June 6, 2013

Endangered Fish and Wildlife; Proposed Rule to Eliminate the Expiration Date Contained in the Final Rule to Reduce the Threat of Ship Collisions with North Atlantic Right Whales

  • Todd Nesbit

    Assistant Professor of Economics, Ball State University
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The proposed rule aims to “eliminate the expiration date (or ‘sunset clause’) contained in regulations requiring vessel speed restrictions to reduce the likelihood of lethal vessel collisions with North Atlantic right whales.” 1 The existing regulation (73 FR 60173; October 10, 2008) is due to expire on December 9, 2013 and restricts travel speeds of large vessels to not more than 10 knots when travelling in certain locations and at specific times of the year along the US Atlantic East Coast Seaboard. Large vessels are defined in the existing rule as 65 feet or greater in length. All provisions of the original 2008 rule other than the expiration date are proposed to remain in place.

The goal of the original rule and the current proposal to remove the expiration date is to reduce the likelihood of serious injury and death of right whales struck by vessels. Evidence is cited indicating “that the probability of death or a serious injury of a struck whale is rapidly diminished when vessel speeds are below 12 knots.” 2 Unfortunately, as my comment argues, the sponsoring agencies have failed to account for all the costs of maintaining the regulation and to adequately assess the benefits of the regulation despite having the historical data available for such an analysis. Furthermore, the analysis presented fails to abide by two primary guidelines set forth by Executive Order 12866. 

First, the economic analysis understates the true costs associated with the proposed rule. While the analysis presented in the December 2012 Final Report appears to present a fair account of the direct and indirect costs to the impacted industries to arrive at the total cost estimate of $44.7 million (represented in 2009 dollars),3 the analysis ignores entirely the management and enforcement costs to the agencies. Given the complexities involved in determining the location and size of the Seasonal Management Areas (SMAs) and Dynamic Management Areas (DMAs) and the difficulties involved with enforcement in light of the abuse of the exceptions clause and the lack of adherence by foreign vessels, these costs are likely substantial. 

Second, the discussion of the benefits of the speed restrictions for vessels traveling in SMAs and DMAs is contradictory to a degree. First, the analysis correctly argues that the benefits are difficult to quantify monetarily and that “the sampling period was too short to make a meaningful determination about the rule’s impact on the right whale population.” 4 However, the agency appears to argue for the elimination of the sunset clause based on the same existing analyses that were just said to be insufficient for definitive conclusions. In addition, the discussion lacks specificity regarding the estimated number of right whales saved due to the regulation. 

Lastly, the analysis provided fails to adhere to the requirements of a Regulatory Impact Analysis as outlined by Executive Order 12866. First, without any benefits estimation, neither a benefit-cost analysis nor a cost-effectiveness analysis is possible. Second, the analysis considers no alternatives to the proposed rule beyond asking for comment as to whether the final rule should simply include an extension of the sunset provision or eliminate the provision entirely. 

It is possible that the elimination of the sunset clause in the 2008 Right Whale Ship Strike Reduction Rule is in the best interest of society in regards to both protecting the endangered North Atlantic right whale population and doing so at the lowest cost. However, the analysis provided does not give Congress and the public enough information to make such a determination. The Department of Commerce and the NOAA should improve the regulatory impact analysis to more accurately estimate all of the costs involved, to provide a more meaningful estimate of the benefits of the regulation, and to compare the net benefits of the proposed rule with those of other reasonable alternative solutions to the threat of lethal ship strikes with right whales.

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