Dynamic_Positioning_Requirement_for_MODUs_and_Other_Vessels_Conducting_Outer_Continental_Shelf_Activities_-_Preliminary_Regulatory_Analysis_and_Initial_Regulatory_Flexibility_Analysis

Dynamic Positioning Requirements for MODUs and
Other Vessels Conducting Outer Continental Shelf
Activities
Preliminary Regulatory Analysis and Initial Regulatory
Flexibility Analysis
Notice of Proposed Rulemaking
33 CFR Parts 140 and 143
46 CFR Parts 2, 61, and 62
USCG-2014-0063
RIN 1625-AC16
September 2014
Prepared by:
United States Coast Guard
Office of Standards Evaluation and Development
Standards Evaluation and Analysis Division
United States Coast Guard Headquarters
Washington, DC

DRAFT REGULATORY ANALYSIS: DO NOT CITE, QUOTE OR DISTRIBUTE
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Table of Contents
Executive Summary..................................................................................................................... xi
1) Introduction .............................................................................................................................31
1.1 Need for Federal Regulatory Action................................................................................... 36
1.2 Regulatory Alternatives ...................................................................................................... 37
1.3 Assumptions: Wages.......................................................................................................... 37
1.4 Assumptions: Value of Life and Injuries........................................................................... 39
1.5 Overview of Regulatory Analysis and Requirements......................................................... 39
2) Affected Population.................................................................................................................40
3) Discussion of Costs...................................................................................................................47
3.1 Changes to 33 CFR part 140 -- Dynamic Positioning Systems.......................................... 47
3.2 Costs for 33 CFR 140.315 (d)............................................................................................. 54
3.3 Costs for 33 CFR 140.320 .................................................................................................. 58
3.4 Costs for 33 CFR 140.335 (b) (2) & (3) / 46 CFR 62.40-15 and 62.40-20 ........................ 61
3.5 Costs for 33 CFR 140.335 (b) (4) & (c) (d) / 46 CFR 62.40-25......................................... 63
3.6 Costs for 33 CFR 140.335 (h)............................................................................................. 65
3.7 Costs for 46 CFR 61.50-4 (b) ............................................................................................. 73
3.8 Costs for 33 CFR 140.335 (i).............................................................................................. 76
3.9 Costs for 33 CFR 140.335 (j) & (k).................................................................................... 82
3.10 Costs for 33 CFR 140.340 (b) (1) / 46 CFR 62.40-5 (b) (1)............................................. 84
3.11 Costs for 33 CFR 140.340 (b) (1) / 46 CFR 62.40-5 (b) (2)............................................. 87
3.12 Costs for 33 CFR 140.345 ................................................................................................ 89
3.13 Changes to 33 CFR part 143 – Design and Equipment .................................................... 90
3.14 Changes to 33 CFR part 146 – Operations ....................................................................... 91
3.15 Changes to 46 CFR part 61 – Periodic Tests and Inspections .......................................... 92
3.16 Costs for 46 CFR 61.50-3................................................................................................. 95
3.17 Costs for 46 CFR 61.50-4................................................................................................. 98
3.18 Costs for 46 CFR 61.50-5, 61.50-10 & 61.50-15 ............................................................. 99
3.19 Changes to 46 CFR part 62 -- Vital System Automation ............................................... 102
3.19 Costs for 46 CFR 62.20-2 (c).......................................................................................... 105
3.20 Costs for 46 CFR 62.25-40............................................................................................. 108
3.21 Costs for 46 CFR 62.40-3, 62.40-5, 62.40-15, 62.40-20, and 62.40-25......................... 109
3.22 Total Industry Costs for NPRM...................................................................................... 110
3.23 Total Government Costs for NPRM ............................................................................... 112
3.24 Total Cost for NPRM...................................................................................................... 114
4) Discussion of Benefits............................................................................................................115
4.1 Frequency of DP Incidents................................................................................................ 116
4.2 Causes of DP Incidents Addressed by Proposed Rule...................................................... 117
4.3 Consequences of DP Incidents.......................................................................................... 119
4.4 Beneficial Impact of Proposed Rule ................................................................................. 121
4.5 Potential Avoided Damage Benefits of DPS Proposed Rule............................................ 134
5) Comparison of Costs and Benefits .......................................................................................154
6) Discussion of Alternatives.....................................................................................................158
6.1 Proposed Alternative......................................................................................................... 161
6.2 Alternative 2: Grandfather all existing non-drilling DP vessels....................................... 162

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6.3 Alternative 3: No Grandfathering and No Phase-in Period ............................................. 168
6.4 Alternative 4: Proposed Alternative Plus Additional DP Manning Requirements For Non-
Drilling Vessels with New or Upgraded DP Systems ............................................................ 172
6.5 Alternative 5: Alternative 3 Plus Additional DP Manning Requirements........................ 175
7) Initial Regulatory Flexibility Analysis.................................................................................177
7.1 Description of the reasons why action by the agency is being considered....................... 177
7.2 Succinct statement of the objectives of, and legal basis for, the proposed rule................ 178
7.3 Description of and, where feasible, an estimate of the number of small entities to which the
proposed rule will apply.......................................................................................................... 179
7.4 A description of the projected reporting, recordkeeping and other compliance requirements
of the proposed rule, including an estimate of the classes of small entities which will be
subject to the requirement and the type of professional skills necessary for preparation of the
report or record; ...................................................................................................................... 182
7.5 An identification, to the extent practicable, of all relevant Federal rules which may
duplicate, overlap or conflict with the proposed rule. ............................................................ 194
7.6 A description of any significant alternatives to the proposed rule which accomplish the
stated objectives of applicable statutes and which minimize any significant economic impact
of the proposed rule on small entities. .................................................................................... 194
8) Collection of Information......................................................................................................195
9) Appendices .............................................................................................................................201

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List of Tables
Table ES-1: Phase-in Schedule for Vessels (except MODUs) with Existing DP Systems ..........xii
Figure ES-1: Example of a WSOC.............................................................................................. xiv
Table ES-2: Summary of Expected Costs of Provisions ............................................................. xvi
Table ES-3: Total Marginalized and Annualized Industry Costs for NPRM by Requirement .xviii
Table ES-4: Total Industry Cost of NPRM ................................................................................. xix
Table ES-5: Total Cost of NPRM................................................................................................. xx
Table ES-6: Potential Monetary Consequences At Risk that Could Result From a DP Loss of
Position ........................................................................................................................................ xxi
Table ES-7: Total 10-year Avoided Damages from Rule..........................................................xxiii
Table ES-8: Comparison of Annualized Benefits and Costs to Industry and Government....... xxiv
Table ES-9: Expand DP Systems in OCS NPRM, Breakeven Analysis ................................... xxiv
Table ES-10: Comparison of Costs and Avoided Damages of Alternatives .............................. xxv
Table ES-11: Comparison of Cost-Effectiveness of Alternatives ............................................. xxvi
Table ES-17: Revenue Impacts for Small Entities Affected by NPRM..................................xxviii
Table 1-1: Dynamic Positioning Requirements based on Vessel Type........................................ 32
Table 1-2: Summary of Wage Rates Used in the Analysis........................................................... 38
Table 2-1: Phase in Schedule for Operational Requirements for Vessels (except MODUs) with
existing DP systems...................................................................................................................... 41
Table 2-2: Summary of Affected Population................................................................................ 42
Table 2-3 Summary of Affected Population by Requirement ...................................................... 44
Table 3-1: Changes to 33 CFR part 140 -- Dynamic Positioning Systems .................................. 49
Table 3-2: New Workers Entering the Industry............................................................................ 55
Table 3-3: Derivation of Cost of Proof of Training Requirement ................................................ 55
Table 3-4: Industry Cost of Proof of Training Requirement ........................................................ 56
Table 3-5: Government Cost of Proof of Training Requirement.................................................. 57
Table 3-6: Annual Industry Cost to Employ a Master as Required by 140.320........................... 59
Table 3-7: Annual Industry Cost to Hire a Navigational Watch as Required by 140.320 ........... 59
Table 3-8: Industry Cost of DP System Manning Requirements ................................................ 59
Table 3-9: Industry Cost of FMEA and FMEA Test Proving Document..................................... 62
Table 3-10: Derivation of Cost to Develop CAMO and ASOC/WSOC ...................................... 64
Table 3-11: Industry Cost to Develop CAMO and ASOC/WSOC............................................... 64
Table 3-12: Industry Undiscounted Cost to Report DP System Incidents.................................... 66
Table 3-13: Industry Cost to Report DPS Incidents .................................................................... 67
Table 3-14: Total Number of DP Investigations by Vessel Type................................................. 68
Table 3-15: Industry Undiscounted Cost to Conduct DP Investigations by Vessel Type............ 69
Table 3-16: Industry Undiscounted Cost to Write and Submit DP Investigation Summaries by
Vessel Type................................................................................................................................... 71
Table 3-17: Industry Cost to Investigate DP System Incidents.................................................... 72
Table 3-18: Industry Cost to Submit Annual DP Investigation Report........................................ 74
Table 3-19: Government Cost to Review Annual DP Investigation Reports............................... 75
Table 3-20: Frequency of Emergency Disconnects Occurring While Using DP ......................... 77
Table 3-21: Frequency of a Serious Marine Incident Occurring While Using DP....................... 77
Table 3-22: Industry Undiscounted Cost to Report Emergency Disconnects While Using DP... 78
Table 3-23: Industry Undiscounted Cost to Report Serious Marine Incidents While Using DP . 79

