Tuesday, December 31, 2013

Fidley Watch: Blivet

By Chris Philips, Managing Editor

In late November, an “informational” meeting with the Washington State Department of Ecology (Ecology) regarding the establishment of a Puget Sound No-Discharge Zone was well attended by people representing the commercial maritime industries that operate in Puget Sound. Where the State had expected thirty people, more than 60 showed up. The tone was set about 45 minutes in, by the presenter, Amy Jankowiak with Ecology, when she snapped to the room in general, “Do you want me to leave or do you want to listen?”

The State of Washington is concerned that the levels of fecal coliform bacteria in Puget Sound are dangerous to humans. Ecology officials believe that commercial vessel traffic is a large contributor to these elevated levels. Unfortunately, as Ms. Jankowiak admitted to the assembled vessel operators, Ecology doesn’t actually have any data to back up the claim. Rather, Ms. Jankowiak explained to the group, the NDZ is needed because the State says it is.

The state’s solution is to petition the US EPA to create a No-Discharge Zone throughout Puget Sound, forbidding any discharge of waste, either treated or untreated.

The regulation will require all vessels to have a holding tank for sewage, or “black water” and will no longer allow the USCG-approved Type II marine sanitation devices carried by most vessels larger than 65 feet. This would include tugs, passenger vessels and fishing vessels.

When asked about the effect this legislation would have on the vessels calling at Puget Sound Ports, Ms. Jankowiak suggested that vessels currently utilizing approved Type II devices could simply add a holding tank to carry sewage onboard until it could be pumped out at existing shoreside treatment facilities. She seemed dismissive of industry protestations that there are currently not nearly enough existing shoreside facilities to serve the vessels affected by the rule. Ms. Jankowiak doesn’t know of any plans to increase the number of shoreside pump-out stations. Many questions were asked, including whether the State appreciated that a retrofit of a vessel for that kind of tankage would be in the $100,000 to $125,000-dollar range, if it could be accomplished at all, and would affect the tonnage of the vessel, as well as stability, cargo capacity and effective range.

“That’s the first I’ve heard of that problem,” Jankowiak said, admitting that the State hasn’t actually consulted with any shipyards or naval architects, and was unaware of stability or tonnage issues. “We’re trying to reach out to everyone we can,” she said.

The term “informational” applies to the meeting because, as was pointed out by Ms. Jankowiak, the decision to petition the EPA for the NDZ has already been made, and the “input” from the audience won’t have any bearing on the decision. Should the EPA declare the NDZ, vessel owners will be required to comply with the new regulations unless they receive an “exemption” due to unique challenges to retrofit, including engineering and certification. This exemption will only be valid until the next time the vessel is drydocked, or 3 years, whichever comes first. The State isn’t even required to have the comment period, according to Ms. Jankowiak. It is simply a courtesy Washington is providing to the stakeholders.

In reaction to the proposed NDZ, a coalition of affected stakeholders is producing a position paper with concerns that Ecology needs to address before moving forward:

Ecology needs to articulate a scientific basis for its determination that areas of Puget Sound are at ecological risk from vessels’ treated blackwater effluent.

Any proposed solution needs to be proportional to the scope of the problem and the degree of risk.

Vessels would need a fair and reasonable amount of time to retrofit their vessels with holding tanks, if necessary.

A regulatory scheme that permits onboard treatment systems that perform to best-achievable protection standards should be strongly favored and considered.

The State of Washington has moved the public comment period to the middle of this month to avoid the holiday crunch. The draft petition can be found on Ecology‘s NDZ website: http://tinyurl.com/bqm9g6d. We urge you to make your voice heard if you hold a stake in the West Coast maritime economy.


We believe the entire discussion should be tabled until Ecology has actual and reliable data. In the country’s current brittle economic conditions, the State of Washington’s baseless disruption of much of the robust West Coast maritime economy is shortsighted and destructive, with negligible, if any, environmental benefit.

Navigating legal waters of salvaging more treacherous than actual salvaging

By Michael A. Moore

The West Coast diving and salvage business has changed a lot since Mick Leitz was in charge of salvaging the Exxon Valdez. Mick is still in business with Portland's Fred Devine Diving and Salvage Company – and still uses Fred Devine's designed and built for salvage flagship, the M/V Salvage Chief with its 400-ton line pull.

The business these days is moving away from local masters of the trade like Mick Leitz and his Alaskan counterpart Dan Magone, and toward well-capitalized international big players – such as Resolve and Crowley – and high technology, such as remotely operated vehicles (ROV) and special software packages.

But big capital and high tech are not the biggest changes to hit the salvage and commercial diving industry – nor are rough seas and deep water the biggest challenges to successful salvage operations.

Mick Leitz says the legal shoals of myriad and often conflicting regulations are the biggest challenges salvors face these days. Some of those rules are a result of the Exxon Valdez grounding and subsequent oil spill.

In fact, Leitz wonders if the Exxon Valdez operation could be pulled off in today's regulatory climate. He says it was difficult enough in those pre-OPA90 times.

"Harbors of refuge was a problem before the Exxon Valdez ," he says. "It's still a major problem." Leitz says he had to write six different towing plans for taking the Valdez from Alaska to San Diego before the seventh was accepted.

"None of the harbors of refuge that were capable of handling the Valdez wanted anything to do with it," he said. "The final plan was to keep the tow route more than 200 miles offshore." Leitz lets the question of what would have happened if a problem arose during the tow remain unanswered.

