-15 are 
based on those described in IMO MSC/Circ.645 and the MTS DP Operations 
Guide, and would consist of an initial survey, an annual survey that 
ensures the DP system remains in good working order, and periodic 
surveys that fully test all systems at least once every 5 years. The 
specific tests to be conducted during the surveys and the documentation 
that

[[Page 70952]]

would be required are discussed in detail in proposed part 61 of this 
NPRM.
    Proposed 46 CFR 61.50-3 creates requirements that each DPSAO must 
meet to receive approval from the OCS NCOE to conduct the surveys 
described above. These provisions include requirements for DPSAOs to 
produce documents showing they have a history of providing DP assurance 
to MODUs and vessels other than MODUs, and have adequate resources and 
experience that demonstrate they are highly qualified to provide DP 
system oversight.
    Proposed 46 CFR 61.50-4 requires an annual report to be submitted 
by each DPSAO to the OCS NCOE. The annual report must contain each 
investigation summary reported to the DPSAO under proposed 33 CFR 
140.335(i). The annual report would provide valuable feedback and allow 
the Coast Guard to verify that the FMEA, WSOC, ASOC and CAMO are being 
updated with lessons learned that address the cause(s) of each 
incident, thereby reducing the likelihood that future incidents will 
occur. Additionally, the OCS NCOE may periodically audit the records of 
DPSAOs to determine whether they are continuing to provide the DP 
system oversight necessary to verify that DP system are in compliance 
with the applicable requirements of this NPRM.
    Proposed 46 CFR 62.40-15 through 62.40-25 would require MODUs and 
other vessels to which Sec.  140.335 applies to conduct testing based 
on the FMEA to determine the CAMO for the DP system. The purpose of the 
testing is to uncover failure modes. For example, failure modes that 
could be transmitted through a bus tie should be included in the CAMO. 
For this type of failure mode, the CAMO should require electrical 
isolation during Critical OCS Activities to prevent the failure from 
resulting in a complete power loss and subsequent drift off.
    Compliance with these provisions of this NPRM would be documented 
on the Dynamic Positioning Verification Acceptance Document (DPVAD) 
issued by a DPSAO under proposed 33 CFR 140.335.

Standard DP Requirements (Critical OCS Activities)

    In addition to meeting the minimum and intermediate DP requirements 
described above, proposed 33 CFR 140.340 and 46 CFR 62.25-40 and 62.40-
5 would require vessels other than MODUs, of 6000 GT ITC or less, that 
use a new DP system to engage in Critical OCS Activities, to comply 
with IMO MSC/Circ.645 and the environmental type testing provisions of 
International Electrotechnical Commission Standard 60092-504 
``Electrical Installation in Ships'', and would require that such 
vessels meet the provisions of the applicable MTS DP Operations Guide. 
Because Critical OCS Activities consist of relatively high-risk 
activities, including those where loss of position on a vessel could 
strike the production riser of a floating or fixed facility, which may 
result in an explosion, a loss of life, and/or an environmental event 
similar in magnitude to that of the DEEPWATER HORIZON, Critical OCS 
Activities should be subject to a higher safety requirement.
    DP systems on these vessels would, at a minimum, be required to 
comply with the provisions of IMO MSC/Circ.645 and the MTS DP 
Operations Guide (incorporated by reference, see Sec.  62.05-1) 
relevant to equipment class 2 (DP-2) or higher. The applicable 
provisions of IMO MSC/Circ.645 are the following paragraphs:
    1.1 Purpose and Responsibility;
    1.3 Definitions;
    2 Equipment Classes;
    3 Functional Requirements; and
    4 Operational Requirements.
    As discussed in the ``Background'' section above, IMO MSC/Circ.645 
and the MTS DP Operations Guide contain recommendations. Circular 645, 
however, is a mature, performance based document with wide industry 
acceptance, and we propose to incorporate it into regulations as 
mandatory provisions. The proposed regulations would also include a 
survey and certification scheme different from that in the Circular. 
Specifically, we propose to require the initial survey to include a 
Failure Modes and Effects Analysis (FMEA) proving test, and require the 
Critical Activity Mode of Operation (CAMO) to be identified.
    Development of a CAMO and ASOC or WSOC would also be required for 
each vessel and well, which have different characteristics and risks. 
Because of these differences, the proposed regulations cannot prescribe 
in detail the content of these documents. Such regulations would be 
extremely lengthy, in a constant state of change as DP technology 
evolves, and prone to overbroad misapplication of standards that should 
be tailored to each vessel and well.
    Instead, we propose to require that owners or operators consult the 
applicable portions of the MTS DP Operations Guide as a method of 
drafting these documents and complying with the other mandatory 
provisions of the regulations. The MTS DP Operations Guide contains 
principles for the development of these documents that address the 
risks experienced by today's modern DP vessels. The Guide also contains 
highly useful examples that will be applicable to a large majority of 
vessels and wells.
    We anticipate that the examples in the MTS DP Operations Guide will 
be used by industry largely without change. However, some vessels will 
employ solutions to obtain DP reliability that vary from the examples 
in the Guide, and will have the option to request the use of 
alternative guidance from the Coast Guard Office of Design and 
Engineering Standards (Commandant (CG-ENG)). Where this occurs, the 
OCMI, the vessel owner or operator, the classification society, and the 
DPSAO will apply the relevant principles of the MTS DP Operations Guide 
to ensure the ASOC or WSOC and CAMO provide a sufficient level of DP 
reliability to meet the DP-2 performance standard in IMO MSC/Circ.645, 
paragraph 2.2.2.
    Owners or operators would also be required under proposed 46 CFR 
62.40-10 to obtain an equivalent class notation from a classification 
society possessing DP system rules that are aligned with IMO MSC/
Circ.645 and meet the requirements of proposed 46 CFR 61.50-3 and the 
MTS DP Operations Guide provisions applicable to the vessel being 
classed. These other vessels would also need to meet the environmental 
design requirements of proposed 46 CFR 62.25-40. That section is 
modeled after a standard promulgated by the International 
Electrotechnical Commission (IEC) to ensure critical equipment is 
appropriately designed to withstand the marine environment.\22\
---------------------------------------------------------------------------

    \22\ IEC 60092-504, Third Edition 2001-03, Electrical 
Installations in Ships--Part 504: Special Features--Control and 
Instrumentation, Clause 5.
---------------------------------------------------------------------------

Enhanced DP Requirements (MODUs and New DP Systems on Large Vessels)

    In addition to meeting the minimum, intermediate, and standard DP 
requirements described above, proposed 33 CFR 140.345 and 46 CFR 62.20-
2 would require vessels other than MODUs, greater than 6000 GT ITC, 
that use new DP systems to engage in Critical OCS Activities, and MODUs 
that conduct Critical OCS Activities, to obtain plan review and surveys 
from a DPSAO, which would be subject to oversight by the Coast Guard.
    The enhanced DP requirements are intended to improve DP designs to 
support the industrial mission of the MODU or large vessel, and are 
necessary because, as discussed in the Background section of this 
preamble, a significant performance disparity exists in various

[[Page 70953]]

DP systems rated DP-2. For example, a DP-2 system on one vessel could 
consist of a power system with two large generators, two switchboards, 
and a bus tie; a DP-2 system on another vessel could consist of four 
smaller generators, four switchboards, and four bus ties. All other 
things being equal, a bus failure on the first power system would 
result in a 50 percent reduction in power and thrust, while a bus 
failure on the second would result in a 25 percent reduction.
    For these reasons, and particularly because of the higher risk 
profile of these vessels when they are engaging in Critical OCS 
Activities with a DP system, more rigorous safety standards are 
necessary.

Dynamic Positioning Verification Acceptance Document (DPVAD)

    Proposed 33 CFR 140.335 would create a new document for vessels 
other than MODUs of at least 500 GT ITC, and MODUs that use a DP system 
to conduct Critical OCS Activities.
    A DPVAD would document compliance with the requirements of this 
NPRM. This document would need to be renewed every 5 years, and would 
be issued by a DPSAO after verifying that the vessel has met the 
applicable DP requirements in this NPRM.

Training

    Operating a DP system requires such familiarity with the system 
that the industry and international community have developed the term 
DPO to describe a person qualified to operate a vessel in DP system 
mode. This NPRM proposes to adopt that term, as well as the related 
concept of a qualified trainee, called a DPOQ. Both terms are defined 
in proposed 33 CFR 140.305.
    We propose to require that when using a DP system to maintain 
station, a DPO must either operate the DP system or supervise a DPOQ 
who is operating the DP system. A DPOQ, if present, may operate the DP 
system if the DPO and the vessel's master have endorsed the DPOQ in 
writing. Both the DPO and DPOQ must be mariners holding credentials as 
a rating forming part of the navigational watch, able seafarer-deck, 
operational-level deck officer, chief mate, master, a rating forming 
part of the engineering watch, able seafarer-engine, operational-level 
engineer officer, second engineer, or chief engineer, and must have 
completed the applicable DP system training set out in proposed 33 CFR 
140.315.
    The training requirements for the DPO and DPOQ are based on 
international standards: Section B-V/e of the STCW Code; IMCA M 117 
Rev.1, ``The Training and Experience of Key DP Personnel''; and IMO 
MSC/Circ. 738, ``Guidelines for Dynamic Positioning System (DP) 
Operator Training''. There are several training facilities in the 
United States that are certified by the Nautical Institute, which has 
established industry-accepted standards meeting the IMO and IMCA 
guidance. Mariners who receive the training specified in proposed 33 
CFR 140.315, and familiarize themselves with the specific system to be 
operated on a particular vessel, are qualified to operate that MODU or 
other vessel in DP mode.
    A DPOQ, by contrast, is a trainee qualified to operate a DP system 
when directly supervised by a DPO. The DPOQ must complete training that 
provides an introduction to the functions and use of a DP system, as 
well as 30 days of training on board any DP system-equipped vessel, and 
must demonstrate understanding of the specific vessel's system he or 
she would operate such that the DPO and the vessel's master give 
written endorsements of the DPOQ's qualifications. This training 
sequence is based on IMCA M 117, and is in keeping with current 
industry practices.
    Because DP systems vary widely, qualifying as a DPOQ is vessel 
specific; a DPOQ from one vessel would still require familiarization to 
qualify as another vessel's DPOQ. The DPOQ must be familiar with the 
specific vessel's DP system, including the generation, distribution, 
and management of power. The DPOQ also must have a thorough knowledge 
of the CAMO and either the ASOC or WSOC, and must be familiar with the 
vessel's FMEA so that he or she understands the vessel's capabilities 
and can anticipate the vessel's movements in the event of DP system 
failure or other reduced operating capacity. Although we recognize that 
mariners working on board MODUs and other vessels should also have 
additional knowledge and understanding of the industrial mission, as 
provided in IMO Resolution A.1079(28), ``Recommendations for the 
training and certification of personnel on mobile offshore units 
(MOUs),'' such a requirement is outside the scope of this rulemaking.
    All records of training for the DPO and DPOQ must be maintained by 
that individual and the owner or operator of the vessel. The Coast 
Guard would accept company letters, course completion certificates from 
a training institution, letters or course completion certificates from 
the DP system manufacturer, or certifications from an industry-accepted 
organization as proof that the seafarer received training.

Manning and Watchkeeping

    We also propose to include a definition of DP system in 33 CFR 
140.305 and 46 CFR 62.10.1 to make clear that a vessel using a DP 
system is a vessel ``underway.'' As discussed above in the 
``Background'' section of this preamble, a vessel using a DP system is 
underway when it is not at anchor, made fast to the shore or ocean 
bottom, aground, or in an on-location or laid-up status. Clarifying 
that a vessel conducting DP operations is underway would ensure that 
appropriate manning, training, certification, and hours of rest 
requirements apply.
    To address the application of the STCW Convention to MODUs and 
other vessels using a DP system to engage in OCS activities on the U.S. 
OCS, we propose manning requirements in 33 CFR 140.320 that meet the 
training, certification, and watchkeeping provisions of the STCW 
Convention. The specifics of these requirements are discussed below.
    We propose a risk-based approach using a performance standard in 33 
CFR 140.310 to determine the number of DPOs and DPOQs necessary for the 
safe operation of the DP system. The performance standard includes 
compliance with STCW hours of rest, conditions for the operation with a 
DPO and DPOQ, use of the officer of the watch as the DPO, and 
consideration of the nature of the DP operations and the DP system. 
This approach provides the flexibility to use different configurations 
when operations or the DP system may require additional personnel, in 
order to enhance navigational situational awareness.
    To ensure proper navigation and adequate operational oversight of 
DPOs, we are proposing a requirement in 33 CFR 140.320 that any MODU or 
other vessel using a DP to engage in OCS activities on the U.S. OCS 
must be under the command of a master and maintain navigational 
watches.
    These proposed requirements are necessary for the safety of the 
vessel and its personnel in the event of a loss of position that 
requires the use of manual control, and when other navigational issues 
arise that are beyond the duties and responsibilities of the DPO. Even 
when maintaining a fixed position using a functional DP system, a 
situation may arise, such as avoiding a collision with a vessel, that 
would be outside of the scope of a DPO's training, authority, and skill 
level, and require a qualified master and navigational watch. 
Additionally, these proposed

[[Page 70954]]

requirements are consistent with STCW training, certification, and 
watchkeeping provisions, as well as the requirements in 46 CFR part 15, 
that are applicable to U.S. MODUs and other vessels.
    To address the concern that the requirements in the STCW tables of 
competency for masters and officers in charge of the navigational watch 
exceed what is required in these proposed regulations for a MODU, the 
STCW Convention permits the issuance of limitations based on vessel 
types after identifying the competencies that are not applicable. 
Although the proposed requirements do not refer to specific STCW 
regulations or identify the appropriate competencies (specifically, 
knowledge, understanding, and proficiency) applicable to MODUs, the 
Coast Guard will address any differences through the issuance of 
exemptions and limitations to the credential in accordance with 46 CFR 
11.301(f). We may also consider developing policy to identify any 
differences based on MODU type, if appropriate.
    In addition, we propose to include a requirement in 33 CFR 140.320 
that the master and officers meet hours of rest requirements in 
Regulation VIII/1 of the International Convention on Standards of 
Training, Certification and Watchkeeping for Seafarers, 1978, as 
amended, and Section A-VIII/1 of the Seafarers' Training, Certification 
and Watchkeeping Code. These provisions would ensure that the 
watchkeeping personnel and the watches on board MODUs and other vessels 
are arranged to protect personnel from impairment because of fatigue. 
These proposed requirements are consistent with the existing 
regulations in 46 CFR part 15 as applicable to U.S. MODUs and other 
vessels.
    We are also proposing a requirement in 33 CFR 140.310 to ensure 
that the DPO and the officer of the watch are in direct communications 
during DP system operation. Nothing in this NPRM, however, is to be 
interpreted as removing or decreasing the responsibility of the master 
and watchstanding officers for the safe navigation and operation of the 
vessel. Changes to the authority of the master and crew on a MODU, 
including matters relating to a MODU's industrial mission, are outside 
the scope of this NPRM.
    Lastly, we propose to include a requirement in 33 CFR 140.320 that 
each MODU be issued a manning document identifying the personnel 
complement necessary to maintain watches and meet the hours of rest 
requirements. Furthermore, a provision similar to existing 46 CFR 
15.520 would permit the flag state to also consider the specialized 
nature of each MODU, including the limitations and capabilities of the 
DP system, when determining the minimum manning complement.

VI. Incorporation by Reference

    Material proposed for incorporation by reference appears in 33 CFR 
140.7, 46 CFR 61.03-1, and 46 CFR 62.05-1. See ADDRESSES for 
information on viewing this material. Copies of the material are 
available from the sources listed in 33 CFR 140.7, 46 CFR 61.03-1, and 
46 CFR 62.05-1. Before publishing a binding rule, we will submit this 
material to the Director of the Federal Register for approval of the 
incorporation by reference.

VII. Regulatory Analyses

    We developed this NPRM after considering numerous statutes and 
Executive Orders (E.O.s) related to rulemaking. Below, we summarize our 
analyses based on these statutes or E.O.s.

A. Regulatory Planning and Review

    Executive Orders 12866 (``Regulatory Planning and Review'') and 
13563 (``Improving Regulation and Regulatory Review'') direct agencies 
to assess the costs and benefits of available regulatory alternatives 
and, if regulation is necessary, to select regulatory approaches that 
maximize net benefits (including potential economic, environmental, 
public health and safety effects, distributive impacts, and equity). 
Executive Order 13563 emphasizes the importance of quantifying both 
costs and benefits, of reducing costs, of harmonizing rules, and of 
promoting flexibility. This NPRM is not a significant regulatory action 
under section 3(f) of E.O. 12866.
    Accordingly, this NPRM has not been reviewed by the Office of 
Management and Budget. A preliminary Regulatory Analysis (RA) 
discussing costs, benefits, and alternatives considered is available in 
the docket by following the instructions in the ``Viewing comments and 
documents'' section of this preamble above.
    Table 1 summarizes the impacts of this NPRM.

      Table 1--Summary of Affected Population, Costs, and Benefits
------------------------------------------------------------------------
             Category                   Notice of proposed rulemaking
------------------------------------------------------------------------
Applicability.....................  U.S.- and foreign-flag vessels that
                                     use an existing or new DP system.
Affected population over 10-year    583 existing OSVs, 53 existing
 period.                             MODUs, and 43 existing crewboats.
                                    322 future OSVs, 57 future MODUs,
                                     and 20 future crewboats.
Industry Costs (7% discount rate).  $20.180 million (annualized).
                                    $141.733 million (10-year).
Benefits (7% discount rate).......  Monetized, avoided property damage
                                     and loss of production:
                                    $8.812 million (annualized).
                                    $61.895 million (10-year).
                                    Non-quantified:
                                    Reducing the risk of injuries, loss
                                     of life, and environmental damage
                                     due to a loss of position resulting
                                     from a DP failure.
Breakeven Analysis................  One incident of the magnitude of the
                                     SAMUDRA SURAKSHA disaster would
                                     need to be prevented every 48 years
                                     for the benefits to equal the
                                     costs.
------------------------------------------------------------------------
* Please refer to the Regulatory Analysis in the docket for details.

    A summary of the RA follows.
    During interactions with industry at National Advisory Committees, 
DP conferences, and industry training seminars in DP design and 
operations, industry expressed the need for a uniform DP standard from 
the United States as a Coastal State. In response, we have developed 
this NPRM, which would provide MODUs and other vessels that engage in 
OCS Activities while using a DP system on the U.S. OCS a uniform 
standard that addresses design, construction, and operation of DP 
systems. This standard would aid

[[Page 70955]]

owners or operators in safely meeting energy market demands and 
pursuing offshore energy ventures that are farther offshore and in 
deeper waters.
    To minimize the costs to industry, we have based our proposed 
standards and requirements on established guidelines used by today's DP 
industry, specifically IMO MSC/Circ.645 and the MTS ``DP Operations 
Guide.'' We have also limited the application of the DP system design 
standards to existing and new MODUs, and to new vessels other than 
MODUs (e.g., OSVs and crewboats) that engage in Critical OCS Activities 
while using a DP system. Vessels other than MODUs, with existing DP 
systems that conduct Critical OCS Activities, would be 
``grandfathered'' from complying with the DP systems design standards, 
which are the most costly requirements of this NPRM, and would be 
permitted to phase-in operating standards, such as developing and 
maintaining an FMEA, CAMO, and ASOCs, reporting and investigating DP 
incidents, and conducting DP Surveys, according to the applicable date 
listed in Table 2.

                 Table 2--Phase-In Schedule for Vessels (Except MODUs) With Existing DP Systems
----------------------------------------------------------------------------------------------------------------
                                          Date requirements
  Tonnage of vessel other than MODU           effective               Number of OSVs and crewboats affected
----------------------------------------------------------------------------------------------------------------
At least 1,900 GT ITC................  Date of Final Rule + 3   224 OSVs and 0 Crewboats.
                                        years.
At least 900 GT ITC..................  Date of Final Rule + 6   183 OSVs and 0 Crewboats.
                                        years.
Greater than 500 GT ITC..............  Date of Final Rule + 9   85 OSVs and 1 Crewboat.
                                        years.
----------------------------------------------------------------------------------------------------------------

    This flexibility in the phase-in schedule is expected to minimize 
costs for the population of vessels most likely to not be in compliance 
with the provisions of this NPRM by date of publication of a final 
rule. Further, by extending the phase-in timeline, we have reduced the 
possibility that DP testing providers would be overwhelmed by any 
sudden increase in demand for their services. Therefore, although a 
less lengthy phase-in schedule would lead to an earlier accrual of 
benefits, it may not lead to lower costs overall, if indirect costs 
(such as a lower quality of service, longer delays between testings, 
and higher prices in the short-term) are also taken into account.
    When properly designed and operated within design limits, DP 
systems provide industry with an ability to safely maintain position, 
using these rapidly evolving, computerized systems to stay within 
meters of their desired location even in the face of wind, wave, and 
current forces. However, these systems are not immune from failures 
and, because MODUs and other vessels in this industry perform high-
hazard industrial missions, including drilling for oil and gas, 
conducting personnel transfers, and handling large quantities of oil 
and hazardous materials, a loss of position could result in an incident 
with significant loss of life or large spill of oil or hazardous 
materials. Establishing minimum standards for DP systems used to 
conduct OCS activities would promote the safety of people and property 
engaged in such operations. While this NPRM would impose no carriage 
requirements nor require use of DP, it would require that minimum 
design, operation, manning, personnel, and training requirements be met 
if the vessel is using DP.
    This NPRM would also require vessels engaged in certain critical 
situations (e.g., transfer of personnel and/or hazardous materials) to 
meet DP-2 design standards to ensure that a single failure of a primary 
component does not lead to catastrophic consequences.
    Additionally, the provisions required of MODUs and other vessels 
engaged in Critical OCS Activities enhance the capability of a DP 
system beyond what it would achieve by obtaining a DP equipment class 2 
or 3 notation from a classification society with DP rules aligned with 
IMO MSC/Circ.645. The enhanced capability enables a MODU or other 
vessel to more safely perform its industrial mission because the DP 
system is more fault-tolerant and fault-resistant, and has greater 
capability to maintain position after a worst-case failure than a 
vessel operating with DP equipment class 1. Further, these additional 
provisions would require owners or operators to develop and implement 
operational measures and decision-support tools (ASOC or WSOC, and 
CAMO) to operate a DP system within its design limits, mitigating the 
severity of a DP system failure in the event that one occurred.
Reason for Coast Guard Action
    MODUs and other vessels that use DP to engage in OCS activities 
that operate with lower safety standards may cause harm or increased 
risk of harm to human safety and the environment. The costs of these 
lower safety standards (increased risk) are not completely borne by the 
OSV or MODU owners or operators, so they are external to the business 
decisions of these owners or operators. The crew, which may face 
increased risk from lower safety standards, may not have any say in 
safety-related decisions. Since the crew may be adversely affected by 
business decisions which it may not be able to mitigate through 
increasing its price (labor cost), it absorbs the cost of the 
externality (increased risk from lower safety standards), which is a 
market failure. Oil spills that result from OSV or MODU accidents also 
impose an externality in the forms of environmental damage and clean-up 
costs that are not borne directly by the OSV and MODU owners.
Affected Population
    Based on the Coast Guard's Marine Information for Safety and Law 
Enforcement (MISLE) data, we estimate that 583 existing OSVs (460 U.S.-
flag), 53 existing MODUs (2 U.S.-flag), and 43 existing crewboats (42 
U.S.-flag) would be affected by this NPRM. Using historical population 
data from MISLE, we forecast that over the 10-year period of this 
analysis, 322 future OSVs (which include OSVs less than 6,000 GT ITC 
and OSVs of at least 6,000 GT ITC), 579 future MODUs, and 20 future 
crewboats would be affected by this NPRM.\23\
---------------------------------------------------------------------------

    \23\ Of this, 255 future OSVs, 2 future MODUs, and 16 future 
crewboats are expected to be U.S.-flag.

[[Page 70956]]



                                                                             Table 3--Summary of Affected Population
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Future     Existing    Phased-in
                                                                Future     Existing    Phased-in  OSVs of at  OSVs of at  OSVs of at
                            Year                               OSVs less   OSVs less   OSVs less     least       least       least      Future     Existing     Future     Existing    Phased-in
                                                              than 6,000  than 6,000  than 6,000   6,000 GT    6,000 GT    6,000 GT      MODUs       MODUs     crewboats   crewboats   crewboats
                                                                GT ITC      GT ITC      GT ITC        ITC         ITC         ITC
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Base........................................................  ..........         563  ..........  ..........          20  ..........  ..........          53  ..........          43  ..........
1...........................................................          22  ..........           0           5  ..........           0           6  ..........           3  ..........           0
2...........................................................          46  ..........           0          10  ..........           0          14  ..........           6  ..........           0
3...........................................................          54  ..........           0          15  ..........           0          20  ..........          10  ..........           0
4...........................................................          77  ..........         224          20  ..........          20          27  ..........          12  ..........           0
5...........................................................         102  ..........           0          25  ..........           0          33  ..........          14  ..........           0
6...........................................................         128  ..........           0          30  ..........           0          38  ..........          15  ..........           0
7...........................................................         159  ..........         183          35  ..........           0          43  ..........          16  ..........           0
8...........................................................         195  ..........           0          40  ..........           0          48  ..........          17  ..........           0
9...........................................................         233  ..........           0          45  ..........           0          53  ..........          18  ..........           0
10..........................................................         272  ..........          85          50  ..........           0          57  ..........          20  ..........           1
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    This NPRM would create design, operating, manning, and safety 
standards by adding or amending regulations in the following 
categories:
Minimum DP System Requirements
    DPO and DPOQ Personnel and Training \24\ (33 CFR 140.310 and 
140.315)--would establish the minimum number of DPOs and DPOQs 
necessary for the safe operation of the DP system, as well as minimum 
training and experience requirements that a DPO or DPOQ must meet prior 
to operating a DP system on the U.S. OCS. A DPO or DPOQ must 
demonstrate thorough knowledge of the vessel's DP system components, 
operational manuals, and the CAMO and ASOC or WSOC. We expect no 
additional cost to be incurred by industry as a result of these manning 
requirements and training procedures, because industry contracts 
currently require these standards.\25\ In addition to incorporating 
these standards into this NPRM, we would also require company letters, 
course completion certificates from a training institution, letters or 
course completion certificates from the DP system manufacturer, or 
certification from an industry-accepted organization as proof of 
completion of training requirements. We estimate that it would cost 
industry $14.30 per DPO or DPOQ to have this documentation made 
available for review by a Coast Guard official during an inspection (6 
minutes x $143.00 per hour). This cost would be incurred by an owner or 
operator each time a new DPO/DPOQ is hired.
---------------------------------------------------------------------------

    \24\ In year 1, we expect that 585 OSVs less than 6,000 GT ITC, 
25 OSVs of at least 6,000 GT ITC, 59 MODUs, and 46 crewboats would 
incur costs as a result of this provision. Over the 10-year study, 
1,078 vessels would incur costs.
    \25\ Based on teleconferences with industry that took place in 
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
---------------------------------------------------------------------------

    DP Manning Requirements (33 CFR 140.320)--would require all 
applicable MODUs and other vessels using a DP system to engage in OCS 
activities on the U.S. OCS to be under the command of a master and have 
an adequate number of mates or navigational watches to meet the hours 
of rest requirements in Regulation VIII/1 of the STCW and Section A-
VIII/1 of the ``Seafarers' Training, Certification and Watchkeeping 
Code.'' By providing some flexibility in the minimum number of required 
masters and navigational watches, we expect that all but six vessels 
would comply with this requirement prior to the issuance of a final 
rule in order to compete in international markets that already require 
this standard.\26\ We estimate that if a vessel would not have complied 
with this requirement in the absence of a final rule, then at most it 
would incur an annual cost of $1,193,920. This maximum cost would be 
incurred if a vessel did not meet the minimum number of mates and 
navigational watches as required in this proposed provision. We 
estimate that each of the six non-compliant MODUs would need to hire 
two new masters and six new navigational watches in order to comply 
with the hours of rest requirements in STCW.\27\
---------------------------------------------------------------------------

