Saturday, February 19, 2011

City Postpones "Shore Power" Resolution Hearing - Carnival Breaks Records - Residents Left Waiting ...... and Continuing To Pay With Their Health

Photo by Joshua Kristal (edited), South Brooklyn Post

As I noted in the updates to my previous post, the City's Committee on Waterfronts has postponed its hearing on the resolution (here) urging the Public Service Commission to establish a new rate of electricity that would allow the use of shore power for the ships visiting the Brooklyn Cruise Terminal in Red Hook. The new date for the hearing is tentatively set for 1pm., March 8th, at the same location - 250 Broadway, 16th Floor. Open to the public.

While we're waiting - yet again - for further action to be taken on this long awaited plan, I think it's helpful to reflect on a couple of pieces of news that are pertinent to this issue.

I'm pleased to see that the "South Brooklyn Post" is continuing to do a great job of covering the story of the stalled process that is holding up the implementation of the shore power plan in Red Hook. After covering the story of cruise ship pollution when the rest of the city's media was AWOL, and after covering the protest that was held in January that urged the breaking of the impasse that was holding this plan up, this week they did a follow up to their initial story, which was published in November, that went into further detail about the conflict. The most recent article, "Big Money Ignores Brooklyn Air" by Lisa M. Collins, basically asks this question: If Carnival are doing so well right now - making huge profits ($11.3 Billion over the last 5 years, $2 Billion in 2010) while paying very little in tax (1.1%, in fact) - why is it such an imposition to ask them to pay a little more, a tiny percentage of their Queen Mary 2 sized profits, to pay for the ongoing costs of using clean, green-house gas reducing electricity while in port, instead of idling their engines and using the dirtiest form of diesel on the planet, the burning of which spews carcinogenic and asthma inducing substances into our city's air, and into our kids' lungs?

This article clearly puts at least some of the onus for the resolution of the shore power stalemate on the shoulders of the cruise operators, Carnival.

And it's only fair.

You know, for the most part, in my writing on this blog, I've tried not to demonize the cruise ships, their operators and billionaire owners. In full disclosure, I've worked on cruise ships in the past as a musician, I've taken a cruise with my family, I've enjoyed the cruising experience on the whole and haven't had any particular animosity towards them. When the cruise terminal opened at the end of my young family's residential street, I, like most of my neighbors, wasn't against it. We all thought it could bring a little more vitality to our waterfront and our neighborhood. However, after that "vitality" never materialized, greatly due to the expedient and shoddy planning of the terminal and its site (without shore power), and since finding out more about the harmful emissions from the visiting ships and generally about the cruise industry and their practices - particularly their patchy environmental record - I've obviously become more ambivalent about it.

Still, the reality is that recently many of the cruise ship operators have been trying to clean up their environmental act - at least a little. (See Friends of the Earth's 2010 "Cruise Report Card" here). For example, some have been reducing or eliminating practices like the disposal of rubbish and waste (including sewerage) at sea. To their credit, Carnival and others are converting some of their ships to accept shore power, as is the case with a number of the Carnival ships that are based on the West Coast, so that they can eliminate the practice of idling in port. Unfortunately, none of the cruise lines, as far as I can see, are volunteering to switch to the use of cleaner low-sulfur fuel while out at sea, but the ships that cruise in the continental waters of the US and Canada will ultimately be required to burn cleaner fuel in those waters, due to the future implementation of the North American Emissions Control Area.

I get it. They're a business. They're just trying to make money, and according to the City of New York, the cruise industry is bringing money to the city and benefiting us all.

But, really, in an environment where the cruise operators are doing so well, and where there is clearly the ability on their part to pay a fair portion of the cost of using shore power, why are Carnival being so recalcitrant?

How well are Carnival doing? Well, apart from the facts about their profits (and miniscule taxes) that are noted above and in this NY Times article (here), there is this recent article in USA Today (here) that notes this staggering, record-breaking information -

Carnival Cruise Lines said it set a one-week reservations record, booking 165,308 customers between Feb. 7-13, eclipsing its previous one-week reservations record set nearly four years ago.

