By Laura L. Myers
Practicalities of implementing new Emission Control Area (ECA) regulations to cut air pollution resulting from sulphur emissions by vessels off the coasts of most of North America — and a lawsuit to stop the edict filed in Alaska against the U.S. government — may raise more immediate questions than solutions.
Canada’s new rules for cleaner vessel fuel to ease air pollution and emissions of soot are projected to be complete by November. As of August 1, ECA mandated a maximum sulphur content of 1 per cent for fuel burned within 200 nautical miles of most of North America’s coastline. In three years, that limit must be lowered to 0.1 per cent.
The area of the North America ECA includes waters adjacent to the Pacific Coast, the Atlantic and Gulf coasts and eight main Hawaiian islands, and extends up to 200 nautical miles from coasts of the United States, Canada and French Pacific territories.
North America now joins the North Sea and Baltic regions which ordered the limiting of sulphur emissions at sea during the late 1990s.
Premium fuel pricing
Currently, however, the availability of ECA-compliant fuel and potentially skyrocketing fuel price hikes are challenges that are looming ahead for the maritime industry.
The Shipping Federation of Canada, in mid-August, was monitoring varying fuel price hikes that ranged from $30 a tonne up to $150 a tonne above baseline prices.
“Fuel supply and prices are highly variable,” Caroline Gravel, the Federation’s Director of Environmental Affairs, told Canadian Sailings.“Compliant fuel is available in pretty much all of the major ports, except for the West Coast.
“ECA compliant fuel is becoming available in an increasing number of ports, obviously at a premium,” Ms. Gravel added.
In Canada, Port State Control inspectors can now board a vessel and advise crew members about upcoming fuel emission mandates, she said.
“The information that I have is that regulations will be ready by November of this year,” Ms. Gravel said.
Transport Canada has issued a ship safety bulletin on how to operate during the interim.
Tony Brewster, President of Vancouver-based Marine Petrobulk Ltd., a supplier of fuel to cruise ships, tankers and dry bulk vessels, told Canadian Sailings that ECA-compliant fuel availability “is pretty tough right now.”
“Cruise ships are taking much of it, although we’re also handling some on the cargo side. The price is really high,” Mr. Brewster said, adding that the current shortage should ease by November, or possibly sooner — after the West Coast cruise season ends.
David Peikin, director of public affairs for Cruise Lines International Association Inc., with 26 member lines, told Canadian Sailings he was unable to comment “on how price hikes will be addressed by our member lines.”
“There remain questions about the availability of suitable low-sulphur fuel in certain markets,” Mr. Peikin said. “Further, the pricing for suitable fuels in Pacific Northwest ports represent quite substantial premiums.”
Tough ECA mandates
The North American Emission Control Area (ECA) will reduce harmful emissions of sulphur dioxide, nitrous oxide and particulate matter burned by large ships that have burned a heavy fuel, laden with up to 4.5 per cent sulphur content.
The International Maritime Organization (IMO) approved the United States’ and Canada’s application for an ECA in 2010 under an international air pollution control program enacted five years earlier.
IMO is the United Nations agency that develops and adopts global regulations on safety, security and the prevention and control of marine pollution from about 60,000 ships globally.
Vessels, cruise and cargo ships, travelling within 200 nautical miles of the non-Arctic U.S., with the exception of the Aleutian Islands, and within Canadian coastlines must use fuels with a sulphur content of 10,000 parts per million (ppm) or less, equivalent to a maximum of one per cent of fuel content.
A stricter new sulphur limit of 1,000 ppm is mandated by 2015. A year later, an 80 per cent reduction in smog-forming nitrous oxides must be implemented.
Maritime use of bunker fuel is so destructive that the U.S. Environmental Protection Agency (EPA) projects the use of cleaner fuels with no more than 1 per cent sulphur will prevent 32,000 premature U.S. deaths and save “tens of billions of dollars in health costs” by 2030, co-wrote Marcie Keever, clean vessels campaign director for Friends of the Earth, in an opinion piece in The Seattle Times, published in late June.
“Bunker emissions contribute to ocean acidification that is plaguing our local shellfish industry, not to mention the plankton base of the marine food web,” Ms. Keever wrote.
The EPA is emphatic about the need for tougher regulations because air pollution from ships is projected to grow during the next two decades.
“The diesel engines that power ships are significant mobile source emitters,” Catherine Milbourn, an EPA senior press officer in Washington, D.C., told Canadian Sailings.
“The largest ship propulsion engines being produced today must meet relatively modest emission requirements. Both the main propulsion and the smaller auxiliary engines installed on these ships operate on fuel that can have extremely high sulphur content.
“Emissions from these engines also cause harm to public welfare, contributing to visibility impairment and other detrimental environmental impacts across the United States,” Ms. Milbourn said.
“Without EPA’s coordinated strategy, by 2030 nitrous oxide emissions from ships would be projected to more than double, growing to 2.1 million tonnes a year while annual PM2.5 (fine particle) emissions would be expected to almost triple to 170,000 tonnes,” Ms. Milbourn added.
