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Maritime Industry Lobbies for Environmental Reform

New and often conflicting regulations regarding vessel discharges and emission control areas have the industry up in arms. Is uniformity possible?

By Larry Kiern 2014-08-12 16:35:00

(Article originally published in May/June 2014 edition.)

On March 4, 2014, representatives of the maritime industry appeared before the House Subcommittee on Coast Guard and Maritime Transportation and called for legislative reform of key environmental regulations. They represented a phalanx of maritime interests: the Chamber of Shipping of America, the American Waterways Operators, the Shipping Industry Coalition, INTERTANKO, Cruise Lines International Association (CLIA), the Maritime Industrial Transportation Alliance (MITA), and the commercial fishing industry.  

The witnesses objected to the burdens thrust upon them by recent regulatory requirements enforced by the U.S. Coast Guard and the Environmental Protection Agency (EPA). Specifically, they targeted the EPA’s regulations governing vessel discharges into U.S. waters and air emissions from vessels as far offshore as the U.S. Exclusive Economic Zone.

The 2013 EPA Vessel General Permit (VGP)

Industry witnesses called for legislative relief from the EPA’s latest VGP and criticized the disparate regulatory regimes governing ballast water treatment. Although they recognized that the EPA and Coast Guard had worked to coordinate their differing statutory authorities, they complained that the differing statutes imposed irreconcilable regulatory burdens.  

Specifically, they complained that while the Coast Guard had agreed to provide exemptions from the requirement to install ballast water treatment systems on certain vessels that had established that they could not comply now, the EPA had refused to accept the Coast Guard’s decisions. Thus these vessels were potentially in violation of the Clean Water Act and subject to penalties levied by the EPA and citizen lawsuits. They stated that the only remedy was to legislate a new uniform national standard for ballast water treatment consistent with the Coast Guard approach.

Likewise, witnesses decried the ability of individual states to impose additional regulatory requirements under the EPA’s VGP. According to the industry, states have imposed disparate additional requirements regulating discharges from vessels and yielding a patchwork of regulations that are overly burdensome. According to one account, a typical voyage along the Pacific Coast from Washington State to California requires a vessel to comply with 25 supplementary, state-specific conditions added by the two states: “This example underscores why clear, consistent federal rules for ballast water and other vessel discharges are desperately needed.”  

The EPA’s VGP came under a withering critique from a representative of the commercial fishing industry. He denounced it as an “incredibly complicated” regime providing “little environmental benefit” that risked the creation of a “cottage industry of litigators.” While he acknowledged the potential benefit of the VGP’s ballast water treatment goal, he roundly denounced the requirements imposed on commercial fishing operations as unwarranted “big government, big business requirements.” 

He objected to the inspection, monitoring, and reporting requirements as onerous and the potential penalties as oppressive. He also criticized specific requirements as applied to commercial fishing vessels as wholly impractical, e.g., washing the anchor chain and prohibiting cooling water discharges in port. He called upon Congress to enact legislation to exempt the commercial fishing industry from the VGP. 

The EPA’s Emission Control Area (ECA) Regulations

The witness representing MITA, an organization that promotes short-sea shipping in North America, testified that the ECA regulation mandated an unwarranted “one-size-fits-all” approach to regulating air emissions. He testified that EPA should have considered the short-sea shipping market as a separate and distinct operation for purposes of establishing the requirements. He explained that EPA erroneously lumped together larger ocean-going vessels of distinctly different operational characteristics with smaller short-sea vessels. 

He testified that short-sea vessels should not be regulated in the same manner as ocean-going vessels. He stated that their smaller engines – 20,000 horsepower and less – produce fewer emissions and that, because they operate largely more than 40 miles offshore, their shore-side environmental impact is negligible.

