It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Friday, April 21, 2023
EU Looks To Toughen Methane Emissions Rules For Fossil Fuel Producers
The industry and environment committees at the European Parliament are set to approve next week proposed legislation to set a methane-reduction target by 2030, including for the oil and gas producers who could face penalties or bans from markets if they fail to repair gas leaks or monitor emissions.
The committees are expected to vote on the methane-emission targets on April 26 and are set to approve the strict rules, according to the agreement seen by Bloomberg.
After the vote at the committees, the European Parliament will then vote on the agreement before moving to discuss it and its implementation with the EU member states. The EU member states have already watered down an original proposal from the European Commission.
Last month, the European Commissioner for Energy, Kadri Simson, warned the EU that the union risked lagging behind in climate goals if it continues to fail to adopt tough regulations on the emissions of methane, a more powerful greenhouse gas than CO2.
Last year, the EU reached an agreement on a proposal to track and reduce methane emissions in the energy sector. The text was the first of its kind and a crucial contribution to climate action, the Council of the EU said in December. The proposal introduces new requirements for the oil, gas, and coal sectors to measure, report and verify methane emissions (MRV) at the highest standard. Operators will need to carefully document all wells and mines, trace their emissions and take appropriate mitigation measures to prevent and minimize methane emissions in their operations, according to the proposal. In the oil and gas sector, operators will have to measure and draw reports on methane emissions that will be checked by independent accredited verifiers.
“This regulation will help us understand where methane emissions come from and address them effectively. This will help us meet our commitments under the Global Methane Pledge to cut methane emissions by 30% by 2030,” Jozef Sikela, Czech minister of industry and trade, said in December.
By Tsvetana Paraskova for Oilprice.com
Another Strike Could Result In UK Oil, Gas Shutdowns
The United Kingdom’s oil and gas industry is bracing for another strike, after the British labor union Union announced that more than a thousand offshore workers would begin a 2-day strike starting on Monday.
The 1,300 offshore workers that are set to walk off the job for 48 hours starting on Monday could disrupt oil and gas production for BP, CNRI, EnQuest, Harbour, Ithaca, Shell, TAQA, and TotalEnergies.
The UK’s Unite Union called the strike, set to go into effect on Monday, earlier last month over pay issues.
The prospective action includes electrical, production, and mechanical technicians in addition to deck crew, scaffolders crane operators, pipefitters, platers, and riggers working for Bilfinger UK Limited, Stork construction, Petrofac Facilities Management, the Wood Group UK Limited, and Sparrows Offshore Services, according to the union. Offshore workers at those five companies have overwhelmingly voted in recent days to begin strike action as they demand a better deal on jobs, pay, and conditions.
“1400 offshore workers are now set to take strike action against these employers who are raking it but refusing to give them a fair share of the pie. This will create a tsunami of industrial unrest in the offshore sector,” Unite general secretary Sharon Graham said in March, arguing that oil and gas companies have profited handsomely over the last year and referring to drilling concessions as “effectively licences to print money.”
Monday’s strike will be the second in a series of planned strikes that began March 29 and will run until June 7, the Unite union announced at the onset of the first strike in the series.
France has recently been subjected to some striking action as well, as unions there mobilized French refinery workers last month. Those strikes blocked refined product shipments from the Donges and La Mede refineries and reduced output at the Normandy and Feyzin refineries.
By Julianne Geiger for Oilprice.com
Shipping Companies Boost Cooperation With California Slowdown Program
Shipping companies showed an increased commitment to protecting whales off the coast of California last year, according to NOAA's Blue Whales and Blue Skies program - even during a booming container freight market, when operators had strong incentives to speed up.
The initiative asks participating vessel operators to transit at 10 knots or less near the state's busiest seaports from mid-May to mid-December, when whale activity and air pollution concerns are at their seasonal peaks. Traveling this speed reduces the risk of a fatal whale strike by an estimated 44 percent, and it cuts stack emissions in areas with longstanding air quality challenges.
