California’s Vessel Fuel Rules Survive Pre-emption Challenge

As States go on to establish comprehensive environmental regulatory schemes of their own, an often used tactic by industry opponents is to try and challenge the schemes under the pre-emption doctrine.  This was the strategy used by the Pacific Merchant Shipping Association (PMSA) to challenge the Vessel Fuel Rules promulgated by California Air Resources Board (CARB) in 2009.  However, the Ninth Circuit rejected the argument that California’s laws were pre-empted.  This decision does not end the challenge against the rules, as it was adopted in response to a motion for summary judgment by the PMSA; however, as the main contentions with regard to the pre-emption issue are questions of law rather than questions of fact, it would not be unreasonable to say that this decision is a good indicator of the latter stages of litigation.

The Fuel Rules mandate all ships making port calls in California to use cleaner fuels within 24 miles off the California Coast.  PMSA alleged that the Rules are pre-empted by the Clean Air Act (CAA) and the Submerged Lands Act (SLA).  The CAA claim was dispatched quickly in the opinion on the grounds that the CAA expressly permits States to adopt their own fuel regulations.  The SLA, which deals with the authority of states concerning the territorial waters surrounding the state and was used by the PMSA to challenge the 24 mile range, required greater analysis by the court.  Ultimately, given the presumption against pre-emption and the extent of the pollution confronting California, the Court found that regulating the fuel use of vessels within the 24 mile area was within California’s authority.

Los Angeles and Long Beach Ports together account for 40% of all the national imports entering the U.S.  The Court noted that “it appears uncontested that ocean-going vessels have been a major source of air pollution in California, due in large part to the widespread use of bunker fuel.” Bunker fuel is the viscous matter left over from crude oil after all the other distillates such as gasoline and diesel have been removed.  It contains an average of 25,000 ppm (parts per million) of sulfur, in comparison to 15 ppm for diesel fuel used for ground transport.  CARB’s findings indicate that the vessels within the 24 mile radius produce “15 tons of diesel particulate matter, 157 tons of nitrogen oxides, and 117 tons of sulfur oxides per day (responsible for 40% of all Sox emissions).”  It is similarly undisputed that 27 million Californians (80% of the state’s population) are exposed to these emissions which have a number adverse health effects such as increasing the risk of cancer and heart disease, as well as causing respiratory illnesses like aggravated asthma. According to CARB, upon full implementation of the rules, the amount of Sox in the air should be cut by 90%. In addition to anticipated healthcare savings and similar financial benefits, this would mean the prevention of approximately 3,500 premature deaths and nearly 100,000 asthma attacks between 2009 and 2015, in addition to reduced risk of cancer.

More discussion about the issue may be found at the NY Times Article by Felicity Barringer. The text of the 9th Circuit decision is available here.

Written by: Sinan Diniz, GIELR Staff