Assembly Select Committee on Select Committee on Ports and Goods Movement

My colleagues who you will hear from in a few moments because of being here and also the demonstration is to show not only our support and why this is important for the level of the prosperity for the ports. I want to pause for a moment for my notes and thank the Port of San Francisco for one, opening up your home to us and allowing us to come in and have and conduct this hearing again. I'm very grateful for that.

The success of the ports translate into a comprehensive market both nationally and globally. We need to strive to meet California's green Gas house admission goals while also prioritizing the well paying union jobs that they offer. During our first two hearings we were educated on the nuts and bolts of the ports and goods movement in the State of California and discussing the problems the ports face, what helps keep them operating and sustainable. It was very extraordinary for me to want to be able to chair this.

And I want to, again, pause and thank one speaker, Anthony Rendon, Emeritus, for one, for creating and allowing me to chair, and also for our speaker, Robert Reevis, for his commitment to continuing on, to having these discussions and moving this conversation out to all of you. For me, it's very gratifying that we have these kinds of very robust discussions as we move on. It is important for us to understand the perspective of each entitle that operates under the scope of this industry going into this hearing.

We are now aware of the substantial work being done in this space and in all the partners that makes up this industry. However, for us to fully understand what it means to be committed to this meeting and also here in California, and also obtaining our Green Gas house emission goals and objectives, we must move into today's topic to examining California's. Exports and how they can maintain their competitiveness and let me underscore what I just said. Their competitiveness in the global market for renewable energy.

The port's efforts to move towards a renewable energies, meaning being able to maintain a competitiveness in the more efficient market space that we're in today. We as a Legislature have the responsibility to working in cooperation with industry stakeholders to develop policies that will help to help us to obtain our goals and objectives. The ports are the economic engine. Let me underscore, and I'll repeat that just for my own edification sometime in case I miss something when I say it myself.

The ports is the economic engine of the State of California. We're not disillusioned. We are very clear of thought what the ports in California means to the economic viability and the importance of where we are. California is the world fifth largest economy and I know That's debatable sometimes we're the fourth, we're the fifth. We're up there. And That's most important.

This Select Committee and the Legislature are to make impacts and meaningful legislation that we have to fully understand the supply chain and how each component can work together and reinforce each other to create a robust, sustainable economy. However, we also need to fully understand why our economy is the fifth or fourth world economy and what it takes to maintain that spot as we work to switch to renewable energy sources. Today we will hear from representatives from our local ports and I'm excited.

California also exports the industry, stakeholders and other experts to inform the Select Committee on the effects and being made and maintaining the competitiveness in California exports both domestically and internationally. I want to thank our panel. For those of you who will be part of our panel, I want to thank you in advance for being here and your attendance which shows your commitment to where we need to go and where we are today.

For those in the audience, I wanted to say thank you very much for being here and your commitment for staying and being part of this very robust conversation. There is a space for you on this agenda. It's during the public comment section.

And I want to also say this, that we'll give two minutes for you to speak and if you have further testimony, my office certainly encourage you to please write additional remarks and additional testimonies down and submit those because we want your voice to be part of this record. And I had opportunity to speak to some of the executives a few moments ago before we started in terms of where we're going with this conversation. This is our second hearing. It is important and it's purposeful.

We had our first hearing in Los Angeles with the port of Los Angeles and all the stakeholders there. We have this hearing today and we would accomplish the goals set out. Also, we're going to tour all 12 ports. Well, you say we got 11. Well, there's a private port. We want to include them in the conversation. We don't want to leave, no one left out.

And the goal is, after we complete the touring of all these ports, for us to get a very hands on, in depth on what's going on in terms of barriers and also our successes. We're going to chronicle all of this and those who are watching, those who are Members who cannot make it, their staffs are watching and they're taking notes, right? Taking notes. And we're going to collect those notes and my team is going to lead that effort to collecting those notes.

And from that we're going to chronicle and create a white paper to create a roadmap in terms of where we need to go and also acknowledging all of our accomplishments, trying to making sure that we are a state that is moving towards our goals and objectives in terms of obtainment. So we're not just having meetings, just to have meetings. I don't do that. Time is too precious and we don't have enough of it.

But we are doing this with very clear thought, with goals and objectives in mind to capture everyone's voices. And this White Paper will be submitted to both houses, the Senate and the Assembly, and also go to the Executive branch, to our Governor, to making sure they understand the goals and objectives and the barriers. So your participation here and the participation that we had in our very first hearing are very purposeful and meaningful in terms of for us to have a roadmap moving forward.

So I just want everyone to be clear in terms of that. We are doing this with clear of thought. I would also like to remind those in the audience about the decorum of our public comments. Each person will have a maximum of two minutes to express your statement. Again I've made available. Please. You can submit your testimony in writing to us. We want to make sure that everyone respect everyone's opinion. No inflammatory comments or anything like that will be tolerated.

And it also could result in a person's forfeiting their time. We want to make sure that we do things in decency and order. We are on a tight schedule. We want to try to conclude by 02:00 p.m.. Again, if you need to submit testimonies, we will make that available to you. Before we begin, I want to recognize my colleagues who've taken time out of their busy schedule to join us this morning.

And I want to start off with my right to have Assemblywoman Mia Banta say a few words and talk about her district. And then I want to Vice Chair Mr. Fong for doing the same. So with that, I want to pause Ms. Bonta, please.

Thank you so much, Chair, and I'm very excited to continue to participate on the Select Committee on Ports and Goods Movements. I'm Assembly Member Mia Bonta. I represent the cities of Oakland, Alameda and Emeryville. The Port of Oakland is very crucial to not only the City of Oakland, but quite frankly, the State of California and this country. It is largely responsible for goods movement that ensures that we have a strong economic engine throughout this state.

So I'm very thankful to be able to continue to participate on the Select Committee. Of course we want to make sure that we are addressing issues related to making sure that we have a strong workforce associated with all of our goods, movement and port activities, that we have strong industry able to be able to have the contracts and opportunities to engage in import and export at a level of volume that fully maximizes the capacity of the Port of Oakland.

And also that we are attentive to the surrounding communities and addressing the issues related to environmental justice and climate action that we need to attend to, as we have in the instance of Oakland, a strong industry nestled within Anir, within communities that have often been displaced and disenfranchised. So I'm very excited to be participating in this.

And I know that we will cover many of these issues as we address the maritime industry throughout the State of California, but very proud to have Oakland be such an amazing contributor to our economy in this way.

Thank you very much. And we have this amazing view. I'm going to try to stay focused. Next up, we like my Vice Chair, Mr. Vince Fong, representing the 32nd Assembly District, to have a few comments.

Thank you, Mr. Chair. It's an honor to be here. Thank you to the Port of San Francisco for hosting us. A beautiful day. Certainly committed to working with our chair and of course visiting all the ports, but also to develop a plan to really allow our ports to operate more efficiently, to begin to make more investments in our ports. I think That's critical. As my colleague from Oakland said, our ports are a foundation of our economic operations.

The way we move goods around the state is reliant on our ports and our infrastructure and their operations. And so this is a critical issue. It doesn't get a lot of attention, but our supply chain is something that we need to be focusing on, especially learning the lessons from the Pandemic. And I also want to thank the Chair for his focus on agriculture, someone who represents current Ancillary counties, which is two of the top three top AG producing counties in California.

We focus a lot on imports, but our exports are critically important. And so the fact that we have a panel that will highlight that, I certainly appreciate that focus. So. Thank you, Mr. Chair.

Thank you very much. We will be expecting one of our colleagues to join us, and that is Assemblywoman Diane Pappas, who would be here representing the Redwood City. So we expect her momentarily. I just want to read for your edification the Select Committee Members, some again who are here and some wish they could be here, but because of scheduling conflicts, they were not. But I think it's important that we highlight and elevate those individuals who are committed to this Committee.

We have Assemblywoman Cecilia Aguilera Curry representing the Fourth District. We have assemblywoman. Tasha Berner, representing the 77th district. We have Josh Lowenthal representing the 69th district. We have Eloise Gomez Reyes representing the 50 Assembly District. We have Carlos Vudiputoa representing the 13th district and Lori Wilson representing the 11th district, and also Dr. Jim woods representing the second district.

So those are all individuals who makes up the Select Committee and their teams, again watching and taking notes so you can correspond with those Members and share with them your thoughts. So with that, I want to invite our first panel up, and we will ask them to please come and take a seat. You know who you are. We will go in the order That's presented on the agenda.

And again, to the commissioners of the Port of San Francisco, we thank you for again, allowing us and being a host to all of us here. We're going to start off with the first person, which is Mr. Danny Wan, Executive Director of the Ports of Oakland, who will be the first presenter. And all of our panelists will have six to eight minutes. I have a timer. It'll alarm. Just let you know.

And we'll do it at the six minute, and then we'll do it at the eight minute, and then I'll be like, looking at you kind of crazy, like, wrap it up so that we can stay on task. And so, again, we want to invite Danny. Thank you very much for being here. And you're well represented by our colleague, Ms. Bonta, who says, I want to be on this Committee and to represent my constituents. So thank you very much and please take it away. You have between six to eight minutes, and the floor is yours.

Thank you, chair. Okay, can you hear me now? Okay. Thank you for coming up to the Bay, and we welcome you to a beautiful scenery up here. Alan going to give you a brief overview of the Port of Oakland and then just some points of what we can work on for the future and be certainly available for questions and answer. So, Port of Oakland, we're actually kind of unique.

The Port of Oakland not only runs a Seaport, but we also is frankly, the waterfront agency of the City of Oakland. We manage about 20 miles of waterfront for the city, and then we also run the Oakland International Airport. So we are frankly, the place where planes, trucks, trains, ships, and everybody come to the port and to have both commerce and recreation and travel taken care of through the East Bay. The economic impact of the Port of Oakland.

We recently just did a study, and to your point, chair and the East Committee, we create the Port of Oakland and its subsidiary tenants, and our cooperating businesses create about 98,000 jobs in total. And we contribute about $970,000,000 of state in local taxes generated from those businesses because the port's existence and also if you add up all the personal income and the contracts and the money that passes through the transactions created by the port, it adds up to about $7.6 billion in 2022.

The Seaport itself, we have four major container terminals, two class one railroads That's up and BNSF. And we have modern class A industrial warehousing space. And currently, as you look at it. Our biggest tenant is SSAT, which is the terminal operator. And we have space, we have capacity. And this is why we joined the Pandemic. We were like, this is congested, yet we have space that we need to develop and invest in so we can activate this space. We have 120 acres.

If you look at the map, the yellow part is the outer harbor. 120 acres that we could activate as new terminal space. That's 50ft deep. And certainly That's something we need to do before we get another congestion so that we don't actually get there again. The Port of Oakland is unique also in many other respects to Committee Vice Chair Point A. Port of Oakland is unique in that sense. We're 50 import, 50% export.

Many of the other ports in California are mainly import ports where 50% export. And we pride ourselves in that. We are the primary agriculture export port for California. We're the closest to the Central Valley and some of the railroad and truck connections to the port. We take care of that relationship. We communicate often with the AG industry. We want to make sure that they're taken care of.

That is why part of the reason that the Committee is formed is because we heard a lot from the AG community join the congestion, that their needs were not taken care of. And we need to be more resilient in terms of taking care of our exporters and their needs and building infrastructure for them. So how are we planning for the future? Like I said, we have the capacity to grow, sustainably. One of the projects we're doing is we're widening a turning basin.

If we go back, do you see the very lower right hand corner? Our ships actually come through that channel and they turn around and they go back. And as the ships get bigger, we need to have that turning basin widened. And That's one of the major projects we're working on. And we also are working on projects that are widening our railways to make sure there's access support is accessible.

Next slide shows one of our latest and most proud efforts is that we are converting our port to a zero emissions port. If you look at that map, That's all the projects ongoing right now for that conversion efforts. It runs everything from hydrogen to electricity. One of the other unique things about the Port of Oakland is that we are actually electric utility. We purchase our own power, we sell power.

We have the capacity to expand our electric utility and describe our efforts as everything, everywhere, all at once. If you know that movie that I'm referring to, and that is seeing which these technologies work for us. And to be Frank, some of the technologies we invest in today may not work. But we're trying to figure out what is best to our tenants in the variety approaches.

So turning base and widening study is what we're doing right now. As I described, this is a 7th street gray separation east. We're trying to make sure that the trucks have their access routes and then we're powering for the future. Many grants that we're getting now is making sure that we have our shore power system down packed instead of just placing in place. We have it to accommodate the bigger ships. We are also using a biomass power generator to generate hydrogen.

We're going to have the biggest hydrogen fueling station in California located right next to the port for the trucks to be able to do their fueling with hydrogen. We're also doing development of our outer harbor as. And just by the way, this chart shows you the impact that you and the Committee and the state is having.

The grants that we're getting in all the California ports is in fact stimulating the zero emission transmission, especially with the $1.2 billion the Governor and the Assembly and the Legislature passed for the ports in the last fiscal year is put into good use right now. And among that list is the grant that we're getting under the PFIB takeaways. The port is committed to growing sustainably and I think Northern California and California ports will lead the way.

I was just released at the conference for the American Association of Port Authorities, and I tell you, the conversation there is about what California is doing, what California ports is doing. And I'm proud to say that the American Association of Port Authorities have said, well, California is doing all this. We better get on with it. We better catch the train before it leaves the station. And that is the effect that we're having. And we are talking to the Biden Administration.

With your help and with the state we've gone with. Secretary Omashakin, the Caltrans Secretary went to Washington to say California is leading the way and when you give out those grants for the infrastructure, you should not leave us behind. Just because we're ahead of the game does not mean you don't deserve the money to go in the next step rather than funding some of the basic stuff that the state, other states are doing. But That's not to say the other states are not being competitive.

We also met with the Port of Georgia, which is leaped bounds ahead in terms of their place in the market share and they're expanding like crazy. And they are also catching on to the hydrogen electric transmission and transition trend. So we should not be laying on Laura's thinking we're ahead of the game, therefore we're going to be ahead. In fact, Georgia, Virginia, those are state sponsored ports and they are planning and they're expanding. They have space.

And I must say that Port of Oakland 10 years ago was the fourth largest port in terms of container volume in the country. Now we're the 10th. There are many reasons for that. But certainly today we need to be leading in the way into zero transition and at the same time investing our ports infrastructure to make sure we keep that place. And leading to that to the next point, which is the State of California. Like I mentioned, Georgia and Virginia are state ports.

They actually plan on a statewide basis how to support those ports and the volume that go through those ports. The State of California needs to adopt a statewide freight policy. I'll tell you what, concrete examples, just one. As we develop these hydrogen trucks, they are heavy. We need overweight quarters on freeways to coordinate that freight transition by these zero emission trucks and vehicles. That's one example where the statewide freight policy will help how we can coordinate this kind of efforts.

The other one is, as we invest in the ports, we need to figure out which port is strong in what like I said, Port of Oakland is strong in agriculture. We have two railroads. We're leading in frozen products export. We need to, as the State of California, figure out where to invest in terms of strengthening each port's unique perspective and unique strength so that we have according to a statewide policy.

That's how I encourage chair that you're going to do a white paper after your hearing, because based on that, we're going to need to develop a statewide port policy. I think I will stop there and be available to address any of questions. I hear you're ringing over there, so I will stop. Thank you very much.

Thank you very much. And we will be having questions from the Committee after the conclusion of all the presentations by the panel. So next up we will have Elaine Forbes, the Executive Director of the Port of San Francisco. Thank you so very much for being our host and being with us this morning.

You're most welcome. Good morning. Assembly Member Gibson, Bonta and Fong. And again. Welcome to San Francisco. We have perfect conditions today for you and you will be given a tour at 02:00 p.m.. From my understanding, and we expect the conditions to continue. I'd like to amplify something that Danny said, which is we need to understand the competitive advantages and what ports do well. So we complement one another. And coming out of the pandemic, that was certainly something that we did in rapid fashion.

The Port of San Francisco is seven and a half miles of waterfront property from Hyde Street Pier near Aquatic Park, all the way down to Heronshead Park. You are sitting in a facility that has a ground lease for the Port of San Francisco. We have very unique business lines, you know, all the big ones, the Giants Ballpark, Pier 39, Fisherman's Wharf, the Ferry Building. We also have the bar pilots here. We have a commercial fishing fleet.

