[Senate Hearing 108-978]
[From the U.S. Government Publishing Office]
S. Hrg. 108-978
FUTURE OF THE JAMES RIVER ``GHOST FLEET''
=======================================================================
FIELD HEARING
before the
SUBCOMMITTEE ON SURFACE TRANSPORTATION
AND MERCHANT MARINE
of the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
__________
JULY 7, 2003
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED EIGHTH CONGRESS
FIRST SESSION
JOHN McCAIN, Arizona, Chairman
TED STEVENS, Alaska ERNEST F. HOLLINGS, South
CONRAD BURNS, Montana Carolina, Ranking
TRENT LOTT, Mississippi DANIEL K. INOUYE, Hawaii
KAY BAILEY HUTCHISON, Texas JOHN D. ROCKEFELLER IV, West
OLYMPIA J. SNOWE, Maine Virginia
SAM BROWNBACK, Kansas JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon JOHN B. BREAUX, Louisiana
PETER G. FITZGERALD, Illinois BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada RON WYDEN, Oregon
GEORGE ALLEN, Virginia BARBARA BOXER, California
JOHN E. SUNUNU, New Hampshire BILL NELSON, Florida
MARIA CANTWELL, Washington
FRANK R. LAUTENBERG, New Jersey
Jeanne Bumpus, Republican Staff Director and General Counsel
Robert W. Chamberlin, Republican Chief Counsel
Kevin D. Kayes, Democratic Staff Director and Chief Counsel
Gregg Elias, Democratic General Counsel
------
SUBCOMMITTEE ON SURFACE TRANSPORTATION
AND MERCHANT MARINE
KAY BAILEY HUTCHISON, Texas, Chairman
TED STEVENS, Alaska DANIEL K. INOUYE, Hawaii, Ranking
CONRAD BURNS, Montana JOHN D. ROCKEFELLER IV, West
TRENT LOTT, Mississippi Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana
GORDON H. SMITH, Oregon RON WYDEN, Oregon
GEORGE ALLEN, Virginia BARBARA BOXER, California
FRANK R. LAUTENBERG, New Jersey
C O N T E N T S
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Page
Hearing held on July 7, 2003..................................... 1
Statement of Senator Allen....................................... 1
Prepared statement........................................... 4
Witnesses
Cox, Delegate M. Kirkland, Chairman, Virginia House of Delegates'
Committee on Agriculture, Chesapeake and Natural Resources..... 22
Prepared statement........................................... 24
Davis, Hon. Jo Ann, Congresswoman, U.S. House of Representatives. 5
Prepared statement........................................... 7
Frank, Hon. Joe S., Mayor-At-Large, Newport News, Virginia....... 25
Prepared statement........................................... 27
Jackson, Patricia, Executive Director, James River Association... 31
Paylor, Hon. David K., Deputy Secretary of Natural Resources,
Commonwealth of Virginia....................................... 28
Prepared statement........................................... 29
Schubert, Hon. William G., Maritime Administrator, U.S.
Department of Transportation................................... 8
Prepared statement........................................... 12
FUTURE OF THE JAMES RIVER
``GHOST FLEET''
----------
MONDAY, JULY 7, 2003
U.S. Senate,
Subcommittee on Transportation and Merchant Marine,
Committee on Commerce, Science, and Transportation,
Newport News, VA.
The Subcommittee met, pursuant to notice, at 11 a.m. at the
Fort Eustis Transportation Museum Auditorium, Newport News,
Virginia, Hon. George Allen, Chairman of the Subcommittee,
presiding.
OPENING STATEMENT OF HON. GEORGE ALLEN,
U.S. SENATOR FROM VIRGINIA
Senator Allen. Good morning. I want to call to order the
Subcommittee on Surface Transportation and Merchant Marine. I
want to welcome you all here today and wish you good morning. I
want to thank all our witnesses for appearing today and meeting
in an effort to gather information on the precarious and very
dangerous situation and nature of the obsolete National Defense
Reserve Fleet, and those ships particularly stored on the James
River.
Let me first thank Major General Dale for hosting this.
Cindy Eure, where are you? Thank you and all the folks at Fort
Eustis for allowing us to use this facility. I know you
welcomed home 300 troops last Saturday, soldiers coming home,
and more will be coming home. Thank you for all you do
logistically to help out in our efforts to support our troops.
I also want to thank--he's not here--but the Chairman of
the Commerce, Science, and Transportation Committee, Senator
John McCain, for acceding to my request to have a hearing of
the Commerce, Science, and Transportation Committee, and in
particular the Surface Transportation and Merchant Marine
Subcommittee.
This hearing is very important in making sure that the
Chairman and all the Members, including the Ranking Member,
Senator Hollings of South Carolina--that all our Members are
aware of the facts, the evidence, and the need for action with
this dangerous situation environmentally here in the Lower
James River. I do want to thank them again for allowing me to
hold the hearing.
These ships as they rust and as they deteriorate, fuel oil
aboard these ships--and it's estimated there is still a great
quantity on these ships--certainly places the James River and
jobs and citizens and wildlife that depend on this river in
great danger. This is a danger, though, that can be mitigated
and preventable with expeditious, prompt, and long overdue
action.
I think it's important to note that the James River Reserve
Fleet, or the National Defense Reserve Fleet, ships stored on
the James River--that's what they are known as. It's not only
the reserve fleet that the government utilizes, but there are--
just here, but there are other similar fleets in Texas, a few
in Alabama, and some in California, but none are nearly--
anywhere nearly as large or as old as the fleet that we have
here in Virginia.
In my estimation, having seen this Ghost Fleet for many
years, having actually toured on several of those ships,
recognizing the danger of even working on those ships, whether
it's the cold, blustery winter weather or let's say a hurricane
that might hit in the middle of the summer, this is a fleet
that--you know, it's disaster, in my view, waiting to happen.
This disaster waiting to happen should not continue. There
are about 94 ships. These are government ships that can be
activated in a time of national crisis. That's the logic;
however, 69 of these ships have been deemed to be nonretention,
obsolete, meaning they will not be returned to service.
I had a wonderful tour. I will say the Administrator did a
great job, as well as others from transportation, on that tour.
They do a great job in understanding and trying to manage this
precarious situation.
We're very eager to hear from particularly the Honorable
William G. Schubert, who is the Administrator of the United
States Maritime Administration, in how--and also from witnesses
on proposals of disposing of these obsolete, dangerous,
deteriorating vehicles.
In my view, the testimony that we're going to hear today
from our witnesses will bolster my efforts and those of my
colleagues, whether it's Congresswoman Davis or my good
colleague John Warner and, indeed, the entire Virginia
delegation, particularly Randy Forbes and Bobby Scott, Ed
Schrock, and the tiger in the House, Jo Ann Davis, John Warner
and I on the Senate side. We're working as a team in the
effort.
Many of these ships contain--and you can see them when you
go on board--toxins. Some of them you can't see, but
nevertheless some toxic chemicals, PCBs, asbestos. As I'm
wandering around there I was actually glad it was pouring down
rain so the asbestos wouldn't be in the air.
They hold an estimated 13 million gallons of oil and fuel
in these rusted, deteriorating hulls. When you think of 13
million gallons, think back on the EXXON VALDEZ disaster in
Alaska, that was 11 million gallons. So, could you imagine
something of that nature or devastation here in Virginia?
These ships were once proud satellite tracking device
ships, helicopters being moved, cargo, missiles, troops all
across all the seas of the world, but they're all now tied
together. They have these cables--you know, cable wires, and 21
of the 69 obsolete ships are listed by the Maritime
Administration as being at high risk for leaks or breaking
apart.
According to a report by the Department of Transportation's
inspector general, some of the ships have deteriorated to the
point that a hammer can penetrate their rusting hulls. If just
two of these toxic, latent ships broke apart, more than 50
miles of the James River could be contaminated within 48 hours,
or 2 days, requiring, obviously, years of cleanup of the spill
and costing billions of dollars.
This is not something you can say: Oh, this is just, you
know, speculative. This is not an unlikely event. Indeed, over
the last 3 years there have been nine oil spills on the fleet.
The Lower James River, as we all know here, includes four State
wildlife sanctuaries, marshes, national and State historical
parks, including the original Jamestown Fort, where we'll be
celebrating in 2007 the 400th anniversary of the cradle of
American democracy.
There also are species that live and breathe in the Lower
James, including federally protected eagles, bald eagles, also
egrets and blue--great blue herons. Just south of the fleet are
some of the largest remaining public oyster grounds in
Virginia. Hard-shell and soft-shell clams and blue crabs are
also harvested from these waters.
The James River, as we all know, served as the first major
transportation way during the birth of this Nation, as part of
one of our Commonwealth's largest and most popular tourist
destinations.
The health of the historic James River represents health of
jobs and security for thousands of Virginians. So, in my view,
in view of even these difficult economic times, it's important
for Congress and the Federal Government to be fully cognizant
of the danger these ships pose to the people in the
Commonwealth of Virginia, and until recently--I will say
there's been progress made, but until recently the Federal
Government has regulated the coast fleet administration into a
corner, making it nearly impossible for environmental concerns
to remove the ships from the river.
Disposal of vessels was further hampered in 1997 when the
Clinton Administration imposed a moratorium prohibiting
overseas ship scrapping based on their environmental concerns.
That has now changed, and it is imperative that the Federal
Government provide the funding for the Maritime Administration
to find a safer haven for these rotting giants.
On numerous occasions I have contacted the President and my
Senate colleagues and have joined--been joined by my colleague
Senator Warner and Congresswoman Davis in calling for adequate
funding and increased funding for disposal of the ships.
The Virginia delegation last year for this fiscal year was
able to secure $31.2 million, which is unprecedented increased
funding for proper disposal of these dangerous ships.
Now, during this hearing we'll discuss the options for
increasing competition for the disposal of ships. Because of
taxpayers benefiting from competition, we are in favor of
competition. If the price is close, I'd like to see U.S. jobs
being able to do the scrapping, because the--the scrapping of
it, because, after all, those are U.S. jobs, and if you have a
relatively close price, those people doing that work will be
paying Federal income taxes.
So, as an enterprise sense it does make sense, but we do
need competition, and that should not be a preclusion of those
from overseas competing to do this work.
We're also going to examine and discuss the proposals that
are put forth and seek out the most appropriate and expeditious
plan for the protection of the James River and all who depend
on it.
The point is: This is the time for action on this time
sensitive and important issue, and I thank you all for joining
us this morning.
Our first panel will be a panel of one, as I said, a tiger.
I'm delighted to have with us today Congresswoman Jo Ann Davis.
She has been a terrific champion of the need to take action to
prevent a disaster on the James River. I'm pleased to work with
her on this important matter, someone who is articulate and as
knowledgeable as Congresswoman Davis. She will be our first
witness.
[The prepared statement of Senator Allen follows:]
Prepared Statement of Hon. George Allen, U.S. Senator from Virginia
Good morning.
I call this hearing of the Subcommittee on Surface Transportation
and Merchant Marine to order. I want to thank our witnesses for
appearing before us today. This morning we meet in an effort to shed
more light on the fragile and dangerous nature of the obsolete National
Defense Reserve Fleet (NDRF) ships stored in the James River. As these
ships rust and deteriorate--fuel and oil storage aboard these ships
place the James River--and the wildlife, jobs and citizens that depend
on this river--in great danger.
I think it's important to note that the James River Reserve Fleet,
as the National Defense Reserve Fleet ships stored in the James River
are known, is not the only reserve fleet the government utilizes. There
are other similar fleets in Texas, Alabama and California--but none are
nearly as large or as old as the one we have in Virginia.
The Ghost Fleet, which is made up of 94 ships, is a disaster
waiting to happen. It is currently the largest and oldest floating
parking lot in the country, designed to hold government ships that can
be reactivated in a time of national crisis. However, 69 of these ships
are deemed to be non-retention obsolete--meaning that they will not be
returned to service.
I am eager to hear from our witnesses the proposals for disposing
of these junked vessels and for doing it before the September 2006
deadline--as set by Congress.
These ships are packed with toxic chemicals and asbestos. All
together they hold an estimated 13 million gallons of oil and fuel in
rusted, deteriorating hulls.
Once, this fleet carried cargo, missiles, and rescue equipment,
helicopters, satellite-tracking devices and troops around the globe.
Now, they are tied together with thick wire cable and 21 of the 69
obsolete ships are listed by the Maritime Administration as being at
high risk for leaks or breaking apart.
According to a report by the Department of Transportation's
Inspector General, some of the ships have deteriorated to the point
that a hammer can penetrate their rusting hulls.
If just two of these toxin-laden ships broke apart, more than 50
miles of the James River could be contaminated--requiring years to
clean up the spill and costing millions of dollars. This is not an
unlikely event--just within the past 3 years there have been nine oil
spills from the fleet.
In just one of the incidents--October 11, 2002, the Virginia
Department of Environmental Quality reported that a fuel leak caused an
oil sheen measuring more than a mile long and 25 yards wide. A larger
spill would place the vital and important tourist and fishing trades
that flourish in this area at severe risk.
