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Friday, October 20, 2017

Hefty fees are payable under California's low-sulfur regulations

Posted to Martin Rushmere (by on December 14, 2011

But the maritime community won't benefit

This is the second part of the analysis of California's new rules on low sulfur fuel in main and auxilia4ry engines.

 

The minimum fee payable for any vessel using calling at a California port from August 1, 2012 and using fuel above 1.0 percent MGO or 0.5 percent MDO will be $22,750. But that only applies if the ship loads compliant fuel at the first port it visits.

If the vessel continues to use higher-sulfur fuel (for want of a better phrase), that fee is $45,500. At the second port of call the fee is again $22,750 if compliant fuel is loaded and $45,500 if the non-compliant stuff continues to be used (i.e. double the fee for compliance.)

The amount ratchets up for each port visited until a maximum of $91,000 and $182,000 respectively is reached for the fifth and subsequent ports visited.

Assuming that the average number of calls to California ports is about two (it's probably between two and three), vessel owners can expect to pay $45,500 or $91,000 for each trip into California waters, if they use non-compliant fuel.

Where does that money go? It disappears into what is officially known as the California General Fund, which means it does not go into maritime use but the state coffers, most of which are used to pay the salaries and pensions of the huge state bureaucracy.

The state's Air Resources Board has not divulged how the fees are3 calculated but officials have indicated that they are related to the environmental costs of maritime pollution and health damage.

The board has gone its own way on when the regulations come into effect, especially the January, 2014 date for 0.1 percent sulfur. International Maritime Organization rules for 0.1 percent sulfur only come into force a year later, while Calif0rnia's South Coast Air Quality District says its own equivalent standards will only be met in 2015.

"It seems very likely that the staff of the board is not telling their own bosses the full story," says an industry insider.

Some allowance has been made for vessels that have to use higher-sulfur fuel. This is largely related to engine breakdowns and/or dangerous situations such as a storm at sea. Just how charitable the bureaucrats will be if a ship has been unable to get low sulfur is unknown. Given the pattern of behavior, the short answer is "tough luck."

The big point to bear in mind is that the civil servants love to throw their weight around and show their power, which is the main reason why they are there (apart from the pension benefits.) Little sympathy can be expected and vessel owners should be prepared to pay more rather than less money.

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