Jensen

Tuesday, April 15, 2014

Engineering Standards Aid Spill Prevention
at Marine Oil Terminals

By Avinash M. Nafday

California’s Marine Oil Terminal Engineering and Maintenance Standards (MOTEMS) were adopted by the Building Standards Commission in 2005 and revised in 2013. During the past eight years, implementation of this comprehensive standard has engendered major facility upgrades at many marine oil terminals, enabling prevention of oil spills in state waters.

MOTEMS Background
The Marine Facilities Division (MFD) of the California State Lands Commission regulates marine oil terminals (MOTs) within the state. MFD inspections during the mid-nineties found MOTs to be in decrepit condition, with extensive physical deterioration of structures, oil transfer pipelines, electrical/mechanical equipment and mooring/berthing infrastructure, from exposure to extreme environmental conditions and lack of maintenance. These MOTs did not meet modern structural, seismic, fire protection, process safety, electrical/mechanical equipment and electrical system standards. When MOTs were built, seismic design standards were practically non-existent and sea level rise or tsunamis were not major concerns. Also, sizes of vessels calling in at MOTs had increased notably from their original design intent. It was concluded that these perilous infrastructure conditions posed a threat to the safety of oil transfer operations with potential for causing large oil spills.

After extensive review of worldwide regulatory and industry standards, MFD determined that no single all-inclusive guide was available for MOT evaluations and worked toward developing a comprehensive standard for the design, operation and maintenance of Existing and New MOTs, incorporating as many industry standards as possible, while providing guidance for topics not covered elsewhere. The Marine Oil Terminal Engineering and Maintenance Standards or MOTEMS became enforceable as part of the California Building Code in 2006, and the revised second edition recently became effective on January 1, 2014. Thus, it is opportune to take a look back at the impact this standard had in advancing spill prevention at California’s MOTs.

Terminal Risk Classification
Typical coastal MOT comprises a docking structure to moor tankers and barges to the wharf and includes handling equipment, safety systems and pipelines to transfer petroleum and petroleum products to storage tanks. MOTEMS classifies the state’s MOTs into three Consequence-Based risk categories (High, Medium and Low) determined from the volume of oil exposed to spillage, number of transfer operations per year and the largest vessel allowed to berth. The oil exposed to spillage is established by aggregating all stored and flowing oil volumes during transfer at the MOT, prior to activation of the emergency shutdown system (ESD) stopping the flow of oil (within either 30 or 60 seconds, depending upon ESD’s installation date). MOTEMS permits risk reduction strategies (e.g. adding new valves) to reduce risk to a lower category. This strategy has economic benefits since MOTEMS becomes more stringent with increase in risk category.

Auditing Marine Oil Terminals
MOTEMS requires all existing MOTs to perform periodic audits and inspections (both above and below the waterline) for each “berthing system”, involving structural, seismic, geotechnical, mooring, berthing, fire protection, piping/pipeline, mechanical, electrical and corrosion evaluations. The aim is to assess structural and non-structural system integrity and confirm berthing systems’ continued “fitness-for-purpose”. Berthing systems are the complete set of structural, mechanical and electrical components for the transfer of product to or from a vessel, extending to first valve onshore. However, if a component outside this realm affects the oil transfer process or engineered system being evaluated, it is included in audit assessment.

MOT’s risk category determines the schedule (30, 48 or 60 months from February 6, 2006) for MOTEMS Initial Audit submittal, return period of design earthquake ground motion parameters used in seismic assessment, and the level of sophistication for such analysis. Thereafter, Subsequent Audits for all risk categories are due every four years. However, the frequency of subsequent underwater inspections varies with berthing system condition and may range from 1-6 years, depending on construction materials (wrapped or unwrapped timber, protected or unprotected steel, composites, plastic), environmental conditions (benign or aggressive, based on fresh or brackish water and current velocity) and channel bottom or mud line scour. New berthing systems are considered High Risk and must complete the Initial Audit of “as-built” system before commencing oil transfer operations at the berth.