    \26\ After examining all applicable vessels' Minimum Safe 
Manning Certificates, we found only six existing U.S. OCS MODUs that 
would not comply with this requirement. All six of these MODUs are 
owned by a single entity and are flagged by Liberia, which considers 
these MODUs non-self-propelled.
    \27\ The Coast Guard assumes that these positions would operate 
under current industry practices: A master and navigational watch 
would work a 28-day on/off schedule, with each work day consisting 
of an 8-hour shift; the master would then be on call for the 
remainder of the day, while three navigational watches would rotate 
8-hour shifts throughout the day. We also expect that two masters 
and six navigational watches would alternate 28-day on/off rotations 
throughout the year in order to keep that MODU operational year 
round. As a result, one crew, which consists of three navigational 
watches and one master, would work seven rotations per year, while 
the other group would work six rotations per year.
---------------------------------------------------------------------------

Intermediate DP System Requirements
    FMEA and FMEA Proving Test Document \28\ (33 CFR 140.335, 46 CFR 
62.40-15 and 62.40-20)--would require all applicable vessels that use a 
DP system while engaging in Critical OCS Activities to complete and 
maintain an FMEA and an FMEA proving test document. An FMEA would test 
a vessel's DP system to establish design and operational limits, which 
could then be used to develop a CAMO and ASOC or WSOC. With these 
support tools, operators would have criteria for deciding when to cease 
operations to prevent a worst-case failure from occurring.
---------------------------------------------------------------------------

    \28\ In year 1, we expect that 12 OSVs under 6,000 GT ITC, and 2 
crewboats would incur costs as a result of this provision. Over the 
10-year study, 390 OSVs under 6,000 GT ITC and 14 crewboats would 
incur costs.
---------------------------------------------------------------------------

    Based on roundtable discussions that included a majority of the 
owners and operators of MODUs operating on the U.S. OCS,\29\ we expect 
that all existing and future MODUs would comply with this requirement 
even in the absence of this NPRM in order to compete in international 
markets. However, similar roundtable discussions with OSV and crewboat 
owners and operators indicated that roughly 50 percent of current 
vessels would not be in compliance with this proposed requirement. 
Owners and operators of OSVs and crewboats further indicated that it is 
likely that a similar percentage of future vessels would also not be 
compliant with these proposed requirements in the absence of a rule. 
Through statements given by FMEA testing providers, we estimate that it

[[Page 70957]]

would cost an owner or operator of a OSV or crewboat a one-time payment 
of $275,000 per vessel to comply with this proposed requirement.
---------------------------------------------------------------------------

    \29\ During the development of this NPRM, the Coast Guard held 
three roundtable discussions with representatives from various 
industry segments. Participants and summaries from these discussions 
are available at http://www.uscg.mil/hq/cg5/cg521/ cg521/.
---------------------------------------------------------------------------

    CAMO and ASOC or WSOC \30\ (33 CFR 140.335)--would require all 
applicable vessels to include in the vessel's DP Operations Manual a 
defined CAMO and, depending on whether the vessel is a MODU or vessel 
other than a MODU, a ASOC or WSOC. A vessel's CAMO is developed after 
conducting an FMEA to determine a DP system's worst-case failure. The 
CAMO will tabulate how to configure the vessel's DP system, including 
power generation and distribution, propulsion, and position reference 
systems, so that the DP system, as a whole is fault tolerant and fault 
resistant. The vessel's CAMO is then used to develop an ASOC or WSOC 
that will provide criteria on the operational, environmental, and 
equipment performance limits considered necessary for safe DP system 
operations while operating on a well. These tools are supplements to a 
DP-2 or higher class system, which would further decrease the 
probability that a worst-case failure could occur.
---------------------------------------------------------------------------

    \30\ In year 1, we expect that 15 OSVs, and 2 crewboats would 
incur costs as a result of this provision. Over the 10-year study, 
390 OSVs under 6,000 GT ITC, 40 OSVs of at least 6,000 GT ITC, 35 
MODUs (only the cost of a CAMO), and 14 crewboats would incur costs.
---------------------------------------------------------------------------

    Based on roundtable discussions with MODU owners and operators, all 
existing and future MODUs are expected to comply with the requirement 
that a MODU must have a WSOC, although only 70 percent of existing and 
future MODUs have--or are expected to have--developed a CAMO in the 
absence of this proposed rule.\31\ Similar conversations with owners 
and operators of OSVs and crewboats indicated that approximately 50 
percent of current vessels would not be compliant with either of these 
requirements. Owners and operators of OSVs and crewboats further 
indicated that it is likely that a similar percentage of future vessels 
would also not be compliant with these requirements in the absence of a 
rule. Through statements provided by industry, we estimate that it 
would cost an owner or operator a one-time payment of $9,120 per vessel 
to develop a CAMO and ASOC or WSOC simultaneously (160 hours x $59.00 
per hour), or $4,560 to develop a CAMO or ASOC or WSOC separately (80 
hours x $59.00 per hour).
---------------------------------------------------------------------------

    \31\ Based on teleconferences with industry that took place in 
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
---------------------------------------------------------------------------

    Report Reactive Change of DP Status \32\ (33 CFR 140.335)--would 
require all applicable vessels to report to an authorized DPSAO any 
incident in which the vessel experiences a reactive change of the DP 
system's status from green to yellow and/or red. Neither the Coast 
Guard nor the IMO or MTS currently require vessels that use DP systems 
to report changes in status. The Coast Guard reviewed documents 
compiled by the International Marine Contractors Association (IMCA), 
which is an international trade association that represents offshore, 
marine, and underwater engineering companies. The IMCA documents 
compile Dynamic Positioning station-keeping incidents voluntarily 
reported by IMCA members. Although the documents do not specifically 
note whether an incident results in a change in status (i.e., green to 
red or yellow), IMCA notes that an activated red DP alert status would 
classify as an incident. We use the IMCA incident rate per vessel as 
the best available data on the change in status from green to red.
---------------------------------------------------------------------------

    \32\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5 
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur 
costs as a result of this provision. Over the 10-year study, 764 
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110 
MODUs, and 21 crewboats would need to report DP incidents.
---------------------------------------------------------------------------

    Based on a review of IMCA station keeping incident reports from 
2004 through 2010 (which is the last year the report was available 
publically), we estimated that a vessel would experience a reactive 
change of the DP system's status from green to red an average of 1.45 
times per year.\33\ Based on subject matter expert input from Coast 
Guard personnel in the Office of Design and Engineering Standards, we 
assume that vessels would incur a similar number of reactive changes of 
the DP system's status from green to yellow, and therefore estimate 
that an owner or operator would need to report an average of 2.90 
incidents per year per vessel. The rate of DP incidents per vessel may 
decrease over time as a result of other requirements in this proposal. 
We assess the impact of the decreased incident rate in the Benefits 
section of this document.
---------------------------------------------------------------------------

    \33\ These reports can be purchased through the IMCA Web site 
at: http://www.imca-int.com/.
---------------------------------------------------------------------------

    Because this proposed requirement would be new, we anticipate 
creating new burdens for industry. We estimate that it would cost an 
owner or operator $47.67 per change in DP status to comply with this 
proposed requirement (20 minutes x $143 per hour). Further, we estimate 
that it would cost the authorized DPSAO $13.67 per change in DP status 
to review and record the information, which we assume would be passed 
on to the owner or operator through the form of the DPSAO charging 
higher prices for its services (20 minutes x $41.00 per hour).\34\
---------------------------------------------------------------------------

    \34\ According to a Coast Guard Subject Matter Expert, it would 
take an owner or operator 20 minutes to report a DP status change to 
a DPSAO--which is expected to be done via email, and that it would 
take an employee from the DPSAO an additional 20 minutes to read and 
respond to this report.
---------------------------------------------------------------------------

    DP Incident Investigations \35\ (33 CFR 140.335)--would require all 
applicable MODUs and other vessels to conduct a DP incident 
investigation for every reported DP status change from green to red or 
yellow, and then to submit a summary report of the investigation's 
findings to the authorized DPSAO. As every DP incident would require a 
DP investigation, we estimate that an average of 2.90 DP incident 
investigations would need to be conducted per year per vessel.
---------------------------------------------------------------------------

    \35\ In year 1, we expect that 12 OSVs under 6,000 GT ITC, 3 
OSVs of at least 6,000 GT ITC, and 3 crewboats would incur costs to 
conduct DP investigations. Additionally, 22 OSVs under 6,000 GT ITC, 
5 OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would 
incur costs to submit DP investigation reports to the DPSAO during 
the first year. Over the 10-year study, 383 OSVs under 6,000 GT ITC, 
35 OSVs of at least 6,000 GT ITC, and 21 crewboats would incur costs 
to conduct DP investigations, and 895 OSVs under 6,000 GT ITC, 70 
OSVs of at least 6,000 GT ITC, 110 MODUs, and 21 crewboats would 
need to submit DP investigation reports.
---------------------------------------------------------------------------

    After conducting roundtable discussions with owners and operators 
of MODUs and other vessels, we determined that all existing MODUs and 
50 percent of existing OSVs are currently conducting DP investigations 
following a DP incident, despite not being required to do so.\36\ 
Through these same roundtable discussions, we determined that no owners 
or operators of crewboats currently conduct an investigation following 
a DP incident. For owners or operators that do not, or would not, 
conduct a DP incident investigation in the absence of a rule, we 
estimate that it would cost $570 per DP incident to conduct the 
investigation (10 hours x $57.00 per hour).\37\
---------------------------------------------------------------------------

    \36\ Based on teleconferences with industry that took place in 
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
    \37\ According to a Coast Guard Subject Matter Expert, it would 
take 10 hours on average for a ship engineer employed by the owner 
or operator to conduct a DP incident investigation.
---------------------------------------------------------------------------

    In addition to the costs that would be incurred to conduct DP 
incident investigations, all owners or operators using DP while 
conducting Critical OCS Activities would experience new costs to submit 
the summary report of the DP investigation to the authorized DPSAO.

[[Page 70958]]

As this is a new reporting requirement, it is not expected that any of 
the affected population would be compliant with this part of the 
provision in the absence of this NPRM. Consequently, we estimate that 
it would cost an owner or operator $119.10 per DP incident 
investigation to write the summary report and then submit it to the 
authorized DPSAO ((2 hours x $57.00 per hour) + $5.10 shipping 
fee).\38\ Further, we estimate that it would cost an authorized DPSAO 
$82.00 per report to review and record the information, which we assume 
would then be passed on to the owner or operator through the form of 
the DPSAO charging higher prices for its services (2 hours x $41.00 per 
hour).\39\
---------------------------------------------------------------------------

    \38\ According to a Coast Guard Subject Matter Expert, it would 
take a ship engineer 2 additional hours to write a DP investigation 
summary and then submit it to the DPSAO. Also included in this 
estimate is the time it would take on average to make changes to the 
vessel's CAMO and ASOCs/WSOCs.
    \39\ According to a Coast Guard Subject Matter Expert, it would 
take a DPSAO employee 2 hours on average to read through the report 
and respond if necessary.
---------------------------------------------------------------------------

    Annual DP Incident Investigation Report \40\ (46 CFR 61.50-4)--
would require a DPSAO to submit an annual report containing a summary 
of each DP incident investigation conducted throughout the year for all 
vessels using its services. Because this would be a new requirement, we 
anticipate new burdens for industry and estimate that it would cost an 
owner or operator $169.10 per year to have the DPSAO file the annual 
report ((4 hours x $41.00 per hour) + $5.10 shipping fee).\41\ Further, 
we estimate that it would cost the Government $150.00 per report to 
review the information provided and respond if necessary (2 hours x 
$75.00 per hour).
---------------------------------------------------------------------------

    \40\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5 
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur 
costs as a result of this provision. Over the 10-year study, 764 
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110 
MODUs, and 21 crewboats would need to submit annual DP investigation 
reports.
    \41\ According to a Coast Guard Subject Matter Expert, it would 
take a DPSAO employee 4 hours on average to prepare the Annual DP 
Incident Investigation Report on behalf of the owner or operator.
---------------------------------------------------------------------------

    Emergency Disconnects and Serious Marine Incidents Resulting from a 
DP Status Change from Green to Red (33 CFR 140.335)--would require all 
applicable vessels to report to the cognizant OCMI any incident in 
which the vessel initiates an emergency disconnect or experiences a 
serious marine incident (as defined by 46 CFR 4.03-2) after 
experiencing a reactive change of the DP system's status from green to 
red. Based on a review of IMCA documents from 2004 through 2010, we 
estimated that a vessel would need to initiate an emergency disconnect 
19 percent of the time it experiences a DP change in status. Further, 
based on the same industry documents, a serious marine incident (as 
defined by 46 CFR 4.03-2) would occur 5 percent of the time a vessel 
experiences a reactive change of the DP system's status from green to 
red. Because this is a new requirement, we anticipate creating new 
burdens for industry. We estimate that it would cost an owner or 
operator $47.67 per status change resulting in either an emergency 
disconnect or serious marine incident to comply with this requirement 
(20 minutes x $143.00 per hour). Further, we estimate that it would 
cost the government $25.00 per report to review and record the 
information (20 minutes x $75.00 per hour).
    Dynamic Positioning Verification and Acceptance Document (DPVAD) 
\42\ (33 CFR 140.335)--would create a new document for MODUs and 
applicable vessels, other than MODUs, that use a DP system to conduct 
Critical OCS Activities. This document would be issued by the 
authorized DPSAO that performed the vessel's DP surveys, and would need 
to be renewed once every 5 years.
---------------------------------------------------------------------------

    \42\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5 
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur 
costs as a result of this provision. Over the 10-year study, 764 
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110 
MODUs, and 21 crewboats would need to receive a DPVAD.
---------------------------------------------------------------------------

    According to a Coast Guard Subject Matter Expert, it is expected 
that it would take an additional 15 minutes for a DPSAO surveyor to 
complete the DPVAD, as the DPVAD would be issued by the same DPSAO that 
conducted the vessel's DP surveys. As a result, we estimate that it 
would cost an owner or operator $10.25 once every 5 years to comply 
with this provision (15 minutes x $41.00 per hour).
    DP Surveys \43\ (46 CFR 61.50-2, 61.50-5, 61.50-10, and 61.50-15)--
would require all applicable vessels to have a DPSAO conduct DP system 
surveys on an initial, periodic, and annual basis. The organization 
could be the classification society that issues the DP notation under 
62.40-5, because the NPRM would require that the classification society 
issuing the DP notation be highly qualified in DP system assurance. 
During the initial survey, and again during the periodic survey 5 years 
later, a full FMEA test must be performed. Based on roundtable 
discussions with owners and operators of MODUs and other vessels, of at 
least 6,000 GT ITC, we have determined that all existing vessels are 
currently in compliance with this requirement and that all future 
vessels would also be in compliance with this requirement.\44\ However, 
this provision would also require a DPSAO to notify the cognizant OCMI 
at least 30 days in advance of the time and location of these DP 
surveys. Because this is a new requirement, we anticipate new burdens 
for industry. We estimate that it would cost an owner or operator $4.10 
per year to comply with this requirement (6 minutes x $41.00 per 
hour).\45\ Further, we anticipate that the OCMI would be present during 
most DP surveys. However, as we anticipate that these surveys would 
occur in conjunction with another Coast Guard inspection, the cost 
incurred by the Coast Guard to attend DP surveys would be minimized. We 
estimate that it would cost the Government an additional $607.50 per 
survey as a result of this NPRM ((6 minutes to record the time and 
location of survey + 8 hours to attend the survey) x $75.00 per 
hour).\46\
---------------------------------------------------------------------------

    \43\ In year 1, we expect that 22 OSVs under 6,000 GT ITC, 5 
OSVs of at least 6,000 GT ITC, 59 MODUs, and 3 crewboats would incur 
costs as a result of this provision. Over the 10-year study, 764 
OSVs under 6,000 GT ITC, 70 OSVs of at least 6,000 GT ITC, 110 
MODUs, and 21 crewboats would need to report the time and location 
of the DP Survey.
    \44\ Based on teleconferences with industry that took place in 
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
    \45\ According to a Coast Guard Subject Matter Expert, it would 
take a DPSAO employee 6 minutes on average to notify the OCMI on the 
time and location of the DP Survey.
    \46\ According to a Coast Guard Subject Matter Expert, a DP 
Survey would take approximately 8 hours to conduct.
---------------------------------------------------------------------------

Standard DP System Requirements
    DP System Equipment and Notation Requirements \47\ (46 CFR 62.40-
5)--would require all applicable vessels that use a DP system while 
engaging in Critical OCS Activities to use, at a minimum, a DP-2 class 
system and to obtain, at a minimum, a DP-2 class notation.
    Based on vessel specification sheets made publicly available by 
MODU owners and operators, all existing MODUs comply with this proposed 
requirement, even in the absence of this NPRM, in order to compete in 
international markets.\48\ The same cannot be said about vessels other 
than MODUs that use DP, however. After

[[Page 70959]]

examining existing OSV's and crewboat's vessel specification sheets, we 
have determined that only 60 percent of existing OSVs and 70 percent of 
existing crewboats that use DP would comply with the DP-2 equipment 
requirement. Because of the mechanical and structural demands 
associated with DP-2 systems or higher that are not feasible to satisfy 
in older vessels, the Coast Guard proposes to make the existing 
population of OSVs and crewboats exempt from the DP-2 equipment 
requirements of this NPRM.
---------------------------------------------------------------------------

    \47\ In year 1, we expect that 12 OSVs under 6,000 GT ITC, and 3 
crewboats would incur costs to obtain DP-2 class notation. Over the 
10-year study, 143 OSVs under 6,000 GT ITC, and 20 crewboats would 
incur costs as a result of this requirement.
    \48\ We assume that owners and operators of MODUs will continue 
to follow this practice in the future.
---------------------------------------------------------------------------

    Our research indicates, however, that offshore oil and gas entities 
are starting to require that all new, contracted OSVs be equipped with 
DP-2 systems or higher.\49\ This same request is not yet being made for 
all new, contracted crewboats though. As a result, we estimate that in 
the years 1 through 3 following the passage of a final rule, one, newly 
constructed crewboat per year would incur costs in order to comply with 
the DP-2 equipment requirement. In later years though, all crewboats 
are expected to be equipped with a DP-2 classed system even in the 
absence of this proposed rule.
---------------------------------------------------------------------------

    \49\ Tollefsen, Sveinung. ``DP systems in the OSV Industry,'' 
May 2010. http://dspace.mit.edu/bitstream/handle/1721.1/64580/727052552.pdf?sequence=1.
---------------------------------------------------------------------------

    In addition to determining the percentage of existing OSVs and 
crewboats that would comply with the equipment standard in this 
proposed rule, we also determined through looking at vessel 
specification sheets that only 50 percent of existing OSVs and 0 
percent of existing crewboats would comply with the class notation 
requirement. We have found that although this NPRM would grandfather 
certain vessels (other than MODUs) that use a DP system installed prior 
to issuance of any rule from this provision, owners or operators of 
OSVs and crewboats have pointed out during roundtable discussions that 
it is likely that a similar percentage of future vessels would also not 
be compliant with this requirement in the absence of a proposed rule.
    We estimate that it would cost an owner or operator $876,237 per 
vessel to comply with the requirement that a vessel using DP to engage 
in Critical OCS Activities must use a DP-2 class system or higher, and 
an additional one-time payment of $64,250 per vessel to obtain a DP-2 
class notation.
Enhanced DP System Requirements
    DP System Plans \50\ (46 CFR 62.20-2)--would require all MODUs and 
other vessels, of at least 6,000 GT ITC, that use a DP system installed 
on or after the effective date of a final rule to submit their DP 
system plans to a DPSAO for approval. The organization could be the 
classification society that issues the DP notation under 62.40-5, 
because the NPRM would require that the classification society issuing 
the DP notation be highly qualified in DP system assurance. As 
proposed, these plans must include a system description, specifications 
of position reference and environmental monitoring sensors or systems, 
the location of thrusters and control system components, details of the 
DP system monitoring and alarm system, FMEA proving test documents and 
annual survey documents, the vessel's CAMO, and the DP system 
designer's or manufacture's self-certification of the DP system control 
equipment to the environmental design standards.
---------------------------------------------------------------------------

    \50\ In year 1, we expect that 5 OSVs of at least 6,000 GT ITC, 
and 59 MODUS would incur costs to submit their DP system plans to 
the DPSAO. Over the 10-year study, 50 OSVs of at least 6,000 GT ITC, 
and 110 MODUs would incur costs as a result of this proposed 
requirement.
---------------------------------------------------------------------------

    Based on roundtable discussions with owners and operators of MODUs 
and other vessels, of at least 6,000 GT ITC, we have determined that 
all vessels currently would be in compliance with this requirement in 
the absence of a rule.\51\ However, this provision would also require 
the DPSAO to submit the plans to the Coast Guard Outer Continental 
Shelf National Center of Expertise (OCS NCOE). Because this is a new 
requirement, we anticipate new burdens for industry. We estimate that 
it would cost a DPSAO $25.60 ((30 minutes x $41.00 per hour) + $5.10 
shipping fee) to submit a vessel's DP system plan.\52\ Further, we 
estimate that it would cost the Government $2,700.00 (36 hours x $75.00 
per hour) to review a DP system plan.
---------------------------------------------------------------------------

    \51\ Based on teleconferences with industry that took place in 
January 2013. The minutes are publicly available at http://www.uscg.mil/hq/cg5/cg521/.
    \52\ According to a Coast Guard Subject Matter Expert, it would 
take 30 minutes for a DPSAO to prepare and submit a vessel's DP 
system plan to the Coast Guard.
---------------------------------------------------------------------------

Other
    Dynamic Positioning System Assurance Organization Application 
Process (46 CFR 61.50-3 and 62.40-5)--would require a DPSAO (for the 
purposes of conducting DP surveys under 61.50) to apply to the Coast 
Guard for acceptance to provide these services. This provision provides 
guidelines as to who should apply, as well as what information the 
applicant should provide in the application. We estimate that it would 
cost a DPSAO $1,235.10 to prepare and submit each application ((30 
hours x $41.00 per hour) + $5.10 shipping fee). Further, we estimate 
that it would cost the Government $600.00 per application to review 
each document and reach a decision (8 hours x $75.00 per hour).
Request for Comment
    We would appreciate additional comments on our cost assumptions, 
including rates of current compliance. Information is specifically 
requested on the following:
    (1) Fraction of current MODUs, OSVs and crewboats using DP-1, DP-2, 
or DP-3.
    (2) Fraction of newly built MODUs, OSVs and crewboats being 
equipped with DP-1, DP-2, or DP-3.
    (3) Frequency of changes in DP status from green to red and green 
to yellow.
    (4) Costs to develop an FMEA and WSOC/ASOC.
    (5) Additional cost to equip a newly built vessel with DP-2 instead 
of DP-1.

Please submit all comments and related material according to the 
instructions given in the DATES, ADDRESSES, and Public Participation 
and Request for Comments sections of this preamble above.
Costs
    We estimate the total average costs of this NPRM to industry for a 
10-year period as summarized in Table 4.\53\
---------------------------------------------------------------------------

    \53\ We document the costs at a 7- and 3-percent discount rate 
as set forth by guidance in the Office of Management and Budget's 
(OMB) Circular A-4.

                                      Table 4--Total Industry Cost of NPRM
                                                   [Per year]
----------------------------------------------------------------------------------------------------------------
                                                                                       Discounted costs
                           Year                               Undiscounted   -----------------------------------
                                                                  costs              7%                3%
----------------------------------------------------------------------------------------------------------------
1.........................................................       $13,295,128       $11,612,479       $12,531,933

[[Page 70960]]

 
2.........................................................        13,583,758        11,864,581        12,803,995
3.........................................................        10,900,925         8,898,402         9,975,891
4.........................................................        44,460,494        33,918,698        39,502,573
5.........................................................        12,960,131         9,240,394        11,179,523
6.........................................................        12,958,982         8,635,117        10,852,943
7.........................................................        40,540,725        25,246,726        32,963,320
8.........................................................        15,177,650         8,833,530        11,981,377
9.........................................................        15,965,539         8,684,195        12,236,256
10........................................................        29,112,460        14,799,299        21,662,405
                                                           -----------------------------------------------------
    Total.................................................       208,955,792       141,733,422       175,690,215
                                                           -----------------------------------------------------
Annualized................................................  ................       $20,179,651       $20,596,253
----------------------------------------------------------------------------------------------------------------

    The 10-year discounted present value cost to industry of this NPRM 
is approximately $141.733 million ($73.239 million to domestic owners 
or operators), based on a 7-percent discount rate, and $175.690 million 
($91.389 million to domestic owners or operators), based on a 3-percent 
discount rate. The annualized cost to industry is $20.180 million 
($10.428 million to domestic owners or operators), based on a 7-percent 
discount rate, and $20.596 million ($10.714 million to domestic owners 
or operators), based on a 3-percent discount rate.
    Table 5 summarizes the total 10-year present value cost to industry 
of this NPRM by risk profile and requirement.

                 Table 5--Total Marginal and Annualized Industry Costs for NPRM by Risk Profile
----------------------------------------------------------------------------------------------------------------
                                                   10-year cost                             Annualized
           Requirement           -------------------------------------------------------------------------------
                                   Undiscounted         7%              3%              7%              3%
----------------------------------------------------------------------------------------------------------------
                                         Minimum DP Manning Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Provide Proof of                $467,996        $332,365        $400,855         $47,321         $46,992
 Training.......................
Cost to Comply with DP Manning        71,635,200      50,313,567      61,106,279       7,163,520       7,163,520
 Requirements...................
                                 -------------------------------------------------------------------------------
    Total.......................      72,103,196      50,645,932      61,507,133       7,210,841       7,210,512
----------------------------------------------------------------------------------------------------------------
                                       Intermediate DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Complete FMEA and FMEA       111,100,000      74,383,054      92,903,263      10,590,474      10,891,097
 Proving Test Document..........
Cost to Develop CAMO and ASOC or       4,208,880       2,858,478       3,540,664         406,983         415,074
 WSOC...........................
Cost to Report DP Status Changes         905,587         565,296         734,721          80,485          86,132
 from Green to Red or Yellow....
Cost to Conduct DP Incident            6,591,592       4,081,179       5,329,997         581,068         624,838
 Investigations.................
Cost to Submit Annual DP                 860,550         537,146         698,162          76,478          81,846
 Incident Investigation Report..
Cost to Report Emergency                  28,791          18,548          23,667           2,641           2,774
 Disconnect and Serious Marine
 Incidents......................
Cost to Obtain a DPVAD..........          14,719           9,594          12,159           1,366           1,425
Cost to Report DP Surveys.......          20,865          13,024          16,928           1,854           1,984
                                 -------------------------------------------------------------------------------
    Total.......................     123,730,983      82,466,319     103,259,560      11,741,349      12,105,171
----------------------------------------------------------------------------------------------------------------
                                         Standard DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Obtain DP-2 System             2,628,711       2,299,523       2,478,534         327,400         290,560
 Equipment......................
Cost to Obtain DP-2 Class             10,472,750       7,119,161       8,803,142       1,013,608       1,031,997
 Notation.......................
                                 -------------------------------------------------------------------------------
    Total.......................      13,101,461       9,418,684      11,281,676       1,341,009       1,322,557
----------------------------------------------------------------------------------------------------------------
                                         Enhanced DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Submit DP System Plans..           4,096           3,222           3,670             459             430
                                 -------------------------------------------------------------------------------
    Total.......................           4,096           3,222           3,670             459             430
----------------------------------------------------------------------------------------------------------------


[[Page 70961]]

    We also expect that the Government would incur labor costs to 
review DPO/DPOQ training certificates, annual DP investigation reports, 
notices of Emergency Disconnects or Serious Marine Incidents that 
resulted from a DP failure, DPSAO applications, and DP system plans, as 
well as to attend DP surveys. Table 6 summarizes the 10-year costs of 
this NPRM to the Government.

