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%.

Political Shenanigans

My posts are generally related specifically to the Marine Industry, so this is a modest one-time departure from that theme. Today, the congress passed a two month extension of the payroll tax cut, in addition to funding the government for the remainder of the governments fiscal year. There is an incredible amount of political grandstanding happening at the expense of the American people. 

I am currently unemployed, trying to survive on the income generated by this blog (which isn't easy.) I have been denied unemployment; I am a Veteran; and I have been dedicating 40 to 50 hours per week looking for a new career. No less than 9 times, I have been told by prospective employers that they were waiting to see what the tax implications are before taking on any new employees. 

So, to the American Congress, I would like to give a big (and yes, very sarcastic) "Thank You!" 

Perhaps the most stomach turning rhetoric I'm hearing is the push to create more jobs for the Veterans coming home from Iraq. Meanwhile, the Keystone Pipeline remains on hold; the payroll tax cut is temporarily extended for two moths; major shipping ports are in need of significant improvements; Inland waterways are in need of improvement; Schools are still a mess; and there is still no dramatic economic rebound from the  800 billion dollars in "shovel-ready" projects that were supposed to save us all. 

Businesses like stability, and our Congress is not providing that. Two months? Again, my sarcastic thank you. Thank you for giving business 2/3 of one fiscal quarter in stability and predictability.

So, what will I do? Well, I will continue looking for work. Hopefully, the new year will  yield more positive results.

Hornbeck Offshore orders 16 new OSVs from VT Halter, Eastern

From a Hornbeck Offshore Press Release
27 November 2011

COVINGTON, La., Nov. 17, 2011 /PRNewswire/ -- Hornbeck Offshore Services, Inc. (NYSE: HOS) announced today the execution of definitive contracts for the construction of sixteen high-specification offshore supply vessels ("OSV"), in connection with its latest newbuild construction program announced on November 7, 2011. This is the Company's eighth newbuild vessel program since its inception in 1997, and its fifth newbuild program involving state-of-the-art, technologically advanced new generation OSVs.
The Company has separately contracted with VT Halter Marine, Inc. of Pascagoula, Mississippi and with Eastern Shipbuilding Group, Inc. of Panama City, Florida for the construction at each yard of eight 300 class vessels with options to build additional such vessels should future market conditions warrant. The Company'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 aggregate 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 the Company's recently completed equity offering), projected free cash flow from operations and, if necessary, available capacity under the Company's 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 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 the most stringent regulations for environmental stewardship, 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 and consist of four vessels based on the STX Marine SV 300 design and four vessels 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. In addition, 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 mentioned above for the Super 320 design and will also carry the ENVIRO class notation by the American Bureau of Shipping.
Based on the schedule of projected vessel in-service dates below, the Company expects to own and operate 56 and 67 new generation OSVs as of December 31, 2013 and 2014, respectively. These vessel additions result in a projected average new generation OSV fleet complement of 52.2 and 62.8 vessels for the fiscal years 2013 and 2014, respectively. Inclusive of the vessel deliveries referred to below, the aggregate cost of the Company's fifth OSV newbuild program is expected to be approximately $720 million, of which $44 million, $227 million, $348 million and $101 million is expected to be incurred in 2011, 2012, 2013 and 2014, respectively. The first sixteen OSVs under this newbuild program are expected to be placed in service in accordance with the schedule shown in the table below:

	2Q2013E	3Q2013	4Q2013	1Q2014	2Q2014	3Q2014	4Q2014
Estimated In-Service Dates:
300 design	1	1	1	1	-	-	-
310 design	-	-	-	1	1	1	1
320 design	-	-	2	2	3	1	-
	1	1	3	4	4	2	1

All of the above capital costs, anticipated periods of their incurrence and delivery date estimates for the contracted newbuild program are based on the latest available information and are subject to change. All of the figures set forth above represent expected cash outlays and do not include the allocation of construction period interest.
Hornbeck Offshore Services, Inc. is a leading provider of technologically advanced, new generation offshore supply vessels primarily in the U.S. Gulf of Mexico and Latin America, and is a leading short-haul transporter of petroleum products through its coastwise fleet of ocean-going tugs and tank barges primarily in the northeastern U.S. and the U.S. Gulf of Mexico. Hornbeck Offshore currently owns a fleet of 80 vessels primarily serving the energy industry.