Audits comprise both the fieldwork and engineering analyses and are performed by California registered professional engineers. The scope includes above and under water inspections, structural loading and hazards assessment, seismic analysis and design, mooring and berthing evaluation, mooring hardware assessment, geotechnical investigations, structural design and drawings, process hazards and instrumentation diagrams, electrical hazard classification diagrams, fire suppression system design, oil pipeline stress analyses, electrical and mechanical equipment, corrosion and electrical supply systems. MOTEMS requires MOTs to address hazards that may affect public health, safety and environment, including sea level rise, tsunamis and passing vessels. For each MOT berthing system, Global Operational Structural Assessment Rating (OSAR), Global Seismic Structural Assessment Rating (SSAR), and Global Inspection Condition Assessment Rating (ICAR) are assigned as - Critical, Serious, Poor, Fair, Satisfactory, or Good - to grade the berthing system’s “fitness-for-purpose”. Additionally, Remedial Action Priority (RAP) ratings, ranging from the highest P1 to the lowest P4, are assigned for deficiencies of individual components.

For conducting audits, MFD has developed an Audit Manual that provides a structured format to comprehend MOTEMS regulations and facilitate complete presentation of all design and “as-built” documentation necessary to corroborate compliance. The audit process requires a comprehensive, time-consuming, in-depth effort and culminates with a final audit report. The final audit report documents and drawings often run into many volumes.

MFD Engineers review and independently validate these terminal audits, inspection, analyses, designs and upgrades to ascertain code compliance and monitor upgrade projects from scheduling through commissioning. MFD also reviews MOT Operations Manuals to verify that Terminal Operating Limits (TOLs) are consistent with those identified in the MOTEMS Audits. However, primary responsibility for MOTEMS compliance rests with the MOT operator, and the signature/seal of their California registered engineers authenticates the validity of audit conclusions. If serious life threatening or oil spill safety issues are identified during the audit process, the said registered engineers are obligated to inform MFD, even before submittal of their formal audit report.

Deficiency Corrections
With submittal of a MOTEMS Audit, an MOT operator acknowledges the deficiencies identified at their facility, and is responsible for taking corrective actions. Deficiencies identified during an audit are cataloged in Executive Summary (ES) tables, with ratings and a recommended schedule for corrective actions. MOTEMS requires that deficiencies be corrected via repair or rehabilitation within a time period mutually agreed upon between the MFD and MOT operator. While there is no specified timeline for achieving compliance and MFD recognizes budgetary cycle constraints, the general aim is for the existing MOTs to be fully MOTEMS compliant within 5 years of their Initial Audit submittal, with exceptions for delays due to permitting, lease or environmental issues. However, if an MOT has structural global rating of Critical/Serious or a component deficiency with P1/ P2 rating, MFD can require immediate/urgent remedial actions.

Note that MOTEMS non-compliance does not necessarily imply that a MOT is unsafe. An MOT that is non-compliant with design standards formulated for extreme environmental conditions may still be operable with restrictive operating conditions. While restrictions pertaining to seismic, mechanical or electrical systems may be imposed, mooring or berthing restrictions are more common. For example, during the time required to achieve compliance with berthing and mooring standards, interim operational or demand restrictions can be imposed or more stringent Terminal Operating Limits (TOLs) based on degraded structural capacity may be specified. Some typical limitations that were applied include:

• Berthing systems not compliant with MOTEMS specified vessel impact velocities were restricted to berthing at reduced speed; MOT operator was required to monitor vessel approach velocity via deck-mounted lasers.

• MOTs that did not meet the MOTEMS berthing angle requirements, special berthing procedures were specified.

• When mooring hooks, bollards, bitts, or the structure itself could not comply with MOTEMS wind criteria, either their usage was prohibited or reduced wind speed was allowed subject to monitoring with anemometer.

• For passing vessel effects, MOTs were required to inform MFD of vessel surge or sway greater than the specified level; minimum under keel clearance was also required.

• Operators were sometimes restricted from using specified breasting or mooring dolphins. At some MOTs, berths were limited to barges until compliance upgrades were completed.

• Vessel DWT, arrival draft or displacements were limited at certain berths.

Due to a number of damaged fender piles, berthing between certain specified bents was prohibited at some MOTs.

• Based on the observed wharf piles deterioration, live load restrictions were placed on portions of some wharves and approach ramps, including restrictions on vehicle access to the wharf.

• Some deficient berths were downgraded or declared out-of-service.

