Assembly Select Committee on Select Committee on Ports and Goods Movement

Want to say good morning to each and every one of you. If we can gather ourselves, it's 10:00 a.m; we want to start on time. Our first panel, if you could just please take your seats.

I want to say good morning, Buenos Dias to each and every one of you. Welcome to our second hearing, the Select Committee on Ports and Goods Movement. I want to introduce myself. My name is Mike Gipson. I have the distinct honor and pleasure of representing as a Chair of the Select Committee on the Ports of Los Angeles and the California State Legislature. I represent the 65th State Assembly District.

Those are areas of Watts, Willowbrook--where I was born and raised--Compton, Carson, North Long Beach, Harbor, Gateway, North and South Harbor City, Wilmington, as well as San Pedro, and it is absolutely a blessing for me to represent the people of the 65th State Assembly District. Before I begin my remarks, I want to ask for a welcome to be given to us by a good friend, a coal laborer who's worked very tirelessly. We represent overlapping districts and areas. The Councilman Tim McOsker, who represent the One Five, and I'll let him talk about the One Five as he comes.

Will you put your hands together and please welcome Councilman Tim McOsker?

Thank you so much, Assembly Member. Thank you, my friend. It's so good to be with you and your Select Committee today. My name is Tim McOsker and I'm the Councilman of the One Five, and as my friend alluded to, there is meaning to this. We are not the 15th Council District anymore. We are the One Five because we are one district; five beautiful, beloved communities.

I am honored and in our overlap to represent Watts and the Harbor Gateway and Wilmington and Harbor City and my hometown of San Pedro. Although on a day like today, I should call myself the One Six because very technically, I represent the port of Long Beach. Why? You own property in my district, and so I'm really happy to be the Council Member who works with our great combined ports, this port complex in the San Pedro Bay.

I work very closely with Director Cordero and with Gene Seroka on the issues that matter to us here, and among the many, many, many issues that we are fighting for is environmental justice, environmental justice in our communities. It is important for us to continue this march to clean the air and to clean the environment and to make this a livable place. And my time on this issue goes way back. It goes back to the No Net Increase Plan, which sounds so quaint now.

In the early 2000s, I was the Chief of Staff to Mayor Jim Hahn when we talked about growing the port with no net increase, and it was significant then. But that is really a small goal long since surpassed by the Clean Air Action Plan. Back then, we talked about plugging in ships and the world told us that that was crazy. Wasn't crazy. It's now an important worldwide standard and we need to keep being in the San Pedro Bay Complex.

We need to keep being the innovators, the folks that bring along the world to this opportunity for economic development and for environmental justice. But here's what's going to be really, really, really important to me as a person who not only represents the ports, but significantly, I represent 260,000 folks who live in and around the ports. We need to make sure that we are achieving environmental justice day in and day out. We need to get to our goals in 2030 and 2035, but we also need to serve economic justice.

We need to make sure that we are promoting and growing these great jobs. And there are so many areas where we can and will do that, and a couple of things that I'm particularly focused on is this false dichotomy, this narrative around automation that we either have to have a clean environment or jobs, and it's not true. We can and we will do both. I know we can and we will do both.

And I'm keeping a close eye also, and I hope you are, and I'm sure you're talking about it later today, you're talking to AQMD about the source rule, and it is going to be important to us that we work with the AQMD and make sure the AQMD works with us, works with our ports, works with our DWP, works with our local officials, works with our labor groups, works with our local community to make sure that we are both cleaning up the environment and protecting this local, regional, and national economy by protecting jobs.

I know you're there with me. I appreciate laboring in the fields with you. I look forward to working with you. I thank you for being in the One Five or today the One Six. I'm glad we are all together. I wish I could stay with you all day, but I have to get to a city council meeting and you probably know why. I would rather be with you. Thank you.

Thank you very much, Councilman Tim McCosker. Again, I want to thank one: all the port commissioners, the port commissioners from here, from the great City of Los Angeles. I want to also pause and thank the Los Angeles Port of Los Angeles, Port of Los Angeles for allowing us to be in their space here in their home and also hosting us today.

I want to also thank the participants again in the space with me and also my Colleagues, as it will reveal your commitment and achievement to California's greenhouse gas emission standards, while also ensuring that the port and the well-paying union jobs they offer are able to continue to operate at a level that will keep us competitive not only domestically, but also globally as well.

Going into this hearing, we know that there is a lot of good and important work being done in this space, in this related industry. But for all of us here, we understand the need of California supports. The first, we must understand the perspective of each entitle that operates under the scope of this industry.

The purpose of this hearing is to examine the port's efforts and transition to renewable energy and how the Legislature--and I wanted to underscore how the Legislature can work in cooperation with its industries and stakeholders to develop policies that will help reach our goal. Just in case you missed it, let me say that again: help us reach our goal.

The ports are the economic engine of our state and they are in large part the reason why we can brag about being the fifth or the fourth largest economy. This Select Committee that I'm happy to Chair and the Legislature are to make an impactful and meaningful legislation. We have to have a full understanding of supply chain and how each component can work together and reinforce each other to create a robust, sustainable economy.

Today we will hear from representatives from surrounding ports, labor, industry regulators, and other experts to inform the Select Committee on the progress of the decarbonization in the port. I want to say thank you to all of you. To my panel, this incredible panel of experts that have gathered here today, we appreciate you taking the time out of your busy schedules and being in attendance.

To all of you who are watching and also who are listening, we thank you, we hear you, we see you, and we support you. For those in the audience, you will have an opportunity during at the end to weigh in in this conversation. It's our public comment section. So you will have about two minutes to share what's on your heart for two minutes. We ask that you certainly be mindful of the time because I will be mindful of the time.

We want to stay on time as we move forward, but in addition to that, we want to make sure that we have decorum in this place. Unruly or inflammatory comments will not be tolerated. We will one: not allow you to speak if in fact anything like that happens, and also ask you to leave, if in fact it comes to that. Before I begin, I want to recognize my awesome Colleagues for taking time, even though we are on break.

These gentlemen who are here, we have some Colleagues who are not here, they are still incredible and still incredibly busy in their own space, in their own right. But I want to give them opportunity, but before I do that, I want to recognize the Select Committee Members for your edification.

We have Assembly Member Vince Fong representing the 32nd Assembly District, Cecilia Aguiar-Curry representing the 4th District, Tasha Boerner representing the 77th District, Mia Bonta representing the 18th District, Josh Lowenthal, the 69th District, Diane Papan representing the 21st District, Eloise Gomez Reyes representing the 50th District, Carlos Villapudua representing the 13th District, and also Dr. Jim Wood representing the 2nd District. So I want to give my Colleagues an opportunity to make a few comments or introductions.

So I will start with my Colleague who's traveled the furthest, I believe, and that's Assembly Member Carlos Villapudua for comments and introductions.

Thank you so much. Thank you for having me here. I'm State Assembly Member Carlos Villapudua. I represent the 13th Assembly District, which is Northern California. Mountain House, Manteca, Stockton, Tracy, Lathrop, Lodi. Very big, huge AG community. Our goods are cherries, almonds, walnuts. We were known for asparagus--that's gone, that's gone to Mexico, but we still grow it. But we're still a big AG community that's right next to the Delta. I represent this port of Stockton and all the ports here in the State of California.

I'm also the Chair of JEDE, which is jobs in the economy, which is very important for us too because it's about transportation, logistics, movements of goods, and all the above. So I am very thankful for being here and I look forward to engaging in this Committee and really hearing from a lot of you and then trying to make sure that we kind of take that back throughout the state to all of our Colleagues. So thank you all for taking this time today out of your busy day. Thank you so much.

Thank you very much. I would like to invite up Mr. Vince Fong.

Thank you, Chair. For those who don't know me, I'm Assembly Member Vince Fong. I represent the 32nd Assembly District. Certainly appreciate the opportunity to come back here. Certainly been on this Committee since I was first elected, so certainly have seen the supply chain and goods movement issues become on the forefront.

This used to be more of a sleepy Committee until recently, and I think that not only you, but I think the public now understands the importance of our supply chain and how we move goods throughout the state. I represent the 32nd Assembly District as I mentioned before, Kern and Tulare counties. So we certainly are a leader in agriculture. So as we focus on imports, our exports are important.

I will be back on Thursday touring this facility again with California Fresh Food Association, but also the Vice Chair of the Transportation Committee, Vice Chair of the Budget Committee, we need to make investments in our ports on a continual basis to sustain not only the operations, but also to ensure that we move goods throughout the state in an efficient way.

So I appreciate the conversation and to continue the conversation with everyone here, and I have a lot of questions that hopefully will get answered as this Committee moves forward. So thank you.

Thank you very much. And also I want to introduce Al Muratsuchi, my Colleague, who also share San Pedro with me. Because he represents San Pedro, we certainly believe that it's prudent and best that he also weigh in because he has a vested interest based on the people he represents. So thank you very much for joining us and please introduce yourself.

Thank you very much, Mr. Chairman. As the Chair indicated, I am proud to represent San Pedro to share San Pedro with Chair Gipson. My district goes from San Pedro up to LAX, and so I know that a lot of people live in my district, if not work directly in the ports of Long Beach or Los Angeles.

I was just here last week with Mr. Sharma where I got an update on what's happening at the Port of Los Angeles and I was very concerned that one of the statistics that one of the data points that he shared with me was that around 2000, the Port of Los Angeles had about 50 percent of all container volume, and today we're down to less than 40 percent.

And so I want to echo what Councilman McOsker was talking about earlier about making sure that we're striking that balance between making sure that we're keeping our ports competitive so that we can keep the container volume coming here to the Port of Los Angeles and to Long Beach so that we can keep the jobs here. I know that San Pedro is a union town. We're proud of our unions, we're proud of our workers.

We want to keep those jobs here at the ports of Los Angeles and Long Beach while at the same time, making sure that we are addressing the local air pollution concerns of surrounding neighborhoods, and so I look forward to the information that we're going to be hearing today. Thank you very much.

Great. Thank you very much. Can you just give my Colleagues a round of applause for being here? So before I introduce the panel, because we're good on time, I just want to let you know how this is going, as the Chair of the Select Committee. It is my desire, one: to have two hearings, one representing Northern California and Southern California. We're in that first phase. We're representing Southern California. Our next hearing--there's flyers disseminated--will be in the ports of Oakland on November the 2nd.

We invite you to please note that time down and please come join us in the ports of Oakland, which we're excited to be able to go there. And so after we complete that, but in between, we will go through and tour all 12 ports. Let me say that again in case you missed it: we will go and visit all 12 ports. We realize it's one port, it's a private port. It's important because it adds to the economy. So we will visit that port as well.

So we will have and we will task my Colleagues to join me in all 12 ports in the State of California after which we will put together a white paper that my select Members, my Colleagues, their Staffs are watching. If they're not here personally, they're watching. They're taking copious notes. Mitch Mattos, who works on my team, who sits to my right, he will lead that discussion with those Staff Members gathering all those notes together to help us complete the White Paper.

And it is our desire that we will present that white paper not only to the Governor's Office, but also to the other forms of Leadership, to the Pro Tem in the Senate and also the Assembly because it is absolutely imperative that they understand all of our successes, but also the barriers that we face. And we hope that as a result of that, that we will come out with some policies that will help move all of our ports in the State of California forward.

So that's our goal before us. That's our challenge, and certainly we invite each and every one of you to take notes and share those notes with us just in case we don't forget anything that's of value and of importance to achieving this particular goal. And so that's what we'll be doing and that's the purpose of all these hearings and tours.

So with that being said, now we have our first panel up, and we have representatives from four local ports, the ports of Los Angeles, the ports of Long Beach, San Diego, and also Hueneme, who are here. We will ask all of each one of our panelists to one: introduce yourself and then please commence with your presentation. We want to try to do this within five to seven minutes. The first one, we want to recognize our host for allowing us to be here.

We thank him for his great leadership to the Port of Los Angeles and to the people of Los Angeles. And that will be Mr. Gene Seroka, the Executive Director of the Port of Los Angeles, but before you do that, if you will please indulge me, I want to recognize my Colleague, a similar Member, Josh Lowenthal, who's just joined us. And if you can please provide us with a few opening remarks, we want to give way for you to do this at this time.

Just, welcome, everybody. Thank you for being here, you know, representing the Port of Long Beach, and I feel so grateful to have my Colleagues here from around the state, as a matter of fact. I certainly consider the two ports to be one complex that works together. So, excited to see people from both communities here today and look forward to the hearing.

Thank you very much, and thank you very much for being with us. With that, the Executive Director for the Port of Los Angeles, Mr. Gene Seroka. Thank you, sir.

Thank you, Chair Gipson and Committee Members, and welcome to the Port of Los Angeles. Here at our port, we focus on three major areas: the business of the port, our great community that was just outlined by Councilman McOsker, and our environmental strategy and stewardship. I'll begin with that for the purpose of this hearing. There is nothing more we want to do at the Port of Los Angeles than reach a zero-emission port complex and supply chain. But it is a daunting task.

I've been in this industry for more than 35 years, I've worked on the ground in 50 countries, and I have lived overseas working in this industry for 11 consecutive years in Asia and the Middle East. I have a view of what this industry looks like today, its leadership, and where it needs to go tomorrow. And I will underscore my comments by saying that the community, the regulators, the policymakers, elected officials, and everyone who counts on us should challenge us every single day.

And we appreciate the opportunity to speak for ourselves here in front of this great Select Committee. On the environmental topic, the ports of Long Beach and Los Angeles back in 2006 embarked on what is now famously called the Clean Air Action Plan, and it still, to my knowledge, stands as the only comprehensive environmental plan at a port complex in the world. Its results so far is a decline of diesel particulate matter by 88 percent as recently reported out in both ports comprehensive findings of their emissions inventories for calendar year 2022. Nitrogen oxide is down by 62 percent and sulfur oxide by 97 percent.

All of these reductions have exceeded our joint commitments to our communities that dated back to even 2015, when both ports called for an update to the Clean Air Action Plan, which yielded no less this strategy of going to a zero-emissions port environment by the year 2030 and a zero-emissions heavy duty truck environment by the year 2035. That was resolved by the mayors of Long Beach and Los Angeles back in June of 2017, far ahead of anyone else's aspirations in our industry, and we continue to march forward where our resolve has never been stronger in this area.

But there are challenges, challenges in infrastructure, in the technology itself, and the cost of adopting that technology. Now, it's not for us to say what is going to work and what's not. We're a test basin for original equipment manufacturers, companies, and our great workforce to test this new equipment, to see what's going to work and what needs to be more refined by our engineering and scientists and those that build these great machines. That work continues on the infrastructure side.

And while we're so thankful to this Committee and this Leadership of elected officials, California Governor Gavin Newsom's budget, at the request of the Assembly, has never had more focus or investment in the 11 ports in the state in generations. And just recently announced with our Secretary of Transportation Toks Omishakin, both ports and surrounding communities received more than 800 million U.S. Dollars on important projects to improve the transportation sector and our communities by reducing those emissions and improving air quality generational.

Now, we need to work on the federal side to get more of that Infrastructure Investment and Jobs Act, Inflation Reduction Act money to come our way. California has only received approximately 14 percent of the IIJA money to date, and we're more than halfway through the lifecycle of that bipartisan infrastructure law. We've got to continue to campaign and push our applications to the front of the class.

Infrastructure also means how we generate energy, store it, and distribute it for these new machines, whether they be ocean-going ships, heavy duty trucks, harbor craft, locomotives, trucks, or the cargo handling equipment that we have on our docks, all of which you'll see firsthand this afternoon on our joint port tour. That infrastructure has led to a lot of debate. How do we get zero-emission trucks on the road quicker?

How do we get them in the hands of the drivers, many of which are small business?About half here in this port complex have five rigs or less. Most of the drivers who are registered to do business at the twin ports are Gen Zero or Gen-One Americans trying to build families and businesses. The cost of one of the new pre-mass production trucks is anywhere from 450,000 to 700,000 dollars.

The typical truck that a small business person drives today is purchased on the tertiary market for about 50,000 dollars. Statewide strategy around infrastructure is also needed. Think of a concept as simple as overlaying a map of where all the diesel stations exist today and start looking at that for electric charging and hydrogen fueling. Trucks charge up or fuel up where they rest. Think of a warehouse when they're unloading their goods. Think of the truck depot as drivers hand off one rig to the next driver.

These are concepts that I think can help get us to areas of infrastructure investment that take place where we need the most: the major trade corridors that we have: Central Valley of California, the Inland Empire in Southern California, the rail yards in East Los Angeles, just to name three. So we need to continue working in these areas. The technology. A battery electric truck today carries a battery of about 16,000 pounds. That more than displaces cargo compared to its diesel competitor.

We know that the technology will move forward, batteries will get smaller, storage will get improved, but we're not quite there yet. And these trucks that we're testing here at the nation's largest port complex have difficulty going over the Cajon Pass, the Vincent Thomas, or the new bridge in Long Beach consecutively with payloads. Again, these are what the engineers are working on but we're not quite there yet to compete with their diesel rivals.

About two-thirds of the trucks that move in and out of the Port of Los Angeles carry cargo. Balance third goes on rail. So this truck migration to zero-emissions is extremely important for all of us and the 20,000 truckers that are registered to do business here at these ports. And the cost structure, as I mentioned, also has to be taken into account, which is why our focus is on accelerating the technology and finding the necessary investment and funding streams to help bridge those gaps.

The Harbor Commission in Los Angeles has given me unprecedented authority to offer now 350,000 dollars per vehicle stacked with California vouchers to help bridge that gap between diesel, electric, and hydrogen. Again, good start. We've got to do more. On the business side, as was correctly said, our market share has dipped from year 2002, as Assembly Member Muratsuchi said, of 50 percent of the nation's imports down to 40 percent, and most recently between the years of 2022 and 2023, down to 33 percent.

History has shown when that cargo moves to East and Gulf Coast Ports, it does not come back in its entirety. Others have hired switched on leadership aligned with policymakers, and gotten great federal investment in order to compete with our California ports. We need to look at that blueprint and accelerate that work together. And that's my final comment, that we can't do this alone.

While we have great vision and resolve, industry expertise, policy, folks, and so many others that want to help us chip in, we've got to harness not only the power of California, but the power of the more than 250,000 companies that do business with us annually here at these ports to row in the same direction. Mr. Chair, I appreciate the opportunity before you all today and look forward to any questions or comments that the Committee may have.

Thank you very much for your testimony. We appreciate it. We ask that you sit tight. We may have some questions from the panel. Next, we want to move to Mario Cordero, the Executive Director of the Port of Long Beach. And again, I see a number of commissioners from the Port of Los Angeles and Long Beach. So we say, welcome, Commissioners. Thank you for allowing us to be here. So with that, Mr. Cordero.

Good morning, Chairman, Vice Chairman, and the Committee.

So appreciative that you're here at the nation's largest gateway. And before I begin my formal comments, let me just preliminarily say Councilman McCosker was right on point with regard to the concerns, particularly of this region and what this gateway has done to address those concerns. Assemblyman Lowenthal, you mentioned you see this as one port complex. That's absolutely correct. In my days that I was in Washington DC.

As Chairman of the Federal Maritime Commission, stakeholder after stakeholder of leading executives of international carriers when I would ask them, well, how do you decide? Do you go to Long Beach or do you go to Los Angeles? It's just one complex. And I mention that because part of the challenge in my view is again to maximize collaboration in this region.

And that's further emphasized and confirmed by a study procured by Mayor Garcetti back in 2018, the Economic Industrial Survey, which talks about the maximized collaboration needs to be had by the San Pedro Bay ports. And I'll just refer you to that report for your casual reading. Chairman, I'm very impressed that this Committee is going to visit all 12 ports of the State of California, 11 of which are public. That's a great step because it's not just about San Pedro Bay for the State of California.

We're not the fifth largest economy solely because of Silicon Valley, it's because of international trade. So from my perspective, I'm very much appreciative by not only this leadership, the leadership of the Governor and the leadership of the state Legislature with regard to focusing on the largest container gateway of the State of California.

Unfortunately, it took a pandemic to raise awareness about the importance of the supply chain, the importance of the resilient workforce we have here in San Pedro Bay, and of course, the economic engine that we've all acknowledged here. And let me just say this, it's not just the number one economic engine of a gateway for a country. I will say it's the number one gateway that has proven economic and environmental stewardship and has metrics in a resume to prove that. Why that's so important?

Because I think to gene's point, regulation here has to be pragmatic. Councilman McCosker referenced the fact that we need to work with our regulatory agencies, AQMD in particular, to move forward for the greater good and not just move forward in a way that you're going to assess fines and penalties and accumulate revenue with no metrics of emission reduction. And I will challenge anyone who questions the resolve of these two ports to address reductions of emission.

