When Great Ideas Go Wrong: How the EPA's New Fuel Shipping Standard Hurts the Environment and Economy | Commentary

There’s at least one law that’s universally familiar in Washington: the law of unintended consequences. It describes how a proposed solution can end up creating new problems. And it perfectly explains how a new, well-intentioned but poorly designed EPA policy meant to improve coastal air quality actually achieves the opposite, meaning more pollution, more traffic congestion and higher transportation costs. Fortunately, it’s not too late to make some sensible changes to everyone’s benefit, and we’ll explain how in our Tuesday testimony before the House Transportation and Infrastructure Subcommittee on Coast Guard and Maritime Transportation.

The rule in question regards a recent update to the North American Emission Control Area. The ECA is a maritime zone extending 200 nautical miles out to sea. All ships traveling within it are required to abide by strict federal emissions standards, in this case standards requiring the use of low-sulfur fuel. Current regulations mandate that all ships use 1 percent sulfur fuel inside the ECA. In 2015, this standard will tighten to 0.1 percent sulfur fuel.

The policy sounds reasonable enough, but its impacts on one sector of the shipping industry, short sea shipping, will mean serious environmental and economic consequences all along our nation’s coastline.

Short sea shipping uses smaller vessels to transport goods along coastal routes close to shore, and is one of the most environmentally friendly forms of transportation available. Those vessels rarely travel beyond a few dozen miles of the coast, let alone the 200 nm boundary of the ECA. So unlike their transoceanic counterparts, which quickly pass through the ECA and are able to use cheaper fuel for the remainder of their voyages, short sea ships are required to use this expensive, newly mandated fuel for most, if not all, of their journey. The result is a meteoric rise in shipping costs, and a previously viable industry unnecessarily priced out of competitiveness.

This is where the law of unintended consequences comes into play. Increased shipping costs means a decreased demand for short sea shipping, but it won’t reduce our need to transport the goods that short sea ships carry. Instead, they will be displaced onto trucks and trains, modes of transportation that actually use more fuel and emit more greenhouse gasses than short sea shipping. And because just one short sea vessel can carry as much cargo as nearly 2,000 trucks, all the while releasing fewer harmful emissions, the end result is more crowded roads and dirtier air closer to home.

But as is the case with many one-size-fits-all regulations, an alternative exists that would bypass these unforeseen consequences altogether. Studies show that short sea vessels have little to no effect on shoreside air quality once they get 50 nm out to sea. If the EPA modifies its rule and allows short sea vessels to use the 0.1 percent sulfur fuel within 50 nm of shore, this slight modification would achieve the intended affects of the EPA’s new rule at a fraction of the cost.

Our testimony is part of an ongoing effort by the short sea shipping industry to work with the Federal government in developing the best, most sensible shipping regulations possible. We want to ensure that our industry’s future is both environmentally sustainable and economically viable. In this case, faced with an assortment of unintended consequences, the solution isn’t complicated, and the benefits are universal.

Rod Jones is president and CEO of The CSL Group, which specializes in the marine transpiration of bulk cargo throughout the Americas, Australia, Asia and Europe. Bill Terry is president and CEO of Eagle Rock Aggregates, a construction materials company.