According to the program, participating ships transiting the Southern California voluntary speed reduction zone - a stretch of about 200 nautical miles between San Miguel Island and LA/Long Beach - chose to operate at the requested speed limit of 10 knots or less for 79 percent of all miles traveled last year. The organizers report that adherence has risen every season, and has come a long way since the 21 percent compliance recorded in this region in 2017.
Cooperation also rose markedly last year off San Francisco, where the initiative has designated a set of corridors covering the traffic separation scheme (TSS) and extending north as far as Point Arena. In 2022, participating shipping companies stayed below 10 knots in this area about 72 percent of the time, up from 60 percent in 2021.
Eight participating companies achieved 85 percent compliance or better, the top-tier category. This is the largest number ever. These leaders included OOCL (with 95 percent adherence), MSC, Swire, Yang Ming, COSCO, NYK Ro-Ro, Wallenius Wilhelmsen and CSL.
Overall, participating ships complied on nearly 260,000 out of 344,000 nm transited during the year (approximately 75 percent). This resulted in the elimination of about 920 tons of NOx and 32,000 tonnes of GHG emissions when compared with baseline operations - a 27 percent improvement on vessel climate performance relative to baseline.
The program is not the only voluntary speed cut initiative in California. A longstanding MOU between the Ports of LA and Long Beach and the shipping community requests operators to reduce speed to 12 knots within 20-40 nm of the port. Port of LA reports exceptionally high compliance with this voluntary measure, above 90 percent.
The Center for Biological Diversity has petitioned NOAA to make the vessel speed reductions mandatory on all transit miles in the covered areas, year-round. Noncooperating operators would also be required to participate for the first time, resulting in additional reductions in whale strike risk and emissions. NOAA declined the Center's petition in 2022, citing increasing compliance with the voluntary program, as well as surveys that show West Coast whale populations recovering despite the impact of ship strikes.
Belfast’s Famed Harland & Wolff Delivers First Newbuild in 20 Years
The barge for use on the Thames is the first newbuild from Harland & Wolff in 20 years (Cory)
Harland & Wolff, one of the most storied names in the history of shipbuilding, delivered its first newbuild in 20 years as the company continues its efforts to rebuild its operations and create a new role in the defense and renewable energy sectors. The Belfast shipyard, which had sat dormant for years, was acquired in 2019 and since then the company has added three other facilities including another well-known shipyard Appledore to the operation.
Once the builder of some of the world’s most famous ships, including the ill-fated Titanic, Harland & Wolff, the current project is small in scale but was an important step in the recommissioning of the facilities and beginning to train the new workforce. The last ship delivered from Belfast was the Anvil Point completed in 2003 as part of a public-private partnership that saw six ro-ros built for commercial service but to be available as auxiliary support to the Royal Navy in time of need. Two of the vessels, each of which was 14,200 dwt, were built in Belfast with the other four in Germany.
The current contract is with Cory Group, a waste management and recycling company that operates tugs and barges on the Thames. The shipyard is building a total of 23 barges as part of Cory’s expansion. The first of the barges was launched from Harland & Wolff’s Belfast shipyard and taken by sea to Cory’s lighterage site on the banks of the River Thames. It will join Cory’s existing fleet of tugs and barges, and will be used to transport recyclable and non-recyclable waste.
Cory placed an initial order of 12 barges with Harland & Wolff in June 2022 and later extended the contract by a further 11 barges. The total value of the contract is £18.1 million ($22.5 million). The company is developing the Riverside 2 Energy from Waste (EfW) facility due to be operational by 2026 expanding its existing operations.
“We are at an exciting period of growth, as construction of our new facility is now underway. As well as investing in developing this vital piece of UK infrastructure, we want to ensure that our supply chain supports UK industries such as shipbuilding so Harland & Wolff was a natural partner for us,” said Fran Comerford-Cole, Director of Logistics at Cory. “We are delighted to have received this first barge, which will be deployed into our fleet on the Thames in the coming weeks.”
