Recently in Shipping Category

Pipeline safety managers who want to gauge the dollar costs of hypothetical hazardous liquid pipeline accidents may now be able to do so in a relatively straightforward way.

With the market for distillates such as diesel and jet back to their normal place in petroleum economics -- below the price of gasoline -- it was sobering to hear a speech last week in Malta, at Axelrod Energy Partners' World Fuel Oil Summit.

Carlos Cuervo, senior vice president for supply and trading at World Fuel Services, addressed the issue of what would happen to the bunker market in the coming years, as International Maritime Organization regulations on sulfur in bunker fuel begins to take hold.

They say bad things come in three, so here's the third installment of a triumvirate of discouraging news items.

News that pirates had taken over a supertanker carrying crude from Saudi Arabia to the US suprised markets, despite the rise of piracy off Somalia and the Malacca Straits over the years.

This was seen as highly ambitious, seeing as the cargo is worth around $100 million, even in these depressed times.

Several panelists spoke this morning at the 5th annual Platts Bunker and Residual Fuel Oil (Bottom of the Barrel) Conference on proposals to shift ships away from using higher sulfur residual fuel oil to lower sulfur resids and distillates, lowering particulate emissions and SOx/NOx. But an effort to move the marine industry to a greener futures by moving to cleaner fuels could also create serious financial and fuel availabilty issues for shipowners, forcing them to pay more "green" for their fuel.

California is ahead of the pack on this, as usual, with a Air Resources Board proposal being debated this week to require ships to run lower sulfur marine gasoil and marine diesel within 24 nautical miles of the coast staring in 2009. Pacific Merchant Shipping Association, represented by vice president T.L. Garrett at the conference today, blocked CARB regulations similar to this in 2007 in court. Garrett reiterated how this could increase fuel costs and tighten fuel availability, and pointed to alternatives such as marine emission control systems, called "scrubbers," that ships could add and still burn resid to meet emission controls.

Red alert to all you farmers and truckers out there -- Shipping PLC is thinking hard about making a raid on the global village and siphoning off all your diesel.

It is almost unimaginable -- in fact it is almost certainly impossible -- but delegates at the Sustainable Shipping Forum in Singapore Friday were talking about a long-term strategy for coping with emissions that involves switching all world shipping away from fuel oil-based bunker fuel to gasoil-based bunker fuel.

While onshore transportation fuel emissions restrictions have tightened dramatically, with on-road diesel going from 500 ppm sulfur to just 15ppm in the US, and in Europe down to as low as 10ppm, emissions restrictions on ship fuel -- known as bunker fuel -- have lagged.

The International Maritime Organization has been taking steps to cut shipborne emissions, setting up Sulfur Emissions Control Areas in the North Sea and Baltic Sea, in which bunker fuel faces a 1.5% (15,000 ppm) sulfur limit, rather than the 4.5% in effect in the open sea.

The Bahamas is well-known as a resort and cruise-ship resting spot, located just 80 miles off the Florida coast. But for crude and fuel oil traders, the most important part is a terminal in Freeport, valued for its 20 million barrels of storage, strategic location and deep-draft jetties.

The Bahamas Oil Refining International Limited, or BORCO, is a subsidiary of the Venezeulan state-owned oil company PDVSA. It was built by Chevron in 1968, began operation in 1970 and was sold to PDVSA in 1990. And just this week, it was purchased by a private equity company named First Reserve, and will be operated by global terminalling giant VOPAK.

The US tugboat industry needs mates and captains--ask anyone in this shipping industry sector and they'll agree, the market's tight for skilled labor.

Many mates/captains have flocked to the US Gulf for work on vessels servicing offshore rigs drilling for oil in recent years following rising oil prices. Wages there are the highest around; why commadeer a tugboat dragging, say, a cement barge down the Hudson River, when you can make big bucks tending to big rigs in the Gulf of Mexico?

Things are looking "up" for the tugboat industry, at least in the eyes of Bob Beegle, president of Marcon International, which sells and charters tugs, barges and other vessels around the world. Beegle spoke Tuesday afternoon at....surprise!--a tug and barge conference in sunny Stamford, Connecticut, where a cool breeze blew through downtown from the nearby Long Island Sound, home to, one would think, no shortage of tugs. (The conference: MarineLog Tugs & Barges Conference/Expo 2007).

Up, up and up was the good word from Beegle. Demand for new and used tugboats is up--494 tugs are on "order" around the world, to add to the current 11,760 "ocean-going" tugs now operating, Beegle said. Rates tugs charge for their services--escorting barges, anchoring vessels, docking vessels, salvaging ships in distress, fighting vessel fires---are up.

Sales of Beegle's own Marcon International are up, thank you very much. And the power of tugs--their horsepower, that is--is up, as it must be to handle the increasingly larger barges and commercial vessels on the world's waterways. (Up from what levels for each of these items was not detailed.)