We have lots of passenger moving things from cruise ships to ferries, to excursions. We have cargo in the south and That's where we see a lot of opportunities for growth and intensification of our cargo facilities, including climate, things like offshore wind. Also, as Danny has said, we're interested in hydrogen and providing fueling as well as electrification of our truck fleets and our ferries. The Port of San Francisco is a port city. We were built out originally as a port city.

Our sea wall, which was built over 40 years, provides flood protection to 500 acres of our city and provides flood protection to the major transportation systems, the utilities. So we are very much I want to spend my time to talk about climate and resilience. We are very much on the forefront of that issue. You are sitting in the Ferry Building. It's one of the most iconic structures in the nation and is at risk to seismic and flood risks.

We will need to raise this building 7ft to bring it into the next generation. We know we're ahead on this, given our urban edge, but we know other ports are going to face major challenges with climate. We're working with the Army Corps of Engineers on a way to provide flood protection to this area. I want this Committee to be aware this is an emerging and ongoing problem and something we must tackle for the ports.

I'd also like to speak to you about the issue of leverage as we come out of pandemic and work on things like economic recovery and equity and resilience, coming together and working toward common goals in organizations such as the California Association of Port Authorities.

And having this Committee hearing today really allows us to all understand what we're pulling for and how we fit in the state's economy and where we need our investments in San Francisco, obviously, the climate issue and how to prepare for sea level rises is front and center. We're also working really hard on equity. We want to be a port that we have 24 million people coming here. We have a lot of economic opportunities.

We want to be a port whose tenants have diversity in terms of business ownership and workforce. We want to welcome diverse communities to this port and we want to see our port built back better as we come out of our pandemic with more diversity and resilience. So I want to thank my team for working so hard to make this day happen. They're in the audience, Boris Delepine and Dominic Moreno.

And as I said, I hope you enjoy our beautiful waterfront today and enjoy the tour and thank you.

Thank you very much. We really appreciate it. I like that theme build back better. So thank you very much. Next, Jason, I don't want to butcher your last name, so please good morning.

Jason Katindoy with the Port of Stockton.

Thank you very much for being here and please proceed with your testimony.

Thank you and thank you collectively for your continued make sure the green button is on. Thank you. And thank you again for your collective efforts in raising awareness of ports and goods movements. I'd like to cover a little bit just the highlights of the Port of Stockton and then ultimately get to where we're at now and how we see ourselves contributing to supply chain. So the Port of Stockton, we're one of 11 California public ports. We are by nature of tonnage throughput number five, to give you a little bit of context.

And we are unique in the fact that we are located. We are not a coastal port, we are an inland port. So we're located 75 miles approximately east of San Francisco. So to access the port, ships travel through our river system, specifically the San Joaquin River, and through the San Joaquin River vessels access to and from the Port of Stockton. The port operates on about 2000 acres, has approximately 150 tenants, a majority of which who are engaged in domestic and international waterborne commerce.

We currently do not handle containers. It's an opportunity sector for us. And as my fellow colleagues represented, we all have our strong niches. And I believe that someday it will make sense from a transport economics perspective for containers to be at the Port of Stockton. So That's more of a medium, longer term goal, rather. So we're not a container port. We do handle bulk and break bolt products. Our commodity portfolio consists of fertilizers, rice, cement, structural steel products.

We have a strong connection to local AG in the Central Valley, and that over 90% of the fertilizer used for the agricultural industry is imported through the Port of Stockton. This year, we celebrated our 90th anniversary. So as we look towards the future, kind of with the goalpost being resilient, efficient, sustainable supply chain, for us, it points to infrastructure, it points to continuing to progress our efforts in zero near zero emission operations and the workforce development piece as well.

Recently, the port was successful in securing $45 million through Calcitus PFIP funding opportunity. That, coupled with the recent award through CTC, it will support a $90 million rail infrastructure project at the port that, when delivered and when finished, will improve efficiencies and goods movement on the near 0 and 0 emission effort. Through funding opportunities from the California Resources Board, we were able to transition approximately 60% of our cargo handling equipment to zero emission year zero emission. So these are all sort of the beginnings for us.

There's a lot more work to do. And when we look at just the phase we're in now of just General planning, one thing is clear, and That's the need for consistent funding sources to help our ports progress. And with that, happy to take any questions at some point.

Thank you very much. We have a lot of time to spare, so appreciate your testimonies. I want to pause for a moment and recognize and allow my colleague, Assemblywoman Pappin, to say a few opening remarks because the next person that will be coming up is Ms. Zortman representing Redwood City. So please the everlasting Diane pappin, you're here.

Who probably had the least distance to come. I apologize, Mr. Chair and the folks that are here. So I represent San Mateo County, most of San Mateo County from Brisbane down to East Palo Alto, all on the eastern side of the peninsula, which includes the Redwood City port. And as I said in our previous hearings, while our port is small, it is mighty.

And it does carry a lot of similar things to the Stockton port, which, while you might not think it's imperative to our area, it is such that all those raw materials that come in or out of there, but mostly in, do help keep Silicon Valley going. And so, like I said, while it is small, it is mighty and is important to our economy. And I'm just delighted to be here today with you, Mr. Chair, Assembly Member Bonta and Assembly Member Fong. Take it away.

Thank you very much. Certainly appreciate your presence this morning with us and your commitment to the ports and goods movement in the State of California. Ms. Zortman is Executive Director of the Port of Redwood City and thank you so very much for being here and please proceed with your presentation.

Thank you, Chairman and thank you, fellow Assembly Members. I am Christine Zortman with the Port of Redwood City, and I also am serving as the President of the California Association Port Authorities. I think one of the things that you have heard through your hearings, hopefully is and all of your tours that you've been doing with all of the ports is that we are all unique.

But we do all collaborate and we do try to cooperate as much as we can, especially when we look at the goods movement and what that means to our state. But I think the other thing you may have heard is once you've seen one port, you've seen one port because we are all so unique. With us today in the audience, I would also like to acknowledge the new Executive Director from the Port of Richmond.

He is new, so unfortunately he was unable to be on the panel. Charles Gerard is here and he is also available for questions and comments should you have any as it relates to the Port of Richmond today. So the Port of Redwood City serves Silicon Valley. We are on about 120 acres. We are 18 nautical miles from the head of San Francisco Bay. It takes a ship 3 hours once the pilot has boarded the vessel to get down to our port.

We are critical to Silicon Valley because as Assembly Member Pappen just mentioned, we are bringing in all the raw construction materials that build out Silicon Valley and the South San Francisco Bay. In addition to that, we are a primary recycling port for the South San Francisco Bay. We recycle scrap metal that is exported out of our port, as well as liquid bulk recycling. We started in the 18 hundreds in the construction industry and we continue that legacy today.

We also look to bring in project cargoes as well as brake bulk cargoes, just further diversifying our portfolio, both from the cargo perspective as well as making sure that the real estate that we have is being taken advantage of in the highest and best use for cargo. The port also plays a significant role as it relates to emergency preparedness and response for the entire Peninsula region and South San Francisco Bay.

In 2017, FEMA designated the port a federal staging area, and that was because of a significant capital investment that the port made into our infrastructure of over $20 million. We were one of the first ports in San Francisco Bay that reconstructed one of our wharfs to be able to accommodate three to 5ft of sea level rise as well as to be able to withstand an 8.9 magnitude earthquake. And that obviously got the attention of FEMA.

While we were designated a federal staging area, we don't receive any money from FEMA for this designation. And so we truly appreciate the state's recent allocation of monies and investment because I'm sure you realize that all ports throughout the state have significant high value infrastructure that we have to maintain. And so any assistance in the maintenance and being able to deploy resources through and across that infrastructure is important for us. We also take environmental stewardship very seriously.

And so while we are responsible for significant amount of dredging at our port, the Army Corps of Engineers is also responsible for maintaining the channel that we have. And one of the things that we really look to is the value that the bay mud has as it relates to softening our shorelines, creating inner tidal habitat through the reuse of materials to be able to add value and resiliency efforts across the bay.

So we believe that our bay mud has that value and rather than going 50 miles offshore, it should be used in other areas of the bay for resiliency and adaptation and to be able to accommodate sea level priorities.

The other thing that we are embarking upon similar to other ports that you've heard in the region is as we look at accommodating sea level rise rather than hardening of our shorelines being able to invest in living shorelines that allow the ebb and flow of the daily tides that we see.

To be able to create and enhance intertidal habitat, to provide educational opportunities for our public, especially our youth, and be able to assist our board in being able to set policies so that as future development comes along our waterfront, we're not just hardening those edges, we are able to soften them. And we believe that that is part of us being a good environmental steward.

The other thing that we take very seriously is working collectively with the Army Corps of Engineers for every foot of channel depth that we lose in the South Bay. That is equivalent to the loss of 3000 metric tons of cargo that cannot come through our port. That potentially has to come or leave our port via a truck.

So for every fully burdened vessel that visits our port, and let's say it's around 40,000 metric tons That's taking off from our regional freeways about 2000 to 2800 truck trips. And as you've heard recently, if we were to look at, if the ships couldn't come to the port of Redwood City, where would they go? They would go potentially to Stockton or others and then be trucked down.

And so it's significant for us to look at how we can reduce our GHGs, continue to partner with both federal and private partnership to be able to improve our environmental footprint at the port. And I would just like to, again, thank you for your time today, and we welcome you on a port tour, hopefully in the near future, and we look forward to seeing the white paper and the fruits and results of your labor here. Thank you.

Thank you very much and appreciate your testimony. I just want to also make sure that I got this correctly. Jason Canadoy is the deputy port Director of maritime and real estate for the Port of Stockton. So, again, thank you very much. I failed to make mention of your title and appreciate you being here. So at this point in time, we want to have my colleagues ask questions of this panel. So brace yourselves.

I'll lead off with the first two questions, because what's not in my notes is something that I want to extract from. One, it was given in testimony about that you're designated as a FEMA. I think it was FEMA, but yet and still the designation doesn't leverage dollars.

And what has been a running theme in the last hearing and this hearing is that the relationship with our congressional Members, we also want to recognize that Congressman Robert Garcia, representing Long Beach, the former mayor of Long Beach, he chairs the port caucus there. And so there may be an opportunity we can bring the Select Committees together as well as those in Washington DC.

Because I think it's important that we leverage some of those resources and figuring out how do we do it in a more effective way to making sure that we have federal dollars protecting. Because we also know that if something happens to California's port, that affects the United States of America and the investment is not there.

So my first question is with respect to investments, it was mate mentioned that the investment that the State of California has made, which is $1.2 billion, I think that was the number that was used. One, we realized that it was only one time funding, and I want to underscore one time funding what would be sufficient as it relates to ongoing funding that would help address the needs of your ports. Thus the ports in the State of California.

So everyone's take that question, and then the next question is, from an administrative standpoint, how does a Legislature and the ports work together to create effective policies to support the ports? So those are two separate questions, and whoever wants to tackle them first. And then I want to open up for my colleagues to ask questions, please.

Perhaps we'll go left to right in terms of the funding. This is such a critical piece of what we're trying to accomplish here. And the 1.2 billion being one time is fantastic. It was one time. But it really, truly needs to be ongoing. And all of our ports have what.

Does that look like? I'm sorry? What does that look like in terms of a dollar amount? It's ongoing.

1.2 ongoing would be a start, I think. But our infrastructure is unfunded in many ways. So actually, when Director Zortman was giving her update about her port, I wanted to say, zero, we do that too. We do that too. We do that too, in terms of construction materials. But we also need to be the lay down space in the event of an earthquake, which is not if, but when.

We also have facilities with deep water berths, lots of staging areas, good freeway access, exactly where we would want to handle the complexities of responding to an earthquake. And of course, we would need all these facilities to get people home from the downtown. These are all unfunded mandates on which our port needs to play a critical vital role.

And so the work we've been doing both at the state and federal level, to recognize and bring investments in so we can do simple things like repair our roadways and get good drainage and get good fendering for the ships, all of these things we need funding for.

Can I stop you for a moment?

Our SB One money, my colleagues can correct me if I'm wrong, it was set up to address infrastructures and roads and things of that nature. So my question would be, are we not leveraging that and drawing down those funds for that particular reason?

Yes.

We are absolutely leveraging and drawing down those funds for exactly that purpose. But the problem is the need is much larger than the funds that we received. We're prioritizing and making really strategic investments with that money. But if we are to sustain the infrastructure that we need to provide for the state, we are grossly underfunded. And I'm curious what my colleagues have to say if they could figure out a number.

Tackle one of those questions.

I think your question points to something which is what is the dollar amount needed to invest in the ports of California? I think this is why points to why we need a statewide freight and goods and movement policy to figure that out what is the amount of investment the State of California will need in each of the ports to make sure that we stay competitive and we supply the needs of California. And that points to why we need this kind of statewide study and policy.

And Ehopio. Whitepiper is a starting point each port can speak on for its own, but we don't have a collective statewide policy and strategy. Just at this Port of Oakland, we have one terminal. It's 120 acres. It's currently not used as a terminal. Why? Because the ground is sinking. We need to level the ground. We need to strengthen the wharf in order to make it usable. It would have been lovely had we been able to use that during the congestion period.

120 acres of space that was not delayed fallow during that congestion. This is the kind of things that we need to study and figure out what we need. And the California Association of Port Authorities, I think That's a project and Martha Mellon, Exec Director, is here right now, is a project we might want to take on along with the State Assembly to figure out what is the consistent year by year investment that the California needs to make.

In my testimony, I pointed out that Georgia and Virginia are in fact state supported ports and their expansion plan. And they laid out. It was amazing when I heard their testimony in the American Association, port authorities, their state Legislature and the ports plan together in terms of the infrastructure needs and not only at the ports, but England, where is the logistics needs of the ports? England, where do we create jobs England.

That are connected to the ports and job training and all that is done at the statewide level? That is the kind of model I think the California needs to really look at in terms of state coordinated freight policy and not only in terms of investment in hard infrastructure, but to Assembly Bonta's point of view, the people investment.

Workforce development is going to be something that we're going to have to talk about very, very much soon in terms of how we invest in people in order to transition them from the jobs of today to the jobs of tomorrow. A lot of green tech is going to be on the horizon that we need people to supply the workforce for. These are the kind of things that statewide policy needs to address. And in terms of answering your question, what is the dollar amount that we need in investment in the Port of California?

Do you happen to know what their Georgia state's investment is?

Not clear, but I can certainly get you that number.

I think it would be very helpful to us, as we put this white paper together, to point to other states and what their investment is. Because certainly they're not as big as California, but if they're making significant investment and That's the purpose of this hearing is to making sure that one, that we look and see what that investment should be.

But also pointing to other examples because if we don't do it and other ports are then I can see some of that work moving to those ports.

Absolutely. I said that Oakland was the fourth largest port 10 years ago. Now we're the 10th. Georgia, on the other hand, moved from the 10th to the fourth largest port. They basically displaced us in terms of that ranking.

Wow. Thank you for bringing that to our attention. Anyone else wants to take a tackle from administrative standpoint? I didn't hear that. Administrative standpoint. How does the Legislature and the ports work together to create efficient policies to support the port? So as you're grappling with that, you can submit it in writing to me, because I really want us to grapple with that and put a real answer to that question. So I want to go to Ms. Bonta and then anyone else.

Okay, thank you. And so thankful for, in particular, our Executive Director of the Port of Oakland, Mr. Danny Wan, who has spent a lot of time just educating me, and I've actually gotten to meet with several of the port commissioners and Executive directors. So thankful for your work. I wanted to move our conversation a bit to the area related to ensuring that we are promoting sustainability and adjusting in climate action while also ensuring that our ports remain competitive throughout the state.

I've learned from Mr. Juan that one of the greatest challenges we have is maintaining our competitive advantage in terms of goods movement and ensuring that we don't have more goods. Kind of being moved over to the East Coast and Gulf Coasts and want to make sure that California maintains its primacy essentially, in being able to be a strong industry leader in that regard.

I also know that there is a challenge that we've created for ourselves, a very good, healthy opportunity challenge where we seek to reduce emissions in the vehicles and technologies that we use in our port industry. And I've learned that there's oftentimes kind of a mistiming, if you will, in terms of the standards that Carba's asked us to meet, in terms of the availability of those technologies that we want to be able to use that are either emissions reducing zero emissions or near zero emissions.

So I would love for all of you to speak to or those who feel best situated to speak to the time sync challenge that we have in terms of making sure that the technologies that we want to be able to introduce that promote zero emissions or near zero emissions are available to us and that are sustainable kind of of an industry standard that are going to be able to make for quality investments in that regard. Mr. Juan and then, yeah, I'll share.

