Panama Canal Expansion May Yield Significant Emission Implications for Shippers, Carriers and Port Authorities

The current expansion of the Panama Canal, expected to be completed by early 2015, creates tremendous opportunities for the global freight transportation industry and may have significant effects on many ports in the United States, particularly in Houston and other Gulf areas. Today, I am happy to announce the publication of a peer-reviewed paper that analyzes the environmental implications of potential changes in container shipping as a result of the expansion. “Panama Canal Expansion: Emission Changes from Possible U.S. West Coast Modal Shift ,” is featured in a special issue of the journal Carbon Management. This paper, a collaboration by researchers at the University of Delaware, Rochester Institute of Technology, and Environmental Defense Fund (EDF), estimates changes in carbon dioxide (CO2) emissions and regional criteria pollutant emissions such as nitrogen oxides and particulate matter.

Our study found that using larger, more efficient container ships instead of the traditional truck/rail overland network for East Coast-bound cargo may not necessarily offset the increase in carbon emissions resulting from a longer waterborne distance traveled. Although the carbon effects may be negligible, localized air pollution is anticipated to rise in ports with projected growth in cargo volume. This includes the emissions of criteria pollutants that increase the risk for health impacts such as asthma and lung disease. Ports located in federal nonattainment areas, such as the Port of Houston, could be faced with additional traffic from the Panama Canal expansion that creates further air quality concerns (see our previous post on this issue). Although some ports, shippers, and carriers are working to improve their environmental performance, more needs to be done to ensure we leverage the opportunities from an enhanced Panama Canal.

Air pollution concerns are even more relevant now for Houston now that the U.S. EPA has strengthened the annual particulate matter (PM) standard to 12 micrograms per cubic meter. This change, projected to save thousands of lives, reinforces the need to understand future emissions scenarios and strategically improve air quality.

As our paper illustrates, short sea shipping may be one way to alleviate traffic and pollutant emissions along the East and Gulf Coasts. As the shipping sector evolves following Canal expansion, we are researching the impact of short sea shipping and other strategies to understand how they might mitigate some GHG and criteria emissions as well as increase reliability, network optimization, and time of delivery.

As carriers and shippers look to reduce their environmental footprint, our report demonstrates that a systems approach must be taken to fully understand the effects of route selection, modes, and distribution networks. An intermodal strategy can best take advantage of infrastructure developments such as Canal expansion, provided that we carefully consider all of the costs and benefits. We continue to evaluate the impact of an expanded Panama Canal for the Houston region, and are working tirelessly to ensure that any growth is smart growth.