Regulatory Oversight

By Jock O’Connell

Maritime officials along the West Coast, especially in California, are currently up in arms about a surprise and possibly illegal move on March 23 by the state’s Air Resources Board (CARB) to accelerate the timetable for meeting new emissions standards that would require terminal operators, truckers, and railroads to operate zero or near-zero emission vehicles.

The obvious problem is that CARB has no clue how the businesses that make the state’s ports function would meet the price of compliance, estimated in the tens of billions of dollars.

One big reason CARB thinks it can get away with such bureaucratic insolence is that there is no real push-back within the Brown administration or even the Legislature. In a different administration, one might hope the Governor’s Office of Business and Economic Development would step up to champion the interests of, well, business and economic development. But this is Jerry Brown’s governorship, and GO-Biz (as some refer to it) is no match for CARB or any other state regulator.

CARB itself is a church of like-minded souls dedicated to the goal of steadily cleaner air. It is probably safe to say that no one aspires to a job at CARB who does not subscribe fervently to this goal. It’s even more probable that no one gets hired at CARB who harbors the slightest doubt about the wisdom of pursuing tighter and tighter air quality standards at any cost. You know, people who might dare ask their colleagues whether new standards might not be economically feasible.

This notion that human resource management practices at an organization like CARB might make it impossible for that organization to recognize real-world constraints, like the desire of businesses to remain in business, is not new. As Bill Dombrowski, president of the California Retailers Association recently commented in a newspaper op-ed: “the adoption of a new environmental policy should not be a one-sided conversation that occurs in a vacuum.”

Yet that’s been standard operating procedure at the state capital.

Consider the following example of one-sided analysis by the California Department of Resources Recycling and Recovery (CalRecycle). This agency publishes an annual report detailing California’s exports of waste material. The most recent report, covering 2015, was issued last November. It’s an interesting piece of work, not only for its wealth of detail but also for the mindset it reveals.

California, it states, generated an estimated 76 million tons of waste material in 2015. Of that, about 40 million tons were disposed, and about 36 million tons were source reduced, recycled, or composted.

About 16.4 million tons of recyclables valued at $5.4 billion were shipped out of California’s ports in 2015. (Not all the material exported from California’s ports was necessarily generated in California.) Recyclables made up about 26% of all California’s seaborne export tonnage in 2015 and about 6% of the value of seaborne exports that year.

California ports accounted for 44% of the country’s seaborne recyclable exports by weight and 38% of their value.

All of this is very interesting to waste exporters and people in the ocean shipping business.

Were these exports beneficial? Recyclers probably think so. For them, it’s money in the bank. Ocean carriers think waste exports are great because of the tens of thousands of loaded back-haul containers the scrap trade generates. And what of the benefits of diverting thousands of tons of scrap from the state’s municipal landfills? Or having to haul tons of refuse to disposal facilities out of state, as Sacramento County does?

No. The sole lament heard in the CalRecycle report is about greenhouse gas emissions from the transport of recyclables on ocean-going vessels, said to be about 2.4 million metric tons of CO2 equivalent (MTCO2e) that were created “because this recyclable material was sent overseas.”

Remarkably, the report concludes that these “are emissions that could have been avoided if materials had remained in California.”

But at what cost? The folks at CalRecycle offer no estimates. Exporting trash overseas is said to be bad because it generates what turns out to be an exceedingly modest -- indeed, almost negligible – contribution to the state’s air emission problems. The regulator’s report provides no discussion of how and at what cost the waste we produce would be absorbed locally. But how should they know?

As they themselves admit: “We don’t have as good a handle on truck and rail information due to lack of tonnage data.”

According to the Los Angeles County Department of Public Works, the county “exported” 42.4% of its solid waste to landfills in Riverside, Orange, Kern, San Bernardino, and Ventura Counties in 2015. That amounted to 4,127,261 tons of waste trucked to sites as distant as Imperial County. Moreover, LA County assumes these “exports” will average 15,000 tons per day through 2030.

LA County recently activated a new “waste-by-rail” landfill site over 225 miles away in Imperial County. Here’s the county’s description of how that site will operate: “At materials recovery or transfer facilities [in LA County], waste will be loaded into sealed containers. The containers will then be trucked to an intermodal rail yard to be placed onto rail cars. The loaded train will haul the containers about 200 miles to the intermodal rail yard at the Mesquite Regional Landfill. The containers will then be loaded onto trucks, transported to the working area of the landfill and unloaded. Empty containers will then be loaded onto the train for the return trip.”

Presumably, this is more environmentally acceptable than sending waste materials to the Port of Los Angeles for shipment overseas.

The fact is that we Americans are world champions when it comes to generating waste. But waste is also a commodity. There is obviously demand for our trash abroad. China’s burgeoning e-commerce sector has a need for waste paper for packaging.

But CalRecycle evidently thinks we should keep our waste at home rather than sharing our waste with others… and making a few bucks in the process. Given state government’s generally antagonistic posture toward most manufacturing operations, CalRecycle needs to ask itself what industries in the state would reuse our scrap and waste as efficiently and economically as our overseas trading partners do.

Perhaps being under the impression they had much to do with it, California officials seldom miss an opportunity to boast about the state’s status as the world’s sixth largest economy. And yet when it comes to supporting the business of transporting the products of that economy to markets around the world, they wax between indifference and hostility.

The commentary, views, and opinions expressed by Jock O’Connell are his own and do not reflect the views or positions of the Pacific Merchant Shipping Association. PMSA does not endorse, support, or make any representations regarding the content provided by any third party commentator.