Executives at Harland & Wolff pointed out the role this contact plays in their effort to expand the capabilities of the shipyard. They have recommissioned the fabrication hall and purchased new equipment.
“It’s great to see the first vessel built in the yard since we acquired the yard in December 2019 completed and delivered. This is the first of 23 barges to be successfully delivered and we look forward to continuing to work with Cory across both Belfast and Methil,” said John Wood, CEO of Harland & Wolff. “This contract is enabling us to build up the necessary workforce and skills we will require when we start to deliver on the three Fleet Solid Support (FSS) Warship contract, with high-quality local employment and apprenticeships.”
The company’s Belfast yard is one of Europe’s largest heavy engineering facilities, with deep water access, two of Europe’s largest drydocks, and fabrication halls. The company also acquired what is now Harland & Wolff (Appledore) in August 2020, and expects to also use that yard for future opportunities in shipbuilding and repair.
Work on the barges is the first step toward the full restoration of large-scale shipbuilding in Belfast and Appledore. Late last year Harland & Wolff was part of a consortium with Navantia UK that won a government contract that includes building three naval support ships. The full contract runs for seven years and is valued at approximately $1.9 billion. Harland & Wolff expects to be responsible for delivery work worth between approximately $850 and $960 million.
The company further expanded its capabilities by acquiring in February 2021 the assets of two Scottish-based yards along the east and west coasts. Now known as Harland & Wolff (Methil) and Harland & Wolff (Arnish), these facilities will focus on fabrication work within the renewable, energy, and defense sectors.
B.C. Underwrites Shore Power Project for Victoria Cruise Terminal
File image courtesy Greater Victoria Harbour Authority
A busy 2023 cruise tourism season has prompted the British Columbia government to invest $6.6 million in power supply infrastructure to enable cruise ships' access electrical power while docked at the Victoria cruise terminal.
Onshore power supply infrastructure will be installed at Victoria's Ogden Point, which is currently the busiest cruise ship port-of-call in Canada. The shore power will enable the high number of cruise ships expected to dock at the terminal in the 2023 season to plug into the local electricity grid while at berth. The plug-in facilities will be installed at two berths, allowing multiple ships to draw electricity at the port, significantly reducing greenhouse gas (GHG) emissions and noise pollution in the region.
This year, the Greater Victoria Harbour Authority (GVHA) estimates 320 cruise ships and approximately 850,000 passengers will dock at the Victoria terminal over the seven-month season between April and October. The first cruise ship of the 2023 season is scheduled to dock in Victoria on April 11.
In Canada, the cruise ship industry represents about $3 billion worth of annual input into the country’s economy and generates approximately 30,000 jobs. The B.C government believes that ensuring sustainability by reducing emissions from this commercially-important activity is critical.
“People want solutions to environmental concerns while also growing our economy. Adding shore power will allow us to turn off large cruise ship engines by connecting vessels to clean electricity at Ogden Point. This will lower GHG emissions, reduce air pollution and create well-paying jobs that support sustainable tourism,” said Rob Fleming, Minister of Transportation and Infrastructure.
The funding will enable GVHA, which owns and operates deep water, marina and upland holdings throughout Victoria's harbor including the port at The Breakwater District, to plan and implement the shore power project at Ogden Point thus enhancing its status as a world-class destination for cruise ships and passengers.
85 percent of Cruise Lines International Association (CLIA)-member cruise ships that are set for delivery over the next four years have the capabilities to plug into shoreside electricity, thus allowing engines to switch off at berth for significant emissions reduction. CLIA has identified shore power as one of the pathways that will enable the cruise industry to achieve net-zero ambitions by 2050.
Victoria will join other Pacific Coast cruise ship ports like Seattle, Vancouver and Juneau, which were among the world’s first major ports of call to offer shore power plug-in options.
