Thursday, September 22, 2011

Russian Seaports Aim for Global Domination

By Eugene Gerden

Russia plans to become one of the most important players in the world market of cargo transshipment by 2030, thanks to ambitious state plans for further development of the national seaports.

Last year Russia’s total seaport capacity increased by 6 percent and reached record highs of more than 526 million metric tons of cargo moved. This is just the beginning, according to state plans existing country’s transport strategy, and during the next 15 to 17 years the cargo throughput of Russian ports is expected to continue to grow to more than 1.6 billion tons per year.

In 2010, the total capacity of Russian ports exceeded 500 million tons, with dry cargo accounting for 211.6 million tons and bulk liquids for 314.4 million tons. The majority of cargo handled by Russian ports was made up of oil, coal, metals and fertilizers.

At present the Russian seaport complex is divided into three big groups, depending on the sea basins – the Northwest, Southern and the Far East.

There are more than 260 stevedoring companies currently operating in Russian ports and the majority of cargo, amounting to 43 percent of the total turnover, is handled in the ports of the Northwest Basin. The Southern basin’s share is about 34 percent and the Far East moves the remaining 23 percent.

According to Viktor Vovk, Deputy Head of Federal Agency of Maritime and River Transport, in the short term the volume of transshipment of the Russian seaports is expected to increase to 840 million metric tons, which will create about 18,000 new jobs.

Currently Russia has 64 seaports, but particular attention is expected to be given to the development of the country’s major ports, including Novorossiysk port, Murmansk port, Kaliningrad sea port and Tuapse. There are also plans for the expansion of ports that are located on the traditional freight routes, including those situated on the north-south and east-west routes of the international transport corridors. Development of the Northern Sea Route will also continue.

Particular attention will be paid to the development of deepwater ports, which will serve as hubs, with the aim of serving of international transport corridors.

Lack of depth in the harbor areas and the approach channels of the majority of Russian ports substantially reduces their competitiveness in the international scene, since it does not allow the opportunity to work with modern heavy-tonnage vessels. There is also a need to establish new port capacities at large and open territories, with good original depth, due to the fact that the development of port infrastructure in the deep-sea ports, which are located in urban areas, is not associated with substantial economic benefits.

Interest From US Investors
According to state plans, the implementation of most of the projects will occur on the basis of public-private partnership. In this regard, there are plans for the attraction of a large volumes of non-budgetary funds for the program, including private investments, but the latter will be associated with the need for improvement of the mechanisms of concessions and leases.

In addition to local investments, the Russian government believes that the development of domestic sea ports could also be of interest to foreign investors and in particular to those from the US.

A few months ago, Igor Levitin, Russia’s Transport Minister, met with a group of the American businessmen who had expressed an interest in the acquisition of certain Russian seaports. The names of potential investors, as well as the Russian ports, which might become an object of investments were not disclosed.

“The US investors have expressed a big interest in acquiring Russian sea ports and airports,” says Levitin, “mainly due to recent changes in the list of Russian strategic enterprises which were recently nonmerchantable to foreign capital,” and many of which were recently excluded from the list. However, Levitin adds, “the American business does not yet have enough information about the investment opportunities in the Russian sea ports and their infrastructure.”

Despite the fact that the capacity of the Russian seaports in recent years has significantly grown, at present most of them (and in particular those, which are located in the Northwest and South basins) still experience a shortage of specialized cargo terminals.

This has resulted in a substantial percentage of cargo which would be suited to the Russian ports still being handled in the ports of the Baltic countries and Ukraine. Last year nearly 26 percent of Russian coal, 44 percent of mineral fertilizers and 44 percent of ore were handled in the Baltic and Ukrainian ports. In addition, a significant volume of Russian oil and package cargo is at present still handled in the ports of neighboring countries.

However, according to Alexander Volodin, deputy head of investments and development programs of the Federal Marine and River Transport Agency (Rosmorrechflot), by 2030 all cargo, which would fit the ports of the Northwest and South Basin but are currently handled at the ports of the Baltic countries, Nordic states and Ukraine, will be re-oriented to the Russian ports. There are also plans to provide a reserve of port facilities in the amount of 20 percent with the aim of the development of transit cargo traffic. All of these measures will allow Russia to draw closer to its strategic goal of a 1.6-billion-metric-ton per year increase in seaport capacity.

