Deepwater Ports Act — Offshore Oil & LNG Terminal Licensing

Most of America's oil and natural gas arrives by ship — but supertankers and LNG carriers are too large to enter many conventional ports. For the liability framework governing oil spills from these offshore facilities, see Oil Pollution Act. The Deepwater Ports Act of 1974 (33 U.S.C. §§ 1501–1524) created a federal licensing system for offshore terminals — facilities moored or fixed beyond the U.S. territorial sea (or within state waters with state consent) that allow large vessels to transfer oil, liquefied natural gas, or other products to pipelines running to shore. These offshore platforms serve as a bridge between open-ocean shipping and the onshore pipeline grid, enabling transfer of cargo too large for conventional port infrastructure.

The most prominent deepwater port in the United States is the Louisiana Offshore Oil Port (LOOP) — located 18 miles offshore in the Gulf of Mexico, LOOP is the only offshore oil deepwater port in the United States capable of fully offloading Very Large Crude Carriers (VLCCs), and has historically handled a significant fraction of U.S. crude oil imports. On the natural gas side, several offshore LNG import terminals were licensed under the Deepwater Ports Act during the early 2000s in anticipation of natural gas import needs — a market that dramatically reversed as U.S. shale gas production made the U.S. a major exporter. The regulatory framework now applies equally to offshore LNG export facilities, representing the next generation of deepwater port development.

Current Law (2026)

Legal Authority

• 33 U.S.C. § 1501 — Congressional declaration of policy: the United States needs deepwater ports to handle large tankers and facilitate oil and natural gas trade; such ports must be licensed to ensure safety, environmental protection, and national security
• 33 U.S.C. § 1503 — License requirement: no person may construct, own, or operate a deepwater port without a license from the Secretary of Transportation; the license may be transferred only with prior approval
• 33 U.S.C. § 1504 — Application and review: license applications go to the Secretary; the Coast Guard serves as lead federal agency for environmental impact statements; adjacent state governors have a 45-day period to approve or disapprove
• 33 U.S.C. § 1505 — Adjacent state approval: if the governor of an adjacent coastal state finds the deepwater port is inconsistent with state law or has significant adverse effect on the state, the Secretary may not issue a license; this gives states a veto right
• 33 U.S.C. § 1507 — Regulations: the Secretary of Transportation shall prescribe regulations for the design, construction, and operation of deepwater ports, including safety standards, environmental protections, and navigational safety requirements
• 33 U.S.C. § 1508 — Environmental protection: the Secretary shall require the licensee to take measures to prevent or minimize harm to the marine environment and shall impose liability for any pollution damage
• 33 U.S.C. § 1509 — Citizen suits: any person may commence a civil action to enforce the Act against any person (including the U.S.) alleged to be in violation; allows private enforcement as well as injunctive relief
• 33 U.S.C. § 1517 — Criminal penalties: knowing violations of the Act or applicable regulations carry fines up to $25,000 per day and imprisonment up to 5 years
• 33 U.S.C. § 1520 — Relationship to other law: the Deepwater Ports Act does not limit authority under the Outer Continental Shelf Lands Act, the Clean Water Act, or other federal environmental laws; the stricter standard applies

How a Deepwater Port License Works

What Qualifies as a Deepwater Port

A "deepwater port" under the Act is any fixed or floating facility other than a vessel that is used or intended to be used as a port or terminal for the transportation, storage, or further handling of oil or natural gas for transportation to or from any state. Qualifying facilities include:

• Single-point mooring buoys (SPMs): Buoys anchored to the seabed where tankers moor and transfer cargo to a submarine pipeline
• Sea Island terminals: Fixed platforms with mooring arms
• Floating Storage and Regasification Units (FSRUs): Vessels converted to serve as floating LNG import terminals
• Gravity-based offshore platforms: Fixed structures for crude transfer
• Offshore LNG export terminals: Offshore structures for loading LNG onto export vessels (emerging category)

Licensing Process

1. Application to MARAD: The applicant submits a detailed application covering design, construction plans, environmental protection measures, financial capability, safety systems, and emergency response plans.
2. NEPA Environmental Review: The Coast Guard serves as lead agency for the environmental impact statement. The review examines impacts on the marine environment, fisheries, navigation, coastal communities, and air quality.
3. Adjacent State Review: The governors of states adjacent to the proposed port have 45 days to approve or disapprove. A disapproval by the adjacent state governor generally blocks the license — this is a meaningful state veto right that reflects the significant impact deepwater ports can have on coastal state interests.
4. Interagency Review: EPA, BSEE (Bureau of Safety and Environmental Enforcement), FERC (for natural gas facilities), and other agencies review the application.
5. Public Hearings: Required in adjacent states and any other states with significant interest.
6. License Conditions: MARAD may impose conditions addressing safety, environmental protection, navigation, and financial responsibility. For LNG facilities, DOE authorization for the export of natural gas is separately required.

