It occurs to me that, apparently, I’m old. Please, let me have my moment for a personal pity party. When I became an agent some 22 years ago, the Masters of vessels (or the Owners) would communicate their need for bunkers to us via Telex and we, the Agent, would order the fuels with a local vendor. It wasn’t complicated at all, in fact rather quite straightforward. We’d read the Telex, flip through our Rolodex to find a number, pick up a desk phone to dial said number and tell someone who answered, “I need 100MT of IFO380 and 25MT of MGO!” Then we’d discuss the where, when and how of said delivery, thereafter making chitty-chat about life in general. Of course they’d tell us how much the fuel would cost which we would then communicate back to the Master/Owner and basis their confirmation of said purchase, we’d finalize the arrangements. That was the way it got done. No talk about specs, sulfur content or regulatory environmental concerns. The old way.
Times have changed. Bunkers are now fixed through brokers who work with traders who then give us orders so we can handle the logistics of facilitating the delivery. Fancy stuff. Agents make sure the bunkers get delivered, collect the samples, dispatch them to the labs where analysis gets done and once approved, the vessel can consume the bunkers that’ve been sitting in their tanks for days (or weeks) awaiting the green light of spec validation.
But wait, there’s more! Times are a’ changing as we speak (or write and read!)
I’ve probably been involved, in some way or another, with the bunkering of more than five-thousand different ships in my career. That’s a very conservative guesstimate considering my time in the industry, where I’ve worked and the volume of traffic we’ve handled. Suffice it to say I’m familiar with the evolution of bunker dynamics, how things are progressing, why there’s concern over fuel options and the multi-faceted issues facing shipowners in the days ahead. Big things they have to be worried about.
So I’ve been following the IMO2020 cap discussions, listening to our principals voice their thoughts on the matter, seeing technical mangers cringe over how to best transition the fleet for compliance and generally watching the pulse of industry as it sought to satisfy the regulation transformation. I’ve stood in the back of packed rooms and watched highly-educated mariners debate on the pros and cons of one solution after another while ticking off why various things could and couldn’t work best in given scenarios. It’s been enlightening at the very least and at times quite entertaining, perhaps because of the passionate views some have in certain regards.
That said, I recently participated in yet another convocation that addressed the subject and feel like I have, for perhaps the first time, came to some articulable conclusions worth sharing. Let me forewarn that you’d be unwise to make commercial decisions based off my rudimentary ponderings on the matter. I’m not a petroleum engineer, a chief engineer or anything with “engineer” or “expert” in the title but I am a decent fly-on-the-wall with a penchant for paraphrase combined with an elemental understanding of the questions at hand.
So, with that disclaimer in mind, here are a few things I’ve learned about vessel fuel issues facing the maritime industry:
CHANGE IS NEEDED. As much was we bemoan the reality, truth is we should be mindful of this green globe God gave us and make better choices when we can. Cleaner fuels are a good thing. We need to embrace the change, be the change and make the change. Studies have clearly shown that communities along inner-coastal waterways are adversely impacted by emissions produced by vessel traffic and thus the justification of the ECA requirements in recent years. They’re tracking this stuff with AIS, GIS and a few more acronyms that all prove it’s a legit concern. There are even heat maps showing where vessels idling at anchor are generating pollutants – technicolor displays that even I could understand – and now they’ve got LNG powered shoreside generators to mitigate even that problem! So the time for bellyaching is past, something I believe we’re done with anyways since the IMO has been discussing this for over 10 years.
CLEAN FUELS ARE GOOD. I said that already but kindly allow me to expound briefly. LNG is the clear frontrunner in this category or, at the very least, the most popularly discussed as new builds with LNG locomotion are on the rise. Possibilities for other fuel categories abound, such as ULSFO which is being tested, tweaked and talked about as a viable option for some applications. Methanol has moved on ships from cargo tanks to fuel tanks (deliberately so!) There’ll be other choices to explore from, no doubt, as more studies are done on residual fuels, paraffinic combustion characteristics, pour points, solidification temperatures, sedimentary sludge filtration issues, viscosity, flashpoints, etc. are all considered. Then you have to scrutinize supply side concerns about who can get what where when from whom and at what price because, for a long time, everything won’t be available everywhere. Regulatory conformity choices won’t be based just on what one thinks is best financially but must also recognize what one can replenish in given trade patterns. It’s distressing to contemplate thus the collective industry angst unless you can afford to produce your own fuels like some owners are planning to do.
