Navigating a Regulatory Storm: California Strikes Again
Onerous emissions rules are certainly no stranger to the maritime sector at large, arguably none more so than those that work and live in California.
The U.S. West Coast state is a global shipping hub, with a coastline spanning more than 800 miles and 11 major ports. It also is known for its penchant for creating and enforcing maritime rules, rules that on occasion transcend the technological means to enact them. Enter Jennifer Carpenter, President and CEO of the American Waterways Operators (AWO), the national advocacy group for the tugboat, towboat and barge sectors.
In a recent interview with Maritime Reporter TV, Carpenter discusses the impact of California’s controversial amendments to the Commercial Harbor Craft rule, the broader implications for maritime operators, and AWO’s top agenda items under the new Trump administration.
The Regulation
The maritime industry is facing a significant challenge on the West Coast as new regulations threaten to upend operations, drive up costs, and exacerbate existing supply chain disruptions. At the heart of the issue is California’s 2022 amendments to the Commercial Harbor Craft rule, a move that industry leaders, including AWO’s Carpenter, have called both "draconian" and "dangerous." These regulations, which aim to enforce stringent emission standards on harbor craft, have been met with fierce opposition from industry stakeholders, citing safety concerns, technological infeasibility, and severe economic consequences.
Carpenter was clear that it is California regulators, rather than the state legislature, that took the lead in mandating new emissions technology on harbor craft, including tugboats that play a crucial role in guiding ocean-going vessels in and out of ports. It was the impetus of Carpenter’s recent letter to Governor Gavin Newsom requesting a reprieve for the maritime sector.
The problem?
The mandated equipment simply does not exist for maritime use. According to Carpenter, maritime labor, vessel owners, and even the U.S. Coast Guard have voiced strong concerns about the potential hazards posed by these requirements. “Mariners' lives could be at risk, vessels could be at risk of fire, and the environment could be at risk,” she warned.
Despite bipartisan recognition in the state legislature that these regulations were impractical and unsafe, Governor Newsom vetoed a bill that sought to suspend the requirements until they were proven safe. As a result, the industry now faces an uncertain future.
An Emissions Reg Double Standard
Further frustrating maritime operators is the perceived regulatory inconsistency. While the California Air Resources Board (CARB) withdrew its request to enforce similar emissions rules for the trucking and rail industries, it pushed forward with its requirements for the maritime sector. Under the Clean Air Act, California must receive approval from the Environmental Protection Agency (EPA) to enforce such stringent emissions standards.
In a controversial move, the EPA granted partial approval to CARB’s harbor craft regulations in the final days of the Biden administration.
However, even this partial approval acknowledged issues with the regulations. According to Carpenter, the EPA’s attempt to strike a middle ground has done little to alleviate industry concerns. The process of petitioning for extensions is burdensome and costly, requiring operators to hire engineering firms to prove that compliance is impossible. Worse yet: California regulators have a history of disregarding engineering evidence in past disputes, leaving vessel owners in a precarious position.
The fallout is already being felt. A survey conducted by the Pacific Merchant Shipping Association found that 85% of its members reported shortages in tug availability. This shortage has led to delayed vessel departures, increased operational costs, reduced efficiency, among other problems. Uncertainty could result, too, in vessel owners being hesitant to invest in California operations, with some considering shifting their maritime assets elsewhere.
This could prove problematic for not only California, but the U.S. economy as a whole as tug operators serve as the backbone of maritime commerce, facilitating the transport of goods in and out of ports. If key players are forced out of the market by regulation, the entire supply chain will suffer.
Relief from Washington?
While California hashes out its regulatory web, Carpenter and AWO have there attention, too, firmly on the new Trump administration, which in and of itself presents both opportunities and uncertainties. The AWO sees three primary policy objectives as essential to stabilizing the industry: preserving the Jones Act, maintaining critical port and waterway infrastructure, and ensuring pragmatic, effective regulations that safeguard people, communities, and the environment without stifling innovation.
Carpenter and AWO are naturally a Jones Act defender, saying the Jones Act is a cornerstone of U.S. maritime policy, crucial for both national security and economic stability. Ensuring robust infrastructure for ports and waterways is equally vital, particularly as the industry contends with extreme weather events and shifting commerce patterns. Above all, the industry is advocating for regulations that strike a balance between environmental responsibility and economic viability.
Carpenter and the AWO remain committed to advocating for the practical solutions that balance environmental goals with operational realities.
- Watch the full interview with Jennifer Carpenter on Maritime Reporter TV: