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Latin American Panel
Buenos Aires
31 October – 1 November 2007
Peter M. Swift
INTERTANKO – The Voice of the Tanker Industry
MISSION• To provide leadership to the Tanker Industry in
serving the world with safe, environmentally sound and efficient seaborne transportation of oil, gas and chemical products.
VISION FOR THE TANKER INDUSTRY• A responsible, sustainable, respected Tanker
Industry, committed to continuous improvement and constructively influencing its future.
INTERTANKO OVERVIEW
Latin American Panel31 Oct – 1 Nov 2007
INTERTANKO Overview
Membership and Internal Developments
• Membership applications
• Financial position
• Review of Panel structures
• Secretariat
INTERTANKO Overview
Review of Panel structures
Regional Panel Mill.
dwt. % of dwt
Number of Members
Asia (China, Malaysia, Hong Kong, Singapore, South Korea, Japan)
60.3 27 52
Hellenic (Greece, Cyprus, Turkey, Italy) (Greece only: 45.6 mill dwt, 67 members)
62.5 29 97
Latin America (Argentina, Chile) 0.6 0 2 North America (Canada, USA) 22.0 10 15 No panel representation 76.1 34 100 Total 221.5 100 266
INTERTANKO Overview
Activities and developments not covered elsewhere in the agenda
• European Court of Justice – recent events• Amicus Curiae – Exxon Shipping punitive
damages case• EU issues• Green House Gas emissions• Council meeting – November 15, London• Incident reporting and information sharing
European Court of Justice
EU Directive on Ship Source Pollution
• Seeks to impose criminal sanctions for “accidental” pollution
• Coalition opposition is based on need for “Universality and Certainty”
• Oral hearing 25 September
• Opinion of Advocate General 20 November
• Decision of Court – early 2008
EU Council Framework Decision
• ECJ rules that Community Law on Penalties should be incorporated within Directive (s)
• ECJ rules that Commission does not have competency to legislate on type and level of penalties for criminal offences under EU law.
• Future uncertain in respect of environmental crimes under EU law AND over criminal liability for accidental pollution
European Commission (The Executive)
EU Institutions
EuropeanParliament
(Direct election)Council
(Member States)
EMSA
EU Issues
• Competition Rules for Tramp Shipping
• Third Maritime Safety Package
• Future Maritime Policy for the European Union
• Lisbon Treaty
Green House Gas activities
Activities at several levels
• IMO correspondence group, MEPC, Assembly, Research projects (?)
• ISTEC projects
• International Shipping Associations study group
• Tripartite partners Work Group
Incident reporting (tanker incidents) &
Information Sharing
ONE OF THE ASSOCIATION’S PRIMARY GOALSLead the continuous improvement of the Tanker Industry’s performance in striving to achieve the
goals of:Zero fatalities, Zero pollution, Zero detentions
Tanker Incidents &Information Sharing
• Recording incidents (events)Incidents: Reports from Lloyd’s Marine Intelligence Unit (LMIU)Total losses: International Union of Marine Insurers, (IUMI)Oil pollution: International Tanker Owners Pollution Federation
(ITOPF) and LMIUPSC Detentions: USCG, Paris MoU, Tokyo MoU
• Informal Sharing of InformationIACS, IUMI, IG, ITOPF, OCIMF
• Establishment of Confidential Platform for Information Reporting
“A responsible, sustainable, respected Tanker
Industry, committed to continuous improvement”
Doing better tomorrow than we do today !
• Incident analyses
• Sharing of information
Learning lessons
Tanker Incidents & Information Sharing- examining trends
Source: INTERTANKO, LMIU, ITOPFSource: INTERTANKO, LMIU, ITOPF
Number 000 ts
0
220
440
660
880
1100
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
00
01
02
03
04
05
06
07
0
140
280
420
560
700
War
Hull & Machinery
Fire/Expl
Grounded
Coll/Contact
Misc.
Pollution - bars
2007 is a projection based on 10 ms
Tanker incidents 2006 by typeLarge contribution of human errors ?
17%33%
9%28%
13%Collision/contact
Grounding
Fire/Explosion
Hull & machinery
Misc/unknown
Collision
Groundings
Hull & Machinery (32 engine, 3 hull related)
Misc.
Fire & Exp.
Reported tanker incidents Jan-Dec
2006 - total 265
Source: INTERTANKO, LMIUSource: INTERTANKO, LMIU
Tanker incidents 2006 by size
11%
24%
52%
13% Below 10,000 dwt
10-29,999 dwt
30-99,999 dwt
100,000+ dwt
Reported tanker incidents Jan-Dec
2006 - total 264
0.017
Rate:*
0.026
0.027
0.024
* Rate= no incidents/no shipsTotal average = 0.020
Tanker engine related incidents
No
0 5 10 15 20 25 30 35
2002
2003
2004
2005
2006
2007
1970s - 18
1980s - 39
1990s - 32
2000s - 19
NN - 5
2007: 40 days
Built:
The Sharing of information- to improve safety
Frequently there are difficulties – commercial confidences and exposures, legal issues, professional integrities to protect, etc.