The lower James River includes four state wildlife sanctuaries,
national and state historical parks, marshes and undeveloped beaches.
Species that live and breed there include federally protected terns,
bald eagles and piping plovers, egrets and great blue herons. Just
south of the fleet, in Burwells Bay, are some of the largest remaining
public oyster grounds in Virginia. Hard-shell and soft-shell clams and
blue crabs also are harvested from the waters.
The James River served as the first major roadway during the birth
of this Nation and is part of one of the Commonwealth's largest and
most popular tourist destinations. The health of the historic James
represents the health of jobs and security for thousands of Virginians.
In 2001, Congress, as part of the National Defense Reauthorization
Act, extended the deadline for the disposal of all obsolete National
Defense Reserve Fleet ships to 2006.
The law requires that Maritime Administration dispose of obsolete
vessels
``without any predisposition toward foreign or domestic
facilities taking into consideration, among other things, the
ability of facilities to scrap vessels--(1) at least cost to
the government; (2) in a timely manner; (3) giving
consideration to worker safety and the environment and; (4) in
a manner that minimizes the geographic distance that a vessel
must be towed when towing a vessel poses a serious threat to
the environment.'' [Public Law 106-398]
All of this must be done before September 30, 2006. At the current
funding level, this deadline will not be met.
Even in these times of economic difficulty, it is important for
Congress and the Federal government to know the danger these ships pose
to the Commonwealth of Virginia and its citizens.
Until recently, the Federal government had regulated the ghost
fleet into a corner, making it nearly impossible--for environmental
concerns--to remove the ships from the river. That has now changed and
it is imperative that the Federal government provide the funding for
the Maritime Administration to find a safer haven for these rotting
giants.
I have contacted the President and have joined Congresswoman Davis
and Senator Warner in calling for adequate funding--increased funding--
for the disposal of these ships.
The history of Virginia, the livelihood of thousands of the
Commonwealth's citizens and innumerable animals and plant species are
so deeply tied to a healthy James River. And each one of them deserves
better.
The fleet was established in 1925 as a parking lot--Today, a large
portion of the parking lot has become a junkyard. During this hearing,
we will discuss options for increasing competition in the disposal of
ships, because hardworking taxpayers benefit when competition is
allowed. We will study the proposals that are put forward and seek out
the most appropriate and expeditious plan for the protection of the
James River and all who depend on it. The time is now to bring
attention to the dire need for action on this important and time
sensitive issue.
Thank you all for joining us today.
I am delighted that we have with us today Congresswoman Jo Ann
Davis. She has been a terrific champion of the need to take action to
prevent a disaster on the James River. I am pleased to work on this
matter with someone as articulate and knowledgeable as Congresswoman
Davis. She will be our first witness. After she has given her
statement, I have asked her to join me at the dais in questioning the
other witnesses.
Senator Allen. Congresswoman Davis, after you complete your
testimony, I hope you will join me and we'll make this a
bicameral hearing, and you can propose questions as well.
STATEMENT OF HON. JO ANN DAVIS, CONGRESSWOMAN,
U.S. HOUSE OF REPRESENTATIVES
Congresswoman Davis. Thank you, Senator.
Mr. Chairman, I'd like to commend you for coordinating the
field hearing today on what you know I consider a most
important topic. Your Committee clearly recognizes the
importance of dealing with the issues related to the James
River National Defense Reserve Fleet, commonly known here as
the ``Ghost Fleet.''
We Virginians have far too long gazed across our beautiful
waterway--the very waters that carried the English settlers to
Jamestown--to view that hulking mess of ships. I know you know
it's a mess. You've been there, as have I. I believe in this
case our Nation has not served the Commonwealth well by
allowing Virginia to be the dumping ground of these
deteriorating, obsolete ships.
While I recognize and appreciate the need for a reserve
fleet, especially in today's dangerous world, this
environmental ticking time bomb needlessly threatens our shores
and the way of life for tens of thousands of Virginians. I
believe the Federal Government must perform its duty by
providing the resources to rid the James and the Tidewater
region of this catastrophe waiting to happen.
In a recent report, MARAD, as they assessed the possibility
of an environmental mishap from the James River Reserve Fleet,
concludes that damage could stretch, as you said, for 50 miles
along the river and take weeks to clean up. MARAD continued:
``assessing the ecological damage could take years.''
As you know, Senator, the Ghost Fleet includes the most
decrepit ships in the National Reserve, stored in what one
Virginia official described as, quote, ``probably the worst
place from an environmental standpoint that you could think
of.''
Together the fleet holds about 7.7 million gallons of oils
and fuels, according to the latest government estimate. That's
slightly less than what the EXXON VALDEZ spilled off the coast
of Alaska in 1989, and that was in the MARAD report. According
to MARAD, Virginia cannot wait any longer.
In Fiscal Year 2003, President Bush asked for only $11
million to scrap ships. I worked hard on the Virginia
delegation and my Senate colleagues, and thankfully my
colleagues and the House Merchant Marine Panel recognized the
severity of the situation and authorized $20 million for the
Fiscal Year 2003 ship disposal account to deal with this
looming problem.
Ultimately, after much debate and arm twisting, the
President's request was appropriated. My colleagues in the
Senate were able to provide an additional $20 million from DOD
to fund scrapping at $31 million last year. Unfortunately, we--
we weren't able to get the $31 million before this past
February, but we are making progress.
For Fiscal Year 2004, I'm happy to report that again the
House Armed Services Committee has authorized my request of $20
million for ship scrapping. Just last week I spoke to Chairman
Istook to again make my case to his committee that funding from
transportation appropriators was critical to continuing this
battle.
September 30, 2006, the legislative deadline to rid the
Reserve Fleet of obsolete vessels, is quickly approaching.
MARAD is making good progress, and I look forward to Captain
Schubert's testimony and his update as to what the Maritime
Administration has planned for this summer.
Last week--last we spoke, a 13-ship deal was in the works
and expected to be signed any day. Additionally, I am told the
Maritime Administration has plans for an additional six ships
to soon follow. It is my hope that Captain Schubert can confirm
these recent developments.
Finally, I would be remiss if I did not comment on recent
press articles regarding ship scrapping abroad. I concede that
it is imperative that every practical measure be taken to
ensure an environmentally sound scrapping program is done.
However, having said that, I firmly believe that the best
policy for scrapping takes into consideration the timely
scrapping to meet the 2006 legislative mandate to rid MARAD of
its obsolete inventory, cost effective proposals that provide
the U.S. Government with the best value, with a strong emphasis
on efforts to scrap ships domestically, but not at the expense
of quicker, more cost effective efforts abroad, because, as we
all know, the more affordable our scrapping program is, the
more ships we can scrap.
I thank you, Mr. Chairman, for allowing me to testify
today. I can't stress enough that I hope that we don't do
anything to slow down the possibility of 13 or possibly 6 more,
a total of 19 ships leaving the James River this year.
I thank you, Mr. Chairman, and I look forward to joining
you and asking questions.
[The prepared statement of Hon. Davis follows:]
Prepared Statement of Hon. Jo Ann Davis, Congresswoman,
U.S. House of Representatives
Mr. Chairman, I would like to commend you for coordinating this
field hearing today on a most important topic. Your committee clearly
recognizes the importance of dealing with the issues related to the
James River National Defense Reserve Fleet, known locally as the
``Ghost Fleet.''
We Virginians have for far too long gazed across our beautiful
waterway, the very waters that carried the English settlers to
Jamestown, to view that hulking mess of ships. I believe in this case,
our Nation has not served the Commonwealth well by allowing Virginia to
be the dumping ground of these deteriorating, obsolete ships. While I
recognize and appreciate the need for a reserve fleet, especially in
today's dangerous world, this environmental ``ticking time bomb''
needlessly threatens our shores and the way of life for tens of
thousands of Virginians. I believe the Federal Government must perform
its duty by providing the resources to rid the James and the Tidewater
Region of this catastrophe waiting to happen.
In a recent report, MARAD, as they assessed the possibility of an
environmental mishap from the James River Reserve Fleet, ``concludes
that damage could stretch for 50 miles along the river and take weeks
to clean up.'' MARAD continued, ``assessing the ecological damage could
take years.''
As you know Senator, the Ghost Fleet includes the most decrepit
ships in the national reserve, stored in what one Virginia official
described as ``probably the worst place, from an environmental
standpoint, that you could think of.'' Together, the fleet holds about
7.7 million gallons of oils and fuels, according to the latest
government estimates. That's slightly less than what the EXXON VALDEZ
spilled off the coast of Alaska in 1989. (MARAD Report) . . . Virginia
cannot wait any longer.
In Fiscal Year 2003, President Bush asked for only $11 million to
scrap ships. I worked hard, and thankfully my colleagues and the House
Merchant Marine Panel recognized the severity of this situation and
authorized $20 million for the FY '03 ship disposal account to deal
with this looming problem. Ultimately, after much debate and arm
twisting, the President's request was appropriated. And my colleagues
in the Senate were able to provide an additional $20 million from DOD
to fund scrapping at $31 million last year. We are making progress.
For Fiscal Year 2004, I am happy to report that again the House
Armed Services Committee has authorized my request of $20 million for
ship scrapping. And just last week I spoke to Chairman Istook to again
make my case to his committee that funding from Transportation
Appropriators was critical to continuing this battle.
September 30, 2006, the legislative deadline to rid the Reserve
fleet of obsolete vessels, is quickly approaching. MARAD is making good
progress and I look forward to Captain Schubert's testimony and his
update as to what the Maritime Administration has planned for this
summer. Last we spoke a 13 ships deal was in the works and expected to
be signed any day. Additionally, I am told that the Maritime
Administration has plans for an additional 6 ships to soon follow. It
is my hope that Captain Schubert can confirm these recent developments.
Finally, I would be remiss if I did not comment on recent press
articles regarding ship scrapping abroad. I concede that it is
imperative that every practical measure is taken to ensure an
environmentally sound scrapping program. Having said that though, I
firmly believe that the best policy for scrapping takes into
consideration the timely scrapping to meet the 2006 legislative mandate
to rid MARAD of it's obsolete inventory, cost effective proposals that
provide the U.S. Government with the best value, with a strong emphasis
on efforts to scrap ships domestically . . . BUT not at the expense of
quicker more cost effective efforts abroad. Because as we all know, the
more affordable our scrapping program is the more ships we can scrap.
Thank you Mr. Chairman for allowing me to testify today.
Senator Allen. Thank you. Thank you, Congresswoman Davis.
I'm going to adduce testimony. These will be leading questions
here so we get this all into the record, because we need to get
the Senate, obviously, as well-versed as the House is on this.
You mentioned the Jamestown Fort. I have here--this was
prepared by apparently John Earl of The Virginian-Pilot. It
asks how many hours away from a spill different sites were.
Within 2 days, 48 hours, you get down to the mouth of the
James, but the Jamestown Fort is only--according to this chart,
the Colonial--original Jamestown about 12 hours upriver, and of
course there are tides and if you had a wind blowing off the
ocean, would you agree it's about 12 hours projected as far as
the spill getting to the original Jamestown Fort?
Congresswoman Davis. I have to take your word for it,
Senator. I haven't seen that report, but I do know that it's
awfully close, and 2007 is around the corner. The last thing I
want--besides hurting the environment here locally--is to do
anything to damage what's going on right now at Jamestown.
Senator Allen. As far as the requests for proposal and the
disposal, you and I both felt if we could get it done at the
best price to--reasonably best price in this country, we would
like those jobs. The bottom-line concern we have is: What is
going to be the most prompt method of getting these
deteriorating, dangerous ships out of this river?
Congresswoman Davis. I'd rather give the jobs here
domestically, but my main concern is moving those ships and
getting them out of here, whatever it takes.
Senator Allen. Thank you. If you would, please join me
here. I also want to enter in the record the statement of
Senator John Warner on the future of the James River Ghost
Fleet. This will be made part of the record. Senator Warner is
a wonderful teammate, a great ally, and one who shares our
concerns. I'll give this to Rob.
I'd like to call Captain Schubert. Captain Schubert, if
you'd please come forward.
The Honorable William G. Schubert is Administrator of the
United States Maritime Administration.
We thank you for being with us here today. Your testimony
is going to be carefully listened to. We look forward to
hearing from you on the progress that is being made and
progress that will be made in the future on this important
matter.
STATEMENT OF HON. WILLIAM G. SCHUBERT, MARITIME ADMINISTRATOR,
U.S. DEPARTMENT OF TRANSPORTATION
Captain Schubert. Morning, Mr. Chairman, Congresswoman. I
would like to request first that my formal statement be
accepted into the record.
Senator Allen. So ordered.
Captain Schubert. I would like to read some brief opening
remarks. Thank you for the opportunity to testify on the
obsolete ships in the James River Fleet and the Maritime
Administration's Ship Disposal Program.
I would like to thank Senator Allen for holding this
hearing that will help continue to raise awareness of issues
and highlight the progress that the Bush Administration is
making with the disposal of the obsolete vessels of the James
River Reserve Fleet.
