The Russians Are Coming to Nome, AK.

The following is the text of a press release issued by the U.S. Coast Guard:

(04 January 2012)

(DUTCH HARBOR, Alaska) -- Coast Guard inspectors completed a port state control exam on the double-hulled ice-classed Russian tanker Renda today in Dutch Harbor.

"The tanker vessel Renda met all applicable federal laws and regulations and can operate in U.S. waters following the successful completion of a required Coast Guard port state control examination," said Rear Adm. Thomas Ostebo, commander District 17. "Our daily discussions will continue with our federal, state, local, tribal partners, and the marine industry to ensure the highest standards of safety and compliance are in place to mitigate risks to the people of Nome, the crews of the vessels, and the environment."

The Renda will be escorted by the Coast Guard Cutter Healy and is expected to arrive in Nome on Jan. 8, 2012 if on scene weather conditions permit safe passage.

The Healy will lead the Renda through 300 miles of ice to within a half mile of the harbor entrance. "Upon arrival, the Renda will transit the remaining distance to stable ice close to the harbor entrance to transfer fuel via hose under approved procedures," said Capt. Craig Lloyd, District 17 chief of response who is coordinating the mission. "University of Alaska personnel are in Nome to assist in determining the thickness of the ice outside the harbor entrance. Due to a large ridge of ice at the harbor entrance, the Renda is unable to enter the actual harbor."

The Secretary of the U.S. Department of Homeland Security approved a Jones Act Waiver Dec. 30, 2011 to Vitus Marine authorizing the foreign-flagged tanker to deliver gasoline from Dutch Harbor to Nome. Renda arrived in Dutch Harbor laden with diesel fuel that was on loaded in Asia. The Jones Act waiver was required since Renda could not load the gasoline cargo in Asia due to weather and scheduling constraints. The vessel is scheduled to take on additional cargo of gasoline in Dutch Harbor today.

The Healy's participation was contingent upon the following items: the Renda passed the port state control exam, there were no inordinate delays, the fuel transfer plans met federal and state requirements and on scene weather conditions permit safe passage.

Sitnasuak Native Corporation of Nome signed a contract with Vitus Marine LLC to deliver 1.3 million gallons of petroleum products to Nome via Renda around the second week of January. If successful, this will mark the first time that petroleum products have been delivered by sea to a Western Alaskan community through ice covered waters.

"This has been and continues to be a highly orchestrated effort between all stakeholders to ensure mission success" said Ostebo. "As we have done for more than 220 years, the Coast Guard is dedicated to ensuring the safe and secure transfer of maritime commerce. The Healy, our nation's only operating polar ice breaker, and its crew are committed to upholding our long history of service to the residents of Alaska."

The Healy is named after Capt. Mike Healy, an 19th century Coast Guard hero. As the commanding officer of numerous Coast Guard cutters, "Hell Roaring Mike", enforced federal law, provided search and rescue, and provided humanitarian assistance along Alaska's 20,000 mile coastline in the late 1800s. The cutter is 420-feet long and has extensive scientific capabilities. Homeported in Seattle, the cutter has a permanent crew of 80 and was originally scheduled to return home in mid December. The primary mission is scientific support but it is capable of other Coast Guard and defense operations such as search and rescue, domestic ice breaking, environmental protection and the enforcement of laws and treaties in the Polar Regions.

Hawaii Superferries to become US Navy Property

From Marine Log
19 December 2011

As widely predicted, the two AustalUSA built former Hawaii Superferries, Huakai, and Alaka, are at last going to wind up under Navy control. Shipbuilding guru Tim Colton has found the following tucked away in the Defense Authorization Act of 2012:

SEC. 1026. TRANSFER OF CERTAIN HIGH-SPEED FERRIES TO THE NAVY.

(a) TRANSFER FROM MARAD AUTHORIZED.—The Secretary of the Navy may, subject to appropriations, from funds available for the Department of Defense for fiscal year 2012, provide to the Maritime Administration of the Department of Transportation an amount not to exceed $35,000,000 for the transfer by the Maritime Administration to the Department of the Navy of jurisdiction and control over the vessels as follows:

(1) M/V HUAKAI.

(2) M/V ALAKAI.

(b) USE AS DEPARTMENT OF DEFENSE SEALIFT VESSELS.—Each vessel transferred to the Department of the Navy under subsection (a) shall be administered as a Department of Defense sealift vessel (as such term is defined in section 2218(k)(2) of title 10, United States Code).

62 Million in Grants go to Port Improvement

From IFW-Logistics
20 December 2011


The US Department of Transportation (DoT) has announced $62 million in port-related grants as part of the third round of funding in its TIGER (Transportation Investment Generating Economic Recovery) programme.

Four of the 46 awards go directly to US port-related infrastructure, comprising around 12% of the total $511 million available for capital grants.

South Jersey Port received $18.5 million to repair the DelAir Bridge (pictured), which links the rail networks of Pennsylvania and New Jersey and enhances freight movement throughout the north-east.

Port of Long Beach got $17 million to improve tracks to two rail yards and relieve a rail chokepoint, improving efficiency, reducing the environmental impact of freight movements and enabling the port to move 35% of goods by on-dock rail by 2035.

Port of Jacksonville received $10 million for the Dames Point Intermodal Container Facility that will be used by CSX railroad.

In addition, Port of New Orleans received US$16 million, as previously reported in IFW.

A number of TIGER-funded projects also address key congestion points along main rail lines, inland port facilities and highway trade corridors, making a positive impact on freight mobility and the movement of goods to and from US seaports.

TIGER grants are awarded to transport projects that contribute to the long-term economic competitiveness of the US, improve existing transport facilities and systems, increase energy efficiency and reduce greenhouse gas emissions and improve safety.

In the first round of TIGER grant awards, port-related infrastructure projects received 8% of the original $1.5 billion. In the second round of grants, port-related infrastructure received 17%.

