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PORT OF SEATTLE MEMORANDUM COMMISSION AGENDA Item No. 7a Date of Meeting February 7, 2012 DATE: January 31, 2012 TO: Tay Yoshitani, Chief Executive Officer FROM: Stephanie Jones Stebbins, Director Seaport Environmental and Planning SUBJECT: Briefing on the Northwest Ports Clean Air Strategy SYNOPSIS: The Port of Seattle Seaport Air Quality Program began in earnest in 2004, after the release of the Puget Sound Clean Air Agency's first Air Toxics Evaluation (2003), which showed that 78% of the public health risk in Puget Sound comes from diesel. Though the Seattle region was, and continues to be, in attainment for the National Ambient Air Quality Standards (NAAQS), the Port recognized it had a unique opportunity to develop a proactive and collaborative approach to reduce emissions from maritime operations, thereby improving public health. In order to develop a fact-based approach, the Port voluntarily initiated and managed the first effort to locate and quantify sources of maritime air emissions in the Puget Sound region. This effort, the 2005 Puget Sound Maritime Air Emissions Inventory (2005 EI), was led by a steering committee of 14 funding partners, which included regulatory agencies, ports, industry associations, and businesses, and non-governmental organizations. The product was a comprehensive baseline of all maritime-related emission sources (ocean-going vessels, cargohandling equipment, trucks, rail, and harbor vessels) in the greater Puget Sound region, and the first to include greenhouse gases. Today, the 2005 EI remains the most comprehensive maritime emissions inventory ever conducted, in terms of both geographical extent and uses included. On January 22, 2008, the Port of Seattle (Port) Commission adopted the Northwest Ports Clean Air Strategy (NWPCAS), a voluntary and collaborative effort of the Ports of Seattle, Tacoma, and Vancouver, B.C., to reduce maritime and port-related emissions that affect air quality and climate change. The Strategy established short-term (2010) and long-term (2015) performance measures to reduce emissions from cargo-handling equipment, rail, harbor vessels, ocean-going vessels, and trucks. The Strategy followed closely on the heels of the release of the first Puget Sound Maritime Emissions Inventory, released in early 2007. That inventory showed the emissions from all maritime sources in Puget Sound, as well as emissions associated with different sectors of maritime operations. Since that time, the Port has made $4,166,250 in investments to reduce emissions from maritime operations in our harbor. These funds have been administered by Puget Sound Clean Air Agency and have resulted in removing 280 of the dirtiest trucks off the road, use of cleaner fuel in 1,023 vessel calls, which resulted in emission reduction COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 2 of 10 of over 631 metric tons of sulfur, and retrofits on many pieces of cargo handling equipment. Thus far the expenditures have been allocated as follows: ABC Fuels $2,100,000; trucks $1,700,000; cargo handling equipment $100,000. The Port Commission has authorized an additional $1,050,000 in the 2012 budget, which will bring the total investment in air quality improvements to $5,216,250. This does not include expenditures on the emissions inventory and the staff and consultant time to support our clean air program. On June 14, 2011, the ports released the 2010 Implementation Report, documenting successes in meeting the short-term Strategy goals. On January 4, 2011, the Port Commission adopted a motion to "Accelerate Seaport Clean Air Goals to 2015," directing staff to present options for accelerating the Clean Air Strategy implementation. The motion also directed staff to provide an interim briefing in mid-2011, draft recommendations at the end of 2011, and present final recommendations in mid-2012. Due to Commission scheduling issues, this briefing responds to the Commission direction for recommendations at the end of 2011. BRIEFING OUTLINE: Port staff will provide an update on the Port's current air quality program efforts, the second Puget Sound Maritime Emissions Inventory, and public requests for information. Staff will also provide draft recommendations on options for accelerating Seaport Clean Air Strategy goals. Northwest Ports Clean Air Strategy 2011 Results: Port of Seattle successes in reaching Northwest Ports Clean Air Strategy goals are as follows: Ocean-Going Vessels (OGV) 70% of all frequent ocean-going vessel calls (cruise and container ships) met or exceeded the 2010 OGV performance measure. The Port had a total of 951 containers and cruise vessel calls in 2011, 808 of which were made by frequent-calling vessels. 100% of the 195 frequent cruise vessel calls met or exceeded the 2010 OGV performance measure by using 1.5% sulfur fuel while at berth or plugging into shorepower, as required by tariff. 60% of frequently calling container vessel calls (367) met the 2010 OGV performance measure by participating in the At-Berth Clean Fuels Program and using 0.5% sulfur diesel fuel in auxiliary engines while at berth. The highly successful At-Berth Clean Fuels Vessel Incentive Program (ABC Fuels), launched on January 1, 2009, provides an incentive to frequent calling vessels that use 0.5% (or less) sulfur fuels in auxiliary engines while at berth. In 2011, the incentive was modified to a tiered program, paying out based on the quantity of fuel burned while at-berth. Cargo-Handling Equipment (CHE) 58% of all CHE at Port of Seattle met the 2010 performance measure. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 3 of 10 100% of all CHE used ultra-low sulfur diesel (ULSD) or 15 ppm fuel and/or biodiesel blends. Since 2005, the Port has been working with marine terminal operators to reduce emissions from CHE via the use of cleaner fuels, exhaust controls, and purchase of new equipment. The marine terminal operators voluntarily switched from off-road higher sulfur diesel fuel to ultra-low sulfur diesel fuel and biodiesel blends in 2005. By the end of 2009, all eligible CHE had been retrofitted with Level 1 exhaust controls (Diesel Oxidation Catalysts), which reduced particulate matter emissions by 25%. As new technologies became commercially available, the Port worked with marine terminal operators and regulatory agency partners (Puget Sound Clean Air Agency, Washington Department of Ecology, and U.S. Environmental Protection Agency [U.S. EPA]) to install Level 2 exhaust controls (Diesel Multistage Filters [DMFs]), which reduce particulate matter emissions by up to 50%. In 2009, 69 DMFs, manufactured by Donaldson Company, Inc. (DCI) were installed on Port of Seattle CHE. In 2010, all 69 DMFs were required to be removed due to California Air Resources Board (CARB) and U.S. EPA revoking verified status. This revocation was a result of about 15% of the devices failing. DCI recommended that DMFs be removed from all cargo handling equipment, at their expense. The removal of the DMFs from CHE at Port of Seattle terminals lowered the percentage of CHE meeting the 2010 performance measure. Had these devices been fully functional, and had they not been removed, 78% of CHE at the Port of Seattle would have met the 2010 performance measure. Port staff continues to work with marine terminal operators to identify alternative emission reduction approaches and technologies, such as evaluating the feasibility of liquefied natural gas (LNG), compressed natural gas (CNG), hybrid and electric options, and identifying verified exhaust treatment technologies which will achieve the highest practical particulate matter reductions for existing equipment and integrate those technologies into retrofit projects. In addition, we are working with marine terminal operators to identify sources of funding to purchase new CHE to replace older models that cannot be retrofitted with emission reduction devices. In 2011, we also applied for a grant from the U.S. EPA that would have installed EcoCrane hybrid systems on two rubber tired gantry cranes (RTGs) at Terminal 18, a technology the Port has been researching through our EcoPartnership with the Port of Dalian. Hybrid technologies for RTGs are classified as "emerging" by the U.S. EPA, due to their recent development; the EcoCrane hybrid technology is expected to be considered "verified" by the U.S. EPA within the next year, pending completion of required operational and emission testing. Unfortunately, the Port did not receive this U.S. EPA grant because the RTG engines at Terminal 18 are of a higher horsepower than the technology is currently approved for under the U.S. EPA Emerging Technologies program. However, Port staff continues to seek funding options for this technology. Also in 2011, the Port applied for and anticipates receiving Department of Ecology funding to conduct a pilot program to install idle reduction mechanisms on cargo handling equipment with Level 3 exhaust retrofits at Port terminals, as well as on some other CHE. The objective is to give terminals a chance to experience the benefits of anti-idling technologies first hand. The final phase will be to develop and implement an incentive program to encourage COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 4 of 10 terminals to install the technology on the remainder of their fleets. Ecology funding for this phase is not yet assured. Rail In 2010, the Port of Seattle reached its 2010 performance measure of supporting the local rail companies in adopting U.S. EPA SmartWay standards. In the first quarter of 2010, idlereduction equipment was installed on two Louis Dreyfus switcher locomotives at the Terminal 86 Grain Facility with grant funding support through the Puget Sound Clean Air Agency. This project reduced fuel consumption from the two switcher locomotives by 50%. In 2011, the Port of Seattle and the Puget Sound Clean Air Agency continued to support the EPA SmartWay commitments made by BNSF Railway and Union Pacific. The Port and the Puget SoundClean Air Agency will continue to pursue grant opportunities with their rail partners to secure additional investments to further reduce emissions. Harbor Craft The Port of Seattle continues to support Puget Sound Clean Air Agency (PSCAA) in reducing emissions from harbor tug operations. Trucks On January 3, 2011, the Port successfully launched the mandatory Clean Truck Program, which requires all drayage trucks entering the container terminals to have model year 1994 or newer engines, as stated in the Strategy, thus meeting the 2010 performance measure. In 2015, th e NWPCAS requirement will change to 80% of trucks meeting model year 2007 particulate emission standards or better, with 100% of trucks