He explained that the increased cost of low and ultra-low sulfur fuels would drive short-sea companies out of business. He predicted an increase in cargo rates of 35 percent, which he feared would force his customers to use trains and trucks, which he described as “less safe, less efficient, and more harmful to our environment.” He proposed that Congress or the EPA revise the regulation to reduce from 200 to 50 nautical miles offshore the approaching ECA requirement for the use of ultra-low sulfur fuel for short-sea shipping vessels in 2015.

The Agencies Respond

In response, representatives of the Coast Guard and EPA exhibited a conciliatory tone while maintaining that their hands were tied by the applicable statutes, which left them no further discretion. They emphasized their own cooperation in working to avoid inconsistencies. They emphasized that their processes had been open and inclusive of public comments. Finally, they offered to consider the unique challenges that might be encountered by individual operators.  

As the EPA representative regarding the ECA requirements offered, “The EPA is committed to working cooperatively with all interested stakeholders within the shipping industry to explore flexible, cost-effective and innovative compliance approaches as allowed under MARPOL Annex VI with respect to technology development programs.”  

Importantly, however, the EPA witness who testified about ballast water treatment went further than the agency had previously in offering comfort to the industry. Industry witnesses had emphasized that the EPA’s decision to make ballast water treatment enforcement a “low priority” was insufficient because technically some vessels would still be in violation of the Clean Water Act and therefore subject to citizen suits and perhaps technically breaching their charter parties, which require compliance with all applicable laws. In response to questioning, EPA Deputy Assistant Administrator Michael Shapiro testified that history showed that the EPA had never brought an enforcement action in like circumstances when it had announced the subject to be a “low priority.”  

At this juncture it remains unclear if the fears voiced by industry witnesses will be realized or avoided by new agency actions. 

First, the VGP includes a re-opener clause which expressly provides a mechanism for the EPA to accept the Coast Guard exemptions. While the provision does not commit the EPA in advance to accept the Coast Guard’s exemption determinations, that is not surprising. And the EPA and Coast Guard have both agreed on the need to approach the challenges of implementation practically. In this circumstance, if the EPA ultimately accepts the Coast Guard’s exemption decisions, there will be no Clean Water Act violation.  

Second, industry witnesses highlighted the possibility that some foreign type-approved ballast water treatment systems which the Coast Guard has accepted for a five-year period may not ultimately gain Coast Guard type-approval and therefore will have to be torn out and replaced at great cost. While this is a possibility five years in the future, it is also possible that the manufacturers of these interim systems will achieve type-approval or that the Coast Guard may extend the deadline further if circumstances warrant.  

After all, the history of these regulatory projects by the agencies with respect to ballast water treatment systems is one of extended deadlines to accommodate practical realities. Vessel operators also have it within their control to identify the best interim systems most likely to secure ultimate Coast Guard type-approval. 

Congressional Action

The industry’s complaints have garnered only limited support in Congress thus far. On April 1, 2013, the House passed a limited provision that would exempt only small commercial vessels and fishing vessels from most of the requirements of the VGP. But the Obama Administration opposed it.  

Neither the Committee on Transportation and Infrastructure nor the House itself considered the more ambitious industry proposal to establish a uniform national standard. Based on a previous proposal offered in the House in 2008, it appears such legislation would prove controversial as many representatives would not support preempting the authority of their individual states to impose stricter standards under the Clean Water Act.  

The industry has therefore turned to the Senate and is garnering support for its proposal, S.2094, to establish a uniform national standard. The bill is being advanced by Senators Mark Begich (D-AK) and Marco Rubio (R-FL), the Chairman and Ranking Member of the Subcommittee on Oceans, Atmosphere, Fisheries, and Coast Guard, and enjoys the bipartisan support of over twenty senators from both political parties.  

But the legislation will likely have to also obtain the consent of the Senate Committee on Environment and Public Works, and that committee has proven more protective of the authority of individual states to regulate water quality under the Clean Water Act. In these circumstances, the more likely outcome will be another moratorium on the application of the VGP to small commercial vessels and fishing vessels.  

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.