Seaway Development Corporation, Port Fight DEC Proposal

OSWEGO, NY – Last month, the Great Lakes maritime industry released the results of a year-long study of the economic impacts of the entire Great Lakes-St. Lawrence Seaway navigation system. Earlier today (Nov. 2), they highlighted the figures regarding the Port of Oswego.

However, looming new ballast water regulations, if implemented by the state, could devastate the port and erase the good economic picture, according to Jonathan Daniels, executive director of the Port of Oswego.

The study was commissioned by members of the marine shipping industry, in partnership with U.S. and Canadian government agencies, Daniels told the small crowd of state and local officials gathered at the port.

The port and St. Lawrence Seaway officials hope the economic impact benefits contained in the report helps to sway a state government plan that could drastically cripple, if not close, the port.

“This study is the first-ever analysis of the economic impacts of the entire system, to both the US and Canada, at the same time, using the same methodology,” Daniels explained.

System wide, the study found that maritime commerce supported 227,000 jobs; contributed $14.1 billion in annual personal income, $35.5 billion in business revenue and contributes a total of $4.6 billion to federal, state/provincial, and local tax revenues, Daniels noted.

Shipping is a key driver to the US economy, creating 129,000 jobs and $18.1 billion in economic activity throughout the eight Great Lakes states; wage and salary income amounts to nearly $10 billion he said, adding that $3 billion is poured back into the local economies.

In this area, the port has an impact of about $6 million to $7 million the director pointed out.

Nearly five years ago, when he first came to town, he said he was stopped on the street one day by a person who said, “Oh, you’re going to be running that little port at the end of the street.”

“I kind of chuckled at that and said, ‘Yes, we are going to do our best to have an impact in the community,’” he replied. “So this is not bad for a ‘little port at the end of the street.’ Directly and indirectly, we support in essence more than 500 jobs. Business revenue at the port is over $38 million.”

Current ballast water regulations require all commercial vessels operating in New York’s waters, traversing through New York, that by Aug. 1, 2013, they need to be able to clean their water and treat the water to a standard that is 100 times the current International Maritime Organization standards.

Additionally, vessels constructed after Jan. 1, 2013, must have equipment that meets a standard 1,000 times higher than international standards.

“That’s a little bit of a problem. No technology exists to treat the 100 times, the 1,000 times, or anything above the current IMO standard,” he added.

It could mean the loss of 500 jobs supported directly by the port; local business revenue of $38 million will be lost; system wide there will be a loss of $10.5 billion in business revenue, he continued.

“Can we, as a community, afford to lose the $10.5 million in state and federal taxes that are currently moving through because of shipping and maritime activities?” he said. “These regulations will not only harm the maritime shipping industry but also steel producers, the farmers, construction companies, the power generation plants and the US consumers who depend on the 47 million metric tons of cargo handled through the Great Lakes and St. Lawrence system.”

A new company notified the port this morning it will be coming through the St. Lawrence Seaway and depositing cargo in Oswego starting early in 2012, said.

“Ironically, the regulation that are being put in place to help control pollution in our waterways actually will add more pollution,” according to Daniels.

For example, he said, a seaway sized laker carrying 25,000 tons can carry the same amount of cargo as 225 rail cars or more than 850 trucks.

Marine shipping saves companies approximately $3.6 billion per year in transportation costs compared to the next least-costly land-based alternative, that being rail.

The industry and the port aren’t crying wolf or saying the sky is falling, Daniels said.

“These are hard facts. These are facts that are backed up by peer review … and are true and accurate,” he said. “The maritime industry faces a patchwork of incoming regulations and standards from nation to nation and state to state in a number of different areas including ballast water and air emissions. The industry’s goal is for practical bi-national regulations that will allow the industry to invest in new technology to protect the environment with the certainty that these regulations won’t arbitrarily change.”

There has been some talk recently that the state DEC might be amending its rules. But nothing has been finalized, Daniels said.

“The shipping industry is in turmoil as they attempt to set schedules for years to come with inbound cargo,” he added. “Given the dire circumstances of these regulations, we hope some positive news will be forthcoming to the Port of Oswego. Because, if not, on Aug. 1, 2013, the Port of Oswego would be forced to cease all international shipping operations.”

And, many other ports throughout the region would also suffer a negative impact, he said.

“The port of Oswego is not the largest port in the system. But, it is very important,” said Collister Johnson Jr., administrator of the U.S. Saint Lawrence Seaway Development Corporation. “In some ways, it kind of sets the tone for how the rest of the system is going to operate, how it’s going to succeed.”

The work the port has done “is quite extraordinary. That, in large part, is due to the skill and talent of your executive director,” he said.

The report is very accurate, he said, adding that it isn’t “hidden;” Links to the Executive Summary and the full report can be found on the Home Page of the Marine Delivers website: www.marinedelivers.com

“That certainly speaks to the accuracy of these numbers,” he said.

If the system ceases to exist, the jobs Daniels talked about would go away, Johnson said, adding, “They wouldn’t shift someplace else. They’d simply disappear. And, that’s a big number in an economy where jobs are scarce to contemplate not having in the region.”

Another thing the report did was measure “what if” the Seaway closed, Johnson said, adding “that is a direct threat facing us from the DEC.”

The report said 72,000 jobs would disappear from Canada and the US, $3.8 billion in annual personal income would also disappear along with $10.5 billion in annual business revenues and $1.4 billion in taxes, he noted.

“Another thing that is puzzling about this process is the DEC’s cavalier approach to Canada,” he said. “Canada is our largest trading partner. There is more trade between the US and Canada … than we undertake in a year with the country of Japan. We are joined at the hip, and the notion that through a set of regulations of one state that would impose on a bi-national system, would thereby prevent Canada from having its ships going to its ports.”

What should be done to protect the environment is get reasonable, workable standards, installed on ships as quickly as you can and then improve from there, Johnson said.

“Just simply snatching out of the air an unsustainable standard and one that the technology doesn’t support and simply keep hammering away at it doesn’t really protect the environment,” he said.

Since the Seaway Corporation and Canada put their own rules in place in 2006, there have been no new discoveries of aquatic nuisance species entering the Great Lakes via ballast water, he added.

By the end of this month, the federal EPA will come out with its standard for ballast water treatment and the Coast Guard will follow shortly after, he said. That will be a national standard.

Governor Andrew Cuomo is also looking closely at this issue, Johnson said, adding that the governor “understands the balance that needs to be taken between environmental protection and job creation.”

The DEC will take another look at its requirements following the release of the EPA’s plan, according to Johnson.

Legislator Jack Proud pointed out that New York jumped way out in advance of the other states that border the lakes and are also impacted.

“Wouldn’t it be better for New York State to work collectively and cooperate with other states and with Canada to develop a stringent standard; something that represents more than just an isolationist point of view?” he asked.

There is a collaborative that gets together every few months that is comprised of many stakeholders, Johnson said.

Hopefully, New York will join in and amend its proposal, he said.

“There are states out there that have recognized they can’t meet the standard. New York State is not one of those, yet,” Daniels said. “And, certainly we hope that they follow suit with the EPA and Coast Guard guidelines. To have the same standards on an international basis, certainly makes sense.”