The compliance effort has often resulted in initiation of major construction projects, requiring budget planning, and permits from local governments and port districts. To keep MOTs functioning during repairs and construction, complex operational arrangements were often devised. MOTEMS implementation at California MOTs is in various stages and some MOTs have opted for a complete tear down of their facility and replacement with entirely new berthing systems. Some smaller facilities have opted to shut down since compliance with MOTEMS standards was not considered economically feasible.

There have also been proposals to re-activate previously abandoned terminals (oil or non-oil). As these terminals are often in poor shape from lack of maintenance, their re-activation requires the application of “new” MOT standards. To establish baseline condition, a complete audit of the facility is required, and deficiencies are addressed by either retrofit/modification of “existing” components or via complete refurbishment or replacement with “new” components. MOTEMS provides guidance regarding the applicability of “new” vs. “existing” provisions. Such decisions require complex engineering reviews, sophisticated knowledge, subject matter expertise, and nuanced professional judgment.

As an example, one MOT opted to idle their berth for oil transfer to avoid complying with MOTEMS requirements. MFD determined that since the pipelines and structures associated with that berth were capable of being used for oil transfer, MOTEMS would still be applicable to those devices and associated structures capable of transferring oil. However, if pipelines were physically segregated from a source of oil making it impossible to transfer oil without additional construction and engineering, MOTEMS would no longer apply. If this berth is to be brought back into oil service after being “out-of-service”, it will be required to comply with the MOTEMS requirements for “new” MOTs.

MFD engineers track the progress of each MOTEMS compliance project, in addition to cyclical inspections and audits, schedule delays, design reviews, permitting, etc. Whenever necessary, engineers conduct a field visit to verify deficiency resolutions and communicate the urgency of upgrade, rehabilitation, or modification to MOT operators that don’t meet the code. Also, coordination of MOTEMS provisions with local authority requirements is a major challenge, requiring substantial efforts to resolve conflicting regulatory conditions.

Post Event Inspections
MOTEMS requires a focused inspection following occurrence of a significant, potentially damage-causing event such as an earthquake, storm, vessel impact, fire, explosion or tsunami. The goal of Post Event Inspection is to determine whether the facility is safe to continue operations and if any remedial action is necessary. After review of a damage-causing event at MOT, MFD engineers determine whether to limit or stop facility operations.

Current Status of MOTEMS Implementation
Two cycles of MOTEMS audits have been completed at 35+ California MOTs, and terminals are in various stages of upgrades to address deficiencies identified during MOTEMS audit. MOT operators in Northern California have taken a more proactive approach to MOTEMS compliance, with several facilities inching closer to full compliance. However, progress in Southern California MOTs is slow. The US Navy MOTs in the state have voluntarily agreed to comply with MOTEMS requirements, and one terminal is planning complete replacement with a new MOT.

Dr. Avinash Nafday leads the MOTEMS compliance effort at the Marine Facilities Division of the California State Lands Commission. After consulting for the nuclear, electrical power, and oil and gas industries, he worked for a multinational oil company before starting with the state. He holds a Ph.D. in Engineering from the Johns Hopkins University, Baltimore; an M.C.E. in Ocean Engineering from the University of Delaware, Newark; and an M.B.A. from California State University, Fullerton.

Report Urges LA, LB Port Merger

By Mark Edward Nero

The LA 2020 Commission, an independent, private commission formed to study and report on fiscal stability and job growth in Los Angeles, has issued a report that recommends in part, that the ports of Los Angeles and Long Beach merge.

“Los Angeles and Long Beach should parlay their individual successes into a combined port to enhance their overall competitive position,” the report, which was released in early April, states in part, citing a five percent lost market share over the past 10 years and a need for more tax revenues and regional jobs as the reasons.

“All too often the Ports of LA and Long Beach issue press releases boasting of new customers – one only has to study the details to understand these customers are just switching from LA to Long Beach or vice versa and not bringing new jobs to the region,” the 21-page report states. “And with the ongoing widening of the Panama Canal, maritime trade is about to get a lot more complex – and competitive. We should be competing with ports in other regions, not with each other.”

The report cites the Port Authority of New York & New Jersey, the Vancouver, Canada-area ports, and a new agreement between the ports of Seattle and Tacoma as examples of regional cooperation.

