PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA – STAFF BRIEFING
Item No.
6a
Date of Meeting
April 14, 2009
DATE: April 3, 2009
TO: Tay Yoshitani, Chief Executive Officer
FROM: Charles Sheldon, Seaport Managing Director
Stephanie Jones Stebbins, Senior Mgr., Seaport Environmental Programs
SUBJECT: Agreement with the Puget Sound Clean Air Agency to support the Northwest
Clean Air Strategy
ACTION REQUESTED:
Request for authorization for the Chief Executive Officer to enter into an agreement with Puget
Sound Clean Air Agency to transfer $2.3 million from the Port’s 2009 operating budget to
support the implementation of the Northwest Ports Clean Air Strategy
SYNOPSIS
The purpose of this memo is to request authorization for the Chief Executive Officer to enter in
to an agreement with Puget Sound Clean Air Agency to transfer $2.3 million from the Port’s
2009 operating budget to support the implementation of the Northwest Ports Clean Air Strategy.
The Port of Seattle and PSCAA have a long history of collaborative partnerships to quantify,
understand, and reduce emissions from port-related operations. Examples of these partnerships
include the 2005 Puget Sound Maritime Air Emissions Inventory, the Northwest Ports Clean Air
Strategy, the Holland America Line and Princess Cruises shore power projects at the Terminal
30 Cruise Facility, and numerous projects to retrofit and replace cargo-handling equipment at the
container terminals. This request builds on these successful collaboration to reduce emissions
from port operations and protect public health in the Puget Sound region.
The Port intends to make a series of unrestricted grants to the PSCAA so it can advance its
efforts to improve air quality in Elliott Bay and the Puget Sound airshed. PSCAA may spend the
funds when and where it deems necessary. The Port would receive reports on how the funds are
spent. Additionally, PSCAA will present their staff recommendations on a truck buy back and
scrap program.
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
April 3, 2009
Page 2 of 4
BACKGROUND
On January 22, 2008, the Port of Seattle Commission adopted the Northwest Ports Clean Air
Strategy, a voluntary and collaborative effort of the Ports of Seattle, Tacoma and Vancouver
(B.C.) to reduce maritime and port-related emissions that affect air quality and climate change in
the Pacific Northwest. Developed in close collaboration with the Puget Sound Clean Air
Agency, Washington Department of Ecology, US Environmental Protection Agency, and
Environment Canada with input from stakeholders, customers, and citizens, the Strategy will
result in emission reductions to further improve air quality throughout the region.
The strategy has three primary emissions reduction objectives:
Reduce maritime and port-related air quality impacts on human health, the environment and
the economy;
Reduce contribution to climate change through co-benefits associated with reducing air
quality impacts; and
Help the Georgia Basin-Puget Sound region continue to meet air quality standards and
objectives.
The Strategy builds on the significant efforts the Ports of Seattle, Tacoma and Vancouver, BC
have invested in emission reductions and establishes common short-term (2010) and long-term
(2015) performance measures for further reducing emissions from cargo-handling equipment,
rail, harbor vessels, ocean-going vessels, and trucks.
ENVIRONMENTAL BENEFITS
Puget Sound Clean Air Agency has identified reduction of diesel particulate matter (DPM)
emissions as one of their top priorities because of the associated public health and environmental
impacts. In 2005, the Port of Seattle conducted the Puget Sound Maritime Air Emissions
Inventory (EI), which located and quantified DPM from maritime sources in the greater Puget
Sound region. Based on the results of the EI, in 2005 the Port of Seattle operations accounted for
9% of all of the DPM emitted in the four county Puget Sound Clean Air Agency region (the
relative contributions to that 9% included ocean-going vessel hotelling: 44%, cargo-handling
equipment: 32%, rail: 12%, ocean-going vessel maneuvering: 9%, trucks: 3%, fleet vehicles
<1%, and harbor vessels <1%).
The expected environmental benefits of implementation of the Northwest Ports Clean Air
Strategy performance measures for trucks, cargo-handling equipment, rail, harbor vessels, and
ocean-going vessels is a reduction in air pollutants of DPM, oxides of nitrogen (NO
x
), volatile
organic compounds (VOCs), and sulfur oxides (SO
x
), as well as a reduction in fuel consumption
and emissions of greenhouse gases (GHGs).
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
April 3, 2009
Page 3 of 4
Trucks: A truck that meets 1994 U.S. EPA particulate matter (PM) emission standards is 6 to 2.5
times cleaner than a truck built before 1994. Similarly, a truck that meets 2007 U.S. EPA PM
standards is 10 times cleaner than a truck built between 1994 and 2006, and 5 to 60 times cleaner
than a truck built before 1994.
Cargo-Handling Equipment: Exhaust retrofits installed on cargo-handling equipment reduce
emissions of particulate matter (PM) and oxides of nitrogen (NO
x
). Switching from off-road
diesel fuel (500 parts per million sulfur [ppm]) to ultra-low sulfur diesel fuel (15 ppm) reduces
emissions of sulfur oxides (SO
x
).
Ocean-Going Vessels: The At-Berth Clean Fuels Vessel Incentive Program (ABC Program)
incentivizes the use of lower-sulfur marine fuels, not to exceed 0.5% sulfur content, in auxiliary
engine operations while at a Port of Seattle berth. Switching from high-sulfur marine fuels
(~2.7% sulfur) to lower-sulfur marine fuels (not to exceed 0.5% sulfur) is expected to reduce
emissions of sulfur dioxide (SO
2
) by 95% and particulate matter (PM) by 60%.
FINANCIAL IMPLICATIONS
Source of Funds
The 2009 Seaport Operating Budget included $800,000 ($600,000 in Operating Expense and
$200,000 in Non-Operating Public Expense) for the implementation of the Northwest Ports
Clean Air Strategy. The additional $1,500,000 amount requested will create an unfavorable
expense in 2009 to the extent it is used in 2009. If costs are anticipated for 2010 they will be
included in the budget for 2010.
Financial Analysis Summary
CIP Category
Not applicable
Project Type
Environmental
Risk adjusted Discount rate
N/A
Key risk factors
Since the grants are unrestricted and the reporting of
expenditures is subsequent to disbursement, there is a risk that
the funds are not spent in way that the Port might consider
most effective and efficient.
There is a risk that the proposed uses do not reduce emissions
to the extent expected. This risk is mitigated by the expertise
and past successes of the Port and PSCAA in understanding
and reducing emissions.
Project cost for analysis
$2,300,000
Business Unit (BU)
Containers
COMMISSION AGENDA
T. Yoshitani, Chief Executive Officer
April 3, 2009
Page 4 of 4
Effect on business
performance
The estimated total project costs will have the following impact on
Net Operating Income (NOI) to the extent funds are expended in
2009:
NOI (in $000's) 2009 2010 2011
NOI* ($2,300) $0 $0
Depreciation $0 $0 $0
NOI After Depreciation ($2,300) $0 $0
*To the extent that some or any of the uses qualify, certain of the expenses may
be recorded as a Non-Operating Public Expense.
IRR/NPV
N/A
PREVIOUS COMMISSION ACTION
On February 16, 2007, the Commission passed a series of environmental motions that required,
in part, that staff present an air quality action plan for Commission approval.
On January 22, 2008, the Commission adopted the Northwest Ports Clean Air Strategy.
