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Talking Freight

Clean Ports

May 18, 2011 Talking Freight Transcript

Presentations

Jennifer Symoun
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Clean Ports.

Before I go any further, I do want to let those of you who are calling into the teleconference for the audio know that you need to mute your computer speakers or else you will be hearing your audio over the computer as well.

Today we'll have three presenters - Arman Tanman from the U.S. Environmental Protection Agency, Carter Atkins from the Port of Los Angeles, and James Jack from the Coalition for Responsible Transportation.

Arman Tanman is a senior staff engineer in U.S. EPA's Office of Transportation and Air Quality. Arman started as a mechanical engineer and spent 13 years investigating cars and trucks. For the past eight years he has been involved with heavy-duty diesel engine programs, regulatory activities, and compliance testing. He currently works on port related issues promoting diesel emission reduction technologies and strategies.

Carter Atkins is an Environmental Specialist for the Port of Los Angeles' Environmental Management Division. He manages air quality programs at the Port. Mr. Atkins has been with the Port for three years working on projects that have focused on ocean-going vessels, alternative maritime power, zero emission vehicles and regulatory issues. Prior to working for the Port, Mr. Atkins worked as an environmental specialist for other City of Los Angeles departments including Los Angeles World Airports and Bureau of Engineering. Prior to working for the City of Los Angeles, Mr. Atkins worked as an environmental consultant focusing on regulatory compliance.

James Jack is the Executive Director of the Coalition for Responsible Transportation. Since its inception in 2007, CRT has grown to include leading importers, exporters, trucking companies and ocean carriers who represent the largest and most progressive customers and service providers at our nation's ports. Through the CRT Clean Truck Initiative, the private sector members of CRT are working in partnership with America's ports to establish industry-supported clean air programs that are both environmentally and economically sustainable.

Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the chat area. Please make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. If we run out of time and are unable to address all questions we will attempt to get written responses from the presenters to the unanswered questions.

The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next few weeks, along with a recording and a transcript. I will notify all attendees once these materials are posted online.

One final note: Talking Freight seminars are eligible for 1.5 certification maintenance credits for AICP members. In order to obtain credit for today's seminar, you must have logged in with your first and last name or if you are attending with a group of people you must type your first and last name into the chat box. I have included more detailed instructions in the file share box on how to obtain your credits after the seminar. Please note that today's seminar is not yet available on the AICP web site. I will send out an email to everyone who registered once it is available for credits. Please also download the evaluation form from the file share box and submit this form to me after you have filled it out.

We're now going to go ahead and get started. Today's topic, for those of you who just joined us, is Clean Ports. As a reminder, if you have questions during the presentation please type them into the chat box and they will be answered in the last 30 minutes of the seminar. Our first presenter will be Arman Tanman of the U.S. Environmental Protection Agency.

Arman Tanman
Thank you, Jennifer. My name is Arman Tanman and I want to talk about EPA's National Clean Diesel Campaign and the Clean Ports Program. Our National Diesel Campaign is a comprehensive approach basically tackling diesel emissions around the United States by regulatory approaches and voluntary approaches.

For the past couple of decades we have been working on addressing diesel emissions from trucks, non-road equipment, locomotive, marine vessels, and ocean going vessels. From a regulatory standpoint, this makes sense, but only for new engines. There are over 14 million existing diesel engines so we have developed a voluntary program for that to retrofit with technologies or strategies to reduce diesel emissions from existing engines. And to do that, we used verified technologies, devices that are cost effective and even though these might not be as cost effective to buy, we try to offer some kind of incentives or funding or recognition to do these retrofits.

To start off with regulations, I want to share our history of what we have done. We first try to address high volume sources, such as cars and trucks. This makes sense for two reasons. The first is because of technology transfer. It is most cost effective to develop new emission control technology for high volume applications. This way the R&D expenses can be spread out over a high number of products. As experience is gained with new technology, it can be applied to a growing number of applications.

Ocean going vessels- all of the diesel applications shown here have standards in place that drive or will drive the use of NOx and PM after treatment technologies such as SCR and diesel particulate traps. The industry likes to spread the cost over time and the different applications to recoup some of their investment. Second, the greatest emission reductions originally achieved for the highest volume applications. However, as the emission from these applications is reduced, the largest remaining reductions can be made from shipping.

As you can see from our 2009 PM inventory map, we have been tackling the trucks because of their high proportion number of PM emissions coming from trucks. That's basically 24% from trucks, highway trucks, and 27% from non-road, which consist about half. As you can see the marine is about 17%, but our projections for 2030 shows marine to be very high, up to one- half of the pie. That's because we have been cleaning up the cars, trucks, and non-road equipment.

Several years ago, we have adopted are more stringent PM and NOx emission standards for locomotive and marine diesel engines. This was a three part program where we tightened the engine standards for new, as well as, when they are remanufactured. We set out near term emission standards tier three for locomotive and marines and set longer term standards as tier four for newly built locomotive and marine engines.

In this graph I want to point out how far we have come along. The X axis or the bottom axis is NOx emission and the vertical is PM emissions. In 1990 emissions were at those levels shown in the middle of the screen and as time went on we addressed like in 1994 and 1998, 2004 and 2007 and 2010 trucks the emissions significantly went down. We reduced PM and NOx emissions by over 95%. That's basically the same tactic we're using for marine engines. As you can see, marine emissions are currently higher and will be getting lower and it is a phased-in approach.

Another area of concern is the ships and we addressed ship emissions back in December of 2009, but we couldn't just do that for US ships, so we have integrated with IMO, International Maritime Organization, to set global standards. As seen on slide 7, we have global NOx controls for roughly 20% reduction for new vessels. That's starting now, and also PM and SOx control through the fuel in 2012 and 2020.

