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    Air Resources Bd. Proposes Rule Requiring Ships To Use Less-Polluting Fuel While In Port Or Adopt Alternative Emission Strategies

    (Oct. 24, 2005) -- Following its release of a draft study indicating that ships at berth account for a significant amount of the port-related toxic pollutants that increase the risk of cancer and other serious illnesses for residents of LB and beyond, staff of the CA Air Resources Board (CARB) has proposed that the agency adopt a rule requiring that vessels operating within 24 nautical miles (nm) of the CA coastline run their auxiliary engines -- used to power the ships while at berth -- on what it calls cleaner-burning marine distillate fuels, or implement equally effective alternative emission control strategies under an "Alternative Compliance Plan (ACP)."

    CARB staff says the rule, which it proposes become effective on Jan. 1, 2007, would "result in immediate, substantial reductions in emissions upon implementation in 2007. Specifically, for the nearly 80 percent of vessels currently using heavy fuel oil in their auxiliary engines, compliance with the proposed regulation will result in an estimated 75 percent reduction in diesel PM, 80 percent reduction in SOx, and 6 percent reduction in NOx."

    As proposed in an official agency rulemaking, a process inviting public and industry comment followed by a hearing and voted action by CARB's governing board, vessels would either have to switch from using heavy fuel oil (so-called "bunker fuel") to marine distillate fuel while in port and while operating within 24 nm of the CA coastline, unless they already use complying distillate fuels or choose to use distillate fuels on a permanent basis. If operators choose the Alternative Compliance Plan, they must demonstrate the alternative emission control strategies will result in no greater emissions than would occur by complying with the fuel requirements.

    The agency says bunker fuel contains high levels of sulfur, ash and nitrogen containing compounds and causes much higher emissions than marine distillate fuels. It says the proposed marine distillate fuels include marine gas oil (MGO) and marine diesel oil (MDO) which are "similar to the diesel fuel used by landside sources." The agency says a lower sulfur 0.1 percent marine gas oil is scheduled for implementation on January 1, 2010, subject to review. A CARB survey showed about 75% of vessels visiting CA use bunker fuel in their auxiliary engines while about 25% use marine distillate fuels.

    Reaction is pending as we post. posts a link to the official CARB rulemaking document below.

    CARB has scheduled a public hearing on the matter on December 8 at CA EPA's HQ in Sacramento...and the item is set for consideration at a two-day CARB meeting starting December 8 that may run into December 9 (or the item may be taken up on Dec. 9 instead of Dec. 8, check CARB's website).

    CARB staff says the proposed regulation would apply to both U.S.-flagged and foreign-flagged vessels:

    [U]nder State and federal law, ARB can regulate both criteria pollutants and toxic diesel PM emissions from marine vessels. Health and Safety Code (H&SC) sections 43013 and 43018 authorize ARB to regulate marine vessels to the extent such regulation is not preempted by federal law. Also, H&SC § 39666 requires ARB to regulate emissions of toxic air contaminants (TAC) from nonvehicular sources, which include ocean-going vessels. The proposed regulation reduces or limits emissions of diesel PM, which is both a TAC and criteria pollutant, and NOx and SOx, which are both criteria pollutants.

    The proposed regulation is neither preempted under federal law, nor does it violate the Commerce Clause. Federal authorization under section 209(e) of the Clean Air Act (CAA) is required for regulating new nonroad engines and for requiring retrofits on existing engines. Ocean-going vessel engines, by definition, fall within the category of nonroad engines. However, no federal authorization is required for implementing in-use operational requirements on existing marine vessels and their engines. The proposed regulation is an in-use operational requirement because it does not apply to the manufacturing process for an engine (i.e., new engine certifications), but only to the emissions of engines installed on ocean-going vessels that operate in California waters. Further, the proposed regulation does not conflict with the Ports and Waterways Safety Act (PWSA) and U.S. Coast Guard regulations. As an even-handed regulation with substantial benefits, the proposed regulation does not violate the Commerce Clause. And federal and state cases support our authority to regulate both U.S. and foreign-flag vessels within California waters. Therefore, federal law neither preempts the proposed regulation, nor does the regulation violate the requirements of the Commerce Clause.

    In pertinent part, CARB staff writes:

    Living in any area impacted by air pollution is harmful, particularly for children, the elderly, and those with compromised health. The communities closest to port operations face even greater impacts and have a greater localized risk due to exposures to high levels of diesel PM. This pollutant poses a lung cancer hazard for humans, and causes non-cancer respiratory and cardiovascular effects that increase the risk of premature death. In addition, in many cases, the populations nearby ports are economically disadvantaged and less able to obtain quality health care to address air pollution-related illnesses.