New LNG fuelled tanker first for inland waterways

From Marine Log
15 December 2011

The inland waterways of the Netherlands are now home to the 6,100 dwt Argonon, the world's first new LNG-fuelled tanker, following its delivery by the Dutch Shipyard Trico B.V.
Built to Lloyd's Register class, MT Argonon represents a significant milestone for the Deen Shipping subsidiary, Argonon Shipping B.V., in its pursuit of cleaner transport solutions for Europe. Lloyd’s Register helped the owners and regulators to identify their risks, meet regulatory requirements and overcome the technical challenges for the precedent-setting tanker.
"This has been a great project and it is a significant first," said Piet Mast, Lloyd’s Register's Marine Business Manager for Western Europe. "The nature of inland waterways traffic, which passes through or close to major population centers, makes LNG an attractive way to reduce harmful local emissions. We had to look carefully at the risks and worked closely with the owner and the regulators to ensure that they understood, and were comfortable with, the technical solutions that were developed."
The dual-fuel system is designed to burn an 80/20 mixture of natural gas and diesel, reducing SOx, NOx and particulate-matter emissions, as well as reducing the greenhouse gas emissions from tank to flue. The LNG is stored in a transport tank located on deck, supplied by Cryonorm Projects, based near Amsterdam.
"The inland shipping industry, as far as we know, is the safest and cleanest mode of transport. But, to keep this lead, we have to take a big step forward in environmental performance," said shipowner Gerard Deen. "I think that the dual-fuel principle is a way to reduce the emissions in our sector. Lloyd’s Register was very pragmatic in their approach to finding solutions to convert seagoing regulations into inland shipping rules regarding dual fuel."
Along with Lloyd’s Register, the Netherlands Shipping Inspectorate approved the vessel’s LNG system for operation in the Netherlands and the ship has taken on its first load of LNG bunker fuel. The next step is to secure the regulatory approvals from the Central Commission for Navigating on the Rhine and the UN-ECE ADN Safety Committee, to open the way for navigation beyond the Netherlands.
"The owners are to be congratulated for being pioneers," said Mast. "At Lloyd’s Register, we have been involved with LNG for a long time, so were able to provide support through the plan-approval and construction processes. We now look forward to supporting the ship through many years of ‘clean’ trading."
Argonon has entered service and will start operating with gas this week following some final, main-engine tests. Propulsion power for the 110-meter-long tanker is supplied by two, dual-fuel Caterpillar DF3512 engines, each providing 1,115 KW.
The ship has the capacity to transit from Rotterdam to Basel and back without bunkering.
"We are currently providing technical and regulatory guidance for 20 confirmed or proposed inland waterway applications that intend to use LNG as fuel," says Bas Joormann, West European Area Inland Waterway Product Manager for Lloyd’s Register. "There is a lot of interest, and for good reason. Inland waterways, like ferries in emission-control areas, are very suitable for LNG. But the regulatory regime is different. We're helping owners and governmental bodies to identify the risks and manage them to at least the level of safety provided by the existing fuel-management and combustion requirements."

Record Breaking Volumes for Port of Los Angeles

Fron IFW Freight and Logistics News Service
16 December 2011


The US port of Los Angeles has reported a record year for exports, buoyed by an all-time monthly high for goods shipped overseas in November, the second consecutive month of record export volumes.

LA exported 1.9 million containers in the first nine months of 2011, breaking the previous record of 1.8 million in full-year 2010.

And imports were 6.2% higher in November than in 2010.

The largest US container port said it was on course to export more than 2 million teu this year.

Exports reached the highest monthly volume in the port’s history last month, handling 195,877teu, 15% up on the previous November. And in October, the port handled 193,547teu, up 28% on October 2010.

Goods exported include raw materials, cotton and grains, as well as high-value goods, including computers, medical equipment and aerospace components.

The rise in export volumes from LA has been buoyed by the weak US dollar boosting demand for US goods, particularly in Asia. The stagnant domestic economy also has forced the country to find new income in foreign markets.

Last year, President Obama outlined a National Export Initiative, aiming to double exports through the nation’s seaports by the end of 2014 to boost the ailing domestic jobs market.

The US will focus on India, China, Brazil and other emerging markets with strong potential for growth.

Like the Railroads, but better.

From Professional Mariner
08 December 2011
(NASHVILLE, Tenn.) -- America's barge industry is entering the spotlight in an effort to win more federal dollars, National Public Radio reported. Waterborne infrastructure needs an estimated $8 billion worth of work. The industry said barge transportation is "like railroads but better." One critic argues that private business should pay for the improvements.    For the original NPR broadcast click here.

No Gas for Nome, Alaska

Article from the Alaska Dispatch
28 November 2011

Unleaded gasoline sells for $5.43 a gallon at the pump in Nome, but that price could skyrocket by this spring because a fuel barge with more than 1 million gallons didn't arrive as expected this fall in the remote Northwest Alaska community.
For Nome residents, the cancelled shipment, which petroleum distributor Delta Western blames on stormy weather and sea ice, brings back memories of a similar situation in another rural Alaska community.
In the spring of 2010, after a fuel barge couldn't reach the Interior town of McGrath, the distributor was forced to fly fuel in. Those costly flights pushed prices at the pump from $5.97 to $8.50 a gallon. Nome Mayor Denise Michels said her community of 3,600 isn't facing an emergency yet. But if Nome fuel stocks drop too low this spring, supplies would have to be flown in, which would raise prices at the pump.
Hopefully, Delta Western and Bonanza Fuel, the company that ordered the 1.6 million gallons of gasoline, diesel fuel and heating fuel, can reach an agreement that avoids passing costs onto Nome residents, said Michels. The companies are discussing the problem now, she said.
"They need to figure it out," Michels said.