You are providing an important forum from which we can all
benefit. I would also like to thank Congresswoman Jo Ann Davis
of Virginia's 1st Congressional District. She has been a
tireless advocate on this issue and instrumental in ensuring
the administration received the Fiscal Year 2003 funding
requested for disposal of obsolete National Reserve Fleet
ships.
She has visited the James River Fleet site numerous times
and has been a critical team player in raising the awareness
among fellow Members of Congress.
Lastly, I would like to thank the senior member of the
Virginia delegation, Senator John Warner, who is not here
today. Senator Warner has also served as a key team player in
assuring the swift removal of obsolete vessels from the James
River Reserve Fleet. His support of the program has been
decisive.
The Bush Administration has faced the challenges of the
James River Fleet head on. This issue has been an intense focus
during my tenure as the Maritime Administrator, and I am
prepared to discuss what I believe is good news for the James
River and the people of Virginia.
Today we are announcing the award of one contract for the
removal of three high-priority vessels from the James River
Fleet to a domestic facility in Brownsville, Texas.
Currently we are on the verge of closing another contract
that would remove 15 ships, at once, from the James River
Reserve Fleet. Together this will be the largest removal of
obsolete ships in a single year from any of MARAD's fleets,
including the James River Fleet, since 1993.
However, before I discuss the current outlook, it is
important that I highlight the recent history of MARAD's ship
disposal program. The Maritime Administration serves as the
U.S. Government disposal agent for merchant-type vessels of
1500 gross tons or more. Most of the 130 ships--actually it's
131 ships--scheduled for disposal are located at MARAD's three
national defense reserve lead anchorages. That's the James
River Fleet, the Beaumont, Texas Reserve, and the Suisun Bay
Reserve Fleet in California.
The National Defense Reserve Fleet, or NDRF, is maintained
by the Secretary of Transportation and was established for the
maintenance of readiness assets, including the ready reserve
force and other vessels owned or acquired by the U.S.
Government that are determined to be of value for national
defense purposes. In fact, six ships from the local area here
recently returned to the James River Fleet from the Operation
Iraqi Freedom after successfully delivering critical cargo.
The National Maritime Heritage Act of 1994 authorized MARAD
to dispose of obsolete NDRF vessels and directs the use of any
proceeds derived from disposal. Prior to 1994 MARAD sold
obsolete vessels for dismantling to the highest bidder and
netted a profit. However, foreign sales were stopped due to
Federal prohibitions on the exports of PCBs found on board
these vessels and an increasing national and international
concern regarding environmental and worker safety.
With overseas sales curtailed in 1994 and upheld in 1998 as
a specific Federal Government moratorium on overseas ship
dismantling, which expired in 1999, MARAD turned exclusively to
the domestic market to sell ships for dismantling. However,
only a few domestic facilities expressed interest in purchasing
vessels for dismantling.
Since 1994 MARAD has sold 22 vessels, only 12 of which have
actually been dismantled. Of the remaining vessels, the
purchasers did not accept the vessels, and as a result the
sales contracts were terminated. Marginal profits due to
changing market conditions for scrap metal and the high cost of
removal and disposal of hazardous material contributed to the
decreased viability of the domestic sales program.
Coupled with the inability to sell ships in the domestic
market and a prohibition on exports, the ship disposal program
was suspended, yet ships continued to arrive at the fleets. At
this time MARAD was also prohibited by statute from paying for
dismantling services. Thus, as a large backlog of obsolete
ships were created, the number of obsolete vessels increased by
over 60 ships since 1997 through the year 2000.
The National Defense Authorization Act of Fiscal Year 2001
contained statutory amendments which gave MARAD unprecedented
ability to pay for dismantling services, if necessary. This
statutory change, along with $10 million transferred from the
DOD appropriation to MARAD for ship disposal allowed us to
begin implementing Federal payment for ship disposal services.
MARAD was instructed by Congress to scrap obsolete vessels at
qualified facilities using the most expeditious scrapping
methodology and location practicable.
Scrapping facilities were to be selected on a best-value
basis, consistent with the Federal Acquisition Regulations, and
without any predisposition toward foreign or domestic
facilities. MARAD was also given a September 30, 2006 deadline
to dispose of all obsolete vessels.
MARAD began a program using a time-phased and level-funded
approach, consisting mainly of domestic vessel dismantlement
and recycling. Using the $10 million provided for in the Fiscal
Year 2001 DOD appropriation, MARAD was able to dispose of six
high-risk vessels in domestic facilities.
However, it became apparent that the limited cost effective
capacity of the domestic dismantling industry would make the
disposal of obsolete ships a larger challenge than anticipated.
In Fiscal Year 2002, the Administration requested $11
million for ship disposal. This was the first request for a
direct appropriation, but unfortunately funding was not
appropriated. At the crossroads regarding the ship disposal
dilemma, the agency was left with two approaches. The first
approach was to do nothing and wait for future appropriations,
basically using it as an excuse to do nothing, or to permit--
for MARAD, this appeared irresponsible. The second approach was
to start creating opportunities and seek out all possible no-
cost options.
In September 2001, MARAD initiated a Program Research and
Development Announcement, also known as a PRDA. The PRDA is a
comprehensive procurement mechanism allowed under the Federal
Acquisition Regulations. This competitive announcement
solicited ship dismantling/recycling proposals from the ship
dismantling industry, both foreign and domestic.
The PRDA provided the industry with the opportunity to
propose feasible and cost effective solutions to MARAD's ship
disposal challenge that are based on their capabilities,
methods, innovations that made sense to their business. During
Fiscal Year 2002, MARAD received numerous proposals involving
foreign vessel recycling facilities, so we began discussions
with the EPA regarding possible export options. Through the
PRDA process we began to see opportunities to recycle ships
domestically or export ships in an environmentally responsible
and cost effective manner.
MARAD's discussions with the EPA have led to a cooperative
relationship that is results oriented in seeking solutions to
the challenges of the NDRF. We also began identifying other
disposal opportunities such as artificial vessel reefing and
deep sinking of vessels in conjunction with the Navy's SINKEX
program.
In Fiscal Year 2003, MARAD asked and received for the first
time a direct appropriation that met the administration's
request for ship disposal--for the ship disposal program. This
direct appropriation, coupled with the additional funding
received from the Fiscal Year 2003 DOD appropriation, has
allowed MARAD to maximize the number of vessels disposed.
Taking advantage of all possible alternatives and options has
been critical to the effort of removing ships from the James
River Reserve Fleet, which is why in Fiscal Year 2003 I
requested and received authority to pay for remediation
services to clean vessels prior to artificial reefing.
For the remainder of Fiscal Year 2003, MARAD expects to
continue making awards based on the PRDA proposals already
received and will release additional IFBs. Discussions have
recently been opened with a domestic company relating to their
PRDA proposal for the dismantling of additional high-risk James
River Reserve Fleet vessels.
Both international and domestic PRDA proposals that
represent the best value to the government will continue to be
considered. With the initiation of the PRDA process we have
seen more competition and a significant decrease in disposal
proposal costs since we first began paying for services in
Fiscal Year 2001.
Our program currently focuses on removing all vessels that
have high or moderate risks as soon as possible. Having all
disposable alternatives available to MARAD and the necessary
funding in place to ensure the obsolete vessels can be disposed
at a rate greater than the obsolete vessels coming into the
fleet will help us achieve these mutual goals, mitigating the
risk by removing the risk is what the Department of
Transportation and the Maritime Administration intends to
achieve.
Thank you for the opportunity to discuss the disposal of
obsolete government vessels today, and I would be pleased to
answer any questions you may have at this time.
[The prepared statement of Hon. Shubert follows:]
Prepared Statement of Hon. William G. Schubert, Maritime Administrator,
U.S. Department of Transportation
Good morning, and thank you for the opportunity to testify about
the obsolete ships in the James River Reserve Fleet and the Maritime
Administration's Ship Disposal Program.
The Maritime Administration (MARAD) serves as the U.S. Government's
disposal agent for merchant type vessels of 1,500 gross tons or more.
Most of the ships scheduled for disposal are located at MARAD's three
anchorages: the James River near Ft. Eustis, VA (JRRF); Beaumont, Texas
(BRF); and Suisun Bay near Benicia, California (SBRF). In total, there
are approximately 130 obsolete ships in all three fleet sites that make
up a portion of the National Defense Reserve Fleet (NDRF).
The NDRF was established for the maintenance of readiness assets,
including the Ready Reserve Force (RRF) and other vessels owned or
acquired by the United States Government that are determined to be of
value for national defense purposes. The NDRF is maintained by the
Secretary of Transportation; NDRF ships, especially the RRF component,
serve as a reserve of vessels which can be activated to help meet U.S.
shipping requirements during a national emergency.
The National Maritime Heritage Act of 1994 authorizes MARAD to
dispose of obsolete NDRF vessels, and directs the use of any proceeds
derived from disposal. Prior to 1994, MARAD was able to sell obsolete
vessels for dismantling to the highest bidder. From 1987 to 1994, MARAD
sold for export and disposed of 130 ships at an average price of $108/
ton, which netted approximately $80 million. However, as a result of
Federal prohibitions on the export of PCBs (polychlorinated biphenyls)
found onboard many obsolete vessels, as well as increasing national and
international concerns regarding environmental and worker safety
issues, foreign sales were stopped in 1994.
With overseas sales curtailed in 1994, and upheld in 1998 as a
specific Federal Government moratorium on overseas ship dismantling
which expired in 1999, MARAD turned exclusively to the domestic market
to sell ships for dismantling. However, only a few domestic facilities
expressed an interest in purchasing vessels for dismantling. Since
1994, MARAD has sold 22 vessels, only 12 of which have been dismantled.
Of the remaining vessels, the purchasers did not accept the vessels and
as a result, the sales contracts were terminated. Marginal profits due
to changing market conditions for scrap metals and the high costs for
removal and disposal of hazardous material contributed to the decreased
viability of the domestic sales program.
When the domestic sales option became less viable in the mid-1990s,
MARAD began negotiations with the Environmental Protection Agency (EPA)
to allow the export of ships after the removal of liquid and ``readily
removable'' PCBs prior to export. Two agreements were signed: November
30, 1995 and November 10, 1997. The first had unworkable notice
language and the second was never put into effect because MARAD agreed
to refrain from further pursuing this agreement due to heightened
international attention on ship dismantling facilities in the third
world.
On September 23, 1998, Vice President Gore, issued a memorandum to
then-Secretary of Defense Cohen and then-Secretary of Transportation
Slater placing a further interim moratorium on efforts to export
vessels for dismantling until October 1, 1999 to ensure that the
Interagency Panel on Ship Scrapping recommendations were fully
considered.
During this time period, the ship disposal program was suspended.
Although no ships were dismantled, vessels continued to arrive at the
fleet sites. At this time, MARAD was also prohibited by statute from
paying for dismantling services. Thus, a large backlog of obsolete
ships was created with the number of obsolete vessels in our fleets
increasing by over 60 ships between 1997 and 2000. This critical
situation, exacerbated by the deterioration of hulls over time,
prompted the Department of Transportation's Office of Inspector General
to name the disposal of MARAD's obsolete ships as a Top 10 Management
Challenge in 2000 and 2001 for DOT.
The National Defense Authorization Act for FY 2001 contained
statutory amendments which gave MARAD unprecedented ability to pay for
dismantling services, if necessary. This change, along with $10 million
transferred from a DOD appropriation to MARAD for ship disposal,
allowed us to begin implementing Federal payment for a ship disposal
program. MARAD was instructed by Congress to scrap obsolete vessels at
qualified facilities, using the most expeditious scrapping methodology
and location practicable. Scrapping facilities were to be selected on a
best value basis consistent with the Federal Acquisition Regulation
(FAR), without any predisposition toward foreign or domestic
facilities. MARAD was also given a September 30, 2006 deadline to
dispose of all obsolete vessels, and required to submit to Congress a
report detailing its ship disposal program.
MARAD began a program using a time phased and level-funded approach
consisting mainly of domestic vessel dismantlement and recycling. Using
the $10 million provided in the FY 2001 DOD Appropriation, MARAD was
able to dispose of six high-risk vessels in domestic facilities.
However, it became apparent that MARAD would not be able to meet the
2006 deadline to dispose of all obsolete vessels without direct
appropriations and the use of additional vessel disposal alternatives.
The high costs and limited cost effective capacity of the domestic
dismantling industry would make the disposal of obsolete ships a larger
challenge than anticipated.
In FY 2002, the Administration requested $11 million for ship
disposal, but funding was not appropriated. At a crossroads regarding
the ship disposal dilemma, the Agency was left with two approaches. The
first approach was to do nothing and wait for future appropriations. To
MARAD, this appeared irresponsible. The second approach was to start
creating opportunities and seek out all possible no-cost options. In
September 2001, MARAD initiated a Program Research and Development
Announcement (PRDA). The PRDA is a competitive procurement mechanism
allowable under the FAR. This competitive announcement solicited ship
dismantling/recycling proposals from the ship dismantling industry both
foreign and domestic. The PRDA provided the industry with opportunity
to propose feasible and cost-effective solutions to MARAD's ship
disposal challenge that were based on their capabilities, methods and
innovations and that made sense for their business.