                                     Table 6--Total Government Cost of NPRM
                                                   [Per year]
----------------------------------------------------------------------------------------------------------------
                                                                                       Discounted costs
                           Year                               Undiscounted   -----------------------------------
                                                                  costs              7%                3%
----------------------------------------------------------------------------------------------------------------
1.........................................................          $286,068          $267,353          $277,735
2.........................................................           153,180           133,793           144,387
3.........................................................           165,220           134,869           151,200
4.........................................................           382,700           291,960           340,024
5.........................................................           409,808           292,187           353,504
6.........................................................           436,068           290,570           365,200
7.........................................................           608,143           378,721           494,476
8.........................................................           645,120           375,466           509,264
9.........................................................           683,585           371,825           523,911
10........................................................           785,380           399,247           584,396
                                                           -----------------------------------------------------
    Total.................................................         4,555,270         2,935,991         3,744,096
                                                           -----------------------------------------------------
Annualized................................................           418,019           438,922
----------------------------------------------------------------------------------------------------------------

    The 10-year discounted present value cost to the Government of this 
NPRM is approximately $2.936 million based on a 7-percent discount 
rate, and $3.744 million based on a 3-percent discount rate. The 
annualized cost to industry is approximately $0.418 million, based on a 
7-percent discount rate, and $0.439 million, based on a 3-percent 
discount rate.
    Table 7 summarizes, by requirement, the total 10-year present value 
cost of this NPRM to the Government.

                Table 7--Total Marginal and Annualized Government Costs for NPRM by Risk Profile
----------------------------------------------------------------------------------------------------------------
                                                   10-Year cost                             Annualized
           Requirement           -------------------------------------------------------------------------------
                                   Undiscounted         7%              3%              7%              3%
----------------------------------------------------------------------------------------------------------------
                                         Minimum DP Manning Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Review Proof of Training        $245,453        $174,317        $210,238         $24,819         $24,646
                                 -------------------------------------------------------------------------------
    Total.......................         245,453         174,317         210,238          24,819          24,646
----------------------------------------------------------------------------------------------------------------
                                       Intermediate DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Review Annual DP                 763,350         476,475         619,304          67,839          72,601
 Incident Investigation Report..
Cost to Review Emergency                  15,100           9,728          12,413           1,385           1,455
 Disconnect and Serious Marine
 Incidents......................
Cost to Record and Attend DP           3,091,568       1,929,724       2,508,182         274,749         294,035
 Surveys........................
                                 -------------------------------------------------------------------------------
    Total.......................       3,870,018       2,415,928       3,139,899         343,974         368,092
----------------------------------------------------------------------------------------------------------------
                                         Standard DP System Requirements
----------------------------------------------------------------------------------------------------------------
No Cost to Government...........  ..............  ..............  ..............  ..............  ..............
                                 -------------------------------------------------------------------------------
    Total.......................               0               0               0               0               0
----------------------------------------------------------------------------------------------------------------
                                         Enhanced DP System Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Review DP System Plans..         432,000         339,849         387,093          48,387          45,379
                                 -------------------------------------------------------------------------------
    Total.......................         432,000         339,849         387,093          48,387          45,379
----------------------------------------------------------------------------------------------------------------
                                               Other Requirements
----------------------------------------------------------------------------------------------------------------
Cost to Review DPSAO                       7,800           5,523           6,866             786             805
 Applications...................
                                 -------------------------------------------------------------------------------
    Total.......................           7,800           5,523           6,866             786             805
----------------------------------------------------------------------------------------------------------------


[[Page 70962]]

    We estimate that the combined total 10-year present value cost of 
this NPRM to industry and Government is $144.669 million ($74.991 
million for domestic owners or operators), discounted at 7 percent, and 
$179.434 million ($93.665 million for domestic owners or operators), 
discounted at 3 percent. We estimate that the combined annualized cost 
to industry and government is $20.598 million ($10.677 million for 
domestic owners or operators), based on a 7-percent discount rate, and 
$21.035 million ($10.980 million for domestic owners or operators), 
based on a 3-percent discount rate.
    Table 8 summarizes the combined 10-year cost of this NPRM to 
industry and the Government.

                                           Table 8--Total Cost of NPRM
                                                   [Per year]
----------------------------------------------------------------------------------------------------------------
                                                                                       Discounted costs
                           Year                               Undiscounted   -----------------------------------
                                                                  costs              7%                3%
----------------------------------------------------------------------------------------------------------------
1.........................................................        13,581,195        11,879,832        12,809,668
2.........................................................        13,736,938        11,998,374        12,948,382
3.........................................................        11,066,145         9,033,271        10,127,091
4.........................................................        44,843,194        34,210,658        39,842,597
5.........................................................        13,369,939         9,532,582        11,533,027
6.........................................................        13,395,049         8,925,687        11,218,143
7.........................................................        41,148,868        25,625,447        33,457,795
8.........................................................        15,822,770         9,208,996        12,490,640
9.........................................................        16,649,124         9,056,020        12,760,167
10........................................................        29,897,840        15,198,546        22,246,801
                                                           -----------------------------------------------------
    Total.................................................       213,511,062       144,669,412       179,434,311
                                                           -----------------------------------------------------
Annualized................................................        20,597,670        21,035,175
----------------------------------------------------------------------------------------------------------------

Benefits
    As offshore drilling industry operations move farther offshore, 
maintaining vessel position and height becomes an increasingly more 
difficult task, especially as water depth precludes mooring. The 
vessel's position and height depend on an understanding of many 
variables, such as the speed and direction of waves and the wind, both 
of which can be very irregular at distances farther offshore. DP 
systems not only remove this uncertainty, they can also predict future 
changes in wave speed and direction based on current conditions.
    However, despite this advanced technology (and in some cases, 
because of this technology) a loss of position can still occur while 
operating under DP. Due to the high-risk environment that OSVs and 
MODUs work in, such a loss of position could result in catastrophic 
consequences. Property damage, environmental damages, and human 
casualties could occur in the event of a loss of position or 
propulsion.
    Table 9 presents the range of potential consequences at risk in the 
event of a DP loss of position or propulsion on a MODU, OSV, or 
crewboat.

      Table 9--Potential Monetary Consequences at Risk That Could Result From a DP System Loss of Position
----------------------------------------------------------------------------------------------------------------
            Consequence category                               Range of potential consequences
----------------------------------------------------------------------------------------------------------------
Property Damage from Collision.............  $5 million to $1 billion.
Environmental Pollution....................  $5 million to $500 million.
Riser Lost on Seabed.......................  $7 million to $70 million.
Pipe Bent or Buckled.......................  $3 million to $30 million.
Downtime from Production...................  Up to $500 thousand per day.
Loss of Life...............................  $9.1 million per statistical life.
----------------------------------------------------------------------------------------------------------------

    At this time, the Coast Guard does not have a comprehensive source 
of information on changes in DP status and the resulting loss of 
position incidents, as vessels of all types currently do not have to 
report DP failures to the Coast Guard. A provision of this NPRM seeks 
to gather this data.
    The following incidents illustrate the potential consequences at 
risk if a position is lost during DP operations. In April 2010, the 
MODU DISCOVERER CLEAR LEADER experienced a DP system failure that 
resulted in a loss of position while conducting well control operations 
on the U.S. OCS. During the incident, the DPO was able to initiate a 
cease operations response, however, an emergency disconnect was 
required. Although the MODU's blow-out preventer was able to prevent a 
spill that could potentially have been on the magnitude of the 
DEEPWATER HORIZON incident, the subsea gear of the MODU suffered 
damages as a result of the MODU's loss of position. The Coast Guard's 
MISLE database lists property damages of $760,000 as a result of this 
incident. Further, the vessel experienced a loss of revenue during the 
time when its operations were suspended.
    In September 2012, a DP incident involving the construction OSV 
BIBBY TOPAZ occurred off the coast of Scotland. During dive support 
activities, the BIBBY TOPAZ suffered a DP system failure that resulted 
in a loss of position. At the time of the incident, three divers were 
in the water, and when the vessel experienced a loss of position, the 
umbilical cord of one of the divers was severed. The diver was unable 
to return to the diving bell and had to instead rely on his standby air 
tank for almost 40 minutes. When the rescue team found the diver, he 
was unconscious, although the team was able to revive him. While

[[Page 70963]]

this incident did not result in any fatalities, the vessel's loss of 
position put the lives of three divers at risk. The VSL of the lives 
that could have been lost as a result of this incident is $27,300,000. 
Although this incident did not take place in U.S. waters, dive support 
activities while operating under DP are regularly conducted on the U.S. 
OCS, with similar consequences at risk.
    Neither of these incidents capture fully the potential worst-case 
consequences of a loss of position that results from a collision under 
power of a MODU, OSV, or crewboat. The allision of the logistics OSV 
SAMUDRA SURAKSHA with a drilling platform illustrates the types and 
potential magnitude of worst-case consequences that could result from 
an OSV loss of position. In July 2005, the SAMUDRA SURAKSHA was 
transferring personnel off the coast of India when the vessel 
experienced a loss of position \54\ and collided with a platform, 
severing a gas riser in the process. Although an emergency shut-off of 
the gas riser was initiated, gas was released, resulting in an 
explosion and massive fire. Twenty-two crewmen lost their lives or went 
missing as a result of the explosion, which, when monetized at 
$9,100,000, amounts to $200,200,000. We use the fatalities as a 
reasonable worst-case scenario of the potential consequences at risk 
from a loss of position and resulting collision between vessels or 
platforms. The incident also had environmental damage, property damage 
and loss of production impacts.
---------------------------------------------------------------------------

    \54\ The vessel was equipped with DP but was not operating under 
DP at the time of the loss of position.
---------------------------------------------------------------------------

    This NPRM mitigates the risk of a DP loss of position in several 
ways. This NPRM provides other guidance on design and operation 
standards for all DP vessels. The development of decision support tools 
such as CAMOs and ASOC or WSOC would provide DPOs and DPOQs with a 
summarized and easy to understand guide on the limits to safe operating 
conditions, which would help DPOs and DPOQs react quicker to prevent or 
mitigate a loss of position while operating DP systems.
    Furthermore, requiring owners or operators of vessels using DP 
systems to examine DP failures and submit documents describing the 
time, location, and reason for why a system failure occurred will 
enable industry and the Coast Guard to better understand the causes of 
these failures and, in time, develop programs to prevent these same 
failures from occurring in the future. Additionally, this information 
can provide assistance to manufacturers and operators of DP systems in 
order to contribute to more efficient and safer DP systems and 
practices in the future.
    To better understand how many DP system incidents occur per year, 
we reviewed reports from the International Marine Contractors 
Association (IMCA), which collects and reports incidents of DP station-
keeping incidents provided on a voluntary basis by its members. From 
2004 through 2010, the IMCA lists 429 reported DP system incidents. 
However, this figure likely underestimates the number of DP system 
incidents that occurred because during that time period, members of the 
IMCA were not required to report station-keeping incidents. As a result 
of this under-reporting, we use the average rate per year at which DP 
system incidents occurred per vessel during that same time period, 
instead of the average number of DP incidents reported per year, since 
the rate is less likely to be influenced by the number of vessels 
reporting. Figure 1 displays the trend in the number of DP incidents 
reported to the IMCA from 2004 through 2010.
[GRAPHIC] [TIFF OMITTED] TP28NO14.001

    Although reporting to the IMCA is voluntary, and therefore may not 
represent the true population mean of the entire affected population's 
DP incident rate, the IMCA data show that the rate of DP system 
incidents has remained relatively stable throughout the 7-year period 
studied, even as the number of vessels reporting has increased.\55\ 
This suggests that DP system incidents occur on a relatively

[[Page 70964]]

consistent basis (one to two times per vessel per year).
---------------------------------------------------------------------------

    \55\ Because this information was voluntarily provided to the 
IMCA, the reporting population may not be representative of the 
population as a whole. However, as the IMCA is the only organization 
that currently collects this data, it is the best data available at 
this time.
---------------------------------------------------------------------------

    The IMCA's report then categorizes the cause of each DP system 
incident that was reported as the fault of either: Environmental force, 
power/thrust equipment, DP equipment, or operator error. Figure 2 
summarizes the categories as a percentage of the total number of DP 
system incidents that occurred from 2004 through 2010 (429 total).
[GRAPHIC] [TIFF OMITTED] TP28NO14.002

    Although Figure 2 shows that only 13 percent of all DP system 
incidents are directly linked to operator error, nearly 94 percent 
could have been mitigated by attention to human factors--environmental 
faults could have been reduced through the development of a well 
defined ASOC or WSOC, power/thrust faults could have been mitigated 
through the development of a properly defined CAMO, DP system faults 
could have been reduced through the development of a well defined ASOC 
or WSOC, and operator faults could have been diminished through DPOs 
and DPOQs becoming more familiar and experienced with a vessel's ASOC 
or WSOC.\56\
---------------------------------------------------------------------------

    \56\ International Marine Contractors Association. ``Dynamic 
Positioning Station Keeping Incidents: Incidents reported for 2008 
(DP system 19)''. Pg. 2.
---------------------------------------------------------------------------

    With regard to the nonhuman, factor-related elements of this NPRM, 
DP system incidents resulting from power generation or thrust faults 
could have been mitigated through the redundancy provided by DP-2, and 
by developing and maintaining a vessel's CAMO. A CAMO would ``identify 
the equipment configuration and methods of operation that ensure the 
vessel meets its maximum level of redundancy, functionality and 
operation and that no single fault will exceed the identified worst 
case failure.'' \57\ Additionally, a CAMO would define the most robust 
configuration for the vessel's power plant set-up, thrusters, power 
management, etc., thereby diminishing the likelihood that an incident 
could occur as a result of human negligence in designing the vessel's 
operating systems.
---------------------------------------------------------------------------

    \57\ International Marine Contractors Association. ``Guidance on 
Operational Activity Planning''. November 2012. Pg. 9.
---------------------------------------------------------------------------

    Furthermore, the development and maintenance of an ASOC or WSOC 
could reduce the probability that a DP system incident occurs as a 
result of a DP reference or DP computer fault. The ASOC or WSOC would 
define, among other things, ``maximum environmental operating 
conditions, maximum offsets permissible from the set point position, 
position reference systems, and auxiliary systems performance limits 
and failures.'' \58\ These guidelines would program the DP computer to 
signal to the DPO or DPOQ to cease operations whenever the vessel 
diverged from the maximum limits set in the ASOC or WSOC.
---------------------------------------------------------------------------

    \58\ IMCA. ``Guidance on Operational Activity Planning''. 
November 2012. Pg. 11.
---------------------------------------------------------------------------

    While the majority of DP system incidents are correctly identified 
and resolved through the DPO or DPOQ manually taking control of the 
system, inaction or delayed action can have immense consequences. If 
left unchecked, a DP incident could result in a loss of position or 
propulsion, a short circuit of the electrical equipment, and/or an 
emergency disconnect. These events could result in major property 
damage to the vessel and/or any surrounding vessels and facilities, 
lost revenue as a result of any downtime caused by damages, injury or 
loss of life, and/or environmental damage as a result of released oil 
or other chemicals.
    Table 10 provides greater detail on how each NPRM provision 
supports one of the four below categories:
     Design Standards and Classification;
     Operations;
     Manning and Training; and
     Reporting.

[[Page 70965]]



                                                      Table 10--Description of Benefits of the NPRM
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                   Design standards &                         Manning &                                           How provision reduces
          Key provision              classification        Operations          training        Reporting         Description               risk
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    33 CFR Part 140--Navigation and Navigable Waters
--------------------------------------------------------------------------------------------------------------------------------------------------------
140.310 DP system personnel       ...................  ..................  ...............  ...............  Requires all        Codifies industry
 requirements.                                                                                                vessels that use    standards that each
                                                                                                              a DP system to      DPO and DPOQ must
                                                                                                              conduct OCS         follow while
                                                                                                              activities to       performing duties,
                                                                                                              have a DPO or       which reduces the
                                                                                                              DPOQ who is         likelihood of
                                                                                                              properly trained    casualties occurring
                                                                                                              and has no other    from operator fatigue,
                                                                                                              responsibilities    inattention or
                                                                                                              outside of DP.      inexperience.
140.315 Minimum DP system         ...................  ..................  ...............  ...............  Defines the         Codifies industry
 training requirements.                                                                                       minimum training    standards that each
                                                                                                              requirements that   DPO and DPOQ must
                                                                                                              each DPO and DPOQ   follow while
                                                                                                              must have before    performing duties,
                                                                                                              operating a DP      which reduces the
                                                                                                              system.             likelihood of
                                                                                                                                  casualties occurring
                                                                                                                                  from inexperience.
                                                                                                             Requires owners or  Enables compliance
                                                                                                              operators to make   verification for this
                                                                                                              available their     critical area to
                                                                                                              DPO's or DPOQ's     ensure that each DPO
                                                                                                              course completion   and DPOQ has received
                                                                                                              certificates for    the proper training
                                                                                                              DP training.        and has the necessary
                                                                                                                                  experience required to
                                                                                                                                  correctly operate a DP
                                                                                                                                  system in routine and
                                                                                                                                  emergency operations.
140.320 DP system Manning         ...................  ..................  ...............  ...............  Defines the         Codifies industry
 requirements.                                                                                                minimum manning     standards that each
                                                                                                              requirements to     DPO and DPOQ must
                                                                                                              which all MODUs     follow while
                                                                                                              must adhere while   performing duties.
                                                                                                              using DP to         Ensures that each DPO
                                                                                                              conduct OCS         and DPOQ is
                                                                                                              activities.         sufficiently rested
                                                                                                                                  and prepared to handle
                                                                                                                                  the challenges of
                                                                                                                                  operating a DP system.
                                                                                                                                  Ensures that each DPO
                                                                                                                                  or DPOQ is in direct
                                                                                                                                  communication with a
                                                                                                                                  licensed master and
                                                                                                                                  navigational watch at
                                                                                                                                  all times while a MODU
                                                                                                                                  is using dynamic
                                                                                                                                  positioning to conduct
                                                                                                                                  OCS activities,
                                                                                                                                  enabling correct
                                                                                                                                  actions for routine
                                                                                                                                  and emergency
                                                                                                                                  situations and thus
                                                                                                                                  reduce the likelihood
                                                                                                                                  of casualties
                                                                                                                                  occurring from
                                                                                                                                  personnel
                                                                                                                                  miscommunication.
140.325 Operations..............  ...................  ..................  ...............  ...............  Requires all        Provides a uniform
                                                                                                              vessels that use    operating standard to
                                                                                                              a DP system to      which all flag DP
                                                                                                              conduct OCS         vessels must adhere.
                                                                                                              activities to       This would reduce the
                                                                                                              meet the DP         probability of
                                                                                                              Operation           operator faults
                                                                                                              Standards in        occurring as a result
                                                                                                              paragraph 4.4 IMO   of a lack of
                                                                                                              MSC/Circ. 645.      familiarity or
                                                                                                                                  experience with a DP
                                                                                                                                  operating system.
140.330 Minimum design standards  ...................  ..................  ...............  ...............  Requires all        Provides design
 and testing.                                                                                                 vessels that use    standards to ensure a
                                                                                                              a DP system to      fault tolerant, fault
                                                                                                              conduct OCS         resistant DP vessel
                                                                                                              activities to       that minimizes risk of
                                                                                                              meet the DP         loss of position if
                                                                                                              Design Standards    one component fails.
                                                                                                              in paragraph
                                                                                                              3.4.1 of IMO MSC/
                                                                                                              Circ. 645.
140.335 Intermediate DP system    ...................  ..................  ...............  ...............  Requires all        Ensures that specifics
 requirements.                                                                                                applicable          of system design,
                                                                                                              vessels to          construction and
                                                                                                              conduct vessel      operation are
                                                                                                              surveys and         developed and tested
                                                                                                              maintain an FMEA,   to ensure that
                                                                                                              FMEA proving test   redundancy is actually
                                                                                                              document, and a     achieved and systems
                                                                                                              CAMO.               function as intended.

[[Page 70966]]

 
                                                                                                             In addition to      Ensures that all
                                                                                                              meeting the         vessels and MODUs have
                                                                                                              minimum DP          well documented course-
                                                                                                              Operating           of-action and DP
                                                                                                              Requirements, all   incident emergency
                                                                                                              MODUs and           response plans for all
                                                                                                              applicable non-     OCS activities.
                                                                                                              drilling vessels    Reduces the
                                                                                                              must also           probability that
                                                                                                              maintain a CAMO     significant casualties
                                                                                                              and ASOC or WSOC,   or property damage
                                                                                                              respectively, as    could occur, since the
                                                                                                              described in the    DP system would be
                                                                                                              MTS DP Operation    programmed, following
                                                                                                              Guidelines.         rigorous testing
                                                                                                                                  during the FMEA, to
                                                                                                                                  recognize maximum
                                                                                                                                  environmental
                                                                                                                                  conditions, maximum
                                                                                                                                  offsets permissible
                                                                                                                                  from the set position,
                                                                                                                                  position reference
                                                                                                                                  systems, and auxiliary
                                                                                                                                  systems.
                                                                                                             All applicable      Provides Coast Guard
                                                                                                              vessels must        officials with
                                                                                                              report a DP         information on how
                                                                                                              system status       often DP station-
                                                                                                              change from green   keeping incidents
                                                                                                              to red or yellow    occur and why, and
                                                                                                              to a DPSAO.         enables the Coast
                                                                                                                                  Guard to ensure that
                                                                                                                                  operations can be
                                                                                                                                  resumed safely.
                                                                                                             All applicable      Ensures that FMEAs,
                                                                                                              vessels must        CAMOs, and ASOC or
                                                                                                              conduct a DP        WSOC are updated based
                                                                                                              investigation       on casualties to
                                                                                                              whenever the DP     prevent similar DP
                                                                                                              status changes      incidents from
                                                                                                              from green to       occurring in the
                                                                                                              yellow or red and   future. This would
                                                                                                              submit a summary    reduce the probability
                                                                                                              from the            that significant
                                                                                                              investigation to    casualties or property
                                                                                                              the DPSAO           damage could occur in
                                                                                                              indicating          the future.
                                                                                                              whether the cause
                                                                                                              of the DP
                                                                                                              incident was
                                                                                                              addressed in the
                                                                                                              vessel's FMEA,
                                                                                                              CAMO, and ASOC or
                                                                                                              WSOC.
                                                                                                             All applicable      Provides Coast Guard
                                                                                                              vessels must have   officials with
                                                                                                              the DPSAO           information on how and
                                                                                                              complete an         why DP failures occur.
                                                                                                              annual DP           This information
                                                                                                              incident            provides valuable
                                                                                                              investigation       feedback to ensure
                                                                                                              report. This        that future such
                                                                                                              report would be     incidents do not
                                                                                                              reviewed annually   occur, which would
                                                                                                              by the OCS NCOE.    reduce the probability
                                                                                                                                  of significant
                                                                                                                                  casualties or property
                                                                                                                                  damage from occurring
                                                                                                                                  in the future.
                                                                                                             All applicable      Ensures that the Coast
                                                                                                              vessels must        Guard is notified
                                                                                                              report a DP         immediately of DP
                                                                                                              incident that       incidents that result
                                                                                                              resulted in an      in catastrophic
                                                                                                              emergency           damages and/or
                                                                                                              disconnect and/or   injuries and
                                                                                                              serious marine      fatalities. This would
                                                                                                              incident to the     allow the Coast Guard
                                                                                                              cognizant OCMI.     to take immediate
                                                                                                                                  action if a serious
                                                                                                                                  event occurred, and to
                                                                                                                                  ensure that operations
                                                                                                                                  are not resumed until
                                                                                                                                  the cause of the
                                                                                                                                  incident has been
                                                                                                                                  addressed.
                                                                                                             Creates a new       Ensures safe design and
                                                                                                              document, a         operation for all
                                                                                                              DPVAD, which        vessels that use a DP
                                                                                                              would be issued     system while
                                                                                                              by DPSAO to MODUs   conducting Critical
                                                                                                              and applicable      OCS Activities.
                                                                                                              vessels other       Ensures that FMEA and
                                                                                                              than MODUs that     CAMO are developed and
                                                                                                              use a DP system     maintained, which
                                                                                                              while conducting    would reduce the
                                                                                                              Critical OCS        likelihood of
                                                                                                              Activities. This    significant casualties
                                                                                                              document would be   or property damage
                                                                                                              issued after the    from occurring in the
                                                                                                              vessel has          future.
                                                                                                              completed its DP
                                                                                                              surveys.

[[Page 70967]]

 
140.340 Standard DP system        ...................  ..................  ...............  ...............  Requires all        Reduces probability of
 requirements.                                                                                                applicable          a DP system failure
                                                                                                              vessels to obtain   occurring by adding
                                                                                                              DP notation         second component that
                                                                                                              equivalent to       would be required to
                                                                                                              Equipment class 2   fail before system
                                                                                                              or higher from an   failure.
                                                                                                              authorized
                                                                                                              classification
                                                                                                              society.
140.345 Enhanced DP system        ...................  ..................  ...............  ...............  In addition to      Provides increased
 requirements.                                                                                                meeting the         assuredness of safe
                                                                                                              design and          design and operation
                                                                                                              operating           for all vessels that
                                                                                                              requirements        use a DP system to
                                                                                                              found in 140.335    conduct Critical OCS
                                                                                                              and 140.340, all    Activities by
                                                                                                              MODUs and new       requiring independent
                                                                                                              vessels other       third party
                                                                                                              than MODUs of at    verification of design
                                                                                                              least 6,000 GT      and planned
                                                                                                              ITC must also       operations. Ensures
                                                                                                              submit, and have    that FMEA and CAMO are
                                                                                                              approved, the       developed and
                                                                                                              vessel's design     maintained, which
                                                                                                              and operating       would reduce the
                                                                                                              plans by the        likelihood of
                                                                                                              DPSAO that          significant casualties
                                                                                                              conducted the       or property damage
                                                                                                              vessel's initial    from occurring in the
                                                                                                              survey.             future.
140.350 Operational control.....  ...................  ..................  ...............  ...............  Permits the         Ensures safe design and
                                                                                                              cognizant OCMI to   operation for all
                                                                                                              suspend an          vessels that use a DP
                                                                                                              applicable vessel   system while
                                                                                                              from using DP, if   conducting Critical
                                                                                                              the vessel is       OCS Activities. This
                                                                                                              found to be not     will reduce the
                                                                                                              in compliance       likelihood of
                                                                                                              with the            significant casualties
                                                                                                              requirements in     or property damage
                                                                                                              this part.          from occurring in the
                                                                                                                                  future.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     46 CFR Part 61--Periodic Tests and Inspections
--------------------------------------------------------------------------------------------------------------------------------------------------------
61.50-2 Surveys.................  ...................  ..................  ...............  ...............  Requires all MODUs  Ensures safe design and
                                                                                                              and applicable      operation for all
                                                                                                              vessels other       vessels that use a DP
                                                                                                              than MODUs that     system to conduct
                                                                                                              use a DP system     Critical OCS
                                                                                                              while conducting    Activities by
                                                                                                              Critical OCS        requiring independent
                                                                                                              Activities, to      evaluation of systems.
                                                                                                              complete DP         Periodic surveys
                                                                                                              surveys conducted   ensure that FMEA and
                                                                                                              by a DPSAO.         CAMO are maintained,
                                                                                                                                  which would reduce the
                                                                                                                                  likelihood of
                                                                                                                                  significant casualties
                                                                                                                                  or property damage
                                                                                                                                  from occurring in the
                                                                                                                                  future.
                                                                                                             Requires the DPSAO  Allows Coast Guard
                                                                                                              conducting the      officials the
                                                                                                              vessel's DP         opportunity to
                                                                                                              survey to notify    participate in DP
                                                                                                              the OMCI at least   system surveys
                                                                                                              30 days prior to    providing government
                                                                                                              the survey.         oversight and quality
                                                                                                                                  control for third
                                                                                                                                  parties. The Coast
                                                                                                                                  Guards presence will
                                                                                                                                  verify and complement
                                                                                                                                  the findings of a
                                                                                                                                  third-party surveyor,
                                                                                                                                  thereby ensuring that
                                                                                                                                  DP system equipment is
                                                                                                                                  operational and
                                                                                                                                  properly maintained,
                                                                                                                                  which would reduce the
                                                                                                                                  likelihood of a loss
                                                                                                                                  of position occurring
                                                                                                                                  in the future.
61.50-3 Acceptance of dynamic     ...................  ..................  ...............  ...............  Creates             Ensures that DPSAOs are
 positioning system assurance                                                                                 specifications      highly qualified at
 organizations.                                                                                               that DPSAO must     conducting an FMEA,
                                                                                                              meet in order to    testing a vessel's
                                                                                                              receive approval    CAMO and ASOC or WSOC,
                                                                                                              from the Coast      and conducting DP
                                                                                                              Guard Outer         failure
                                                                                                              Continental Shelf   investigations. This
                                                                                                              National Center     would reduce the
                                                                                                              of Expertise (OCS   likelihood that
                                                                                                              NCOE) to conduct    significant casualties
                                                                                                              DP surveys, FMEA    or property damage
                                                                                                              testing, and plan   occur because of a
                                                                                                              reviews.            poorly created CAMO or
                                                                                                                                  ASOC or WSOC.