Some experiences at the Port of Stockton. So about three years ago, the Port. In collaboration with the Port of Long Beach, the Port of Stockton, and the Port of Oakland, all participated in California Air Resources Board funding opportunity Zanzaf. And through that, the Port of Stockton was able to procure about $10 million for cargo handling equipment. And the focus was zero near zero emission. The challenge was technology wasn't there. So it was very leading edge.

And there's a certain amount of risk that the port took when choosing to transition to zero near zero. It turned out that technology has proven itself in this space, specifically related to the transition from lead acid to lithiumion. That technology. So it worked out for us. But in several cases, the mandate I mean, at birth regulations are one of them. I think we heard from W City City that if you see one port, you've seen one port.

What we've seen at the Port of Stockton is a lot of the technology that is out there today related to at birth regulations are not practical for the Port of Stockton just because operationally and the way we're set up, we're different. So as we look to promote sustainable operations, the piece of how far ahead of technology or how much risk ports have an appetite for is certainly a question. Thank you.

I can add a couple of comments here. I think one of the challenges we have been having is the specificity and the requirements of the regulation may be infeasible, but the goal of achieving zero emissions and getting clean is achievable. And so we have a mismatch of a regulatory body that tells you what you need to have by when, instead of what the emissions should be and what your plan is. Because I know all of us have a very strong goal to zero emissions, environmental sustainability.

I can give an example here. With cruise ships, we are required to have shoreside power, which is wonderful, but it's expensive, very expensive, and it requires a lot of energy to pull off. We have shoreside power at our primary cruise ship terminal, pier 27, and out at the shipyard. However, we do not have it at our secondary cruise berth, pier 35. And getting it would be completely economically infeasible relative to the cruise operation there.

So we're very limited in the number of cruise ships we can bring into San Francisco. And at a time when we need economic recovery for the state, and we want to welcome as many visitors as possible, we do not want to turn cruise ships away.

I want to second that point, which is I think the ports are all on board with Carbs ambitious goal and the state's goal in terms of greening and zero emissions. I think the target that we're set is something we can all achieve. It's the specificity of the regulations in terms of dictating which technology to use, when and where, that is problematic sometimes, and I understand CARB staff is very hardworking, but they cannot possibly know what is happening on the ground at all times.

I think we all would agree sometimes we wish that if they were going to set such specific standards, they would come and see us more often and work with us in terms of developing those standards in a way that actually is feasible. So that is certainly want to second that point. Again, I want to emphasize the goals that they set is something we can help work together achieve, especially with the investment recently that the federal and state government has come forward with.

I think five years ago, if you asked me the same question, I would have said, no way. There's not enough money to do all this right now. I think it is possible. I think we just need to have standards that are workable. I just want to give you an example. At the Port of Oakland, which is the trucks, as you know, the CARB standard is starting January next year. All trucks, new trucks bought has to be zero emissions.

Well, I don't know where you're going to get that truck right now by January. There's an example. Luckily, there's a 10 year phase out period for those trucks that are currently owned. And what we anticipate is that some of these trucks will be sold elsewhere, and the trucker is going to have to figure out how to finance new trucks in the next 10 years. That today. We're working with them. There is no financing mechanism for them yet.

There is really not a whole lot of sort of technical help that we need to put on the ground for them. We just had a truck fair today, and somebody, a trucker told me that he put down $50,000 deposit with Tesla to buy a truck from them. Well, Tesla, That's two years ago. So far, Tesla has not even said when that truck is going to be available. And yet they're holding his money, $50,000 in the bank that he's not being able to use.

And Tesla is not telling him when the truck will be available, whether the truck will even be workable for his hauling distance. So this is the kind of technology, kind of issues that we need to work through. And again, these truckers are mostly a lot of immigrants. They're working independent truckers. And so this is the kind of practical solutions we need to work out as we transition to zero emissions.

I'd like to also say that I think the other synergistic benefit that could come from the state establishing a freight and policy, individual or process, is that you bring in other stakeholders that are important to this discussion. For example, when we look at electrifying some of our stuff at the Port of Redwood City, we meet an obstacle when we go to our energy supplier as it relates to their ability to build that capacity or provide that capacity.

We're struggling with that as well as we look at bringing forward future ferry service because of the distance that we are from both Oakland and San Francisco, being able to have ferries that can go that distance within that short timeframe, is there an opportunity for them to plug in at the port of Redwood City? Not if your energy provider cannot provide that.

So I think that there's synergies that maybe you could achieve better collaboration with CARB, with your public private partnerships, if you have that entity to assist you through what the regulators want versus what can happen in reality.

I want to ms Papan.

Just want to follow up on a couple of questions. This was not my first question, but let me dovetail on the discussion here. What role do you see hydrogen playing, both with respect to how you all conduct yourselves at the ports and with respect to trucks and drainage? Because as I understand it, most trucking companies won't really benefit by going the electric route. The batteries are heavy. They take a long time to charge.

In the meantime, if we had hydrogen trucks, they won't be idling at a port next to communities of color that are just sucking up all those fumes. So what role do you see hydrogen playing then? I got just a couple of their follow ups.

Hydrogen is going to have to play a big role. And because it's, like you said, portable, it's flexible. Right now, frankly, the technology for trucks is that long distance trucks going to have to use hydrogen technology. And this is an example of something that we spent a lot of time earlier on, the discussion about transition zero emission, whether it's electricity or hydrogen. And there was a whole debate about hydrogen is not going to work because electricity is the way to go.

Well, now I think we're figuring out that we're going to have to try all these methods. So this is another example where the sort of bureaucratic well, I want to use bureaucratic, but this sort of regulatory debate, sometimes it kind of takes on the arva reality because on the ground we all knew that hydrogen is going to have to be in the mix. And yet we took about a year and a year and a half to debate whether hydrogen is Supreme or electricity is Supreme.

To your question, it's going to be one of the technologies that we're going to have to implement. I think we're going to have to have a transition period from sort of this gray blue hydrogen to green hydrogen. There's going to be having a transition. Again, it cannot be the purest view that we must start with green hydrogen right away. It's not going to work. And especially if we're anticipating, the truck is going to have to transition during that period.

We're going to have to start with a transition period just like we did with hybrid technology into zero emissions. We use a lot of hybrid equipment right now, reduces emissions by 97% versus 100%. This is the kind of debate that we need to get away from and use the technology and get it speedy as fast as we can to a place where it's better.

And I would also like to say, I think that there's an element of outreach and education that can also coincide with bringing other types of alternative fuels forward hydrogen, including making sure that the public understands it, that they are not scared of it, whether it's hydrogen or what it is, and that they're supporting it so that there is a broader voice to support these other types of alternative modes of fueling.

Are you complete just a couple of follow up questions relating to budgeting. So it is that a portion of your budget come from ships that are using the port and you can answer in the abstract. I don't need specific numbers. What percentage of your budget is that and have you gone as far as you could go with, hey, we got to charge more because we need green infrastructure.

We need to not always go to hardening our and I appreciate all your remarks, Director Zortman, because as you know, our county's most vulnerable county in the state to sea level rise and the fact that you are working hard to do some soft hardening rather than hard hardening. I really appreciate that, but I'm just wondering how much of that can you realistically get? Or does it just make you less competitive and everybody goes through the Panama Canal and lands in Georgia or the Gulf?

Know, again, these are abstract. I'm not holding you to specific numbers, but you are certainly a business that is able to charge your users, unlike some other governmental infrastructure, if you will.

I'll be the quickest. It's about 30% of our revenue. So the Port of San Francisco earns its revenue primarily from our real estate leases. In terms of economics for us, we are deeply underfunded in the maritime side. We rely on state and federal grants to maintain that infrastructure. And the big thing for us is not whether we could charge more. We actually earn quite a bit from cruise ships per passenger head charge, and we're always working on that piece.

But on cargo specifically, we need funding for opportunities to come. So we need to create fabrication jobs. Again, in San Francisco. We need to utilize all of our acreage of land in the most efficient way for maritime commerce. So Port of San Francisco cannot we're an enterprise organization that is, I would say, structurally unbalanced because of the needs, the investment needs into our asset, and that has been persistent. But for us, it's not going to be earning more from cargo.

It's going to be investing more in cargo for the value that it provides to the community and to the state in terms of goods movement and green transitions.

So the Port of Stockton is in a very similar case, and from a revenue standpoint, we're about 50/50. So mainly two main revenue streams are real estate and maritime side, and it's about a 50/50 split. But when we start to think about potentially adjusting the commercial aspect of the maritime business, it then kind of goes down the path of competitiveness when we hear about Georgia ports and funding that plans that specifically focus on ports.

So it's something that we struggle with, is how to fund infrastructure needs. And the consistency of funding from funding sources, from agencies is a huge piece of that for us.

I'm sorry, you're not privately held?

Oh, no, yeah, we are. A port district public. Benisha is privately held, but I don't believe they're on.

The panel today, I think. Excellent question, because you saw us all squirming and eager to answer that question as you asked it. I think this is a fundamental sort of question that we need to ask a state port of Oakland. Our revenues support our ongoing operations, but not infrastructure. I'll just give you an example. Our biggest port right now terminal right now is the SSA Arter Harder in Burn Terminal.

20 years ago, we invested about $1.0 billion and issued $1.0 billion debt to build that terminal. And to this day, we're paying that back. That $1.0 billion debt nearly bankrupted the port because right after we laid off 50% of our workforce, nearly 50% of Lake workforce. And that will also coupled with the recession in 2009, but basically we fell under that burden of that debt for the next 20 years. We're just now digging out of that debt burden.

We're just now becoming a sustainable port again in terms of operation. So That's an example of how much the investment in infrastructure is simply not within the reach of our charges. Because I wish sometimes I talk to some of the utilities, water utility, and they're monopolies, they get to charge what they need to charge for their operations and investment and sometimes they get tax revenues too. We don't get any tax revenues, we don't get any property taxes or anything like that. So we're not a monopoly.

We have to compete against the other ports in other countries. And in order to hold that competitiveness, we simply, at the end of the day, after we pay for operation maintenance, do not have money for investment infrastructure that we need to keep up. So that is where the state we're asking to come in as a freight policy study that issue.

Frankly, I'm so glad that Caltrans Department of Transportation Director Omashakan has taken on the view that transportation includes the ports, because a long time I think people view transportation as simply the roads. If you look at the roads and highways, it is totally subsidized by the State of California. You don't anticipate the users to pay totally out of that. Why? Because we believe investment in roads is going to facilitate economic development, people movement and such in jobs.

You need to look at the ports the same way. It's an investment into the economy and should not expect the port to pay for itself, both for infrastructure and ongoing maintenance.

We want to move to Mr. Vince Fong.

Thank you, Mr. Chair. First, I want to build off what the chair was saying. I certainly am one that believes that there should be continuous investment in the ports, especially coming from the General Fund. And as the Vice Chair of the Budget Committee, I've been an advocate for that. And I also want to thank you all for being the first movers in innovation and being centers of innovation when it comes to new technologies.

I do want to ask you, I'm trying to wrap my hands around two reoccurring themes. One is the competitiveness challenge. You mentioned, Ms. Wan, about how Georgia and your port had flipped from fourth and 10th. Now you were fourth and now you were fourth and now 10th and Georgia was 10th. Now fourth. And then juxtapose the comments from all of you about, and I won't quote all of you, but you've used the words infeasible, you've used the words costly, unrealistic.

You've used examples when it comes to cruise ships, when it comes to truck requirements, I guess I would like to get a little deeper in terms of your recommendations. If the regulations from CARB, for example, are infeasible, costly, unrealistic, then what do you ask CARB to do in terms of functioning? Because you mentioned before your example about how taking on a massive amount of debt almost bankrupted the port. And I don't think that is a very pragmatic solution to this whole scenario.

Which is to be ambitious, but not to be realistic is not a recipe for success. And especially when economic growth, our entire supply chain and jobs are on the line when it comes to the operations of the ports. So help me understand how to balance the two.

I think CARB needs to include feasibility in the analysis before the regulations are let. I think CARB needs to work much more closely with the operators and the port directors to see how feasible these concepts are and to make it a key part of the analysis before the regulation is put into law.

Again, I think I want to emphasize the difference. I think in terms of the goals, I think we can all meet those goals. In terms of reduction, the goal, overall goal is not infeasible it's when tarb uses certain specific regulations as to a certain technology and where and when when you start specifying that kind of level, it becomes departing from reality of the operations.

So I would concur with Director from San Francisco that they need to look at working with the operators to develop feasibility standards into any particular standards and that you can set feasibility standards and then give us a timeline as to go where you want to go the ultimately meet. But give us the goal and let us do the technology. Let us choose the methodology of how to meet that rather than dictating the particular method.

So I think that will be something that we would urge in terms of the regulatory balance.

And if I can also say I think it's working with the ports, but it's also looking at the service providing industry. You have your tugs and your other service providers that are oftentimes not invited to the table. And so as we look at technology improvements, it's industry wide. So working with the ports, as has been mentioned, but also reaching out to your industry providers because they're the ones who when it's hitting their bottom line, it all gets passed back on to us.

And I just want to say that this is clearly one of the reoccurring themes that I think should be the focal point of our statewide freight policy is to find that balance. And I would, I guess, challenge all of you, that I would hope that you would provide us with a policy and not wait for us to develop one.

Because I think that you're going to have a lot of problems as someone who serves in the Legislature, that if you have a lot of individuals who don't understand or is trying to understand the supply chain, And I've spent seven years trying to harden supply chain and appreciate being on the committees that allow us to do it. But a lot of times there are going to be unintended consequences if you wait. And I think that That's something That's very important.

But I also want to underscore that their problems are our problems.

Absolutely. And I think That's where that synergy is going to be critically important is that we certainly have to provide that leadership when it comes to our statewide freight policy. I think that a lot of times we're supposed to be the adults in the room to provide that balance. And I think that your voice is going to be critically important in that not only with ongoing investments, but what we're doing is what we're asking realistic.

And I will just ask one this one specific example because I think Danny, you mentioned this, the CARBS new truck requirements, they take effect January 1 and you've outlined the added costs, you've outlined the impact to the trucking world. Probably other supply chain and other stakeholders are going to have enormous costs and consequences. What's going to happen? If you're asking for flexibility and I am one that agrees with you 110%, there should be flexibility and feasibility. Right. I deal with this all the time.

CARB is probably a four letter word we don't say in the Central Valley very often. Right.

Because a lot of the technology they're asking for just doesn't exist yet. Will it exist in the future? Absolutely right. But we have to allow that technology to mature and we need innovators and we need investment. Right.

You just can't force an operation to go zero to 100 in 4.2 seconds. Some cars can do that, but our cars we're asking are not going to do that right away. So what does that mean? I certainly don't want to live through the supply chain crisis that we had over the pandemic. So January 2 rolls around and CARB is not flexible. So what is reality? What is going to happen in that scenario if nothing changes?

I think if you ask the whole industry, we anticipate that there will be a shortage of truckers come in next three to five years. We anticipate that we're going to have to find either trainees. We're going to have to have a big, huge financing program to help truckers buy these trucks that they're going to need if the technology exists.

I think you would fully anticipate if you talk to trucking associations, that these rules are going to have to be postponed somehow, because it's simply not going to be enforceable. At some point, either you're going to drive a lot of people out of business and you're going to drive up the rates for Central Valley AG freight movement.

I know a lot actually in terms of and the result is not even good because these trucks that they currently have, it's going to be sold to some other state. So it's not that these trucks are going to go simply disappear the planet earth, so you're going to have a shortage of trucks and yet these other trucks, dirty trucks and go to somewhere else to be used to support their industry, which is not a good result you have.

So I think That's just one example of the impact that you have on tender results of a regulation that specifies the time and the technology that you need to use. Rather than giving us a goal to say we anticipate that your freight industry needs to achieve this goal and tell us what the technology is and we'll supply that to you in a way that maybe uses penalties and incentives rather than regulatory mandates and deadlines.

And I just want to thank you for your candor and this is one of our challenges as a Committee, is that we're weighing and we're trying to prevent some real consequences. These are not academic exercises. The regulations and the costs that are being layered on top of each other when it comes to our supply chain, our ports are real. And so as we develop this statewide freight policy and as we debate policies that impact the ports, don't sugarcoat it for us.

