U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

86–924 PDF 2014

MARITIME TRANSPORTATION REGULATIONS: 

IMPACTS ON SAFETY, SECURITY, JOBS, 

AND THE ENVIRONMENT, PART 2 

(113–56) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

COAST GUARD AND MARITIME TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

MARCH 4, 2014 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

VACANCY 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON COAST GUARD AND MARITIME TRANSPORTATION

DUNCAN HUNTER, California, Chairman 

DON YOUNG, Alaska 

HOWARD COBLE, North Carolina 

FRANK A. LOBIONDO, New Jersey 

PATRICK MEEHAN, Pennsylvania 

STEVE SOUTHERLAND, II, Florida, 

Vice Chair 

TOM RICE, South Carolina 

MARK SANFORD, South Carolina 

BILL SHUSTER, Pennsylvania (Ex Officio) 

VACANCY 

JOHN GARAMENDI, California 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

TIMOTHY H. BISHOP, New York 

LOIS FRANKEL, Florida 

CORRINE BROWN, Florida 

JANICE HAHN, California 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

PANEL 1 

Rear Admiral Joseph A. Servidio, Assistant Commandant for Prevention Policy, United States Coast Guard .......................................................................... 4 

Hon. Michael H. Shapiro, Principal Deputy Assistant Administrator, Office 

of Water, U.S. Environmental Protection Agency ............................................. 4 

Christopher Grundler, director, Office of Transportation and Air Quality, 

Office of Air and Radiation, U.S. Environmental Protection Agency .............. 4 

PANEL 2 

Thomas A. Allegretti, president and chief executive officer, The American 

Waterways Operators .......................................................................................... 24 

Kathy J. Metcalf, director of maritime affairs, Chamber of Shipping of America .......................................................................................................................... 24 

James Roussos, Vessel General Permit coordinator, LaMonica Fine Foods 

and Oceanside Marine ......................................................................................... 24 

Rod Jones, president and chief executive officer, CSL Group Inc. ...................... 24 

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS 

Hon. John Garamendi, of California ...................................................................... 36 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Rear Admiral Joseph A. Servidio ........................................................................... 38 

Hon. Michael H. Shapiro ......................................................................................... 42 

Christopher Grundler .............................................................................................. 51 

Thomas A. Allegretti ............................................................................................... 57 

Kathy J. Metcalf ...................................................................................................... 66 

James Roussos ......................................................................................................... 71 

Rod Jones ................................................................................................................. 81 

William Terry † ......................................................................................................... 108 

SUBMISSIONS FOR THE RECORD 

Hon. John Garamendi, a Representative in Congress from the State of California, request to submit the following letters from: 

Mary D. Nichols, chairman, California Air Resources Board, to Hon. 

Duncan Hunter, Hon. John Garamendi, and Hon. Janice Hahn, Representatives in Congress from the State of California, February 28, 

2014 ................................................................................................................ 18 

Christopher A. Coakley, vice president of government affairs, Saltchuk 

Resources, Inc., to Hon. Duncan Hunter and Hon. John Garamendi, 

Representatives in Congress from the State of California, March 2, 

2014 ................................................................................................................ 21 

†William Terry, president and chief executive officer, Eagle Rock Aggregates 

Inc., was scheduled to be a witness at the hearing but was unable to 

attend due to a family emergency. His written statement is included in 

the record. 

iv 


Insert offset folio 1 here 86924.001
v 


Insert offset folio 2 here 86924.002
vi 


Insert offset folio 3 here 86924.003
vii 


Insert offset folio 4 here 86924.004
viii 


Insert offset folio 5 here 86924.005
ix 


Insert offset folio 6 here 86924.006
(1) 

MARITIME TRANSPORTATION REGULATIONS: 

IMPACTS ON SAFETY, SECURITY, JOBS, AND 

THE ENVIRONMENT, PART 2 

TUESDAY, MARCH 4, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON COAST GUARD AND MARITIME

TRANSPORTATION, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The committee met, pursuant to call, at 3:05 p.m. in Room 2253, 

Rayburn House Office Building, Hon. Frank A. LoBiondo presiding. 

Mr. LOBIONDO. The subcommittee will come to order. 

Chairman Hunter, because of the crazy schedule this week, is in 

the air as we speak. He has asked me to sit in. And I believe Mr. 

Garamendi will be here very shortly. But out of respect for your 

schedules, we will go ahead and we will get started. 

The subcommittee is meeting today for the second part of our 

two-part hearing to review regulations affecting the maritime industry. Today’s hearing will focus on environmental regulations 

and how such regulations impact the flow of commerce through our 

ports and the ability to grow jobs in the maritime sector. 

The Coast Guard and the EPA are writing and enforcing new 

regulations on vessel owners in an effort to improve water and air 

quality. While regulations should address ways to enhance environmental stewardship, they must also balance the importance of 

maintaining the free flow of maritime commerce. I am very concerned that some of these regulations fail to achieve that balance. 

Some of these rulemakings are extremely costly. They are burdensome and they are duplicative and they are not being applied 

and enforced in a fair manner. Take, for instance, regulations governing the discharge of ballast water. 

Currently the Coast Guard and the EPA have developed separate 

regulations under two different Federal laws to govern ballast and 

water discharges. Although the agencies have worked together to 

try to reach uniformity, the programs still differ in vessels covered, 

geographic reach, enforcement, and penalties for noncompliance. 

For example, the Coast Guard rules allow for vessel owners to 

seek an extension if treatment technologies do not exist or cannot 

be installed by the deadline. The EPA provides no mechanism for 

an extension, leaving a vessel owner liable for civil and criminal 

penalties through no fault of their own. 

2 

The situation only becomes more confusing and burdensome for 

vessel owners as each individual State adds its own ballast water 

discharge requirements on top of the EPA’s program. 

Under the EPA’s current program, 25 States have added their 

own differing discharge standards. Some States have laws in place 

forcing vessel owners to treat their ballast water to a standard for 

which no technology has yet been invented. I would like to know 

what the rationale is behind that, but we will leave that go. 

The situation is ridiculous. It is completely unreasonable to ask 

vessel operators to comply with 2 Federal standards and as many 

as 25 different contradictory and unachievable State standards. 

I appreciate the committee’s work to include legislation that Mr. 

Larsen and I drafted to address incidental discharges from fishing 

vessels in the Coast Guard bill, and I hope that legislation will 

move forward soon. However, we still need to tackle the issue of 

ballast water. 

I look forward to working with my colleagues in the House and 

Senate on bipartisan legislation to establish a uniform national ballast water discharge standard. I am also concerned about the implementation of the North American Emissions Control Area. 

Beginning January 1st of 2015, vessels transiting 200 miles from 

shore will need to burn ultra-low-sulfur fuel. While I understand 

the critical importance of improving the air quality in our coastal 

regions, I am concerned the EPA and Coast Guard did not properly 

consider the economic impact this rule will have on smaller vessels 

that must travel entirely within the EEZ. 

The costs associated with this new rule could severely undermine 

efforts to promote the use of short sea shipping as an alternative 

to moving freight along our congested highways. I look forward to 

hearing from our witnesses on what steps they plan to take to work 

with industry on this issue. 

As I have said before, maritime commerce is essential to the U.S. 

economy. Domestic shipping alone is responsible for over 500,000 

American jobs and $100 billion in annual economic output. With 

the economy still in a fragile state, it is imperative that the Federal 

Government foster an atmosphere where our maritime industry 

can compete and expand. 

I want to thank Ranking Member Garamendi and the witnesses 

for working with us on rescheduling today’s hearing, and I look forward to hearing from all of our witnesses. 

With that, I yield to Mr. Garamendi. 

Mr. GARAMENDI. Thank you, Mr. LoBiondo. 

I understand that our chairman is still trying to find his way 

here from California. 

Mr. LOBIONDO. You seem to have mastered that. 

Mr. GARAMENDI. I didn’t say that to draw that as a difference. 

Mr. LOBIONDO. No. I mentioned right before you got here, he 

sent his regrets. There is an outside chance he could make it, but 

with the flight schedules that he had to deal with, he couldn’t quite 

get here for 3 o’clock, and appreciates the cooperation to allow this 

important topic to move forward. 

Mr. GARAMENDI. I had the good fortune to have one of the few 

flights that actually did take off in the last couple days. 

3 

In any case, I want to thank you and the chairman for rescheduling this hearing from this morning to this afternoon and for the 

previous effort to get it done. 

It is important, really. The status of the environmental regulations affecting the maritime transportation is of utmost importance 

to the industry as well as to the environment. 

I look forward to learning more about the status of the Coast 

Guard’s and the Environmental Protection Agency’s rulemaking activities and, as you said, either the coordination or lack of coordination. 

As I have stated before, making sure that the Federal regulations are targeted, fair, and reasonable is necessary to ensure that 

the ongoing recovery of the U.S. economy continues to gain traction 

and that the U.S. maritime industry remains a vibrant source of 

job creation. My constituents expect nothing less. 

In particular, I will be interested in hearing from both the Coast 

Guard and the EPA on the challenges that remain in implementing 

their respective rules to address the issue of ballast water discharge into the waters of the United States. 

According to the National Oceanic and Atmospheric Administration, every year there are more than 21 billion gallons, more than 

40,000 gallons a minute, of ballast water that are discharged into 

U.S. waters. 

Moreover, every day an estimated 10,000 marine species are 

transported around the world in ballast water. The current number 

of invasive species in San Francisco Bay alone is now at 212, and 

new species are appearing every 14 weeks. 

That is a major economic problem for the area that I represent, 

the San Francisco Bay and the delta. It has led to a huge blowup 

in the water issues. 

Unfortunately, the ecological havoc that is caused by this is not 

likely to get better. In fact, it is likely to get worse as the spread 

of invasive species is increased along with expansion of global 

trade. 

We need to hear from the EPA on what challenges may lay 

ahead in the Vessel General Permit to regulate vessel discharges. 

I also want to hear from the Coast Guard on its forecast for the 

type approval for ballast water treatment systems allowing shipping lines to comply with the Coast Guard and the EPA’s ballast 

water discharge regulations. And, once again, I think it is extremely important that these regulations be coordinated and consistent and work together. 

I would also be interested in hearing from the EPA and witnesses from the maritime industry about EPA’s ongoing implementation of its rule implementing the North American Emissions Control Area. We are a coastal State in California, and this issue was 

of considerable interest to the State. 

That North American Emission Control Area is intended to reduce vehicle emissions in the coastal airsheds and improve public 

health. The ECA is a vital contributor to the California strategy to 

meet its emission reduction targets. 