[[Page 70968]]

 
61.50-4 Oversight of dynamic      ...................  ..................  ...............  ...............  All applicable      Provides Coast Guard
 positioning system assurance                                                                                 vessels must have   officials with
 organizations.                                                                                               the DPSAO           information on how and
                                                                                                              complete an         why DP failures occur.
                                                                                                              annual DP failure   This information
                                                                                                              investigation       provides valuable
                                                                                                              report. This        feedback to ensure
                                                                                                              report would be     that future such
                                                                                                              reviewed annually   incidents do not
                                                                                                              by the OCS NCOE.    occur, which would
                                                                                                                                  reduce the probability
                                                                                                                                  of significant
                                                                                                                                  casualties or property
                                                                                                                                  damage from occurring
                                                                                                                                  in the future.
                                                                                                                                  Further, this
                                                                                                                                  information would
                                                                                                                                  allow the Coast Guard
                                                                                                                                  to determine whether
                                                                                                                                  the DPSAO is still
                                                                                                                                  under compliance with
                                                                                                                                  the requirements
                                                                                                                                  necessary of an
                                                                                                                                  authorized DPSAO
                                                                                                                                  specified in 61.50-3.
61.50-5, 61.50-10, 61.50-15       ...................  ..................  ...............  ...............  Requires all        Ensures safe design and
 Initial, periodic, and annual                                                                                vessels that use    operation for all
 surveys of DP systems.                                                                                       a DP system to      vessels that use a DP
                                                                                                              conduct Critical    system to conduct
                                                                                                              OCS Activities to   Critical OCS
                                                                                                              have surveys to     Activities. Tests a
                                                                                                              ensure compliance   vessel's FMEA and CAMO
                                                                                                              with DP system      to ensure that they
                                                                                                              requirements.       are developed and
                                                                                                              Additionally,       maintained, which
                                                                                                              these sections      would reduce the
                                                                                                              require that the    likelihood of
                                                                                                              authorized DP       significant casualties
                                                                                                              assurance           or property damage
                                                                                                              organization        from occurring in the
                                                                                                              conducting the      future. Allows Coast
                                                                                                              survey notify the   Guard officials the
                                                                                                              Coast Guard on      opportunity to
                                                                                                              the location and    participate in DP
                                                                                                              time of the         system surveys. The
                                                                                                              survey.             Coast Guards presence
                                                                                                                                  will verify and
                                                                                                                                  complement the
                                                                                                                                  findings of a third-
                                                                                                                                  party surveyor,
                                                                                                                                  thereby ensuring that
                                                                                                                                  DP system equipment is
                                                                                                                                  operational and
                                                                                                                                  properly maintained,
                                                                                                                                  which would reduce the
                                                                                                                                  likelihood of a loss
                                                                                                                                  of position occurring
                                                                                                                                  in the future.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         46 CFR Part 62--Vital System Automation
--------------------------------------------------------------------------------------------------------------------------------------------------------
62.20-2 Required plans for DP     ...................  ..................  ...............  ...............  Requires all MODUs  Ensures safe design for
 systems.                                                                                                     that conduct        all vessels that use a
                                                                                                              Critical OCS        DP system to conduct
                                                                                                              Activities and      Critical OCS
                                                                                                              all other vessels   Activities by
                                                                                                              of at least 6,000   requiring that systems
                                                                                                              GT ITC that have    be verified by
                                                                                                              installed a DP      independent third
                                                                                                              system on or        party, which would
                                                                                                              after the           reduce the probability
                                                                                                              effective date of   of significant
                                                                                                              this final rule     casualties or property
                                                                                                              to submit a DP      damage.
                                                                                                              system plan to      Classification, plan
                                                                                                              assurance DPSAO.    review and
                                                                                                                                  certification
                                                                                                                                  requirements serves as
                                                                                                                                  a fundamental building
                                                                                                                                  block for safe DP
                                                                                                                                  operations by ensuring
                                                                                                                                  a minimum level of
                                                                                                                                  reliability for a DP
                                                                                                                                  system verified by a
                                                                                                                                  qualified third party,
                                                                                                                                  particularly for
                                                                                                                                  higher risk vessels.
                                                                                                             Requires the DPSAO  The Coast Guard's
                                                                                                              to submit a copy    oversight would verify
                                                                                                              of the approved     and complement the
                                                                                                              DP system plan,     findings of a third-
                                                                                                              as well as the      party surveyor,
                                                                                                              Annual Survey       thereby ensuring that
                                                                                                              Document in         DP system equipment is
                                                                                                              subsequent years,   operational and
                                                                                                              to the commanding   properly maintained,
                                                                                                              officer of the      which would reduce the
                                                                                                              Marine Safety       likelihood of a loss
                                                                                                              Center.             of position occurring
                                                                                                                                  in the future. It
                                                                                                                                  would further provide
                                                                                                                                  for government
                                                                                                                                  oversight.
62.25-40 Environmental design     ...................  ..................  ...............  ...............  Incorporates IEC    Reduces the risk of
 standards on OCS units.                                                                                      environmental       pollution or a subsea
                                                                                                              standards into      spill by ensuring that
                                                                                                              Title 46.           design of DP system
                                                                                                                                  equipment meets
                                                                                                                                  environmental
                                                                                                                                  standards.

[[Page 70969]]

 
62.40-3, and 62.40-5, 62.40-10    ...................  ..................  ...............  ...............  Requires all        Reduces probability of
 Design standards and                                                                                         vessels that use    a DP system failure
 classification for DP systems                                                                                a DP system to      occurring, because a
 on OCS.                                                                                                      conduct Critical    DP-2 system must
                                                                                                              OCS Activities to   maintain position at
                                                                                                              meet the DP         all times, excluding
                                                                                                              Operation           incidents involving
                                                                                                              Standards in IMO    the loss of a
                                                                                                              MSC/Circ. 645 and   compartment.
                                                                                                              recommend
                                                                                                              following the MTS
                                                                                                              DP Operation
                                                                                                              Guidelines.
                                                                                                              Requires all
                                                                                                              applicable
                                                                                                              vessels to obtain
                                                                                                              DP notation
                                                                                                              equivalent to
                                                                                                              Equipment class 2
                                                                                                              or higher from an
                                                                                                              authorized
                                                                                                              classification
                                                                                                              society.
                                                                                                             All applicable      Ensures that all
                                                                                                              vessels must        vessels and MODUs meet
                                                                                                              maintain an FMEA    their maximum level of
                                                                                                              that demonstrates   redundancy,
                                                                                                              compliance with     functionality, and
                                                                                                              the applicable      operation, and that no
                                                                                                              provisions of IMO   single fault would
                                                                                                              MSC/Circ.645 for    exceed the identified
                                                                                                              DP equipment        worst-case failure.
                                                                                                              class 2 or higher.  This would reduce the
                                                                                                                                  likelihood of
                                                                                                                                  significant casualties
                                                                                                                                  or property damage,
                                                                                                                                  since the DP system
                                                                                                                                  would alert the DPO or
                                                                                                                                  DPOQ before a worst-
                                                                                                                                  case failure occurs.
62.40-15, 62.40-20 FMEA and FMEA  ...................  ..................  ...............  ...............  Requires vessel     Ensures that each
 proving test documents.                                                                                      owners or           vessels' and MODUs' DP
                                                                                                              operators to        system failure modes
                                                                                                              create and          are assessed and
                                                                                                              maintain a          tested to ensure that
                                                                                                              vessel's FMEA and   limits are understood
                                                                                                              FMEA test proving   and in compliance with
                                                                                                              document.           regulations.
62.40-25 Critical Activity Mode   ...................  ..................  ...............  ...............  Requires owners or  Ensures that all
 of Operation (CAMO).                                                                                         operators to        vessels and MODUs meet
                                                                                                              develop and         their maximum level of
                                                                                                              maintain a CAMO.    redundancy,
                                                                                                                                  functionality, and
                                                                                                                                  operation and that no
                                                                                                                                  single fault would
                                                                                                                                  exceed the identified
                                                                                                                                  worst-case failure.
                                                                                                                                  This would reduce the
                                                                                                                                  likelihood of
                                                                                                                                  significant casualties
                                                                                                                                  or property damage,
                                                                                                                                  since the DP system
                                                                                                                                  would alert the DPO or
                                                                                                                                  DPOQ before a worst-
                                                                                                                                  case failure occurs.
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Because DP is an emerging technology and there are no existing 
requirements for reporting DP incidents, we have casualty reports of 
uncertain quality, constraining our ability to conduct a casualty 
review. However, we attempt to quantify the potential benefits that are 
expected to result from the requirements in this NPRM using the best 
available information that we have gathered from various segments of 
industry. These benefits focus on damages only, and not on fatalities, 
injuries or environmental damage given the limitations in data noted.
    In publicly available documents (2004 through 2010), the IMCA 
estimates that an average of 1.45 DP incidents occur per vessel every 
year.\59\ Next, we estimate the number of DP incidents that are 
expected to occur given the forecasted population figures and the 
average DP incident rate per vessel per year.
---------------------------------------------------------------------------

    \59\ Although reporting to the IMCA is voluntary, we accept this 
average rate, as it is the best available data currently available.
---------------------------------------------------------------------------

    Next, we calculate the number of DP incidents that resulted in a 
loss of position and damages using IMCA station keeping incident 
reports provided from 2004 through 2010. The average percentage of 
incidents that resulted in vessel damages from 2004 through 2010 was 6 
percent for non-drilling vessels and 4 percent for drilling vessels.
    Using the average percentage of incidents that result in vessel 
damage and the total number of incidents forecasted to occur during the 
10-year period of our study, we then calculate the total cost that 
would occur to industry as a result of DP incidents. According to the 
MTS ``Reliability and Risk Analysis,'' for DP incidents that result in 
damages, ``the average incident cost for drilling is estimated to be $2 
million, which includes rig downtime, possible damage, the possibility 
of a fishing job, and even the remote possibility of lost well 
control.'' \60\ We note that this cost does not take into account the 
possibility of injuries or loss of life that could result from DP 
incidents, and, therefore, is likely an underestimate. We then adjust 
this estimate to $2,902,891 to account for inflation that occurred 
between 1997 and 2013.\61\ For non-drilling vessels, we estimate that 
the cost per DP incident

[[Page 70970]]

that results in damages is $132,991.\62\ We calculated this figure by 
estimating the percentage difference between day rates for non-drilling 
vessels and drilling vessels, and then multiplying that percentage by 
the inflation adjusted total damages provided in the MTS ``Reliability 
and Risk Analysis.'' \63\
---------------------------------------------------------------------------

    \60\ Marine Technology Society. ``Reliability and Risk 
Analysis,'' Dynamic Positioning Conference. October 21-22, 1997. 
Page 29.
    \61\ Inflation Adjustment Calculation = > 2013 value =. The 
average annual CPI-U data was obtained from the BLS at http://stats.bls.gov/cpi/cpifiles/cpiai.txt.
    \62\ Calculation used = > x $2,902,891.
    \63\ Day rate for non-drilling vessel = $23,818. ``Dynamic 
Positioning System Research Task Order,'' by Rolling Bay, LLC August 
2012. The average day rate for drilling vessels = $527,506.
---------------------------------------------------------------------------

    For DP incidents that do not result in damages, we calculate the 
cost to investigate the incident, as well as the lost revenue that 
would occur while the investigation was taking place. According to a 
Coast Guard Subject Matter Expert, it was determined that it would take 
an engineer 10 hours on average to investigate a DP incident, at an 
hourly loaded wage of $57.\64\ Further, the Coast Guard estimates that 
a non-drilling vessel would lose $10,070 of revenue per DP incident 
that does not result in any damages, and a drilling vessel would lose 
$219,794 of revenue per DP incident that does not result in any 
damages.\65\ This lost revenue would occur as a result of operations 
having to be stopped while the engineer conducts the DP incident 
investigation.
    Following this calculation (our baseline), we then calculate the 
cost of DP incidents following the effective date of our final rule. 
First, we needed to calculate the rate of DP incidents that are 
expected to occur after publication of a final rule. Based on 
roundtable conversations with owners and operators of DP vessels that 
operate on the U.S. OCS, we estimate that DP incidents would be reduced 
by 95 percent after adopting the MTS DP Operations guidance.\66\ If we 
assume that the vessels were experiencing the industry average number 
of incidents per year, 1.45, prior to adopting the MTS guidance, then a 
95-percent reduction in DP incidents would equate to vessels 
experiencing only 0.0725 DP incidents per year following adoption of 
the MTS guidance.\67\ Using this new figure, we recalculated the number 
of DP incidents that are expected to occur given the forecasted 
population figures. However, we continue to use the original DP 
incident rate (1.45 incidents per vessel per year) for vessels that 
would not benefit from this proposed rule, or would not benefit from 
the proposed rule until the applicable phase-in date.
---------------------------------------------------------------------------

    \66\ This reduction is based on a decrease in the frequency of 
DP position-loss incidents, from a frequency of six DP position-loss 
incidents in 6 months prior to adoption of the MTS DP Operations 
guidance, to five position-loss incidents in 8 years following the 
adoption of the guidance.
    \67\ New DP incident rate per vessel per year = 1.45 x 0.05.
---------------------------------------------------------------------------

    After implementation of the NPRM, we estimate that 2,926 DP 
incidents for vessels other than MODUs (OSVs and crewboats) and 361 DP 
incidents for drilling vessels (MODUs) would be prevented over the 10-
year period of our analysis.
    Using the same methodology that we used to calculate the cost of DP 
incidents that would occur without this proposed rule, we then estimate 
the total cost of DP incidents after implementation of this proposed 
rule. We assume that the average percentage of DP incidents that result 
in damages remains the same.
    We estimate that the reduction in the occurrence of DP failures 
would result in avoided damages of $115.849 million ($28.375 million to 
owners or operators of domestic vessels), discounted at a 7-percent 
rate, and $146.289 million ($37.050 million to owners or operators of 
domestic vessels), discounted at a 3-percent rate, over the 10-year 
period of our analysis. The annualized benefits are estimated to be 
$16.494 million ($4.040 million to owners or operators of domestic 
vessels), discounted at a 7-percent rate, and $17.150 ($4.343 million 
to owners or operators of domestic vessels), discounted at a 3-percent 
rate.
    Table 11 summarizes the total damages avoided that would accrue to 
industry from issuing this NPRM. These avoided damages would accrue 
from a reduction in the frequency of DP failures, which would reduce 
vessel downtime, possible damage, and the possibility of lost well 
control. These benefits do not reflect the potential reduction in the 
risk of injuries or fatalities that would likely occur after 
implementation of this NPRM. Figure 3 supplements Table 11 by providing 
a graphical representation of the difference between the cumulative 
total costs incurred by noncompliant vessels prior to the issuance of a 
final rule, and the cumulative total costs incurred by noncompliant 
vessels after issuance of a final rule.

                                                    Table 11--Total 10-Year Avoided Damages From NPRM
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                       Undiscounted benefits                    Discounted benefits             Annualized benefits
                                         ---------------------------------------------------------------------------------------------------------------
               Time period                 Vessels other     Drilling
                                            than MODUs        vessels          Total            7%              3%              7%              3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total Damages from DP Incidents prior to    $105,234,662    $126,218,084    $231,452,746    $157,200,830    $194,581,898     $22,381,862     $22,810,935
 DP System Rule.........................
Total Damages from DP Incidents after DP      51,101,224       3,746,191      54,847,415      41,351,452      48,293,037       5,887,517       5,661,417
 System Rule............................
Estimated Benefits from Following MTS         54,133,438     122,471,893     176,605,331     115,849,378     146,288,861      16,494,345      17,149,517
 Guidance...............................
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.


[[Page 70971]]

[GRAPHIC] [TIFF OMITTED] TP28NO14.003

Request for Comment
    We request additional comments on our benefit model assumptions. 
Information is specifically requested on the following:
    (1) Frequency of changes in DP status from green to red, and green 
to yellow;
    (2) The rate of DP incidents that result in damages and the type 
and amount of these damages;
    (3) The effectiveness of the proposed rule in reducing DP 
incidents, loss of position, and resulting consequences; and
    (4) Case studies on DP incidents that resulted in a loss of 
position.

DATES:  Comments and related material must be submitted to the online 
docket via http://www.regulations.gov or reach the Docket Management 
Facility on or before February 26, 2015. Comments sent to the Office of 
Management and Budget (OMB) on collection of information must reach OMB 
on or before February 26, 2015.

ADDRESSES:  Submit comments using any one of the listed methods, and 
see SUPPLEMENTARY INFORMATION for more information on public comments.
     Online--http://www.regulations.gov following Web site 
instructions.
     Fax--202-493-2251.
     Mail--Docket Management Facility (M-30), U.S. Department 
of Transportation, West Building Ground Floor, Room W12-140, 1200 New 
Jersey Avenue SE., Washington, DC 20590-0001.
     Hand delivery--mail address, 9 a.m. and 5 p.m., Monday 
through Friday, except Federal holidays (telephone 202-366-9329).
Comparison of Costs vs. Benefits
    We estimate that the total annualized net cost of this NPRM is 
$4.219 million ($6.680 million to domestic owners or operators), 
discounted at a 7-percent rate, and $3.930 million ($6.653 million to 
domestic owners or operators), discounted at a 3-percent rate. Tables 
12 and 13 summarize the net costs that would be incurred as a result of 
the publication of this NPRM. Figure 4 then compares the cumulative net 
present value, using a 7-percent discount rate, as a result of 
publication of this NPRM to the net present value of not requiring the 
provisions in this NPRM (i.e., the baseline).

                                                 Table 12--Total Cumulative Net Present Value From NPRM
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Discounted costs                     Discounted benefits                     Net present value
                Year                 -------------------------------------------------------------------------------------------------------------------
                                              7%                 3%                 7%                 3%                 7%                  3%
--------------------------------------------------------------------------------------------------------------------------------------------------------
1...................................        $11,879,832        $12,809,668         $8,008,721         $8,319,739        ($4,683,985)        ($4,865,887)
2...................................         23,878,206         25,758,050         16,568,099         17,556,832         (8,122,981)         (8,577,177)
3...................................         32,911,477         35,885,141         25,319,946         27,368,422         (8,404,405)         (8,892,677)
4...................................         67,122,135         75,727,738         36,404,432         40,277,695        (31,530,576)        (35,826,001)
5...................................         76,654,716         87,260,764         49,473,907         56,089,844        (27,993,683)        (31,546,879)
6...................................         85,580,403         98,478,907         62,079,796         71,933,404        (24,313,481)        (26,921,461)
7...................................        111,205,850        131,936,702         75,965,563         90,063,319        (36,053,161)        (42,249,341)
8...................................        120,414,846        144,427,343         89,321,957        108,179,291        (31,905,763)        (36,624,010)
9...................................        129,470,866        157,187,510        102,476,664        126,714,614        (27,807,076)        (30,848,853)
10..................................        144,669,412        179,434,311        115,849,378        146,288,861        (29,632,908)        (33,521,407)
                                     -------------------------------------------------------------------------------------------------------------------
    Total...........................        144,669,412        179,434,311        115,849,378        146,288,861        (29,632,908)        (33,521,407)
                                     -------------------------------------------------------------------------------------------------------------------
Annualized..........................         20,597,670         21,035,175         16,494,345         17,149,517          4,219,059           3,929,732
--------------------------------------------------------------------------------------------------------------------------------------------------------


[[Page 70972]]


                Table 13--Comparison of Annualized Benefits and Costs to Industry and Government
                                            [7-Percent discount rate]
----------------------------------------------------------------------------------------------------------------
                        Rule                           Cost to industry     Total benefits       Net benefits
----------------------------------------------------------------------------------------------------------------
DP System NPRM......................................        $20,597,670         $16,494,345        ($4,219,059)
----------------------------------------------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

[GRAPHIC] [TIFF OMITTED] TP28NO14.004

    These net benefits do not include the potential reduction in the 
number of injuries or fatalities that would likely occur after 
publication of this NPRM. As a result, these net benefits are likely to 
be underestimated.
Breakeven Analysis
    Based on monetized benefits from reduction in property damage and 
lost productivity, the NPRM would not result in positive net benefits. 
However, our monetized estimates do not include benefits that would 
accrue to society from reducing the risk of fatalities or environmental 
damage from an oil spill that could result from a catastrophic DP 
event, such as a collision with a MODU during drilling operations 
caused by a DP-related loss of position. It is likely then, that we 
have underestimated the total benefits that would result from this 
proposed rule. Unfortunately, because of data limitations, we are 
unable to calculate the risk of a catastrophic event causing fatalities 
or oil spills that would be prevented as a result of requiring the 
provisions in this proposed rule. Instead, we estimate the number of 
fatalities that would need to be prevented per year in order for this 
proposed rule to be cost neutral, by using the value of a statistical 
life (VSL).\68\ Using the VSL to monetize the value of fatalities and 
fatalities prevented, the NPRM would need to prevent 0.5 fatalities per 
year from occurring during the 10-year period for net benefits to equal 
the net cost of this NPRM.
---------------------------------------------------------------------------

    \68\ Value of a statistical life is currently measured at $9.1 
million. ``Guidance on Treatment of the Economic Value of a 
Statistical Life,'' prepared for the U.S. Department of 
Transportation, April 2013. http://www.dot.gov/sites/dot.dev/files/docs/VSL%20Guidance%202013.pdf.
---------------------------------------------------------------------------

    Table 14 summarizes this breakeven analysis.

       Table 14--Expand DP Systems in OCS NPRM, Breakeven Analysis
                         [7 percent, annualized]
------------------------------------------------------------------------
                                                            Fatalities
           NPRM requirement              Annualized net    prevented to
                                              cost          breakeven
------------------------------------------------------------------------
Total for NPRM requirements...........    ($4,219,059)             0.46
------------------------------------------------------------------------

    The consequences of a loss of position while using DP can be high. 
In order to put this breakeven analysis in perspective, we consider and 
compare the impacts of two events to illustrate potential worst case 
scenarios that could result from a DP-related loss of position. First, 
as an example of the fatalities that could result from a loss of 
position and subsequent collision, we use the SAMUDRA SURAKSHA incident 
as a reasonable worst case scenario. In order

[[Page 70973]]

for this proposed rule's benefits to equal its costs, one worst case 
event on the magnitude of the SAMUDRA SURAKSHA which resulted in 22 
fatalities, would need to be prevented approximately every 48 years to 
breakeven.\69\
---------------------------------------------------------------------------

    \69\ We acknowledge that the SAMUDRA SURAKSHA incident would not 
be avoided or its consequences mitigated as a result of this 
proposed rule since it involved a foreign flag vessel operating in 
foreign waters.
---------------------------------------------------------------------------

    A loss of position and collision could result in a catastrophic oil 
spill if a MODU is involved and the blowout preventer does not engage 
or fails (as was the case during the DEEPWATER HORIZON). The DEEPWATER 
HORIZON oil spill illustrates the potential environmental damage that 
could result from an oil spill from an uncontrolled well. The DEEPWATER 
HORIZON incident resulted in an estimated 4.9 million barrels of oil 
spilled. To date, the responsible party has spent $14 billion on 
cleanup costs alone. This estimate of cleanup costs does not include 
additional restoration costs under the Natural Resource Damage 
Assessment process or other liabilities or settlements.\70\ Assuming a 
$14 billion cleanup cost for a reasonable worst case catastrophic oil 
spill, the proposed rule would have to prevent one such event every 
1,000 years to breakeven.
---------------------------------------------------------------------------

    \70\ ``Active Shoreline Cleanup Operations from Deepwater 
Horizon Accident End'', press release from BP, 15 April 2014, 
available at: http://www.bp.com/en/global/corporate/press/press-releases/active-shoreline-cleanup-operations-dwh-accident-end.html.
---------------------------------------------------------------------------

Alternatives
    We examined several alternatives with varying degrees of vessel 
applicability and required provisions. Of the alternatives examined, we 
selected the alternative that provided industry with the largest amount 
of flexibility without sacrificing maritime safety. The Coast Guard 
considered the following alternatives:
     Proposed Alternative (NPRM);
     Alternative 2: Grandfathering all existing non-drilling DP 
vessels;
     Alternative 3: No Grandfathering and No Phase-in Period;
     Alternative 4: Proposed Alternative Plus Additional DP 
Manning Requirements for non-drilling vessels with new or upgraded DP 
systems; and
     Alternative 5: Alternative 3 Plus Additional DP Manning 
Requirements.
    Because of the frequency of DP-related incidents, as well as the 
potential for severe consequences that could occur as the result of an 
incident, the Coast Guard decided that the benefits that would be 
gained through requiring compliance from existing OSVs and crewboats 
would outweigh any additional costs that would be incurred by industry.
    In order to minimize the impact on existing OSVs and crewboats, the 
Coast Guard developed the proposed alternative, which uses a phase-in 
schedule to provide existing non-drilling vessels with some flexibility 
in meeting the provisions of this proposed alternative. Further, the 
Coast Guard decided to grandfather existing non-drilling vessels from 
being required to comply with the most costly provisions in this 
proposed rule--the provisions that would require a vessel using DP to 
use a DP-2 system or higher and obtain a DP-2 or high class notation.
    Through providing flexibility to existing OSVs and crewboats, the 
proposed alternative minimizes costs, without sacrificing benefits that 
could accrue from a larger population of vessels.
    Table 15 summarizes the alternatives considered. The costs and 
benefits displayed are for both total 10-year costs and benefits and 
the annualized cost and benefits discounted at a 7 percent annual rate. 
Because the net benefits do not include the potential reduction in the 
number of injuries or fatalities that are likely to occur after 
issuance of a final rule, Table 15 also includes the number of 
fatalities that would need to be prevented for the costs of this 
proposed rule to equal the benefits.

                                                          Table 15--Comparison of Alternatives
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Annualized cost       Annualized       Annualized net     Number of fatalities
               Proposal                    (7% discount      benefits  (7%    cost (7% discount   needed to be prevented       Impact of alternative
                                              rate)          discount rate)         rate)          per year to breakeven
--------------------------------------------------------------------------------------------------------------------------------------------------------
Proposed Alternative..................        $20,597,670        $16,494,345       ($4,219,059)  1 fatality per year.....   Offers protection
                                                                                                                            for 91% of crew from risk of
                                                                                                                            DP failure.
                                                                                                                            Mitigates risk for
                                                                                                                            462 vessels.
                                                                                                                            Reduces costs by
                                                                                                                            allowing continued use of
                                                                                                                            existing DP-1 systems as
                                                                                                                            long as they meet good
                                                                                                                            operational practices.
                                                                                                                            Minimizes burden by
                                                                                                                            allowing phase-in of
                                                                                                                            operational requirements
                                                                                                                            based on risk.
Alternative 2.........................         13,307,230         13,688,325          (265,983)  0 fatalities per year...   Offers protection
                                                                                                                            for 51% of crew from risk of
                                                                                                                            DP failure.
                                                                                                                            Mitigates risk for
                                                                                                                            205 vessels.
                                                                                                                            Minimizes burden by
                                                                                                                            grandfathering non-drilling
                                                                                                                            vessels that have installed
                                                                                                                            a DP system prior to the
                                                                                                                            effective date of a final
                                                                                                                            rule.
Alternative 3.........................         25,718,386         21,699,818        (4,896,965)  1 fatality per year.....   Offers protection
                                                                                                                            for 100% of crew from risk
                                                                                                                            of DP failure.
                                                                                                                            Mitigates risk for
                                                                                                                            528 vessels.
                                                                                                                            Requires non-
                                                                                                                            drilling vessels that have
                                                                                                                            installed a DP system prior
                                                                                                                            to the effective date of a
                                                                                                                            final rule to comply with
                                                                                                                            all operational requirements
                                                                                                                            before issuance of final
                                                                                                                            rule.
Alternative 4.........................        137,508,218         16,494,345      (121,332,655)  14 fatalities per year..   Offers protection
                                                                                                                            for 91% of crew from risk of
                                                                                                                            DP failure.

