1. THE OPERATIONAL FOOTPRINT OF SHIPPING Operations Committee Maritime Exchange for the Delaware River and Bay January 15, 2009

2. US COMMISSION ON OCEAN POLICY “…THE DOMINANT PARDIGM FOR GOVERNING THE OCEANS WAS THE PRINCIPLE OF FREEDOM OF THE SEAS, BASED ON THE PREMISE THAT THE OCEANS WERE INFINITE AND MARINE RESOURCES INEXHAUSTIBLE…” (US COMMISSION ON OCEAN POLICY, DRAFT FINAL REPORT, PG. 358)

3. Fundamentals of Marine Transportation Shipping is international… so should be the regulation of shipping. Shipping is international… so should be the regulation of shipping. Consistency and predictability of requirements is critical. Consistency and predictability of requirements is critical. Global increase in marine transportation will be significant. Global increase in marine transportation will be significant. Need for coordinated global initiatives to address maritime safety and protection of the marine environment. Need for coordinated global initiatives to address maritime safety and protection of the marine environment. Potential tensions among international and domestic requirements. Potential tensions among international and domestic requirements.

4. DO THE NEEDS OF THE MARINE TRANSPORATION SYSTEM AND MARINE ENVIRONMENT REPRESENT AN IRRESOLVABLE CONFLICT? ABSOLUTLY NOT!!!

5. NATURE DOES NOTHING IN VAIN. Aristotle

6. WHY NOT? Shipping is global….so must be marine environment and resources management even as applied to coastwise and offshore operations Shipping is global….so must be marine environment and resources management even as applied to coastwise and offshore operations Both requires a systems approach Both requires a systems approach Cultural shift from casualty focus to normal vessel operations Cultural shift from casualty focus to normal vessel operations Not conflicting processes but may represent competing users Not conflicting processes but may represent competing users Both require expansion beyond man-made boundary lines e.g. EEZ Both require expansion beyond man-made boundary lines e.g. EEZ

7. YOU CAN’T BUILD A REPUTATION ON WHAT YOU ARE GOING TO DO. Henry Ford

8. Where to begin? URGENT NEED FOR US RATIFICATION AND IMPLEMENTATION OF PENDING TREATIES  UN Convention on the Law of the Sea  MARPOL Annex VI – Air Emissions (original 1997) – ratified October 2008  MARPOL Annex VI – Air Emissions (2008 amendments)  Ballast Water Convention  Anti-fouling Convention

9. Cooperative Endeavors Regular industry input to decision makers Regular industry input to decision makers Formal and informal settings Formal and informal settings Share successes and failures Share successes and failures Federal Advisory Committees (USCG, NOAA, EPA) Federal Advisory Committees (USCG, NOAA, EPA) National Academy of Sciences (Marine Board) and other independent groups National Academy of Sciences (Marine Board) and other independent groups Input to legislative and regulatory projects (preferably before they are initiated!) Input to legislative and regulatory projects (preferably before they are initiated!) Integrity, transparency and credibility are crucial Integrity, transparency and credibility are crucial

10. Substantive Operational Issues (The Big Five!) Air emissions Air emissions Ballast water management and hull fouling Ballast water management and hull fouling Waste management (minimization) Waste management (minimization) Discharges incident to the normal operation of vessels Discharges incident to the normal operation of vessels Shipping Impacts on living marine resources Shipping Impacts on living marine resources Seafarer recruitment and retention Seafarer recruitment and retention

11. Other Issues Maintain level playing field Maintain level playing field General environmental statutes are not a “one size fits all” especially as regards the maritime industry General environmental statutes are not a “one size fits all” especially as regards the maritime industry Jurisdictional limits on sovereignty necessitate international instruments that are legally binding and global in scope (environmental management extends to high seas) Jurisdictional limits on sovereignty necessitate international instruments that are legally binding and global in scope (environmental management extends to high seas)

12. Capt. John Henry Bates

13. Air Emissions – The Fundamental Conflict Shipping is international and so should be control of air emissions (IMO) Shipping is international and so should be control of air emissions (IMO) Air emissions are local/regional Air emissions are local/regional Air quality is usually defined in national and sub-national terms and therefore emissions control strategies are best designed at national and regional levels Air quality is usually defined in national and sub-national terms and therefore emissions control strategies are best designed at national and regional levels HOUSTON….WE HAVE A PROBLEM HOUSTON….WE HAVE A PROBLEM

