By Timothy B. Wheeler, The Baltimore Sun
June 16, 2013
Gov. Martin O'Malley has interceded with the U.S. Environmental Protection Agency on behalf of Carnival Cruise Lines after the company threatened to pull its business from Baltimore over a pending air-quality regulation that would require large, ocean-going ships to burn cleaner fuel.
O'Malley spoke twice with Bob Perciasepe, acting EPA administrator, since late May to support Carnival's request for what the governor's press secretary called a waiver from the agency's cleaner-fuel mandate.
The EPA says the requirement, which calls for the use of cleaner-burning fuel in coastal waters, could significantly reduce air pollution not just along the coast but far inland. The cruise industry has warned of potential cutbacks in cruises and job losses because of higher costs.
O'Malley "picked up the phone right away" after learning that Carnival had told state port officials it was considering ending its weekly cruises out of Baltimore as early as next year as a result of the regulation, said his press secretary, Takirra Winfield.
Carnival wanted O'Malley's help in getting the EPA to expedite a review of its plan, because the decision could affect whether it schedules cruises from Baltimore next year and beyond, said Maryland Port Administration spokesman Richard Scher.
"If jobs are at stake, the governor is going to go to bat for those jobs," Winfield said.
But Frank O'Donnell, president of Clean Air Watch, a Washington environmental group, said O'Malley let himself be used by the nation's largest cruise line in what he called "an attempt to squeeze the EPA and to try to intimidate them."
"What I find absolutely deplorable is that a big polluter like Carnival in effect is trying to use the people of Maryland as pawns in this battle to try to relax life-saving clean-air requirements," O'Donnell said. "What surprises me a little bit is that O'Malley fell for this so easily."
Carnival and Royal Caribbean cruise lines operate one vessel each from Baltimore, sailing to such places as Bermuda, the Bahamas and Canada. Their two ships support 220 direct jobs, state officials say, and spending by cruise passengers, the companies and their suppliers pumps $90 million a year into the region's economy.
"This is a lot of jobs and this is a lot of revenue," Winfield said. "The governor took this seriously and wanted to do everything that he could here to try to get some assistance, keeping in mind that this is a huge deal for our economy."
Carnival did not respond to inquiries about whether it was looking to pull the Carnival Pride from Baltimore. Neither would it discuss the impact of the clean-fuel requirement.
Company spokesman Vance Gulliksen said in an email that Carnival and other cruise lines have been "exploring alternative compliance" with the EPA, including development and installation of a new type of pollution scrubbers on ships that he said would meet or exceed air-quality standards.
Gulliksen said Carnival plans to continue making voyages from Baltimore to the Bahamas and the Caribbean through April but is reviewing its plans after that for several cruise programs, including those from Baltimore. An announcement is expected by the end of this month, he said.
The cruise industry has been pressing the EPA since last year to soften federal requirements that all large cargo and passenger ships burn progressively cleaner fuel in an "emission control area" that extends up to 200 nautical miles out to sea. Alaska has filed a lawsuit challenging the fuel mandate.
The EPA adopted the rule to comply with pollution reductions called for by the International Maritime Organization, an agency of the United Nations. Last August, ships in U.S. coastal waters were required to start burning fuel containing a maximum of 1 percent sulfur. By 2015, the sulfur content will have to be reduced by 90 percent. Cruise ships are particularly affected by the mandate, because much — and sometimes all — of their time is spent in coastal waters.
The agency estimated that by 2020, the reduced emissions of particulate and smog-forming pollution from shipping would prevent 5,500 to 14,000 premature deaths, avoid nearly 4,000 emergency room visits and save more than $100 billion in health care, lost work and other costs.
"The big diesel engines on cruise ships are a big source of particulate matter and sulfur emissions that make particulate matter," said Russell Dickerson, a professor in atmospheric and oceanic sciences at the University of Maryland, College Park. They also emit nitrogen oxides, which contribute to the formation of summertime smog. Depending on which way the winds are blowing, ship emissions can be carried far up the heavily populated East Coast, he said.
Most cruise ships and other large ocean-going vessels consume huge quantities of fuel and burn what's known as "bunker," a relatively inexpensive grade with many impurities.
"It's the dirtiest stuff out there," said Pamela Campos of the Environmental Defense Fund, with many times higher levels of polluting impurities than the diesel fuel used by buses and trucks. "It's basically what's left over after you refine everything else out."
Last summer, when the 1 percent sulfur limit took effect, several cruise and shipping lines complained of being unable to find enough fuel. They also told officials they were paying 15 percent to 40 percent more for it. With a tighter standard looming in 2015, some industry officials have warned of sharply higher prices and cutbacks in U.S. cruises.