It is important that we understand how the rule is working, how 

the industry is adapting during its transition to meet the low-sulfur fuel standards and whether we can expect any shortage in the 

4 

supply of low-sulfur fuel to vessel operators and the cost associated 

with that. 

Mr. LoBiondo, I thank you for conducting the hearing. I look forward to working with you as this hearing proceeds. And who 

knows. Maybe the chairman can actually catch a plane. We will 

see. 

Mr. LOBIONDO. OK. Thanks, John. 

Mr. GARAMENDI. Or a plane can actually fly. 

Mr. LOBIONDO. We welcome our first panel of witnesses today: 

Rear Admiral Joseph Servidio, Assistant Commandant for Prevention Policy at the United States Coast Guard; Mr. Michael Shapiro, 

Principal Deputy Assistant Administrator of the Office of Water at 

the Environmental Protection Agency; Mr. Chris Grundler, who is 

director of the Office of Transportation and Air Quality at the Environmental Protection Agency. 

Admiral, you are recognized. 

TESTIMONY OF REAR ADMIRAL JOSEPH A. SERVIDIO, ASSISTANT COMMANDANT FOR PREVENTION POLICY, UNITED 

STATES COAST GUARD; HON. MICHAEL H. SHAPIRO, PRINCIPAL DEPUTY ASSISTANT ADMINISTRATOR, OFFICE OF 

WATER, U.S. ENVIRONMENTAL PROTECTION AGENCY; AND 

CHRISTOPHER GRUNDLER, DIRECTOR, OFFICE OF TRANSPORTATION AND AIR QUALITY, OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY 

Admiral SERVIDIO. Chairman LoBiondo, Ranking Member 

Garamendi, distinguished members of the subcommittee, good 

afternoon. 

It is my pleasure to return today and continue our discussion 

about the Coast Guard’s regulatory program and specifically our 

environmental reg initiatives. 

The Coast Guard’s regulatory program focuses on managing maritime risks through the establishment of proficiency, safety, and security standards. Doing so protects life, property, and our precious 

marine environment. 

Our goal is to harmonize protection of the maritime environment 

with ensuring safe and efficient flow of commerce. Achieving the 

appropriate balance requires a pragmatic and transparent reg development process. We aim to produce relevant, environmentally 

sound, and achievable standards. 

More than half of the Coast Guard’s rulemaking projects involve 

environmental issues, such as ships’ discharge of solid waste and 

pollution from oil and hazardous substances. 

The Coast Guard has also published a number of rules aimed at 

protecting the marine environment. Two of the more notable ones 

include Ballast Water Discharge Standard and the Nontank Vessel 

Response Plan Final Rules. 

Ballast Water Discharge Final Rule established a Federal standard for the concentration of living organisms in ships’ ballast discharged into the U.S. waters. The Coast Guard worked closely with 

our interagency partners to develop this rule, ensuring appropriate 

measures were in place to protect our waterways. 

The recently published Nontank Vessel Response Plan Final 

Rule requires nontank vessels to plan for and contract resources to 

5 

respond to a fuel spill, a fire, a vessel grounding or other incidents 

posing environmental threats. 

This rule enhances national preparedness and response capabilities. It increases U.S. oil spill, marine firefighting, and salvage capabilities, and it ensures shortened response times to potentially 

catastrophic incidents. 

The shipping industry rose to meet the requirements by submitting 1,700 nontank vessel response plans for Coast Guard approval 

before the 30th of January with no apparent impact on commerce. 

To date, we have issued over 1,800 interim operating authorizations covering more than 12,000 nontank vessels. 

These rulemakings highlight two of the more significant reg 

projects finalized by the Coast Guard. My written statement provides details on others. 

The Coast Guard also works internationally to protect the marine environment with our interagency partners at the International Maritime Organization, or IMO. The Coast Guard has 

been successfully shaping and influencing initiatives that globally 

promote safe and effective environmental protection standards. 

Our efforts at IMO include working to reduce air emissions from 

ships through improved efficiency, implementing more stringent 

measures to eliminate at-sea garbage discharges, and developing 

standards for safe and environmentally friendly ship recycling. 

Through strong ties with Canadian counterparts and working 

with the EPA, we developed and implemented the North American 

and Caribbean Sea Area Emission Control Areas, or ECAs. 

In the polar regions, the Coast Guard recognizes expanded environmental risk. We worked with interagency and industry reps, including NOAA, the EPA, the National Science Foundation, and the 

Department of Defense, to develop a consensus U.S. position. 

The Polar Code will provide a crucial mechanism for ensuring 

vessels in Arctic waters meet safe and environmentally sound design and operating standards. 

Along with our interagency colleagues and the partnering Arctic 

States of Norway, Finland, Canada, Denmark, and Iceland, the 

Coast Guard is leading the development of the Polar Code’s environmental component. 

In summary, the Coast Guard has a long and consistent history 

of collaboration with our interagency partners and the international community. 

We nurture these relationships to develop thoughtful standards 

that promote the protection of the marine environment while balancing the need for the efficient flow of commerce. This has been 

and will remain our core focus. 

As I said before, the Coast Guard thanks Congress and specifically this subcommittee for your interest and your involvement in 

our activities. 

Your continued support will ensure the Coast Guard is able to 

effectively advance marine environmental policy development in 

both domestic and international arenas. 

Thank you. I look forward to your questions. 

Mr. LOBIONDO. Thank you, Admiral. 

Mr. Shapiro, you are now recognized. 

6 

Mr. SHAPIRO. Good afternoon, Chairman LoBiondo and Ranking 

Member Garamendi. Thank you for the opportunity to discuss the 

EPA’s regulation of vessel discharges under the Clean Water Act. 

All of us are concerned about the environmental and economic 

impacts of invasive species. Economic costs from invasions are in 

the billions of dollars annually. 

Over the past several years, we have worked together with the 

Coast Guard to develop a strong ballast water management program to help reduce the risk of new introductions. 

EPA’s Vessel General Permit, or VGP, regulates discharges incidental to the normal operation of a vessel, including ballast water. 

The VGP includes discharge limits, monitoring, and recordkeeping 

requirements and other conditions. 

Discharge limits are primarily in the form of best management 

practices, or BMPs, that in many cases are already being performed on vessels. The 2013 Vessel General Permit went into effect 

in December of last year. 

As we have started to implement these requirements, we have 

been contacted by vessel owners concerned about the ballast water 

technology requirements in the Coast Guard’s rule and the EPA’s 

Vessel General Permit. 

To help address these concerns, the EPA issued an enforcement 

response policy in December of 2013 which states that vessels that 

cannot meet the VGP’s numeric ballast water limits and have received a compliance extension from the Coast Guard are considered 

a low enforcement priority. 

The EPA and the Coast Guard worked together to develop and 

distribute a joint letter to those vessel owners that have been or 

will be granted an extension from the Coast Guard’s regulations. 

Our coordinated response helps to provide the regulated community with a common understanding of how the permit and the rule 

work together with respect to such extensions. 

Regarding smaller vessels, the EPA proposed the Small Vessel 

General Permit, or SVGP, in 2011 to provide Clean Water Act authorization for fishing vessels and commercial vessels less than 79 

feet if and when the congressional moratorium on these smaller 

vessels expires. 

Recognizing that these smaller vessels are different in how they 

operate, the draft SVGP is shorter and simpler than the VGP, 

which was developed for larger vessels. 

The draft SVGP specifies commonsense best management practices for several categories of discharges, all of which need to be 

covered in order for a vessel to operate in compliance with the 

Clean Water Act. 

We are currently considering public comments we received which 

will inform our development of a final Small Vessel General Permit. 

Once again, Chairman LoBiondo and Ranking Member 

Garamendi, thank you for the opportunity to discuss EPA’s vessel 

permits. I look forward to answering any questions you may have. 

My full statement has been submitted for the record. 

Mr. LOBIONDO. Thank you, Mr. Shapiro. 

Mr. Grundler, you are now recognized. 

7 

Mr. GRUNDLER. Thank you, Chairman LoBiondo, Ranking Member Garamendi, and other Members. I appreciate the opportunity 

to testify today on the implementation of the North American and 

U.S. Caribbean Sea Emission Control Areas, or ECAs. 

ECAs are one of the most important and cost-effective air quality 

programs the U.S. Government has put into place in the past decade and will result in the prevention of tens of thousands of premature deaths. 

The North American ECA is already yielding significant public 

health and environmental benefits extending from all U.S. coastal 

areas to hundreds of miles inland. 

In 2014, more than 135 million people living in ozone nonattainment areas and over 84 million people living in fine particle nonattainment areas will benefit from cleaner air due to the ECA. 

Furthermore, these air quality improvements are critical for 

States to attain and maintain the existing health-based National 

Ambient Air Quality Standards, or NAAQS. 

By 2030, emission reductions resulting from the North American 

ECA will prevent between 12,000 and 31,000 premature deaths 

and 1.4 million workdays lost in the United States. 

EPA estimates that the monetized human health and welfare 

benefits of this program outweigh the costs of this program by a 

factor of at least 30 to 1. In short, the ECA is one of the most costeffective mobile source programs ever adopted. 

Implementation of the ECA started in August 2012 when the allowable marine fuel sulfur level was reduced to no greater than 

10,000 parts per million. 

The Coast Guard and EPA have worked and continue to work 

closely with the regulated community to ensure an orderly transition during this first stage of ECA standards. Overall, implementation of ECA is going very well and ships are using compliant fuel 

in the ECA. 

A second stage of fuel sulfur controls takes effect in January 

2015 when the allowable limit decreases to 1,000 parts per million. 

This ECA-compliant fuel is expected to be diesel fuel, which is 

already widely available at many ports as it is used on ships for 

auxiliary engines and for startup of the main engines. 

The EPA and Coast Guard will continue to work with vessel 

owners during the transition to the 2015 standards, just as we 

have done in the first stage of the fuel standards. 

While the ECA is a significant public health achievement, ECA 

fuel in 2015 will still have a much higher sulfur content than fuels 

used in any other U.S. transportation sector, more than 65 times 

higher than the allowable sulfur content for diesel fuel used in 

cars, trucks, trains, and ships operating on our inland waterways. 

MARPOL Annex VI contains some flexibility provisions, and several owners of ships that operate primarily in the ECA have requested and received permits to develop new technologies and 

methods that can achieve compliance at a lower cost. 