14. Air Emissions Control Strategies MARPOL Annex VI (original) MARPOL Annex VI (original) MARPOL Annex VI (amendments) MARPOL Annex VI (amendments) EU Marine Fuel Sulfur Directive EU Marine Fuel Sulfur Directive US Clean Air Act and implementing regulations US Clean Air Act and implementing regulations Subnational – all states but especially California Subnational – all states but especially California Regional – Port of LA/Long Beach Regional – Port of LA/Long Beach

15. Policy Considerations #1 All entities currently regulating or trying to regulate air emissions from ships have legitimate legal jurisdiction to do so to SOME degree All entities currently regulating or trying to regulate air emissions from ships have legitimate legal jurisdiction to do so to SOME degree All entities have ethical responsibilities to constituents to assure a safe and healthy environment for their citizens All entities have ethical responsibilities to constituents to assure a safe and healthy environment for their citizens

16. Policy Considerations #2 Vast percentage of international trade is carried in the global (non US flag) fleet Vast percentage of international trade is carried in the global (non US flag) fleet Citizens want clean air AND cheap goods Citizens want clean air AND cheap goods “Cookie cutter” approaches to ship emission controls will not provide the best balance of environmental benefit and the facilitation of trade “Cookie cutter” approaches to ship emission controls will not provide the best balance of environmental benefit and the facilitation of trade

17. Unknowns Predicted growth rate of world fleet Predicted growth rate of world fleet Actual emissions from ships Actual emissions from ships Cost of fuel under more stringent emissions reductions programs (globally and regionally) Cost of fuel under more stringent emissions reductions programs (globally and regionally) Emissions abatement technology development (SCR, EGS, others?) Emissions abatement technology development (SCR, EGS, others?) Cost/benefit equation Cost/benefit equation

18. Ultimate Goal Net environmental benefit at all levels Net environmental benefit at all levels No cross media transfers No cross media transfers Global availability of fuels meeting requirements at all jurisdictional levels Global availability of fuels meeting requirements at all jurisdictional levels Continuing advances in shipboard emission reduction technologies Continuing advances in shipboard emission reduction technologies Adaptability and flexibility to address regional issues without adverse impact on international trade Adaptability and flexibility to address regional issues without adverse impact on international trade

19. Annex VI Amendments - SOx GLOBAL 4.5% cap now 4.5% cap now 3.5% cap by 1/1/12 3.5% cap by 1/1/12 0.5% cap by 1/1/20 0.5% cap by 1/1/20 Subject to fuel oil availability review Subject to fuel oil availability review Max extension to 1/1/25 Max extension to 1/1/25ECAs 1.0% by 3/1/10 1.0% by 3/1/10.1% by 1/1/15.1% by 1/1/15

20. Annex VI Amendments - NOx NEW ENGINES* Tier I – current Tier I – current Tier II = 20% reduction by 2012 Tier II = 20% reduction by 2012 Tier III = 80% reduction by 2016 (only in ECAs) Tier III = 80% reduction by 2016 (only in ECAs) * Refers to Category 3 engines only EXISTING ENGINES No controls currently No controls currently Tier I would apply subject to emission upgrade system certification by flag state Tier I would apply subject to emission upgrade system certification by flag state

21. US Activities EPA Cat 2 rulemaking (final rule issued) EPA Cat 2 rulemaking (final rule issued) EPA Cat 3 rulemaking (final rule by Dec 2009) EPA Cat 3 rulemaking (final rule by Dec 2009) Federal legislation – S 1499/HR 2458, Marine Vessel Emissions Act of 2007 (pending, expect reintro next year) Federal legislation – S 1499/HR 2458, Marine Vessel Emissions Act of 2007 (pending, expect reintro next year) State action – CARB (2 nd iteration) State action – CARB (2 nd iteration)

22. IN A NUTSHELL – US ACTIONS EPA using best efforts to accomplish goals at IMO EPA using best efforts to accomplish goals at IMO If unsuccessful, implementation via federal legislation and rulemaking If unsuccessful, implementation via federal legislation and rulemaking Wild card – California Wild card – California Likely legal challenges Likely legal challenges Consideration of SECA/ECA along all three coasts Consideration of SECA/ECA along all three coasts

23. Ballast Water Management  Balance of Powers gone wrong!  Legislative, judicial and executive branch  BW Legislation – S 1578, HR 2830  Court case – NW Environmental Advocates vs. EPA (Industry intervened)  EPA and USCG regulatory programs

24. BASIC FUNDAMENTALS  Shipping is international  Regulation of shipping should be international  Predictability of requirements  Elimination of regulation induced competitive disadvantages  Potential tension among international, legislative and regulatory requirements  Timing is everything!!!!