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Table 3-24: Industry Cost to Report Emergency Disconnects and Serious Marine Incidents While
Using DP....................................................................................................................................... 80
Table 3-25: Government Cost to Record Reported Emergency Disconnects and Serious Marine
Incidents While Using DP ............................................................................................................ 81
Table 3-26 Industry Cost to Obtain DPVAD................................................................................ 83
Table 3-27: Return on Capital Difference of a DP-1 crewboat and a DP-2 crewboat................. 85
Table 3-28: Industry Cost of Removing DP-1 Crewboats from the Fleet .................................... 86
Table 3-29: Derivation of DP-2 Class Notation Cost................................................................... 87
Table 3-30: Industry Cost for DP Notation................................................................................... 88
Table 3-31 Changes to 33 CFR part 143 -- Design and Equipment ............................................. 90
Table 3-32 Changes to 33 CFR part 146 -- Operations ................................................................ 91
Table 3-33: Changes to 46 CFR part 61 -- Periodic Tests and Inspections.................................. 92
Table 3-34: Derivation of Cost to Apply for DPSAO Approval .................................................. 96
Table 3-35: Industry Cost for DPSAO Application...................................................................... 96
Table 3-36: Government Cost for DPSAO Application............................................................... 97
Table 3-37: Industry Cost for Initial, Periodic, and Annual Survey Requirement ..................... 100
Table 3-38: Government Cost for Initial, Periodic, and Annual Survey Requirement............... 101
Table 3-39: Changes to 46 CFR part 62 -- Vital System Automation........................................ 102
Table 3-40: Derivation of Cost of DP system Plan and Annual Survey Document Requirement
..................................................................................................................................................... 105
Table 3-41: Industry Cost of DP System Plan............................................................................ 106
Table 3-42: Hours by Component to Review a DP system Plan................................................ 107
Table 3-43: Government Cost of DP system Plan...................................................................... 108
Table 3-44: Total Industry Cost of NPRM ................................................................................. 110
Table 3-45: Total Marginal and Annualized Industry Costs for NPRM .................................... 111
(by Requirement) ........................................................................................................................ 111
Table 3-46: Total Government Cost of Rulemaking .................................................................. 112
Table 3-47: Total Marginal and Annualized Government Costs for NPRM.............................. 113
(by Requirement) ........................................................................................................................ 113
Table 3-48: Total Cost of NPRM................................................................................................ 114
Figure 4-1: Rate of DP Failures per Vessel ................................................................................ 116
Figure 4-2: Causes of DP system Incidents................................................................................ 117
Table 4-1: Potential Monetary Consequences At Risk that Could Result From a DP System Loss
of Position................................................................................................................................... 119
Figure 4-3: Example of a WSOC................................................................................................ 123
Table 4-2: Description of Benefits of the NPRM....................................................................... 125
Table 4-3: Percentage of Non-Drilling Vessel DP Incidents that Result in Vessel Damages.... 134
Table 4-4: Percentage of Drilling Vessel DP Incidents that Result in Vessel Damages............ 135
Table 4-5: Total Number of OSV DP Incidents With and Without Damages, Pre-Rule
Implementation ........................................................................................................................... 136
Table 4-6: Total Number of Crewboat DP Incidents With and Without Damages, Pre-Rule
Implementation ........................................................................................................................... 137
Table 4-7: Total Number of MODU DP Incidents With and Without Damages, Pre-Rule
Implementation ........................................................................................................................... 138
Table 4-8: Total Damages Resulting from DP Incidents to Noncompliant OSVs and Crewboats,
Pre-Rule Implementation............................................................................................................ 140

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Table 4-9: Total Damages Resulting from DP Incidents to Noncompliant Drilling Vessels, Pre-
Rule Implementation................................................................................................................... 141
Table 4-10: Total Number of OSV DP Incidents With and Without Damages, Post-Rule
Implementation ........................................................................................................................... 143
Table 4-11: Total Number of Crewboat DP Incidents With and Without Damages, Post-Rule
Implementation ........................................................................................................................... 144
Table 4-12: Total Number of MODUs DP Incidents With and Without Damages, Post-Rule
Implementation ........................................................................................................................... 145
Table 4-13: Total Damages Resulting from DP Incidents to Noncompliant OSVs and Crewboats,
Post-Rule Implementation .......................................................................................................... 146
Table 4-14: Total Damages Resulting from DP Incidents to Noncompliant Drilling Vessels, Post-
Rule Implementation................................................................................................................... 147
Table 4-15: Cumulative Total Cost From DP Incidents to Noncompliant Vessels - Pre- and Post-
Rule............................................................................................................................................. 149
Figure 4-4: Comparison of Cumulative Total Cost from DP Incidents Pre- and Post-Rule....... 150
Table 4-16: Cumulative 10-year Avoided Damages from Rule (per Year)................................ 151
Table 4-17: Total 10-year Avoided Damages from Rule ........................................................... 152
Table 5-1: Cumulative Net Present Value from Rule................................................................. 155
Figure 5-1: Comparison of Cumulative Net Present Values – Baseline vs. NPRM................... 156
Table 5-2: Comparison of Annualized Avoided Damages and Costs to Industry and Government
..................................................................................................................................................... 156
Table 5-3: Expand DP Systems in OCS NPRM, Breakeven Analysis....................................... 157
Table 6-1: Comparison of Alternatives....................................................................................... 159
Table 6-2: Comparison of the Risk of Fatality Addressed by Alternative ................................. 161
Table 6-3: Summary of Affected Population in Alternative 2.................................................... 163
Table 6-4: Total Cost of Alternative 2........................................................................................ 164
Table 6-5: Total 10-year and Annualized Avoided Damages of Alternative 2 .......................... 166
Table 6-7: Total 10-year and Annualized Avoided Damages of Alternative 3 .......................... 170
Table 6-8: Industry Cost to Hire a DPO as Required by Alternative 4 ...................................... 173
Table 6-10: Total Cost of Alternative 5...................................................................................... 175
Table 7-1: Standard Size of Revenue of Entities Affected by NPRM........................................ 179
Table 7-2: Size of Entities Affected (MODUs)......................................................................... 180
Table 7-3: Size of Phased-in Entities Affected (OSVs of at least 500 GT ITC) ........................ 180
Table 7-4: Size of Entities Affected (OSVs under 500 GT ITC) ............................................... 181
Table 7-5: Size of Entities Affected by NPRM
(Crewboats)................................................................................................................................. 181
Table 7-6: NPRM First-year Cost............................................................................................... 183
Table 7-7: NPRM First-Year Revenue Impact to Small Entities ............................................... 184
(OSVs of at least 500 GT ITC)................................................................................................... 184
Table 7-8: NPRM Annual Cost................................................................................................... 185
Table 7-9: NPRM First-year Cost............................................................................................... 186
Table 7-10: NPRM First-Year Revenue Impact to Small Entities (OSVs under 500 GT ITC) . 187
Table 7-11: NPRM Annual Cost................................................................................................. 188
Table 7-12: NPRM First-year Cost............................................................................................. 190

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Table 7-13: NPRM First-year Cost............................................................................................. 191
Table 7-14: NPRM First-Year Revenue Impact to Small Entities (Crewboats)......................... 192
Table 7-15: NPRM Annual Cost................................................................................................. 193
Table 7-16: NPRM Annual Revenue Impact to Small Entities (Crewboats) ............................. 194
Table 8-1: Summary of Industry Burden from Collection of Information................................. 197
Table 8-2: Summary of Government Burden Estimates............................................................. 199

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Acronym List
The Act
CFR
The Coast Guard Authorization Act of 2010 (Pub. L. 111-281)
Code of Federal Regulations
CNG
COI
DHS
Compressed natural gas
Certificate of Inspection
U.S. Department of Homeland Security
DPO
DPOQ
DP SYSTEM
FMEA
FR
GRT
GT ITC
IBC Code
ICLL
Dynamic positioning operator
Dynamic positioning operator, qualified
Dynamic positioning system
Failure Modes and Effects Analysis
Federal Register
Gross register tons as measured under 46 U.S.C. 14502, Regulatory
Measurement System
Gross tonnage as measured under 46 U.S.C. 14302, Convention
Measurement System
International Code for the Construction and Equipment of Ships Carrying
Dangerous Chemicals in Bulk
International Convention on Load Lines, 1966, as amended
IEC
IECEx
IMCA
IMO
LNG
MISLE
MSMS
International Electrotechnical Commission
IEC System for Certification to Standards Relating to Equipment for use in
Explosive Atmospheres
International Marine Contractors Association
International Maritime Organization
Liquefied natural gas
Marine Information Safety and Law Enforcement System
Marine Safety Management System
MTS
NAICS
Marine Technology Society
North American Industry Classification System
NEC National Electric Code
NFPA
OCS
National Fire Protection Association
Outer Continental Shelf
OCMI
OICNW
OMB
Officer in Charge, Marine Inspection
Officer in charge of the navigational watch
Office of Management and Budget
OSV
STCW
Offshore Supply Vessel
International Convention of Standards of Training, Certification and
Watchkeeping for Seafarers, 1978, as amended
STCW Code
SOLAS
RA
Seafarers’ Training, Certification, and Watchkeeping Code
International Convention for the Safety of Life at Sea, 1974, as amended
Regulatory Analysis
SBA Small Business Administration
USCG United States Coast Guard

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Executive Summary
Executive Orders 13563 and 12866 direct agencies to assess the costs and benefits of available
regulatory alternatives and, if regulation is necessary, to select regulatory approaches that
maximize net benefits (including potential economic, environmental, public health and safety
effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of
quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting
flexibility. The Coast Guard does not expect the costs of this rulemaking to exceed the threshold
of economic significance (i.e., the rulemaking will not have an annual affect on the economy of
$100 million or more in any year). Additionally, this NPRM has been designated a “non-
significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, the
rule has not been reviewed by the Office of Management and Budget. However, a preliminary
Regulatory Analysis (RA) has been undertaken, which provides supporting documentation for
the regulatory evaluation in the preamble of the Dynamic Positioning Requirements for MODUs
and Other Vessels Conducting Outer Continental Shelf Activities [USCG-XXXX-XXXX]. We
did not attempt to replicate precisely the regulatory language of the proposed rule in this RA; the
regulatory text of an effective rule, not the text of this RA would be legally binding.
As the oil and gas industry move farther and farther offshore and into deeper waters, Mobile
Offshore Drilling Units (MODUs) and other vessels engaged in Outer Continental Shelf (OCS)
operations including Offshore Supply Vessels (OSV’s) face an increasing challenge to maintain
position. In particular, since environmental conditions are more extreme and increased water
depth makes conventional mooring no longer feasible, these vessels increasingly use dynamic
positioning (DP) systems to maintain position when conducting drilling and/or support functions
including personnel transfer, dive support and other critical operations. These systems typically
involve multiple sensors (position-sensing, environmental monitoring, etc.), a computer to
process these data, connections to propulsion and maneuvering control systems, and a user
interface to enable operators to set commands, monitor system performance and potentially step
in when systems are not working properly. Costs for such systems range from $350,000 to
$408,000 per vessel depending on requirements of the vessel and its operation. When properly
designed and operated within design limits, DP systems provide industry with an ability to safely
maintain position, using these rapidly evolving, computerized systems to stay within meters of
their desired location even in the face of wind, wave and current forces. However, these systems
are not immune from failures, and because MODUs and other vessels in this industry perform
high hazard industrial missions including conducting personnel transfers and handling large
quantities of oil and hazardous material, a resultant loss of position could result in an incident
that leads to a catastrophic loss of life or spillage of hazardous substances.
During interactions with industry at National Advisory Committees, DP conferences, and
industry training seminars in DP design and operations, industry expressed the need for a
uniform DP standard from the United States as a Coastal State. Additionally, the Coast Guard
has identified the lack of DP standards as allowing a potentially catastrophic risk to go
unmitigated. In response, the Coast Guard has developed this NPRM which would provide
MODUs and other vessels that conduct OCS activities while using a DP system on the U.S. OCS
a uniform standard that addresses design, construction, and operation of DP systems. This

