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Nov. 26, 2023 - Epoch Times
29:43
California's 100-Year-Old Ferry Is on the Verge of Shutdown | Seymour Beek
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There's an organization in California called CARB, and their goal is to make the air cleaner in California.
They made a rule that all short-run ferries in California had to be zero emission by 2026.
Our business, for example, consumes, year-round, we consume an average of 26 gallons of fuel a day.
You're not going to save the world by making us go zero emission.
They have made the rule, and that's their position.
No, there's no way to do it.
We'd have to shut down.
The assumption is that if you guys are shut down, this emission will go away.
If we were shut down, emissions would go up by probably a factor of a hundred.
My guest today is Seymour Beek, president of the Balboa Island Ferry.
Today he'll talk about new rules in California that aims at reducing emissions for ferries.
And he's going to talk about the impacts of this on the ferry and other ferries.
You look at all over California, there's some huge changes.
They haven't really examined the consequences of the rules they're making to see what effect they would have on individual businesses.
It's extremely challenging, extremely expensive.
I'm Siamakorami.
Welcome to California Insider.
Seymour, it's great to have you on.
Welcome.
It's a pleasure.
You know, we want to talk to you about Balboa Ferry.
You guys are facing some challenges.
There's an organization in California called CARB, and their goal is to make the air cleaner in California.
And to tell you a story, Seymour, I actually was living in China for a while.
For six months, I was staying in China.
I was in Beijing.
And I came back.
I landed in LAX. My sister picked me up from the airport.
And as we were driving down the freeway to go to San Diego, because I lived in San Diego, I rolled the window down, and I was like, wow, fresh air.
And my sister is laughing at me, saying, why are you doing this in the middle of the freeway?
But the air in the middle of the freeway was so much better than when I was in Beijing.
And this organization, CARB, has done a lot to actually bring us to where we are today.
But at the same time, recently, there are some rules and your business, which is a pretty historic business, has been impacted by it.
Can you tell us what's happened with CARB and you guys, which is your ferry?
Well, they made a rule that all short-run ferries in California had to be zero emission by 2026.
And there are only 12 or 13, I think, short-run ferries in California.
And we fall into that category.
They're defined as ferries that run under three miles.
And we only run 900 feet, so we're a very short run ferry.
But we are very different than any of the others.
We run continuously.
We're not on a schedule where you run every four hours or something.
We shuttle back and forth just as fast as we can because there's almost always traffic that wants to cross the bay.
And, of course, more sometimes on weekends and summer, of course, a lot busier than in the winter.
But we're different because we operate continuously and there's not a lot of time to charge batteries except from midnight till 6 in the morning.
And I don't think CARB really looked at any of the individual businesses that were being impacted.
You know, our business, for example, consumes, year-round, we consume an average of 26 gallons of fuel a day.
So you're not going to save the world by making us go zero emission.
And going to zero emission, going to electric, turns out, we don't know the exact cost yet, but our initial estimates that we've had from contractors, it's millions of dollars, maybe eight to ten million dollars All in all, to convert our vessels to electric.
And it seems like that's a little out of balance with burning 26 gallons a day.
And can you tell us more about when they issued this order?
Did you guys have any conversations with them or they just went in a vacuum?
We did.
We actually hired a law firm to make arguments on our behalf to CARB when they were having hearings on the subject.
The staff had come up with the proposed ruling and then they had hearings.
And grouped in with us were the commercial fishing boats.
And the commercial fishing lobby was huge, and they got them to back off on the fishing boats and give them a 10-year extension.
But they didn't give us that extension.
They said, no, short-run ferries must comply.
So here we are.
We're scrambling around.
We've got a marine engineering company under contract that's examining the options and trying to do a preliminary design of how we could go to electric.
It may turn out it's not feasible with the boats that we have now.
You know, they're wooden boats.
You only have about two and a half feet of clearance inside the hulls.
It's just not a simple job to make them electric.
You can't just go buy a system off shelf and stick it in the ferry boat and say, okay, now it's electric.
It doesn't work that way.
It's a big engineering challenge.
I can tell you there's a lot of complexity, a lot of things that you wouldn't normally think of.
There are Coast Guard rules that have to be complied with.
You change the weight balance characteristics of the boats, then there's a new set of calculations for the Coast Guard.
There are fire suppression considerations when you put these lithium-ion batteries in the boat.
You have to have a much more sophisticated fire suppression.
You have to have a ventilation system to cool the batteries.
You have to have an energy management system to control the batteries.
And then you have to train your employees on the use of all of this stuff.
They have a whole new skill set involved in maintaining the electric hide boat.
And it's a lot different than a diesel boat.
And so you have to train people.
So that's just some of the complexity involved.
