June 18, 2019

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EPA Offers a Regulatory Reprieve to Great Lakes Steamships

U.S. EPA  has issued a direct final rule to create an incentive for converting Great lakes steamships to diesel. The new rule allows steamships that convert to diesel to continue using cheaper (higher sulfur) fuels through 2025, despite new, more stringent fuel sulfur requirements that will otherwise apply to Great Lakes ships beginning in August 2012. The agency believes that the increased efficiencies gained with a diesel engine over a steam boiler will lead to a 34% decrease in sulfur oxide emissions, even with the higher sulfur fuels.

The freshwater environment of the Great Lakes allows much greater longevity for ships than that enjoyed by those operating in salt water.  At present, there are thirteen U.S. flagged steamships still operating on the lakes. These steam ships are exempt from the federal fuel sulfur requirements. Because of this exemption, steamships that are not refitted will be able to continue burning cheaper, higher sulfur fuels than diesel-powered ships. In contrast, owners who convert their ships would be faced with the considerable cost of the conversion itself, followed by higher fuel costs going forward due to federal fuel sulfur requirements applicable to diesel engines. However, by providing what is in effect a regulatory reprieve on fuel sulfur requirements for ships that refit to diesel power, the EPA is hoping that the economics of efficiency will drive ship owners to refit their steam-powered vessels, thereby lowering sulfur oxide emissions on the lakes over the long term.

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About this Author

Timothy J. Lundgren, Varnum, Environmental Attorney, Public Service Lawyer
Partner

Tim is a partner in the Environmental, Energy and Natural Resources team. On energy issues, Tim represents clients before the Michigan Public Service Commission, including energy suppliers, marketers, manufacturers, agricultural processors, public entities and institutions, and trade associations representing competitive power supply and business interests. He also advises clients on developments in energy law and policy in Michigan, and assists them in the development of legislative proposals.

Tim works on natural resource development and environmental permitting...

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