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Low-sulfur fuel could sink cruise industry profits

International treaty requires EPA enforcement

Posted: July 19, 2012 - 12:07am  |  Updated: July 19, 2012 - 7:46am

An amendment in an international treaty on shipping pollution could have profound effects on the cost of getting goods and people in and out of Alaska’s ports. Everything from the cruise industry to the cost of imported cherries could be impacted by costlier fuel.

The state of Alaska sued several defendants, including Secretary of State Hillary Clinton and the head of the Environmental Protection Agency. The suit is to stop enforcement of the Emissions Control Area in Southeast and Southcentral Alaska. Ships in the area are required to burn low-sulfur fuel. Low-sulfur is defined as a sulfur content of less than 1,000 parts per million.

“The State seeks declaratory and injunctive relief to protect its citizens and economy from enforcement of the ECA in the waters off the coast of Alaska,” according to a state complaint filed July 13.

Extension of emissions control to Alaska requires approval by two-thirds of the U.S. Senate, the state said in its complaint. This was not done, according to the state, therefore ECA enforcement in Alaska is unconstitutional.

ECA is an amendment to the International Convention for the Prevention of Pollution from Ships treaty.

EPA announced the Aug. 1 deadline to convert to low-sulfur fuel in the spring of 2010.

The state said public comments indicated “no scientific basis for extending the ECA to Alaska.” The state said the EPA does not have authority to enforce an emission control area in Alaska.

The cruise industry in Alaska is pleased with Alaska’s lawsuit, said John Binkley president of the Alaska Cruise Association.

Enforcing the low-sulfur fuel rule would “cost Alaska a tremendous amount,” Binkley said. “We are glad he is standing up for Alaskans.”

If EPA and Coast Guard enforcement is not enjoined, Alaska’s cruise industry would see a direct financial hit.

“It is going to increase substantially the cost,” Binkley said. He said the industry estimates low-sulfur fuel to cost an extra $3.5 million to $5.5 million per ship, depending on the ship and itinerary.

“So it is substantial,” Binkley said. And Alaska is already an expensive destination, he said.

Binkley said cruise ships coming into Alaska are currently required to use fuel with lower sulfur content than is required and remove some sulfur from their tailpipes.

“We are already leading in scrubber technology,” Binkley said. The ECA doesn’t account for scrubbers, he said.

In some ports, cruise ships are able to plug in to shore power.

“And shut down our engines all together,” Binkley said.

Juneau currently has one cruise dock with shore power.

Binkley said low-sulfur fuel isn’t the only solution to cleaning up cruise ship emissions. Cruise ships can burn highly refined fuel in populated areas and at port or plug in to shore power, in exchange for burning lower quality fuel out at sea.

“Lets look for alternatives that achieve the same results,” Binkley said.

If the state of Alaska’s request to enjoin enforcement of low-sulfur fuel use in Alaska is turned down, the cruise industry will comply, Binkley said.

“We’ll burn more expensive fuel,” Binkley said. “But it ultimately will have an impact on the number or ships coming to Alaska. Less people will come and less ships will come.”

• Contact reporter Russell Stigall at 523-2276 or at russell.stigall@juneauempire.com.

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