No Way Out?

MarAd’s struggles with ‘Ghost Ship’ fleet(s) continue, but the solution to all of it turns out to be quite simple.

It would be a classic case of overstating the obvious to say that the U.S. Department of Transportation has its hands full this month. Nowhere within that department is the situation more apparent than at the U.S. Maritime Administration. Administrator confirmation hearings, the quest for a new Superintendent at Kings Point, activation of repossessed Title XI ferry assets to assist in the Haiti response and a raft of other annoying tasks are just stacking up on Secretary Lahood’s desk, with no relief in sight.

Just when the Secretary thought it was safe to pop downstairs for a quick sandwich, court case number (2:07-cv-2320GEB-GGH) got slapped onto the pile, too. This time, though, the ‘Ghost Fleet’ flap between MarAd and various California-base stakeholders is an easy fix. The only question left to ask is whether MarAd and DOT will be smart enough to reach out snatch the brass ring from the enormous jaws of crushing defeat. It’s not apparent that they are – or will.

It hasn’t been too long – Okay, it’s been more than one year, actually – since I was invited to visit MarAd’s offices in Washington to talk about various items on their agenda with senior staff. The one ground rule that you were typically asked to follow was to refrain in referring to the three national defense reserve sites as “the Ghost Fleet.” At MarAd, the phrase is considered the moral equivalent of using the wrong fork during dessert at a formal state dinner. But, like a bad penny that keeps on turning up, the problems associated with these aging, sometimes decrepit ships seem to have more than nine lives. At this point, if there is anything that keeps MarAd staffers lying awake in bed at night, then it is probably the ghosts that almost certainly haunt these three fleets – Suisun Bay, CA in particular.

It also wasn’t too long ago that the Maritime Administration’s announcement that it had awarded – for the first time in almost three years – contracts to remove and recycle two obsolete WWII-era vessels at the Suisun Bay Reserve Fleet (SBRF) had West Coast politicians and media outlets both gleefully dancing in the streets. In fact, both MarAd and local newspapers cloaked the announcement as proof of the Obama administration’s superior commitment to the environment. One editorial even went as far as to suggest that previous administration was guilty of “ignoring years of pleas for action to remove the Mothball Fleet anchored in Suisun Bay.” Problem solved, right? Um, no.

Last week, U.S. District Court Judge Garland Burrell ruled that MarAd and the U.S. Department of Transportation violated hazardous waste laws via improper stewardship of the Reserve Fleet ships in Suisun Bay. The decision, released on January 21, agreed with the Natural Resources Defense Council and California Regional Water Quality Control Board’s San Francisco Bay Region (which joined the suit November 10, 2008). In a nutshell, MarAd got slammed on violations of the Clean Water Act (peeling paint) and has to get an NPDES permit and additionally got spanked as a generator of hazardous waste (paint chips). The tone of the decision was anything but friendly and left the door open to the Golden State to further sue, claiming that the fleet is essentially an open dump. Also left unspoken were the unknown implications of the ruling on the other two fleets located in Beaumont, TX and Hampton Roads, VA.

In October of 2009, DOT PAO Olivia Alair told MarEx, "The ships in California present the greatest challenges with their condition placing them at the top of the list for disposal. Dry docking allows us to clean the hulls of marine growth and remove the environmental concerns with exfoliating paint in an environmentally sound, cost effective, and safe manner." This week – and last – both DOT and MarAd declined to acknowledge our additional queries on this rapidly developing story. That silence did nothing to quell the uncertainty surrounding the legality of more than 120 vessels in similar condition in the Gulf and East Coast fleets that have been disposed of without drydocking in the past 8 years. And, it is issues like this that tend to gobble resources and money that could otherwise be better spent for MarAd’s core missions – like for example – the development of a viable shortsea shipping program. It doesn’t have to be this way.

Beyond the immediate issue of how to deal with this problem is the question of how to pay for it all. Plaintiffs want the remaining 50+ ships at the Suisun fleet gone and they want them gone yesterday. Unfortunately – and as we pointed out less than three months ago in our 29 October online editorial on the same subject – the money just isn’t there to do that: “Arguably, MARAD has done a pretty good job of moving the vessels that it could, especially given a limited annual budget for the task that hovers around $18 million. And, I know of no instances where any of these vessels from Hampton Roads or Beaumont had to be drydocked prior to their ultimate departure, except where a vessel might be slated for reefing. Hence, with 57 vessels slated for removal from California waters at an average cost of $1.8 million per vessel, it will take as much as six years to get the job done out there, assuming that MARAD neglects its responsibilities to the other two fleets at the same time. More likely, California – given its higher cost per vessel – is looking at 15 years or more to get the job done. Therefore, the euphoria on the left coast will be short lived once folks out there understand that this year's Marad isn't going to be moving very much faster than the last version. That’s not the fault of MarAd or the Bush administration, for that matter.”

There is seemingly no way out, but that’s not the case at all. MarEx spoke with Polly Parks of Southern Recycling--EMR USA on Monday. Parks said that the solution was simple one. She added emphatically, “If MARAD would sell us the ships to recycle they wouldn’t have this problem because of the scrap metal definitions in RCRA.” Parks went to explain that industry is more than ready to expand to meet capacity. “We’ll buy the ships and then it becomes our problem. At that point, the nature of the product changes once it goes into the commodities market.”

The process would still involve MarAd getting a discharge permit for its fleets, but once the vessel is sold for domestic recycling, a “plan” is in place to take care of the problem. At that time, the onus would be on the contractor – and not the federal government – to manage their own facility hazmat and NPDES plan. Southern Recycling’s Parks goes on to insist, “They can still obviate the problem if they (MarAd) start today.” But the solution that Parks suggests is only one part of the equation. At some point, the President should probably just take the ship recycling out of MarAd’s hands and give it to the Corps of Engineers or GSA; or in other words, an entity that might understand the mission and is better equipped to launch the right solution. But then, with as many as 11 FTE’s riding on that annual appropriation for ship recycling, that’s an unlikely scenario, isn’t it?

MarEx readers are no doubt familiar with the 1987 movie No Way Out, starring among others, Kevin Costner and Gene Hackman. In that flick, the Secretary of Defense (Hackman) and a dashing, young Naval Officer (Costner) both have big problems to solve. In the end, there really was no way out. I’m not suggesting that Secretary Lahood or his (soon-to-be-confirmed) MarAd chief should be cast in similar roles in the sequel, but if MarAd’s “Ghost Ship” woes were to be the subject of a future full-length movie, the ending certainly would allow for more than one way out. You really don’t need to read the script to figure it out. – MarEx.

* * *

Joseph Keefe is the Editor in Chief of THE MARITIME EXECUTIVE. He can be reached with comments on this editorial at jkeefe@maritime-executive.com and/or join the Maritime Executive ‘Linked In’ group at by clicking http://www.linkedin.com/e/gis/47685>