The line said bookings were at "unprecedented levels" across its fleet.

It's good times for Carnival. But, while many of the parties involved in this deal to "plug in" the cruise ships at Brooklyn seem to be making some concessions to "get it done", Carnival hardly seems to be coming to the party.

The New York City Economic Development Corporation, the City agency that built the new cruise terminal and brought the polluting ships to our neighborhood, has been trying to strike a deal with the New York Power Authority to subsidize the rate of electricity supplied to the ships to make the practice more economically viable. The Port Authority has allocated $12 Million for the building of the shore power infrastructure. The EPA, through its Diesel Emissions Reduction (DERA) program, has granted nearly $3 Million for the same. (Side note: Worryingly, for proponents of cleaner ports and those wanting to reduce the health burden of port pollution on our most vulnerable, DERA was given no mention in the recently released US budget proposal). Our legislators are pushing for an end to the "idling ships and idling negotiations", as they said at the recent protest, and with the NY City Council Shore Power resolution, they are urging the Public Service Commission to establish a new "shore power tariff" to allow the cruise ships, in the long term, to "plug in" without economic disincentive.

A lot is being offered.

So far, Carnival's only commitment has been to retrofit their ships to accept shore power, at a cost of $1 - 2 Million per ship. That sounds like a decent offer on the surface, but aren't Carnival getting off pretty easily? They've already done many of these conversions on their other ships, and isn't it likely that they'd have to do this with them all anyway because many ports, including some on the West Coast, are making it mandatory to for cruise ships to plug in while in port. Also, as I've mentioned before, there is the coming regulation that would force ships of all types to use cleaner, more expensive diesel in US waters, so the cost differential for using shore power will eventually be far less - a further incentive for its broad use. Additionally, as our cities and nation as a whole tries to reduce CO2 and other greenhouse gasses, and with the EPA playing a role in regulating these emissions, (despite push-back in the Republican House), the use of shore power will, no doubt, be an obvious and effective method being encouraged to reduce these significant emissions from all types of ships while in port, while reducing our reliance on fossil fuels.

My point is, given these factors, and with all of this news about Carnival and the cruise industry as a whole doing so well, why shouldn't we expect them to do their bit to get this shore power deal done - soon?

It's troubling enough to know that Carnival, like many cruise lines, is using every loophole they can to minimize their taxes and reduce their operating costs - like being registered in Panama, or not having to comply with US labor laws - while benefiting greatly from the tax payer-funded services and infrastructure of the cities they visit, like New York. It's hard enough to hear Carnival cry "poor" and unable to pay for shore power when they're operating luxury cruise ships like the Queen Mary 2 and doing business at a record breaking, "unprecedented" pace - in a recession!

While they're getting away with all of that, isn't it at least fair to ask them to give back a little to the communities that they call their neighbors?

What's at stake here isn't just Carnival's bottom line. It's the health of the residents of the communities in which they operate. As I wrote in one of my previous posts, when I criticized the callousness of the way Con Edison and the Public Service Commission were weighing up the "cost" and "fairness" of establishing a shore power rate, this isn't just about money.

You can certainly count the costs of the extra pollution that the ships are bringing in monetary terms. The Port Authority did this in their recent testimony to the Public Service Commission, stating that the avoidable cruise ship pollution was costing Brooklyn residents an estimated $9 Million per year in monetized health costs.

But it's not just about the money.

It's about the boy on our block, a friend of my 7 year old son, who is suffering from increasingly regular bouts of asthma, often ending in a visit to the emergency room.

It's about the three kids in the Red Hook Houses that died from asthma attacks just last year.

It's about the two women on our block, and more in our community, who have recently developed cancers.

It's about the 40% childhood asthma rate, and cancer clusters that occur in our neighborhoods.

Can Carnival - and the others who are dragging their feet - tell these people that the ship emissions are playing no role in these negative health outcomes? Can Carnival tell our residents that they are doing their business and earning their massive profits at no cost to their neighbors - our community, our residents, particularly our most vulnerable?

