[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
MARITIME TRANSPORTATION REGULATIONS:
IMPACTS ON SAFETY, SECURITY, JOBS,
AND THE ENVIRONMENT, PART 2
=======================================================================
(113-56)
HEARING
BEFORE THE
SUBCOMMITTEE ON
COAST GUARD AND MARITIME TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
MARCH 4, 2014
__________
Printed for the use of the
Committee on Transportation and Infrastructure
Available online at: http://www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=transportation
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
VACANCY
------ 7
Subcommittee on Coast Guard and Maritime Transportation
DUNCAN HUNTER, California, Chairman
DON YOUNG, Alaska JOHN GARAMENDI, California
HOWARD COBLE, North Carolina ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey RICK LARSEN, Washington
PATRICK MEEHAN, Pennsylvania TIMOTHY H. BISHOP, New York
STEVE SOUTHERLAND, II, Florida, LOIS FRANKEL, Florida
Vice Chair CORRINE BROWN, Florida
TOM RICE, South Carolina JANICE HAHN, California
MARK SANFORD, South Carolina NICK J. RAHALL, II, West Virginia
BILL SHUSTER, Pennsylvania (Ex (Ex Officio)
Officio)
VACANCY
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Panel 1
Rear Admiral Joseph A. Servidio, Assistant Commandant for
Prevention Policy, United States Coast Guard................... 4
Hon. Michael H. Shapiro, Principal Deputy Assistant
Administrator, Office of Water, U.S. Environmental Protection
Agency......................................................... 4
Christopher Grundler, director, Office of Transportation and Air
Quality, Office of Air and Radiation, U.S. Environmental
Protection Agency.............................................. 4
Panel 2
Thomas A. Allegretti, president and chief executive officer, The
American Waterways Operators................................... 24
Kathy J. Metcalf, director of maritime affairs, Chamber of
Shipping of America............................................ 24
James Roussos, Vessel General Permit coordinator, LaMonica Fine
Foods and Oceanside Marine..................................... 24
Rod Jones, president and chief executive officer, CSL Group Inc.. 24
PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS
Hon. John Garamendi, of California............................... 36
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Rear Admiral Joseph A. Servidio.................................. 38
Hon. Michael H. Shapiro.......................................... 42
Christopher Grundler............................................. 51
Thomas A. Allegretti............................................. 57
Kathy J. Metcalf................................................. 66
James Roussos.................................................... 71
Rod Jones........................................................ 81
William Terry \\......................................... 108
SUBMISSIONS FOR THE RECORD
Hon. John Garamendi, a Representative in Congress from the State
of California, request to submit the following letters from:
Mary D. Nichols, chairman, California Air Resources Board, to
Hon. Duncan Hunter, Hon. John Garamendi, and Hon. Janice
Hahn, Representatives in Congress from the State of
California, February 28, 2014.............................. 18
Christopher A. Coakley, vice president of government affairs,
Saltchuk Resources, Inc., to Hon. Duncan Hunter and Hon.
John Garamendi, Representatives in Congress from the State
of California, March 2, 2014............................... 21
----------
\ William Terry, president and chief executive officer,
Eagle Rock Aggregates Inc., was scheduled to be a witness at
the hearing but was unable to attend due to a family emergency.
His written statement is included in the record.
[GRAPHIC] [TIFF OMITTED]
MARITIME TRANSPORTATION REGULATIONS: IMPACTS ON SAFETY, SECURITY, JOBS,
AND THE ENVIRONMENT, PART 2
----------
TUESDAY, MARCH 4, 2014
House of Representatives,
Subcommittee on Coast Guard and Maritime
Transportation,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to call, at 3:05 p.m. in Room
2253, Rayburn House Office Building, Hon. Frank A. LoBiondo
presiding.
Mr. LoBiondo. The subcommittee will come to order.
Chairman Hunter, because of the crazy schedule this week,
is in the air as we speak. He has asked me to sit in. And I
believe Mr. Garamendi will be here very shortly. But out of
respect for your schedules, we will go ahead and we will get
started.
The subcommittee is meeting today for the second part of
our two-part hearing to review regulations affecting the
maritime industry. Today's hearing will focus on environmental
regulations and how such regulations impact the flow of
commerce through our ports and the ability to grow jobs in the
maritime sector.
The Coast Guard and the EPA are writing and enforcing new
regulations on vessel owners in an effort to improve water and
air quality. While regulations should address ways to enhance
environmental stewardship, they must also balance the
importance of maintaining the free flow of maritime commerce. I
am very concerned that some of these regulations fail to
achieve that balance.
Some of these rulemakings are extremely costly. They are
burdensome and they are duplicative and they are not being
applied and enforced in a fair manner. Take, for instance,
regulations governing the discharge of ballast water.
Currently the Coast Guard and the EPA have developed
separate regulations under two different Federal laws to govern
ballast and water discharges. Although the agencies have worked
together to try to reach uniformity, the programs still differ
in vessels covered, geographic reach, enforcement, and
penalties for noncompliance.
For example, the Coast Guard rules allow for vessel owners
to seek an extension if treatment technologies do not exist or
cannot be installed by the deadline. The EPA provides no
mechanism for an extension, leaving a vessel owner liable for
civil and criminal penalties through no fault of their own.
The situation only becomes more confusing and burdensome
for vessel owners as each individual State adds its own ballast
water discharge requirements on top of the EPA's program.
Under the EPA's current program, 25 States have added their
own differing discharge standards. Some States have laws in
place forcing vessel owners to treat their ballast water to a
standard for which no technology has yet been invented. I would
like to know what the rationale is behind that, but we will
leave that go.
The situation is ridiculous. It is completely unreasonable
to ask vessel operators to comply with 2 Federal standards and
as many as 25 different contradictory and unachievable State
standards.
I appreciate the committee's work to include legislation
that Mr. Larsen and I drafted to address incidental discharges
from fishing vessels in the Coast Guard bill, and I hope that
legislation will move forward soon. However, we still need to
tackle the issue of ballast water.
I look forward to working with my colleagues in the House
and Senate on bipartisan legislation to establish a uniform
national ballast water discharge standard. I am also concerned
about the implementation of the North American Emissions
Control Area.
Beginning January 1st of 2015, vessels transiting 200 miles
from shore will need to burn ultra-low-sulfur fuel. While I
understand the critical importance of improving the air quality
in our coastal regions, I am concerned the EPA and Coast Guard
did not properly consider the economic impact this rule will
have on smaller vessels that must travel entirely within the
EEZ.
The costs associated with this new rule could severely
undermine efforts to promote the use of short sea shipping as
an alternative to moving freight along our congested highways.
I look forward to hearing from our witnesses on what steps they
plan to take to work with industry on this issue.
As I have said before, maritime commerce is essential to
the U.S. economy. Domestic shipping alone is responsible for
over 500,000 American jobs and $100 billion in annual economic
output. With the economy still in a fragile state, it is
imperative that the Federal Government foster an atmosphere
where our maritime industry can compete and expand.
I want to thank Ranking Member Garamendi and the witnesses
for working with us on rescheduling today's hearing, and I look
forward to hearing from all of our witnesses.
With that, I yield to Mr. Garamendi.
Mr. Garamendi. Thank you, Mr. LoBiondo.
I understand that our chairman is still trying to find his
way here from California.
Mr. LoBiondo. You seem to have mastered that.
Mr. Garamendi. I didn't say that to draw that as a
difference.
Mr. LoBiondo. No. I mentioned right before you got here, he
sent his regrets. There is an outside chance he could make it,
but with the flight schedules that he had to deal with, he
couldn't quite get here for 3 o'clock, and appreciates the
cooperation to allow this important topic to move forward.
Mr. Garamendi. I had the good fortune to have one of the
few flights that actually did take off in the last couple days.
In any case, I want to thank you and the chairman for
rescheduling this hearing from this morning to this afternoon
and for the previous effort to get it done.
It is important, really. The status of the environmental
regulations affecting the maritime transportation is of utmost
importance to the industry as well as to the environment.
I look forward to learning more about the status of the
Coast Guard's and the Environmental Protection Agency's
rulemaking activities and, as you said, either the coordination
or lack of coordination.
As I have stated before, making sure that the Federal
regulations are targeted, fair, and reasonable is necessary to
ensure that the ongoing recovery of the U.S. economy continues
to gain traction and that the U.S. maritime industry remains a
vibrant source of job creation. My constituents expect nothing
less.
In particular, I will be interested in hearing from both
the Coast Guard and the EPA on the challenges that remain in
implementing their respective rules to address the issue of
ballast water discharge into the waters of the United States.
According to the National Oceanic and Atmospheric
Administration, every year there are more than 21 billion
gallons, more than 40,000 gallons a minute, of ballast water
that are discharged into U.S. waters.
Moreover, every day an estimated 10,000 marine species are
transported around the world in ballast water. The current
number of invasive species in San Francisco Bay alone is now at
212, and new species are appearing every 14 weeks.
That is a major economic problem for the area that I
represent, the San Francisco Bay and the delta. It has led to a
huge blowup in the water issues.
Unfortunately, the ecological havoc that is caused by this
is not likely to get better. In fact, it is likely to get worse
as the spread of invasive species is increased along with
expansion of global trade.
We need to hear from the EPA on what challenges may lay
ahead in the Vessel General Permit to regulate vessel
discharges.
I also want to hear from the Coast Guard on its forecast
for the type approval for ballast water treatment systems
allowing shipping lines to comply with the Coast Guard and the
EPA's ballast water discharge regulations. And, once again, I
think it is extremely important that these regulations be
coordinated and consistent and work together.