EPA has worked closely with the Coast Guard and the relevant 

flag countries to assess and approve several of these projects. As 

a result, these companies are making substantial investments to 

develop exhaust gas cleaning systems, convert or build new vessels 

8 

to use liquefied natural gas fuel, and use shoreside power to reduce 

emissions. 

EPA has worked closely with these companies to ensure that 

they will receive equivalent or greater emission reductions and are 

incentivizing the development of this new technology. 

We will continue to work with the Coast Guard and the industry 

on programs to reduce costs and encourage the development of new 

lower cost technologies and compliance methods while meeting 

these tremendous public health benefits of the ECA. 

Thank you for the opportunity to appear before you today. 

Mr. LOBIONDO. Thank you very much. 

We will now go to some questions. 

Admiral, first for you. Why do you think the manufacturers are 

reluctant to submit their treatment systems for type approval in 

the U.S. Coast Guard? I mean, why aren’t we seeing some of that? 

Admiral SERVIDIO. Sir, what I can say is that the G8 guidelines, 

which are the international standards, are guidelines, and the interpretation by some of the administrations have been different on 

what needs to be done for an approved—an IMO-approved ballast 

water treatment system. 

I believe some of the manufacturers are going through testing 

now to make sure that their systems will pass Coast Guard type 

approval, which is going to be done by an independent third party. 

We have two consortiums of laboratories that have been identified, and they are looking—I am aware of one company that is 

looking in the next couple of months to aggressively begin type approval for its system that the Coast Guard has accepted as an alternate management system, sir, a system which currently has 

IMO type approval. When the Coast Guard brought AMSs into the 

AMS program, it was anticipated they would go through Coast 

Guard type approval. 

So, all of those systems are expected to go through Coast Guard 

type approval. I can only speculate on why it has taken some of 

them longer. We do anticipate at least one system will be going 

through type approval very shortly. 

Mr. LOBIONDO. Admiral, does the Coast Guard support a single 

Uniform National Discharge Standard for ballast water? 

Admiral SERVIDIO. Mr. Chairman, I could say that right now we 

do have two different statutes with two different requirements. We 

are working closely with the EPA to, as best we can, mesh those 

systems. I have spoken to Mike Shapiro probably weekly on some 

of what we are trying to do. 

I think the fact that we cosigned a letter that accompanies all 

Coast Guard extensions for ballast water management systems 

speaks to the fact that we are looking to have one unified Government voice with regards to ballast water requirements, but there 

are two different statutes, sir, with two different requirements. 

Mr. LOBIONDO. So as of now, you don’t support a single uniform 

standard? 

Admiral SERVIDIO. Sir, I can just say there are two different statutes that the Coast Guard works over and the EPA works under, 

and we are trying to mesh them as best we can. But they are two 

different statutes, sir. 

9 

Mr. LOBIONDO. Well, I certainly will not speak for other colleagues on the committee, but this, I think, is getting sort of to the 

heart of the problem, as some of us see it, and as what happens 

out in the real world. I don’t know how you have people going to 

a couple different standards. But thank you for your answer. 

Mr. Shapiro, you talked in your statement about law enforcement priority. Can you tell us what that means. I mean—I am 

sorry—low enforcement priority. 

Mr. SHAPIRO. Low enforcement priority is a way of guiding EPA’s 

enforcement activities so as to avoid focusing on areas which we believe don’t merit attention—or merit very low attention. 

In the case of the Vessel General Permit and those vessels that 

have been granted extensions by the Coast Guard and are otherwise in compliance with the other requirements of the Vessel General Permit, our strong belief is that looking at the discharge limits 

from the ballast water should not be a priority for our enforcement 

activities. 

And, again, the reason for that is we want our approach to be 

as closely aligned with the Coast Guard’s as it can be under the 

statutory framework that we operate under. 

Mr. LOBIONDO. So from your perspective or the EPA’s, are these 

vessel owners going to be held in violation of the Clean Water Act 

or not? 

Mr. SHAPIRO. Again, our expression is it is a very low priority. 

I think history has shown, when we have used a similar tool in the 

past in other situations similar to this, EPA has not pursued enforcement where it has been designated a low priority. 

So I think there is a track record that we have to point to that 

shows that, when we say low priority, we mean very low priority. 

Mr. LOBIONDO. Very low priority. 

But if you are a small vessel owner, I hope you can understand 

the uncertainty that is created, because what you are saying, I 

guess, is that, on a given day, under given circumstances, the EPA 

could choose to enforce, which would result in a fine. And that is, 

I think, getting to part of the heart of the problem that we are talking about here. 

One more question for you, Mr. Shapiro. Given the problems that 

have arisen due to the differences with the Coast Guard on scope, 

extension, enforcement, and, you know, the differing standards, 

does EPA support a single uniform ballast water discharge standard? 

Mr. SHAPIRO. The administration has not taken a position on 

that question. 

So as with Rear Admiral Servidio, what we have—based on the 

existing law and the court decisions affecting our jurisdiction, the 

serious intent on the part of EPA to align our work as closely as 

possible with the Coast Guard’s, I think we both share the objective that, ultimately, vessels will be operating under type-approved 

systems which are meeting rigorous standards that EPA and the 

Coast Guard jointly worked on and hope to implement. 

So, you know, I think our two answers are the same. We don’t 

have a position on that question. We are doing what we think are 

the appropriate measures in order to align our work together under 

the existing statutory framework. 

10 

Mr. LOBIONDO. Well, I think therein lies the problem, at least for 

myself and some of my colleagues. 

If we can’t point to a single standard, I don’t know how we go 

to the people who are operating vessels and give them any certainty about what they have to do and how they have to do it. 

I have a couple more questions, but I want to defer to Mr. 

Garamendi at this time, and then I will come back for the balance 

of mine. 

Mr. GARAMENDI. Thank you, Mr. LoBiondo. 

Admiral Servidio and Mr. Shapiro, you have both repeatedly said 

given the statute that you have to work with. It is our business to 

change statutes. 

I am not advocating that we change, but we—is there some— 

what are the differences that are causing the discussion that we 

just had? What are the specific differences in the statutes that lead 

to this conflict between the statutes? 

Admiral SERVIDIO. Ranking Member, the Coast Guard works 

under the National Invasive Species Act, and the EPA is working 

under the Clean Water Act. Those are very different statutes with 

different requirements, with different State requirements. There is 

a number of factors. The regimes are very different, sir. 

Mr. GARAMENDI. There is nobody else in this room that has the 

experience that the two of you have in working with these. 

Is there a way to coordinate these two statutes so as to eliminate 

the problem while maintaining the goal? 

Admiral SERVIDIO. Ranking Member, I can say the cleanest way 

forward is to install a Coast Guard type-approved ballast water 

management system. 

At the present time we are working on that type approval process, but we don’t have a Coast Guard type-approved ballast water 

management system, and that is causing some of the problems between the two statutes. 

Mr. GARAMENDI. But that is an industry issue trying to develop 

a specific solution, that is, technology, to address the problem. Is 

that correct? 

And then, if that were to happen, then you are suggesting the 

EPA’s law and regulation would be satisfied? 

Mr. SHAPIRO. Well, certainly the particular issue we are talking 

about, which is the treatment of vessels whose owners have applied 

for and gotten an extension to the compliance for the ballast water 

numeric standard—that issue would certainly be resolved. Once 

the type-approved systems are available, vessels would have to 

adopt those systems. 

In the interim, though, there are differences in the way our laws 

are structured, which in this particular case gives EPA somewhat 

less flexibility than the Coast Guard in addressing the current unavailability of type-approved systems. 

Mr. GARAMENDI. You mentioned this. But what is the status of 

the type-approved system? You said there is one that is being reviewed now? Go into that—— 

Admiral SERVIDIO. Sir, the Coast Guard is required—sorry, sir. 

Mr. GARAMENDI. Just go into that in a little more depth, if you 

would, please. 

11 

Admiral SERVIDIO. An internationally approved ballast water 

management system, the Coast Guard was required to bring it into 

the alternate management system, which allows the vessel to keep 

that system on for 5 years until a type-approved system is available. 

The thought would be that they would be able to, during that 5- 

year period, make whatever modifications to that system so it could 

become type-approved. There is a requirement that, when you become part of the AMS process, that you have to submit for Coast 

Guard type approval. 

Of the 33 international systems now that the Coast Guard have 

brought into the AMS program, none of them have aggressively— 

or have at this point in time initiated the type approval process 

through those 2 designated independent laboratories that are capable of doing that. 

I have been told that one of them is going to be doing that shortly, sir, and I am hoping that others will also be doing that shortly. 

Mr. GARAMENDI. So it is the industry that has the initiative? 

Admiral SERVIDIO. There is different segments of the industry, 

sir. It is both vendors and it is the shipowners and operators. 

Mr. GARAMENDI. Take them one at a time. 

What are the vendors doing? 

Admiral SERVIDIO. Again, the vendors now are the ones that 

have to get their systems type-approved. The owners-operators are 

taking a risk by installing a system or even working with a vendor. 

If that does not become type-approved, they might have to replace 

that system, sir. 

Mr. GARAMENDI. So the initiative lies with the vendors and, I 

suppose, also with the shipowners, who I assume would be pressing 

for some approved system that they could then work with? 

Admiral SERVIDIO. I think, sir, the second panel can probably 

talk more about what—the specific problems they have seen or 

what they have—why we haven’t seen more type-approved systems 

at this point, sir. 

Mr. GARAMENDI. Then, I will get into it with the second panel. 

Mr. Shapiro, if there is a system approved or multiple systems 

approved, would they meet your requirements and fulfill your obligations under the law? 

Mr. SHAPIRO. Type-approved systems would certainly meet our 

requirements. 

Now, we also have some ongoing monitoring requirements as 

part of the Vessel General Permit regulation. So the systems would 

have to, in operation, achieve certain limits that are listed in our 

Vessel General Permit. 

But we start with the presumption that a type-approved system 

meets all the equipment requirements necessary for operation. 

So—— 

Mr. GARAMENDI. The question—— 

Mr. SHAPIRO [continuing]. We also—— 

Mr. GARAMENDI. Please go ahead. 

Mr. SHAPIRO. We also do accept in our Vessel General Permit 

AMS systems that Rear Admiral Servidio referred to as well, but 

they would also have to meet the same numerical limits. 

12 

Mr. GARAMENDI. Now, Admiral Servidio, do you also have ongoing monitoring requirements? 

Admiral SERVIDIO. Sir, once we end up getting type-approved 

systems, we will develop a compliance and enforcement policy, and 

during that compliance and enforcement policy, we will get into the 

details of what sampling or other types of things might be necessary. 