The barge carrying the big fuel load couldn’t reach Nome, in part because of stormy weather, including the recent tempest in the Bering and Chukchi seas, said Kirk Payne, Delta Western vice president. Sea ice that has since enveloped the community, delivering the final blow. The barge won't reach Nome this winter, Payne said.
It's possible that costs related to the canceled barge shipment could be rolled into a state disaster declaration, said Scott Ruby, director of the state Division of Community and Regional Affairs.
Gov. Sean Parnell's Disaster Policy Cabinet meets on Wednesday to consider whether damage from the mid-November storm across a wide swath of western Alaska warrants a disaster declaration from the state. The cabinet will advise the governor, who makes the final call, Ruby said.
Nome has asked the state's emergency services division to determine whether a disaster declaration would cover the cost of higher fuel prices, said Michels. It might, but the city hopes Bonanza and Delta Western resolve the issue themselves.
One question is whether the weather was truly the problem, said Michels.
It was, said Payne. But Jason Evans, board chair of Bonanza parent company, Sitnasuak Native Corp., said Bonanza ordered the fuel in May, and the company has been awaiting its order for three months. "There's not been 90 days of extreme weather," Evans said, and other barges have reached Nome before ice surrounded it.

Contact Alex DeMarban at alex(at)alaskadispatch.com

Interferry says meeting low-sulfur deadline is "mission impossible"

I find this interesting in contrast with the study done by the Glosten Associates on the conversion of Washington State Ferries to LNG Propulsion. (Refer to our  21 November Blog Post.) I guess that the contrast comes from the economic hardships facing Europe versus our own here in the United States. I think this deadline hits them economically where we were three or four years ago. It will be interesting to see how they emerge from it.

From MarineLog News Article.
28 November 2011

The international trade association for the ferry industry, Interferry, claims that ferry operators in northern Europe face a "near-impossible" choice in trying to meet the 2015 deadline for ultra-low sulfur emissions from bunker fuel. It also says that the low-sulfur legislation will " percentprompt an environmentally damaging modal shift from short-sea to overland transport and pose severe financial implications for the overall European economy.

Under pending IMO and soon to be agreed European Union (EU) environmental requirements, vessels operating in the Baltic, North Sea and Channel Emission Control Areas (ECAs) will have to comply with a 0.1 percent limit on fuel sulfur content.

Interferry says that meeting the 2015 deadline is "mission impossible" because of "unsustainable cost increases."

The association argues that, despite the ferry industry's efforts to develop alternative technologies and feasible alternative fuels, abatement technologies and financial support will not be available or sufficient enough to avoid a modal shift from sea to road.

A "toolbox" of technical and financial solutions proposed by the European Commission (EC) suggests the use of clean LNG fuel or, for vessels that continue to run on heavy fuel oil, the use of scrubbers - exhaust gas cleaning systems. It also points operators towards EU funding initiatives and state aid.

Interferry says that these are not realistic options because:

• It is widely recognised in Europe that LNG is only an option for new vessels due to the prohibitive cost of converting existing vessels, and in any case the LNG fuel supply infrastructure is inadequate
• Scrubber technology is not a "miracle cure." Ferry operators have contributed financially and operationally to developing the technology and Interferry says it is a solution that seems to be able to remove sulfur particles from the exhaust gases on some ships. However, a new Interferry feasibility study covering 108 vessels from six leading operators reveals that scrubbers would not be technically or financially viable for 60 percent of the existing fleet. Furthermore, trial installations among association members have shown that it will not be possible to have scrubbers in operation in time for 2015 for the other 40 percent
• EU funding is virtually non-applicable as it applies largely to newbuilds and new routes – a low priority among operators who have invested heavily in new tonnage in recent years, and who now face a desperate economic climate that also reduces the likelihood of state aid

"There is no financial support for existing ferries, while LNG and scrubbers are not feasible," says Johan Roos, the association's executive director of EU and IMO affairs. "In effect, the toolbox is completely empty.

"Our only option is to use marine gas oil – technically straightforward but very costly and potentially counter-productive in environmental terms. Operators have warned that they will not be able to pass on the 70 percent or more fuel cost increase to customers with a choice of transport modes, which will inevitably push up to 50 percent of cargo off short-sea ships and back on to the road network."

Mr. Roos added that, apart from cost, availability is also an issue with MGO, stressing: "At the very least, the IMO must bring forward its availability review from 2018, as mandated in MARPOL Annex VI, to 2012 or 2013. It's also clear that the ongoing revision of the EU Directive must put provisions in place as to what should happen if low-sulfur fuel is simply not available to operators in 2015."

Interferry conducted the scrubber feasibility study among six Interferry members operating in the north European ECAs - Brittany Ferries, DFDS, Grimaldi Group, P&O Ferries, Stena Line and TT-Line.

The conclusion that more than half their existing ships could not be fitted with scrubbers was based on five critical parameters:
Vessel age and the consequent commercial viability of making a massive technical investment

• Stability reserves taking into account the weight of scrubber units and how high up the stack they would be fitted
• Deadweight reserves and the resulting impact on cargo capacity
• Casing – because many ferries have very limited void in the ideal stack casing location and would therefore need special scrubber casing that reduces cargo capacity
• Whether or not Selective Catalytic Reduction (SCR) technology was already fitted to reduce NOx emissions – if so, retrofitting wet exhaust scrubbers would be more challenging as these cool gases to below 100 degrees C compared with temperatures above 400 degrees C required by SCR

The detailed results are being offered to the European Maritime Safety Agency for independent audit and will also be made available to relevant authorities.

The EC toolbox was discussed in Helsinki on November 18 when senior personnel from Interferry members joined Mr. Roos at a special seminar organized by the Finnish Ministry of Transport & Communications and the Finnish Transport Safety Agency. Invited delegates also came from national authorities, shipowners' associations and equipment manufacturers.