Responder immunity is the biggest problem plaguing the industry from the fallout of the Exxon Valdez grounding says Leitz.

"It has to do with the way OPA90 is written," said Leitz. "The way things are now, the salvor is potentially liable, whereas environmental cleaners have responder immunity."

Leitz is referring to a responder immunity provision Congress included in the post-Exxon Valdez OPA90 legislation that was intended "to protect from liability those individuals or corporations who provide care, assistance, or advice in mitigating the effects of an oil spill."

"Unfortunately, the OPA 90 standard specific to responders has proven inadequate to protect responders from becoming entwined in such suits," writes Jonathan K. Waldron, a partner in law firm Blank, Rome, LLP, in the Fall 2011 edition of Soundings, published by the American Salvage Association. Waldron was referring to the legal problems encountered by emergency responders to the Deepwater Horizon oil platform disaster in the Gulf of Mexico.

"Immediately following the explosion on the Deepwater Horizon, emergency response vessels rushed to the rig to save lives, render assistance to those in peril and fight the fire.

"In the ensuing months, responder companies worked to clean up the oil that was pouring into the gulf in an effort to mitigate the spill. Notwithstanding these valiant efforts to help in the worst environmental disaster in US history, these emergency and cleanup responders are entwined in complex and protracted specialized multidistrict litigation (MDL) despite the fact that protections were put in place following lessons learned from the Exxon Valdez specifically to prevent such occurrences.

"Salvors could find themselves in the same situation in future incidents unless enhancements are made to current law," Waldron said. "Congress intended that responses to oil spills be immediate and effective and noted that without such a provision the substantial financial risks and liability exposures associated with spill response could deter a prompt, aggressive response.

"This immunity does not prevent any injured parties from recovering their full damages resulting from the spill incident, as OPA 90 provides that the responsible party (RP) is liable for any of the removal costs or damages that a responder is relieved of pursuant to this immunity consistent with the OPA 90 'polluter pays' principle," he said.

"This immunity does not apply if a responder acts with gross negligence or willful misconduct, or in cases involving personal injury or wrongful death."

That last sentence is the loophole big enough to tow the Exxon Valdez through when it comes to creating legal liability to salvors.

Which is what happened to emergency responders following the 2010 Deepwater Horizon explosion, which resulted in the deaths of 11 and injuries to 17 men working on the platform, plus the discharge of approximately five million barrels of oil.

Deepwater Horizon required thousands of responders working several months to contain and clean up under challenging conditions – numerous claims and lawsuits were filed.

"Unfortunately, the OPA 90 standard specific to responders has proven inadequate to protect responders from becoming entwined in such suits," said Waldron. "In these cases, plaintiffs have been successful in simply alleging gross negligence (without providing any supporting facts), and to cast "exposure" claims resulting from alleged exposure to released oil or from approved dispersants used to treat that oil as personal injury claims falling outside the scope of the specific responder immunity provisions."

The cases have been catalogued into pleading bundles called "Master Complaints" under various categories – including one bundle that named as defendants all the owners and/or operators of the rescue vessels that answered the Deepwater Horizondistress call and responded to the fire emergency after the explosion. This is similar to suits that could have been filed against salvors had there been salvage actions related to the incident, said Waldron.

Mick Leitz's way of dealing with the increased potential for lawsuits and liability in today's new world of marine salvage law is to be very selective about the jobs he takes on and the way the contracts on those jobs are worded.

"You try to protect yourself contractually, but you can still end up in court," said Leitz.

Leitz believes the increased regulatory and liability climate is counterproductive to the real mission of the salvor. "The sooner you get the vessel out of the water, the better – but the regulations slow you down," he said. "In the old days, you would use a sling to pick up a vessel and get rid of it.

"The risk the salvor runs now is if you get two drops of oil on the water, you are liable to get sued.

Anything goes wrong, debris, paint chips, oil – you can spend five years in court for a week's work."

Leitz's solution is to work for state agencies as much as possible. He says the states have funds to get rid of derelict vessels and they provide an umbrella of protection if something goes wrong.

Dan Magone took another tack to solving the perfect storm of challenges he found himself facing after more than 33 years of sailing into Alaska's wintry, storm-tossed seas to rescue fishing boats and other vessels in distress.

"We never had any competition until the big companies started to notice this neck of the woods," said Magone.

"Climate change and petroleum are bringing a lot larger vessel traffic up through Alaska's waters. The Arctic passage is spurring growth – next year they will be laying cable through the passage from Norway to Tokyo," he said.

Magone decided it was better to join the big salvage and diving companies than to compete with them. He joined forces this last August with Florida-based Resolve Marine Group.

"The result will be a greatly expanded, emergency response and marine services company that combines the long-standing, deep and local expertise massed by Magone Marine's Alaskan salvors with the extensive resources, personnel, and vast salvage & wreck removal experience of Resolve Marine Group," states the joint press release on the venture. "This newly-formed business will be named Resolve-Magone Marine Services (Alaska) and coincides with increased vessel traffic now in the environmentally-sensitive Aleutian Chain."

Magone's decision to hitch up with Resolve was not made on the spur of the moment.

"I decided to join forces with the best – plus I am friends with the co-owner of Resolve," he said. "We are like-minded guys, and had been discussing this move for several years. I knew I couldn't ante up to the level it's going to take to do business with the increased competition and regulations.

"We did all the wreck removals for the fishing fleet for 20 years. The big shipping companies that are coming up are way beyond my scope."

