California’s ports get $1B for going electric, critics say it’ll slow them down

(The Center Square) - California Gov. Gavin Newsom announced $1 billion in federal funding for California to go zero-emissions at its ports, which are ranked as the least efficient in the world. Critics say the new systems, which often replace diesel with battery power, will make California’s slow ports even slower, which would make imported goods more expensive, and threaten fuel supplies for California, Arizona and Nevada.

“Thanks to historic support from the Biden-Harris Administration and our state’s Congressional leaders, California’s ports are undergoing a rapid transition to become zero-emission,” said Newsom in a statement. “Cleaner ports means cleaner air for communities up and down our state – this is a huge win for our ports that are the backbone of the fifth largest economy in the world.”

Newsom’s office highlighted how California’s ports “handle about 40% of the nation’s containerized imports and 30% of America’s exports,” meaning the state’s ports ability to function impacts every American. In 2021, the ports Long Beach and Los Angeles were ranked as the worst in the world by the World Bank and S&P’s annual Container Port Performance Index.

As Chevron noted in its opposition letter to the governor's recently-passed special session refinery regulations, California's ports are already backed up, and thanks to the Jones Act, which limits shipping between American ports to American-built and crewed ships, there just aren't enough ships to carry American refined products from other American ports to California. This means that reductions in refining capacity in California — the state could soon lose a quarter of its refining capacity — would necessitate substitution with imports from abroad, which would back up California ports even more.

Critics warn that substituting functioning machinery with technology that is not yet mature could have major economic consequences. Many of the upgrades involve replacing diesel-powered equipment with costly battery-powered equipment that must be recharged.

“California ports handle roughly 40% of the nation’s containerized imports and I worry waiting to buy new tools & technology, some of which are still in developmental phases, will cause even more slow-downs and amplify our already fragile supply-chain issues,” said Assemblymember Laurie Davies R-Laguna Niguel, who serves as Assembly Transportation Committee Vice Chair, to The Center Square. “I am all in favor of using the most environmentally-friendly technology to reduce GHG emissions, but it cannot come at the cost to consumers and our international trade economy.”

Refinery shutdowns and port delays would have a major impact not just on California, but on Arizona and Nevada, which rely on California for its fuel supplies. The two states’ governors issued a bipartisan letter to Newsom imploring him to not move forward with his new refinery regulations, out of fear the new rules could result in fuel shortages and price hikes in their states.