Mr. Roos reports that at the meeting, where an EC representative and various national administrators also participated, it became obvious that current funding support programs are only allowed for new ships or new routes and are not available to address the "real problem"of safeguarding existing fleets and the routes they already service – offloading millions of trucks from the European road network every year.

November 28, 2011

Port of Los Angeles to participate in clean-ships program

The Following is a press release from the Port of Los Angeles.

(SAN PEDRO, Calif.) -- The Port of Los Angeles is working with the International Association of Ports and Harbors (IAPH) to develop incentive program strategies to participate in the Environmental Ship Index (ESI) Program starting in 2012.

ESI is an international web-based ship-rating system ports can use to promote clean ships by rewarding operators whose vessels exceed current environmental performance standards and regulations. Port staff presented an outline of the program to the Board of Harbor Commissioners last week and expects to submit recommendations for participation in the program to the Board by early 2012.

The announcement comes on the fifth anniversary of the Port's adoption of the Clean Air Action Plan (CAAP), a landmark pollution reduction initiative whose measures have helped to cut harmful air emissions from port-related sources in the San Pedro Bay by as much as 76 percent. The CAAP was designed as a blueprint for charting a permanent course for the Port of Los Angeles to operate the cleanest, most environmentally sustainable port. In 2010, the Port reaffirmed its commitment to the CAAP by expanding its programs and setting more aggressive targets with near-term goals through 2014 and long-term objectives through 2023.

"The Port of Los Angeles continues to be a world leader in combating pollution," said Los Angeles Mayor Antonio Villaraigosa. "We've had five years of extraordinary success with the Clean Air Action Plan and now we're looking at the next generation of strategies for running the cleanest possible port and improving air quality in Los Angeles and throughout Southern California."

"The Port of Los Angeles is looking forward to being part of these international standards and setting the stage for North American ports to follow suit and reward operators for greening their fleets," said Port of Los Angeles Executive Director Geraldine Knatz, Ph.D. and IAPH president. "As participation grows, the benefits increase for carriers and communities."

The Port of Los Angeles adopted the CAAP to help tackle harmful emissions in the South Coast Air Basin. After launching the CAAP in 2006, the Port has met or exceeded nearly all its goals for reducing air pollution from port-related sources. Ships remain the toughest challenge, as they are regulated by international convention and represent the single largest source of air pollution from port-related operations.

The ESI identifies voluntary engine, fuel and technology enhancements ships can use to exceed current environmental performance standards. The ESI targets primary pollutants, which include nitrogen oxides (NOx), sulfur oxides (SOx), and diesel particulate matter (DPM). The program also contains a component to help reduce greenhouse gases. The index was developed by some of the world's major ports collaborating under the World Ports Climate Initiative, a project of the IAPH.

Nine European ports in the Netherlands, Norway, Germany, Belgium and Italy have signed on to participate in the ESI and either have current programs or are in the process of developing programs to offer financial incentives to reward operators whose ships outperform environmental standards.

The Port of Los Angeles is America's premier port and has a strong commitment to developing innovative strategic and sustainable operations that benefit the economy as well as the quality of life for the region and the nation it serves. As the leading seaport in North America in terms of shipping container volume and cargo value, the Port supports more than 830,000 regional jobs and $35 billion in annual wages and tax revenues. A proprietary department of the City of Los Angeles, the Port is self-supporting and does not receive taxpayer dollars.

Clipper Daisy diverts to rendezvous with sailboat and medevac man

The following is the text of a press release issued by the U.S. Coast Guard: 25 November 2011 (PORTSMOUTH, Va.) -- Crewmembers aboard two merchant ships responded to the Coast Guard’s call for assistance to medevac a Canadian man reportedly experiencing signs of a heart attack aboard his sailboat 170 miles southwest of Bermuda, Thursday. Watchstanders at the Coast Guard 5th District Command Center, internationally known as Rescue Coordination Center Norfolk, coordinated the rescue using the Automated Mutual–Assistance Vessel Rescue System after receiving notification from Nicole Gaudreault, an amateur radio operator from Montreal. The wife of the man experiencing the symptoms initially called Gaudreault stating she was a nurse and believed her husband needed to be medevaced. She also said they were aboard the Argo V, a 36-foot sailboat and were en route to St. Martin. Two AMVER vessel crews responded to the Coast Guard’s enhanced group call. A crewmember from aboard the merchant vessel Mary Ann Hudson stated they were approximately 120 miles from the Argo V, were willing to divert and the crewmember also said they had heart medication aboard. The crew of the Clipper Daisy also responded to the call for assistance saying they did not have heart medication but were willing to divert to the Argo V’s position to take the man aboard and transport him to Bermuda. The wife aboard Argo V altered her course to head toward Bermuda, but was unable to continue because of strong winds and 6-foot seas. The crew of the Clipper Daisy rendezvoused with the Argo V at approximately midnight Thursday and took the man aboard. The man is currently being transferred to Bermuda then to a local hospital. “This case is a prime example of the outstanding coordination using various tools in the search and rescue system to include amateur radio operators, AMVER system and Rescue Coordination Center Bermuda,” said Lt. Cmdr. James Klein, chief of the Rescue Coordination Center Norfolk.

Barge Breaks Lose, Runs Aground

From a US Coast Guard Press Release:
25 November 2011

MILWAUKEE — Personnel from U.S. Coast Guard Sector Lake Michigan are conducting a marine casualty investigation after a barge broke free while being towed by a tug and ran aground in Lake Michigan near Sheboygan, Wis., Nov. 24, 2011.

Marine investigators from Sector Lake Michigan arrived on scene on Friday Morning and are monitoring the situation until the barge can be re-floated and examined. The barge is reportedly carrying a cargo of rocks. There are no reports of pollution or environmental hazards.

U.S. Coast Guard photo.