Mr. GARAMENDI. Could that be coordinated and be the same as 

the EPA? 

Admiral SERVIDIO. I think we can look to coordinate it, sir. But, 

again, the heart of the issue is the Invasive Species Act is different 

than the Clean Water Act. 

And even though we might be able to address something short 

term, I am not sure long term whether there will also be issues 

that pop up in the future, sir. They are different statutes. We are 

coordinating them as best as we can. 

Mr. GARAMENDI. I fail to see why they couldn’t be coordinated. 

You both have to monitor the ongoing operation of that discharge 

system. 

What conceivable reason is there that you could not have the 

same form to fill out, the same monitoring, the same dates or the 

same time periods in which they would be monitored? 

Admiral SERVIDIO. Sir, I am not an attorney, but I do believe 

there are some different requirements as far as technology that is 

different in the Clean Water Act than might be in the Invasive 

Species Act. 

Mr. GARAMENDI. Mr. Shapiro, is that the case? 

Mr. SHAPIRO. I don’t know whether, in practice, that would be 

the case. I can say we would work as hard as possible with our colleagues in the Coast Guard to make sure things were aligned effectively. You know, we will have to look into it. 

Mr. GARAMENDI. And you guys get together every week? 

Mr. SHAPIRO. Recently we have been communicating, often by 

phone, almost weekly. Given the nature of the issues that we are 

addressing, we will continue to work closely with the Coast Guard. 

Mr. GARAMENDI. I am not going to speak for the chairman, but 

I will tell you the ranking member wants to know the specifics of 

how these two systems can coordinate. 

You have already said that it can be coordinated with the Coast 

Guard certifying these systems and that would suffice the EPA. 

Now you are down to monitoring. 

Am I right? I think I am right. I think that is what I heard. 

And I should think that the Coast Guard and the EPA could figure out how to have the same form, same timeframe for monitoring, you know, every 6 months or every 6 minutes, whatever it 

might be, and do it once. 

Now, if that is not the case, I want to know specifically where 

it is not going to be able to be done that way. OK? 

Admiral SERVIDIO. Sir, yes, sir. What I can say is that there is 

a requirement under the Clean Water Act that States have authorities under that. They can file some requirements. 

Mr. GARAMENDI. That is yet another issue. Let’s not get the 

States involved here right now. 

13 

But just between the two of you, you are suggesting that, because the State might have a different system, that that would 

then make this more complex? 

Admiral SERVIDIO. Sir, there are some States that have said—— 

Mr. GARAMENDI. For one, California and New York. 

Admiral SERVIDIO [continuing]. You have to do ballast water exchange and ballast water treatment. 

And right now on the—for Coast Guard type approval, it doesn’t 

necessarily take into account having to do both of those aspects, 

both treating the water and exchanging the water. 

So there is potentials going forward, sir, that there might be 

some conflicts. I do think we are working closely together, as close 

as we can, to have a uniform—— 

Mr. GARAMENDI. I want to be very specific here. 

When State regulation or State action—and this is yet another 

matter, and I am certainly familiar with that, being from California and actually being involved in that when I was in California 

as a Lieutenant Governor. 

But the issue here is between the two of you. And if there is another piece of this that comes in because a State—California or 

New York—which, incidentally, have backed off—leave that aside. 

So for the EPA and the Coast Guard, apparently, there is a way 

to have one system or multiple systems that are approved by the 

Coast Guard that would be OK for the EPA. 

Then comes the question of how do you continue to monitor, 

which I think is necessary, and I suspect you do and—kind of 

standard procedure. 

I want to know, is there something in the laws that prohibits you 

from having the same monitoring system? 

With that, I will let that question be answered soon, I hope, and 

I will yield back. 

Mr. SHAPIRO. We will respond. 

Mr. LOBIONDO. Mr. Meehan. 

Mr. MEEHAN. I thank you, Mr. Chairman. 

And allow me to attach myself to the line of questioning of the 

gentleman from California because I am particularly concerned as 

well just from the practical perspective of a ship’s operator. 

I mean, you both appreciate, do you not, the requirements that 

one as an owner has to go through to meet your inspection standards and why we would be requiring two separate inspections when 

they can be done simultaneously just as a matter of creating less 

ambiguity, but more efficiency, which is something that I hope we 

could work towards? 

I think we have established that you have created regulations for 

a technology that does not yet exist, isn’t that accurate, what we 

are talking about, for the ballast water exchange? 

Let me ask you, Rear Admiral, first. 

Admiral SERVIDIO. Sir, we recognize—we said in the preamble to 

the regulations that we believe the first type approval would be in 

2015. 

And that is part of our regs. We have an extension permit process so that there is a way for vessels to stay in compliance until 

a type-approved system is available. 

14 

Mr. MEEHAN. Why is that being done before the technology is 

available? 

Admiral SERVIDIO. Sir, at times, there needs to be a forcing function. There is technology available. I believe there—— 

Mr. MEEHAN. Saltwater technology. Right? 

Admiral SERVIDIO. There are some systems that have had freshwater technology, too, sir, that are in the AMS system that are able 

to work on freshwater. I believe there is about a thousand systems 

that have been installed internationally right now, sir. 

Some of the issue is just how they were approved and whether 

it was done by a third party and whether they can meet the somewhat rigorous third-party independent laboratory process that we 

have established for type approval here in the U.S., sir. 

I believe we will have type-approved systems. I believe there is 

technology. We are going through that process right now, sir. 

Mr. MEEHAN. Well, let me ask a question of you, Mr. Shapiro, in 

terms of the regulations that are being conducted right now. 

We share that waterway, do we not, with a northern neighbor? 

Mr. SHAPIRO. Well, we certainly share a waterway with Canada. 

Yes. 

Mr. MEEHAN. So, in essence, these regulations are going to affect 

Canadian shipping as well. Is that not right? 

Mr. SHAPIRO. That is correct. 

Mr. MEEHAN. Now, do I understand that—while you have been 

contemplating this issue and the regulations will not be fully enforceable, I am assuming what you are saying is you are not going 

to enforce the regulation until 2015, until you think you have some 

standards for American shipping. 

Is that the same for Canadian shipping? 

Mr. SHAPIRO. Our Vessel General Permit applies to any foreign 

vessels that are entering U.S. jurisdictional waters. So, yeah, it 

would apply to Canadian vessels as well as vessels from other nations that are entering our waters. 

Mr. MEEHAN. Have you created special exemptions for American 

ships? 

Mr. SHAPIRO. No, sir. 

Mr. MEEHAN. So it is not accurate that there has been certain 

exemptions that have been identified by the EPA that—regard to 

vessels that were constructed before 2009 do not have to meet 

standards that ships built after 2010 do? 

Mr. SHAPIRO. Vessels with respect to lakers, vessels operating on 

the Great Lakes, it is my understanding that you are correct. Vessels that were built before 2009 do not have to have ballast water 

discharge devices installed. 

Mr. MEEHAN. So what you are doing, even though this is a situation in which it is—largely the Canadian fleet has invested more 

in newer shipping and we have a more aging American fleet. 

But is it not accurate, then, that you are creating a—perhaps you 

are sort of gaming the system, so to speak, so that Canadian shipping is put at a disadvantage? 

Mr. SHAPIRO. I think the requirement applies equally to Canadian or U.S. vessels. And so I don’t think there was any intent to 

game, in your terms, the system to favor one nation’s vessels 

versus another. 

15 

Mr. MEEHAN. Well, it was my understanding that some of them 

were exemptions that were for uniquely—are you saying that there 

is no exemptions that relate exclusively to United States shipping? 

Mr. SHAPIRO. Well, for vessels that are solely operating in U.S. 

waters, for example, barges that are operating in the U.S. waters, 

they are not subject to ballast water requirements, but those are 

not doing international trade. 

Mr. MEEHAN. What I need from you is whether or not you can 

give us a representation that you will work on a resolution. 

I have great concern that what this is going to create is going 

to be retaliatory measures on the part of the Canadian authorities, 

who will turn around and create their own standards. 

And am I not correct that there are certain points where, regardless of the shipping, they may have to go through waters that are 

controlled by—in the Saint Lawrence Seaway and other things that 

are controlled by Canada? 

Mr. SHAPIRO. There is a long history of joint operations in the 

Saint Lawrence Seaway and others, but certainly Canada and the 

U.S., as you say, share that common seaway. 

Mr. MEEHAN. Are we looking at the possibility that there could 

be significant retaliatory measures if, in fact, we don’t find a way 

in which there can be collaboration and equal treatment for the Canadian vessels as those that are—in the same way American vessels are being treated in this waterway? 

Mr. SHAPIRO. That issue has not been raised to my attention. I 

certainly would be willing to go back and look to see if we believe 

that such an issue is present. 

Mr. MEEHAN. Will you make a commitment to me that you will 

reach out to the Canadian authorities and determine whether or 

not there is a capacity for there to be a resolution on this issue before there is final decisionmaking about how things are going to be 

enforced? 

Mr. SHAPIRO. I am not actually sure of the specific issue you are 

referring to. 

I think you raised the issue of whether there was some uneven 

treatment between U.S. and American vessels, and I will certainly 

look into that. But until I know what the specific issue is, it is hard 

to make a commitment as to what we can do about that. 

Mr. MEEHAN. OK. Well, I don’t—I am told it has to do with dates 

with regard to construction of ships and it also has—you know, exemptions that were made for American shipping, but not for Canadian shipping, with regard to the ballast, you know, equipment 

that must be put on it. 

You are saying that you are not going to, in effect, write the ticket against the American ship, even though the regulation is there, 

because the technology is not there. 

Isn’t that, in effect, what you are both saying, that, ‘‘We all know 

that, by the law, the standard is there, but we know it is not able 

to be reached yet. So we are not going to enforce it in the meantime’’? 

Mr. SHAPIRO. Well, with respect to the ballast water provisions 

for the older vessels, we determined that it wasn’t technically feasible to retrofit them. But, again, I don’t think there was an intent 

to benefit one nation versus the other in our process. 

16 

Mr. MEEHAN. If it is not technologically feasible, then are you by 

the rules then underwriting what would be older vessels that create a greater risk than the newer ones? 

Mr. SHAPIRO. Well, the net result of that finding is that the older 

vessels would not have the ballast water systems in them. 

Mr. MEEHAN. Well, then, we are not accomplishing the very 

thing that you are trying to create the whole thing for in the first 

place. Isn’t that right? 