The 2020 levels are of course very low, and that could be delayed subject to a fuel review that we're going to have in 2018. Another important thing that this regulation provided was for an ECA, an Emission Control Area, where countries can apply for more stringent standards for their specific area.

We have adopted for North America and Canada basically a 200 perimeter area for the ECA, meaning ships coming into these areas have to burn the lower sulfur fuel. In the emission control areas ships will have to use the cleaner fuel, basically this will lower SOx emissions, the fuel sulfur levels will be going down to 1% fuel sulfur level starting in August 2012 and even lower than that down to 0.1 in 2015 on, and we expect to reduce SOx emissions by 96% and 85% of PM.

To show the emissions that are reduced we tried to put these maps and some people might think, that the emissions are only at water or only immediate area where the ships are, and that's not true. We are looking at health analysis and emissions analysis. We see the ship emission levels, we can see as far hundreds or thousands of miles inland even, and this map shows that even though the red areas you see are directly impacted, you can see the emissions impact going as far as Kansas in the light green and light blue.

Similar for ozone on the next slide, that's a result of NOx emissions, and of course it is concentrated on the East and the West Coast as well as in the Gulf. And also on the next slide for sulfur, again, it is just it is in the predominantly in the water area or coastal areas, but the emission impacts goes all the way as far as the inland United States.

You might ask why we're doing these. It is basically to reduce emissions and to protect the public health. To be able to show that it is beneficial for the public, we have done, with Office of Management, Budget, and other offices within the government, a cost benefit analysis. I mean, any regulation requires a cost benefit analysis, and I just want to point out what kind of cost benefit analysis was done for each of the different regulations that I mentioned before.

As you can see, we started with a light duty highway which result the in a 5 to 1 meaning that every dollar spent you saved $5 in health costs, and this grew for highway engines and then for non-road engines and then as you can see it is a 36 to 1 benefit for ocean going vessels. We have been starting in the last couple of decades if you combine all of those costs and benefits, it is basically a benefit to cost ratio of 20 to 1.

So far, I mentioned the regulations, but to shift gears into our voluntary programs, we have noticed that ports have a high degree of pollution, so we have tried to assess the pollution at the ports and work with ports to voluntarily reduce emissions from the existing diesel engines. There are more than 40 major ports which are located in non-attainment areas. That means that EPA actually looks at the air within certain areas and measures it, and we can see that about 88 million people live in these 39 areas that do not meet the PM national air quality standards.

To combat the pollution at ports or at least to foster emission reductions at ports, we have a clean ports program and have been targeting all types of diesel emissions from ports. We worked with port authorities, terminal operators, shipping, truck, and rail companies which that have been also very positive. They wanted to work with us, and we're basically promoting cleaner diesel technologies through education, incentive programs, financial assistance, for diesel reduction at Ports. The backbone of this is our verification program, so any device that we recommend or approve of has to be verified through us, EPA or the California Air Resource Board. We basically have a recognition program. I don't know if most of you heard about our SmartWay Program and I will mention it later, too, about called the SmartWay Transport Partnership which provides tools, information and recognition to reduce carbon footprint for the freight industry, and not only because we realize that not only the freight supports but all types of other ships and rail and marine. We want to expand that SmartWay Program to other nodes basically.

What we have looked at clean ports is to reduce pollution through technology approaches and operational strategies, and we like to say the five R's are the way to do it as refueling with cleaner fuels, retrofitting, repairing, rebuilding, repowering or replacing. Because every port is different and every case is different, we have shown case studies on our website and also given case examples of different ports of how to do it. As I mentioned, every port is unique, so there is different strategies and not only technology strategies but also operational strategies such as improving the port efficiency by the input and output, using shore power and considering air quality impacts while there are security changes at a port.

I mentioned about the backbone of our program as the technology verification and what we tried to do, this is in EPA and California, is to look at technologies and to give confidence to the public that these devices actually do work and are durable. Some of the key technologies include diesel particulate filters, crank case ventilation systems, SCR systems, and we have a website (listed on the last slide) called a verified list for EPA and California of all of these verified systems.

We also encourage engine upgrades which actually is a cost effective way to clean up some of the marine engines. Some of the marine engines stay around for a very long time. As I mentioned technologies include cleaner fuels, vehicle replacement, idle reduction and even hybrid technologies that some ports are embarking on.

Of course we had to offer some incentives. Congress was fortunate to give us funding last several years, and even though you hear about government cutting back, this is one of the few programs in the government that is endorsed by both parties even though we had a bipartisan party last year, with our 2011 budget, and everyone was in favor of it. I just wanted to point out we first started received funding to clean up diesel emissions through the DERA funding program in 2008 and we were planning for 2009 but because of the economy we had the American Recovery Act in the middle of 2009 where we were given a big lump sum of money to basically give to public entities and then we were funded in 2009 and 2010 and as well as a 50 million in this year.

What we have been focusing on not only the highway of course but also the marine and we realize some of the biggest gains are in marine and locomotive and non-road, so we have been working with ports and encouraging ports to do marine and port related projects,

I would like to show some of the examples of different types of projects starting with marine repowers, that we have done, awarded about $4.5 million award grant to NESCAUM to upgrade 13 vessels and some of these are very old vessels.

Another project was in the Great Lakes where we awarded $1.2 million for a steamship company to repower with a genset. Also more on marine is an example of a tug boat in Pittsburgh where the original engines were rebuilt to meet newer standards and also actually save fuel, too, so the ship owner or the tug boat owner was very happy with that.

At the Port of Baltimore we have done a variety of things, another grant consisting of cargo handling equipment, drayage trucks, locomotives, and tug boats. That was about 3.5 million dollars.