25. INDUSTRY BASED ASSUMPTIONS  Need for internationally accepted mandatory BW management program  Consistency between international and domestic programs  Solutions must provide real benefit to the environment  We are experts in vessel operations, not marine/invasion biology  Be careful what questions you try and answer!

26. INDUSTRY POSITIONS  Mandatory national BW management program  Exchange as technology benchmark but no longer appropriate focus for future control strategies  Promote ID and testing of new technologies  Oppose dual regulatory structures e.g. CWA NPDES and ballast water statute

27. LAY OF THE LEGAL LANDSCAPE  Finalized IMO Convention  Development of IMO Guidelines  US Legislative Initiatives (Fed/State)  Regulatory Initiatives (Fed/State/Local)  Multitude of technology developers all assuring their “silver bullet”

28. IMO CONVENTION VS. US LEGISLATION  IMO entry into force????  Multiple US legislative efforts  US legislation enactment expected ???  Industry position to maximize alignment of national and IMO requirements  100% alignment unlikely (performance std.)

29. DEVIL IS IN THE DETAILS (IMO Guidelines)  Sediment and BW Reception Facilities  Sampling  Equivalent Compliance for pleasure/SAR vessels  BW Management Plans  BW Exchange  Additional measures and risk assessment protocols  Approval of ballast water management systems  Procedures for approval of “active” substances  Prototype BW treatment technologies

30. DEVIL IS IN THE DETAILS (US Legislative and Regulatory)  General legislation with details left to regulatory programs or…  Specific legislation with less detail left to regulatory programs?  IMO requirements reflected in total…in part…or not at all?  Intentional or inadvertent loopholes with partial adoption of IMO requirements

31. PERFORMANCE BASED STANDARD  Mandatory requirements “do able” by all vessels regardless of location, vessel type or weather/sea conditions  New technology verified by standardized test protocols  Timed phase-in differentiating between new and existing ships

32. ALTERNATIVE BW MANAGEMENT TECHNOLOGY PROGRAM  Must be transparent process  Specified process for proposal submittal, evaluation and approval  Specified format and content  Use of technology verification protocols  “Temporary” approval for testing program with final review and approval for successful test programs

33. FEDERAL PREEMPTION OF STATE REQUIREMENTS  NISA 96 recognizes need for national and international consistency  Equally applicable to federal and state programs  Must have strong legal and policy justification to gain Congressional support  Current evidence of “patchwork quilt” in varying state and national requirements

34. NEED FOR EXCLUSION FROM CLEAN WATER ACT PROVISIONS  Text to make national legislation the EXCLUSIVE statute for managing ballast water  Otherwise, provisions of CWA permitting program (NPDES) would apply as well

35. DEVELOPING TECHNOLOGIES  Filtration  Other physical separation  UV/IR or other electromagnetic spectra application  Thermal  Chemical biocides  Ozone  But…..need performance standard to assess

36. TECHNOLOGY DEVELOPMENT CONSIDERATIONS  Maximum operational flow rate (vessel)  Maximum operational flow rate (application and/or residence time)  Adaptability to shipboard environment  Footprint  Installation and maintenance feasibility  Back-up capability and redundancy  Sampling and monitoring needs

37. CHALLENGES  Standardized test protocols  Finalized IMO guidelines and domestic requirements  Ramp-up from lab to pilot to shipboard  Conversion of existing performance data (% removal to concentration based format)  Sufficient funding (public and private)  ACKNOWLEDGEMENT THAT THERE IS NO SILVER BULLET!

38. PENDING LEGISLATION (FEDERAL)  None as yet in new Congress  Expect re-introductions of ballast water legislation in House and Senate?  Senate players – Levin, Inouye, Boxer  House players - Oberstar

39. STATE ACTIONS  California (zero discharge by 2020)  Washington, Oregon, Michigan  Other Great Lakes states in process  Expect others……..  Provides perfect example of why a national program is necessary e.g. varied requirements  Wide variety of state requirements in NPDES Vessel General Permit

41.  Clean Water Act (CWA) Permit Basics  Vessel General Permit and Exclusions  Court Decision(s)  Implications  Questions & Issues to Consider 41

42.  “Discharge of a pollutant” generally prohibited without a permit [CWA § 301(a)]  National Pollutant Discharge Elimination System (NPDES) Permits [CWA § 402] ◦ Individual permits ◦ General permits  State authorization ◦ 46 States and authorized territories 42

43.  Effluent limits [CWA § 301(b)] ◦ Technology based [CWA § 304(b)]  Effluent guidelines (BAT)  Best professional judgment (BPJ) ◦ Water quality based [CWA § 303]  Permit needs to achieve State water quality standards  For purposes of the CWA, State waters are internal waters and the 3 mile territorial sea  Processing (General Permits)  Proposed draft permit  Public comment (Ended August 1, 2008)  Issue final permit  Vessel files notice to be covered under general permit 43

