TRAVERSE CITY, Mich. (AP) -- The nation's last operating coal-fired ferryboat would stop dumping waste ash into Lake Michigan within two years under a deal with federal regulators announced Friday.
The agreement between Lake Michigan Carferry, which operates the S.S. Badger, and the U.S. Environmental Protection Agency would require the ship to retain its coal ash during trips across the lake and dispose of it on land. The 410-foot Badger hauls passengers, vehicles and cargo between its home port of Ludington, Mich., and Manitowoc, Wis., from May to October. Currently, ash from its boilers is mixed with water and piped overboard. More than 500 tons of ash is released during a typical season.
The EPA ordered the Badger to stop the practice in 2008 and granted a four-year grace period, which expired in December — raising the possibility that the historic vessel would be unable to continue sailing.
The company had applied for a permit to continue dumping the ash while researching how to retrofit the ship to operate on liquefied natural gas. Under a proposed consent decree filed in U.S. District Court in Grand Rapids, the company would scrap that option in favor of onboard storage.
Disposal into the lake would be reduced over the next two years and stop altogether by the end of the 2014 sailing season.
After a 30-day public comment period, a judge will decide whether to approve the deal, which also would require the company to pay a $25,000 civil penalty for exceeding mercury pollution standards last year. Coal ash contains low concentrations of arsenic, mercury and other heavy metals, although it's not classified as hazardous. The company denied violating federal or state mercury regulations.
"This consent decree offers the fastest and most certain path available to EPA to stop the discharge of coal ash from the Badger into Lake Michigan," said Susan Hedman, EPA regional administrator.
Bob Manglitz, president and CEO of Lake Michigan Carferry, said the agreement would keep the Badger afloat and save the jobs of more than 200 employees.
"The resolution of this issue has taken far longer than we had hoped, but the end result has been worth the effort," he said.
The deal would resolve a lengthy dispute between regulators and the company that has drawn interest from state legislators, members of Congress, environmental advocates, maritime history buffs and even a rival ferry service. Hedman said the EPA's Chicago office has received more letters and calls about the Badger — about 6,000 — than any other issue during her three years in charge there.
Launched six decades ago to haul rail cars across the Great Lakes, the Badger was spared from the scrapyard in the late 1980s when an entrepreneur bought and refurbished it as a passenger vessel. It offers a four-hour cruise across 60 miles of open water, an alternative to driving between Michigan and Wisconsin by way of crowded Chicago.
The ship is a cultural icon in Ludington, the last remnant of a once-thriving carferry fleet. Local officials say it's a pillar of the shoreline community's tourist industry, drawing customers to restaurants, motels and gift shops.
But the EPA, under a court order to regulate discharges from ships, told the company it would have to find an alternative to depositing its ash in the lake. As the deadline approached, supporters pressure the agency for more time while critics said the ship's operators had been given plenty of time to meet the same requirements imposed on other vessels.
Rep. Bill Huizenga, a Michigan Republican who represents Ludington, sponsored an amendment last year that would have given the Badger a permanent exemption. Sen. Richard Durbin of Illinois, the Senate's second-ranking Democrat, denounced the proposal. Other members of Congress took opposing sides.
Huizenga and Wisconsin Gov. Scott Walker were among elected officials praising the agreement Friday.
"Too often local businesses are forced to close their doors due to Washington's heavy-handed regulatory bureaucracy," Huizenga said. "I applaud Lake Michigan Carferry for successfully navigating the bureaucratic fog and overcoming the unprecedented regulatory hurdles placed before them."
Environmental groups said the EPA should have ordered the company to stop its coal ash dumping immediately.
"Why wait two years to do the right thing when we can start today?" said Melissa Damaschke, the Great Lakes program director with Sierra Club. "It's far past time for the S.S. Badger to begin to utilize cleaner alternatives for healthier residents and a cleaner environment."
Durbin also criticized the deal.
"The S.S. Badger, the filthiest ship on the Great Lakes, has been given two more years to dump hundreds of tons of dangerous coal ash into Lake Michigan," Durbin said in a statement. "The millions of people who live, work and play in and around this beautiful Lake should be outraged that this filthy ship will continue to operate."
Hedman said if the EPA had denied Lake Michigan Carferry's permit application instead of negotiating the deal, the company could have filed appeals that would take years to resolve. The consent decree is the quickest route to a solution and would be enforced by the courts, she said.
The company said it would need two years to design and install a "sophisticated ash retention system" for the ship. It said after the ash is brought to shore, it will be "disposed of or recycled in an approved manner."