Royally Shelled

By Chris Philips

On January 1, 2013 the Royal Dutch Shell (Shell) drilling rig Kulluk went aground on Sitkalidak Island, Alaska when the towing line failed while the rig was being towed from Dutch Harbor to Seattle by the Shell-owned and operated towing vessel Aiviq. The Kulluk had on board approximately 144,000 gallons of diesel fuel and 16,000 gallons of lube oils and hydraulic fluid. Several attempts at reattaching the tow were not successful, in part due to heavy weather. A week later the weather was calmer and the Aiviq was reconnected and towed the Kulluk to Kiliuda Bay, 30 nautical miles away, where its condition was being evaluated before continuing on to Seattle.

Last year, the Prince William Sound Regional Citizen’s Advisory Council (www.pwsrcac.org) commissioned an escort winch, towline and tether system analysis. The report, produced by Vancouver, BC naval architecture firm Robert Allan and Associates, was released in early August of 2012.

The study found that the absence of a working load render-recover capability is considered a deficiency in a modern escort capable tug, especially one operating in higher sea-states.

With the increasing use of HMPE (high-molecular-weight polyethylene) lines, which have very little “stretch”, winch braking systems have evolved to the point where render-recover capable winches are required as the virtual “fuse” in the system. Finally, the study concluded, “the vast majority of operators agree that the electric-driven Markey Render-Recover^© winch is the best winch technology on the market today.”

Although Shell has not responded to numerous requests for information on the outfitting of the vessel, a Markey spokesman said the Aiviq, launched late last year, was not equipped with render/recover winches. We suspect that the lines attaching the two Royal Dutch Shell vessels were HMPE (again, Shell doesn’t want to talk about it).

Two massive vessels tethered by HMPE lines without the “fuse” of a modern winch system were destined to part. Fortunately, the loss and subsequent retrieval of the Kulluk resulted in no discernible environmental damage, no loss of life, and little if any operational downtime, as the rig was on her way to overwinter in Seattle. On the other hand, the ensuing media frenzy over the incident will have far-reaching implications.

The US West Coast is blessed with an abundance of natural resources, and the industries that work alongside those resources, most notably the Jones-act commercial fleet of tugs, barges, cargo and passenger vessels are clean, safe and responsible. The West Coast fleet is equipped to deal with the particularly fierce North Pacific winter storms, and the “battle-hardened” mariners operating those vessels know when it’s safe to move a tow, and when it’s prudent to stay in port or at anchor. The equipment on West Coast vessels is built to take the abuse of the weather, including the deck equipment used to successfully assist and moor fully laden tankers. All the groundwork laid by the West Coast commercial maritime community to assure the public that our operations are safe and responsible is threatened by the careless or negligent actions of a big company using substandard equipment with little accountability.

When the Aiviq was launched, Shell Alaska VP, Pete Slaiby said the vessel is “… a symbol of how Shell is approaching the Arctic.” If this foray is an indication of Shell’s approach, the company should hire some West Coast experts to advise them on equipment and procedures.

LA/LB Union Membership Rejects Labor Pact

The possibility of dockworkers resuming a strike that ended in December became more real last week as rank and file members of International Longshore and Warehouse Union Local 63 rejected a contract agreement negotiated between the union and an employers association.

The pact was voted down by all 16 bargaining units of Local 63, an office clerical unit, during a membership ratification vote Wednesday, February 6. The agreement had been reached between union leadership and the Los Angeles/Long Beach Harbor Employers Association in response to an eight-day strike at the LA/Long Beach port complex last year.

The crippling strike, which began at noon on November 27, was launched after more than two years of negotiations. The clerical staffers had been working without a contract since their previous three-year pact with management expired June 30, 2010.

At the time of the agreement’s announcement, it was lauded by both sides. ILWU International Vice President Ray Familathe, who helped coordinate the strike and assist the local in negotiations, said it would help prevent job outsourcing to other states and countries.

Neither the union nor employers association has been willing to go on the record regarding the labor negotiations, specific details of the agreement or the rank and file’s rejection of the deal. Both sides acknowledge however, that the main sticking point had been the outsourcing issue. The union has contended that management wants to implement new technology that would lead to fewer flesh and blood workers being necessary.

Although the employers’ group has maintained that implementation of new technology is needed to improve efficiency, the ILWU has specifically opposed technology that would allow customers to directly access booking information, saying it could lead to the outsourcing of jobs.