[[Page 70974]]

 
                                                                                                                            Mitigates risk for
                                                                                                                            462 vessels.
                                                                                                                            Minimizes burden by
                                                                                                                            allowing phase-in of
                                                                                                                            operational requirements
                                                                                                                            based on risk.
                                                                                                                            Requires additional
                                                                                                                            manning requirements for new
                                                                                                                            builds that industry is
                                                                                                                            unlikely to meet on its own.
Alternative 5.........................        625,109,533         21,699,818      (608,728,065)  67 fatalities per year..   Offers protection
                                                                                                                            for 100% of crew from risk
                                                                                                                            of DP failure.
                                                                                                                            Mitigates risk for
                                                                                                                            528 vessels.
                                                                                                                            Requires non-
                                                                                                                            drilling vessels that have
                                                                                                                            installed a DP system prior
                                                                                                                            to the effective date of a
                                                                                                                            final rule to comply with
                                                                                                                            all operational requirements
                                                                                                                            before issuance of final
                                                                                                                            rule.
                                                                                                                            Requires additional
                                                                                                                            manning requirements for all
                                                                                                                            vessels using DP that
                                                                                                                            industry is unlikely to meet
                                                                                                                            on its own.
--------------------------------------------------------------------------------------------------------------------------------------------------------
* Net Cost does not include avoided fatalities or other benefits of this proposed rule.
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    Although Table 15 shows that Alternative 2, which would grandfather 
all existing non-drilling vessels from having to comply with this 
proposed rule, minimizes net costs, Alternative 2 would reduce the risk 
of a fatality the least out of all of the alternatives. This is because 
fewer vessels would benefit from the proposed requirements, and thus 
the probability of a DP incident, which could result in a fatality, 
would remain at its current rate for a majority of existing vessels 
using DP on the U.S. OCS. Furthermore, given the catastrophic damage 
potential of DP-related incidents from non-drilling vessels, the 
additional costs are relatively small. In Table 16, we summarize the 
risk of fatality addressed and the cost to address that risk in each of 
the alternatives.

                      Table 16--Comparison of the Risk of Fatality Addressed by Alternative
----------------------------------------------------------------------------------------------------------------
                                                                      Percentage
                                                         Crew with        of
                                    Total crew subject    risk of     potential     Annualized       Cost per
             Proposal                   to risk of        fatality     fatality        cost        fatality risk
                                    fatality--baseline   addressed       risk                        addressed
                                                                      addressed
----------------------------------------------------------------------------------------------------------------
Alternative 1.....................            5,119           4,675           91     $20,179,651       $4,316.50
Alternative 2.....................            5,119           2,623           51      13,072,297        4,983.72
Alternative 3.....................            5,119           5,119          100      24,990,468        4,881.90
Alternative 4.....................            5,119           4,675           91     137,090,199       29,324.11
Alternative 5.....................            5,119           5,119          100     624,381,615      121,973.36
----------------------------------------------------------------------------------------------------------------

    Table 16 shows that the cost to reduce the risk of a fatality 
occurring while a vessel is using DP is minimized under the proposed 
alternative.\71\
---------------------------------------------------------------------------

    \71\ To estimate this cost, we first derive the total number of 
crew members working onboard vessels which currently do not comply 
with this proposed rule in its entirety. Next, we calculate the 
number of crew members working on board vessels which would benefit 
from the provisions in each of the alternatives listed above. The 
cost to address this risk is then estimated by dividing the 
annualized cost of each alternative by the number of crew members 
expected to be on board vessels which would benefit from the 
provisions in each of the alternatives.
---------------------------------------------------------------------------

Alternative 1: Proposed Alternative
    The analysis for this alternative is discussed in detail previously 
in this RA.
Alternative 2: Grandfathering All Vessels Other Than MODUs With 
Existing DP Systems
    For this alternative, the Coast Guard would grandfather all vessels 
other than MODUs with existing DP systems, and OSVs and crewboats with 
an existing DP system would not be required to comply with any of the 
DP requirements in this NPRM. As a result, this would provide industry 
with the greatest amount of flexibility in meeting the requirements in 
the proposed alternative, because it would only require future OSVs and 
crewboats to comply with the provisions in this proposed rule, in 
addition to still requiring MODUs with existing and future DP systems 
to comply immediately with the provisions in the proposed alternative. 
This approach was created after taking into account the increased risk 
profile of MODUs, as well as current industry practices. By examining 
the existing population of MODU's vessel specification sheets, we 
determined that all existing MODUs operating on the U.S. OCS that 
utilize DP would comply with the most costly

[[Page 70975]]

provisions in this NPRM. Because of this, as well as the higher risk 
profile of MODUs, we elected not to grandfather in MODUs with existing 
DP systems as outlined in this alternative.
    We considered Alternative 2 because of the large proportion of OSVs 
and crewboats with existing DP systems that would not be compliant with 
the most costly DP provisions in this NPRM. However, because of the 
high risk potential of DP-related incidents, we decided that the 
benefits that would be gained through requiring compliance from 
existing OSVs and crewboats would outweigh the additional costs that 
would be incurred by industry.
Alternative 3: No Grandfathering and No Phase-in Period
    For this alternative, the Coast Guard would require all vessels 
other than MODUs with existing DP Systems to comply with the 
requirements in this proposed rule immediately following issuance of a 
final rule. This alternative would affect the same number of existing 
OSVs and crewboats as in proposed alternative, but would not permit 
existing vessels to phase-in DP requirements.
    We considered this Alternative 3 because of the high probability 
that significant consequences could occur as a result of a DP failure. 
However, this alternative places a larger burden on industry that 
cannot be justified by either the added benefits that would be incurred 
by requiring the existing population of non-drilling vessels using DP 
to comply with the requirements in the NPRM immediately following 
publication of a final rule (the net cost of this alternative is 
greater than the proposed alternative), or the reducing the risk of 
death for a greater number of crew members. As a result, we rejected 
Alternative 3.
Alternative 4: Additional DP Manning Requirements
    Under Alternative 4, all vessels, with the exception of MODUs, that 
have a new DP system would be required to have a DPO or DPOQ whose only 
responsibility is operating the DP system.
    We rejected this alternative because industry is unlikely to comply 
with the additional DP manning requirements in the absence of this 
NPRM. As such, industry would incur large costs that would not be 
justified by the benefits.
Alternative 5: Additional DP Manning Requirements With No 
Grandfathering
    Alternative 5 would also require additional DP manning 
requirements, but would not grandfather vessels other than MODUs that 
have an existing DP system. Because industry is not currently complying 
with this requirement and is not expected to comply with it in the 
future, we expect that this provision would burden industry with large 
costs that would likely force a large number of vessels out of the 
market. We, consequently, rejected this alternative.

B. Small Entities

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the Coast Guard prepared this Initial Regulatory Flexibility 
Analysis (IRFA) that examines the impacts of the NPRM on small entities 
(5 U.S.C. 601 et seq.). Due to the anticipated impacts on small 
businesses, Coast Guard is including an analysis of the NPRM 
requirements for informational purposes.
    A small entity may be--
     A small independent business, defined as any independently 
owned and operated business not dominant in its field that qualifies as 
a small business per the Small Business Act (5 U.S.C. 632);
     A small not-for-profit organization; and
     A small governmental jurisdiction (locality with fewer 
than 50,000 people).

An IRFA addresses the following:

     A description of the reasons why action by the agency is 
being considered;
     A succinct statement of the objectives of, and legal basis 
for, the proposed rule;
     A description of and, where feasible, an estimate of the 
number of small entities to which the proposed rule will apply;
     A description of the projected reporting, recordkeeping 
and other compliance requirements of the proposed rule, including an 
estimate of the classes of small entities which will be subject to the 
requirement and the type of professional skills necessary for 
preparation of the report or record;
     An identification, to the extent practicable, of all 
relevant Federal rules which may duplicate, overlap or conflict with 
the proposed rule; and
     A description of any significant alternatives to the 
proposed rule which accomplish the stated objectives of applicable 
statutes and which minimize any significant economic impact of the 
proposed rule on small entities.
1. Description of the Reasons Why Action by the Agency Is Being 
Considered
    Agencies take regulatory action for various reasons, one of which 
is the failure of markets to reach socially optimal outcomes. The 
market failures prompting this proposed rule result from the absence of 
economic incentives that promote an optimal outcome.
    The absence of economic incentives that promote an optimal outcome 
results in a negative externality. A negative externality is an adverse 
byproduct of a transaction not accounted for within the transaction. In 
this case, MODUs and other vessels that use DP to engage in OCS 
activities that operate with lower safety standards may cause harm or 
increased risk of harm to human safety and the environment. The cost of 
these lower safety standards (increased risk) is not completely borne 
by the OSV or MODU owners, so they are external to the business 
decisions of these owners. The crew, which may face increased risk from 
lower safety standards, may not have any say in safety-related 
decisions. Since the crew may be adversely affected by business 
decisions which it may not be able to mitigate through increasing its 
price (labor cost), it absorbs the cost of the externality (increased 
risk from lower safety standards) which is a market failure. Oil spills 
that result from OSV or MODU accidents also impose an externality in 
the form of environmental damage and clean-up costs that are not borne 
directly by the OSV and MODU owners.
2. Succinct Statement of the Objectives of, and Legal Basis for, the 
Proposed Rule
    Establishing these minimum standards is necessary to improve the 
safety of people and property involved in such operations, and the 
protection of the environment in which they operate. This proposed rule 
would decrease the risk of a loss of position by a dynamically-
positioned MODU or other vessel that could result in a fire, explosion, 
or subsea spill, and supports the Coast Guard's strategic goals of 
maritime safety and protection of natural resources.
    Several sections of the Outer Continental Shelf Lands Act (43 
U.S.C. 1331-1356a,) provide ``the Secretary of the Department in which 
the Coast Guard is operating'' with rulemaking authority. The 
Secretary's authority under all these sections is delegated to the 
Coast Guard through Department of Homeland Security Delegation No. 
0170.1, paragraph II(90).
    43 U.S.C. 1333(d)(1) gives the Secretary ``authority to promulgate 
and enforce such reasonable regulations with respect to lights and 
other warning devices, safety equipment, and other matters relating to 
the promotion of safety of life and property on the

[[Page 70976]]

artificial islands, installations, and other devices referred to in 
subsection (a) of this section or on the waters adjacent thereto, as 
[the Secretary] may deem necessary.'' The Coast Guard interprets 
section 1333(d)(1) as conferring authority to regulate any OCS vessel 
or facility (collectively referred to as ``OCS unit'') attached to the 
OCS seabed or engaged in OCS activity to support such a unit.\72\
---------------------------------------------------------------------------

    \72\ OCS activity is defined in 33 CFR 140.10 to mean ``any 
offshore activity associated with exploration for, or development or 
production of, the minerals of the Outer Continental Shelf.''
---------------------------------------------------------------------------

    Section 1347(c) requires promulgation of ``regulations or standards 
applying to unregulated hazardous working conditions related to 
activities on the outer Continental Shelf when . . . such regulations 
or standards are [determined to be] necessary'' and authorizes the 
modification ``from time to time'' of ``any regulations, interim or 
final, dealing with hazardous working conditions on the Outer 
Continental Shelf.'' Section 1348(c) requires promulgation of 
regulations for onsite scheduled or unscheduled inspections of OCS 
facilities ``to assure compliance with . . . environmental or safety 
regulations.'' Additionally, section 1356 calls for regulations 
requiring, with limited exceptions, all OCS units to be manned by U.S. 
citizens or resident aliens and to comply with ``such minimum standards 
of design, construction, alteration, and repair'' as the Secretary or 
the Secretary of the Interior establishes.
3. Description of and, Where Feasible, an Estimate of the Number of 
Small Entities To Which the Proposed Rule Will Apply
    Through review of the Coast Guard's MISLE database, as well as 
comparing owners' annual revenues to the small business threshold as 
defined by the Small Business Administration, we determined the number 
of small entities within drilling and non-drilling owners that would be 
affected by this proposed rule. We did not find any drilling or non-
drilling vessels owned by governments or non-profits.
    Table 17 provides the SBA's revenue thresholds for the entities 
that are affected by this proposed rule. We used these standards in our 
analysis to determine which entities should be defined as small.

     Table 17--Standard Size of Revenue of Entities Affected by NPRM
------------------------------------------------------------------------
                                 Description of NAICS   Standard size of
          NAICS code                    group               revenue
------------------------------------------------------------------------
213112........................  Support Activities            $7,000,000
                                 for Oil and Gas
                                 Operations.
487210........................  Water Transportation           7,000,000
                                 Excursion.
488330........................  Navigation Services           35,000,000
                                 to Shipping.
488390........................  Other Support                 35,000,000
                                 Activities for Water
                                 Transportation.
522220........................  Sales Financing......          7,000,000
532411........................  Commercial Air, Rail,          7,000,000
                                 and Water
                                 Transportation
                                 Equipment Rentals
                                 and Leasing.
541990........................  All Other                     14,000,000
                                 Professional
                                 Scientific and
                                 Technical Services.
------------------------------------------------------------------------

    Through this analysis, we determined that all existing MODUs, 60 
percent of all existing OSVs of at least 500 GT ITC, 58 percent of all 
existing OSVs less than 500 GT ITC, and 63 percent of all existing 
crewboats exceed these small business standards.\73\
---------------------------------------------------------------------------

    \73\ We have separated our analysis of OSVs into OSVs of at 
least 500 GT ITC and OSVs under 500 GT ITC in order to account for 
the phase-in schedule which would only require OSVs of at least 500 
GT ITC to meet more stringent DP requirements.
---------------------------------------------------------------------------

    The following tables summarize our findings.

                Table 18--Size of MODUs Affected by NPRM
------------------------------------------------------------------------
                                                       Number    Number
                                                         of        of
                                                       owners    vessels
------------------------------------------------------------------------
Entities with Data--Above Threshold.................         2         4
Entities with Data--Below Threshold.................         0         0
Total Small Entities................................         0         0
                                                     -------------------
  Total.............................................         2         4
Percentage of Small Entities........................      0.0%      0.0%
------------------------------------------------------------------------

    The annual revenue for MODU owners that would be affected by this 
proposed rule is within a range of $875,000,000 to $3,000,000,000. Our 
results indicate that all drilling vessels using DP and currently 
operating on the U.S. OCS exceed the small business standards presented 
in Table 17.
    Next, we examined publicly available revenue data for owners and 
operators of OSVs of at least 500 GT ITC that use DP while operating on 
the U.S. OCS. These vessels would be required to comply with a majority 
of the provisions of this proposed rule by the date specified in Table 
2 of this Regulatory Analysis section. Table 19 summarizes our analysis 
on owners or operators of OSVs of at least 500 GT ITC.

     Table 19--Size of OSVs of at Least 500 GT ITC Affected by NPRM
------------------------------------------------------------------------
                                                       Number    Number
                                                         of        of
                                                       owners    vessels
------------------------------------------------------------------------
Entities with Data--Above Threshold.................        21       401
Entities with Data--Below Threshold.................        14        56
Total Small Entities................................        14        56
                                                     -------------------
  Total.............................................        35       457
Percentage of Entities..............................       40%       12%
------------------------------------------------------------------------

    Through our analysis, we estimate that approximately 40 percent of 
owners or operators of existing OSVs of at least 500 GT ITC that use DP 
are defined as small by the SBA threshold. The annual revenue stream of 
the entities affected by this proposed rule that are defined as small 
is within a range of $630,000 to $51,834,000.
    We then examined revenue data for owners or operators of OSVs less 
than 500 GT ITC. Although these owners or operators would incur some 
cost as a result of this proposed rule, existing vessels in this group 
would be

[[Page 70977]]

grandfathered from the most costly provisions.
    Table 20 describes the results of our analysis on the revenue 
streams of owners or operators of OSVs less than 500 GT ITC.

      Table 20--Size of OSVs Less Than 500 GT ITC Affected by NPRM
------------------------------------------------------------------------
                                                       Number    Number
                                                         of        of
                                                       owners    vessels
------------------------------------------------------------------------
Entities with Data--Above Threshold.................        14        48
Entities with Data--Below Threshold.................        10        23
Total Small Entities................................        10        23
                                                     -------------------
  Total.............................................        28        71
Percentage of Small Entities........................       42%       32%
------------------------------------------------------------------------

    Using annual revenue data from public databases, we estimate that 
approximately 42 percent of the owners of vessels less than 500 GT ITC 
are small entities. The annual revenues for owners or operators defined 
as small entities range from $565,000 to $3,750,000. The median revenue 
per small entity owner is $3,109,500, while the mean revenue is 
$2,556,965.
    Lastly, we examined the revenue streams of owners or operators of 
crewboats that use DP on the U.S. OCS. Table 21 summarizes our 
findings.

              Table 21--Size of Crewboats Affected by NPRM
------------------------------------------------------------------------
                                                       Number    Number
                                                         of        of
                                                       owners    vessels
------------------------------------------------------------------------
Entities with Data--Above Threshold.................         8        36
Entities with Data--Below Threshold.................         3         7
Total Small Entities................................         3         7
                                                     -------------------
  Total Entities....................................        11        43
Percentage of Small Entities........................       27%       16%
------------------------------------------------------------------------

    Using annual revenue data from public databases, we estimate that 
approximately 27 percent of the owners or operators of crewboats are 
small entities. The annual revenues for crewboat owners or operators 
defined as small entities range from $162,000 to $2,200,000. The median 
revenue per small entity owner or operator is $1,081,000, while the 
mean revenue is $1,147,667. As with OSVs less than 500 GT ITC, however, 
these vessels would be grandfathered from having to comply with the 
most costly provisions in this proposed rule.
4. A Description of the Projected Reporting, Recordkeeping and Other 
Compliance Requirements of the Proposed Rule, Including an Estimate of 
the Classes of Small Entities That Would Be Subject to the Requirement 
and the Type of Professional Skills Necessary for Preparation of the 
Report or Record
    In general, this proposed rule would require owners or operators of 
vessels that use DP on the U.S. OCS to--
     Make available to the OCMI upon request a copy of a DPO/
DPOQ's certificate of completion of DP training courses;
     Use DP-2 or higher systems if conducting Critical OCS 
Activities; \74\
---------------------------------------------------------------------------

    \74\ Or choose to not operate with DP.
---------------------------------------------------------------------------

     Receive a DP-2 class notation;
     Conduct an FMEA;
     Develop and maintain a CAMO and ASOC or WSOC;
     Report DP system incidents to an authorized DP assurance 
organization;
     Conduct DP incidents investigations whenever the DP system 
status changes from green to yellow or red;
     Report Serious Marine Incidents that result from a DP 
incident to the OCMI;
     Submit a copy of a DP incident investigation report to the 
OCMI annually;
     Report the time and location of a DP survey to the OCMI at 
least 30 days prior to the survey; and
     Submit a copy of the vessel's DP system plan if the vessel 
is a MODU or of at least 6,000 GT ITC.
    Our research indicates that all MODUs and OSVs that plan on using 
DP on the U.S. OCS will be built with a DP-2 system even in the absence 
of this proposed rule. Further, all existing MODUs that use DP on the 
U.S. OCS already are operating with DP-2 or higher systems. Lastly, 
because existing OSVs and crewboats would be grandfathered from having 
to comply with this requirement, we anticipate that only one future 
crewboat owner per year could potentially incur this cost. Therefore, 
this provision is expected to have a minimal impact on industry as a 
whole.
    To determine the impact of this proposed rule on an individual 
owner or operator, we calculated the expected cost for the vessel 
categories examined above to comply with all applicable provisions.
Expected Cost to MODUs
    Because all drilling (MODU) owners or operators exceed the small 
business threshold and the expected cost to these owners or operators 
is estimated to be well below their annual revenue streams, we instead 
begin our analysis with the expected cost to owners or operators of 
OSVs of at least 500 GT ITC.
Expected Cost to OSVs of at Least 500 GT ITC
    We estimate that the total first-year cost of this NPRM to 
noncompliant owners or operators of existing OSVs of at least 500 GT 
ITC would be $286,835 per vessel. Table 22 summarizes the cost per 
provision to these noncompliant vessels.

 Table 22--First-Year Costs to an Existing Non-Compliant OSV of at Least
                               500 GT ITC
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........         $114.40
Replace DP-1 Crewboats..................................            0.00
Cost to receive DP-2 Class Notation.....................            0.00
Conduct an FMEA.........................................      275,000.00
Develop a CAMO and ASOC.................................        9,120.00
Report DP System Incidents..............................          177.87
Conduct DP Incident Investigation And Write Report......        2,236.19
Report Serious Marine Incidents Resulting from DP                   3.46
 Incident...............................................
Submit Annual DP Incident Investigation Report..........          169.10
Obtain DPVAD............................................           10.25
Report DP Surveys.......................................            4.10

[[Page 70978]]

 
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................      285,835.36
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    After a review of the Coast Guard's MISLE database, as well as 
vessel profiles that are publicly available on company Web sites, we 
estimate that roughly 50 percent of existing OSVs that would be phased-
in to the DP requirements of this proposed rule would incur this entire 
cost. We estimate that the remaining owners or operators of existing 
OSVs affected by this proposed rule would incur a cost of $1,062.36 per 
vessel.\75\
---------------------------------------------------------------------------

    \75\ These vessels are expected to already comply with the FMEA, 
CAMO and ASOC, and DP Investigation requirements.
---------------------------------------------------------------------------

    Additionally, through conversations with members of industry, we 
expect that 50 percent of future OSVs of at least 500 GT ITC would also 
incur the full cost displayed in Table 22. Like the existing 
population, the rest are expected to incur a cost of $1,062.
    We then use the population estimates in Table 3 of this Regulatory 
Analysis section to calculate the expected first-year cost to an owner 
or operator of an OSV of at least 500 GT ITC.
    Using the expected value formula,

Expected First-Year Cost =
((247 existing DP vessels no compliance x $286,835)
+ (265 existing DP vessels partial compliance x $1,062)
+ (418 existing vessels without DP x $0)
+ (12 future DP vessels no compliance x $286,835)
+ (17 future DP vessels partial compliance x $1,062))/(959 Total 
Vessels Affected)

we estimate that the expected average first-year cost as a result of 
this proposed rule to owners or operators of OSVs of at least 500 GT 
ITC would be $77,778.88.
    Using this expected average first-year cost, we then estimate the 
first-year revenue impact to the small entities that we identified in 
Table 19. During the first-year of implementation, we estimate that 71 
percent of these 14 owners or operators would incur a cost less than 5 
percent of their annual revenue stream. The remaining 28 percent would 
incur costs less than 13 percent of their annual revenue stream.

 Table 23--First-Year Revenue Impact to Small Entities That Own OSVs of
                           at Least 500 GT ITC
------------------------------------------------------------------------
                                                                 Impact
                                                                  from
                     Revenue impact range                        first
                                                                  year
                                                                 costs
------------------------------------------------------------------------
Expected cost per vessel.....................................    $77,779
0% < Impact < 1%.............................................        21%
1% < Impact < 3%.............................................        21%
3% < Impact < 5%.............................................        29%
5% < Impact < 10%............................................         7%
Above 10%....................................................        21%
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    This proposed rule is also expected to have reoccurring costs. We 
estimate that the annual cost to owners or operators of OSVs of at 
least 500 GT ITC that meet none of the applicable provisions would be 
$2,573.
    Table 24 summarizes the reoccurring costs incurred by an owner or 
operator of a vessel that would not comply with any of the applicable 
provisions of this proposed rule.

 Table 24--Annual Cost to an Existing Non-Compliant OSV of at Least 500
                                 GT ITC
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........          $42.90
Replace DP-1 Crewboats..................................            0.00
Cost to receive DP-2 Class Notation.....................            0.00
Conduct an FMEA.........................................            0.00
Develop a CAMO and ASOC.................................            0.00
Report DP System Incidents..............................          170.87
Conduct DP Incident Investigation And Write Report......        2,236.19
Report Serious Marine Incidents Resulting from DP                   3.46
 Incident...............................................
Submit Annual DP Incident Investigation Report..........          169.10
Obtain DPVAD............................................            0.00
Report DP Surveys.......................................            4.10
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................        2,633.61
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    We estimate that all owners or operators of OSVs of at least 500 GT 
ITC would incur this cost following the first year.
    Using these total costs, we then estimate the expected annual cost 
to an owner or operator of an OSV of at least 500 GT ITC.
    The estimated expected annual cost incurred by owners or operators 
of OSVs of at least 500 GT ITC is $1,485.70. This expected cost is 
estimated to be less than 0.1% of the

[[Page 70979]]

annual revenue of the two entities identified as small.
Expected Cost to an OSV Less Than 500 GT ITC
    During development of the phase-in schedule summarized in Table 2 
of this Regulatory Analysis section, we realized that the risk profile 
of OSVs less than 500 GT ITC that use DP on the U.S. OCS was much 
smaller than the risk profile of larger-sized vessels that use DP. As a 
result, we decided to grandfather these smaller existing vessels, not 
only from being required to use DP-2 or higher systems, but also from 
being required to comply with the FMEA, CAMO, ASOC, and DP failure and 
incident reporting requirements.
    We estimate that because of these less stringent requirements, the 
total first-year cost of this NPRM to noncompliant owners or operators 
of existing OSVs less than 500 GT ITC is $126.00 per vessel. Table 25 
summarizes the cost per proposed provision to these noncompliant 
vessels.

  Table 25--First-Year Costs to an Existing Non-Compliant OSV Less Than
                               500 GT ITC
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........         $114.40
Replace DP-1 Crewboats..................................            0.00
Cost to receive DP-2 Class Notation.....................            0.00
Conduct an FMEA.........................................            0.00
Develop a CAMO and ASOC.................................            0.00
Report DP System Incidents..............................            0.00
Conduct DP Incident Investigation And Write Report......            0.00
Report Serious Marine Incidents Resulting from DP                   0.00
 Incident...............................................
Submit Annual DP Incident Investigation Report..........            0.00
Obtain DPVAD............................................            0.00
Report DP Surveys.......................................            0.00
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................          114.40
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    We expect that none of the existing population of OSVs less than 
500 GT ITC that use DP would be in compliance with the proposed 
requirement that all DPOs and DPOQs make available to the Coast Guard 
upon request the certificates of completion from their DP training 
course. As such, the entire population of OSVs less than 500 GT ITC 
that use DP would incur a cost of $114.40 in the first year.
    Using the same methodology as before, we estimate the expected 
average cost to these owners or operators per vessel using the 
following formula:
[GRAPHIC] [TIFF OMITTED] TP28NO14.005

    We estimate that the expected average first-year cost to owners or 
operators is $54.88 per vessel. Using this expected cost, we then 
analyze the expected impact on owners or operators identified as small 
entities in Table 20. During the first year of implementation, we 
estimate that all OSVs less than 500 GT ITC would incur a cost of less 
than 0.1 percent of their annual revenue stream.
    Table 26 summarizes the revenue impact that this NPRM would have on 
the existing population of small entities owning or operating OSVs less 
than 500 GT ITC.

Table 26--First-Year Revenue Impact to Small Entities That Own OSVs Less
                             Than 500 GT ITC
------------------------------------------------------------------------
                                                                 Impact
                                                                  from
                     Revenue impact range                        first
                                                                  year
                                                                 costs
------------------------------------------------------------------------
Expected Cost per Vessel.....................................     $54.88
0% < Impact < 1%.............................................       100%
1% < Impact < 3%.............................................         0%
3% < Impact < 5%.............................................         0%
5% < Impact < 10%............................................         0%
Above 10%....................................................         0%
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    In subsequent years, vessel owners or operators of OSVs less than 
500 GT ITC are expected to have costs slightly less than those 
estimated in Table 25 as a result of this proposed rule. We estimate 
that in later years, owners or operators of OSVs less than 500 GT ITC 
that use DP would incur a cost of $21.35 annually.
    Table 27 summarizes the reoccurring costs that these owners or 
operators can expect if this proposed rule is implemented.