We need to know what the real consequences are so that we can make decisions that will improve our economy but also preserve jobs in our state. Thank you.

I'd like to add something Assembly Member Fong is this is a major equity issue in San Francisco. Our truckers are overwhelmingly black owned small businesses. And if I look across the city in terms of black owned small businesses, trucking would be right up there. And so these requirements are going to hit vulnerable populations, are going to hit people who are doing quite well as their own enterprise and this really hasn't been considered enough.

I agree with you 110%. Certainly in the central valley, being a truck driver is a critical path to the middle class. This is something that is very near and dear to me and That's why I think I'm so focused on improving our supply chain because the consequences not only impact the economy, but they impact real people. Thank you.

Thank you very much for your testimony. Really appreciate this very robust discussion. I just want to underscore the request of Vice Chair Fong is to provide us with a plan so that we can dissect it, analyze it, so that we can certainly as you submit it to us, we will incorporate it as part of our white paper for the Legislature and also for the governor's office.

And I also underscore before as we get ready to transition the cooperation from our secretary of transportation tokes and I understand there's collaboration that exists, but I'm also as we transition to our next panel, if you can prepare yourself the surprise that there is no collaboration with CARB. That surprised me that decisions are being made without bringing stakeholders to the table. And so I want to underscore that as we transition to our next panel. So thank you very much. We appreciate yes, I've sat through a.

Lot of Committee hearings. I just want to thank this panel. You answered with such succinctness and you were tremendously informative. So I'm really grateful for each of you. You are in command of the subject matter and you did a great job. The rest of the day. This is a high watermark.

Thank you all. Thank you very much. We want to invite our next panel up, which is the California Exports and their effects on the global market. We'll start off with Mrs. Audrey Bettencourt. She will be our first presenter yesterday.

James Johansson and also Regin Thompson. Thank you all very much for being here and being part of this panel and this robust conversation that we're having. We want to just remind you that you have between six to eight minutes for your presentation. We hope that you will incorporate it by part of your introduction of who you are and the industry, the area in which you represent. And again, thank you very much and we'll start with you.

There we go. We got it. Thank you so much today to the chair and the Committee for taking this time. My name is Aubrey Bettencourt. I'm the CEO of the Almond Alliance. I appreciate this opportunity today and truly appreciate the Committee's time and effort seeking solutions to the issues of our ports, our importers, and our exporters, and bringing us together, really, port infrastructure and functionality opened the world to California's, bountiful agriculture and incredible innovation.

And it is what has made California the global economic powerhouse that it is in the last century. But as you've seen already today and you'll hear today as well, what got us here isn't going to get us there in this next century. Almonds are the largest agricultural export of California and one of the fourth largest agricultural exports of the United States, contributing $20 billion in economic revenue to the state each year.

Brought to you by 7600 farms and 110,000 employees, California's farmers produce 80% of the world's supply of almonds and almond ingredients, 70% of which is shipped around the world. Until recently shipped the majority of our almonds through the port of Oakland. But in a post pandemic world and for a myriad of reasons, this we anticipate, will no longer be the case. Pandemic supply chain disruptions wreaked havoc on the almond industry along with our fellow commodities.

Demand for empty containers at an all time high resulted in global shipping carriers skipping Oakland altogether, leaving almonds on the docks and a surplus of supply on our shores, creating a cash flow crisis that devastated our small farmers for three years. Over the course of six months in 2022, almonds alone lost $2 billion in price degradation alone.

In 2022, the almond industry made headlines for creating a multimodal, multiport network to get our products moving again, partnering with rail, ocean carriers, and trucking, and even the port of Oakland to move product through alternative ports, including Long Beach, Los Angeles, Houston, Norfolk, and Savannah. While pricing has returned to pre pandemic levels and some carriers have restored services out of Oakland, some may never return.

Like the hapag middle eastern routes, which is our second largest export market, we have not seen an increase to pre pandemic levels of shipping out of Oakland, unfortunately. And we prepare for the next round of challenges that put additional pressures on the functionality of our California ports.

As you've already heard the CARB new mandates that will require all new purchase drainage fleets or trucks that move freight very short distances in and out of ports or for intermodal facilities must be zero emissions vehicles starting in 2024, with the entirety of the drage fleet being zero emission vehicle by 2035 is the next serious threat to our port functionality, our equipment availability, cost to market and the deciding factor of whether California almonds will continue to choose Oakland as its port of preference.

After almonds have been hulled, shelled and processed, they're shipped to either domestic retail markets or ports or export ports for market. A recent study found that the median road distance for almond processors to the Port of Oakland is 111 miles, and the median road distance to the port of Long Beach is 324 miles. About 42% of our processors are positioned within 100 miles of the port of Oakland, but no processor is located within 100 miles of the Port of Long Beach.

A third of the processors analyzed are more than 150 miles from both ports. For processors, the large difference in proximity to port will likely make the industry more reliant on the port of Oakland, or additional rail infrastructure could be built to transport almonds to the port of Long Beach. Huller, sheller and processors located further from both ports will be forced to increase fees to the farmer to make up for the challenge and the charging time differences.

Quoting the terrain economist Matt Clark, the current zero emissions medium and heavy duty truck regulations impact a very targeted and important region of agriculture. In 2021, California represented 11% of the national AG receipts and is the largest AG state. The implications of the cost of the farmer and the consumer could be far reaching.

If driving range for zero emission medium and heavy duty vehicles is found to be significantly less than that of traditional medium and heavy duty vehicles, there will likely be some significant holes in the agricultural and food supply chain that could make the system much less resilient. At the almond alliance, we like to say we lead with solutions. With these challenges coming to the ports and our supply chain, we're going back to the basics. Infrastructure not for the 21st century, but for the 22nd century.

The modern supply chain must be invested in, like yesterday expedited development for critical inland infrastructure, including hydrogen, electric grid capacity, energy generation, connectivity, rail inland ports meeting the climate goals of our state cannot happen without expediting investment, public and private, in the basic infrastructure needed to achieve them. Oakland is a perfectly balanced port, thanks to agriculture. As the largest agricultural export port in the nation, it imports 50% and it exports 50% in the port world. This is the envy of the world.

We may fail to make Oakland if we fail to make Oakland a priority port again and invest in the modern infrastructure network to support it, both from the central valley to the coast, we'll lose it. That we can't afford. Thank you.

Thank you very much.

Our next presenter good morning, Chair Gibson and Members. I'm Jamie Johansson, President of the California Farm Bureau. I'm also a farmer up in Butte County. I farm olives. We make olive oil and sell some citrus up there as well. And I want to thank you for including agriculture and California Farm Bureau in this hearing. Today California Farm Bureau represents nearly thirty thousand farmers and ranchers throughout the State of California. Over 80% of our membership is made up of small family farms.

As we know, the global COVID-19 pandemic devastated communities and industries around the world, and agriculture was no exception. Due to supply chain challenges, California farmers lost over $2 billion in export sales. And of course, as we just heard from Aubrey Ammons being one of the hardest hit in that situation, but certainly other commodities felt it and continue to feel it. I would say that the full recovery of COVID and also drought are having drastic impacts on what we export out of California.

We should point out that a little over 40% of what we grow in California needs to find an export market, whether That's over an ocean or over a border. And it's easy to say that in US. Trade, agricultural trade, we represent around 15% coming from California. So a tremendous impact that we have globally when it comes to feeding this world, really. There was a 17% drop from 2020 due to shipping container shortages and port congestion issues.

Some of the top commodities affected by these disruptions were tree nuts, wine and rice. Within the first six months of the pandemic, 80% of shipping containers, as we know, left California ports empty. Shippers opted to leave Southern California ports and return directly to Asian markets instead of stopping in Oakland to pick up agricultural exports. Ultimately, with these orders and shipments left unfilled, foreign markets turn to other countries to supply their goods.

These countries are often able to sell their commodities at a much lower price due to their Low production costs, thus leaving California farmers struggling to compete while meeting the state's burdensome regulations, some of which have already been discussed here. This problem will soon be exacerbated by the impending advanced clean fleets. As been discussed in the previous panel, these advanced clean fleet regulations, which will begin on January 1 of 2024. This regulation will directly affect the ports, drainage trucks and fleet owners that make international trade possible.

If we try to address these issues, we must look to the effects of the advanced clean fleets on our food supply and the ability to feed the state, nation and the world. According to the American Farm Bureau, production cost for farmers and ranchers rose 18% in 2022. With the implementation of the advanced clean fleet, we anticipate another large increase in our cost for our California Members.

Also remember that on our agricultural farms, we are looking at a zero emission mandate of 2035 when it comes to off road vehicles, which would include our tractors, food prices. As we all know, with the instability around the world and also inflation here in the United States, food prices continue to inflate. And we see this trend will continue with transportation costs rising, as every step of the food supply chain Farm Bureau supports the use of technology to improve efficiency at the ports.

With the development of technology, ports may be able to overcome current obstacles which cause costly and damaging delays. Even with these recent setbacks, California continues to feed the nation and the world. However, we urge our legislators, regulators and Administration to look at the effects of laws that are restricting our proven health, safe and nutritious product from reaching the shelves of those who most need it.

We view the interaction of agriculture and our ports in California as the ultimate success when running efficiently of the rural and urban interface we are very proud of. I'm just made to find out that Port of Oakland has dropped now from the fourth to the 10th largest shipping container, because we often brag about half and maybe at times 60% of what goes through the Port of Oakland being agriculturally related.

And that tie together is an important point that makes agriculture essential to California, but also agriculture essential to our urban centers. So, thank you for holding these hearings. I look forward to your questions. And again, thank you for including agriculture, one of our most important industries in California. Not just to Californians, but globally.

Thank you, Mr. Johansson. Rain, please proceed.

Hi. I'm Rain Thompson, Vice President at Sunkist for Government Affairs and Sustainability. I really want to thank you for the candid conversation about the hurdles that we're facing. Sunkist is the largest exporter of U. S. Citrus around the world. We are a cooperative, so we're owned by a thousand Arizona and California growers. We predominantly market, just us fruit. That is our focus and our business model. The average size of our farmer is 50 acres.

So we do really our membership tends to be on the smaller side, but collectively we have a very strong place in the market. I want to give you a global perspective of how important both our ports and our truckers are to us and our competitiveness. What we saw in COVID is that we saw really, it showed us the fragile system that we have, what we look at and shipping. Every single day we ship about 7 million cartons around the world.

Our largest markets are China, Japan, South Korea, Malaysia, Singapore, Indonesia, and they're all going out of the West Coast ports every day. We're looking know do we need to move that shipment from Oakland to LA, Long Beach and even Wainemi. And That's what we did. During COVID Oakland was becoming so cumbersome, carriers were skipping Oakland altogether. So we shifted most of our exports out of LA and Long Beach, and we even did private charters to meet customer demands.

Right now, this year we're at a 5050 split between Oakland and Los Angeles. But what happened is, because we were so delayed in shipping, we usually go from a 30 to 40 day shipping to our major destinations in Asia, but we went up to a 60 day shipping is that our product would arrive in those markets rotting, completely delayed in preparation for going out into the marketplace upon arrival. And we had to pay exorbitant fees because you have to pay the customer.

If you have a product that arrives rotten, they're expecting that product. They've made marketing plans and movement plans of that product into their major grocery stores. So countries started looking at major importers of those countries. Asian countries started looking at foreign competitors, not US. Suppliers. They started looking at Egypt that can produce significantly cheaper for the United States and also delivers quality citrus South Africa, Chile and Argentina and Australia.

Also the advantage that those competitors have is that they have a much lower tariff than the United States. So though we are a preferred product that is quickly dwindling in these markets, they are getting used to the flavor of a quality product that can arrive, reliably and be significantly cheaper than US. Citrus. We are deeply concerned about that.

Not only did the port congestion, but also the trade disputes have really created where we're starting to see this gap, where we were a dominant player in major markets and we could demand the preference for our product and the price that we needed. And I think That's important to understand in looking at how important our port infrastructure is in ensuring reliable exports out of our ports.

The Biden Administration, which Sunkist sits on the Department of Commerce Advisory Committee on supply chain with Southwest Airlines, Amazon, PepsiCo and others where we talk about the national infrastructure needs for the nation. And we're talking a lot about these issues here. So I'm glad that Port of Oakland Danny shared a lot of the real challenges that we're talking about, and we're talking about our climate goals, but how do we marry that with our other goals, which is our increasing exports?

Increasing exports, we know, has a major impact on jobs and job creation, not just here for California, but also for the Midwest. Sunkist, with Adm, Cargill, Tyson Foods and others, along with Aubrey as well, was very focused on the Ocean Shipping Reform Act that we crafted and got passed and signed by President Biden because those other entities from the Midwest, large companies, are focused on getting product out to West Coast ports.

But last year we did meet with Georgia and the Port of Georgia during the pandemic. The Port of Georgia was easily able to put up an inland port within a year, and they are now becoming an EV hub and attracting a lot of major industries. If you're a shelf steady product, you can go to those ports as an option. It's harder for us as citrus to do that.

But I'll tell you the flip side is you may have us as a customer that mainly has the West Coast ports as an option, but as prices increase for shipping, it becomes harder to stay competitive in global marketplaces and we have to shift that product more to the domestic market, which is a whole other issue.

But when you look at what I would encourage you guys to do is not just focus on seeing the California ports, but really get out to the rest of the nation and the world and see what's possible with ports. Yes, we have a very different business structure for our ports here. It's competitive so customers can chop and change. We can go from Oakland, LA and private ports which we are looking at more and more because they are more reliable.

But if you go to some of the other business structures of Georgia, the East Coast, and then even some of the Asian markets, you'll see kind of what are the different things that we could implement here. I think we have to be honest about the challenges and I'm really thankful that the ports brought up those challenges that we're facing. We're on a limited real estate footprint. How do we use that space efficiency efficiently?

What investments do we really need to make to meet the goals that we want to meet? See, not only do we focus on being zero emissions, but also ensuring that we can do reliable delivery around the world because That's the only way we are going to remain competitive in a global marketplace.

And you see that states and countries that recognize the importance of exports, that is their sole focus is creating an infrastructure not only of the ports, but all the nodes going into the ports that they are really facilitating smooth trade and transition. It infrastructure for real time data is critically important so we can make all of our plannings, we can move shipments, move trucks to where they need to be.

And I think of course everyone has also talked about the truck rule, which I don't think I need to reiterate some more, but happy to answer questions. I hope that that helped provide what we look at in terms of the competitive nature.

Thank you very much for your testimony. The entire panel really appreciate your insight and your expertise into this area. Raise, you talked about challenges and I want to just expound on that just for a moment. What is the biggest challenge facing your industry in terms of availability, in terms to exporting goods? What does that look like? What's the barriers there that keep you from continuing on moving forward? Does that make sense to you?

Yeah, I think one of the big things that we have right now, we saw it in COVID, luckily times have gone back to normal, which is great and pricing has gone down, which is significant, but it's really planning because we have to coordinate. The steamship lines will give us a date in terms of EndGate of when you get your cargo to the port, but then we have to check with the terminal operators to determine actually when we can drop off our cargo.

We have to organize an empty container going into the Valley to the packing house to pick up the cargo and then take it. Because we have a perishable product, we have very limited time. We're on a very tight window of making sure that we deliver freshness versus a shelf steady. So I think that data, having that data available so we can make better planning decisions is important. And I think where the government can play a role in that is they can invest in that data.

And you see that with the flow project at the federal level that the Administration has been working on. But there are some other data needs that I think we could do as an appropriations ask. To really put that influx of cash into that real time data would be important.

Vice Chair Fong.

Thank you very much. Certainly. Thank you all for being here. As I mentioned in my earlier comments, for us in the Central Valley, the recognition of agriculture is critically important. If you look at Tulare, Fresno and Kern, many of your Members farm in those areas, and I'm proud to represent those areas. We're 44% of California's total AG production value, so our region alone is that.

And I want to thank Mr. Johansson's last point about the synergy and the symbiotic relationship between our Central Valley farmers and our urban ports and the fact that we succeed together. I do want to just as I talked about earlier, I think a lot of times we talk very 30,000 foot level about these costs and these regulations. But how does it affect your supply chain process? As mentioned in other hearings, it's a system of systems.

So you kind of outlined rain about just the process of scheduling and the containers and getting a trucker to pick up that container and then to the port. But when it comes to the Draya check rule, how does that in a realistic way, how does that affect, your.

Know, and just kind of what we look at? We look at our trucking and freight costs both to ports as well as across the United States to the East Coast. We are a large supplier to the East Coast, and so we have competition on the East Coast of other cheaper foreign suppliers that can actually sell at half the price we can. Because once you factor in our production costs here in California and then the freight cost, which is about $15, it was a lot less.

It's about $15 to the East Coast. But if they bring in a ship from Chile or Argentina, they can actually sell for half the cost into the East Coast. So every day we are looking at freight costs. And the concern with the CARB rule is that freight costs are going to go up significantly, not just for our export product going to the ports here, but we're also going to now see it going to the East Coast, which is very, very competitive.

Already in the domestic market for us, we were bidding at $41 a carton to the East Coast, to our major buyers, retailers this year, and Argentina was bidding at $22 a carton. So that is really what we're facing. That's why we look at freight costs, both trucking and export costs constantly. We lost significant dollars during COVID because we had to pay for so many damages upon arrival. So it's a huge factor into our bidding that we do, and it's a huge factor into our competitiveness.

I think when California citrus was the only game in town and it was the premium product, but now retailers, foreign buyers and consumers are getting used to that competitive product that can be sold for a lot less. So it's very critical to us.

How does it affect other crops very.

Similar to what Rain is describing in terms of the data and the ability to be on time. Those costs then get handed down. If for some reason a carrier line closes our receiving window from four days to two days, well, I have to get an empty container, which means I have to sit and wait and get one, go back to the valley, get it loaded up. And now as I come back, I can't get on the boat.

I've missed my ride, which means I have to pay the detention and demarriage on that or my processor, and then it trickles down. Already the truckers are paying on average, or excuse me, farmers are paying on average about a $12 per acre premium to move product to the port.

If what we anticipate in talking with truckers and a number of others is an additional cost for the time to get there with the transition to zero emissions vehicles, if that does anything to delay the time of transportation. That cost will be handed back down to the farmer. Broken down in that capacity either in revenue not being received back to them because that product doesn't receive revenue until it reaches its destination. So it creates that cash flow crisis I described.

If the product can't get out, the farmer doesn't get paid, and the cash flow into the economy and into the community is totally capped over the course of the pandemic to now, we are still not recovered during the pandemic because of how much product was unable to be shipped, almost over a third. So on average, American almonds grow about 2.6 billion pounds.

We for now three years in a row because of how much we couldn't get out during the pandemic, are still sitting with 900 million pounds, 800 million pounds on average per year, carried over from one year to the next. That is when it's basic economics. Supply is going up, demand is staying the same. And the problem with that is the cash flow is totally drying up into the communities.

And when you then consider, as Jamie mentioned, zero emission standards are going to translate into our farms with our off road vehicles. We critically need the infrastructure and the support network. It is a total connection between what happens in the valley out to our ports. And the third point I would make is again how I mentioned lines not returning. Almonds are taking trains to Norfolk because it's cheaper than going out of a West Coast port. Why?

Because the carrier has not returned those lines to the West Coast. If our ports are not attractive to the carriers and restoring our lines into our critical markets like India and the Middle East, then we have to go to other ports around the country, regardless of the cost, because we're 80% of the world's game to get back out to those marketplaces. Again, those costs continue to go up.

That means you got to remember, farmers are the only people that buy at retail, sell at wholesale, and pay the freight both ways. And That's happening even more and more under this post pandemic network.

Let me ask Mr. Hansen to also add another layer to this, which is the importance of market share. So I started my career in international trade policy when I worked for Congressman Bill Thomas. We're all about talking about getting more market access and could you educate us and the other Members about the fact that once we lose that markets internationally and they're used to getting other products from other countries, we don't get that back or if at all right.

And oftentimes we can't get there and it incentivizes them to develop their resources within the country. Rain brings up Chile, for example. I was just in Michigan talking with their blueberry growers and asparagus growers who are being undercut, just like our growers on imports from South America and Chile certainly was given the time to develop their water system and bring water from the mountains into their desert region, if that doesn't sound familiar, and now have a prosperous agricultural system there.

Now we still say that ours have more flavor than theirs, but nonetheless, there's dramatic impact to the growers and it's no different in California. I'd also like to remind you a well functioning port for agriculture, western ports, means that we get our machinery on time, we get our fertilizers on time, we get our cardboard on time, we get our plastic crates on time. And also our infrastructure, our irrigation needs, and also any needs for our homes and our businesses.

We depend on that import to keep our businesses going. And so if it's not functioning well, it brings everything to a grinding halt. I bring up, for example, tomato processors in California who have had a tough time, not just from COVID but for drought. California represents 95% of all processing tomatoes grown in the United States. Of California tomatoes, we represent about 40% of the world market. We are the fifth largest exporter of tomato paste, and we're the third largest exporting country of canned tomatoes.

A significant industry here in California, primarily centered in Central California doing that. But you can go back and look at when we talk about trade wars and you look at bringing in cans from China greatly disrupted, but then we go into the COVID period and those kind of shipping supply chain issues, but we also run into a drought situation that we haven't fully recovered from last year. The amount of processing tomatoes planted in California were as Low as it was in the 1950s.

So drought has a significant impact on what we can export and can also lead. So it's important, too, as we talk about keeping agricultural healthy, not just from a shipping point of view, but also the infrastructure and the inputs, like water, that we need to be successful. So California, again, we could talk about rice going out of West Sacramento and the port of Stockton. And the significance 40% of all rice being exported out of the United States is California rice.

Though we're about a third of the rice growers acreage in the United States when it comes to exporting and meeting those quality needs, which is oftentimes an increased revenue generator to pay for our regulations. California farmers and ranchers certainly punch above their weight.

I just want to thank all of you and your Members, thank the farmers and the farm workers and the ranchers. You've persevered through a lot, drought, flood, and now added costs when it comes to regulations. And so I just want to implore to the Members on this Committee that not only are we trying to keep the ports competitive to other states, but we're trying to keep our farmers competitive overseas so that we can continue to be the number one AG producing state in the country.

And, of course, to preserve the number one food producing region in California. Thank you.

Other questions, ms. Papper question. Well, this has certainly been eye opening experience and thank you very much for your testimonies. Before we move to our next panel, I just have one brief question. And we talked about, I think it was Ms. Thompson talked about investment. What does that investment looks like from your lens that we should be looking at? Because again, we have and we take full advantage of Mr. Fong's position as the Vice Chair of the Budget Committee in the Assembly.

What does that look like from your lens? And then my second question is will your industries get together and submit to us what it looks like moving forward in an ideal world and how we should play a collaborative role, your industry with the state to try to tear down some barriers. And so I know you didn't come here looking for homework, but certainly I would like for you to be part of this collaboration. We've asked the previous panel do the same.

We would like for you to get together and collaborate and submit something to us so we can look at and also utilize as part of our white paper. So thank.

What? I didn't know if you were that was a question. I'm assuming it was a little bit of a question. So I think what Danny brought up, the state freight plan is really important for laying out very specifically, and we're happy to contribute to that, putting that together both from the lens of what we're talking about at the national level as well as what we need here.

But that plan should really look at all the nodes as well as what needs to happen at our port infrastructure. We have limited real estate. We're in prime real estate, as Oakland knows. Everyone wants to be there. So I think we need to look at that limited real estate, but it can really be used efficiently. I think we can meet environmental goals and also make our port infrastructure State of the art.

It's going to take a lot of money and really hard policy decisions that might make us uncomfortable at first, but I think it's achievable. I think we just have to be focused and we have to really say this is our goal. And then I think it will really benefit so many people, provide more jobs, and provide for so many more environmental benefits. So we'll work on that state plan with the ports.

I know others are talking about it as well, so I think that that will be really important in identifying where the best investments are.

Thank you very much. Anyone else want to chime in before we transition?

Just similar to what Rain is talking about, the infrastructure inside of a new corridor within the Central Valley that then can connect to the coast. We're going to have to rethink because of the goals. We're trying to reach a model of Shorter term runs of heavier loads and changing the different modes of transportation. So you have to invest across the board, not only in the basic it's like the modern Maslow's hierarchy of needs. We have to have the basic things of connectivity for technology and data.

We have to have grid capacity and the energy to support it reliably. That goes for hydrogen as well as electric. And I think you're looking at a new organized Central Valley style corridor that then makes Shorter runs to the coast, which does help with our emissions, which does help with our at risk communities both in the valley as well as on the coastal and port areas.

Can I just ask, does that include inland ports as well?

Yes, absolutely.

Great. Please.

Not much more to add, but I was going to add the inland ports as well. And the other thing to look at too, and it's not just happening in agriculture for many, many reasons, but we know it's happening in our shipping, whether That's trucking or whether That's just who actually carries our containers on their ships. And That's the consolidation that you see happening. And a real effect of any rising cost is simply you have to become more efficient.

And oftentimes to do that, you have to become bigger. And that shouldn't be a lost point and a good starting point. Looking across the transportation spectrum as well as agriculture, what is leading to consolidation. I'll leave you with some good news, though.

And met with a large cheese processor in California who also has a cheese plant in Texas as well, and was shocked to learn that for them, it's still more efficient to bring their cheese from Northwest Texas to Long Beach than it is to go down to Houston. However, the challenge would be the largest dairy exporter in the United States is out of Colorado, who now moves out of Houston, if not air freight, if they need to.

But we still have an opportunity, so thank you for addressing it. And there's still a great chance to restore what we understand, our transportation infrastructure in California to be the best in the United States.

Thank this panel. Thank you very much for being part of this robust discussion. As we transition to our next panel, the next panel will be discussing Northern California Goods Movement and supply Chains Partners perspective. So, again, thank you very much. And the next panel, if you could please join us, we'll be starting off with Mr. Hunter. Mr. Hunter is the regional thank you very much. The regional representative for the International Organization of Master Mates and Pilots. So thank you very much.

Your speech. Okay.

Thank you very much, brother. I appreciate it. Thank you.

And if anyone needs to use the restrooms, it's out the door and to the right. Don't down a long corridor. I don't think you need a code, but. Thank you very much. Thank you.

So great. Thank you very much. Mr. Hunter, the microphone is yours. We want to just remind this panel we have between six to eight minutes. I have a timer that would go off at eight minutes. Then we give another two minutes to wrap up and close up if, in fact, you need it. So the floor is yours. Thank you very much.

Good morning, Chair Gipson and Members of this Committee. Thank you for allowing me to speak with you today. My name is Captain Sly Hunter. I'm the regional representative for the International Organization of Masters, Mates, and Pilots, commonly known as MMP. Our union, which is an affiliate of the AFL CIO, was founded over 140 years ago after a side paddle Wheeler siwanika suffered a boiler explosion in New York Harbor.

We were founded after the captain successfully maneuvered his ship to shallow water in order for the ship's passengers to evacuate safely. I share that anecdote to emphasize that safety and preservation of life is why we were founded, and it continues to be the most important aspect of what MMP does every day. Prior to my career as MMP representative, I served as a ferry captain on San Francisco Bay and have spent 30 years and thousands of hours operating on these waters.

And now I work to protect the men and women who work on them. In fact, I negotiate all West Coast labor contracts for MMP from San Francisco, Oakland, all the way down to LA Long Beach. And now moving into San Diego. And the very first item we negotiate with any new contract is mariner safety. We can't allow our Members to work on an unsafe boat or equipment.

And with the new amendments to the Commercial Harbor Craft Rule, it's going to be difficult for our union Members to work for our workers. This is not a job. Most of the time, it's a vocation. It's a calling to want to work on the water. And so we owe it to the workforce to make sure that they can return home safely to their families each night on a boat.

The engines are the gas pedal and brakes, and a loss of engine power is a catastrophic risk to vessel safety and more importantly, to mariner safety. The new CHC rule does not do enough to address mariner safety and could, in fact, endanger the men and women on the vessels. That is why we've partnered with American Waterways Operators to make improvements to the rule. We don't want to stop car from doing anything.

Our mariners breathe the same air as everyone else, and we want to have a healthy environment as much as anyone else. However, we also want to have safe working conditions, and putting unproven, untested technology on a vessel That's responsible for moving and assisting very large cargo ships can jeopardize that safety.

All we're looking for is the opportunity to ensure that these technologies are vetted as safe and that in the event of failure, they will not render a ship dead in the water, posing unnecessary threats to mariners, vessels, cargo, and the environment. As you know, the CHC provides strict timelines for the installation of equipment on the vessels that does not currently exist.

The six month grace period offered by the rule is not enough time for vessel classification societies to sign off on the equipment and for engine manufacturers to verify their safety for use. Thank you for your time today. I wish I could say that CARB has addressed our safety concerns during and after their comment period, but they have not, which is why you are finding employers, union members in lockstep before you and your colleagues in Sacramento.

We're looking to you for leadership and for stepping up for common sense workplace safety as a response to what CARB has put forward. I look forward to answering any questions you may have.

Thank you very much. We appreciate your testimony. We have a representative, the American waterways operators. Please self introduce yourself.

Thank you, Chair Gipson and Members of this Committee for the opportunity to address you today. My name is Kyle Burleson, and I'm a Director of State Advocacy for the American Waterways Operators, which is the tugboat, towboat, and barge industry's, advocate, resource, and united voice for safe, sustainable, and efficient transportation on America's waterways, oceans and coasts. Our industry's 5000 towing vessels and 33,000 barges comprise the largest segment of the US.

Flag domestic fleet, supporting more than 270,000 jobs nationwide and moving more than 665,000,000 tons of cargo critical to the US. Economy. Further, awo has eight Member companies headquartered here in California and about 20 that do business here. California, as you know, is third among states in waterborne commerce and has home to over 51,000 maritime jobs that contribute $12.2 billion to the economy here and generate over $3.6 billion in labor income.

California is a linchpin to maritime trade, not just on the Pacific Coast, but the entire United States. Tugboats, tow, boats, and barges are the greenest mode of freight transportation, with one barge producing 43% less greenhouse gas emissions than rail and more than 800% less than trucks per ton. Having said that, our Members are continually looking to improve efficiencies and environmental sustainability.

AWO members brought the first hybrid tugboat to California in 2010, operated the first fuel barges with hydrocarbon capture technology, and will be bringing America's first zero emission ship assist vessel online at the port of San Diego soon, perhaps as early as this year. Elsewhere in the United States, an AWO member just recently christened the country's first hybrid electric inland towboat. I say that to say that our industry is not afraid of regulation or innovation. We partner with the Coast Guard routinely.

We work with federal and state legislators to develop cooperative methods to achieve shared goals for the sake of expediency in the time allotted. I also want to focus on mariner safety. The current iteration of the Commercial Harbercraft Rule is going to create a Catch-22, where vessels can be either Coast Guard certified or CARB certified, but not both. That's because the diesel particulate filters and selective catalytic reduction devices mandated under the rule do not yet exist in the size or scale required for large marine engines.

What that means is that there will not be time for these devices to be properly vetted by engine manufacturers or vessel classification societies, which are subject matter experts relied upon by the Coast Guard to ensure that vessels can operate safely. Installing them without this can result in an engine losing its EPA Tier certification, which renders it useless under both federal and California law. More concerning is the history of DPFs having sensors fail on trucks or worse yet, catching fire on a truck.

When that happens, the driver can simply pull over and walk away. And obviously That's not ideal, but mariners don't have that option. As Captain Hunter, alluded a ship's engines are the propulsion, the steerage, and the brakes. Without functioning engines, a vessel is dead in the water, posing threats to mariner safety, vessel safety, and environmental safety. Mariners need to have safe, embedded equipment on their vessels in order to do their job safely and get home when it's done.

In fact, the United States Coast Guard voiced these issues, among many, to CARB directly. While CARB responded to the Coast Guard's letter, they made no changes to the rule that quelled any of the concerns held by the nation's foremost authority on maritime safety. That's why we've worked with Assemblymember Bains to introduce AB 1122, which doesn't tell CARB what it can do. Doesn't tell CARB what it can't do.

It simply says that if you're going to mandate equipment on a vessel, it has to be verified by a vessel class society for safe use before it can be installed. Moreover, in the event of a DPF regeneration or failure, an override or bypass can be used to get the vessel and its crew home safely before having to deal with the root cause of the failure.

The Bill requires any operator using a bypass or override system to report to the Coast Guard and to the state as soon as possible to keep records of these events. Larger and stronger storms and atmospheric rivers are the new normal. Vessels and crews that operate them work 24/7, including building the forthcoming offshore wind farms. Safety can never take a backseat to any other issue when protecting human lives and the environment. Thank you for your time.

