The following article appears in the December 2011 issue of WorkBoat magazine. It is reprinted here with permission. The opinions expressed in this article do not reflect the opinions or policies of the National Maritime Domain Awareness Coordination Office, the United States Government or any of its agencies.
Towing Vessel Inspection Rule
The initial heavy lifting is done, and now the U.S. Coast Guard and the industry are getting down to the devilish details of the historic towing vessel inspection rule unveiled in August.
Differences of opinion are to be expected over a document that was seven years in the making and is one of the most significant regulations for the towing industry since operators were required to be licensed in 1972.
Aimed at improving safety on the nation’s waterways, the proposed rule will cover 5,208 vessels belonging to 1,059 companies and cost operators an estimated $14 million to $18 million annually over a 10-year phase-in period. It would exempt vessels less than 26′ unless they’re towing barges carrying oil or other hazardous cargo.
Sentiment at hearings held in the fall strongly favored safety management systems audited by a Coast Guard-approved third party rather than an option for an annual Coast Guard inspection. In addition, operators opposed electrical and mechanical requirements that make them fix what’s not broken, suggested compliance cost estimates were way off base, and sought better definitions of terms like “major conversion.”
The Coast Guard also raised some hackles with its request for comment on the topic of crew endurance and manning as it considers establishing hours-of-service standards. Operators generally oppose including requirements in the proposed rule, but some mariners favor regulatory protection.
In general, many of those who weighed in echoed Jeff Parker, vice president of operations at Allied Transportation Inc., a Norfolk, Va. tug-and-barge company, who said, “I applaud the Coast Guard for getting this rule mostly right.”
Nevertheless, they want some changes to a regulation that likely will cause some barge operators to fold because they are unable or unwilling to comply.
Operators say a safety management system ensures uniform standards for all and can be scaled to the size of a company. But they want to be sure that companies can’t pit one third party auditor against another and that the Coast Guard begins qualifying auditors well in advance of the final rule. They also were skeptical that the Coast Guard would have enough of its own people to perform audits.
All vessels would need a certificate of inspection issued by the Coast Guard, which retains authority to inspect boats at any time. The COI requirement would be phased in within three to six years after the effective date of the final rule, with 25 percent of a company’s fleet required to obtain a COI each year.
The rule also outlines requirements for electrical and mechanical systems, lifesaving and fire protection, and operational guidelines such as crewmember training and drills, navigation and recordkeeping.
The industry is concerned about the cost of the equipment requirements, especially since the major cause of accidents is human error. It’s one thing to eliminate unsafe conditions and another to make wholesale changes to vessels that have operated safely for years, they argue.
They also questioned the Coast Guard’s figures for items such as independent propulsion and steering systems. The agency estimates it will cost $20,000 to bring one vessel into compliance.
Ingram Barge Co. recently replaced steering and propulsion systems on a 5,000-hp vessel. The cost of the new equipment “that only partially meets the rule was $200,000,” David Sehrt, chief operating officer of the Nashville, Tenn.-based barge giant, said at the St. Louis hearing.
Others wanted the Coast Guard to consider the diversity of the industry, contending that one size does not fit all. For example, a harbor operator wondered about the wisdom of needing red flare distress signals, saying they add another ignition source that will never be used.
“I’ve yet to hear of a towing vessel lost at river,” said Lee Nelson, president of Upper River Services Inc., St. Paul, Minn.
The flares are just one part of the massive inspection rule that was first required in the 2004 Maritime Transportation Safety Act. It was spurred by several accidents including the 1993 derailment of an Amtrak train when a barge tow hit the Big Bayou Canot railroad bridge near Mobile, Ala. Forty- seven passengers were killed and 103 injured. As a result, the American Waterways Operators developed its Responsible Carrier Program, a voluntary safety management system.
The rule’s formal comment period ends Dec. 9, and the Coast Guard will publish a final rule, possibly by 2013. — Dale K. Dupont
Flooding woes hit the waterways
Aside from the woeful economy, no event directly affected more marine industry businesses in the U.S. this year than the flooding along the inland waterway system.
Depending on the location, operating capacity was reduced by anywhere from 15 percent to as much as 50 percent.
“They’re calling it ‘The Great Flood of 2011,’ ” said Patrick Chambers, acting chief of navigation, Mississippi Valley Division, Corps of Engineers, Vicksburg, Miss.