Magone says that another challenge his company and the rest of the industry is facing is finding reliable trades people and vessel crew.

Meanwhile, back in sunny Southern California, Richard Barta has built a niche for Long Beach-based Muldoon Marine Services.

"We do mostly ship repair and maintenance inspections," he said. "When we do emergency work it's with OPA90 partners. You have to have pollution insurance.

"It's the nature of the beast – when something happens, someone has to respond. Even with a small job like boat salvage, it can be a mess," he said.

Barta's strategy is to work as a member of a larger OPA90 responder team.

"Part of OPA90 is that ship operators of vessels over a certain size have to have an OPA90 responder," he said. 'We have worked with Marine Response Alliance – there are others, like Titan and Resolve.

"If something happens in LA or some other place like Ensenada, they call in small groups to help get the job done. We worked on the APL Panama."

Barta is referring to the hard grounding of the containership APL Panama in December of 2005 when it was attempting to enter the harbor at Ensenada, Mexico and missed the ship's channel.

"On big jobs, a large contractor steps in and brings in everyone who's got the right equipment and who can get there the fastest."

The salvage of the Costa Concordia by Crowley Maritime subsidiary Titan Salvage is the latest and greatest example of multi-contractor teamwork on a difficult salvage job.

Titan teamed up with Italian engineers Microperi – Titan brought its experience as a salvor and Microperi contributed their expertise at underwater construction and engineering.

The task of bringing the gigantic ship – which is twice the size of the Titanic – upright and off the rocks in one piece required the talents of 450 specialists from 19 countries working around the clock seven days a week. The project team included more than 100 specialized divers from more eight countries – who could only work 45 minutes at a time at the 150-foot depths before entering a hyperbaric chamber for decompression.

At the same time Titan and Microperi were taking care of the physical work, specialist representatives from Costa Crociere, Carnival Corporation, London Offshore Consultants and Standard P&I Club, with the collaboration of RINA and Fincantieri, worked behind the scenes to ensure that the project had the financial, legal and governmental support needed to move forward to a successful conclusion.

The final cost for the salvage of the Costa Concordia was approximately $400 million, according to Crowley.

Crowley's history in responding to maritime emergencies also goes back to the Exxon Valdez – Crowley Marine Services was the first on scene with high horsepower tugs positioned alongside the stricken tanker and these tugs were also used to assist Marine Pollution Control during the transfer of oil from the stricken tanker to lightering vessels.

That was the first step in a working partnership that eventually became today's Marine Response Alliance – Crowley's MRA partners include Marine Pollution Control, Titan Salvage, Marine Hazard Response and McAllister Towing.

Seattle-based Global Diving and Salvage may be closer to the new model for small and medium size salvors going forward.

The company's work mix consists of marine casualty response, marine construction and offshore support for the oil and gas industry. Global Diving has worked on projects from Alaska to Saudi Arabia.

Technology combined with top professionals and teamwork is the company's formula for confronting the challenges and minimizing the risks associated with marine emergency response and salvage operations.

"There have been a lot of technical changes in this industry," said Frank Immel, Global Diving's marketing director. " We use remotely operated vehicles (ROV) to do initial recons in salvage situations instead of risking a diver.

"We can put an ROV down to do a visual inspection and gather information that allows us to develop a salvage plan."

A major part of Global's salvage plan development involves the use of a software system that was developed for the design and evaluation of all types of ships and floating structures. The software addresses flotation, trim, stability and strength by calculating the forces involved using mathematical/geometrical models of the vessels.

"You could say we use the software in a reverse mode," said Immel. "Instead of using it to design a vessel, we input a shape for the hull line and other parameters – this enables weights and stability to be calculated to a greater degree of accuracy.

"This is really important when using a crane to do a vertical lift. You want to know where is the center of gravity, where do you connect for the pick, what's the weight of the vessel? The software makes the whole process more consistent and reliable," he said.

Global prefers to use cranes instead of lift bags when the water is deeper than 15 or 20 feet.

"A lift bag is great in shallow water," said Immel. "But you can't forget the laws of physics as you go deeper – you pressurize a lift bag at depth – as it rises the bag wants to go faster. It can get out of control – the bag comes up and then wants to go back down. With cranes you have more control, there is no volumetric expansion to deal with."

Immel says that Global's objective in every aspect of their operations is to minimize risk.

"Our first job is to minimize risk to keep people alive," Immel said. "We put people where they are not supposed to be."

Monday, December 30, 2013

K Line, NYK Fined for Shipping Act Violations

Two ocean carrier companies operating pure car carriers (PCCs) and roll on/roll off (ro/ro) vessels in US inbound and outbound trades, have been penalized a combined $2.3 million by the Federal Maritime Commission for allegedly breaking rules regarding commercial shipping.

Under separate agreements, Tokyo-based companies Kawasaki Kisen Kaisha Ltd. (K Line) and Nippon Yusen Kaisha (NYK Line), paid $1.1 million and $1.2 million, respectively, in civil penalties, the FMC revealed Dec. 23.

The fines resolved allegations that K Line and NYK Line had violated provisions of the Shipping Act by acting in concert with other ocean common carriers for the shipment of automobiles and other motorized vehicles by ro/ro or specialized car carrier vessels, but did not file such agreements with the Commission.

“These penalties underscore the seriousness with which the Commission views the carriers’ obligation to file with the Commission any agreement with other carriers affecting working relationships in the US trades, both for import and export traffic,” Commission Chair Mario Cordero said. “The shipping public has a right to know the subject matter and scope of any such agreement.”