Problems and Possible Solutions
Today, the development of the Russian ports is continuing, but their technical condition remains poor. This is reflected by the fact that only 30 percent of general cargo is transported and handled in containers, while 70 percent is still package cargo. Further port development is hampered by a lack of reserve lands for their expansion. There is also a shortage of territory for the construction of new marine terminals, rail container yards, and other logistics facilities. In addition, there is an eternal problem of the Russian bureaucracy and corruption.

According to Vitaly Yuzhilin, Chairman of the Association of the Russian Sea Commercial Ports, one of the major challenges in the development of the port complex in Russia is the need for an improvement of investment attractiveness of the local port business and creation of favorable conditions for private business. This is expected to be achieved through the reform of existing legislation in this field.

In addition, Russian analysts called on the government to increase the number of special port economic zones, which will provide tax and other benefits to its residents. To date, Russia has only two ports with free economic zones: the port of Sovetskaya Gavan (Khabarovsk Krai) and the port of Murmansk.

The expansion of port infrastructure is expected to occur in all of the country’s basins. In the case of the Southern (Azov-Black Sea) basin, which is comprised of 14 seaports and where 180.3 million tons of cargo were handled in 2010, further expansion of local ports capacity would allow Russia to strengthen its position in Europe and North Africa, both in terms of energy supplies and transit cargo.

Special attention will be paid to the development of a new deep sea port of Taman, whose capacity by 2025 is expected to reach 66 million tons. After the expansion, the port will be able to service ships with a draft of 14 meters (46 feet) and with a displacement of 100,000 tons. The intake capacity of the port will reach 307 ship entries per year.

The development of Taman port will allow Russia to create major trans-shipment point between the countries of the Black Sea and Caspian Sea basins. As part of these plans, there are also plans for the development of Novorossiysk Sea Port, Russia’s largest commercial sea port and one of the five largest ports in Europe, whose capacity in 2010 reached more than 117 million tons.

In the case of the Northwest, there are plans to increase freight traffic of the Ust-Luga port (St. Petersburg region), which is expected to compete with the ever expanding Baltic ports such as Riga, Klaipeda and Tallinn.

Near-term state plans have the Ust-Luga port becoming a key Russian port on the Baltic Sea. In 2010 its capacity reached 15 million tons, whereas by 2018, it is expected to grow more than 10 times and reach 180 million tons of cargo per year. The port will be able to serve vessels with the displacement tonnage of up to 150,000 tons.

Finally, there are plans to build a new deep sea port on the Balge peninsula (Kaliningrad region), which will have an annual capacity more than 130 million tons of cargo. The new port is expected to serve as hub-port, which will be able to admit ocean container vessels and to compete with the largest hub-ports in the Northern Europe, such as Hamburg, Rotterdam, Bremerhaven, Antwerp, and some others.

The construction of the hub-port in the Kaliningrad region will allow ocean container to pass directly into the Baltic Sea with further rehandling. Total cost of the project will amount to 263 billion rubles (USD$8.7 billion).

Eugene Gerden is a free-lance writer based in Moscow, Russia who has covered the European maritime industry for 10 years. He can be reached at

FMC Chair Will Seek Review of West Coast Cargo Diversions to Canadian Ports

Federal Maritime Commission Chairman Richard Lidinsky plans to seek an FMC review on cargo diversions from US West Coast ports to Canadian and Mexican ports and the impacts the federal Harbor Maintenance Tax (HMT) has on encouraging such diversions.

Speaking at the Canadian Maritime Conference in Montreal on Wednesday, Lidinsky said that he is moving forward with the review based on a personal request from US Senators Maria Cantwell and Patty Murray, both of Washington State.

In their Aug. 29 request to Lidinsky, Cantwell and Murray suggest that the federal HMT has become a "significant competitiveness issue" with the rise of Canadian and Mexican West Coast ports.

"It appears the HMT may be a key factor causing US ports to lose a growing share of imported container cargo from Asia," the senators said.

The two senators asked Lidinsky to "conduct an analysis of the impacts and the extent to which the HMT and other factors impact container cargo diversion from US West Coast ports to West Coast Canadian and Mexican ports, as well as offer legislative and regulatory recommendations to address this concern."