MILWAUKEE — Personnel from U.S. Coast Guard Sector Lake Michigan are conducting a marine casualty investigation on a tug-and-barge, after a barge being towed broke free and ran aground in Lake Michigan near Sheboygan, Wis., Nov. 24, 2011.

The Coast Guard advises that people stand clear of the salvage area until the barge is free of the lake bottom.

The empty barge broke away from the tugboat Donald C during a routine transit toward Manitowoc, Wis., Thursday evening. The crew of the Donald C was unable to regain control of the barge because of rough seas and heavy winds.

Marine investigators from Sector Lake Michigan arrived on scene on Friday Morning and are monitoring the situation until the barge can be re-floated and examined. The barge is reportedly carrying a cargo of rocks. There are no reports of pollution or environmental hazards.

For more information contact Lt. Casey Steuer, Coast Guard Sector Lake Michigan, at 414-747-7151.

Maritime Industry Urges Support for Cargo Preference

From the Seafarers InternationalUnion
22 November 2011

SIU Executive Vice President Augie Tellez and other maritime labor and company officials on Oct. 3 attended an open forum on an important program that greatly affects Seafarers and the industry at large. The multi-component program known as cargo preference stipulates that a certain percentage of U.S.-made or U.S.-funded items must be shipped on American vessels with American crews. The meeting was organized by the Maritime Administration (MarAd), whose stated goal was to open up the issue to public discussion.

Tellez (pictured below) and other speakers pointed out that cargo preference law enforcement is becoming increasingly more important to the maritime industry. With overseas conflicts starting to wind down, non-military cargo is going to become a more vital source of income for shipping companies and subsequently for merchant mariners.

“We in the maritime industry understand the critical need for our cargo preference laws, particularly those that affect food aid, our loan guarantee programs and other nondefense cargoes,” said Tellez. “As Operation Iraqi Freedom and Operation Enduring Freedom wind down after almost a decade, our industry needs to find cargo wherever it can, and we recognize we cannot continue to rely on the Pentagon for everything. Non-defense cargo is more important now than it has ever been.”

Maritime Trades Department, AFL-CIO (MTD) Executive Secretary-Treasurer Daniel Duncan was also on hand at the meeting expressing the department’s support for cargo preference laws.

“The MTD firmly believes that the nation’s series of cargo preference laws is a bedrock of the U.S.-flag maritime industry,” said Duncan. “These laws have played a vital role in ensuring that America has a strong domestic shipbuilding base and merchant marine. Cargo preference laws help create good-paying jobs for American workers, provide tax revenues at the local, state, and federal levels, and make sure America’s merchant marine is ready and available when needed for strategic sealift and other defense interests.”

The Marine Engineers’ Beneficial Association (MEBA) and the International Organization of Masters, Mates, and Pilots (MM&P) also jointly voiced their support for cargo preference laws and talked about the impact that they have on their respective memberships.

“There should be no question that, in order to grow and maintain the U.S. Merchant Marine, U.S.-flagged vessels should be used to the greatest extent possible when shipping government-impelled cargoes,” said William Doyle of MEBA. “Rigorous enforcement and oversight of cargo preference laws enables MarAd to fulfill its mission. Without oversight and enforcement from MarAd, the presence of the U.S.-flag fleet in the foreign trades would cease to exist, leaving a glaring hole in our national defense capabilities and negatively impacting our economy.”

Other speakers pointed out the economic importance the laws have on private shipowners and the costs that are deferred from the government because of them. Cargo preference laws, according to several presenters, provide an economically efficient way to bolster private industry and support jobs.

“Virtually every privately owned U.S.-flag vessel engaged in the foreign trade depends to some degree on cargo preference to remain economically viable,” said Bill Kenwell of Maersk Line, Limited on behalf of USA Maritime, an industry group consisting of shipowners, operators, and labor groups. “Indeed, absent cargo preference, it is no exaggeration at all to say that the U.S.-flag fleet in foreign commerce would disappear and the U.S. government would have to duplicate that sealift capability at enormous expense with government-owned vessels.”

In spite of these facts, however, many in the room were disappointed with MarAd’s efforts to enforce cargo preference laws. Even with revisions made by Congress that would bolster the programs, the agency’s efforts are still seen as lacking.

“If I had to sum up our feelings about MarAd’s performance when it comes to cargo preference matters in one word, that word would be frustration,” said Tellez, pointing to long vacancies in important MarAd positions and the lack of implementation of a three-year-old revision that punishes entities that don’t adhere to cargo preference rules.

Richard Berkowitz of the Transportation Institute, another maritime industry group composed of multiple sectors, agreed.

“Judging from the lengthy time it has taken to fill key management positions at MarAd related to cargo preference administration, it is difficult to believe that the administration’s role to ‘promote … the viability of the U.S. Merchant Marine’ is being taken with the earnestness and purpose needed to direct the government-impelled cargo so key to sustaining U.S. vessels in international trade lanes,” said Berkowitz.

Liberty Maritime Corporation CEO Philip Shapiro sent a letter to MarAd to throw his company’s support behind USA Maritime’s statements but added that the agency could be doing more in regards to cargo preference.

“Liberty Maritime would only like to add that it is imperative that the U.S. Maritime Administration place a high priority on cargo preference implementation and enforcement,” said Shapiro. “Congress has charged MarAd with ensuring that cargo preference achieves its objectives of supporting a strong and vibrant U.S.-flag Merchant Marine.”

In spite of some complaints, the SIU and others at the meeting reinforced their eagerness to work with the administration.

“The cargo preference laws work when they are properly enforced,” said Tellez. “They work when the resources needed to ensure that they’re being enforced are there. I am confident that MarAd can resolve these issues swiftly and I look forward to working with the agency in the future as we all strive to promot and protect our merchant marine.”