The fines also addressed related activities and violations. Commission staff had alleged that the practices persisted over a period of several years and involved numerous US trade lanes, including to and/or from the Far East, Europe, the Middle East and South America.

In reaching the compromise agreements, K Line and NYK Line did not admit to guilt, but agreed to provide ongoing cooperation with other Commission investigations or enforcement actions with respect to these types of activities.

The Commission’s enforcement bureau is now investigating whether additional carriers are involved in similar agreement activities, Cordero said.

Kinder Morgan Buying Tanker Companies

Kinder Morgan Energy Partners said Dec. 23 that it is buying American Petroleum Tankers (APT) and State Class Tankers (SCT) from affiliates of The Blackstone Group and Cerberus Capital Management for $962 million in cash.

“This is a strategic and complementary extension of our existing crude oil and refined products transportation business,” John Schlosser, president of KMP’s Terminals division said in a statement.
APT and SCT are involved in the marine transportation of crude oil, condensate and refined products in the United States domestic trade.

APT’s fleet consists of five medium range product tankers, each with 330,000 barrels of cargo capacity. With an average vessel age of about four years, the APT fleet is one of the youngest in the industry. Each vessel is operating pursuant to long-term time charters with major integrated oil companies, major refiners and the US Navy.

Crowley Maritime operates APT's vessels.

SCT has commissioned the construction of four medium range product tankers, each with 330,000 barrels of cargo capacity. The vessels are scheduled to be delivered in 2015 and 2016 and are being built by General Dynamics’ NASSCO shipyard. Kinder Morgan says it plans to invest about $214 million to complete construction of the SCT vessels.

“Product demand is growing and sources of supply continue to change, in part due to the increased shale activity,” Schlosser explained. “As a result, there is more demand for waterborne transportation to move these products. We are purchasing tankers that provide stable fee-based cash flow through multi-year contracts with major credit worthy oil producers.”

The transaction, which is subject to standard regulatory approvals, is expected to close during the first quarter of 2014.

Hawaiian Tug & Barge Adopts Foss Name, Colors

Hawaiian Tug & Barge, which provides harbor support services at Hawaii ports, has a new name: Foss Maritime Co.

Hawaiian Tug & Barge officially came under the Foss name Dec. 11 at a rebranding ceremony at Harbor View Center at Pier 38 in Honolulu. The traditional green and white Foss colors have already replaced the HTB colors on many company vessels.

“We’ve updated the name and brand of HTB, but beyond those changes almost everything else will continue on as business as usual in Hawaii,” Paul Stevens, CEO and president of Seattle-based Foss Maritime explained. “We won’t lose any people or vessels.”

Hawaiian Tug & Barge was founded by Young Brothers Ltd. as a sister company to separate harbor operations and charter activities from Young Brothers’ inter-island freight operations. The company has since become Hawaii’s leading tug and barge transportation company, operating four tugs with 20 employees.

Young Brothers and HTB joined the Foss Maritime group of companies in 1999. The newly branded tugs will fall into Foss Maritime’s Harbor Service division.

“Adopting the Foss name and colors gives us tremendous exposure across the world,” Young Brothers President Glenn Hong said, adding that the change strengthens the company and its ability to provide services by being part of a global brand with a well-established name and maritime tradition.

“We are looking forward to further growth in mid-Pacific well into the future,” Stevens said.

Petrich Chosen as Tacoma Port Commission President

The Port of Tacoma Commission has named Clare Petrich its president for 2014. Petrich, who was first elected to the Commission in November 1995, succeeds Commissioner Don Meyer as president.

Petrich, owner of Petrich Marine Dock on the Thea Foss Waterway across from downtown Tacoma, is co-founder and chair of the Commencement Bay Maritime Fest, and is involved in maritime heritage research.

Among the other boards on which she serves are the Pacific Northwest Waterways Association, the Youth Marine Foundation, the Flood Control Zone District Committee, the Washington Council on International Trade and the Tacoma-Pierce County Economic Development Board.

Petrich is also a past president of the Puget Sound Regional Council’s Economic Development District Board and continues to serve on the board. She is also a past president and secretary for the Trade Development Alliance of Greater Seattle.

Port commissioners serve four-year terms on the five-member board, with officer positions rotated yearly. For 2014, the makeup of the board is: Clare Petrich, president; Don Johnson, vice president; Connie Bacon, secretary; Dick Marzano, first assistant secretary; and Don Meyer, second assistant secretary.

Friday, December 27, 2013

Protesting ‘Santas’ Disrupt Port Metro Vancouver Operations

Anti-coal protestors dressed as Santa Claus and carrying sacks of coal were able to gain access to offices at Port Metro Vancouver and disrupt operations on Dec. 16.

According to a statement released by the port regarding the incident, “a group of masked protestors” illegally gained entry to port offices around 10:15 am and attempted to access a restricted area.

“A number of our employees were physically assaulted and property was damaged during this aggressive act,” according to the statement, which was issued the day of the protest. “We are concerned by the violent actions taken against Port Metro Vancouver and its staff.”

The environmental group Rising Tide has claimed responsibility for the unusual protest, saying that half a dozen Santas were trying to deliver sacks of coal to unspecified port employees to show their opposition to the proposed Fraser Surrey Docks (FSD) Coal Facility.

Fraser Surrey Docks has a project permit pending with Metro Vancouver to develop the direct transfer coal facility, which would export coal from the US Midwest to Asia and handle up to eight million metric tons of coal annually.