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standard would aid owners and operators in safely meeting energy market demands and pursuing
offshore energy ventures that are farther offshore and in deeper waters.
To minimize the costs of new standards, the Coast Guard has based its requirements on
established guidelines used by today’s DP industry, specifically International Maritime
Organization (IMO) Maritime Safety Committee (MSC) Circular 645 and the Marine
Technology Society’s (MTS) DP Operations Guide. These standards complement each other,
with IMO MSC Circular 645 providing for the adequate design of such systems and the MTS DP
Operations Guide providing standards to ensure that they are operated properly. The Coast
Guard has also limited the application of the DP system design and operations standards to
existing and new MODUs and new vessels, other than MODUs, that conduct OCS activities
while using a DP system. Existing non-drilling vessels that conduct OCS activities while using a
DP system are “grandfathered” from being required to comply with the most costly design
requirements, and are provided a phase-in period to comply with the operational DP
requirements. This phase-in period was designed to provide industry with some flexibility in
enacting these requirements, while still providing for vessel and personnel safety. Table ES-1
summarizes this phase-in schedule.
Table ES-1: Phase-in Schedule for Vessels (except MODUs) with
Existing DP Systems
Tonnage of Non-drilling Vessel
Date Requirements
Effective
At least 1,900 GT ITC Date of FR + 3 years
At least 900 GT ITC Date of FR + 6 years
Greater than 500 GT ITC Date of FR + 9 years
Design Standards and Classification
The IMO standards incorporated currently divide DP equipment systems into three
classifications: equipment class 1 (DP-1), equipment class 2 (DP-2), and equipment class 3 (DP-
3).1
These classes primarily diverge in their level of reliability, with DP-1 classed systems
offering the least reliability, and DP-2 and DP-3 classed systems offering increasing amounts of
reliability. This reliability is achieved through redundancy of critical components such as
computer systems, wind sensors, vertical reference units, gyrocompasses, bus bars, generators,
and thrusters used to maintain positioning of the vessel.
In a DP-1 classed system, the failure of a single component would likely result in a DP system
failure, which in turn would likely lead to a loss of position and potentially to a mishap involving
catastrophic loss of life, property damage, and/or environmental pollution. Conversely, a DP-2
system is designed to reduce the threat of a loss of position in the event of a single “active
1
IMO MSC/Circ.645

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component” equipment failure (e.g. position reference systems, generators, electrical distribution
components, control computers, or thrusters) by providing for redundancy in these “active
components” thereby increasing reliability. This increased reliability is further ensured through
failure analysis and testing. DP-3 systems, which achieve physical independence by segregating
system components into separate locations with fire and watertight boundaries, are designed to
further reduce the threat of a loss of position occurring if a fire or flooding was to remove an
entire compartment, such as the vessel’s engine room. While this rule imposes no carriage
requirements, nor does it require use of DP, it does require that DP used in certain critical
situations (e.g., transfer of personnel and/or hazardous materials) meet DP-2 requirements to
ensure that a single failure of a primary component does not lead to catastrophic consequences.
The IMO MSC Circular better enables a MODU or other vessel to perform its industrial mission
because the DP system is more fault-tolerant and fault-resistant, and has greater capability to
maintain position after a worst-case failure. A fault tolerant system is designed to continue to
function without interruption following an error or failure of a subsystem or component within
the system, and is achieved through multiple design approaches based on the level of
performance required for the industrial mission of the vessel. The design limits of such systems
reduce the risk of a loss of position by reducing reliance upon the human element.
Operations
The Marine Technology Society’s DP Operations Guide complements the design standards by
focusing on the safe operation of these systems, provides guidance on how to successfully
develop and implement operational measures and decision support tools. Specifically, the rule
incorporates MTS requirements for Activity Specific Operating Criteria/Well Specific Operating
Criteria (ASOC/WSOG) and Critical Activity Mode of Operations (CAMO) to operate a DP
system within its design limits. The WSOC/ASOC are visual decision support tools that provide
DPOs/DPOQs an easy to use tool to summarize limits to safe operating conditions and indicate
when DP operators must take corrective action, such as disconnecting a well pipe because of the
potential or actual loss of position. The goal of this tool is to prevent a loss of position and
potential costly consequences by making it easier to DP operators to respond correctly in the
event of an emergency. Figure ES-1 contains an example of a WSOC.
Based on industry experience, use of MTS DP operations guidance can reduce incidents of DP
incidents. According to data provided during industry roundtables, prior to adoption of MTS
guidance, a fleet experienced 6 DP position loss incidents in 6 months (a rate of 1 per month).
After adoption, the fleet experienced 5 DP position loss incidents in 8 years (a rate of 0.05 per
month, which is a reduction of 95 percent). Based on evaluations of theses five loss events, four
could have been avoided if the WSOC had been followed.

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Figure ES-1: Example of a WSOC
Manning and Training
To ensure that operators and crews of MODUs and other vessels that use dynamic positioning to
maintain position while operating on the U.S. OCS are properly manned, have an in-depth
knowledge of the DP system, are able to constantly and consistently monitor it, and take manual
control of the system when appropriate, the proposed rule contains minimum manning and
training requirements. These training requirements mandate that an operator have a thorough
knowledge of the CAMO and either the ASOC, or WSOC, and must be familiar with the vessel’s
FMEA. These provisions would reduce the likelihood that vessel and personnel casualties occur
because of operator fatigue or inexperience using the system.
Reporting
The proposed rule contains requirements that owners/operators report DP system incidents
involving a reactive change from “green” to “yellow” and “green” to “red” as defined by the
ASOC or WSOC and an annual summary report of the DP investigations which followed these
incidents. Reporting DP incidents (green to red) and near misses (green to yellow) will assist
Coast Guard in understanding the frequency, causes and potential consequences of DP incidents
in order to better ensure safety for this evolving technology.

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In general, this notice of proposed rulemaking would:
• Increase vessel safety and protection of persons and the maritime environment through
the use of design and operational standards that prevent a loss of position by a vessel
conducting Critical OCS activities while using a DP system.
• Ensure compliance with established standards through mandatory vessel surveys that
would test DP systems and the Failure Modes and Effects Analysis (FMEA).
• Increase accountability by requiring vessel owners and operators to document system
designs and operating procedures.
• Increase the understanding of why DP systems fail by requiring vessel owners and
operators to describe when and why a DP incident occurred.
The Coast Guard estimates that 679 vessels with existing DP systems would be affected by this
rule (583 OSVs, 43 crewboats, and 53 MODUs). Using historical population data, we forecast
that over the 10-year period of this analysis, 322 future OSVs (which include OSVs less than
6,000 GT ITC and OSVs of at least 6,000 GT ITC), 57 future MODUs, and 20 future crewboats
would be affected by this NPRM.
We then use price and industry cost estimates to develop the potential costs for each provision in
this rule. Table ES-2 summarizes the expected cost per requirement per vessels. As can be seen,
only four provisions have costs in excess of $10 thousand per vessel; requirements for the six
foreign flagged MODU’s currently sailing without maritime master or crew to fill these critical
positions when underway on DP ($1.194 million per vessel), requirements for all vessels using
DP for certain critical operations to have the higher reliability DP-2 that is not susceptible to the
failure of a single component ($876 thousand per vessel), requirements that these DP-2 systems
are able to be certified by classification societies as meeting DP-2 standards ($64 thousand per
vessel) and requirements that the potential failures of the installed systems be understood by the
vessel crew through analysis and testing ($275 thousand per vessel).

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Table ES-2: Summary of Expected Costs of Provisions
(per Vessel)
Requirement
Industry
Cost
Government
Cost
(per vessel) (per vessel)
1. 33 CFR 140.315 (d): all applicable vessels must make available a copy of a
DPO's or DPOQ's certificate of completion of DP training courses. (repeating).
$114.40 $60.00
2. 33 CFR 140.320 (a): all applicable vessels must have a master and the
minimum number of mates while the vessel is underway.
$1,193,920.00 $0.00
3. 46 CFR 62.40-15 and 62.40-20: all applicable vessels must develop and
maintain a FMEA and FMEA test proving document.
$275,000.00 $0.00
4. 33 CFR 140.335: all applicable vessels must develop and maintain CAMO
and a WSOC or an ASOC, respectively.
$9,120.00 $0.00
5. 33 CFR 140.335 (h): all applicable vessels must report a dynamic positioning
incident to the DPSAO that conducted the vessel’s DP surveys (repeating).
$177.89 $0.00
6. 33 CFR 140.335 (h): all applicable vessels must conduct a DP investigation
following a dynamic positioning incident and submit a summary of the
investigation to the DPSAO that conducted the vessel’s DP surveys (repeating).
$2,236.19 $0.00
7. 46 CFR 61.50-4 (b): all applicable vessels must complete an annual report
that contains a summary of each DP incident investigation that was conducted
during that year and submit the report to the OCSNCOE (repeating).
$169.10 $150.00
8. 33 CFR 140.335 (i): all applicable vessels must report to the cognizant OCMI
DP incidents that involve an emergency disconnect or serious marine incident
(repeating).
$47.67 $25.00
9. 33 CFR 140.335 (k): all applicable vessels must receiving a DPVAD prior to
conducting Critical OCS activities while using DP.
$10.25 $0.00
10. 46 CFR 62.40-5 (b): all applicable vessels must have at a minimum a DP-2
system
$876,237.00 $0.00
11. 46 CFR 62.40-5 (b): all applicable vessels must obtain a DP-2 class
notation.
$64,250.00 $0.00
12. 46 CFR 61.50-3: all applicable DP assurance providers must seek approval
from the U.S. Coast Guard prior to conducting DP surveys, tests, inspections,
and plan reviews.
$1,235.10 $600.00
13. 46 CFR 61.50-2: all applicable vessels are required to report the time, date,
and location of initial, periodic, and annual surveys to the OCMI. (repeating).
$4.10 $607.50
14. 33 CFR 140.345 and 46 CFR 62.20-2: all applicable vessels are required to
submit the DP System Plan to the MSC.
$25.60 $2,700.00
*Dollar figures are in 2013 terms.