TO SCRUB OR NOT TO SCRUB. Flip a coin but flip fast because orders for scrubbers are rapidly increasing with sizable fleets being retrofitted en masse. But don’t decide too hastily because picking the wrong scrubber solution could be detrimental in short order. Not all ships are the same nor do they travel in the same seas and this matters because scrubbers need to be uniquely matched to vessels based on a multitude of variables. Metallurgy, salinity and density of seawater must all be considered (amongst other things) for each application which means you can’t just grab some low-cost scrubber off the shelf, slap it the engine room and think all is well. It ain’t that easy! You honestly need a bonafide guru consultant to guide you through the variant choices in order to arrive at the best solution. Or you can consider nanotechnology, a potential scrubber alternative, but think fast; while delaying these decisions will be expensively imprudent, ignorance and arrogance will be equally costly for the hasty.
DIRTY FUEL EPIDEMIC. In what is clearly the worst contamination issue of the past 25 years, some 150+ vessels supplied with fuels from over a dozen suppliers have been impacted with some being grounded or even left powerless at sea. It was first observed this past February when ships began reporting problems with fuel pumps sticking, purifiers being overloaded and filters being blocked. Then power plants in the Caribbean, that import US fuel, started having trouble too. By July, occurrences were reported in Singapore.
Why? Initial testing didn’t raise questions but more detailed analysis indicated high phenol content, specifically 4-cumylphenol which is a chemical known for its adhesive strength. How that got in bunker fuel products is the million (or possibly billion) dollar question that lots of lawyers, along with their fleet of investigatory experts, are trying to figure out. Did it originate at a refinery level or elsewhere as an additive in a blending process? Where it began geographically is even in question because the seedstock could have come afar to the US Gulf before being distributed to buyers globally. And what to do is equally debatable as shipowners seek to safeguard their fleet from contamination. Some vessels with adulterated product have debunkered but what happens to that bad stuff to ensure it isn’t reblended and sold again? Vigilant buyers of new bunkers should consider sample analysis prepurchase from the intended supplier’s tankage and insist on protection from the clauses in para 5 of ISO8217 as applicable. Rotterdam has implemented a model that makes it a criminal offense to supply corrupted fuels which has not only served as a strong deterrent but also yielded some $14M in fines thus proving its conceptual value for replication elsewhere. Until the investigations determine whether this problem was caused by an accidental twist of a valve or a greedy intentional conspiracy, principals would be wise to remember that most suppliers are honest (and innocent) but the “trust and verify” policy well serves industry until this contaminated crud has run its course.
ENFORCEMENT. As much as fuel grades can vary, even within spec, so can the policies and practices of agencies tasked with ensuring compliance to the standards. Within American waters, local USCG teams will engage regionally under the guidance of district command. Sector folks tasked with examining vessels may occasionally detect criminal violations that get referred up the food chain but they, locally, only adjudicate civil matters. These teams of inspectors board vessels to review bunker delivery notes (BDN), discuss ECA changeover procedures, check logbooks and walkthrough engine rooms (make sure fuel sample lockers are kept tidy!) to confirm all is in order. Utilizing a multilayered approach that combines outreach, prevention, compliance and enforcement, their ultimate goal is to assure compliance in a helpful way that encourages industry excellence. Working closely with the EPA (who really only get involved if major violations occur), the USCG has observed exemplary compliance overall and the rare deficiencies they’ve encountered have commonly been over failure to switchover fuel sources timely, consumption of noncompliant products and incomplete BDN’s which is their primary, if not nearly sole, source of determining fuel qualities.
Principals should be aware, by now, that there is no such thing as a “waiver” from ECA standards. There are 3E’s in the way of Exceptions, Exemptions and Equivalencies that might apply pursuant to MARPOL Annex VI Reg 3-4 and Masters should be reminded that while they’re free to claim an exception at their discretion, USCG will examine the facts to validate same. In general, if the Master/Owner is doing their documentable best to comply, diligently planning voyages to ensure suitable fuel availability and transparently notifying authorities as early as possible when issues arise, they should have few enforcement challenges. The landscape for administering IMO2020 legislation is uncertain at present and while some agencies may apply their own interpretation of “permitted variances”, the USCG supports consistent implementation and enforcement nationally which best serves everyone globally.
To sum it all up, please remember the above is nothing more than my thoughts on things (plus a few links to reputable articles) that I’ve learned while being fortunate to listen to really smart folks like Jack Grogan, Dr. Ram Vis and Mark Bottiglieri (all of whom spoke recently at the WGMA/NAMEPA event in Houston) along with my two decades of experience in fooling with smelly bunker samples. But if the good people of this great industry continue to take the high road of the high seas, we’ll come through this storm of bunker fuel related drama clouding the sky today to soon find glassy waters just over the horizon. I’ve got extreme confidence in us!