Inaugurated in 1986, the HMT is a federal tax imposed on shippers based on the value of imported and domestic goods being shipped through US ports. The tax, which generates between $1.3 billion and $1.6 billion a year, is placed in the federal HMT Trust Fund to be used for maintenance dredging of federal navigational channels.

"A growing number of containerized US imports from Asia move through the West Coast Canadian container ports of Vancouver and Prince Rupert en route to the US Midwest (i.e., Chicago and Memphis) through cross-border rail," the senators wrote in their letter to the FMC chair.

"Additional volumes enter US markets via Mexican ports. As a result, non-US ports are able to claim a substantial per-container cost advantage over US seaports based on the HMT alone. The results of this unfair disparity are increased cargo diversion and lost US jobs."

Lidinsky told the conference attendees "the volume of US cargo we saw moving through Canadian ports was around 140,000 TEU in the early 1980’s, today it stands at approximately 750,000 TEU annually."

He said he would ask the FMC at their next meeting in October to begin the review the two senators requested.

Lidinsky cited five main elements he believes are critical to the review, including: basic legal questions on where waterborne commerce of the US begins and ends; is the US handicapping itself with the HMT; the differing approaches of US and Canadian authorities toward container inspections; disparities between US and Canadian rail rates; and, the importance of investment in US infrastructure.

"I believe strongly," Lidinsky said, "that if our inquiry, and our open discussion, lead to improvements to US ports and policies, the commerce and the economies of both of our great nations will benefit."

Transpacific Stabilization Agreement Shifts to Committee Leadership Model

The 15 members of the Transpacific Stabilization Agreement trade group have formally shifted from a single executive leadership model to a structure headed up by a six-member committee.

The shift cements the committee leadership structure put in place in July on the departure of TSA Chairman Y.M. Kim – current president and CEO of Hanjin Shipping – following the end of his 18-month term heading the trade group.

The TSA's six-member executive committee has been acting in an advisory capacity to the overall group since July, but will now officially be responsible for the direct leadership of the group. While the structure change on face value elevates the six-member executive committee's role, a Lloyd's List report indicates that the committee will serve in a steering capacity to the expanded authority of TSA executive administrator Brian Conrad.

The current TSA six-member executive committee includes representatives from APL, Evergreen, Hanjin, Maersk, NYK, and OOCL.

Established in 1989, the TSA describes itself as a "research and discussion forum," for its 15 ocean carrier members, which include: APL, China Shipping, CMA CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai, K-Line, NYK, Maersk, MSC, OOCL, Yang Ming, and Zim.

Due to US antitrust laws, shippers cannot collectively set rates. The TSA provides a forum where the lines can exchange market information and conduct market research, develop voluntary non-binding guidelines for rates and charges, establish common terms of service and documentation standards on a voluntary non-binding basis, and represent carrier interests to government and business entities.

Vancouver USA Port Awarded $15M In Rail Project Funds

The United States Department of Transportation on Wednesday formally awarded $15 million in federal stimulus funds to the Port of Vancouver USA, which port officials plan to use to complete a key component of the port's 10-year West Vancouver Freight Access (WVFA) rail modernization project.

The funds, part of a $31 million DOT grant to Washington state passenger and freight rail projects, came from $2.4 billion in federal high-speed rail funds that Florida Governor Rick Scott rejected in February. Following Scott's rejection of the funds, the DOT selected dozens of projects across 15 states to receive the stimulus funds.
In July, Congressional GOP members led by Rep. Rodney Frelinghuysen of New Jersey unsuccessfully sought to shift $1.6 billion of the redistributed Florida high-speed funds – which included the Vancouver grant – to cover federal disaster aid.

Vancouver port officials plan to invest the $15 million windfall in the construction of a rail access point at the east end of the port that is separate from the BNSF mainline. The $38 million project – part of the overall $150 million WVFA plan – is set to start by April 2013, with scheduled completion in January 2016. The port, with state assistance, plans to pick up the remaining $23 million cost of the project after applying the federal stimulus funds.

Divided into 20 project elements, the overall WVFA project includes construction of a new dual carrier rail access into the port, enhancement of the port’s internal rail system, relocation of port facilities and utilities to accommodate track realignment, and improvements to port roadways.

The WVFA, the largest capital investment in the port's history, is at the heart of port officials' efforts to attract new business and retain existing businesses.