And my question to the Committee, what other gateway has a goal of zero emission? So the two pronged mission of these two ports, there's substance to this. We will take advantage of any available technology that's available to continue our mission. Now with that, as I mentioned, the port of Long Beach is part of this premier gateway.

And from our perspective we move forward 200 million in annual trade, 2.6 million jobs result from indirect or direct movement from the poor Long Beach and of course, 575,000 region wide. I do have a PowerPoint and I apologize. Here we go. As I mentioned, here's a graph of the movement of San Peter obey TEU volume. And by the way, you'll note that 2021 was a record year.

We reduced a little bit in 2022, but it's far beyond the forecast that was made in 2016 about TEU volume in the San Peter Bay ports. So there is a recognized concern and challenge with regard to the loss of business. So just in 2023, when you look to May of this year, may was Portal Long Beach strongest month. Going back from August of 2022, these two ports moved one round figures. In May, these two ports moved 1.5 million. In June, we dipped to 1.4 million.

In July, we dipped again to 1.2 million. But the good news, in August it's moved up to 1.5 million back to approximately where we were in May, but still far beyond the forecast of what was made a decade ago in terms of container movement here in this complex. So as we move forward, the Portal Long Beach, as I mentioned to you, these are the important metrics for us. Cargo volume, movement of containerized cargo, and of course, sustainability and what the environment holds for.

And in that regard, this is our quest, this is our mission, this is our resolve. And this has been the quest since 2005 when the Port of Long Beach moved forward. The Greenport Policy, there were five principles to that policy, and one of which is the commitment to reduce emissions.

And with our partnership with the Port of AOA since 2005, as Gene referenced, the 2006 Clean Action Clean Air Action Plan came about, the Clean Truck Plan of 2008 came forward and there's been substantive improvement metrics to prove that this gateway has undertaken a mission that no other containerized gateway has been able to achieve. So our plan is 00 emission energy resilient operations and has been referenced already.

We're going to be zero emission in terms of cargo handling equipment in 2000 and 32,0350 emission trucks, which I've said previously, we're going to get there before 2035 for the Portal Long Beach. We already have 19% of our cargo handling equipment is zero emission and by the way, the most of any other port in the country. Now let me go to slide number five here, talk a little bit more about the trucks. As I mentioned, by 2035 our goal is to have zero emission trucks.

I want to thank CARB for their recent advanced clean truck fleet, which provides market enhancement so that by 2036, everybody knows you have to have a zero missing trailer truck in this state. Currently there's an excess of $8 million that the two ports have accumulated as a result of the application implementation of the Clean Truck fee which commenced in April of 2022.

The port, Long Beach has supported significant truck charging infrastructure, including the nation's first heavy duty dryest truck chargers at the Terminal Access Center, leases with entities such as four gen watt EV forum mobility for public charging. We have released an RFP for additional charges at the Terminal Access Center, and we have plans for an additional RFP at a larger North Harbor site. And altogether, we are on track to have 100 charging stations at the Port of Long Beach by year 2027.

Now, even though that's cutting edge leadership, I will tell you far below what we need in this region and for that matter, in this state. In March, the poor lombies joined a delegation led by Lieutenant Governor Eleni Kounalakis with regard to international partnerships on environmental initiatives, more specifically with Japan assemblyman, you were there witnessing leading technology involvement in Japan with regard to investment in hydrogen. So there's great news coming ahead, despite by some who may question the resolve of the two ports.

I can represent to you that on the international stage, the carriers have moved forward with substantive orders of new vessels which will have alternative fuel capabilities, methanol, green ammonia in the future, hydrogen. Nothing immediately in the near term, but we're moving forward. This is not an industry that has been dismissive like other sectors. I could just refer you to the article in the OA Times this weekend about other sectors who have not been very corporately responsible in reducing emissions.

I'm proud to say that these two ports have and will and we will achieve our zero emission goals. Moving now to slide number six. Here's a number with regard to what we've been able to accomplish. I want to thank the Committee for their Advocacy, the Governor and CalSTA. Is that my time's up? Oops okay. As I move quickly to close, I want to talk real quick about peer win on dock rail. Thank you.

In terms of our 158,000,000, we received for that as part of the 308, excuse me, as part of the greater allotment by the CalSTA grant of 383,000,000. But here's another development at the pier of Long Beach that's huge. And we're going to need to support the Committee and the Legislature, of course, the government, to make forward this reality about renewable energy. So, in conclusion, let me just emphasize what I think are the takeaways here in terms of what you're hearing.

These two ports are vital not only to the nation, they're vital to the State of California. This economic engine provides jobs. But I think the takeaway and the most important point is that no other containerized gateway, no other port authorities have moved forward with the kind of environmental initiatives to reduce emissions and of course, the quest to move to zero. But we can't do this alone. Keep in mind, we're public ports, part of a city, City of Long Beach, City of LA.

There's only so much we can do. We cannot do this alone. And one of the questions about the competitiveness that I believe is very real is the cost that's involved with regard to what some people want to apply in terms of fees and penalties. We cannot acquiesce to that, especially when we have been environmental leadership. So with that, I apologize for exceeding the time limit. I'm very energetic on this issue because, again, we are in a very good period for the State of California.

We're moving forward to support the ports and a great appreciation of the state Legislature for not only the funding, but the continued commitment of sustainable funding to these ports, because it is vital. So with that, Mr. Chairman and the Committee, thank you so much.

Thank you very much for your testimony. Ask if you could just please stick around for questions from the panel. Kristin Decas is the CEO and port Director for the Port Hueneme. Thank you so very much for being here. And you can commence with your testimony. But before you do that, I also want to note that the governor's office, GoBiz and also representative from our speaker's office and also Robert Rivas and our Secretary of Transportation, we have people watching and also in the audience.

That's how important this hearing is. And I appreciate, again, Speaker Rivas for allowing us to continue with this Select Committee. So thank you very much and please commence.

Good morning. Thank you, honorable Assembly Member Gibson. Select Committee Members, it's a privilege to be here. Thank you for including the Port of Hueneme on behalf of my Board of Harbor Commissioners. We're very pleased to be here this morning and share some of what's happening at the Port of Hueneme. Just a sidebar you may recognize one of my commissioners, Commissioner Hodge, who happens to be married to our state Treasurer, Fiona Ma. So we have some friends up in Sacramento as well.

This is a snapshot of our port, the physical port. And I thought it might be just worth sharing that we do share a harbor with Navy base Ventura County. And it's been a great private public win for our local military. We have access to 54 acres of infrastructure when the Navy is not using it to deploy for commercial purposes. And in lieu of paying rent, that would go to the General Fund. The money stays here locally, and we build for the Navy.

We also have a customer on that side that leases 90 acres of land. And collectively, we both have that pay to play and build for the Navy. And we've invested over $90 million in our local installation in Navy based Ventura County. So those are ways that we can contribute to our nation as well. Here the port just thought I'd share does have strategic quarters. These do have national significance because of Navy based Ventura County as well.

We do have a 90,000 heavyweight allowance, and we also own a short haul railroad and we connect with the class one railroad, Union Pacific in downtown Oxnard. And I am looking forward to you all coming out and visiting the Port of Hueneme. This is our domestic reach, so we do support trade throughout our nation as well. 15 states we reach as well as into Canada, both on the import and the export side.

And I appreciate all the different perspectives at the table here because we are actually known as the port farmers built. So AG is in our DNA. We move a lot of refrigerated cargo. 5 billion bananas are imported to our port every year. But we also support our local communities with the export side of the house and a lot of other commodities come through us that are AG related. We are the fourth largest California container port, six on the West Coast.

A lot of people don't realize that we're number six for autos in our nation and in the top 10% of the nation seaports for AG and produce and automotive cargo. When we do well, our communities do well. You can see the growth. We've actually grown 80% in throughput over the last decade. And so our jobs have jumped 144%, tax revenues into our community, 224%. And over economic activity has grown 150%. So that impact is real. We live in disadvantage. Our communities around the port are disadvantages.

So we really are creating pipelines. 60% of the people that work at the Port of Hueneme live in Oxnard or Port Hueneme neighboring communities and 95% of the people that work at the port live in Ventura County. This is another showcase of that growth. We have seen tremendous volume upticks over the last decade and it kind of shows the tonnage and the commodities that come through here.

I think this is one you might not know is that we are actually the 16th largest container port in our nation now moving more containers than the port of Boston, Portland, Oregon. So we really have emerged in this area since 2000. When I started 10 years ago, we hardly moved a container. Now we're moving close to 270,000 TEUs of containers a year. On the automotive front, it's worth mentioning that we are supporting the Governor's goal to go to an EV economy and the electric vehicle mandate.

23% of the vehicles now coming through our port are electric. So we're really on the front end of that supply chain and outpacing the national average of 5.3%. When things break, Hueneme Osmond is the port that steps up as the resiliency hub. We run a little different. We only have 120 acre footprint, but we have all of these private terminals, extensions of the port outside the gate, and we start adding up that acreage, we really have a significant footprint.

So by way of example, when a Chiquita banana comes into our port, the container doesn't stay there. It will go to an offsite private terminal outside the gate. Where it's actually a bonded customs facility. Inspection happens there, so we don't get a congested seaport. You have all these extensions of the port outside the gate. Same thing with cars.

When a vehicle lands at port of Hueneme, shoremen will take it off the vessel, and then it's actually driven to one of the off port locations, so we don't have auto carriers coming onto the port. All of these extensions of the port are where the cargo goes. And that's a model. Ports are seeking now to build right inland ports to eliminate congestion.

And we were built that way by design, so during supply chain congestion and we also operate more like an operating port, so we can pick and choose who we do business with. So if someone's going to congest our port with a lot of containers stacking up and not get bananas to market or exports into the market, we can say no to that business.

And during supply chain congestion, our cargo actually exports grew 219% and we were able to launch new services from China to go into a gateway that wasn't congested and get things like electronics, medical supplies, Hanes underwear, croc shoes and other commodities onto the shelves in American markets. So we do play a role as a resiliency hub. I will say with some of the slippage that we've seen in market share that we are seeing a lot more.

Travelers come from LA and Long Beach to the Port of Hueneme now to get work. So that's how real that impact is and it affects our casual workforce as well. So our casual workers are now not getting that work. And I put this slide up there because I think if the system of California, if the San Pedro ports get sick, our whole system, the ecosystem of ports in California will get sick.

So our goal is to go green, but do it in a way that is sustainable and keeps our ports competitive. As the role of the Committee here today, I will mention that we also have zero emission ambitious goals. We got a $200,000 grant from the CEC, so we're building our blueprint to decarbonization.

We plan to roll that plan out this month, and we're looking at very similar targets as my friends here in terms of ambitious goals to go to zero emissions, we'd like to be the first zero emission port. We think the size of our port might give us the economies of scale to be able to achieve that ambitious goal. To date, we've invested 70 million in green infrastructure, from things like hybrid electric cranes, to the Shoreside power systems, to Tesla battery storage technologies at our port.

So we're really, as all the California ports collectively are trying to lead the way towards the zero emission future. We have stood air quality monitors in our community. We collect air quality data every second, every day, and we share that data because we want our community to know the status of their air.

On the wind front, we're a little different play on this than some of the larger ports, but we're looking at how our workforce can become, maybe how we can help develop the workforce in Oxnard opportunities around operations and maintenance, like manufacturing. And in terms if it's going to be expensive, our needs won't be as great as, say, the $1.0 billion project of my neighbor here. But we do want to play in that development of offshore wind as well.

Just some other unique ways that we help our country. In terms of emission reductions, I won't go into technicalities of what a blueberry pilot project is, but essentially about three years ago, only one other port in our country could accept blueberries from Peru, and that was the Port of Philadelphia, and they would truck all those blueberries out here. Well, we did a pilot project with USDA, CSDA, and our local AG inspector, and we were able to open our doors to accept blueberries from Peru.

And now we have all these emission reductions. In a given month, we might move more blueberries than bananas and prevent all these emissions from going across country in trucks. And then finally, we are extremely grateful for the funding that has come through the Governor's Budget. It is transformational for our port. We received 80 million. So it's going to be a combined green effort to go to zero emission while we create thousands of jobs related to trade and commerce.

And so I think you've heard a lot of the high notes here already. But we're all in, right? We're here. We want to run. We want to be that zero mission port. But as my partners here said and colleagues today, we need your help. We need sound policy and we need money. We need infrastructure. Collaboration is so key to success. You can't have a mandate coming from one agency and then have not enough grid capacity to meet that mandate.

So just having that robust conversation through good public policy is really important. We touched on leveraging federal funding. I had the privilege to join my colleagues and go to Washington with Secretary Toques Omashopkin and firsthand tell them, bring some of the bacon back to California where you have that agenda alignment with President Biden. Let's start bringing the money, not giving the money to the states that aren't doing it, give it to the states that are doing it and leading the way.

And we could certainly use your help there. And then it's just really important that we assess the needs. So we build smart, we do it right the first time. We get all the infrastructure in place, we do it right and then invest. And we'll need your help on that. But we're all in at Hueneme, and we thank you for your leadership.

Thank you very much. We appreciate your testimony, your presentation. Next up, we would like to invite up to speak. Mike LaFleur, a Vice President and Port of San Diego. Thank you very much and welcome.

Chairmna, thank you, Assembly Members. Thank you for this opportunity to come and speak to you and to gather the ports here of Southern California to DeVoice some of our thoughts and what we've seen and what we're doing at our ports. The Port of San Diego fulfills a unique role among our California ports, fourth largest in California and also one of the designated commercial strategic ports.

Therefore, we have to have our facilities available within 48 hours notice, much in the same way as Long Beach does, Oakland does, in order to help support our national security. Definitely a differentiator on the West Coast with regard to capacities and utilization of our ports. Also as a strong economic engine district has an overall impact of about 20.9 billion and 114,000 jobs in California. We manage a diverse portfolio that generates revenue to support vital public services and amenities. From building ships for the US.

Navy and bolstering California's cargo supply chain to demonstrating new clean technologies, San Diego's waterfront provides jobs and revenue that flow into the communities in and around the bay and supports federally designated critical infrastructure. We're about to Commission our first all electric mobile harbor crane. It's going to be a first in the nation. We have a lot of all electric cranes here, but the first all electric mobile system also will be the largest capacity on the West Coast from a port standpoint at 400 tons.

So it's a great addition to California's infrastructure and ability for some of these projects we're seeing coming online. As we talked about wind, as we talked about a lot of the energy transformation here, to be able to bring those heavy capacity units in here without having to use ship's gear, vital for kind of the supply chain and cargo. We're also awaiting the arrival of the first all electric harbor tug. Crowley will be bringing that into our port, hopefully the beginning of this year.

It's finalizing its build in Mobile, Alabama, but I think a great platform to show the capabilities and a port of firsts in California as to what we're doing with regard to air emissions and electrification initiatives. Since you're here today to tour and have a discussion mostly at the Port of San Pedro or the San Pedro ports, we look forward to having you down into San Diego in the near future as you continue that.

But let me give you a little bit background on kind of who we are down in San Diego. We're a special district that controls about 34 miles of bayfront from the beautiful urban waterfronts of downtown to the saltwater marsh habitat in Chula Vista and our South Bay communities, to the oceanfront of Imperial Beach and Coronado, including some of our naval facilities there. We are diverse and we have a diversity of not only the cities we represent, but the communities that surround us as well.

We have two cargo terminals that pack a punch down in that area. 10th Avenue Marine Terminal is a specialty in brake bulk cargo facility. We process large project cargoes like the wind blades and the transformers. We completed a first phase project that helped to modernize our terminal. It demolished two underutilized transit sheds in the area and created more lay down area for project cargo out of oversized cargo wind, as well as military moves and created a strong strategic port.

Other Cargo this terminal includes fresh fruit, containerized, steel, bauxite and other raw materials coming into the region. Large quantities of these steel go to NASCO, which is the only full service shipbuilding facility on the West Coast. A little further south is our National City Marine Terminal. One in every 10 vehicles that you see on the roads comes through National City, so vital for the automobile market here in the United States and those imports.

That terminal also supports our US flagged Jones Act carrier that transits between the West Coast and Hawaii, supporting rental cars, personal vehicles, big rigs, yachts, and as well as our military moves. Again, emphasis for San Diego is really on non containerized cargo that needs the special cargo handling equipment and capabilities. We're also talking about some of the funding side of it. We're pursuing the Federal PIDP Grant around 11 million to leverage the impact of California's 20 million towards the port.

We'll be using that for substation upgrades when we talk electrification, as well as lighting upgrades and infrastructure when we talk infrastructure needs for not only what we have now, but also these ongoing projects in the future of the ports. Those are critical for our developments and the future benefits not only for the port, but for the communities that we also support. So we want to talk a little bit about the growing pains when we start to look at our electrification initiatives, sustainability.

What have we seen at the ports? When we talk about a lot of these initiatives that these ports and my colleagues up here have had, what are some of the common challenges that we've seen? And you've heard many of those today, and I wanted to kind of go through a few of those. When it comes to early adoption in maritime technology, early adopters sometimes face an uphill challenge. It's not always easy being first.

We see that in a lot of these situations, and it's also not cheap. With the Port of San Diego installed shore Power 10 years ago, there weren't many ships ready to plug in. We knew it was the right thing to do, but the international market was still a bit off. We're consistently seeing that in the transition. In 2025, the Row row regulations will take place in which row vessels need to be shore powered. International market hasn't quite caught up to that.

And when you hear the amount of vehicles that are coming through these four ports here. That's a significant challenge for us to make sure that our infrastructure is ready not only for the regulations here, but to make sure that the infrastructure is designed properly for an international market that's not quite sure what they're going to do yet. So we're seeing that when we go and do designs, there becomes a redesign, a reduplication, and having to go back to the drawing board.

So somewhat in the similar statement, you can have things cheap, fast or good, but you can't have all three of them. And so what we're trying to accomplish here is to make sure, as my colleagues have mentioned, that we're doing it right the first time, and sometimes that takes a little bit of time in order to get it right.

We're seeing that a bit on the shore power with Roro standardization as a smaller, more diversified port, we're not a market driver for off the shelf and commercially available technology. Demonstration projects are not the same as universally available equipment manufacturing being available to the General masses. As my colleagues had mentioned, a lot of the equipment out here is a test platform. We have to recognize that we're so far ahead of things.

The standardization of models is one of the challenges that we're facing when the international community may not be where California is on technology that potentially strands our own assets and any of the infrastructure that we've put in place. And that's one of the challenges that we're seeing as well, to make sure that what we are building and the infrastructure we're putting in place matches what the international market is going to do in implementation. Today's goals and tomorrow's standards all require market readiness and available technology.

To make it happen. We need long lead times to create the infrastructure for the end users. I'll use the port Drayge trucks as that example. To the point of diesel gas trucks need gas stations. An electric charging infrastructure is a need along California. We're not seeing that yet. We're working on a RFP to bring one in to San Diego so we can create that southern region. There's a couple in Otay Mesa somewhat underutilized at this point.

As technology catches up, we're working the same as our colleagues here to do our part to bring in charges, but it's a vast need throughout the state that's going to be a requirement and then funding. Third lesson on funding legacy grant programs at the states need to be reworked for ports of different sizes, operations and needs. The Legislator can Fund a program, but the program needs to reach the need. Funding solicitations should be written in such a way that more ports can truly compete.

And then the bottom line the system supports is self supporting to a point. During the supply chain crisis, we all had each other's backs. San Diego was able to bring on some of the containerized cargo, cargo that moved out of containers into bulk. To alleviate some of the system pressures up to the north here in San Pedro. But in turn, the port needs California to champion them too.

We're on the front line showing the country what sustainability really looks like and competing with ports elsewhere who do not perform to our environmental standards. These are a few of the ways the states can align with ports here to ensure more meaningful support and effective partnership in the years to come. I thank you for listening today and I look forward to having conversation with you and here to answer any questions.

Thank you very much. We appreciate this panel and the information you provide the panel of experts because your hand is on the pulse. You have a great responsibility to guide California supports. And so I want to say how much we appreciate you for being here. I want to open up for questions and I want to start off with the first question because you've given us a lot of fruitful thoughts and I appreciate and I saw my colleagues taking copious notes.

And so get ready because they're certainly coming. I also want to, Mia Bonta Assemblywoman, who will be hosting us in the ports of Oakland in November, November the second. And I'll be repeating these dates to make sure that you hear them and also write them down and join us. Although there's all men up here, but there's five women who's part of the Select Committee. So I wanted to underscore they just was not able to be with us.

But Mia Bonta said, please come join us on November the second in Oakland where she will be hosting us. So the first question that I want to pose to the panel and whoever wants to regale us, then feel free to do so. I kept hearing a running theme. One, it's about federal investment and partnership. I need to, one, ask the question, what are we not doing and what should we be doing as a state in order to get because we all are not disillusioned.

