Agreement Reached With TOTE on EPA Fuel Standards

The federal government has reached agreement with one of Alaska's largest shipping companies, providing a conditional waiver for new fuel standards while Totem Ocean Trailer Express converts its ships to cleaner-burning fuel.

The announcement comes two days after rules took effect requiring cargo carriers and cruise ships use a low-sulfur fuel within 200 miles of U.S. and Canadian shores. Alaska has sued, saying the rules will result in higher freight rates and pricier cruises that will hurt the state's economy.

The U.S. Environmental Protection Agency, which is working with the U.S. Coast Guard, had said the agencies were aware of Alaska's concerns and had some flexibility in implementing the rules.

EPA says once the conversion is complete, in 2016, Totem's vessels will achieve significantly higher emission reductions than required.