required to meet the standard in 2017. The Port of Seattle is evaluating ways to accelerate this goal. Model years were selected based on U.S. EPA heavy duty diesel engine regulations. The first year the particulate matter emission standard was lowered was 1994, with the second (and last) being 2007. A model year 1994 truck is 2.5 to 6 times cleaner than a pre-1994 truck, while a model year 2007 truck is up to 60 times cleaner than a pre-1994 truck. The Port negotiated amendments to our leases with the marine terminal operators to include implementation of the mandatory Clean Truck Program as a lease requirement. In order to ensure drayage truck compliance with this mandatory program, the Port developed and implemented a Drayage Truck Registry (DTR) that requires all drivers to go online and input key information. The DTR uses an automatic Vehicle Identification Number (VIN) lookup system to determine the age of a truck engine. Once the truck is determined to be compliant, a sticker is issued that includes the truck license plate number, a barcode, and the unique DTR number; this sticker must be displayed on the driver's side door for access to container terminals. To date, there are over 9,500 trucks registered in the DTR. Because our registration system was free and simple and is required for even single calls at Port of Seattle Terminals, we have had many trucks that are infrequent callers registering. For instance, about 44% of the trucks registered are from out of state. Our core drayage fleet is much smaller than the number registered. As RFID COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 5 of 10 comes on line at all of our terminals, we will know more precisely the size of our core drayage fleet. A significant component of the development and launch of the Clean Truck Program was the extensive outreach effort aimed at ensuring that all drayage truck drivers and companies were informed of the program requirements and to help register compliant trucks. The Port engaged in significant education and outreach efforts including over 120 meetings with the various stakeholders (truckers, community and environmental groups, rail, marine terminal operators, shipping lines, shippers, community councils, labor, regulatory agencies, and elected officials). This outreach initiative included: Distribution of program notification fliers and posting of countdown signage at terminal gates. Email notices of program status and updates. Follow-up calls to truckers and trucking companies to ensure that their trucks were successfully registered in the DTR. Trucker Resource Fairs to provide information and support, such as financing, insurance, and business resources, to independent truckers. Drayage trucker BBQ and registration events. Establishment of a Trucker Liaison at the Port's Office of Social Responsibility, with a dedicated hotline and email. Partnerships with the African Chamber of Commerce and Port Jobs Employment Assistance, to reach out to truckers and provide resources. The Port of Seattle partnered with the Puget Sound Clean Air Agency (PSCAA) to concentrate on maritime air emission reduction programs. PSCAA, as part of its programs, contracted Cascade Sierra Solutions to implement the 'Scrappage and Retrofits for Air in Puget Sound (ScRAPS) Program, a buy-back, scrap, and replacement program for pre-1994 model year engine trucks. ScRAPS provided a $5,000 (or blue-book value, whichever was greater) incentive to scrap pre-1994 model year trucks that perform drayage at the Port of Seattle. Launched on November 18, 2009, and was concluded on January 31, 2011, ScRAPS successfully removed 280 pre-1994 model year drayage trucks (27 in 2009; 253 in 2010). Through this program and other fleet turn over, all pre-1994 trucks have been eliminated from our dray fleet. Second Puget Sound Maritime Air Emissions Inventory - 2011 EI: The Port is working with the partners of the Puget Sound Maritime Air Forum to conduct a second inventory of all maritime-related diesel emission sources in the greater Puget Sound region. This second inventory is an update to the 2005 Puget Sound Maritime Air Emissions Inventory and is a voluntary public/private partnership formed to provide funding, data, in-kind assistance, technical expertise, or a combination thereof. The 2011 EI will report calendar year 2011 criteria pollutant and greenhouse gas emissions from ocean-going vessels, harbor craft, cargo-handling equipment, heavy-duty trucks, and locomotives. The project, led by Port of Tacoma, has 14 funding partners: American Lung Association of the Mountain Pacific BNSF Railway COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 6 of 10 Northwest Clean Air Agency North West & Canada Cruise Association Pacific Merchant Shipping Association Port of Anacortes Port of Everett Port of Olympia Port of Seattle Port of Tacoma Puget Sound Clean Air Agency Washington Department of Ecology Washington Department of Transportation Ferries Division Western States Petroleum Association Total cost of the 2011 EI is estimated at $230,000, not including significant in-kind contributions by the project partners. The 2011 EI will be an activity-based inventory following the same methodology as the 2005 EI, which was the first emissions inventory in the United States to include a detailed, activity-based inventory of greenhouse gases for