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TOTE wins EPA fuel standards waiver but must switch ships to natural gas #SupplyChain

EPA (Photo credit: crownjewel82)
Agreement with feds comes 2 days after new rules take effect.

Associated Press
Published: August 3rd, 2012 11:07 PM
Last Modified: August 3rd, 2012 11:08 PM

JUNEAU -- The federal government has reached agreement with one of Alaska's largest shipping companies, providing a conditional waiver for new fuel standards while Totem Ocean Trailer Express, or TOTE, converts its ships to a cleaner-burning fuel.

Friday's announcement comes two days after rules took effect requiring that cargo carriers and cruise ships use a low-sulfur fuel within 200 miles of a significant portion of U.S. and Canadian shores.

Alaska had sued to block enforcement of the rules off the state's coast, saying they would result in higher freight rates and......

Led by TOTE, liquefied natural gas comes to US shipping fleet
Alex DeMarban | Aug 03, 2012
A shipping company with Alaska roots will apparently be the nation's first such company to burn large amounts of liquefied natural gas, as part of a trailblazing agreement that allows Totem Ocean Trailer Express to avoid new requirements that it burn low-sulfur fuel.

The company's deal with the Environmental Protection Agency and the U.S. Coast Guard gives it four years to convert the engines on its two large Alaska-bound vessels to run on liquid natural gas, according to statements from Alaska's senators.

The company says its so-called ORCA-class ships, which stretch some 800 feet long, are already the “greenest” in the U.S. domestic fleet, according to TOTE's announcement about the deal.

The agreement gives TOTE a conditional waiver to a newly implemented program that requires large ships to burn low-sulfur fuel in the so-called.....

Waiver Allows Freight Carrier to Convert Ships to LNG; But Alaska Consumers Still Face Major Cost Increases from ECA
August 03, 2012
(SitNews) Ketchikan, Alaska - A conditional Emission Control Areas waiver has been granted to Totem Ocean Trailer Express (TOTE), allowing the shipping company to use liquefied natural gas (LNG) as a means of complying with new rules to reduce air pollution from ships. The Environmental Protection Agency (EPA) and U.S. Coast Guard announced the approval of the waiver today.

The waiver will give Totem Ocean Trailer Express (TOTE) four years to convert its two Alaska-bound ships to liquefied natural gas, instead of having to switch immediately to more costly fuel.

The waiver will enable TOTE to develop and convert its two ORCA-class vessels, already the “greenest” ships in the U.S. domestic fleet, to the use of Liquefied Natural Gas (LNG) as their primary fuel source. The conversion will advance technology and accelerate the use of natural gas as a cleaner domestic energy source. The ORCA-class vessels ship between Tacoma and Anchorage.

“When the Orca class vessels were delivered in 2003, they were purpose-built to...

The shipping news: EPA and TOTE reach a deal on emissions
Fairbanks Daily News-Miner editorial
Aug 04, 2012
............... In the long run, that sounds like a fine solution, but it raises several short-term concerns.

First, what will happen to shipping rates? Converting a ship to LNG sounds like an expensive operation. Will Fairbanks residents take a financial hit from this “solution”?

Second, is this option available to other shippers? If only TOTE is able to swing the deal, other shippers still will have to burn the more expensive fuel. That likely would mean shipping prices would increase, regardless of whether TOTE starts saving money on its new fuel.......