xvii
The proposed alternative would not require existing OSVs and crewboats to comply with system
and class requirements in provisions 10, 11, and 14 from Table ES-2, and would phase-in the
operational and reporting provisions 3 through 9 according to the schedule summarized in Table
ES-1. This will minimize the expected costs incurred by owners and operators of existing non-
drilling vessels.
Table ES-3 breaks down the total discounted costs and the annualized costs to industry by
requirement.

xviii
Table ES-3: Total Marginalized and Annualized Industry Costs for NPRM by Requirement
Requirement
10-Year Cost Annualized
Undiscounted 7% 3% 7% 3%
Minimum DP Manning Requirements
Cost to Provide Proof of Training (Table 3-4) $467,996 $332,365 $400,855 $47,321 $46,992
Cost to Comply with DP Manning Requirements2
(Table 3-8) $71,635,200 $50,313,567 $61,106,279 $7,163,520 $7,163,520
Total $72,103,196 $50,645,932 $61,507,133 $7,210,841 $7,210,512
Intermediate DP System Requirements
Cost to Complete FMEA and FMEA Proving Test Document (Table 3-9) $111,100,000 $74,383,054 $92,903,263 $10,590,474 $10,891,097
Cost to Develop CAMO and ASOC or WSOC (Table 3-11) $4,208,880 $2,858,478 $3,540,664 $406,983 $415,074
Cost to Report DP Status Changes from Green to Red or Yellow (Table 3-13) $905,587 $565,296 $734,721 $80,485 $86,132
Cost to Conduct DP Incident Investigations (Table 3-17) $6,591,592 $4,081,179 $5,329,997 $581,068 $624,838
Cost to Submit Annual DP Incident Investigation Report (Table 3-18) $860,550 $537,146 $698,162 $76,478 $81,846
Cost to Report Emergency Disconnect and Serious Marine Incidents (Table 3-24) $28,791 $18,548 $23,667 $2,641 $2,774
Cost to Obtain a DPVAD (Table 3-26) $14,719 $9,594 $12,159 $1,366 $1,425
Cost to Report DP Surveys (Table 3-37) $20,865 $13,024 $16,928 $1,854 $1,984
Total $123,730,983 $82,466,319 $103,259,560 $11,741,349 $12,105,171
Standard DP System Requirements
Cost to Obtain DP-2 System Equipment3
(Table 3-28) $2,628,711 $2,299,523 $2,478,534 $327,400 $290,560
Cost to Obtain DP-2 Class Notation (Table 3-30) $10,472,750 $7,119,161 $8,803,142 $1,013,608 $1,031,997
Total $13,101,461 $9,418,684 $11,281,676 $1,341,009 $1,322,557
Enhanced DP System Requirements
Cost to Submit DP System Plans (Table 3-41) $4,096 $3,222 $3,670 $459 $430
Total $4,096 $3,222 $3,670 $459 $430
2
Costs are only incurred by six foreign-flagged MODUs.
3
We forecast that costs would only be incurred by 1 future crewboat in the first three years following the effective date of a final rule.

xix
Table ES-4 summarizes the 10-year present value costs that are expected to be incurred by
industry as a result of this rule.
Table ES-4: Total Industry Cost of NPRM
(per Year)
Year Undiscounted Costs
Discounted Costs
7% 3%
1 $13,295,128 $11,612,479 $12,531,933
2 $13,583,758 $11,864,581 $12,803,995
3 $10,900,925 $8,898,402 $9,975,891
4 $44,460,494 $33,918,698 $39,502,573
5 $12,960,131 $9,240,394 $11,179,523
6 $12,958,982 $8,635,117 $10,852,943
7 $40,540,725 $25,246,726 $32,963,320
8 $15,177,650 $8,833,530 $11,981,377
9 $15,965,539 $8,684,195 $12,236,256
10 $29,112,460 $14,799,299 $21,662,405
Total $208,955,792 $141,733,422 $175,690,215
Annualized $20,179,651 $20,596,253
* Numbers may not add due to rounding.
The first year undiscounted cost of this rule is $13,295,128. The highest undiscounted cost is
expected in Year 4 at $44,460,494. Over the 10-year period of our analysis, annual costs are not
expected to exceed the $100,000,000 threshold in the first or any subsequent year.
The 10-year present value cost of this rule to industry is $141,733,422 discounted at a rate of 7
percent, and $175,690,215 discounted at a rate of 3 percent. The annualized cost is estimated at
$20,179,651 at a 7 percent discount rate and $20,596,253 discounted at a 3 percent discount rate.
We expect government will incur labor costs to review a vessel’s compliance with the provisions
in this rule. The Coast Guard estimates that the 10-year present value cost to government is
$2,935,991 discounted at 7 percent, and $3,744,096 discounted at 3 percent. Annualized
government costs are expected to be $418,019 at a 7 percent discount rate, and $438,922 at a 3
percent discount rate.
The combined 10 –year present value cost of this rule to industry and government is estimated at
$144,669,412at a 7 percent discount rate, and $179,434,311 at a 3 percent discount rate. The
annualized costs are expected to be $20,597,670 discounted at 7 percent and $21,035,175
discounted at 3 percent.
Table ES-5 summarizes the combined 10-year present value costs to industry and government as
a result of this rule.

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

xxi
Benefits
The primary goal of this NPRM is to reduce the occurrence of incidents of DP systems and to
mitigate the impacts of incidents if they occur. While DP system incidents can be resolved
through the DPO or DPOQ manually taking control of the system, inaction or delayed action can
have potentially catastrophic consequences. If left unchecked, a DP incident could result in a loss
of position or propulsion, a short circuit of the electrical equipment, and/or an emergency
disconnect. These events could result in loss of life, injury, major property damage to the vessel
and/or any surrounding vessels and facilities, lost revenue as a result of any downtime caused by
damages, and/or environmental damage as a result of released oil or other chemicals. While
casualty histories are limited with this emerging technology, existing data show that the potential
for catastrophes exists. Table ES-6 monetizes these potential consequences.
Table ES-6: Potential Monetary Consequences At Risk that Could Result From a DP Loss
of Position4
Consequence Category Range of Potential Consequences
Property Damage from Collision $ 5 million to $ 1 billion
Environmental Pollution $ 5 million to $500 million
Riser Lost on Seabed $7 million to $70 million
Pipe Bent or Buckled $ 3 million to $ 30 million
Downtime from Production Up to $500 thousand per day rate
Loss of Life $ 9.1 million per statistical life5
The collision of the logistics OSV Samudra Suraksha with a drilling platform illustrates the types
and potential magnitude of worst case consequences that could result from an OSV loss of
position. In July, 2005, the Samudra Suraksha was transferring personnel off the coast of India
when the vessel experienced a loss of position6
and the vessel collided with a platform, severing
a gas riser in the process. Although an emergency shut-off of the gas riser was initiated, a
sufficient amount of gas was released, resulting in an explosion and massive fire. Twenty-two
crewmen lost their lives or went missing as a result of the explosion, which, when monetized at
$9,100,000, amounts to $200,200,000. We use the fatalities lost as a reasonable worst case
scenario of the potential consequences at risk from a loss of position and resulting collision
between vessels or platforms. The incident also had environmental damage, property damage
and loss of production impacts.
4
Global Maritime, Chris Jenman. “Dynamic Positioning & Thruster Assisted Mooring”, accessed at:
http://www.lmalloyds.com/CMDownload.aspx?ContentKey=f4599810-6043-4af0-bd66-437564aacad6&ContentItemKey=68a88ec5-64d1-48c9-
8627-060ea6a856de
5
Value of a statistical life is currently measured at $9.1 million. Guidance on Treatment of the Economic Value of a Statistical Life,” prepared for
the U.S. Department of Transportation, April 2013. Available at:
http://www.dot.gov/sites/dot.dev/files/docs/DOT%202013%20Signed%20VSL%20Memo.pdf
6
The vessel was equipped with DP but was not operating under DP at the time of the loss of position.

xxii
Table ES-6 and the incident involving the logistics OSV Samudra Suraksha highlight the
catastrophic potential of DP failures. This NPRM seeks to reduce this risk by diminishing the
likelihood that a DP system incident would occur and mitigating the consequences of any such
occurrence should one occur. The following discussion elaborates upon the functional benefits of
the proposed rule by element.
Through examining publicly available International Marine Contractors Association
(IMCA) reports from 2004-2010, we estimate that 1.45 DP incidents occur per vessel every
year.7
Using this figure, the Coast Guard estimates the number of DP incidents that are expected
to occur given the forecasted population figures. Based on conversations with members of
industry, we then estimate the rate of DP incidents that are expected to occur after publication of
this proposed rule. According to data provided during the industry roundtables, DP incidents can
be reduced by 95 percent after adopting the MTS DP Operations guidance. 8
If we assume that
the vessels were experiencing the industry average number of incidents per year, 1.45, prior to
adopting the MTS guidance, then a 95 percent reduction in DP incidents would equate to vessels
experiencing only 0.0725 DP incidents per year following adoption of the MTS guidance.
We expect that the reduction in the occurrence of DP incidents would result in benefits including
avoided damages of $115,849,378 discounted at 7 percent and $146,288,861 discounted at 3
percent over the 10-year period of our analysis. The annualized benefits are estimated to be
$16,494,345 discounted at a 7 percent rate and $17,149,517 discounted at a 3 percent rate. These
estimates would accrue from a reduction in the frequency of DP incidents, which would reduce
vessel downtime, possible property damage, and the possibility of lost well control. They do not
reflect the potential reduction in the number of injuries or fatalities that would likely occur after
implementation of this proposed rule.
Table ES-7 summarizes the total avoided damages that would accrue to industry after issuing the
proposed rule. It is important to note that, because of phase-in requirements, most of the non-
drilling population would not benefit from the rule until year 10.
7
International Marine Contractors Association. “Dynamic Positioning Station Keeping Incidents.” Documents from 2004-2010.
8
This reduction is based on a decrease in the frequency of DP position-loss incidents, from a frequency of six DP position-loss incidents in 6
months prior to adoption of the MTS DP Operations guidance, to five position-loss incidents in 8 years following the adoption of the guidance.