If California goes, this country goes, America goes. So how do we one and what should we be doing in terms of painting the picture about federal investment? Is it our congressional delegation from California that we're not leveraging? What is the block and what should the Legislature be doing to try to help in those efforts? Okay, I'm going to shut up, so please, whoever wants to take it.

Yeah, chair. I think it's been shared with us from Secretary Buttigieg, the Department of Transportation, to so many other cabinet Members and more recently, former New Orleans Mayor Landrew, who is the senior advisor on infrastructure. We need to unite, and that's what competing areas have done versus us. California is a big state, 40 million people. You all have large districts and a lot of responsibility in so many different areas. But in order to compete with those ports on the east and Gulf Coast, for money.

We have to unite on pure causes. California stepped up, as noted by the budget that you all started at the Assembly to create these initiatives and was put into that final fiscal year series of numbers 1.5 billion U. S. Dollars for these 11 ports never done before. We have to unite across these ports as a unified California with some very particular ass on infrastructure dollars. Again, 14% of the IIja money has gone to California.

Broadly, we move 40% of the freight we got to punch above our weight in this case. And why is this important? Two reasons for you all and for your districts, your voters. For every four containers we move, we create a job here at the Port of Los Angeles. For every container that goes to these other ports, they likely travel longer distances emitting more toxins into the air going on transit paths that don't have the effect of voluntary involvement on the environmental stewardship side that we do.

They're going to burn dirtier going to these other places. Keeping the cargo here is cleaner. It's better for the planet. It's better for our own neighborhoods. And to do that, we've got to keep investing. And those jobs are so sacrosanct to all of us. And that's why the ports of Long Beach and Los Angeles have with your initiative, Mr. Chair, embarked on the nation's first goods movement training campus.

And that's an effort to upskill and reskill people of my vintage, attract young people into this industry and bring folks, again collaborating and to this central point, we've gone even farther than that. Just announced in Shanghai this week between the ports of LA Long Beach and that great port the world's first green shipping corridor we want to see a zero emissions vessel and a zero emissions transit path.

If we reduce the emissions on that Shanghai to Southern California route by 10% we eliminate all the emissions in a year at the Port of Los Angeles. So this is what's at stake here. Big time jobs, big time work on spreading this environmental stewardship. But we can only do it if we act together. And it's a broad coalition we need to pull in from federal to state elected policymakers and that core business that I mentioned earlier.

Thank you very much. Before I turn over to my colleagues, was with Congressman Robert Garcia, who would like for us to join together because he also chaired the port caucus in Washington, D.C. To how to really leverage, but collaborating and bringing us all together in terms of making sure that we don't miss the mark, that we hit it spot on with resources from the federal government level. So with that, I would like may.

I just add 1 point to Gene's comment that's I think worth mentioning is when we were in Washington too, a lot of us apply for grants and we're applying for them, we're applying for emerging technologies because they're not mature in technologies yet, and then they're not proven or verified, so the federal government won't Fund them, and so our applications get disqualified. So I think some of the messaging coming from the state should be, let pilot projects be eligible for funding.

I know there's a big clean ports program getting developed with the EPA right now that's going to be coming out in a NOFO in February. If we could influence that legislation to include emerging technologies, that would go a long way for the ports of California.

Can I challenge you for a moment? If you could, please, maybe two paragraphs, and send that to my office. We want to incorporate that. We want to use that as a map of terms of how do we leverage those resources. So I'll be tasking you with some responsibility as we move forward. So thank you very much. I want to start with my Vice Chair, Mr. Fong.

Thank you, Mr. Chair. I'll probably jump around a little bit. But I wanted to delve a little deeper following up on my colleague from Torrance and...

Yeah, Assemblymember Fong, great question. And this is not a recent trend. This started back in 2002 where we began to see the market share depletion. Three basic categories of concern by the people who choose which port they go to, the importers and exporters of the United States. Number one, cost. We all know everything costs more, takes longer in California. We've got to keep chipping away and streamlining our processes, whether they be entitlements-- CEQA was never meant to be weaponized or litigated to decades worth of troublesome dialogue.

But the biggest thing is, even though we have a high fixed cost, if you move more containers, your unit costs gets competitive. So we keep pumping the containers through here, that cost is going to be spot on with others. The second piece is that we've got a very complex labor landscape.

We've got a lot of people in the right jobs here at the harbor, but we may not in trucking, in warehousing, in logistics management, in government that support ports. So that's one of the reasons why the twin ports really put a lot of focus. And we're so proud of the Assembly and the Chair for getting this workforce training campus off the ground.

Now, it's not meant to move the entire industry, but it is the spark to get private sector investment and more policy around how we get the workforce ready for the future. We know automation, robotics, IT and AI are really moving faster than we could have ever imagined. Our postulate is very simple. With all that, we cannot leave the workforce behind.

The third piece has been the perceived heavy handedness of the regulatory environment in California and it's kind of like going to the movies and watching the coming attractions. If you don't like what you're seeing, you're going to leave the theater. You're not going to wait to see how this plays out, how it adjudicates in a court of law. You're going to take your cargo where people want it. And unfortunately, we haven't been able to have that unified message here.

I am not advocating we roll anything back. We want to keep this resolve as strong as we can because we are powerful in our conviction. But at the same time, people get really scared of things like AB 5 and how it's going to work. They get scared of what the indirect source rule is going to mean before it's even been promulgated. So we got to keep working together and that's all we're asking for. Keep us at the table.

Community Members, policymakers, regulators, those are the three things. Where's it going? The fastest growing ports in the nation: Savannah, 177% growth during that time period; Port of Houston, just shy of that growth. And then folks like Norfolk and Charleston. Again, these people have hired really great leadership and they've aligned with their policymakers. I'll leave you with this.

Over the last 10 years, between year 2010 and 2020, the federal government outinvested West Coast Ports at a rate of 11 to one. $11.0 billion went to Eastern Gulf Coast Ports and a little over $1.0 billion to the West Coast Ports. There's no doubt in my mind that that is a big piece of the competitiveness aspect. So it really is complex, it's nuanced. But those are the three drivers: Cost, we found ways to get after that; complex labor landscape of such a big geography, we're working day and night on that, as you are, too; and the regulatory environment. Again, we've got to keep working together, pull people together. It does not need to be a polarizing conversation.

Mr. Cordero wants to.

Yes, absolutely. Mario?

Yes. Thank you. And again, if I could add to that, it is a great question. Let me just say this. When I was in Washington, I visited 18 out of the top 20 container terminals. Ask yourself the question, what did the Port of Savannah look like in 2005? What did it look like in 2010? And ask that question to every one of our competitors, be it Houston, New York, New Jersey--spent about 1.5 billion raising the Bayonne Bridge completed around 2016, 2015.

That's what's the missing piece in the State of California. What the Pandemic showed us was not necessarily a diversion of cargo, so to speak. But think about this. We were the gateway of choice. Everybody came to the San Pedro Bay gateway to the tune that we had 109 vessels up and down the coast. Why do you think that? Because this is the most strategic gateway to distribute the Asian import commerce. So to fix this, it's in our hands, the State of California.

We need to figure out how we move 20 million containers without congestion and bottlenecks. If we could do that, we don't have to worry about the competition. Now, to Gene's point, these other states, be it Savannah, Charleston, New York, New Jersey, Virginia--they did that because of, in addition to federal funding, state funding. So what the Pandemic did do, as I indicated in my opening comments, it brought awareness about the importance of the supply chain.

And we are very grateful to this Committee and your leadership, Mr. Chairman, the Governor, and everyone in Sacramento who realized we need to invest in our ports. It's a beginning. And I'm advocating that hopefully it's not an end. There has to be a focus on these 11 ports, or 12, of the State of California, because again, I'll end by saying some of our industry periodicals, media have really emphasized diversion. We're losing cargo because of union negotiations. Now come on, we all know that's not true.

You know why we're losing cargo? Lack of investment. We have the best dock workers in America here. They proved it during the pandemic. We need to support them with the infrastructure that both of us, our respective ports have invested billions in the infrastructure that you will witness in today's tour. What we need is the State of California and the political will to acknowledge the importance of the economic engine and do not back down because of somebody's perception that we're not doing enough on the environment.

So the answer is the political will to support these ports. It is vital, it's been vital and we appreciate the continued support. And Mr. Chairman again the fact that you're visiting all 11 ports of State of California is the beginning of the shape of things to come that needs to happen from the State of California.

So I want to build on that and I know my other colleagues have questions so I have a few more questions and I'll defer my time to my colleagues unless that bell goes off on the Chair's. But in terms of, so certainly agree we need more investment. I think you're preaching to the choir amongst us. Certainly need more federal investment.

I was struck by one of the slides I think that Kristin had which says that we need ongoing state funding, which I agree with wholeheartedly. In terms of comparing us to other states and I'm assuming these other states do have ongoing state funding. We don't have ongoing state funding. I think Gene mentioned we did plus up one time significant investments into our port infrastructure.

But in terms of other states how much do they invest ongoing in their state budgets, and what do we need to get to? I guess is my question.

Well I think with reference to California it was clear that the investment given the magnitude of this operation the investment was de minimis in past years. Now I'm talking about the past, but I want to emphasize how important the future should be. And again when I reference to the other states I mean the fact is that you look at those state authorities or those respective port authorities, they have that support and they continue to build.

What does that look like?

We can go through each state budget and kind of give you a look based on how big they are or how much cargo they move. But I'll give you this one thing and that's called the Harbor Maintenance Trust. It's an ad valorem tax on the import goods that come into the United States on the west coast. The twin ports of Long Beach and Los Angeles--round numbers only and our staff can follow up with you in writing on the specific details as you need it--but we collect a little more than $300 million a year on this ad valorem tax.

And based on the mathematics of this antiquated law, we get back out of that 300, about $3 million for the two of us. The rest of it goes to east and Gulf Coast ports, river ports that have requirements for dredging and taking up the work alongside their wharfs. Bottom line, we're investing in our competitors ports so they can grow.

San Diego and Hueneme, are also contributing to that same Fund in the same scenario, not getting any money back. So you have the four California donor ports sitting up here, and our funding goes back and invests in these other ports.

And I think that's an important point for us is what would that ongoing funding look like? How much would we need to invest ongoing? I know that we were catching up for the lack of investment for certainly a number of decades. And so what would that investment need to be to be sustainable?

I think it's a great question. I think we have some homework we can work on that through CAPA, I would imagine our California Association of Port Authorities and come back with some real solid numbers on what the other states are doing. But it's not insignificant, right?

But a budget line item every year, starting with the 1.5 billion that we saw in last year's budget, I think would be a good step forward.

And as the Vice Chair of the Budget Committee, I'm very interested in that.

But we'll work with you on the details. Definitely.

My last question, and this is the elephant in the room. But since we have all four of you here, I hear the term 'pragmatic,' the term 'balance' in terms of our ability to manage operations here in Southern California when it comes to our ports. You mentioned in your last point when it comes to competitiveness, you know the heavy handedness of regulations, I would like to get your perspective on this indirect source rule. What you're hearing, what you're not hearing, what would you like to see?

What would the impact be? Certainly we discussed this a little bit in our hearing in Sacramento. Certainly the concern of volume caps is very disconcerting for us, especially when you talk about the economic impact to the State of California as well as to the country, as the chair mentioned, the national supply chain, the importance to our state and local economies, the importance to our competitiveness.

So can you give me the status in terms of what you're seeing, what you're hearing, and what you like to see?

Sure. Two quick points, Assemblyman. Number one, just one quick additional comment from your prior question here's. What the State of California can do to address these questions about funding and the level of a freight office that's substantive and maps out a strategic state freight plan. Why does not California have this in the year 2023? I don't know.

But what I do know is there's enough political energy here to make that happen so that step alone could issue now and make the roadmap in terms of what is required to make these ports sustainable, and goods movement overall in the State of California.

So that would be thank you for that because I carried that legislation exactly for everyone. I carried that legislation to make that happen.

That's why I wanted to add to that because you know how much important the export market is to the State of California. Now, as to the question, I will say that the regulatory agencies have done a very good job over the many years to making sure that not only the port sector, but everybody moves forward to the critical need to address the climate change and reduce emissions. My commentary is these ports have stepped up and done it.

I think there's a limit now in terms of how much you expect these ports to do when in fact the technology is not there. So from our view, at least for the port of Long Beach, I am not in favor of any more regulation by the AQMD, the indirect source room. And by the way, just by definition they're indirectly trying to regulate a stationary source. But in that regard, it's another legal debate.

But my point is, what more are you going to squeeze out of us and our stakeholders, our tenants, when we in fact have led in this endeavor? Because the technology is not there. You've already heard testimony here that do we have demonstration programs? Yes. Are they moving in a good step, moving forward? Absolutely. But 100 and plus zero emission trucks right now with a 20,000 truck registry is not going to do it in the short term.

We are making tremendous progress as well as our carriers with the investment by carriers like Merck, CMA, MSC, Costco shipping and alternative fuel. It's coming. So what I would ask for our regulatory agencies, particularly AQMD, be patient, give us a couple more years. The industry. Do not come and slam the hammer on us when it's critical right now for a competitive edge that we cannot increase the cost and increase the diversion to other ports that do not have that similar mandate.

And as a matter of fact, that's where the attention should be at these competitors who do not have anywhere near a Green Port zero emission or near-zero plan of action quickly.

You put laws in that govern this area of the port, whether it's a cap or type of equipment, et cetera. You wipe out this last discussion we've just had about grant making capability. I don't get a rebate to wear a seatbelt every day, it's the law. If they put a law in, we forego all this grant money to get to this aspirational notion of zero emissions. That's got to be worked on every single day.

Thank you. And I want to thank you for being proactive in your implementation of new technologies, and I certainly want to acknowledge and heed those warnings that you're offering us. Thank you.

And we want to move over to Assemblymember Lowenthal, Muratsuchi and also Villapudua, in that order. We're a little bit behind schedule, so we wanted to ask if we could get shorter responses and shorter questions. Mr. Lowenthal?

Thank you, Mr. Chair. And I will be brief. I want to expand on clean trucks. We have been talking about poor competition, and we're speaking about it in an apples to apples context, but it's not. It's apples to oranges. Port of New York, New Jersey doesn't have communities abutting their operations in the same way that we do here.

I loved your opening comment, Mr. Cordero, that it took a pandemic to understand the value that ports have, but it also took a pandemic to understand how bad the air is because of the levels of lung disease and asthma by the people who live in this community here, and disproportionately died of COVID. The number one job of government is protecting its citizens, we had to look very closely on whether or not we're doing a good enough job there.

So I certainly understand the concerns about the difficulties of implementing a proper clean truck program, but I'd like to drill down on that a little bit more on the clean truck fundraiser that you're speaking of. Mr. Seroka, speaking about the $350,000 you have set aside. I'd like to hear more about that. I'd like to understand better. Is there a sense of priority for those that are driving locally for local usage?

Do you feel that the state can be involved more in buying and negotiating in bulk by the manufacturers, or is there ways that the state can participate to facilitate this anymore? Do you feel that there's adequate financing available for these small businesses? I'm equally concerned. These are small businesses. This is absolutely very, very challenging. Are there enough business incentives? And also, is there a buyback program? You know, if these tertiary market trucks are 50 grand and we're just letting them go, are we just moving this environmental problem?

Are we moving the diesel particulates to other communities and killing the folks there? Which concerns me as well. So I leave it open to the four of you to want to answer this as you will, but I'd like to drill down on this most, it seems, as far as equipment and support, we have an answer for that. It really does. This is vexing, the issue about the trucks and how it's impacting communities.

And aside from the four legislators or the five legislators that are up here today, this affects all legislators throughout the state. Everybody is concerned about these trucks that are moving through their communities. In the Inland Empire and the warehousing areas. The talk about inland ports as an example. It's a tough discussion to have right now because of how those legislators in those areas feel it may impact their communities. So we need to have a better answer for this. And I value your thoughts.

I'll just say one thing that I didn't hear from you, which is the infrastructure piece of this too. That is one of the biggest challenges for the trucking community, whether they're going to be on hydrogen or if it's going to be electric. It's where the big state could have a profound impact is helping us figure out that assess and invest conversation.

Yeah, and I want to comment on that very briefly. So the state we just passed actually a renewal of the DMV fees, the registration fees, and how that gets divided up, and a minimum of 15% of those fees are actually going to be going towards hydrogen. So there is going to be hydrogen build out taking place, infrastructure taking place. And that just happened.

Congratulations.

In the interest of being concise, the answer to the question, do we need state funding? Yes. But to be more specific, a truck, right now, if you were to buy an electric truck, cost you at least $500,000. Now, Assemblyman, you know who drives those trucks? Independent operators, small business people. They don't have the resources to buy a $500,000 truck. So it's going to take a lot of state incentive, partnerships, collaboration for us to pull our money to do this.

But then again, the trucks aren't ready yet. It's coming, but we need to get ready to make sure that we subsidize or have some credible program to make these trucks available to the people who do this work. And number two, one of the interesting developments in terms of funding; Hydrogen, I believe, is the ultimate answer for the heavy duty trucks that do this work. And that is going to take some time.

But the exciting news is we're on the verge of receiving some funding at the federal level, but the state has to really move this. Assemblyman Muratsuchi, you've been a big advocate of that, so I think anyway, I said I was going to be concise, so I'm going to stop here.

How are the monies from the clean truck fundraise going out?

Well, right now we have about over 100 million collected between the two ports from the feed that began to be implemented in April of 2022. There's really no significant takers because the trucks aren't there yet in any kind of numbers, but we do need to get prepared for when that would be. I'll defer to Gene for commentary on this.

Are they on order?

Your questions are great. You're not going to get any argument from me. You can order anything you want. Doesn't mean they're going to be produced, doesn't mean they're going to be commercially available, doesn't mean you're going to be able to get spare parts.

But are they on order?

Not in the quantities that we need. And the production delivery dates are nowhere near where we need to be to get to our goals, infinitesimal amounts. And again, let's go after this in maybe a different way. Right. You cannot paint the globe with one stroke of a brush. We're not going to turn over 20,000 trucks, whether it's affordability capability or commercial availability. Look at those key commerce corridors. Let's set some milestones and be aggressive in those areas. This is really challenging.

Happy to work with you offline on it. As I know we have been talking.

The technology is really emerging, too. We did a grant with the Port of LA and we were going to get a hydrogen truck to come to the Port of Hueneme and it couldn't make it. So we're all in. As we say, we want to work.

It's a chicken and egg situation, though, just so you know. Like, on the other know, it's tough to really step on the gas, use the pun, know, infrastructure when we don't know are these orders taking place or not?

It's a great question.

Mr. Muratsuchi. Mr. Assemblymember Villapudua. Just want to follow up on that. If you don't mind.

Yeah, if I can. My colleague Lowenthal opened up questions that I want to kind of echo. But as Vice Chair of Problem Solvers, right? We have these hardcore discussions of what are we doing in the middle? Right. We understand that we're trying to get to zero. I visit New Orleans where their slogan is basically, we welcome all jobs, we welcome all energy. And I get that. I love to hear that.

But as I heard, my colleagues basically said, it's causing a lot of issues, concerns in his district. My district, what I keep hearing is this: it's killing local small jobs that are going from A, back and forth to the Port of Oakland to the Port of Stockton where they can get in. So those are jobs that I'm worried about. Right. They're trying to get to zero emissions. They can't afford it.

And how we're going to try to figure out how to help them out, that is something not just the state needs to figure out, but the Federal needs to figure out. We need to put our heads together. It's very complex, and I know that we also need to figure out internationally, right? How you mentioned that we need to figure out how, as we invest our money in our ports, why are we having these discussions internationally as they come in?

Are they adapting to what we're asking them to? This is more of a comment. You don't have to answer the question. But as you can see, I get a lot of calls from my locals. Not just California truckers associations, but I'm talking local businesses that are moving almonds, walnuts. These are jobs that are going not just locally or statewide, they're going internationally. And guess what? They're losing. Do not think that a farmer is multimillionaire.

A lot of them lease land, they rent land, and trying to get that cargo out and trying to obey and follow all of the California regulations, it's very, very hard. So I think that we need to figure out how do we think in the middle? How do we get from point A? And I know we're trying to get to Z, but how do we start thinking about that? We've been talking about hydrogen and all that.

So I would love to have more discussion on this as we're on this tour and as we visit all these ports, but it was more of a comment. Thank you.

This is a very robust conversation. I see the enthusiasm of my colleagues. We want to turn over to Mr. Muratsuchi and then we want to transition to the next panel.

Thank you. I wanted to follow up with Mr. Seroka just for clarification in terms of the overall trends of California's ports and their competitiveness. You indicated that we have gone from 50% in 2002 to about 33% in 2023. But I'm trying to reconcile that with the chart that Mr. Cordero put up where he talked about container volume growth from 2015 to 2022.

Sure. Pretty straightforward. Those numbers that I cited are our percentage of the imports nationwide between the ports of Los Angeles and Long Beach only. We've grown cargo business, but we're not growing as fast as the marketplace is. Therefore, we lose market share.

Okay. So we are growing, but we're.

We're not growing as fast as the General market, and we're certainly not growing as fast as some of those other ports I cited to you on the Eastern Gulf Coast.

Okay.

And had we kept up with market growth just with these two ports, it's my evaluation we have foregone about 170,000 jobs per year every year in the region.

All right. I'm looking at I believe this is a chart from the Port of Hueneme, but this chart shows that the Port of Long Beach, from 2019 to 2023, container volume has grown 4.2%, Savannah, Georgia, 5.5%. Virginia, 8.7%. But Los Angeles had dropped 8.8%. Can you explain why Los Angeles has, according to this chart, shown this the most significant drop?

Yeah, I don't know what the source of that data is. What are the mile markers again?

PMSA's chart that they put in their publications.

Okay, I can't see it from here. I'll be happy to look at it and share my feedback with you.

All right, thank you. I just want to quickly comment. I would like to follow up. I know, Mr. Cordero, you had in your slide deck the importance for California to support the building of the offshore wind port infrastructure, specifically at the Port of Long Beach. But I believe we are running out of time, and so I'd like to follow up to get a status update on that investment.

Thank you. Will do.

I want to thank this panel for your expertise and joining us this morning, and thank you very much. And please share with us, anything that you want us to know to add to our report. So we're going to invite the next panel. So let's give this panel a round of applause, please. Thank you very much.

We're going to start off with Patty Monahan. She's the Commissioner for the California Energy Commission. This is the regulatory industry panel who's going to be joining us. And we're going to ask them to self introduce. We're going to start again with Mrs. Monahan for her opening comments.

And we're going to try to make up some time if we can. It's been a very robust and interesting conversation and we appreciate each one of you for being here. Yes, and I also want to take a time as we're doing the transition, want to thank the Ports of Los Angeles police for being with us. We thank them for being here. They are a stakeholder in the ports as well. So we want to thank our port police for being with us this morning.

So with that, should I start it up? Well, thank you. Good morning, everyone and Members of the Committee, as well as Assembly Member Muratsuchi. So, I'm Patty Monahan, Commissioner at the California Energy Commission and I'm the lead for clean transportation at the Energy Commission. I'd also like to introduce my colleague, David Erne, who is sitting to my left. David is the Deputy Director for our Energy Assessments division. He knows all the modeling, so any questions you have about reliability, he can go into the weeds. I'll stay up in the clouds a little bit.

So thank you for inviting me to testify here today. It's a pleasure to be here to talk about such an important topic. We want to make sure that ports are able to decarbonize to help clean the air, but also remain a vibrant economic driver here in the State of California. So the Energy Commission recognizes the importance of supporting ports as they make this journey to a decarbonized future. I host our California Ports quarterly through something we call the California Ports Collaborative.

And that brings ports and state agencies together to talk about this issue and really work together and understand the challenges and the opportunities. So some of the challenges that ports face is the need on the power side is the need for electrical infrastructure upgrades to accommodate this concentrated load growth that we see for electrifying port equipment.

And we need renewable and resilient energy supplies that are going to be to ensure that we can continue to move goods, continue to improve air quality, and that even when the grid is down, that we're still making progress. So the Energy Commission, the Air Resources Board and other state agencies are helping to support ports in this journey. There's a lot to fit in. I'm really afraid of the chair's bell. And so I'm going to try to talk fast.

I'm going to cut down my remarks so we can have more room for conversation. You all know we have ambitious goals and you have set them. You have told us we need to have a zero carbon grid by 2045. We need to have a carbon neutral economy. Thank you, Assembly Member, for that. A carbon neutral economy by 2045. And we need to drive down emissions from transportation. It is the big kahuna, I would say, when it comes to our climate goals.

Half of the global warming pollution in the state comes from transportation. When you account for both combustion, so tailpipe pollution plus the fuel production. Half. And historically, what we've seen is while the grid has gotten a lot cleaner, we've seen emissions just shoot down. Transportation hasn't. It has remained relatively stable until recently. And that's because we're seeing a massive increase in the number of zero emission vehicles on our roads. One in four last year of new vehicles on the passenger vehicle side were electric.

And that's phenomenal when you think just a few years ago we were only at 7% market share. Governor Newsom has set a target 100% transportation zero emission by 2045. So over the next 15 to 25 years, we really need to zero out pollution from all sources of transportation. And ports are on the cutting edge of that. So now, let me just talk a little bit about the Energy Commission's role in this and I'm going to start on the grid side.

That was, I know a question of the Select Committee is how are we going to make sure that, given the challenges we face on the grid, that we can have resilient supplies. What I would say is that we are planning for this future and there have been dramatic shifts, which David can talk more about in how we plan our energy forecast. So we are responsible as the lead energy planning agency, to prepare a forecast every year of what our energy needs are going to be.

We've changed the forecast recently to account for what we're seeing on the climate side and also what we're seeing in terms of the future of transportation policies. So we're accounting for regulations not just finalized by the Air Resources Board, but under development. What that means is that what we're seeing over the last number of planning cycles is a big increase in our demand for electricity. And we're planning for that. So between 2018 and 2022, we've seen a 6000 megawatt increase in our 2030 electricity needs.

That information is being sent to the Public Utilities Commission, who's telling the IOUs you need to plan for this growth. And the key to us being able to meet our goals is really to plan carefully with our sister energy agencies, so that we're working as one whole energy system to be able to meet our energy needs. So I want to talk about some of the investments we've made on that side.

We are investing in micro grids on the demonstration side to allow ports to continue to power critical electric equipment even when the grid is down. Our electric program investment charge, or EPIC program, has funded two Demonstration Micro Grids, one at the Port of Long Beach and another at the Port of San Diego. One of our sister agencies, the California Transportation Commission, recently awarded 42 million to the Port of Oakland for a green power microgrid.

And microgrids I see in the ports as really a key part of the strategy to be able to ensure that when the power is down, they can still continue to move goods. So I'm going to talk about the transportation side of the equation now. So let me first clarify the roles of the Energy Commission vis a vis the Air Resources Board. So we're on the grid side in terms of building infrastructure for zero emission vehicles, planning for that infrastructure.

The Air Resources Board is on the vehicle side so they can talk about vehicle incentives. So let me first talk about how we plan for this transition. We're required for legislative mandate to do an analysis of the infrastructure we need both for fuel cell vehicles and for battery electric vehicles, two different pieces of legislation. And we've just released an inaugural assessment for hydrogen infrastructure. Every two years we're releasing one on charging infrastructure and we're planning for the build out of these investments.

So in addition to the planning side, we also have grant programs. I want to thank the Legislature for passing AB 126, which provides $100 million a year through 2035. That's going to be a really critical investment going forward, and it shows that California is committed in the long run in providing infrastructure for these vehicles. We also have funding through the Legislature, the General Fund and GGRF funds. Last year we passed a $2.9 billion investment plan for zero emission, mostly for zero emission vehicle infrastructure.

So hydrogen stations or charging stations, and 1.7 billion of that was for medium and heavy duty vehicles. That's a huge focus. And we've been told by you, the Legislature, you need to focus on that. And we are. So some of the programs that we use to spend this money, we have the nation's first Block Grant Program for medium and heavy duty vehicle infrastructure. It's both hydrogen and battery electric infrastructure. It's called energized commercial vehicles.

The program currently has a budget of $184,000,000 and ports can benefit from two of the lanes of that program. One is the drayage set aside funding lane, and the other is the EV public Charging station funding lane. The second are blueprints that we have funded. These blueprints allow for ports or for local governments to plan for this transition, you really have to think through what am I going to invest in? Is it going to be hydrogen? Is it going to be battery electric?

Where am I going to put those chargers? Where is the grid ready for those chargers? We're developing some tools to help make it easier to figure out where the grid is ready. And the Public Utilities Commission is working to look more towards the future about what's going to happen on the freight side and how do we plan for those grid investments that we know we're going to have to make.

So finally, I just want to talk about some of our research and development grants that we funded through our EPIC program that are related to clean transportation. Epic is piloting the use of solar and storage in medium and heavy duty transportation. This helps to improve resilience, but also helps to reduce costs, because during peak times of the day, when it's very expensive, you can use the battery to charge the vehicles instead of the grid.

Other relevant grants support responsive charging to cut peak demand, innovative opportunity charging, pairing solar and wind with dynamic load limiting technologies zero. I thought I was talking so fast. All right. And next generation charging technologies. In conclusion, I just want to say I appreciate the opportunity to share with you some of the Energy Commission's investments in the space and I look forward to your questions and comments.

Thank you very much. They go beyond the seven minutes. I actually add three more minutes and I forgot to do that before it went off. But thank you very much for your testimony, your presentation. On to Carrie Anderson, the chief freight transportation branch for the California Air Resource Board. Thank you very much for joining us and please start when ready.

Okay. Thank you, Chair Gipson. Good morning. My name is Cari Anderson and I am the chief of the Freight- It is on yes, is that better? Of the freight transport branch at the California Air Resources Board, or CARB. Thank you for the opportunity to speak today. I also have David Garcia, our Legislative Director, here with me to help answer questions. My branch is within the Transportation and Toxics Division at CARB, where we focus on minimizing community health impacts from diesel equipment operating at freight facilities.

The mission of CARB is to protect public health and fight climate change by meeting standards set by the state and the federal laws. We use a three pronged approach to develop strategies to address community level risk, regional air quality, and our state climate goals. Reducing emissions in the freight transport sector is critical to meeting these objectives and protecting the health of California citizens.

As you've heard this morning, California remains the nation's largest gateway for international trade and domestic commerce, with an interconnected system of seaports, railroads, highways that allow freight from around the world to move throughout the state and nation. However, the air pollution from freight transport is still the biggest contributor to our unhealthy air that negatively impacts everyone's quality of life, but even more disproportionately impacts our low income communities and communities of color.

Where freight movement increases from new and existing facilities over time, nearby communities experience increased exposure to higher toxic air pollutants. Increased exposure to these toxic emissions has public health implications, such as increased risk of premature death, lung cancer, heart and lung disease, and asthma. In recognition that specific communities in our state are more heavily impacted by air pollution than others, we continue to prioritize actions that reduce emissions from sources contributing to cumulative toxic air pollution emission exposure within indirectly surrounding these communities.

Fortunately, California is on a path to transitioning to a more efficient, economically competitive, and less polluting freight transport system as described in the 2015 California Sustainable Freight Action Plan. This plan was developed with our sister agencies CalEPA, CalSTA, the Natural Resources Agency, GoBiz, Caltrans, and CEC. The sustainable freight actions underway set a path to address emissions from virtually all diesel vehicles and equipment, including trucks, locomotives, ships, harbor craft, transport, refrigeration units, and other equipment used to move cargo.

Throughout the process, to develop these actions, CARB collaborates with stakeholders such as industry, community groups, public health advocates, legislative staff, regional air districts, local, state and federal entities, and many others. We also routinely work with California seaports to coordinate with their public health and climate goals, such as the commitments in the San Pedro Bay Port's Clean Air Action Plan and the Port of San Diego Maritime Clean Air Strategy.

Recent and future regulations that transition freight transport to humanoperated zero emissions everywhere feasible and human operated near zero, powered by renewable energy everywhere else, are developed via an extensive public process. That public process includes hundreds of meetings over multiple years, including workshops, one on one meetings and board meetings, et cetera. These efforts include a suite of freight transport regulations such as the advanced clean trucks in advanced clean fleets, ocean going vessels, commercial harbor craft transport, refrigeration units, and other supporting regulatory efforts such as sequa letters.

The zero emission equipment promoted by these regulations will displace combustion powered vehicles, resulting in substantial reductions in nitrogen oxides, particulate matter, and greenhouse gas emissions. As we work to achieve our ambitious goals, incentives play a critical role in assisting California's freight transport sector to transition to cleaner technologies by deploying new climate smart technologies and practices, reducing barriers to adoption, and providing near term emission reductions.

The Budget Act of 2023 in associated trailer bills maintains over $10 billion over the next six years across multiple agencies to decarbonize and accelerate zero emission vehicle transportation and focuses on communities most impacted by air pollution. The responsibility for administering these funds falls upon CARB and other sister agencies such as CalSTA, GoBiz, and CEC. These agencies collaborate to support an equitable transition to zero emission vehicles, especially for the needs of priority populations.

It is worth noting that these new funds build upon previous investments made by the state in ZEVs and ZEV infrastructure, as well as workforce training for more than a decade. Thank you for the opportunity to speak with you today, and I'm happy to answer any questions you may have.

Thank you very much. Appreciate your testimony, your presentation, Ms. Anderson. Next up we will go to Derrick Alatorre, deputy Executive Director of the South Coast AQMD. Welcome and please commence whenever you are ready.

Thank you. Chair Gibson and fellow Committee Members first want to apologize on behalf of our Executive Officer, Wayne Nastry. He wasn't able to make it today. Interesting enough, he is visiting ports in Europe right now that are very advanced and have a tremendous amount of zero emission technology that they're using over there. For those of you who are not familiar with South Coast, I got two Members from the northern part of California.

Just want to give you a little overview of South Coast AQMD. We are the largest air district in the State of California with over 17 million people within our district in our region and also 10,000 sq mi. We have significant problems in our district. Most notably, we're considered non attainment by the federal government for NOx, nitrogens of oxides. And we are in violation, currently in violation of the Clean Air Act. NOx is a precursor pollutant that forms ozone which causes health problems.

Mobile sources make up over 80% of the NOx problem. As I mentioned earlier, we are not on track to meet the federal attainment standards, and there are significant consequences that can happen because of that. Specifically, and more importantly, the health impacts of not meeting the Clean Air Act, the ozone standards. We estimate there's $19 billion per year in Monetized Public Health impacts due to all the sources in our basin. The other significant consequence is federal sanctions.

Federal sanctions can significantly burden businesses to get new permits if they're moving into our district or renew their permits. Port related sources aren't reducing emissions enough, and the regulatory burden shifts to other sources. Even if we were to shut down every stationary source in our region, we would not be able to meet the federal Clean Air Act standards that are set.

There's also the possibility of loss of Federal Highway Dollars up to $35 billion between now and 2045 if the federal government were to sanction us, and also loss of control of air quality regulations. Now, many people say that the federal government would never come in and issue a federal implementation plan, okay? Now, we don't believe that, they've done it before, but for the sake of argument, let's say they don't come in. There are going to be environmental groups who will file federal lawsuits, okay?

And it's going to be up to the courts to decide whether our basin meets the standards or not. And if not, then the federal courts will decide what consequences this region will have. Ports emissions collectively represent the largest source of NOx in our region. Port sources make up about one 8th of all emissions in our basin. Port's efforts have resulted in great progress to reduce emissions, but emission reductions are largely tied to either CARB regulations or incentive fundings.

The ports have always known that their emission targets from more than a decade ago were not sufficient to meet their fair share. Now, I know earlier they talked about indirect source rules and how they don't want an indirect source rule, but let me just delve into that a little bit, okay? So I don't think any of us want anybody to tell us what to do. But unfortunately, that's not the rule of law. The rule of law, we got to follow the law okay?

And sometimes what we have to do is we have to do things that are not comfortable. I don't believe the air district wants to do it, but we're being forced to do it because we have not met the federal standards. Now, what will the indirect source rule do? We don't know yet, because we are in discussions. Those discussions are going to be ongoing. But there are themes that we need to meet in this indirect source rule. Specifically, the core components is to reduce NOx, very important.

The ports do not have any NOx air emission reduction targets after 2023. This rule would not establish a cap on port cargo volume. I want to repeat that because there is a misinformation out there that this ISR will create caps, and it is not going to create caps. What we're going to do is we are going to work with the ports.

We expect this rule to have multiple compliance options that will allow for technological and economic uncertainty, require zero emission fueling and charging infrastructure both for the planning and implementation. And the zero emission infrastructure is a necessary investment for our ports to remain world class to achieve air quality standards. As I mentioned earlier, our Executive officer and some of our staff and Executive staff are over in Rotterdam as we speak.

Other approaches that we could take is working with the federal government to do more to address their responsibility. I agree. Federal government has not done enough to do their part. Okay? They expect us to meet these standards, but yet they don't help us out on meeting the standards, having stricter requirements. They have rules and regulations that have not been updated for over a decade, which needs to be done. Okay?

Federal regulations are not suited to address non attainment here in the South Coast region, this is a nationwide regulation. But not every part of the nation has problems. There's a growing number of areas in the nation that are becoming non attainment because the rules regulations have not been updated and there's significant volume, as the ports had mentioned. At these other ports, we stand ready to work with the ports to try to secure funding to help reduce emissions.

We're continuing to advocate with Congress to address our air quality problems. I know I visited Assembly Member Muratsuchi, Assembly Member Gipson. You even helped us on a Bill a couple years ago. And then also when Assembly Member Lowenthal first got sworn in, I visited his office and spoke to him about our problems. And our problems are significant. It's impacting everybody, not in your districts, but across this region here.

CARB is continuing to adopt new regulations using its authority, which is really important. We work with CARB to ensure that the actions we take are compatible with their regulations. We also advocate with CARB to adopt regulations that maximize emission reductions, which is very important. The ports have the ability to use their authority as a landlord and government agency. Did I go over my time? No, I'm good. Ports have the ability as a landlord and a government agency to require tenants to reduce their emissions.

We don't care how they reduce their emissions, as long as they reduce emissions. Whether it means more funding for infrastructure to plug in, making only zero emission trucks have access to the ports. Whatever they want to do. We are open. The recent cap program of 2017, unfortunately, falls short. It does not include pollution, as I mentioned, past 2023. Programs that are designed have fallen short of what they promised.

Some say that the port sources have already reduced emissions in the past, and I agree. They have done some of the work. But they can do more, and they need to do more. Port sources, as I mentioned earlier, are still the largest contributor to our regional smog, also the largest source of localized toxic risk from diesel particulate matter. Even knowing this, they would rather have other sources bear the regulatory burden.

As I mentioned earlier, if we were to shut down every single stationary source, we still wouldn't meet the standards. We understand the fear that doing more to protect our residents could cause competitive disadvantage with other ports, and we don't want that. We want to work with them. But we believe there's ways that we can both win on this. And it's not just the ports winning. It's not just South Coast AQMD winning.

But we got to look at it from the community, how the community wins. Because we all know that they are the ones who are being... I'm going to say it from a personal standpoint. I had cancer one time, and my doctor told me the reason why I got cancer was from DPM. Okay? I live right near a freeway. So these communities are being impacted every day. God knows what is going on.

Now, here could be other sources of why they got cancer, but DPM is a toxic, toxic material that causes cancer. There's no question about that. And we need to reduce that. With that, I'll end it. And available to answer any questions.

Thank you very much. I appreciate your testimony and your presentation. And so we want to open up for questions. Mr. Alatorre, you talked about collaboration. But can you tell me, in a short period of time, what does the collaboration looks like from your lens? Because today's hearing is we're collaborating. And we're trying to get to barriers and trying to figure out how do we address these barriers in a policy standard, but also making sure that we create some collaborations.

So the right hand and what the left hand is doing. And it's all about regulations that I've heard from the previous executive directors that runs these ports. Heavy regulations coming in. I don't think you will find any other port that is committed to making sure that we reduce these emissions in the state of California, making sure that we reach our goal. But we just need to figure out what's reasonable and how do we move forward. So, can you share with me, what does collaboration looks like for you and your lens and your agency?

So I'm not the one that's negotiating this ISR. I do public affairs for the agency. But let me just say from a standpoint that you're mentioning, collaboration is working with them, listening to them, listening to both sides. Because we as an agency, nor the ports, can only view it through one lens. We got to view it from many different lenses rather than just our specific glasses. And so collaboration is working it out. We got to continue to work it out.

We've tried. And I believe we started negotiations. The board directed us to start memorandum of understanding negotiations. I believe it was 2019. I could be wrong on that. And we tried to, we tried and tried. And it got to the point where there was not enough give and take. Okay? And again, we are mandated to abide by the Clean Air Act.

And if you want to buy a house, and you need a down payment. Oh I'm going to save 10%. Rather than what you really need, okay. You're not going to get to where you want. You're not going to be able to buy that house. So we need to have significant emission reductions. How that takes place is all about working it out. We got to work it out with, not just the ports, but also their tenants. What are they going to do to reduce it? What can they do to reduce it? So in a nutshell, that's kind of where, from my lens, collaboration. But again, I'm not the technical person who's doing the ISR.

And I appreciate. I want to ask the same question of Ms. Anderson with CARB in terms of collaboration. Because what I heard earlier, there is a lot of regulation that will have a significant impact on the productivities of our ports in California. And if we lose, I think it has been well articulated who will win. And it won't be California. Other ports will win. And that cargo, those businesses will go to those other ports, even though it may take longer.

