New Ballast Regulations Could Hurt Michigan and the Shipping Industry

Michigan has become the first state in the nation to require that deep draft, ocean-going vessels calling at Michigan ports have special ballast permits. The maritime shipping industry has responded by saying that Michigan's already fragile economy will again be rocked if state officials continue with the program.

The new regulations stipulate that vessels planning to discharge ballast must have approved equipment fitted with which to treat their ballast discharge. The purpose of the equipment would be to eliminate potential invasive species loaded with the ballast in foreign ports. The equipment could cost ??" in accordance with Michigan state official estimates ??" hundreds of thousands of dollars to install. Industry executives say the cost is closer to $1 million per ship, once the cost of the equipment, downtime and other expenses are factored in. But the Michigan DEQ counters by saying that the costs are justified because just one of many invasive species that have been introduced to Michigan’s waters have cost the local economy more than $3 billion over the past decade.

The irony of the situation is that the technology is still not yet approved or mandated by the U.S. Coast Guard. When such equipment is finally agreed upon, it may or may not be what Michigan is now calling for. The end result, according to John Jamian, former acting MARAD Administrator and now the president of Seaway Great Lakes Trade Association (SGLTA), will be that ship operators will simply circumvent the law by loading and discharging cargoes in other states ??" or worse; Canada, where the business, like so many other offshoring adventures, will simply go overseas.

Jamian’s trade group has asked the state to delay the permits for a year, but so far, those pleas have fallen on deaf ears. He hopes to bring the issue in front of Michigan’s Governor before the end of January. Jamian says, “In all likelihood, it’s less than 18 months until the Coast Guard will make a decision on codifying a standard solution for the problem of invasive species.” And, he says, only one of the four technologies being pushed by the state of Michigan have any chance of being part of the final solution.

While Michigan is the first state in the nation to take the extreme measure of regulating ballast water on a local basis, the move could backfire on them in more ways than one. John Jamian himself points to the increased road traffic and diesel truck pollution which will be injected onto local Michigan roads as cargo which had previously come in on ships will now have to be trucked in, and at much greater cost. With a little patience, says Jamian, Michigan could be part of a workable solution, while protecting its maritime commerce and fragile economy. Beyond this, he says, “There’s nothing to prevent invasive species which emanate form port calls at other Great Lakes ports from migrating to Michigan waters.

The ultimate effect on Michigan’s economy from vessels which might have called on Michigan ports but now will go elsewhere is difficult to calculate. Jamian says that there were more than 100 port calls in each of the past two years, but the new law comes into effect at a time when the Seaway is effectively closed to seagoing traffic for the winter. But, he cautions, “People book cargoes well in advance.” He adds, “Not one request for a ballast permit has yet been filed by any shipper.”

Michigan and local environmental activists are convinced that the new law is a good one. After waiting many years for the federal government and the IMO to formalize a solution to the spread of invasive species in the Great Lakes, they’ve taken the matter into their own hands. In the meantime, however, the interim move by Michigan is likely to counter-productive in any number of ways. The downstream effect on Michigan’s economy could be significant, with a corresponding increase in road wear-and-tear, air pollution and a marked decrease in the effectiveness of any “shortsea shipping” initiatives. John Jamian and the SGLTA say that it doesn’t have to be this way. Hence, their efforts to sway public officials in the coming months could possibly define the future of Michigan’s ocean commerce business, and the very economy of the Great Lakes state itself.