We have also been encouraging more SmartWay type related projects and SmartWay focusing on freight and expand further and in the SmartWay example we provided Port of New York with a grant to basically an incentive program to replace the older drayage trucks with newer models, and this involved replacing 1993 or older Drayage trucks with 2004 to 2008 trucks. The last slides I have is about Port of Los Angeles. We have been doing a lot with the Port of Los Angeles, and this is just one example to basically replacing and repowering and retrofitting different harbor craft equipment at the port.

With that my slides end, and there is some more information about contacts. We have a great website that has actually more examples of projects we have at ports and if you need to contact me or my co-worker who is also in charge of the Clean Port Program, Bill Jones. For regulations, we have actually our regulatory people and his name is Mike Samulski. Feel free call to any one of us. Thank you. I will answer questions later, and then the next is Carter with Port of Los Angeles.

Jennifer Symoun
Thank you, Arman. I will take the presentation down to bring the next up, but you can download in the bottom right corner of the screen and they will also be posted online following the webinar. You will be able to get the information from there. I will now turn it over to Carter Atkins of the Port of Los Angeles.

Carter Atkins
Thank you, Jennifer and thank you Arman for the great presentation. A lot of what you talked about dovetails into what I am going to talk about on more of a local level. Today I will give everybody an update to the Clean Air Action Plan. I am going to talk about the CAAP, the accomplishments to date, and then in 2010 we did an update to the CAAP specifically related to the San Pedro Bay standards and emission benefits. The CAAP is actually the first clean air action plan developed by a port and in this case the Port of Los Angeles and Port of Long Beach collaboratively worked together to develop this joint program.

A lot of what we did is in lock step. The CAAP is a planning document which identifies the path forward for reducing air quality impacts from port operations. The plan for most part is focused on actions that can be taken over the next five years, so these are all near term strategies. With our efforts with the CAAP, the ports and the agencies, especially the EPA and CARB, worked together. The agencies provided extensive input into the port's air quality planning efforts.

It has several guiding principles. First we wanted to identify and implement programs that will minimize health risks. For the sources that operate in the port, we're focused on reducing emissions of diesel particulate matter. In California, diesel particulate matter has been identified as a carcinogen. Second, the ports also wanted to contribute to our fair share of the reduction in emissions to assist the region with attainment of ambient air quality standards. To do this we're building upon past efforts and working on with the agencies and industry to implement effective programs targeting NOx, SOx, and DPM emissions.

Third, the ports are working cooperatively to set consistent standards to be implemented at the project level and at the source level. We wanted to ensure the two ports would be coordinated on the requirements and we also felt it was critical to coordinate with the agencies to ensure near term requirements being implemented at the port level would be consistent with the regulatory direction and eventually would be over taken by regulatory requirements that would help level the playing field for the industry.

Lastly, it is critical the port be able to modernize facilities and accommodate the demand for cargo through these ports. We recognize our ability to accommodate that cargo and continue to grow would require significant changes and efforts to reduce the impact from port operations therefore we have been aggressively moving forward in that direction. For example, the port of Long Beach, the middle harbor project through the strategies being implemented at the project future emissions, will be half of what they were for baseline conditions. I know it is a lot of information on that slide.

Now I will get into the accomplishments. The original CAAP was adopted at a joint port meeting in November of 2006. Since then over the last three and-a-half years there have been a lot of things that have been accomplished in that time. First, I would like to highlight the Clean Truck Program. One of the most significant efforts has been the development, approval and implementation of Clean Trucks Program. We spent a lot of time in this group discussing elements of the program, and throughout the development especially during 2007 when the program elements were being defined and each port adopted the Clean Truck Program tariff in late 2007 which established the compliance schedule for clean trucks, and that action followed by additional updates to the tariff to enhance the programs.

We already reached two major milestones. In October of 2008 all pre-1989 trucks were banned, and in January of 2010, pre-1993 trucks were banned, and then 2004 through 2003 trucks required level 3 plus NOx retrofits. As of January 2010, about 80% of the trucks calling the ports met the emissions standards, and this number is rising. I would like to talk about heavy duty vehicle measure. It called for constructing an LNG facility in the port area. The site was identified, and Clean Energy was awarded the lease to move forward with the construction. The fueling operation began in early 2009. In addition, the ports have also financially supported the development of other fueling stations in the port area.

Next is the Technology Advancement Program. This was established in 2007. It is an advisory committee established with port staff, EPA, CARB, AQMD, and basically they do technical review and funding support of new technologies to reduce emissions. TAP funded package projects include the tug boat, the Caroline Dorothy, a diesel electric hybrid, hybrid RTG cranes, AMEX which you may know is an emission reduction system where it essentially you put a hood over the exhaust stack of a ship and the exhaust is treated. We're looking into LNG engine development, CNG truck demonstration and more recently involved in two projects. One is the sea water scrubber on an ocean going vessel auxiliary engine and a class 8 hydrogen fuel cell vehicle. To date the ports have made available $9 million and have funded $5.4 million in projects. Vessel speed reduction is the slowing down of vessels to 12 knots in the 40 nautical mile zone. The project was originally developed in 2001 so prior to the CAAP and compliance has been steadily climbing and as you can see the compliance rates for both ports is extremely high and in 2009 we expanded our program to include the 40 nautical mile zone.

Second is a vessel fuel switch incentive program. This is a one-year incentive program which was in effect between mid-2008 and mid-2009 where we paid the delta between bunker fuel and 0.2% sulfur fuel in main engines again in the VSR zone. I will show you that slide right now.

So here you have the port of Los Angeles and then there is two arcs, the first arc is 20 nautical miles and then the second arc is 40 nautical miles and you see the recognized shipping zones there, and then the over water boundary. That is essentially part of our emission domain where we calculate the emissions coming to the ports.