Opponents of the project say that it would result in 17 million tons of carbon dioxide being pumped into the atmosphere each year.

After the protest, the Rising Tide group posted a 30-second video on YouTube, showing the protestor Santas being ejected from the port headquarters building.

“The safety and security of our employees is paramount, and we will not tolerate actions which place them in jeopardy,” the port said in its statement. “Everyone deserves a safe workplace.”

The statement also said that port is “working with the authorities” to ensure that “appropriate action is taken and those responsible are held accountable.”

$19 Million Facelift of Canadian Ferry Complete

After a full year out of service, the T-class ferry M/V Tachek, a 44-year-old vessel owned and operated by Canadian company BC Ferries has completed a $19 million life extension project that is expected to allow the vessel to remain in service another 15 years.

The 800-ton ferry spent eight and a half months at Point Hope Maritime in Victoria, British Columbia undergoing the majority of the work, plus another three-plus months at BC Ferries’ Fleet Maintenance Unit in Richmond, BC.

Work for the major capital investment project included a new wheelhouse structure, the addition of a hybrid battery system, new engines, asbestos abatement, a new bow thruster unit, complete paint renewal, the elimination of the use of a generator for thruster and secondary power requirements, and more.

“We are always looking for new and innovative ways to promote our environmental stewardship as well as reduce our overall operating costs,” BC Ferries’ Vice President of Engineering, Mark Wilson, said. “Overall, this work will result in a significant improvement in safety, reliability and performance.”

BC Ferries says it spends $70 million to $120 million in a year on maintenance, refit and major capital projects. In the past five years, the company’s spent about half a billion dollars on fleet investments.

The 162-foot long, 48-foot wide M/V Tachek, which can accommodate 30 vehicles or 143 passengers, was pulled from service Dec. 15, 2012, and is expected to return to its Quadra Island–Cortes Island route in January 2014.

Study: Washington Maritime Industry Generates Billions

The Washington State maritime industry generated $30 billion in direct, indirect and induced revenues in 2012 and is responsible for over 148,000 workers being employed, according to a newly released study.

The Washington State Maritime Cluster Economic Impact Study, which was finalized in November, was conducted by Seattle-based research firm Community Attributes, and included interviews with over 35 regional leaders in the maritime sector. It sought to quantify the impact of the maritime industry across Washington State in order to better understand and strengthen its contribution to the regional economy.

The study, commissioned by the Economic Development Council of Seattle and King County and the Workforce Development Council of Seattle-King County with support from the Puget Sound Regional Council, found that maritime wages in general are near or greater than the state median wage of $51,000, averaging $70,800 per year. The maritime industry as a whole paid out nearly $4 billion in wages in 2012, according to the study.

Among the study’s other highlights: fishing and seafood processing accounted for nearly 60 percent of the industry’s revenues, with maritime logistics and shipping accounting for another 25 percent. Also, industry-wide, revenues have grown an average of 6.4 percent per year, with maritime logistics and shipping seeing the highest growth rate at 10.2 percent.

The report also states that the maritime occupations most in demand during the next eight years are expected to be civil engineers; meat and fish cutters and trimmers; sailors and marine oilers; fishermen and related fishing workers; laborers and freight, stock and material movers; and captains, mates and pilots.

Long Beach Harbor Commission Shifts Meetings to Evenings

The Port of Long Beach Harbor Commission, which has typically met during the mid-day during most of its decades of existence, is switching to an evening schedule beginning in January 2014.

The panel’s regular, twice-monthly board meetings are being shifted to 6 pm on the second and fourth Mondays of each month.

The next two meetings are scheduled for 6 pm Jan. 13 and 27 at the Harbor Department headquarters, 925 Harbor Plaza, Long Beach, 90802.

Previously, the Board typically met at 1 pm on the first and third Mondays of each month.

The switch is expected to enable more public participation at the gatherings, something that the port has tried to make happen for years, even going so far as to conduct special meetings at locations off port or City of Long Beach property, such as at nearby schools and community centers.

Although Long Beach is making a switch, the harbor board for the adjoining Port of Los Angeles has no plans to change from a day to night meeting schedule in 2014. For the upcoming year, its meetings are mostly scheduled for at 8:30 am on the first and third Thursdays of each month, with a few rare exceptions where meetings are planned for the second and/or fourth Thursdays.

The Port of Long Beach Harbor Commission’s full meeting calendar for 2014 can be viewed at http://www.polb.com/cals/default.asp.

Thursday, December 19, 2013

Boatbuilding, Repair Company Awarded $22 Million in Contracts

Shipbuilding and repair company Marine Group Boat Works, located on the Port of San Diego waterfront, has been awarded two contracts totaling $22 million for boat repair and refurbishment.

Marine Group successfully competed for two separate contracts to fully refurbish commuter ferries from the San Francisco Bay area: the 97-foot Bay Breeze, owned by the Water Emergency Transportation Authority, and the 180-foot M.S. San Francisco, owned by the Golden Gate Bridge Highway and Transportation District.

Both vessels were transported to Marine Group’s Chula Vista, California facility in October and docked for refurbishment.

“We’re privileged to be in a port city that has good weather year-round, existing infrastructure and an extensive marine services and supplies network to be able to compete with other port cities nationwide,” Marine Group Boat Works Vice President Todd Roberts said.

The Bay Breeze ferry is receiving a new conventional propeller system, a brand-new interior and systems upgrades, among other refurbishments and a new paint scheme.

