PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA
Item No.
6b
Date of Meeting
February 1, 2011
DATE: January 24, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Stephanie Jones Stebbins, Director, Seaport Environmental and Planning
Sarah Flagg, Seaport Air Quality Program Manager
SUBJECT: Amendment 4 of Agreement 200900046 between the Port of Seattle and the Puget
Sound Clean Air Agency relating to the Northwest Ports Clean Air Strategy
Amount of This Request: $1,160,250 Source of Funds: General Fund
Est. State and Local Taxes: N/A Est. Jobs Generated: 1 FTE
Total Project Cost: $4,166,250
ACTION REQUESTED:
Request Commission authorization for the Chief Executive Officer to sign Agreement
200900046 Amendment 4 with the Puget Sound Clean Air Agency (“PSCAA”) to transfer
$1,160,250 in funds to support the implementation of the Northwest Ports Clean Air Strategy,
and to extend the end date from June 30, 2011, to June 30, 2013. Amendment 4 would increase
the total amount transferred from the Port to PSCAA since 2009 to $4,166,250.
SYNOPSIS:
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 At-Berth Clean Fuels Vessel Incentive Program, the Scrappage and Retrofits for
Air in Puget Sound (ScRAPS) program, and numerous projects to retrofit and replace cargo-
handling equipment at the container terminals. This request builds on this successful
collaboration to reduce emissions from Port operations and protect public health in the Puget
Sound region.
This amendment seeks to increase the amount of funding the Port intends to make via a series of
unrestricted grants to the PSCAA so it can advance its efforts to improve air quality in Elliott
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 24, 2011
Page 2 of 4
Bay and the Puget Sound Airshed. Agreement 200900046, which was executed on July 9, 2009,
has previously been amended 3 times:
Amendment 1: Changed the agreement end date from June 30, 2010, to June 30, 2011. Signed
on December 7, 2009.
Amendment 2: Increased funding by $300,000, for a total amount transferred of $2.6 million.
Signed on April 12, 2009.
Amendment 3: Increased funding by $406,000, for a total amount transferred of $3.006 million.
Signed on August 25, 2010.
PSCAA may spend the funds when and where it deems necessary. The Port will continue to
receive quarterly reports from PSCAA on how the funds are spent. Port staff will also request
that PSCAA report to the Commission on annual basis on its use of the funds and the impact of
its projects on reducing emissions from Port operations and improving air quality throughout the
region.
BACKGROUND:
On January 22, 2008, the Port of Seattle Commission adopted the Northwest Ports Clean Air
Strategy (“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 is
expected to 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.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 24, 2011
Page 3 of 4
FINANCIAL IMPLICATIONS:
Source of Funds
On November 9, 2010, the Commission approved the transfer of $110,250 from the Port to
PSCAA in support of the At-Berth Clean Fuels Vessel Incentive Program. If the amendment is
approved, the $110,250 will be paid out in 1
st
quarter 2011 for participating vessel visits during
4
th
quarter 2010. Additionally, the Commission approved the 2011 Seaport Budget, which
included $1,050,000 in Non-Operating Expense for funding to the PSCAA. Funding for
transfers to the PSCAA is provided by the General Fund.
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
$1,160,250
Business Unit (BU)
Containers
Effect on business
performance
Of the total amount to be funded, $110,250 was recorded as a
Non-Operating Expense in 2010 and the remaining amount,
$1,050,000, will be recorded as a Non-Operating Expense in
2011.
IRR/NPV
N/A
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 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 Port 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%).
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
January 24, 2011
Page 4 of 4
The expected environmental benefits of implementation of the Northwest Ports Clean Air
Strategy performance measures for ocean-going vessels, cargo-handling equipment, and trucks 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).
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%.
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
).
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.
OTHER DOCUMENTS ASSOCIATED WITH THIS REQUEST:
Fourth Amended Agreement Between the Port of Seattle and the Puget Sound Clean Air Agency
to Reduce Diesel Emissions.
PREVIOUS COMMISSION ACTIONS:
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.
On April 4, 2009, the Commission approved the CEO to enter into Agreement 200900046 with
Puget Sound Clean Air Agency.
On June 8, 2010, the Commission approved an additional $406,000 to be transferred from the
Port’s 2010 Budget to PSCAA, in support of the At-Berth Clean Fuels Vessel Incentive Program
On November 9, 2010, the Commission approved an additional $110,250 to be transferred from
the Port to PSCAA, in support of the At-Berth Clean Fuels Vessel Incentive Program
On January 4, 2011, the Commission adopted the Motion to Accelerate Seaport Clean Air Goals
to 2015 as an aspirational goal.