Report: Pentagon Has Concerns About Offshore Wind off Mid-Atlantic
The U.S. Navy and U.S. Air Force have serious misgivings about the potential siting of offshore wind farms along the mid-Atlantic coastline, according to new reports.
Fox and Bloomberg have both confirmed that the Pentagon believes that several proposed wind lease areas off the mid-Atlantic coast would interfere with essential military activities, with negative repercussions for national security. A chart showing the areas in conflict has reportedly circled among wind industry executives for months, and shows that DoD believes that four out of six call areas are "highly problematic" for key operations - in particular, flight training.
"The initial assessment performed by DoD found complicated compatibility challenges with wind turbines near Navy and Air Force training," a Pentagon spokesperson told Fox. "The DoD continues to work with the Bureau of Ocean Energy Management, industry, and other stakeholders to identify the best locations for development."
Draft Wind Energy Areas, orange and blue; call areas outlined in red (BOEM)
Out of the six original call areas for the mid-Atlantic, BOEM has propose eight draft Wind Energy Areas for leasing off North Carolina, Virginia, Maryland and Delaware. Taken together, they cover about 1.7 million acres of federal waters, though BOEM says that they could be further reduced after consultations with stakeholders. If auctioned and developed, they would result in massive new infrastructure installations next to some of the largest military bases in the world, including Naval Station Norfolk, Naval Weapons Station Yorktown and Oceana Naval Air Station.
In a statement to reNews, BOEM emphasized that it has a longstanding working relationship with the Pentagon, and that "together we have successfully deconflicted and identified areas that have resulted in 27 leases" to date. This includes the finalized lease areas off California, which were contested by the U.S. Navy for years. BOEM expressed confidence that this collaboration would continue for the proposed sites off the mid-Atlantic coast.
“BOEM is in the process of analyzing and incorporating DoD’s compatibility assessment into the spatial model being used to inform identification of final Wind Energy Areas in the Central Atlantic," the agency said.
The proposed lease areas are part of the Biden administration's ambitious plan to support installation of 30 GW of offshore wind in federal waters by 2030.
Friday marks the thirteenth anniversary of the blowout at BP's Macondo oil well off Louisiana, which killed 11 workers aboard the drilling rig Deepwater Horizon. Over the 87 days that followed, the ruptured well spilled an estimated 210 million gallons of crude oil into the Gulf of Mexico, making it the largest maritime spill in history. Oil slicks from the blowout spread to cover nearly 60,000 square miles of ocean, and crude washed up along an estimated 4,500 miles of shoreline.
To contain the damage, BP hired thousands of fishermen and local residents to help with skimming and shoreline cleanup, and federal response officials approved the use of at least 1.8 million gallons of dispersant to break up slicks. Despite these efforts, the economic toll was substantial. The Gulf fishing industry lost an estimated $1 billion in revenue, and BP's total costs for criminal fines, civil penalties and cleanup came to about $65 billion, including more than $16 billion for ecosystem restoration.
This year, the anniversary of the spill coincides with a new boom in offshore oil and gas - primarily overseas, in the Middle East and South America, but also in the Gulf of Mexico. Last month, the Biden administration auctioned off lease rights to 73 million acres of the continental shelf and secured winning bids for 1.6 million acres, bringing in $260 million in revenue and demonstrating the continued strength of industry interest in the region.
BP also marked a milestone in its return to the Gulf this month with the startup of its first new operated offshore platform since the spill. The BP Argos platform will be able to handle up to 140,000 barrels of oil a day, increasing BP's operated production capacity in the Gulf of Mexico by 20 percent. "Argos is key to our strategy of increasing our Gulf of Mexico production to around 400,000 barrels of oil equivalent per day by the middle of this decade," said Ewan Drummond, BP SVP of projects, production and operations, in a statement last week.