The M.S. San Francisco was built in San Diego and delivered in 1977 to the Bay Area for service. After 36 years of transporting passengers, the vessel is receiving all new components: machinery, replacements and upgrades to electrical and auxiliary systems and a new interior and paint job.

The two new projects are expected to create about 50 new jobs in the area, according to Marine Group, which represents a workforce increase for the company of about 45 percent.

LB Harbor Board Gets New President

The Long Beach Board of Harbor Commissioners on Dec. 17 elected member Doug Drummond as its new board president. Additionally, the board welcomed newly appointed Commissioner Lori Ann Farrell to her first meeting.

Drummond, a former Long Beach City Councilman and retired Long Beach Police Department Commander, was appointed to the five-member Harbor Commission by Mayor Bob Foster in 2011.

Farrell, a former Chief Financial Officer for the City of Long Beach who currently works as the City of Huntington Beach’s finance director, was appointed to the board by Foster last month.

In addition to Drummond’s selection as president, the harbor board also voted in Commissioner Rich Dines as Vice President and Farrell as Secretary. The election of board officers became necessary following the firing last month of former President Thomas Fields and the resignation of then-Vice President Nick Sramek.

Fields, a Long Beach advertising executive and former city planning commissioner, was appointed to a six-year term on the Board by Foster in December 2009, but after a series of disagreements, Foster had him removed Nov. 19.

Sramek, the man Farrell replaced on the Harbor Board, spent nearly six-and-a-half years on the panel before resigning Nov. 21, citing fatigue.

“It’s my goal to promote a spirit of cooperation among the Board and the staff of the Harbor Department,” Drummond said after being chosen president by his peers on the board. “I know that all of the commissioners take our responsibilities here very seriously. We intend to work together to make this port even stronger and better able to compete in the international marketplace.”

In her first meeting, Farrell said she looked forward to her new role as a harbor commissioner. “I’m hoping that together with the other commissioners we can really take our port to the next level,” she said.

With the seating of Farrell, the board currently has four members, one short of its allotted number. A fifth commissioner is expected to be chosen by Mayor Foster and confirmed by the City Council by either the end of the year or in early 2014.

Daewoo Shipbuilding Wins $500 Million VLCC Order

Daewoo Shipbuilding & Marine Engineering announced Dec. 16 that it has won a $500 million contract to build five very large crude carriers (VLCCs) for the US division of Scorpio Tankers, with delivery slated for the first half of 2016.

South Korea-based Daewoo said in a statement that the tankers are expected to carry about 300,000 tons per vessel and have dimensions of about 1,100 feet in length and 197 feet in width. The ships are designed to be equipped with high-efficiency engines and state-of-the-art technology in order to improve fuel efficiency.

Daewoo, the second-largest shipbuilder in the world, says this is its first VLCC order in about 23 months, since January 2012.

Scorpio Tankers, which has locations in the US and Monaco, is a provider of marine transportation of petroleum products worldwide. It owns 19 tankers and time charters in 29 product tankers.
The company says it has contracted for 65 new vessels in recent years, of which 45 are expected to be delivered in 2014.

Marine Research Campus Planned for Port of LA

The Los Angeles City Council on Dec. 17 unanimously approved a 50-year lease to transform a 100-year-old pier on the LA waterfront into an urban marine research and innovation center dubbed AltaSea.

The lease agreement – signed between the Port of Los Angeles and the AltaSea project’s fiscal sponsor, the Rockefeller Philanthropy Advisors – involves about 35 acres of land and water at the port’s City Dock No. 1 site, Berths 56-60 and Berths 70-71.

The AltaSea site will be developed through a public-private partnership that includes the port, AltaSea and regional public and private universities. Funding commitments for the project’s first phase currently total $82 million, including $57 million in site-related capital investments by the port and a $25 million gift by the Annenberg Foundation. Phase 1 is currently estimated to cost $185 million with a 2018 completion goal.

For the first phase of the project – berths 56 and 57 – the port has agreed to make improvements to the wharf and subsurfaces to ready the property for development. AltaSea is responsible for upgrading the existing historic warehouse structures, as well as other improvements and facility operations.

“AltaSea is a game changer not only for the Los Angeles waterfront but for the entire region,” LA Harbor Commissioner Anthony Pirozzi remarked, saying that the project provides “a unique opportunity to diversify the job base along the Los Angeles waterfront” via a world-class marine research institute that that he predicted would become an “economic engine” for the region.

The AltaSea campus is planned to feature circulating seawater labs, offices, classrooms, lecture halls, support facilities, an interpretive center, a facility for marine-related commercial ventures, and development of a seawater wave tank for studying tsunamis and rogue waves.

The entire project cost is estimated at more than $500 million with completion over a 15- to 20-year timeframe.

Tuesday, December 17, 2013

Diving and Salvage


By Michael A. Moore

From well-capitalized international salvage companies to high technology, such as remotely operated vehicles (ROV) and special software packages, diving and salvage along the West Coast and worldwide is evolving rapidly.

The West Coast diving and salvage business has changed a lot since Mick Leitz was in charge of salvaging the Exxon Valdez. Mick is still in business with Portland's Fred Devine Diving and Salvage Company – and still uses Fred Devine's designed and built for salvage flagship, the M/V Salvage Chief with its 400-ton line pull.