In January, Seattle and Tacoma, which sit 30 miles apart, reached an agreement to share information about operations, facilities and rates in order to help Puget Sound better compete in the global maritime industry. The LA 2020 report suggest setting up a joint-powers agreement under which “future strategy” of the two ports would be managed, as well as capital planning and rate setting.

After the report’s release, the Port of Los Angeles indicated it was amendable to discussing such a merger. However, officials with the City and Port of Long Beach were quick to dismiss the proposal, calling it a bad idea.

In comments to local media, both Long Beach Mayor Bob Foster and Harbor Commission President Doug Drummond said the status quo should remain, with the Port of Long Beach continuing to be overseen by the municipal government. Foster even went so far as to say that it was “mysterious,” “condescending” and “disrespectful” that the 2020 Commission never bothered to get Long Beach’s input before issuing the recommendation.

The commission’s full report, titled “A Time For Action,” can be read at http://www.la2020reports.org/reports/A-Time-For-Action.pdf.

Retail Federation Urges Early Maritime Contract Negotiations

By Mark Edward Nero

The National Retail Federation, concerned about the potential of a strike or lockout resulting from upcoming contract negotiations between maritime industry management and union labor, is urging the two sides to come to a quick agreement.

On April 14, NRF President and CEO Matthew Shay said expedited negotiations would strengthen the supply chain and provide shippers and retailers the certainty they need to utilize the West Coast ports during the holiday shipping period, which begins in July.

In a letter to Pacific Maritime Association Chairman and CEO James McKenna and International Longshore & Warehouse Union President Robert McEllrath written on the behalf of the millions of businesses the NRF represents, Shay urged the two to begin contract negotiations far ahead of the June 30 expiration date of the current six-year contract. Talks are currently scheduled to begin in mid-May.

“A failure to reach agreement could seriously harm the US economy, especially if it results in supply chain disruptions,” Shay wrote. “Both parties should attempt to reach a contract well before expiration for the benefit of the national economy and to provide the needed certainty to all of the stakeholders in the supply chain who rely on the US West Coast ports.”

Shay also called for the ILWU and PMA to issue a joint statement committing to begin negotiations soon and promising to continue negotiating and working “without interruption or reduced productivity,” even if negotiations continue past the current contract’s June 30 expiration.

The NRF’s letter was spurred by a history of contentious talks between the two sides. Both the 2008 and 2002 talks weren’t resolved until after the contracts’ expirations, and in 2002, the PMA launched an employer lockout that shut down the West Coast ports for 10 days and resulted in an estimated $1 billion loss per day to the industry.

Longview Enters Terminal Option Agreement

By Mark Edward Nero

The Port of Longview has entered into a one-year option agreement with a Texas company to explore a proposed propane and butane export terminal interested in developing a new facility on the West Coast.

Haven Energy, a subsidiary of Houston-based natural gas-related infrastructure company Sage Midstream, is proposing an export facility to move propane and butane currently being flared in the Midwest to energy markets around the Pacific Rim.

Haven Energy says it’s looking at building a unit train accessible rail unloading facility, storage tanks and ship loading area at the port with the capability to load marine vessels with up to an about capacity of 550,000 barrels. The proposal calls for the cargo to be railed to the port from the North Dakota and South Dakota, then refrigerated and stored on site before being loaded to vessels for export to Hawaii, Mexico and Asia.

The option agreement allows both Haven and the port to evaluate the project; during the yearlong option period, the port agrees not to negotiate with any other party interested in locating a similar facility at the port. Further, the Port of Longview and Haven Energy say they plan to negotiate a commercial lease for port property and dock use and submit permit applications that are required for the trans-shipment facility.

The preliminary concept for the terminal is to place two tall, doubled-walled storage tanks on a 30 to 40 acre tract near the port’s Berth 4. Unit trains of over 100 railcars that are designed to carry propane and butane would use the port’s industrial rail corridor to enter the facility.

Haven Energy estimates the terminal would receive a unit train every day and half and about 30 vessels a year when it’s at full operation.

If built, the terminal could be operational by the fourth quarter of 2016, according to Haven, and would have a capacity of 47,000 barrels per day.