44.  STATUTORY exclusions: Stated in the CWA itself and thus unaffected by lawsuit: ◦ Vessels operating as a means of transportation beyond 3 mile limit [CWA § 502(12)(B)] ◦ Sewage from vessels or discharges incidental to the normal operation of vessels of the Armed Forces, within the meaning of § 312 [CWA § 502(6)(A)] 44

45.  REGULATORY exclusion (vacated by court case) [40 CFR 122.3(a)]  EPA excluded certain discharges incidental to the normal operation of vessels from the obligation to obtain an NPDES permit ◦ Issued in May 1973 ◦ Never previously challenged 45

46.  Rulemaking petition ◦ Jan 1999: Petition from Northwest Environmental Advocates, Center for Marine Conservation, Great Lakes United  Petition concerns focused on ballast water ◦ Sept 2003: EPA denied petition based on Congressional acquiescence and Coast Guard authority under NISA ◦ Dec. 2003: Lawsuit filed by Northwest Environmental Advocates and others challenging petition denial  Litigation & outcome in U.S. District Court ◦ March 2005: Ruling that the regulation (40 CFR 122.3(a)) excluding discharges incidental to the normal operation of a vessel from NPDES permitting exceeded the Agency ’ s authority under the CWA ◦ Sept 2006: Final order vacating (revoking) the regulatory exclusion as of September 30, 2008, and potentially affects all incidental discharges of vessels  Current status ◦ August 2007: Appellate oral arguments with 9 th Circuit ◦ July 2008: 9 th Circuit upholds lower court decision ◦ August 2008: US District Court grants extension to December 19, 2008 ◦ December 2008: US District Court grants extension to Feb 6, 2009 46

47.  All vessels with discharges of pollutants over 79’ will need permit coverage by 2/6/2009 (60,000+)  Congressional exemption for recreational boaters and fishing vessels  Coverage automatic on February 6, 2009; vessels allowed 6-9 months to file NOI  Not just limited to ballast water discharges but includes other operational discharges ◦ But does NOT affect exemptions specifically contained in CWA itself (see earlier slide) 47

48.  EPA Vessel Vacatur Taskforce ◦ Proposed VGP issued June 17, 2008 (comment period ended August 1, 2008)  EPA Request for Comments ◦ Implications of Court’s decision, vessel discharge inventory, best management practices and/or regulatory requirements already in place  General permit published December 19, 2008  Compliance extension granted by CA District Court to February 6, 2009  Continued coordination with USCG and EPA  Enactment of Federal legislation with CWA exclusion text (moots court case) still possible 48

49.  How to define and categorize the universe of vessels?  How to inform affected universe that they need to obtain permit coverage?  How to define and categorize operational discharges and control technologies/BMPs?  How to determine technology requirements using BPJ factors? Availability and feasibility as criteria. 49

50.  How to address State WQ standards that vary reach-by-reach or State to State?  How to integrate with any applicable international or domestic requirements under statutes besides CWA? (e.g., Coastal Zone Management Act which requires State certification as to consistency with coastal zone management plans) 50

51.  Deck Washdown and Runoff  Bilgewater  Ballast Water  Anti-fouling Hull Coatings  AFFF  Boiler/Economizer Blowdown  Cathodic Protection  Chain Locker Effluent  Controllable Pitch Propeller Hydraulics  Elevator Pit Effluent  Firemain System  Graywater  Non-Oily Machinery Wastewater  Reefer and Air Condensate Discharge 51

52.  Rudder Bearing Lube Discharge  Seawater Cooling Overboard  Seawater Piping Biofouling Prevention  Small Boat Engine Wet Exhaust  Stern Tube Oily Discharge  Underwater Ship Husbandry  Graywater + Sewage  Exhaust Gas Scrubber Washwater  Materials (including Hazmat) storage 52

53.  Incorporate current legal requirements  Create Best Management Practices (BMPs) reflecting current practices  Some “add ons” with biggest impacts on vessels not going outside 3 nm and those that do but remain inside for extended period (anchorage, repairs, etc.) 53

54.  Use of ambiguous terms (minimize, where practical, to the extent possible)  Insufficient science and fleet data to justify discharge restrictions (no environmental impacts analysis)  Lack of temporal and spatial distribution data  State 401 certification process and varying state requirements 54

55. Kathy Metcalf Director, Maritime Affairs Chamber of Shipping of America 1730 M Street, NW Suite 407 Washington, DC 20036 Kmetcalf@knowships.org 55