A government agency has decided that the Ports of Los Angeles and Long Beach, two of the largest gateways for U.S. container exports, need new limits on air pollution, and fears are mounting that a proposed rule now being drafted will end up restricting trade.

Shipping and ag industry representatives as well as politicians are voicing concerns that plans by the regionally powerful South Coast Air Quality Management District will unnecessarily add new layers of bureaucracy and result in fewer ships and trucks being able to service the ports that send U.S. farm commodities overseas.

The air quality agency, which presides over Los Angeles, Orange, Riverside and San Bernadino counties and goes by the awkward acronym SCAQMD, has not released a draft of its Indirect Source Rule for Commercial Marine Ports and spokespersons refused to allow specialists to speak with Agri-Pulse.

The proposal — which also goes by the wonky title PR 2304 — won’t be published until next month at the earliest, but shipping, union and farming leaders are slowly getting a picture of it as information seeps out from the agency, and industry officials are not liking what they are hearing.

California Assemblyman Vince Fong, a Republican who represents one the most agriculturally-productive districts in the Golden State, tells Agri-Pulse he’s very concerned about the potential impact of the agency’s proposal that will put emission caps on dozens of terminals as well as the two entire Ports of Los Angeles and Long Beach. 

Vince Fong at A-P West SummitAsm. Vince Fong

“This rule that has been proposed will have disastrous effects on the operation of our ports,” Fong said in an interview. “It could serve as a volume cap on the two largest ports in California. Forty percent of goods enter and leave (the U.S.) through those ports. This would have a disastrous impact on imports and exports and the entire economy, not only in California but across the United States.

The primary fear, says Mike Jacob, vice president and general counsel for Pacific Merchant Shipping, is whether the SCAQMD proposal will create a ceiling on how much cargo is allowed to flow through the two ports. 

“Are they proposing a cargo cap?” he rhetorically asked lawmakers at a hearing held Thursday by the California State Assembly’s Select Committee on Ports and Goods Movement. “Because it looks like they are. They've told us they are. And if they did that, that would just be, frankly, untenable.”

The envisioned scenario is that the ports will not be able to meet the proposed emissions caps through investments in technology and will then be forced to cut back on business to comply with the new standards that have yet to be published.

Speaking at an Aug. 10 community steering committee meeting hosted by SCAQMD, Ian MacMillan, the agency’s assistant deputy executive officer, agreed that the Los Angeles and Long Beach ports could indeed reduce operations to avoid exceeding the coming air pollution standards that are being considered.

“The way this is currently set up, that would be a potential compliance option,” MacMillan said in a recording of the Zoom call provided to Agri-Pulse. “They could just do less emissions-causing activity, so maybe that’s shipping less goods as one option.”

MacMillan said the agency would prefer that the ports achieve targets by using lower-emission technologies because the ports “are a significant economic engine for our region and for our nation.”

They are also a gateway for U.S. ag exports to Asia and the rest of the world, and that’s why the Western Growers Association is concerned. The group is already wrangling with standards imposed by the California Air Resources Board (CARB) and other SCAQMD measures.

“To us, it just adds to the uncertainty that we have around West Coast ports,” said Tracey Chow, a federal government affairs specialist for the association. “It’s just another thing that our farmers and exporters will have to figure out and see what it means for their long-term business models.”

Fong agrees that shipping companies and port operators are being hit by new “mandates coming from various levels … that are going to impede the productivity and competitiveness of our ports” and farmers that need to get their crops to terminals and loaded on vessels will be impacted.

The ports, Jacob said, will be penalized for doing what they are there to do — facilitate exports and imports.

“What we're being asked to do in Southern California under the indirect source rule is have very local rules, which potentially impact international and interstate commerce, not just because the commerce is occurring … but because the sources of emissions that they're trying to regulate are in that commerce,” he said.

The proposal is not being designed to cap the ports’ ability to facilitate exports and imports, said one government official, but declined to provide details.

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Still, PR 2304 is stirring fears among politicians and industry leaders like Pacific Merchant Shipping Association President John McLaurin, who called the proposal a “power grab” by SCAQMD at a time when port greenhouse gas emissions are already regulated by state and federal authorities.

McLaurin, in an op-ed published by the Journal of Commerce, said the regional air quality agency “is not mandating specific equipment upgrades or technology enhancements, nor is it setting emission limits for individual supply chain elements, as the California Air Resources Board has done in the past. Instead, SCAQMD bureaucrats are setting hard target dates for total emission reductions on all supply chain components and making those reductions the responsibility of the ports and terminal operators.”

Despite the lack of a published draft of the rule, McLaurin says he is certain the verbiage will limit trade.

“What happens if that goes forward?” he said. “We don't know because we haven't seen the language, but we've seen the proposal. And the proposal essentially says once you hit a cap, or a finite number of containers that have moved through a terminal, you cannot lawfully move another container without being in violation of the law.”

California Assemblyman Mike Gibson, chair of the select committee, voiced concern over whether restrictions under the Indirect Source Rule for Commercial Marine Ports could eventually spread to other California ports like Oakland and San Francisco. 

But Gary Herrara, president of Local 13 for the International Longshore Warehouse Union, said he was more concerned about Los Angeles and Long Beach losing business.

“This is going to be devastating to the ports of L.A. and Long Beach,” said Herrera, who predicted more cargo would be sent to other ports and stressed that any limits on port activity would hurt the workers who depend on the hours.

No matter the labor or commerce concerns, one certain thing is that the SCAQMD is convinced the Ports of Los Angeles and Long Beach need to do much more to cut emissions.

MacMillan, speaking at an SCAQMD committee meeting in April, said the ports are enacting “a lot of very good air quality measures” under CARB’s Clean Air Action Plan, but they are still only doing only 1-10% of what they need to do. That big gap, he said, “is something that we are looking to fill with this proposed rule.

“The port complex is the largest (source of nitrogen oxide) emissions in our basin,” MacMillan added. “We need substantial emissions reductions from the ports.”

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