Lastly, I welcome your thoughts on these issues; let’s help each other become more knowledgeable on this stuff. And if you’ve got questions, ask away; I’m happy to thoroughly confuse you if one my smarter friends doesn’t come to the rescue!
Times have changed. Bunkers are now fixed through brokers who work with traders who then give us orders so we can handle the logistics of facilitating the delivery. Fancy stuff. Agents make sure the bunkers get delivered, collect the samples, dispatch them to the labs where analysis gets done and once approved, the vessel can consume the bunkers that’ve been sitting in their tanks for days (or weeks) awaiting the green light of spec validation.
But wait, there’s more! Times are a’ changing as we speak (or write and read!)
I’ve probably been involved, in some way or another, with the bunkering of more than five-thousand different ships in my career. That’s a very conservative guesstimate considering my time in the industry, where I’ve worked and the volume of traffic we’ve handled. Suffice it to say I’m familiar with the evolution of bunker dynamics, how things are progressing, why there’s concern over fuel options and the multi-faceted issues facing shipowners in the days ahead. Big things they have to be worried about.
So I’ve been following the IMO2020 cap discussions, listening to our principals voice their thoughts on the matter, seeing technical mangers cringe over how to best transition the fleet for compliance and generally watching the pulse of industry as it sought to satisfy the regulation transformation. I’ve stood in the back of packed rooms and watched highly-educated mariners debate on the pros and cons of one solution after another while ticking off why various things could and couldn’t work best in given scenarios. It’s been enlightening at the very least and at times quite entertaining, perhaps because of the passionate views some have in certain regards.
That said, I recently participated in yet another convocation that addressed the subject and feel like I have, for perhaps the first time, came to some articulable conclusions worth sharing. Let me forewarn that you’d be unwise to make commercial decisions based off my rudimentary ponderings on the matter. I’m not a petroleum engineer, a chief engineer or anything with “engineer” or “expert” in the title but I am a decent fly-on-the-wall with a penchant for paraphrase combined with an elemental understanding of the questions at hand.
So, with that disclaimer in mind, here are a few things I’ve learned about vessel fuel issues facing the maritime industry:
CHANGE IS NEEDED. As much was we bemoan the reality, truth is we should be mindful of this green globe God gave us and make better choices when we can. Cleaner fuels are a good thing. We need to embrace the change, be the change and make the change. Studies have clearly shown that communities along inner-coastal waterways are adversely impacted by emissions produced by vessel traffic and thus the justification of the ECA requirements in recent years. They’re tracking this stuff with AIS, GIS and a few more acronyms that all prove it’s a legit concern. There are even heat maps showing where vessels idling at anchor are generating pollutants – technicolor displays that even I could understand – and now they’ve got LNG powered shoreside generators to mitigate even that problem! So the time for bellyaching is past, something I believe we’re done with anyways since the IMO has been discussing this for over 10 years.
CLEAN FUELS ARE GOOD. I said that already but kindly allow me to expound briefly. LNG is the clear frontrunner in this category or, at the very least, the most popularly discussed as new builds with LNG locomotion are on the rise. Possibilities for other fuel categories abound, such as ULSFO which is being tested, tweaked and talked about as a viable option for some applications. Methanol has moved on ships from cargo tanks to fuel tanks (deliberately so!) There’ll be other choices to explore from, no doubt, as more studies are done on residual fuels, paraffinic combustion characteristics, pour points, solidification temperatures, sedimentary sludge filtration issues, viscosity, flashpoints, etc. are all considered. Then you have to scrutinize supply side concerns about who can get what where when from whom and at what price because, for a long time, everything won’t be available everywhere. Regulatory conformity choices won’t be based just on what one thinks is best financially but must also recognize what one can replenish in given trade patterns. It’s distressing to contemplate thus the collective industry angst unless you can afford to produce your own fuels like some owners are planning to do.
TO SCRUB OR NOT TO SCRUB. Flip a coin but flip fast because orders for scrubbers are rapidly increasing with sizable fleets being retrofitted en masse. But don’t decide too hastily because picking the wrong scrubber solution could be detrimental in short order. Not all ships are the same nor do they travel in the same seas and this matters because scrubbers need to be uniquely matched to vessels based on a multitude of variables. Metallurgy, salinity and density of seawater must all be considered (amongst other things) for each application which means you can’t just grab some low-cost scrubber off the shelf, slap it the engine room and think all is well. It ain’t that easy! You honestly need a bonafide guru consultant to guide you through the variant choices in order to arrive at the best solution. Or you can consider nanotechnology, a potential scrubber alternative, but think fast; while delaying these decisions will be expensively imprudent, ignorance and arrogance will be equally costly for the hasty.
