September 30, 1997
NOAA Environmental Compliance Policy 97-03

1.0 Policy

1.1 Although technically exempt from most environmental compliance laws and regulations, the National Oceanic and Atmospheric Administration's (NOAA) fleet voluntarily applies the intent of these laws as "good marine practice."

1.2 NOAA's policy is to consider the environmental cleanup costs associated with ship decommissioning as a financial environmental liability, as defined by the Chief Financial Officer (CFO) Act of 1990 and amended in 1994, only under the provisions of the Toxic Substances Control Act (TSCA).

2.0 Terms

2.1 A liability exists when a property or other asset has some currently existing problem requiring environmental corrective action. The problem may be due to an obligation by law, order, or an agreement to expend money in the future to correct an existing environmental condition. Annual operating costs which are addressed during the course of a year such as ordinary maintenance, compliance, and operating costs for pollution control systems and routine waste handling are NOT financial liabilities.

2.2 In general there are two types of financial environmental liabilities for NOAA: 1) remediation liabilities such as soil or groundwater contamination, and 2) other liabilities such as old transformers containing polychlorinated biphenyls (PCBs) or underground storage tanks. Financial environmental liabilities in NOAA most frequently come from the requirements of the Toxic Substances Control Act--TSCA (which includes proper management and/or disposal of PCB's, asbestos, lead, and radon), the Resource Conservation and Recovery Act--RCRA (which includes the management and disposal of hazardous waste, and the operation of underground storage tanks), and the Comprehensive Environmental Response, Compensation and Liability Act--CERCLA (which is concerned with all the issues associated with abandoned, uncontrolled, or inactive hazardous waste disposal sites and includes the purchase or transfer of real property).

3.0 Background

3.1 Applicable Requirements:

3.1.1 The requirements imposed on NOAA's fleet regarding environmental compliance are derived from a number of sources, including international protocols and guidelines, Federal statutes and regulations, and internal NOAA Corps instructions.

3.1.2 NOAA vessels are different in both function and legal status from other NOAA facilities, and as "public vessels," are owned and operated by the United States Government making them different from other seagoing vessels. Because of this status, NOAA vessels are unique in the applicability of Federal statutes and regulations as compared with other NOAA facilities.

3.1.3 They are often technically exempt (by definition or exclusion) from various environmental laws and regulations that apply to onshore facilities and commercial vessels, as stipulated in the laws and regulations themselves.

3.1.4 In other cases, although they are not specifically exempted from the laws and regulations, these laws and regulations do not apply because NOAA vessels do not meet any of the applicable criteria specified in the text.

3.1.5 Although not legally binding, the intent and provisions of most laws and regulations are voluntarily applied to NOAA vessels through Executive Order or NOAA Corps Instruction. This is in keeping with "good marine practice" and is based on the procedures followed by other seagoing services.

3.1.6 A summary of statutes, regulations, and guidelines as they apply to the NOAA fleet is contained in Attachment 1.

3.2 Financial Liability:

3.2.1 In order to be considered a financial liability under the CFO Act of 1990 as amended in 1994, an environmental compliance requirement must be a pollution clean-up law or regulation.

3.2.2 Although NOAA vessels are covered under Executive Order 12088 (signed in 1980) which directs each Federal agency to comply with Federal environmental statutes, and Executive Order 12856 (signed in 1993) which commits Federal agencies to not only comply with all environmental statutes, but to assume a leadership role, these orders do not carry with them a financial liability. Only the laws themselves can mandate this liability.

3.3 Example: Attachment 2 presents an example of how a financial liability would be calculated using the process described in this policy.

4.0 Procedures

4.1 Recognition: Cleanup costs associated with property are estimated when the property is first placed in service and subsequently adjusted for material changes due to inflation/deflation or changes in regulations, plans, or technology. The costs of decommissioning existing and future NOAA ships will be considered cleanup costs for financial environmental liability purposes.

4.2 Methodology: There are two primary ways to estimate the financial environmental liability associated with a ship decommissioning.

4.2.1 The direct method physically determines the quantity of TSCA-regulated material requiring remediation and applies industry rates for the removal. However, since most of the material is contained in inaccessible areas of the vessel and is not apparent prior to opening the areas, physical assessment is expensive and seldom practicable.

4.2.2 The indirect method relies on prior experience with previously decommissioned ships and the witnessed level of effort in removing the TSCA-regulated material, coupled with standard industrial rates. This calculation would then be applied to vessels not yet decommissioned, using vessels of comparable size and characteristics whenever possible. When no comparable vessels have been decommissioned, the liability may be determined by extrapolation of previously calculated data.

4.2.3 Whenever possible, the two estimation techniques should be used together to refine the accuracy of the estimated liability.

4.3 Office of NOAA Corps Operations (ONCO) Role:

4.3.1 Given the specialized knowledge required to develop accrual cost estimates, the original cost estimate will be developed by ONCO with assistance from the servicing Regional Environmental Compliance Officer (RECO).

4.3.2 Estimates are to be provided for ships as they enter NOAA service and are to be updated annually by ONCO at the beginning of each fiscal year.

4.3.3 Estimates are to be supported with a description of the methodology used in determining the financial environmental liability.

4.3.4 If there is no reason to change the cost estimate during the annual review, a simple statement to that effect will be provided.

4.4 Regional Environmental Compliance Officer (RECO) Role:

4.4.1 Project data will be maintained by the RECOs for each NOAA ship managed within their region.

4.4.2 Project data will include a description of the liability on an Environmental Project Prospectus form (to be provided by ONCO), the cost estimate accompanied by a description of how that estimate was developed (to be provided by ONCO), and any other information pertinent to the application of TSCA to ships.

4.4.3 Given that the same information may apply to each of the ships under the oversight of a RECO, it is permissible to reference a central file in each of the individual ship files.

4.5 Environmental Compliance Staff Headquarters (HQ) Role:

4.5.1 The HQ will validate NOAA ship-related projects and include them in NOAA's master project database in accordance with NOAA Environmental Compliance Policy 97-02.

4.5.2 The disclosure associated with vessel decommissioning will be coordinated by HQ and provided in a timely manner for inclusion within the annual NOAA Financial Statement. The disclosure will specify the laws and regulations requiring the cleanup; a description of the method used to assign an estimated cleanup cost to the current period; and the nature of estimates and information regarding possible changes due to inflation, deflation, technology, or applicable laws and regulations (for instance, possible changes in TSCA regarding the transfer of vessels between governments).

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