Marine Transportation System

Posts Tagged ‘EPA’

LNG: Ports as a Catalyst?

In Energy/Environ, Green Transportation, MTS Policy, Ports on October 10, 2013 at 8:47 am

MTS Matters welcomes a well-known and regarded figure in D.C. transportation circles. John Graykowski, a Principal of Maritime Industry Consultants, served as Deputy Administrator of the Maritime Administration, and for two years as Acting Administrator, during the Clinton Administration. He is an attorney with experience in both private and public sectors. The subject of LNG-fueled transportation and how it might develop in the context of maritime policy and port communities has been a focus of his attention in recent years. This is the first of his contributions to this blog’s musings on port/maritime policy—present and future.

Over the past year, LNG as a marine fuel has gone from novel concept to an accepted alternative fuel here in the United States. Some LNG-capable vessels are operating and more will be under construction as appreciation is growing for the environmental, economic and energy security benefits offered by LNG. This transformation of a marine cargo commodity to emerging marine fuel in here and elsewhere might lead one to conclude that the broad deployment of LNG throughout the U.S. is underway and faces no challenges or constraints—but this is not the case. Lagging behind LNG-fueled vessel development here are the necessary market and regulatory structures that promote its widespread development.

The most common platitude in any discussion of LNG is the “chicken and egg” problem. Ship owners are loathe to make the large capital investment in LNG technologies absent certainty of supply.  Meanwhile gas suppliers are averse to spending $150 million or more on bunkering infrastructure without firm, long term purchase contracts by ship owners. This reflects the lack of historic relationships between the gas supply industry and marine operators, who purchase bunker fuel in virtually every port on a spot basis and never needed long term contracts.

Compounding that is a lack of understanding and knowledge about each other’s industries. Marine operators are not familiar with gas production, transportation and market dynamics and gas suppliers have little direct knowledge about the marine industry practices, requirements, and the like. Emblematic of the divide between the two industries is the simple fact that marine operators purchase fuel on the basis of metric tons or barrels of oil, while the gas industry sells LNG on the basis of million BTUs. Potentially complicating this market disconnect, are increasingly stringent accounting rules that likely require a long term LNG contract to be carried as a contingent liability, thus impairing a balance sheet and constraining future capital expenditures for a marine company.

Beyond these market issues are significant regulatory challenges related to both operational procedures for bunkering vessels and, more importantly, the siting, permitting and operation of small and medium sized LNG marine terminals. It may come as a surprise to some, but there are no existing uniform federal regulatory structures that apply specifically to LNG marine fueling terminals.

The United States Coast Guard (USCG) and Pipeline and Hazardous Materials Administration (PHMSA) each have regulations that apply to LNG fueling terminals. These regulations, however, were developed with large scale export and import facilities in mind and thus are largely inapplicable to a small marine fuel terminal and the fueling of other than LNG carriers. In many cases these regulations may conflict, which creates a large area of potential regulatory confusion and will most likely result in ad hoc development of LNG regulations. Adding to this uncertainty is the probable requirement that these facilities will be subject to local permitting actions, which can provide opponents of LNG the opportunity to intervene and delay the project.

Where do ports fit in this puzzle of a marketplace?

Ports can and should be a catalyst to spur LNG development throughout the transportation industries since they are at the center of marine activities in the United States. They provide a ready-made, multi-modal market for LNG expansion beyond large oceangoing vessels, which includes ferries and harbor craft, trucking, and rail operations. Port agencies may have some degree of jurisdiction, and even control, over property where LNG operations will occur. Depending on the port, it may have a role in the siting, permitting, financing, development, or even operations of an LNG fueling terminal. As a responsible economic development agency, a port can also play a critical role in the public education and promotion of LNG and the mitigation of local opposition to such projects.

Public port agencies generally understand this is a constructive role they are in a position to play. We are seeing that in isolated initiatives, notably on the West Coast, as well on an international scale with Antwerp leading a working group that includes the Ports of Los Angeles and Long Beach.

The expansion of LNG and compressed natural gas (CNG) as a replacement fuel in port related operations, already showing benefits, is also a powerful tool that ports can use to achieve significant emissions reductions and thus reduce the cost and impact of increasingly more stringent environmental regulations or measures to meet local community demands. If LNG is used to fuel vessels’ auxiliary generators while in port there may be no need to install costly shore power systems for cold ironing since equivalent emissions results could be obtained with LNG.

Collectively, ports can be in the forefront of a “Green” initiative, leading to the expansion of LNG as a transportation fuel throughout the nation. Individually, ports that facilitate LNG bunkering operations could find them to be a competitive factor in attracting and retaining liner business as those companies bring LNG-capable vessels on line to meet IMO global standards by 2020.

