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Juneau shipper already meets new low-sulfur fuel standards

Posted: September 23, 2012 - 12:08am
Science Advisory Panel member Michelle Ridgway, right, gives a tour to Rep. Cathy Muñoz during an open house at Centennial Hall intended to inform Alaskans of the work of the Panel, the history of cruise ships in Alaska, and the history of cruise ship wastewater technologies and issues. The Alaska Department of Environmental Conservation is hosting its sixth Science Advisory Panel meeting of the year Wednesday through Friday.  Michael Penn / Juneau Empire
Michael Penn / Juneau Empire
Science Advisory Panel member Michelle Ridgway, right, gives a tour to Rep. Cathy Muñoz during an open house at Centennial Hall intended to inform Alaskans of the work of the Panel, the history of cruise ships in Alaska, and the history of cruise ship wastewater technologies and issues. The Alaska Department of Environmental Conservation is hosting its sixth Science Advisory Panel meeting of the year Wednesday through Friday.

Alaska Marine Lines will not have to change its operations in response to marine pollution control standards implemented August 1.

“The diesel fuel we burn and the engines we burn it in already meet [Emission Control Area] rules,” Dave Curtis, VP of marketing for Alaska Marine Lines said. “We are using diesel that is cleaned up, that has had a lot of the sulfur removed.”

ECA is an amendment to MARPOL (marine pollution) International Convention for the Prevention of Pollution from Ships treaty. A treaty between the U.S. and Canada allows the countries to establish Emissions Control Areas along their coasts and is recognized by the United Nations.

The EPA was tasked with the enforcement of sulfur levels in certain marine fuel at 10,000 ppm on Aug. 1, which will then be reduced to 1,000 ppm by 2015.

The state of Alaska sued several defendants, including Secretary of State Hillary Clinton and the head of the Environmental Protection Agency.

In its complaint, the State listed two primary ways the pollution requirements could affect its interests. Low-sulfur fuel is more expensive and would increase the cost of goods the State imports and would reduce royalty payments and production taxes it receives from oil companies. The rule would also increase costs of goods shipped to Alaskans and raise costs for the cruise industry.

The cruise industry has come out in favor of the State’s lawsuit. Alaska’s cruise industry was required to upgrade its bunker fuel to meet ECA standards – a move that is expected to cost the industry millions.

AML provides regular and seasonal service throughout Southeast and Central Alaska. Fuel prices have a major impact on the price of shipping, second only to personnel costs, Curtis said.

“I look at the price of diesel every morning,” Curtis said. “If we were building houses for a living, fuel would be our lumber.”

While the shipper hasn’t had a direct impact from the new fuel requirements, Curtis said ECA enforcement is bad for all Alaskans.

“When the cruise industry is impacted, it impacts all of us,” Curtis said. If ticket prices go up, cruise passengers purchase fewer goods, which results in fewer goods to ship, he said.

While AML has paid all along to burn cleaner fuel, other shippers, he said have had to adjust to the new low-sulfur rules.

Totem Ocean Trailer Express announced in early August that it received a permit from the EPA to waive ECA requirements while it converts two of its vessels to burn liquefied natural gas.

This can have carry-on effects for Alaska’s economy.

“It is the guy who buys the gallon of milk at the end who pays,” Curtis said. “Having that big populated part of the state pay higher costs could trickle down to all.”

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

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