"We needed to increase our rail capacity. We needed to handle unit trains that are more than 100 rail cars long and unclog a bottleneck caused by trains coming into the port, stalling national rail lines to the west coast," port Executive Director Larry Paulson said in April.

In July 2010, the port completed its $66 million Terminal 5 rail upgrade project, the first major component of the larger WVFA project. The entire WVFA project is set for completion some time in 2017. When complete, the WVFA is expected to triple the rail car capacity of the port-area BNSF tracks.

Longview Labor Strife Flares Up...Again

Longshore union protestors on Wednesday again attempted to block a grain-laden train from entering a Port of Longview grain terminal at the center of a labor dispute, leading to the arrest of a dozen protestors including two International Longshore and Warehouse Union officers, as well as wives and mothers of union members.

The two union officers, including ILWU Local 21 President Dan Coffman, and members of the ILWU local's "ladies auxiliary," which reportedly includes wives and mothers of union members, were detained on charges of criminal trespass and obstructing a train.

At least two of the protestors were reportedly treated after being hit by pepper spray from a phalanx of police officers tasked with preventing the train from being blocked.

The train eventually reached its destination at the port's new $200 million grain terminal operated under lease by EGT Development.

The ILWU has been locked in a labor dispute with EGT since June, when the terminal operator hired a different union to provide labor for about 50 positions at the grain facility. The ILWU maintains that EGT, by signing a lease with the port, is required to abide by a labor exclusivity agreement the docker union has with the port.

Since then, more than 200 protestors have been arrested.

Wednesday's action appears to fly in the face of a restraining order issued by a federal judge that bars ILWU members from, among other things, preventing trains from entering the grain facility.

On Sept. 1, Federal District Court Judge Ronald Leighton issued a temporary restraining order against the protesters, admonishing the protesters from engaging in violent action, damaging EGT property, impeding business at the terminal or preventing access to and from the grain terminal.

On Sept. 7, in apparent defiance of the initial restraining order, several hundred protesters prevented a BNSF train loaded with grain from moving through Vancouver on its way to the EGT terminal in Longview. After protesters relented and allowed the train to progress, another group of about 200 protesters blocked the train again as it entered the Longview port. Following a tense hour and a half stand off with police in riot gear, the train was allowed to continue and eventually pulled into the EGT terminal Wednesday night. Nineteen protestors were detained by police at the Longview incident.

Early the next morning, a group of between 400 and 500 protesters stormed the EGT facility, broke down the gates, broke windows in the guard shack, damaged EGT security vehicles, cut brake lines on the grain train and dumped a large amount of the grain from the rail cars before fleeing.

Later the same day, Judge Leighton made the temporary restraining order a preliminary injunction and expanded the order to include all ILWU locals on the West Coast. He warned that a violation of the injunction could carry charges of federal civil contempt and up to $25,000 per violation.

Leighton warned that the ILWU actions over the previous 48 hours had been "patently illegal," and he angrily told union attorneys that while a proper way to protest requires restraint, "Your clients have none of that."

Last Thursday, Judge Leighton made good on his warning, finding the ILWU in contempt of court for the Sept. 8 incident and ruling that the union will have to pay for damages caused by the union raid of the grain facility. An accounting of the full damages is expected by the end of the month.

Tuesday, September 20, 2011

Ocean and Coastal Towing

By Jim Shaw

The ocean and coastal towing sector has been witnessing an expansion in work for the offshore petroleum industry on the West Coast and along the Gulf of Mexico. This is requiring larger barges that can offer stronger deck load capacities as well as higher horsepower tugs with extended towing ranges. Tows of obsolete oil field structures and old ships have also been increasing as more rigs and related marine items are retired in the Gulf of Mexico and the Maritime Administration (MarAd) continues to clean out its reserve fleet anchorages. Almost gone, however, is the ocean towing of petroleum barges, which has largely been turned over to articulated tug/barge (ATB) combinations, with the world’s largest ATB unit now being readied for operation by Crowley Maritime. The trend toward pushing rather than pulling is also beginning to show up in the dry bulk sector, where several dry bulk barges have been converted for ATB work and new bulk ATB barges ordered. Further ATB conversions may be in the offering if short-sea routes can be successfully established as alternatives to over-the-road haulage. Several Pacific Coast-based towing companies, including Crowley and Foss, have also been moving farther afield in the international market. And while towing usually escapes the public eye, the move of the US Missile Defense Agency’s Sea-Based X-Band Radar vessel SBX-1 into Puget Sound from Hawaii earlier this year demonstrated to the public what the sector can accomplish (see Pacific Maritime Magazine, August 2011).