  Table 27--First-Year Costs to an Existing Non-Compliant OSV Less Than
                               500 GT ITC
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........          $44.50
Replace DP-1 Crewboats..................................            0.00

[[Page 70980]]

 
Cost to receive DP-2 Class Notation.....................            0.00
Conduct an FMEA.........................................            0.00
Develop a CAMO and ASOC.................................            0.00
Report DP System Incidents..............................            0.00
Conduct DP Incident Investigation And Write Report......            0.00
Report Serious Marine Incidents Resulting from DP                   0.00
 Incidents..............................................
Submit Annual DP Incident Investigation Report..........            0.00
Obtain DPVAD............................................            0.00
Report DP Surveys.......................................            0.00
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................           44.50
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    Again, we expect that all owners or operators of existing OSVs less 
than 500 GT ITC that use DP would incur the full annual cost listed in 
Table 27.
    Using these estimated annual costs, we then calculate the expected 
annual cost to an owner or operator of an OSV less than 500 GT ITC.
    The estimated expected annual cost incurred by owners or operators 
of OSVs of at least 500 GT ITC is $21.35. We estimate the distribution 
of the revenue impact to small entities as a result of this expected 
annual cost to be the same as the distribution of the revenue impact as 
a result of expected first-year costs. Therefore, we estimate the 
impact for all owners or operators of OSVs less than 500 GT ITC to be 
less than 0.1 percent of their annual revenue streams.
Expected Cost to a Crewboat
    Although existing crewboats that use DP while conducting critical 
OSC operations on the U.S. OCS would be grandfathered from having to 
comply with the most costly requirements in this proposed rule 
(replacing a DP-1 system with a DP-2 or higher system, conducting an 
FMEA, and developing and maintaining a CAMO and ASOC), future crewboats 
would not be granted this luxury.
    In order to comply with the proposed DP equipment provision, it is 
likely that an owner or operator who had planned to build a crewboat 
with a DP-1 system to conduct Critical OCS Activities would instead 
need to purchase a larger vessel in order to meet the greater 
mechanical and structural demands of a DP-2 system.\76\ We estimate, 
then, that this proposed requirement would cost an owner or operator 
$876,237 in order to comply.\77\ It is unlikely, however, that a small 
entity would choose to pay this cost up-front. Instead, we assume that 
an owner or operator would finance the cost of this purchase over 10 
years. We estimate that the annual mortgage payment would be $124,756 
to finance this cost over 10 years at a 7-percent interest rate. We 
considered that less favorable financing terms, such as shorter loan 
durations or higher mortgage rates, would be possible. In those cases, 
the annual cost would be higher.
---------------------------------------------------------------------------

    \76\ Although the owner or operator has the option to not 
conduct Critical OSC activities or not use DP while conducting 
Critical OCS activities, the Coast Guard does not anticipate these 
to be likely alternatives, since these alternatives would 
effectively remove the vessel from being considered for future work 
from contractors. Therefore, the Coast Guard believes that the 
preferred option will be purchasing a DP-2 crewboat instead of a DP-
1 crewboat.
    \77\ See the Cost section of this Regulatory Analysis for more 
detail on this cost.
---------------------------------------------------------------------------

    Table 28 summarizes, by proposed requirement, the first-year cost 
to owners or operators of future crewboats that did not meet any of the 
applicable provisions in this proposed rule.

      Table 28--First-Year Costs to a Future Non-Compliant Crewboat
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........         $114.10
Replace DP-1 Crewboats..................................      124,756.44
Cost to receive DP-2 Class Notation.....................       64,250.00
Conduct an FMEA.........................................      275,000.00
Develop a CAMO and ASOC.................................        9,120.00
Report DP System Incidents..............................          177.87
Conduct DP Incident Investigation And Write Report......        2,236.19
Report Serious Marine Incidents Resulting from DP                   3.46
 Incident...............................................
Submit Annual DP Incident Investigation Report..........          169.10
Obtain DPVAD............................................           10.25
Report DP Surveys.......................................            4.10
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................      475,841.80
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    Table 28 shows that the estimated first-year cost to owners or 
operators of future crewboats that would not meet any of the 
requirements in this proposed rule is, after financing, $475,841.80 per 
vessel.

[[Page 70981]]

    However, this cost would only be incurred by a small percentage of 
owners that would have built a DP-1 crewboat in the absence of this 
proposed rule. In addition to these owners, we estimate that there 
would be some owners who would incur a smaller cost, because they are 
expected to build crewboats with DP-2 systems even in the absence of 
this proposed rule. Finally, we expect that there will be some owners 
who would choose not to build a crewboat with DP, and therefore, would 
not incur costs from this proposed rule.\78\
---------------------------------------------------------------------------

    \78\ Through statistical analysis, we estimate that 1 crewboats 
per year would incur the full cost listed in Table 28 in the first 
three years following issuance of a final rule.
---------------------------------------------------------------------------

    In addition to new builds, owners or operators of existing 
crewboats that use DP systems would also incur a cost to comply with 
the reporting requirements of this proposed rule. Using publicly 
available data on vessel specifics, we estimate that, of existing 
vessels that use DP, 30 percent use DP-1 systems, with the remainder 
using DP-2 systems.\79\ Further, there are 224 crewboats currently 
operating in U.S. waters that do not use DP systems.
---------------------------------------------------------------------------

    \79\ These percentages are based on a review of all existing 
crewboats' vessel specifics, 13 crewboats list DP-1 systems, 30 list 
DP-2 systems, and 224 list no DP system.
---------------------------------------------------------------------------

    We estimate that this proposed rule would result in a first-year 
cost of $114.40 per vessel to owners or operators of existing crewboats 
that use DP systems, as they would be grandfathered from being required 
to comply with most of the requirements in this proposed rule.
    Table 29 summarizes this estimated cost.

    Table 29--First-Year Costs to an Existing Non-Compliant Crewboat
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........         $114.40
Replace DP-1 Crewboats..................................            0.00
Cost to receive DP-2 Class Notation.....................            0.00
Conduct an FMEA.........................................            0.00
Develop a CAMO and ASOC.................................            0.00
Report DP System Incidents..............................            0.00
Conduct DP Incident Investigation And Write Report......            0.00
Report Serious Marine Incidents Resulting from DP                   0.00
 Incident...............................................
Submit Annual DP Incident Investigation Report..........            0.00
Obtain DPVAD............................................            0.00
Report DP Surveys.......................................            0.00
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................          114.40
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    Although the first-year cost to owners or operators for future 
builds is estimated to be large, this cost will be borne by only a 
small percentage of crewboat owners or operators. Because we assume, 
for simplicity, that these owners or operators already own or operate 
crewboats that are in operation today, we calculate the expected first-
year cost to the existing eight crewboat owners or operators in 
business today.
    Using the expected value formula,
    [GRAPHIC] [TIFF OMITTED] TP28NO14.006
    
we estimate that the expected average first-year cost to crewboat 
owners or operators would be $4,381.23 as a result of this proposed 
rule.
    Using this expected average first-year cost, we then estimate the 
first-year revenue impact to the three small entities identified 
earlier in Table 21. During the first-year of implementation, we 
estimate that 67 percent of these owners or operators would incur a 
cost less than 1 percent of their annual revenue stream. The other 
owners or operators would incur costs less than 3 percent of their 
annual revenue stream.
    Table 30 summarizes the revenue impact that this NPRM would have on 
the existing population of small crewboat owners.

Table 30--First-Year Revenue Impact to Small Entities That Own Crewboats
------------------------------------------------------------------------
                                                             Impact from
                    Revenue impact range                      first year
                                                                costs
------------------------------------------------------------------------
Expected Cost per Vessel...................................    $4,381.23
0% < Impact <1%............................................          67%
1% < Impact <3%............................................          33%
3% < Impact <5%............................................           0%
5% < Impact <10%...........................................           0%
Above 10%..................................................           0%
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    In subsequent years, we expect that the annual cost to comply with 
this NRPM would decrease significantly for owners or operators of 
newly-built crewboats and slightly for owners or operators of existing 
crewboats.
    Table 31 summarizes the annual cost to an owner or operator of a 
new crewboat that would not have met the design standards of this 
proposed rule.

[[Page 70982]]



        Table 31--Annual Costs to a Future Non-Compliant Crewboat
------------------------------------------------------------------------
                                                            First year
                       Requirement                             cost
------------------------------------------------------------------------
Make Available DPO/DPOQ Training Certificates...........          $44.50
Replace DP-1 Crewboats..................................      124,756.44
Cost to receive DP-2 Class Notation.....................            0.00
Conduct an FMEA.........................................            0.00
Develop a CAMO and ASOC.................................            0.00
Report DP System Incidents..............................          177.87
Conduct DP Incident Investigation And Write Report......        2,236.19
Report Serious Marine Incidents Resulting from DP                   3.46
 Incident...............................................
Submit Annual DP Incident Investigation Report..........          169.10
Obtain DPVAD............................................            0.00
Report DP Surveys.......................................            4.10
Submit DP Systems Plan..................................            0.00
                                                         ---------------
    Total...............................................      127,391.65
------------------------------------------------------------------------
* Numbers may not add due to rounding.
* Dollar figures are in 2013 terms.

    For future builds that would meet the DP design standards even in 
the absence of this proposed rule, the estimated annual cost to owners 
or operators is $2,635.21. Lastly, we estimate that owners or operators 
of existing crewboats that use DP would incur an annual cost of $44.50.
    Using the same formula we used above, we calculate the expected 
annual cost per vessel to a crewboat owner or operator.
[GRAPHIC] [TIFF OMITTED] TP28NO14.007

    We estimate that the expected annual cost to crewboat owners or 
operators is $498.43 per vessel as a result of this proposed rule. 
After the first year of implementation, all crewboat owners who are 
defined as small entities would incur a cost less than 0.01 percent of 
their revenue stream annually.
5. An Identification, to the Extent Practicable, of All Relevant 
Federal Rules That May Duplicate, Overlap, or Conflict With the 
Proposed Rule
    There are no relevant Federal rules that may duplicate, overlap, or 
conflict with the proposed rule.
6. A Description of any Significant Alternatives to the Proposed Rule 
That Accomplish the Stated Objectives of Applicable Statutes and That 
Minimize Any Significant Economic Impact of the Proposed Rule on Small 
Entities
    Because of the frequency of DP-related incidents, as well as the 
severe consequences that could occur as the result of an incident, we 
decided that the benefits that would be gained through requiring 
compliance from existing OSVs and crewboats would outweigh any 
additional costs that would be incurred by industry.
    To minimize the impact on existing OSVs and crewboats, we developed 
the proposed alternative, which uses a phase-in schedule to provide 
existing non-drilling vessels with some flexibility in meeting the 
provisions of this proposed alternative. Further, we decided to 
grandfather existing non-drilling vessels from being required to comply 
with the most costly provisions in this proposed rule, namely, the 
provisions that would require a vessel using DP to use a DP-2 system or 
higher and obtain a DP-2 or higher class notation.
    By providing flexibility to existing OSVs and crewboats, the 
proposed alternative minimizes costs without sacrificing benefits that 
could accrue from a larger population of vessels.
    If you think that your business, organization, or governmental 
jurisdiction qualifies as a small entity and that this NPRM would have 
a significant economic impact on it, please submit a comment to the 
Docket Management Facility at the address under the ``Public 
Participation and Request for Comments'' section of this preamble.

C. Assistance for Small Entities

    Under section 213(a) of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (Pub. L. 104-121), we want to assist small 
entities in understanding this NPRM so that they can better evaluate 
its effects on them and participate in the rulemaking. If the NPRM 
would affect your small business, organization, or governmental 
jurisdiction and you have questions concerning its provisions or 
options for compliance, please consult LT Jeff Bybee, Project Manager, 
CG-ENG-1, Coast Guard, telephone 202-372-1357. The Coast Guard will not 
retaliate against small entities that question or complain about this 
proposed rule or any policy or action of the Coast Guard.
    Small businesses may send comments on the actions of Federal 
employees who enforce, or otherwise determine compliance with, Federal 
regulations to the Small Business and Agriculture Regulatory 
Enforcement Ombudsman and the Regional Small Business Regulatory 
Fairness Boards. The Ombudsman evaluates these actions annually and 
rates each agency's responsiveness to small business. If you wish to 
comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR 
(1-888-734-3247).

D. Collection of Information

    This NPRM would call for a collection of information under the 
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). As defined in 5 
CFR 1320.3(c), ``collection of information'' comprises reporting, 
recordkeeping, monitoring, posting, labeling, and other, similar 
actions. The title and description of the information collections, a 
description of those who must collect the information,

[[Page 70983]]

and an estimate of the total annual burden follow. The estimate covers 
the time for reviewing instructions, searching existing sources of 
data, gathering and maintaining the data needed, and completing and 
reviewing the collection.
    Title: Requirements for MODUs and Other Vessels Conducting Outer 
Continental Activities with Dynamic Positioning Systems.
    OMB Control Number: 1625--NEW.
    Summary Of The Collection Of Information: Title 33 CFR Sections 
140.315, 140.335, and Title 46 CFR 61.50-4, 61.50-3, 61.50-2, and 
62.20-2 of this NPRM would have COI requirements for vessel owners or 
operators, and authorized DP assurance providers (DPSAOs). Section 
140.315 would require owners or operators to provide the Coast Guard 
proof of the training records for their DPOs and DPOQs within 48 hours 
of a request. Section 140.335 (j) would require a vessel owner or 
operator to report to the cognizant OCMI a DP incident that results in 
either an emergency disconnect or a serious marine incident as defined 
by 46 CFR 4.03-2.
    Proposed Sec.  61.50-4 would require an authorized DP assurance 
provider to submit a DP incident investigation report annually to OCS 
NCOE if the vessel is a MODU conducting Critical OCS Activities; is a 
vessel other than a MODU conducting Critical OCS Activities while using 
a DP system installed after the effective date of a final rule; or is a 
vessel other than a MODU conducting Critical OCS Activities, and is 
greater than 500 GT ITC and uses a DP system installed prior to the 
effective date of the final rule. Section 61.50-3 would require a 
prospective DP assurance organization to submit an application to the 
OCS NCOE prior to being recognized by the Coast Guard as an authorized 
DPSAO. Sections 61.50-2 would require the DPSAO conducting a vessel's 
DP survey to notify the cognizant OCMI of the time and location of a DP 
initial and annual survey at least 30 days prior to when the survey 
would take place. Finally, Sec.  62.20-2 would require an DPSAO to 
submit a copy of the DP system plan for each MODU or other vessel of at 
least 6,000 GT ITC that uses a DP system to conduct Critical OCS 
Activities.
    Need for Information: The Coast Guard is requesting this 
information to determine whether a vessel satisfies the new regulatory 
requirements for vessel designs and operations, DP surveys, and DPO and 
DPOQ training. Furthermore, this information is required to better 
understand why DP system incidents occur.
    Proposed Use of Information: The Coast Guard would use this 
information to determine whether a vessel satisfies the new regulatory 
requirements for vessel designs and operations, DP surveys, and DPO and 
DPOQ training. This information also would be used to better understand 
why DP system incidents occur.
    Description of the Respondents: The respondents would be vessel 
owners or operators, ship engineers, and authorized DPSAOs of U.S.- and 
foreign-flag OSVs and MODUs that operate on the U.S. OCS.
    Number of Respondents: This NPRM, if promulgated, would have 719 
respondents in the first year after the effective date of a final 
rule.\80\ Over the course of the 3-year collection period, there would 
be 784 respondents.\81\
---------------------------------------------------------------------------

    \80\ This is calculated from the sum of the projected affected 
population figures listed earlier in this analysis (610 OSVs, 59 
MODUs, 46 crewboats, and 4 DPSAOs).
    \81\ This is calculated from the sum of the projected affected 
population figures at the end of the three year collection period of 
the analysis (652 OSVs, 73 MODUs, 53 crewboats, and 6 DPSAOs).
---------------------------------------------------------------------------

    Frequency of Response: The number of responses per year of this 
NPRM would vary by requirement. Owners or operators must provide proof 
of training for each DPO and DPOQ employed (we expect eight training 
certificates would need to be made available during the first year and 
three training certificates, on average, in subsequent years, to 
account for a worker turnover rate of 38.9 percent per year).\82\ 
Owners or operators would be required to report, to the cognizant OCMI, 
DP incidents that result in an emergency disconnect or serious marine 
incident, which we estimate would occur at a rate of 0.19 and 0.05 per 
vessel per year, respectively. An authorized DP assurance provider 
would need to submit an application to the OCS NCOE in order to become 
an authorized DPSAO.
---------------------------------------------------------------------------

    \82\ These numbers are based on the assumption that each entity 
will need eight DPOs or DPOQs on staff.
---------------------------------------------------------------------------

    Additionally, the DPSAO would need to submit an annual summary 
report, per vessel, of DP incidents investigations that were conducted 
throughout the year. A DPSAO would also be required to submit a 
vessel's DP system plan once. Finally, an authorized DPSAO would need 
to report the time and location of their initial DP survey once per 
vessel, as well as report the time and location of their annual DP 
survey once per year per vessel starting in the second year.
    Burden of Response: The burden per response for each regulatory 
requirement varies. Details are shown in Table 32 for the burden to 
industry.

                       Table 32--Summary of Industry Burden From Collection of Information
----------------------------------------------------------------------------------------------------------------
                                                                  Total annual   Average burden    Total annual
                            PRA Item                                number of     per response     burden  (in
                                                                    responses      (in hours)         hours)
----------------------------------------------------------------------------------------------------------------
Make Available Certificates of Training Completion for DPOs/              5,720             0.1            572.0
 DPOQs Year 1 [140.315(d)].....................................
Make Available Certificates of Training Completion for DPOs/              2,545             0.1            254.5
 DPOQs Year 2 [140.315(d)].....................................
Make Available Certificates of Training Completion for DPOs/              2,534             0.1            253.4
 DPOQs Year 3 [140.315(d)].....................................
Submit Annual DP Failure Investigation Report to OCMI Year 1                 89             4.0            356.0
 [61.50-4(b)]..................................................
Submit Annual DP Failure Investigation Report to OCMI Year 2                129             4.0            516.0
 [61.50-4(b)]..................................................
Submit Annual DP Failure Investigation Report to OCMI Year 3                152             4.0            608.0
 [61.50-4(b)]..................................................
Report DP Failures that Result in Emergency Disconnects to OCMI              16             0.3              5.3
 Year 1 [140.335(j)]...........................................
Report DP Failures that Result in Emergency Disconnects to OCMI              18             0.3              6.0
 Year 2 [140.335(j)]...........................................
Report DP Failures that Result in Emergency Disconnects to OCMI              20             0.3              6.7
 Year 3 [140.335(j)]...........................................
Report DP Failures that Result in Serious Marine Incidents to                 6             0.3              2.0
 OCMI Year 1 [140.335(j)]......................................
Report DP Failures that Result in Serious Marine Incidents to                 9             0.3              3.0
 OCMI Year 2 [140.335(j)]......................................
Report DP Failures that Result in Serious Marine Incidents to                11             0.3              3.7
 OCMI Year 3 [140.335(j)]......................................
Submit DPSAO Application to OCSNCOE Year 1 [61.50-3]...........               4            30.0            120.0
Submit DPSAO Application to OCSNCOE Year 2 [61.50-3]...........               1            30.0             30.0
Submit DPSAO Application to OCSNCOE Year 3 [61.50-3]...........               1            30.0             30.0

[[Page 70984]]

 
Report Initial Surveys to OCMI Year 1 [61.50-2]................              89             0.1              8.9
Report Initial Surveys to OCMI Year 2 [61.50-2]................              40             0.1              4.0
Report Initial Surveys to OCMI Year 3 [61.50-2]................              23             0.1              2.3
Report Annual Surveys to OCMI Year 1 [61.50-2].................  ..............             0.1  ...............
Report Annual Surveys to OCMI Year 2 [61.50-2].................              89             0.1              8.9
Report Annual Surveys to OCMI Year 3 [61.50-2].................             129             0.1             12.9
Submit DP System Plans to MSC Year 1 [62.20-2].................              64             0.5             32.0
Submit DP System Plans to MSC Year 2 [62.20-2].................              13             0.5              6.5
Submit DP System Plans to MSC Year 3 [62.20-2].................              11             0.5              5.5
                                                                ------------------------------------------------
    Total: Year 1..............................................           5,988  ..............          1,096
                                                                ------------------------------------------------
    Total: Future Years........................................           5,725  ..............          1,751
                                                                ------------------------------------------------
        Total..................................................          11,713  ..............          2,848
----------------------------------------------------------------------------------------------------------------

    Estimate of Total Annual Burden: This NPRM would have a first-year 
burden on industry of approximately 1,096 hours. The average annual 
burden on industry of this NPRM would be approximately 876 hours.

E. Federalism

    A rule has implications for federalism under E.O. 13132 
(``Federalism''), if it has a substantial direct effect on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. We have analyzed this NPRM under E.O. 13132 and 
have determined that it is consistent with the fundamental federalism 
principles and preemption requirements described in E.O. 13132. Our 
analysis follows.
    It is well settled that States may not regulate in categories 
reserved for regulation by the Coast Guard. It is also well settled, 
now, that all of the categories covered in 46 U.S.C. 3306, 3703, 7101, 
and 8101 (design, construction, alteration, repair, maintenance, 
operation, equipping, personnel qualification, and manning of vessels), 
as well as the reporting of casualties and any other category in which 
Congress intended the Coast Guard to be the sole source of a vessel's 
obligations, are within fields foreclosed from regulation by the 
States. (See the decision of the Supreme Court in the consolidated 
cases of United States v. Locke and Intertanko v. Locke, 529 U.S. 89, 
120 S.Ct. 1135 (March 6, 2000).) This NPRM addresses the design, 
construction, maintenance, operation, training, and personnel 
qualification of MODUs and other vessels equipped with DP systems. For 
the portions of this NPRM that are promulgated under the authorities of 
46 U.S.C. 3306, 3703, 7101, and 8101, the States may not regulate 
within these fields. Thus, these rules are consistent with the 
principles of federalism and preemption requirements in E.O. 13132.
    Additionally, for those portions of this NPRM that are promulgated 
under the authority of 43 U.S.C. 1333, States are also field preempted 
from prescribing safety regulations on the OCS. Congress specifically 
granted the exclusive authority, through delegation by the DHS 
Secretary, to the Coast Guard, stating that the Coast Guard ``shall 
have the authority to promulgate and enforce such reasonable 
regulations with respect to lights and other warning devices, safety 
equipment, and other matters relating to the promotion of safety of 
life and property on the artificial islands, installations, and other 
devices'' or on ``the waters adjacent thereto'' on the OCS. 
Furthermore, States do not have jurisdiction to regulate on the OCS. 
Because states may not regulate within these categories on the OCS, 
this proposed rule is consistent with the principles of federalism and 
preemption requirements in E.O. 13132.
    While it is well settled that States may not regulate in categories 
in which Congress intended the Coast Guard to be the sole source of 
authority to issue regulations, the Coast Guard recognizes the key role 
that State and local governments may have in making regulatory 
determinations. Additionally, for rules with federalism implications 
and preemptive effect, E.O. 13132 specifically directs agencies to 
consult with State and local governments during the rulemaking process. 
If you believe this proposed rule would have implications for 
federalism under E.O. 13132, please contact the person listed in the 
FOR FURTHER INFORMATION CONTACT section of this preamble.

F. Unfunded Mandates Reform Act

    The Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1531-1538, 
requires Federal agencies to assess the effects of their discretionary 
regulatory actions. In particular, the Act addresses actions that may 
result in the expenditure by a State, local, or tribal government, in 
the aggregate, or by the private sector of $100,000,000 (adjusted for 
inflation) or more in any 1 year. Though this NPRM would not result in 
such an expenditure, we do discuss the effects of this NPRM elsewhere 
in this preamble.

G. Taking of Private Property

    This NPRM would not cause a taking of private property or otherwise 
have taking implications under E.O. 12630, Governmental Actions and 
Interference with Constitutionally Protected Property Rights.

H. Civil Justice Reform

    This NPRM satisfies applicable standards in sections 3(a) and 
3(b)(2) of E.O. 12988, Civil Justice Reform, to minimize litigation, 
eliminate ambiguity, and reduce burden.

I. Protection of Children

    We have analyzed this NPRM under E.O. 13045, Protection of Children 
from Environmental Health Risks and Safety Risks. This NPRM is not an 
economically significant rule and would not create an environmental 
risk to health or risk to safety that might disproportionately affect 
children.

J. Indian Tribal Governments

    This NPRM does not have tribal implications under E.O. 13175, 
Consultation and Coordination with

[[Page 70985]]

Indian Tribal Governments, because it would not have a substantial 
direct effect on one or more Indian tribes, on the relationship between 
the Federal Government and Indian tribes, or on the distribution of 
power and responsibilities between the Federal Government and Indian 
tribes.

K. Energy Effects

    We have analyzed this NPRM under E.O. 13211, Actions Concerning 
Regulations That Significantly Affect Energy Supply, Distribution, or 
Use. We have determined that it is not a ``significant energy action'' 
under that order because it is not a ``significant regulatory action'' 
under E.O. 12866 and is not likely to have a significant adverse effect 
on the supply, distribution, or use of energy.

L. Technical Standards

    The National Technology Transfer and Advancement Act, codified as a 
note to 15 U.S.C. 272, directs agencies to use voluntary consensus 
standards in their regulatory activities unless the agency provides 
Congress, through OMB, with an explanation of why using these standards 
would be inconsistent with applicable law or otherwise impractical. 
Voluntary consensus standards are technical standards (e.g., 
specifications of materials, performance, design, or operation; test 
methods; sampling procedures; and related management systems practices) 
that are developed or adopted by voluntary consensus standards bodies.
    This NPRM uses the following voluntary consensus standards:

 IEC 60092-504--Electrical Installation in Ships--Part 504: 
Special Features--Control and Instrumentation Third Edition, 2001 
(``IEC 60092-504'')
 IMO Circular 645--Guidelines for Vessels with Dynamic 
Positioning Systems, 1994 (``IMO MSC/Circ.645'')
 Marine Technology Society DP Operations Guidance (``MTS DP 
Operations Guide''), Part 1, October 2010
 Marine Technology Society DP Operations Guidance (``MTS DP 
Operations Guide''), Part 2, Appendix 1, March 2012
 Marine Technology Society DP Operations Guidance (``MTS DP 
Operations Guide''), Part 2, Appendix 2, July 2012
 Marine Technology Society DP Operations Guidance (``MTS DP 
Operations Guide''), Part 2, Appendix 3, July 2012

    The proposed sections that reference these standards and the 
locations where these standards are available are listed in 33 CFR 
140.7, and 46 CFR 61.03-1, and 62.05-1. If you disagree with our 
analysis of the voluntary consensus standards listed above or are aware 
of voluntary consensus standards that might apply but are not listed, 
please send a comment to the docket using one of the methods under 
ADDRESSES. In your comment, please explain why you disagree with our 
analysis and/or identify voluntary consensus standards we have not 
listed that might apply.

M. Environment

    We have analyzed this NPRM under Department of Homeland Security 
Management Directive 023-1 and Commandant Instruction M16475.lD, which 
guide the Coast Guard in complying with the National Environmental 
Policy Act of 1969 (NEPA)(42 U.S.C. 4321-4370f), and have made a 
preliminary determination that there are no factors in this case that 
would limit the use of a categorical exclusion under section 2.B.2 of 
the Instruction. Therefore, this NPRM is categorically excluded from 
further environmental documentation under figure 2-1, paragraphs 
(34)(a),(c),(d), and (e) of the Instruction, which exclude regulations 
that are editorial or procedural and regulations concerning: Internal 
agency functions or organization; training, qualifying, licensing and 
disciplining of maritime personnel; manning, documentation, inspection 
and equipping of vessels; and equipment approval and carriage 
requirements. This NPRM is also categorically excluded under paragraph 
6(a) of the Appendix to National Environmental Policy Act: Coast Guard 
Procedures for Categorical Exclusions, Notice of Final Agency Policy, 
published in the Federal Register on July 23, 2002 (67 FR 48243), which 
excludes regulations concerning vessel operation and safety standards. 
The environmental impact associated with requiring additional 
equipment, training, and improved facilities will be insignificant. An 
``Environmental Analysis Check List'' is available in the docket by 
following the instructions in the ``Viewing comments and documents'' 
section above.

List of Subjects

33 CFR Part 140

    Continental shelf, Incorporation by reference, Investigations, 
Marine safety, Occupational safety and health, Penalties, Reporting and 
recordkeeping requirements.

33 CFR Part 143

    Continental shelf, Marine safety, Occupational safety and health, 
Vessels.

33 CFR Part 146

    Continental shelf, Marine safety, Occupational safety and health, 
Reporting and recordkeeping requirements, Vessels.

46 CFR Part 61

    Incorporation by reference, Reporting and recordkeeping 
requirements, Vessels.

46 CFR Part 62

    Incorporation by reference, Reporting and recordkeeping 
requirements, Vessels.