I would also be interested in hearing from the EPA and
witnesses from the maritime industry about EPA's ongoing
implementation of its rule implementing the North American
Emissions Control Area. We are a coastal State in California,
and this issue was of considerable interest to the State.
That North American Emission Control Area is intended to
reduce vehicle emissions in the coastal airsheds and improve
public health. The ECA is a vital contributor to the California
strategy to meet its emission reduction targets.
It is important that we understand how the rule is working,
how the industry is adapting during its transition to meet the
low-sulfur fuel standards and whether we can expect any
shortage in the supply of low-sulfur fuel to vessel operators
and the cost associated with that.
Mr. LoBiondo, I thank you for conducting the hearing. I
look forward to working with you as this hearing proceeds. And
who knows. Maybe the chairman can actually catch a plane. We
will see.
Mr. LoBiondo. OK. Thanks, John.
Mr. Garamendi. Or a plane can actually fly.
Mr. LoBiondo. We welcome our first panel of witnesses
today: Rear Admiral Joseph Servidio, Assistant Commandant for
Prevention Policy at the United States Coast Guard; Mr. Michael
Shapiro, Principal Deputy Assistant Administrator of the Office
of Water at the Environmental Protection Agency; Mr. Chris
Grundler, who is director of the Office of Transportation and
Air Quality at the Environmental Protection Agency.
Admiral, you are recognized.
TESTIMONY OF REAR ADMIRAL JOSEPH A. SERVIDIO, ASSISTANT
COMMANDANT FOR PREVENTION POLICY, UNITED STATES COAST GUARD;
HON. MICHAEL H. SHAPIRO, PRINCIPAL DEPUTY ASSISTANT
ADMINISTRATOR, OFFICE OF WATER, U.S. ENVIRONMENTAL PROTECTION
AGENCY; AND CHRISTOPHER GRUNDLER, DIRECTOR, OFFICE OF
TRANSPORTATION AND AIR QUALITY, OFFICE OF AIR AND RADIATION,
U.S. ENVIRONMENTAL PROTECTION AGENCY
Admiral Servidio. Chairman LoBiondo, Ranking Member
Garamendi, distinguished members of the subcommittee, good
afternoon.
It is my pleasure to return today and continue our
discussion about the Coast Guard's regulatory program and
specifically our environmental reg initiatives.
The Coast Guard's regulatory program focuses on managing
maritime risks through the establishment of proficiency,
safety, and security standards. Doing so protects life,
property, and our precious marine environment.
Our goal is to harmonize protection of the maritime
environment with ensuring safe and efficient flow of commerce.
Achieving the appropriate balance requires a pragmatic and
transparent reg development process. We aim to produce
relevant, environmentally sound, and achievable standards.
More than half of the Coast Guard's rulemaking projects
involve environmental issues, such as ships' discharge of solid
waste and pollution from oil and hazardous substances.
The Coast Guard has also published a number of rules aimed
at protecting the marine environment. Two of the more notable
ones include Ballast Water Discharge Standard and the Nontank
Vessel Response Plan Final Rules.
Ballast Water Discharge Final Rule established a Federal
standard for the concentration of living organisms in ships'
ballast discharged into the U.S. waters. The Coast Guard worked
closely with our interagency partners to develop this rule,
ensuring appropriate measures were in place to protect our
waterways.
The recently published Nontank Vessel Response Plan Final
Rule requires nontank vessels to plan for and contract
resources to respond to a fuel spill, a fire, a vessel
grounding or other incidents posing environmental threats.
This rule enhances national preparedness and response
capabilities. It increases U.S. oil spill, marine firefighting,
and salvage capabilities, and it ensures shortened response
times to potentially catastrophic incidents.
The shipping industry rose to meet the requirements by
submitting 1,700 nontank vessel response plans for Coast Guard
approval before the 30th of January with no apparent impact on
commerce. To date, we have issued over 1,800 interim operating
authorizations covering more than 12,000 nontank vessels.
These rulemakings highlight two of the more significant reg
projects finalized by the Coast Guard. My written statement
provides details on others.
The Coast Guard also works internationally to protect the
marine environment with our interagency partners at the
International Maritime Organization, or IMO. The Coast Guard
has been successfully shaping and influencing initiatives that
globally promote safe and effective environmental protection
standards.
Our efforts at IMO include working to reduce air emissions
from ships through improved efficiency, implementing more
stringent measures to eliminate at-sea garbage discharges, and
developing standards for safe and environmentally friendly ship
recycling.
Through strong ties with Canadian counterparts and working
with the EPA, we developed and implemented the North American
and Caribbean Sea Area Emission Control Areas, or ECAs.
In the polar regions, the Coast Guard recognizes expanded
environmental risk. We worked with interagency and industry
reps, including NOAA, the EPA, the National Science Foundation,
and the Department of Defense, to develop a consensus U.S.
position.
The Polar Code will provide a crucial mechanism for
ensuring vessels in Arctic waters meet safe and environmentally
sound design and operating standards.
Along with our interagency colleagues and the partnering
Arctic States of Norway, Finland, Canada, Denmark, and Iceland,
the Coast Guard is leading the development of the Polar Code's
environmental component.
In summary, the Coast Guard has a long and consistent
history of collaboration with our interagency partners and the
international community.
We nurture these relationships to develop thoughtful
standards that promote the protection of the marine environment
while balancing the need for the efficient flow of commerce.
This has been and will remain our core focus.
As I said before, the Coast Guard thanks Congress and
specifically this subcommittee for your interest and your
involvement in our activities.
Your continued support will ensure the Coast Guard is able
to effectively advance marine environmental policy development
in both domestic and international arenas.
Thank you. I look forward to your questions.
Mr. LoBiondo. Thank you, Admiral.
Mr. Shapiro, you are now recognized.
Mr. Shapiro. Good afternoon, Chairman LoBiondo and Ranking
Member Garamendi. Thank you for the opportunity to discuss the
EPA's regulation of vessel discharges under the Clean Water
Act.
All of us are concerned about the environmental and
economic impacts of invasive species. Economic costs from
invasions are in the billions of dollars annually.
Over the past several years, we have worked together with
the Coast Guard to develop a strong ballast water management
program to help reduce the risk of new introductions.
EPA's Vessel General Permit, or VGP, regulates discharges
incidental to the normal operation of a vessel, including
ballast water. The VGP includes discharge limits, monitoring,
and recordkeeping requirements and other conditions.
Discharge limits are primarily in the form of best
management practices, or BMPs, that in many cases are already
being performed on vessels. The 2013 Vessel General Permit went
into effect in December of last year.
As we have started to implement these requirements, we have
been contacted by vessel owners concerned about the ballast
water technology requirements in the Coast Guard's rule and the
EPA's Vessel General Permit.
To help address these concerns, the EPA issued an
enforcement response policy in December of 2013 which states
that vessels that cannot meet the VGP's numeric ballast water
limits and have received a compliance extension from the Coast
Guard are considered a low enforcement priority.
The EPA and the Coast Guard worked together to develop and
distribute a joint letter to those vessel owners that have been
or will be granted an extension from the Coast Guard's
regulations.
Our coordinated response helps to provide the regulated
community with a common understanding of how the permit and the
rule work together with respect to such extensions.
Regarding smaller vessels, the EPA proposed the Small
Vessel General Permit, or SVGP, in 2011 to provide Clean Water
Act authorization for fishing vessels and commercial vessels
less than 79 feet if and when the congressional moratorium on
these smaller vessels expires.
Recognizing that these smaller vessels are different in how
they operate, the draft SVGP is shorter and simpler than the
VGP, which was developed for larger vessels.
The draft SVGP specifies commonsense best management
practices for several categories of discharges, all of which
need to be covered in order for a vessel to operate in
compliance with the Clean Water Act.
We are currently considering public comments we received
which will inform our development of a final Small Vessel
General Permit.
Once again, Chairman LoBiondo and Ranking Member Garamendi,
thank you for the opportunity to discuss EPA's vessel permits.
I look forward to answering any questions you may have. My full
statement has been submitted for the record.
Mr. LoBiondo. Thank you, Mr. Shapiro.
Mr. Grundler, you are now recognized.
Mr. Grundler. Thank you, Chairman LoBiondo, Ranking Member
Garamendi, and other Members. I appreciate the opportunity to
testify today on the implementation of the North American and
U.S. Caribbean Sea Emission Control Areas, or ECAs.
ECAs are one of the most important and cost-effective air
quality programs the U.S. Government has put into place in the
past decade and will result in the prevention of tens of
thousands of premature deaths.
The North American ECA is already yielding significant
public health and environmental benefits extending from all
U.S. coastal areas to hundreds of miles inland.
In 2014, more than 135 million people living in ozone
nonattainment areas and over 84 million people living in fine
particle nonattainment areas will benefit from cleaner air due
to the ECA.
Furthermore, these air quality improvements are critical
for States to attain and maintain the existing health-based
National Ambient Air Quality Standards, or NAAQS.
By 2030, emission reductions resulting from the North
American ECA will prevent between 12,000 and 31,000 premature
deaths and 1.4 million workdays lost in the United States.
EPA estimates that the monetized human health and welfare
benefits of this program outweigh the costs of this program by
a factor of at least 30 to 1. In short, the ECA is one of the
most cost-effective mobile source programs ever adopted.
Implementation of the ECA started in August 2012 when the
allowable marine fuel sulfur level was reduced to no greater
than 10,000 parts per million.