High-Security Tow
The movement of the attention-catching SBX-1 was accomplished under very high security standards during its positioning from Pearl Harbor to the Vigor Shipyard on Seattle’s Elliott Bay for a $27 million overhaul. Meeting the 389-foot by 276-foot floating structure some 50 miles outside the Strait of Juan de Fuca was the 8,200-HP Foss tug Lindsey Foss, which escorted the structure to Port Angeles where the 6,610-HP tug Pacific Star joined in the escort, later to be accompanied by the tugs Henry Foss and Wedell Foss.

Foss Pacific Northwest Operations Manager, Jim Van Wormer, reported that the job was performed under security restrictions as stringent as those for Air Force One, the President’s Boeing 747, and that he and Foss Capt. Dave Corrie flew to Hawaii to ride with the marine pilot taking the SBX-1 to sea on its departure from Pearl. This allowed the two men to observed the 50,000-ton displacement vessel’s handling characteristics and helped them plan the structure’s move into and through Puget Sound.

“The thing I’m proud of is that when we presented the transit plan to the Coast Guard, Missile Defense Agency, the pilots and all the stakeholders, everybody was on board from the beginning,” said Van Wormer. “We all worked closely on this as a group to make it happen.”

The SBX-1, which draws 32 feet of water lightship and stands about 250 feet high, is expected to be in Seattle for several more weeks.

New Foss Atlantic Division
Although most of Foss’ towing operations still take place in the Pacific, the acquisition of Boston, Massachusetts-based Constellation Maritime has seen a growing amount of work on the Atlantic. Constellation, which has been adopting Foss management systems, safety practices and operations procedures since coming under Foss control in 2006, also took on the Foss logo and Foss colors this year to become part of Foss’ new Foss Atlantic Division, a division that also incorporates the earlier acquired Gulf Caribe Maritime of Mobile, Alabama.

While the former Constellation fleet does about 40 percent of the ship assist work in Boston harbor its strongest line of business has become project work, mainly long-distance towing. This has seen it complete fourteen tows totaling more than 50,000 miles from Maine and South Carolina to Port Arthur, Texas over the past few months carrying oil refinery modules.

Another tow saw the 2,400-HP tug Volans move the barge Chem Caribe from Brewer, Maine to an oil refinery in New Jersey with a cargo of oil refinery modules on board. At the same time, the 3,000-HP Leslie Foss accomplished a similar move between Milwaukee, Wisconsin and Quebec, Canada using barge 343. On the horizon is a possible ocean towing project involving 130 windmills to be installed offshore between Cape Cod and Nantucket Island.

Wind Energy Barging
The wind energy sector has also been generating business for Foss on the West Coast, and the market is continuing to pick up. Earlier this year 40 windmills were moved by barge from Vancouver, Washington to West Sacramento, California for installation at a power-generating farm located at Rio Vista, California. Advanced Tower Systems (ATS), a joint venture between Germany’s MECAL Hurks Group BV and Juwi Holding AG, contracted Foss to move the mills, which required four coastal trips.

To ensure safe transport the structures were broken down into component pieces ranging in size from 70 to 90 feet long and between 89,000 pounds and 145,000 pounds in weight. Foss organized the tows in such a manner that 30 pieces could be carried per voyage utilizing the barge Weeks 2702, which measures 340 feet by 78 feet. The first tow was handled by the 3,000-HP Sidney Foss while the final three tows were accomplished by the 4,000-HP Justine Foss. Loading and discharge operations took about two days in each port.

At Vancouver, which is anticipating a dramatic increase in its wind energy business this year, the port’s two Liebherr mobile harbor cranes were employed in tandem to lift the heavier and more awkward pieces.

Old structures and ship are also generating business for the towing industry. The continual disposal of obsolete ships in the MarAd-managed reserve fleet has seen several tows along the East and West Coast this year, including that of the former American President Lines freighter President Tyler, which was moved out of the Suisun Bay fleet for a trip through Panama. On the East Coast, the partially-built Navy oilers Benjamin Isherwood and Henry Eckford were also sent for scrap, with all three ships towed to Brownsville, Texas.