License Holder Obligations

• Maintain liability insurance or financial assurance for potential oil spill or other damages
• Operate according to the safety and environmental regulations in 33 C.F.R. Part 150
• Allow Coast Guard inspections and audits
• Report incidents, spills, and safety events
• Comply with all applicable environmental laws (Clean Water Act, OPA 1990, MARPOL)
• Pay compensation into the federal Oil Spill Liability Trust Fund for oil transfers

Implementing Regulations

The USCG and MARAD regulations implementing the Deepwater Port Act live primarily at 33 CFR Parts 148–150 — covering the general licensing framework (Part 148), design and construction standards (Part 149), and operations requirements (Part 150). Key provisions of 33 CFR Part 148 — Deepwater Ports: General (75 sections):

• § 148.1 — Purpose and scope: this subchapter prescribes regulations for the licensing, construction, design, equipment, and operation of deepwater ports under the Deepwater Port Act; the Commandant of the Coast Guard (CG-5P) and MARAD jointly administer the licensing process
• § 148.2 — Owner responsibility: the owner of a deepwater port is responsible for ensuring compliance with all requirements of the subchapter; responsibility cannot be contractually transferred to an operator or lessee
• § 148.100–148.110 — Application requirements: applicants must submit detailed documentation covering: (1) ownership and financial structure of the applicant and all affiliates; (2) design specifications and engineering plans; (3) environmental protection measures; (4) safety systems and emergency response plans; (5) financial capability to construct, operate, and decommission the port; (6) insurance or financial assurance arrangements for oil spill liability; and (7) a marine traffic analysis covering navigational impacts in the port's operating area
• § 148.125 — Application fee: a nonrefundable fee of $350,000 must accompany each application for a deepwater port license; additional fees may be assessed if the application requires NOAA to prepare supplemental environmental analyses
• §§ 148.200–148.207 — Application processing: the Commandant maintains a public docket for each application (§148.205); all docketed documents are available for public inspection; MARAD coordinates interagency review and schedules public hearings in adjacent states
• §§ 148.300–148.400 — Adjacent state review: the governors of adjacent coastal states receive formal notice of each application; the 45-day adjacent-state approval window begins upon formal notification; governors may disapprove if the port is inconsistent with state law or will have a significant adverse effect — a disapproval by an adjacent state governor is a near-absolute bar to license issuance except in cases of overriding national interest

The Part 148 framework establishes the front-end of deepwater port licensing — the application, review, and state-consultation stages. Part 149 (Design and Construction) specifies structural and safety standards for the physical port structure. Part 150 (Operations) sets ongoing operational requirements including incident reporting, spill response plans, and Coast Guard inspection access — the obligations that apply throughout the port's operating life. Together the three Parts constitute the complete regulatory lifecycle for a deepwater port from license application through decommissioning.

LOOP — The Prototype Deepwater Port

The Louisiana Offshore Oil Port (LOOP) opened in 1981 as the first and only offshore crude oil deepwater port in the United States. Located approximately 18 miles south of Port Fourchon, Louisiana, LOOP is owned by a consortium of major oil companies and can:

• Receive Very Large Crude Carriers (VLCCs) carrying up to 2 million barrels of crude oil — too large for any U.S. onshore port
• Transfer crude at rates up to 1.5 million barrels per day
• Store crude in underground salt caverns onshore through pipelines
• Distribute to refineries throughout the Gulf Coast

LOOP was critical infrastructure during periods of high U.S. crude imports. As U.S. domestic crude production surged from the shale revolution, LOOP's import volumes declined, but it adapted — LOOP received regulatory approval to export crude oil in 2015 (after Congress lifted the 40-year crude export ban) and by the early 2020s was handling significant crude export volumes as well.