The Coast Guard and EPA have worked and continue to work
closely with the regulated community to ensure an orderly
transition during this first stage of ECA standards. Overall,
implementation of ECA is going very well and ships are using
compliant fuel in the ECA.
A second stage of fuel sulfur controls takes effect in
January 2015 when the allowable limit decreases to 1,000 parts
per million.
This ECA-compliant fuel is expected to be diesel fuel,
which is already widely available at many ports as it is used
on ships for auxiliary engines and for startup of the main
engines.
The EPA and Coast Guard will continue to work with vessel
owners during the transition to the 2015 standards, just as we
have done in the first stage of the fuel standards.
While the ECA is a significant public health achievement,
ECA fuel in 2015 will still have a much higher sulfur content
than fuels used in any other U.S. transportation sector, more
than 65 times higher than the allowable sulfur content for
diesel fuel used in cars, trucks, trains, and ships operating
on our inland waterways.
MARPOL Annex VI contains some flexibility provisions, and
several owners of ships that operate primarily in the ECA have
requested and received permits to develop new technologies and
methods that can achieve compliance at a lower cost.
EPA has worked closely with the Coast Guard and the
relevant flag countries to assess and approve several of these
projects. As a result, these companies are making substantial
investments to develop exhaust gas cleaning systems, convert or
build new vessels to use liquefied natural gas fuel, and use
shoreside power to reduce emissions.
EPA has worked closely with these companies to ensure that
they will receive equivalent or greater emission reductions and
are incentivizing the development of this new technology.
We will continue to work with the Coast Guard and the
industry on programs to reduce costs and encourage the
development of new lower cost technologies and compliance
methods while meeting these tremendous public health benefits
of the ECA.
Thank you for the opportunity to appear before you today.
Mr. LoBiondo. Thank you very much.
We will now go to some questions.
Admiral, first for you. Why do you think the manufacturers
are reluctant to submit their treatment systems for type
approval in the U.S. Coast Guard? I mean, why aren't we seeing
some of that?
Admiral Servidio. Sir, what I can say is that the G8
guidelines, which are the international standards, are
guidelines, and the interpretation by some of the
administrations have been different on what needs to be done
for an approved--an IMO-approved ballast water treatment
system.
I believe some of the manufacturers are going through
testing now to make sure that their systems will pass Coast
Guard type approval, which is going to be done by an
independent third party.
We have two consortiums of laboratories that have been
identified, and they are looking--I am aware of one company
that is looking in the next couple of months to aggressively
begin type approval for its system that the Coast Guard has
accepted as an alternate management system, sir, a system which
currently has IMO type approval. When the Coast Guard brought
AMSs into the AMS program, it was anticipated they would go
through Coast Guard type approval.
So, all of those systems are expected to go through Coast
Guard type approval. I can only speculate on why it has taken
some of them longer. We do anticipate at least one system will
be going through type approval very shortly.
Mr. LoBiondo. Admiral, does the Coast Guard support a
single Uniform National Discharge Standard for ballast water?
Admiral Servidio. Mr. Chairman, I could say that right now
we do have two different statutes with two different
requirements. We are working closely with the EPA to, as best
we can, mesh those systems. I have spoken to Mike Shapiro
probably weekly on some of what we are trying to do.
I think the fact that we cosigned a letter that accompanies
all Coast Guard extensions for ballast water management systems
speaks to the fact that we are looking to have one unified
Government voice with regards to ballast water requirements,
but there are two different statutes, sir, with two different
requirements.
Mr. LoBiondo. So as of now, you don't support a single
uniform standard?
Admiral Servidio. Sir, I can just say there are two
different statutes that the Coast Guard works over and the EPA
works under, and we are trying to mesh them as best we can. But
they are two different statutes, sir.
Mr. LoBiondo. Well, I certainly will not speak for other
colleagues on the committee, but this, I think, is getting sort
of to the heart of the problem, as some of us see it, and as
what happens out in the real world. I don't know how you have
people going to a couple different standards. But thank you for
your answer.
Mr. Shapiro, you talked in your statement about law
enforcement priority. Can you tell us what that means. I mean--
I am sorry--low enforcement priority.
Mr. Shapiro. Low enforcement priority is a way of guiding
EPA's enforcement activities so as to avoid focusing on areas
which we believe don't merit attention--or merit very low
attention.
In the case of the Vessel General Permit and those vessels
that have been granted extensions by the Coast Guard and are
otherwise in compliance with the other requirements of the
Vessel General Permit, our strong belief is that looking at the
discharge limits from the ballast water should not be a
priority for our enforcement activities.
And, again, the reason for that is we want our approach to
be as closely aligned with the Coast Guard's as it can be under
the statutory framework that we operate under.
Mr. LoBiondo. So from your perspective or the EPA's, are
these vessel owners going to be held in violation of the Clean
Water Act or not?
Mr. Shapiro. Again, our expression is it is a very low
priority. I think history has shown, when we have used a
similar tool in the past in other situations similar to this,
EPA has not pursued enforcement where it has been designated a
low priority.
So I think there is a track record that we have to point to
that shows that, when we say low priority, we mean very low
priority.
Mr. LoBiondo. Very low priority.
But if you are a small vessel owner, I hope you can
understand the uncertainty that is created, because what you
are saying, I guess, is that, on a given day, under given
circumstances, the EPA could choose to enforce, which would
result in a fine. And that is, I think, getting to part of the
heart of the problem that we are talking about here.
One more question for you, Mr. Shapiro. Given the problems
that have arisen due to the differences with the Coast Guard on
scope, extension, enforcement, and, you know, the differing
standards, does EPA support a single uniform ballast water
discharge standard?
Mr. Shapiro. The administration has not taken a position on
that question.
So as with Rear Admiral Servidio, what we have--based on
the existing law and the court decisions affecting our
jurisdiction, the serious intent on the part of EPA to align
our work as closely as possible with the Coast Guard's, I think
we both share the objective that, ultimately, vessels will be
operating under type-approved systems which are meeting
rigorous standards that EPA and the Coast Guard jointly worked
on and hope to implement.
So, you know, I think our two answers are the same. We
don't have a position on that question. We are doing what we
think are the appropriate measures in order to align our work
together under the existing statutory framework.
Mr. LoBiondo. Well, I think therein lies the problem, at
least for myself and some of my colleagues.
If we can't point to a single standard, I don't know how we
go to the people who are operating vessels and give them any
certainty about what they have to do and how they have to do
it.
I have a couple more questions, but I want to defer to Mr.
Garamendi at this time, and then I will come back for the
balance of mine.
Mr. Garamendi. Thank you, Mr. LoBiondo.
Admiral Servidio and Mr. Shapiro, you have both repeatedly
said given the statute that you have to work with. It is our
business to change statutes.
I am not advocating that we change, but we--is there some--
what are the differences that are causing the discussion that
we just had? What are the specific differences in the statutes
that lead to this conflict between the statutes?
Admiral Servidio. Ranking Member, the Coast Guard works
under the National Invasive Species Act, and the EPA is working
under the Clean Water Act. Those are very different statutes
with different requirements, with different State requirements.
There is a number of factors. The regimes are very different,
sir.
Mr. Garamendi. There is nobody else in this room that has
the experience that the two of you have in working with these.
Is there a way to coordinate these two statutes so as to
eliminate the problem while maintaining the goal?
Admiral Servidio. Ranking Member, I can say the cleanest
way forward is to install a Coast Guard type-approved ballast
water management system.
At the present time we are working on that type approval
process, but we don't have a Coast Guard type-approved ballast
water management system, and that is causing some of the
problems between the two statutes.
Mr. Garamendi. But that is an industry issue trying to
develop a specific solution, that is, technology, to address
the problem. Is that correct?
And then, if that were to happen, then you are suggesting
the EPA's law and regulation would be satisfied?
Mr. Shapiro. Well, certainly the particular issue we are
talking about, which is the treatment of vessels whose owners
have applied for and gotten an extension to the compliance for
the ballast water numeric standard--that issue would certainly
be resolved. Once the type-approved systems are available,
vessels would have to adopt those systems.
In the interim, though, there are differences in the way
our laws are structured, which in this particular case gives
EPA somewhat less flexibility than the Coast Guard in
addressing the current unavailability of type-approved systems.
Mr. Garamendi. You mentioned this. But what is the status
of the type-approved system? You said there is one that is
being reviewed now? Go into that----
Admiral Servidio. Sir, the Coast Guard is required--sorry,
sir.
Mr. Garamendi. Just go into that in a little more depth, if
you would, please.
Admiral Servidio. An internationally approved ballast water
management system, the Coast Guard was required to bring it
into the alternate management system, which allows the vessel
to keep that system on for 5 years until a type-approved system
is available.
The thought would be that they would be able to, during
that 5-year period, make whatever modifications to that system
so it could become type-approved. There is a requirement that,
when you become part of the AMS process, that you have to
submit for Coast Guard type approval.
Of the 33 international systems now that the Coast Guard
have brought into the AMS program, none of them have
aggressively--or have at this point in time initiated the type
approval process through those 2 designated independent
laboratories that are capable of doing that.
I have been told that one of them is going to be doing that
shortly, sir, and I am hoping that others will also be doing
that shortly.
Mr. Garamendi. So it is the industry that has the
initiative?
Admiral Servidio. There is different segments of the
industry, sir. It is both vendors and it is the shipowners and
operators.
Mr. Garamendi. Take them one at a time.
What are the vendors doing?
Admiral Servidio. Again, the vendors now are the ones that
have to get their systems type-approved. The owners-operators
are taking a risk by installing a system or even working with a
vendor. If that does not become type-approved, they might have
to replace that system, sir.
