Plans for 1st ‘Green’ Ship Terminal in U.S. Stall

Plans to create what Los Angeles officials bill as the nation’s first environmentally sensitive cargo terminal have hit a snag, with the prospective tenant still not committed to retrofitting ships to make the project work.

One reason for the snag: City and port officials say they agreed to a landmark, $60-million court settlement with residents and environmental groups without first consulting with China Shipping, whose cooperation is a key piece of that deal.

The court-approved settlement requires that, as of next March, all ships docked at the terminal use electricity rather than diesel engines that cause air pollution. The cutting-edge technology would make the cargo terminal the first in the nation to require ships to plug in to on-shore electrical power.

When the settlement was announced March 5, a top port official said the 174-acre terminal could begin operations within weeks. The Port of Los Angeles is building the $47-million terminal, with China Shipping as the tenant. Now the terminal stands empty.

A city official said Friday that final construction work will be done July 15, but he could not say when China Shipping will take occupancy.

“The port’s working very hard to get them in,” Deputy Mayor Troy Edwards said.

The current problems do not mean the nationally acclaimed settlement is in jeopardy. But if China Shipping leaves for another port, a change of tenants would force a delay of 18 months or longer before the terminal could be occupied. The court-approved settlement requires the completion of a lengthy environmental review before a new tenant moves in.

Such delays could dampen ambitious plans for a “green” port championed by Mayor James K. Hahn, who has pledged “no net increase” of emissions at the port.

Nearby residents have long complained about diesel emissions, which are known to cause cancer. On a single day, 16 ships dock in Los Angeles and Long Beach, releasing more pollution than a million cars.

The settlement came in a lawsuit brought against the city by residents and environmental groups seeking to lessen pollution from diesel ships, trucks and dock equipment. A court ruling in the case blocked the terminal’s opening, and city and port officials sought to end the impasse by agreeing to the pact. China Shipping was not a party to the suit.

A spokesman for the mayor confirmed Wednesday that city and port officials did not consult China Shipping before agreeing to the pact.

Nor did the city know that China Shipping leases, rather than owns, most of its ships, said Deputy Mayor Matt Middlebrook. Converting leased ships could pose significant problems.

A strict confidentiality agreement forbade the city from discussing settlement negotiations with China Shipping, Middlebrook said. But a lawyer for plaintiffs in the case said that would not have been a problem. The city simply could have asked the plaintiffs for permission to talk to the shipping firm, said Gail Ruderman Feuer, a senior attorney with the Natural Resources Defense Council and a major player in the talks.

“It actually never dawned on us that they weren’t talking to China Shipping,” Feuer said. She said plaintiffs named China Shipping as a party in the case. “So it surprised me to hear that China Shipping was not consulted before the deal was reached,” she said.

Feuer said she continues to believe that the “plug-in” option for ships is a viable technology that will work in Los Angeles and ports nationwide. The current delay, she said, is being caused by factors other than the costs of creating a green terminal.

City officials say they remain confident that China Shipping, formally known as China Shipping NA Holding Co. Ltd., will agree to the key changes required by the pact. But the port still does not have the full commitment of China Shipping to convert its fleet of container ships, a process estimated to cost $300,000 or more per vessel.

Port Executive Director Larry Keller confirmed this week that he flew to Shanghai in May for talks at the company’s home office. He said the firm has agreed to test new technology called for in the settlement by equipping two new ships so they can run on electricity while in port. The port will pay for that work with some of the $5 million earmarked in the settlement for retrofitting.

That commitment to two ships is a major step forward, Keller said.

Mayor Hahn, in an interview Tuesday, said he was not aware of the new complications surrounding China Shipping’s tenancy.

Nor did he know that Keller had gone to China, he said. He added: “We came up with a settlement. It’s obviously going to take some time to implement, and I’m certainly committed to everything that we’ve worked so hard to come to agreement on.”

Peter Talbot, operations director of China Shipping North America, said Wednesday that he has not yet heard from the Shanghai home office about the agreement for the new ships.

“I can tell you there are ongoing talks and negotiations,” Talbot said. “There are a large number of technical issues.”

Two ships would represent only a fraction of the company’s fleet. China Shipping is an international concern with more than 100 ships. During the next six weeks, for example, more than 30 China Shipping vessels will dock at Los Angeles, according to figures supplied by Talbot.

The settlement was crafted to end a long legal battle.

Residents and environmental groups sued the port in June 2001, claiming that the port failed to conduct environmental impact reviews for the project it was building for China Shipping. A panel of the state’s 2nd District Court of Appeal issued an order in October 2002, halting construction until the environmental reports were conducted. At the time, the terminal was 90% complete.

Worried that the delay would prompt China Shipping to leave for another city, port and city officials entered into negotiations with the plaintiffs.

They jointly announced a settlement March 5 calling for an array of projects with a cost of $60 million, most of them designed to curb diesel fumes and other air pollution. All work is to be funded with port revenue rather than tax dollars.