During FY 2002, MARAD received numerous proposals involving foreign
vessel recycling facilities, so we began discussions with the EPA
regarding possible export options. Through the PRDA process, we began
to see opportunities to recycle ships domestically or export ships in a
responsible cost-effective manner. MARAD's discussions with EPA have
led to a cooperative relationship that is results-oriented in seeking
solutions to the challenges of the NDRF. We also began identifying
other disposal opportunities, such as artificial vessel reefing and the
deep sinking of vessels in conjunction with Navy's SINKEX Program.
In FY 2003, MARAD received, for the first time, a direct
appropriation that met the Administration's request for the Ship
Disposal Program. This direct appropriation, coupled with additional
funding received from a FY 2002 DOD appropriation, has allowed MARAD to
maximize the number of vessels disposed. Taking advantage of all
possible alternatives and options is critical to the effort of removing
ships from the James River Reserve Fleet.
Today, MARAD is announcing the award of one contract for the
removal of three high-priority vessels from the James River Reserve
Fleet. Currently, we are on the verge of closing on another contract
that would remove fifteen ships at once, from the James River Reserve
Fleet. Combined, this will be the largest removal of obsolete ships in
a single year from any of MARAD's fleets, including the James River
Reserve Fleet, since 1993.
The three-ship award is the result of a domestic Invitation for Bid
(IFB) that was submitted by ESCO Marine of Brownsville, Texas. ESCO was
awarded a contract to dismantle three high priority ships from the
James River Reserve Fleet for $2.2 million. This is the second award to
a Brownsville, Texas ship disposal facility in 2003. Earlier this year,
Marine Metals was awarded a contract to dispose of two high priority
vessels from the James River Reserve Fleet for approximately $600,000.
The pending contract that has not yet closed will be the result of
a negotiated PRDA. This company will remove a total of fifteen ships
from the James River Reserve Fleet site. Thirteen vessels are scheduled
to be dismantled at the AbleUK facility in Teesside, England and two
will be converted for operation outside U.S. trade.
MARAD employed a variety of procurement methodologies to achieve
the best value to the taxpayer and Government in order to remove as
many high priority ships as possible from the James River Reserve
Fleet. The IFB and PRDA have resulted in best value awards. The ESCO
Marine facility, and the PRP proposal that utilizes the Able UK
facility, were selected under a best value basis consistent with
Federal Acquisition Regulations (FAR).
For the remainder of FY 2003, MARAD expects to continue making
awards based on PRDA proposals already received and additional IFBs.
Discussions have recently been opened with a domestic company related
to their PRDA proposal for the dismantling of additional high risk
James River Reserve Fleet vessels. Both domestic and international PRDA
proposals that represent best value to the government will continue to
be considered. With the initiation of the PRDA process, we have seen
more competition and a significant decrease in disposal proposal costs
since we first began paying for services in FY 2001.
As you may know, the President's budget includes $11 million to
support MARAD's continued efforts to eliminate high risk ships and
significantly mitigate the environmental threat of oil discharge at the
fleets. Adequate funding and aggressive pursuit of all cost effective
disposal alternatives is especially important given the projections
that approximately 47 additional vessels will be added to MARAD's
fleets as non-retention, obsolete vessels over the next five years.
Our program currently focuses on removing all vessels that have a
high or moderate risk as soon as possible. Having all disposal
alternatives available to MARAD and the necessary funding in place to
ensure that obsolete vessels can be disposed of at a rate greater than
obsolete vessels coming into MARAD's fleet will help us achieve these
mutual goals. Mitigating the risk by removing the risk is what the
Department of Transportation and the Maritime Administration intends to
achieve.
Thank you for the opportunity to discuss the disposal of obsolete
Government vessels today. I would be pleased to answer any questions
you may have at this time.
Senator Allen. Thank you, Captain. Thank you for your
leadership, your assessment, and also your good news that you
have brought here. We ought to have hearings more often. That's
good news. Thank you.
I will ask some questions, and I'll allow Representative
Davis to ask questions as well. I understand your testimony. I
was trying to read how you wrote it here versus there. I
understand obviously the lack of funding previously made it
very difficult for the Maritime Administration, and if you
couple, in your view, a lack of domestic capabilities, you add
that to a lack of funding--some of this precedes your
administration but, nevertheless, right when you were coming in
this was a problem.
Now, what is--what in your view are the current
capabilities of the domestic market or capabilities for
scrapping domestically now as opposed to previously, and if you
could determine it--as a practical matter you've said: Here are
the ones that are the most dangerous, the ones that most needed
disposal.
One of the great things for you is now the limits that it
all has to be domestic is off. You can get it overseas if you
can get it out there quickly, or you can put it in here. The
competition has reduced the cost, which is good for the
taxpayer, but what is--do you have an estimate of how much of
this could be done domestically as far as the most dangerous
deteriorating ships?
Captain Schubert. Mr. Chairman, first of all, the disposal
of the high-risk--or what we refer to as high-risk--vessels has
been one of my top priorities as the Maritime administrator.
Currently we have about 21 ships in the James River Fleet that
are considered high-risk vessels.
I wish I could have gone into a little more detail in my
opening statement, but I tried to keep it down. The good news
is with the current efforts that are underway right now which
involve both domestic and foreign scrapping, that by--let's say
the current ones that we have actually awarded or are on the
verge of awarding--we will have diminished the high-risk
vessels down to three ships.
Senator Allen. So, of those 18--there's 3 that are going to
Texas and 15 that may be going overseas. I assume----
Captain Schubert. Yes, we----
Senator Allen. Out of those--those 18 that you are talking
about are the 3 plus the 15, right?
Captain Schubert. The math gets a little confusing here,
but we have--I can run down the current status if you like, but
we have basically two ships that we have already awarded this
year that have already left the fleet.
Senator Allen. These are out of the 21 high risk?
Captain Schubert. Out of the 21, correct. We have 15 ships
which are part of the much publicized pending deal, which I
can't go into any more detail, except out of those ships 11 of
those ships are actually considered high-risk ships.
Then we have a three-ship award, which I did announce in my
opening statements, which I signed just the other day, then
we're also evaluating another three-ship award under the PRDA
and are considering--that would be a domestic--that would also
be a domestic scrapping.
So, if you add up all those ships, the 2, the 11, that's
13--that's 19 ships, but 21 of the ships--one of the ships that
we're going--one of the high-risk ships included in that is a
ship down in Mobile, Alabama, which is even worse than the
ships that we have here.
So, that leaves three ships left that we have not
contracted for yet. So, I think that is a big step forward. I
think you would agree.
Senator Allen. I definitely agree.
Captain Schubert. So, my highest priority is to find a way
to get rid of those last remaining three ships.
Now, the good news is because of the--some of the
creativity we used, the PRDA process, some of the--combined
with some foreign options to get rid of a lot of ships fast, is
that we should have--just the appropriations already given to
us--somewhere between $6 million to $10 million left over.
Senator Allen. That is my next question: Do you have enough
funds to do that? Great.
Captain Schubert. So, I'm guardedly optimistic that we will
have all 21 ships that are considered high-risk ships with the
current fundings that we have been appropriated. I say
guardedly optimistic because you never know. You know, somebody
who is contracted to do services may not come up with the bonds
they need to do it properly.
There's still some other sort of technical issues we need
to address, but I wanted to give you a sense that I have taken
this as the highest priority, one of the highest priorities, as
the Maritime administrator.
When I stepped in the office in July--excuse me--in
December 2001, I had this--no money and a lot of ships to get
rid of. As I said in my opening statement, we used our time
wisely. We didn't use the lack of funds as an excuse to not try
to address the problem, and we used our time wisely. I met
personally with the EPA several times at the highest level to
try to get some cooperation, not only on the issue of whether
or not we can export ships again, but also on the artificial
reefing, which we think is another very--very cost effective
way to take care of a lot of ships, an environmentally
acceptable way.
But what we have to determine with the--to get the EPA's
cooperation, which we have so far, we have a working group
working on this. We have to have a remediation standard that's
acceptable to where the five states that are currently
interested in ships from our fleet to sink for artificial
reefs, that they would be--the remediation standards would be
acceptable to all five states. So, we are currently working on
that.
To get back I think to what your question was----
Senator Allen. Before I--I'm going to get back to that.
First of all, well done. If this all gets done as you planned--
and you seem like you are well on the way to getting it done--
you will have done with this funding and your proper planning
more to alleviate the most disastrous and dangerous ships in
one year than has been done in probably a decade.
So, you ought to be very proud of that.
Captain Schubert. Thank you, sir. I think that is also--I
would like to take credit, but I won't. I think I have a good
staff.
Senator Allen. Fine. But your team is doing it. Everyone is
working together. Congresswoman Davis and I want to make sure
that you have proper funding.
Now, back to the question: Do you feel there are--again,
these are 21 ships. There will be more that will need to be
scrapped. I'll get your criteria of how you determine the
highest risk, but what is your estimation of the domestic
capacity to handle this job?
Captain Schubert. This has been part of our problem over
the years is that there hasn't been a lot of interest from the
full service yards. These are the shipyards that actually build
ships, the ones that have expressed interest that in my opinion
just cost--was not cost effective at some of the proposals that
we looked at.
So, that being said, we have some yards in Texas, some in
the Commonwealth of Virginia that are interested. That's really
where the heart of the issue is, is capacity. In Texas alone,
where most of the ships if not all the ships have gone over the
last several years, we're talking about a capacity of about 12
ships a year is the capacity of actually dismantling ships.
We don't like taking more ships than a shipyard can
dismantle into an area, because--especially an area in the Gulf
of Mexico, because it's a hurricane prone area. We just don't
think the liability is wise. But let's just say 12 ships a year
for the Texas yards.
We are currently engaged in discussions with some local
dismantling companies here in Virginia. We're hoping that we
can maybe conclude some transactions. Obviously it would be
much better to not have to tow them. Even down to Texas is a
pretty long tow from here.
If we can work that out under the PRDA process, the Program
Research and Development Announcement that we've made, we think
there could be some domestically here. Also, I've been having
discussions with the shipyard repair industry, which is of
vital importance to our--to our Navy to have places to repair
ships.
As you probably can be aware, the repair business is not a
steady business in many cases. You need to have some business
in between to kind of keep the workforce employed. We'd like to
see some shipyard repair businesses on the East Coast
especially maybe look at setting up a state-of-the-art
dismantling process where they can keep the shipyard employees
working in between repair jobs that they may have. So, we are
working with them.
The answer to your question in a nutshell is I don't
believe to get rid of ships at the pace that we are going to
have to dispose of these vessels--one of the reasons we need to
look foreign is the capacity issue; that is, to do it at a cost
effective way. I just--I don't think we want to be spending $3
million or $4 million a ship to dispose of the ship. The
taxpayers I think deserve better than that.
Senator Allen. Thank you. I guess one more question, then
I'll turn it over to Congresswoman Davis for some questions.
What is your criteria, if you can summarize it, for when
you determine a ship is a high-risk ship versus one that is
still risk but not high risk? What is the criteria on that
determination?
Captain Schubert. First of all, we are continuously
monitoring all the ships. We have 69 ships, obsolete vessels,
in the James River Fleet for example. They are continuously
monitored. We do audio gauging on the hull--the hull thickness
within certain--within certain criteria if it's considered at
risk for let's say a puncture on the side of the hull because
of the hull thickness. That would be one of the considerations,
also how much oil is onboard, primarily how much oil is
onboard.
It probably could be summarized as the condition of the
hull primarily that puts it into a high-risk category.
Senator Allen. Are those ones that are high-risk hulls, are
they--you're not going to ship or transport something, whether
it's across the Atlantic or down to Texas, unless it is
seaworthy I assume?
Captain Schubert. That's correct. Mr. Chairman, I'm also a
ship's captain. I sailed 12 years, so I'm very familiar with
the seaworthiness issue. Prior to any vessel--whether it goes
to Texas or even down the river, let's say to a local facility
or across the Atlantic, we have the independent surveyor make
a--what's called a towing survey for its fitness for tow.
If the vessel is not fit for tow, he won't issue the
certificate for towage. Also, the Coast Guard has to approach
those towing plans or actually view them before the ships can
leave the U.S. waters.
So, we try to exercise due diligence, and if the vessel
really does not--cannot make--especially a transatlantic tow,
then we won't risk that. We probably estimate that about 90, 95
percent of our ships can be towed in open water tows. There's
about 5 to 10 percent of ships that really cannot be towed for
any length, just to give you some general sense. Thank you.
Senator Allen. Thank you. Congresswoman Davis.
Congresswoman Davis. You answered most of my questions by
responding to the Senator, but I want to get to the ones that
are supposed to leave here real soon. I notice you're very
careful to not say that contract is affirmed yet, so I assume
you are still waiting on the one thing you have been waiting
on.
The time line concerns me. We are getting into tropical
storms, hurricane-type seasons. Are we going to make it with
those? It's my understanding if we don't get those ships out of
here soon they won't make it across the Atlantic.