maritime-related sources. The 2011 EI will cover the same geographical extent as the 2005 EI, which is the U.S. portion of the Puget Sound / Georgia Basin International Airshed, an area spanning approximately 140 miles south to north and 160 miles west to east, at its extremities. Data and technical guidance will be collected from ports, and individuals, agencies, and companies (or their representatives) that own, operate, maintain and/or charter the equipment and vessels. Contributors include ports, terminal owners, vessel captains and engineers, equipment operators, and others having firsthand knowledge of either equipment details or operational parameters. Regional clean air agencies, other government agencies and industry associations also will provide data. The 2011 EI is expected to be published in mid-2012. When the results are known, we will communicate them broadly to community and stakeholder groups. Clean Truck Program Request for Information (RFI): As technologies to reduce diesel emissions and fuel consumption from drayage trucking are evolving quickly, Port staff is constantly seeking ways to learn about and understand these developments. On April 19, 2011, the Port published an RFI, seeking information and ideas on alternative ways to upgrade trucks to U.S. EPA particulate matter emission standards equivalent to a 2007 model year diesel truck engine; no contract or funding was associated with this RFI. The Port received one response, for a comprehensive truck grant and lease program from California Fleet Solutions. Clean Truck Program Technology Solutions: Port staff has included money in the 2012 budget for maritime air emission reduction programs that may include support of pilot projects for new technologies that will convert and report existing 1994 to 2006 model year engines to alternative fuels and technologies that meet stringent 2007 model year emission standards. We are currently pursuing several options and hope to have a pilot project launched in 2012. This will give time to evaluate the results and COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 7 of 10 whether the results are "scalable" and can be more broadly applied to our fleet. Some solutions, such as alternative fuels, have the potential to reduce operational costs to drivers, as well as reduce emissions. Draft Recommendations to Accelerate Seaport Clean Air Strategy Goals: Clean Truck Program: Staff has developed programmatic and funding options to accelerate the Clean Truck Program goals, taking into consideration legal, operational, funding, and trucker impacts. The programmatic options are: No change to goals o Legal: Current lease agreements with marine terminal operators require implementation of Strategy truck goals as currently stated. o Operational: Administration complexity of 80%/20% split. o Financial: Allows more time for trucking industry to finance truck replacements. Accelerate long-term goal to 2015 o Legal: Need to amend lease agreements with the marine terminal operators to match accelerated Strategy goal for trucks. o Operational: Low administrative complexity. o Financial: Requires earlier investment in model year 2007 trucks. Model Year 2007 Equivalency o Legal: Would need written agreement/certification from PSCAA regarding whether truck emissions are equivalent to 2007 model year emission. o Operational: PSCAA would need to determine if suitable technologies for model year 1994-2006 trucks exist that achieve equivalent particulate matter reductions. o Financial: Cost of equivalent technologies currently unknown. The financial options are: No Port funding o Operational: Requires private investment, allows Port to invest in other emission reduction programs. o Truckers: Lack of funding assistance to truckers could cause delays in implementation. ScRAPS 2.0 o Operational: Need to determine amount of ScRAPS incentive so that truckers can purchase replacement trucks that meet model year 2007 particulate matter emission standard o Truckers: Depending on Port funding commitment, may not be able to address the size of the core fleet. Pilot projects o Operational: Would assist with the deployment of new truck technologies, but would not address the entire core fleet; possibility that technology does not work as expected. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 8 of 10 o Truckers: Possible inequities regarding which truckers receive pilot project assistance. Ocean Going Vessels: The North American Emissions Control Area phases in over the next several years, requiring cleaner fuel within 200 miles of shore. Starting in August of this year, all vessels must use fuels not exceeding 1.0% sulfur. In January of 2015, all vessels must use fuels not exceeding 0.1% sulfur fuel. The implementation of the Emissions Control area will dramatically reduce emissions from vessels. Our ABC fuel program is not anticipated to continue after January of 2015. Our approach to emission reductions is expected to focus on efficiency improvements. Design a new incentive program to replace ABC Fuels that incentivizes use of fuelefficient vessels to carry cargo or cruise passengers into the Port of Seattle. o Demonstrated use of new technologies o Proven emission reduction (SOx, NOx, GHGs, CO ) as a result of technology 2 o Technologies might include: Stack scrubbers Hull and propeller design Air cavity systems to