Mr. SHAPIRO. Well, as new vessels continue to move into the 

trade, ultimately, we will achieve—— 

Mr. MEEHAN. But you are creating a regulation that is encouraging the continuation of older, ostensibly more threatening vessels. 

Mr. SHAPIRO. Well, in my experience as a regulator, in a number 

of different programs, we often find that, given the way our statutes ask us to make decisions, it is necessary to address new 

sources in a somewhat different way than existing sources because 

of the difficulties and costs associated with retrofit. So I don’t think 

this is an unusual circumstance. But, again, I would be happy to 

go back and look at it. 

Mr. MEEHAN. I know my time has expired, Mr. Chairman. Thank 

you. 

Mr. LOBIONDO. Mr. Shapiro, when can we expect the EPA will 

release a final Small Vessel General Permit? 

Mr. SHAPIRO. Well, as I mentioned in my testimony, it is currently at interagency review. That process is ongoing. 

Our goal has always been to issue the final Small Vessel General 

Permit well in advance of the expiration of the current moratorium 

at the end of this year. 

We are trying to move the process along as effectively as I can, 

but I cannot give you a specific date at this point. 

Mr. LOBIONDO. That is about as ambiguous as we can get. 

I am not trying to be contradictory here, but I would ask you to 

put yourself in the position of one of us, who has constituents who 

come to us and ask for some degree of certainty on how they can 

conduct their business, and we look totally inept that we can’t give 

them any answers at all. 

We can’t give them any timing. We can’t tell them we come up 

with a single standard. We can agree to do a single standard, not 

necessarily what it is. We just—I mean, it is very frustrating. 

Mr. Shapiro, one more question. 

Many of the proposed management practices are impossible to 

comply with, especially for fishing vessels. For example, the EPA 

prohibits the discharge of unused bait unless that bait had been 

caught in the same water body, but ‘‘water body’’ is not defined. 

So would this prohibit fishermen in the Gulf of Mexico from 

using as bait mackerel and herring caught in New Jersey? 

Mr. SHAPIRO. That provision, which—appeared in one version in 

our draft Small Vessel General Permit, but also in our final 2000 

permit, and in that case it applies to live bait only, not to all bait. 

But I think that there is, as you point out, a condition in there that 

basically talks about going from one water body to another. 

In the situation you are referring to where there is a substantial 

distance and certainly different environmental conditions, we 

17 

would view that as a different water body. However, there are 

other questions that have been raised regarding that that will 

probably need some clarification. 

Mr. LOBIONDO. So we just don’t know, I guess, is—I mean, 

‘‘water body’’ not being defined, so the Atlantic Ocean, is that a 

water body? I mean—or is it that we don’t define that? 

Mr. SHAPIRO. Well, you are correct that there is ambiguity in 

that language, which we will work on clarifying. 

Mr. LOBIONDO. Mr. Grundler, from the record before us, it is 

pretty clear the EPA did not take smaller coastal vessels, such as 

certain self-unloading bulk carrier vessels, into account when it 

promulgated this rule. 

Can you tell us what the EPA is doing with these and other vessel classes that it did not consider when promulgating the rule, the 

ECA. 

Mr. GRUNDLER. Sir, I have to correct the record. 

We certainly did take into account all vessels operating within 

this zone when we did our complex and, frankly, very rigorous economic analysis and air quality analysis. 

So all vessels that travel our shores were considered when we did 

our inventory assessment and then the air quality model. 

Mr. LOBIONDO. Mr. Garamendi? 

Mr. GARAMENDI. Thank you, Mr. Chairman. A couple of things, 

just some housekeeping. 

I had asked the chairman of the California Air Resources Board 

to attend the meeting and to speak on this issue from the California perspective. She was unable to attend, but there is a letter 

I would like to have unanimous consent to enter into the record. 

Mr. LOBIONDO. Without objection, so ordered. 

[The information follows:] 

18 


Insert offset folio 7 here 86924.007
19 


Insert offset folio 8 here 86924.008
20 

Mr. GARAMENDI. And, also, a letter from Saltchuk Resources on 

the same issue. 

Mr. LOBIONDO. Without objection, so ordered. 

[The information follows:] 

21 


Insert offset folio 9 here 86924.009
22 


Insert offset folio 10 here 86924.010
23 

Mr. GARAMENDI. The issue of the air quality is one that is keenly 

felt in California. We have a very busy maritime industry in California, and the cities, the major ports, the San Francisco Bay area 

and Los Angeles, are questionable attainment districts. 

And so this—it turns out that this particular issue of the quality 

of the fuel is extremely important in that area, and I suspect it is 

in other parts of the Nation, although I am not familiar with those 

areas. 

It may be a burden—and I am stating my own opinion without 

asking a question here because I was deeply into this a few years 

ago—that this is an appropriate way to address a significant source 

of pollution, not easy, to be sure, and one that does have costs associated with it. 

But the necessity of maintaining—of obtaining an air quality 

standard in those two very important parts of California is going 

to be met by somebody. 

If one or another of the industries or polluters in the area don’t 

meet their share of the burden, then somebody else is going to have 

to make it up. And so we are simply shifting the cost of implementation off to somebody else. There is no reason to believe this cannot be done. 

I do have some questions about the scrubbers that are available, 

that might be available. 

Mr. Grundler, in your testimony, you mention this. Could you go 

into that in more detail. 

Mr. GRUNDLER. Certainly. We are very well aware of the challenges that, in particular, California faces in achieving public 

health standards, and we work very closely with our colleagues at 

the Air Resources Board as well as the South Coast in developing 

the proposal that United States and Canada took to the IMO. 

So you are right. It is not without cost. But the benefits are enormous and outweigh the cost by at least 30 to 1. The range goes 

from 30 to 90 to 1. 

But we do certainly recognize that it is a greater burden for 

those vessels that spend more time in this zone than others. They 

have a higher burden, but they also contribute more to the pollution that is traveling onto our shore and, frankly, well inland. 

What was remarkable when we did our modeling was to see how 

these public health benefits reach far hundreds of miles into the interior of the country and will be enjoying these benefits. 

There are provisions under the treaty that provide the Coast 

Guard and the EPA to develop alternative compliance—lower cost 

compliance alternatives, and we have been exercising those flexibilities. 

We have entered into permits with a number of firms, both 

cruise lines as well as people engaged in the coastwise trade, to explore these other technologies, including fuel switching to liquefied 

natural gas in several instances. 

And we have ongoing conversations with other firms who are interested in LNG, other firms that the cruise lines in particular 

have opted to enter into a technology demonstration project to experiment with scrubbers and different ways to install those scrubbers as well as different types of scrubber technologies. 

24 

So some firms look to install them while they are actually using 

the vessel, thereby not interfering with commerce. Others will be 

installing them during dry dock. But they are quite optimistic that 

this will be a lower cost way to achieve the goals than buying the 

more expensive clean fuel. 

Mr. GARAMENDI. The issue is that California has onshore winds. 

And so whatever is out there is coming on shore, and it creates a 

very substantial problem for all the industry in California. 

So the air quality attainment requirement is going to be met by 

somebody. And so it turns out that everybody from agriculture to 

cars, to diesel, to the ports, is sharing the burden here. I think I 

will let it go at that. 

Thank you, Mr. Chairman. 

Mr. LOBIONDO. This will conclude our first panel. 

I just hope you think a little bit about the frustration that we 

are feeling and, more importantly, the folks who are expected to 

comply are feeling and understand how we have got to get some 

of this resolved and do it in a manner that can give some certainty, 

that the people we are asking to spend a whole lot of money just 

don’t know where we are going on all this. 

So we will take a very brief recess while we can get set up for 

the second panel, and then we will proceed immediately. 

Our second panel today includes Mr. Tom Allegretti, president 

and CEO of The American Waterways Operators; Ms. Kathy 

Metcalf, director of maritime affairs at Chamber of Shipping of 

America; Mr. James Roussos, Vessel General Permit coordinator 

for LaMonica Fine Foods and Oceanside Marine in Millvile, New 

Jersey; and Mr. Rod Jones, president and CEO of the CSL Group 

Inc. 

Finally, I understand that Mr. Terry, president and CEO of 

Eagle Rock Aggregates, could not be here today due to a family 

emergency. So we will include his testimony as part of the record, 

and all wish him well with that family emergency. 

I will proceed. Mr. Allegretti, you are now recognized. Thank you 

for being here. 

TESTIMONY OF THOMAS A. ALLEGRETTI, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, THE AMERICAN WATERWAYS 

OPERATORS; KATHY J. METCALF, DIRECTOR OF MARITIME 

AFFAIRS, CHAMBER OF SHIPPING OF AMERICA; JAMES 

ROUSSOS, VESSEL GENERAL PERMIT COORDINATOR, 

LAMONICA FINE FOODS AND OCEANSIDE MARINE; AND ROD 

JONES, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CSL 

GROUP INC. 

Mr. ALLEGRETTI. Good afternoon. Thank you for the opportunity 

to testify on behalf of the American tugboat, towboat, and barge industry and our partners in the Shipping Industry Coalition, who 

together represent 90 percent of all vessels calling at U.S. ports in 

both domestic and international commerce. 

My testimony today will focus on one critical area, the regulation 

of ballast water and other vessel discharges, in which the current 

regulatory regime serves neither the economy, the environment, 

nor the American taxpayer well. 

25 

Today the Coast Guard and EPA regulate ballast water and 

other vessel discharges under 2 differing statutory authorities, and 

because neither Federal statute preempts State action, more than 

2 dozen States have established their own State-specific requirements for many of those same discharges, over 150 of them in all. 

This overlapping patchwork of Federal and State regulations 

makes compliance complicated, confusing, and costly for vessel 

owners and for mariners. It is counterproductive to the goal of enhanced environmental protection as companies have delayed investment in costly treatment technologies because they lack assurance that such systems will be acceptable wherever a vessel calls, 

and it has forced Federal and State agencies to duplicate efforts 

and expend significant time and taxpayer money in an unsuccessful effort to harmonize their requirements. This is a poster child for 

needed congressional reform. 

Today—and we have an illustration here for your information— 

a tug barge unit moving crude oil from Puget Sound, Washington, 

to the port of Richmond, California, must comply with requirements for vessel discharges established by both the Coast Guard 

and EPA. The same vessel must also comply with 25 State-specific 

conditions added to EPA’s Vessel General Permit by Washington 

and California. In addition, the vessel must comply with State ballast water requirements established by Washington, Oregon, and 

California, outside the framework of the VGP. 