So even if you had the money, the $10 million you wanted to invest to change, it would be still not easy?
Still very difficult.
And, of course, we don't have the money.
The company hardly has any money.
So in order to do this at all, we'd have to get grant funding.
And we're working on that.
We've got a consultant and one of our family members that are out there beating the bushes for grant funding, and they're making applications for grant funding as we speak.
We have no assurance that's going to be granted.
There's competition for the grant funds, and we'll see what happens.
We had a chance to talk to CARB to find out what their side of the story is.
Here's a statement they sent us.
The Balboa Island Ferry's iconic and storied history in Southern California means that it has an opportunity to lead what a zero-emissions future looks like for commercial harbor craft.
Short-run ferries such as the ones used by Balboa Island Ferry were prioritized for early adoption because zero-emission technologies for short-run ferries is available now.
CARB staff have visited Island Ferry in person and met with them virtually to offer one-on-one support through the process.
CARB has provided extensive information about the funding available to help operators defray the cost of transitioning to cleaner technology, discuss potential technological solutions that are specific to their operations, and outline the availability of applicable compliance extensions, which include a provision to stagger upgrades to minimize impact to their operations.
Now, with the 26 gallons a day, you mentioned each one of them?
No, no.
Our whole operation is 26 gallons a day.
We looked at all of our fuel bills for the year 2022, added them all up, divided by 365, and it comes out 26 gallons a day.
Wow.
And how many people?
You guys are taking a lot of people across.
Well, like one and a half million people here.
Yeah.
And about 300,000 cars.
It's very popular.
And if these people were to cross themselves, how much?
Did you guys make that argument?
Well, yes we did.
We made the argument.
We don't have, of course, we don't have an exact quantity, but it would be Clearly, hundreds of gallons of fuel would be consumed if people drove around instead of taking the ferry, not to mention the pedestrians and bicyclists that currently take the ferry, who would, by alternative, they'd get in their cars and drive.
So there's a huge—we save a whole lot of energy by operating the ferry.
So, is the assumption is that if you guys are shut down, this emission will go away?
Well, if we were shut down, emissions would go up by probably a factor of a hundred.
So, have you guys made that argument to them?
Yes, we have.
And what's the response?
No response.
They have made the rule, and that's their position.
So I don't know what it takes to undo the rule, but they've made it, and so we're scrambling around trying to comply, which, as I said, it may not be possible for us to comply, but we're scrambling around trying, and we're spending money trying, by the way.
Here is CARB's argument on why they think that the emissions from traveling by cars if the ferry was to shut down might be less.
While the argument is that passenger cars will need greater emissions than the Balboa Island Ferry's small short run operation, a 2020 report by the University of California Berkeley found that emissions of oxides of nitrogen and particulate matter from a marine diesel engine are 4 to 21 times greater on a per passenger Mile-for-mile basis than a passenger car.
The harbor craft regulation is expected to reduce diesel suit by 89%, which along with other emissions reductions will reduce cancer risk for 22 million residents who live near the coast.
The expected emissions reductions from the commercial harbor craft are the equivalent of eliminating 246,000 diesel trucks traveling from Los Angeles to Sacramento every day for a year.
The rule will yield $5 billion in health benefits to reduce deaths, hospitalization, ER visits, and incidents of illness.
California Insider, we were not able to independently verify and understand the assumptions behind the study done by UC Berkeley.
This is their perspective in general of why they're doing these kind of mandates.
In a state that continues to have the nation's worst air quality, everyone needs to pitch in to build a clean air future.
The stakes are too high, including for the ferry's neighboring communities, and the Balboa Island Ferry has an opportunity to write its next chapter as an environmental leader and a company that stands behind improved public health.
Is it possible for you guys to do it financially?
You said $10 million?
No.
No, it's not possible.
I mean, we can finance these preliminary studies and things like that, but the actual do the work, the millions of dollars, no.
There's no way to do it.
We'd have to shut down if we don't get grant funding.
There is a big history with your ferry.
Can you tell us what is it?
Well, my father moved to Newport Beach basically to be a real estate salesman on Balboa Island.
He worked for the company that was developing Balboa Island.
And later on, he became their head salesman, their chief salesman, which wasn't really a big deal in those days because they weren't selling a whole lot of property.
But he moved to Balboa Island.
And along about that time, there was ferry service to the island, but people became very dissatisfied with it.
It wasn't very good.
So the city asked my dad, or they asked other people, but my dad was, I think, the only volunteer.
And he said, yes, he'd run the ferry service.
And he had an 18-foot rowboat with an outboard, and that was his first ferry boat.
There wasn't a whole lot of demand and then there were only a few houses on Balboa Island.