“The North American ECA ensures that emissions from ships that operate in our waters and ports will be reduced significantly, delivering substantial benefits to large segments of our population, as well as to marine and terrestrial ecosystems,” she said.
Coast Guard enforcement
The U.S. Coast Guard will enforce MARPOL Annex VI under EPA guidelines. The new rules affect most U.S. and foreign-flagged diesel-engine vessels of at least 400 gross tonnes built after Jan. 1, 2000. Many engines likely will need to be retrofitted.
Compliance will be verified through shipboard documentation, equipment certification and approval and testing. International Air Pollution Prevention and Engine international Air Pollution Prevention certificates will document ECA compliance.
EPA has released interim guidelines for shipowners and operators clarifying how the U.S. government will implement fuel availability provisions when ships are unable to obtain compliant fuel, Ms. Milbourn told Canadian Sailings.
The guidelines explain how vessel owners and operators who cannot obtain compliant fuel oil can make a “fuel oil non-availability claim,” Ms. Milbourn said.
TOTE gets waiver
Totem Ocean Trailer Express (TOTE) of Federal Way, Washington – one of six operating companies owned by TOTE Inc., a subsidiary of Seattle-based Saltchuk Resources Inc. – earlier this month received a conditional waiver, or exemption from ECA fuel sulphur level requirements, while it converts two ORCA-class vessels to use Liquified Natural Gas (LNG) fuel.
The exemption was granted by the Coast Guard until September 2016 for TOTE’s two Orca-class vessels, purpose-built for the Alaskan market.
In its announcement, TOTE said that its conversion to LNG and shore-side LNG infrastructure “could result in a significant increase in air quality throughout the Puget Sound region.”
The privately owned shipping company has operated roll-on/roll-off cargo vessels between the ports of Tacoma, Washington and Anchorage, Alaska, since 1975, currently with twice-weekly service.
Sen. Mark Begich, D-Alaska, in a news release, called the waiver the “first major use of LNG as a ship fuel in the United States, and others in the maritime industry are sure to follow the path that TOTE will be blazing.
“This means the effects of expanded natural gas use, more economical shipping and cleaner air will be multiplied many times over,” Mr. Begich stated.
It’s likely that future similar waivers could be granted, Ms. Milbourn told Canadian Sailings.
“EPA has indicated that it is open to similar negotiations with other companies. We wouldn’t comment specifically on any such negotiations at this time,” Ms. Milbourn said.
Cruise itinerary changes?
Cruise lines, meanwhile, warn that ECA will provoke cruise price increases and changes to popular itineraries, particularly in the Pacific Northwest, to outside the 200 nautical miles of North America shorelines.
Cruise Lines International Association Inc. (CLIA) projects that the 0.1 per cent sulphur fuel mandate, set for January of 2015, will have “significant impact” on cruise itineraries in three popular close-to-home markets: Canada-New England, Alaska and Northeast-Bahamas-Caribbean.
ECA’s fuel mandate puts those cruise markets at “high risk for a significant contraction in cruise itineraries and the subsequent loss of productive output and employment,” CLIA stated.
Ships currently sailing Canada-New England and Alaska markets fall within ECA’s 200-mile boundaries,
and increasing fuel costs could rise about 80 per cent, CLIA projected.
Thus, CLIA also projected a 29-per-cent decrease in net cruise income to cruise lines in the Canada-New England and Alaska markets and a 20 per cent decline in the Northeast-Bahamas-Caribbean market.
Total cruise passenger visits at Canadian and U.S. ports are projected to fall by 2.2 million visits, with a loss of 661,000 passengers at Canadian ports and 1.5 million at U.S. ports.
Seven-day itinerary cancellations by cruise lines because of fuel hikes could include 132 in Alaska, 36 in Canada-New England and 34 in the Northeast-Bahamas-Caribbean markets, according to CLIA.
Most impacted by potential losses in the Canada-New England markets would be the ports of Halifax, Saint John and Quebec City and New York, Baltimore, Boston and Portland, Maine, the cruise organization stated.
“CLIA supports the health and environmental goals of the North American ECA and intends to comply with its associated regulations,” Mr. Peikin told Canadian Sailings.
“Responsible, sustainable environmental stewardship of our oceans, coastal areas and beaches is absolutely critical to the long-term success and viability of the cruise industry. The very nature of our business depends on a healthy natural environment. Cruise lines have invested extensively to develop new technologies to continually reduce the environmental impact of their ships,” Mr. Peikin added.
Several cruise companies, including Disney Cruise Line, which deferred to CLIA, and Princess Cruises and Carnival Cruise Lines, did not respond to queries by Canadian Sailings.
Added Mr. Peikin: “The cruise industry is working collaboratively with the EPA and Transport Canada to identify workable options within the framework of the ECA regulations.”
According to Ms. Keever’s opinion piece in The Seattle Times, “cruise companies recently succeeded in getting a rider attached to the House Interior Appropriations bill that would allow ships to continue to use dirtier bunker fuel rather than fully comply with the Emissions Control Area designation.”
CLIA’s ECA Position Statement proposes “a variety of flexible approaches” that include “weighted averaging based on air quality” such as using “conventional” fuels away from population centers and lower-sulphur fuels near large populations.