At a time when there's a lot of talk about shared sacrifice, I think it's clear that our community has done its fair share. We've been bearing the burden of the many hundreds of tons of new pollution that has been emanating from the ships since they started calling Red Hook home in 2006, all in the name of "economic development".

Now it's time for those, like Carnival, who are benefiting from this economic development and are doing very well, to do their bit to make sure our residents don't have to carry this cost any more - in their health or otherwise.

It's Carnival's turn - even if it means taking a small hit to their ever-growing profits.


Thursday, February 10, 2011

Council of the City of New York To Hold Hearing on Shore Power Resolution, while Con Edison asks, "Who Should Pay?" (NEW UPDATE - HEARING POSTPONED!)


: An article in the Metropolitan Waterfront Alliance's excellent on-line publication, "Waterwire", titled, "CITY COUNCIL ADDS TO CLAMOR CALLING FOR ELECTRICAL SHORE POWER IN BROOKLYN" (story here), notes that the City Council's Committee on Waterfronts hearing on the shore power resolution is open to the public.

Details: Thursday, February 17, 1pm, 250 Broadway, 16th Floor.
In my last post, I wrote about the squabbling that continues to stall the plan to bring shore power to the Brooklyn Cruise Terminal in Red Hook, Brooklyn.

This squabbling centers around the debate about who should pay for the added cost of powering the ships by using shore generated electricity compared to the cost of burning the cheapest and dirtiest form of diesel (bunker fuel) to idle their engines while in port, as the cruise ships (and every other cruise and container ship visiting the Ports of NY and NJ) currently do.

There are those that think that Carnival, the operators of the cruise ships, who are making huge profits (while paying very little tax), should just "cough up" and pay the added cost of using electricity. It's been asserted that this is only fair because there is coming regulation that will eventually create an Emissions Control Area (ECA) around the continental waters of the US and Canada that would stipulate that ships had to use a cleaner form of diesel in those waters, and therefore while idling in port. This fuel will be more expensive, and so the difference between paying current rates of electricity, as supplied by Con Ed in Brooklyn's case, and using the cleaner, more expensive fuel would be negligible, according to many - including a commenter on my last post. So the argument is, the ships should pay for the clean, green-house gas and harmful emissions reducing electricity now, because they'll just have to use the more expensive fuel in the future.

The alternate argument is that Con Ed should supply a cheaper rate of electricity so as not to create an economic deterrent to the ships' operators for the use of shore power. This is a strategy that cities on the West Coast have taken to incentivize the use of shore power with all types of ships in many of their ports, including ones that Carnival cruise ships use now.

Con Edison has not been willing, so far, to go along with this idea. This is why there has been this drawn out process at the Public Service Commission regarding a case that has been requesting the creation of a special "tariff", or rate of supply of electricity, which would specifically address the requirements of the cruise ships. The argument has been that the ships would be creating new business for Con Ed, business that they would not otherwise have, and that the unique needs of the ships - i.e., plugging in for short periods (12 or so hours at a time), and their ability to generate their own power if there was any interruption of shore power supply, etc. - warrants the creation of a special reduced rate tariff.

There have been many supporting this idea.

In their original testimony to the Public Service Commission, the EPA made important statements about the harmful health impacts of ship emissions (see them on the side bar of this blog), and made these further points supporting the establishment of a "shore power tariff" -

  • e. Implementation of a shore power tariff is consistent with economic development in New York City.
  • f. Implementation of an appropriate Shore Power Tariff in New York City would provide an impetus for ship owners to invest in ship-side Shore Power equipment and for widespread use of this technology in other ports on the East Coast.
  • g. None of the Company's tariff's accurately account for the unique service characteristics of ships that dock in New York City.

There have been others making similar points - from the Port Authority to many of our elected officials - some who have made their argument in written testimony to the Public Service Commission in support of the establishment of the new tariff.

However, the Public Service Commission - over a year after hearing these arguments - has yet to act, and in a statement made by their staff, quoted in a recent NY Times "Questions About New York" column by Michael Pollock (here), the PSC claims that "the way Con Edison’s delivery rates are currently structured posed “neither a barrier to, nor an unwarranted incentive for” the kind of electrical facilities shore-based power would need."