Mr. Garamendi. So the initiative lies with the vendors and,
I suppose, also with the shipowners, who I assume would be
pressing for some approved system that they could then work
with?
Admiral Servidio. I think, sir, the second panel can
probably talk more about what--the specific problems they have
seen or what they have--why we haven't seen more type-approved
systems at this point, sir.
Mr. Garamendi. Then, I will get into it with the second
panel.
Mr. Shapiro, if there is a system approved or multiple
systems approved, would they meet your requirements and fulfill
your obligations under the law?
Mr. Shapiro. Type-approved systems would certainly meet our
requirements.
Now, we also have some ongoing monitoring requirements as
part of the Vessel General Permit regulation. So the systems
would have to, in operation, achieve certain limits that are
listed in our Vessel General Permit.
But we start with the presumption that a type-approved
system meets all the equipment requirements necessary for
operation. So----
Mr. Garamendi. The question----
Mr. Shapiro [continuing]. We also----
Mr. Garamendi. Please go ahead.
Mr. Shapiro. We also do accept in our Vessel General Permit
AMS systems that Rear Admiral Servidio referred to as well, but
they would also have to meet the same numerical limits.
Mr. Garamendi. Now, Admiral Servidio, do you also have
ongoing monitoring requirements?
Admiral Servidio. Sir, once we end up getting type-approved
systems, we will develop a compliance and enforcement policy,
and during that compliance and enforcement policy, we will get
into the details of what sampling or other types of things
might be necessary.
Mr. Garamendi. Could that be coordinated and be the same as
the EPA?
Admiral Servidio. I think we can look to coordinate it,
sir. But, again, the heart of the issue is the Invasive Species
Act is different than the Clean Water Act.
And even though we might be able to address something short
term, I am not sure long term whether there will also be issues
that pop up in the future, sir. They are different statutes. We
are coordinating them as best as we can.
Mr. Garamendi. I fail to see why they couldn't be
coordinated. You both have to monitor the ongoing operation of
that discharge system.
What conceivable reason is there that you could not have
the same form to fill out, the same monitoring, the same dates
or the same time periods in which they would be monitored?
Admiral Servidio. Sir, I am not an attorney, but I do
believe there are some different requirements as far as
technology that is different in the Clean Water Act than might
be in the Invasive Species Act.
Mr. Garamendi. Mr. Shapiro, is that the case?
Mr. Shapiro. I don't know whether, in practice, that would
be the case. I can say we would work as hard as possible with
our colleagues in the Coast Guard to make sure things were
aligned effectively. You know, we will have to look into it.
Mr. Garamendi. And you guys get together every week?
Mr. Shapiro. Recently we have been communicating, often by
phone, almost weekly. Given the nature of the issues that we
are addressing, we will continue to work closely with the Coast
Guard.
Mr. Garamendi. I am not going to speak for the chairman,
but I will tell you the ranking member wants to know the
specifics of how these two systems can coordinate.
You have already said that it can be coordinated with the
Coast Guard certifying these systems and that would suffice the
EPA. Now you are down to monitoring.
Am I right? I think I am right. I think that is what I
heard.
And I should think that the Coast Guard and the EPA could
figure out how to have the same form, same timeframe for
monitoring, you know, every 6 months or every 6 minutes,
whatever it might be, and do it once.
Now, if that is not the case, I want to know specifically
where it is not going to be able to be done that way. OK?
Admiral Servidio. Sir, yes, sir. What I can say is that
there is a requirement under the Clean Water Act that States
have authorities under that. They can file some requirements.
Mr. Garamendi. That is yet another issue. Let's not get the
States involved here right now.
But just between the two of you, you are suggesting that,
because the State might have a different system, that that
would then make this more complex?
Admiral Servidio. Sir, there are some States that have
said----
Mr. Garamendi. For one, California and New York.
Admiral Servidio [continuing]. You have to do ballast water
exchange and ballast water treatment.
And right now on the--for Coast Guard type approval, it
doesn't necessarily take into account having to do both of
those aspects, both treating the water and exchanging the
water.
So there is potentials going forward, sir, that there might
be some conflicts. I do think we are working closely together,
as close as we can, to have a uniform----
Mr. Garamendi. I want to be very specific here.
When State regulation or State action--and this is yet
another matter, and I am certainly familiar with that, being
from California and actually being involved in that when I was
in California as a Lieutenant Governor.
But the issue here is between the two of you. And if there
is another piece of this that comes in because a State--
California or New York--which, incidentally, have backed off--
leave that aside.
So for the EPA and the Coast Guard, apparently, there is a
way to have one system or multiple systems that are approved by
the Coast Guard that would be OK for the EPA.
Then comes the question of how do you continue to monitor,
which I think is necessary, and I suspect you do and--kind of
standard procedure.
I want to know, is there something in the laws that
prohibits you from having the same monitoring system?
With that, I will let that question be answered soon, I
hope, and I will yield back.
Mr. Shapiro. We will respond.
Mr. LoBiondo. Mr. Meehan.
Mr. Meehan. I thank you, Mr. Chairman.
And allow me to attach myself to the line of questioning of
the gentleman from California because I am particularly
concerned as well just from the practical perspective of a
ship's operator.
I mean, you both appreciate, do you not, the requirements
that one as an owner has to go through to meet your inspection
standards and why we would be requiring two separate
inspections when they can be done simultaneously just as a
matter of creating less ambiguity, but more efficiency, which
is something that I hope we could work towards?
I think we have established that you have created
regulations for a technology that does not yet exist, isn't
that accurate, what we are talking about, for the ballast water
exchange?
Let me ask you, Rear Admiral, first.
Admiral Servidio. Sir, we recognize--we said in the
preamble to the regulations that we believe the first type
approval would be in 2015.
And that is part of our regs. We have an extension permit
process so that there is a way for vessels to stay in
compliance until a type-approved system is available.
Mr. Meehan. Why is that being done before the technology is
available?
Admiral Servidio. Sir, at times, there needs to be a
forcing function. There is technology available. I believe
there----
Mr. Meehan. Saltwater technology. Right?
Admiral Servidio. There are some systems that have had
freshwater technology, too, sir, that are in the AMS system
that are able to work on freshwater. I believe there is about a
thousand systems that have been installed internationally right
now, sir.
Some of the issue is just how they were approved and
whether it was done by a third party and whether they can meet
the somewhat rigorous third-party independent laboratory
process that we have established for type approval here in the
U.S., sir.
I believe we will have type-approved systems. I believe
there is technology. We are going through that process right
now, sir.
Mr. Meehan. Well, let me ask a question of you, Mr.
Shapiro, in terms of the regulations that are being conducted
right now.
We share that waterway, do we not, with a northern
neighbor?
Mr. Shapiro. Well, we certainly share a waterway with
Canada. Yes.
Mr. Meehan. So, in essence, these regulations are going to
affect Canadian shipping as well. Is that not right?
Mr. Shapiro. That is correct.
Mr. Meehan. Now, do I understand that--while you have been
contemplating this issue and the regulations will not be fully
enforceable, I am assuming what you are saying is you are not
going to enforce the regulation until 2015, until you think you
have some standards for American shipping.
Is that the same for Canadian shipping?
Mr. Shapiro. Our Vessel General Permit applies to any
foreign vessels that are entering U.S. jurisdictional waters.
So, yeah, it would apply to Canadian vessels as well as vessels
from other nations that are entering our waters.
Mr. Meehan. Have you created special exemptions for
American ships?
Mr. Shapiro. No, sir.
Mr. Meehan. So it is not accurate that there has been
certain exemptions that have been identified by the EPA that--
regard to vessels that were constructed before 2009 do not have
to meet standards that ships built after 2010 do?
Mr. Shapiro. Vessels with respect to lakers, vessels
operating on the Great Lakes, it is my understanding that you
are correct. Vessels that were built before 2009 do not have to
have ballast water discharge devices installed.
Mr. Meehan. So what you are doing, even though this is a
situation in which it is--largely the Canadian fleet has
invested more in newer shipping and we have a more aging
American fleet.
But is it not accurate, then, that you are creating a--
perhaps you are sort of gaming the system, so to speak, so that
Canadian shipping is put at a disadvantage?
Mr. Shapiro. I think the requirement applies equally to
Canadian or U.S. vessels. And so I don't think there was any
intent to game, in your terms, the system to favor one nation's
vessels versus another.
Mr. Meehan. Well, it was my understanding that some of them
were exemptions that were for uniquely--are you saying that
there is no exemptions that relate exclusively to United States
shipping?
Mr. Shapiro. Well, for vessels that are solely operating in
U.S. waters, for example, barges that are operating in the U.S.
waters, they are not subject to ballast water requirements, but
those are not doing international trade.
Mr. Meehan. What I need from you is whether or not you can
give us a representation that you will work on a resolution.
I have great concern that what this is going to create is
going to be retaliatory measures on the part of the Canadian
authorities, who will turn around and create their own
standards.
And am I not correct that there are certain points where,
regardless of the shipping, they may have to go through waters
that are controlled by--in the Saint Lawrence Seaway and other
things that are controlled by Canada?
Mr. Shapiro. There is a long history of joint operations in
the Saint Lawrence Seaway and others, but certainly Canada and
the U.S., as you say, share that common seaway.
Mr. Meehan. Are we looking at the possibility that there
could be significant retaliatory measures if, in fact, we don't
find a way in which there can be collaboration and equal
treatment for the Canadian vessels as those that are--in the
same way American vessels are being treated in this waterway?