    Unless substantial additional control measures are implemented, port-related emissions are expected to significantly increase as trade grows over the next 15 to 20 years. While the movement of goods through California ports is a vital component of the State’s overall economy and provides a key link to international trade, it is essential that aggressive steps be taken to counter the projected emissions increases and ensure that the port-related emissions are reduced to health protective levels.

    As one of several steps being taken to reduce emissions from port activities, the Air Resources Board (ARB) staff is proposing a regulation to reduce emissions from oceangoing vessel auxiliary engines. Implementation of this regulation will be an important and necessary step in the effort to improve the public health in communities near ports.

    As for adopting a statewide regulation instead of inviting local district rules -- a thorny issue that has prompted the local South Coast Air Quality Management District to oppose as weak and counter-productive a CARB-staff negotiated statewide Memorandum of Understanding with CA railroads, CARB staff writes:

    We are proposing statewide, uniform implementation of this regulation, rather than encouraging district-by-district adoption of different regulations, for practical reasons as well as ensuring that California speaks with "one voice" with regard to regulating foreign-flag vessels. Under H&SC § 43013 and 43018, ARB and the districts share concurrent jurisdiction over marine vessels, which are considered to be nonvehicular sources. In addition, H&SC § 39666(d) requires the districts to implement and enforce an ARB airborne toxic control measure (ATCM) or adopt and enforce an equally effective or more stringent ATCM. Thus, the districts are authorized to regulate the auxiliary diesel engines on vessels, and each district can do so provided its regulations are equally effective or more stringent.

    The districts' authority notwithstanding, we believe it is prudent for the districts to coordinate their efforts with those of ARB and have ARB to take the lead role in implementing the ATCM. We believe this for several reasons. First, it is impractical for many districts to enforce an ATCM against ocean-going vessels, many of which make multiple visits to ports throughout California. Second, ARB has gained technical expertise over several years of developing this regulation, which would require a significant expenditure of district resources to replicate. Third, the districts are permitted but not required to adopt and enforce an equally effective or more stringent ATCM. By coordinating their efforts with ARB and having ARB take the primary lead in implementing the ATCM statewide, the districts will have met their statutory obligations under H&SC § 39666(d).

    Equally important to the practical concerns are the international foreign commerce concerns. Under the dormant Foreign Commerce Clause, regulations that interfere with a nation’s ability to "speak with one voice when regulating commercial relations with foreign governments," may be held invalid. Having a patchwork of district regulations different from ARB’s proposal, may frustrate the efficient execution of the nation’s foreign policy to speak with one voice. Thus, it would be in California's best interests to coordinate statewide efforts so that foreign-flag and U.S.-flag vessels visiting California ports only need to understand and meet one set of statewide regulations.

    The rule would potentially encompass both cargo ships and cruise ships, and some tankers.

    Auxiliary engines are diesel engines on ocean-going vessels that provide power for uses other than propulsion (except as noted below for diesel-electric vessels). Auxiliary engines are usually coupled to generators used to produce electrical power. On cargo vessels, most auxiliary engines are used to provide ship-board electricity for lighting, navigation equipment, refrigeration of cargo, and other equipment. Typically, a cargo vessel will have a single, very large main engine used for propulsion, and several smaller auxiliary "generator-set" engines.

    Passenger cruise vessels, and some tankers, use a different engine configuration which is referred to as "diesel-electric." These vessels use large diesel generator sets to provide electrical power for both propulsion and ship-board electricity. For the purposes of the proposed regulation, these large diesel generator sets are included in the definition of "auxiliary engines."

    What are the exposures and potential heath risks from ocean-going vessel auxiliary engine emissions? CARB staff writes:

    The majority of California’s ports are in urban areas and, in most cases, are located near where people live, work, and go to school. This results in substantial exposures to diesel PM emissions from the operation of vessel auxiliary engines California. Exposures to these emissions can result in increased cancer risk and non-cancer health impacts, such as premature death, irritation to the eyes and lungs, allergic reactions in the lungs, and asthma exacerbation.

    Because analytical tools to distinguish between ambient diesel PM emissions from vessel auxiliary engines and that from other sources of diesel PM do not exist, we cannot measure the actual exposures to emissions from auxiliary engines. However, modeling tools can be used to estimate potential exposures. To investigate the potential risks from exposures to the emissions from auxiliary engines, ARB staff used dispersion modeling to estimate the ambient concentration of diesel PM that results from the operation of ocean-going vessel auxiliary engines that visit the Port of Los Angeles (POLA) and the Port of Long Beach (POLB). The study area was a 20-mile by 20-mile grid centered on POLA and POLB.