The situation is untenable, it is unnecessary, and bipartisan congressional leadership is badly needed to fix it. 

I hope that this example illustrates why the current situation is 

untenable. Let me explain what I mean when I say that it is unnecessary. Over the past 3 years, there has emerged a national scientific consensus about the capability of currently available ballast 

water treatment technology. Scientific experts, the Coast Guard, 

EPA, and the States, all of the States, are now in agreement on 

the ballast water treatment standard that is achievable with current technology. Last June, the California State Lands Commission 

acknowledged that the State’s ballast water treatment standard 

could not be met with the best technology available today, and the 

California Legislature then acted to delay implementation of its 

State’s standards. 

Unfortunately, the scientific consensus has not yet solved the 

problem faced by vessel owners. Despite the fact that the Coast 

Guard, EPA, and the States now agree on a ballast water treatment standard, Federal and State regulators have been unable to 

eliminate overlap and inconsistency between their regulations. This 

is because, as you heard, they are accountable to different statutory 

authorities which they believe limit their flexibility to act. 

It is not too much to say that governmental agencies have been 

set up to fail by a statutory framework that does not work. This 

should be unacceptable to all of us. Congress can rectify the situation. You can fix this problem and establish a single national 

framework for the regulation of vessel discharges in which vessel 

owners are subject to one set of scientifically based, environmentally protective and technologically achievable vessel discharge 

rules. You can pass legislation that provides vessel owners with the 

certainty that multimillion-dollar investments in ballast water 

26 

treatment technology will be acceptable wherever that vessel calls. 

And, you can save the American taxpayer the wasteful expense created by duplication of effort among Federal and State agencies that 

will never be able to harmonize their regulations fully unless the 

statutory framework under which they operate is changed. 

Chairman LoBiondo and Ranking Member Garamendi, we implore you to take action. We thank you for your leadership in holding this hearing. We stand ready to work with you to enact legislation that is good for the marine transportation industry, good for 

the marine environment, and good for the American taxpayer. 

Thank you very much for the opportunity to testify. 

Mr. LOBIONDO. Thank you, Mr. Allegretti. 

Ms. Metcalf. 

Ms. METCALF. Thank you, Mr. Chairman. We would request that 

our testimony be entered into the record, our written and oral testimony as well. 

I am Kathy Metcalf, director of maritime affairs for the Chamber 

of Shipping of America. Today I am also testifying on behalf of 

INTERTANKO and the Cruise Lines International Association, or 

CLIA. A full detail of our members’ credentials are contained in the 

written testimony, and I won’t take my time up to go through that 

at this point. 

We are, all three of these organizations, are also members of the 

Shipping Industry Coalition that Mr. Allegretti alluded to. As such, 

we are fully supportive of the comments he has just provided to 

you, so I will try not to duplicate any of that. 

The fundamental tenet of our approach to these environmental 

issues has always been smart legislation and regulation discussed 

by all the stakeholders can result in smart and effective legislation 

and regulation. 

Aside from the challenges associated with the sheer volume of 

initiatives impacting the industry, the issues are further complicated by the fact that a number of executive branch agencies are 

involved in rulemaking processes. And that, honestly, is quite justifiable to be sure that there is, in fact, an administration sign-off 

on a very impactful regulatory process. 

For example, the U.S. approach to regulation of greenhouse gases 

is led by the State Department at the international level, while 

EPA is also developing domestic problems to address greenhouse 

gases. Now, while we understand the need for a unified U.S. position on this issue, it is critical that the nature of the sources being 

considered as we move this issue forward at the Federal and international level take into account the differences between stationary 

and mobile sources, something I would suggest probably was not 

fully appreciated when the EPA was forced to regulate ballast 

water discharges as well. 

With these many significant and diverse requirements, we offer 

two specific examples where we will believe smarter legislation and 

regulation would benefit everyone. First, with regard to vessel discharges, as Mr. Allegretti discussed, ballast water and the other 

discharges, quite frankly, are included in the EPA’s program because a court said that the exemption that had been 35 years in 

existence was not legally applicable, and thus vessels would have 

to be included in this program. This is a program that was never 

27 

anticipated to include things that move versus things that sit on 

the shore. So a lot of the problems that we are seeing now with 

vessels in the NPDES program is a result of that. 

Also, as was discussed earlier, the extension issue where the 

Coast Guard will issue the extension, but EPA cannot or will not 

be legally bound by it, we congratulate the Coast Guard and the 

EPA for doing everything they possibly could to reconcile the two 

sets of regulations. Looking at the proposed VGP and the Coast 

Guard regulations versus the final VGP, they have gotten rid of a 

lot of conflicts that were there, not the least of which was the definition of ‘‘dry docking date’’ that was 2 years apart. 

So they have done a lot of work on this, but in our opinion, EPA 

is legally constrained by what they can and can’t do to individual 

sources that are covered under a general permit. 

Second example is requirements associated with the creation of 

the North American Emissions Control Area. We are not here to 

suggest that the ECA, or the ECA, was a bad idea or is a bad idea. 

It is clear from EPA’s modeling there are going to be significant improvements in air quality as a result of this. However, for a number of ships, particularly those engaged in coastal trade, the significant increased costs associated with the use of currently the 1 percent fuel and, in 2015, .1 percent fuel can be mitigated by the installation of scrubbers, which allow you to continue to use a higher 

sulfur fuel, but to have reduced emissions consistent as you would 

with an engine using low-sulfur fuel without the scrubber. However, EPA’s Vessel General Permit covering exhaust gas scrubber 

discharges prevents the use of a mixing zone to measure the discharge effluent, such that most of the scrubbers that are being designed globally for use on ships will likely not meet the EPA discharge requirements, taking away a very cost-effective alternative 

to the use of fuels. 

We also know that we are going to see an increase in the cost 

of fuels. Thus far with the 1 percent, we have seen somewhere between the neighborhood of 10 and 30 percent. When it goes to .1 

percent, hold onto our hats, because we believe we are going to see 

premiums in the 50 to 60 percent range. 

I see my time is up. I thank you for the opportunity to chat this 

morning. 

Mr. LOBIONDO. Thank you, Ms. Metcalf. 

Mr. Roussos, you are now recognized. 

Mr. ROUSSOS. Chairman LoBiondo, Ranking Member Garamendi, 

I am responsible for managing the NPDES Vessel General Permit, 

VGPs, for our fleet of five clam boats at LaMonica Fine Foods and 

Oceanside Marine in southern New Jersey. 

Several of our boats, which are 85 to 100 feet in length, will be 

subject to the requirements for ballast water, and all of them for 

incidental discharge. I want to fully thank this entire subcommittee 

and Mr. LoBiondo for keeping this unnecessary burden off of our 

backs for years and for moving H.R. 4005, which will permanently 

exempt the fishing industry from this permit. We appreciate your 

efforts and hope that the House and Senate will follow suit, because the new VGP requirements are being applied to the fishing 

industry with little merit. Under the guise of environmental legislation, they achieve no real positive environmental results. They 

28 

serve only to make it harder for fishermen to fish and harder for 

this industry to attract qualified, career-seeking individuals. 

I want to be clear that these new requirements are not the result 

of any wrongdoing by our industry. The requirements are a result 

of the 2006 lawsuit brought by environmentalists over ballast 

water. Unfortunately it produced a whole new set of regulations 

that are excessive, burdensome and ineffective. 

The incidental discharges from our vessels were originally exempted from the Clean Water Act and the citizen lawsuit provisions, but this change with the 2006 lawsuit. Should our exemption 

not be reinstated, our small fishing business and many others like 

us will be exposed to substantial reporting and monitoring requirements, the potential for citizen lawsuits, and harsh punishments 

that will prove costly. 

Please understand that those of us in the business of harvesting 

food for the benefit of this Nation do so in a hostile environment. 

We are under constant scrutiny by environmentalists who petition 

or sue the Federal Government on a regular basis to increase environmental protection and restrict fishing activities. 

We have already filed two lawsuits on this issue, so we fully expect the citizen lawsuit provision will be used against us. Environmental regulation by litigation is out of control and could potentially cripple our industry. Congress correctly and permanently exempted 13 million pleasure boats in this country from the regulations, but did not permanently exempt commercial fishing vessels 

even though the environmental risks are no greater for commercial 

fishing vessels than pleasure craft. In fact, fishing vessels are less 

likely than pleasure boats to be the carrier of invasive species, for 

example, because our boats do not travel to foreign destinations or 

between bodies of water. We typically fish in a very small area of 

the ocean, usually leaving and returning to the same port. 

So 13 million pleasure craft, including 125-foot yachts, are exempt from this regulation; but our smaller clam boats and a 38-foot 

gillnetter out of Puget Sound in Washington—sorry, out of Viking 

Village, New Jersey, and the 24-foot salmon boat on Puget Sound 

in Washington, as well as an 18-foot open skiff on the Chesapeake 

Bay all will be subject to the new discharge regulations. This is not 

fair or logical. 

Despite our best efforts to make sensible changes to the regulations, we are left with troubling issues related to some details of 

the permit. Frankly, the VPG attempts to solve problems that don’t 

exist or even make common sense; for example, the requirement to 

collect refrigeration condensation or having to wash the anchor and 

chain thoroughly every time it is used, or the fact that naturally 

occurring fish slime combined with seawater is now an effluent, 

and consider that too much vegetable oil in the galley sink dishwater and too many crew showers while at dock would now be violations of Federal law. 

These permits are not written for the facile use of fishermen for 

whom it was intend to regulate. Many will have to hire lawyers or 

consultants to navigate the ridiculously complicated reporting requirements in attempts to comply. If they do not, then they risk 

being fined out of business. The permit, if inflicted upon the fishing 

29 

industry, will only add more paperwork and bureaucracy, further 

demoralize our workforce, and cause economic hardship. 

For the sake of our fishing industry and coastal economies, we 

respectfully request permanently extending the moratorium for the 

NPDES permits for commercial and charter fishing vessels and 

fairly treating our vessels like 13 million sport boats that are already exempted. 

We appreciate your leadership and the hard work that Mr. 

LoBiondo and Mr. Larsen are doing to rectify the situation for the 

long term, and we strongly support their efforts and encourage all 

Members to join with them. 

Mr. LoBiondo, Ranking Member Garamendi, members of the subcommittee who aren’t here, thank you for the opportunity to speak 

to you today. 

Mr. LOBIONDO. Thank you, Mr. Roussos. 

Mr. Jones, you are now recognized. 

