The air we breathe is important to all of us. Some things that affect air quality are easy to see. Take for example, wildfires currently burning in Washington, Oregon and Idaho. These events create smoke plumes that are visible to the naked eye and on a larger scale in satellite imagery. But there are other things that can affect air quality that might not be as apparent in the course of our day-to-day lives. At the Port, making air quality improvements is important to us, which is why we were pleased to see a significant change to global marine fuel standards implemented on August 1. The new standard will result in improved air quality along our nation’s coasts and inland areas.
Marine passenger and cargo vessels are now required to burn fuel containing no more than one percent sulfur once they pass within 200 nautical miles of U.S. coastline. Currently, bunker fuel is commonly used and contains about three percent sulfur which, upon combustion, emits fine particulate pollution. The regulatory change is the result of an amendment to the International Convention for the Prevention of Pollution from Ships, governed by the International Maritime Organization and enforced here in the U.S. by the Coast Guard and Environmental Protection Agency (EPA). The measure designates an Emissions Control Area (ECA) along the North American coastlines and inland waterways of Canada and the U.S.
The more stringent regulations are certainly a step in the right direction toward improving air quality and decreasing the risk of health conditions like asthma. However, any fuel transition in the marine transport industry does not come easily. Ocean-going vessels are now required to burn a compliant low-sulfur fuel once they enter the ECA. Premiums for compliant fuel run at about 20 percent above current fuel costs. However, failure to comply could also cost as much as $25,000 per day in fines for ships in violation. Some ships have already changed their routes to traverse directly across the ECA and minimize the amount of expensive compliant fuel they must burn.
The new standards have also resulted in disproportionate impacts. For inland ports, like the Port of Portland, ship operators will bear added fuel costs not only within the ocean portion of the ECA, but also for the 100 mile journey upriver to reach their port of call. Many vessels that call on Alaska will travel entirely within an ECA during their voyage. Like any industry, change can often lead to innovation. TOTE, a company whose vessels sail exclusively inside the ECA between Washington and Alaska found another solution. They will switch some ships to run exclusively on liquid natural gas. LNG generates no particulate pollution because it does not contain sulfur. It also generates far less carbon dioxide. Even better, its biggest advantage is that it is far less expensive than the high sulfur bunker fuel it replaces.
The sulfur standard that went in to effect in August can be achieved through blending bunker fuels and lighter low sulfur fuels. However, an even more stringent standard will go in to effect in the North American ECA in 2015, when fuel must contain 0.1 percent sulfur or less. To achieve that milestone, the industry will likely need a new oil-based fuel formula that does not yet exist—or it will need to convert ships to burn LNG.