xxiii
Table ES-7: Total 10-year Avoided Damages from Rule
Time Period
Undiscounted Discounted Annualized
Non-Drilling
Vessels
Drilling
Vessels
Total 7% 3% 7% 3%
Total Damages from DP Incidents
prior to DPS Rule
$105,234,662 $126,218,084 $231,452,746 $157,200,830 $194,581,898 $22,381,862 $22,810,935
Total Damages from DP Incidents
after DPS Rule
$51,101,224 $3,746,191 $54,847,415 $41,351,452 $48,293,037 $5,887,517 $5,661,417
Estimated Reduced Damages Post-
Rule
$54,133,438 $122,471,893 $176,605,331 $115,849,378 $146,288,861 $16,494,345 $17,149,517

xxiv
The total annualized avoided damage to vessels resulting from this rulemaking are expected to be
insufficient (by themselves) to exceed costs at a 7 percent discount rate, as shown in Table ES-8.
Table ES-8: Comparison of Annualized Benefits and Costs to Industry and Government
(7% Discount Rate)
Rule Annualized Cost Annualized Benefits
Annualized Net
Benefits
DPS NPRM $20,597,670 $16,494,345 ($4,219,059)
In order to calculate the number of fatalities that would need to be prevented per year in order for
this rulemaking to be cost neutral, the Coast Guard uses the value of a statistical life (VSL) to
monetize the loss of a life. 9
Using the VSL to monetize the value of fatalities and fatalities
prevented, the proposed rule would need to prevent 0.5 fatalities per year from occurring during
the 10-year period for net benefits to equal the net cost of this rulemaking.
Table ES-9 summarizes this breakeven analysis.
Table ES-9: Expand DP Systems in OCS NPRM, Breakeven
Analysis
(7 percent, Annualized)
Proposed Rule Requirement
Annualized
Net Cost
Fatalities
Prevented to
Breakeven
Total for Proposed Rule Requirements ($4,219,059) 0.46
The consequences of a loss of position while using DP can be high. In order to put this
breakeven analysis in perspective, we consider and compare the impacts of two events to
illustrate potential worst case scenarios that could result from a DP-caused loss of position.
First, as an example of the fatalities that could result from a loss of position and subsequent
collision, we use the Samudra Suraksha incident as a reasonable worst case scenario. In order for
this rulemaking’s benefits to equal its costs, one worst case event on the magnitude of the
Samudra Suraksha, which resulted in 22 fatalities, would need to be prevented approximately
every 48 years to breakeven.10
A loss of position and collision could result in a catastrophic oil spill if a MODU is involved and
9
“Guidance on Treatment of the Economic Value of a Statistical Life,” prepared for the U.S. Department of Transportation, April 2013.
http://www.dot.gov/sites/dot.dev/files/docs/VSL%20Guidance%202013.pdf
10
We acknowledge that the SAMUDRA SURAKSHA incident would not be avoided or its consequences mitigated as a result of this proposed
rule since it involved a foreign flag vessel operating in foreign waters.

xxv
the blowout preventer does not engage or fails (as was the case during the Deepwater Horizon).
The Deepwater Horizon oil spill illustrates the potential environmental damage that could result
from an oil spill from an uncontrolled well. The Deepwater Horizon incident resulted in an
estimated 4.9 million barrels of oil spilled. To date, the responsible party has spent $14 billion
on cleanup costs alone. This estimate of cleanup costs does not include additional restoration
costs under the Natural Resource Damage Assessment process or other liabilities or
settlements.11
Assuming a $14 billion cleanup cost for a reasonable worst case catastrophic oil
spill, the proposed rule would have to prevent one such event every 1,000 years to breakeven.
Alternatives
When developing this proposed alternative, the Coast Guard considered a wide range of vessels
and provisions that could be part of this rule. The Coast Guard considered the following
alternatives:
 Proposed Alternative (NPRM)
 Alternative 2: Grandfathering all existing non-drilling DP vessels
 Alternative 3: No Grandfathering and no phase-in period
 Alternative 4: Proposed Alternative Plus Additional DP manning requirements
for non-drilling vessels with new or upgraded DP systems
 Alternative 5: Alternative 3 Plus Additional DP manning requirements
A comparison of the costs and avoided damages of each alternative is summarized in Table ES-
10.
Table ES-10: Comparison of Costs and Avoided Damages of Alternatives
Proposal
Annualized Cost
(7% Discount
Rate)
Annualized
Benefits
(7% Discount
Rate)
Annualized Net
Cost
(7% Discount
Rate)
Number of Fatalities
Needed to be Prevented
per Year to Breakeven
Proposed Alternative $20,597,670 $16,494,345 ($4,219,059) 1 fatalities per year
Alternative 2 $13,307,230 $13,688,325 ($265,983) 0 fatalities per year
Alternative 3 $25,718,386 $21,699,818 ($4,896,965) 1 fatalities per year
* Net Cost does not include avoided fatalities or other benefits of this rule.
11
“Active Shoreline Cleanup Operations from Deepwater Horizon Accident End”, press release from BP, 15 April 2014, available at:
http://www.bp.com/en/global/corporate/press/press-releases/active-shoreline-cleanup-operations-dwh-accident-end.html

xxvi
Although Table ES-10 shows that Alternative 2, which would grandfather all existing non-
drilling vessels from having to comply with this rule, minimizes net costs, it reduces the risk of a
loss of life and lost down time the least out of all of the alternatives. This is because fewer
vessels would benefit from the proposed requirements, and thus, the probability of a DP failure,
which could result in a fatality, would remain at its current rate for a majority of the population
of non-drilling vessels.
In Table ES-11, we summarize the risk of fatality addressed and the cost to address that risk in
each of the alternatives.
Table ES-11: Comparison of Cost-Effectiveness of Alternatives
Proposal
Total Crew
Subject to
Risk of
Fatality-
Baseline
(A)
Crew with
Risk of
Fatality
Addressed
(B)
Percentage of
Potential
Fatality Risk
Addressed
(B/A)
Annualized Cost
(7% Interest Rate)
(C)
Cost Per Fatality
Risk Addressed
(C/B)
Proposed Alternative 5,119 4,675 91% $20,179,651 $4,316.50
Alternative 2 5,119 2,623 51% $13,072,297 $4,983.72
Alternative 3 5,119 5,119 100% $24,990,468 $4,881.90
Alternative 4 5,119 4,675 91% $137,090,199 $29,324.11
Alternative 5 5,119 5,119 100% $624,381,615 $121,973.36
Table ES-11 shows the cost to reduce the risk of a fatality occurring while a vessel is utilizing
DP is minimized under the proposed alternative.
Because of the frequency of DP related incidents, as well as the severe consequences that could
occur as the result of an incident, the Coast Guard decided that the benefits that would be gained
through requiring compliance from existing non-drilling DP vessels such as OSVs and crewboats
(particularly the life safety considerations) would outweigh any additional costs that would be
incurred by industry.
In order to minimize the impact on existing OSVs and crewboats, the Coast Guard developed the
proposed alternative, which uses a phase-in schedule to provide existing non-drilling vessels
with some flexibility in meeting the provisions of this proposed alternative. Further, the Coast
Guard decided to grandfather existing non-drilling vessels from being required to comply with
the most costly provisions in this rule–the provisions that would require a vessel using DP to use
a DP-2 system or higher and obtain a DP-2 or higher class notation.
Through providing flexibility to existing OSVs and crewboats, the proposed alternative
minimizes costs, without sacrificing benefits that could accrue from a larger population of
vessels.

xxvii
Impact on Small Entities
This RA includes an Initial Regulatory Flexibility Analysis (IRFA) that considers the impacts of
the rulemaking on small entities, including businesses.
Under the Regulatory Flexibility Act (5 U.S.C. 601 – 612), we have considered whether this rule
would have a significant economic impact on a substantial number of small entities. The term
“small entities” comprises of small businesses, not-for-profit organizations that are
independently owned and operated and are not dominant in their fields, and government
jurisdictions with populations of less than 50,000. We did not find any drilling or non-drilling
vessels owned by governments or non-profits.
Through this analysis, we have determined that there are no existing MODUs that are owned or
operated by entities below the small business standards set by the Small Business Administration
(SBA). We further determine that 40 percent of existing OSVs of at least 500 GT ITC, 42
percent of existing OSVs under 500 GT ITC, and 37 percent of existing crewboats are owned or
operated by entities below the SBA small business standards.12
Through our analysis, we estimate that there are 14 owners and operators of existing OSVs of at
least 500 GT ITC that use DPS defined as small by the SBA threshold. The annual revenue
stream of the entities affected by this rule that are defined as small is within a range of $630,000
to $51,834,000.
Similarly, we then examined revenue data for owners and operators of OSVs under 500 GT ITC.
Although these owners would incur some cost as a result of this rule, existing vessels in this
group would be grandfathered from the most costly provisions. During the first year of
implementation, we estimate that all OSVs under 500 GT ITC would incur a cost less than 0.1
percent of their annual revenue stream.
Lastly, we examined the revenue streams of owners and operators of crewboats that use DPS on
the U.S. OCS. Like OSVs under 500 GT ITC, these vessels would be grandfathered from having
to comply with the most costly provisions in this rule. During the first-year of implementation,
we estimate that 33 percent of these 3 owners or operators would incur a cost under 1 percent of
their annual revenue stream. The remaining 67 percent would incur costs under 3 percent of their
annual revenue stream.
Table ES-17 summarizes our findings.
12
We have separated our analysis of OSVs into OSVs of at least 500 GT ITC and OSVs under 500 GT ITC in order to account for the phase-in
schedule which would exempt OSVs of less than 500 GT ITC from many DP requirements.

