Green Terminal White Elephant Exposed

Past POLA president Tonsich is sued

Almost five years after the Port of Los Angeles unveiled Pasha’s Green Omni Terminal as a model for the future, an ugly truth buried in the heart of it was finally openly admitted at the June 3 Harbor Commission meeting. While it may still approach being “the first all-electric operated terminal” as Mayor Eric Garcetti promised at a July 12, 2016 press conference, it will not capture or offset the carbon emissions of docked ships, thus exposing a significant gap between “all-electric” — the means — and “carbon neutral” — the goal. A lot of greenhouse gases will still be generated; it didn’t have to be that way.

Chris Cannon, POLA’s chief environmental officer, stated under questioning that the controversial ShoreKat system, developed by Clean Air Engineering-Maritime or CAEM, owned by former Harbor Commission President Nick Tonsich, is no longer expected to play any positive greenhouse gas role. 

Local environmental activists have questioned the ShoreKat system from the beginning on multiple counts — because of the lack of demonstrable technology, the lack of an open-bid process, and the involvement of Tonsich himself, who some believe is forbidden from receiving port contracts flowing from policies he had a hand in creating. POLA staff has used the project’s structure — with CAEM as a subcontractor and the California Air Resources Board, or CARB, not POLA, as the funding source — to fend off the latter two objections. But at the recent June 3 Harbor Commission meeting, the activists have once again seized on the perceived lack of technology.

Jesse Marquez, founder and president of Coalition For A Safe Environment, and Janet Gunter, an initiator of the 2001 China Shipping lawsuit, both sent letters to the commission concerning the ShoreKat system as the board prepared to rubber-stamp the extension of the project schedule, as was previously done on April 16, 2020. Marquez also called in a public comment, causing the extension to be pulled from the consent calendar for commissioners to discuss. 

“We are concerned about the continued Port of Los Angeles staff misrepresentation on the status of the Green Omni Terminal project,” Marquez said. “If you read the letter you will see that we have given you very specific details.” 

“The ShoreKat is not as agile and mobile as proposed and it cannot service large container ships,” the letter noted. “In addition, one [of] the critical requirements was for ShoreKat to meet the CARB AB 32 mandate to reduce greenhouse gases and it does not…. We are concerned about the continuing Port of Los Angeles management and staff unethical and illegal support of Clean Air Engineering-Maritime Inc. and its owner, former Los Angeles Board of Harbor Commission Port of Los Angeles President and Commissioner Nicholas G. Tonsich.” 

“I am concerned about the issues raised by Mr. Marquez, and the issues raised in another series of letters that were sent to the commissioners … correspondence we’ve received from Ms. Gunter,” Commissioner Diane Middleton said. “How do we handle this?”

“We’re happy to do a report on the overall status of the OMNI project, including the ShoreKat elements of it,” Chris Cannon responded. “It’s true there were some things that were altered and we can just be honest about it; and the carbon sequestration elements were not able to be carried out and so money was diverted by the Air Resources Board to another aspect of the project.

“It was a new technology and they had proposed to do it. And once they got into it they found out that they couldn’t.” 

But the story is more complicated than that and still not entirely clear — including the role POLA staff has played.

In a December 2015 email to CARB, Cannon wrote that “CO2 reductions will be realized through improved overall system energy efficiency by three methods as described below.” 

But these only reduced CO2 from the ShoreKat operating system — not from the ship emissions it was supposed to contain.  The ShoreKat system itself is not all-electric. For example, the first involved “a heat exchanger that will reduce the amount of diesel required to operate the system by at least 50%.” 

So, it’s still a producer of greenhouse gases.

To remove CO2 from the ship emissions, Cannon wrote, “the capture of CO2 will be demonstrated by amine scrubbing with thermochemical regeneration.” 

This is a decades-old technology used in oil refineries, for example, with well-recognized limits and trade-offs, so a reasonably plausible prototype, model or at least design would have been required in any sensible open-bid process. The lack of this reflects a seriously flawed process, critics charge.

“There have been delays but we are hoping it will be operational within the next two months,”  CARB spokesman Dave Clegern told Random Lengths News in February 2019.

At the same time, in contrast, Cannon said that two different technologies would each be tested for a six-month period. 

“CARB understands that to date, the originally anticipated greenhouse gas (GHG) reduction component of the ShoreKat system has experienced challenges and is not ready for demonstration in this project,” CARB Executive Officer Richard Corey wrote to Marquez three months later, on May 30. “[CARB] has not paid for any milestones related to GHG reductions from the ShoreKat system.”

This came 10 days after Random Lengths News had reported that the Air Resources Board implicitly confirmed the lack of a greenhouse gas component.

By the next year, the project’s status report #14, for the first quarter of 2020 stated that “The ShoreKat demonstration period has been completed,” but that “Carbon treatment system testing has been excluded from the project based on the lack of progress on securing viable systems by CAEM.” As a result, “By mutual agreement of CARB and POLA project funding is being reallocated from the carbon treatment component of the project to the acquisition of another yard tractor.”

This occurred in the early weeks of the pandemic, without any public visibility, and remained virtually buried from public view. But a lawsuit Pasha filed against CAEM on April 27 alleges that it wasn’t the only problem with the ShoreKat system, charging that “CAEM has breached and continues to breach its duties under the Agreement. For over seven months, CAEM has been holding up delivery of the ShoreKat by refusing to submit the ShoreKat for certification by CARB.” 

It has also stopped paying fuel invoices, refused to obtain insurance, and “failed to design the ShoreKat consistent with the specifications of the Agreement,” according to the complaint. 

Most notably, the lawsuit alleges it’s unable to be towable at distances up to 5,000 feet at 10 miles per hour as promised, it can’t travel safely above five miles per hour and there are non-payment and safety design issues as well. The failure to develop a carbon capture component is not part of the lawsuit, however. 

The contract’s wording, according to the lawsuit, only called for CAEM to “provide for a demonstration project of an emerging technology for the reduction of CO2 and greenhouse gases.” [Emphasis added.]

The suit alleges that “At Tonsich’s direction, CAEM is holding the ShoreKat hostage because he is upset that he is being sued by Pasha for his role in a $4 million illegal kickback scheme,” which Random Lengths reported on last year.  Tonsich responded by suing Random Lengths — a suit he dropped after losing two preliminary arguments.

The kickback suit is scheduled for trial in September, but a settlement is rumored to be near, so all that transpired in that case may be buried. But the Omni Terminal involved public financing. What happened to it shouldn’t be buried. A thorough review of this project component and POLA’s flawed oversight is long overdue.