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 â¿¿ about 6,000 â¿¿ 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.

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