(L.A. Waterfront Alliance)

The Port of Los Angeles is aiming to become a hub of international cuisine and marine innovation, thanks to new environmental policies that are making big economic waves.

The Ports O’Call is a fishing village built in the 1960s that hosts shops and restaurants. Port officials saw its potential for a tourist attraction and are adding a brewery, a full-scale marine research center and perhaps even a Ferris wheel. None of this would have been possible without the efforts of some dedicated community members who fought the port to reduce its carbon footprint. Though stricter environmental regulations usually hurt businesses, in this case, they resulted in economic gains.

Not too long ago, the Port stank of diesel fumes and was not an ideal destination for a vacation, let alone a residence. People living around the waterfront objected to the noise, traffic and pollution in their neighborhood. In 2001, residents discovered that the port was planning to build a giant terminal for the China Shipping Company. Outraged, the residents voiced their opposition at the next meeting, but nobody noted their concern. Plans for construction would go on as before.

The community members did not give up, even though they faced a formidable opponent. The port affects one out of every eight jobs in Southern California and handles almost a quarter of the cargo that comes into the United States every year. Together with an environmental lobbying firm, residents sued the city and its engineers for failing to evaluate the environmental impact on the San Pedro area. This time, their efforts prevailed. The city was forced to stop construction until officials came up with a plan to cut back pollution.

Between 2005 and 2008, the Port developed two environmental programs: the Clean Air Action Plan and Clean Truck Program. The same rules applied to the Port of Long Beach. The two ports decided to collaborate, “so nobody could get the competitive advantage of being the dirtier port,” said Michael Keenan, the assistant director of the Planning & Economic Development Division at the Port of LA. “It’s the same air, so we should follow the same rules.”

Although it took a lawsuit to spark reform, the ongoing research to produce cleaner and more efficient machinery opened the doors for start-up companies dealing with pollution and technology. This, in turn, created manufacturing jobs for the new products. The funds for the projects also injected money into the economy during the recession in 2009. 

Through the Clean Air Action program, ships can earn incentives by sending their cleanest vessels. This measure, in part, aimed to discourage vessels from using bunker fuel, the dirtiest fuel distilled from crude oil. The Port had to set aside about $9 million to reimburse the shipping companies for the cost difference between the bunker and the more expensive clean fuel. It also introduced Alternative Marine Power (AMP). In the past, a ship ran its engine to give it power even when it was loading or unloading. Now, AMP allows a ship to plug into an electric power source and cuts back on bout one ton of emissions for every 24 hours the ship is connected, according to Port estimates. Of course, this also meant shipping lines had to retrofit their ships to comply with the new technology, a process which cost them $500,000 to $1.5 million per vessel. 

“The carriers may not like it, but they understand that it’s business,” said James Fawcett, a research scientist at the USC Wrigley Institute for Environmental Studies. “The regulations were more than worth it,” he said.

Fawcett explained that the regulations made for more jobs and better health prospects for residents.

"You can’t just look at the programs in terms of money spent, because they brought about a lot of public benefits that can’t be calculated in dollars," he added.

Clean Trucks

The second plan, the Clean Truck Program, set aside funds for trucking companies to purchase about 7,000 more fuel-efficient trucks.

“This happened at a time when car and truck sales were low (during the 2009 recession) and buying all those trucks put money back into the economy,” said Port spokesman Phillip Sanfield. 

But independent drivers had to pay out of pocket to replace their own trucks, which run from $100,000 to $180,000, twice the income of the average driver, according to Big City Driver.

The truckers faced a dilemma: most own their own rigs and have to pay the bulk of the cost for the upgrades. But trucking firms dictate the work they get at the Port, as well as what and when they haul, and how much they earn. The truckers argued, unsuccessfully, that their employers should have had to bear part of the cost. The trucking companies could not be reached for comment.

Despite truckers’ dissatisfaction, the Port considers the Clean Truck program a success. Its only downside was that it almost worked too well, Keenan said. The port charged a fee on any truck that did not meet the environmental standards ($35 on all 20 ft. containers and $70 on containers over 20 ft.), but trucking companies began purchasing more and more “green” trucks to meet the qualifications.

“The fee was supposed to subsidize the new trucks, but we didn’t need to fine as many as we originally thought,” Keenan said. “The Port ended up paying a few million more for the program than it expected.”

Around the same time, Retailers such as Target and Wal-Mart, who use supply chains, began to realize that safe environmental practices mattered to customers. For example, Wal-Mart received negative publicity in the early 1990s when shoppers learned that a ‘green’ brand of paper towels were actually unrecycled paper treated with chlorine bleach. A 2005 study by consulting firm McKinsey & Company found that the chain lost between two and eight percent of customers over its lack of environmental awareness. 

“It became a branding opportunity to be the first to say they can transport products more ‘safely,’” Keenan said. “Terminal operators were afraid that standards would scare away shipping lines but that hasn’t happened.” 

In 2009, the Port and the city developed PortTech LA, a “giant networking organization,” to connect entrepreneurs with Port entities who need their innovations, according to Ann Lee Carpenter, PortTech’s Director of Marketing. 

“We work with entrepreneurs who have already started businesses. They’ve invented technology that hasn’t been created with ports necessarily in mind, but we help them see the opportunities,” Carpenter said.

PortTech has worked with “well over 50 companies,” according to Carpenter, and looks at ongoing student projects at California universities for possible leads. The company has helped find connections for recent college graduates as well as professors. 

Carpenter agrees that the Clean Air Action Plan and the Clean Truck Program have created an economic environment where “everybody wins.” For example, the truck regulations spurred the Port to investigate clean technology. Marine Oil Technology, one of PortTech’s clients, developed an oil processor that removes contaminants from engines. Trucks with this installation do not require an oil change, which saves the fleets money and increases truck efficiency on treks across the country.

“If you have trucks running thousands of miles, every penny you can save on fuel is incredible,” Carpenter said. “More efficiency also saves the fleets money because there’s a faster turnaround of trucks on the road. Then they buy more filters, which helps create jobs, and then brings the jobs to economically depressed areas.” 

Now that the sky above San Pedro is more visible, the city and Port want to push the economic gains even further with the remodeling of Ports O’Call.

“We want to bring people from other parts of L.A. There’s a whole other side of the city where people aren’t aware of the benefits of our efforts to have a clean, green port,” Sanfield said. “It’s easier to make the Port an attraction to sell had we not done that.”

Reach Staff Reporter Anne Artley here