Mr. Shapiro. That issue has not been raised to my
attention. I certainly would be willing to go back and look to
see if we believe that such an issue is present.
Mr. Meehan. Will you make a commitment to me that you will
reach out to the Canadian authorities and determine whether or
not there is a capacity for there to be a resolution on this
issue before there is final decisionmaking about how things are
going to be enforced?
Mr. Shapiro. I am not actually sure of the specific issue
you are referring to.
I think you raised the issue of whether there was some
uneven treatment between U.S. and American vessels, and I will
certainly look into that. But until I know what the specific
issue is, it is hard to make a commitment as to what we can do
about that.
Mr. Meehan. OK. Well, I don't--I am told it has to do with
dates with regard to construction of ships and it also has--you
know, exemptions that were made for American shipping, but not
for Canadian shipping, with regard to the ballast, you know,
equipment that must be put on it.
You are saying that you are not going to, in effect, write
the ticket against the American ship, even though the
regulation is there, because the technology is not there.
Isn't that, in effect, what you are both saying, that, ``We
all know that, by the law, the standard is there, but we know
it is not able to be reached yet. So we are not going to
enforce it in the meantime''?
Mr. Shapiro. Well, with respect to the ballast water
provisions for the older vessels, we determined that it wasn't
technically feasible to retrofit them. But, again, I don't
think there was an intent to benefit one nation versus the
other in our process.
Mr. Meehan. If it is not technologically feasible, then are
you by the rules then underwriting what would be older vessels
that create a greater risk than the newer ones?
Mr. Shapiro. Well, the net result of that finding is that
the older vessels would not have the ballast water systems in
them.
Mr. Meehan. Well, then, we are not accomplishing the very
thing that you are trying to create the whole thing for in the
first place. Isn't that right?
Mr. Shapiro. Well, as new vessels continue to move into the
trade, ultimately, we will achieve----
Mr. Meehan. But you are creating a regulation that is
encouraging the continuation of older, ostensibly more
threatening vessels.
Mr. Shapiro. Well, in my experience as a regulator, in a
number of different programs, we often find that, given the way
our statutes ask us to make decisions, it is necessary to
address new sources in a somewhat different way than existing
sources because of the difficulties and costs associated with
retrofit. So I don't think this is an unusual circumstance.
But, again, I would be happy to go back and look at it.
Mr. Meehan. I know my time has expired, Mr. Chairman. Thank
you.
Mr. LoBiondo. Mr. Shapiro, when can we expect the EPA will
release a final Small Vessel General Permit?
Mr. Shapiro. Well, as I mentioned in my testimony, it is
currently at interagency review. That process is ongoing.
Our goal has always been to issue the final Small Vessel
General Permit well in advance of the expiration of the current
moratorium at the end of this year.
We are trying to move the process along as effectively as I
can, but I cannot give you a specific date at this point.
Mr. LoBiondo. That is about as ambiguous as we can get.
I am not trying to be contradictory here, but I would ask
you to put yourself in the position of one of us, who has
constituents who come to us and ask for some degree of
certainty on how they can conduct their business, and we look
totally inept that we can't give them any answers at all.
We can't give them any timing. We can't tell them we come
up with a single standard. We can agree to do a single
standard, not necessarily what it is. We just--I mean, it is
very frustrating.
Mr. Shapiro, one more question.
Many of the proposed management practices are impossible to
comply with, especially for fishing vessels. For example, the
EPA prohibits the discharge of unused bait unless that bait had
been caught in the same water body, but ``water body'' is not
defined.
So would this prohibit fishermen in the Gulf of Mexico from
using as bait mackerel and herring caught in New Jersey?
Mr. Shapiro. That provision, which--appeared in one version
in our draft Small Vessel General Permit, but also in our final
2000 permit, and in that case it applies to live bait only, not
to all bait. But I think that there is, as you point out, a
condition in there that basically talks about going from one
water body to another.
In the situation you are referring to where there is a
substantial distance and certainly different environmental
conditions, we would view that as a different water body.
However, there are other questions that have been raised
regarding that that will probably need some clarification.
Mr. LoBiondo. So we just don't know, I guess, is--I mean,
``water body'' not being defined, so the Atlantic Ocean, is
that a water body? I mean--or is it that we don't define that?
Mr. Shapiro. Well, you are correct that there is ambiguity
in that language, which we will work on clarifying.
Mr. LoBiondo. Mr. Grundler, from the record before us, it
is pretty clear the EPA did not take smaller coastal vessels,
such as certain self-unloading bulk carrier vessels, into
account when it promulgated this rule.
Can you tell us what the EPA is doing with these and other
vessel classes that it did not consider when promulgating the
rule, the ECA.
Mr. Grundler. Sir, I have to correct the record.
We certainly did take into account all vessels operating
within this zone when we did our complex and, frankly, very
rigorous economic analysis and air quality analysis.
So all vessels that travel our shores were considered when
we did our inventory assessment and then the air quality model.
Mr. LoBiondo. Mr. Garamendi?
Mr. Garamendi. Thank you, Mr. Chairman. A couple of things,
just some housekeeping.
I had asked the chairman of the California Air Resources
Board to attend the meeting and to speak on this issue from the
California perspective. She was unable to attend, but there is
a letter I would like to have unanimous consent to enter into
the record.
Mr. LoBiondo. Without objection, so ordered.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T6924.007
[GRAPHIC] [TIFF OMITTED] T6924.008
Mr. Garamendi. And, also, a letter from Saltchuk Resources
on the same issue.
Mr. LoBiondo. Without objection, so ordered.
[The information follows:]
[GRAPHIC] [TIFF OMITTED] T6924.009
[GRAPHIC] [TIFF OMITTED] T6924.010
Mr. Garamendi. The issue of the air quality is one that is
keenly felt in California. We have a very busy maritime
industry in California, and the cities, the major ports, the
San Francisco Bay area and Los Angeles, are questionable
attainment districts.
And so this--it turns out that this particular issue of the
quality of the fuel is extremely important in that area, and I
suspect it is in other parts of the Nation, although I am not
familiar with those areas.
It may be a burden--and I am stating my own opinion without
asking a question here because I was deeply into this a few
years ago--that this is an appropriate way to address a
significant source of pollution, not easy, to be sure, and one
that does have costs associated with it.
But the necessity of maintaining--of obtaining an air
quality standard in those two very important parts of
California is going to be met by somebody.
If one or another of the industries or polluters in the
area don't meet their share of the burden, then somebody else
is going to have to make it up. And so we are simply shifting
the cost of implementation off to somebody else. There is no
reason to believe this cannot be done.
I do have some questions about the scrubbers that are
available, that might be available.
Mr. Grundler, in your testimony, you mention this. Could
you go into that in more detail.
Mr. Grundler. Certainly. We are very well aware of the
challenges that, in particular, California faces in achieving
public health standards, and we work very closely with our
colleagues at the Air Resources Board as well as the South
Coast in developing the proposal that United States and Canada
took to the IMO.
So you are right. It is not without cost. But the benefits
are enormous and outweigh the cost by at least 30 to 1. The
range goes from 30 to 90 to 1.
But we do certainly recognize that it is a greater burden
for those vessels that spend more time in this zone than
others. They have a higher burden, but they also contribute
more to the pollution that is traveling onto our shore and,
frankly, well inland.
What was remarkable when we did our modeling was to see how
these public health benefits reach far hundreds of miles into
the interior of the country and will be enjoying these
benefits.
There are provisions under the treaty that provide the
Coast Guard and the EPA to develop alternative compliance--
lower cost compliance alternatives, and we have been exercising
those flexibilities.
We have entered into permits with a number of firms, both
cruise lines as well as people engaged in the coastwise trade,
to explore these other technologies, including fuel switching
to liquefied natural gas in several instances.
And we have ongoing conversations with other firms who are
interested in LNG, other firms that the cruise lines in
particular have opted to enter into a technology demonstration
project to experiment with scrubbers and different ways to
install those scrubbers as well as different types of scrubber
technologies.
So some firms look to install them while they are actually
using the vessel, thereby not interfering with commerce. Others
will be installing them during dry dock. But they are quite
optimistic that this will be a lower cost way to achieve the
goals than buying the more expensive clean fuel.
Mr. Garamendi. The issue is that California has onshore
winds. And so whatever is out there is coming on shore, and it
creates a very substantial problem for all the industry in
California.
So the air quality attainment requirement is going to be
met by somebody. And so it turns out that everybody from
agriculture to cars, to diesel, to the ports, is sharing the
burden here. I think I will let it go at that.
Thank you, Mr. Chairman.
Mr. LoBiondo. This will conclude our first panel.
I just hope you think a little bit about the frustration
that we are feeling and, more importantly, the folks who are
expected to comply are feeling and understand how we have got
to get some of this resolved and do it in a manner that can
give some certainty, that the people we are asking to spend a
whole lot of money just don't know where we are going on all
this.
So we will take a very brief recess while we can get set up
for the second panel, and then we will proceed immediately.
Our second panel today includes Mr. Tom Allegretti,
president and CEO of The American Waterways Operators; Ms.
Kathy Metcalf, director of maritime affairs at Chamber of
Shipping of America; Mr. James Roussos, Vessel General Permit
coordinator for LaMonica Fine Foods and Oceanside Marine in
Millvile, New Jersey; and Mr. Rod Jones, president and CEO of
the CSL Group Inc.
Finally, I understand that Mr. Terry, president and CEO of
Eagle Rock Aggregates, could not be here today due to a family
emergency. So we will include his testimony as part of the
record, and all wish him well with that family emergency.