reduce hull resistance Cargo Handling Equipment: Work with local agencies and terminals to fund the purchase of hybrid RTGs and new fuel efficient cargo handling equipment, such as electric yard hostlers. This c ould include an assessment of the potential for distributed energy as part of overall terminal energy use. Implement pilot phase of installing idle reduction on cargo handling equipment and work with terminals to explore funding for idle reduction on all CHE. OTHER DOCUMENTS ASSOCIATED WITH THIS BRIEFING: PowerPoint presentation PREVIOUS COMMISSION ACTIONS OR BRIEFINGS: On February 9, 2005, the Commission adopted Resolution No. 3534, expressing its commitment to Maritime Air Quality. On April 26, 2005, the Commission authorized joint development of the Puget Sound Maritime Air Emissions Inventory and $500,000 for support and implementation of the project. On February 16, 2007, the Commission passed a series of environmental motions that required, in part, that staff present an air quality action plan for Commission approval. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 9 of 10 On March 27, 2007, the Commission authorized the amendment of the existing contract for the Air Emission Inventory in the amount of $25,000, and to receive and spend supplemental funding for the Puget Sound Maritime Air Emissions Inventory Project. On April 10, 2007, the Commission was briefed on the Puget Sound Maritime Air Emissions Inventory Project. On August 28, 2007, the Commission adopted Resolution No. 3585, endorsing theU.S. Proposal to the International Maritime Organization seeking more stringent air emissions standards for ocean going vessels. On December 6, 2007, the Commission was briefed on the revised draft of the Northwest Clean Air Strategy. On January 22, 2008, the Commission adopted the Northwest Ports Clean Air Strategy. On April 1, 2008, the Commission and the public were briefed on the Northwest Ports Clean Air Strategy Implementation. On July 8, 2008, the Commission was briefed on the Port's Clean Truck Program. On September 2, 2008, the Commission was briefed on the Port's Clean Truck Programs for drayage operations at West Coast Seaports. On November 11, 2008, the Commission was briefed on the Port's Clean Truck Program. On December 2, 2008, Commission authorized a transfer of $500,000 to the Puget Sound Clean Air Agency for maritime emission reductions. This funding was ultimatelyused by the agency for the At-Berth Clean Fuels Vessel Incentive Program. On February 10, 2009, the Commission held a policy roundtable discussion of the Clean Air Program. On February 24, 2009, the Commission was briefed on the Port's first emission reduction credits banked with the Puget Sound Clean Air Agency. On March 31, 2009, the Commission was briefed on the customer support package and the Clean Air Program. On April 14, 2009, the Commission authorized the execution of lease agreements with Total Terminals Inc. for Terminal 46, SSAT (Seattle) for Terminal 25/30, SSA Terminals for Terminal 18, and Eagle Marine for Terminal 5, to incorporate the Customer Support Package and the Ports Clean Air Program into those leases. On April 14, 2009, the Commission authorized an agreement with Puget Sound Clean Air Agency, to transfer $2.3 million ($1.15 million in 2009 & $1.15 million in 2010) from the Port's operating budget to support the implementation of the Northwest Ports Clean Air Strategy. On June 23, 2009, the Commission received a briefing on the Northwest Ports Clean Air Strategy 2008 Implementation Report. On August 25, 2009, the Commission authorized a revised Customer Support Package lease amendment with Total Terminals Inc.; and authorized the Port to purchase energy efficient light fixtures and related equipment for Terminal 46, for an amount not to exceed $680,000. On August 25, 2009, the Commission received a Clean Air Update. On January 12, 2010, the Commission was briefed on the Seaport's Air Quality Program. COMMISSION AGENDA Tay Yoshitani, Chief Executive Officer January 31, 2012 Page 10 of 10 On June 8, 2010, the Commission authorized to supplement the value of the funds to support maritime emissions reductions by $541,500, for a total 2010 annual program budget of $841,500. Within the $541,500, $135,000 represents funds that were originally approved in 2009, but were not used until 2010. On November 9, 2010, the Commission authorized to increase the amount of the funds for support of maritime emission reductions by $110,250, for a total 2010 annual program budget of $951,750. On December 7, 2010, the Commission was briefed on the Northwest Ports Clean Air Strategy Implementation Status. On January 4, 2011, the Commission adopted a motion to "Accelerate Seaport Clean Air Goals to 2015." On February 1, 2011, the Commission authorized signing of Agreement 20090046 Amendment 4 with the Puget Sound Clean Air Agency to transfer $1,160,250 in funds to support the implementation of the Northwest Ports Clean Air Strategy, and to extend the end date from June 30, 2011, to June 30, 2013. Amendment 4 would increase the total amount transferred from the Port to PSCAA since 2009 to $4,166,250. On July 12, 2011, the Commission was briefed on the Northwest Ports Clean Air Strategy 2010 Implementation Report and interim report on Accelerating Clean Air Goals.
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