Happy to answer any questions about the testimony I've given here or the more extensive testimony I've submitted. Thank you.

Thank you very much. Next we'll have representative representing the Legislative Director Dan Jacobson, Legislative Director from Environment California. Thank you very much. And you can certainly proceed when ready.

Thank you very much, Mr. Chairman. My name is Dan. Thank you very much, Mr. Chairman. My name is Dan Jacobson, Senior Advisor to Environment, California. Environment California is an environmental group working on clean air, clean water, and protecting open spaces. This past year, we worked really closely with many Members of this Committee to help pass AB 1373, which was a Bill by Assemblymember Eduardo Garcia to set up central procurement, which is one of the key pieces that we need in order to establish offshore wind.

And I'm really glad to hear the last speaker talking about offshore wind because the ports are going to play an integral part in how we can move forward with offshore wind. As it's been said many times before, if we're going to hit our SB 100 targets, offshore wind is going to be one of the major players that we have to do. In order to do that, the threats to climate change means that ports need to play a greater role.

Our ports will need to develop the clean energy. They'll need to focus on the rising sea levels. They'll be part of the educational centers that track the impacts that we're having on the oceans, and they'll be a big player in the sustainable blue economy That's emerging in this state and across the country if we look at what it's going to take to bring offshore. And I want to be very specific with some of the questions that you asked earlier, Mr. Chairman.

The California Energy Commission is that in order to get the ports ready for offshore wind, we're going to need a total of about $10 billion, plus or minus. Now, some of that money is going to come from the federal government, some from the state government, some from the offshore wind developers, and maybe some from the localities. In this upcoming year, we'll have an opportunity to take a look at the climate bond That's been suggested.

And there's a number of you are already supporting this concept, but putting $1.0 billion into the climate bond in order to help get our ports ready for this offshore wind development, That's going to happen. Without that, the ports aren't able to proceed with the infrastructure that they need, and we run into a bottleneck in terms of the Clean Energy Development that we have.

If the ports can't produce both to manufacture to produce these large turbines and then to do the operation and maintenance That's required over the next 15 years, then California can't hit the goals that we've set. The national goals. The international goals, in order to reduce the direct impacts of climate change by accelerating our move to 100% clean energy. Now, the benefits of offshore wind are even more than just clean energy. There's tremendous labor benefits that we get from offshore wind.

We partnered with the California Trades in order to pass AB 525. That was authored by now City Attorney Assemblymember David Chiu. And we worked with the trades and a number of other unions around the state to get the California Energy Commission to set the aggressive goals of between 2 and 5 gigawatts by 2030 and up to 25 gigawatts by 2045. This, if you look across the country, would make us the leader in offshore wind anywhere.

And it's important to note that California's offshore wind will be different than the offshore wind that we have on the East Coast. There, they have a direct stake into the ocean ground. Ours, because of the distance that we'll have between 25 and 35 miles off the coast, will be floating. This, again, will be providing an opportunity for workforce development. We've been working with community colleges with training centers in order to how do we get our workforce up to speed on this?

And then, obviously, and I'll say this in closing, is that as we electrify and move toward 100%, that has a direct health impact on the quality of life in the ports. The ports have often been seen and have trouble with clean air issues. But moving to this clean energy source will help to not only reduce the greenhouse gas emissions that we have, but also to improve air quality around the ports.

Community involvement in this issue is critical, and I want to thank you for your time and the opportunity to speak here today. Thank you very much.

Thank you very much. Alex Podolsky, please. Correct my butchered last name, Senior Director of California Business Development. Thank you very much for being here and proceed when ready. You have eight minutes.

Thank you, Chair Gipson and the other Committee Members who have made it this far through the presentation. So. Alex Podolsky, Senior Director of Business Development for Amoresco. I live in the Bay Area and I've been a California resident for most of my adult life. I've been working in renewable energy for a little over 15 years now, and Amoresco is the type of company that solves the problems that we're discussing today. We are a clean tech integrator.

We were founded in the year 2000, so 23 years ago, and we are publicly traded on the New York Stock Exchange. We are a mid-cap company. We do about 2 billion in revenue annually, plus or minus. Have about 1500. Actually, it says 1300 employees. Many of those are degreed professional engineers. We are a national company in the US. We have 60 plus offices and I think probably over 10,000 customers now.

And we really make a huge dent in the carbon emissions of the customers that we work with. Next slide, please. So this is the portfolio of different types of customers that we work with, airports and ports, among them colleges and universities. Federal government is a big customer of ours, and I think the rest is fairly self explanatory. Next slide, please. So this is pretty important. Renewable energy is great to help customers reach their sustainability initiatives, but it doesn't make sense to apply thank you.

To apply a renewable energy project to a site That's really inefficient. What makes more sense is to make that site use energy really efficiently and then for the remainder, attack it with onsite or offsite renewable energy. In addition to doing our core business of providing these solutions, we also do energy analytics. And then after the project is complete, we provide operations and maintenance. One throw to choke. It's good to have one individual or one company to provide the aftercare from the project.

Hopefully, this gets us there. There we go. This just shows sort of cumulatively over the last few years how big an impact we have had for our customers. Offsetting almost 100 million metric tons of CO2. This slide shows how expansive our footprint is in California. Each one of those pins represents a project that we've done. Some of those are portfolio projects. So I think I'm allowed to talk about Kaiser Permanente and Sutter Health.

Obviously very extensive facility footprints in California, and we've done many projects for both of those folks. So in total, 1.3 gigawatts of renewable energy projects, 143, those are PV. And yeah, Kaiser and Sutter are mentioned explicitly there. So the next few slides are just some of our project highlights that are not port specific, but sort of indicate the sorts of projects that we do. And each one of these projects could be applied to a port.

So for the US Coast Guard in Petaluma, this is a really interesting project for us because it's a micrograde capable project. For those that are familiar with California, you're familiar with public safety, power shutoffs, which have become a part of our lives recently. And for a lot of facilities that is not viable, not tenable. So the Coast Guard had a use case where they wanted us to solve a potential situation where they were without power for 10 days.

And we did that with a combination of onsite, solar power, battery energy storage, and backup diesel generation. And by the way, I didn't mention at the beginning that Amoresco finances a large percentage of the projects that we build. And That's a critical piece of the puzzle. And many of these projects can be financed at zero cost to the offtaker customer and at a positive cash flow out of the gate and through the contract term. Here's a project in San Joaquin County.

It's on a closed landfill, 5 PV. And interestingly, the energy is actually sold to the County of San Joaquin, and it is sold to them at a rate below what the utility would charge. I did throw in because wind is such a key part of the conversation both in California and today. At this hearing, we've done two wind projects, one in Greece and one in Ireland, and it's becoming a bigger part of our service, offering nationally as well.

This is an example of Sutter Health's Santa Rosa Regional Hospital, and what it's profiling is these beautiful solar canopies that in addition to offsetting the majority of the hospital's use annually, provide shaded parking in a place where That's really beneficial, certainly in the summertime. This project just shows the diversity of the sort of projects that Amoresco focuses on. This is highly engineering intensive, but it's a landfill gas recovery project, and then we sell that gas to an offtaker.

I think Amoresco is the largest developer of renewable natural gas projects in California, so probably 15-plus projects in the state. Trying to get to the next slide. There we go. So happy to answer any questions that you may have and just one interesting comment. So we're working with tenant at the Port of Los Angeles. They are a big international shipper, and they've publicly stated that they're going to meet very aggressive renewable energy targets, zero carbon, I believe, by 2035.

And so they've engaged with us to provide them a solution at the Port of Los Angeles. And the local electricity provider is the gating factor on that project moving forward. And with all of this push to electrify the ports in California, it's often true that the electricity that is necessary to provide for that doesn't actually exist. Or if it does exist, it can take five to 10 years of planning to get that on site. So, something to consider in our discussion. Thank you.

Thank you very much for your testimony. Next up, we'd like to invite Ms. Beverly Yu, the Legislative Director of California State Buildings and Construction Trade Council. So thank you very much for being here and proceed when ready.

Thank you. Mr. Chair, Mr. Chair, Members, Beverly Yu on behalf of State Building and Construction Trades Council, we represent 500,000 hardworking men and women of the construction trades, including over 65,000 enrolled in our State of the art apprenticeship programs. Three quarters of our apprentices are people of color, one in five are emancipated youth, come from foster care, or were formerly incarcerated. We appreciate the opportunity to speak today to provide some background on how our building trades operate with the ports.

Specifically on the recent alliance for Renewable Clean Hydrogen Energy Systems, RCHES funding, as well as a brief update on the Port of Oakland and San Francisco work that we do where the tour will take place today for Arches. We are excited to share that recently the Department of Energy announced that Arches has been awarded up to $1.2 billion under the Department of Energy's Regional Clean Hydrogen Hubs program to produce and create a market for renewable hydrogen.

Hydrogen presents a very big opportunity for all of us to build out a hydrogen network, create a delivery system, and maximize the hydrogen economy. Arches is a statewide public private partnership to bring clean energy and green jobs to the State of California.

Arches has truly been exemplary collaboration between our partners to put forward the best application to the federal government, including with GO-Biz, the University of California, the Renewable 100 Policy Institute, various private companies, and with the state building trades, as well as a founding Member and part owner of the consortium.

We are thankful for the leadership of Biden-Harris Administration, Secretary Granholm, Governor Newsom, GO-Biz, and many others to make this possible, and we are working together with our partners to provide the next generation of energy that will benefit California's disadvantaged communities, create jobs, support businesses in this new industry, and expand clean energy infrastructure.

ARCHS will utilize clean energy technology to produce hydrogen exclusively from renewable energy and biomass to substantially decarbonize multiple sectors of the economy, including public transportation, heavy duty trucking ports, operations, and these are the key emission drivers in the state and sources of air pollution that are among the hardest to decarbonize.

In particular, the California Hydrogen hub will introduce clean hydrogen to heavy duty transport through cargo handling equipment and drainage to support the ventral conversion of maritime equipment at ports and prepare the port for the potential export of hydrogen. California's hydrogen hub aims to reduce carbon emissions by 2 million metric tons per year, roughly equal to the annual emissions of 445,000 gasoline powered cars.

The expansion of hydrogen-fueled vehicles and heavy-duty transportation, including the use of hydrogen fuel cells, will not only drive improvements in air quality along interstate transportation corridors but will also facilitate greater connectivity. Expansion of a clean West Coast freight network that links our neighboring Pacific Northwest hydrogen hub.

The funding is coming from Federal Acts provisions that provide investments in clean energy, and California has submitted a funding application April and as mentioned, was recently awarded funding, and this is with six other hubs to establish a national hydrogen network. With its support, Arches would create 220,000 green jobs, 130,000 construction and 90,000 permanent jobs, and generate more than $2.95 billion annually in economic value from 2030. In addition to economic benefits, there's also health savings benefits as well.

As it will help provide local benefits to communities to prevent harmful air pollution, Arches has committed to requiring project labor agreements for all projects connected to the hub, and project labor agreements are the bedrock of what the state building trades are seeking for these projects. A PLA is a comprehensive pre hire collective bargaining agreement that sets the basic terms and conditions of employment for entire construction project. Essentially, they are efficiency agreements to help prevent delays.

A PLA is the fastest route to a good job, good benefits and strong middle class. A PLA leads to a middle class livelihood, provides a living wage for construction workers, known as the prevailing wage, and it includes all the associated benefits as well for a prevailing wage. And with local hire provisions, paying local workers has demonstrated a positive ripple effect. Enhancing the prosperity and well-being of the entire community, reduces vehicle miles traveled, and improves the quality of lives for everyone in the community.

RCHES presents a lot of work for the trades. With strong labor standards, churning our training programs, and attracting and retaining workers with good-paying green jobs, many of the apprentices coming in today and into the future will be able to work on these projects.

And more importantly, it's a catalyst to bring local people in from all walks of life and provides an opportunity to participate and get into a lifelong dignified career in the trades and be able to access training That's debt-free and in their area on the Port of Oakland. I would like to briefly highlight the work That's taking place, particularly as it relates to Arches. Ports, as you know, are a key cog of the RCHES ecosystem for the transition of the good movement industry to zero emissions.

There are tremendous benefits to disadvantaged communities directly downwind and the hub provides a green hydrogen zero emissions roadmap for ports and goods movement. Nationally, ports depend on wide range of vehicles and machinery to move goods. Cargo handling equipment is central to these port operations and the Port Oakland project potentially will convert existing diesel fuel cargo handling equipment with zero-emission hydrogen fuel cell technology. Construction will also potentially take place in these terminal hydrogen fueling stations to support this zero-emissions equipment.

Our local Alameda building trades has been working together with the ports commissions to make this a reality and we should remember that the safety and value by always requiring a human safety operator with these equipment is very important and negotiations are still ongoing around the detail-specific projects. But we're very happy to please to announce that there's a lot of work that is going to potentially result from all these conversations.

In terms of potential considerations for RCHES, it is important to ensure that California region's communities are engaged and have access to the benefits of a clean hydrogen economy. This hydrogen hub plans to incorporate robust governance mechanisms, including labor, tribal, and environmental representation on its governing board, strong state requirements for environmental justice and community benefits plans, monitoring on the poor. San Francisco Our San Francisco building trades works very closely with the port and local officials with continued high greenhouse gas emissions.

According to the LAO, San Francisco could see as much as 7ft of sea level rise by 2100, so it's critical that we reinforce the aging seawall infrastructure. There's also developments happening in several piers of San Francisco. Pier 70 is the largest interfaces with both public and private development. There are a lot of ongoing projects to build out a new ferry terminal.

There are also ongoing discussions, as mentioned to offshore wind by my colleague Dan Jacobson to set up offshore wind projects and looking to see if there are opportunities to manufacture potentially at the ports, build out the wind technology, and deliver to the north and south from these waterways. This year we also worked successfully with the city and County of San Francisco and the Pores to pass SB 273, authored by Senator Wiener, which would authorize a mixed-use project located on Pierce 3032.

And as part of the overall 1.2 billion project, the development will make $400 million in infrastructure investments in the resiliency pier and sea wall upgrades. Public asks us, and this will all be achieved using union labor. Really appreciate the time to speak today and happy to answer any questions. Thank you.

Thank you very much for the entire panel, for your testimonies and your perspective given to this body. We want to ask a few questions from the Committee. I'll start off and then invite my colleagues to do likewise. So our goal is to try to gather all this information so that we can make some real positive decisions. Doing nothing is not an option. Let me say that again, doing nothing is not an option, right?

And so we want to make sure that we are moving collectively and collaboratively together to try to address issues and problems and concerns and then provide answers to those problems and concerns so we can help making sure that our ports in California continue to be the most vibrant ports in the country. So my question is, how can the Legislature, the ports, and the stakeholders make policies that can benefit all hard working Californians that operate our ports every day? So That's the first question.

Then the second question that I would like to ask is do any of the panel thinks that there are solutions that the Legislature could take to help bolster your prospective industry? Are there any areas that the Legislature has fallen short of in helping solve some of the problems and barriers that face this industry? So whoever want to take one or both questions, the floor is yours. If you need me to clarify that, then I'll certainly be happy to.

Mr. Chairman, I'd be happy to start with AB 1122, which I just mentioned. CARB is not a workplace safety organization. They do air emissions. As the representatives of the port community alluded to, we share the same goals that CARB has, although the deadlines and requirements they've put in place are difficult, if not impossible. And as Ms. Zortman said, I don't think anybody believes that they take a good hard look at everybody that works at the port, including the tugboat and towboat industry.

So we think that with offshore wind coming online, that is our industry's biggest new job opportunity in a generation. We're very excited about it. We're going to have to recruit more workers to do this sort of thing. And as Captain Hunter could attest to, all of my ember companies need workers. So anything the Legislature can do to promote that would be critical. But also, AB 1122 will ensure that those offshore wind jobs and the ship assist jobs that exist now can all be done safely.

Thank you very much. Dan?

Thank you, Mr. Chairman, I'd say the simplest answer to your question is let's get a climate bond on for 2024, and let's put $1.0 billion in there for the port development that needs to happen with offshore wind, the state's going to need about 11 ports. Some of them are going to be manufacturing, some of them are going to be siding, and some of them are going to be operation and maintenance.