Conrad Industries, located on the Atchafalaya River in Morgan City, La., is located outside the city’s floodwall and temporarily had to shut down operations. Vessels that were under construction and key pieces of equipment had to be moved to Conrad’s other south Louisiana shipyards.
“A lot of workboat businesses had to move equipment, relocate, and try to hold out until the water went down,” Duane Lodrigue, a port commissioner at the Port of Morgan City, said. “Some won’t come back.”
Conrad, however, returned to its riverfront facilities and operations are now back to normal.
Barge company earnings took a hit as well. SCF Marine, a subsidiary of Seacor Holdings, saw its second-quarter earnings drop to $4.4 million on $41.4 million in revenue. This compares to first-quarter numbers of $10.7 million on $46.5 million in revenue.
Kirby Corp.’s second quarter earnings dipped seven-cents per share as a result of the flooding.
Ingram Barge Co., Nashville, Tenn., said the high water levels significantly reduced its operations for a one- to two-month period.
Trinity Industries, a barge builder located in Caruthersville, Mo., reported about $8.4 million in lost productivity and costs from flooding.
Not everyone suffered, however. Some companies got a financial boost from the floodwaters, as tugs were hired to hold barge fleets and ships in place and to berth ships. Bisso Towboat Co. said its tugs were working 24/7 during the worst of it, and that its bottom line would be much healthier for the year because of it.
Most in the inland industry agree that businesses could have suffered greater losses if it weren’t for the efforts of the River Industry Executive Task Force — a group made up of the Corps of Engineers, Coast Guard, and industry officials. The RIETF monitored the floodwaters and coordinated efforts around the clock.
On May 2, the Corps made the decision to dynamite a levee in southeast Missouri, near the confluence of the Ohio and Mississippi rivers, to save Cairo, Ill. The drastic measure flooded outlying areas but kept floodwaters out of the city.
As the floodwaters moved south toward New Orleans, the Corps ordered the opening of the Bonnet Carré Spillway. Over several days, 330 of the spillway’s 350 bays had to be opened and remained that way until river levels dropped below 1.25 million cu. ft. per second (cfs) at New Orleans, where the normal spring flow is 730,000 to 780,000 cfs.
Additionally, the Corps opened the Morganza Spillway, about 40 miles northwest of Baton Rouge, La. It was the first time the floodway had been opened since 1973. The decision to open the Morganza kept Mississippi River floodwaters from inundating Baton Rouge and New Orleans.
However, shipyard towns farther south such as Patterson, La., and Morgan City were in the crosshairs of the diverted water that now swelled the Atchafalaya. Fortunately, the flooding turned out to be less problematic than first feared, and river towns were able to dodge a wet bullet.
When the water finally began to recede this summer, another problem arose — silting. Particularly problematic were the smaller channels and waterways within the system and the mouth of the Mississippi where silting is a year-around battle.
“Our primary concern has been with life-safety issues,” said Chambers, “The rebuilding of the Birds-Point levee is going well, and we’re getting that back up.”
The flooding caused serious silting that reduced drafts on several river sections. The Corps has asked Congress for $1 billion for dredging try to put things back the way they were before the flooding began.
In addition, around mid-July members of the inland waterways industry descended on Washington, D.C., and Congress looking for financial assistance.
So far, industry and Corps requests have fallen on deaf ears. “We’re going to have issues,” said Chambers. “Right now, we’re making do with what we’ve got, but there are going to be issues.”
— Ken Hocke
Passenger weight limits hit operators
The culprits aren’t new. Heading the list are fast-food restaurants and hours spent in front of computers and video games — instead of good old fat- burning exercise. And passenger boat operators are feeling the financial effect of America’s dietary and exercise — or lack of — habits.
Any way you dish it out, Americans have gotten fatter. One-third of adults in this country are obese, according to National Public Radio, at a cost to U.S. employers of about $73 billion a year.
Owners of passenger boats are certainly experiencing some of this financial pain. Call it the obesity rule if you will, but on Aug. 20, 2008, the U.S. Coast Guard proposed using 185 lbs. as the average passenger weight for calculating a boat’s stability. The previous weight had been 160 lbs. or 140 lbs. for boats operating on protected waters and carrying a mix of men, women and children. Those weights were established in the 1960s.