But it'll get to those ports. And they become the distribution hub of America, not California, which leads in this space. So I want to ask you a question in terms of not only collaboration with stakeholders, but also the regulation that is seemingly strangling for us getting and obtaining our goal, but also moving and becoming prosperous and staying the fifth or fourth world economy.

Sure. Thank you. Part of our regulation development, as I mentioned, includes an extensive collaboration process with industry as well as community and regulated parties. And part of the developing that regulation is to balance the cost to industry with those community health benefits that we're seeing by reducing those toxic emissions, which I discussed, as well as the greenhouse gas emissions to meet our climate goals that are dictated by both the state, as well as our regional air quality goals, dictated by the federal government.

So we try to balance all of that out in keeping in mind the economic benefits associated with the creation for green jobs, for fuel, zero emission equipment, and infrastructure production. We also take into account the workforce development that is associated with that and the businesses that are creating more and more green jobs every day. So we do take that into consideration and try to balance all of those while we're developing regulations to reduce those emissions and provide those benefits while providing a sustainable freight transport system.

Over to my Vice Chair for a question, Mr. Fong. And then we'll go to Mr. Muratsuchi, and Lowenthal, Villapudua. Okay.

Thank you, Mr. Chair. I guess I want to start out the conversation by saying that nothing happens in a vacuum. So this panel has highlighted the fact that every one of you, along with other agencies, are putting regulations and mandates on the supply chain, the goods movement sector, and the ports. We can't look at every action by each agency through a straw. Everything is layered on top of each other.

And I think that's why we're concerned about trying to harden our supply chain and balance and be pragmatic because it's not each of you operating independently. You guys are all layering costs and regulations, as mentioned by the ports, all on top of each other.

So I guess my first question, if I may ask CARB, is, we had this longed conversation during the supply chain, the last supply chain crisis. And of course in our last hearing about who the lead agency is in terms of determining what happens when it comes to goods movement. So you're the Chief of Freight Transport. So who do you report to? Who is the lead agency?

Well, I don't think there's any one single agency that's in charge of the sustainable freight transport system.

Well, there is actually, because that came out in our first hearing. At least that's what the California Transportation Agency told us and testified in front of us. So I'm just trying to understand who's in charge.

Well, I think like you said, there's a number of agencies that are involved, and we do try to work collaboratively. Someone mentioned starting with the Governor's executive order to move all of the equipment and vehicles and operation to zero missions. And we work with Cal EPA, and CalSTA, CalTrans, and CEC. And we work collaboratively together to try to implement, like for example, the sustainable freight action plan that I mentioned. And taking those actions that are in that plan, that are under the purview of those different agencies, and moving them forward to achieve those goals.

So just so that I understand as an elected official, as a policymaker, as someone who's trying to, that serves on this Committee, do you dispute the fact that the California Transportation Agency is the lead agency when it comes to the supply chain and goods movement and the movement of freight? I'll ask you the same question so you can prepare your answer.

I think we each have our own jurisdiction and different authority that we have.

So the answer is you don't believe that CalSTA is the lead agency.

I think all of the agencies work together as the state to move the transportation system.

So who's in charge of the supply chain and goods movement policy? If I wanted to talk, if we're developing policy. And we had a crisis that happened. All the containers and all the ships that were out off the coast of California two years ago. And we were trying to figure out what we were going to do to fix that problem.

And we had a hearing in Sacramento, and we had all the agencies in front of us. And multiple members on a bipartisan basis said, who's in charge? Where does the buck stop? And the answer to us was from the California Transportation Agency saying that they were the lead agency overseeing the supply chain and goods movement in California.

Vice Chair, I think it is the State Transportation Agency and Secretary Omishakin that oversees. We're talking just about goods movement policy kind of separated from the environmental side.

But that's the point. You're making my point. Is that all your actions don't happen in a vacuum. Your actions by your agencies or independent agencies. Well, not independent, because they're supposed to report. To my understanding, the Transportation Agency. Has an impact. So when you talk about collaboration and conversations, at some point there has to be a voice.

Not to, I won't speak for the Chair. But there has to be a voice to say, look, this is having a significant impact not only to the economy, to the state, to the supply chain, to jobs, to local economies. I guess the rephrase the question from the Chair is what does collaboration look like if there is no lead agency? Who do we go to when we have a concern about a policy? When it comes to the ports and goods movement.

I think the answer is the implementing agency as well as the Governor. I mean, we all report to the Governor. My agency reports to Cal EPA, which reports to the Governor. We also have these federal mandates that were mentioned that we need to meet as well. So there is the administration there that comes in in times of trouble to help coordinate those efforts.

And I'm not frustrated at you. I'm more frustrated at just the situation. And the process that we have right now is because we've been relitigating this question. And I think part of the conversation when we talked about introducing legislation to create a Freight Advisor or a Supply Chain Advisor within the Governor's office is to determine that structure.

To say hey, if there's all these actions taken by different agencies, and they're all having a different impact on goods movement, maybe we need someone with a clear voice and a clear vision and a clear mission to say we should evaluate these actions and its impact on the supply chain. Especially when 40% of the goods and products coming into the United States of America comes from the ports in Southern California.

So that's all I'm saying. In terms of, I guess, to South Coast AQMD, I'm trying to understand when we talk about the indirect source rule. And I guess this is the elephant in the room, right? It's that to essentially meet whatever the goal is or whatever that mandate is, it would limit and cap operations within the port, is that correct?

We don't believe so.

And how would that look like? What would that look like?

Goes back to collaboration. What you're saying we all have to have a say in this, whether it be the ports, the community, us. As mentioned earlier, there is technology out there, zero emission. Although, yes, it's expensive. Yes, it's going to take years to get to that point. But it can be done.

But you're making a conclusion where we don't have the policy yet. Right? So as you said before, we don't know what the indirect source rule looks like. Right?

Right.

So how can you definitively say that it won't cap volume? Because we're using this. If I'm going to use your logic and say, well, here's a mandate layered on top of everything else, and the very operations of the ports create activity. And if you say, well, you now can only do this. And now you have to layer that on top of every port operation. The only thing they can do is to limit either volume or limit operations.

It's a good question. But again, it comes to the fact that something needs to be done, number one, and also that the ports have to acknowledge and the tenants have to acknowledge that they can do more. And whether that be, I'm not talking about caps, I'm talking about equipment that can be used. I'm talking about shore power. It's infrastructure that can help out significantly the emissions that are coming from the ports. So by doing that, by the infrastructure, we're really not affecting volume. We're only affecting how they power their ship.

So I'm trying to juxtapose that answer to the panel we had before. Which is look, they're implementing emerging technologies. They want to invest in operations that are cleaner. But their argument, I guess I'll ask you this, is that the modern technology doesn't allow them to do that just yet.

Now, in 20-30 years or however many, or maybe in 10 years, right, there could be new technologies. But if they're maxed out in terms of implementing every possible technology to try to operate and be good partners, but then they just can't meet it because technology doesn't allow it. There has to be some flexibility here, right, in terms of acknowledging their importance to, not only the region here, but to the state and to the country. And so to say somehow, well, we understand the consequences. I mean, you acknowledge that you're going to put the ports at a competitive disadvantage.

I don't think I said we're going to put them at...

Well, I wrote it down. I mean, we can roll back the tape at some other point. But you did say that you acknowledge the fact that the indirect source would place the ports in the competitive disadvantage, right?

I think you said will and I said could.

Okay, well, I'll stipulate that. You said it could. So if it could place the ports of disadvantage, then what are we going to do?

I think it's all part of everybody working together to decrease that chance. But let me just get back to one of the questions that you asked about the infrastructure. I was in the Navy. I was in the Navy back in the 80s. When we pull into ports, the Philippines. You know, the first thing we did? We powered on, we got electric power, okay? This is not a new technology. In 1983 to 86, on the ships and we pull in a port.

The technology has been there for a long time. Whether they have wanted to or whether they had the means to do it, I don't know. I'm talking about the ports here. But the technology has been there for a long time. And I saw it for myself.

I'll turn it over to other Members. But let me just say to that point, look, I don't dispute the fact that there are technologies out there. The feasibility is in question, right? Look, when we had the Flex alerts, what was the first thing that the Governor did? Is he signed an executive order to relieve people from that mandate, right? And we have questions about the electricity grid and the reliability. So we can try to push all those things onto the economy and onto different industries.

But something's got to give if things aren't feasible. Now, we could be investing more in reliability and other things, and we should do that. But I'm trying to understand, and I think to my point to you, is that this indirect source rule could have a massive impact. And, from listening to the stakeholders, and very few things unite labor and business. This does.

I mean, I'm looking at every single stakeholder involved in the goods movement supply chain industry that says that this potential indirect source rule, which I guess we want some certainty. So it would be nice to have what that looks like. But has the impact to try to meet whatever this nebulous goal is. Would essentially either cap volume or limit port activities, which as I mentioned before, every four containers leads to a job in California.

And so if all of those containers go to another state, not only are we emitting more, we're allowing more emissions to occur, but we're also costing California jobs, and we're hurting our economy. And we're also hurting the supply chain. Getting goods from the port to our homes and stores, as well as getting products overseas.

And I think that's the concern that I have, speaking for myself, for someone in the Central Valley, is that we have to be pragmatic. And to somehow say we're going to set this rule and consequences be damned. That's not a good policy.

That's not what we're saying at all. That's why we're going to continue to collaborate, not just with the ports, with the communities, and with other stakeholders.

I hope you do so. And I hope you collaborate with the lead agency when we find out who it is. Thank you.

Sure.

And I'm going to turn it over to my colleague. I think that Assembly Member Fong touched upon, there was a theory, a motivation, to ask the Governor to appoint... when I gave the example, the right hand doesn't know what the left hand is doing. We need someone from the Governor's office to coordinate and to collaborate with everyone so we'll exactly know who's in charge, who oversees who, and also it's very clear in terms of jurisdictional responsibility. So with that, I'll turn over to my colleague, Mr. Muratsuchi.

Thank you very much. So following up on that line of questioning, Mr. Alatorre, you're the focus of our attention here.

I want to say AQMD is not me personally but South Coast.

I appreciate that clarification. Let me start off by saying that we appreciate you sharing your personal experience about how suffering from a particular matter that's really an issue that all communities surrounding the ports, that's the reality that they're facing. I represent a portion of Wilmington and I know that Wilmington is one of the most polluted neighborhoods, not only in California, but in the entire country. You know, your efforts are directed to try to protect our constituents and our communities.

At the same time, I think you've been listening to all the testimony from the first panel. I thought Mr. Cordero made it very clear that, in his opinion, the ports have already led. You can't squeeze us anymore. The technology is not there. And that I think he clearly indicated that he opposes the AQMD in terms of the implementation of the indirect source rule. So first of all, I want to clarify. You laid the foundation for your argument.

You talked about how the Southern California Base is in violation of the Clean Air Act. And so given that the Clean Air Act is a federal law, not a state law. The state legislature doesn't have any control in terms of amending or clarifying the Clean Air Act. Is that correct?

So there's, yes. On the federal Clean Air Act, there is a federal Clean Air Act, there's, I believe... the state Clean Air Act also. But basically, ours can't be less stringent than the federal government's. So we have to be at least as strict or stricter.

Okay. In terms of the Indirect Source Rule and the potential for federal court. You said federal court litigation, which is why I was thinking that the problem is more federal and not state. Is that accurate?

Yes. The federal government actually the ISR for the warehouses is currently under litigation. So that's being challenged already. And then we're quite sure that if and when there is a port ISR, we'll be challenged also. So we're prepared for that.

But the basis for the challenge would be, would it be under the federal Clean Air Act or the state Clean Air Act or both?

I think it'd be under the... I'm not the attorney, so I can't speak for the attorneys, but I would say is probably the federal because there is some federal exemptions that we cannot do. As an example, regulating a ship. We can't regulate ships. We can regulate, you know, as an example of trucks. We can't regulate trucks going to the warehouses, but we can tell warehouses, hey, you have to reduce your emissions. And that's exactly what the ISR does for their warehouses. We don't care how you do it, but just do it, reduce it somehow. Okay? And I believe that's probably going to be the same thing when it comes to the port ISR.

Okay. You emphasize in terms of the need to collaborate in response to Assembly Member Fong's line of questioning. Is the basic idea that the ports and the stakeholders need to demonstrate some good faith efforts to comply, or are there going to be hard and fast standards that are going to be enforced through the Indirect Source Rule?

The last thing we want to do is be hard and fast. So we want to be able to lessen whatever hard facts we have to give as long as we're all collaborating together and coming up with real solutions. And sometimes we don't want to give as much as we want to, but ultimately sometimes we have to give more than what we're willing to give. So I think that's kind of where we're all at. Is that ultimately.

The Clean Air Act drives everything for us right now. No one person, agency, entity can tell us, no, you can't do that. Federal government has that ability. And again, as I mentioned, the last thing we want and anybody wants is for there to be a FIP, a federal implementation plan. The federal government coming in. Because they don't know our region, they don't know our problems. They're going to come in here and just do a blanket regulation, and it could mean a lot of different things. That's the last thing we want. We want to be in control of our own destiny. We don't want somebody else to be in control of our destiny.

I want to switch to Ms. Anderson, as a representative of the ARB. There was earlier testimony about how any container volume, especially the ports of Los Angeles and Long Beach, lose to the East Coast, to the southern states that that would result in greater greenhouse gas emissions.

Just in terms of the sheer proximity know, getting containers from Shanghai to Los Angeles is going to be a lot shorter route than going through the Panama Canal into East Coast. I mean, is that part of the ARB's considerations in terms of its greenhouse gas regulations?

I'm not sure we know the answer to that. I think what we can say is--you know--we work with EPA when we're developing regulations to see how the things that we're doing could be implemented nationally but that's not something that we quantify. So, for example, if we take a particular sector to zero-mission, but it's traveling throughout the United States, it's providing benefits throughout that transition, but we're not accounting for the health benefits associated with that, but we do account for the costs for that equipment to be operating in the state.

I'm in particular thinking about how we address locomotives. But I think one of the things that we need to talk about is when we're talking about plans that have goals, we also have mandates from both the federal government as well as the state to actually achieve targets, as well as the Governor himself in an executive order, for example.

So when we're doing a regulation, the point of that is to be technology forcing and force technology to move in the right direction that provides benefits that outweigh the cost to industry. So-

But my question specifically is, is the ARB looking at the GHG impacts of California ports losing container volume to other states? Is it taking into account the GHG impacts of containers going from California to other states?

I couldn't say. We'll have to follow up on that.

Okay, thank you.

Could you please follow up and give us something in writing? We'll appreciate a response to that question. Thank you.

Last question to Commissioner Monahan. Mr. Cordero made it clear that, in his opinion, as far as heavy duty trucks, we need to go with hydrogen. I hear that a lot from trucking business operators who say that the electric trucks just don't charge up fast enough, that it's just not feasible that we need to focus on hydrogen for heavy duty trucks.

Does the Energy Commission have any similar position in terms of this hydrogen versus electric trucks, in terms of where to invest in the charging infrastructure in order to send the market signals that this is the direction that the State of California wants to head?

So in our Energized Commercial Vehicles Program, as I said, we fund both hydrogen and charging infrastructure. Right now, about 20 percent of the money so far has gone to hydrogen, maybe a little bit more, and so that's been more of a responsiveness to the request from the market. I would say we're at an early stage. I mean, having two fuels is a resilience strategy.

It would be having both hydrogen and battery electric vehicles, I think, would be if we can overcome the barriers to each, that would be ideal. I think the question is, can we overcome the barriers? And the state is doing all it can with this ARCHES Program to try to get federal funding to be a hydrogen hub to help drive down the cost of hydrogen. We need this to be a globally scalable solution. Right now, battery electric vehicles are globally scaling, hydrogen less so, but I would say we're seeing more and more interest, especially in the EU, Japan, other countries.

I think the EU, in the face of what's happened with Ukraine, is really interested in hydrogen as a solution. So as we develop these solutions, we really have to think about it from a globally scalable point of view.

So right now, the Energy Commission is basically--

We're funding both.

Covering your bases, largely driven by the current technology as well as the market demand?

Yeah, and I would say the potential for it to be scalable in the future to help drive down costs--we have to drive down the cost of fuel cells, we have to drive down the cost of hydrogen, and similarly with battery electric vehicles.

So the Energy Commission's position would be that it is potentially, technologically feasible as well as financially feasible? We keep hearing about these 500,000 dollar trucks that no small business or small trucking operator can afford.

I really think it's too early to tell. We have seen battery prices fall 90 percent over the last decade. Lately, they've been going up a little bit because of global supply chain issues. We haven't yet seen that in fuel cells. But there is the potential, and the more we have a co-invested strategy globally, the more we're going to see that happen. China was a big part of the reason why batteries fell in price. We're seeing China also show more interest in hydrogen. So that could also lead to a more scalable future for hydrogen and fuel cells.

Okay. I just want to conclude Mr. Chair, I'm as sympathetic as anyone on this panel in terms of trying to clean up our environment and fight climate change, but it sounds to me that a lot of this technology is still in the developmental stages. And again, Mr. Cordero said it earlier, the technology just doesn't sound like it's there. And we know that our trucking operators can't afford 500,000 dollar trucks.

I frustrated as anyone in this room in terms of the perception of this gap between our aspirations and where our technology is. Thank you.

Thank you very much. I just want to underscore--and real quick, just real brief, before we move to the next panel--if we're placing all these regulations on those who do business in California, what happens to China and all those other ships that comes into our port? Are we going to mandate that they have the same kind of technology as we're mandating our own? Or those are coming into our ports? Do we even have jurisdiction? Whoever wants to answer the question.

Can I just say that South Coast AQMD, we don't have, obviously, the authority to tell them what types of ships can come in. We have been working with some of the shipping companies in China to try to incentivize them to use their cleanest ships to come into our ports. I think incentivization--that's the right word--is the way to go because if not, they have no incentive to bring in clean ships. It's only the dirtier ships, the older ships. But also change out their technology, too.

It can in the future be a norm, but right now it's not. But we need to incentivize them to only allow the cleaner ships to come into our ports.

So we're going to incentivize them, but we're not going to incentivize others?

No, we do incentivize, as an example, the district, as well as the ports. We incentivize to change over their dirty trucks or their equipment.

Right, but there's no mandate that we can impose on them. So they can still continue to use whatever vessel they choose to and lie idle or whatever coming in, which still will affect our air. Did you want to comment on that before we transition?

No, I think that's right. There are certain equipment types that were exempt under the Federal Clean Act for us to control and put controls on, and when we're talking about airplanes, ships, there's federal standards. I'm not sure exactly. I couldn't speak to the International. But when they do come to port, and then we can say, for example, have a regulation that forces them to plug in so that they're operating in a clean mode while the cargo is taken off and put in back on.

Okay, great. Well, thank you very much for this panel. We appreciate this robust conversation. Let's give this panel a round of applause, please. Thank you very much. As the next panel is transitioning, we would ask them to please--you know who you are, you're on the agenda--please come in and take your seats, and we'll be starting with Sal first, and we're going to try to make up some time. We want to welcome this next panel. Thank you very much for being with us.

This panel is a Southern California Goods Movement and supply chains partner perspective, and so I want to have introduce Sal--I don't want to butcher your last name, so please forgive me--representing ILWU Local 13 Port Liaison and labor relations connection. So thank you so very much for being here, Sal, and when you're ready, please introduce yourself and take it away.

Thank you, Assembly Member. Good morning, Chairperson Gipson, Select Committee Members, and esteemed guests. My name is Sal DiCostanzo and I am here representing the International Longshore and Warehouse Union. Local 13 President Gary Herrera sends his regrets for missing today's proceedings and hopes to rejoin the discussion at your next convening.

Welcome to San Pedro Bay, home of the ports of Los Angeles and Long Beach, the cleanest marine gateway in the world, and the result of over 100 years of planning and investment that has fueled the growth of one of the largest and most successful metropolitan areas in the history of the world, not to mention the most powerful nation on the planet.

The ILWU in Southern California represents over 15,000 longshore workers, marine clerks, and walking bosses that for the past 86 years has moved cargo to and from ships, trains and trucks throughout our ports. In addition, the ILWU has a proud history of providing its own members with a pathway to the middle class, standing up for just, social causes, and facilitating growth for international trade. The Goods Movement industry is central to California's economic power and underpins its leadership position within the United States and around the world.

During the COVID-19 Pandemic, ILWU members broke cargo volume records at these ports to ensure that Americans received the necessary medical supplies, equipment, and essential products they needed to survive. Then, as always, ILWU members courageously keep these ports open every day and night. In days gone by, these local ports also housed vibrant commercial fishing fleets, canning facilities, private shipyards, as well as a naval shipyard.

