In March of this year Canada and the United States submitted a bi-national proposal to reduce emissions from ships at ports. The proposal marked the culmination of years of study of the costs and benefits of requiring emission reductions from ocean going vessels. However, the proposal never mentions the Great Lakes and includes no analysis of the costs or benefits of extending the requirements to the region.
Now, in a separate proposed rule making issued on August 28th, U.S. EPA has proposed to expand the costly shipping regulations to include the Great Lakes region. The proposed expansion would in essence amend the bi-national proposal even though no formal application has been submitted to the governing international body. In addition, EPA has not provided a study of the costs/benefits of extending the regulations to the Great Lakes.
Background on North American Emission Control Area
In March 2006, President Bush and Canadian Prime Minister Harper agreed to prepare a bi-national application to the International Maritime Organization (IMO) to designate nearly all of North America’s coastlines as an Emission Control Area (ECA). Ships that enter the ECA are required to reduce emissions through a combination of cleaner burning fuel and air pollution controls. (see, U.S. EPA’s frequently asked questions on ECAs)
On March 30, 2009, U.S. EPA submitted the final ECA application to the IMO. The U.S.-Canadian ECA application included years of work and study of the ship traffic, anticipated air pollution reductions as well as the projected costs of the proposed controls. A thorough explanation of the studies can be found in the application. However, the ECA application does not include any studies or evaluation of the shipping traffic or costs in the Great Lakes region. In fact, no where in the document is the term Great Lakes even found.
[Below are the charts showing the proposed emission reductions as well as the proposed ECA]
Figure 1- Proposed ECA included in the March 2009 application to the IMO. Green line denotes area covered by the ECA.
Figure 2- Chart shows the phase in of sulfur limitations on fuel as well as air pollution controls requirements. Lower sulfur fuel will reduce fine particle pollution in port cities.
The proposal requirement to move from fuel with a 15,000 parts per million (ppm) sulfur content to a clean fuel with only a 1,000 ppm sulfur content amounts to a 98% reduction. The overall costs of the regulations to the shipping industry is $3.2 billion, with the largest costs being fuel switching at $1.9 billion.
The proposal assumes that ships will reduce the cost of compliance by carrying two fuel tanks. One tank would contain the much dirtier high-sulfur fuel which would utilized at sea outside the ECA. Once the ship enters the ECA, it would switch to the low-sulfur fuel.
EPA Proposed Regulation to Extend ECA to Internal Waters Including the Great Lakes
On August 28, 2009 U.S. EPA issued a proposed rule titled "Control of Emissions From New Marine Compression-Ignition Engines at or Above 30 Liters Per Cylinder." The preamble to the regulations includes the following statement regarding the proposed ECA:
However, our recent proposal for ECA designation that was submitted to IMO, although intended to protect air quality in U.S. ports and internal areas, does not explicitly state that it applies to internal waters. Therefore, we are proposing regulatory text under the authority of APPS, in order to avoid confusion on whether vessels must meet ECA requirements in internal waters. The text clarifies that the ECA requirements generally apply to internal waters, such as the Mississippi River and the Great Lakes, that can be accessed by ocean-going vessels. Vessel emissions in these waters affect U.S. air quality to an equal, if not greater extent that emissions taking place in coastal waters. Specifically, the proposed rule would require compliance with the fuel sulfur requirements and the NOX emission standards of Regulations 13, 14, and 18 in internal waters. (emphasis added)
While there is no doubt cleaner ships in the Great Lakes would improve air quality. The issue is that U.S. EPA appears to be amending the bi-national application to the IMO without any supporting information. The IMO ECA application does not include costs for the Great Lakes shipping fleet which is of a different make up than those traveling to ocean ports on the coasts.
For example, the IMO ECA application estimates compliance costs will be reduced through fuel switching between high sulfur and low sulfur fuel. However, that will not be an option for ships traveling in the Great Lakes which will always be within the ECA. Also, the Great Lakes fleet tend to be smaller in size than some of the large vessels that enter the coastal ports. No analysis has been performed on the costs and benefits given the different make up of the Great Lakes fleet.
Smaller marine engines are already required to use lower sulfur fuel under the Nonroad Diesel Rule (finalized June 29, 2004). It is possible that the proposal to extend the ECA to the Great Lakes would have negligible impacts because ships tend to be smaller. However, without any analysis of the Great Lakes fleet is it impossible to make this determination.
U.S. EPA proposed rule was issued on August 28, 2009 and the Agency has allowed public comments only until September 28, 2009.