BP's new Argos production platform (BP)
While the offshore industry has recovered, the impact and controversy surrounding the spill have not yet fully disappeared. Cleanup workers who claim that chemical and oil exposures damaged their health are still trying to pursue compensation from BP in the courts. Rig safety has been considerably improved through multiple changes in oversight, response equipment and standards, but a court-appointed monitoring panel led by the National Academies of Science cautions that progress on safety management is not uniform across the sector - warning that "a visible, industrywide, industry-led commitment to a culture that supports safety is still lacking."
The environmental legacy also continues: Some researchers believe that the environmental impact on Louisiana's coastal wetlands may be persistent. A long-term study published in the journal Environmental Pollution this month found that oil contamination persisted for at least eight years in the soil beneath marsh grasses; as recently as 2018, areas oiled by the 2010 spill appeared to have less root mass and reduced soil strength, potentially accelerating the region's problems with coastal erosion.
This week, evironmental group Oceana called for the White House to halt offshore E&P in federal waters, citing climate risks, the potential for another spill, and President Joe Biden's campaign pledge to block offshore drilling. "It’s not a matter of if there will be another spill, but when. And those spills bring immediate economic and environmental devastation to our coastal communities," warned Diane Hoskins, the campaign director at Oceana.
Wood Mac: Energy Industry Will Focus on Offshore Projects in 2023
Wood Mac is expecting a relatively conservative offshore oil and gas investment environment this year - but it believes that offshore projects will be a bigger part of the picture.
"We believe we will see a slight uptick in activity this year, with over 30 of the 40 most viable projects likely to reach this milestone," said Wood Mac VP of Upstream Analysis Fraser McKay. "International oil companies (IOCs) will be focusing largely on higher-cost but higher-return deepwater developments."
According to the forecast, offshore projects (including shelf and deepwater) make up the overwhelming majority of the project reserves best placed to achieve final investment decision this year. Conventional shelf prospects account for a bit more than a quarter of the total, and deepwater options make up about a third (by BOE). By region, the national oil company projects in the Middle East dominate by BOE capacity, accounting for about half of the total. Latin America - where Exxon and Petrobras have massive E&P plans - comes in at second place.
The reason for a new emphasis on offshore becomes clear when looking at profit margins and time to payback. The average Brent price breakeven across all onshore and offshore prospects on the list comes to about $50 - but virtually all of the deepwater options are below the average, including some smaller developments that would make money with $30 oil. These projects also have below-average emissions intensity from production - a highly desirable feature in the event of a carbon tax. Under a hypothetical carbon tax scenario of $100 per tonne, deepwater oil projects would be "robust" survivors when it comes to continued profitability.
The findings broadly align with recent predictions from Rystad Energy. The consultancy recently forecast a boom in offshore oil and gas investment, equaling about $100 billion per year across the next two years. This is twice the expected investment in offshore wind, and 50 percent more than capex on onshore oil and gas projects.
Contract Awards for Vast EU Offshore Power Grid Reach $33 Billion
TenneT and representatives from seven contractors announce the last $8 billion worth of awards for the project (TenneT)
Transmission grid operator TenneT has completed the largest contract tender ever awarded in Europe for green transition infrastructure. Adding to an initial round announced in March, TenneT today signed deals with seven different industrial suppliers to build out the offshore wind power transmission system for the German and Dutch North Sea. The contract signing brings the total for all project awards to $33 billion.
“As the leading offshore transmission system operator in the EU, we have the know-how needed to make Europe’s goal of securing an independent supply of renewable energies a reality. To achieve this, the North Sea must be developed as Europe’s green power house and quickly connected to the electricity grids on land," said Tim Meyerjürgens, COO of TenneT.
TenneT needs to build out enough transmission capacity to handle 40 GW of wind power in Dutch and German waters, which will enable two-thirds of the 65 GW offshore wind energy target set by Germany, the Netherlands, Denmark, and Belgium. The scope of the overall project requires construction of 14 different power converter and transmission systems, and TenneT is bringing in most of the world's major offshore contractors in order to complete the work. (Chinese contractors were excluded from the Dutch segment of the project on security grounds, according th Upstream.)
