Today Energy and Environmental Research Associates (EERA) released a white paper co-authored by Dr. James J. Corbett of the University of Delaware and Dr. Edward W. Carr of EERA on the economic effects of the International Maritime Organization’s (IMO) 2020 standards to cap sulfur emissions from shipping fuels. According to the paper, IMO 2020 “is good policy for the United States, for energy security, the economy, and the environment.”
“The global shift to cleaner fuels serves U.S. interests, both economic and environmental,” the paper notes. “Advance regulatory notice, planning and investment, and technology and operational adjustment will help achieve IMO 2020 goals with minimal and temporary economic impact.”
IMO 2020 will reduce the maximum sulfur content in marine fuels from 3.5 percent to 0.5 percent. With the United States already producing and using fuel that is five times more stringent, IMO 2020 will bring the rest of the world more in line with American standards. To achieve compliance, shippers can either install emissions-control devices known as “scrubbers” or exchange their high-sulfur fuel for a low-sulfur alternative such as liquefied natural gas or light, sweet crude—both of which are widely produced in the United States.
“U.S. industry is prepared to provide advanced fuels and technologies to achieve IMO 2020 standards, at a competitive advantage,” the paper states. “The U.S. refining industry invested more than $100 billion over the past decade to meet growing demand for middle distillates used by freight transportation and to provide cleaner fuels, including ultra-low sulfur diesel and IMO 2020 compliant marine fuels.”
The IMO’s Marine Environment Protection Committee 74th annual meeting is currently taking place in London. Thus far during the meeting, IMO officials, echoing earlier comments from the U.S. Coast Guard, have stated that IMO 2020 standards will be enforced as planned.
The Coalition for American Energy Security launched earlier this year to educate policymakers on the benefits IMO 2020 offers to American energy security and competitiveness. “The U.S. operates some of the most technologically advanced refineries in the world and is well prepared to comply with the new standards,” said Ken Spain, spokesperson for the coalition. “Dr. Corbett’s conclusions add to a growing body of research pointing to industry’s readiness to meet the IMO 2020 standards and how the U.S. stands to gain.”
Members of the coalition include, among others, the American Fuel & Petrochemical Manufacturers, the World Shipping Council, the United Steel Workers, the American Petroleum Institute, the Center for Liquefied Natural Gas, the Domestic Energy Producers Alliance, the Independent Petroleum Association of America, American Exploration and Production Council, and several state oil and gas associations.