Next is shore power. To date Port of Los Angeles has implemented shore power at three container berths and two cruise berths. We are looking at building 13 additional container berths by January 1, 2013. Switching now to locomotives, PHL has upgraded in 2008 to tier 2 and tier 3 gensets. Significant reductions of emissions in harbor craft and cargo handling equipment has also been done. A lot of funding through the grant funds and the industry has made significant investments to clean up those emissions. Again, there are CARB regulations to back stop the efforts here.

With all of those programs in place since 2006 we started to see significant emission reductions from the port sources, and we are on track to achieving the original forecast in the CAAP. Comparing the 2008 emission inventory data with the 2008 forecast and the original CAAP, emissions are lower than originally for all pollutants.

So we also want to look at our emissions, not just at the port area but also to the Southern California Air Basin. So even with all of our emissions reductions, there is still work to be done. Looking at the 2008 port emission inventory data in comparison to the 2008 emissions throughout the basin, the ports you will see the orange slice there still make up 17% of particulate matter, 9% of total NOx and 54% of SOx. So this is very important as we continue with our focused efforts to ensure the port emissions continue to reduce to meet basin needs.

So that was a general overview of the accomplishments and now I will talk about the updates to the CAAP. So the CAAP is a living document. Ports made a commitment to continually update and improve upon the CAAP to monitor progress, plan for the future, and maximize success. As part of the update we reviewed the existing measures to ensure the information was correct and reflective of the efforts under way or planned for future. We also wanted to evaluate new areas that require focus. As a result, we have added new measures to our ocean going vessels and also want to make sure that the plan reflected the latest regulatory requirements. A lot has happened at the state level, federal level and international level; as Arman mentioned, the ECA. We wanted to reflect those actions in the plan. It is always the belief behind the CAAP that while ports need to take their own near term action eventually all of these should be implemented more broadly. The first is the development of the San Pedro Bay standards. This is the most significant change. The ports have proposed long-term reduction goals in both emissions of diesel particulate matter, NOx, SOx, and reductions to in-health risk.

As I just mentioned the San Pedro Bay standards are long-term emissions and health risk reduction goals for the two port complex which encompasses all port sources, ocean going vessels, heavy duty vehicles, cargo handling equipment, harbor craft, and rail. The ports established targets for fair share reductions in emissions to assist the region in meeting the 2014, 2.5 PM and the 2023 eight-hour ozone national air quality standards and in addition the ports establish a target for health risk reduction for people living in the port area.

The emissions forecasting is developed by the Technical Working Group which were port staff, EPA, CARB, and South Coast management district. We utilize the latest cargo forecast included, port CAAP commitments and currently adopted regulations as of July 2008 and looked at forecasted emissions to 2014 and 2023 compared to 2005 baseline. Moving forward I will talk about 2020 for health risk standard and 2023 date for are emission reduction standard.

The year 2020 is the target year for achieving health risk reduction standard because it generally lines with the CARB's state goal for reducing diesel particulate matter related health risks from the goods moving industry by 85% below 2000 levels by 2020.

So here are the emission forecast results. In 2014 we see a reduction of 72% of diesel particulate matter, 19% NOx, and 93% SOx. In 2023 we see 75% reduction in diesel particulate matter, 18% reduction in NOx and 92% reduction in SOx. So for the health risk assessment is to develop again with the agreed upon protocol with the Technical Working Group, and the health risk assessment was based upon spatially allocated 2005 and 2020 forecasts, diesel particulate matter emissions and the comparison of the 2020 to 2005 baseline.

Next these next two slides actually show the modeling results from the Bay-wide health risk assessment tool indicated that between 2005 and 2020 population weighted average risk will decrease 74% throughout the port region and 72% in communities within a 2-kilometer snake of the ports boundaries and major good movement corridors through the implementation of presently feasible and available CAAP measures and existing emission control regulations. In order to close the gap and reach the goal of 85% reduction in health risks, ports seek to develop new measures. The next slide 1.2-kilometer boundary around the ports and the emission reductions forecasted emission reductions.

Here are our proposed standards. By 2014 we want a 72% in diesel particulate matter, 22% reduction in NOx, and 93% reduction in SOx. By 2023, we want a 77% reduction in diesel particulate matter, 59% reduction in NOx, and 92% reduction in SOx. So for 2020 you will see that we have to reduce diesel particulate matter by 85%, so we're a little bit short. So what we are going to do is implement the strategies through the CAAP. We will keep implementing existing CAAP strategies and then also look at new CAAP strategies which I will talk about next to help hopefully meet this goal.

So here are new strategies that are in the 2010 CAAP. First are OGV5 and OGV6. These are ocean going vessel measures that focus on transmitting emissions so what we are looking at is emission reductions for main engines. OGV5 is attracting the cleaner vessels to the ports and then OGV6 is looking at retrofits technologies for on the main engine during transit. So scrubbers, exhaust gas recirculation, and fuel technologies to reduce diesel particulate matter, and second is RL2. What this is a rail measure to include by 2023 all locomotives entering the port should be tier 3. Then RL3 measure includes new locomotive engine standards and support of CARB's 95% tier 4 standard by 2020.

With that we hope to reduce our emissions and meet our health risk goals, so thank you very much.

Jennifer Symoun
Thank you, Carter. We'll now move onto the final presentation given by James Jack of the Coalition for Responsible Transportation, and I want to remind everybody if you have questions for any of the presenters, please type them into the chat area and following James' presentation we'll get to the question and answer session. James, you can begin.

James Jack
Thank you so much. Good morning, every. My name is James Jack and I am the Executive Director for the Coalition for Responsible Transportation and really appreciate the opportunity to present before the Talking Freight webinar group today. You have heard an overview about the tremendous effort of the public sector efforts both at the federal and the local port levels that are taking place, specifically to reduce port related emissions and from a variety of sources, certainly port trucks has been a central focus of those efforts as well. I am here to talk a little bit about the private sector effort and how port customers and service providers play a critically important role in the effort to help meet the air quality goals in our local port communities and nationally as well.