Clean shoreside power
California regulations will require cruise lines to phase in shoreside power, allowing cruise ships to cut off their engines in port and plug into the local power grid, beginning in 2014.
Several U.S. ports – including Los Angeles, San Diego, San Francisco, Seattle, Juneau, along with Vancouver, B.C., are already providing this clean-energy technology.
Princess Cruises, Holland America Line, Norwegian Cruise Line and Disney Cruise Line are among lines taking the forefront in outfitting ships for shoreside hookup.
Alaska’s unique challenges
Some elected officials in Alaska, meanwhile, are fighting mad about ECA, saying that increased shipping costs could hike the price of goods such as milk and laundry detergent anywhere from 8 per cent to 25 per cent.
Alaska has some of the “most stringent environmental standards in the world. In addition, cruise lines have voluntarily adopted higher standards than required by state and federal law, and have spent hundreds of millions of dollars on environmental upgrades in recent years,” the Alaska Cruise Association’s website states.
The Association projects that cruise prices could be hiked up to $15 per day per passenger.
Sen. Lisa Murkowski, R-Alaska, is pressuring EPA
officials to come up with a compromise and calling for the agency to sample the state’s air quality.
In the Alaskan cruise market, CLIA projects that an estimated $886 million in output and nearly 9,450 jobs will be lost, mostly in the homeport embarkation cities of Seattle and Vancouver.
Destination ports of Ketchikan, Juneau and Skagway and British Columbia’s Victoria will be impacted most.
Alaska sues U.S. feds
The state of Alaska, in its lawsuit filed in mid-July against the EPA, the U.S. State Department, Department of Homeland Security and Coast Guard, states that the EPA did no research in Alaska when designing ECA regulations.
“The Secretary of State’s acceptance of the (emissions control area) as a treaty amendment to MARPOL, without the advice and consent of two-thirds of the Senate, was unconstitutional,” the lawsuit states.
The lawsuit names as plaintiffs Hillary Clinton as U.S. Secretary of State; Lisa Jackson as EPA Administrator; Janet Napolitano as Homeland Security Secretary; and Admiral Robert Papp, Jr., as Coast Guard Commandant.
“Low-sulphur fuel is more expensive, and more difficult to obtain, than the fuel currently used by many marine vessels operating in the waters off the coast of Alaska,” the lawsuit states. “Requiring the use of low-sulphur fuel in the ECA will greatly increase operating costs for vessels that supply Alaska’s resident with basic necessities, and for cruise ships that facilitate Alaska’s tourist industry.”
Dire ECA consequences
Citing impact on cargo movement, the lawsuit states that the port of Anchorage “serves 85 per cent of Alaska’s population as the entry point for 90 per cent of the commodities entering Alaska.
“That cargo comprises, among other things, groceries, fuel, retails goods, cars, school supplies and construction material and equipment, including essential supplies to the U.S. military … Companies that ship goods to Alaska estimate that ECA’s low-sulphur requirements will increase shipping costs to Alaska by 8 per cent. Those increased costs will be passed on to consumers, effectively resulting in a tax increase on all Alaskans,” the lawsuit states.
The lawsuit also states that 14 per cent of all employment in Alaska is tied to tourism. A 15-per-cent decline in cruise ship visitors, or 585,000 fewer visitors to the state, would “cause a decrease of approximately $150 million in income for Alaska workers and a decline of approximately $180 million in direct spending by Alaska tourists.”
Cruise passenger costs could increase by $12 to $18 per passenger day, which could add $86 to $112 to the price of a typical seven-day cruise.
“Clearly, enforcement of ECA will have a significant and harmful effect on Alaska’s citizens and economy,” the lawsuit states.
Other maritime opposition
Rules targeting vessels travelling in Caribbean waters around the U.S. territories of Puerto Rico and the U.S. Virgin Islands are scheduled to take effect in late 2013.
Although Jacksonville, Florida-based Crowley did not respond to a query about ECA, it issued a statement on July 13 on its website.
“Currently, the information that is available by U.S. refineries that will be supplying the fuel on the cost impact of bunker fuel is unknown, but could result in a significant increase. Once clarification of this cost is available, we will advise accordingly.”
Crowley’s San Juan service tugs already use low sulphur gasoil, it stated.
Boston-based short-sea shipping operator CSL International is calling for the ECA limit to be reduced to 50 miles in 2015 for vessels of less than 20,000 horsepower.
CSL President Paul Cozza, in testimony on April 26 before the Committee on House Transportation and Infrastructure Subcommittee on the Coast Guard and Maritime Transportation, testified that “flaws in current ECA regulations will jeopardize the Short Sea Shipping sector.
“Indeed, based on supply issues, we are concerned that compliant North American marine fuel prices could nearly double in 2015,” Mr. Cozza testified.
“Approximately two-thirds of the cargo that we ship is in support of the construction industry in the U.S. Therefore, this regulation-mandated cost increase has strong potential to negatively impact both commercial and residential economic development in the U.S.,” Mr. Cozza said.