In March, TenneT awarded an initial package of contracts to three consortia: Hitachi Energy/Petrofac, with six projects; GE/Sembcorp, with three projects; and GE/McDermott/Sembmarine, with two projects. The total came to $25 billion worth of industrial activity.
On Thursday, TenneT awarded an additional $8 billion worth of work for the last three systems to Hitachi Energy/Petrofac, GE/Sembcorp, GE/McDermott and Siemens Energy/Dragados. The core components of TenneT's proprietary 2GW power transmission system will be built in Europe.
The scope for each project includes offshore and onshore converter stations, along with TenneT's next-gen HVDC technology. The suppliers will start the preparatory work for the projects immediately to make sure that the system can be finished by 2031.
"Shorter contracting processes, large-scale tenders and standardization of solutions show how grid operators and manufacturers are already pulling together to get green energy to consumers faster," said Tim Holt, member of the Siemens Energy Executive Board. "However, in order for the industry to continue ramping up capacity, all available levers must now be pulled at the policy level as well – from raw material and skilled labor strategies to further streamlining permitting processes at all levels.”
Report: Russia is Studying Europe's Subsea Cables With Covert Fleet
In a pattern echoing back to the Cold War, Russia has deployed a covert fleet of trawlers and research ships to identify vulnerabilities in the subsea cable network off the coasts of NATO nations, according to a new joint report by public broadcasters in Denmark, Norway, Finland and Sweden.
In a new in-depth documentary dubbed "The Shadow War," these four outlets detail a large-scale subsea surveillance operation targeting key communications and electrical transmission infrastructure in the Baltic, the North Sea and the Norwegian Sea. The BBC separately confirms that Russia has a similar program in place for surveilling British waters, as widely suspected.
The first episode follows the oceanographic research vessel Admiral Vladimirsky, a civilian government-owned ship with dual-purpose capabilities. With help from a former Royal Navy expert, the reporting team tracked the Vladimirsky on a tour of about 11 different wind farms in the Baltic and the North Sea, the majority in UK waters. When Danish reporters approached the Vladimirsky in a small launch, they were greeted not by a deck officer, but by an armed guard with body armor and a rifle - a greeting more appropriate to the coast of Somalia than the uneventful waters of the Skaggerak.
If the Vladimirsky's mission is as described, the subsea mapping of power transmission infrastructure near windfarms could be used in a potential conflict to disrupt the European electrical grid.
"This is a strategic capacity for Russia, which is considered very important and is controlled directly from Moscow," said Nils Andreas Stensønes, head of the Norwegian Intelligence Service, speaking to reporters with the project.
In a possible preview of these gray-zone tactics, communications cables to and from the Norwegian island of Svalbard were cut in April 2021 - and the interruption coincided with a Russian trawler crossing and recrossing the cable route. "Of course, Russia denies any responsibility for the cable disruption, but it matches up in time, location and capacity," said Karen-Anna Eggen, a fellow of the Norwegian Institute for Defence Studies, speaking to EuroNews.
Linkages between civilian ships and state business are far from unusual. The white hulls of the U.S. National Oceanographic and Atmospheric Administration are crewed by commissioned officers with security clearances, and American universities' T-AGOR academic research vessels are owned and maintained by the U.S. Navy. In a more formal example, China operates a fleet of "maritime militia" fishing vessels whose crewmembers are enrolled militia members with military training and armament. Though Beijing denies that they have any role beyond fishing, these well-maintained trawlers spend weeks or months near politically sensitive locations, without generating commercial revenue to support their operations.
Russia also has a long history of operating "civilian" covert ships. During the Cold War, Soviet trawlers with altered superstructures and large antennas were a common sight near U.S. Navy training exercises and naval operations. In the mid-1960s, they became so common that the U.S. came up with a catch-all descriptor and named them "Auxiliary General Intelligence" vessels (AGIs).