I will proceed. Mr. Allegretti, you are now recognized.
Thank you for being here.
TESTIMONY OF THOMAS A. ALLEGRETTI, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, THE AMERICAN WATERWAYS OPERATORS; KATHY J.
METCALF, DIRECTOR OF MARITIME AFFAIRS, CHAMBER OF SHIPPING OF
AMERICA; JAMES ROUSSOS, VESSEL GENERAL PERMIT COORDINATOR,
LAMONICA FINE FOODS AND OCEANSIDE MARINE; AND ROD JONES,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, CSL GROUP INC.
Mr. Allegretti. Good afternoon. Thank you for the
opportunity to testify on behalf of the American tugboat,
towboat, and barge industry and our partners in the Shipping
Industry Coalition, who together represent 90 percent of all
vessels calling at U.S. ports in both domestic and
international commerce.
My testimony today will focus on one critical area, the
regulation of ballast water and other vessel discharges, in
which the current regulatory regime serves neither the economy,
the environment, nor the American taxpayer well.
Today the Coast Guard and EPA regulate ballast water and
other vessel discharges under 2 differing statutory
authorities, and because neither Federal statute preempts State
action, more than 2 dozen States have established their own
State-specific requirements for many of those same discharges,
over 150 of them in all.
This overlapping patchwork of Federal and State regulations
makes compliance complicated, confusing, and costly for vessel
owners and for mariners. It is counterproductive to the goal of
enhanced environmental protection as companies have delayed
investment in costly treatment technologies because they lack
assurance that such systems will be acceptable wherever a
vessel calls, and it has forced Federal and State agencies to
duplicate efforts and expend significant time and taxpayer
money in an unsuccessful effort to harmonize their
requirements. This is a poster child for needed congressional
reform.
Today--and we have an illustration here for your
information--a tug barge unit moving crude oil from Puget
Sound, Washington, to the port of Richmond, California, must
comply with requirements for vessel discharges established by
both the Coast Guard and EPA. The same vessel must also comply
with 25 State-specific conditions added to EPA's Vessel General
Permit by Washington and California. In addition, the vessel
must comply with State ballast water requirements established
by Washington, Oregon, and California, outside the framework of
the VGP.
The situation is untenable, it is unnecessary, and
bipartisan congressional leadership is badly needed to fix it.
I hope that this example illustrates why the current
situation is untenable. Let me explain what I mean when I say
that it is unnecessary. Over the past 3 years, there has
emerged a national scientific consensus about the capability of
currently available ballast water treatment technology.
Scientific experts, the Coast Guard, EPA, and the States, all
of the States, are now in agreement on the ballast water
treatment standard that is achievable with current technology.
Last June, the California State Lands Commission acknowledged
that the State's ballast water treatment standard could not be
met with the best technology available today, and the
California Legislature then acted to delay implementation of
its State's standards.
Unfortunately, the scientific consensus has not yet solved
the problem faced by vessel owners. Despite the fact that the
Coast Guard, EPA, and the States now agree on a ballast water
treatment standard, Federal and State regulators have been
unable to eliminate overlap and inconsistency between their
regulations. This is because, as you heard, they are
accountable to different statutory authorities which they
believe limit their flexibility to act.
It is not too much to say that governmental agencies have
been set up to fail by a statutory framework that does not
work. This should be unacceptable to all of us. Congress can
rectify the situation. You can fix this problem and establish a
single national framework for the regulation of vessel
discharges in which vessel owners are subject to one set of
scientifically based, environmentally protective and
technologically achievable vessel discharge rules. You can pass
legislation that provides vessel owners with the certainty that
multimillion-dollar investments in ballast water treatment
technology will be acceptable wherever that vessel calls. And,
you can save the American taxpayer the wasteful expense created
by duplication of effort among Federal and State agencies that
will never be able to harmonize their regulations fully unless
the statutory framework under which they operate is changed.
Chairman LoBiondo and Ranking Member Garamendi, we implore
you to take action. We thank you for your leadership in holding
this hearing. We stand ready to work with you to enact
legislation that is good for the marine transportation
industry, good for the marine environment, and good for the
American taxpayer.
Thank you very much for the opportunity to testify.
Mr. LoBiondo. Thank you, Mr. Allegretti.
Ms. Metcalf.
Ms. Metcalf. Thank you, Mr. Chairman. We would request that
our testimony be entered into the record, our written and oral
testimony as well.
I am Kathy Metcalf, director of maritime affairs for the
Chamber of Shipping of America. Today I am also testifying on
behalf of INTERTANKO and the Cruise Lines International
Association, or CLIA. A full detail of our members' credentials
are contained in the written testimony, and I won't take my
time up to go through that at this point.
We are, all three of these organizations, are also members
of the Shipping Industry Coalition that Mr. Allegretti alluded
to. As such, we are fully supportive of the comments he has
just provided to you, so I will try not to duplicate any of
that.
The fundamental tenet of our approach to these
environmental issues has always been smart legislation and
regulation discussed by all the stakeholders can result in
smart and effective legislation and regulation.
Aside from the challenges associated with the sheer volume
of initiatives impacting the industry, the issues are further
complicated by the fact that a number of executive branch
agencies are involved in rulemaking processes. And that,
honestly, is quite justifiable to be sure that there is, in
fact, an administration sign-off on a very impactful regulatory
process.
For example, the U.S. approach to regulation of greenhouse
gases is led by the State Department at the international
level, while EPA is also developing domestic problems to
address greenhouse gases. Now, while we understand the need for
a unified U.S. position on this issue, it is critical that the
nature of the sources being considered as we move this issue
forward at the Federal and international level take into
account the differences between stationary and mobile sources,
something I would suggest probably was not fully appreciated
when the EPA was forced to regulate ballast water discharges as
well.
With these many significant and diverse requirements, we
offer two specific examples where we will believe smarter
legislation and regulation would benefit everyone. First, with
regard to vessel discharges, as Mr. Allegretti discussed,
ballast water and the other discharges, quite frankly, are
included in the EPA's program because a court said that the
exemption that had been 35 years in existence was not legally
applicable, and thus vessels would have to be included in this
program. This is a program that was never anticipated to
include things that move versus things that sit on the shore.
So a lot of the problems that we are seeing now with vessels in
the NPDES program is a result of that.
Also, as was discussed earlier, the extension issue where
the Coast Guard will issue the extension, but EPA cannot or
will not be legally bound by it, we congratulate the Coast
Guard and the EPA for doing everything they possibly could to
reconcile the two sets of regulations. Looking at the proposed
VGP and the Coast Guard regulations versus the final VGP, they
have gotten rid of a lot of conflicts that were there, not the
least of which was the definition of ``dry docking date'' that
was 2 years apart.
So they have done a lot of work on this, but in our
opinion, EPA is legally constrained by what they can and can't
do to individual sources that are covered under a general
permit.
Second example is requirements associated with the creation
of the North American Emissions Control Area. We are not here
to suggest that the ECA, or the ECA, was a bad idea or is a bad
idea. It is clear from EPA's modeling there are going to be
significant improvements in air quality as a result of this.
However, for a number of ships, particularly those engaged in
coastal trade, the significant increased costs associated with
the use of currently the 1 percent fuel and, in 2015, .1
percent fuel can be mitigated by the installation of scrubbers,
which allow you to continue to use a higher sulfur fuel, but to
have reduced emissions consistent as you would with an engine
using low-sulfur fuel without the scrubber. However, EPA's
Vessel General Permit covering exhaust gas scrubber discharges
prevents the use of a mixing zone to measure the discharge
effluent, such that most of the scrubbers that are being
designed globally for use on ships will likely not meet the EPA
discharge requirements, taking away a very cost-effective
alternative to the use of fuels.
We also know that we are going to see an increase in the
cost of fuels. Thus far with the 1 percent, we have seen
somewhere between the neighborhood of 10 and 30 percent. When
it goes to .1 percent, hold onto our hats, because we believe
we are going to see premiums in the 50 to 60 percent range.
I see my time is up. I thank you for the opportunity to
chat this morning.
Mr. LoBiondo. Thank you, Ms. Metcalf.
Mr. Roussos, you are now recognized.
Mr. Roussos. Chairman LoBiondo, Ranking Member Garamendi, I
am responsible for managing the NPDES Vessel General Permit,
VGPs, for our fleet of five clam boats at LaMonica Fine Foods
and Oceanside Marine in southern New Jersey.
Several of our boats, which are 85 to 100 feet in length,
will be subject to the requirements for ballast water, and all
of them for incidental discharge. I want to fully thank this
entire subcommittee and Mr. LoBiondo for keeping this
unnecessary burden off of our backs for years and for moving
H.R. 4005, which will permanently exempt the fishing industry
from this permit. We appreciate your efforts and hope that the
House and Senate will follow suit, because the new VGP
requirements are being applied to the fishing industry with
little merit. Under the guise of environmental legislation,
they achieve no real positive environmental results. They serve
only to make it harder for fishermen to fish and harder for
this industry to attract qualified, career-seeking individuals.
I want to be clear that these new requirements are not the
result of any wrongdoing by our industry. The requirements are
a result of the 2006 lawsuit brought by environmentalists over
ballast water. Unfortunately it produced a whole new set of
regulations that are excessive, burdensome and ineffective.
The incidental discharges from our vessels were originally
exempted from the Clean Water Act and the citizen lawsuit
provisions, but this change with the 2006 lawsuit. Should our
exemption not be reinstated, our small fishing business and
many others like us will be exposed to substantial reporting
and monitoring requirements, the potential for citizen
lawsuits, and harsh punishments that will prove costly.