    The activities of vessel auxiliary engines resulted in significant cancer risk and other PM related health impacts on the nearby residential areas. Figure ES-2 shows the estimated cancer risk isopleths for diesel PM emissions from vessel auxiliary engines (during transiting, maneuvering, and hotelling) at the Ports of Los Angeles and Long Beach superimposed on a map that covers the ports and the nearby communities. ARB estimated the area in which the cancer risks are predicted to exceed 100 in a million to be about 13,500 acres with an exposed population of about 225,000. For the cancer risk level over 200 in a million, the impacted area is estimated to be about 2,260 acres, with an exposed population of about 48,000 people. Overall, about 99.5 percent of the study area (excluding port property and the surrounding ocean area) has an estimated cancer risk level of over 10 in a million due to auxiliary engine emissions. We estimate that about 2 million people live in the study area. ARB staff believes that the results from this analysis provide quantitative results for exposures around the Ports of Los Angeles and Long Beach and indicate that elevated risks also occur at other ports in California...

    ARB staff also estimated the potential non-cancer impacts associated with exposure to diesel PM from ocean-going vessel auxiliary engines. The non-cancer health effects evaluated include premature death, asthma attacks, work loss days, and minor restricted activity days due to diesel PM emissions from auxiliary engines. Based on the analysis, staff estimates that the average number of cases statewide per year that would be expected from exposure to the 2004 ocean-going vessel diesel PM emission levels are as follows:

  • 31 premature deaths (for ages 30 and older), 16 to 48 deaths as 95% confidence interval (CI);
  • 830 asthma attacks, 202 to 1,457 as 95% CI;
  • 7,258 days of work loss (for ages 18-65), 6,143 to 8,370 as 95% CI;
  • 38,526 minor restricted activity days (for ages 18-65), 31,403 to 45,642 as 95% CI.
  • The following Q & A text is included in CARB's proposed rulemaking. [We boldfaced the questions for more easy reference]:

    Is the proposal technically feasible?

    Yes. Based upon ARB staff’s analysis and discussions with numerous stakeholders, including the engine manufacturers, staff believes that the requirements of the proposed regulation are technically feasible. Under the proposal, vessel operators may comply by using cleaner-burning marine distillate fuels in their auxiliary engines instead of heavy fuel oils, or implementing alternative emission control strategies. For vessel operators that comply through the use of cleaner-burning fuels, they will need to ensure that they are using marine distillate fuels prior to entering the 24 nm boundary. ARB staff found that vessel operators already switch to marine distillate fuels prior to certain scheduled maintenance operations, and many also routinely switch to these fuels for air quality reasons in California. Discussions with the manufacturers also indicated that these engines can operate on marine distillate fuels provided certain precautions are followed, such as performing fuel switches according to recommended procedures. Beginning January 1, 2010, the proposal specifies a lower 0.1 percent sulfur marine distillate fuel. This standard will be subject to a feasibility evaluation prior to implementation to fully investigate the availability of this fuel and if any technical issues exist...

    What businesses and public agencies will be affected by the proposed regulation?

    The proposed regulation would impact foreign and domestic businesses that own or operate large ocean-going vessels. This would include ocean shipping companies and passenger cruise vessel operators.

    We do not expect significant impacts on "downstream" companies such as importers or exporters of goods, since the added costs imposed by the proposal are not expected to result in significant adverse impacts to vessel owners or operators. Similarly, we do not expect adverse impacts on California ports because we do not believe the added cost of the proposed regulation is great enough to induce vessel operators to divert cargos to ports outside California.

    We do not predict any significant impact on public agencies. With the exception of military vessels, which are exempted from the requirements of the proposed regulation, public agencies in California generally do not operate ocean going vessels as defined in the proposal...

    What are the health and environmental impacts of the proposed regulation?

    Upon implementation in 2007, the proposed regulation will result in immediate and significant reductions in emissions of diesel PM, NOx, SOx, and “secondarily” formed particulate matter. Specifically, considering only the directly emitted emissions (not secondarily formed PM), the proposed regulation will result in estimated statewide emission reductions of 2.7 TPD of diesel PM, 1.9 TPD of NOx, and 22 TPD of SOx in 2007. For perspective, the proposal would result in an estimated 75 percent reduction in diesel PM, 80 percent reduction in SOx, and a 6 percent reduction NOx from an engine that previously used typical heavy fuel oil. Beginning in 2010, the 0.1 percent sulfur limit will result in an additional 10 percent reduction in diesel PM. The estimated reductions for diesel PM, NOx and SOx, as shown in Table ES-2, reflect the use of the cleaner marine distillate fuels specified in the proposed regulation, although alternative control technologies could also be used to achieve equivalent reductions. The estimates do not reflect participation in the "noncompliance fee provision" in the proposal that allow shippers to pay a fee in lieu of compliance because we cannot predict the rate of participation. However, we would expect that the use of noncompliance fees would be very limited, and whatever fees that are generated would be used to achieve emission reduction around the ports...