The Challenge is to overcome these !
Examples of successes:
• Company “NO-BLAME” cultures
• Confidential reporting – for example CHIRP (Confidential Hazardous Incident Reporting Programme)
• Near-Miss reporting – for example with pilotage in straits
• Inter-industry analyses – for example of fires and explosions on Chemical and Product Carrier
• IACS “Early Warning System” (EWS)
…. More are needed !
Confidential Platform for Information Reporting
Enables members to simply send a copy of the incident report, root cause analysis and corrective action that they submit to the oil companies post any incident.
The approach:• provides INTERTANKO (the secretariat) with first-hand information of
any significant incidents, • permits INTERTANKO members to share important incident
information and, where possible, lessons learned – thus contributing to INTERTANKO’s policy commitment to “continuous improvement”,
• encourages members (and in turn others) to share information on incidents,
• avoids a member who wishes to provide information to INTERTANKO having to duplicate information already submitted to charterers (and/or others), and
• respects the confidentiality of the sources of the information provided.
Human Element Committee
INTERTANKO MEMBERS will -• Promote the availability and utilization of
personnel with the highest quality marine skills and competencies
Human Element Committee (plus)
• Cadet Berths (Training)
• ILO 180 Guidelines (also Maritime Labour Convention)
• Safe manning
• Officer Retention
• TOTS – Tanker Officer Training Standard
• Human Factor in tanker incidents
• Fair treatment of seafarers – IMO guidelines and elsewhere
• Accommodation standards – Tripartite and other
• Image of industry
TOTS- Tanker Officer Training Standard
• An alternative approach to oil companies’ “Officer Matrix” requirements, based upon “Time in Rank” and “Years with the Operator”
• Built on officer competences and training, as well as time in rank and with operator
• Incorporates training modules onboard and ashore, as well as verification processes
• TMSA compatible
Addresses “Quality and Experience”
Shipping is more than ships moving around the world; it’s about people and passion
it’s about expertise and commitment
www.maritimefoundation.com
AIR EMISSIONS Recent Developments
Revision of Annex VI
Air Pollution from Ships
• Developments at IMO – Recap, Timeline, (Establishment of IMO Group of Experts)
• Developments elsewhere - SECA intents (US and other)
• Scrubber developments
• The INTERTANKO proposal and other options at IMO
• Emissions Trading- carbon- all emissions
MARPOL Annex VI
• Adopted September 1997
• Entered in to Force May 2005 (US and Canada not parties)
• Revision initiated at MEPC July 2005
• SECAs from May 2006
• Target date for adoption of Revision 2008
EXISTING Sulphur Emission Control Areas (SECAs)
NOV. 2007EU from AUG. 2007
MAY2006
SOURCE:
http://maps.google.com/
Revision of Annex VI
PROPOSALS FOR AMENDMENTS
- Lower limits for SOx & NOx emissions
- SECAs with lower S cap (1.0% or 0.5%)
- NOx emission limitation on existing engines
- NECAs – NOx controlled areas
- Restrict Particulate Matters (PM) emissions
- Restrict on VOC emissions from cargo oil tanks
- Restriction on CO2 emissions
AIR EMISSIONS
IMO ANNEX VI REVISION TIMETABLE TO DATE
• MEPC 54 (March 2006) – Proposals for revision. The work is delegated to BLG Sub-Committee
• BLG 10 (April 2006) – Initial review of the proposals and documents (over 30 documents)
• Two correspondence groups (April – October 2006)
• Intersessional Meeting (November 2006)
• BLG 11 (April 2007) – consider draft proposals for revised Annex VI, the NOx Code and Guidelines
• MEPC 56 (July 2007)
• Intersessional Meeting (October 2007)
• IMO Sec Gen establishes government-industry group of experts to report by December 2007
Developments elsewhere
• California introduces state requirements• US considers ratification of Annex VI• Draft bill introduced in to US Senate for US
waters plus• Canada mulls own requirements• SECA proposals under discussion for US coasts,
Mediterranean, …• EU bides times on revision of Sulphur Directive• Ports under pressure to act unilaterally
IMO has to deliver
Exhaust Gas Scrubber Development
Exhaust Gas Scrubber Development
1. Seawater scrubbers
2. Freshwater scrubbers
• Trials underway• Application to existing ships complex• Many issues including:
availability, costs, effectiveness (operating location, engine loads, with catalytic converters, …), waste streams and products, …………………
The INTERTANKO proposal
• All ships to burn only distillate fuels, with a global sulphur content cap:o Tier I - a maximum sulphur content of 1.0%, ando Tier II - for new engines - a maximum [0.5%]
sulphur content
• i.e. one Global Sulphur Emission Control Area
• One Single Fuel specification included in Annex VI
• Simplified checking and monitoring provisions
Revision of Annex VI
IMO WORKING GROUP PROPOSALSA. Status Quo - No change
B. Sulphur Emissions Control Area (SECA):– A global sulphur cap (unchanged or lower value) – SECA sulphur cap lowered in two tiers:
• 1.0% in [2010]• 0.5% in [2015]
C1. Change to distillate fuels (ref. INTERTANKO):– Use of distillate fuels for all ships– A global sulphur cap in two tiers:
• 1.0% in [2012]• 0.5% in [2015]
– Include in MARPOL Annex VI the specification for the distillate fuel to be used by ships
C2. Global cap – As C1 but allows use of residual fuel + scrubbers
Distillate Proposal
Accepted by most as being THE ideal solution, but
Issues:
Availability: 2012, 2015, 2020, ? longer
Price: Oil company investment USD 126 bn.Future fuel price for distillates 1/3 rd more than HFO.Investment in scrubbers 60,000 x USD 3 m per ship = USD 180 bn.