xxviii
Revenue Impact Range
Impact from First Year Costs
Crewboats
OSVs under 500
GT ITC
OSVs of at least
500 GT ITC
Expected Cost per Vessel $4,381.23 $54.88 $77,778.88
0% < Impact < 1% 33% 100% 7%
1% < Impact < 3% 67% 0% 21%
3% < Impact < 5% 0% 0% 29%
5% < Impact < 10% 0% 0% 7%
Above 10% 0% 0% 36%
Table ES-17: Revenue Impacts for Small Entities Affected by NPRM

xxix
OMB A-4 ACCOUNTING STATEMENT
While this proposed rule is not expected to exceed the threshold for economic significance nor
has it been classified as significant under section 3(f) of Executive Order 12866, Regulatory
Planning and Review, we have prepared a preliminary accounting statement showing the
classification of impacts associated with the rulemaking.

xxx
Agency/Program Office: U.S. Coast Guard
Rule Title: Dynamic Positioning Requirements for MODUs and Other Vessels Conducting
Outer Continental Shelf Activities
RIN#: RIN 1625-XXXX
Date: February 2013
Category Primary Estimate Minimum Estimate High Estimate Source
Benefits
Annualized monetized
benefits ($ Mil)
$16,494,345 7% 7% 7%
RA
$17,149,517 3% 3% 3%
Annualized quantified, but
unmonetized, benefits
None RA
Unquantifiable Benefits
Reduced risk of fatalities and injuries
RA
Reduced risk of subsea spill
Greater transparency on why DP systems fail
Costs*
costs ($ Mil)
$20,597,670 7% 7% 7% RA
$21,035,175 3% 3% 3% RA
Annualized quantified, but
unmonetized, costs
None
Qualitative (un-quantified)
costs
None
Transfers
transfers: “on budget”
None
From whom to whom?
transfers: “off-budget”
None
From whom to whom?
Miscellaneous Analyses/Category
Effects on State, local, and/or
tribal governments
None
Effects on small businesses
We expect the rulemaking to impact small businesses owning OSVs
under 500 GT ITC and crewboats.
RA
Effects on wages Not determined
Effects on growth Not determined
Note : Discount rate appears to the right of the estimates.
* Includes both costs to industry and government

1) Introduction
This Regulatory Analysis (RA) provides an assessment of the impacts to industry from proposed
changes detailed in the Dynamic Positioning Requirements for MODUs and Other Vessels
Conducting Outer Continental Shelf Activities NPRM. We did not attempt to replicate precisely
the regulatory language of the proposed rule in this RA; the regulatory text, not the text of this
RA, would be legally binding.
In the NPRM, the Coast Guard proposes to establish minimum safety standards based upon
International Maritime Organization MSC/Circ.645 and Marine Technology Society (MTS)
guidance for Dynamic Positioning (DP) systems used by vessels to conduct Outer Continental
Shelf (OCS) activities. Establishing minimum standards for DP systems used to conduct OCS
activities is necessary to improve the safety of people and property engaged in such operations.
This proposed rule would decrease the risk of a loss of position by a dynamically positioned
MODU or other vessel that could result in catastrophic loss of life, pollution and/or other
damages. Table 1-1 outlines the requirements proposed in this rulemaking, delineating
applicability by vessel type and whether the vessel is an existing or new build.

Table 1-1: Dynamic Positioning Requirements based on Vessel Type
Requirement
Crewboat
Offshore Supply
Vessel less than 6,000
GT ITC
Offshore Supply Vessel of
at least 6,000 GT ITC
MODU
Existing
New
Build
Existing
New
Build
Existing New Build
Existing and New
Build
33 CFR 140.315 (d): all applicable vessels must make
available a copy of a DPO's or DPOQ's certificate of
completion of DP training courses.
Yes Yes Yes Yes Yes Yes Yes
33 CFR 140.320 (a): all applicable vessels must have a
master and the minimum number of mates while the
vessel is underway.
Yes Yes Yes Yes Yes Yes Yes
46 CFR 62.40-15 and 62.40-20: all applicable vessels
must develop and maintain a FMEA and FMEA test
proving document.
Phased-in Yes Phased-in Yes Phased-in Yes Yes
33 CFR 140.335: all applicable vessels must develop
and maintain CAMO and a WSOC or an ASOC,
respectively.
33 CFR 140.335 (h): all applicable vessels must report
a dynamic positioning incident to the DPSAO that
conducted the vessel’s DP surveys, and conduct a DP
investigation.

33
46 CFR 61.50-4 (b): all applicable vessels must
complete an annual report that contains a summary of
each DP incident investigation that was conducted
during that year and submit the report to the
OCSNCOE.
33 CFR 140.335 (i): all applicable vessels must report
to the cognizant OCMI DP incidents that involve an
emergency disconnect or serious marine incident.
33 CFR 140.335 (k) : all applicable vessels must meet
DP survey and plan review requirements prior to
receiving a DPVAD.
46 CFR 62.40-5 (b): all applicable vessels must have at
a minimum a DP-2 system
No Yes No Yes No Yes Yes
46 CFR 62.40-5 (b): all applicable vessels must obtain
a DP-2 class notation.
No Yes No Yes No Yes Yes
46 CFR 61.50-2: all applicable vessels are required to
report the time, date, and location of initial, periodic,
and annual surveys to the OCMI.
33 CFR 140.345 and 46 CFR 62.20-2: all applicable
vessels are required to submit the DP System Plan to
the MSC.
No No No No No Yes Yes
*Phase-in requirements are applicable if the vessel is of at least 500 GT ITC

For further discussion regarding the development of these changes, see the preamble
“Background and Purpose” section of the NPRM and Request for Comment publication.
As the oil and gas industry move farther and farther offshore and into deeper waters, Mobile
Offshore Drilling Units (MODUs) and other vessels engaged in Outer Continental Shelf (OCS)
operations including Offshore Supply Vessels (OSV’s) face an increasing challenge to maintain
position. In particular, since environmental conditions are more extreme and increased water
depth makes conventional mooring no longer feasible, these vessels increasingly use dynamic
positioning (DP) systems to maintain position when conducting drilling and/or support functions
including personnel transfer, dive support and other critical operations. These systems typically
involve multiple sensors (position-sensing, environmental monitoring, etc.), a computer to
process these data, connections to propulsion and maneuvering control systems, and a user
interface to enable operators to set commands, monitor system performance and potentially step
in when systems are not working properly. Costs for such systems range from $350,000 to
$408,000 per vessel depending on requirements of the vessel and its operation. When properly
designed and operated within design limits, DP systems provide industry with an ability to safely
maintain position, using these rapidly evolving, computerized systems to stay within meters of
their desired location even in the face of wind, wave and current forces. However, these systems
are not immune from failures, and because MODUs and other vessels in this industry perform
high hazard industrial missions including conducting personnel transfers and handling large
quantities of oil and hazardous material, a resultant loss of position could result in an incident
that leads to a catastrophic loss of life or spillage of hazardous substances.
During interactions with industry at National Advisory Committees, DP conferences, and
industry training seminars in DP design and operations, industry expressed the need for a
uniform DP standard from the United States as a Coastal State. Additionally, the Coast Guard
has identified the lack of DP standards as allowing a potentially catastrophic risk to go
unmitigated. In response, the Coast Guard has developed this rulemaking which would provide
MODUs and other vessels that conduct OCS activities while using a DP system on the U.S. OCS
a uniform standard that addresses design, construction, and operation of DP systems. This
standard would aid owners and operators in safely meeting energy market demands and pursuing
offshore energy ventures that are farther offshore and in deeper waters.
To minimize the costs associated with new standards, the Coast Guard has based requirements
on established guidelines widely used by today’s DP industry, specifically IMO MSC Circ. 645
and certain requirements in the Marine Technology Society’s DP Operations Guide. These
standards complement each other, with IMO MSC Circular 645 providing for the adequate
design of such systems and the MTS DP Operations Guide providing standards to ensure that
they are operated properly. The Coast Guard has also limited the application of the DP system
design and operations standards to existing and new MODUs and only other vessels that conduct
OCS activities while using a new or upgraded DP system. Existing non-drilling vessels that
conduct OCS activities while using a DP system are “grandfathered” from being required to
comply with the most costly design requirements, and are provided a phase-in period to comply
with the operational DP requirements. This phase-in period was designed to provide industry
with some flexibility in enacting these requirements, while still providing for vessel and
personnel safety. The smallest non-drilling vessels, those less than 500 tons, are exempt from

35
both the design and operational requirements and will incur minimal costs for reporting and
documentation.
Design Standards and Classification
The IMO currently divides DP equipment systems into three classifications: equipment class 1
(DP-1), equipment class 2 (DP-2), and equipment class 3 (DP-3). These classes primarily diverge
in their level of reliability, with DP-1 classed systems offering the least reliability, and DP-2 and
DP-3 classed systems offering increasing amounts of reliability. This reliability is achieved
through redundancy of critical components such as computer systems, wind sensors, vertical
reference units, gyrocompasses, bus bars, generators, and thrusters used to maintain positioning
of the vessel.
Under a DP-1 system, the failure of a single component would likely result in a DP system
incident, which could lead to a loss of position and consequences that could include catastrophic
loss of life, pollution, and/or property damage. Conversely, a DP-2 system is designed to reduce
the threat of a loss of position in the event of a single “active component” equipment failure (e.g.
position reference systems, generators, electrical distribution components, control computers, or
thrusters) because of the increased reliability achieved by the “active component” equipment
redundancy. This increased reliability is further ensured through failure analysis and testing.
DP-3 systems, which achieve physical independence by segregating system components into
separate locations with fire and watertight boundaries, are designed to further reduce the threat of
a loss of position occurring if a fire or flooding was to remove an entire compartment, such as
the vessel’s engine room. While this rule imposes no carriage requirements, nor does it require
use of DP, it does require that DP used in certain critical situations (e.g., transfer of personnel
and/or hazardous materials) meet DP-2 requirements to ensure that a single failure of a primary
component does not lead to catastrophic consequences.
The IMO MSC/Circ. 645 better enables a MODU or other vessel to perform its industrial
mission because the DP system is more fault-tolerant and fault-resistant, and has greater
capability to maintain position after a worst-case failure. A fault tolerant system is designed to
continue to function without interruption following an error or failure of a subsystem or
component within the system, and is achieved through multiple design approaches based on the
level of performance required for the industrial mission of the vessel. The design limits of such
systems reduce the risk of a loss of position by reducing reliance upon the human element.
Operations
The Marine Technology Society’s DP Operations Guide complements the design standards and
classification by focusing on the safe operation of these systems, provides guidance on how to
successfully develop and implement operational measures and decision support tools.
Specifically, the rule incorporates MTS requirements for Activity Specific Operating
Criteria/Well Specific Operating Criteria (ASOC/WSOC) and Critical Activity Mode of
Operations (CAMO) to operate a DP system within its design limits. The WSOC/ASOC are
visual decision support tools that provide DPOs/DPOQs an easy to use tool to summarize limits
to safe operating conditions and indicate when DP operators must take corrective action, such as