Please understand that those of us in the business of
harvesting food for the benefit of this Nation do so in a
hostile environment. We are under constant scrutiny by
environmentalists who petition or sue the Federal Government on
a regular basis to increase environmental protection and
restrict fishing activities.
We have already filed two lawsuits on this issue, so we
fully expect the citizen lawsuit provision will be used against
us. Environmental regulation by litigation is out of control
and could potentially cripple our industry. Congress correctly
and permanently exempted 13 million pleasure boats in this
country from the regulations, but did not permanently exempt
commercial fishing vessels even though the environmental risks
are no greater for commercial fishing vessels than pleasure
craft. In fact, fishing vessels are less likely than pleasure
boats to be the carrier of invasive species, for example,
because our boats do not travel to foreign destinations or
between bodies of water. We typically fish in a very small area
of the ocean, usually leaving and returning to the same port.
So 13 million pleasure craft, including 125-foot yachts,
are exempt from this regulation; but our smaller clam boats and
a 38-foot gillnetter out of Puget Sound in Washington--sorry,
out of Viking Village, New Jersey, and the 24-foot salmon boat
on Puget Sound in Washington, as well as an 18-foot open skiff
on the Chesapeake Bay all will be subject to the new discharge
regulations. This is not fair or logical.
Despite our best efforts to make sensible changes to the
regulations, we are left with troubling issues related to some
details of the permit. Frankly, the VPG attempts to solve
problems that don't exist or even make common sense; for
example, the requirement to collect refrigeration condensation
or having to wash the anchor and chain thoroughly every time it
is used, or the fact that naturally occurring fish slime
combined with seawater is now an effluent, and consider that
too much vegetable oil in the galley sink dishwater and too
many crew showers while at dock would now be violations of
Federal law.
These permits are not written for the facile use of
fishermen for whom it was intend to regulate. Many will have to
hire lawyers or consultants to navigate the ridiculously
complicated reporting requirements in attempts to comply. If
they do not, then they risk being fined out of business. The
permit, if inflicted upon the fishing industry, will only add
more paperwork and bureaucracy, further demoralize our
workforce, and cause economic hardship.
For the sake of our fishing industry and coastal economies,
we respectfully request permanently extending the moratorium
for the NPDES permits for commercial and charter fishing
vessels and fairly treating our vessels like 13 million sport
boats that are already exempted.
We appreciate your leadership and the hard work that Mr.
LoBiondo and Mr. Larsen are doing to rectify the situation for
the long term, and we strongly support their efforts and
encourage all Members to join with them.
Mr. LoBiondo, Ranking Member Garamendi, members of the
subcommittee who aren't here, thank you for the opportunity to
speak to you today.
Mr. LoBiondo. Thank you, Mr. Roussos.
Mr. Jones, you are now recognized.
Mr. Jones. Good morning, Chairman LoBiondo, Ranking Member
Garamendi. My name is Rod Jones, and I am president and CEO of
the CSL Group. I appreciate the invitation to speak to you
today about the North American Emission Control Area, or ECA,
and its unintended consequences. I am pleased to represent our
Massachusetts-based U.S. operations, where we specialize in the
coastal shipping of strategically important cargoes such as
iron ore, coal, petroleum coke, road salt, aggregates and
gypsum.
I also speak for the Maritime Industrial Transportation
Alliance, or MITA, which is a coalition of industry members who
rely on the safe and efficient, environmentally smart short sea
shipping. ECA is designed to reduce emissions of nitrogen
oxide, dioxide particulate matter and sulfur dioxide. It
creates a 200-mile zone around the United States and Canada
where, as of 2012, ships must use fuel with no more than 1
percent sulfur. In 2015, ECA sulfur levels will be dramatically
lowered to .1 percent for all ships, again out to the 200-mile
limit regardless of size.
My primary point is that the 200-mile ECA boundary was
established for all ship sizes without firm scientific
rationale. It did not differentiate between large oceangoing
ships and smaller short sea vessels. The engines on these
smaller ships emit much lower amounts of pollutants.
Intuitively it doesn't make sense that all ship sizes would
have the same onshore impact, so putting our intuition to the
test, we commissioned a scientific study using the same or
similar models as those relied on by the EPA. The resulting
study examined the emissions and movements of sulfur dioxide,
which is the main pollutant emitted from sulfur found in fuel.
The study shows the coastal air quality impacts diminish as
expected. The ships move away from the coast with a sharp drop
in impact at about 40 miles off shore. However, it also shows
that short sea ships with propulsion systems of under 20,000
horsepower have negligible air quality impacts on the shore
when they are only 50 miles at sea.
The EPA's forecast that the new ECA limits would impact
vessel operating costs by about 3 percent may be correct for
transoceanic voyages, but it is plain wrong for coastal
voyages. Smaller short sea ships operate almost completely
within the ECA, requiring extended or in many cases exclusive
use of the highest priced fuel.
The EPA did not consider short sea ships as a sector, and
equally the EPA didn't weigh the benefit that that short sea
shipping provides by reducing truck and rail emissions and
their associated social impacts, particularly road congestion
and infrastructure wear and tear.
Furthermore, our efficient self-unloading ships discharge
very, very quickly and typically reduce unload port stays from
4 to 5 days to often less than a day. No matter the size of the
eco zone, ship emissions are most damaging when the ship is in
port, and our self-unloading ships are in port for less time
than any other bulk vessel.
When we last addressed the subcommittee in 2012, we
projected a fuel cost increase for our sector of at least 40
percent in 2015. We were correct; .1 percent sulfur fuel is now
as much as 40 percent higher than intermediate fuel. And we
underscore that these aren't predictions, but actual market
prices. Under the 2015 ECA, we estimate that our fuel costs
will increase over $14 million per year. Now, this would be OK
if it would result in a significant environmental benefit;
however, for almost no incremental benefit, as our scientific
study has proven, it is an unacceptable cost burden for our
customers.
CSL estimates that the 2015 ECA limits will force us to
raise our rates by about 35 percent in most trades. Many of our
customers cannot absorb these freight rates. Despite well-
documented social and environmental benefits of short sea
shipping, consumers will obviously opt for the lowest cost,
which will mean more trucks and trains. Bill Terry was expected
to testify on this here today, but unfortunately, as you
mentioned, he was unable to make it.
As environmental stewards, CSL supports the aims of ECA. We
simply disagree, based on our scientific study, with the EPA's
policy prescription. Smaller, cleaner ships should not be
lumped together with much larger ships. Specifically we propose
that in 2015, when the sulfur standard reduces to .1 percent,
the EPA reduce the 200-mile ECA to 50 miles for ships of less
than 20,000 horsepower, while continuing to require the use of
1 percent sulfur fuel between 50 and 200 miles.
In addition, MITA continues to advocate congressionally
supported dialogue with the EPA to explore other impact-based
alternatives.
Chairman LoBiondo, distinguished Members, clean air is the
responsibility of all users of fossil fuels, and the shipping
industry is no exception. We support the ECA to help improve
air quality, but vigorously challenge the 200-mile boundary for
smaller ships. We urge the Coast Guard and the EPA to work with
MITA to find a compromise solution that does not add
unacceptably high costs to our customers' businesses with
almost no incremental environmental benefit.
Thank you.
Mr. LoBiondo. Thank the panel.
Mr. Garamendi.
Mr. Garamendi. With regard to the air quality issue, the
question arose as to, Ms. Metcalf, about mixing zone and
scrubbers. Could you go into that quickly?
Ms. Metcalf. As an ex-mariner, I will go into it with the
level of scientific detail that I have been equipped with with
my mariner education.
Essentially what it means is that how you measure an
effluent, an overboard discharge from a ship, whether it is
right at the side of a ship, or whether it is in a 3-foot
radius outside the ship----
Mr. Garamendi. I understand that mixing zone. The mixing
zone I thought you were referring to was associated with
scrubbers, which I think is the air quality issue. If that is
not the case, then I just----
Ms. Metcalf. Yes, sir, it is. The IMO development of
effluent scrubber guidelines would permit the use of a mixing
zone to determine if you met the effluent standards. It is our
understanding the EPA regulations relative to measurement of
that effluent do not. So you are going to have a world full of
scrubbers out there that could be installed as a cost-effective
alternative to low-sulfur fuels, but not be passable under the
EPA's effluent guidelines.
Mr. Garamendi. You look like you want to jump in.
Mr. Jones. Well, I just think she was talking about the
effluent from the overflow of the chemicals that are created
when you scrub, not from the air itself, so I think that might
have been the misunderstanding.
Mr. Garamendi. Thank you. Clearly I didn't quite catch what
you guys were talking about here.
It seems to me that there is a solution to that problem.
You can find a way to it. The point here really is scrubbers.
Can we get to scrubbers? And do they work? Are they effective?
The argument basically made by Ms. Metcalf was that scrubbers
are economically desirable compared to the cost of the fuel. Do
you agree?
Mr. Jones. Yes. I think in most cases they would be
economically desirable. CSL has put a scrubber on one of our
ships. These are in developmental stages right now. They don't
work as well as they are being advertised yet, and there is
some differences between cruise ships, which have a lot of room
on them, and our old ships, which are very small, and it is
very difficult to install. So it is something that we are
considering doing and we think should be done in some certain
cases, but it also will not improve the air quality any more
than what we are able to demonstrate by being 50 miles
offshore, so for us it doesn't seem to be worth it.
Mr. Garamendi. Let me get to that question. You have a
study. The EPA has a study. Have you submitted your study to
the EPA for their review, and analysis and comment?