So then gradually the area built up, the demand gradually increased and he began to build bigger ferry boats that would carry cars and there's a whole evolution of the ferry boats that goes on to this day.
But it's been in the family ever since and it just gradually grew and The family has never really relied on it as a big source of income.
We just keep it running because it's a good thing.
We have a lot of good employees, and we have good benefits for the employees, and I would hate to see anything happen to the business that would cause them concern.
But we have about 40 employees, and about 15 of them are full-time.
And it's become part of the culture of this community, right?
Oh, people rely on it.
You go out there on a weekend, there are people that plan their bicycle rides around a trip across on the ferry.
People go walking, they take walks on the peninsula, they take walks on Balboa Island, they take the ferry.
To go shopping, ferry to go to restaurants.
No, people really rely on it.
And some people come down and just ride across it just for the ride, you know, just to see the bay, see the boats.
Yeah, it's a great inexpensive way to see the harbor and see the activity on the harbor.
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Now let's go back to the interview.
And the distance is, you said it's 900 feet?
900 feet, yeah, from dock to dock.
And if you were to drive around, how long?
It's six miles from dock to dock if you drive around.
So essentially driving you would do a lot more energy if you were to consume a lot more energy.
Somehow it doesn't make sense, right?
No.
And obviously there's a great mix of uses and the people that use it and how far they would have to drive if it wasn't there.
But it's clear that there would be a heck of a lot more driving if the ferry wasn't there.
And based on what you see, so you grew up in California, right?
I grew up in Newport Beach.
I grew up on Balboa Island, actually.
And your family has been having this very, and it's part of the culture, and it's a sad situation if it shuts down.
Oh, yeah.
Oh, it would be very sad.
Very sad, very disruptive.
It would be very bad for some local businesses, too, that rely on ferry traffic.
Yeah, like the Fun Zone, for example, and local restaurants around the area.
Sure, a lot of their business comes from ferry riders.
I mean, personally, it wouldn't affect me very much, but we've got a lot of good employees, and some of them long-time employees.
And they rely on the retirement plan and rely on the benefits, and it would be very sad for them.
And Seymour, growing up in California, what you're experiencing now, it seems like with the way the government is running, was it like this before?
Was it where you have conversations with someone?
No, no.
These kinds of regulations are pretty new, I think.
CARB made some regulations about 15 years ago that forced us to upgrade our diesel engines.
We had what was called a Tier 1 engine in those days, and they forced us to go to Tier 2.
Well, that wasn't a bad thing.
It was affordable.
We could do it.
And the Tier 2 engines are a little cleaner.
And it turned out that we bought the Tier 2 engines.
They're really better engines.
We've got a better propulsion system than we used to.
And there is a Tier 3 engine which we could go to, which we could afford to do, but they've just jumped over that, they've hopscotched over that step, and they want us to go to zero emission.
They haven't ordered us to go to Tier 3.
So what was the mindset back in the day, like when you guys were working with these kind of regulators?
Well, I don't think anybody ever thought of the ferry in terms of air pollution.
The engines are small and the distance is small.
I don't think anybody ever considered that the ferry was a source of air pollution until this rule came out.
So you guys were able to have conversations with them?
Yes, we have.
We had conversations.
Some CARB people actually came down and looked at our boats, and we showed them the obvious difficulty of putting enough battery storage in the boats with the electric motors and so on.
And they just sort of said, hmm, very interesting.
And they went away.
And they said, well, you know, their mantra has always been, well, you know, CARB will assist you in getting grant funding, and CARB will help you there.
And they have.
They've been supportive in filling out the applications for grant funding and so on.
They're helpful in that regard.
But they're not helpful in terms of the engineering required to do the job.
We're paying for that and we don't have the outcome yet.
It'll be a couple of months before we get a report from our engineering company.
And if they allow you more time, is it financially feasible?
Probably time makes it more feasible because the technology keeps improving.
Battery technology is on the move.
It keeps getting better.
And then there are other propulsion schemes like hydrogen fuel cells and other things like that that are in the offing that could help later on.
But those things aren't available to us right now, not on the scale we operate.
We can't just go out and buy a Hydrogen fuel cells stick at the ferry boat, no.
And, Seymour, you're pretty passionate about this.
Why are you passionate?
Well, I'm a big supporter of our community and our city and our neighborhood.
And even if I wasn't an owner of the ferry, I'd be very concerned because of what impact it would have on our neighborhood if the ferry was to shut down.
What is the value that the ferry brings to the neighborhood you mentioned?
Well, cultural, if you talk to just about anyone who lives on Balboa Island or has lived in the area, they will tell you a story about the ferry.
And it will be a fond memory of the ferry.
I mean, everybody, pretty much everybody loves it.