Much has been written of the significant impact that domestically produced natural gas and its liquefied form will have on our on our nation. Ports are where all surface modes of commercial transportation intersect and where LNG distribution will naturally occur. They are in a position to be influential in the development of national policies that promote and accommodate the broad deployment of LNG as a transportation fuel.
John E. Graykowski

 

When State Regulation is Invasive

In Federal Government on September 1, 2009 at 5:24 pm

Non-indigenous species carried in ballast water (graphic by Patterson Clark of the WPost)

Non-indigenous species carried in ballast water (graphic by Patterson Clark of the WPost)

The Coast Guard issued on August 28th a proposed rule for the regulation of ballast water discharges (BWD).  This is the Nagging Problem (NP) that has plagued the maritime sector, particularly vessel operators.  That problem is both the habitat devastation caused by non-indigenous aquatic species unwittingly carried here from foreign ports and the  patchwork of regulation that can confound those responsible for ships in commerce.

Two Federal agencies claim jurisdiction.  The EPA does, per the Clean Water Act, and through that several states  exercise delegated authority to protect their waters.   So states like California, Michigan, Washington, and New York set their own requirements for vessels to meet.

But the vessels in question don’t just putter around Lake Erie, so to speak.  They transit international waters in international commerce and call in multiple ports.  The proposed Coast Guard rule takes a national approach with an international foundation for starters.  The proposed regs  would establish a standard for allowable concentrations of organisms in BWD.  The standard and schedule are consistent with the applicable IMO convention.  In the next decade, the standard would tighten significantly–assuming you think 1000x is significant–if currently unavailable technology would become available.  (Comments on the regulations are due November 27th.)

Still, there is that other NP.  The complication of multiple standards courtesy of the states.   At present Federal law doesn’t preempt non-Federal standards though that would be a good idea.  Who is to say that the means to meet one standard can also satisfy a second or a third standard as a ship moves from port to port?  And what if the State standard isn’t…well…carefully considered?

New York’s regulation, effective 2012, will put a ship’s pilot in violation of the law if the ship, lacking a means to meet the standard, crosses New York waters (without discharging) on its way to a terminal in New Jersey.  As frustrating  is the stricter-than-IMO standard for which ships must have onboard environmental technology that has yet to be devised, not to mention shown to be safe and effective.  NYDEC does not allow for an absence of applicable technology.  Take this enlightening discussion from The Washington Post story of August 31

Steve Fisher, executive director of the American Great Lakes Ports Association, called different regulations in each state a “nightmare scenario.” He said current technology cannot meet New York’s standards, which are 100 times stronger than the IMO treaty, and he expects that the state will have to close ports or relax its rules.

Jim Tierney, assistant commissioner for water resources at the New York State Department of Environmental Conservation, disagreed. “It’s not that hard to kill things,” he said. “You can heat them up, crush them, pressurize them, put a chemical on them. We think this is a problem that can be solved in a very economical fashion.”

Well, there ya go, naval architects, biologists and others who have been working this question for a good many years.  Maybe it’s not so difficult after all.  Maybe just a big hammer, goggles, and a trash bag will get ‘er done.   Pbea

Walking the Dock and Talking the Talk

In Federal Government on August 16, 2009 at 9:19 pm

CMTS group

This week Federal agency folks caught the bus to Baltimore to see a port.   It was organized by Helen Brohl and staff of  the Committee on the Marine Transportation System (CMTS) and facilitated by Frank Hamons and colleagues of the Maryland Port Administration.  The civil servants from NTSB, ITA, OMB, MARAD, NOAA, USACE, USCG, EPA and  perhaps other offices and agencies left Washington to see elments of the MTS first hand.

Terminal operations, a NOAA survey vessel, a Ready Reserve Force ship, an intermodal yard, and a tugboat tour of the cargo and quiche sides of the waterfront.   They met with public and private sector people who keep the working port working.

From time to time one reads complaints about taxpayer money spent on public employee field trips and conference-going…as if it’s always a pleasure jaunt and never of professional value.  I’m sure that this same-day hop, just an hour up the parkway, will spark no such carping.  But that’s beside the point.  It’s a fact that trips like this one  to  the Maryland port instill more understanding than does the reading of a report.  Even one with lots of pictures.   When one is in the field the senses absorb.  The mind muses.   The discussion flows.

Washington is paying much more attention than ever to ports, shipping, and our system of logistics.   EPA regulates ballast water.   The Corps maintains channels.  TSA checks dock worker backgrounds.  NOAA decides when the dredges can work.  OSHA sets new container lift standards.   The Senate ratifies standards to lower ship emissions.  CBP scans cargo for radiation.   OMB reviews regs and budgets.  Fees are collected and new fee proposals abound.

Taking one day to take in the context for all of the above is a day and money well spent.  Kudos to CMTS and the folks in the picture.   Pbea

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