Mr. Jones. Yes, we have had discussions with the EPA on our
study. They don't necessarily agree with us on most of the
study. They felt that we should have included NOx in the study.
But NOx we are not disagreeing with. We are not saying we would
do anything different on NOx. NOx has been legislated as an
engine issue, and that is something that we just don't disagree
with.
They also felt that our CALPUFF model was not completely
appropriate, and I can't get into the science on this. We have
a Ph.D. who understands it, but our scientists feel very
strongly that it is.
Mr. Garamendi. It is really important for me, for a policy
point of view and for decisions here, to have a clarity of the
differences in view of the two studies. If your study is valid,
then you have got a good argument. If it is not valid, then you
don't.
There is another thing that is going on, at least on the
west coast, and that is cap and trade. And your industry will
be involved in that also, and I think certainly California is
there, and there is somewhat of an agreement between the three
coastal States on that matter, which might change this entire
argument. I would appreciate your comments on that, at least
insofar as the west coast is concerned, but not right now. If
you could provide written comments to us about how that might
affect this, I think it may significantly affect it.
Mr. Jones. Yes. I think it is a different issue, but I will
make comments on that and try to tie it together.
Mr. Garamendi. Please. I don't want to tell you how to do
it, but if you are going to a lower, you may be significantly
reducing carbon along the way and which you can trade and pay
for the fuel or the scrubbers, but I will leave that to you.
The other question has to do with--Mr. Allegretti, with
regard to the ballast water. We had a long discussion here
earlier with the previous panel about how they might integrate
their activities. Do you have any comment about that discussion
we were having here; and specifically, can those businesses
that are developing the mechanical solutions or solutions to
ballast water, why are they not pushing that issue forward with
the Coast Guard?
Mr. Allegretti. I don't know that I can speak to the issue
of why companies are not pushing the technology with the Coast
Guard. My observation on the conversation that you heard
between Admiral Servidio and Mr. Shapiro is--and I think, you
know, they were being careful and polite, but they were telling
you that they have worked to the very best of their ability to
reconcile the differences between their two ballast water
standards, and what they have produced today is as good as they
feel they can get. The gaps that exist between the two are
apparently gaps that they don't feel they can reconcile, given
the differing requirements of the two statutes under which they
operate. I think it points up the need for a single national
Federal standard.
As I listened to that conversation, Mr. Garamendi, I really
was thinking about it from the perspective of a vessel owner
who is facing a multimillion-dollar investment in this
technology and asking himself, am I prepared to make this
investment with this lack of certainty from the Government
agencies that are regulating the program?
Mr. Garamendi. I understand and appreciate that point. I
think I heard it slightly different, that they were looking at
the--that these systems, once certified, meet the EPA
requirements. Then the question is one of monitoring, and I
find it difficult that they could not figure out how to monitor
in a coordinated fashion or exactly the same way. If they
can't, then surely there is a slight tweak to one of the other
laws that would cause that to happen.
But I don't--and I don't have a clear answer now about why
these systems are not being pushed forward. It would seem to me
that there is a business opportunity here that somebody seems
to be missing, because apparently these systems are going to go
into place at some point, and that doesn't speak to the issue
between the two laws, but rather just the Coast Guard itself.
We will have to find out an answer to that, and I don't
think I am going to get it from the witnesses here. I guess I
am right.
I think I have run my time. I have got a lot more
questions, but I think I will put those in writing to the Coast
Guard and the EPA. Specifically I would like some more
information on the scrubbers if you can handle it. And if you
could also--well, we will ask the EPA and you to provide me
with specific information on the study that you did and the way
it works. If you would do that, Mr. Jones, I would appreciate
it. Thank you.
Mr. LoBiondo. John, if you want some extra time, or are you
pressed to go?
Mr. Garamendi. Well, let's just say it is all of the
elected officials from my district that are outside that door.
Maybe I should stiff them? I can blame it on New Jersey.
Mr. LoBiondo. Blame it on New Jersey. Thanks, John.
Mr. Garamendi. Thank you.
Mr. LoBiondo. So for Mr. Allegretti and Ms. Metcalf, we
have talked about this a lot, but can you just tell us in sort
of simple terms so we can maybe disseminate this to our
colleagues why it is necessary for Congress to act to establish
a single Uniform National Discharge Standard?
Mr. Allegretti. In simple terms, the system under which we
operate today does not work. It is not good for industry, it is
not good for the environment, it is not good for mariners, it
is not good for the companies.
That illustration there is only three States. Imagine a
tugboat going down the Ohio and Mississippi rivers from
Pittsburgh to New Orleans. It is going through the
jurisdictions of 11 States and facing that kind of complexity.
You have regulations coming at the industry from four separate
vectors, the EPA, Coast Guard, the States in VGP State-specific
conditions, and then the States as they legislate outside the
framework of the VGP. It is an operational nightmare for a
vessel owner to ensure that he is in compliance with that
system as he moves from one State line to another. Also it is
legally treacherous for companies, and it is legally
treacherous for mariners to operate within this system.
Mr. LoBiondo. Yes.
Ms. Metcalf. I will take 30 seconds, Mr. Chairman, if I
could.
There is a precedent that this Congress has done a number
of years ago, and that is the Uniform National Discharge
Standards rule, the UNDS rule, that is applicable to Armed
Forces vessels.
I want to be sure that we have not been misleading you as
far as terminology goes, but for the 401 State certifications
as part of the Clean Water Act and VGP program, the performance
standard that the Coast Guard and EPA have established is the
same standard. So the big machine, the big concept, there is a
lot of consistency with, but it is in the nuts and bolts of the
implementation where some of the disconnects are occurring.
So as Mr. Allegretti said, that if we could create one
Federal program under an appropriate statute that regulates
vessel discharges and preempts State actions, then we have that
consistency, much like the UNDS program created for the Armed
Forces vessels.
Mr. LoBiondo. OK. Mr. Roussos, we talked about it, and the
EPA has recently announced a new Small Vessel General Permit
which will apply to commercial fishing vessels. In your view,
are some of these proposed new management practices even
feasible? Can it work?
Mr. Roussos. From what I know now, having read what I have
read and the research--I was charged with the VGPs for our
company and spent scores and scores of hours trying to decipher
what it was that they were trying to accomplish, what they were
trying to permit, and what their objective was. And it is
greatly obfuscated what they are attempting to do, but what is
clear and was clear was that the recordkeeping was ridiculous
and with no apparent benefit.
So do I think it is possible to implement with the guy that
has got the open boat trying to make a living, working as a
one-man business? Where is he supposed to put these records?
How is he supposed to do it?
These are people--you know, these are some of the hardest
working people you are going to find anywhere in America. They
have done it the way their fathers have done it and their
grandfathers have done it. The industry has evolved in the over
200 years that it has been around, but it is not going to
evolve any more with a hammer. You can't beat it into them. We
need education. We need resources.
It is an onerous document that is doomed to failure, or if
you want to talk about evolution of fishing, there is going to
be a lot of dead ends in that evolution. There is going to be a
lot of people that are going to go extinct because of this
permit as I understand it now.
Mr. LoBiondo. Could you even venture a guess as to what
these new regulations would cost the fishing industry, or is it
kind of too hard to get the brain around?
Mr. Roussos. I haven't approached it from that point of
view. I couldn't venture a guess.
Mr. LoBiondo. OK. Mr. Jones, can you tell us what your
costs have been to comply with the EPA--or ECA, sorry?
Mr. Jones. The 1 percent sulfur requirement that is in
place now? Actually I can't give you that off the top of my
head here, but I can say we consider those costs to have been
manageable. The difference between our old sulfur and the 1
percent sulfur has been something like--I think it is like $30
a ton or something like that, and we have been able to program
that into our program, and our customers have been able to
record that. It is the $300 to $400 a ton that is what is
really scaring us.
Mr. LoBiondo. And I think you alluded to this, that there
is a real fear and a real possibility that shippers could
decide to move cargo by other means with this?
Mr. Jones. Yes. These are very low-value commodities. This
is like aggregate that is used for road construction. So the
transportation is sort of more than half the cost of the
delivered product, so if we increase that cost significantly by
30 or 40 percent, we have been told by our customers that they
will not be able to move that cargo by ship anymore, and there
will be movements by other modes of transportation.
Economic theory, if you raise the price of something,
something else will substitute in to move it. So it is very
difficult to pin down exactly what that is, but we are quite
concerned and quite convinced that we will lose a big part of
the business that is currently moving by ship to other forms of
transportation because of mobile or sourcing shift. It may be
that instead of moving the product to one place, it will be
sourced from another closer place and moved by truck, for
instance.
Mr. LoBiondo. This is certainly one of the concerns that at
least some of us have, and as we struggle in the next few
months to try to come up with some kind of a solution for the
highway bill, it almost further underscores that with not being
able to come up with enough money for highways, you are not
actually asking for money, you are asking for certainty and
regulatory relief here, which could help balloon out a
problem--keep from ballooning out a problem at the other end if
we could just be sensible, because in many respects, especially
with the short seas shipping, this makes sense for America, it
makes sense for shippers. And it is very, very frustrating to
deal with the bureaucracy from our standpoint when that which
is so obvious to so many, just is--we can't get to a conclusion
on it.
So unless any of you have any last comments, I want to
thank you very much for being here today. I assure you on
behalf of Chairman Hunter and the rest of the subcommittee that
this is an issue we will continue to try to find a way to get
you some relief. And the committee now stands adjourned.
[Whereupon, at 4:46 p.m., the subcommittee was adjourned.]