That's really what the Coalition for Responsible Transportation is about. CRT was formed in 2007 which was really right around the time that port clean air programs were beginning to really hit their critical mass and certainly as we saw in Southern California the Ports of LA and Long Beach were really pioneers in this regard, and were among the first in the nation to develop these comprehensive programs. It quickly became clear to leading private sector companies that there was an important role for the private sector to play in the development of these programs by virtue of the fact that being port customers and port users and also sharing the dedication to meeting the air quality goals of the ports and improving the environmental quality of port communities led us to create a group that became to help facilitate partnerships with ports around the country, not just in Southern California, certainly starting in Southern California and around the country to give the industry a way to demonstrate its environmental responsibility.

As folks are well aware, many of the leading members of both the import and the export community and their service providers have strong corporate commitments to sustainability across their operations, certainly transportation among them and the transportation sector has long benefited from leading environmental policy through programs like SmartWay and others. Those programs really didn't deal with port related activities so we really needed to draw a tight focus around port activities and reducing our environmental footprint. So that's what CRT was formed to do. As you can see, since CRT's formation we really attracted a number of leaders cargo owners, ocean carriers, trucking companies, and also more recently in partnership with some of the major ports around the country as well. In joining CRT, these are companies that will be able to better serve customers, better meet the needs of the communities they work in, and do business in and better help the reputation of the shipping industry to demonstrate the commitment to environmental sustainability. While our members are many of the largest players in the shipping industry of course we're only a small fraction of the total numbers of shippers and providers in the field so we always try to use opportunities like today's Talking Freight webinar to educate folks and let people know that there is a venue for this type of private-public partnership to build these clean air programs around port communities and invite people to join us. So the question always gets back to why are you focused on trucks. Trucks have easily become the most visible source of port related emissions in and around the port communities and certainly not the only source obviously as the presenters identified. We have a variety of sources in the port communities from locomotives to ocean going vessels, but the trucks are the most visible. They drive through the local communities back and forth to the part terminals and certainly create localized effects on port communities.

The impact of truck age is of specific interest as we're developing these clean truck programs, and as you can see in the slide here, the older the truck, the more significant polluter it becomes by virtue of the model year standards in effect at the time of the truck's manufacture. You can see that the difference between a 1993 truck and a 2004 truck is roughly a 95% reduction in PM and a 60% reduction in NOx, that's for 2004 truck equipped with a DPF. So what we're seeing is getting older trucks out of the port drayage fleets can have an immediate and significant impact on air quality. Certainly our initial goals have been to get pre-1994s off the road first and begin phasing in a newer and cleaner truck fleet.

This is getting back to Southern California. This is a copy of full page newspaper ad that the Coalition for Responsible Transportation ran in Southern California newspapers, and really the attention was being developed around clean truck programs. We wanted to make clear the industry supports the goals, the air quality goals that were developed in Southern California. The industry was an agent of change; we wanted to make clear that it wasn't something that industry was going to be opposed to, that we wanted to work collaboratively to help the ports meet their goals. This was a way for us to let the community know that we're serious about improving air quality, and certainly you know we really began to garner some positive recognition then in Southern California, but since then nationally about private sector efforts to help ports solve these problems. So since that time we have launched a national partnership called the Clean Truck Initiative with the Environmental Defense Fund. We launched that over a year ago, and really brought in the vast knowledge and health and air quality expertise of the Environmental Defense Fund to help us partner with port communities to identify health effects, to identify air quality inventories, and to begin to set goals to reduce those health effects and improve that air quality. It has really been an unprecedented industry environmental partnership to affect that type of change.

As you can see, although there is some a little bit of formatting issues on the slide, we have been active in many ports around the country, obviously starting in Southern California, LA and Long Beach, but clean truck programs have migrated around the country and up the West Coast and across to New York, New Jersey and we're focused heavily in the mid-Atlantic and Southeast right now, and Houston as well. So we have a real nice robust national campaign to build upon the work in Southern California and bring clean air to port communities around the country. I will briefly go over the objectives for the clean truck initiative.

Obviously the primary one is to develop clean truck programs that have full industry support around the country. Partnerships with environmental organizations help us promote our sustainability efforts. They help provide recognition to companies to encourage them to join in these sustainability efforts, and they help provide us the scientific measurement tools that can identify the air quality problems and then also help us measure our progress in meeting them.

Working with carriers and drivers, financial support, transitioning to clean equipment is comes at a cost as folks are aware. New clean equipment is a financial investment, and one that can't just fall on the shoulders of the individual driver. It is one that has to have the participation of the trucking company, and of the shipper, of the cargo owner, and which is something we believe very strongly in.

Partnering with government agencies, certainly DERA and the Clean Diesel Program administered through the EPA has been an incredibly valuable source of funding and seed money for truck replacement and retrofit programs and working with state and local agencies to provide funding for additional incentives, grants, low interest loans, things that can help bridge the gap between the old trucks and the new trucks and finally collaborating with port authorities, and this can take a variety of different forms between hard truck bans as we have seen in many communities to voluntary programs that we're seeing in other communities. The bottom line is clean up the fleet and get the oldest and highest polluting trucks off the road.

The benefits, this is really where it comes down to any time I sit down with a large cargo owner or a large trucking company, they want to know, you know, why is it in our interest to invest the resources it will take to clean up our fleet? The benefits are many fold. Certainly the community benefits, demonstrating positive commitment to the communities that we serve, and improving the reputation of the industry, but more importantly it is the right thing to do. There is an economic benefit as well. As we have seen, the drayage regulations are increasingly present in ports, state and the federal level around the country. We don't want to put ports in a position where they are fearful that adopting clean truck programs will drive discretionary cargo away from their gateways. They don't want to lose customers, and they don't want to lose market share and as a country we don't want to lose market share to many of the other ports competing for that international commerce. So part of our goal is to make sure that parts know they have the support of their customers and they have the support of their service providers that by instituting clean truck programs they don't have to choose between clean air and cargo.