###

Wärtsilä completes unique conversion of vessel to LNG operation

We recently published an article on the conversion of Washington State Ferries to LNG propulsion. This seemed like an appropriate follow up for that article which was based on a study by the Glosten Associates.

Wärtsilä Corporation, Trade & Technical Press release, 23 November 2011

The product tanker ‘Bit Viking’ was the first vessel ever to undergo a conversion by Wärtsilä from heavy fuel oil to liquefied natural gas (LNG) operation. The conversion enables the ‘Bit Viking’ to qualify for lower nitrogen oxide (NOX) emission taxes under the Norwegian NOX fund scheme.

The unique fuel conversion of the product tanker ‘Bit Viking’, from heavy fuel oil to gas operation, has been finalised and in October the vessel was handed over to the customer, Tarbit Shipping. The re-commissioned vessel is operated by Statoil along the Norwegian coastline, and the conversion carried out by Wärtsilä enables it to qualify for lower NOX emission taxes under the Norwegian NOX fund scheme. The fund is a cooperative effort whereby participating companies may apply for financial support in return for introducing NOX reducing measures. Furthermore, liquefied natural gas (LNG) operation means lower carbon oxide emissions, and virtually no sulphur oxide or particle emissions whatsoever.

First marine dual fuel (DF) conversion

This is the first marine installation in the world to involve converting Wärtsilä 46 engines to Wärtsilä 50DF engines, and the first 50DF marine installation with mechanical propulsion. By operating on LNG, the ‘Bit Viking’ becomes one of the most environmental friendly product tankers in the world.

In August 2010, Wärtsilä announced that it had signed a turnkey project with Tarbit Shipping to convert the ‘Bit Viking’ to LNG operation. The scope of the conversion package from Wärtsilä included deck-mounted gas fuel systems, piping, two six-cylinder Wärtsilä 46 engines converted to Wärtsilä 50DF units with related control systems and all adjustments to the ship’s systems necessitated by the conversion. The vessel’s classification certificate was also updated. The engines are connected directly to the propeller shafts through a reduction gearbox, thus avoiding the electrical losses that are an unavoidable feature of diesel-electric configurations. This enables a significant improvement in propulsion efficiency, reduced fuel consumption, and corresponding reductions in emissions. This is the first LNG fuelled vessel to be classified by Germanischer Lloyd.

New LNG storage system

The ‘Bit Viking’ utilises Wärtsilä’s new LNGPac system, which enables the safe and convenient onboard storage of LNG. The two 500 cubic metre LNG storage tanks are mounted on the deck to facilitate bunkering operations and permit the bunkering of LNG at a rate of 430 cubic metres per hour. The storage tanks provide the vessel with 12 days of autonomous operation at 80 per cent load, with the option to switch to marine gas oil if an extended range is required. When visiting EU ports, which have a 0.1 per cent limit on sulphur emissions, the vessel operates on gas.

“Wärtsilä’s unique expertise and experience with dual fuel technology, as well as with fuel conversion projects, were the main reasons for us choosing them. We appreciate the technological efficiency of the Wärtsilä solutions and the expert way in which this conversion project has been handled. We are proud that the ‘Bit Viking’ is now one of the world’s most environmentally sustainable tankers in operation,” says Anders Hermansson, Technical Manager, Tarbit Shipping.

“This is a major step for Wärtsilä in consolidating its market leading position in LNG solutions for the shipping industry. The successful sea trials with this vessel provide yet further validation of the viability of LNG as the marine fuel of the future. We anticipate that this development will rapidly accelerate during the coming few years,” says Sören Karlsson, General Manager, Gas Applications, Ship Power Technology

Coast Guard closes Columbia River Bar due to hazardous weather

The following is the text of a press release issued by the U.S. Coast Guard:

22 November 2011

(SEATTLE) -- The Coast Guard Captain of the Port (COTP) Sector Columbia River, in Astoria, Ore., issued the closure of the Columbia River, Ore., bar entrance due to hazardous conditions at approximately 9 p.m., Monday.

The bar closure applies to all vessels and any request to transit the bars prior to reopening must be approved by the COTP, Sector Columbia River. Mariners may contact the Coast Guard on VHF-FM Channel 16 or Sector Columbia River by telephone at (503) 861-6211 for further information or to request crossing.

The Coast Guard will re-evaluate the bar closure on an ongoing basis and will re-open the waterway as soon as the offshore weather improves.

The bar is anticipated to re-open by 8 a.m., Wednesday, based on current weather predictions.

The Coast Guard understands the effects these closures have on commerce and will make every effort to re-open these waterways as soon as they are considered safe for navigation.

Priority for standard private armed guards contract

From the Baltic and International Maritime Council (BIMCO)
21 November 2011


With the increasing use of armed guards on ships and the fear that second-rate security firms may take advantage of the piracy situation, BIMCO is forging ahead with the development of a standard contract for the employment of armed guards. The new contract, which will be drafted by a team of experts of shipowners, lawyers and underwriters, and with the assistance of the International Group of P&I Clubs, will require private security firms offering armed guards to follow the IMO Guidelines for owners on the used privately contracted armed security personnel on board ships (MSC Circular 1405). Of major importance is ensuring that security contractors have in place proper and sufficient public and employers’ liability insurance – which is a concern recently raised by the International Group of P&I Clubs. While much of the new BIMCO contract will deal with operational aspects of employing armed security guards, issues of liability and responsibility will be of prime importance.
New private maritime security firms are springing up almost daily to meet shipowners’ growing demands for their services for vessels operating in high risk areas. It is very important that this new sector is regulated and that harmonised terms are developed and agreed. BIMCO has given this project the highest priority so that the standard contract can be published as soon as possible – most likely within the next two months.

LNG use on Washington State Ferries Could Save Millions over Time.

