Status of Senior Service School Program



Purpose: Provide remarks at the International Association of Independent Tanker Owners (INTERTANKO) 2017 Tanker Summit.Media: The event is open to the media; all remarks are on the record.Audience: Approximately 300 international tanker owners, operators, and industry representatives.Key Message: The Coast Guard implements a common-sense approach in the development, implementation, and enforcement of requirements to ensure a safe, secure, and efficient MTS.Duration: 30 minutes.OPENINGThank you Nikolas! It’s great to be with you today. And it’s great to be here in Houston – home to our Nation’s largest petrochemical complex and a fitting place for the annual Tanker Summit!This port is vital to our Nation’s economy. Everyone in this room plays a vital role in keeping our global economic engine running – literally and figuratively. And it’s no small feat. SCENE SETTERA few years ago, higher oil prices and advancing extraction technologies prompted a huge rush to the market in U.S. Today, oil prices have come down to around $50/ppb, changing the calculus for extraction and causing industry shifts. But, while the price per barrel fluctuates we still see tremendous growth in other energy markets… LNG is the fastest growing and most readily available energy source throughout the world. The United States is producing more natural gas than ever before. At last count, the U.S. now has 16 LNG export projects pending approval or in pre-filing stage.There is also LPG… Last year, I visited Sunoco Marcus Hook Industrial Complex, the largest LPG exporter on our East Coast. They converted from an oil refinery to an LPG export terminal in 2014 and are currently expanding their output and infrastructure.READINESS & RESILIENCE IN A COMPLEX MARKETWhy am I telling you this? It’s nothing you aren’t aware of. But it highlights the complex nature of these rapidly shifting markets – and the agility required to keep up. The movement of high levels of hydrocarbons, natural gas, and derivative products through the global supply chain exemplifies how technology and dynamic markets introduce opportunities for economic growth within our maritime system. But as energy markets shift and demands on the U.S. Coast Guard shift as well. Our global markets see a constant influx of new vessels, new products, new routes, new fuels, and new operations required to transport oil, gas, and chemicals around the world. It is our motto– our mission really - to be Semper Paratus, Always Ready to meet the evolving demands of our Maritime Transportation System. I happy to announce we recently appointed 27 new Master Marine Inspectors that all have over 12 years of bag carrying field experience to help us stay one step ahead of the next shift.America’s economic prosperity demands it – our economic prosperity is reliant on the safe, secure, and efficient flow of commerce through the Maritime Transportation System and we will always endeavor to strike the appropriate balance. 179 YEARS OF EXPERIENCEWe’ve been in this business for 179 years… Our Marine Safety mission was born in 1838 out of catastrophe (exploding steamboats and countless lost lives) through an Act of Congress. Sure, we face complex challenges today. But I ask, what major changes in our Maritime Industry haven’t been viewed as complex at the time?Ships went from wood to iron and sail to steam… From signal flags to radios. Our lighthouses used to be fires on a hill. And, just think about when we went to containerization. With almost 2 centuries under our belts, we’ve got a pretty well oiled machine when it comes to facilitating prosperity. We have a well flushed out, common-sense, predictable, and fair approach that levels the playing field, provides certainty, and can be built into successful business models.And that means a safe, secure, efficient, and resilient system. Our long history of working together with all the stakeholders in the maritime industry that makes us so successful. It is our collaboration - working side by side to adapt in a constantly evolving industry… to changes in shipping methods… shifting markets… evolving technologies… Since the beginning, together, we have managed risks in order to facilitate commerce, without sacrificing safety. And it is no different as we forge further into the 21st Century.CYBERWe are pressing forward with cyber risk management. And the past two years have been extremely productive. We’ve achieved a better understanding of operational risks associated with cyber systems in the MTS. And we are building momentum toward deploying effective cyber risk management regimes and tools. Here in the U.S., Congress held its first-ever hearing on cyber risk in our ports. The International Association of Classification Societies has made cyber risk management a cornerstone of their agenda, the international shipping industry has published guidelines for cyber safety and security, and the IMO has the topic on the agenda for both the Facilitation and Maritime Safety Committees, including a new paper on addressing Cyber Risk Management through the International Safety Management (ISM) Code. The U.S. Coast Guard remains focused on providing policy, training, tools, and regimes to reduce cyber risk in the MTS. And soon you should expect to see guidance on simplified voluntary reporting of cyber incidents in the MTS, common cyber vulnerability assessment tools, and how to address cyber risk in compliance with the requirements of the Maritime Transportation Security Act. Coast Guard Captains of the Port have all received training on cyber risk management and will continue their engagement with Area Maritime Security Committees and facility plan holders to ensure we adequately manage this operational risk.Just as we have done for 179 years, we are learning a great deal from each other is this evolving domain. Especially from our off-shore, oil and gas industry who are really tackling this issue head-on. I had a great engagement with Shell in New Orleans last month where I visited the remote operations center for the Olympus tension platform.We had a great dialogue about process control, risk management, metrics, information sharing, cyber control... And we also discussed the “upstream” and “downstream” aspect to cyber risk management - ensuring vendors and suppliers are securing their systems as well.Together, we will continue to grow, learn, and adapt - just as we have since the beginning - in order to meet the challenges of today and tomorrow, in the cyber domain and beyond. BALLAST WATER MANAGEMENTI know Ballast Water Management is another area that has your attention. Hopefully we all agree there is some good news in this arena despite many challenges.In the U.S. we will continue to balance protecting natural resources with the critical need to facilitate commerce and ensure a level playing field for industry.Coast Guard has type approved three ballast water management systems and we have three additional systems that are almost approved. We continue to receive applications and expect additional ones throughout the year.As with all we do, it is my direction that we be consistent, reasonable, and practical in our implementation of these regulations and international standards. We have issued policy updates and guidance to field units and industry. And we will be judicious in reasonably phasing out the temporary compliance options.CLOSING / Q&AThere are lots of good news stories. But, I’d like to leave it there and hear from you. Together, we face a dynamic and complex environment. But that is nothing new. In the Coast Guard, with our stakeholders, we will continue our steady course to safeguard and secure a resilient and productive MTS! -----------------------------------------------------------------------------------LIKELY QUESTION-----------------------------------------------------------------------------------Q: With President Trump’s recent Executive Order regarding regulations, how do you see that impacting regulations in the tanker community? Do you envision de-regulation? What else might change under this new Administration?A: In line with the EO, we have a task force in place and we are working with DHS to fully understand how this EO might apply to our regulatory program. We are currently conducting a comprehensive review of all of our regulations. There are certainly some regulations that are on the books that are outdated, and the reason we haven’t taken them off the books is because the effort required to do so really exceeds the benefits (no one impacted by those regulations). However, the Coast Guard’s regulatory program vision remains unchanged: Coast Guard regulations provide the certainty required to encourage investment and innovation, and the level playing field to ensure fair competition and free market solutions. A uniform Federal regulatory regime adds consistency and reduces the burden that can be associated with sometimes contradictory state regulations; particularly for a global industry like shipping. Regulations are one tool by which the Coast Guard shapes the environment in which we operate and helps to manage risks in the Maritime Transportation system.We only propose or publish regulations when we can reliably demonstrate the benefits outweigh the costs. And we will continue to apply a common-sense approach to the development of policy and regulations to manage risks in our complex Maritime Transportation System. As well as remain consistent, reasonable, and practical in their implementation and enforcement. Again, we are in the business of safeguarding and securing our MTS to ensure its resiliency and productivity. ................
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