The Coast Guard felt the old weight estimates weren’t so accurate after the Lady D, a 36-foot pontoon boat, capsized in 2004, killing five people, and then a year later when the 40-foot tour boat Ethan Allen sank. Twenty people died in that accident.
As of Dec. 1, 2011, 185 lbs. will be the new average weight used to calculate a boat’s stability. That means the operator of a passenger boat has to show the Coast Guard how the stability of his boat has been calculated using the new passenger weight standard.
They have to “send to the captain of the port a document or letter saying ‘I’m complying with the new stability standards in the following way,’ ” said Ed Welch with the Passenger Vessel Association.
The Coast Guard will review what is sent to them and “at some point send an acknowledgement saying we are satisfied with your strategy or we disagree,” Welch added.
The upshot is that a 100-passenger boat might now only be able to accommodate 75. Obviously this can be costly for passenger vessel operators. The extent to which an operator will be affected depends on the type of boat and if it has any reserve stability.
“As a very general rule, the smaller the vessel the more likely it will have an impact of some consequences,” said Welch.
“While anything is possible given enough time, money and steel, in general the older, narrower and taller a boat is, the less likely it will be economically feasible to make changes,” said Eric Blumhagen at Jensen Maritime Consultants. In other words you may have to start thinking about building a new boat or carry fewer passengers.
If a boat owner is lucky, his boat will have passed the old stability calculations by a wide enough margin that changes will not be required. “You can send in the new stability calculations saying you are using the new passenger weights with the same passenger count and the boat passes stability,” said Blumhagen. That way the passenger count won’t have to be reduced.
Beyond that a boat’s stability could be improved by sponsoning it. Though instead of cutting a hull open to make it wider, Blumhagen said what they did for a recent customer to improve stability was to put a large rub rail along the sides of the boat. “That’s a cheap and easy way to sponson and you get the stability out of it,” he said.
For a multideck boat, stability requirements might be able to be met by restricting the number of passengers on the upper deck.
In general, to carry the same number of passengers, modifying a passenger boat will be cheaper than building a new boat. Blumhagen cautions, however, that operators need to be mindful of current repair and maintenance expenses. “If you are constantly just keeping ahead of maintenance on an old boat, it doesn’t make sense to, say, sponson, as opposed to building a new boat.”
And looking to the future, there probably should be a fair amount of reserve stability built into boats because the Coast Guard estimates that if the weight-gain trend continues, 50 percent of the population will be obese by 2030. — Michael Crowley
New offshore drilling permits finally issued
In February, the Interior Department began awarding drilling permits to operators that had wells in progress when the deepwater drilling moratorium was implemented.
The government also approved new exploration plans and drilling permits. Shell, for example, was the first operator to receive exploration approval and drilling permits for completely new wells following lifting of the deepwater drilling moratorium in October 2010. By the summer of 2011, Shell was able to put its entire deepwater Gulf rig fleet back to work.
At the end of October, the Interior Department granted extensions for about 1,380 leases in 500′ of water and greater that were affected by the deepwater drilling moratorium. Extensions of up to one year were granted.
“The Department of Interior’s announcement that it has approved nearly 1,400 lease extensions is certainly welcome news,” said Randall Luthi, president of the National Ocean Industries Association (NOIA). “Due to industry-led initiatives to increase safety standards, response capability and containment ability, NOIA members are ready to safely increase exploration and production activities which will add new jobs, new energy, and new revenues to the federal treasury.”
Luthi said his organization continues to raise the issue of shallow-water leaseholders who ought to receive similar consideration. “It is important to ensure that all projects affected by the blanket moratorium and the subsequent slower rate of permitting are given the same consideration, including shallow-water operations. Shallow-water leases provide shorter time periods for production, and we believe it is appropriate they be extended as well,” he said.
It’s been more over 18 months since BP’s Macondo well blew out in April 2010 and Transocean’s semisubmersible Deepwater Horizon sank, killing 11 workers aboard the rig.
During the five months after the blowout, BP employed numerous methods to try and halt the flow of oil, some of which were highly questionable. One issue that seems to have been forgotten is what happened to the nearly five million gallons of oil that flowed from the well?
What hasn’t been forgotten is the nearly complete shutdown of the deepwater Gulf market. With no work, several rigs, deepwater and shallow, departed the Gulf. A few dozen supply vessels left as well.
