Licensing Process and Requirements

In response to both the nation’s growing energy and security needs, Congress accelerated the deepwater port licensing process to promote the importation of natural gas to offshore energy receiving facilities.  The rigid timeline of the Deepwater Port Act requires significant pre-application development on the part of an applicant to meet license requirements and avoid a suspended review that can significantly delay processing activities.  The Maritime Administration and U.S. Coast Guard work with applicants to meet rigorous review requirements and the expectations of state regulators and the general public in the licensing process.

The pre-application stage gives potential applicants the opportunity to confer with the Maritime Administration and the U.S. Coast Guard to provide an overview of their proposed project, discuss the intricate details of the federal and state application and licensing process, introduce key personnel, and discuss specific financial requirements mandated by the Deepwater Port Act.  Applicants are encouraged to conduct similar meetings with state and local agencies to review and discuss state requirements and interests.

The project milestones of the application process have mandatory deadlines and operate on a 356-day ‘clock’ that begins when the applicant submits an application, and ends when the Maritime Administration issues a Record of Decision. The Maritime Administration, the Coast Guard, and other federal and state agencies evaluate a newly submitted application for completeness. This process takes 26 days, and results in either a Notice of Application or a formal rejection by the Maritime Administrator. The table below represents a typical timeline, assuming there will be no clock stoppage to get additional information.

The National Environmental Policy Act process takes up approximately two-thirds (240 days) of the application review timeline, beginning when the Notice of Application is issued. During this time, the Maritime Administration and the U.S. Coast Guard, in collaboration with other agencies, ensure that a thorough Environmental Impact Statement is developed. Without complete information, meeting this onerous timeline is impossible. Any gaps in information may require a suspension of the timeline. The Maritime Administration and the Coast Guard will suspend an application review because of a lack of adequate information necessary to the licensing process. Issues that have triggered “stop clocks,” or suspended reviews, include:

• Inadequate information regarding project financing;
• Re-gasification technologies;
• Fisheries analysis;
• Air quality review;
• Endangered species; and
• Marine habitats.

Along with the National Environmental Policy Act review process, the Maritime Administration has its own approval criteria that must be met before a license may be issued. Once the application has made it through the federal and state review process and has reached the Record of Decision stage, the Maritime Administrator considers nine criteria, which are detailed below.

Further, the Record of Decision describes the Maritime Administration’s decision to grant, grant with conditions, or deny the application.  For example, if a license is revoked or terminated, all components of the deepwater port must be removed. Licensees must guarantee, through a license condition, that the facility will be decommissioned at the end of the facility’s life cycle or upon revocation or termination of the license and/or facility. 

Financial Responsibility
Applicants must be financially able to construct, own, and operate the deepwater port, and must provide a financial guarantee or bond sufficient to meet all costs for complete removal of all components of the deepwater port upon revocation or termination of the license and/or facility.  Further, applicants must be able to meet the requirements of the Oil Pollution Act of 1990 (33 U.S.C. §§2701 et seq.; 104 Stat 484) as they relate to the Deepwater Port Act.

Compliance with Relevant Laws, Regulations, and License Conditions
Applicants must comply with relevant laws, regulations, and license conditions, and must state their intention to do so in writing.

National Interest
The construction and operation of the deepwater port must be in the national interest and consistent with national security, energy sufficiency, environmental quality, and other national policy goals and objectives.

International Navigation
The deepwater port should not interfere with international navigation or other reasonable uses of the high seas, as defined by treaty, convention, or customary international law.

Impact on the Marine Environment
The deepwater port will be constructed and operated using the best available technology to prevent or minimize adverse environmental impact, in accordance with environmental review criteria.

National Environmental Laws
The deepwater port will comply with national environmental laws. The application must properly address all relevant provisions of the Clean Air Act, as amended, the Federal Water Pollution Control Act, and the Marine Protection, Research and Sanctuaries Act as well as other applicable Federal and state environmental laws.

Consultation with the Secretaries of the Army, State, and Defense
The Secretary of the Army, the Secretary of State, and the Secretary of Defense must be consulted and must express their views on the adequacy of the application and its effect on programs within their respective jurisdictions.

Approval of the Governor of the Adjacent Coastal State
Pursuant to 33 U.S.C. § 1508 of the Deepwater Port Act, the governor of the adjacent coastal state(s) must approve the issuance of a deepwater port license. Silence on this issue denotes approval.

Consistency with Coastal Zone Management Program
An applicant for a deepwater port license must demonstrate consistency with the Coastal Zone Management Plan of the adjacent Coastal States (per the Coastal Zone Management Act of 1972).

For information on how to apply for a Deepwater Port License and what to include in your application, see: Deepwater ports: General (33 CFR 148.105)