An LNG-fuelled ferry would have significant environmental and economic benefits, according to a recently feasibility study for Washington State Ferries. Architectural and marine engineering firm, The Glosten Associates, recently completed the feasibility study for Washington State Ferries (WSF) on converting its 144-car ferry design to liquefied natural gas (LNG) propulsion. 

Glosten's study concluded that the conversion is both technically feasible and cost effective, although technical and regulatory challenges remain. The study examined design, economic, regulatory, and environmental issues. 

The operational savings for a single vessel are estimated to be between $900,000 and $1.25 million per year, after an upfront capital cost premium of $8.5 million to $10 million. Switching to natural gas fuel will significantly reduce emissions of nitrous oxides (NOx), sulfur oxides (SOx), particulate matter, and carbon dioxide (CO2). These greenhouse gases have been identified by the U.S. Environmental Protection Agency (EPA) as significant factors in harming human health, including respiratory illnesses, as well as damaging to the environment. 

Glosten’s design was formally reviewed by the United States Coast Guard (USCG). USCG provided extensive feedback as well as a written response, showing their willingness to work with owners early in developing a case-by-case design basis until official rules are developed. The USCG response provides WSF with a regulatory basis from which to advance the project design. This is an important result, as the lack of USCG regulations is often cited as a primary risk to vessel owners interested in reaping the benefits of LNG fuel conversion.

Overall, this looks very promising for the nation's largest ferry system to save on operating costs. The initial investment is pretty sizeable, however saving nearly a million dollars per year in fuel will do a lot to shrink the state budget. We think that this would be a great use of federal funds as opposed to some of the other job creation projects that have been touted - such as the high-speed rail project the current administration is pushing.

Click herefor the full Glosten Associates report.

Hornbeck Executes Contracts for Newbuilds, $720 Million

From Marine Log
17 November 2011

Hornbeck Offshore Services, Inc. (NYSE: HOS) says it has executed definitive contracts for the construction of sixteen high-specification offshore supply vessels. Deliveries will take place between the second quarter of 2013 and fourth quarter of 2014.

VT Halter Marine, Inc. of Pascagoula, Mississippi and Eastern Shipbuilding Group, Inc. of Panama City, Fla, will each build eight 300 class vessels, with options to build additional vessels. Hornbeck's first decision with respect to the exercise of options will need to be made in September 2012. Delivery dates for option vessels will be approximately 26 months following the option exercise.

The total cost of the first sixteen vessels under this program is expected to be approximately $720 million, excluding construction period interest. Construction costs will be funded with cash on-hand (including the net proceeds of a recently completed equity offering), projected free cash flow from operations and, if necessary, available capacity under the Hornbeck currently undrawn and recently expanded $300 million revolving credit facility.

VT Halter Marine will construct eight vessels based on the Super 320 design that it has developed for Hornbeck Offshore. These DP2 OSVs are designed to have 6,200 long tons of deadweight capacity, approximately 20,900 bbls of liquid mud carrying capability, 11,863 sq. ft. of deck area and a fire-fighting class notation. The Super 320 design is based on a larger version of the HOS Coral, an existing 290 class DP-2 OSV which the company has successfully operated since her delivery in early 2009. The Super 320 design has been developed with particular attention to environmental regulations, including a double-hull that eliminates any fuel storage adjacent to the sideshell, and propulsion machinery that meets the requirements of EPA Tier 3 for stack emissions.

The eight OSVs to be constructed by Eastern Shipbuilding Group will be DP-2 classed. Four vessels will be based on the STX Marine SV 300 design and four will be based on the STX Marine SV 310 design. Features of the STX design include over 20,000 bbls of liquid mud carrying capacity and a fire-fighting class notation. The SV 300 design calls for 5,500 long tons of deadweight capacity and 10,976 sq. ft. of deck space, while the SV 310 design calls for 6,144 long tons of deadweight capacity and 11,536 sq. ft. of deck space. The STX designs meet the same environmental standards as the Super 320 design and will also carry the ENVIRO class notation by the American Bureau of Shipping.


November 17, 2011

General Maritime files for Chapter 11

From Marine Log

17 November 2011

 

Tanker operator General Maritime Corporation (NYSE: GMR) says it has filed for relief under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Substantially all of the company's subsidiaries – with the exception of those in Portugal, Russia and Singapore as well as certain inactive subsidiaries– have also commenced Chapter 11 cases.

The company says the bankruptcy filing is necessary to implement a restructuring agreement reached with its key senior lenders, including its bank group, led by Nordea Bank Finland plc, New York Branch as administrative agent, as well as affiliates of Oaktree Capital Management, L.P.

General Maritime says the restructuring agreement and related equity commitment letter have the support of over two thirds of the company's obligations from its banks and Oaktree. Under terms of the agreements, Oaktree will provide a $175 million new equity investment in General Maritime and convert its prepetition secured debt to equity. Under the terms of the agreement, General Maritime expects to substantially reduce its funded indebtedness and enhance its liquidity profile. It says that operations are expected to continue without interruption.

In conjunction with the filing, General Maritime has received a commitment for up to $100 million in new debtor-in-possession (DIP) financing from a group of lenders led by Nordea as administrative agent. The initial amount of the DIP is $75 million, however, the credit facility contemplates that, if needed, the company will have access to another $25 million of future financing, subject to the applicable lenders' agreement, certain other conditions and further order of the Bankruptcy Court.

November 17, 2011

Mobile Content and Your Boat

Earlier this year I received an Android phone as a birthday gift. Of course the first thing you do when you get a smart phone is go searching for the best Apps available. There are Apps that do useful things like track your bank accounts, and there are Apps that do useless mind-numbing things like blowing bubbles.

Eventually, once I began to comprehend how my phone works, I started looking for Boating related applications. There are actually more than I thought there would be. There are Navigational applications (my favorite is still from Navionics), tidal information, weather data, and quite a few others.