Mr. JONES. Good morning, Chairman LoBiondo, Ranking Member Garamendi. My name is Rod Jones, and I am president and 

CEO of the CSL Group. I appreciate the invitation to speak to you 

today about the North American Emission Control Area, or ECA, 

and its unintended consequences. I am pleased to represent our 

Massachusetts-based U.S. operations, where we specialize in the 

coastal shipping of strategically important cargoes such as iron ore, 

coal, petroleum coke, road salt, aggregates and gypsum. 

I also speak for the Maritime Industrial Transportation Alliance, 

or MITA, which is a coalition of industry members who rely on the 

safe and efficient, environmentally smart short sea shipping. ECA 

is designed to reduce emissions of nitrogen oxide, dioxide particulate matter and sulfur dioxide. It creates a 200-mile zone around 

the United States and Canada where, as of 2012, ships must use 

fuel with no more than 1 percent sulfur. In 2015, ECA sulfur levels 

will be dramatically lowered to .1 percent for all ships, again out 

to the 200-mile limit regardless of size. 

My primary point is that the 200-mile ECA boundary was established for all ship sizes without firm scientific rationale. It did not 

differentiate between large oceangoing ships and smaller short sea 

vessels. The engines on these smaller ships emit much lower 

amounts of pollutants. 

Intuitively it doesn’t make sense that all ship sizes would have 

the same onshore impact, so putting our intuition to the test, we 

commissioned a scientific study using the same or similar models 

as those relied on by the EPA. The resulting study examined the 

emissions and movements of sulfur dioxide, which is the main pollutant emitted from sulfur found in fuel. The study shows the 

coastal air quality impacts diminish as expected. The ships move 

away from the coast with a sharp drop in impact at about 40 miles 

off shore. However, it also shows that short sea ships with propulsion systems of under 20,000 horsepower have negligible air quality impacts on the shore when they are only 50 miles at sea. 

The EPA’s forecast that the new ECA limits would impact vessel 

operating costs by about 3 percent may be correct for transoceanic 

voyages, but it is plain wrong for coastal voyages. Smaller short sea 

ships operate almost completely within the ECA, requiring extended or in many cases exclusive use of the highest priced fuel. 

30 

The EPA did not consider short sea ships as a sector, and equally 

the EPA didn’t weigh the benefit that that short sea shipping provides by reducing truck and rail emissions and their associated social impacts, particularly road congestion and infrastructure wear 

and tear. 

Furthermore, our efficient self-unloading ships discharge very, 

very quickly and typically reduce unload port stays from 4 to 5 

days to often less than a day. No matter the size of the eco zone, 

ship emissions are most damaging when the ship is in port, and 

our self-unloading ships are in port for less time than any other 

bulk vessel. 

When we last addressed the subcommittee in 2012, we projected 

a fuel cost increase for our sector of at least 40 percent in 2015. 

We were correct; .1 percent sulfur fuel is now as much as 40 percent higher than intermediate fuel. And we underscore that these 

aren’t predictions, but actual market prices. Under the 2015 ECA, 

we estimate that our fuel costs will increase over $14 million per 

year. Now, this would be OK if it would result in a significant environmental benefit; however, for almost no incremental benefit, as 

our scientific study has proven, it is an unacceptable cost burden 

for our customers. 

CSL estimates that the 2015 ECA limits will force us to raise our 

rates by about 35 percent in most trades. Many of our customers 

cannot absorb these freight rates. Despite well-documented social 

and environmental benefits of short sea shipping, consumers will 

obviously opt for the lowest cost, which will mean more trucks and 

trains. Bill Terry was expected to testify on this here today, but unfortunately, as you mentioned, he was unable to make it. 

As environmental stewards, CSL supports the aims of ECA. We 

simply disagree, based on our scientific study, with the EPA’s policy prescription. Smaller, cleaner ships should not be lumped together with much larger ships. Specifically we propose that in 

2015, when the sulfur standard reduces to .1 percent, the EPA reduce the 200-mile ECA to 50 miles for ships of less than 20,000 

horsepower, while continuing to require the use of 1 percent sulfur 

fuel between 50 and 200 miles. 

In addition, MITA continues to advocate congressionally supported dialogue with the EPA to explore other impact-based alternatives. 

Chairman LoBiondo, distinguished Members, clean air is the responsibility of all users of fossil fuels, and the shipping industry is 

no exception. We support the ECA to help improve air quality, but 

vigorously challenge the 200-mile boundary for smaller ships. We 

urge the Coast Guard and the EPA to work with MITA to find a 

compromise solution that does not add unacceptably high costs to 

our customers’ businesses with almost no incremental environmental benefit. 

Thank you. 

Mr. LOBIONDO. Thank the panel. 

Mr. Garamendi. 

Mr. GARAMENDI. With regard to the air quality issue, the question arose as to, Ms. Metcalf, about mixing zone and scrubbers. 

Could you go into that quickly? 

31 

Ms. METCALF. As an ex-mariner, I will go into it with the level 

of scientific detail that I have been equipped with with my mariner 

education. 

Essentially what it means is that how you measure an effluent, 

an overboard discharge from a ship, whether it is right at the side 

of a ship, or whether it is in a 3-foot radius outside the ship—— 

Mr. GARAMENDI. I understand that mixing zone. The mixing zone 

I thought you were referring to was associated with scrubbers, 

which I think is the air quality issue. If that is not the case, then 

I just—— 

Ms. METCALF. Yes, sir, it is. The IMO development of effluent 

scrubber guidelines would permit the use of a mixing zone to determine if you met the effluent standards. It is our understanding the 

EPA regulations relative to measurement of that effluent do not. 

So you are going to have a world full of scrubbers out there that 

could be installed as a cost-effective alternative to low-sulfur fuels, 

but not be passable under the EPA’s effluent guidelines. 

Mr. GARAMENDI. You look like you want to jump in. 

Mr. JONES. Well, I just think she was talking about the effluent 

from the overflow of the chemicals that are created when you 

scrub, not from the air itself, so I think that might have been the 

misunderstanding. 

Mr. GARAMENDI. Thank you. Clearly I didn’t quite catch what 

you guys were talking about here. 

It seems to me that there is a solution to that problem. You can 

find a way to it. The point here really is scrubbers. Can we get to 

scrubbers? And do they work? Are they effective? The argument basically made by Ms. Metcalf was that scrubbers are economically 

desirable compared to the cost of the fuel. Do you agree? 

Mr. JONES. Yes. I think in most cases they would be economically 

desirable. CSL has put a scrubber on one of our ships. These are 

in developmental stages right now. They don’t work as well as they 

are being advertised yet, and there is some differences between 

cruise ships, which have a lot of room on them, and our old ships, 

which are very small, and it is very difficult to install. So it is 

something that we are considering doing and we think should be 

done in some certain cases, but it also will not improve the air 

quality any more than what we are able to demonstrate by being 

50 miles offshore, so for us it doesn’t seem to be worth it. 

Mr. GARAMENDI. Let me get to that question. You have a study. 

The EPA has a study. Have you submitted your study to the EPA 

for their review, and analysis and comment? 

Mr. JONES. Yes, we have had discussions with the EPA on our 

study. They don’t necessarily agree with us on most of the study. 

They felt that we should have included NOx in the study. But NOx 

we are not disagreeing with. We are not saying we would do anything different on NOx. NOx has been legislated as an engine 

issue, and that is something that we just don’t disagree with. 

They also felt that our CALPUFF model was not completely appropriate, and I can’t get into the science on this. We have a Ph.D. 

who understands it, but our scientists feel very strongly that it is. 

Mr. GARAMENDI. It is really important for me, for a policy point 

of view and for decisions here, to have a clarity of the differences 

32 

in view of the two studies. If your study is valid, then you have got 

a good argument. If it is not valid, then you don’t. 

There is another thing that is going on, at least on the west 

coast, and that is cap and trade. And your industry will be involved 

in that also, and I think certainly California is there, and there is 

somewhat of an agreement between the three coastal States on 

that matter, which might change this entire argument. I would appreciate your comments on that, at least insofar as the west coast 

is concerned, but not right now. If you could provide written comments to us about how that might affect this, I think it may significantly affect it. 

Mr. JONES. Yes. I think it is a different issue, but I will make 

comments on that and try to tie it together. 

Mr. GARAMENDI. Please. I don’t want to tell you how to do it, but 

if you are going to a lower, you may be significantly reducing carbon along the way and which you can trade and pay for the fuel 

or the scrubbers, but I will leave that to you. 

The other question has to do with—Mr. Allegretti, with regard 

to the ballast water. We had a long discussion here earlier with the 

previous panel about how they might integrate their activities. Do 

you have any comment about that discussion we were having here; 

and specifically, can those businesses that are developing the mechanical solutions or solutions to ballast water, why are they not 

pushing that issue forward with the Coast Guard? 

Mr. ALLEGRETTI. I don’t know that I can speak to the issue of 

why companies are not pushing the technology with the Coast 

Guard. My observation on the conversation that you heard between 

Admiral Servidio and Mr. Shapiro is—and I think, you know, they 

were being careful and polite, but they were telling you that they 

have worked to the very best of their ability to reconcile the differences between their two ballast water standards, and what they 

have produced today is as good as they feel they can get. The gaps 

that exist between the two are apparently gaps that they don’t feel 

they can reconcile, given the differing requirements of the two statutes under which they operate. I think it points up the need for a 

single national Federal standard. 

As I listened to that conversation, Mr. Garamendi, I really was 

thinking about it from the perspective of a vessel owner who is facing a multimillion-dollar investment in this technology and asking 

himself, am I prepared to make this investment with this lack of 

certainty from the Government agencies that are regulating the 

program? 

Mr. GARAMENDI. I understand and appreciate that point. I think 

I heard it slightly different, that they were looking at the—that 

these systems, once certified, meet the EPA requirements. Then 

the question is one of monitoring, and I find it difficult that they 

could not figure out how to monitor in a coordinated fashion or exactly the same way. If they can’t, then surely there is a slight 

tweak to one of the other laws that would cause that to happen. 

But I don’t—and I don’t have a clear answer now about why 

these systems are not being pushed forward. It would seem to me 

that there is a business opportunity here that somebody seems to 

be missing, because apparently these systems are going to go into 

33 

place at some point, and that doesn’t speak to the issue between 

the two laws, but rather just the Coast Guard itself. 

We will have to find out an answer to that, and I don’t think I 

am going to get it from the witnesses here. I guess I am right. 

I think I have run my time. I have got a lot more questions, but 

I think I will put those in writing to the Coast Guard and the EPA. 