The number of rigs departing the region slowed significantly once drilling permits began to be issued again. Once most operators learned what was required to secure drilling permits in a new, more regulated offshore industry, rig activity began increasing, although at a much slower pace than pre-Macondo.
Among the regulatory reforms implemented were performance-based standards similar to those used by regulators in the North Sea, making operators responsible for identifying and minimizing the risks associated with drilling operations. This was done through the development and implementation of two rules that raised the standards of oil and gas operations on the Outer Continental Shelf (OCS).
The first was the Drilling Safety Rule that created new standards for well design, casing and cementing and well control procedures and equipment — including blowout preventers (BOPs).
This rule requires operators to have a professional engineer certify the adequacy of the proposed drilling program and requires an engineer to certify that the BOP to be used in the drilling program meets new standards for testing, maintenance and performance.
Next is the Workplace Safety rule that requires operators to identify risks and establish barriers to those risks. This rule required substantial work by operators and, as a result, the bureau delayed its implementation until November of this year.
One of the most important requirements for a deepwater drilling permit is an oil spill response plan that includes a well-specific blowout and worst-case scenario. Operators must also demonstrate that they have access to and can deploy subsea containment resources that would be sufficient to promptly respond to a deepwater blowout or other loss of well control.
It wasn’t until containment systems were available that the government began awarding deepwater drilling permits.
As more new exploration plans were approved and subsequent drilling permits awarded, rig activity began improving, albeit slowly. The deepwater drilling moratorium had a big effect on the floating rig market.
Jackups were also significantly affected by the drilling moratorium as they were subjected to some of the same safety regulations and criteria put into place regarding BOP certification and more stringent review of exploration plans and awarding of drilling permits.
Another reason for slack jackup demand is the region’s hurricane season, which has typically resulted in lower jackup rig activity as a result of different water depth and air gap criteria.
“We expect jackup activity to increase beginning in December when hurricane season ends,” said Cinnamon Odell, senior rig market editor for ODS-Petrodata. “Several jackups have recently been contracted to begin work late this year,” she said.
In the semisubmersibles market, none were available for contract in late October, with three semis cold stacked.
“These rigs were stacked due to cost considerations to upgrade their blowout preventers,” Odell said.
— Jerry Greenberg
TWIC’s reputation remains dubious
Nine years after it was first mandated by Congress, the Transportation Worker Identification Credential remains a controversial and costly national security initiative that even some federal officials believe has questionable security benefits. Mariners and workboat operators have long claimed the TWIC program is a cumbersome and costly waste of time.
Nonetheless, federal law mandates TWIC. And until Congress decides otherwise, securing a card, paying the fees, and showing the credential when appropriate will become a routine fact of life for those working in the maritime community.
Nearly $500 million in federal funds has been spent on the program so far, and according to a 2007 Department of Homeland Security estimate, federal and private sector spending on the program could reach $3.2 billion over 10 years. But this does not take into account implementing and operating the next step in the TWIC program: purchasing reader machines for use at ports and on vessels that will confirm authenticity of cards and verify cardholder identity.
Over this past year, the program has reached several milestones, both positive and negative.
More than two million biometric cards — at a cost of $135 each — have been successfully issued and activated to workers in maritime and other transportation sectors. Delays in the time it takes to evaluate the applications and issue the cards have been reduced. And progress has been made in Congress to eliminate the dreaded second trip to the enrollment center to pick up a completed TWIC.
But the Government Accountability Office reported that the program is beset by serious weaknesses. In a recently released GAO report, investigators said they were able to obtain cards using fraudulent documentation and enter secure areas of several U.S. ports using counterfeit TWICs. In addition, the report found significant internal weaknesses in how the program is managed, how background checks are done and in the process used for applications.
These problems could compromise security at the nation’s ports and on vessels, the GAO said.
The report also said that DHS has not done risk assessment and cost-benefit analyses of the program. In fact, DHS can’t show that TWIC is more effective than the approach used to secure ports and facilities before 9/11.
Already under fire for card delays and other problems, DHS came under renewed criticism from Congress for its handling of the program at several congressional hearings earlier this year.