The ports that we have now are all going to need to be upgraded to be able to do that. That's one thing that you can do that has a benefit, I think, for everybody here at this table and for the people that came at the previous tables too. So That's a direct answer to that question.

If I may. Please. And I know that you raised $10 billion and the state has to put some skin in the game. Are you guys also looking at the federal government in terms of a partnership? Because again, we can't do it alone. $10 billion is a huge dollar amount and so we certainly need that. But what has been the workings in terms of conversation with our federal partners in this regard?

Yeah, I'm happy to answer that question. It's a really good one. I was just in Washington, DC. Three weeks ago with the Port of Humboldt and their commissioners applying for a $426,000,000 grant from the Department of Transportation that they'd be able to use for the Port of Humboldt to immediately get started on that, I think basically three things have to happen.

One is that and this is already done under the leadership of CAPA and the great work That's done by their staff, but to make sure that the ports are organized and that we're speaking with one voice here in California. The one critique I would have is it's difficult for Humboldt to go up and say, we need $426,000,000, and then two weeks later for the Port of Long Beach to go up and say, well, we need $624,000,000. That's got to be more unified.

It not only has to be unified here in California, it has to be unified amongst the whole West Coast. Because while California will play the lion's share in offshore wind, we're going to have to work with Oregon and with Washington on supply chain issues, on transmission issues, on environmental protections, but also on port development. Who does what and where. And so That's going to be critical.

And then I think the third thing is just having the Legislature and the state show that they're putting skin into the game, having the developers put their skin into the game. And when the federal government and the state government see we're all cooperating, that $10 billion I know this sounds ridiculous to say can look smaller if everyone takes a chunk of it.

You raise a good point because I know we have a federal lobbyists that represent us in Washington, DC. I think there needs to be, at least in my notes, that we reflect that we need to have a coordination to figure how do we coordinate and collaborate together to making sure we're speaking with one voice. Before I go to Ms. Bonta. Anyone else who wants? Sure.

The specific pain that we're feeling is thank you for the question. The specific pain that we're feeling is permit related. That's at the local level and with the utilities. So the project that I alluded to at the Port of Los Angeles, the client wants to move forward with the project. It's a solar PV project, so 100% green, zero emission project.

It would offset a substantial part of their annual energy usage, but we can't get the project permitted in a reasonable time frame, and it's not unique to that site. I talked to universities. I talked to what we call CNI clients, commercial entities. They've all committed to getting to net zero. They all have aggressive timelines, and the permitting is the issue.

And then the real elephant in the room is that if you're going to transition to a carbon free state, you're going to have to beef up the electric infrastructure dramatically. And I've seen dollar amounts thrown at that idea that are scary. So I'm not going to specify what those are.

But ultimately, the grid that we have was designed for a completely different use case, and a lot of resources and brain power is going to have to go into making that appropriate for where we need to be. Thank you.

Ms. Bonta? Ms. Yu?

Thank you, Mr. Chair Members. From our perspective, we generally want to see a lot more investments going to the infrastructure at these ports. Just recently, there were earthquakes here in San Francisco. The US. Geological Survey estimates that there's a 72% chance of a major earthquake between now and 2043, with the potential to shake San Francisco here, even at levels not seen for over 110 years. So, I mean, this is just San Francisco here. I'm sure there are other sets of data for around the state.

We want to make sure that folks are prepared. And the ports also too, if needed, can serve as public safety infrastructure for the building trades. Many of our folks were just on site even during the 1989 Loma Prada earthquake as a second responder to help out, not law enforcement or medics. But we're there, and we're helping get everything back up and running to our members. So we want to make sure that the investments are there, infrastructure isn't crumbly and willing to and able to withstand what's coming at us in California.

Thank you. I want to turn up to Ms. Bonta and this Assemblywoman Papan, but I also want the captain after they finish, I want to talk about safety. You raised that issue, and we shouldn't glaze over it because I want to make sure that most of all, that our personnel is taken care of and working a safe space. So, Ms. Bonta and then Ms. Papan.

Thank you for being with us today and presenting on this panel. I wanted to, if you will, return our attention back to where we started in the first panel, which is the suggestion that Mr. Juan raised around really developing a statewide freight and I'm going to say statewide freight and goods movement policy to really anchor a lot of our work.

Throughout the course of these three panels we've heard the necessity to have investment in port infrastructure consistency in terms of the investment year over year in terms of what that means from the dollar perspective, dollar amount perspective. The introduction of this idea of a bond to be able to support that work. Initially needing to be able to invest in the inland infrastructure to ensure that we have the kind of agriculture to urban movement that we need to be able to support.

And with this panel, we've heard the importance of not only workplace safety, but also the importance of workforce development. For me, that sounds like there are a lot of interdependencies between the various industries, markets and perspectives that need to be woven together very carefully under the umbrella of ensuring that we are all meeting the CARB goals so that we have a purely green economy involved in our imports and goods movement.

So I just wanted to give this panel an opportunity to lend your voice to this idea. If we were really to move forward in the very near term with the statewide goods and goods movement and freight policy, what aspects of that policy and the interdependencies, if you will, do we absolutely need to make sure are included in that?

Sure. Absolutely. You touched upon workforce development. It's very important that we take into account and have discussions, make sure that labor is at the table, ensuring that the state building trades, our local building trades, our affiliates, the ones who are doing the construction, along with our brothers and sisters in labor that are impacted are a part of this conversation and really thinking through how do we bake these labor standards in at the very beginning when funding goes out, as Paula asks, when we think through different policies to improve the infrastructure of the ports.

Thank you for the question. I'll just say that the interdependencies are real and complex, and I would look at it through the lens of first--are the solutions technically viable in the near future? And then some solutions that are technically viable are wildly expensive, not commercially, sort of reasonable. And then what is the timeline for implementing this and getting back to the car issue, making sure that the timelines dovetail with the technical and economic timelines? Thanks.

I think maybe I would just add public health. That's going to be so important. So many of our communities have been impacted by the diesel emissions, by the other emissions. Whatever we look at going forward, we have to look at how fast can we improve the quality of people's health and how can we do it while also decreasing the impacts that we're going to have from climate change. Those are really, really difficult things to be able to wrestle with, but public health has got to be first and foremost in people's minds.

One thing I'll add, because I haven't asked you guys for money yet, is the conservative pre-inflation estimate our industry came up with to comply with the new harbor craft rules was $1.3 billion. So it's most assuredly a lot more than that. You're talking about $4 million for a tier four engine. Typical tugboat has four of those, two for propulsion, two for electrical generation. It's a lot of money. Now we have members that are publicly traded corporations.

We have a lot more that are literal mom and pop operations. So That's a lot of money to ask for. And if a ship is rendered unable to operate in California because of these rules, they can't be doing the work to make the money to pay for the upgrades. And when you look at--that's, the cost to buy the engines. You also need time in a shipyard. You're going to have to modify the vessel in some way when it comes to DPFs and SCRs.

So these are major investments, and you might wind up basically zeroing out the value of a ship with all the work that goes into it. So as we look at these regulations, if they're unchanged, they have to comply with that--or figure out how to comply with that--and then figure out what's next. Maybe it's hydrogen. We've heard a lot about hydrogen today. So, it's continual upgrades, and we're probably at north of $1.5 billion now.

I know that the Carl Moyer Program has had some updated flexibility, which has been helpful. We hope our members can take advantage of that. But as of now, the state's only allocated $60 million to specifically comply with the Harbor Craft Rule, and other types of vessels are being prioritized in that program over our industry.

So if we want to keep these tugboats working, serving the cargo vessels that come in, doing offshore wind work, moving up and down the rivers here, we're going to need to find a lot more funding, not just for this, but whatever the next iteration of the rules are in order to comply. Thank you.

Assembly Member Papan, do you have any questions?

I do. So first of all, this panel, the first half of it scared the daylights out of me. And then the second half of it gave me hope. So I thank you for at least having some balance to the consultant, the chair who's not here. So That's the first part of my comments. Mr. Polowski, I hope I didn't butcher your name. Oh, Podolski. I got you. You in particular gave me a lot of hope.

First of all, I was on Kefalonia this summer and I did see your wind turbines off in the distance on the hill. So congratulations there. I was very hopeful also because you said your company finances a lot of these projects. So you've got my attention. Mr. Jacobson, I am a co author on the climate bond. I hear you loud and clear, so I just wanted to make those initial comments.

I was curious, what does your, tugboat folks, what does your financing look like with respect to upgrading, other than needing money from the state? And I appreciate you being very direct and giving me some specific numbers. I'm also a little intrigued. I was trying to figure out what happened to Bains's bill. I see it's stuck in senate rules.

So I'll try to follow up on why we're there and why that isn't moving forward, at least to give you more time, as you related to the cardboard, which you so eloquently put is not a safety agency, so you're up against it. But what does your financing look like other than what you might get from the state?

There's a few federal opportunities that some of our members have been able to take advantage of, but more often than not, they're going to have to go to the banks and borrow.

Okay.

And as I said, if a boat gets taken out of service, it can't be generating revenue, so you get hit on both sides of it. But there is some federal funding available. Obviously, that's a national competition for those funds. So most of our members are looking for going to a bank or borrowing money elsewhere.

And let me ask one follow up question. Is it the cardboard has rejected your concerns altogether or just never responded--go ahead and comply with the timeline, we don't really care about you? Where are you in this process?

Sure, it's been an interesting evolution. I know I wasn't part of AWO when the first commercial Harbor Craft Rule came online, but our members have told us that at that point, it was a collaborative process. There was a give and take, they listened to our concerns, they even gave in to some of our concerns. This new iteration, they have listened to nothing that I'm aware of.

We met with the CARB staff in March or April, and the staff said, "We want to hear everything you have to say, but we are not reopening the rule." It's really put us at a loss, because, as I said, we're not afraid of regulation. We work with federal and state entities all over the country. We have the longest standing safety partnership with the United States Coast Guard. We meet at the regional level and at the national level multiple times a year.

So this isn't something where we're just saying, the sky is falling, we can't do it, but we have real concerns. They've really listened to none of our complaints, and they really haven't listened to the Coast Guard either. So it's been a very concerning interaction with them.

As I said, you scared the daylights out of me.

I'd like to follow up in regards to how that affects the working man and woman, the cost. So one of our premier companies operates right here in San Francisco. They also operate in LA. And they're ahead of the standard right now. They went ahead and got tier three engines when they weren't required to. They're doing tier four engines. The cost to put these devices on is out of pocket.

So as I go negotiate a labor deal for my 50 or 75 members at $2,000 a month for health care and $700 a month into their pension, not to mention $160,000 wage line increase that we're going to go ask for, and we're trying to stay ahead of the cost of living like every other union. So those companies are going to leave.

I have one company that has a better deal to sell their boats to the East Coast to work on offshore wind because they don't have the same California requirements. So what this does, it ruins businesses. It puts mariners out of work. And so we have to transition them into different companies or different lines of work. It's a snowball at the top of the hill that could just ruin the house at the bottom.

And if I may add one more piece, the old saying is, if you can't agree on the problem, you'll never agree on the solution. We couldn't have agreed with them on the number of vessels this would affect. CARB said there were 229 vessels similar to the ones my agency represents in California, but real life data from the automated identification system showed that there were 200 vessels. Moreover, they inflated those numbers largely to make our emissions seem worse than they are.

We had an independent study done that showed they drastically overestimated that. We presented that to them, and they just said, okay, thanks, and moved ahead.

Thank you very much. Captain, about safety of the men and women, your members. You raised it early on in your testimony how safety is an issue, and I think you touched on it just in your comments about the previous question offered by my colleague. But can you talk about, again, the safety piece, and what does that look like?

Because we want to make sure that those men and women who are employed by the ports day in and day out are working in a safe environment, and you raised that. And I just want to just try to extract a little bit more from that, if you would, please.

Absolutely. Thank you. Thank you for this opportunity to answer. So let's take an example of some of the failures that have taken place, land-side. So, we've had trucks, we've had school buses where these devices would catch fire.

They would have to evacuate the students or the people. So you have loss of cargo, potential loss of life, but you have the ability to evacuate on a roadside. You don't have that ability on the water. Imagine. So I want to give you two examples. So if that bus driver with a bus full of kids had to lose his steering and his brakes and his ability to accelerate, would that be tolerable? Would we sit in a room and say, well, let's take that chance?

Because That's what happens on a ship. The moment you lose your engines, you've lost your ability to turn, you've lost your ability to stop, and you've lost your ability to speed up, to get out of the way of anything. So you're basically dead in the water. And if you're tugging on a container ship and that happens, there's probably going to be a potential loss of life.

And at this point, when we do contracts, we have to factor in the danger when we're sitting down with these companies. Normally, that's not a factor because we try to operate in a safe environment. But any device--and I've had it happen on vessels that weren't this restricted. You know what I mean? I had an incident as a captain where you lost your engine, I lost my engine, and we had a catastrophe.

The coast guard deemed that I was not at fault because it was a mechanical failure. However, those 212 passengers were still my responsibility. And any captain that takes a ship out or a boat out, your crew--that's your primary concern. We can lose the goods. We can lose the product. You can't lose life. And so any device that is going to inhibit a captain's ability to safely return is unacceptable.

May I add one point?

Sure.

One of the things I failed to mention with the installation of these pieces of equipment about voiding a tier certification or a warranty. So without those warranties, you lose the ability to get insurance. And under the Jones Act, federal law from 1920, the men and women that work on Jones Act vessels don't qualify for workers comp. So the ship owners are responsible for all of that. And without insurance, they can't make sure that if somebody does get injured that they can be taken care of.

The whole problem is an onion that the more and more you unpeel it, the more and more problems you find. And I apologize for not mentioning it before, but it just occurred to me, as Captain Hunter was discussing.

Well, I want to thank this panel for, again, your testimony that you provide to this Select Committee. All of us have taken copious notes and again, it's being recorded. And members who are on this Select Committee, their staffs are watching it and taking notes as well.

And so we appreciate your testimony and giving us an insight in terms of the barriers, but also at the same time looking at how and the successes that we have moving forward. Just want to say that CARB did in fact appear at our last hearing at the Port of Los Angeles, the one in the south. We have every reason to believe they're watching and certainly taking in your testimonies as well.

And we want to make sure that we work not as individuals, but collaboratively, to try to address this issue. And certainly we need that state agency to be part of the conversation in helping us solve the solutions to making sure that the ports in California continue to be the fifth or the fourth world economy moving forward. Right?

Because for me, I represent and did represent communities, not only was hit hard because of the pandemic, but they were hit hard just trying to keep and make ends meet. And we know that we want to make sure that we keep people employed and continue to be on the job to continue to help as a partner to move California and move California forward. So with that, I want to say thank you very much.

I'm looking around to see if there's anything that I missed out before I'll let you go. That's it. Thank you very much. We're going to move to our public comments section. And for those of you who weren't in the room, there's a microphone, there's a podium there. We invite you to come and line up. We ask that you introduce yourself. You have two minutes, and I will time you on those two minutes. We ask that you be as courteous as you can when giving your testimony.

And again, for those of you who wish or want to add to it and two minutes is not enough, we invite you to please submit your written testimony to us in writing and it will certainly will be incorporated. And we will make sure that our colleagues, my colleagues, get copies of your testimonies you're providing with us today. And so with that said, please, gentlemen, please step up to the microphone and just introduce yourself. So if there's organizations you're representing, please share and you have two minutes. Thank you very much.

Hi there. My name is Robert Estrada. I'm the regional director for the Inland Boatman's Union of the Pacific. We're the Marine Division of the ILWU. And like Captain Hunter, I represent mariners, and many of them tugboat mariners. So, you know, I was really happy to hear some of the concerns that I would carry be so well expressed so articulately. The whole table and the previous panels were all right on top of their game.

But I certainly really identify with what Captain Hunter and Mr. Burlson said down on the end. When I look at the concerns about the move towards cleaner energy, to me, there's almost no amount of investment that's too much because I see it as an existential thing. So this is nothing that I would brush aside lightly. What CARB is doing is God's work. I mean, we need to change our habits. We have to. And so that's not in question.

And yet the concerns about safety that were expressed and also about cost, they also can't be sort of brushed aside. The most fearsome word if you're on a boat, is fire. I mean, there's nowhere to go. We can't take that lightly. If there are unproven elements of this technology, we have to make sure that it's safe. As to the cost, I represent employees with employers here in the bay that as these CARB increased regulations came in, they had to send their tugs out of state and some of those tugs weren't replaced.