The business these days is moving away from local masters of the trade like Mick Leitz and his Alaskan counterpart Dan Magone, and toward well-capitalized international big players – such as Resolve and Crowley – and high technology, such as remotely operated vehicles (ROV) and special software packages.

But big capital and high tech are not the biggest changes to hit the salvage and commercial diving industry – nor are rough seas and deep water the biggest challenges to successful salvage operations.
Mick Leitz says the legal shoals of myriad and often conflicting regulations are the biggest challenges salvors face these days. Some of those rules are a result of the Exxon Valdez grounding and subsequent oil spill.

In fact, Leitz wonders if the Exxon Valdez operation could be pulled off in today's regulatory climate. He says it was difficult enough in those pre-OPA90 times.

"Harbors of refuge was a problem before theExxon Valdez ," he says. "It's still a major problem." Leitz says he had to write six different towing plans for taking the Valdez from Alaska to San Diego before the seventh was accepted.

"None of the harbors of refuge that were capable of handling the Valdez wanted anything to do with it," he said. "The final plan was to keep the tow route more than 200 miles offshore." Leitz lets the question of what would have happened if a problem arose during the tow remain unanswered.
Responder immunity is the biggest problem plaguing the industry from the fallout of the Exxon Valdez grounding says Leitz.

"It has to do with the way OPA90 is written," said Leitz. "The way things are now, the salvor is potentially liable, whereas environmental cleaners have responder immunity."

Leitz is referring to a responder immunity provision Congress included in the post-Exxon Valdez OPA90 legislation that was intended "to protect from liability those individuals or corporations who provide care, assistance, or advice in mitigating the effects of an oil spill."

"Unfortunately, the OPA 90 standard specific to responders has proven inadequate to protect responders from becoming entwined in such suits," writes Jonathan K. Waldron, a partner in law firm Blank, Rome, LLP, in the Fall 2011 edition of Soundings, published by the American Salvage Association. Waldron was referring to the legal problems encountered by emergency responders to the Deepwater Horizon oil platform disaster in the Gulf of Mexico.

"Immediately following the explosion on the Deepwater Horizon, emergency response vessels rushed to the rig to save lives, render assistance to those in peril and fight the fire.

"In the ensuing months, responder companies worked to clean up the oil that was pouring into the gulf in an effort to mitigate the spill. Notwithstanding these valiant efforts to help in the worst environmental disaster in US history, these emergency and cleanup responders are entwined in complex and protracted specialized multidistrict litigation (MDL) despite the fact that protections were put in place following lessons learned from the Exxon Valdez specifically to prevent such occurrences.

"Salvors could find themselves in the same situation in future incidents unless enhancements are made to current law," Waldron said. "Congress intended that responses to oil spills be immediate and effective and noted that without such a provision the substantial financial risks and liability exposures associated with spill response could deter a prompt, aggressive response.

"This immunity does not prevent any injured parties from recovering their full damages resulting from the spill incident, as OPA 90 provides that the responsible party (RP) is liable for any of the removal costs or damages that a responder is relieved of pursuant to this immunity consistent with the OPA 90 'polluter pays' principle," he said.

"This immunity does not apply if a responder acts with gross negligence or willful misconduct, or in cases involving personal injury or wrongful death."

That last sentence is the loophole big enough to tow the Exxon Valdez through when it comes to creating legal liability to salvors.

Which is what happened to emergency responders following the 2010 Deepwater Horizon explosion, which resulted in the deaths of 11 and injuries to 17 men working on the platform, plus the discharge of approximately five million barrels of oil.

Deepwater Horizon required thousands of responders working several months to contain and clean up under challenging conditions – numerous claims and lawsuits were filed.

"Unfortunately, the OPA 90 standard specific to responders has proven inadequate to protect responders from becoming entwined in such suits," said Waldron. "In these cases, plaintiffs have been successful in simply alleging gross negligence (without providing any supporting facts), and to cast "exposure" claims resulting from alleged exposure to released oil or from approved dispersants used to treat that oil as personal injury claims falling outside the scope of the specific responder immunity provisions."

The cases have been catalogued into pleading bundles called "Master Complaints" under various categories – including one bundle that named as defendants all the owners and/or operators of the rescue vessels that answered the Deepwater Horizondistress call and responded to the fire emergency after the explosion. This is similar to suits that could have been filed against salvors had there been salvage actions related to the incident, said Waldron.

Mick Leitz's way of dealing with the increased potential for lawsuits and liability in today's new world of marine salvage law is to be very selective about the jobs he takes on and the way the contracts on those jobs are worded.

"You try to protect yourself contractually, but you can still end up in court," said Leitz.

Leitz believes the increased regulatory and liability climate is counterproductive to the real mission of the salvor. "The sooner you get the vessel out of the water, the better – but the regulations slow you down," he said. "In the old days, you would use a sling to pick up a vessel and get rid of it.

"The risk the salvor runs now is if you get two drops of oil on the water, you are liable to get sued. Anything goes wrong, debris, paint chips, oil – you can spend five years in court for a week's work."
Leitz's solution is to work for state agencies as much as possible. He says the states have funds to get rid of derelict vessels and they provide an umbrella of protection if something goes wrong.

Dan Magone took another tack to solving the perfect storm of challenges he found himself facing after more than 33 years of sailing into Alaska's wintry, storm-tossed seas to rescue fishing boats and other vessels in distress.

"We never had any competition until the big companies started to notice this neck of the woods," said Magone.

"Climate change and petroleum are bringing a lot larger vessel traffic up through Alaska's waters. The Arctic passage is spurring growth – next year they will be laying cable through the passage from Norway to Tokyo," he said.