Group Seeks Permits for Grays Harbor Oil Terminal

By Mark Edward Nero

US Development Group, a Texas-based rail logistics and terminal facilities developer, has filed paperwork seeking permits to build an $80 million oil terminal at the Port of Grays Harbor.

The company, which has already developed over a dozen bulk liquid facilities in the US, says it filed permit applications with the city of Hoquiam April 7 to begin a process that includes an environmental review process by the city and Washington state Department of Ecology.

The proposed Grays Harbor Rail Terminal project would bring about one unit train to the facility every two days. A unit train typically has 120 rail cars and each car can hold about 28,000 gallons.

If constructed, the Grays Harbor facility could handle about 45,000 barrels of crude oil daily, USDG says, all of it brought in by train from the Bakken region of North Dakota and Montana.

The Grays Harbor Rail Terminal is the third crude-by-rail facility proposed at the Port of Grays Harbor. In January, Westway Terminal Co. and Imperium Terminal Services each launched Environmental Impact Statements for proposed projects.

If all three facilities are built and operate at capacity, between nine and 12 crude-by-rail trains would arrive at Grays Harbor per week, according to the port and result in 100 to 150 vessel calls, as opposed to 97 in 2012, the most recent year for which data is available.

About 17 million barrels of oil were shipped across Washington State in 2013, primarily to refineries in Anacortes and Cherry Point near Bellingham, according to data.

Friday, April 11, 2014

Survey: LNG Usage Developing Fast in Coming Years

By Mark Edward Nero

Liquefied natural gas could account for 13 percent of the bunker fuel market supply by 2020 and 24 percent by 2025, according to a newly released study by Lloyd’s Register.

The results of the 2014 Lloyd's Register’s LNG Bunkering Infrastructural Survey were released April 7. The report surveyed 22 major ports around the globe, including those in Los Angeles, Long Beach and Vancouver, British Columbia.

Shipowner demand for LNG was found to be the biggest driver from the ports’ perspective, with the availability of LNG infrastructure being the second most important driver.

Among the report’s other key findings:
  • Fifty-nine percent of the ports surveyed have specific plans for LNG bunkering infrastructure. Lack of in-port infrastructure will not hamper LNG bunker delivery plans.
  • Seventy-six percent of the ports believe that LNG bunkering operations will commence at their port within five years.
  • Seventy-three percent of ports say that LNG will be supplied by existing onshore LNG terminals. In the short term, ports will rely on third party specialist suppliers to supply gas from terminals to ship – mainly by either truck or bunker barge.
  • In the longer term, 47 percent of ports said they will have dedicated LNG storage capability for bunkering.
  • Eighty-six percent of the ports surveyed indicate that it is either likely (54 percent) or very likely (32 percent) that demand for LNG will be from deep-sea ships within a three to 10-year time horizon.

The study also found that no significant change in bunker delivery methods is anticipated – for example, if HFO bunkers are being supplied by barge today it is expected that LNG will be delivered by barge in future.

The complete survey can be seen at http://go.lrenergy.org/lngsurvey2014.

MARAD Schedules Maritime Symposium

By Mark Edward Nero

The US Maritime Administration (MARAD) says it is seeking leaders in all segments of the US maritime industry to participate in a National Maritime Strategy Symposium scheduled for Tues., May 6 at MARAD headquarters in Washington, DC.

The agency says its seeking participants to help it identify concerns, opportunities and issues facing the US maritime industry.

The symposium’s focus is on domestic US maritime issues. Principal focus areas are planned to include: US ports, domestic shipping, US shipyards, environmental compliance & maritime energy use, and labor/workforce.

In January, MARAD conducted the first of two National Maritime Strategy Symposiums, where over 200 maritime stakeholders came together to discuss and respond to the issues facing US-flag vessels. The purpose of initial meeting was to solicit input from individuals that will be used to generate ideas to improve, strengthen, and sustain the cargo opportunities and sealift capacity of the US-flagged fleet engaged in international commercial trade.

The second symposium is planned for MARAD Headquarters, 1200 New Jersey Avenue SE, Washington, DC, 20590. It’s open to the public, but seating is limited and advance registration is required. Registration is on a first come, first served basis.

Following this initiative, MARAD says it will develop new policies to: “keep America’s sealift capability robust; protect our long-term economic interests; and maintain the strategic assets of the US Merchant Marine.”