Captain Schubert. That's correct. We have a towing season
that starts right about now to November that we are trying to
use as a window to get those ships underway if this deal is
concluded. I want to give you some peace about this. This isn't
the only game in town. We have backup plans. If the transaction
was to for some reason not be concluded, it's very ambitious,
trying--the idea was to get rid of 15 ships as quickly as
possible. That was our main objective here, plus the price
was--I can't say. It was very good, very attractive.
But we have backup plans to address this issue if the
transaction is not concluded.
Congresswoman Davis. So, if this one falls through, we are
still looking at getting rid of as many as you said earlier?
Captain Schubert. I don't know that we can get rid of 13
ships as quickly, but we do have backup plans to expeditiously
get rid of these ships as quickly as possible. This is the only
foreign-approved alternative. We have actually been working on
some other potentials involving exporting.
Congresswoman Davis. Let me ask you this: If my math is
correct--and I'm not sure--you said we have 69 that we need to
get rid of out here in the James River; is that correct?
Captain Schubert. Correct.
Congresswoman Davis. And 21--let's see. Let me go back.
You're looking at getting rid of 19 this year?
Captain Schubert. Correct.
Congresswoman Davis. That leaves 50.
Captain Schubert. They are not all high-risk ships.
Congresswoman Davis. Which ones have to be gone by
November, September, whatever it is, of 2006?
Captain Schubert. All of them.
Congresswoman Davis. Either way, you still have 50 ships to
dispose of in 3 years.
Captain Schubert. That's correct. Actually, we have a total
of 131 ships right now.
Congresswoman Davis. How many of those have to be gone by
2006?
Captain Schubert. Well, If you go by the law that was
passed, they are all supposed to be disposed of by September
30, 2006.
Congresswoman Davis. All 131?
Captain Schubert. All 131 ships. What you need to know is
that's an impressive number and a real challenge, but I--what
I'm----
Congresswoman Davis. Challenge? It sounds impossible.
Captain Schubert. Well, I can highlight some other
promising areas that we can get rid of all the ships very
quickly if we just make a little more progress in some of the
other areas we have been exploring, but my priority is to get
rid of the high-risk ships, the ones we mentioned the EXXON
VALDEZ and all these horrible things.
I have to tell you, in January 2002, my first visit at the
EPA to discuss this option, you would have thought I lived in
Virginia. I was passionate about it. I said: You know what, we
can't blame the people that came before us, because if
something happens and it happens on my watch, it happens on my
watch.
So, we got everybody into high gear to do--to really work
together with the EPA and other government agencies to try to
address the issue, but my priority is to get rid of those 21.
Plus the other fleet had a few high-priority ships, too, but to
get rid--by this year to get rid of all those 21 high-priority
ships, the ones that pose the biggest risk to the James River,
the people that live in this area from an environmental point
of view.
Congresswoman Davis. That is my high priority, too. Having
said all I just said, I want to commend you and all the folks
at MARAD for the fantastic job you have done with working with
me and my staff and the whole delegation in trying--from what I
saw when I got to Congress was that we have given you a
mandate, but we hamstrung you, wouldn't give you any money to
do it with. It's like telling somebody to go buy groceries to
feed the hungry but not giving them any money. How do you do
it?
I'm really pleased with all the work you are doing and you
have given me some great news today.
Captain Schubert. Thank you, Congresswoman. What I tried to
do as Administrator and leadership of MARAD is to show good
stewardship. With the money appropriated to us we can get rid
of a lot of ships in a quick period of time, also being
sensitive to the environmental issues and doing it in a
responsible way. In fact, I'd like to see the United States
lead the world in setting environmental standards for
dismantling ships.
So, all the things that we have been working on the last
year and a half have hopefully furthered that objective.
Congresswoman Davis. Senator, I want to thank you and
Senator Warner, because you all have been fantastic over on the
Senate side. If it hadn't been for the Senate, we would have
had a very difficult time getting that $31 million. I really
appreciate all that they have done, so I have to say thanks to
them, too.
Senator Allen. That's fine. It's bicameral and everyone
working together.
Let me ask you this, because I'm going to ask the next
panel what they have to say, so you're going to get critiqued.
What you're doing with this $31 million is great. Obviously
there are some contingencies out there, backups and so forth.
Very good.
The law says 2006. Can you share with us what your plan is
to meet this September 30, 2006 deadline for the disposal of
these obsolete ships? That is a daunting task. You indicated
you had some way of doing it. I assume it was an
environmentally sound way. Could you share with us what your
plans are as best you can determine in 2006.
Don't make promises that you realize cannot be kept. We
want straightforward, honest assessments from you, because I
think we can trust you. And, to the extent you can--and I
understand how it is when you have agency heads speaking for an
executive. If at all possible, it would be helpful for us to
know what you would estimate the cost would be to make sure
those funds are there for you. Please proceed with answering
those questions, Captain.
Captain Schubert. OK. Thank you, Mr. Chairman. Settling the
fact we let's say have disposed of the high-risk vessels, then
we have a hundred or so other ships we need to dispose. Some of
those are considered in poor condition but don't present any
immediate threat. What you need to understand is a lot of the
costs associated with dismantling the--these vessels that are
in very bad condition is the disposal of the hazardous
material, the oil. There's not a whole lot of steel left in the
ships that you can really recycle that's really good steel.
The more we get into the newer ships, let's say the ones
that aren't in as bad condition, then we're looking at vessels
might have a net positive value for all we know. So, to give an
estimate of the total cost would be something that I really
honestly couldn't answer at this time. I can say that I don't
believe the newer ships will be as expensive to dismantle as
the older ships, the ones we're worried about right now.
Secondly, we have other, I think, very creative approaches
to this problem. As I said earlier, we're working on our
artificial reefing standards with the EPA. Let's say it costs
only $300,000 to $500,000 a vessel to clean up the removable--
to do the remediation on the hazardous material on the ship
before we sink it. That's a lot cheaper than paying a million
dollars or more to scrap a ship.
We have a lot of states interested in this. I mentioned the
PRDA announcements, one of the ones. We notified all the
states, told them that we can now pay for services. That is the
thing about it. We didn't do a lot of artificial reefing in the
past because the state would have to pay for the remediation.
Now we can use our money to pay for the remediation and donate
the ship to the state for diving platforms or whatever they
want to use it for.
Senator Allen. How many states?
Captain Schubert. Five states.
Senator Allen. Could you list them, please.
Captain Schubert. For the record, Louisiana, Texas,
Florida--I might have to ask my staff here who the other two
were. I would be happy to provide that. Can I shout it out?
Senator Allen. Yes.
Captain Schubert. Who are the other two states?
A Speaker. New Jersey and Virginia.
Captain Schubert. New Jersey and Virginia. Another
interesting program is the SINKEX program, a Navy program where
they take it out and do deep sinking. Obviously the ships have
to be cleaned up properly before you do that. We are not sure
how much that will cost on a per-ship basis.
We're--you know, as you know, some states are having
coastal erosion problems. This may seem a little far fetched,
but when I was walking around the D-Day museum in New Orleans I
noticed that back in D-Day they actually scuttled ships and
used them for barriers for ports, and they used it so they can
discharge cargo in that place that didn't have a port before.
So, we have started working with the Corps of Engineers
and--U.S. Army Corps of Engineers and some others to look at a
pilot project to use these ships as barriers, barrier islands
to help coastal erosion. You might have visions of this hawk
sitting out there with a boom sticking up in the air. You clean
the ship off and you often actually use the ship as a
containment vessel for some of the dredge material.
So, I wanted to give you a sense that we are looking at
virtually every single idea you can think of. I think between
those--those are the main ones that I think have some real
merit. Using that--using those methods, paying for some
dismantling here in the United States, possibly reopening up a
few more markets overseas, I think we would--we can go a lot
further than anybody ever thought we would in terms of getting
rid of these ships.
Senator Allen. This is--may be unfair, but it is the law.
I'm going to ask you this question: Do you think it's
reasonably probable--I'm putting in enough qualifiers in there
because I--I really believe your sincerity and your
determination to get this done. What is the probability--
reasonable probability of being able to meet this law that was
passed before either--right before Jo Ann and I got elected?
Nevertheless, laws get passed. No one funds it, expects
people to do--it was to be done in 6 years. At this point the
funding came in Fiscal Year 2003. Granted, it was three times
as much as had been requested but, regardless, you have--you
have a pretty long way to go and a short length of time to get
there, in a roundabout way.
What is your sense of the ability to actually meet that
deadline?
Captain Schubert. It will be very challenging, to say the
least. We are having--if we just froze the number of ships that
we have now and we didn't take any more ships in, it would be
33, 35 ships a year that we--starting in September that we
would need to get rid of all the ships within that timeframe.
Is it impossible? No. Is it likely? I really just--I think
it depends on how much funding is provided and whether or not
some of these other alternatives pan out.
One issue that I need to advise the Committee here is we're
also expecting to take over the next 5 years about 50
additional ships into the fleet. So, at the same time we are
getting rid of ships--we are disposing of ships, we are going
to be bringing ships into the fleet.
Senator Allen. Well----
Captain Schubert. Ships in good condition, by the way.
Senator Allen. I was looking at the great work--Rob Freeman
of our staff had done a memorandum from our staff, and I do
want to commend him for the great job. That is exactly what the
problem was. You had--it's been a problem, really, through the
1990s. Of course it's exacerbated in the late 1990s, where very
few ships were being disposed of because of the law and
restrictions and no funding, as well as restrictions.
Just in 1999--this is for the general public to understand
this situation. In 1999 alone, the Department of Defense
vessels acquired were 40, adding 40 just in 1999, 4 in 2000, 18
in 2001, 7 in 2002. So, it's an ongoing responsibility.
My general view is your plan makes sense. There are a lot
of contingencies, some uncertainties in it, but I very much
appreciate your testimony and your leadership. It is very
important. We are glad you feel like a Virginian and argue like
a Virginian. We'll keep in contact.
Again, thank you for your time, your leadership, and mostly
thank you for your care.
Captain Schubert. Thank you, Mr. Chairman.
Senator Allen. I'd like to call our third panel, the
Honorable Kirk Cox, Delegate, House of Delegates in Virginia;
the Honorable Joe S. Frank, Mayor At-Large of Newport News; the
Honorable David K. Paylor, Deputy Secretary of Natural
Resources, Commonwealth of Virginia; and Ms. Patricia Jackson,
Executive Director of the James River Association.
Thank you all. We'll have folks testify. Mr. Cox, Mayor,
Deputy Secretary. Patty, you're always a cleanup hitter;
anyway, in that order. I want to welcome you all here. I know
each of you all in a variety of different ways.
Kirk Cox is a leader in the General Assembly, certainly a
leader on environmental issues for many, many years. Thank you
so much for being with us. I know you are the Chairman of the
Agriculture of Chesapeake and Natural Resources Committee. That
obviously is a Committee that cares about the issue.
We welcome you, Delegate Cox. Please share with us your
views.
STATEMENT OF DELEGATE M. KIRKLAND COX, CHAIRMAN,
VIRGINIA HOUSE OF DELEGATES' COMMITTEE ON
AGRICULTURE, CHESAPEAKE AND NATURAL RESOURCES
Mr. Cox. Thank you, Senator Allen. Obviously a lot of what
I'm going to say has already been said, so I'll try to
abbreviate a little bit. I know you have a lot on your agenda.
Senator Allen. Incidentally, let me interrupt. Any of you
all--I know we have written statements from you all. You need
not read that whole statement. All your statements will be put
into the record. Excuse me.
Mr. Cox. Let me try and see if I can summarize what I had.
First of all, I know everyone said this, but I think it is very
important that we do thank you and Congresswoman Davis for your
efforts here.
I think, having come from the budget committee on the State
side, trying to get a million from anybody is an
accomplishment. Obviously 31--is a Herculean effort. We want to
thank you for that. You have heard about the environmental
risk. Obviously, as the Committee Chair of that, it's my major
concern.
Governor, I think--Senator, you know this. You know this I
think as much as anyone. Obviously our oyster population we
really struggled with. My Committee has taken several tours.
Obviously, the Lower James is absolutely key. Anything that
would impact the oyster population where we're at right now
would be devastating.
We recently had hearings in my Committee concerning the
blue crab, very, very concerned with the harvest of the crab.
It has been down very substantially. We had DMRC come in and
talk about the blue crab, trying to figure out some of that,
but obviously--I think on your reports the Commission says
obviously a spill could be very detrimental to the blue crab,
especially in the summertime. So, that would be something that
would be a problem.
Just an observation if I could. One of the things that I
always liked about you as a Governor is you used to tell me
``common sense solutions.'' One of the things I guess that
doesn't make total sense to us on the State side is--I've heard
Secretary Murphy comment on this, et cetera. It seems like--I
won't exaggerate the point--it seems like if we need funds to
restore or rehabilitate habitat after the spill we can get it.
It doesn't seem to make much sense that it is so hard to get
the funds to prevent what could be an obvious disaster that
would cost tremendous amounts of money.