Magone decided it was better to join the big salvage and diving companies than to compete with them. He joined forces this last August with Florida-based Resolve Marine Group.

"The result will be a greatly expanded, emergency response and marine services company that combines the long-standing, deep and local expertise massed by Magone Marine's Alaskan salvors with the extensive resources, personnel, and vast salvage & wreck removal experience of Resolve Marine Group," states the joint press release on the venture. "This newly-formed business will be named Resolve-Magone Marine Services (Alaska) and coincides with increased vessel traffic now in the environmentally-sensitive Aleutian Chain."

Magone's decision to hitch up with Resolve was not made on the spur of the moment.

"I decided to join forces with the best – plus I am friends with the co-owner of Resolve," he said. "We are like-minded guys, and had been discussing this move for several years. I knew I couldn't ante up to the level it's going to take to do business with the increased competition and regulations.

"We did all the wreck removals for the fishing fleet for 20 years. The big shipping companies that are coming up are way beyond my scope."

Magone says that another challenge his company and the rest of the industry is facing is finding reliable trades people and vessel crew.

Meanwhile, back in sunny Southern California, Richard Barta has built a niche for Long Beach-based Muldoon Marine Services.

"We do mostly ship repair and maintenance inspections," he said. "When we do emergency work it's with OPA90 partners. You have to have pollution insurance.

"It's the nature of the beast – when something happens, someone has to respond. Even with a small job like boat salvage, it can be a mess," he said.

Barta's strategy is to work as a member of a larger OPA90 responder team.

"Part of OPA90 is that ship operators of vessels over a certain size have to have an OPA90 responder," he said. 'We have worked with Marine Response Alliance – there are others, like Titan and Resolve.
"If something happens in LA or some other place like Ensenada, they call in small groups to help get the job done. We worked on the APL Panama."

Barta is referring to the hard grounding of the containership APL Panama in December of 2005 when it was attempting to enter the harbor at Ensenada, Mexico and missed the ship's channel.

"On big jobs, a large contractor steps in and brings in everyone who's got the right equipment and who can get there the fastest."

The salvage of the Costa Concordia by Crowley Maritime subsidiary Titan Salvage is the latest and greatest example of multi-contractor teamwork on a difficult salvage job.

Titan teamed up with Italian engineers Microperi – Titan brought its experience as a salvor and Microperi contributed their expertise at underwater construction and engineering.

The task of bringing the gigantic ship – which is twice the size of the Titanic – upright and off the rocks in one piece required the talents of 450 specialists from 19 countries working around the clock seven days a week. The project team included more than 100 specialized divers from more eight countries – who could only work 45 minutes at a time at the 150-foot depths before entering a hyperbaric chamber for decompression.

At the same time Titan and Microperi were taking care of the physical work, specialist representatives from Costa Crociere, Carnival Corporation, London Offshore Consultants and Standard P&I Club, with the collaboration of RINA and Fincantieri, worked behind the scenes to ensure that the project had the financial, legal and governmental support needed to move forward to a successful conclusion.
The final cost for the salvage of the Costa Concordia was approximately $400 million, according to Crowley.

Crowley's history in responding to maritime emergencies also goes back to the Exxon Valdez – Crowley Marine Services was the first on scene with high horsepower tugs positioned alongside the stricken tanker and these tugs were also used to assist Marine Pollution Control during the transfer of oil from the stricken tanker to lightering vessels.

That was the first step in a working partnership that eventually became today's Marine Response Alliance – Crowley's MRA partners include Marine Pollution Control, Titan Salvage, Marine Hazard Response and McAllister Towing.

Seattle-based Global Diving and Salvage may be closer to the new model for small and medium size salvors going forward.

The company's work mix consists of marine casualty response, marine construction and offshore support for the oil and gas industry. Global Diving has worked on projects from Alaska to Saudi Arabia.

Technology combined with top professionals and teamwork is the company's formula for confronting the challenges and minimizing the risks associated with marine emergency response and salvage operations.

"There have been a lot of technical changes in this industry," said Frank Immel, Global Diving's marketing director. " We use remotely operated vehicles (ROV) to do initial recons in salvage situations instead of risking a diver.

"We can put an ROV down to do a visual inspection and gather information that allows us to develop a salvage plan."

A major part of Global's salvage plan development involves the use of a software system that was developed for the design and evaluation of all types of ships and floating structures. The software addresses flotation, trim, stability and strength by calculating the forces involved using mathematical/geometrical models of the vessels.

"You could say we use the software in a reverse mode," said Immel. "Instead of using it to design a vessel, we input a shape for the hull line and other parameters – this enables weights and stability to be calculated to a greater degree of accuracy.

"This is really important when using a crane to do a vertical lift. You want to know where is the center of gravity, where do you connect for the pick, what's the weight of the vessel? The software makes the whole process more consistent and reliable," he said.

Global prefers to use cranes instead of lift bags when the water is deeper than 15 or 20 feet.
"A lift bag is great in shallow water," said Immel. "But you can't forget the laws of physics as you go deeper – you pressurize a lift bag at depth – as it rises the bag wants to go faster. It can get out of control – the bag comes up and then wants to go back down. With cranes you have more control, there is no volumetric expansion to deal with."

Immel says that Global's objective in every aspect of their operations is to minimize risk.

"Our first job is to minimize risk to keep people alive," Immel said. "We put people where they are not supposed to be."