Not exactly encouraging.

In that column, in a section that deals with a question about the stalled shore power plan, there is also a quote from Con Edison that explains their recalcitrance on this matter, stating that they are reluctant to create a new shore power tariff because they are concerned that setting a "special rate" for one group, i.e. the operators of the ships, may unfairly burden another, i.e. homeowners.

“How do you come up with a fair rate that doesn’t burden other customers?” Chanoch Lubling, Con Edison’s vice president of regulatory services, said in an interview. Shore-based power through feeder connections “happens to be a great idea,” he said. “I think the big debate here is who should pay for their cost.”

Unfortunately, the representative from Con Edison doesn't seem to recognize the fact that there is already a cost being paid. It's a cost being borne by the residents of port-side communities such as Red Hook, Carroll Gardens and others. A real health cost.

Nowhere in their equation of "fairness" does Con Ed acknowledge the real health effects that our communities are suffering - in asthma, cancer, heart disease and premature mortality. This burden is being carried by our most vulnerable - children, the elderly, low income and minority communities, people with lung disease - and the Port Authority has stated in testimony to the PSC that the switch to shore power at the Brooklyn Cruise Terminal would save Brooklyn residents yearly health costs "approaching $9 Million".

If the concerned parties could work out their differences and finalize this shore power deal, the burden of these health impacts could finally be lifted from our communities.

The concern about those real health impacts is pushing some of our representatives in the Council of the City of New York to present a resolution that, as Resolution 463 states, "urges the New York State Public Service Commission to immediately set a competitive electrical rate at the Brooklyn Cruise Terminal in order to facilitate the use of shore-based electrical power by cruise ships that wish to cease idling in ports and reduce the amount of emissions released into the surrounding neighborhoods."

The entire resolution is at the bottom of this post. It cites many of the facts I have been articulating in this blog and makes a compelling case for the immediate creation of a "shore power tariff".

The Committee on Waterfronts will be holding their hearing on the resolution on February 17, 2011 at 1:00PM at Council chambers, 16th Floor, 250 Broadway, New York, NY. This hearing is open to the public.

Hopefully the resolution will spur some action and push forward a process that will lead to a long-term solution. But while we're waiting for the PSC to rule on this - and given their track record, it might take a while - something needs to be done to get the shore power plan up and running, a.s.a.p.

The bottom line is, at least in the short term, someone might need to pay - whether it's Carnival who seem to be doing pretty well right now, or perhaps the NYC Economic Development Corporation (who could subsidize Carnival or Con Ed in the short term), or, hey, Con Ed could just create a cheaper rate for the ships and know that they're getting a whole lot of new business, and maybe more to come with what should be the expansion of shore power throughout the Ports of New York.

What is clear is that it's unfair to ask our most vulnerable to pay this cost any longer. Kids with asthma, the elderly, minority communities and people with lung disease shouldn't have to bear this burden any longer.

Action is needed - right now.

Here's the resolution -

Res. No. 463

Resolution urging the New York State Public Service Commission to immediately set a competitive electrical rate at the Brooklyn Cruise Terminal in order to facilitate the use of shore-based electrical power by cruise ships that wish to cease idling in ports and reduce the amount of emissions released into the surrounding neighborhoods.

