Traverse City Deal struck on Great Lakes ship pollution Compromise exempts 13 vessels from new federal rule

By John Flesher

AP Environmental Writer

TRAVERSE CITY, Mich. (AP) -- Congressional negotiators reached a deal Tuesday that would effectively exempt 13 ships that haul iron ore, coal and other freight on the Great Lakes from a proposed federal rule meant to reduce air pollution.

The Lake Carriers' Association, which represents the 55 U.S.-flagged vessels that operate on the lakes, had asked for at least a partial exemption from rules proposed by the Environmental Protection Agency that would require large vessels operating within 200 miles of a U.S. coast to use cleaner -- and costlier -- fuel and improve engine technology.

Negotiators in Washington approved the exemption as part of a natural resources spending bill.

"This compromise will allow EPA to go ahead with a new clean air rule without sinking the Great Lakes fleet -- and all the jobs it creates in the region," said Rep. David Obey, D-Wis., chairman of the House Appropriations Committee.

The rules are designed to reduce emissions of airborne contaminant's blamed for smog, acid rain, respiratory ailments and possibly cancer. Large ships are leading producers of nitrogen and sulfur oxides and tiny contaminated particles that foul the air near ports and coastlines and hundreds of miles inland, the EPA says.

Frank O'Donnell, president of Clean Air Watch, a Washington-based advocacy group, said he was disappointed that Obey and Rep. Jim Oberstar, a Minnesota Democrat and chairman of the House Transportation and Infrastructure Committee, had sided with the shippers in talks with the Obama administration.

"They deservedly have a stellar record and reputation on environmental issues, but departed in this case to work essentially behind closed doors for a special interest fix for a favored industry," he said.

The industry group said the regulations would ground 13 aging steamships while forcing 13 others to use fuel 70 percent more expensive than the present blend. The added cost to Great Lakes shippers -- about $210 million -- would be passed to their customers, said Jim Weakley, president of the shipping association.

"We're very grateful that we've got some breathing room," Weakley said after the deal was announced. "It's a good balance between the environment and the economy."

The original rules would damage not only shippers, but Great Lakes industries that rely on them -- including steel and auto manufacturers already battered by the economic downturn and foreign competition, said Rep. Candice Miller, a Michigan Republican.

Some officials in Alaska say the rules could deter visits to their ports by cruise ships, which are important to the state economy.

As written, they would require ships by 2012 to burn fuel with sulfur content not exceeding 1 percent, or 10,000 parts per million. In 2015, the limit would drop to 1,000 parts per million.

The 13 Great Lakes steamships are powered by a type of marine fuel that carries about 30,000 parts per million of sulfur.

"It's among the filthiest fuel known to mankind -- literally the sludge at the bottom of the barrel after the refining process," O'Donnell said.

Under the compromise, the steamships will be exempt. Most were built in the 1950s and can't be switched to low-sulfur fuel without risking explosions, Weakley said.

Mothballing them would be self-defeating because much of the cargo would be switched to trucks or trains, which emit more pollution than ships, said Phil Linsalata, spokesman for Warner Petroleum, a marine fuel company in Clare, Mich.

The deal also will allow the 13 ships that use a mixture of fuels to apply to the EPA for waivers. It directs the agency to evaluate the rule's economic effect on Great Lakes shippers and report in six months.

The EPA rule would apply within 200 miles of a U.S. coast. Weakley said that unfairly singles out Great Lakes vessels because they're always within that zone, unlike ocean freighters.

Clean-air and health advocates urged the EPA to stand by its proposed rules, scheduled for final approval in December.

"Air pollution is not confined to state boundaries," Arthur Marin, director of a group representing northeastern state air quality agencies, said in a letter to Congress. "Through long-range transport in the atmosphere, pollutants emitted in domestic waters, such as the Great Lakes, affect air quality in the Northeast."

EPA estimates the regulations would prevent up to 33,000 premature deaths over the next two decades and hundreds of billions in medical costs.


Associated Press writer Dennis Conrad in Washington contributed to this report.