At the same time, the growing number of oil rigs and other related equipment being retired in the Gulf of Mexico has been generating tows. One of these was the 5,400-ton semi-submersible oil-drilling rig Hercules 78, which was moved from Pascagoula, Mississippi to Brownsville by Foss Maritime’s 8,200-HP Corbin Foss in May of this year. The platform was bound for the breaking yards of Esco Marine, which has also been busy with several of the MarAd ships.

According to Foss director of Global Towing and Transportation, Leiv Lea, the seven-day rig tow could be a precursor of things to come. “There are many obsolete rigs in the Gulf of Mexico,” observed Lea, “and the scrapping companies feel these will become a larger part of their business, which could translate to more of these rig tows
for Foss.”

Upriver Push
Not an ocean tow, nor even a coastal tow, but a substantial cargo-moving project never the less has been the pushing of barge loads of oversized oil production modules up the Columbia and Snake rivers from Vancouver, Washington to Lewiston, Idaho. Foss started moving the Korean-built modules late last year using its barges 286-3 and Sitka, handled by the river-based tugs PJ Brix and Betsy L. Three tandem tows and one single-barge tow were completed before the upper Columbia/Snake System was closed for a three-month period of lock maintenance over the winter months. During this time, Foss accomplished major overhauls on the two tugs as well as the two barges. This saw the Z-drive unit of the PJ Brix pulled for maintenance while Betsy L’s engines were reconditioned. At the same time, the two barges underwent preservation work and had their ballasting systems checked. New mounting and lashing gear was also installed.

The towing operation was resumed in April and the project is expected to be completed toward the end of this month. From Lewiston the modules are to be moved overland to the $8 billion Kearl Oil Sands project located near Fort McMurray, Alberta using Self Propelled Module Transporters (SPMTs) provided by heavy equipment specialist Mammoet. However the highly intricate move faces pressure from local environmental groups because they feel the oversized route being established for the modules may become a permanent corridor.

Northbound Tows
In the far north, Crowley Maritime has again been active in Alaska after employing two of its high deck strength barges, 455-3 and Marty J, to move oil modules to Point Oliktok last year. That tow saw the 7,500-HP tugs Warrior and Commander move the loaded barges from Houma, Louisiana to the Bering Sea via the Panama Canal, a journey of more than 8,000 miles. The modules were destined for the Nikaitchuq oil field, being developed by Eni, and will be used to produce the first oil from the North Slope that will not be processed by facilities owned by BP or Conoco Philips.

A second two-barge tow, employing the barges 455-8 and 455-7 towed by the 7,200-HP tugs Gladiator and Guardsman, delivered a DOYON drill rig to Prudhoe Bay to support BP’s North Slope drilling operations. The rig had been loaded at Vancouver, Washington in component pieces, with Barge 455-7 used to carry eight pieces while 455-8 transported four pieces.

This year’s season saw another Alaska-bound tow made by Crowley from Vancouver with two modular Arctic Alaskan Drilling Units (AADU), each weighing approximately 5,000 tons, loaded aboard barges 455-4 and 455-5 for the 3,063 mile trip north. The tow was accomplished in 18 days using a 7,200-HP Crowley tug at the head of each barge.

The 455 series barges, built with 25-foot side shells, are becoming highly popular within the petroleum and construction sectors and three of the units have found employment with Heerema’s North Rankin Project in Asia and Australia. Crowley plans to build up to 13 of the high-capacity barges by 2013.

Southbound Tow
Crowley’s AADU oil rig tow north passed another rig being moved south. This was Shell’s circular-shaped drilling rig Kulluk, being moved from Dutch Harbor to Seattle for upgrading work. A difficult structure to move, Kulluk provided work for a number of tugs during its mobilization out of Dutch Harbor’s Captain’s Bay as well as upon its arrival in Puget Sound. Shell’s purpose-built Arctic oil spill response vessel, Nanuq, was a main feature of the long-distance tow but also lending assistance were Western Towboat’s 5,000 horsepower Ocean Titan and 4,200 horsepower Ocean Ranger, Harley Maritime’s 4,300 horsepower Gyrfalcon and Dunlap’s 4,300 horsepower James Dunlap.