“TWIC is turning into a dangerous and expensive experiment in security,” said Rep. John Mica, R-Fla., chairman of the House Transportation and Infrastructure Committee. “Nearly half-a-billion dollars have been spent since the Maritime Transportation Security Act of 2002 directed the secretary of DHS to issue biometric transportation security cards to maritime workers. Yet today, TWIC cards are no more useful than library cards.”
Little has changed since the GAO report was released in May.
“We haven’t seen anything to indicate that the management of the TWIC program has significantly improved,” said Justin Harclerode, spokesman for the House Transportation Committee. “Without a doubt, serious questions about the program persist.”
TWIC will continue to have security gaps until the biometric readers are in place. This is not likely to happen for a while as a final rule on the readers has been delayed from this fall until early next year. Without the readers, which cost about $6,000 or more per machine, the cards are vulnerable to fraud and abuse of the kind exposed by GAO investigators.
Before the final rule is issued, results of a reader pilot program held on selected vessels and at ports across the country must be reported to Congress, according to Brian Vahey of the American Waterways Operators. Participants have reported their findings to DHS, which is now reviewing the data, he said.
In the meantime, inland vessel companies and ports appear to be taking two approaches to the eventual reader requirement. Some have applied for federal grants to purchase the readers in advance of the rule and get them up and running with employee TWICs. In Louisiana, the Greater Lafourche Port Commission and four other entities in the Port Fourchon area, for example, recently received a $1 million federal grant to purchase handheld readers and make other TWIC-related enhancements.
Others have decided to wait until the final rule is out. But waiting is risky, as funds for port security grants are dwindling. This could mean that those who wait would end up footing the entire bill for buying and implementing the readers.
In the meantime, the reader pilot program has just about ended and results are being analyzed with a report due to Congress soon. — Pamela Glass
Fallout from duck boat accident continues
The tragedy that began with a child’s medical appointment and resulted in the deaths of two tour-boat passengers has led to a tugboat mate’s guilty plea to involuntary manslaughter and renewed calls for a crackdown on mariners’ cell phone use.
The July 2010 accident involving a duck boat and a sludge barge on the Delaware River in Philadelphia has also resulted in revised safety guidelines and operating procedures at many companies.
The incident brought to light the dangers of electronic devices, which have been cited in train, truck and plane mishaps, and has hardened the National Transportation Safety Board’s determination to change people’s habits.
“I want our society to reach the point when texting or telephoning — whether you’re operating a vessel, a train, or a motor vehicle — is just as unacceptable as smoking in a cockpit, or not wearing a seat belt, or driving under the influence of alcohol,” NTSB chairman Deborah Hersman said in the final duck boat accident report issued in September. “Culture change is possible. It has happened before. It must happen again — now. How many more lives will be lost before our society corrects its deadly acceptance of distractions?”
The distractions in the accident were cell phones and a laptop. The NTSB concluded that the tug mate on watch was in the lower wheelhouse dealing with a family emergency on his cell phone and laptop and not maintaining a proper lookout. The board also said the deckhand on the duck boat was using his cell phone while on the bow, keeping him from his duty as a lookout.
A Ride the Ducks tour boat, the DUKW 34, was struck by the city of Philadelphia’s 250′ sludge barge, The Resource, being towed by the Caribbean Sea, a 2,400-hp tug owned and operated by K-Sea Transportation Partners. The duck boat anchored in the navigation channel after the captain saw smoke coming from an air vent.
The tug didn’t answer distress calls, the NTSB found, because the mate on watch was distracted by his son’s medical condition — complications that developed during eye surgery. He was originally scheduled to be off that week but came to work after he was assured the surgery was routine, he told the NTSB.
The mate, Matthew Devlin, 35, of Catskill, N.Y., was sentenced in early November to a year and a day in jail. He also agreed to the permanent revocation of his Coast Guard license.
The NTSB, which has no enforcement authority, recommended that the companies involved find a better way to make sure employees follow safety and emergency procedures. And they told the Coast Guard to develop regulations about the use of cell phones and other electronic devices by on-duty crew.
Both K-Sea, East Brunswick, N.J., and Ride the Ducks, Norcross, Ga., have policies against personal cell phone use.
Both “appear to be running a good operation,” NTSB board member Robert Sumwalt said at a hearing. So, “Why is it at the end of the day, when the chips are down, people don’t follow procedures?”