    For the reasons discussed in the preamble, the Coast Guard proposes 
to amend 33 CFR parts 140, 143, and 146, and 46 CFR parts 61 and 62 as 
follows:

Title 33--Navigation and Navigable Waters

PART 140--GENERAL

0
1. The authority citation for part 140 continues to read as follows:

    Authority:  43 U.S.C. 1333, 1348, 1350, 1356; Department of 
Homeland Security Delegation No. 0170.1.

0
2. Revise Sec.  140.7 to read as follows:


Sec.  140.7  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Coast Guard must publish a notice of 
change in the Federal Register and the material must be available to 
the public. All approved material is available for inspection at the 
U.S. Coast Guard, Office of Design and Engineering Standards (CG-ENG), 
2703 Martin Luther King Jr. Ave., SE., Stop 7509, Washington, DC 20593-
7509, and is available from the sources listed below. It is also 
available for inspection at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030, or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) American National Standards Institute (ANSI), 11 West 42nd 
Street, New York, NY 10036, http://www.ansi.org/.
    (1) ANSI A10.14-1975--Requirements for Safety Belts, Harnesses, 
Lanyards, Lifelines, and Drop Lines for Construction and Industrial 
Use, IBR approved for Sec.  142.42.

[[Page 70986]]

    (2) ANSI/UL1123-1987--Standard for Marine Buoyant Devices, IBR 
approved for Sec.  143.405.
    (3) ANSI Z41-1983--American National Standard for Personal 
Protection-Protective Footwear, IBR approved for Sec.  142.33.
    (4) ANSI Z87.1-1979--Practice for Occupational and Educational Eye 
and Face Protection, IBR approved for Sec.  142.27.
    (5) ANSI Z88.2-1980--Practices for Respiratory Protection, IBR 
approved for Sec.  142.39.
    (6) ANSI Z89.1-1981--Safety Requirements for Industrial Head 
Protection, IBR approved for Sec.  142.30.
    (c) International Maritime Organization (IMO), 4 Albert Embankment, 
London SE1 7SR, +44 (0)20 7735 7611, http://www.imo.org. (1) IMO 
Assembly Resolution A.414 (XI) Code for Construction and Equipment of 
Mobile Offshore Drilling Units, IBR approved for Sec. Sec.  143.207 and 
146.205.
    (2) IMO MSC/Circ.645--Guidelines for Vessels with Dynamic 
Positioning Systems, 1994 (``IMO MSC/Circ.645''), IBR approved for 
Sec.  140.325.
    (3) The International Convention on Standards of Training, 
Certification and Watchkeeping for Seafarers, 1978, as amended (the 
STCW Convention or the STCW), IBR approved for Sec.  140.320.
    (4) The Seafarers' Training, Certification and Watchkeeping Code, 
as amended (the STCW Code), IBR approved for Sec.  140.320.
    (d) Marine Technology Society (MTS), 1100 H Street NW., Suite LL-
100, Washington, DC 20005, 202-717-8705, http://www.mtsociety.org.
    (1) MTS DP Operations Guidance for MODUs (March 2012), Project 
Construction Vessels (July 2012), Logistics Vessels (July 2012), IBR 
approved for Sec.  140.335.
    (2) Reserved.
0
3. Add new subpart D, consisting of Sec. Sec.  140.300 through 140.350, 
to read as follows:
Subpart D--Dynamic Positioning Systems
Sec.
140.300 Applicability.
140.305 Definitions.
140.310 DP system personnel requirements.
140.315 DP system training requirements.
140.320 DP system manning requirements.
140.325 Operations.
140.330 Minimum DP system requirements.
140.335 Intermediate DP system requirements.
140.340 Standard DP system requirements.
140.345 Enhanced DP system requirements.
140.350 Operational Control.

Subpart D--Dynamic Positioning Systems


Sec.  140.300  Applicability.

    This subpart applies to all MODUs and vessels other than MODUs that 
use a dynamic positioning (DP) system to engage in Outer Continental 
Shelf (OCS) activities on the U.S. OCS.


Sec.  140.305  Definitions.

    The following definitions apply throughout this subpart:
    Activity Specific Operating Criteria (ASOC) means criteria that set 
out the operational, environmental, and equipment performance limits 
considered necessary for safe dynamic positioning (DP) system 
operations while carrying out a specific activity. The ASOC sets out 
various levels of operator action as these limits are approached or 
exceeded and varies depending on the activity. The ASOC defines whether 
the DP system must be configured in its Critical Activity Mode of 
Operation (CAMO) during that specific activity. If the CAMO is required 
for that specific activity, the ASOC will require the vessel to cease 
operations when an equipment failure makes operation in CAMO 
impossible.
    Critical Activity Mode of Operation (CAMO) means a tabulated 
presentation of how to configure the vessel's DP system, including 
power generation and distribution, and propulsion and position 
reference systems, so that the DP system as a whole is fault-tolerant 
and fault-resistant. The CAMO is validated by a Failure Modes and 
Effects Analysis (FMEA) proving test at the initial survey described in 
Sec.  61.50-5 of this subchapter.
    Critical OCS Activities means OCS activities where maintaining 
station is critical because a loss of position could cause a personal 
injury, environmental pollution, or catastrophic damage. See Sec.  
140.10 of this subchapter for the definition of OCS activity.
    Critical OCS Activities on a MODU means OCS activities where a loss 
of position could cause a major process safety incident, such as a loss 
of well control where flow reaches the MODU, or water. These OCS 
activities include but are not limited to: Well test and completion 
operations; running non-sheareables such as drill collars through the 
Blowout Preventer (BOP); and an OCS activity on a well where 
hydrostatic balance is lost and BOP rams are used to maintain well 
control. The Coast Guard may identify other activities that fall within 
this definition.\83\ Each MODU that engages in Critical OCS Activities 
must include those activities in the MODU's WSOC.
---------------------------------------------------------------------------

    \83\ The Coast Guard would provide industry with advance notice 
and an opportunity to provide input before determining that 
additional activities meet the definition of critical OCS activities 
on a MODU.
---------------------------------------------------------------------------

    Critical OCS Activities on Vessels Other than MODUs means OCS 
activities where a loss of position could cause a serious marine 
incident as defined by 46 CFR 4.03-2. These OCS activities include but 
are not limited to: OCS activities where loss of position risks a 
collision with a production riser; transfer of oil or other hazardous 
material while underway; personnel transfer between vessels or 
structures while underway; and engaging in diving support or remotely 
operated vehicle operations when maintaining station is critical. The 
Coast Guard may identify other activities that fall within this 
definition.\84\ Each vessel that engages in Critical OCS Activities 
must include those activities in the vessel's ASOC.
---------------------------------------------------------------------------

    \84\ The Coast Guard would provide industry with advance notice 
and an opportunity to provide input before determining that 
additional activities meet the definition of critical OCS activities 
on vessels other than MODUs.
---------------------------------------------------------------------------

    Dynamic Positioning Operator or DPO means a mariner who holds a 
credential as a rating forming part of the navigational watch, able 
seafarer-deck, operational-level deck officer, chief mate, master, a 
rating forming part of the engineering watch, able seafarer-engine, 
operational-level engineer officer, second engineer, or chief engineer; 
and has completed the applicable training requirements of 33 CFR 
140.310 and, if applicable, 33 CFR 140.315.
    Dynamic Positioning Operator, Qualified or DPOQ means a mariner who 
holds a credential as a rating forming part of the navigational watch, 
able seafarer-deck, operational-level deck officer, chief mate, master, 
rating forming part of the engineering watch, able seafarer-engine, 
operational-level engineer officer, second engineer, or chief engineer; 
has completed the applicable training requirements of 33 CFR 140.310 
and, if applicable, Sec.  33 CFR 140.315 for that specific vessel; and 
has obtained the written endorsement of the vessel's DPO and master for 
that specific DP system.
    Dynamic Positioning System or DP System is defined in 46 CFR 62.10-
1.
    Direct communication, for purposes of 33 CFR 140.310 only, means 
being in the direct line of sight of the officer in charge of the 
navigational watch, or maintaining direct two-way communications by a 
convenient, reliable means, such as a predetermined

[[Page 70987]]

working frequency over a handheld radio.
    Dynamic Positioning System Assurance Organization or DPSAO means an 
organization approved by the Coast Guard under 46 CFR 61.50-3 to 
conduct independent verification that a MODU or other vessel's DP 
system is in compliance with applicable requirements contained in this 
subchapter.
    Vessels include, but are not limited to, Mobile Offshore Drilling 
Units (MODUs). Vessels other than MODUs that conduct certain activities 
or possess certain design characteristics means vessels that conduct 
such activities or possess such characteristics and are not MODUs.
    Well Specific Operating Criteria (WSOC) means criteria that set out 
the operational, environmental, and equipment performance limits 
considered necessary for safe DP system operations while operating on a 
well. The WSOC sets out various levels of operator action as these 
limits are approached or exceeded, and varies depending on the well or 
location. The WSOC defines when the DP system must be configured in its 
CAMO during drilling or production. If the CAMO is required for that 
specific activity, the WSOC will require the MODU to cease operations 
when an equipment failure makes operation in CAMO impossible.


Sec.  140.310  DP system personnel requirements.

    (a) When using a dynamic positioning (DP) system to engage in Outer 
Continental Shelf (OCS) activities on the U.S. OCS, each mobile 
offshore drilling unit (MODU) or other vessel to which this subpart 
applies must have on board a sufficient number of Dynamic Positioning 
Operators (DPOs) and Dynamic Positioning Operators, Qualified (DPOQs) 
to meet the following operational requirements:
    (1) DPO and DPOQs must meet the rest hour requirements in 46 CFR 
15.1111.
    (2) DPOQs operating the DP system must be under the direct 
supervision of a DPO.
    (3) A DPO or DPOQ must be available at the DP operating station.
    (b) Determination of the number of DPOs and DPOQs must take into 
account the nature of the DP operations and the operational 
requirements of the DP system.
    (c) On a MODU or other vessel using a DP system to engage in OCS 
activities on the U.S. OCS, navigational watches must be maintained at 
all times as required in Sec.  140.320 of this subpart. The DPO or DPOQ 
must be in direct communication with the officer in charge of the 
navigational watch during DP system operations. Nothing in this section 
is to be interpreted as relinquishing or lessening the responsibility 
of the master and watchstanding officer(s) to ensure the safe 
navigation and/or operation of the vessel.
    (d) When using a DP system to engage in OCS activities on the U.S. 
OCS, each MODU or other vessel must have a properly trained DPO 
operating the DP system or directly supervising a DPOQ operating the DP 
system.
    (e) A DPOQ on each MODU or other vessel using a DP system to engage 
in OCS activities on the U.S. OCS may operate the DP system on that 
specific MODU or other vessel only after meeting the training and 
practical experience requirements for that vessel and being endorsed in 
writing by the DPO and master of that MODU or other vessel.
    (f) While operating the DP system pursuant to paragraph (d) of this 
section, the mate or officer of the watch may also serve as the DPO 
provided the mate or officer holds the appropriate credential and the 
DP system control systems are collocated with the navigational 
equipment.


Sec.  140.315  DP system training requirements.

    (a) The Dynamic Positioning Operator (DPO) must receive training 
and practical experience in the operation of the dynamic positioning 
(DP) system and its components. The content of training and experience 
must include all provisions of paragraph (b) of this section, and the 
following:
    (1) The DP system components, including the control station, power 
generation and management, propulsion units, position reference 
systems, heading reference systems, environmental reference systems, 
and external force reference systems, such as hawser tension gauges.
    (2) The range of routine DP operations, as well as the handling of 
DP faults, failures, incidents, and emergencies, to ensure that 
operations are continued or terminated safely.
    (3) The type and purpose of documentation associated with DP 
operations, such as operational manuals, Failure Modes and Effects 
Analysis (FMEAs), and capability plots.
    (b) To be qualified to operate a DP system, the Dynamic Positioning 
Operator, Qualified (DPOQ) must have--
    (1) Completed training that provides an introduction to the 
functions and use of a DP system;
    (2) Completed 30 days of DP system training on board a vessel 
equipped with a DP system, including training on the design, 
components, related and integrated shipboard systems, system redundancy 
alarms, and warnings for that specific vessel's DP system;
    (3) Demonstrated thorough knowledge of the DP system operating 
manual for the specific vessel on which the DPOQ will serve, including 
procedures for shifting the DP system between all normal operational 
modes and emergency procedures. A DPOQ who will serve on a vessel 
engaging in Critical Outer Continental Shelf (OCS) Activities must also 
demonstrate thorough knowledge of the industrial mission, including the 
Critical Activity Mode of Operations, and either the Activity Specific 
Operating Criteria or Well Specific Operating Criteria as defined in 46 
CFR 62.10-1.
    (4) Demonstrated a fundamental understanding of the specific DP 
system's FMEA and its implications; and
    (5) Demonstrated familiarity with the vessel's specific DP system, 
including participating in a walkthrough of the design and mechanical 
features with the DPO, to include at a minimum--
    (i) Power generation;
    (ii) Power distribution;
    (iii) Thruster units and associated equipment;
    (iv) Power management/logic; and
    (v) DP system control interfaces and related electronics and 
computer functions.
    (c) DPOs and DPOQs must carry the original copy of their DP system 
record of training or be able to provide such a copy to a requesting 
authority within 48 hours of the request.
    (d) The Coast Guard will accept company letters, course completion 
certificates from a training institution, letters or course completion 
certificates from the DP system manufacturer, or certification from an 
industry-accepted organization as proof of DP system training.
    (e) The owner or operator of a U.S.-documented seagoing vessel 
using a DP system to maintain station must maintain a copy of each DPO 
and DPOQ training record in accordance with 46 CFR 15.1107.
    (f) All onboard DP system training must be documented in each 
mariner's record of training in accordance with 46 CFR 15.1107.
    (g) The master, officers in charge of a navigational watch, and 
DPOs must be familiar with the characteristics of the vessel and the 
specific equipment fitted on it prior to operating the equipment as 
required in 46 CFR 15.405. This

[[Page 70988]]

familiarization must include reading the DP system equipment and 
operations manual, DP system incident reports, FMEAs, and any 
documented history of the DP system. The familiarization must be 
documented.


Sec.  140.320  DP system manning requirements.

    (a) All Mobile Offshore Drilling Units (MODUs) and other vessels to 
which this subpart applies must--
    (1) Be under the command of an individual holding an appropriate 
certificate of competency as a master issued by the Flag State 
authority; and
    (2) Maintain navigational watches with an adequate number of mates 
or officers in charge of a navigational watch holding an appropriate 
certificate of competency issued by the Flag State authority.
    (b) Each person assigned duties as master, mate, or officer in 
charge of a navigational watch must meet the hours of rest requirements 
in Regulation VIII/1 of the STCW Convention and Section A-VIII/1 of the 
STCW Code (both incorporated by reference, see Sec.  140.7 of this 
part) .
    (c) All MODUs using a dynamic positioning (DP) system to engage in 
Outer Continental Shelf (OCS) activities on the U.S. OCS must hold a 
manning certificate specifying the minimum complement necessary to 
maintain the navigational watches. The manning complement must meet the 
requirements in paragraph (a) of this section and Sec.  140.310 of this 
part. The manning complement may be determined after considering the 
specialized nature of each MODU, including the limitations and 
capabilities of the DP system.


Sec.  140.325  Operations.

    (a) Owners or operators of Mobile Offshore Drilling Units (MODUs) 
and other vessels to which this subpart applies must maintain a Dynamic 
Positioning (DP) System Operations Manual that complies with paragraph 
4.4 of IMO MSC/Circ.645 (incorporated by reference, see Sec.  140.7).
    (b) The owner, operator, or master of each MODU or other vessel to 
which this subpart applies must ensure that all DP System Operations 
Manuals, including manufacturers' manuals, are available to the Dynamic 
Positioning Operator (DPO) at or near the DP system console when using 
a DP system to engage in OCS activities.
    (c) When conducting vessel-to-vessel transfer operations using a DP 
system--
    (1) Operational procedures for conducting oil or hazardous material 
transfers in DP mode must follow the transfer procedures in 33 CFR 
155.750 and must include emergency procedures for securing operations 
and executing emergency breakaway;
    (2) Vessel masters and, as appropriate, chief engineers must--
    (i) Determine which vessel will be designated to maintain a 
geographic position;
    (ii) Ensure that all watchstanders of all vessels other than MODUs 
understand their responsibility to maintain a designated relative 
position to or remain clear of the vessel maintaining the geographic 
position;
    (iii) Complete a Declaration of Inspection before beginning 
transfer operations; and
    (iv) Reconcile any differences between the emergency procedures in 
each vessel's DP System Operations Manual;
    (3) Vessel personnel must establish voice communications between 
participants to determine--
    (i) The vessel designated as the controlling station;
    (ii) The controlling station DPO coordination responsibility;
    (iii) Primary and alternate communication channels;
    (iv) An emergency-only channel that can be monitored uninterrupted 
for the duration of the procedure;
    (v) The acquisition and assessment of regular weather forecast 
information for the area of operations; and
    (vi) The sharing with other active vessels of weather information, 
assessment of prevailing conditions, and use of onboard weather 
forecasting instruments;
    (4) When a MODU or other vessel to which this subpart applies uses 
a DP system to conduct vessel-to-vessel transfers with a vessel that is 
using a different DP system equipment class, the criteria for action in 
any emergency situation will be based on the least redundant DP system;
    (5) Any crew member on a MODU or other vessel conducting a vessel-
to-vessel transfer operation using a DP system for station keeping must 
execute a ``stop operations'' command if they identify a situation that 
warrants such action;
    (6) Each unit's DPO must keep the bridge personnel of the other 
units, as defined in 33 CFR 140.10, involved in the vessel-to-vessel 
transfer fully advised of all alarm or emergency situations, including, 
but not limited to, DP system operations that could affect the 
operation in progress; and
    (7) During an emergency or the sounding of a general alarm, pumping 
operations must cease until the problem has been resolved.


Sec.  140.330  Minimum DP system requirements.

    Vessels to which this subpart applies must, at a minimum, satisfy 
the provisions of 33 CFR 140.310, 140.315, 140.320, 140.325 and 46 CFR 
62.40-3. Vessels that must comply with the intermediate, standard, or 
enhanced DP system requirements in Sec. Sec.  140.335, 140.340, and 
140.345 must also comply with the provisions of this section.


Sec.  140.335  Intermediate DP system requirements.

    (a) Vessels other than MODUs of more than 500 GT ITC (500 GRT if GT 
ITC not assigned) that use a dynamic positioning (DP) system installed 
before [30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE] to engage in 
Critical Outer Continental Shelf (OCS) Activities on the U.S. OCS must 
comply with the provisions of this section no later than the applicable 
date in table 140.335 of this section.
    (b) Vessels that must comply with the standard or enhanced DP 
system requirements in Sec. Sec.  140.340 and 140.345 must also comply 
with the provisions of this section.

    Table 140.335--Phase in Schedule for Vessels (Except MODUs) With
                           Existing DP Systems
------------------------------------------------------------------------
    Tonnage of vessels other than MODUs      Date requirements effective
------------------------------------------------------------------------
At least 1,900 GT ITC.....................  Date of Final Rule + 3
                                             years.
At least 900 GT ITC.......................  Date of Final Rule + 6
                                             years.
Greater than 500 GT ITC (500 GRT if GT ITC  Date of Final Rule + 9
 not assigned).                              years.
------------------------------------------------------------------------

    (c) Vessels to which this section applies must meet the 
requirements of--
    (1) 46 CFR 61.50 (Survey);
    (2) 46 CFR 62.40-15 (FMEA);
    (3) 46 CFR 62.40-20 (FMEA Proving Test Document); and
    (4) 46 CFR 62.40-25 (CAMO).
    (d) The DP System Operations Manual for a vessel other than a MODU 
to which this section applies must also meet section 4.8 of the MTS DP 
Operations Guide (incorporated by reference, see Sec.  140.7) for 
either project/construction vessels or logistics vessels, as 
appropriate. The DP System Operations Manual for a vessel other than a 
MODU must contain Activity Specific Operational Criteria (ASOC) 
applicable to the operations performed by the vessel.
    (e) The DP System Operations Manual for a MODU to which this 
section applies must also meet section 4.7 of the MTS DP Operations 
Guide for MODUs

[[Page 70989]]

(incorporated by reference, see Sec.  140.7). The DP System Operations 
Manual on a MODU must contain Well Specific Operational Criteria (WSOC) 
applicable to the operations performed by the MODU.
    (f) Vessels to which this section applies must define a Critical 
Activity Mode of Operation (CAMO) for use during Critical OCS 
Activities. The CAMO must be included in the DP System Operations 
Manual required by this section.
    (g) Vessels other than MODUs to which this section applies must 
operate in accordance with the ASOC applicable to its operation every 
time the DP system is used, regardless of whether or not the particular 
operation is a Critical OCS Activity. A MODU must use a WSOC when 
operating on a well.
    (h) Vessels to which this section applies must configure the DP 
system in its CAMO when engaging in Critical OCS Activities as defined 
in 33 CFR 140.305.
    (i) In the event that a vessel to which this section applies 
experiences a reactive change of DP status from green to yellow or red 
as described in the applicable MTS DP Operations Guidance and defined 
by the vessel's ASOC or WSOC, the owner or operator of the vessel must 
report this DP incident to the DPSAO that conducted the DP surveys 
required under 46 CFR 61.50. For each such DP incident, the owner or 
operator of the vessel must conduct an investigation as described in 
section 4.11 of the MTS DP Operations Guide for MODUs or section 4.12 
for either project/construction vessels or logistics vessels, as 
appropriate (incorporated by reference, see Sec.  140.7) and send an 
investigation summary to the DPSAO that issued the DPVAD to the vessel. 
Each DP incident investigation summary must include--
    (1) The cause of the DP incident and whether it was addressed by 
the vessel's FMEA, Well Specific Operating Criteria (WSOC) or Activity 
Specific Operating Criteria (ASOC), and Critical Activity Mode of 
Operation (CAMO), and lessons learned for incorporation into revised 
documents; and
    (2) If the cause of the DP incident was not addressed by the 
vessel's FMEA, ASOC, WSOC, or CAMO, the changes that were made to those 
documents to address the cause(s) of the incident. This requirement is 
applicable whether or not the operation or activity at the time of the 
incident was a Critical OCS Activity.
    (j) Immediately after addressing safety concerns resulting from a 
DP incident, the owner or operator of the vessel must notify the 
cognizant OCMI verbally and by email of any DP incident reported under 
paragraph (i) of this section if the incident--
    (1) Involved a reactive change of DP status from green to red; and
    (2) Required an emergency disconnect from a well; or
    (3) Was a serious marine incident as defined by 46 CFR 4.03-2.
    (k) A vessel to which this section applies must be issued a Dynamic 
Positioning Verification Acceptance Document (DPVAD) by a DPSAO. The 
DPVAD describes the vessel's DP system particulars, the certificate's 
period of validity, the identification of the DPSAO, the requirements 
of this subpart that are being certified, the dates of the completed 
surveys required by paragraph (c) of this section, and the subsequent 
surveys required to maintain the certificate's validity.
    (l) A DPVAD issued under paragraph (k) of this section is valid for 
5 years.
    (m) Alternative guidance may be used in lieu of the MTS DP 
Operations Guide to meet the requirements of paragraphs (d), (e) and 
(i) of this section if permitted by the Commandant (CG-ENG) to the 
extent and under conditions that will ensure a degree of safety 
comparable to or greater than that provided by use of the MTS DP 
Operations Guide.


Sec.  140.340  Standard DP system requirements.

    (a) Vessels other than MODUs of 6000 GT ITC or less that use a DP 
system installed on or after [30 DAYS AFTER DATE OF PUBLICATION OF 
FINAL RULE] to engage in Critical OCS Activities must comply with the 
provisions of this section and 33 CFR 140.335 and 140.330.
    (b) Vessels that must comply with the enhanced DP system 
requirements in Sec.  140.345 must also comply with the provisions of 
this section.
    (c) Vessels to which this section applies must meet--
    (1) 46 CFR 62.40-5 (Design);
    (2) 46 CFR 62.40-10 (Classification); and
    (3) 46 CFR 62.25-40 (Environmental Design).
    (d) Compliance with paragraphs (a) through (c) of this section must 
be verified by the DPSAO during the surveys required by 46 CFR 61.50 
and documented on the DPVAD.


Sec.  140.345  Enhanced DP system requirements.

    (a) The following vessels must comply with the provisions of this 
section:
    (1) Mobile Offshore Drilling Units (MODUs) that use a dynamic 
positioning (DP) system to engage in Critical Outer Continental Shelf 
(OCS) Activities on the U.S. OCS; and
    (2) Vessels other than MODUs of more than 6,000 GT ITC that use a 
DP system installed on or after [30 DAYS AFTER DATE OF PUBLICATION OF 
FINAL RULE] to conduct Critical OCS Activities on the U.S. OCS.
    (b) Vessels to which this section applies must meet the 
requirements of this section, 33 CFR 140.330, 140.335, 140.340, and 46 
CFR 62.20-2 (Required plans for DP systems).
    (c) Vessels to which this section applies must have the surveys 
required by 46 CFR 61.50 completed and have the plans required by 46 
CFR 62.20-2 approved by a DPSAO prior to receiving a Dynamic 
Positioning Verification Acceptance Document (DPVAD) under 33 CFR 
140.335(j).


Sec.  140.350  Operational Control.

    If the Cognizant OCMI determines that a vessel is not in compliance 
with this part, the OCMI may require the owner or operator of a vessel 
to suspend use of DP to conduct an OCS activity until the OCMI 
determines that the vessel complies with this part.

 PART 143--DESIGN AND EQUIPMENT

0
4. The authority citation for part 143 continues to read as follows:

    Authority:  43 U.S.C. 1333(d)(1), 1348(c), 1356; 49 CFR 1.46; 
section 143.210 is also issued under 14 U.S.C. 664 and 31 U.S.C. 
9701.

0
5. Revise Sec.  143.15 to read as follows:


Sec.  143.15  Lights and warning devices.

    (a) OCS facilities, except when using DP systems defined by Sec.  
140.305, must meet the lights and warning devices requirements under 
part 67 of this chapter concerning aids to navigation on artificial 
islands and fixed structures.
    (b) * * *
    (c) Vessels, including MODUs and attending vessels, using a DP 
system defined by Sec.  140.305 to maintain station, even when in 
contact of the seabed of the OCS, are considered underway and should 
display the lights and shapes for ``vessel restricted in her ability to 
maneuver'' as defined under Rule 3 of the International Regulations for 
Preventing Collisions at Sea 1972.

PART 146-- OPERATIONS

0
6. The authority citation for part 146 continues to read as follows:

    Authority:  33 U.S.C. 1223, 1226; 43 U.S.C. 1333, 1348, 1350, 
1356; Sec. 109, Pub. L. 109-347, 120 Stat. 1884; Department of 
Homeland Security Delegation No. 0170.1.

0
7. In Sec.  146.405 add paragraph (b)(4) to read as follows:

[[Page 70990]]

Sec.  146.405  Safety and Security notice of arrival for vessels 
arriving at a place on the OCS.

* * * * *
    (b) * * *
    (4) Vessels to which 140.335 applies that use a dynamic positioning 
(DP) system, as defined by 140.305, must provide the following 
information from the Dynamic Positioning Verification Acceptance 
Document (DPVAD):
    (i) DPVAD period of validity; and
    (ii) Identification of the dynamic positioning system assurance 
organization, as defined in 140.305, that conducted surveys;

Title 46--Shipping

PART 61--PERIODIC TESTS AND INSPECTIONS

0
8. The authority citation for part 61 is revised to read as follows:

    Authority:  43 U.S.C. 1333; 46 U.S.C. 2103, 3306, 3307, 3703; 
sec. 617, Pub. L. 111-281, 124 Stat. 2905; E.O. 12234, 45 FR 58801, 
3 CFR 1980 Comp., p. 277; Department of Homeland Security Delegation 
No. 0170.1.