Many of the people who toiled at these jobs immigrated here to escape poverty, war, or oppression and were grateful to perform the demanding and often dirty tasks these positions required. Sadly, many of these industries that help build the middle class from the bottom up and the middle out have relocated elsewhere due to economic restraints and environmental regulation. Today, many of our members fear that the same may happen to California's Good Movement economy should our ports continue to be vilified as environmental bad actors.

The Coastal Act mandates--this is the California Coastal Act--mandates that port facilities be concentrated in as few locations as practical to protect and preserve California's 1,000 miles of beautiful coastline. Our ports are not a single source of pollution, but rather an orchestra of hundreds of thousands of individual components and people that work in harmony. The unintended consequences of overregulation will be to drive our jobs away to states like Texas, Florida, Georgia, South Carolina, New York, New Jersey, where our environmental goals are not mirrored.

This is not conjecture. This is a fact. Through great efforts and stakeholder collaboration, true stakeholder collaboration, the ports of Los Angeles and Long Beach have made enormous progress in reducing local emissions. Cleaner fuels, newer equipment, the expanded use of on-dock rail, utilization of larger vessels, shore power requirements, advanced vessel queuing, longer gate hours, peel piles, et cetera, have all contributed to the cleaner, more efficient supply chain we enjoy today.

In addition, we hold great optimism for the role that emerging clean technologies like hydrogen and green ammonia can play in powering the zero-emission ports of the future. Furthermore, we look forward to the promise of clean, renewable wind power that can be generated from floating offshore turbines. The Port of Long Beach hopes to build a 400 acre facility dubbed 'PURE WIND' for staging, constructing, and deploying these engineering marbles.

The ILWU looks forward to helping realize this goal by using our vast experience in loading and unloading oversized brake bulk cargo. In collaboration with other partners, we believe that together we will help California and the nation achieve its ambitious offshore wind goals.

The operation, maintenance, and repair of modern technologies will require extensive workforce training, and we are grateful to the Governor, the Legislature, particularly many of the Members on this panel, the California Workforce Development Board, the Ports of Los Angeles and the Ports of Long Beach for their historic investment in the ILWU PMA Goods Movement Workforce Training Campus.

This first of its kind facility will not only ensure that our members receive training in a safe environment, but will also ensure that as technologies change, our workforce will be up to date with the appropriate skill sets. As we discuss technology, automation cannot be left out of the conversation. Unlike the productivity gains that resulted from containerization and mechanization, numerous industry studies and our own firsthand observations all conclude that automation is more expensive and less productive than a conventional terminal.

Also, labor costs that support wages and benefits are turned into capital costs sent overseas and not reinvested locally. Automation reduces port efficiency, violates by American laws, reduces flexibility, and makes us more susceptible to cyber attacks and national security threats. In conclusion, the members of the ILWU look forward to a future where good jobs and a clean environment can coexist within our local communities and within the great State of California. Our port should be recognized and celebrated for elevating our communities, this state, and this nation.

Thank you for the opportunity to address you today and for your continuing interest in learning more about our industry, communities and members.

Thank you very much for your testimony. We want to turn to Mike Jacob representing the Pacific Merchants Association. Thank you very much for being here and please feel free to introduce yourself and commence with your presentation.

Thank you, Mr. Chair. Mike Jacob with Pacific Merchant Shipping Association represent ocean carriers, marine terminal operators, and port tenants. Happy to be here today. I send my regards for my Colleague Michele Grubbs, who is supposed to be here. She's both more attractive and more eloquent than I am, so you have to suffer through my presentation, but I appreciate the offer.

I have a short slide deck, but because most of this was actually touched on by the Director's panel, I'll go through this very quickly and provide us some more time for questions and answers, but I couldn't agree with any of the words from any of the directors more. Everyone in the supply chain is committed to moving forward with our zero carbon future goals. The challenges are immense, but our progress to date on reducing diesel toxics and other types of air contaminants has been significant.

So when you put those two emissions inventory results that we saw from the ports of LA, Long Beach that have been released over the last couple of months, we're exceeding our voluntary goals that we have set as an industry through investment, and we intend to continue to do more of that. Why is that important? Because this is a good news story on our localized emissions. But we also just released a study updating what happens when we lose cargo and we divert cargo and what happens is we're the physical embodiment of GHG leakage.

Our emissions are actually 19 percent higher on average when you lose cargo to our competitor ports, when you have discretionary cargo that's bound for Memphis or Chicago or middle of America and it goes through the Port of Houston or Port of Savannah or Port of New York, New Jersey, on average, what happens is they're bypassing the most efficient ports, and those are our ports.

So we not only have jobs we're trying to protect, but we have a win-win, which is, if your goal is to decarbonize, you should be investing in California ports, not bypassing them. What we have is the opposite. The goals that we have obviously are rooted on forecasting. Our investments are rooted on forecasting. The costs and benefits are a regulatory environment based on forecasting.

So when you heard from Executive Directors Cordero and Seroka earlier about where we were in the early 2000s, this was our forecast based on our actual TEUs. We were talking about doubling or tripling our total throughput by 2030, and then the Great Recession happened and we've rejigged our forecast. So in 2009, you can see what happened. We never really recovered from that. So then we had another set of forecasts in 2016.

We put out a high, mid, and low forecast for our San Pedro Bay ports. And unfortunately, this is where we've been. We have not been on the front of the investment curve. So as our costs for environmental investment get higher, we haven't been following that, and as Executive Director Seroka said, we are a volume business. We drive things on per unit cost. We've always had higher fixed costs in California.

We've always had higher labor costs in California, we've always had higher environmental costs in California, and that was okay because we grew faster than the rest of the country through discretionary cargo, which meant our price per unit of the additional marginal cost of those things was actually lower. But that's not happening anymore. So this is from our West Coast Trade Report. This is the same data set that Executive Director Dacus was using on her data.

We didn't go that deep on this, but if you look at the top 10 ports, this is total 2020 cargo versus what was happening in 2021 and 2020. 2022 versus 2021. Very significant. Why? Every single red number up there is on the West Coast. They're Pacific ports. That's LA, Long Beach, Oakland, Pacific Northwest, British Columbia. Every other port that's growing 2022 versus 2021 is positive. Compare that to 2020. Is this issue of the Pandemic effect? Unfortunately, no.

Even though all of the ports except for Oakland are growing in that top 10, look at the rates. The local economy of New York, New Jersey, was not growing almost four times as fast as the economy of LA. It just wasn't. But they were moving 25 percent more cargo compared to seven percent growth. Same thing with Savannah. Look at Houston, Virginia. Their economies were not growing that much faster than ours. These are representations of shifts in our national trade lines. How does that look over time?

Again, going back to 2006, if you zero these things out, who's growing? And we did grow, but not nearly fast enough to actually invest and reinvest in the types of technology and environmental improvements that we need to make to actually capture the emissions benefits and the jobs. We need a policy of reinvestment. And I'll close with this last slide, which I borrowed from the Port of LA, which again, just goes back to reinforce what you heard directly from Executive Director Seroka.

The national policy is to invest in a strategy that increases greenhouse gases by diverting cargo from the U.S. West Coast. That is not inconsistent with what we're seeing here and here. It's a direct representation of our investment priorities as a nation. We are not reinvesting in our largest gateways.

So it's incumbent on us if our goal is to actually reduce greenhouse gases and to conform with our international goals as an industry in the maritime sector, which is total transition of shipping to zero-emissions globally by 2050 to facilitate investment in those types of things. Again, those goals, already set. They've been adopted by the IMO, they're reflected in the goals that have already been set by the California Air Resources Board, and I cannot emphasize enough how much we agree with the testimony from the Air Resources Board here today.

The state is the place where you make rules in California about transportation and about mobile sources. It's not on a local jurisdiction, by local jurisdiction, an air district basis. The state needs to do it in the context of the Federal Clear Air Act. Why? Because then the state goes to US EPA and works together to set national standards. That's the way move forward with these rules.

That's the context for the rules. We might disagree about the specifics and the details of those rules, but we do not disagree with the formation of rules in the context of the Federal Clean Air Act in partnership with the California Air Resources Board. That is the correct way to move forward through this process and very much appreciate you, including us.

Today in this hearing.

Thank you, Mr. Chairman.

Thank you very much. We appreciate your testimony. We want to move on now to Matt Hillyer, Director of Engineering, Taylor Equipment Manufacturing. Thank you very very much for being with us.

Mr. Chairman, Select Committee Members, thank you very much. Good morning and greetings from Mississippi. My name, like you said, is Matt Hillyer. I'm Director of engineering for a company called Taylor. Taylor is a manufacturer of large, heavy duty, off highway powered industrial trucks, and that portfolio includes material handling equipment, cargo handling equipment. We produce top handlers, side handlers, terminal tractors, heavy lifts, otherwise known as forklifts, and other equipment that are used to transport cargo on the terminals, especially here in California.

A little bit about Taylor as a company. We are a privately owned business, almost 100 years old, centrally located in Mississippi. Mississippi contains the headquarters for administration, engineering, research and development, and our aftermarket business as well. I am responsible personally for all product development and R and D for Taylor Machine Works and some of the Taylor Group's subsidiaries, which also includes power generation, standby and prime power, and mobile generators. I've heard a lot about technology, and I guess we are technology.

And so I'm looking forward to presenting what we are doing as a manufacturer to advance zero emissions equipment for the sake of progress, innovation and the environment. As shown on that slide, some of our equipment is being right now converted to zero emissions. So traditionally diesel powered powertrains, which have lasted over the last decades, but now in the transition to zero emissions, we are currently developing and have commercially available equipment which are zero emissions. The top left picture represents what we call a top handler.

It's a loaded container handler which moves loaded container cargo on the terminals. We also have terminal tractors which pull cargo on the terminals as well. The top right is our first entry into the zero emissions realm of equipment, and it is what's called the ZLC 995. That piece of equipment is a demonstration product which began our life back in around 2016, as we won an opportunity to perform on a demonstration project to produce zero missions loaded container handlers.

And that machine we placed into service a total of 8 of those machines in various applications up and down the California West Coast, especially here in Long Beach and Los Angeles. That machine was developed in collaboration with a battery supplier to prove that zero emissions powered container handlers can perform equally up against their diesel powered counterparts.

That particular piece of equipment in normal terminal operations shows that it can be operated for 16 straight hours or 2 full workshifts with no opportunity charging, and then can be fully charged in the third shift or in about 4 1/2. So full operations, no opportunity charging on one battery charge and up to 16 hours. And in some applications, more than 16 hours. And then charged in around 4 1/2.

That's important to understand as we make this transition from diesel powered equipment which are quickly fueled to zero emissions powered equipment which have challenges for fueling charging depending on what the source of that fuel might be, electricity or hydrogen. We also are developing the piece of equipment on the bottom left which is an empty container handler which will be zero emissions counterpart to its diesel powered equivalent.

In the middle is a reach stacker also for moving cargo on terminals and then on the bottom right is a commercially available ZH 360 which is sometimes called a heavy lift but is a forklift which carries or can lift up to 36,000 pounds and transport General cargo. Again, this ZLC 995 which was our first entry into zero missions material handling equipment contains about 985 kilowatt hours of battery energy on board.

It included a small amount of regenerative braking which is a method by which recovering energy and trying to improve efficiency to try to get the machine to perform at its peak level. From a powertrain standpoint, it was a time to market research and development project so we replaced basically the engine with an electric motor and the battery pack to power that machine in the demonstration project to prove its performance.

And again the charging, using a which is a standard charging connector which is called CCS One at 180 kilowatts can recharge that pack from completely depleted in around 4 1/2 to 5 hours. It's worth saying. I'm not sure if there's a following slide, but we have under development, as we speak, in prototype the next generation of this piece of equipment which, again, will have even higher efficiency due to state of the art electronics, state of the art components.

A redesign of the electrical system and the hydraulic system to improve efficiencies. It will have the highest level of regenerative braking that we can put on the machine and it will perform in a similar mantle in a similar manner improving the run times by 10 to 15% and maintaining the charging time of about 4 1/2. Also under development is a counterpart to the top handler which is a reach stacker which will also handle the same type of cargo on the terminals.

This ZRS 9972, which is the model name, has a comparable amount of onboard energy and because of its duty cycle and its similar use will have very similar specifications in terms of the amount of energy, the amount of runtimes, the charging time necessary as the ZLC 996 top handler.

As far as the General duty forklift goes it carries about 250 kilowatt hours of onboard battery energy full plug in electric again just like the top handler it includes the same regenerative braking for energy recovery and utilizing that energy recovery for longer runtimes. For the 250 kilowatt hours of onboard energy for the ZH 360 it will perform up to about 10 hours of normal duty forklift General forklift application, so it is at least a 1 shift truck.

But because the amount of energy is a little bit less, then the charging time also is reduced to about 1 1/2 hours of charging. So that kind of gives you an idea of a General duty forklift and the capabilities as far as the electric powertrain and battery system go to be able to operate in a worksheet with no opportunity charging and then be able to be completely recharged in 1 1/2 hours.

Also under development as we speak is a hydrogen fuel cell powered version of the ZLC 996 top handler. This is an important development for us because the challenges which I will save to the end and speak to, which include infrastructure, creates a situation where we need to provide equipment that are not only dependent on electrical infrastructure, but also the hydrogen infrastructure as well. This particular machine is designed on the same platform as the all electric ZLC 996.

So its drive mechanisms, some of its high voltage components like inverters and motors are very similar. The hydraulic system which operates the machine so that it can handle the cargo, it's very similar to the plug in battery electric version, but it also includes a reduced battery pack, so smaller amount of batteries, but then also a hydrogen powered fuel cell which operates basically as an onboard charger.

So as the machine is utilizing the hydrogen as its primary fuel source, there is supplementary needs for the power of this type of machine that comes temporarily from the battery pack. So the fuel cell is charging the battery, the fuel cell is providing power to operate the machine, but the source of fuel is hydrogen. And so there is no need to plug in or use grid power or anything to charge this machine.

So while it's an electric architecture, I want to make that kind of distinction, that a hydrogen fuel cell powered machine does operate fully on hydrogen fuel, but it is still on an electric machine type of architecture. This particular machine will need to carry in somewhere upwards of 70 kilograms of hydrogen to be able to operate on the same 2 work shift work cycle, which really is a large amount of hydrogen.

To kind of put that in perspective, that amount of hydrogen is about 8 or 9 containers of 18 inch diameter by 8 foot long tanks of hydrogen. So that's a huge amount of hydrogen to get it to perform the last thing. And so that's the 3 minute warning, I hope. The last technology that we're currently working on. We have signed a letter of intent with Cummins to produce a very important addition to the zero emission suite of products.

So we have plug in, battery, electric, we have hydrogen fueled fuel cell machines, but this engine is an internal combustion engine powered solely on hydrogen gas. So while the semantics of the term internal combustion engine sometimes gets connected to the diesel internal combustion engine, I want to be clear that it is a zero carbon emissions power plant.

The one challenge that comes along with the hydrogen ICE is it does have a very small minimal amount of NOx produced in the combustion cycle, which has caused a lot of discussion. And amongst the regulatory requirements, I will say that in Europe there has been language included in their clean air initiatives to include internal combustion engines powered by hydrogen in zero emissions equipment.

So there's an important amount of work that is being done right now to try to include this type of technology into the suite of zero emissions equipment. And the reason for that primarily, and I'm going to skip through this because I'm going to run out of time, but I do want to speak to the challenges. The challenges start with suppliers with Build America, Buy America built in America type equipment, which we are Mississippi manufacturer.

We build our equipment in America and we strive to have American built equipment. Today, the suppliers for the components that are needed to produce zero emissions equipment sometimes come from non American sources. So there are challenges to continue to try to comply with the Build America by America standards, by finding the suppliers that can provide this type of zero emissions technology, that's fuel cells, that's batteries, that's motors and inverters, et cetera. Secondly, time.

Time is of the essence to try to get us moved from diesel emissions to electric to zero emissions on electric and hydrogen powertrains. But development takes time. That's one of the largest challenges that I face as a development manager, is the amount of time that it takes to get these vehicles from a demonstration product to a commercially viable product.

We have time.

Yes, I look forward to answering any questions.

Thank you very much. I appreciate that information because I have some questions. When we get to that point for you, we want to move to Matt pronounce your last name. Shrap, the Chief Executive Officer of the Harbor Trucking Association. Thank you very much, sir, for being with us. And the floor is yours.

Thank you very much, Chair Gibson, and Committee Members, for the opportunity to participate here today and provide some perspective on how the drainage sector fits into the regulatory framework for emissions reductions here in San Pedro Bay port complex, as well as throughout covered facilities in California. The Harbor Trucking Association is the nation's largest trade Association representing drainage carriers doing business on the United States West coast. We have a particular focus in California for obvious reasons.

Our Member companies range from the small 1 to 2 truck fleet operators all the way up to the largest trucking companies doing business in intermodal service in the United States. The term drainage is derived from description of horse drawn carts that would carry heavy loads, short distances from a dock to a larger wagon or rail car. Today, drainage is used primarily to describe the movement of containers by heavy duty truck from seaports or intermodal rail yards.

While this definition also includes brake bulk, the primary thought of when considering drainage is primarily looked at as containerized freight movement. As of today, over 70% of cargo is handed off these local docks exclusively by truck.

As mentioned by Executive Director Gene Soroka earlier, while the traditional definition of drainage was directed towards shorter routes, today, here at America's ports, trucks are coming from all over the country, including even our own Central Valley, to pick up and drop off cargoes that helps keep America's cargo and economy moving. In the ports of Los Angeles and Long Beach. As of July 20,720, individual drainage trucks are registered to do business at this gateway. Of that number, 14,430 could be considered active or in service.

These numbers do fluctuate and can represent even more individual drainage vehicles, as the overall churn is not accounted for in the aggregate numbers. From month to month, the port registries of active vehicles can see as much as a 15% swing in unique vins, meaning that the port truck fleet is not static and in fact grows and shrinks depending on volume swings or overall truck availability.

It is no secret that close to the past 20 years, drainage trucks across the state have been the focus of both state and local regulatory policy. Even before AB 32, the Global Warming Solutions Act of 2006, was signed, the heavy duty trucking industry had already been directed down the regulatory route as rules for private fleets, including drainage, were being looked at for massive reductions in Particulate Matter, or PM, that had been identified by the Diesel Risk Reduction Plan in 1998.

While the state was developing its diesel rules and AB 32, the two local ports began to craft their own standards for trucks and the companies who do business at the Gateway. The so called Clean Air Action Plan, or CAP, as you have already heard today, was the first of its kind port directed effort to clean up overall port operations the world over. Including in this cleanup effort were, of course, trucks.

But similar to the statewide rule, the focus for trucks had been criteria pollutants both TM 25 and Knox, as well as PM 10. The focus of the reductions was on deployments of advanced engine technology, of which both the ports in the state eventually mandated through regulatory measures and incentives, some might say disincentives, through a clean truck fee assessed from cargo moving through the ports of LA and Long Beach as well as actual incentives in the form of grants which were doubly responsible for the quick turnover.

While not without challenges to implement, the Cleaner Action Plan for trucks was extremely successful in reducing criteria pollutants from this sector. In fact, targets were met early and additional directions were achieved above and beyond what was previously forecasted.

This is true especially for trucks, which as of this last cop up data has resulted in an overall reduction of 98% of diesel particulate matter from the baseline year, as well as an 88% reduction in NOx. Equating to 5512 tons according to port data. This was achieved through billions of dollars in private investment and a reliance on technology that most importantly had widespread commercial availability that was proven in the marketplace.

This is a stark contrast to where we currently reside with the drainage proposal under the Advanced Clean Fleets rule, which at best is aspirational and at worst is downright malicious. Under the ACF proposal, thousands of drainage trucks will be moved from the system on 1125, with thousands more following each year thereafter, with the limitation on no additional capacity that can be added after 1124 unless it meets ARB zero emission non ICE standards.

The drainage provision in ACF is by far the least flexible under the rural construct. One glaring emission, while there are several, is a lack of recognition that fleets will need to rely exclusively on public facing fueling infrastructure have no exemption pathway should the charging not materialize by the time vehicles begin their phase out.

Even according to Carbs on estimates, drainage trucks will need to rely on public facing fueling infrastructure up to 75% of the time, while the Port of Long Beach, in their September 2021 study puts the number squarely at 58% of Drainage trucks that will need to rely exclusively on public fueling. Unfortunately, no exemption pathway exists for these folks, and they will likely leave the market once their time is up.

Another emission is not taking into account the operational restrictions, namely limited range and the payload impacts due to heavier battery weights. That is the norm amongst currently available heavy duty class 8 onroad technology. If a fleet cannot find a vehicle that meets their operational profile, they are out of luck and will likely need to change their business model, which in many fleet structures is difficult and possibly downright impossible. This is a reality that CARB staff acknowledges, but it refuses to address.