Captain Schubert I think gave a tremendous testimony. My
quick observation there would be: I hope your Committee will
look at some of the things we did on the State side with the
Governor. We did a pollution prevention fund for small
businesses, which is proactive. I think he's got four or five
solutions, that you all need to look at tax incentives or some
other things that you can look at to help him out.
Obviously if there doesn't seem to be a big market
currently for the shipyards I think you-all need to look at how
you can make that more attractive than you are currently doing.
The other thing--I know this is obvious--is it seems to me just
listening to the testimony is the ships that are decommissioned
and in better shape, you need to immediately set up a policy to
look at scrapping those as soon as you can, because I just
think that is proactive.
Everyone right now--I think Congresswoman Davis has said
this--is tremendously concerned. The ships are in bad shape.
What we tend to do in government sometimes is we're so worried
about those, we forget about the 50 new ships been
recommissioned. I think any kind of incentive system set up to
get the market more viable, et cetera--let me just finish with
this: I do think the Maritime Administration has done a
tremendous job.
Let me just tell you my sense, though. This is obviously a
job--just sort of a sense. I think it would be helpful--I guess
I'll say this for Dave Paylor, sort of my observation--if
communication between the State officials and the Federal
officials was a little bit better--I think what happens a lot
of times on the Federal side is a lot of things come out of DC,
and there are some intriguing things going on that I found out
just today.
Frankly, a lot of what I found out about was going on was
in newspaper accounts. It was very, very hard to find out some
of the other details. Let me give you some examples. The
artificial reef issue I find fascinating. I think the state
would have a lot of good input on that, DMRC, et cetera. They
have some good ideas how that would work in Virginia.
Obviously in Virginia the water is more shallow, a
different situation than in Florida. I think it is very
important at this point for the Maritime Administration to be
in direct contact with the DEQ, not only telling them specifics
about what they are going to do and some of those ideas, but
listening to their input would be helpful. There are a lot of
opportunities in Virginia that you could miss out on.
I don't think it's deliberate by any means. It's a
tremendously big agency, trying to do a lot, and have obviously
done a lot. I think there is a little bit of a communication
lapse that Virginia needs to be included on.
That's sort of I guess the summary of my comments.
Obviously your opening comments, Senator, I think were very
important. Obviously being from Colonial Heights in the
Hopewell area, the Kepone disaster we had--we just almost never
recovered from that.
So, just potentially--I think you are not exaggerating the
point. Potentially it could be as disastrous. I appreciate your
efforts. I certainly as chair of the fancy committee with the
new name that makes me sound more important--I'm certainly
willing to try to help you.
[The prepared statement of Hon. Cox follows:]
Prepared Statement of Delegate M. Kirkland Cox, Chairman, Virginia
House of Delegates' Committee on Agriculture, Chesapeake and Natural
Resources
Chairman Allen and members of the Subcommittee, thank you for the
opportunity to discuss the issues related to the disposal of obsolete
vessels in the National Defense Reserve Fleet. As Chairman of the House
of Delegates' Committee with responsibility for oversight of Virginia
natural and historic resources, my remarks will focus on the
environmental aspects of having these vessels on the waters of the
Commonwealth. First, Mr. Chariman, let me extend my appreciation for
your personal efforts and the rest of the Virginia delegation in
securing the initial commitment of $31 million for remediation efforts.
But, I think we all would acknowledge that properly completing any
clean-up effort by 2006 will take a significantly greater commitment of
Federal funds.
The James River Ghost Fleet is seen by many in the Commonwealth as
the greatest threat to the environment of the Lower James River. These
ships contain in excess of 7.8 million gallons of oil and significant
amounts of PCBs, mercury, asbestos, and lead paint. According to our
Department of Environmental Quality, since 1998 at least eight oil
spills have been linked to these ships. We worry that a spill of
thousands of gallons could result in damage to fishery habitats,
wetlands, aquatic life, waterfowl, our seafood industry, and tourism. I
would also note that our seed oyster beds are concentrated in the
James. As Senator Warner has stated, and I find myself with a similar
reaction, that ``everytime I hear that a hurricane is approaching the
coast, I think of the fleet.''
One indication of the potential threat represented by the fleet was
described in the Maritime Administration's worst-case scenario report.
The report commissioned by the agency, at the request of our Department
of Environmental Quality, concluded that if just two of the more
dilapidated ships broke apart due to a storm, 50 miles of the river and
shoreline would be contaminated. The cost of clean-up could exceed $35
million. Even as recently as May of this year, oil leaked from one of
the ships, which washed up on a 400-foot stretch of shore near Fort
Eustis. Luckily only a small amount of oil was involved.
Mr. Chairman, I know you recognize the importance of protecting
this vast tributary of the Chesapeake Bay is not without some
historical context. We appreciated your interest and efforts as
Governor to find common sense solutions to our environmental
challenges. Almost 30 years ago you'll remember the upper regions of
the James just south of Richmond experienced what some have
characterized as its greatest environmental insult as a result of the
Kepone contamination. We are still trying to recover from that
disaster. So, many Virginians are again concerned about the health of
their river, seeing the current situation as a ``ticking time bomb,''
which must be handled with some sense of urgency.
It is regrettable that this situation has gotten to the point where
Virginia's Department of Environmental Quality has had to issue a
series of Notice of Violations, the latest on June 18, 2003, for the
May 13 oil release from the Mormac Wave. I understand that Maritime
Administration has refused to sign any consent order to resolve the
environmental issues claiming they cannot waive sovereign immunity. I
hope this can be resolved without having to go to court.
Virginia's position has been that we want the risk removed from the
river. That means if the funds are limited and full funding is not
available, then some of the dollars should go to removing the oil from
the remaining ships. I understand that MARAD (Maritime Administration)
prefers not to remove the oil first because it increases the overall
costs. The state has given MARAD the time to develop a plan for using
available funds before taking further legal action. I have been
informed by the Warner Administration that as long as MARAD's plan
addresses the risk and shows an ability to completely mitigate the
problem, we will be satisfied. Addressing risks involves things like
removing ships, with those most likely to leak going first, and some
demonstration that there will be a sustained effort to scrap others.
But, I am encouraged that our Secretary of Natural Resources,
Tayloe Murphy, has communicated his desire to work with MARAD in
addressing this environmental threat represented by the fleet. While I
think the ultimate responsibility for the problem rests with the
Federal government, I am convinced that Virginia, working with the
Federal government, can develop an effective strategy for resolving
this problem.
In summary, Mr. Chairman, I thank you for your leadership in
holding this hearing. I believe it will help bring this issue into
focus as the deadline for action approaches to get the funds needed to
complete this clean-up effort.
Thank you, Mr. Chairman.
Senator Allen. Thank you, Delegate Cox, for all your
leadership over the years on this. I think there certainly is a
willingness on the part of Captain Schubert and his crew to
do--I use crew in a larger sense--to communicate. One of the
reasons to have a field hearing is to actually get--people see
faces and personalities behind names on organizational charts.
So, to the extent that's helped, that was one of the purposes
accomplished at this hearing. Again, thank you for your great
leadership.
Mayor Frank, we want to hear from you in that your city--
and not that it would be only Newport News that would be
affected. Clearly James City County, Surry County, Isle of
Wight, Hampton, in fact on down to Suffolk and Virginia Beach
and Norfolk could all be adversely affected. But clearly you
have a long shoreline, and we wanted to get the perspective of
a leader in local government. You're one who is well respected,
and we wanted to get your views on the James River Fleet, and
we welcome you and thank you for your time, Mayor.
STATEMENT OF HON. JOE S. FRANK, MAYOR-AT-LARGE, NEWPORT NEWS,
VIRGINIA
Mr. Frank. Thank you, Senator. Thank you so much,
Congresswoman Davis. You know, this isn't the first meeting the
Congresswoman and I have had in this room about this subject.
We have been here before and talked about these things before.
You and I have engaged in these conversations before, Senator
Warner and I.
It is certainly appropriate, and I am certainly grateful
that you all have come to give folks here an opportunity to
express themselves on what I think is a critical public safety
issue, public health issue in our region.
I was very encouraged by the testimony of Captain Schubert
on behalf of the Maritime Administration with regard to their
plans. It seems to me that the number of points that need to be
made--and I'll try to do those briefly.
First of all, beyond the plans to demolish these ships and
remove them from the fleet, I think there are a number of
comments that are appropriate. First is that here we think all
of these ships are high risk. I understand the definition that
Captain Schubert tried to apply to what he defined as the high-
risk ships.
Certainly you have to try to find a way to prioritize with
limited resources those ships that you are going to address
first, but beyond the risk of a hull giving way and oil and
other virtually hazardous materials getting in the water is the
risk of hurricanes and those ships becoming unmoored and
creating havoc along the river ridge that's between the fleet
and the Hampton Roads shipyard.
Frankly, we think there is a terrorist risk with those
ships there that could be easily compromised. We worry about a
ship becoming loosened and the havoc it could play on shipping
in the Hampton Roads Harbor, on the bridge and the tunnels, the
shipyard itself, the waterfront of our citizens.
Leaks have already cost over $2 million over the last
several years, based on my information. So, again, while I
understand you have to define the problem, my view is--and I
think the views of the citizens of this region are that all of
those ships pose a risk to health and public safety.
I think a comment that someone else made is particularly
useful. It's not just these ships. These ships will be replaced
by other ships. We need to have a legislative plan and a
program in effect, a funding mechanism in effect, to be sure
that as time goes on you don't make the same mistakes of
history and allowing these things to be there and deteriorate
to the level where they pose the risk that they do. So, I would
urge you to give that some careful thought.
One of the things that I did not hear discussed by Captain
Schubert was funding for adequate personnel for maintenance and
security on these vessels until they are taken out of the
river. One of the problems, at least in the prior discussions
and conversations that have taken place in this room--and the
Congresswoman and I were here with others talking about these
issues--from local people who are assigned to service and
provide security on the fleet was inadequate personnel,
inadequate funding to provide maintenance and security so that
you minimize the risk while plans are being evolved to remove
the ships and demolish them at other locations.
I think those are critical issues. I just point out that
this is symptomatic of what I think is a problem that is real
and needs to be put in some perspective. As a long serving
member--some would say too long serving member--of local
government, I tell you unequivocally that if local government
or local business tried to get Federal permits to operate a
James River Reserve Fleet, it would be impossible.
The Federal Government doesn't hold itself to the same
standards and to the same requirements when it comes to
environmental and safety regulations that it applies to other
people. While I understand the purpose of the reserve fleet
historically was a valid one and important one to national
defense, at some point we have to recognize the reality of
impacts. The impacts here--potential of impacts and potential
harm are really very serious, I think.
The perception in our community is that these things pose a
clear and present danger to the health, welfare, and well-being
of our communities, to the river, to the oyster beds, to the
fishing, to the homes along the banks, to the businesses along
the banks, that these ships get loose or deteriorate to the
point where we have the kind of polluting environmental impacts
that we believe is a present danger, the consequences and the
cleanup costs and the impacts are going to be overwhelming, I
think incalculable.
So, I don't think anybody would pretend that if an
environmental impact statement were required to deal with these
things that anyone would have a finding of no significant
impact. These things are just beyond dangerous. So, if the
reports I have are right that over 70 percent of the ships are
considered obsolete and should be scrapped, if there are 59
ships that need to be scrapped and we have funding for 21 of
them and plans for 15 or 19 of them, you know, I'm not sure we
have really fully and completely addressed the problem.
Although, as you do, I certainly applaud the effort of the
Maritime Administration to move forward.
They didn't--the problem wasn't created overnight, and we
all recognize it's not going to be cured overnight, but it
certainly is critically important that a appropriately funded
plan be implemented in a very, very time expedient way, because
the clock is ticking. I really don't think that we have the
luxury of more years to work all this out.
Several million gallons of oils and lubricants remain
aboard these vessels, and a quantity approaching that which was
spilled by the--as you mentioned, the EXXON VALDEZ. That is a
frightening number. A 2002 report prepared by the Maritime
Administration suggested that an oil or gas spill from these
ships is no longer a possibility but a probability.
Those are the kinds of things that we hear on the
Peninsula, and the citizens of Newport News are terribly
concerned about it. So, we believe that all these ships pose a
high risk of one kind or another, and the situation is not
getting better. Beyond money to move them and dismantle them, I
think that we need to address the issue of being sure that they
are properly secured and maintained to prevent whatever
disaster we can while the rest of that process is moving
forward.
So, without belaboring the point, which I know you are more
familiar with than we are, I just have to tell you how grateful
I am for the attention you are giving this, the support you are
giving us here to remedy and address this situation that has
become so critical for all of us. I thank you.
[The prepared statement of Hon. Frank follows:]
Prepared Statement of Hon. Joe S. Frank, Mayor-at-Large,
Newport News, Virginia
As a long-serving member of local government, I can tell you
unequivocally that if the local government or a business tried to get
Federal permits to operate something like the James River Reserve Fleet
it would be impossible.
The Federal Government does not hold itself to the same standards
that it holds others when it comes to environmental and safety
regulations.
I recognize that the purpose of the Reserve Fleet was a worthy one,
however, time has passed that purpose by.