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

Nation’s Third Littoral Combat Ship Successfully Completes Builder’s Trials

MARINETTE, Wisc., October 24th, 2011 — A Lockheed Martin [NYSE: LMT]-led industry team completed Builder’s Sea Trials for Fort Worth, the nation’s third littoral combat ship.

The trials – a coordinated effort between the U.S. Navy and the Lockheed Martin team including Marinette Marine Corporation (MMC) – were conducted in the waters of Green Bay and Lake Michigan. They included operational testing of the vessel’s propulsion, communications, navigation and mission systems, as well as all support systems.

“Successful completion of Builder’s Sea Trials means we are on track for the Navy’s Acceptance Trials, putting us a big step closer to getting the Navy the ships it needs,” said Joe North, vice president of littoral ship systems for Lockheed Martin’s Mission Systems and Sensors business. “We support the Navy’s effort to grow their fleet affordably and effectively.”

The rigorous trial period included maneuverability tests; high-speed runs; power and navigation system checks; rescue boat launch and recovery; and tracking exercises, as well as other ship and system evaluations.

Following the successful completion of Builder’s Sea Trials, Fort Worth returned to MMC to prepare for Acceptance Trials. LCS 3 will be delivered to the Navy next year and its home port will be San Diego, Calif.

Fort Worth, the second Freedom variant ship in the LCS program, was christened in December 2010. It is more than 96 percent complete and remains on cost and on schedule. LCS 3 is being constructed with 30 percent fewer production hours as a result of lessons learned from designing and building LCS 1, USS Freedom.

The team began construction on LCS 5, the future USS Milwaukee, in August.

Headquartered in Bethesda, Md., Lockheed Martin is a global security company that employs about 126,000 people worldwide and is principally engaged in the research, design, development, manufacture, integration and sustainment of advanced technology systems, products and services. The Corporation’s 2010 sales from continuing operations were $45.8 billion.

New amendment passes to boost transparency of Jones Act waivers

Press Release From US Representatives Elijah E Cummings and Jeff Landry
Cummings, Landry say measure will help preserve U.S. mariners' jobs
(11/15/2011)
(WASHINGTON) -- Congressman Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, and senior member of the House Committee on Transportation and Infrastructure, today joined Rep. Jeff Landry (R, LA-03), Vice Chairman of the Coast Guard Subcommittee, in applauding their colleagues in the House of Representatives who approved the Cummings-Landry amendment to the Coast Guard reauthorization bill that passed the House on Tuesday. The amendment will increase government transparency surrounding the issuance of waivers allowing non-Jones Act-qualified vessels to carry cargo between U.S. ports. It is nearly identical to the American Mariners Job Protection Act (H.R. 3202), a bill with bipartisan support that was introduced by Reps. Landry and Cummings earlier this year. “Americans are desperate for jobs,” said Cummings. “In this time of economic turmoil, we owe it to the people we represent to make full use of American maritime capabilities by adhering firmly to the Jones Act. Every single ship that can carry cargo under the Jones Act should be full and every American mariner should be able to work a fair day’s work for a fair paycheck. Congressman Landry has stood resolutely beside me as we protect the jobs of American mariners and I thank him for his support.” Under current law, when the head of the agency responsible for the administration of the Jones Act believes it necessary to waive the Act’s requirements in the interest of national defense, the agency must request the Maritime Administration to assess whether Jones Act-qualified vessels are available to carry the cargo under consideration. “I came to Congress to increase government transparency and get America back to work; today we took another step in that direction,” said Landry, whose district has the most domestic maritime industry jobs in the nation and transports much of the nation’s energy-based resources. Excited by today’s passage, Landry continued: “American mariners are the most qualified and safest workers in the world, and I am grateful my colleagues voted today to put them back to work. I thank Congressman Cummings for his leadership on this issue and thank him for working to ensure that the American mariner is always the first option.” The Cummings-Landry amendment will require the Maritime Administration to include in such assessments information on the actions that could be taken to enable Jones Act-qualified vessels to carry the cargo for which the Jones Act waiver is sought. The Maritime Administration would also be required to publish its determinations on its website. Further, the amendment would require notification to be provided to Congress when a waiver is requested or issued.