Certainly there is an infrastructure benefit. We see often times that clean air is the key that unlocks infrastructure projects. That is usually the number one speed bump that these projects hit, whether it is the Gerald Desmond bridge in Southern California that had been litigated for over a decade and was finally approved by virtue of the fact that the dramatic air quality improvements that were enjoyed in Southern California led to a lot of the oppositions to that bridge project dissolving so terminal expansion projects that we have seen in many places around the country as well. We know that clean air is a way to facilitate growth of ports and really remove that barrier and then finally, as Arman mentioned in his slides, we know that we have new, federal standards that are going to be tightening the federal air quality standards around the country. To the degree that we can begin to prepare and get ahead of those standards will mean we'll avoid disruptions in the supply of available trucks, we'll avoid disruptions in the supply chain, and shippers, carriers and ports will be better prepared and positioned to meet these new standards if they take action now.

The final slide, we have a huge and very impressive group and audience that's on the call today many of whom are thinking about ways that additional ports or additional parts of the country can implement their own clean truck programs, and so what we like to offer is by partnering in this effort you know we really invite ports, cargo owners, service providers, to demonstrate their commitment to sustainability. This gives folks the ability to improve the environmental quality of port communities and again preserving the competitive business environment in our nation's ports. We want to make sure that as we grow, we grow in a way that doesn't risk diverting cargo to other places because not only of the economic issues that are involved there, but frankly we would rather have cargo moving through America's gateways on cleaner trucks than moving through neighboring countries dirty trucks and then coming into the nation that way. This is a better path forward and as industry we're really feel very strongly by partnering together we can really drive a cleaner future for the goods movement industry.

So I want to thank you for letting me join today. We're very excited about being at the forefront of developing these environmental programs and look forward to any questions and answers.

Question and Answer

Jennifer Symoun
Thank you, James. We'll go ahead and start the Q&A session with the questions that have been typed online. I encourage everybody to keep on putting questions as we go through these, and once we go through them if we still have time we can open up the phone lines for questions. I am just going to start off at the top in the order of the questions came in. Arman, the first question is for you. I think you did partially answer it. Are you aware of similar efforts to address PM emissions for ships and ports in Canada and Mexico?

Arman Tanman
Yes, thank you for asking that question. As I mentioned Canada does have the same standards and they have adopted ECA just like we have and Canada usually follows all the regulations so we are in sync with Canada and Canada is in sync with us, but Mexico is another matter. Mexico because PEMEX is a state owned company, there is a little bit behind, so I think they're working on it, but they're not there yet. Eventually they will, I think. I don't know that much more about Mexico joining the ECA. I hope that answers the question.

J. Symoun
If not to the person who asked, feel free to type in more to clarify or if we get to the phone lines, you can ask over there. The next question is for Carter. Are trucking arriving from Mexico subjected to the same standards of trucks registered in the US?

Carter Atkins
If a truck does come up, they have to register and could get a like a one-day pass, but eventually if they start coming up regularly, they would be enrolled in the clean truck program.

J. Symoun
Thank you. The next question is for Arman. Why did the ECA not have the significant impact in the Northeast that it does along the rest of the coast with New York being a major port?

A. Tanman
That is a good question, I think another ECA worker mentioned it, and I think weather has a great impact on that because of weather conditions and the prevailing winds. I think that's the major contributor, but as you can see, there are impacts maybe less than other areas, but it is weather related.

J. Symoun
Thank you. Back to a question for Carter. How sensitive are the 2014 and 2023 reduction estimates to the cargo forecast? Are they updated when the cargo forecast is updated?

C. Atkins
Those emission reduction estimates don't change, so in theory we could actually meet those emission reduction goals with a low growth model, but the emissions estimates and the cargo forecast are done separately. The next time we do an emission forecast it will be the next time we update the CAAP so we can see where we are.

J. Symoun
And now, this is a question for James. Where does CRT stand on the need for dray trucks to have company drivers, not owner-operators, to be clean trucks?

James Jack
Thanks. That's a great question. We have developed our model in a way that can accommodate either independent owner-operators or employee drivers. Obviously, you know, right now both types of drivers are in the marketplace, and we feel strongly that whatever the employment status of the driver is important to provide them with the financial tools and support that they need to get clean trucks on the road. We have developed kind of what we call the CRT financial model and often compare that to a three legged stool where the shipper and cargo owner is one leg of the stool, and the trucking company is the second leg, and then the driver, whether independent or employee, is the third leg of that stool. We strongly believe that unless each of those players has a financial role in the support of the transition to new equipment, these clean truck programs aren't going to be economically sustainable over the long-term. We really advocate and support the need for shippers to play a role in supporting financially their provider's transition to cleaner equipment, even if the shipper which is true in most cases doesn't directly own that equipment. There are a number of models that exist where shippers are paying kind of a clean truck rate, where they're paying a premium to ensure that all of their cargo is moved with the clean truck, and that premium is then combined with the trucking company and allows for financial incentives to help image before the cost of the new truck so it is not falling squarely on the shoulders of the drivers.

We feel that is a model that really has to have everyone's support in order to work and be viable. We want to make sure it is a model that works for all drivers involved in port drayage and in order to do that it has to address both independents and employees.

J. Symoun
Thank you, James. I believe this question is for you as well. I noticed no clean trucks programs listed for the Great Lakes ports. What is the status there?