After the accident, K-Sea and Ride The Ducks reviewed company safety policies, held seminars, and hired outside consultants to make recommendations and conduct audits.
The Coast Guard issued an advisory following the accident suggesting vessel operators implement policies on the use of cell phones and other devices and noting that potential risks associated with improper use “should be apparent to vessel owners and operators.”
— D.K. DuPont
Inland infrastructure funding remains elusive
A long-term funding solution for the nation’s aging inland infrastructure remains elusive, as Congress, skittish about increasing taxes and federal spending, considers two funding proposals that would do just that.
The difficulty is that neither of the plans — one offered by the Obama administration, the other by a joint industry-federal advisory board — makes lawmakers feel politically comfortable in an environment dominated by partisan politics and intense pressure to cut spending and the federal deficit.
The first, floated more than a year ago by the Inland Waterways Users Board (IWUB), envisions more federal spending on lock-and-dam construction while proposing an increase in the diesel fuel tax now paid by the barge industry into the Inland Waterways Trust Fund. The Capital Development Plan (CDP) also calls for significant reforms in how water projects are evaluated and prioritized for funding.
The industry plan “is a place to start the discussion,” Rep. Bob Gibbs, R-Ohio, chairman of the House Water Resources and Environment subcommittee, said after a September hearing. “I don’t think it will go forward with a tax increase.”
Added Rep. Timothy Bishop, D-N.Y., the panel’s ranking minority member: “I don’t see how this plan can fly unless there is an increase in the Corps budget, and I don’t see that happening.”
The second plan, proposed recently by the Obama administration, would collect more funds for inland waterways infrastructure by imposing new fees on commercial vessels that use the nation’s rivers. The plan is expected to raise $1 billion over the next 10 years by using a two-tier fee system — one for all inland waterways operators and a second for those transiting locks — and would supplement the current 20-cent-per-gallon fuel tax. The plan would also expand the definition of inland waterways from 27 to 67 segments that would be subject to the new fees.
These differing proposals have set up a perfect storm for a stalemate. The barge industry opposes the Obama plan, saying it is unworkable and unfairly doubles the taxes and fees on commercial shippers. The Obama administration opposes the industry plan, preferring instead its solution that would make commercial users pay more for using inland rivers.
Meanwhile, Congress hasn’t shown much enthusiasm for either. No lawmaker has yet come forward to offer legislation on the industry’s plan, only one hearing on Capitol Hill has been held, and several lawmakers have said that any plan that shifts more costs to U.S. taxpayers or increases taxes will not pass Congress. User fees are equally unpopular, with previous proposals being ignored by Congress.
But industry representatives, acknowledging tight budgets and challenges of educating lawmakers about the importance of waterways, remain optimistic that a solution can be found.
The Waterways Council Inc., an industry-funded group, has taken a different track on convincing Congress that the industry plan merits approval. Newly appointed WCI president and CEO Michael J. Toohey pointed to some positive signs of late, including the willingness of Rep. Ed Whitfield, R-Ky., to offer the CDP legislation, and the inclusion of waterways infrastructure improvements in the president’s jobs plan.
“We have a moment in time where the stars are aligned, and we must take advantage of it,” he said. “We will continue to have an opportunity if the economy remains stagnant, and we have high unemployment before the elections.” — P. Glass
Weak economy fuels consolidation
The inability of the U.S. economy to gain traction since the recession continues to affect the workboat industry.
There were some interesting developments in the shipyard sector beginning with Vigor Industrial LLC’s purchase of Seattle-based Todd Pacific Shipyards in February. “Things are going very well,” said Alan Sprott, spokesman for Vigor in Portland, Ore. “We just finished three ferries for Washington State Ferries and we’re overhauling an icebreaker. Yeah, we’ve got plenty of work. It’s going well.”
For aluminum boatbuilder SeaArk Marine, Monticello, Ark., things have not gone well. The company announced earlier this year that it was suspending acceptance of new boat orders. SeaArk’s new construction sales have been down for two years, and the company is going to try to ride out the existing market conditions.
SeaArk president John McClendon said the company has a positive cash position, no debt, and is paying its employees and vendors. He said he would not accept a situation in which the company couldn’t live up to its obligations to customers and vendors. “We wanted to be able to continue that position and control those elements long before it became any sort of crisis to manage,” McClendon said in a statement.