If some other organization wanted to have such an operation there
would be many regulations.
There would be a requirement for an environmental
assessment.
Surely there would be a requirement for an environmental
impact statement.
Could anyone seriously imagine that a ``finding of no
significant impact'' would result from a review of that
operation?
The reasons why we are alarmed about the continuing presence of
these obsolete vessels have been stated many times.
According to reports, over 70 percent of the ships in the Reserve
Fleet are considered obsolete and should be scrapped.
Several million gallons of oils and lubricants remain aboard these
vessels in a quantity approaching that which was spilled in Alaska by
the Exxon Valdez.
In a 2002 report prepared by the government's own Maritime
Administration, it was suggested that an oil or gas spill from these
ships is no longer a possibility, but a probability.
There have already been several documented fuel oil leaks from the
Reserve Fleet in the last five years involving approximately $2 million
of clean-up costs.
The potential for serious environmental damage and the potential
for a break-away ship to damage property or the James River Bridge are
obvious concerns.
In today's world, we have to add the fear that these ships could in
some way be used as potential terrorist platforms.
On behalf of the citizens and City Council of Newport News, I urge
you to move forward with all dispatch to eliminate this threat to our
community's environment and public safety.
Senator Allen. Thank you, Mayor. Thank you for your very
coherent, logical advice. I agree with you. The Federal
Government is doing something that I guarantee you no one else
in this country can ever get away with, whether a government or
private entity, would never be permitted.
I will say Captain Schubert and all of us are trying to
remedy this as quickly as possible. Clearly funding for the
maintenance of it until the existing fleet--it is dangerous
work, dangerous, hazardous work. Clearly laws are passed--
it's--the law was passed in late 2000 to get these all handled
and disposed of by 2006.
Clearly, as you say, this did not happen overnight. It's
not going to get done overnight. We have a few nights to go.
It's still going to be difficult, but you can count on us in
your Virginia delegation to work with you and the General
Assembly and State government and others.
Mr. Frank. We know that and are confident of your support
and your help, and we are grateful for it, and we thank you.
Senator Allen. OK. Thank you. Now we'll hear testimony from
the Commonwealth as represented by David Paylor, Deputy
Secretary of Natural Resources.
Secretary Paylor, welcome.
STATEMENT OF HON. DAVID K. PAYLOR, DEPUTY SECRETARY OF NATURAL
RESOURCES, COMMONWEALTH OF VIRGINIA
Mr. Paylor. Thank you, Senator Allen, Congresswoman Davis.
It's good to be here. I'll try to summarize my summary as well.
I think everybody has pretty well rehearsed all of the hazards
that are posed by the Ghost Fleet, and you know last summer
Governor Warner underscored the problems that we have, and just
to maybe reinforce Mayor Frank's comments, we called for the
Maritime Administration to enter into a consent order with us
to remove the oil from the ships and so forth.
I'm not smart enough to understand the legalities of it,
but we are still waiting to do that consent order, and it's
been more challenging to hold the Federal Government to a
standard that we're able to hold others to.
Notwithstanding that, I want to thank Senator Warner and
Congresswoman Davis and Congressman Wolf and you and all of the
delegation for the support, because the $31 million that we got
is really more than we could have hoped for when we became
aware of how great a danger it was over the last year. As you
already noted, more money is going to be needed, but with good
planning we believe that we are well on the way to removing the
risk from the river.
The Commonwealth's main goal is to remove the threat of oil
spills and environmental damage from the James River. We want
this disposal done in an environmentally responsible manner
which protects the safety of workers, and this responsibility
falls to MARAD. We've heard some good news from them in that
regard already.
Our expectation is these criteria will be met and the
disposal of ships will proceed, as you said, Senator, in a cost
effective manner which maximizes the availability of the money.
We've--there are a lot of different numbers out there about
how many high-priority ships we have and how many are left. We
know, as the mayor has said, there are close to 70 that need to
go, and we need to see them go in a high-priority order.
MARAD has been keeping the Commonwealth informed of this
progress on a limited basis, however we have repeatedly asked
for and not yet received comprehensive plans from MARAD for
ship disposal based on funds available and anticipated revenue.
We know we have $31 million available to us right now. The
question mark is: What else do we have? We need to be making
our plans in accordance with reasonable expectations. It's
important to us to know this plan so we can ensure the risk is
dealt with in a cost effective manner.
For example, MARAD has consistently resisted the removing
of oil from vessels because it adds to the overall disposal
cost. We recognize this, but we are looking for some certainty
that the resources will be available to dispose of the ships
expeditiously and in priority order. Without some assurance
that those high-priority vessels at least can be gone in the
next 12 to 24 months and that funds will be available to
continue the disposal of the remaining ships, we will continue
to insist that some of the resources be spent on removing the
oil from the ships that are in the fleet that remains in the
river.
The Commonwealth's highest priority is to make sure the oil
in the ships is removed from the rivers so that they no longer
pose a threat to other people and the environment. We want
this--we will insist this be done in an environmentally
responsible way, and we look to MARAD to use its money wisely
to achieve a maximum result.
As you discussed earlier, we would like to see this done
domestically, but the taxpayers' money needs to be used wisely
and the ships need to be removed from the river. To the extent
that it's cost effective, we do find the reefing alternative to
be attractive because it can result in an ongoing economic
return from tourism and perhaps lower the per-ship disposal
cost.
We count on the Environmental Protection Agency to
establish guidelines to protect the environment and allow the
shipping to proceed effectively, because we need to recognize
that we already have a significant environmental risk with our
current condition. We need to address that as well. We look to
the Coast Guard to ensure the ships are transported safely to
their destination.
Those are our comments, and I thank you for holding this
hearing and for the opportunity to testify.
[The prepared statement of Hon. Paylor follows:]
Prepared Statement of Hon. David K. Paylor, Deputy Secretary of Natural
Resources, Commonwealth of Virginia
Mr. Chairman and members of the Committee, on behalf of Governor
Warner I want to thank you for this opportunity to present testimony
before you. The growing danger presented by the aging vessels of the
National Defense Reserve Fleet anchored in the James River has become
clear to all of us. This section of the James River is an ecologically
diverse and sensitive estuary, which provides critical spawning,
nursery and wildlife habitat. Our seafood industry relies on a healthy
James River. As the hulls of these ships continue to corrode the
likelihood of large oil spills increases. These spills would wreak
environmental havoc and require expensive cleanup operations.
Governor Warner underscored this threat last summer by calling upon
the Maritime Administration to enter in to a Consent Order with the
Commonwealth to remove the oil from the ships and immediately begin
scrapping these ships to remove them from the James River. He also
called upon the Environmental Protection Agency to establish guidelines
that allow environmentally responsible scrapping operations to begin
and to help find sources of funding. In truth, the lack of funding and
of cost effective disposal options was the principal factors that had
stalled the scrapping effort.
Iwant to recognize and thank Senator Warner, Congressman Wolf and
Congresswoman Davis for their tireless efforts to provide funding to
MARAD to restart the ship disposal process. The $31 million provided
last year as a result of their efforts is an excellent beginning. As
you have already noted, more funding will be needed. But with good
planning we can be well on the way to removing the risk from the river.
The Commonwealth's principal goal is to remove the threat of oil
spills and environmental damage from the James River. And the disposal
effort must be done in an environmentally responsible manner, which
protects the safety of workers. This responsibility falls to MARAD. Our
expectation is that these criteria will be met and disposal of ships
will proceed in a cost effective manner, which maximizes the use of
available money.
There are more than 70 non-retention vessels in the James River
National Defense Reserve Fleet. At least 25 of these are designated as
high-priority vessels, indicating that the risk of oil release is high.
These ships need to be disposed of soon or the oil must be removed from
their cargo.
MARAD has been keeping the Commonwealth informed of its progress on
a limited basis. However, we have repeatedly asked for, and have yet to
receive, a comprehensive plan from MARAD for ship disposal based on
funds available and anticipated additional revenues. This is important
to us to assure that the risk is dealt with in a cost-effective manner.
For example, MARAD has consistently resisted removing oil from the
vessels because it adds to the overall cost of disposal. While we
recognize this we are looking for some certainty that resources will be
available to dispose of ships expeditiously and in priority order.
Without some assurance that the high priority vessels will be removed
in the next 12-24 months, and that funds will be available for
continued disposal of remaining ships, we will insist that money be
spent immediately to remove the oil from ships so that the primary
source of environmental risk is gone.
The Commonwealth's highest priority is to make sure the oil and the
ships are removed from the James River so that they no longer pose a
threat to our people and environment. As I have said before, we will
insist that this be done in an environmentally responsible way. And we
look to MARAD to spend their money wisely to achieve a maximum result.
To the extent it is cost-effective, we the find the reefing alternative
to be attractive because it can result in an ongoing economic return
from tourism and, perhaps, lower the per ship disposal cost. We count
on the Environmental Protection Agency to establish guidelines that
protect the environment and allow scrapping to proceed effectively. We
need to recognize the ships already pose a significant environmental
risk and must be removed. And we look to the United States Coast Guard
to assure the ships are transported safely to their destination.
I thank you again for your attention to this critical matter. We
ask for your assistance to provide continuing appropriations to MARAD
to complete the task of ship disposal. Thank you for your time and
attention.
Senator Allen. Thank you, Secretary Paylor. You and
Delegate Cox and the Mayor all have a similar view. I know it's
good that Captain Schubert is still here hearing these views.
We don't need to turn this into any sort of back and forth, but
I think they are all well-taken concerns. Not speaking for the
captain, not turning this into a debate but rather a
discussion, it strikes me that the--his stewardship is
symmetrical and is constant with what--many of your comments
insofar as maintenance and so on.
I will say this: Having been Governor and serving the State
legislature--and I know John Davis also served in State
legislature--comparing the way things work in the Federal
Government to anything you do in the State, just trying to
estimate--I was trying to get the captain to give his estimates
and so forth. There are a lot of contingencies, and a lot of
them are in here. So, it makes it more difficult to get it.
Congress passes a law, then it doesn't fund it, not that that
might not happen in State government as well. In the Federal
Government it seems to be the routine way of doing things.
I'm one who--as I said, this is just another example. I
hope I never get accustomed to thinking the way they do in
Washington. It doesn't make much sense to say: Here, do this,
and then not fund it or put constraints on the ability of
Administrators to do the job you have told them to do. It's
absurd.
At any rate, you do have this effort on our part. It is
bipartisan, it's bicameral. I also think the executive branch,
the Bush Administration, is very much wanting to get this
addressed. We may have to add some more money into it, but
nevertheless there is a commonality of purpose and an awareness
of this risk.
Mr. Paylor. We agree, and we have certainly seen that over
the last year. If you compare where we are now to where we were
a year ago, we have made great strides, and we have heard
really good, encouraging news from Captain Schubert as well.
So, we agree, and I think we have a dialogue here that we are
going to make progress with.
Senator Allen. Great. I'd like to hear from the Executive
Director of the James River Association, Ms. Patty Jackson.
STATEMENT OF PATRICIA JACKSON, EXECUTIVE DIRECTOR, JAMES RIVER
ASSOCIATION
Ms. Jackson. Thank you, Mr. Chairman.
Senator Allen. Look at that. They don't move the
microphones for--we don't even have one.
Ms. Jackson. Thank you, Mr. Chairman.
Senator Allen. Star witness. Go ahead, Ms. Jackson.
Ms. Jackson. Senator, Congresswoman Davis. It's a pleasure
to be here today. I'm Patty Jackson, the Executive Director of
the James River Association. I want to thank you and echo all
the comments that have been made. Thank you for all the efforts
on behalf of the River and the resources and trying to acquire
the funding necessary to remove this significant threat from
the James River.
Our organization has been a voice for the River and for
riparian landowners and users of the river since 1976. Our
goals match I think the goals of your hearing today, which are
conservation, responsible stewardship of the James River and
its resources. So, we are delighted to have this focus on this
important issue.
As you know, the James River has been described as
America's most historic river and Virginia's largest tributary
to the Chesapeake Bay, which has been heralded as the Nation's
most productive estuary. What happens in the James is certainly
not only important in the James but also in the Chesapeake Bay.
I'm going to try to abbreviate my remarks as well. As
Delegate Cox mentioned, we've already had one significant
environmental catastrophe in the James, the Kepone. We still
have a fishing advisory on part of the Lower James remaining
from that catastrophe. So, it's very fresh in all of our minds
what can happen in the event of a significant problem.
The reserve fleet here on the James River presents a unique
situation. We've all recognized the concept of a reserve fleet
has made sense to folks over the years, but unfortunately over
time we have become much more aware of a particular
environmental hazard that this presents with not only the oil
that's on these ships, but also PCB, asbestos, and other
hazardous materials.
Of particular concern to our association is the potential
for a significant oil spill on the river, and as you've
mentioned, Senator Allen, the devastating impacts that would
result as a result of such an oil spill. There have been
several leaks that have occurred, and this reserve fleet has
been described as a ticking time bomb.