J. Jack
Yeah. Well, that is something that we very much intend to move forward on in the future. We really started in CRT as I mentioned although we represent many of the largest shippers in the industry, we're small in the number of the shippers and providers in the field. We have had to move at a somewhat measured pace and what we have done is started with the interactions with the top ten container ports by volume in country that are representative of the largest source of emissions in the country through containerized trade. As we have seen clean truck programs get well established certainly on the West Coast, we begun to focus on the Mid-Atlantic and Southeast. Our hope is that as we continue to move along and get these clean truck programs set up, we are really going to be looking at the Gulf of Mexico and the Great Lakes as the next regions that we want to really focus on.

J. Symoun
Perhaps, Arman, I should give you an opportunity to address the question as well from the EPA standpoint.

A. Tanman
I think James did a great job explaining that, but, yes, we are as James said we did focus on major ports and as we go around to the smaller ones now, we do plan it, and it is cleaning up drayage trucks is very important as I mentioned in one of my slides. It is a very cost effective approach so we will get to those eventually.

J. Symoun
James, I had a question sent directly to me so you probably didn't see it. Can you name or direct us to a list of any shippers currently paying a clean truck premium so we can encourage locally active shippers to do likewise?

J. Jack
All of the CRT members support the CRT financial model as a best practice. All of the CRT members have committed to providing financial support to their drayage providers to help the transition to new equipment. Obviously as folks are aware, any discussions of actual rates that are being paid are something that is not the purview of a trade association for obvious antitrust reasons.

As a best practice it is something that all of our cargo owners endorse and it is something that they negotiate directly with their service providers and in each of the markets that they're involved in, and we are certainly trying to use CRT as a way to attract other shippers to adopt this as a best practice as well.

J. Symoun
We still have plenty of time left. That's all the questions I see typed in. I do encourage you if you have additional questions to type them in. I will also ask the operator to give instructions if you want to ask a question over the phone.

Operator
At this time I would like to remind everyone in order to ask a question please press star 1 on your telephone keypad. We'll pause for just a moment to compile the Q&A roster.

Operator
There are no questions from the phone line.

J. Symoun
Another question was just sent to me for James. Can you comment on whether truck bans aid or impair voluntary program like CRT.

J. Jack
That's a great question. The issue of truck bans is really interest unique to each port community. CRT supported truck bans in all of the communities in all of the port area that is adopted them. That is Ports of LA and Long Beach, Oakland, Seattle-Tacoma, and New York New Jersey. We believe it can be a very effective tool in helping to transition the fleets into especially for when are you talking about the pre-1994 trucks, which seems to be the common denominator as truck bans get implemented. It is really trying to get the oldest and dirtiest trucks out of the drayage fleet at their respective ports. It is always the 80/20 rule: 20% of the trucks create 80% of the pollution. We believe that is an important and effective tool. For those ports that choose to use that tool and we are supportive of that as a tool. That said, every port is unique and the needs of every port are quite diverse for a variety of reasons: the geography of the port, the air quality issues of the port, and also the political atmosphere of the ports. We know that there are some that prefer to explore voluntary approach before a regulatory approach for a variety of reasons.

We are just as happy to partner with those ports to make sure that a voluntary approach has the best possible chance of succeeding. When we look at a voluntary approach versus a truck ban, certainly there are some different challenges that we face in trying to really incentivize behavior and that's probably the most valuable tool to transitioning the truck fleet. If we're going take a volunteer approach we have to make sure we have some incentives in place, financial incentives, that help whether it is down payment assistance, low interest loans, whether it is a scrappage incentive. We are also exploring operational incentives. We're looking at ways where owner-operators, trucking companies and employees who deployed clean trucks can get recognition as a green player and then also potentially benefit from operational incentives, for instance, having gates that are dedicated for participants in a green operator program so that you can reduce the weight and the turn time for clean trucks. Also, potentially extended gate hours for a green operator where you can afford the green operators a way to get an extra couple of turns per week to help them recoup the investment in the clean truck.

Also encouraging through programs like SmartWay for shippers to encourage them to contract with participants in programs like SmartWay that have made a commitment to cleaning up their fleets and giving preference to the folks that are participating in that government program. There are a lot of different tools that are available and truck bans are one of those tools, a very important one, and we know it is not a perfect fit for every port. We believe the truck programs can be successful on a voluntary basis as well and we work with the port to try and get their air quality goals met, whether it is voluntary or mandatory.

J. Symoun
Okay. Thank you. We have a question from Tony Furst, who is in the room with me.

Tony Furst
This is a question for Arman and James. A lot of the conversation today has revolved around trucks and container ports. Can you talk to us a bit about what you're doing in the bulk ports, particularly in the area of green diesel emissions?

A. Tanman
Let me address that first. Thanks for the question. We have a verification program similar to CARB and we're trying to foster technologies to reduce the diesel emissions from marine, locomotive which lacks some of the technologies now because the emission standards or the requirements are still far away. We have two types of verification programs. One is where the vendor or technology manufacturer comes to us and says there is a device you can put it on a locomotive and can you please verify it. Of course when they give us that information we also want to ask them where is the data to be able to reduce it and usually it takes time to develop that, and data and the testing for us to make sure that it is as I mentioned that it is reduces as much as they say it does and also the durability of it, and sometimes that takes several years to get to us.

We realized there are emerging technologies which is another program we have in our verification program where technology manufacturers can come to us and say they have this device or strategy. There have been reductions strategies and other devices that are put on locomotive, switchers and gensets, and we're looking at those. So the emerging technology is a little different and that technology manufacturer comes to us and says we have this testing program and it will take one or two years. We say, okay, you're on the emerging technology list. The reason they want to be on that list is it makes them eligible for federal funding. They can combine or work with a public entity such as a port or other public entities or nonprofit organizations to apply for the grant money, and use their technology. That's the voluntary approach, trying to encourage the technology by funding or grant incentives to the foster the technology, and remember in locomotive and in marine there aren't that many of them out there. Both the research and development is a high amount compared to the number of sales they're going to get and in the past they haven't really focused on that technology because it was not a money maker. They're basically sold new technologies to new engines, and so we're trying to foster retrofit market, and that's through grant incentives. Maybe Carter can add more.

