Panama Canal Expansion – Panacea or Problem for Ports in Texas?

Panama Canal — Photo by Antonio Zugaldia, from Flikr

Everything is bigger in Texas, they say. Now, with the expansion of the Panama Canal this summer, we may start to see bigger ships in some Texas ports, too. These bigger ships would represent more business for Texas, but there could be a downside. Since these ships have huge engines that emit dangerous pollutants, we could see – and breathe – dirtier air. That’s why it’s so important for us to carefully manage these changes.

In late June, the first post-Panamax ship traveled through the newly-expanded Panama Canal, signaling a new era for mega-containerships and other super-sized vessels that can carry up to three times as much cargo as before. (“Panamax” was the term for the Panama Canal Authority’s size limit for ships traveling through the canal, The new mega-ships are sometimes called “Neopanamax” vessels.)

The expansion of the Panama Canal means that the near monopoly held by west coast ports, like the Ports of Los Angeles/Long Beach and others, on container trade from Asia may be ending. Instead of offloading cargo in southern California and relying on trains and trucks to transport goods to inland regions in the U.S., shippers will now be able to offload containers from Asia at U.S. ports on the Gulf or East Coast — taking advantage of potentially lower shipping costs and improved economies of scale.

Potential Diversion of Cargo from the West Coast to Texas

No post-Panamax vessel has called at a Texas port via the Panama Canal — yet.

But Texas ports stand to benefit if shippers moving goods from Asia decide to divert cargo from the U.S. West Coast through the newly-expanded canal.

Besides being geographically closer to Asia than East Coast ports (such as Savannah, Charleston, Norfolk, and New York),Texas is home to four major metropolitan areas experiencing rapid growth —  Houston, Dallas-Fort Worth, San Antonio, and Austin. These fast-growing cities help to support strong demand for consumer goods, many of which come from Asia.

Texas is also a powerhouse in the oil and gas industry. Houston is the petrochemical capital of the country, as well as home to several major active oil and natural gas fields. Exports of liquefied natural gas (LNG) could also attract larger vessels — of the nearly 70 Neopanamax vessels transiting the expanded Panama Canal since June, two were LNG carriers, and 24 were liquefied petroleum gas carriers.

Why Big Ships Could Mean Bigger Problems for Texas’ Air Quality

Texas is home to 18 ports along the Gulf Coast. Seven Texas ports are ranked in the top 50 nationally for total tonnage, according to the US Department of Transportation:

• Port of Houston
• Port of Beaumont
• Port of Corpus Christi
• Port of Texas City
• Port Arthur
• Port Freeport
• Port of Matagorda/Point Comfort.

Most of these ports face air quality challenges, and are located in regions that have not been able to meet health-based air pollution standards for ground-level ozone (also known as smog).

Newer mega-containerships have been designed to carry two to three times as many containers as those built to travel through the Panama Canal before its expansion (the “Panamax” vessels). Since engine power does not have to scale up at the same rate as cargo capacity, they use engines that are only ten percent larger.

Because the size of an engine has a direct impact on emissions, the expectation is that, all things being equal, these ships would increase emissions by ten percent over conventional “Panamax” ships – but would carry up to 300 percent more cargo (so fewer ships would be needed). Newer ships are also required to meet International Maritime Organization requirements that limit emissions from ship exhaust, so newer ships typically have cleaner engines.

If these newer ships are able to carry more cargo and have newer engines that are cleaner, then why should we be worried about their impact on air quality in Texas?

It’s because ship emissions are the largest source of pollution at ports, and emissions from increased ship traffic at Texas ports could negatively impact the air we breathe.

Emissions from ships come from the large propulsion engines used for transiting and maneuvering, as well as auxiliary engines for hoteling while the ship is at dock. Emission inventories commonly show more than half of nitrogen oxides and particulate matter emissions at ports coming from ocean-going vessels, with the remaining emissions shared among cargo-handling equipment, drayage trucks, locomotives, and harbor vessels.

This means that if either more ships come to call or ships stay longer, we could see deterioration in air quality from more emissions of harmful pollutants in Texas. Either of the following scenarios could happen:

1. Bigger ships take more time to load and unload, which can increase emissions of ships hoteling, as well as cargo-handling equipment and other sources, if landside operations are not able to handle the increased cargo volume. This can also contribute to congestion issues.
2. Bigger ships may offload cargo to smaller ships (also called “transshipment”) at Texas ports, meaning we could see a higher volume of ships because of the additional cargo being transported. Moreover, these smaller ships may not be newer, cleaner-emitting ships.

More Solutions Available to Address Ship Emissions

The good news is that today, ports in Texas have more options to address ship emissions than they did in the past.

In addition to shorepower systems, which allow ships to “plug-in” to the electrical grid instead of running engines while at dock, there are now two emissions capture technologies that show some promise for capturing emissions of pollutants that are harmful to human health. These emission capture technologies operate by containing many of the emissions that directly affect human health (like nitrogen oxides and particulates) at the smokestack of a vessel while it continues to run its engines. This is a compromise, however, since fuel continues to be burned to run the vessel’s engines, so climate-polluting greenhouse gas pollution continues to be emitted.

Ten years ago there were few if any options for addressing ship emissions. Today, shorepower installations have been deployed (or planned) at ports and marine terminals around the country (including throughout California, Seattle/Tacoma, Halifax, and the planned installation at the Brooklyn Cruise Terminal at the Port Authority of New York/New Jersey), and new demonstrations of emissions capture technologies are being conducted.

Texas stands to benefit economically from the Panama Canal expansion, but these benefits should not happen at the cost of breathing clean air. EDF has called on lawmakers, as well as Texas ports, to make clean air projects a priority before, and we’ll continue to work to move these efforts forward.

In future blogs, we will share more about these promising technologies and how investments in these technologies could help reduce ship emissions at and around ports in Texas.