Is the America's Cup in Jeopardy?

San FranciscoBusiness Times reporter Eric Young reported October 27th, 2011 that U.S. Senator Dianne Feinstein (D-CA) introduced a bill to the Senate on 20 October 2011 to facilitate the America's Cup Match to occur in San Francisco in 2013. Senate bill 1759 basically saves the America's Cup from the prohibitive rules outlined in the Jones Act of 1920. Commendable for her to do this I think, considering it will be a huge windfall for the City of San Francisco and the State of California. This is an example of a Senator doing the right thing to help out her constituency. There is only one question I have, which by the way is intended to be very cynical. Why was the Jones Act not a problem from 1920 thru 1995, when the Americas Cup was hosted in United States Waters?

 I have read the Bills, S.1759 and H.R.3270 (the House of Representatives nearly identical version), and they seem rather harmless in the grand scheme of things. They are very limited in focus, and effect primarily support vessels for the event. I also re-read every piece of the Jones Act I could think of that might affect the event, and I don’t believe the bills are necessary. Primarily because the waiver authority for Jones Act regulation  already resides with several government agencies. 

They were read twice in their respective forums and will be up for discussion and the a vote. This is government efficiency, right? (Warning, I'm going to get cynical again.)So, my first question stands, why wasn't this a problem from 1920 thru 1995? The next question is, are we going to hear anything about this as it progresses? Answer: Probably not. Why do we care now. Let me think … oh yeah, its an election year next year. This would be a harmless feather in the cap of the good Senator on how her bill saved the America's Cup Event in San Francisco. A more sinister answer could be that since this is an "under the radar" bill (Her office didn't even issue a press release about it), how easy would it be to tack something more meaningful onto it?  I hope this is not the case.

Now, Senator Feinstein has done many things and has many accomplishments. Some of them I actually agree with and some of them (I believe) did more harm than good. I believe that she is doing what she feels is in the best interest of her constituency as well as our country (No I don’t think she's evil), however, I question the need for this Bill now, when the only thing it really threatens immediately is the San Diego America's Cup World Series Match beginning November 12th.

Introduction of this now will not only create panic for the organizers of the America's Cup and the World Series events, but it will open the door for a lot of confusion regarding the Jones Act, which has done pretty well for us since 1920.

Lets leave this fine event and its coverage to the Port Authority of San Francisco, the US Coast Guard, Immigrations  and Customs Enforcement (ICE), and the governing body of the America's Cup Event.  I for one think that this should remain a sporting event with a long and distinguished history dating back to 1851, before it became the America's Cup.

In August of 1851, a Schooner christened America raced against 15 other yachts in a 53 nautical mile regatta around the Isle of Wight. She finished 8 minutes ahead of the nearest rival. This is when its said Queen Victoria asked who was second and someone replied to her,"Ah, Your Majesty, there is no second."

Since 1857, the America's  Cup (newly renamed) has been a perpetual challenge trophy via Deed of Gift of the Americas Cup to the New York Yacht Club.

Politics were not involved in 1851, and should not be involved now. It’s a stretch (at the least) to say the Jones Act will interfere with the upcoming events and our politicians have more to worry about than a yacht race in San Diego or San Francisco.