DIRTY FUEL EPIDEMIC. In what is clearly the worst contamination issue of the past 25 years, some 150+ vessels supplied with fuels from over a dozen suppliers have been impacted with some being grounded or even left powerless at sea. It was first observed this past February when ships began reporting problems with fuel pumps sticking, purifiers being overloaded and filters being blocked. Then power plants in the Caribbean, that import US fuel, started having trouble too. By July, occurrences were reported in Singapore.
Why? Initial testing didn’t raise questions but more detailed analysis indicated high phenol content, specifically 4-cumylphenol which is a chemical known for its adhesive strength. How that got in bunker fuel products is the million (or possibly billion) dollar question that lots of lawyers, along with their fleet of investigatory experts, are trying to figure out. Did it originate at a refinery level or elsewhere as an additive in a blending process? Where it began geographically is even in question because the seedstock could have come afar to the US Gulf before being distributed to buyers globally. And what to do is equally debatable as shipowners seek to safeguard their fleet from contamination. Some vessels with adulterated product have debunkered but what happens to that bad stuff to ensure it isn’t reblended and sold again? Vigilant buyers of new bunkers should consider sample analysis prepurchase from the intended supplier’s tankage and insist on protection from the clauses in para 5 of ISO8217 as applicable. Rotterdam has implemented a model that makes it a criminal offense to supply corrupted fuels which has not only served as a strong deterrent but also yielded some $14M in fines thus proving its conceptual value for replication elsewhere. Until the investigations determine whether this problem was caused by an accidental twist of a valve or a greedy intentional conspiracy, principals would be wise to remember that most suppliers are honest (and innocent) but the “trust and verify” policy well serves industry until this contaminated crud has run its course.
ENFORCEMENT. As much as fuel grades can vary, even within spec, so can the policies and practices of agencies tasked with ensuring compliance to the standards. Within American waters, local USCG teams will engage regionally under the guidance of district command. Sector folks tasked with examining vessels may occasionally detect criminal violations that get referred up the food chain but they, locally, only adjudicate civil matters. These teams of inspectors board vessels to review bunker delivery notes (BDN), discuss ECA changeover procedures, check logbooks and walkthrough engine rooms (make sure fuel sample lockers are kept tidy!) to confirm all is in order. Utilizing a multilayered approach that combines outreach, prevention, compliance and enforcement, their ultimate goal is to assure compliance in a helpful way that encourages industry excellence. Working closely with the EPA (who really only get involved if major violations occur), the USCG has observed exemplary compliance overall and the rare deficiencies they’ve encountered have commonly been over failure to switchover fuel sources timely, consumption of noncompliant products and incomplete BDN’s which is their primary, if not nearly sole, source of determining fuel qualities.
Principals should be aware, by now, that there is no such thing as a “waiver” from ECA standards. There are 3E’s in the way of Exceptions, Exemptions and Equivalencies that might apply pursuant to MARPOL Annex VI Reg 3-4 and Masters should be reminded that while they’re free to claim an exception at their discretion, USCG will examine the facts to validate same. In general, if the Master/Owner is doing their documentable best to comply, diligently planning voyages to ensure suitable fuel availability and transparently notifying authorities as early as possible when issues arise, they should have few enforcement challenges. The landscape for administering IMO2020 legislation is uncertain at present and while some agencies may apply their own interpretation of “permitted variances”, the USCG supports consistent implementation and enforcement nationally which best serves everyone globally.
To sum it all up, please remember the above is nothing more than my thoughts on things (plus a few links to reputable articles) that I’ve learned while being fortunate to listen to really smart folks like Jack Grogan, Dr. Ram Vis and Mark Bottiglieri (all of whom spoke recently at the WGMA/NAMEPA event in Houston) along with my two decades of experience in fooling with smelly bunker samples. But if the good people of this great industry continue to take the high road of the high seas, we’ll come through this storm of bunker fuel related drama clouding the sky today to soon find glassy waters just over the horizon. I’ve got extreme confidence in us!
Lastly, I welcome your thoughts on these issues; let’s help each other become more knowledgeable on this stuff. And if you’ve got questions, ask away; I’m happy to thoroughly confuse you if one my smarter friends doesn’t come to the rescue!
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