They'll have a story about how they jumped off in the middle of the bay when they were kids, or how they met a girlfriend on the ferry.
Everybody has a story.
It's very popular.
People like the experience.
And as I said, some people actually come to Newport Beach to take the ferry ride.
That's one of the things on their list of things to do.
They want to come ride the ferry.
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Now let's go back to the interview.
And you grew up in California and we would love to hear more about what was California like when you were growing up.
Well, my part of California, which was Newport Beach, Balboa Island, well, it was two things.
It was a fishing village up in Newport.
And then down in the Balboa, Balboa Island area, it was more vacation homes.
The population in the winter was maybe 5,000 people when I was a little kid, and it would go to probably 40,000 people in the summer because all the people would come down from Los Angeles, Pasadena, San Marino, Riverside, they came from all over the place and had summer homes and people loved to come to the beach in the summer.
And was it as expensive as it is today?
No.
No.
It was a lot cheaper than it is today and much more affordable.
Yeah, one of the things I worry about now about, well, it's true all over Southern California, but especially in the Newport Beach area, is the affordability of homes for young people.
You know, young people that are, you know, have good jobs, college educated, young professionals, they can't afford to buy a house in Newport Beach, which is a very sad situation.
And how was it back then for a young professional Oh, you could be a young professional just out of college, a young engineer, and you could come rent a house, and maybe after five years you could afford to buy a house.
It was not terribly expensive.
And how much was your income versus rent, or what was it like?
Well, I suppose somewhere rent was maybe 20% of the average income in those days.
Of a college graduate.
Well, my first job out of college I made $400 something a month and my rent was, I think it was $50 a month.
Wow.
That's probably typical.
I was a ferry captain when I was in college.
It was a sought after job and a lot of my friends did the same thing.
And it was good, good experience.
Going back to CARP, they want to go zero emission.
They want to clean up the environment more.
What would you recommend to the people?
I'd recommend that they go after bigger targets than the Balboa Island Ferry.
I'd recommend to them that perhaps they require us to go to Tier 3 engines from Tier 2.
They're somewhat cleaner than Tier 2 engines, but the amount of pollution that we create is not really significant.
We're in an area where there's clean air almost all the time anyway, and so it's not going to make a lot of difference.
But we could go to Tier 3 engines and continue to study electrification.
If it became easily feasible, we could do it.
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And now it seems like when they ask you to go to Tier 2 engine, it actually not only helped the environment, it also helped your business too, right?
When you guys worked closely with them and they helped.
Well, it was a pretty rational decision.
Actually, it was good for us because our engines were old at that time.
They were perfectly good, but they just weren't as good as the newer engines we got.
We got John Deere engines that had some improvements over what we had before and improved our whole propulsion system.
That didn't hurt us.
That was a good thing.
So there is a way for them to work with the industry.
Yeah.
Can you explain to us how does the ferry work?
How many boats you have and how do they run?
Well, sure.
We have a slip on each side of the bay and the ferries are double-ended.
They don't turn around after they pull out of the slip.
They just go from...
The bow becomes the stern when you get to the other side of the bay.
And each one carries three cars.
And at busy times, we run three boats, just in, you know, circulate three boats.
One is waiting to get into the dock, and one pulls out, and then the other one pulls in.
And at our busy times, we run about six round trips an hour.
It's roughly a car a minute at our busy times.
In addition to three cars, both 75 people.
Very seldom is there a waiting line, but sometimes there is a line of people waiting to get on, but they never have to wait more than 5-10 minutes.
It's pretty fast.
Lots of bicycles nowadays.
So the bicycles use up a lot of real estate on the deck, so you don't get as many people on when you've got a lot of bicycles.
The tickets are very cheap, right?
It's a dollar and a half for an adult.
It's fifty cents for a kid under twelve.
Two dollars and a half for a car and driver.
Then passengers in the car are extra.
So it's pretty inexpensive.
And how long is the ride?
Three or four minutes.
Something like that.
Depending on the amount of bay traffic.
Sometimes you have to wait for boats to go by.
So it can be a longer ride.
So it can be a longer ride, yeah.
Seymour, do you have any other thoughts for our audience?
Well, I think CARB has great, noble ambitions and cleaning up the environment obviously is good.
I think in some cases, as in our case, they haven't really examined the consequences of the rules they're making to see what effect they would have on individual businesses.
And I think if they'd done a little more homework and looked at our business, for example, they wouldn't have thought that they could really implement this role at this time.
Now, maybe sometime in the future, the technology will have advanced to the extent that it would be easy to do.
But right now, it's extremely challenging, extremely expensive.
Seymour Beek, president of Balboa Island Ferry, was great to have you on California Insider.
I'd just like to say, save the fairy.
Hopefully it will happen.
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