SeaArk Boats, a sister company that builds aluminum recreation boats, is unaffected by the SeaArk Marine decision.
Derecktor Shipyards closed down its Bridgeport, Conn., facility in September. Opened in 2001, it was the third location for Derecktor, whose yards in Dania, Fla., and Mamaroneck, N.Y., remain open. Derecktor officials leased the Connecticut yard from the Bridgeport Port Authority.
The yard had been finishing some conversion work on the New York Hornblower Hybrid for San Francisco-based Hornblower Cruises and Events. Hornblower hired a number of the employees who were working for Derecktor at the time of the yard’s closing to finish the Hybrid.
This was not the first time Derecktor’s Connecticut facility has run into financial trouble. The yard filed for Chapter 11 bankruptcy in 2008 and continued operations until this year.
“The economy killed us,” owner Paul Derecktor told the Fairfield County (Conn.) Independent earlier this year.
Shipyards were not the only sector of the industry with significant developments in 2011.
Alter Barge Line Inc. sold its fleet of 387 barges and six towboats to Cargill Inc.’s Cargo Carriers and Marquette Transportation Co. The deal included Alter’s Blackhawk Fleet in Buffalo, Iowa, and Azalea Fleet in New Orleans.
Alter’s president, Larry Daily, said the sale was more about the offer being too good to pass up rather than a result of the poor economy. Alter has retained its terminals, grain elevators and scrap business and is considering starting a logistics business.
Seattle-based Marine Resources Group, a family of companies that operates tug and barges, bought Cook Inlet Tug & Barge, a harbor services business in Anchorage, Alaska. Cook Inlet’s fleet consisted of three tugs, one barge, and 10 employees at the time of the purchase. Terms of the transaction were not disclosed.
Xanterra Parks & Resorts, Greenwood Village, Colo., purchased the assets of Ambassadors International Inc., from U.S. Bankruptcy Court in Delaware for $39 million in cash. The assets include the paddlewheelers Delta Queen and Columbia Queen and Windstar Cruises.
HMS Global Maritime, New Albany, Ind., bought another Ambassadors vessel, the American Queen, for $15.5 million. The 436-passenger paddlewheeler was purchased from the Maritime Administration after Ambassadors’ Majestic America Line ceased operations. Ambassadors returned the American Queen and another vessel, the Empress of the North, to MARAD, which paid bondholders $68 million.
Genesis Energy LP, Houston, paid $141 million to acquire the black oil barge transportation business of Florida MarineTransporters, Covington, La. The fleet includes 30 barges and 14 pushboats that haul heavy refined petroleum products, primarily serving refineries and storage terminals along the inland waterways and Gulf Coast.
Kirby Corp., Houston, bought K-Sea Transportation Partners in a deal that expands the giant tank-barge operator’s business into the coastwise petroleum transport trade. Kirby’s latest and largest acquisition this year is valued at $600 million — $335 million for K-Sea’s equity and $265 million in assumed debt. The two companies share oil company and refinery customers, so the transaction combines complementary rather than competing businesses. — K. Hocke
The Green revolution continues
If there’s one word that says “green” for the marine industry, the word is “hybrid.”
Meaning something composed of mixed parts, hybrid is a completely apt adjective for boats powered by a variety of sources. Hornblower Cruises & Events’ newest hybrid ferry, the 168′×36′ New York Hornblower Hybrid, is a perfect example in that it combines non-fossil-fuel energy from wind and sun, along with diesel, grid power and hydrogen. Hornblower’s first hybrid, the San Francisco Hornblower Hybrid, has all the same sources except for the hydrogen. The New York boat definitely extends the hybrid concept with the addition of a hydrogen-powered fuel cell as another source of electricity. Both ferries also rely on large battery banks and power management systems to mix and match power sources with the demands of propulsion and ship’s services.
The New York Hornblower Hybrid is a conversion, and the work was done at Derecktor Shipyards in Connecticut, both before and after the yard suspended operations.
Foss Maritime, Seattle, is also closely associated with hybrid technology, primarily with the design and construction of the Carolyn Dorothy, the world’s first hybrid harbor tug. This year, Foss added another hybrid harbor tug, the Campbell Foss, to its fleet. Built as a conventionally powered tug with the same lines as the Carolyn Dorothy, the Campbell Foss was converted to hybrid power at Foss’s Rainier, Ore., shipyard. The job included replacing one of the two original 125-kw gensets with a 350-kw model and the addition of motor-generators between the main engines and the Z-drives, a new power management system and a bank of lithium batteries. The original main engines were retained.