The EPA estimated that burning cleaner fuel would add $7 per day, on average, to individual cruise fares. In a recent briefing to the Maryland Port Commission, state transportation officials estimated that using less-polluting fuel could raise the cost of six- to 10-day cruises from Baltimore by $66 to $140 per passenger, depending on destination. Rates now being advertised run from $905 and up for two people in an interior cabin on a late-fall voyage to the Bahamas.
State officials also warned the commission that the cost increases were such that cruise routes could be changed and vessels might be relocated.
Carnival is "not ready to announce anything, but it's our understanding based on discussions we've had with them that they're inclined to leave," Winfield said. She added that "we're hoping they'll return in the future" should the EPA offer relief.
Environmentalists say they are skeptical of industry threats to abandon Baltimore, noting that the fuel regulation would apply to cruises departing from any other U.S. port.
Scher said Carnival has done good business out of Baltimore, from which it has been sailing since 2009.
"Their ships have sailed full continuously," he said. "They recognize it's a strong market."
But he said Carnival has indicated its concern about the impact of the fuel mandate. Baltimore is at a disadvantage, port officials say, because its location near the head of the Chesapeake Bay adds hundreds of miles per voyage.
O'Malley's press secretary said the EPA chief had told him the agency was reviewing Carnival's request for relief and was leaning toward granting it. After speaking with Perciasepe by phone in late May, the governor also spoke with him briefly in person at a meeting in Washington, said Alisha Johnson, Perciasepe's press secretary.
Johnson said Perciasepe told O'Malley that regulators have been talking with the shipping company but nothing has been decided.
Another EPA spokeswoman, Julia Valentine, said officials were unaware of any other governors, except Alaska's, who have expressed concerns to the federal agency about losing cruise business because of the fuel mandate. Spokesmen for government agencies overseeing cruise departures from Boston and New York said they had not heard similar warnings about ships being pulled or making less frequent voyages.
Asked how O'Malley's appeal on behalf of Carnival squared with his oft-stated advocacy for clean air and water, Winfield said the governor had been told that there was alternate technology for reducing air pollution from cruise ships, obviating the need for the EPA requirement to burn more costly ultra-low-sulfur diesel fuel. She said she believed that information came from Carnival.
"The governor is a strong advocate for the environment and protecting the bay," Winfield said, "But as we are in this economic recovery, we're always fighting for jobs. So we have to strike that balance."
Neither EPA officials nor Carnival's spokesman would discuss what the company is asking of the agency.
International maritime rules do not allow a waiver from the fuel requirement but do permit consideration of alternatives that would provide the same overall pollution reductions. Rules also allow temporary exemptions to try out new emission-control technology.
The EPA, in consultation with the Coast Guard and a Canadian shipping authority, has approved a proposal by Royal Caribbean to meet the fuel sulfur limits by averaging emissions among some of its ships, according to an agency official, who was allowed to speak only on background.
Some of Royal Caribbean's ships are powered by diesel turbines that burn a more-refined, less-polluting fuel. Their cleaner emissions, when paired with those of other ships operating in the same region, produce emissions that meet the air-quality standard on average, the EPA official said.
Royal Caribbean also has been granted a temporary exemption from the low-sulfur fuel mandate for some ships while they are being outfitted with scrubbers that remove pollution from engine exhaust. A Royal Caribbean spokeswoman said in an email that the line is seeking such permits for six ships, including Baltimore-based Grandeur of the Seas, but did not respond to further questions.
During the retrofit, the affected ships are allowed to burn fuel with up to 21/2 times the sulfur content that all other vessels are now supposed to be using, according to EPA officials. The agency would not say how long the exemptions would be, saying it varies by ship and was up to Royal Caribbean if it wants to provide that information. But the EPA did say the scrubber installation could take anywhere from six months to four years or more, depending on whether the work was done in drydock or while the vessel remained in service.
O'Donnell said the EPA appears to be softening a major pollution-control initiative under political pressure, including from cruise industry supporters in Congress.
"At least for the short run," he said, "breathers are going to get dirtier air and health damage."
He said that while the ships could clean up emissions if and when they're fitted with scrubbers, it was troubling that neither the EPA nor the industry could say how long that might take.
O'Donnell likened the industry's bid for temporary exemptions while installing pollution controls to a famous line from an old animated cartoon.
"They're saying, 'I'll gladly pay you Tuesday for the hamburger I eat today,' " he said. "But they're not saying Tuesday. That's a reason for concern."
Even after the tighter fuel limit begins in 2015, cruise ships would be able to burn fuel with 60 times the sulfur allowed in diesel used by buses and trucks in the United States, according to the EPA.
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