The 1983-built Kulluk, which had been idle for a number of years, will receive maintenance and a number of technical upgrades at Seattle’s Vigor shipyard before being towed back north to Dutch Harbor later this year. According to Shell, the rig has been chosen as a primary drilling unit for the company’s 2012 Beaufort Sea Plan of Exploration once all upgrading work is completed.

New Crowley Tugs
To further enhance its ocean towing and offshore support capabilities, Crowley is having four 10,880HP Ocean Class tugs built by Bollinger Marine Fabricators at Amelia, Louisiana, with the first 15-knot vessel due to come on line by early next year. These next generation 1,600-gt towing tugs are being equipped with twin-screw, controllable-pitch propellers fit in nozzles and high lift rudders to give increased performance and better fuel economy. The boats will also incorporate dynamic positioning technology to allow accurate positioning and heading using a centralized manual control.

Crowley had originally planned to build all four with DP-1 technology but has since decided to upgrade the third and fourth units to DP-2. In addition, the Caterpillar-supplied main engines and generators for all four tugs will be EPA Tier II compliant and will have the ability to be upgraded to meet future environmental standards. For towing, the vessels will have Intercon DW75 hydraulic towing winches with a minimum holding power of 350 short tons.

The first two tugs, Ocean Wave and Ocean Wind, will measure 146 feet by 44 feet and will be equipped with DP-1 technology while the second two boats, Ocean Sun and Ocean Sky, will be ten feet longer and equipped with DP-2 technology.

Long Beach Moves Forward With New Box Terminal Proposal

Port of Long Beach officials last week released the draft environmental documents for a proposed 160-acre $650 million container terminal which, if built, would create thousands of area jobs and showcase some of the industry's latest pollution reduction technologies.

If developed, it would be the first completely new terminal constructed at the port since the 2005 adoption of the port's Green Port Policy, which sets pollution criteria and reduction goals for port activity.

The port's plan calls for a Pier S terminal to feature ship-to-shore power – allowing vessels to plug into landside electricity while at berth – on-dock rail lines that would help to minimize area truck trips, and what the port describes as "the cleanest cargo-handling equipment" to handle containers on at the facility.

An additional benefit of the development would be navigational improvements in the Cerritos Channel located on the north face of the project site.

"A Pier S development would support tens of thousands of new jobs in the region and supply Southern California’s business and consumer needs," port executive director Richard Steinke said in a statement. "A Pier S terminal would help to modernize the Port of Long Beach as we seek to sharpen our competitive edge in the goods movement industry."

On Friday, the port released a draft environmental impact statement (DEIS) and supplemental environmental impact report (SEIR) analyzing the impacts of the proposed development, and the mitigation measures that would be used to address those impacts. The port has released the DEIS/SEIR for a public review period, which continues through November 15, 2011, following which the port will incorporate public comments and responses to the comments into a final environmental impact report.

The draft environmental document includes several development alternatives for Pier S, including a full container terminal option as well as an option for a multi-use storage facility for cargo containers.

Construction of a container terminal would include development of a wharf, berths and terminal infrastructure at Pier S to support container shipping operations. The project would include a rail yard to facilitate on-dock rail.

In addition, the port plan calls for the port to provide $12 million for the Port Mitigation Grants Programs, designed to reduce the overall effects of the port on the local community.

Located on the port's Pier S, the proposed terminal location has been in development limbo for more than 10 years. The port, which purchased the former railroad property in 1994, utilized massive amounts of landfill from the Alameda Corridor construction in the early 2000s to bring the majority of the parcel well above sea level. Pier S was the epicenter of the port's subsidence problems in the 1940s, 1950s and 1960s, with areas of the parcel dropping almost 30 feet due to oil being pumped from underneath the port. A water injection project, still in operation today, halted the subsidence in the 1960s and stabilized the ground level.

In the early 2000s, the port laid an initial decking on most of the Pier S parcel. However, following successful legal challenges by environmental groups over a terminal development at the neighboring Los Angeles port in 2003, both ports entered a nearly seven-year long self-imposed moratorium on major terminal development. This left the Pier S property to sit vacant, mainly used as a temporary storage space and as a movie/TV location shoot.

Ocean carrier Evergreen, which operates a terminal at the Los Angeles port, was initially linked to a possible Pier S terminal in the early 2000s. Long Beach port officials have recently indicated that Evergreen may still be a potential customer for a Pier S terminal, albeit most likely as a second Southern California terminal to compliment their existing Los Angeles facility.