Not to raise concerns even more, but in 1999 as many as 30
of the ships did break loose from their moorings, and some went
into the main shipping channel and some went onto nearby
beaches. That I think makes us even more aware, as Mayor Frank
said, of the potential for much greater impact, particularly on
the James, which is so important to the Virginia economy, as
well as the environment, not only with the shipping that occurs
on this navigable river, but also as a result of the sea oyster
beds for the Chesapeake Bay, the crab, and the commercial
fishing industry, and tourism, which is very significant. And
as you mentioned, Senator, with 2007 fast approaching, we
certainly want to do everything we can to protect the historic
resources of the James, as well as the natural resources.
The MARAD report in 2002 on the potential for--the impacts
of such a spill indicated that the cost of cleaning up just
over about 263,000 gallons, which could be--of oil, which could
be generated from just two of these vessels breaking apart,
could cost as much as $123 million, based on cleanup costs for
other oil spills of similar size, and with the heavy Bunker C
oil which is on many of these vessels. That's pretty daunting.
Even when we're talking about the potential for as much as
$1 million or even a little more for each of these vessels to
be scratched or decommissioned, the potential for cleaning up
an oil spill is probably exponentially higher, and potentially
as much as 8 million or more gallons of oil that are present on
these vessels, the potential environmental problems could be
significant.
One of the things--this goes back to Delegate Cox's remark
about spending money to prevent an oil spill rather than
cleaning up an oil spill. There is a lot more emphasis now on
pollution prevention rather than pollution control. One of the
things we would hope that you would take a look at is the Oil
Spill Liability Trust Fund, which is a fund that is available
for cleaning up oil spills, but if you connect that to a
section of the Clean Water Act on oil and hazardous substance
liability, it does look to us--I'm not an attorney, but it does
look to us like there is an opportunity that if there is a
substantial threat of a discharge of oil or hazardous
substances from a vessel that there is the opportunity to
access this fund, that the President shall direct all Federal,
State, and private actions to remove or mitigate to protect
from the threat of such a discharge.
It may not have been in the past. We understand that the
EPA may not have been receptive to that suggestion previously,
but it does look like the authority is there perhaps, and that
might be an alternative for preventing pollution from this
fleet. If not, if for some reason that is not accessible, then
we certainly urge you to look at all of the potential funding
sources from the Federal budget that could be used to clean
this--to remove this threat from the James River as quickly as
possible.
We're acutely aware of the magnitude of the James River
Reserve Fleet and what threat that presents to the James River
estuary and its abundant resources. We really would hope the
reserve fleet would not become an aquatic brown field or a
floating Superfund site, and so in order to prevent that we
would hope that every effort would be made to prevent a
catastrophe from the site, but when we looked at it, thinking
about what if this were--as Mayor Frank was saying, what if
this were someone other than the Federal Government, it does
seem the threat could be as high as a Superfund site or some
radical sites in the country.
We applaud your efforts. Thank you for the opportunity to
be here and draw attention to this, and if there's anything we
can do to help you with this endeavor, we'll be happy to do
that, too. Thank you.
Senator Allen. Thank you, Ms. Jackson. Thank you for your
ideas. We'll check some of those out. I've not considered a
floating junkyard. That's what it would be, something like
that, obviously on water.
Have you had a chance, Ms. Jackson--and any of you all can
comment. Some of you already have. Have you reviewed the
Maritime Administration's plan for disposal of these obsolete
vessels? If you haven't reviewed it, you heard Captain Schubert
on what they are developing and what their plans were and
trying to meet this statutory goal of disposing or handling all
of this as best they can by 2006. What is your view? Do you
think that the--does it sound reasonable to you?
Ms. Jackson. It does. I think that prior to today we
certainly had misgivings about the ability of MARAD to move
forward as quickly in order to meet that 2006 deadline,
particularly because we're 2 years or more into that schedule
without having a significant number of the vessels removed. I
think Captain Schubert's remarks this morning are encouraging,
but it does look like we are still going to need another $50
million just on the James River Reserve Fleet if it's about a
million dollars per ship to remove the additional obsolete
vessels. And how that can be done in the next 3 years--I think
we would certainly be interested in knowing what the specific
plans would be for that.
It sounds like if they have the funding and the market is
creative for more opportunities for scrapping that those two
things can go hand in hand and they could meet the deadline, or
I would think come fairly close to it. So, that is encouraging.
Senator Allen. Thank you. Do you have any----
Congresswoman Davis. I just want to say something on what
we heard from Mr. Paylor, and I think you alluded to it too,
Ms. Jackson, on taking the oil off the ships. That's something
I talked to Secretary Murphy about last year. The concern as I
understand it from MARAD--if I can get a nod from them if I'm
correct on this--just removing the oil does not take away the
environmental danger, because it will still be oil residue left
in the tanks. So, you could still get a pinhole leak, still
have the same problems with the oil spill, and I think it is
estimated roughly about $40 million just to remove the oil from
the ships.
Had we taken the $31 million to remove the oil, we wouldn't
have accomplished anything, other than maybe wouldn't have as
much oil spill, but still have the environmental danger, as
well the PCB, asbestos, and other problems.
So, I think MARAD's doing the best that they can do with
the dollars that we and the Federal Government have given them,
and I think it's a shame the Federal Government gets by with
what they do. Who polices us?
Senator Allen. We do, the board of directors.
Congresswoman Davis. The board of directors. The only thing
I can tell you is you have our word--I wake up every morning
worried I'm going to see something in the headlines. That's one
of the reasons I work on this as hard as I do. I don't want it
to be on my watch, either.
Delegate Cox, I enjoyed working with you on the Chesapeake
committee when--it didn't have that fancy title when I was
there. My office will certainly keep in better touch with you.
I apologize for that.
Senator Allen. Mayor Frank?
Mr. Frank. I appreciate the question. I think it's a good
plan. I have had an opportunity to look at it. Plans are plans.
This is a time bomb. The risk is--as the Congresswoman says, we
all have a fear of waking up one morning or going home one
evening and turning on the news and finding there is a
disaster, which is why I departed from my prepared remarks in
talking about money for maintenance and security, because while
the plan goes forward to dismantle these ships, I think there
needs to be--you can't pump the oil out, if that is an issue,
certainly making sure those things are maintained in a way and
secured in a way that minimizes the risk until the plan can be
implemented I think is critically important.
None of us want to see a disaster out there, nobody working
on this, nobody cognizant of the issues. Everybody has a
different approach, perhaps, to what works best and the most
cost effective way. If disaster strikes, the cost is going to
be the least of the issues. Right now I think that the critical
piece is, again, making sure that we are maintaining these
things and protecting them in a way that gives the most
possible security while the plan is implemented.
Congresswoman Davis. If I might, I think, if I'm not
mistaken, when I was out touring the ships the last time MARAD
was working on resecuring or reanchoring or mooring the ships
with better--so the security is--I'm getting a nod of yes. I
think they are working on that as far as securing them.
Mr. Frank. I was using security in a broader sense than
that. I'm really talking about the environmental piece of the
vessels, not just they might float off or come loose, although
that is a critical issue. That oil is a huge risk. Everybody
knows it. It's not news, it's just how you deal with it. You
know, I know the State's position is: Pump it out. I know
MARAD's position is: That doesn't work.
I'm saying that you can't ignore maintaining those ships
because next year they are going to get towed out of here and
dismantled. We may not have until next year.
Senator Allen. Agreed. Let me conclude this panel with this
fact: They do spend millions of dollars on maintenance and
administration of this. Everything that everyone of this panel
has said is exactly correct. I was looking at the overview.
This is an example: 1999, they spent $5.2 million in Fiscal
Year 1999 to maintain the vessels. Maintenance performed by the
Maritime Administration on these vessels is just enough to keep
them afloat. In some cases it's done on an emergency basis.
According the inspector general of the Department of
Transportation, the Maritime Administration spent $1.3 million
just to keep one vessel afloat over a two-year period.
Now, using common sense, if you get this money to get these
things disposed of and scrapped, you're going to save a whole
lot of money, while also not obviously having to worry about
the expense of maintenance issues. So, both need to be a
concern. Maintenance, but the key focus and goal is getting
across the goal line, and that is getting the ships out of this
river, whether it's done domestically, overseas. Get them out
of this river, and get them properly disposed in an
environmentally sound way.
That's what has not been being done until really this year.
There's been a hiatus of neglect, and spending millions of
dollars on a lot of maintenance keeping something afloat that--
--
Mr. Frank. I couldn't agree with you more, Senator.
Senator Allen. That is the approach we need to take. I
thank you, this panel. Before you leave, I noticed Captain
Rusty Mullane. Do you all have the capability to do anything
here?
Mr. Mullane. Yes, Senator.
Senator Allen. You have 60 seconds.
Mr. Mullane. We are a ship scrapping and reefing concern
based in Chesapeake. I want to take the time out to say that
the reefing is an excellent idea for a lot of the ships. There
are some ships in the fleet that aren't any good for reefs, but
there is a lot of financial gain to be had by reefing. There
was a study in Broward County, Florida in the year 2000 that
showed in Broward County their reefs brought in $2 billion--
that's billion with a ``b''--into their economy in the year
2000.
We stand prepared to help with this fleet and dispose of it
in any way. Thank you.
Senator Allen. Thank you very much. That idea of economic
gain certainly had both of Secretary Paylor's eyebrows raised.
With that, I want to--yes, sir. Did you have some pressing
comments you wanted to make back there?
Mr. Paul. Yes, sir.
Senator Allen. You have 60 seconds.
Mr. Paul. My name is Peter Paul. I'm an Engineering Analyst
with the Department of Defense at Fort Lee. Two-and-a-half
years ago I founded a group called the Memorial Reef Foundation
with the express purpose of coordinating a memorial and seeing
to it that these ships are remediated as quickly as possible.
About a year-and-a-half ago we conducted a meeting at the
Atlantic State Marine Fisheries Commission under the auspices
of the State of Virginia, the VMRC office here in Newport News
to make that happen. We gathered together the combined brain
power of most of the people in this room, including agency
representatives, the Corps of Engineers. MARAD was there, plus
the state and others. I hope not to omit too many here at the
moment.
We came to the unanimous conclusion that in principal
reefing was the way to go. We have heard that sort of addressed
here, but not quite. When you talk about money--and I've been
notoriously frugal at expending government money since I'm in
charge of some of it. The idea that it could be less expensive
to tow a ship for two or three thousand miles, and to tow 50 to
a site off the coast of Virginia and lose the economic gain, as
has been mentioned earlier, plus remediate the ships to a lower
standards than the EPA now already recognizes in the REEFEX and
SINKEX program doesn't make sense to me.
The standards for deep water sinking defined in temperate
Atlantic waters of 100 feet or more, which already exists. You
have the reef site called the Triangle Reef area is there. The
standards of the EPA mandates today under those Navy programs
are lower than the standard required to convert that material
to human use in any form, the two different numbers. The
numbers are substantial.
MARAD know this, and so does everyone else involved in this
as intensively as I have. You heard the number $300,000--I
believe Captain Schubert mentioned earlier--to 500- for doing a
sinking exercise versus a scrapping exercise. That's not an
insignificant number times 130 ships.
Costs, location, distance, all of that dovetails with the
expediency. If we can do one and we don't have to clean it up
as much as we would have to clean it up for human use, you
would think we could move more ships more quickly by keeping
them local or Atlantic, and doing it as a reef and all the
benefits that garners for the marine environment, which is my
interest in this.
It seems to me we have the opportunity in front of us to
make everybody a winner, including the United States Navy,
which is a rare opportunity when industry, the
environmentalists, and the Navy can all dovetail and say: Yes,
this is win/win.
Senator Allen. We love the Navy.
Mr. Paul. The Navy saw an opportunity at my suggestion that
we use these ships as live-fire target objects. That is one of
the options if you--they don't get this opportunity, as we
witnessed in Puerto Rico, very often.
The public, as witnessed by the article that was written up
on this proposal in the Pilot was 100 percent for this. There
is no backlash within the community as far as the environment
goes. They are for it, because of the lack of reef structure
offshore Virginia that this would in some sense improve.
Senator Allen. Thank you, sir. You have only 1 second left.
Mr. Paul. Sorry.
Senator Allen. Do you have something in writing?
Mr. Paul. Tons of it, sir.
Senator Allen. No, do you have----
Mr. Paul. I have my prepared remarks, which I totally
ignored.
Senator Allen. Of course. If anybody has any other evidence
you want to put into the record--while this is not a town
meeting as such, I see folks here who I know care about it. I
want to get your input, but if you have anything in writing. I
already have the letters from Bay Bridge Enterprises. Give that
to us. I know Delegate Diamonstein has also written to me.
Mr. Paul. I would have dressed less casually had I known
this was a formal hearing.
Senator Allen. Who cares? Who cares? It's hot and sweaty.
Again, I want to conclude this, but thanking everyone for
attending, thanking all the witnesses, administrator, Captain
Schubert, thank you. We're all going to work together with you
at the local, State, executive, legislative levels to get the
job done. Again, thank you all so much. Hearing adjourned.
[Whereupon, at 12:47 p.m. the hearing was adjourned.]