U.S. District Judge Rosemary M. Collyer said she would decide Thursday whether to issue a preliminary injunction that would block the towing of two obsolete ships scheduled to leave Hampton Roads on Friday.

The two World War II-era ships- the Canisteo and Caloosahatchee- are the first of 13 ships in the James River Reserve Fleet that would be towed to England for scrapping under a contract awarded by the U.S. Maritime Administration in July.

At a court hearing today, an attorney for the Sierra Club and Basel Action Network, an international network of environmental activists, told Collyer the towing should be halted until federal officials comply with all environmental regulations.

"These are vessels that are already in decrepit condition," said attorney J. Martin Wagner. "These ships are already beginning to leak toxic materials."

Wagner said MARAD had violated the Toxic Substances Control Act, which generally prohibits the export of toxic PCBs.

The Environmental Protection Agency, in a letter to MARAD last May, granted a waiver to allow the PCB-laden ships to go to England. Wagner challenged the validity of that letter, saying the EPA had not followed a formal rulemaking process required by law.

Collyer questioned whether the EPA could be expected to abide by such a lengthy procedure and meet the timetable set by Congress for removing the ships from the James.

"As a practical matter, isn't it impossible for the agency to accomplish all of this and have the EPA engage in formal rulemaking?" Collyer asked.

Wagner also argued the towing would violate the National Environmental Policy Act, which requires an environmental impact statement for all "major federal actions" that could threaten the environment.

No such study has been conducted for the 13 ships to be towed.

Attorneys for the Department of Justice argued that a study is not required because the towing of the first four ships was authorized by Congress as a pilot program that does not amount to a \'\'major federal action."

Brian C. Toth, a Justice Department attorney, also said that reports submitted to Congress should be considered the equivalent of an environmental impact statement.

A ruling to block the towing would come as a severe blow to the MARAD, which has struggled for months to get the 13 ships certified for towing and scrapped overseas.

The pilot program of four ships authorized by Congress was scheduled to be completed in the fiscal year that ended on Tuesday. Officials have said any delay past October could force all towing to be halted until next spring because of the rough seas during the winter months.

"This program has been so difficult to put together," said Cynthia Morris, the lead attorney for the federal government. "If we don't get the program started by the end of October, there is a real risk of jeopardizing the entire program."

Collyer, in a nearly two-hour hearing, raised concerns about the safety of the towing across the Atlantic and whether enough safeguards had been put in place.

"Everyone wants the ships out of there," she said. "The question is, Can we get the ships to England safely?"

Morris said any concerns raised by the Coast Guard would have to be addressed before the ships could depart.

David Lerman can be reached at (202) 824-8224 or by e-mail at dlerman@tribune.com.