0
9. Revise Sec.  61.03-1 to read as follows:


Sec.  61.03-1  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Coast Guard must publish a notice of 
change in the Federal Register and the material must be available to 
the public. All approved material is available for inspection at the 
U.S. Coast Guard, Office of Design and Engineering Standards (CG-ENG), 
2703 Martin Luther King Jr. Ave SE., Stop 7509, Washington, DC 20593-
7509, and is available from the sources listed below. It is also 
available for inspection at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) ASTM International 100 Barr Harbor Drive, West Conshohocken, PA 
19428-2959, http://www.astm.org.
    (1) ASTM D 665-98, Standard Test Method for Rust-Preventing 
Characteristics of Inhibited Mineral Oil in the Presence of Water, IBR 
approved for Sec.  61.20-17.
    (2) [Reserved]
    (c) International Maritime Organization (IMO), 4 Albert Embankment, 
London SE1 7SR, +44 (0)20 7735 7611, http://www.imo.org. (1) IMO MSC/
Circ.645--Guidelines for Vessels with Dynamic Positioning Systems, 1994 
(``IMO MSC/Circ.645''), IBR approved for Sec. Sec.  61.50-3, 61.50-5, 
61.50-10, and 61.50-15.
    (2) [Reserved]
    (d) Marine Technology Society, 1100 H Street NW., Suite LL-100, 
Washington, DC 20005, 202-717-8705, http://www.mtsociety.org.
    (1) MTS DP Operations Guidance (``MTS DP Operations Guide''), Part 
2, for MODUs (March 2012), Project Construction Vessels (July 2012), 
Logistics Vessels (July 2012), IBR approved for Sec. Sec.  61.50-5(a) 
and 61.50-10.
    (2) [Reserved]
0
10. Add new subpart 61.50, consisting of Sec. Sec.  61.50-1 through 
61.50-20, to read as follows:
Subpart 61.50--Dynamic Positioning System (DP System) Surveys and 
Dynamic Positioning System Assurance Organizations (DPSAO) for Vessels 
Operating on the Outer Continental Shelf.
Sec.
61.50-1 Applicability.
61.50-2 Surveys of MODUs and vessels, other than MODUs.
61.50-3 Acceptance of dynamic positioning system assurance 
organizations.
61.50-4 Oversight of dynamic positioning system assurance 
organizations.
61.50-5 Initial survey.
61.50-10 Periodic survey.
61.50-15 Annual survey.
61.50-20 Appeals

Subpart 61.50--Dynamic Positioning System (DP System) Surveys and 
Dynamic Positioning System Assurance Organizations (DPSAO) for 
Vessels Operating on the Outer Continental Shelf.


Sec.  61.50-1  Applicability.

    (a) The following vessels must comply with the provisions of this 
subpart:
    (1) Vessels other than MODUs of more than 500 GT ITC (500 GRT if GT 
ITC not assigned) that use a dynamic positioning (DP) system installed 
before [30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE] to conduct 
Critical Outer Continental Shelf (OCS) Activities, as defined in 33 CFR 
140.305, on the U.S. OCS must comply with the provisions of this 
section no later than the applicable date in 33 CFR table 140.335;
    (2) Vessels other than MODUS that use a DP system installed on or 
after (30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE) to engage in 
Critical OCS Activities, as defined in 33 CFR 140.305, on the U.S. OCS; 
and
    (3) MODUs that use a DP system to conduct Critical OCS Activities, 
as defined in 33 CFR 140.305, on the U.S. OCS.
    (4) For purposes of this subpart, ``vessels'' includes, but is not 
limited to, MODUs. Vessels other than MODUs that conduct certain 
activities or possess certain design characteristics means vessels that 
conduct such activities or possess such characteristics and are not 
MODUs.


Sec.  61.50-2  Surveys of MODUs and vessels, other than MODUs.

    (a) The owner or operator of a vessel to which this subpart applies 
must ensure that the dynamic positioning system surveys required by 
Sec. Sec.  61.50-5, 61.50-10, and 61.50-15 of this subpart are 
completed by a DPSAO and provide the cognizant Officer in Charge, 
Marine Inspection an opportunity to attend upon request. The DPSAO that 
conducts the surveys required by this subpart must notify the cognizant 
Officer in Charge, Marine Inspection at least 30 days in advance of the 
survey.
    (b) Alternative guidance may be used in lieu of the MTS DP 
Operations Guide to meet the survey requirements of Sec.  61.50-5(a) 
and Sec.  61.50-10(a) of this subpart if permitted by the Coast Guard 
Office of Design and Engineering Standards (Commandant (CG-ENG)) to the 
extent and under conditions that will ensure a degree of safety 
comparable to or greater than that provided by use of the MTS DP 
Operations Guide.


Sec.  61.50-3  Acceptance of dynamic positioning system assurance 
organizations.

    (a) Each DPSAO, as described in Sec.  61.50-2 of this subpart, must 
be accepted by the Coast Guard Outer Continental Shelf National Center 
of Expertise (OCS NCOE). To be accepted, such an organization must 
apply to the OCS NCOE in writing for acceptance. The application must 
contain information demonstrating that the organization or society--
    (1) Has functioned as a recognized source to the industry of 
guidance on recommended practice through participation in industry 
groups (e.g., International Marine Contractors Association, Marine 
Technology Society, National Offshore Safety Advisory Committee);
    (2) Has functioned as a DP assurance provider to vessel owner, 
operators, charterers, etc., for at least 5 years in the role of DP 
Assurance with a documented, auditable history of providing Failure 
Modes and Effects Analysis (FMEA) and survey services on a wide variety 
of Mobile Offshore Drilling Units (MODUs) and vessels with different 
industrial missions;
    (3) Has a history of advising vessel owners, operators, and 
charterers and

[[Page 70991]]

providing guidance on appropriate corrective actions to address 
nonconformities and observations raised during DP trials and otherwise, 
to include incidents, casualties, and cases of nonconformity with DP 
class rules;
    (4) Has adequate resources, including research, technical, and 
managerial staff, to ensure appropriate updates and maintenance of 
internal DP guidelines, trials procedures, and survey requirements;
    (5) Has adequate resources and processes in place to ensure regular 
and adequate communications to the Coast Guard concerning recurring DP-
related issues for purposes of trend analysis, reporting, and 
continuing development of rules and guidelines;
    (6) Uses personnel with a minimum of 5 years of experience for both 
FMEA and survey services;
    (7) Directly employs a number of surveyors adequate to meet Coast 
Guard survey requirements;
    (8) Has adequate criteria for hiring and qualifying surveyors and 
technical staff;
    (9) Has an adequate program for continued training and development 
of surveyors and technical staff. Training and development must be 
structured, measured, monitored, and auditable;
    (10) Maintains an internal quality system based on current industry 
quality standards (e.g., ANSI/ASQC Q9001, or equivalent);
    (11) Can determine whether MODUs and vessels, other than MODUs, 
comply with the DP requirements of the Coast Guard during appropriate 
surveys and DP trials;
    (12) Can monitor all activities related to surveys and plan reviews 
performed pursuant to 46 CFR parts 61 and 62 for consistency and 
required end-results;
    (13) Is not under the financial control of owners or builders of 
MODUs or vessels, other than MODUs, or of others engaged commercially 
in the manufacture, equipping, repair, or operation of MODUs or 
vessels, other than MODUs; and
    (14) Does not have any business interest in, or share of ownership 
of, any MODU or other vessel to which it provides DP assurance 
services.


Sec.  61.50-4  Oversight of dynamic positioning system assurance 
organizations.

    (a) The OCS NCOE may periodically audit the records of DPSAOs with 
reasonable advance notice to determine whether such organizations 
continue to comply with the provisions of paragraph Sec.  61.50-3(a) of 
this subpart. The OCS NCOE may revoke acceptance after determining that 
such an organization no longer complies with the provisions of 
paragraph Sec.  61.50-3(a) of this subpart. Acceptance remains in 
effect until revoked by the OCS NCOE.
    (b) DPSAOs must submit an annual report to the OCS NCOE that 
contains each DP investigation summary reported to it under 33 CFR 
140.335(i). The DPSAO must confirm in the report that each DP 
investigation summary complies with 33 CFR 140.335(i).
    (c) Where the OCS NCOE is not satisfied with the resolution of any 
DP incident contained in the report required by paragraph (b) of this 
section, the OCS NCOE:
    (i) will advise the cognizant OCMI who may exercise operational 
control under 33 CFR 140.350 and require the DPSAO and the owner or 
operator of a MODU or vessel other than MODU to satisfactorily resolve 
the cause of the DP incident; and,
    (ii) may initiate an audit of the DPSAO under paragraph (a) of this 
section.


Sec.  61.50-5  Initial survey.

    (a) An initial survey, specified in paragraph 5.1.1.1 of IMO MSC/
Circ.645 (incorporated by reference, see Sec.  61.03-1) and section 4.6 
of the MTS DP Operations Guide for MODUs or section 4.7 for either 
project/construction vessels or logistics vessels, as appropriate 
(incorporated by reference, see Sec.  61.03-1), must be conducted on a 
Mobile Offshore Drilling Unit (MODU) or vessel other than a MODU to 
which this subpart applies. The initial survey must include a Failure 
Modes and Effects Analysis (FMEA) proving test using the dynamic 
positioning (DP) system FMEA proving test document described in Sec.  
62.40-20 of this subchapter. The initial survey must identify the 
Critical Activity Mode of Operation (CAMO) defined in Sec.  62.10-1 of 
this subchapter.
    (b) DP system software, programmable controls, and alarm system 
logic must not be altered after satisfactory completion of the initial 
survey without the approval of the DPSAO described in Sec.  61.50-2 of 
this subpart. The DPSAO must notify the cognizant Officer in Charge, 
Marine Inspection of any approved alternation of software after an 
initial survey. The notification must include any changes to the 
vessel's FMEA or CAMO that resulted from the software change, if 
applicable.
    (c) The initial survey must be completed in accordance with 
Sec. Sec.  61.50-2 of this subpart.


Sec.  61.50-10  Periodic survey.

    (a) A periodic survey, specified in paragraph 5.1.1.2 of IMO MSC/
Circ.645 (incorporated by reference, see Sec.  61.03-1) and section 4.6 
of the MTS DP Operations Guide for MODUs or section 4.7 for either 
project/construction vessels or logistics vessels, as appropriate 
(incorporated by reference, see Sec.  61.03-1), must be conducted on a 
vessel to which this subpart applies at intervals not exceeding 5 
years. This survey is intended to verify compliance with IMO MSC/
Circ.645 and the applicable requirements of this subchapter.
    (b) The periodic survey must be completed in accordance with 
Sec. Sec.  61.50-2.


Sec.  61.50-15  Annual survey.

    (a) An annual survey, described in paragraph 5.1.1.3 of IMO MSC/
Circ.645 (incorporated by reference, see Sec.  61.03-1), must be 
conducted on a vessel to which this subpart applies within the 3 months 
before or after each anniversary date of the initial survey. The annual 
survey must ensure that the dynamic positioning system has been 
maintained in accordance with applicable parts of IMO MSC/Circ.645 and 
is in good working order.
    (b) The annual survey must be completed in accordance with 
Sec. Sec.  61.50-2 this subpart.


Sec.  61.50-20  Appeals

    (a) Any person directly affected by an action or decision of the 
Coast Guard Outer Continental Shelf Center of Excellence (OCS NCOE) 
taken under the regulations in this subchapter may request 
reconsideration of that action or decision. If still dissatisfied, that 
person may appeal the action or decision of the OCS NCOE within 30 days 
to the U.S. Coast Guard Deputy Commandant for Prevention (CG-5P). The 
Deputy Commandant for Prevention will issue a decision after reviewing 
the appeal submitted under this paragraph. Rulings of the Deputy 
Commandant for Prevention constitute final agency action.
    (b) An appeal to the Deputy Commandant for Prevention:
    (1) Must be made in writing, except in an emergency when a verbal 
appeal may be accepted;
    (2) Must describe the decision or action being appealed;
    (3) Must state the reasons why the action or decision should be set 
aside or modified; and
    (4) May contain any supporting documents and evidence that the 
appellant wishes to have considered.
    (c) Pending determination of any appeal, the action or decision 
appealed remains in effect, unless suspended by the Deputy Commandant 
for Prevention.

[[Page 70992]]

PART 62--VITAL SYSTEM AUTOMATION

0
11. The authority citation for part 62 continues to read as follows:

    Authority:  46 U.S.C. 3306, 3703, 8105; sec. 617, Pub. L. 111-
281, 124 Stat. 2905; E.O. 12234, 45 FR 58801, 3 CFR, 1980 Comp., p. 
277; Department of Homeland Security Delegation No. 0170.1.

0
12. In Sec.  62.01-5 revise paragraph (a) to read as follows:


Sec.  62.01-5  Applicability.

    (a) Vessels. Except as described in Sec.  62.40-1 of this part, 
this part applies to self-propelled vessels of 500 gross tons or more 
that are certificated under 46 CFR subchapters D, I, or U and to self-
propelled vessels of 100 gross tons or more that are certificated under 
46 CFR subchapter H.
* * * * *
0
13. Revise Sec.  62.05-1 to read as follows:


Sec.  62.05-1  Incorporation by reference.

    (a) Certain material is incorporated by reference into this part 
with the approval of the Director of the Federal Register under 5 
U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that 
specified in this section, the Coast Guard must publish notice of 
change in the Federal Register and the material must be available to 
the public. All approved material is available for inspection at the 
U.S. Coast Guard, Office of Design and Engineering Standards (CG-ENG), 
2703 Martin Luther King Jr. Ave SE., Stop 7509, Washington, DC 20593-
7509, and is available from the sources below. It is also available for 
inspection at the National Archives and Records Administration (NARA). 
For information on the availability of this material at NARA, call 202-
741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
    (b) American Bureau of Shipping (ABS), ABS Plaza, 16855 Northchase 
Drive, Houston, TX 77060, http://www.eagle.org.
    (1) Rules for Building and Classing Steel Vessels, Part 4 Vessel 
Systems and Machinery (2003) (``ABS Steel Vessel Rules''), IBR approved 
for Sec. Sec.  62.25-30, 62.35-5, 62.35-35, 62.35-40, 62.35-50, and 
62.50-30.
    (2) [Reserved]
    (c) International Electrotechnical Commission (IEC), 3, rue de 
Varembe, Geneva, Switzerland, +41 22 919 02 11, http://www.iec.ch.
    (1) IEC 60092-504 Electrical Installation in Ships--Part 504: 
Special Features--Control and Instrumentation (Third Edition, 2001-
03)(``IEC 60092-504''), IBR approved for Sec.  62.25-40(b).
    (2) [Reserved]
    (d) International Maritime Organization (IMO), 4 Albert Embankment, 
London SE1 7SR, +44 (0)20 7735 7611, http://www.imo.org.
    (1) Resolution MSC/Circ.645--Guidelines for Vessels with Dynamic 
Positioning Systems, 1994 (``IMO MSC/Circ.645''), IBR approved for 
Sec. Sec.  62.40-3, 62.40-5(b), and 62.40-15.
    (2) [Reserved]
    (e) Marine Technology Society (MTS), 1100 H Street NW., Suite LL-
100, Washington, DC 20005, 202-717-8705, http://www.mtsociety.org.
    (1) MTS DP Operations Guidance (``MTS DP Operations Guide''), Part 
2, for MODUs (March 2012), Project Construction Vessels (July 2012), 
Logistics Vessels (July 2012), IBR approved for Sec. Sec.  62.40-5(a), 
and 62.40-15.
    (2) [Reserved]
0
14. Amend Sec.  62.10-1 by adding, in alphabetical order, the 
definitions of the terms ``Activity Specific Operating Criteria 
(ASOC)''; ``Capability Plot''; ``Consequence analyzer''; ``Critical 
Activity Mode of Operation (CAMO)''; ``Dynamic positioning system (DP 
system)''; ``Redundancy''; ``Vessels''; and ``Well Specific Operating 
Criteria (WSOC)'', to read as follows:


Sec.  62.10-1  Definitions.

    (a) * * *
    Activity Specific Operating Criteria (ASOC) means criteria that set 
out the operational, environmental, and equipment performance limits 
considered necessary for safe dynamic positioning (DP) system 
operations while carrying out a specific activity. The ASOC sets out 
various levels of operator action as these limits are approached or 
exceeded and varies depending on the activity. The ASOC defines whether 
the DP system must be configured in its Critical Activity Mode of 
Operation (CAMO) during that specific activity. If the CAMO is required 
for that specific activity, the ASOC will require the vessel to cease 
operations when an equipment failure makes operation in CAMO 
impossible.
* * * * *
    Capability Plot means a document that provides an indication of a 
vessel's DP station-keeping ability, expressed in a common format.
    Consequence analyzer means a software function that continuously 
performs an analysis of the vessel's ability to maintain its position 
and heading after a predefined, worst-case failure during operation. 
Possible consequences are based on the actual weather conditions, 
enabled thrusters, and power plant status.
    Critical Activity Mode of Operation (CAMO) means a tabulated 
presentation of how to configure the vessel's DP system, including 
power generation and distribution, and propulsion and position 
reference systems, so that the DP system as a whole is fault-tolerant 
and fault-resistant. The CAMO is validated by a Failure Modes and 
Effects Analysis (FMEA) proving test at the initial survey described in 
Sec.  61.50-5 of this subchapter.
    Dynamic positioning system (DP system) means a complete 
installation of components and systems that act together and is 
sufficiently reliable to provide vessel position-keeping capability. 
Any vessel using a DP system is considered a vessel underway, even if 
maintaining a fixed position. A DP system is comprised of the following 
sub-systems:
    (1) Power system, consisting of prime movers with necessary 
auxiliary systems and associated piping, generators, switchboards, and 
distribution system.
    (2) Thruster system, consisting of thrusters with drive units and 
associated auxiliary systems and piping, main propellers, and rudders 
(if all such thruster system parts are under the control of the DP 
system), thruster control electronics, manual thruster controls, and 
associated cabling and cable routing.
    (3) Control system, consisting of computer system, joystick system, 
sensor system, display system (operator panels), position reference 
system, and associated cabling and cable routing.
* * * * *
    Redundancy means the ability of a component or system to maintain 
or restore its function when a single failure has occurred. For 
example, redundancy may be achieved by the installation of multiple 
components, systems, or alternate means that perform the same function.
* * * * *
    Vessels include, but are not limited to, Mobile Offshore Drilling 
Units. Vessels other than MODUs that conduct certain activities or 
possess certain design characteristics means vessels that conduct such 
activities or possess such characteristics and are not MODUs.
* * * * *
    Well Specific Operating Criteria (WSOC) means criteria that set out 
the operational, environmental, and equipment performance limits 
considered necessary for safe DP system operations while operating on a 
well. The WSOC sets out various levels of

[[Page 70993]]

operator action as these limits are approached or exceeded, and varies 
depending on the well or location. The WSOC defines when the DP system 
must be configured in its CAMO during drilling or production. If the 
CAMO is required for that specific activity, the WSOC will require the 
MODU to cease operations when an equipment failure makes operation in 
CAMO impossible.
0
15. Add new Sec.  62.20-2 to read as follows:


Sec.  62.20-2  Required plans for DP systems.

    (a) The following vessels must comply with the provisions of this 
section:
    (1) MODUs that use a dynamic positioning (DP) system to conduct 
Critical Outer Continental Shelf (OCS) Activities, as defined in 33 CFR 
140.305, on the U.S. OCS; and
    (2) Vessels of more than 6,000 GT ITC other than MODUs that use a 
DP system installed on or after [30 DAYS AFTER DATE OF PUBLICATION OF 
FINAL RULE] to conduct Critical OCS Activities, as defined in 33 CFR 
140.305, on the U.S. OCS.
    (b) The owner or operator of each vessel to which this section 
applies must submit the following DP system plans and information for 
approval to the dynamic positioning system assurance organization 
(DPSAO) that performs the surveys under subpart 61.50 of this 
subchapter and is accepted under Sec.  61.50-3 of this subchapter by 
the Coast Guard Outer Continental Shelf National Center of Expertise 
(OCS NCOE):
    (1) A DP system description, including a block diagram and 
functional relationships of various components.
    (2) Specifications of position reference and environmental 
monitoring sensors or systems.
    (3) The location of thrusters and control system components.
    (4) Details of the DP system monitoring and alarm system and 
interconnection with the main centralized monitoring and alarm system.
    (5) DP system Failure Modes and Effects Analysis (FMEA) and FMEA 
proving test documents as described in Sec.  62.40-15 and Sec.  62.40-
20 of this part, respectively.
    (6) The Critical Activity Mode of Operation determined from the 
initial survey required by Sec.  61.50-5 of this subchapter.
    (7) Designer or manufacturer self-certification of the DP system 
control equipment to the environmental design standards in Sec.  62.25-
40 of this part. See Sec.  62.20-5 of this part.
    (c) The DPSAO that performs the surveys under subpart 61.50 of this 
subchapter must submit a copy of the approved plans under paragraph (b) 
of this section and the results of the initial survey, including the 
FMEA proving test required by subpart 61.50 of this subchapter to the 
Commanding Officer, Marine Safety Center, U.S. Coast Guard Stop 7410, 
4200 Wilson Blvd., Suite 400, Arlington, VA 20598-7410. The Commanding 
Officer, Marine Safety Center may elect to review the plans to validate 
compliance with the requirements of this subpart and advise the DPSAO, 
the Coast Guard OSCNCOE and the cognizant Officer in Charge, Marine 
Inspection.
0
16. Add new Sec.  62.25-40 to read as follows:


Sec.  62.25-40  Environmental design standards.

    (a) The following Mobile Offshore Drilling Units (MODUs) and 
vessels, other than MODUs, must comply with the provisions of this 
section:
    (1) MODUs that use a dynamic positioning (DP) system to conduct 
Critical Outer Continental Shelf (OCS) Activities, as defined in 33 CFR 
140.305, on the U.S. OCS; and
    (2) Vessels other than MODUs that use a DP system installed on or 
after [30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE] to conduct 
Critical OCS Activities, as defined in 33 CFR 140.305, on the U.S. OCS.
    (b) Computer-based systems, microprocessors, storage devices, power 
supply units, signal conditioners, analog/digital converters, computer 
monitors (visual display units), keyboards, reference sensors, and 
related systems (excluding printers), and data recording or logging 
devices must be designed to the environmental standards in Clause 5 of 
IEC 60092-504 (incorporated by reference, see Sec.  62.05-1).
0
17. Add new subpart 62.40, consisting of Sec. Sec.  62.40-1 through 
62.40-25, to read as follows:
Subpart 62.40--Dynamic Positioning Systems
Sec.
62.40-1 Applicability.
62.40-3 Minimum dynamic positioning system requirements.
62.40-5 Design for Critical OCS Activities.
62.40-10 Classification for Critical OCS Activities.
62.40-15 Failure Modes and Effects Analysis (FMEA).
62.40-20 Failure Modes and Effects Analysis (FMEA) proving test 
document.
62.40-25 Critical Activity Mode of Operation (CAMO).

Subpart 62.40--Dynamic Positioning Systems


Sec.  62.40-1  Applicability.

    This subpart applies to all vessels, including Mobile Offshore 
Drilling Units (MODUs), that use a dynamic positioning (DP) system to 
conduct Outer Continental Shelf (OCS) activities, as defined in 33 CFR 
140.10, on the U.S. OCS. ``Vessels,'' for purposes of this subpart, 
include but are not limited to MODUs.


Sec.  62.40-3  Minimum dynamic positioning system requirements.

    Vessels to which this subpart applies must meet the applicable 
requirements of this part and 46 CFR 62.35-5 and 46 CFR 62.50-30 for 
remote propulsion control systems with periodically unattended 
machinery plants, as well as paragraph 3.4.1 of IMO MSC/Circ.645 
(incorporated by reference, see Sec.  62.05-1), except subparagraph 
3.4.1.4.


Sec.  62.40-5  Design for Critical OCS Activities.

    (a) The following vessels must comply with the provisions of this 
section:
    (1) MODUs that use a dynamic positioning (DP) system to conduct 
Critical Outer Continental Shelf (OCS) Activities, as defined in 33 CFR 
140.305, on the U.S. OCS; and
    (2) Vessels other than MODUs that use a DP system installed on or 
after (30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE) to conduct 
Critical OCS Activities, as defined in 33 CFR 140.305, on the U.S. OCS.
    (b) Vessels to which this section applies must meet the provisions 
of IMO MSC/Circ.645 (incorporated by reference, see Sec.  62.05-1) and 
the provisions of the applicable MTS DP Operations Guide (incorporated 
by reference, see Sec.  62.05-1) relevant to equipment class 2 (DP-2) 
or higher for MODUs, project construction vessels, or logistics 
vessels, as appropriate.


Sec.  62.40-10  Classification for Critical OCS Activities.

    (a) The following vessels must comply with the provisions of this 
section:
    (1) MODUs that use a dynamic positioning (DP) system to conduct 
Critical Outer Continental Shelf (OCS) Activities, as defined in 33 CFR 
140.305, on the U.S. OCS; and
    (2) Vessels other than MODUs that use a DP system installed on or 
after (30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE) to conduct 
Critical OCS Activities, as defined in 33 CFR 140.305, on the U.S. OCS.
    (b) Vessels to which this section applies must obtain an IMO MSC/
Circ.645 equipment class 2 (DP-2) or

[[Page 70994]]

higher notation from a classification society that meets the 
requirements of paragraph (c) of this section.
    (c) The classification society that issues an equipment class 2 
(DP-2) or higher notation to vessels under this section applies must--
    (1) Comply with the provisions of 46 CFR, part 8, subpart B;
    (2) Possess DP system rules aligned with IMO MSC/Circ.645 and the 
MTS DP Operations Guide (incorporated by reference, see Sec.  62.05-1) 
applicable to the vessel being classed; and,
    (3) Submit evidence that it complies with paragraphs c(1) and c(2) 
of this section to the Coast Guard Outer Continental Shelf National 
Center of Expertise (OCS NCOE), which will authorize the classification 
society to issue notations as described in this section.


Sec.  62.40-15  Failure Modes and Effects Analysis (FMEA).

    (a) The following vessels must comply with the provisions of this 
section:
    (1) Vessels other than MODUs of more than 500 GT ITC (500 GRT if GT 
ITC not assigned) that use a dynamic positioning (DP) system installed 
before (30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE) to conduct 
Critical Outer Continental Shelf (OCS) Activities, as defined in 33 CFR 
140.305, on the U.S. OCS;
    (2) Vessels other than MODUs that use a DP system installed on or 
after (30 DAYS AFTER DATE OF PUBLICATION OF FINAL RULE) to conduct 
Critical OCS Activities; and
    (3) MODUs that use a DP system to conduct Critical OCS Activities, 
as defined in 33 CFR 140.305, on the U.S. OCS.
    (b) The owner or operator of each vessel to which this section 
applies must complete and maintain an FMEA with the details necessary 
to demonstrate compliance with the applicable provisions of IMO MSC/
Circ.645 and must demonstrate compliance with the MTS DP Operations 
Guide (both incorporated by reference, see Sec.  62.05-1) for equipment 
class 2 (DP-2) or equipment class 3 (DP-3) requirements and this 
subpart, as applicable.
    (c) Vessels described in paragraph (a)(1) of this section must 
comply with the provisions of this section no later than the applicable 
date in 33 CFR table 140.335.
    (d) Alternative guidance may be used in lieu of the MTS DP 
Operations Guide to meet the requirements of this section if permitted 
by the Office of Design and Engineering Standards (Commandant (CG-ENG)) 
to the extent and under conditions that will ensure a degree of safety 
comparable to or greater than that provided by use of the MTS DP 
Operations Guide.


Sec.  62.40-20  Failure Modes and Effects Analysis (FMEA) proving test 
document.

    (a) The owner or operator of each vessel to which Sec.  62.40-15 of 
this subpart applies must complete and maintain a dynamic positioning 
system FMEA proving test document that--
    (1) Provides the necessary test instructions, based on the FMEA 
required by this subpart, to demonstrate design and operation in 
accordance with the equipment class of the DP system and this subpart; 
and
    (2) Is approved by the Marine Safety Center under Sec.  62.20-2 of 
this part and retained on board.


Sec.  62.40-25  Critical Activity Mode of Operation (CAMO).

    (a) The owner or operator of each vessel to which Sec.  62.40-15 of 
this subpart applies must complete and maintain a CAMO as defined in 
Sec.  62.10-1 of this part.

    Dated: November 13, 2014.
J.G. Lantz,
Director of Commercial Regulations and Standards, U.S. Coast Guard.
[FR Doc. 2014-27594 Filed 11-26-14; 8:45 am]
BILLING CODE 9110-04-P