Supreme Court Ends Famed Commission Fighting NY/NJ Port Corruption
New Jersey argues 90 percent of cargo volumes moves through its side of the harbor today (file photo)
The Supreme Court of the United States released its opinion today that clears the way for the end of the Waterfront Commission of New York Harbor which has overseen port operations and fought corruption since the 1950s. At issue was New Jersey’s decision to unilaterally withdraw from the commission despite the consistent opposition from its partner on the commission New York State. The decision is seen as a victory for the unions which argued the commission structure was an impediment to efficient operations.
The dispute between the two states had been ongoing for the past five years since New Jersey lawmakers voted in 2018 to end their participation in the commission. The original compact entered into by the two states in 1953 to form the commission did not address each state’s power to withdraw from the compact, with New York arguing that it had to be by mutual consent. The case had gone through a series of decisions in the lower courts before the Supreme Court agreed to hear the case as part of the court’s original mandate to resolve disputes between states.
The commission, which was equally managed by the two states, was established in response to the long history of corruption and organized crime in New York Harbor. The problems of the port famously became the backdrop for a 1950s movie “One the Waterfront,” and remained a center of attention.
“As the decades have, passed the circumstances at the port have changed,” says the opinion authored by Justice Brett Kavanaugh and supported in a nine-to-nothing vote by the justices. They highlight that in 1953, roughly 70 percent of waterfront employees worked on the New York side of the port. By 2018, however, it had evolved according to New Jersey that more than 80 percent of work hours occur in New Jersey with 80 percent of the cargo handled by terminals in New Jersey.
New Jersey justified its decision to end the commission saying that it believes the commission was “ill-equipped to handle 21st-century security challenges. They also supported the union's position that the port is over regulated and as such it impedes job growth and efficiency. New York argued that beyond the need to have an agreement to end the commission, the commission continued to play a vital role in the oversight of the operations and helping to keep organized crime out of the port.
In the nine-page opinion, Justice Kavanaugh highlights that both states recognized the fact that the commission was never intended to operate forever. Neither side disputed that during the arguments. The court says the issue comes down to the understanding when the two states entered into the compact and points to the principles of contract law. They believe the absence of specific language in the compact points to a belief that either state may unilaterally withdraw. Contract law the opinion states provided in 1953 and still today that a contract can be terminated at will by either side. The decision further highlights the principles of state sovereignty, which in the opinion of the court also support New Jersey’s position.
The court says that New York’s arguments that the “compact should be read to prohibit unilateral withdrawal are unpersuasive.” New York highlighted other examples of pre-1953 compacts that while also silent on withdrawal were understood to forbid it. Kavanaugh’s opinion says that those cases concerned issues of boundaries and water-rights allocation that are not governed by the default contract-law rule. New York also sought to use international treaty law, past practices in similar compact disputes, and the potential for sweeping consequences to support its arguments.
New York Governor Kathy Hochul and Attorney General Letitia James responded to the court’s decision by saying, “We are disappointed by the Supreme Court's decision to allow New Jersey to unilaterally withdraw from the Waterfront Commission. For decades, the Waterfront Commission has been a vital law enforcement agency, protecting essential industries at the port and cracking down on organized crime. We will continue to do everything in our power to combat corruption and crime, protect the health of our economy, and ensure the safety of New Yorkers.”
New Jersey Governor Phil Murphy in a written statement after the opinion was released says "I am thrilled that the United States Supreme Court has unanimously ruled that New Jersey has the right to withdraw from the Waterfront Commission…. For many years, frustration over the Commission’s operations has been building. I am proud that after a five-year battle in the federal courts, where my Administration used every legal tool at our disposal, New Jersey’s sovereign right to govern our ports has been vindicated.”
New Jersey plans to transition the Waterfront Commission’s law enforcement and regulatory responsibilities to the New Jersey State Police.
