Commercial Vessel Compliance

11/6/2014: Assistant Commandant for Prevention on the greening of maritime industry

Last week, the North American Marine Environment Protection Association hosted a conference in New York, Rear Adm. Paul Thomas was a keynote speaker.

Thomas, assistant commandant for prevention policy, was asked to provide a regulatory review at the NAMEPA conference. Thomas shared what he sees as the most significant factors influencing maritime governance today and into the future. Maritime Commons will present an excerpt of the key takeaways from Thomas’ remarks in a three-part series.

His comments shared in this post are focused the greening of maritime industry. Read the other two posts for additional summarized comments on the domestic oil and gas production boom and the complexity cycle .

Delivered by Rear Adm. Paul Thomas

Greening of the industry

Even as the energy boom, population growth and a rising world-wide standard of living call for significantly increased capacity of the Maritime Transportation System, the sustainability of this industry and of global economic growth call for a significant decrease in environmental footprint – the shipping industry will lead the way.

As an industry, shipping has evolved from a focus on basic safety of life at sea following Titanic with development of SOLAS – to prevention of oil pollution at sea following Exxon Valdez, – to ensuring the security of the global maritime supply chain after 9/11 – to reducing all waste streams today. That is why we see the focus today on air emissions, ballast water, garbage, noise, design efficiency and carbon footprint.

Environmental regulation has evolved as well. We have moved from passive, design and construction mitigation measures, such as containment around manifolds and double hulls around cargo tanks, to active, more technologically enabled measures such as oily water separators with oil content meters, ballast water treatment systems, sophisticated black water systems and scrubbers for exhaust gas.

We have the technology today to understand our impact on the environment in real terms, and in real time. This represents an incredible opportunity for industry. An opportunity to maximize environmental efficiency and an opportunity to make the case with real numbers that shipping is the most sustainable way to meet our national and global transportation needs in the future.

But environmental governance comes with significant challenges. First, movers are often not well incentivized; traditional compliance measures are not nearly as effective; ships crews have fewer vested interests vs. safety and security regulation, and the incentive to cheat is significantly greater.

Let me take the latter first – the incentive to cheat. I’m not telling anyone anything new when I say there is a significant economic incentive not to comply with the forthcoming 0.1% fuel sulfur limit in the North American Emissions Control Area. Even for a vessel that simply transits into a U.S. port from overseas, makes a typical port turn, and departs directly overseas. The cost difference between 1.0% fuel and 0.1% fuel can be in the hundreds of thousands of dollars. Ships that make multiple port calls in the U.S. and Canada, or spend all of their time in the ECA, have an even greater incentive to cheat. An operator that does cheat gains a significant competitive advantage over those who comply.

This same incentive to cheat applies to many environmental regulations, now and in the future.

Obviously, robust and consistent enforcement of the requirements is critical to deterring cheating and providing the level playing field. But, as I already said, traditional compliance measures are not as effective for environmental regulations that require active systems – like scrubbers for example. A spot check on a scrubber is not nearly as effective as a spot check on a lifeboat for obvious reasons.

So, the governance model needs to change. Regulations and regulators have a role – but we can be slower and less effective than industry and industry standards. The key here is transparency; and while I applaud the Trident initiative, I fear it falls short of providing the level of transparency required to ensure the level playing field you desire. Transparency looks something like an oil content meter – a continuously monitoring system that can be interrogated to determine when and how it has been operated and to what standard.

In the case of the sulfur emissions standards, fuel oil content meters at the point of injection, or emissions monitoring at the stack can provide transparency and level the playing field. Similar governance will be effective for ballast water systems, greenhouse gas emission reduction and other waste streams – the reduction of which will move this industry forward.

Increased transparency has a tremendous side effect. It drastically increases capacity with regard to ensuring compliance. Spot checks are no longer needed. You go to where you see the problem – or to where you see a lack of transparency.

In addition to this post about the greening of maritime industry, be sure to read the other two posts with Thomas’ remarks from the NAMEPA conference.

Domestic oil and gas production
Complexity cycle

This blog is not a replacement or substitute for the formal posting of regulations and updates or existing processes for receiving formal feedback of the same. Links provided on this blog will direct the reader to official source documents, such as the Federal Register, Homeport and the Code of Federal Regulations. These documents remain the official source for regulatory information published by the Coast Guard.