Cosco Busan Owners To Pay $44.5M For 2007 Oil Spill

Federal and California state authorities announced Monday a $44.5 million settlement with the owner of the container vessel Cosco Busan to cover the cleanup costs and environmental damage caused when the vessel hit a Bay Area bridge in November 2007 and leaked more than 53,000 gallons of diesel fuel into San Francisco Bay.

The US Department of Justice, the state of California, the city and county of San Francisco and the city of Richmond, California, signed and lodged a consent decree that requires Regal Stone Limited and Fleet Management Ltd., the owners and operators of the M/V Cosco Busan, to pay $44.4 million for natural resource damages and penalties and to reimburse the governmental entities for response costs incurred as a result of the Cosco Busan allision and subsequent leak.

The federal and state natural resource trustees estimate that the Cosco Busan spill killed 6,849 birds, impacted 14 to 29 percent of the herring spawn that winter, oiled 3,367 acres of shoreline habitat and resulted in the loss of more than one million recreational user-days.

A result of a multi-governmental effort by federal and state agencies, and municipal governments, the settlement is expected to fully compensate (in addition to previously reimbursed costs) for the natural resources and other damages and costs resulting from the spill.

The portion of the settlement for lost human uses of the shoreline and the bay, $18.8 million, constitutes one of the largest human use recoveries for any oil spill in the United States. Of this, the National Park Service is receiving approximately $9.75 million to improve coastal access and facilities in the bayside, coastal and estuarine areas of Golden Gate National Recreation Area, San Francisco Maritime National Historical Park and Point Reyes National Seashore.

The remaining $9 million will be disbursed either directly to local government as part of the consent decree or through a grant program to fund shoreline recreational projects throughout the impacted spill areas.

"With this settlement, we are seeing to it that those responsible for the spill are held accountable and that they pay their share for restoring and improving our precious natural resources and public lands," US Secretary of the Interior Ken Salazar said during a press conference on Treasure Island overlooking the site of the 2007 incident.

Total Box Volumes At Seattle, Tacoma Ports Drop In August

Containerized cargo levels at the two major Puget Sound ports, reflecting what appears to be a similar downturn across the major West Coast ports, were both down in August compared to the same period last year.

The Port of Seattle continued a fourth-month streak of declining monthly volume numbers, with port officials reporting the handling of a total of 182,808 TEUs in August, a 14.6 percent drop compared to the year-ago period.

Import numbers turned downward sharply in August, with the port handling 66,013 loaded inbound TEUs for the month – a 25.5 percent drop compared to August 2010.

Exports were the sole bright spot for the port, with 52,203 loaded outbound TEUs handled in August, a 9.6 percent gain over the same period last year.

For the calendar year-to-date, the port has handled a total of 1,363,371 TEUs, a 5.3 percent drop from the first nine months of 2010.

Further south, Port of Tacoma officials reported handling a total of 121,033 TEUs in August, a 2.6 percent decline over August of last year.

On the import side, Tacoma handled a total of 40,902 loaded inbound TEUs, a 2 percent increase over the same period last year.

The export side was also bright for Tacoma as well in August, with a total of 26,505 loaded outbound TEUs handled – a strong 16.4 percent increase over export volumes in August 2010.

Tacoma remains in positive territory for the calendar year-to-date, up 1.9 percent over the January to September period last year with 963,533 total TEUs handled.

Total Oakland Port Box Volume Off Slightly In August, Exports Up

Cargo volumes at the Port of Oakland, California's third busiest container port, slid slightly in August, while export box volumes posted growth for the eight month this year.

A total of 216,268 TEUs moved over the Oakland wharves and docks in August, a slight 0.7 percent drop compared to August of last year.

Port officials reported that import box levels also slid slightly downward in August, with 75,891 loaded outbound TEUs handled – 0.9 percent lower than the same month in 2010.

Like most other major West Coast ports in August, Oakland reported an uptick in export box volumes. The port handled a total of 84,817 loaded outbound TEUs for the month, a 6.1 percent increase over August 2010.

For the calendar year-to-date, the port has handled a total of 1,555,578 TEUs, a 2.5 percent increase over totals in the first nine months of last year.