C. Atkins
On the tanker industry, it is difficult because the nature of that business. We have been focusing on our container fleet and crews because those vessels show up once a month or once a week, so there are returning customers. The bulk, the tankers, you may get that vessel calling the port one time a year due to the business model. The vessel could be calling port LA one month and then overseas for the rest of the year. With that being said, to help meet our goals and our standards, we like to do some sort of shore power equivalent to the non-regulated fleets.

J. Jack
This is James. I will kind of chime in. I think much along the same lines is that bulk is something that I think we intend to increase our focus on in the coming months, and as a long-term goal. I think part of it supports a more kind of broad scale approach to port activities as well that I think ties in really nicely to what the US EPA is doing with regard to clean ports. I think that ultimately we certainly don't want to limit ourselves by focusing on solely on containerized traffic. We know that opportunities exist for emissions reductions from additional types of cargo, and the container traffic was our first objective in this effort, but it is certainly not our only objective. Much as we intend to continue working with additional ports around the country, and we intend to hopefully bring some solutions to the table for that type of cargo as well.

J. Symoun
Thank you. The next question is for Arman. What are federal agencies like EPA doing to clean up freight train locomotives including, idling and railroads, and what's the role for state agencies involved in goods movement and air quality?

A. Tanman
This is similar to the last question that I mentioned. We're working on marine and locomotive technologies and the regulations are there for new locomotives, but as it is going to take some time, so in the interim we have the verification program and grant volunteer programs to provide grant incentives to foster technologies in this area.

J. Symoun
There were two more questions that were sent to me, one is for James. Can you comment on how shippers can best ensure that dray trucking logistics providers pass on clean truck premiums to contractor owner operators to help them afford and maintain cleaner trucks?

J. Jack
A question that we have gotten often is how do you make sure if you are a shipper that is financially supporting the deployment of clean equipment, how do you make sure that financial support is reaching the owner of the equipment? If, in the case of an independent owner-operator who actually owns the truck, really what we say is that is something that is enforced through the terms of the contracts with their providers. I think if any shipper were to understand they're paying a premium to make sure their cargo is moved with clean equipment and that financial support is not being shared in the manner it is intend the, that carrier won't be working with that shipper for much longer. It is something that carriers take very seriously. When you are dealing with some of these large shipper that move tremendous amounts of volume, it is something that is very strictly enforced by the shippers and as I said, it is something that if that premium is not being used in the way that it is intended, I can assure you that contract is not long for this world.

J. Symoun
Thank you, and now a question for Arman and Carter. How can environmental best work with their transportation agency counterpart to identify and fund the best port based projects? In some states, the comfort line extends only as far as land slide connection support rather than that of cargo handling equipment and docking infrastructure to reduce vessel emissions. The question is how environmental agencies can and transportation agencies work together?

A. Tanman
I think first place to start would be doing an emissions inventory of the area and see what the basically low hanging fruits are. We, in our grant RFPs request for proposals, ask for a cost effectiveness of the project and it is I think if the port or the area has emission inventories and can assess which projects are the most cost effective, and identify that to EPA, that would make it easier for them to do it. Basically they need to coordinate among themselves what are the important projects and get the port or public entity or air environmental group to propose the idea to EPA and suggest a project. I think that answers the question. Carter, would you like to add?

C. Atkins
With the CAAP, that's what we did. We did an emissions inventory. We have been doing emission emissions inventory since I think going back to 2005, and we have been doing one every year. So we have looked at our sources. In the 2006 CAAP we identified controlled measures. Those are really whittled down from a list of 40 different measures down to a few measures per source category and I would like to highlight the vessel speed reduction which is just a slowing of vessels is extremely cost effective because you don't have to do any retrofits to the vessel. Now that with the downturn in economy, worldwide, you know, you have heard this term of slow steaming really creep up, so with these large vessels you have direct drive engines, so there is cubic a relationship between fuel consumption and speed, and so you slow down and you save not only on criteria pollutants and also greenhouse gas.

J. Symoun
Okay. I don't see any other questions at this point right now. We do still have a few minutes left. I will go ahead and start reading the ending information, but if any other questions come in I can pause and read those out and go back to them.

I do want to thank all three presenters for three great presentations today. As you can see by the number of questions I think we have a lot of interest in it and the topic area. I also want to thank everybody for attending today's seminar. The recording from today will be available online within the next few weeks on the Talking Freight website and I will send out a notice when that's available and it will also include a transcript and a presentation and you can download the presentations from the bottom right corner of the screen right now. Actually you will be able to go back into those websites that you're on now and download them if you didn't get a chance to do it during the seminar at any point between now and the next seminar in June. You basically just log into the website the same way you did today.

As a reminder, if you are AICP member and want to receive 1.5 certification maintenance credits for today make sure you either were signed in with the first and last name or if not type your name into the chat box. As I mentioned the seminar is not on the AICP website and I will send out an email once it is.

For everybody in attendance download the evaluation form and send it back to me. We to want make sure the seminars continue to meet your needs. The next seminar already held June 15th and be about a freight situational awareness project. It is not available for registration and once we have more information on the topic and presenters I will open it for registration and send out a notice to the freight planning LISTSERV which is our primary means of sharing information about upcoming seminars. If you haven't joined the list I encourage to you do so and the web address to do so is showing on your screen.

I didn't see any additional questions so I think we will go ahead and close out for today so thank you to Arman, Carter and James and thank you, everybody, for attending and have a great rest of the day.

Updated: 06/29/2011
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