By Council Members Nelson, Chin, Fidler, Gentile, James, Koppell, Lander, Palma, Rose, Sanders Jr., Williams, Rodriguez, Seabrook, Levin, Gonzalez and Halloran
  • Whereas, Bunker fuel, a heavy petroleum product that is left behind after the distilling process, is one of the dirtiest fuels and is used to power most cargo ships because it is much cheaper than other fuel sources; and
  • Whereas, Bunker fuel releases gases such as carbon, nitrogen oxides, and sulfur dioxide when it is burned and therefore, 43% of particulate matter in ports are due to marine vessels; and
  • Whereas, According to a study published in the journal of the American Chemical Society, pollution from cargo ships in 2002 was linked to the premature deaths of 60,000 people worldwide; and
  • Whereas, When cruise ships dock, their engines idle at the terminal in order to keep the electrical systems on the ship running; and
  • Whereas, Environmentalists believe that a ship docked for one day emits as much exhaust as 10,000 cars; and
  • Whereas, To avoid idling, ships have begun to employ a process called shore power, or cold-ironing, in which a ship plugs into an electrical power supply at the port, allowing the ship to turn off its engine; and
  • Whereas, Shore power permits a large extension cable from the pier to be plugged into the ship, giving it power to operate its machinery without running the engine; and
  • Whereas, According to the Port Authority of New York and New Jersey, implementing cold-ironing at the Brooklyn Cruise Terminal would reduce annual nitrogen oxide and sulfur dioxide emissions by 100 tons each, particulate matter by 6 tons, and carbon dioxide emissions by almost 1,500 tons; and
  • Whereas, The Port Authority also estimates that reducing emissions by switching to shore power would create $9 million per year in health benefits; and
  • Whereas, Shore power is already in use at ports such as San Francisco, Los Angeles, Long Beach, and San Diego; and
  • Whereas, In order to bring shore power to the Brooklyn Cruise Terminal, the Port Authority has committed to invest $15 million in capital for infrastructure improvements and the Environmental Protection Agency awarded the Port Authority $2.85 million to support improvements as well; and
  • Whereas, Carnival Cruise Lines has also committed to investing $1 million to $2 million per ship to enable the vessels to connect to electric power; and
  • Whereas, A major obstacle, however, that is standing in the way of implementing shore power at the cruise terminal is the price of electric power, which can cost millions of dollars more than leaving the ship idle; and
  • Whereas, Con Edison's electric rates for shore power are too costly and must be lowered in order to be competitive with the cheaper bunker fuel that is used while idling; and
  • Whereas, New York City and the Port Authority have both lobbied the New York State Public Service Commission to institute a shore power tariff that is economically viable for cruise ships; and
  • Whereas, An appropriate shore power tariff in New York City would discontinue the use of high polluting diesel engines, improve the air quality of Brooklyn and New York City in general, and provide the potential for the establishment of shore power throughout the ports of New York; now, therefore, be it

Resolved, That the Council of the City of New York urges the New York State Public Service Commission to immediately set a competitive electrical rate at the Brooklyn Cruise Terminal in order to facilitate the use of shore-based electrical power by cruise ships that wish to cease idling in ports and reduce the amount of emissions released into the surrounding neighborhoods.

Saturday, February 5, 2011

Despite Carnival paying only 1.1% Tax, the Quibbling Continues about Who Pays For the Cost of Shore Power at the Brooklyn Cruise Terminal

There was a New York Times article this week, "The Paradox of Corporate Taxes", by David Leonhardt, that detailed how little many corporations pay in taxes in this country due to the exploitation of loopholes in the tax code - this being despite the US having an official corporate tax rate higher than many other countries.

The example that Mr. Leonhardt cites as an example of this practice of tax minimization - an "extreme case", as he puts it - is Carnival Corporation, the operators of Carnival Cruises, the company that operates the cruise ships that use the Brooklyn Cruise Terminal in Red Hook, Brooklyn.

The NY Times article states -

"Over the last five years, the company has paid total corporate taxes — federal, state, local and foreign — equal to only 1.1 percent of its cumulative $11.3 billion in profits (That's profits folks - not earnings - Ed). Thanks to an obscure loophole in the tax code, Carnival can legally avoid most taxes."

It's also noted that Carnival operates with the benefits of many tax payer funded services - Customs officers and services; infrastructure, including roads, bridges and terminals; US Coast Guard services, etc. - and that Carnival "wouldn't have much of a business" without these publicly funded services. Anyone who has ever wondered who was paying for the NY City Police who park their cars to stop traffic going through to Summit Street from Hamilton Ave at Van Brunt Street and control traffic at the Bowne Street intersection while the ships are in - well, if Carnival aren't paying their fair share of taxes, I guess we have our answer.