Besides telling these exact fleets that hopefully something will be available, last time I checked, hope is not a business strategy. The rule has several other issues that staff has refused to address, including how overall truck capacity will be impacted by the rule and how that it may impact total overall competitiveness for volume coming through covered facilities in California. The other dismissal of overall impacts is an indication of the political motivations of this rule that trump reality.

Even from the port zone data, there is a demonstrated slow adoption rate of ZE vehicles. There are fewer than 150 in port service across the state currently. Keep in mind that as 1124 is when begins the entry standard, which is less than three months away, that is out of over 30,000 trucks that Carba's staff has identified across the state. That are considered active in port service.

While over 100 ZE trucks are registered right here in the San Pedro Bay port complex, only about 90 of them are actually operational. The others, although registered, are not moving containers and likely will not be doing so anytime soon until the needed infrastructure is built out to support the truck deployment. As you have heard today, there is no shortage of infrastructure challenges. The CEC has estimated that over 150,000 chargers will be needed by 2030 to support the medium and heavy duty battery electric wall out.

That is well over 400 chargers that need to be brought online every week to stay on track with that goal. And echoing this, as you heard from Commissioner Monahan earlier, we will need 6000 additional megawatts of capacity to fuel this transition. That's enough energy to fuel New York City. And while I'm here in my final three minutes, I will wrap up.

While California has met some of its light duty charging targets here, in the interim, we are parsecs away from meeting the heavy duty demand, especially public facing. Yet we are moving headlong into the breach without any real consideration of real impacts of the rule on small businesses and little, if any, recognition of the technical limitations facing its implementation.

Nevertheless, as we look towards a future to investigate techniques that will help continued reduction of GHGs, it is important that we are aware that not all reductions come from engine regulation and fuel type. Overall efficiency improvements still have the great potential to decrease overall operations emissions from the complex. For drainage operators, the amount of wasted time, fuel energy and resources repositioning chassis or empty containers due to terminal imposed restrictions, ERD shifts, and terminal closures is staggering.

Not to mention the hours of wasted time sitting behind marine terminal gates waiting to be serviced. This is evidenced by the fact that trun turn times in the harbor average over 10% of all moves lasting 2 to 3 hours, and approximately 6% of those moves exceeding 3 hours. And during peak times, 25% of the turns are over 2 hours, with over 10 leading over 3.

Improving these statistics would result in greater throughput and velocity and very like will help offset some of the capacity losses that we felt to attrition under the ACF. In conclusion, while the challenges are great, it will take leadership at every level to continue encouragement and dialogue amongst all impacted stakeholders to facilitate this transition to ZE transportation.

The Legislature has a grand opportunity here to act as the voice of reason or dare I say, the adult in the room when it comes to perspective on how this transition will evolve. Select Committee hearings such as this provide a valuable opportunity to hear directly from stakeholders who are trying to maintain their businesses and the jobs they support while also trying to meet the regulatory goals laid out by the state.

It is of tremendous importance that we maintain it is of tremendous importance that we maintain dialogue to continue to impress upon all those who will listen the importance of the maritime gateways in California and maintain cognizant perspective that this is a global marketplace where strict regulatory requirements have the potential for massive, unintended consequences. Thank you for the opportunity. I look forward to questions and further discussion.

Thank you very much. Next, we will move to Peter Gilbertson representing the Pacific Harbor Line. Thank you very much for being I know Otis couldn't make it, but glad you are here. Please introduce yourself. And floor is yours.

Sure. Chair Gibson. Thank you. And Assembly Members. A pleasure to be here. I'm sorry Otis could not be here today. He had an important conflict. Pacific Harbor Line is the railroad that serves the ports of LA and Long Beach. We provide switching services, we maintain the rail infrastructure, and we provide dispatching of both our trains, but also the Class 1 railroad trains that come in and out of the ports.

Our focus is really, and our goal is to do that in a neutral and transparent way, safely, with good customer service and low unit costs. We're proud of through the supply chain crisis, we really had a success story. We again will acknowledge our employees, who are represented by the Brotherhood of Locomotive Engineers, a unit of the teamsters. They came to work every day. We never laid anyone off. We continued to hire all through the pandemic.

And as a result of that and those efforts, we maintained our service almost 100% service provision for our intermodal customers. In fact, we were recognized in May by the US. Federal Railroad Administrator, Amit Bose, who came out for our graduating Class of Nine engineers and recognized their joining our company as engineers. And at that event, it was sort of a coincidence.

We were expecting for some time, but it had arrived a couple of days before, really the first zero emissions battery electric locomotive in the United States built by Progress Rail, which is a unit of Caterpillar, it is in testing at Pacific Harbor Line now, and it's part of the environmental focus we've had for years. Our fleet today, which is about 23 locomotive units I shouldn't say about it is 23, is all class EPA, class 3, tier 3, plus or tier 4.

So compared to non tier locomotives, which are operating all over the United States today, we have dramatic reductions in NOxs and particulate matter. We've had those in place, those units, since 2011. So this has been a long standing commitment. We have. But our most recent initiative before the zero emissions locomotive is earlier this year, we converted our entire fleet to renewable diesel, and that alone, according to the CARB regulations, reduced our CO2 emissions by over 50%.

So this is an initial interim step that can be taken, and we took it to try to address CO2 emissions. The zero emissions locomotive is being tested as I say we've tried battery electric locomotives in the past. We had one by a different manufacturer about 10 years ago that we managed to melt. Didn't work very well. So we're thrilled to have this back. We've invited in all the railroads in the United States to come and look at it.

We've invited other ports to come and look at it. We'd like all of you, if you're interested, to come and see it at some time and tour our operations. We'd like you to do that. But it is a test. And one of the things that's interesting and telling is that we right now are still charging that locomotive with sort of the equivalent of your home extension cord. The fast charger, which we have on site, has not yet been connected to the grid.

And it just illustrates one of the transition issues here. And it's again, there's no villain here, but it's how long is the distance, what's the size of the conduit, what's the grid connection, multiple decision makers in that process. And it just illustrates some of the issues that are associated with this transition. What we're all trying to do.

The other project that's underway, and this is great, is the South Coast Air Quality Management District was successful in getting a grant from the CalSTA program, the 1.5 billion program to build a hydrogen fuel cell locomotive. Webtech, which is one of the two large locomotive manufacturers in the United States. Progress being the other, has a contract to build that. It is going to be tested at PHL. It's several years away to be built, but we're working with Webtech and the South Coast on that project.

So we're going to have really 2 of the transition technologies right here in these ports. So what are some of the constraints of this? I mentioned that just getting the charging station, as I think one of the port directors mentioned earlier, it's generation, its storage, its distribution, that's a huge issue with this transition. The cost is another one.

We can get a compliant locomotive for less than $1.0 million and the zero emissions battery electric, although there isn't really a retail price, we're assuming it's going to be in the 4 to 5 million range, just to give you a sense of this. So again, we're a small business. We're trying to lean into this and we have for years. But it's a big step function and it will require some public investment. We have to be pragmatic about these things.

We have to find out where we can get near term reductions. That's why the renewable diesel effort, which gave us 50% reductions, is something that's very significant. We have to leverage those kinds of things as we move to the longer term transition. There's also ways we can operate that need to be looked at. We expect to release fairly soon a consultant study that we commissioned about shorthaul intermodal in California. This is not something we're pitching ourselves to operate.

This would be operated by the Class One railroads, but we do think it can potentially address the market share issues that a lot of you've heard about today. So we'll share that with you when that comes out. Thank you very much. Remember, we're small businesses. We want to lean into this. We're trying to lean into this. Come and see what we're doing. You have an open invitation. Thank you.

Thank you very much. We appreciate everyone's testimony. We also had a representative, Mitch Potts, the business agent and Vice President of the Iron Workers Local 433, representing the state building trades, had an emergency. So he's not on the panel this morning with us. And so we're buying a little time and we want to open up this time for my colleagues to ask any questions that they may have.

If I may just ask Matt Hillyer, the first question in your presentation with all the new technology, because where the screen was, is all of that technology manned by the human being or is it autonomous?

The answer is yes. I will add the answer. It is operated by a human. Okay. I would like to add autonomy does not necessarily always mean driverless vehicles.

We are also involved in autonomy. And you can do autonomous functions that increase efficiency for the operator. So it's important to know that that type of autonomy can supplement human operators. That doesn't necessarily always have to replace the human operator.

Right.

Thank you very much. Question Senator.

Thank you all for being here today. I really do appreciate this. Talking to the chair for many times about this subject because I get these calls from everyone in my district. I'm glad that I've heard. I visit Cummings to see what they're doing. And I think that as we start having these talks about all the good, I think we also have to have these talks about the flexibility.

How do we give folks flexibility if the language is not in there, where it's supposed to be all about buying in the United States, but if we don't have the parts that we have to have that flexibility. I get calls from folks that don't understand. They understand the forecasts, they understand that what they see that's coming. And what's coming is basically losing jobs, right? As Sal mentioned, 30,000 jobs or 30,000 trucks. We have the 30,000 trucks, right? 30,000 trucks and more. And there's more.

But I hear those talks every day. I get calls from folks that say, know, I'm going to be driving from Stockton, California to the Port of Oakland, and how are we going to be able we're in gridlock and traffic sitting there and we have to turn our truck around because we don't have enough electricity to make it there and back. Today was very informative. These were all good talks. But we need to figure out at the end of the day, as we try to meet our goals here, that we need to also have some flexibility.

We need to make sure and be honest with each other, that's the point is that competition I hear this all the time, we're going to lose it to other states. I visit other states. I visit their ports, and they have flexibility. And I know we're going to get to our goal, but I do not want to cut jobs. I want to make sure that there was some flexibility.

Looking at that again, as I said earlier, I'm Vice Chair of the problem solvers of how do we solve this problem? We're going to meet the goals. But in between, in the middle, what is that? And we got to have those serious talks. And I want to thank the chair of listening to all of us, because he knows that we're not speaking just for our district. We're speaking for the State of California. We're competitive. We always say that we're going to lead against other states.

But in this one here, I think that we need to kind of like, pull back, look at the language, what we do, amend it, fix it, and still not lose these jobs. Be competitive, let's lead. And that's why I'm glad that my chair of this board has an ear and wants to get something done. And so do mean, as I look at my colleagues, that you hear their frustration. We hear your frustration. We really want to do something. Thank you.

Thank you very much, Mr. Fong.

Thank you very much. I want to build upon my colleague from Stockton. Competitiveness is clearly the takeaway from this hearing. And to hear what Matt said about requiring us to be the adults in the room, we've got to look at the data and be honest. I do want to ask Mike to kind of if you could expound upon the numbers on exhibit 3. It's pretty clear that we are not competitive versus other ports right now, and that in a global market, goods and containers can go.

Different areas and different know. Gene mentioned kind of the high level issues that we have to address to keep California competitive. I guess from your perspective, from your know, what are the things that need to be done in the short term and then clearly in the long term to kind of straighten out these numbers for California's benefit?

I think referencing Executive Director Seroka's comments are exactly right because he hit the nail on the head. No daylight between him and us on those factors. But to make maybe a finer point of the context that we're in, the public sector cannot spend its way out of this problem because it's a commercial problem and we're kind of in a place where we're asking you to do no harm. Don't add costs that cannot be monetized through our system. The way that we build infrastructure in California at our ports is through a revenue bonding system because our ports are proprietary actors which means they are not supported by a dedicated tax revenue stream.

So if another ports are part of the local city infrastructure they don't have access to property taxes or other types of local excises or anything like that. So when you add costs, the challenge is that if they're not connected to revenue streams they just pile up and they become that source in which we're ending up in the opposite of the virtuous cycle of reinvestment.

Typically what we want and what was happening until 2006 is as we added costs, they were scalable because we were outgrowing those costs because we were competing for discretionary cargo. We're bringing in more cargo and we all operate on economy of scale at a terminal or on a vessel. So we have fixed costs. You move more containers, that cost per unit goes down. That's what you want. So it sustains higher base costs because you're growing just as faster, fast or faster than the increase in costs.

What we've done for the last 15 years is bad math. We've added costs faster than units and when you do that then your cost per unit goes up. And when it goes up and your competitor's cost per unit goes down then you lose discretionary cargo. And when you lose discretionary cargo, your volume goes down and it goes into the denominator but your costs keep going up. So your cost per unit goes the wrong direction.

And that's a cycle that we've been caught in over and over and time and time again. So our challenge is to essentially take a pause and look at the timeline it takes us to actually finance these costs. So typically in our environment when we're investing in infrastructure, we're doing it through revenue associated with revenue bond. That's backed by a lease of 20 or 30 or 40-plus years. That's the scale that we're talking about. You mass a lot of capital.

You're able to make amazing investments in infrastructure and in equipment and then you pay it off over a long period of time. We're on the front edge of that. We need to stand the front edge of that. Everything you heard on this panel, including from our friends at Taylor, our OEMs, are that we're within reach of technology that will allow us to do that. We need to build that equipment and the cost of the infrastructure into our equations up front and then let the system run so we can actually pay for those things over time.

So Mario mentioned that he used the phrase we have a strategic location. Our proximity to large markets, especially the Asian market. Is it correct, then, to in a way to summarize is that the regulations and the costs associated with it are overtaking our strategic advantage in a way that is moving is what we're saying. Containers and product to other ports.

Yeah. We have California-only costs that get concentrated, and they've accumulated faster than we can grow our cargo. So if we were to pause and even better reduce the costs to operate in California, would we be able to rebalance these numbers in a way that brings more market share back to California? We think so. And the reason why we think so is, again, going back to the role of the ports and their tenants and customers.

It's a proprietary relationship. They have to go into the market space and test the market. How can we build this infrastructure? How long does it take to pay it back? What's the revenue bonding capacity? Yes, sir.

Thank you. Assembly Member that was a great question. I just wanted to add something to it. And again, we're quoting the Executive Director very famous quote. He says, when you've seen one port, you've seen one port, and this port is like none other.

If you were to take a vessel that left Asia and went to Europe, it might stop and go through the Suez Canal. It might stop in Greece and discharge a couple of bays. It might go to Italy, work its way around, and country by country, it discharges a certain percentage of the overall vessel. When a vessel comes from Shanghai to Los Angeles and Long Beach, it intends to discharge its entirety here, which creates logistical problems and bottlenecks.

We're often compared to ports that are not like ours. If you are a transshipment port, for example, like Shanghai or Singapore, where many feeder vessels are going to that one port, discharging their goods, never leaving the dock, just going on to another vessel, well, then that's counting that move twice, number one, and they don't have the same constraints that we have. Our cargo has to come off the vessel. It has to hit the dock.

It has to get on a rail or it has to get on a truck, and it has to go somewhere because someone wants to buy it. I think it's the highest moves in the country or in the world. By port. We are at 11,000 or 12,000 TEUs per vessel call which is far ahead of anyone else that's in competition. So I just want to add one other thing and that is that everybody wants clean air. It would be ludicrous to argue differently, right?

The question becomes, in light of the progress that we've made to date, which has been substantial and we're trying to get that last chunk which we know has detrimental impacts, but what is the cost of getting those diminishing returns? What do we have to give up in terms of jobs, in terms of competitiveness to squeeze out that last bit of pollution, local pollution that we all want to get rid of? And that's another conversation.

Good jobs build households, households build communities, communities build cities and so on and so on and so on. Without belaboring the point, I have a report here from it's called Poor Health and it's from one of the doctors here is from UCSF and it's a very prescient quote says that socioeconomic status is the most powerful predictor of disease, disorder, injury, and mortality that we have. It's a cause of causes, right?

So as we're looking at the impacts of local emissions, let's weigh that against what the impacts would be of job loss. It would be equally catastrophic. And I think that the last comment that I would make on this subject is that it's kind of three legs on the stool. You have your local emissions, you have the economic, which is also relatively local, but then spreads to the state, et cetera.

But then you also have greenhouse gas emissions and you can't underestimate the impact that the greenhouse gas has on our local emissions. In this way we're likely to have to go through some kind of an emissions inventory with ARB, with AQMD there are also monitors that measure the actual emissions that are in the air. And the largest source of emissions now is not port emissions. It's wildfires. On days that there are wildfires, there's a tremendous spike in what's read from those monitors.

So if we are solely focused, myopically focused on local emissions at the exclusion of jobs and at the exclusion of greenhouse gas emissions, we're shooting ourselves in the foot and we just can't afford to do that. So we need a holistic approach and we're happy to work with you on getting there.

One last question. I think you teed it up, which is I have the letter in front of me in terms of the opposition and your concern to the ISR, since I have you here, everyone who the major stakeholders when it comes. To terminals and the people who deliver goods and those who take it off the ships. I want to give you an opportunity to at least give us your guidance and your insight on the ISR and what you think of it.

So we are opposed to the ISR as we understand it. It was testified to earlier that there was an MoU process that was pursued. We know that there is an MoU that's being pursued with some success with the railroads. And that's great. As we understand it, the ISR for ports was contemplated. The MoU for ports was contemplated while the ISR was waiting in the wings. So essentially, it was a negotiation with a gun to your head.

Either you give us what you want in the MoU or in a couple of months we're going to run out the clock. I think it was a three month extension. Six months. Six month extension. We're going to talk for six months. If we can't get there, we're coming with our rule. That's not a negotiation. We need the rule set aside permanently in order to pursue an MoU realistically. Thank you. I just want to open up to yeah. Thank you. Thank you.

Assemblymember Fong, two comments. One generally is we disagree with the assertion by the air district that somehow federal transportation funds are at risk here. You have to do a plan. This is part of the planning process. State of California in the last 33 years, since the 1990 amendments to the Clean Air Act, has never been an attainment. We've never lost our transportation funding. It's a lot like the housing element for a local city.

You have to get HCD to bless your plan and the housing element, but you don't get punished if you didn't actually build the housing. That's the analogy with the Clean Air Act. But I will agree with four things that the representative from the South Coast said. He said they don't have the authority because they can't regulate ships. 100% agree. They said that he thought that incentivization was the best way to go. Could not agree more.

He said that their real issue is the need to work with the federal government to right size national standards that are applied to the local air district. We couldn't agree more. We would love to work with both the air district and the local delegation, both congressional and state level, to make sure the federal government knows that the standards that they're asking the local air district to bear are completely unreasonable. And the fourth thing he said was, they don't care about how we reach those standards.

We agree the way they've approached this is indicative of that. They don't care what the impacts of that are. That is unfortunate. It's not becoming of an arm's length, objective, third party, fact based regulator, and we encourage them to come to the table, sit down with us, care about Sal's members jobs, care about whether or not we get diverted, care about whether or not we grow greenhouse gases, care about how that affects farmers in the Central Valley.

They can't sit in their silo and then be offended when the rest of us aren't. Thank you. Did you want anything, Matt?

Thank you. Committee Members, I really don't think there's anything else to say. I mean, there's the short-sightedness by the district and abandoning the MoU process, as Sal put it, was already laid out they had their goals that they wanted to achieve. Diesel magnet source rules are nothing new.

If you look at the level of compliance that's happening with the warehouse ISR right now, even compared to their baseline estimates of total truck trips, they were wrong. So we don't have a lot of confidence in their ability to now regulate this gateway with some cap on emissions that they allude to the fact that it's just up to the individual operators to determine how they're going to meet that standard and also say, well, we don't know because we're still trying to promulgate it.

Meanwhile, shippers are making real time decisions about where they're going to send their cargo. And as vessel operators have less volume that they need to bring to the West Coast, so goes vessel capacity. If they start canceling strings, that limits the amount of agricultural exporters in the valley to obtain space on those vessels to go to places outside of the United States. So it's a comprehensive issue that I agree with my colleagues that we need to have serious take a serious step back and continue these discussions positively and productively.

And I don't know, Peter, if you have anything else to add. Okay, well, I'm sorry.

Before you close this out, first of all, I just want to say thanks for getting us together. I know but this panel, thank you for what we heard today and I really look forward to working with all of you. job, I mean, port activities, increasing jobs. Thank you so much.

And I just want to echo my colleagues comments and at this time we want to open up for public comment. And so what we would like to do is you can approach the microphone to my left, your right. You have two minutes. You can please state your name and or organization that you represent and please, we'll adhere to the two minutes we see people lining up right now.

And again to this panel, thank you so very much. And to the commissioners who are still here, we appreciate commissioners from Los Angeles and Long Beach still here representing those two ports and any other commissioners that are here. So with that being said, we will recognize our first public speaker and you may state your name and just go from there.

Good afternoon, Fernando Gaetan with you know, the port complex is without a doubt still one of the most productive in the nation. It also comes with continuous delivery of toxic dose of air pollution to region already with a dubious distinction of having the most polluted air in the nation, layering public health costs on top of a community that's already overburdened by air pollution. So there's three things that you can do as a Committee to look into that one is let regulators do their job. The ISR rule has not yet been issued. You have nothing to review. Wait to see the rule before you pass judgment.