And so we lost capacity in the employers that I represent here as a result. These same boats are operating up in the northwest now. They're not operating here. And we didn't get replacements. And so, you know, there's a balance to be struck. And where that balance is, I leave it to smarter minds than myself. But these are all very important issues.

The last thing I would say is just when you were asking what could the Legislature do? And a kind of a shift here, this wonderful opportunity of wind, this offshore wind. We've been pushing and pushing and pushing, trying to get our foot in the door. We want to make that happen. Unlike the building trades, what we don't have, what no other unions have, that the building trades have, is they have their project labor agreements. And so they can set things up in advance.

They know what workers they need. It justifies expenditure on training and hiring, all that stuff. It's illegal for us to have a project labor agreement. And yet when we get our shorter notice call to be bringing people forward, we have to be able to provide these workers. And so training a pool of workers is a huge deal for us, especially all the more so with such short notice.

If we don't know if our company is going to get the contract, we don't know how many they're going to need. We don't know any of this until it's much closer to that threshold, unlike the building trades. And so if there's something that I would throw on your radar, it's if we could do something to get a pool of workers ready for that demand so that we could respond to it. Thank you.

Thank you very much.

Good afternoon. My name is Sasan with Earth Justice. We represent clients and partners on the front lines of the worsening freight pollution across California, including in West Oakland, Stockton, the Valley, the Inland Empire, and South Coast ports. And it's notable that one representative from these communities is present today. I'd like to clarify some things for the record on the life saving health regs that CARB has recently adopted.

First, I want to do away with the antiquated economy versus environment arguments that have presented because they are not supported by the data. No honest accounting looks exclusively at upfront costs without considering savings. For example, the Department of Finance's analysis of these rules found that operational savings alone, in other words, not including health and environment, lead to over 48 billion in net savings.

In other words, you could justify these rules purely on economic grounds because it results in so many savings passed on to fleets, small businesses and consumers. When you add the health savings, the benefits of these rules and dollar values dramatically outweigh their costs. On the concern that the CARB regulations are too specific or prescriptive, you should ask for clarification what the industry is asking for. All the panelists agreed they want to get to zero emissions. Well, That's exactly what the CARB regs do.

They set the standard at zero emissions and allow any compliance pathway that achieves that. So operators are free to choose hydrogen fuel cell or battery electric. If what the panelists mean is that they don't want to be required to reach zero emissions, they should have to admit that. Next, these rules do already include feasibility assessments and studies, and they include several exemptions and extensions. If compliance is deemed infeasible, there's an exemption or extension for vehicle availability, sufficient power supply, infrastructure delays, operational constraints.

But you don't get to just claim it's infeasible. You have to actually make the demonstration. So it's not accurate to say that these rules demand something infeasible. They just demand that industry give it an honest effort and prove why they can't take a life saving measure or why it's not possible yet. There's more I could say on the Harbor Craft rule and the safety issues. These vessels have been operating this technology in the Navy for more than nine years.

CARB expects several manufacturers will receive their verification for level three DPF filters by 2024, and they also granted unlimited compliance exemptions if there are issues with technology, feasibility and safety. Again, you don't need perfection, just effort. So many more points to correct. That's why I encourage you to invite a broader set of voices to the future panels. Thank you.

Thank you very much.

Hello. Thank you. My name is Katrina Tomas. I'm an attorney with Earth Justice. I work closely with groups in West Oakland to advocate for electrification of ships and port equipment to lessen the air quality and public health burdens that the port and freight industry have had historically on West Oakland. Increased rates of asthma, cancer, heart disease, and low birth rate are the realities in West Oakland, and they result from the increased pollution brought on by freight and good movements at the Port of Oakland.

And this is the case across all frontline communities, on all the ports across the state. The perspectives of communities most burdened by the externalities of ports and goods movement have not been represented today. They were not represented in the prior two meetings either. And this is shameful, especially since we provided this feedback and a list of advocates weeks ago to Assembly Member Gipson staff.

Without community voices here, you will not have an accurate understanding of ports and good movements in California, and any white paper produced without this will be unproductive. The information shared in these hearings will inform state policies and regulations, and we cannot set state policies based on incomplete and false information. California ports are receiving unprecedented levels of state and public funding and investment that will help modernize operations and should be used to eliminate air pollution.

Understanding the impact that the freight industry has on frontline communities needs to be considered when the state determines which projects to Fund so that communities are not harmed by publicly funded infrastructure improvements at the ports. We've seen the Port of Oakland pursue projects that would increase harmful air pollution and particulate matter emissions under the guise of modernization. Port improvements cannot come at the expense of public health.

The Port of Oakland has relied on letters from community and environmental groups to secure some of the currently available state funding. But it's important that this partnership is reciprocated and that the state ensure this reciprocation. The state needs to think through how state funding for port modernization will incorporate community benefits to not just minimize harm to communities, but also meaningfully improve communities like West Oakland that for too long have had to bear the burden of the fate industry's impacts.

I also just want to conclude quickly, I know you all are going on your port tours and you have been going on port tours. I hope this also includes a tour of the frontline communities. West Oakland Environmental Indicators Project is an EJ group in West Oakland that runs toxic tours of West Oakland. I think it's important for you all to be there and see the air, noise, and traffic pollution the communities and environmental justice communities are forced to endure. Thank you.

Thank you.

Good afternoon. I'm Joel Irvis with RAMP, Regional Asthma Management and Prevention, a project of the Public Health Institute. Our mission is to reduce the burden of asthma with a focus on health equity. Any analysis of the port's role in our state would not be complete without paying significant attention to the air pollution, health impacts and environmental injustices created by port operations.

Emissions from diesel trucks, fossil fueled ships, and cargo handling equipment can cause respiratory and cardiovascular diseases, such as asthma onset in children and adults, asthma attacks, heart attacks, strokes, cancer, and premature death. These risks are not borne equally. Portside communities, typically low-income communities and communities of color, bear an inequitable burden from pollution from freight transportation. Given that increased risk, I urge the Committee to champion efforts to electrify any and all port operations as quickly as possible.

Examples include ensuring that we meet ZEB standards outlined in the Advanced Clean Fleet and Advanced Clean Truck Regulations, requiring ports to deploy 100% zero emission cargo handling equipment by 2030 and continuing to provide targeted zero emission vehicle incentives. I know my colleagues here have many other recommendations to offer as well. Additionally, it is critical that the Committee increase its efforts to bring community voices to the table. Port communities subsidize the cost of cheap products on our shelves with their own health and well being.

It is only fair and appropriate that community Members highlight the problems associated with ports and craft solutions in the upcoming port tours, as well as the white paper the Committee plans on producing. It also means making these types of meetings Zoom accessible for people who can't attend the hearings in person. Involving community Members and continuing to advance zero emission policies will result in public health benefits, lives saved, reductions in cancer risk, and a lower burden of asthma, particularly in some of California's most overburdened communities. Thank you for your time.

Thank you for your testimony.

Good afternoon, Chair and Members of the Committee. My name is Gabielle Vera and I'm with Pacific Environment, a global 501c public benefit corporation headquartered here in San Francisco that has earned permanent consultative status at the International Maritime Organization. We work to rapidly eliminate emissions from ports and ships on a 1.5 degrees Celsius timeline. Pacific Environment urges the Committee to consider the public health and climate harms from shipping and port operations. Port operations and shipping are major contributors to climate and air emissions.

The shipping industry spews 1 billion metric tons of carbon dioxide into our atmosphere each year. Yet the UN Intergovernmental Panel on Climate Change has made it clear. Climate emissions must peak before 2025 and be halved by 2030 from 2019 levels to stay on a 1.5 degrees Celsius warming trajectory and avert the worst effects of climate change. In terms of public health impacts, ship pollution contributes an estimated 3700 premature deaths each year in California, which disproportionately affects marginalized communities.

In West Oakland, ships maneuvering and birthing are the top two cancer-causing sources in the community. To protect public health and address the climate emergency, we urge the Committee to support a standard for 100% zero emission shipping by 2040.

Additionally, we encourage you to consider requirements in the white paper for the deployment of zero emission infrastructure, with planning completed by 2025, stronger commitments to deploying zero emission technology across port operations, robust data collection and reporting to ensure that ports are on a path to zero emission and cleaner air, the prioritization of public health in port clean air plans, and shore power for all categories of vessels, as well as offshore charging stations for ships. Thank you for your time.

Thank you for your testimony.

Hello, Chair and Committee. My name is Francis, I'm an associate for Better World Group and partnered with Pacific Environment, the organization you just spoke before. I'm here to urge the Commission to ensure that we are really thinking about cleaning up our ports and making sure that we are emphasizing that ship pollution is literally killing communities at port-side communities. In Oakland itself, the port is responsible for being the top two cancer-causing resource.

So we are here urging you all, especially in these Committee meetings, in your white papers, to be thinking about environmental justice, communities, climate change, and public health. In order to do that, this body needs to do better. The public engagement process of these meetings themselves have been incredibly terrible. We found out this week that the meeting is not going to be held in Oakland, but at the Ferry Building in San Francisco. There's still no opportunity to engage virtually except for watching.

And then of course, the agenda still has not been posted online. This kind of public engagement is what prohibits communities from being able to meaningfully engage in the decision-making process of how their communities will endure the future. When we talk about ports in specific, this is unimaginably different because of the health impacts that ports have. Right now, there is still no environmental justice, health advocate, or climate advocate perspective That's being given the same amount of time and respect that these panelists have had.

These voices are very important to this process, and the fact that they're still not here means that this body is failing to actually advocate and protect their constituencies. Chair Gibson, I know you represent port communities. It's the same way over there. And so, to conclude, we're asking for clearing ports, we're asking for clean ships, and we're asking for the due diligence of giving communities and advocates the perspectives that they deserve in this meaningful conversation. Thank you.

Thank you very much for your testimony.

Good afternoon. My name is Fern Uennatornwaranggoon. I'm a resident of Oakland and have been for almost 10 years now. My husband and teenage son have lived in Oakland all their lives, and we feel very blessed to call California our home. I also work as a policy advocate at the Environmental Defense Fund, which is a nonprofit organization. And as part of my job, I'm lucky to get to work with community leaders in port-side communities, including West Oakland.

And I'm also a steering committee member of the West Oakland Community Air Protection Program or the AB 617 community program. As part of that program, the local air district conducted a technical assessment to understand the main sources of pollution affecting West Oakland. And they found that the Port of Oakland is by far the largest contributor, accounting for more than 50% of local diesel particulate matters, pollution, and cancer-related toxics.

And in addition to that, trucks on the highways closest to the community, on local streets, and pollution from rails account for another 20% of the same pollutants. This is not to say that the Port of Oakland hasn't taken steps to clean up its operations. I'm looking at Danny because credit where credits do. They really have?. And port emissions have certainly declined.

However, residents of West Oakland still experience double the rate of asthma from traffic-related pollution and specifically diesel related pollution compared to other parts of Oakland that are not as close to goods movement activities. And yes, ports are a multi-billion dollar economic engine for California and an important source of livelihoods for so many, and I really hear that. Ports and freight industry are critical for the supply chain, not only for the state, but for the nation. We've heard that.

But the operations of this industry and its continuing growth does come at a cost to the surrounding communities who haven't had a seat at the table at these hearings. So any actions taken by this community, please need to prioritize the concerns of the communities most impacted by port and freight pollution. And zero trucks may not have tailpipe emissions, but they still have pollution impacts from tires that create dust and brake wears, and also with hydrogen fuels.

If the stock feed has to come from somewhere else, they have to be trucked in, so that's more trucks in the communities. So, I really urge you that as you continue your listening tour, to please make sure to meet and consult with communities to make sure that they can express what investments needs they have. Thank you.

Thank you very much for your testimony.

Good morning, Chair and Legislators. My name is Gloria Lonzo. I am representing Little Manila Rising, a community based organization in South Stockton, and I also sit in the steering committee for the AB 617 Stockton Community Program. South Stockton is a northern Central Valley community host to the inland port of Stockton.

Stockton is impacted by multiple sources of pollution due to a long legacy of discriminatory planning policies that have pushed industrial activity to the southern portion of the city, such as the most recent boom in warehousing projects. Layering these environmental conditions, the San Joaquin Air Pollution Control Board has not met their ozone and particulate matter standards since the late 1970s, meaning that we are way behind operating our infrastructure by not meeting the Clean Air Act requirements.

As the environmental justice discourse continues to evolve and government funding continues to be allocated to disadvantaged communities, such as through the AB 617 program to mitigate emissions, it only makes sense that legislative discussions make space for frontline communities to speak on their concerns and what they would like to see in regards to the impacts from these issues such as maritime logistics.

Particularly because this conversation is traditionally focused on economic feasibility, with zero consideration about public health costs from asthma exacerbations or hospitalizations caused by long term exposure to air pollution. This conversation today is an example of how the state disregards meaningful participation from environmental justice advocates. For a long time, South Stockton has been subject to the environmental degradation and hazards resulting from multiple jurisdictions environmental--sorry, industrial ambitions.

With the Port of Stockton being an influential agency locally, these industrial ambitions have shaped our environment without consideration about long-term air pollution exposure to poor adjacent communities. Although in Stockton we commonly recognize mobile sources, such as heavy duty trucks, as the main polluters, ocean-going vessels are also a leading source of pollution.

According to the 2020 Port of Stockton Clean Air Plan, ocean-going vessels are the biggest source of air pollution at the Port of Stockton, making up 60% of nitrogen oxides emissions, 60% of particulate motor emissions, and 49% of greenhouse gas emissions. As legislators, you should do better. You should do everything in your power to protect the public from harmful air pollution by supporting state and local efforts to support a swift transition to zero emission shipping and port operations. Part of that means supporting local efforts. Thank you. There's no one behind me.

Thank you very much. We want to be fair with the time. There's a lot to everyone. We want to thank everyone for your comments. And again, I just want to reiterate that, if in fact, you wish to submit any additional testimony, we'll be more than happy to take that additional testimony into consideration as part of the discussion for today. In addition to that, I want to call to your attention well, let me just talk about this one thing. I want to thank those of you who provided testimonies.

I want to thank the panel for taking time out of your busy schedule and being part of this. This type of conversation that includes many diverse perspectives is the way we expand our understanding of other things that we need to take in consideration when, one, putting the white paper together, but also taking everyone's consideration and their concerns in as part of this discussion today. I want to thank again, Speaker Robert Rivas, for approving this Committee to move forward.

My colleagues who are here and was here for giving of their time being part of this robust discussion. As again, we have a number of tours that are already scheduled and we invite even the public to join us on this tour right after the conclusion of this meeting. Our next tour will take place January the twelve. That will be the Port of Redwood City. On January 19, the Port of Humboldt. February 9, the Port of San Diego is tentative.

We have February 28, the Port of Richmond. We have March 13, the Port of West Sacramento, Port of Stockton and also, March 29, the Port of Humboldt. That's also tentative. I'm sorry. Hueneme is the January the 19th is the Port of Hueneme.

And so again, we ask you to join us so that we can see and touch and feel firsthand. And comments were made, and we certainly mindful taking those comments into consideration, and we also believe that the CARB is watching and viewing who takes the community's input. They're the ones who's implementing these policies. And so we do have people weighing in on this conversation. We're not closed-minded by not having people weighing in.

We have public comments for people to weigh in in this very robust conversation. So we're not closed minded as it relates to that. We want to take all perspectives into consideration as we move forward. Again, I want to thank each and every one of you.

I want to thank my team for help in working and traveling from Sacramento here to join us in putting all of this information together so we could have before us. I want to turn to my team and see whether or not there's anything that I am leaving out. Okay, final comments. We'll ask Papan for any final comments or closing remarks. Thank you very much. So this concludes our hearing.

We'll invite all of you to come and join us as we tour the Port of San Francisco and we'll wait for further instructions. How is that going to be done?

I know it's scheduled for two.

It's scheduled for 2:00. We are a little ahead of time, so we're still meeting that 02:00 timeline. And if there's nothing else, this Committee, Select Committee on Ports and Goods Movement is...Yes? Great. Thank you very much for that. Yes? Okay.

Leaving at 02:00, so we should get there before 02:00. Great. 1:55. Again, I want to thank the Port of San Francisco for hosting us and their team for doing a magnificent job to the Commission. Thank you very much. We appreciate each and every one of you and this Select Committee on Ports and Goods Movement. Stand adjourned. Thank you very much.