LNG Deepwater Ports — From Import to Export

The Import Wave (2000s)

When natural gas prices were high and imports seemed necessary, developers licensed several offshore LNG import terminals as deepwater ports:

• Gulf Gateway Energy Bridge (Excelerate Energy): an offshore Louisiana LNG import terminal using specialized regasification vessels; ceased operation around 2013 as U.S. shale gas displaced imports
• Neptune LNG (Massachusetts): licensed but ultimately not built as import economics shifted
• Northeast Gateway (offshore Massachusetts): operated briefly for LNG imports

The Export Shift

The shale gas revolution inverted the market. The U.S. became a net natural gas exporter, and attention shifted to LNG export facilities. Most major U.S. LNG export terminals (Sabine Pass, Corpus Christi, Cameron, Freeport, Elba Island, Cove Point) are onshore facilities regulated primarily by FERC under the Natural Gas Act. But offshore LNG export deepwater ports have attracted significant interest, including:

• Texas LNG Offshore and similar proposals: offshore Gulf of Mexico LNG export platforms
• New Fortress Energy offshore LNG proposals: utilizing FSRU technology for offshore LNG export

Offshore LNG export deepwater ports require both a Deepwater Ports Act license (MARAD) and DOE authorization to export natural gas to non-FTA countries (a public interest review).

How It Affects You

If you work in oil and gas shipping, maritime transportation, or energy logistics: The Deepwater Ports Act governs the offshore infrastructure that connects supertanker trade to the U.S. pipeline grid. LOOP's ability to receive VLCCs — the largest crude carriers — is what makes Gulf Coast refinery access to waterborne crude viable at scale. Understanding Deepwater Port Act licensing matters if your company is considering offshore terminal development (the licensing process takes 3-5 years and requires significant state political engagement given the adjacent governor's veto right). Port State Control inspections under MARPOL apply to all vessels calling at deepwater ports just as at conventional ports. Oil spill liability under OPA 1990 applies to offshore transfers; deepwater port operators must maintain substantial financial assurance (typically certificates of financial responsibility, "COFRs") covering potential spill costs.

If you live in a coastal state near a proposed deepwater port: Your governor has a statutory veto right over deepwater port licenses that would affect your state (33 U.S.C. § 1505). This is a meaningful protection that has been exercised. Several New England states have opposed or conditioned offshore LNG import terminal proposals. The public comment process includes mandatory hearings in adjacent states. Environmental impacts of concern typically include: vessel traffic and navigation risks, potential marine mammal interactions with mooring systems, seabed disturbance, air emissions from transfer operations, and accident/spill risk. The NEPA environmental impact statement is a key document — it should address cumulative impacts with other offshore development in the area.

If you track energy infrastructure policy: The Deepwater Ports Act sits at the intersection of energy security, environmental regulation, and coastal state rights. Its licensing regime is distinct from onshore LNG terminal regulation (FERC/NGA) and from offshore oil platform regulation (BOEM/BSEE under OCS Lands Act). The same offshore facility — an LNG transfer platform — can fall under multiple regulatory regimes depending on its design and location. As U.S. LNG export capacity grows and offshore floating LNG becomes more commercially viable, expect increased activity in the deepwater port licensing pipeline. The adjacent state veto has been particularly consequential in New England, where environmental and community concerns have historically created friction with offshore LNG proposals.

State Variations

The adjacent state veto right (33 U.S.C. § 1505) is the primary mechanism by which states shape deepwater port development. Key dynamics:

• Gulf of Mexico states (Texas, Louisiana) have been broadly supportive of offshore port development, given the energy industry's economic importance and existing offshore infrastructure presence
• Atlantic and New England states have historically been more skeptical, reflecting different coastal community values and economic profiles
• States can negotiate conditions as part of their approval — including additional safety requirements, community benefit agreements, or environmental protections beyond the federal minimum
• State coastal zone management programs (under the Coastal Zone Management Act) provide additional state review authority — federal activities affecting the coastal zone must be consistent with the state's approved coastal management plan

Recent Developments

• 2023-2025 — LNG export licensing surge: Following Russia's invasion of Ukraine, European demand for U.S. LNG accelerated interest in additional export capacity, including offshore LNG export terminals. Multiple deepwater port license applications for LNG export facilities were filed with MARAD. The Biden administration's January 2024 pause on new LNG export authorizations (DOE review) created uncertainty for projects needing both MARAD and DOE approvals; the pause was lifted under the Trump administration in January 2025.
• 2024 — LOOP crude exports: LOOP continued processing significant crude export volumes, reflecting the transformation of Gulf Coast energy infrastructure from primarily import-oriented to a mix of imports and exports.
• 2025 — Offshore LNG floating platforms: New Fortress Energy and other developers continued advancing proposals for offshore floating LNG production and export facilities, which would require deepwater port licenses for the offshore transfer component.
• 2025 — Environmental justice review requirements: MARAD updated deepwater port application requirements to require formal environmental justice analyses, assessing disproportionate impacts on underserved coastal communities — particularly relevant for Gulf Coast communities near existing and proposed offshore infrastructure.