Holistic approach:At least carbon neutral, probably carbon positive, i.e. net beneficial effect
Leave open options for other solutions ?
The CO2 Equation
CARBON NEGATIVE
• SOx deposits in Ocean due to Buffering effects
• Energy required to run scrubbers
• Sulphur deposits to Ocean in scrubber waste water due to Buffering
• Energy required to produce LSFO/Distillates
CARBON POSITIVE
• Burning Distillate vs HFO(Low sulphur – little or no buffering)(Higher calorific value)
• No pre-treatment required for fuels
• No post-treatment required of fuel wastes
Time to choose
Solution1. HFO with abatement technologies
2. Cleaner fuels – LSFO or Distillate
Application
1. Globally
2. Locally/regionally
Driving for Cleaner Air !!!
• Societal pressures for improvements in fuel quality
• EU and California set the pace
• Calls for international standards
• Refiners cite $bn investments needed and negative CO2 implications – all too difficult
• Refiners claim time frames impossible and propose local solutions
• Industry holds line
• Clean fuels mandated / cleaner air results
√
√
√
√
√
√
?
Decision Time !
• IMO Group of Experts – report end 2007• BLG meets February 2008• MEPC 57 meets April 2008• MEPC 58 meets October 2008
• ?? 2008
EU/US consider own legislation if IMO does not deliver
FINAL COMMENTFINAL COMMENT
Distillates (MDO) ADDRESSES
THE ROOT CAUSE OF
AIR POLLUTION FROM SHIPS
RATHER THAN THE EFFECTS OF
CLEANING UP THE AIR POLLUTION
ON THE SHIP
AFTER IT HAS BEEN CREATED
Emissions Trading
• Emissions Trading
- where, with whom ?
- carbon
- all emissions ?
THANK YOUFor more information, please visit:
www.intertanko.com www.poseidonchallenge.com
www.shippingfacts.comwww.maritimefoundation.com
Blue Sky Thinking
• Business Environment• Industry Developments• Regulatory and Governance Environment• Environmental and Social Pressures• Human Element (Personnel) & Operational
Challenges• Other
Blue Sky Thinking
Business Environment• Cyclical business• Rising costs• Tanker accident• ……………………….
Blue Sky Thinking
Industry Developments• Consolidation• New business opportunities• ……………
Blue Sky Thinking
Regulatory and Governance Environment• Weaker/stronger IMO• More/less regional
pressures/legislation• Role of flag states• Role of class• Higher standards set by… ?• Challenges to Limitation of Liability • …………….
INTERNATIONALCONVENTIONS
WHO GOVERNS SHIPPING ?
COMMUNITY INTERESTS- LOCAL LAWS / REGULATIONS
REGIONALREGULATIONS
INTERNATIONAL SHIPPING
INTERNATIONALCONVENTIONS
MARPOL Annex VI
Who governs Shipping ?- Environmental pressures
COMMUNITY INTERESTS
-LOCAL LAWS / REGULATIONS
California,West Coast/Canadian
Ports,Rotterdam, Antwerp,
Helsinborg,Other
REGIONALREGULATIONSEU / USA (EPA)
INTERNATIONAL SHIPPING
Blue Sky Thinking
Environmental and Social Pressures• Climate change / global warming and air
pollution pressures on shipping industries• Development of (zero emission) eco-ships• Tankers singled out – not cold ironing, large
ballast water transporters, difficult recycling • “Green legislation” grows – higher entry
barriers, knowledge and experience more valued
• Corporate Social Responsibility practices and programmes are the “norm”
• ……………..
Blue Sky Thinking
Human Element (Personnel) & Operational Challenges• Availability and quality of officer pool will get worse
before it gets better• Solutions will be
- through regulatory changes and/or market mechanisms- at both macro and micro level ?
• Sourcing will be even more from “new” Asian countries• Greater participation of women• Tanker industry could lose out to other sectors• Standards in some sectors will slide• More activity by management companies• ……………
Blue Sky Thinking
Other
?
Blue Sky Thinking
BLUE SKIES
or
STORM CLOUDS
?
