Nautical Institute : US Gulf

US Gulf Branch Newsletter for March 2009

Spring meeting: a reminder that our next meeting will take place at the Hess Club on Westheimer; the date is Wednesday 11th March. While some of us will be out of town on that date, we would appreciate a good turnout by those who can make it. Our success as a club depends on good attendance at our functions. The presentation will be on the subject of EPA-NPDES (National Pollutant Discharge Elimination System), and VGP (Vessel General Permit), which was discussed in the previous newsletter.

The theme of the presentation is to get an overview of the permit requirements and the pitfalls faced by the maritime industry in implementation, as the Regulations came in force on 6th February 2009 and the vessel documentation requirements kick in on 19th February 2009.

For more details see the March Meeting Program header.

Maritime Affairs:
Vessel General Permit (VGP). This potential bureaucratic minefield came into force on February 6th. We gave a brief summary in the last newsletter and here are some more details.

Under the final VGP, discharges incidental to the normal operation of a vessel into the navigable waters of the United States (i.e. within three nautical miles of the shoreline) are subject to the permit. All commercial vessels of 79 ft or greater in length are included with a few exceptions; a two year moratorium was granted to all commercial fishing vessels and commercial vessels less than 79 ft, except for ballast water discharges, and all recreational vessels. The final VGP covers 26 different types of discharges such as deck runoff, bilge water, ballast water, chain locker effluent and so on. The link to the EPA website containing the VGP and other supporting documents is: http://cfpub.epa.gov/npdes/home.cfm?program_id=350 this is informative and well worth checking out.

Failure to obtain coverage under the VGP will mean that discharges incidental to the normal operation of a vessel are prohibited within three nautical miles of the shoreline. Commercial vessels less than 300 gross tons with no more than eight cubic meters of ballast water will automatically be covered. Owners and operators of larger vessels must obtain coverage by submitting a Notice of Intent (NOI) between June 19 and September 19 2009.

Apparently this can be done electronically using eNOI. Prior to the submission dates, vessels will be deemed automatically authorized to discharge under the VGP. The final VGP sets forth a routine inspection schedule program requiring a company to establish per voyage or weekly, quarterly, and annual inspections, which must be logged in the ship’s log or other recordkeeping mechanisms. Violations to effluent limits and other noncompliances with the VGP require a corrective action assessment to be conducted. The vessel must be returned to compliance within certain deadlines, and findings documented.

Failure to comply with the permit constitutes a violation of the VGP and failure to remedy violations within a specified time constitutes an additional violation. Penalties under the VGP subject a person to a $10,000 fine or imprisonment for two years or both for the first violations and double this amount for subsequent violations. It is unclear at this time how EPA will enforce this new regime as it is still developing its enforcement strategy. At the moment it does not have the resources and EPA were approaching the Coast Guard for help, but to little avail apparently.

Piracy:
The hijacking of the Sirius Star in November grabbed everyone’s attention to the piracy problem. To us mariners, the pirates have been a thorn in our side in certain parts of the world forever. But it does seem to have become big business off the coast of Somalia. The Sirius Star was released in January for $3m and in early February, the pirates released the Ukrainian vessel, Faina after a ransom of $3.2m was paid. Sadly her captain, Viktor Nikolski, died of a heart attack or hypertension just before help could be given.

Apparently, according to Chatham House, a think tank, during 2008 a total of $30m was paid in
ransom money to Somali Pirates. It’s a really sticky problem; if you don’t pay the ransom, you endanger the crew, but if you do pay, then the pirates are encouraged to make further attacks.

The arming of merchant vessels is also controversial, and the general consensus is not to put weapons on ships. There are of course many non-lethal methods of discouraging pirates, such as remote controlled water cannons situated on the aft deck and LRADs (Long Range Acoustic Device). Blackwater are getting in on the act too, supplying their own escort vessels – at a price.

Probably the only solution is to saturate the area with naval vessels, and when there is sufficient deterrent, the piracy will die off. To this end, the US, India, Great Britain, France, Germany, China, Saudi Arabia, and South Korea have naval vessels operating in the area. Japan has announced they will be sending two destroyers and Turkey will also send naval vessels to the Combined International Force. The UN Security Council has authorized countries to enter Somalia’s territorial waters with advance notice, and to use “all necessary means” to stop piracy and armed robbery at sea. Of course the best policy is, if possible, to avoid the area at the cost of some extra time and fuel oil.

How is the recession affecting the maritime community?
The world is settling into its second year of recession, with no relief visible in the short term. How are things faring for the merchant fleet? It would appear that the container trade is hardest hit. Driven by reducing consumer demand, container traffic is dropping off. Also container vessel operating costs saw the highest increase of 18% last year. Combined with lowering freight rates, these factors have forced shipowners to begin laying up vessels. Maersk Line has laid up eight container vessels, while many of their rivals are closing down routes. Neptune Orient Lines are laying off 1,000 staff or 9% of their workforce. According to Nils Anderson, CEO of Maersk, major shipping lines will likely continue laying up ships in 2009 to reduce capacity. Not good.

Aframax rates on the Middle East-Singapore route have fallen 34 percent this year as chartering demand slowed following a rush in hiring before the Christmas holidays and the Northern Hemisphere winter. Charter rates for supertankers, which can carry 2 million barrels of oil, on the benchmark Middle East-Japan route have plunged 36 percent during the first 11 days of the year, lowering fees for smaller tankers. There are not a lot of oil cargos on the market, and with close to 120 new Aframaxes coming onto the market this year, the rates are likely to be depressed further. There is also a big drop in VLCC rates, with a build-up of these vessels being used for storage in the Gulf of Mexico. Carrying out lightering operations in the Galveston Lightering Area was becoming difficult due to the congestion, until the (storage) ships removed themselves further south.

