The Port of Long Beach signed a landmark lease agreement last week with Oakland-based Matson Shipping Co. marking the first time a ship-to-shore electrical power hookup to reduce diesel emissions has been directly tied to a lease.
The agreement to install the electrical hookup known as "cold ironing" comes as environmental groups and local community activists have put increasing pressure on the ports and shippers to clean up the sprawling complex. The hookups allow ships to run their engines with clean electricity while they're in port, instead of running their emissions-belching on-board engines.
Together, the operations at the ports of Los Angeles and Long Beach are the single largest source of diesel and other pollutants in the entire Southern California region.
"This is very consistent with our general policy regarding environmental sensitivity," said Jeff Hull, a spokesman for Matson. "Because we are a California-based company, we are very sensitive to the environmental health of the ports and the communities that surround them."
Matson has teamed up with stevedoring company SSA Marine of Seattle to run the 68-acre terminal at the port's Pier C. The 20-year lease from the Port of Long Beach was originally signed in 2002, but Matson sought to renegotiate the lease because it wanted to start a service line to China.
With pollution becoming more of an issue of late, the ports are looking to use leases as leverage to encourage companies to make pollution reduction a priority.
"They came to us last summer and said they wanted to renegotiate their lease," said Art Wong, a spokesman for the port. "Since this was the first time this had been done, it was new to both of us. But we worked together and were able to come up with an agreement we're both pleased with." Specifics of the deal were not released but tax incentives and discounted tariffs to facilitate these greener agreements.
Matson will pay the cost of outfitting five of its ships with the cold ironing equipment. The precise cost of that isn't known but industry estimates have each ship costing between $150,000 and $500,000.
As part of the agreement, the port will pay San Pedro-based Manson Construction Co. to build the shore side cold-ironing infrastructure which is worth a reported $7 million.
Matson and SSA Marine are two of a handful of American-based partnerships operating terminals in Southland ports.
Cold ironing is hardly a new technology. The U.S. Navy has been using cold ironing on its vessels for decades and several other international ports use the technology as well.
But shipping lines have resisted using cold ironing at American ports because it costs more to have both diesel and electric capabilities for their ships. Also, terminal operators have balked at the additional cost of setting up shoreside hookups the power plugs to make the electric connections to the ships possible. They also don't want to foot the electricity bill, which can run thousands of dollars per ship docking.
But rising community and environmental opposition to business-as-usual has changed the equation. The NRDC and other organizations sued the Port of Los Angeles in the late 1990s over excessive emissions at the ports. The courts ruled in their favor, forcing the port to allocate $50 million towards pollution reduction.
As part of this settlement, the Port of Los Angeles required China Ocean Shipping Co. to use cold-ironing at a condition for allowing the shipper to establish a terminal there in 2002. The cold-ironing was set up in 2004. Currently, 70 percent of the ships that call at the China Shipping terminal use cold ironing.
The Port of Long Beach has sought similar measures as part of its Green Port initiative to reduce pollution in the entire port by 90 percent over the next 10 years. Earlier this year, the port reached an agreement with BP plc for cold ironing on its tankers. But that was not connected to a port lease. The Matson agreement is the first time a port lease was involved.
"We're very pleased to see the ports using the authority they have to encourage greener measures by their tenants," said Melissa Lin-Perrella, an attorney with the Natural Resources Defense Council. "We hope they're realizing that it just can't be business as usual. The communities are demanding this change."
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