I’ve even read a couple articles about applications that control various functions of the boat itself. This is where I become a bit leery of the how fast things are advancing. The fact is that paper charts have not been completely replaced , yet people are willing to allow their phone to control things like auto-pilots and power distribution panels.

The National Marine Electronics Association(NMEA)  has made incredible progress in getting a protocol established that enables most marine electronics to interface. While the people at Apple, Google and Microsoft are all very bright – I'm not certain that any thought has been given to whether any of these programmers have even been on a boat, let alone piloted one.

The London P&I Club, one of the world’s leading mutual marine liability insurers, published in their StopLoss Bulletin that, “Onboard communication has improved significantly over the last few years, with technological advances enabling crew to use mobile phones and laptops to stay in contact with family and friends ashore. However, the use of such equipment at inappropriate moments may distract crew from the navigation or operation of the ship.

“Another issue is the risk of being exposed to excessive information and simply being unable to process it all. Bridge equipment is increasingly sophisticated and it can provide the crew with access to extensive information regarding the relative positions of other ships. But, unless it is used in a focused manner, it can confuse, rather than clarify, and ultimately prove counter-productive.”

There have been accidents on inland waterways, as well as intra-coastal waterways caused by the distractions of Skype calls, streaming news reports, and Email/Texting. Often, these  activities are being conducted on equipment either adjacent to or on the same screen as chartplotters, AIS displays or RADAR supplies.

There is no doubt that great advances have been made in what is possible to accomplish with technology, particularly within the marine industry. In 2004, the idea of linking different systems together seemed like something from the realm of "Star Trek." Now, in the world of tech, there is an app for everything it seems. The question isn't whether we “can” control a boat from an iPhone, Droid, Blackberry or Windows Phone – rather “should” we take this step. Eventually, sure but this is where the NMEA should monitor closely what the mobile device developers are “attaching” to boats. The most dangerous of the four major smart phone’s to the marine industry is the Droid phones – because anybody can make an application for them. This is great for the general public, but can mean disaster to mariners.

We’ve all had that person checking their Twitter or Facebook account cut us off on the road – boats are not quite as responsive. Already there are apps that are trying to replicate the functionality of AIS systems. What happens when somebody loses reception, or they forgot to plug in their phone the night before when they happen to be in a very busy port? Call me a cynic – but I can see bad things happening.

The bottom line is that there always seems to be a trade off for progress made to quickly.

As always, I appreciate any comments.

Tonnage Numbers Steady at U.S. Ports

 

From Marine link:

Great Lakes-St. Lawrence Seaway

Wednesday, November 16, 2011, 10:44 AM

U.S. ports continued to post positive tonnage numbers in October. The Seaway’s year-to-date total cargo shipments from March 22 to October 31 were 29 million metric tons, up 2 percent from the same period last year.

“With just two months left in the 2011 navigation season, the Seaway is on track to meet its projected seven percent improvement over last year’s tonnage performance,” says Rebecca Spruill, Director of Trade Development for the Saint Lawrence Seaway Development Corporation. “General cargoes like steel slabs and coils and wind turbine components are posting solid increases, while we’re moving nearly a million tons more of petroleum products than last season.”

In early October, 18,000 metric tons of hot-rolled steel coils produced at ArcelorMittal’s Burns Harbor facility in Indiana were delivered to the Republic of Macedonia. “Northwest Indiana is the richest steel-producing region in the world and being able to access world markets through our port is vital for ArcelorMittal and many other companies,” said Peter Laman, port director of the Port of Indiana-Burns Harbor.

He added, “This is the first substantial steel export from the port since 2008. Year-to-date steel shipments through the port are up more than 20 percent over last year, with 2011 on target for having the highest steel shipments since 2007. Whether it’s bringing in raw materials or shipping out finished products, steel companies can substantially reduce their logistics costs by shipping through our port.”

The Toledo Port Authority was another Great Lakes port registering tonnage increases. “Through the month of October, seaport cargo tonnage remained nearly 4 percent ahead of the same period in 2010 with increases in all major cargo categories (petroleum products, general cargo, and iron ore), with the exception of coal and grain. Through October, the port handled 9.2 million short tons and 13 more vessels than at the same point in 2010. The month finished strong as grain began to pick up due to the fall harvest,” explained Joseph Cappel, director of cargo development at the Port.

Diversification has been a critical component to growing port commerce during difficult economic times. “The Port of Green Bay has historically been a leading indicator of regional fiscal conditions in Wisconsin,” said Dean R. Haen, port manager.  “The fact that the port has seen a 26 percent increase in tonnage from 2010 to 2011 is a positive sign for the port and our regional economy.” One port tenant, US Venture, continues to be the main driver in increased tonnage and ship arrivals in 2011. They teamed with Wisconsin’s Department of Transportation and invested in opening an inactive port terminal last year which, amidst tough economic conditions, is now paying dividends. October tonnage increases for coal for power generation were up 15 percent year-to-date, while the construction industry demand for cement rose 11 percent from the same time last year. The 69 percent year-to-date increase in gypsum handled by the port was for industrial use.

St. Lawrence Seaway shipments of petroleum products and salt continued up at 90 percent and 33 percent respectively compared to October 2010. Coal shipments totaled 62,000 metric tons in October, a two percent increase from the same month last year. Year-to-date scrap metal and coke shipments saw double digit increases for October 2011. Other general cargo like wind turbine components, increased 31 percent over last year.

The Great Lakes-St. Lawrence Seaway maritime industry supports 227,000 jobs in the U.S. and Canada, and annually generates $14.1 billion in salary and wages, $33.5 billion in business revenue, and $4.6 billion in federal, state/provincial and local taxes. North American farmers, steel producers, construction firms, food manufacturers, and power generators depend on the 164 million metric tons of essential raw materials and finished products that are moved annually on the system. This vital trade corridor saves companies $3.6 billion per year in transportation costs compared to the next least-costly land-based alternative.