Deepwater development is slowing a bit, but will probably forge ahead over the next several
years. It is forecast that average spending in this sector will be $27B a year until 2013.
Deepwater currently accounts for over 15% of total offshore oil production, but over the next
few years its relative share will rise to over 20%.

Hebei Spirit:
This e-mail was sent by Capt. Joki in response to the article about the Captain
and Chief Officer of the Hebei Spirit;
“FYI there is no way any unions or private organizations can challenge a government. I had an
experience in Singapore 1983. I was after all the only licensed officer onboard drill ship ENIWETOK as she hit overhead cable cars and 7 people died. After several months Singapore government made me look like the one who was guilty. There have been cases of Erika and Prestige afterwards. Now it is Hebei Spirit! I believe all this mess should be handled by United Nations! Best regards!” Joki Pekka.

The following appeared on the internet dated 10th February:
COURT CAP ON HEBEI SPIRIT DAMAGES
Tuesday, 10 February 2009
A South Korean court has set a ceiling on damages the operators of the tanker Hebei Spirit are liable for, relating to oil pollution caused when the anchored tanker was hit by a barge in December 2008. The Chosun Ilbo online service reports that the figure was set yesterday at
Daejeon District Court to the protection and indemnity insurance limit of won142.5 billion
(US$103m).

The ruling is reported to be in response to a request by the operators of the Hebei Spirit for a cap on compensation. The ship is owned by Hebei Ocean Shipping and managed by V.Ships.
The Chosun Ilbo comments: “The ruling shows that the Hebei Spirit did not cause an accident
grave enough to expose it to unlimited indemnity and that the scale of damages would clearly
surpass the limit of its insurance coverage.”

As far as we know, Captain Chawla and Chief Officer Chetan are still detained in Korea, on bail. It appears that they have been reunited with their families.

Texas Offshore Port System (TOPS)
It looks like the offshore terminal for Freeport is moving ahead. The Maritime Administration
announced that the Coast Guard, in coordination with the Maritime Administration, will prepare an environmental impact statement (EIS) as part of the environmental review of this license application. The facility would be located approximately 30 miles southeast of Freeport, Texas.

A public meeting was held on February 18th in Freeport. Another was held in Texas City on the
19th February. The following website can be accessed for further information on this project.
http://edocket.access.gpo.gov/2009/E9-1514.htm

News Item:
Captain Andre Le Goubin (Hon) Treasurer and Captain Derek McCann (Editor)
have obtained their Masters degrees. Andre has completed a Master of Arts degree at Middlesex
University, which was done in partnership with the Nautical Institute. Derek completed his
Masters in Business Studies with Liverpool John Moores University, where be obtained a
distinction for his dissertation on Irrational Decision Making by Experienced Personnel.
Andre’s thesis is being published and he will be presenting it at Transnav 2009 in Poland later this year. The paper, which is summarized below, is the product of research data provided primarily by members of NI. The following is the paper abstract:
“According to various statistics, the number of marine accidents is rising, and recent increases in the cost of P & I insurance cover provides further evidence that the cost of these accidents is also soaring. This paper establishes that a contributory factor to the increase in accidents is that experiential knowledge (knowledge gained from professional ‘on the job’ experiences and reflected upon), is not being passed from senior to junior officers onboard many merchant vessels, in the traditional way that it used to be, by mentoring. Following worldwide research throughout the maritime community by questionnaire, and ethnographic research by the author, the paper will show what is considered to be the most significant lack of knowledge and causation of this lack of knowledge. It will offer some practical suggestions that may break down these barriers and re-establish the flow of experiential knowledge in the multi-national, multi-cultural merchant fleet of today.”

The following article was supplied by Don Dykstra.
FERDINAND DE LESSEPS 1805-1894
Born into a family of distinguished French diplomats, Ferdinand de Lesseps studied law and
served in various countries as a consul. In 1832 he was stationed in Alexandria, Egypt, where he became familiar with Napoleon Bonaparte's plans from the beginning of the 19th
century, to dig a Canal to connect the Mediterranean with the Red Sea.

During his stay in Egypt , Mr. De Lesseps befriended the son of the Turkish Viceroy, the de facto Ruler of Egypt. In 1854 he received an invitation from the Viceroy’s son, who had succeeded his father, to discuss the possibility of building a Canal. Although not an engineer, Mr. De Lesseps was a tireless promoter. After many setbacks he was able to raise
enough money to start excavation of the Canal in 1859. In 1869 it was officially inaugurated.

Unfortunately Mr. De Lesseps’ efforts to build the Panama Canal were not so successful. Work
was started in 1880, but after eight long years of being confronted with geographical obstacles and a hostile climate; resulting in the deaths of thousands of workers, the effort ended in failure. In 1904 the US gained control of the old French Panama Canal company and the project was completed in 1914.

Not only did Mr. De Lesseps have an eminent career in the French foreign service, but after
completion of the Suez Canal he became the symbol of France’s ingenuity and enterprise. He
also had an interesting domestic life. First of all he was related to Empress Eugenia; wife
of\Emperor Napoleon III, who ruled France from 1852 to 1870 during the time the Suez Canal,
was built. De Lesseps was married to his first wife for fifteen years till her death of scarlet fever.

The marriage produced six children. In 1869, when Mr. De Lesseps was 64, he married his
second wife, who was 20. The marriage produced no less than 11 children; the last of which was born in 1885, the year Mr. De Lesseps turned 80. Some wags proclaim that this is the real
reason a statue was put up for him in Port Said. I am not sure if it is still there.

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