36
disconnecting a well pipe because of the potential or actual loss of position. The goal of this tool
is to prevent a loss of position and potential costly consequences by making it easier to DP
operators to respond correctly in the event of an emergency.
Manning and Training
To ensure that operators and crews of MODUs and other vessels that use dynamic positioning to
maintain position while operating on the U.S. OCS are properly manned, have an in-depth
knowledge of the DP system, are able to constantly and consistently monitor it, and take manual
control of the system when appropriate, the proposed rule contains minimum manning and
training requirements. These training requirements mandate that an operator have a thorough
knowledge of the CAMO and either the ASOC, or WSOC, and must be familiar with the vessel’s
FMEA. These provisions would reduce the likelihood that vessel and personnel casualties occur
because of operator fatigue or inexperience using the system.
Reporting
The proposed rule contains requirements that owners/operators report DP system incidents
involving a reactive change from “green” to “red” as defined by the ASOC or WSOC and an
annual summary report of “green” to “yellow” and “green” to “red” changes. Reporting DP
incidents (green to red) and near misses (green to yellow) will assist Coast Guard in
understanding the frequency, causes and potential consequences of DP incidents in order to
better ensure safety for this evolving technology.
In general, this NPRM would:
 Increase vessel safety and protection of persons and the maritime environment
through the use of design and operational standards that prevent a loss of position
by a MODU or other vessel conducting Critical OCS activities while using a DP
system.
 Ensure compliance with regulations through mandatory surveys that would test the
DP systems and FMEAs of MODUs and other vessels.
 Increase accountability by requiring MODU and other vessel owners and operators
to document system designs and operating procedures.
 Increase understanding of why DP systems fail by requiring MODU and other
vessel owners and operators to describe when and why a DP incident occurred.
1.1 Need for Federal Regulatory Action
Agencies take regulatory action for various reasons, one of which is the failure of markets to
reach socially optimal outcomes. The market failures prompting this proposed rule result from
the absence of economic incentives that promote an optimal outcome.
The absence of economic incentives that promote an optimal outcome results in a negative
externality. A negative externality is an adverse by-product of a transaction not accounted for
within the transaction. In this case, MODUs and other vessels that use DP to engage in OCS

37
activities that operate with lower safety standards may cause harm or increased risk of harm to
human safety and the environment. The cost of these lower safety standards (increased risk) is
not completely borne by the OSV or MODU owners, so they are external to the business
decisions of these owners. The crew, which may face increased risk from lower safety standards,
may not have any say in safety-related decisions. Since the crew may be adversely affected by
business decisions which it may not be able to mitigate through increasing its price (labor cost),
it absorbs the cost of the externality (increased risk from lower safety standards) which is a
market failure. Oil spills that result from OSV or MODU accidents also impose an externality in
the form of environmental damage and clean-up costs that are similarly not borne directly by the
OSV and MODU owners.
1.2 Regulatory Alternatives
The Coast Guard considered the following alternatives:
 Proposed Alternative (NPRM)
 Alternative 2: Grandfathering all existing non-drilling DP vessels
 Alternative 3: No grandfathering and no phase-in period
 Alternative 4: Proposed Alternative plus Additional DP manning requirements
for non-drilling vessels with new or upgraded DP systems
 Alternative 5: Alternative 3 plus Additional DP manning requirements
When comparing alternatives, the Coast Guard looked at the results of a cost-benefit and cost-
effectiveness analysis for several different levels of vessel population compliance. In selecting
the proposed alternative, we chose the alternative that provided industry with the most flexibility
without limiting the effectiveness of the proposed rule. The proposed alternative would provide
risk reduction at the lowest net cost.
1.3 Assumptions: Wages
To account for the opportunity cost to industry of complying with new Coast Guard requirements
concerning DP systems, the Coast Guard uses an average wage rate estimated by a Coast Guard
subject matter expert from the Eighth District or data presented by The Bureau of Labor
Statistics (BLS).
According to an Officer-in-Charge, Marine Inspector (OCMI) of the Eighth District, a captain,
master, or owner/operator of a DP operated vessel has an average daily wage of $850. It is
expected that a captain, master, or owner/operator would work 8 hours per day. The Coast Guard
calculated that the loaded hourly wage of a captain, master, or owner/operator is $143. 13
In addition, a mate or navigational watch on a DP operated vessel has an average daily wage of
$500, according to an OCMI of the Eighth District. It is expected that a mate would also work 8
13
The median income listed by BLS for a captain or master is $39 unloaded. Based on input from District personnel, a captain or master of a
vessel with DP would require a higher level of expertise and experience than other vessels and would be paid a higher wage.

38
hours per day. Using a load factor of 1.42, the Coast Guard calculated that the loaded hourly
wage of a navigational watch is $89. 14
In order to calculate the loaded hourly wage for technical ship engineers, the Coast Guard uses
the BLS’ 2012 median hourly wage for “Ship Engineers”. The Coast Guard then applied a load
factor of 1.42 to the median hourly wage to calculate a loaded hourly wage of $57 for ship
engineers.
Furthermore, we use the BLS’ mean hourly wage for “Transportation Inspectors” to calculate the
hourly loaded wage of a DP surveyor from an organization highly qualified in DP assurance.
Using the same approach, the Coast Guard calculates a loaded hourly wage of $41 for a DP
surveyor.
The Coast Guard has also included the loaded wage rate used by government employees who
would be affected by this rulemaking.15
Table 1-2 summarizes the wage rates used throughout the regulatory analysis.
Table 1-2: Summary of Wage Rates Used in the Analysis
Personnel Category Loaded Wages Source
Captains/Master/Owners $143.00 Coast Guard subject matter expert from Eighth District
Mate/Navigational Watch $89.00 Coast Guard subject matter expert from Eighth District
Ship Engineers $57.00
BLS, Occupational Employment and Wages, May 2013, 53-5031
Ship Engineers, accessed at
http://www.bls.gov/oes/2013/May/oes535031.htm
DPSAO Surveyor $41.00
BLS, Occupational Employment and Wages, May 2013, 53-6051
Transportation Inspectors, accessed at
http://www.bls.gov/oes/2013/May/oes536051.htm
OCMI $75.00 Commandant Instruction 7310.1O (O-3 in Government Rate)
* Loaded wages are rounded to the nearest dollar.
14
BLS, Employer Costs for Employee Compensation, 2nd
Quarter 2014, Private Industry, Wages/Salaries: $20.55 per hour, Cost of Benefits:
$8.68 per hour, Ratio: $8.68/$20.55=.42, Load Factor: 1.42. http://www.bls.gov/news.release/pdf/ecec.pdf
15
DHS, Coast Guard Reimbursable Standard Rates, COMDTINST 7310.1O http://www.uscg.mil/directives/ci/7000-7999/CI_7310_1N.pdf

39
1.4 Assumptions: Value of Life and Injuries
To monetize the value of fatalities and fatalities prevented, we use the concept of “value of
statistical life” (VSL), which is commonly used in safety analyses. The VSL does not represent
the dollar value of a person’s life, but the amount society would be willing to pay to reduce the
probability of death. We currently use a value of $9.1 million as an estimate of VSL.16
1.5 Overview of Regulatory Analysis and Requirements
This RA presents the initial examination of costs, benefits, and other impacts of this proposed
rule. It also contains an analysis of the potential impacts on small businesses. Section 2 of this
RA describes the derivation of the affected population. Section 3 summarizes the cost estimates
to industry. Section 4 discusses benefits of the NPRM. Section 5 analyzes regulatory alternatives.
Section 6 presents the Small Business Analysis, and Section 7 presents the Collection of
Information.
16
“Guidance on Treatment of the Economic Value of a Statistical Life,” prepared for the U.S. Department of Transportation, April 2013.
http://www.dot.gov/sites/dot.dev/files/docs/VSL%20Guidance%202013.pdf

40
2) Affected Population
When developing this rulemaking, the Coast Guard pursued the most cost-effective alternative,
in order to adequately provide for vessel and personnel safety. Further, this alternative
considered a vessel’s risk profile and current levels of compliance with standard industry
practices among existing vessels when determining which vessels should comply with each
provision and the time in which they should comply, with lower risk vessels exempted from
requirements and/or given extended time to comply as compared to higher risk vessels.
Vessels affected by this rule can be considered in one of two categories; drilling and non-drilling
vessels. For the former, the impacted vessels (typically referred to as mobile offshore-drilling
units, or MODUs) present high risk given not only the potentially catastrophic consequences of a
DP failure, but also because MODUs operate in DP mode for longer periods of time.
Furthermore, it was determined through examining each affected MODU’s vessel specification
sheet, as well as through conversations with members from industry, that all existing MODUs
are already operating with a DP-2 system or higher, and that approximately 90 percent of
existing MODUs would be compliant with all of the provisions in this rule even in the absence of
a rule. Given this, the Coast Guard is proposing that all existing MODUs must comply with this
rule in its entirety immediately upon issuance of a final rule, with the 10 percent that are not
compliant incurring additional costs.
However, through similar research and conversations with members of industry, it was
determined that a significant portion of the existing population of non-drilling vessels that use
DP systems on the U.S. OCS would not be in compliance with any rulemaking that required all
vessels that have a DP system to be equipped with a DP-2 system or higher. Of existing non-
drilling vessels that use a DP system on the U.S. OCS, only 60 percent of existing OSVs and 70
percent of existing crewboats would be in compliance with this equipment requirement.
Therefore, in order to minimize this rules burden on industry, the Coast Guard decided to exempt
existing non-drilling vessels from this requirement. Instead, the Coast Guard would only require
existing non-drilling vessels to comply—immediately upon issuance of a final rule–with the
training and manning requirements. Additionally, the Coast Guard would require non-drilling
vessels of at least 500 GT ITC to meet DP operational design requirements according to a phase
in-period detailed in Table 2-1.