The union had also sought to have language included in the contract specifying that workers would not be laid off.

If the current impasse drags on, it could lead to a reopening of last year’s strike. Although Local 63 only represents about 800 dockworkers at the port complex, its November-December strike was highly effective because it was honored by its much larger sister, Local 13, which has about 7,000 registered members and represents almost 20,000 part- and full-time longshore workers who discharge cargo at the adjoining ports.

During the strike, about 20 ships were rerouted to other West Coast ports, according to the Marine Exchange of Southern California, while another 13 vessels were idle in and around the port complex’s waters.

Smuggled Ammo Seized at Oakland Port

Thousands of rounds of ammunition were found hidden in the air filters of three cars that were recently scheduled to be shipped to Mongolia from the Port of Oakland, federal authorities revealed Feb. 7.

US Customs agents seized about 2,300 rounds of ammo after authorities making an enforcement exam on an outbound shipping container at the port in early December noticed discrepancies.

While searching the three cars in the container, high-power rifle and shotgun rounds were found, Customs & Border Protection field office spokesman Frank Falcon said. The container was then taken to a secure location and unloaded.

When the vehicles – a 2006 Lexus RX400, 2006 Toyota Land Cruiser and 2007 Toyota Camry – were disassembled, more ammo was found in the air filters, Falcon said. The undeclared ammunition included a Winchester .22-caliber long rifle and Remington 12-gauge shotgun shells.

The ammo and three cars are valued together at more than $45,000, according to Customs.

Officials said the investigation has determined that the smuggling attempt was likely that of an individual acting alone, not an act of organized crime.

Authorities say the vehicles are registered to an area resident, but would not reveal his name because no charges have been filed in the case, and no arrests made.

“The penalty was the resident had to forfeit the items,” Falcon said.

Longview Port Settles With Insurance Carriers

The Port of Longview, which had been suing its insurance carriers over the cost of cleaning up contaminated sites that the port wants to redevelop, has decided to accept a settlement with three of the companies.

On February 9, port commissioners agreed to a $950,000 settlement offered by Arrowood Indemnity Co, Indemnity Marine Assurance Co. and Marine Indemnity Insurance Co. of America, following a closed-door session at the seaport.

The port had sued 20 insurance carriers in total who operate under the Lloyd’s of London insurance exchange, saying the insurers are liable for costs to clean up the two contaminated sites. The case against the other 17 companies is continuing in a jury trial this week in Cowlitz County Superior Court.

The case against the other 17 companies is continuing in a jury trial this week in Cowlitz County Superior Court.

The insurance company attorneys have argued that the insurance exchange shouldn’t be responsible for damages caused decades ago by other industries. The contamination was discovered in the late 1980s and is expected to cost millions of dollars to clean up.

The contaminated sites are a former International Paper Co. creosote plant which was used for treatment of wood products on about five acres of land, and a rail line at the port’s west end, where an underground pipe leading from a storage tank to Berth 1 leaked bunker fuel decades ago.

The port wants to clear the contaminated soil and replace it with new, clean fill in order to attract developers.

California Export Market Down, Report Says

California’s merchandise export trade finished 2012 on a weak note, owing largely to a sharp drop in shipments of electronics components to factories in Mexico, according to an analysis of newly released foreign trade data.

According to an analysis by Beacon Economics of foreign trade data released by the US Commerce Department on Feb. 8, California’s merchandise export trade for 2012 fell just short of the mark attained in 2011.

For December, California’s merchandise export trade was valued at $13.36 billion, a decline of 1.3 percent from the $13.53 billion recorded in December 2011. Adjusting for inflation, December exports were down 3.3 percent from the same month one year earlier.

“The December decline in exports was disappointing but not unexpected,” Beacon Economics international trade adviser Jock O’Connell said. “While the economies of several of our principal trading partners had been moving through a sluggish stage, California’s export trade has been severely pummeled by the shrinking worldwide demand for personal computers.”

That analysis reveals that exports to Mexico, California's leading foreign market, fell by 17.2% in the last quarter of 2012.

Significant fourth quarter declines were also observed in California shipments to South Korea (-7.8 percent), China (-6.4 percent), Japan (-3.4 percent) and Canada (-3.3 percent). Gains were recorded in exports to Taiwan (+7.1 percent) and the European Union (+2.6 percent), according to the Commerce Dept. data.

For 2012 as a whole, California merchandise exports totaled $161.7 billion, a gain of just 1.6 percent over 2011’s $159.12 billion.