Friday, October 23, 2009
EPA move roils Great Lakes maritime industry
By Kari Lydersen and Juliet Eilperin
updated 2:49 a.m. ET, Fri., Oct . 23, 2009
DULUTH, MINN. - A horn blasts, seagulls screech and tourists clap as the longest ship in the Great Lakes, the 308-meter Paul R. Tregurtha, glides through Duluth's canal and heads into Lake Superior, loaded down with coal bound for Midwestern power plants.
Piles of crushed limestone, salt, iron ore and coal line the shores of the Great Lakes' busiest port, destined to forge steel, de-ice roads and build skyscrapers throughout the heartland. The towering grain elevators along the harbor's shores are stuffed with wheat and soy waiting for the trip out the St. Lawrence Seaway to the Atlantic Ocean, then on to Europe, North Africa or South America.
Underlying this show of commercial strength is a maritime industry many see as fragile, threatened not only by a weak economy but also by broader environmental initiatives. The emissions from these ships -- the only mode of transportation not under new federal air pollution regulations -- have been linked to increased levels of heart and lung disease.
Now, an Environmental Protection Agency proposal that would compel the vessels to burn cleaner fuel and upgrade their engines has sparked a furious behind-the-scenes lobbying campaign that has come to a head this week, pitting congressional Democrats against a Democratic administration as lawmakers allied with Midwestern and Alaskan shippers pressure the EPA to back down and protect jobs.
The outcome of the battle -- which has delayed consideration of the EPA's budget -- has implications for a region battered by unemployment and one of the Obama's administration's key environmental strategies.
Large vessels rank second only to power plants as to the health risk their air pollution poses, and the EPA estimates the proposal will produce more health benefits than those it has applied to off-road vehicles, diesel trucks and other sources. Without further regulation by 2030, the agency projects that smog-forming nitrogen oxide emissions from the ships will more than double, to 2.1 million tons a year.
Environmental and health groups say the new standards, proposed in July and set to be finalized by Dec. 17, would prevent up to 33,000 premature deaths a year from problems such as heart disease, respiratory illness and cancer. Although coastal areas would reap the biggest clean air benefits, air quality would also improve for states hundreds of miles inland, including Nevada, Tennessee and Pennsylvania, and parks such as the Grand Canyon and the Great Smoky Mountains.
The proposal would limit air emissions from ships in the United States' exclusive economic zone, which extends 200 nautical miles from its coasts. This includes the 133 American and Canadian "Lakers" that spend their whole lives in the Great Lakes or St. Lawrence Seaway and the smaller "Salties" that go between foreign and Great Lakes ports.
The agency wants to require vessels to switch by 2015 from viscous bunker fuel, which contains about 30,000 parts per million sulfur, to fuel that contains no more than 1,000 parts per million. Trucks are required to use fuel with no more than 15 ppm sulfur, and by 2015 locomotives, bulldozers and barges will have similar limits.
Great Lakes shipping industry officials say the cost of the new fuel and the engine overhauls needed to burn it would undermine their competitive edge and shift commodity transport to rail and truck.
Lake Carriers' Association President James H.I. Weakley said the rule would cost U.S. and Canadian ships an extra $210 million a year for fuel. Out of a U.S. fleet of 65, he predicted that 13 steamships with 429 mariners would be scrapped and that 13 ships with old diesel engines might face premature retirement.
Great Lakes shippers said the process is incomplete. The EPA analysis that the policy's health benefits would outweigh its compliance costs by at least 30 to 1, they said, fails to grasp the impact the rule would have on a region experiencing double-digit unemployment -- a problem that could spread to iron ore miners, farmers, salt miners and others if exports decrease. Iron ore shipments from Great Lakes ports are nearly half of last year's, with coal shipments falling by a third.
"We asked them to pause, go back, study the economic impact, work with industry," said Steven Fisher, executive director of the American Great Lakes Ports Association. "We applaud their goal of clean air, but how do we get there without wrecking this economy and wrecking this industry?"
The government has required businesses as small as bakeries, dry cleaners and auto body refinishing plants to curb emissions, said S. William Becker, executive director for the National Association of Clean Air Agencies. "How can all of these other industries be expected to clean up," asked Becker, "while this one, spewing all this stuff, be exempted?"
In an economic downturn, however, many lawmakers appear to have little patience for such arguments. Led by House Appropriations Committee Chairman David R. Obey (D-Wis.) and House Transportation and Infrastructure Committee Chairman James L. Oberstar (D-Minn.), they are trying to soften the rule for Great Lakes shippers.
Neither Oberstar nor Obey would comment. But Rep. Candice S. Miller (R-Mich.) said she and others have asked the "EPA to really rethink what they're talking about. You can't imagine how bad it is in a state like Michigan. We're looking at this, and we could lose 50 percent of our shipping capacity -- that's what the shippers are telling us."
On Oct. 8, Oberstar arranged for EPA officials to meet with him, Miller, Obey and Reps. Kathy Dahlkemper (D-Pa.), Marcy Kaptur (D-Ohio), Dale E. Kildee (D-Mich.) and Don Young (R-Alaska). They raised the prospect of attaching language to the annual Interior and Environmental Appropriations Bill that could halt implementation of the rule, Kaptur and Miller said, and have delayed moving the bill as they seek to resolve the matter.
Kaptur said the lawmakers want "a realistic effort to assist our industry transition." Miller said the EPA could explore options such as exempting Great Lakes shippers temporarily as it studies the issue or permanently.
EPA spokesman Brendan Gilfillan said the agency is aware of the industry's concerns and its international obligations to curb emissions. The EPA, he said, listens to public comments and prides itself on "taking them into account."