We are.

Now, many corporations are benefiting from these corporate tax loopholes, but the reason that the revelations about Carnival's tax avoidance seem so egregious, is that they come at at time that there is a squabble about who should be paying for the ongoing costs of supplying "shore power" to the visiting ships at the Brooklyn Cruise Terminal. This is in relation to the already funded plan to build infrastructure and implement the practice of "cold ironing" at the terminal, allowing the visiting ships to stop idling their dirty-diesel burning engines while in port, as they currently do.

In my previous post, I wrote of the rally that was held in January, convened by many local politicians and attended by representatives from the community, demanding that the drawn out process that was taking place to resolve the differences between the various parties involved - The City of New York, The NYC Economic Development Corporation, Con Edison, The New York State Public Service Commission, Carnival Cruise Lines and others - finally come to a close by getting an agreement to finally get this deal done.

The message from that rally was that this process was taking too long. Despite all parties being in agreement about the merits of the "shore power" plan, and various entities, including the Port Authority, the NYCEDC, Carnival Cruise Lines the EPA and others, committing real funds to build the infrastructure and support the plan, many were still quibbling about who was going to pay for the ongoing operating costs, or whether the Public Service Commission should set a new rate of electricity supply from Con Edison to make this plan more economically viable, or whether Carnival should just pay the additional cost of electricity vs. diesel - yadda, yadda, yadda.

The quibbling continues.

The City of New York will be holding a hearing on Monday, Feb. 17th, during which there will be a resolution presented, as the text in Res. No. 463 states, "urging the New York State Public Service Commission to immediately set a competitive electrical rate at the Brooklyn Cruise Terminal in order to facilitate the use of shore-based electrical power by cruise ships that wish to cease idling in ports and reduce the amount of emissions released into the surrounding neighborhoods."

Full Google Docs text of the resolution here. (It outlines many of the facts and figures I have been trying to disseminate in this blog).

The Public Service Commission moves very slowly and this may be a long process - this case has already been at the PSC for over a year - but, if this resolution has any influence, maybe there's hope that something will get resolved concerning the long term operation of the terminal.

But, we also need to make sure something gets done in the short term - like right now.

We've already waited 5 years .... it's 5 years since the "state of the art" terminal was built .... it's already hundreds of avoidable tons of carcinogenic SOx and smog causing NOx later ... it's already tens of tons of avoidable asthma inducing Particulate Matter later .... it's already $27 Million in avoidable health costs later .....

We need someone to step up to take these burdens off our communities. But, at least in the short term, who will pay?

Will it be the NYCEDC who built the terminal without this already proven "shore power" infrastructure that was being used up and down the West Coast a decade before? Will it be the Port Authority who own the terminal, but who, according to one of their spokesmen, weren't aware of the pollution mitigating practice of "cold ironing" till 2007 (despite the U.S. Navy using it for decades)? Will it be the City of New York that benefits economically from the visitors that the cruise ships bring ($145 Million last year), but, despite the proclaimed "green" credentials of the Mayor himself, seems slow to acknowledge and address the health burdens the operation of their ports - cruise, container, etc. - puts on the residents of the city? Will it be Carnival, a company that in the 5 years since this terminal was built has seen profits of $11.3 Billion, while paying little tax, but can't seem to "cough" with the added cost of using electricity while in port, instead of burning extra dirty diesel?

No one seems to be putting up their hand.

Meanwhile, the residents of Brooklyn are still breathing in these carcinogenic and otherwise harmful substances. The residents of Brooklyn, especially our most vulnerable, are paying with their health, and as the statement of the Port Authority to the Public Service Commission states, "we estimate that the annual health benefits emissions reductions arising from a switch from on board generation to shore power at the BCT (Brooklyn Cruise Terminal), adjusted for Kings County, approaches $9 Million".

That's a $9 Million Per Year health cost to Brooklyn residents - to our kids - to our elderly - to our minority communities - you know, in cancer, asthma, heart disease, premature mortality - right now.

I wonder how much of that is covered by the 1.1% tax rate that Carnival currently pays?