Sunday, July 29, 2012

NA ECA: well, maybe

"proud to be stuck in 70's"
Transport Canada, last week, declared that they will not be be enforcing the North American Emission Control Area (NA ECA), which stipulated burning a lower sulphur fuel for ships, and which comes into force next week - August 1, 2012. The whole idea of the ECA is to reduce pollution and the impacts it has on human and planetary health.
" Due to significant additional discussions required with the domestic marine industry, the marine air emissions regulatory package will be delayed by a few months and will not come into effect on August 1, 2012, to implement the NA-ECA and standards for Canadian vessels operating in the Great Lakes and St. Lawrence waters.
Until the proposed Regulations come into force, there would be no means to enforce international standards under the NA-ECA to limit the sulphur content in marine fuel to 1%, which come into effect internationally on August 1, 2012.  As well, there would also be no means to implement new domestic standards for vessels voyaging in the Great Lakes and St Lawrence waters.
As a result of the above, interim measures are required for the period of August 1, 2012, to when the Regulations come into force, which is expected towards the end of 2012."
The above is a quote from Transport Canada; and means that if your ship is found to have fuel on-board, with a higher than the 1% sulphur content mandated, while in Canada's part of the NA ECA, you might get a stern verbal dressing down by a mean looking, but otherwise toothless Transport Canada inspector. Even more worrying, there is no firm date now on when we can expect implementation of the ECA in Canada. You can read the full Transport Canada Ship Safety Bulletin here.

Meanwhile, the USCG, jointly tasked with the EPA in enforcing the new regulations, have slightly more tonality in their enforcement "mean voice". They will be telling shipowners in US ports to comply.... if you want to... but don't go out of your way - like a pothead asking for chips from the 7-11.
"Duuuuuude! can you swing by to the corner store, and get me some chips and some low sulphur fuel? But you don't have to if you don't want to... Thanks bros"
Over in Alaska, the State government - which has dubious track record for taxing passenger ships there - the state government is up in arms that the cruise ship industry will be damaged by the ECA, and has file suit to have its implementation put on hold altogether.

I guess Canada's marine industry has a better connected lobby than in the US. I'm sure in some plush office, some are "high-five'n" each other over the success of this deferral of regulations.

Let me propose that a toothless enforcement agency creates an uneven playing field (well duh - that's the point). Sure "shareholder value", will rise a small fraction of a percentage point; someone may feel powerful that they have manipulated the regulators in their favour.

But this dilution of regulations, the watering down of regulator's mandate, is in my view, corruption of the system, and yet another short term solution that will yield bigger problems down the road. I know the mainstream media treats us like stupid lambs, but the fact is, the general population recognizes when an institution is corrupt or pandering. Over time, people will adapt and find creative ways of getting their goals achieve - we have seen this in California with CARB and other jurisdictions.

Over the past decade, shipping companies have been up at arms about ballast water management regulations. In several jurisdiction, news rules have "pop up", have been haphazardly implemented, circumventing the usual foot dragging "regulatory" channels, much to the ship owners laments.

I think the way ballast water management has been forced onto governments and ship owners, by legal action(s), is merely a preview of things to come. I propose that with out a strong, active, and unyielding regulatory regime that people can depend on, to protect the greater good's interest, those in shipping can only expect the unexpected down the road - and they will not have the right to be surprised. Perhaps, the seafarer criminalization trend is a manifestation of this populist apathy towards the ability of our institutions such as regulators to do the right thing, effectively.

The NA ECA has been on the table for some time. Yes, there will be cost to implement, but the idea is there for a reason - emissions have been linked to human health issues and do harm to our communal environment - whether you "feel it" or not, its just the way it is. If you dont believe me, go into the garage, start your SUV with the garage door close - then let me know the results after 15 minutes.

I am going to go out on a limb, and say that fuel sulphur limits are going to be the norm, on all waterways and oceans, in the very near future, I think it would be prudent as an operator to expect this instead of continuously fighting it.

Is an unstable and unpredictable regulatory playing field in the future, and its associated compliance cost and headaches, really worthy of a short term "win" for shareholders / industry ?

DNV's map of current and possible ECAs in the future
You can read more about the NA EPA, and its enforcement in the United States here.

By the way, if you got the Almost Live reference, your automatically "alright" in my books. ehehehe.

1 comment:

Velu said...

A nice post. Its been a week since the ECA was established and there are as yet no reports of any problems with the supply of the low sulphur fuels.

Lets see how it pans out in the next few days.