Specifically I would like some more information on the scrubbers 

if you can handle it. And if you could also—well, we will ask the 

EPA and you to provide me with specific information on the study 

that you did and the way it works. If you would do that, Mr. Jones, 

I would appreciate it. Thank you. 

Mr. LOBIONDO. John, if you want some extra time, or are you 

pressed to go? 

Mr. GARAMENDI. Well, let’s just say it is all of the elected officials 

from my district that are outside that door. Maybe I should stiff 

them? I can blame it on New Jersey. 

Mr. LOBIONDO. Blame it on New Jersey. Thanks, John. 

Mr. GARAMENDI. Thank you. 

Mr. LOBIONDO. So for Mr. Allegretti and Ms. Metcalf, we have 

talked about this a lot, but can you just tell us in sort of simple 

terms so we can maybe disseminate this to our colleagues why it 

is necessary for Congress to act to establish a single Uniform National Discharge Standard? 

Mr. ALLEGRETTI. In simple terms, the system under which we operate today does not work. It is not good for industry, it is not good 

for the environment, it is not good for mariners, it is not good for 

the companies. 

That illustration there is only three States. Imagine a tugboat 

going down the Ohio and Mississippi rivers from Pittsburgh to New 

Orleans. It is going through the jurisdictions of 11 States and facing that kind of complexity. You have regulations coming at the industry from four separate vectors, the EPA, Coast Guard, the 

States in VGP State-specific conditions, and then the States as 

they legislate outside the framework of the VGP. It is an operational nightmare for a vessel owner to ensure that he is in compliance with that system as he moves from one State line to another. 

Also it is legally treacherous for companies, and it is legally treacherous for mariners to operate within this system. 

Mr. LOBIONDO. Yes. 

Ms. METCALF. I will take 30 seconds, Mr. Chairman, if I could. 

There is a precedent that this Congress has done a number of 

years ago, and that is the Uniform National Discharge Standards 

rule, the UNDS rule, that is applicable to Armed Forces vessels. 

I want to be sure that we have not been misleading you as far 

as terminology goes, but for the 401 State certifications as part of 

the Clean Water Act and VGP program, the performance standard 

that the Coast Guard and EPA have established is the same standard. So the big machine, the big concept, there is a lot of consistency with, but it is in the nuts and bolts of the implementation 

where some of the disconnects are occurring. 

So as Mr. Allegretti said, that if we could create one Federal program under an appropriate statute that regulates vessel discharges 

and preempts State actions, then we have that consistency, much 

like the UNDS program created for the Armed Forces vessels. 

34 

Mr. LOBIONDO. OK. Mr. Roussos, we talked about it, and the 

EPA has recently announced a new Small Vessel General Permit 

which will apply to commercial fishing vessels. In your view, are 

some of these proposed new management practices even feasible? 

Can it work? 

Mr. ROUSSOS. From what I know now, having read what I have 

read and the research—I was charged with the VGPs for our company and spent scores and scores of hours trying to decipher what 

it was that they were trying to accomplish, what they were trying 

to permit, and what their objective was. And it is greatly obfuscated what they are attempting to do, but what is clear and was 

clear was that the recordkeeping was ridiculous and with no apparent benefit. 

So do I think it is possible to implement with the guy that has 

got the open boat trying to make a living, working as a one-man 

business? Where is he supposed to put these records? How is he 

supposed to do it? 

These are people—you know, these are some of the hardest working people you are going to find anywhere in America. They have 

done it the way their fathers have done it and their grandfathers 

have done it. The industry has evolved in the over 200 years that 

it has been around, but it is not going to evolve any more with a 

hammer. You can’t beat it into them. We need education. We need 

resources. 

It is an onerous document that is doomed to failure, or if you 

want to talk about evolution of fishing, there is going to be a lot 

of dead ends in that evolution. There is going to be a lot of people 

that are going to go extinct because of this permit as I understand 

it now. 

Mr. LOBIONDO. Could you even venture a guess as to what these 

new regulations would cost the fishing industry, or is it kind of too 

hard to get the brain around? 

Mr. ROUSSOS. I haven’t approached it from that point of view. I 

couldn’t venture a guess. 

Mr. LOBIONDO. OK. Mr. Jones, can you tell us what your costs 

have been to comply with the EPA—or ECA, sorry? 

Mr. JONES. The 1 percent sulfur requirement that is in place 

now? Actually I can’t give you that off the top of my head here, but 

I can say we consider those costs to have been manageable. The 

difference between our old sulfur and the 1 percent sulfur has been 

something like—I think it is like $30 a ton or something like that, 

and we have been able to program that into our program, and our 

customers have been able to record that. It is the $300 to $400 a 

ton that is what is really scaring us. 

Mr. LOBIONDO. And I think you alluded to this, that there is a 

real fear and a real possibility that shippers could decide to move 

cargo by other means with this? 

Mr. JONES. Yes. These are very low-value commodities. This is 

like aggregate that is used for road construction. So the transportation is sort of more than half the cost of the delivered product, 

so if we increase that cost significantly by 30 or 40 percent, we 

have been told by our customers that they will not be able to move 

that cargo by ship anymore, and there will be movements by other 

modes of transportation. 

35 

Economic theory, if you raise the price of something, something 

else will substitute in to move it. So it is very difficult to pin down 

exactly what that is, but we are quite concerned and quite convinced that we will lose a big part of the business that is currently 

moving by ship to other forms of transportation because of mobile 

or sourcing shift. It may be that instead of moving the product to 

one place, it will be sourced from another closer place and moved 

by truck, for instance. 

Mr. LOBIONDO. This is certainly one of the concerns that at least 

some of us have, and as we struggle in the next few months to try 

to come up with some kind of a solution for the highway bill, it almost further underscores that with not being able to come up with 

enough money for highways, you are not actually asking for money, 

you are asking for certainty and regulatory relief here, which could 

help balloon out a problem—keep from ballooning out a problem at 

the other end if we could just be sensible, because in many respects, especially with the short seas shipping, this makes sense for 

America, it makes sense for shippers. And it is very, very frustrating to deal with the bureaucracy from our standpoint when 

that which is so obvious to so many, just is—we can’t get to a conclusion on it. 

So unless any of you have any last comments, I want to thank 

you very much for being here today. I assure you on behalf of 

Chairman Hunter and the rest of the subcommittee that this is an 

issue we will continue to try to find a way to get you some relief. 

And the committee now stands adjourned. 

[Whereupon, at 4:46 p.m., the subcommittee was adjourned.] 

36 


Insert offset folio 11 here 86924.011
37 


Insert offset folio 12 here 86924.012
38 


Insert offset folio 13 here 86924.013
39 


Insert offset folio 14 here 86924.014
40 


Insert offset folio 15 here 86924.015
41 


Insert offset folio 16 here 86924.016
42 


Insert offset folio 17 here 86924.017
43 


Insert offset folio 18 here 86924.018
44 


Insert offset folio 19 here 86924.019
45 


Insert offset folio 20 here 86924.020
46 


Insert offset folio 21 here 86924.021
47 


Insert offset folio 22 here 86924.022
48 


Insert offset folio 23 here 86924.023
49 


Insert offset folio 24 here 86924.024
50 


Insert offset folio 25 here 86924.025
51 


Insert offset folio 26 here 86924.026
52 


Insert offset folio 27 here 86924.027
53 


Insert offset folio 28 here 86924.028
54 


Insert offset folio 29 here 86924.029
55 


Insert offset folio 30 here 86924.030
56 


Insert offset folio 31 here 86924.031
57 


Insert offset folio 32 here 86924.032
58 


Insert offset folio 33 here 86924.033
59 


Insert offset folio 34 here 86924.034
60 


Insert offset folio 35 here 86924.035
61 


Insert offset folio 36 here 86924.036
62 


Insert offset folio 37 here 86924.037
63 


Insert offset folio 38 here 86924.038
64 


Insert offset folio 39 here 86924.039
65 


Insert offset folio 40 here 86924.040
66 


Insert offset folio 41 here 86924.041
67 


Insert offset folio 42 here 86924.042
68 


Insert offset folio 43 here 86924.043
69 


Insert offset folio 44 here 86924.044
70 


Insert offset folio 45 here 86924.045
71 


Insert offset folio 46 here 86924.046
72 


Insert offset folio 47 here 86924.047
73 


Insert offset folio 48 here 86924.048
74 


Insert offset folio 49 here 86924.049
75 


Insert offset folio 50 here 86924.050
76 


Insert offset folio 51 here 86924.051
77 


Insert offset folio 52 here 86924.052
78 


Insert offset folio 53 here 86924.053
79 


Insert offset folio 54 here 86924.054
80 


Insert offset folio 55 here 86924.055
81 


Insert offset folio 56 here 86924.056
82 


Insert offset folio 57 here 86924.057
83 


Insert offset folio 58 here 86924.058
84 


Insert offset folio 59 here 86924.059
85 


Insert offset folio 60 here 86924.060
86 


Insert offset folio 61 here 86924.061
87 


Insert offset folio 62 here 86924.062
88 


Insert offset folio 63 here 86924.063
89 


Insert offset folio 64 here 86924.064
90 


Insert offset folio 65 here 86924.065
91 


Insert offset folio 66 here 86924.066
92 


Insert offset folio 67 here 86924.067
93 


Insert offset folio 68 here 86924.068
94 


Insert offset folio 69 here 86924.069
95 


Insert offset folio 70 here 86924.070
96 


Insert offset folio 71 here 86924.071
97 


Insert offset folio 72 here 86924.072
98 


Insert offset folio 73 here 86924.073
99 


Insert offset folio 74 here 86924.074
100 


Insert offset folio 75 here 86924.075
101 


Insert offset folio 76 here 86924.076
102 


Insert offset folio 77 here 86924.077
103 


Insert offset folio 78 here 86924.078
104 


Insert offset folio 79 here 86924.079
105 


Insert offset folio 80 here 86924.080
106 


Insert offset folio 81 here 86924.081
107 


Insert offset folio 82 here 86924.082
108 


Insert offset folio 83 here 86924.083
109 


Insert offset folio 84 here 86924.084
110 


Insert offset folio 85 here 86924.085
111 


Insert offset folio 86 here 86924.086
112 


Insert offset folio 87 here 86924.087
113 


Insert offset folio 88 here 86924.088
114 


Insert offset folio 89 here 86924.089
115 


Insert offset folio 90 here 86924.090
116 


Insert offset folio 91 here 86924.091
117 

Æ 


Insert offset folio 92 here 86924.092