41
Table 2-1: Phase in Schedule for Operational Requirements for Vessels
(except MODUs) with existing DP systems17
Tonnage of Non-Drilling Vessel
Date Requirements
Effective
At least 1,900 GT ITC Date of FR + 3 years
At least 900 GT ITC Date of FR + 6 years
Greater than 500 GT ITC Date of FR + 9 years
This phase-in schedule was chosen for existing non-drilling vessels of at least 500 GTC ITC,
because the Coast Guard believes that a vessel’s size is a major determinant of the vessel’s risk
profile – a loss of position could result in more significant consequences for larger vessels, on
average, than smaller vessels. Therefore, larger non-drilling vessels would be required to comply
with the DP operational requirements at an earlier date than smaller non-drilling vessels. The
smallest category of non-drilling vessels (less than 500 GTC ITC) are exempt from the
operational requirements.
Table 2-2 summarizes the population of drilling and non-drilling vessels that would be affected
by this rulemaking.
17
All existing MODUs would need to comply with the requirements in this proposed rule by the effective date of
the final rule.

Table 2-2: Summary of Affected Population
Year
Future
OSVs
Less
Than
6,000 GT
ITC
Existing
OSVs
Less
Than
6,000 GT
ITC18
Phased-in
OSVs Less
Than 6,000 GT
ITC19
Future
OSVs of
at least
6,000 GT
ITC20
Existing
OSVs of
at least
6,000
GT ITC
Phased-in
OSVs of at
least 6,000 GT
ITC
Future
MODUs
Existing
MODUs
Future
Crewboats
Existing
Crewboats
Base - 563 - - 20 - - 53 - 43
1 22 - 0 5 - 0 6 - 3 -
2 46 - 0 10 - 0 14 - 6 -
3 54 - 0 15 - 0 20 - 10 -
4 77 - 224 20 - 20 27 - 12 -
5 102 - 0 25 - 0 33 - 14 -
6 128 - 0 30 - 0 38 - 15 -
7 159 - 183 35 - 0 43 - 16 -
8 195 - 0 40 - 0 48 - 17 -
9 233 - 0 45 - 0 53 - 18 -
10 272 - 85 50 - 0 57 - 20 -
18
The existing population of OSVs under 6,000 GT ITC includes 492 vessels of at least 500 GT ITC but less than 6,000 GT ITC that use DP systems, and 71 vessels under 500 GT ITC.
19
Through interviews with private owners and operators of OSVs, the Coast Guard determined that 50 percent of the existing fleet of OSVs of at least 500 GT ITC but under 6,000 GT ITC that use DP
systems would not be compliant with the phase-in requirements.
20
We forecast that 4 U.S.-flagged OSVs of at least 6,000 GT ITC and 1 foreign-flagged OSV of at least 6,000 GT ITC would be built per year.

This rulemaking would affect approximately 583 existing OSVs (460 U.S.-flagged), 53 existing
MODUs (2 U.S.-flagged), and 43 existing crewboats (42 U.S.-flagged). The number of existing
OSVs, MODUs, and crewboats that would be affected by this rulemaking was derived from the
Coast Guard’s Marine Information Safety and Law Enforcement System (MISLE) database.
Using historical population data, we then forecasted the population growth that would occur
during the following 10 years after issuance of a final rule. We estimate that during the 10-year
period of our study, an additional 322 future OSVs (which include OSVs less than 6,000 GT ITC
and OSVs of at least 6,000 GT ITC), 57 future MODUs, and 20 future crewboats would be built.
This future population of OSVs, MODUs, and crewboats was forecasted using a regression
model based on vessel growth occurring from 1975 through 2014.21
Table 2-3 provides a summary of the annual number of vessels, broken down my subtype,
affected by the provisions in this rule.
21
See Appendix A for vessel population growth models.

Table 2-3 Summary of Affected Population by Requirement
Provision Vessel Type
Year
1 2 3 4 5 6 7 8 9 10
Minimum DP System Requirements
Section 3.2 - 33 CFR 140.320 (d) (DP Training Requirements) 22
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 610 639 652 680 710 741 777 818 861 905
Crewboats 46 49 53 55 57 58 59 60 61 63
Section 3.3 - 33 CFR 140.325 (DP Manning Requirements) 23
MODUs 6 6 6 6 6 6 6 6 6 6
OSVs 0 0 0 0 0 0 0 0 0 0
Crewboats 0 0 0 0 0 0 0 0 0 0
Intermediate DP System Requirements
Section 3.4 - 33 CFR 140.335 (b) (2) (Develop a FMEA) 24
MODUs 0 0 0 0 0 0 0 0 0 0
OSVs 12 13 5 124 13 13 108 18 20 64
Crewboats 2 2 2 1 1 1 1 1 1 2
Section 3.5 - 33 CFR 140.335 (b) (4) (Develop a CAMO and ASOC/WSOC) 25
MODUs 18 2 2 2 2 2 2 2 2 1
OSVs 15 16 8 137 16 16 111 21 23 67
22
The affected population for this requirement would be required to make available 8 DPO/DPOQ training certificate prior to conducting OCS activities, and then 3.112 DPO’s/DPOQ’s training
certificates in subsequent years. It is estimated that 3.112 training certificates would need to be made available in later years in order to account for personnel turnover, which the Coast Guard assumes
would be at a rate of 38.9%. This turnover rate was calculated in the BLS’s Job Openings and Labor Turnover Survey for 2012: http://www.bls.gov/jlt/.
23
After examining applicable vessel’s Minimum Safe Manning Certificate, the Coast Guard has determined that only 6 Liberian flagged MODUs would not comply with the provisions described in
Section 3.3 of this analysis. After reviewing proposals for the construction of new MODUs, the Coast Guard has determined that all new MODUs would comply with the Manning requirements.
24
Through interviews with private MODU owners, it was determined that all existing and future MODUs would comply with these requirements. However, through interviews with OSV and crewboat
owners, it was estimated that 50 percent of future OSVs, excluding OSVs of at least 6,000 GT ITC who are expected to comply, and crewboats would not have developed a FMEA or FMEA test proving
document in the absence of this rule.
25
Through interviews with private MODU owners, it was determined that all existing and future MODUs would have developed a WSOC in the absence of this rule, while only 70 percent of existing
and future MODUs would have developed a CAMO. Through interviews with OSV and crewboat owners, it was estimated that 50 percent of future OSVs, including OSVs of at least 6,000 GT ITC who
are expected to comply, and future crewboats would not have developed a CAMO or ASOC in the absence of this rule.

45
Crewboats 2 2 2 1 1 1 1 1 1 2
Section 3.6 - 33 CFR 140.335 (h) (Report DP Incidents) 26
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 27 56 69 341 371 402 621 662 705 834
Crewboats 3 6 10 12 14 15 16 17 18 21
Section 3.6 - 33 CFR 140.335 (h) (Conduct DP Investigations)
MODUs 0 0 0 0 0 0 0 0 0 0
OSVs 15 29 36 172 187 202 312 332 355 418
Crewboats 3 6 10 12 14 15 16 17 18 21
Section 3.6 - 33 CFR 140.335 (h) (Submit DP Investigation Reports)
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 27 56 69 341 371 402 621 662 705 834
Crewboats 3 6 10 12 14 15 16 17 18 21
Section 3.7 - 46 CFR 61.50-4 (b) (Submit Annual DP Investigation Reports)
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 27 56 69 341 371 402 621 662 705 834
Crewboats 3 6 10 12 14 15 16 17 18 21
Section 3.8 - 33 CFR 140.335 (j) (Report Emergency Disconnects) 27
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 0 0 0 0 0 0 0 0 0 0
Crewboats 0 0 0 0 0 0 0 0 0 0
Section 3.8 - 33 CFR 140.335 (j) (Report Serious Marine Incidents) 28
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 27 56 69 341 371 402 621 662 705 834
Crewboats 3 6 10 12 14 15 16 17 18 21
26
Using IMCA data on reported DP incidents, the Coast Guard estimates that a vessel would experience 2.90 DP status changes from green to red or yellow per year.
27
Using IMCA data, the Coast Guard estimates that a MODU using DP would need to initiate an emergency disconnect 19 percent of the time it experienced a DP status change from green to red (at a
rate of 1.45 times a year).
28
Using IMCA data, the Coast Guard estimates that a vessel using DP would have a serious marine incident 5 percent of the time it experienced a DP status change from green to red (at a rate of 1.45
times a year).

46
Section 3.9 - 33 CFR 140.335 (k) (Receive a DPVAD) 29
MODUs 59 8 6 7 6 64 13 11 12 10
OSVs 27 29 13 272 30 58 248 54 315 159
Crewboats 3 3 4 2 2 4 4 5 3 5
Section 3.18 - 33 CFR 140.335 (k) (Report DP Surveys)
MODUs 59 67 73 80 86 91 96 101 106 110
OSVs 27 56 69 341 371 402 621 662 705 834
Crewboats 3 6 10 12 14 15 16 17 18 21
Standard DP System Requirements
Section 3.10 - 46 CFR 62.40-5 (b) (Install a DP-2 System) 30
MODUs 0 0 0 0 0 0 0 0 0 0
OSVs 0 0 0 0 0 0 0 0 0 0
Crewboats 1 1 1 0 0 0 0 0 0 0
Section 3.11 - 46 CFR 62.40-5 (b) (Receive DP-2 Class Notation) 31
MODUs 0 0 0 0 0 0 0 0 0 0
OSVs 12 13 5 12 13 13 16 18 20 21
Crewboats 3 3 4 2 2 1 1 1 1 2
Enhanced DP System Requirements
Section 3.19 - 46 CFR 62.20-2 (b) (Submit DP System Plans)
MODUs 59 8 6 7 6 5 5 5 5 4
OSVs 5 5 5 5 5 5 5 5 5 5
Crewboats 0 0 0 0 0 0 0 0 0 0
29
A DPVAD would need required to be renewed every 5 years.
30
Through interviews with private MODU and OSVs owners, it was determined that all future MODUs and OSVs would be built with a DP- 2 system. However, all crewboats are not expected to be
under compliance with this requirement. The Coast Guard estimates that 1 crewboat would install a DP-2 system in order to comply with this rule during the first three years following issuance of a final
rule. In later years, all new crewboats are already expected to be built with a DP-2 system even in the absence of this rule.
31
Through interviews with private MODU owners, it was determined that all existing and future MODUs would comply with these requirements. However, through interviews with OSV and crewboat
owners, it was estimated that 50 percent of future OSVs, excluding OSVs of at least 6,000 GT ITC who are expected to comply, and all future crewboats would not have obtained a DP-2 class notation
in the absence of this rule.

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