Unlike the Hornblower hybrids, which are both driven by electric motors, the Foss hybrids can be powered either electrically or mechanically.
Foss and the state of California have determined that the hybrid tug uses about 25 percent less fuel than a conventionally powered tug and therefore all emissions, including CO2, are reduced accordingly.
Another new hybrid-powered workboat is now patrolling the harbor in Annapolis, Md. The boat itself is a 10-year-old, aluminum 23-footer built by MetalCraft Marine, Kingston, Ontario, but the power system was upgraded this year to hybrid power with the addition of a Steyr diesel-electric engine that turns a HamiltonJet waterjet. A 48-volt battery pack was also added that allows the boat to patrol the harbor at 4.5 knots silently and emissions-free. A high-output solar array helps keep the batteries charged.
MetalCraft Marine plans on introducing additional electric models in the near future.
Harvey Gulf International Marine, New Orleans, is staking its claim to environmental progress with the construction of a new class of 300′×64′, 9,800-hp OSVs. Being built by Eastern Shipbuilding Group, Panama City, Fla., to ABS Enviro Plus Notation standards, the six OSVs will also carry the ABS Green Passport notation.
In addition to these boats, Harvey Gulf has announced its intentions to build two and possibly three dual-fuel (diesel and liquid natural gas) OSVs. The LNG vessels are being built by Trinity Offshore, Gulfport, Miss. Harvey Gulf CEO Shane Guidry said the LNG-powered OSVs demonstrates Harvey Gulf’s “commitment to environmental protection by becoming the first [company] to build a U.S.-flagged vessel that can run entirely on natural gas. These vessels will meet the highest emissions standards that exist today and even higher standards that haven’t been created yet.” — Bruce Buls
The Davy Crockett salvage
What started as an illegal salvage/scrap job, ended up becoming the most complex and expensive ($22 million) salvage operation of the year in the U.S. In 2011, the Davy Crockett was finally put to rest and recycled.
Built in 1941-42 at Todd Shipbuilding in Houston, the Davy Crockett was one of the first Liberty Ships, a class of ships thrown ingeniously together to serve the war effort. After surviving the war, the Davy was eventually stripped of its house and most equipment and worked as a cable-laying barge until it was finally anchored and abandoned in the Columbia River a few miles upstream from Portland, Ore.
A scrap scavenger bought the vessel in 2010 and proceeded to cut away a center section, which caused it to crack in half and start leaking oil.
The Coast Guard quickly determined that it had an emergency on its hands and tapped into the Oil Spill Liability Trust Fund for mitigation money. Ballard Diving & Salvage, Seattle, was hired as a primary contractor.
After concluding that the former ship may have been loaded with bunker oil and other toxic substances, plans to tow it to drydock shifted to dismantling in place. A cofferdam of sheet piling was built around its perimeter and workers cut the vessel apart piece by piece, both above and below water. During the winter, some of the salvage operations were conducted during record-high flooding that overtopped the cofferdam.
Bunker oil was indeed found in the double-bottom fuel tanks. Officially, the total is 33,491 gals. Other life-threatening pollutants found on board included asbestos (4,850 gals.) and PCB-laden oily products (70 gals). The total amount of steel removed was 4.43 million lbs. Oiled and other debris totaled 838,000 lbs.
The good news is that all the material was safely cut, collected, washed and disposed of. There were no spills, and no one was injured during the job. It was the biggest salvage job in the country that no one had ever heard of.
The case of the Davy Crockett has focused more attention on the derelict vessel problem in the Columbia River and its tributaries. A new task force has been formed to identify and monitor known and potential derelicts.
On Sept. 29, Bret Simpson, the last owner and would-be scrapper, was indicted by a federal grand jury with two felony violations of the Clean Water Act. “The rivers of the Pacific Northwest are our heritage, and must be protected for future generations,” said U.S. Attorney Jenny A. Durkan. “Those who attempt to sacrifice environmental quality in pursuit of profit will be held accountable.” If convicted of both felonies, Simpson could be imprisoned for up to eight years and fined up to $300,000. — Bruce Buls
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