By Mike Jacob
Pacific Merchant Shipping Association
The Port of Oakland has a problem - the California Air Resources Board has pulled a bait-and-switch on them regarding cold-ironing. First, $1 billion in voter-approved funds for port and trade corridor air quality projects is dangled in front of them for shore power infrastructure, and then the Air Board sticks them with a $120 million mandate instead that in turn makes the voter funds mostly off-limits. Even if CARB were to do the right thing and give Oakland the tens of millions requested, they'd still only be 50 percent of the way toward funding the infrastructure they need to build to comply with the State's shore power mandates.

The net result for this large and important, but nonetheless regional and discretionary, seaport? In 2014, just when the world of west coast discretionary cargo gets more competitive than ever, the Port of Oakland will potentially be either still scrambling to build the infrastructure for CARB's strict cold-ironing fleet rule or even worse, scrambling to build it and finance it.

After being burned by the state Air Board, Oakland has doggedly and creatively pursued federal Stimulus funding from every possible angle. Unfortunately, even those funding streams which seemed tailor-made for shore power were seemingly off limits. The Department of Energy had a transportation electrification pot of funds which attracted a joint application from the West Coast ports - and how much of that went to port cold-ironing? None. U.S. EPA not only failed to step up, but the local regional office had the audacity to send a representative to a recent CARB workshop and throw cold water on Oakland's cold-ironing request ... needless to say, that funding source has shorted out.

But, the good news is that all hope is not lost.

After a long string of disappointments for the whip-sawed port, U.S. Department of Transportation emerged as a possible angel. Reacting to Oakland's need to offset its environmental costs, its award of a TIGER Grant to the Oakland-Stockton-Sacramento "Green Trade Corridor" project creates a new shore power funding opportunity. Right now, these three ports are looking to share the award so Oakland can use some of the funding for cold-ironing but the majority of the funding would stay in the two river ports to help build the infrastructure for a new "Marine Highway" barge project - designed to ferry containers between Oakland and the Central Valley. While DOT's job is to build transportation infrastructure and not funding environmental mitigation projects, by embracing the "Green Trade Corridor" application it proved that it's willing to look at the intermodal system with fresh eyes and think outside the box.

With that creativity in mind, maybe it is time to rethink the emphasis placed on short-sea shipping in the Green Trade Corridor grant and re-emphasize the cold-ironing aspects of the three ports' application. The Marine Highway project is attractive - but it doesn't hold a candle to the commercial necessity represented by Oakland's cold-ironing challenge. So, while about $8 million of the $30-plus million award is currently designated for Oakland's shore-power infrastructure, a good and serious case can be made why much more of it should be.

• First, a barge-based feeder service doesn't make sense if ocean carriers aren't calling in Oakland because the cold-ironing infrastructure doesn't exist.
• Second, the additional cost and time associated with the marine highway project cannot be absorbed in rates if shippers who do use Oakland must first pay out a substantial additional fee or surcharge to fund and finance cold-ironing infrastructure.
• Third, shore power infrastructure investments will be an investment of public money in a publicly-owned asset generating purely public air quality benefits and public health improvements that also have the immediate impact of creating construction jobs and the long-term economic impact of making the port more viable and competitive.
• Fourth, only a select number of shippers and port customers will ever remotely see benefits from the establishment of the marine highway, but every single shipper and ocean carrier will be hurt if the cold-ironing infrastructure mandated by the State isn't built and financed soon.

Don't get me wrong, the Marine Highway project is a good idea. Who wouldn't want to get additional trucks off of the road, take advantage of our national asset of navigable internal waterways and help grow our local maritime economy, and reduce emissions in the process? However, planning to build the infrastructure for a good idea that may possibly come to fruition at some unknown time in the future with marginal environmental benefits while existing and critical infrastructure needs for existing customers in existing trade lanes with existing environmental mandates go wanting for funding doesn't make sense.

If we aren't able to make sure that Oakland remains a strong and viable destination for discretionary cargo then we've doomed both the actual and existing oceangoing cargo in addition to the theoretical marine highway barged cargo to the same gloomy fate.

Between a rock and a hard place, and spurned by the very environmental agencies that should have been bending over backwards to assist it, the Port of Oakland has been handed a potential lifeline by the Department of Transportation; if we don't use it wisely, all of us in the Northern California maritime community may one day be kicking ourselves that we had one last opportunity to stave off this mandate, but instead we let a Good Idea get in the way of making a critical Good Investment.

-- Mike Jacob is Vice President of the Pacific Merchant Shipping Association, an attorney and local regional planning official. PMSA is a trade association that represents ocean carriers and marine terminal operators on the West Coast. It has offices in Long Beach, San Francisco and Seattle.

-- The Cunningham Report