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37 Policy Impacts particular environmental issues with which they were con- cerned as more important than the port's level of traffic. The economic benefits of dredging deeper ship channels GAO has argued that the COE has overestimated the bene- derive from the fact that deeper channels allow larger ships to fits of some dredging projects.39 In this sense, the magnitude of call at a port. Over time, the marine shipping industry has positive impacts may be unexpectedly small for some projects. been moving to larger container ships, and this trend is ex- pected to continue. Because the cost of operating a con- tainer ship does not increase proportionally with the size of Water Pollutant Discharge Rules the vessel, larger ships reduce the cost of shipping freight. for Vessels Ports that do not have channel depths to serve larger con- Policy Description tainer ships can lose business to those that do. In addition, lower cost freight transportation may benefit local busi- In 1973, less than 1 year after the CWA was enacted, EPA nesses that rely on trade. promulgated a regulation that excluded discharges incidental Deeper channels are also important for other cargoes, espe- to the normal operation of vessels from requiring a permit cially for liquid bulk (e.g., petroleum) and dry bulk (e.g., coal). under the National Pollutant Discharge Elimination System For instance, tankers that are too heavily laden for a channel (NPDES). This exclusion was revoked as a result of a 2005 must offload oil to barges in order to reduce their draft. Light- U.S. District Court decision. In 2008, President Bush signed ering, as this is called, adds to the cost of moving petroleum two laws that exempted certain vessels from the need to com- through these channels. ply with NPDES permits. The first law exempted recreational Issues over spoil disposal have often delayed dredging proj- vessels and instead directed the Coast Guard to promulgate a ects. Some high-profile projects have been held up by problems regulation to require recreational boaters to use best manage- in obtaining environmental permits or by litigation from con- ment practices identified by EPA.40 The second law imposed cerned communities after the permits have been issued. An ex- a 2-year moratorium on requiring NPDES permits for inci- ample is the Port of Oakland, where litigation over various dis- dental discharges other than ballast water from vessels less posal options delayed for 11 years the start of a major dredging than 79 feet long or commercial fishing vessels of any length.41 project to increase channel depths to 42 feet. This included chal- EPA issued a final Vessel General Permit (VGP) in Decem- lenges by California's Water Resources Control Board and De- ber 2008. This permit applies to incidental discharges into partment of Fish and Game, EPA, a fisherman's association, U.S. waters. The permit establishes effluent limits (mostly in and a local water authority. the form of best management practices) to control the dis- Industry experts have suggested that those ports that upgrade charge of 26 different vessel waste streams. The permit also their facilities first often receive long-term benefits from lock- includes specific requirements for certain vessels (including ing in market share. The first port of call for a ship is a "revenue barges and oil tankers) that have incidental discharges not goldmine" for the receiving port because all of the containers shared by other types of vessels. In addition to the effluent for inland sites tend to unload there. It can be difficult to get limits, the permit includes requirements for inspections of shippers back once they leave a port, because of the business in- vessels, recordkeeping, and reporting. frastructure involved in a terminal agreement. Shippers develop long-term terminal agreements, move equipment, and have Policy Impacts long-term contracts with trucking firms, drayage operations, and railroads. Thus, policy decisions regarding dredging can EPA's rulemaking will increase compliance costs for most have major impacts on the freight system across nearly all modes marine vessels engaged in U.S. freight movement. In its and a large geographic scale. final economic impact analysis for the VGP, EPA estimated that the permit would apply to roughly 38,000 freight or tank barges and 8,300 freight or tank ships (these figures include Unexpected Impacts both domestic and foreign vessels). EPA estimated that the total annual incremental compliance costs for both domestic Government agency decisions that delay individual dredg- and foreign freight vessels would range from $5.6 million to ing projects (e.g., the Oakland example) are probably made $16 million annually. The cost attributable to the paperwork with at least some recognition of their economic repercussions related to freight movement. The Port of Oakland's dredging plans were contested by a diverse range of parties, many of 39GAO, "Delaware River Deepening Project: Comprehensive Reanalysis Needed," whom were not primarily concerned with the economic im- June 7, 2002. pacts. Had they foreseen clearly the effects on the port, it is not 40P.L. No. 110-288. clear that they would have acted differently. They saw the 41P.L. No. 110-299.