    The emission reductions shown for 2007 reflect the initial implementation of the fuel specifications in the proposal, assuming that the average sulfur content of the fuel will be 0.5 percent. The 2010 and later reductions reflect the use of 0.1 percent sulfur marine gas oil, which is scheduled to be implemented in 2010 subject to the results of a feasibility evaluation required under the proposed regulation...

    Significant air quality benefits are expected from the proposed regulation. The reductions in diesel PM, NOx and SOx will help improve regional ambient air quality levels of PM and ozone. We also anticipate significant health benefits due to reduced mortality, incidences of cancer, PM related cardiovascular effects, chronic bronchitis, asthma, and hospital admissions for pneumonia and asthma-related conditions. These directly emitted diesel PM reductions are expected to reduce the number of premature deaths and other non-cancer health effects from air pollution in California. Staff estimates that the implementation of this regulation will avoid between 2007 and 2020 years approximately:

  • 520 premature deaths (260 to 810, 95% CI)
  • 14,000 asthma attacks (3,400 to 24,000, 95% CI)
  • 120,000 work loss days (103,000 to 140,000, 95% CI)
  • 650,000 minor restricted activity days (530,000 to 770,000, 95% CI)

    With respect to potential cancer risk, ARB staff believes there will be significant reductions in exposures and potential cancer risks to residents that live near ports in California. For example, based on an analysis of the predicted 2008 and 2015 ambient diesel PM levels near the POLA and POLB, we estimate that in 2008 there will be a 70 percent reduction in the population-weighted average risk relative to the predicted risk levels in 2008 from ocean-going vessel auxiliary engine diesel PM emissions and a 78 percent reduction in 2015.

    ARB staff has concluded that no significant adverse environmental impacts will occur from implementation of the proposed regulation. There will be no increase in emissions at any of the locations due to this proposed regulation. The locations experiencing the greatest emission reductions will be those areas nearest to the ports.

    What are the economic impacts of the proposed regulation?

    The proposed regulation would directly impact businesses that operate large oceangoing vessels. These businesses would be required to reduce their emissions through the use of marine distillate fuels, or other equally effective emission control strategies.

    To estimate the costs of the proposed regulation, we assume compliance will occur through the use of marine distillate fuels. We also estimate that about ten percent of vessels will need to make some modifications to be able to use the specified fuels. For example, some vessels would add an additional fuel tank dedicated for the use of marine distillate fuels.

    We estimate the total added fuel cost of the proposed regulation to be about $34 million annually, and about $38 million in 2010 when the lower sulfur fuel standard is scheduled to be implemented. We also estimate total capital costs of about $11 to $18 million for vessel modifications.

    The total annual cost and cost-effectiveness of the proposed regulation is assigning all of the cost of the proposed regulation to each pollutant individually. Using this approach, the diesel PM cost-effectiveness would be about $26-27 per pound of diesel PM reduced. This estimate does not account for the fact that the proposed regulation would also reduce emissions of NOx and SOx. If half of the compliance costs are attributed to diesel PM reductions, and half to NOx and SOx reductions, the diesel PM cost-effectiveness would be about $13-14 per pound. Using either approach, these results compare favorably with the cost-effectiveness of other diesel PM regulations adopted by the Board...

    We estimate that affected businesses will be able to absorb the costs of the proposed regulation with no significant adverse impacts on their profitability. This finding is based on the staff’s analysis of the estimated change in “return on owner’s equity” (ROE). The analysis found that the overall change in ROE for typical businesses was less than one percent. Generally, a decline of more than ten percent in ROE suggests a significant impact on profitability. In addition, the added costs of the proposed regulation are a small fraction of the overall operating costs of these large vessels. Another way to analyze the costs of the proposed regulation is to assume all of the added costs are passed on to the customer. Using this type of analysis, we do not expect significant impacts on the customers of oceangoing vessel operators. For example, we estimate that the added costs of the proposed regulation would add about a dollar per container for importers or exporters shipping containerized goods overseas.

    We estimate that this represents less than one percent of the shipping cost. For passenger cruise ships, we estimate the added cost of the proposed regulation for a typical Los Angeles to Mexico cruise would be about $8 per passenger, representing about a 2 percent fare increase.

    Since the proposal would not significantly alter the profitability of most businesses, we do not expect a noticeable change in employment, business creation, elimination, or expansion, and business competitiveness in California. We also found no significant adverse economic impacts on any local or State agencies...

    To view the rulemaking document in full (pdf form), click Rulemaking to Consider the Adoption of Proposed Regulations to Reduce Emissions from Auxiliary Diesel Engines and Diesel-Electric Engines Operated on Ocean-Going Vessels Within California Waters and 24 Nautical Miles of the California Baseline".

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