There is nothing to suggest that ports can't have to cut their productivity to cut pollution. If switching to zero emissions makes ports less competitive, then ports wouldn't be lining up to receive billions of dollars in public subsidies to make this transition. The Port ISR delivers a tremendous opportunity for the air district to use its legal authority to really regulate the largest source of fixed air pollution in the region by coming up with a comprehensive strategy. We haven't seen that yet.

Second, put public health at the center of your decisions today and going forward. I noticed that there is not a single environmental justice organization invited to these panels. For the last two hearings, no local groups were invited to speak to the problems of air pollution in the region that impact residents, your constituents. We invite you to engage in a deeper level with those dealing with a public health crisis and invite them to future hearings and include the public health discussion in your white paper. Thank you.

Thank you very much and you can please share your comments by email. We would love to respond and receive them. Thank you.

Good afternoon, Chair Committee. My name is Daniel Hidari and I serve as Climate Campaign Manager of Advocacy at Pacific Environment, which is a local to global environmental NGO working on shipping and port decarbonization. I live in Long Beach myself and we possess consultative status at the International Maritime Organization, which is the body that's responsible for setting global shipping law.

I just want to echo my friend Fernando in his earlier comments right now and emphasize the public health aspect. Fossil fueled ships remain the largest, fastest growing and most unregulated source of pollution within the San Pedro Bay port complex. Most ships currently burn heavy fuel oil, which is the cheapest, dirtiest, most deadly fossil fuel containing asthma and cancer causing pollutants, including nitrogen oxide, sulfur oxide and particulate matter.

It is the lowest common denominator of all fuels life expectancy in port adjacent West Long Beach is eight years Shorter than the Los Angeles County average. Black Long Beach residents are hospitalized with asthma attacks at eight times the rate and Latinx residents at twice the rate as white Long Beach residents. So this is a racial justice issue.

Part of the reason that there is so much indifference towards these communities on the front lines of port pollution is because they are communities of color and lack the political power that industry possesses. The State Assembly and the ports should support a standard for 100% zero emission shipping no later than 2040 across the state and at the port complex.

Already, there are standards for 100% zero emission cargo handling equipment by 2030 and standards for 100% zero emission drainage trucks by 2035, but no standard for shipping, which is the largest, fastest growing sector at the Port of pollution. So I really urge you to set a standard for zero emission shipping, urge you to support the South Coast Air Quality Management District in doing its job and take climate change seriously. Thank you. Thank you very much.

Good afternoon, Chair Gipson, and your esteemed colleagues from the Assembly. My name is Jerilyn Lopez Mendoza. I am the regional organizer for The Climate Center, which is a small nonprofit organization. I also served on the Board of Public Works I'm sorry, the Board of Harbor Commissioners for the Port of Los Angeles from 2005 to 2010. So I was actually on the board when we worked in collaboration with Long Beach and a number of other regulatory agencies to bring forward the first clean air action plan.

Thank you. Today I want to urge you to address the issue of shipping in a way that you can that doesn't imply international jurisdiction. I was at an event last week where Jean Soroka said that one ocean-going vessel emissions add up to all the dockside equipment together in terms of their emissions. So the shippers, the ocean-going vessels are really where the problem is.

And so what I would like to suggest to this Committee is that you require shore power for all categories of vessels, as well as offshore charging stations for ships. This is mature technology. This called shoreside plugin or alternative marine power. It's been around since I was on the board, and it can be done without inflicting any problems with the international jurisdiction in 2021, as dozens of ships were anchored offshore during the congestion crisis, running their fossil fueled engines while waiting for entry into port.

Due to the harm communities faced during this ship congestion, shipper Maersk announced plans to launch the world's first electric offshore charging venture for Chips, with plans to reduce CO2 emissions by 5 million tons, along with reductions in air pollution at up to 100 ports globally starting in 2028. And we urge the Committee to follow Maersk's example and require infrastructure for offshore charging. Thank you very much.

Thank you, Commissioner. Appreciate your testimony. Good afternoon. My name is Thero Golden. I'm a resident of West Long Beach, which is adjacent to the porch and my community. I'm also a Member of the West Long Beach Association and the treasurer and I take care of all environmental issues. We had no environmental person here today to speak about the negative health impacts. Zero emissions does not equal negative health impacts. It does help, but it does not equal to that.

Whatever type of fuel, especially if it's a combustible fuel, you will have a residue won't be as much and as prevalent. Today. We are losing at least three of our residents from pollution at this point. The statistics say it's 1200 a year. You divide that by 365 and it'll get you to that number. That's what we want, relief from these communities. Are paying for goods movement with their blood. That's why you need a good some people like to use strong.

You need something that's measurable in everything rule. So we know where we are, to know where we're going. There is no plan to my knowledge, in California except like the gentleman here was saying, nobody's in charge. Where are we going? We reach containment. Is containment going the place where we need to be? It's like starship. We go into places where no man has been before. And that's just the nature of what's happening here because it's more disorganized than organized.

We have to have this organized so we can move in a direction. It's like an army. You can't have everybody doing whatever they want. But it is important that you recognize the human suffering that's going on. Why there's all the delay? Everything the gentleman said about the economic issues are there. And I want to thank you. Thank you so much. Thank you.

Good afternoon, Committee, Chair. My name is Marvin Norman. I'm the policy coordinator with the Center for Community Action and Environmental Justice. I also live in an impacted community in San Bernardino. One day I recall the time where it was Clear day and then the wind shifted and I thought it was a forest fire because of all the small coming. So this is what we are hoping and want to make sure that AQMD is addressing. The AQMD is charged with protecting public health and when pollution is contributing to public health, it is their job to take care of it. I did want to bring up some points.

I believe it was Mr. Jacob mentioned that the difference of what's been happening with the port and I think he forgot to mention a couple of things that have happened within since the early 2000 s that have also certainly contributed to the traffic going elsewhere.

The Suez Canal was widened, the Panama Canal was widened and we've had a lot of nearshoring, a lot of job, a lot of manufacturing has been coming back from Asia to Mexico and Latin America where it gets shipped up here by train instead of being put on a ship and shipped across the Pacific Ocean. So all those will inevitably lead to other ports getting more traffic and other modes getting more traffic as compared to what was expected in the early 2000s.

Another thing to bring up was it is a real concern about the lack of infrastructure for charging. And I know it was mentioned hydrogen is a potential and there is some potential for hydrogen. But the problem with hydrogen is that you need about triple the energy to create the hydrogen that you need for straight electricity. So if there's a problem getting the infrastructure for straight electric, your problem is three times as large if you're going to try to rely on hydrogen. So hydrogen can be used in certain situations, but it should be used only where electrification is not an option. Thank you. Thank you.

Head, Committee and Chair. Thank you so much. My name is Dori Chandler, and I'm the policy advocate for the Coalition for Clean Air. And I'm also a Long Beach resident. We want the most emissions reductions possible at the ports as fast as possible. This includes air toxics, greenhouse gas emissions, and criteria pollutants. We support an approach to strengthen the port's renewable energy strategy and to clean up the goods movement sector. The public health consequences of not taking action are clear.

The ports and the emissions they attract expose our local communities to harmful health impacts. These include higher rates of asthma, heart disease, cancer, and premature deaths. Where are the voices on today's panel? Conversations from the community groups harmed by port operations and their emissions? The communities harmed need to be included and not from the sidelines. We would like to hear also an update from the Port of Los Angeles on the 2007 settlement agreement.

As per this agreement to install 10 solar, the port installed a 1 world cruise center. In its press release, the port said that, quote the 10.8 million solar photovoltaic installation, which is expected to result in an annual $200,000 energy cost savings, is the first phase of a multi-location solar power program that will eventually produce 10 solar system generation capacity. Three additional project phases are slated for completion over the next five years. End quote. Has the port fulfilled this agreement since this was communicated 16 years ago?

Has the other 9 solar been completed from the Port of Long Beach? We would like to know what is the status on the Energy Island initiative to install solar energy in a microgrid? The link for this is broken on the Port of Long Beach website. We need South Coast AQMD to put an effective emissions reductions framework at the ports. For years, California has had a cap on greenhouse gas emissions and seen booming economic growth.

During this time, the argument that the economy will be affected negatively by a cap on emissions to protect human health doesn't hold. This is an unfounded and dataless myth. We need new and existing technology to be put into use. The ports have made a promise to do this. They have the incentives and resources to do it. Backing away from these technologies and not putting them into practice is myopic. The public continues to subsidize port and industry profits with their health and lives. What the port and gas movement sector has been asked to do is feasible and not unreasonable. Thank you.

Thank you very much. Next speaker.

Good afternoon, Chair Gibson and honorable Committee Members, fellow citizens, and business people. My name is Pete Marsh. I served 25 years in the Coast Guard, including vessel traffic service, port work, 10 more with Booz Allen Hamilton and other defense industry contractors. I'm now in my third career as a solar contractor to put my energy towards solving a climate crisis.

And I'm the volunteer co-leader of the National Electrification Action Team for Citizens Climate Lobby, which is a nonpartisan grassroots climate advocacy nonprofit with almost 500 local chapters, roughly one in every single US. Congressional district. So first, the energy transition. The consensus of the industry analysts and academics is we can decarbonize 80 or 90% of the US. And global economies with electrification as the primary source. That means transitioning roughly 15, almost 20% of global and US. GDP from fossil to electric. And that's not easy.

You've heard a lot of that today. But we have to do it. Climate crisis aside, you've heard a lot about the air pollution impacts. You know those the estimates are that we have roughly almost 10 million premature deaths per year. That's one 10th of 1% of our fellow humans prematurely dead every year from air pollution impacts. Trucking electrification. I want to draw an analogy to what we've seen in the light-duty passenger car EVs over the last decade.

In 2011, we sold only 130,000 electric vehicles globally. Last year, we sold 130,000 a week. The trucking industry is a decade or so behind that. But all the major manufacturers, there are 140 different models of electric trucks from 40 different manufacturers. Currently, that industry is growing. All right, thank you very much. I have some other comments I'll submit by email one really quickly. Electrified rail. We heard an anecdote about problems here. China, India, and Europe all have between 60 and 80% of their total rail networks nationwide electrified.

Thank you very much. We can do that. Thank you very much and please feel free to submit your testimony to my office. Thank you. You're very welcome. Next speaker.

Good afternoon. My name is Francis. I'm an associate with Better World Group and we work really closely with Pacific Environment. Those are very long couple of presentations. I'm sure you all are still processing what's going on. So we wanted to make it very clear that since 2005, there have been no actual progress on air reductions from the ports. Just like CARB and AQMD said today, even if you turned off all the stationary sources, like the refineries along the freeway, they would still not be in attainment.

We're still dealing with cascading problems of air pollution and every single counterargument that industry trucking associations and the ports themselves have spewed conveniently used distorted data figures that says that they have somehow attained 90% NOx reductions in the past couple of years. How is that data sufficient when we're still seeing record air qualities breaking here and not just in wildfire days like Assemblymember Fong mentioned? We are seeing them constantly.

It's just now just a running thing that we call it Smoggy Summer, because it's always smoggy in the summer. Yes, there's geographical issues, but it's always concentrated in the same acting places at ports, along trucking corridors and freeways. And just like Thero Golden mentioned earlier, people are being poisoned. We are seeing this by neighbor-by-neighbor. It is not just a data, it is people that we are talking about.

So when we are asking, and accordingly, our agencies are freaking out, it is difficult to tackle this process. Assemblymember Fong. You were right. There is not exactly a lead agency that's solving this crisis. So when leadership like Y'all come to our communities, we are looking to you to uphold these regulations. And when we work with AQMD, it's the same actors who are arguing to us it is impossible. Cargo displacement is happening.

But if you look at cargo displacement, do you remember a couple of years ago when all the ships were lined up? It's because they cannot get through. It is an infrastructure problem. We are at capacity. Growth is important, and jobs are so important, especially union labor. This is such a proud union space, but we cannot grow at the expense of continuing to pollute. It is not just a reason of environment and clean air versus jobs. It is a capacity constraint. We need these regulations. Thank you.

Thank you very much. The gentleman in the back with a suit on, you'll be our last speaker. We have 10 minutes for public comment, so I welcome you to please feel free to start.

Thank you. My name is Sarah Wiltfong, and I'm with the Los Angeles County Business Federation, also known as BizFed. We're an alliance of over 245 business organizations who represent over 420,000 employers in Los Angeles County. First, we want to applaud the ports of Los Angeles and Long Beach for significant progress on its emissions inventory, reaching the goals of a Clean Air Action Plan ahead of schedule.

As has been stated, this was done by both ports working with industry and organized labor together, and their continual inclusion will ensure further reduction at the ports. Second, we need to call attention to a letter signed by 112 national, statewide, regional, local, business, agriculture, and other groups that highlighted significant concerns with AQMD's proposed indirect source rule. We agree with many of the panelists anything that caps cargo at the ports and would hurt the region's economy should be a nonstarter.

Finally, we appreciate you hosting a Committee hearing today and are encouraged by your dedication to tour all ports in the state. And we look forward to being a resource to the Committee as we continue to pursue reducing emissions while protecting our supply chain. Thank you.

Thank you very much. Next speaker. Hi, good afternoon. My name is William Morris. I work at a multi-faith nonprofit called Green Faith. We educate, equip, and mobilize people of faith to take bold action on the climate crisis and to build a more just, equitable, and loving future. I'm here taking time out of my day because reducing emissions and pollution is of the utmost importance for human health. I grew up in the South Bay near the 110 and a refinery, and I live in an area according to Callan, viral screen is in the 90th percentile for pollution burden.

I've spent my life breathing in polluted air, which is why I'm here. And why do the work I do out of necessity? When one of us suffers, we are all suffering. I'm also a person of faith who believes that we are to care for the least of these and those who are suffering the most. There are many affected communities who are crying out about what they are facing and I implore you to not let their experiences and their pain fall on deaf ears. Our current way of doing things is causing harm and the human cost is staggering. There's always obstacles to change, but it doesn't mean the change is not worth making.

I'm imploring you all, as people of reason, values, and conscience to do the right thing and echo what other community Members have said and ask that you reduce the most emissions from the port and the most amount of pollution as quickly as possible. Thank you. Thank you very much.

Good afternoon, Chairman Gipson and Assembly Members. Thank you for the opportunity to comment today at this important hearing. My name is Alyssa Diaz, Senior Policy Manager, speaking on behalf of the Los Angeles Area Chamber of Commerce. The LA area Chamber is a regional chamber and we have over 1400 Members with a broad spectrum of organizations, including the business community, job creators, and innovators in the LA region.

The ports of Los Angeles and Long Beach are critical to the Southern California economy, responsible for one in nine jobs in the region. We want to emphasize the importance of the goods movement to the region's and nation's economy while encouraging balanced approaches to improving environmental sustainability. Since it was discussed today, we are concerned the proposed indirect source rule for ports risk damaging Southern California status as the nation's most critical international gateway.

As recently announced by the ports, the two ports have exceeded their goals and have achieved reductions in priority emission categories according to their emission inventory for 2022. These achievements provide real benefits to our local communities. The ports, through collaboration with regulators and industry, have led the way to a cleaner environment with a clean air action plan. A collaborative approach is needed to continue to maintain and grow the workforce at the ports and to be able to move forward. Thank you for your time.

Thank you very much for your time. Next speaker. Good afternoon, Committee Members. My name is Matt Garland. I'm here to speak to you in two capacities. Number one, I'm a member of the Central San Pedro Neighborhood Council. And I didn't realize we were going to be talking about the AQMD rule here, but I will let you know that we have, as a community council, taken a position of opposition to the proposed indirect source rule, and I'd be glad to forward you our letter.

But really why I came is because I just wanted to come and tell you we talk about job loss and one job and what that means to me and my family. What that means to me working in the harbor is I have dignity. I can afford to buy a home in this community. I raise my kids in this community. I can provide a future for them. And this is one job. Mr. Soroka said we're losing 170,000 jobs a year because we're not competitive. Well, that's what one job means. So thank you for your time and your consideration.

Thank you very much. Give me one moment. There you go, please. Thank you. Thank you, Chair Gipson. Honorable Members of the Select Committee, my name is Marcos Holguin, and I serve as counsel to the Southern California ILW locals at the ports of Los Angeles, Long Beach, San Diego and Wainimi. Here in the San Pedro Bay ILW locals 1363 and 94 represent approximately 15,000 longshore workers, marine, clerks and foremen.

As was mentioned, every four containers equals one job. To put that into scale, according to the most recent data, the San Pedro Bay port complex is responsible for 168,000 jobs in Los Angeles and Long Beach, which is one in every 12 jobs. 883,000 jobs in the counties of Los Angeles, Orange, Riverside, San Bernardino, and Ventura, which is one in every nine jobs, and throughout the entire United States, one in every 62 jobs.

A review of our membership shows that approximately 54% of our Members live within 5 miles of the port complex and 73% live within 10 miles. These are historically disadvantaged communities that depend heavily on the ILW middle-class union jobs. Today we heard from CARB we'd like to flag that we believe CARB implemented the Commercial Harbor Craft CHC rule without considering mariner or vessel safety. As such, we recommend this rule is revisited.

To ensure worker protections are implemented, we ask for Carbon, the Legislator's support in ensuring this. As we mentioned, we are losing market share to the dirtier East and Gulf Coast ports. This market share loss is not just an abstract statistic. That loss in market share means a decrease in work. And our members, we see it every day. We know our Members are feeling the pinch of decreased cargo. Everyone in this room is supportive of achieving emission reductions.

But we ask that this is done with a balance between environmental justice and economic justice, a portmanteau of Enveco justice. Thank you again for your attention. And as you continue your work towards your white paper, ILW stands ready and able to assist any way we can. Thank you.

Thank you very much. That concludes our public comments section. We want to make sure that everyone had opportunity to weigh in on this conversation. And for those who are viewing at other places, we invite you to please submit your written testimony to my office, to either office, district office or email. But please submit those testimonies to us I want to thank my panel and all the panel who came in, the experts who came and gave us a lot of fruitful thought, a lot of information, as well as data and statistics. It was a very robust conversation.

I also want to thank my colleagues for taking time out of your busy schedule from Stockton to where are you from? Bakersfield. Forgot from Bakersfield and everything in between. And we're so excited that you were able to make this journey. A lot of information. I have taken a lot of notes, so much that I'm writing on back of paper just to make sure that I keep up and absolutely capture people's comments.

I want to thank our speaker, Robert Rivas, for one, continuing the Select Committee, moving forward under his Administration, moving and knowing the importance of the Select Committee on Ports and Goods movement in the State of California. I want to also give my colleagues an opportunity to have some closing remarks, say a few words. Thank you very much.

Again, I want to call to your attention November the second, we will be in the ports of Oakland on November the second, where we'll have our second hearing, and also in between we will be having tours of all 12 ports. After this adjournment, we will be touring the ports of Los Angeles.

And so we invite my colleagues and others to join us as we walk across the street and also take a tour of the ports of Los Angeles and gather information and hear firsthand what's going on. For me, it's been an enlightening conversation. Certainly, this is an important one. This is an important conversation as well as an important Select Committee. It is absolutely important to me that we get it right. I don't want to just have a Select Committee and not do a damn thing with it.

My goal and objective is to, one, have collaboration from all stakeholders so that we can reach some kind of real resolution, but clarity moving forward, it is important for me. I've never been hungry. Let me say that again. I have never been hungry. And we want to make sure we get it right, that no one in California lacks any meals or suffer from not only homelessness, being unhoused or being hungry in this state. We're the fourth world economy.

I believe that the answers and the solution to these problems are in this room. But it's going to take all of us working together, not in silos, because that doesn't help us move towards reaching our goal. Our Governor has large goals, our state has large goals in terms of dealing with emissions that exist.

But it's going to take each and every one of us with the talent that and the gifts in this room, we can work towards solutions and solving our problems and continue to be the light of this country. Because people are looking to California and we can still be a very robust economy and continue to grow with the work that we're doing and the policies that we're setting. And so for me, it's a delight to be the Chair of this Committee, to have so many well-articulate individuals with open minds in their own right, in their own space. And for all of you, again, we want and invite you to be part of this conversation.

So if you did not get a chance to speak to the microphone today, then again, I want to underscore you have an opportunity to weigh in because we're going to take everyone's opinions, comments, but most of all solutions to constructive criticism and utilizing that to be part of our paper. So we can have a roadmap towards not only our prosperity but reaching our real goals in the State of California. So I want to say thank you very much. It has absolutely been a delight.

We look forward to seeing each and every one of you November the second at the Port of Oakland. With that being said, is there anything thank you very much for coming. This meeting is adjourned.