Tanker-and-the-environmentfor use for members

Erik.Ranheim@INTERTANKO.com

Manager Research and Projects

Tanker shipping serving some of the world’s biggest companies

BP’s approach to managing the environmental impact of its operations is underpinned by the goal of continuous performance improvement

We strive to conduct business in a manner that is protective of the environment, and that is compatible with the environmental and economic needs of the communities in which we operate.

Meeting the world’s growing energy needs and protecting the environment requires new technology, new partnerships and new ways of operating.

How to produce energy in environmentally responsible ways

Are tankers Green? Challenges

Life cycle Building to Decommissioning/recycling

ODS = OzoneDepleting Substances(cooling medium)

NOx, SOx, PMAnnex VI

Sewage

Garbage

Accidental oil pollution Ballast water

ToxicAntifouling

CO2/GHG emission

VOC = VolatileOrganicCompounds

Environmental challenges in shippingCleaner seas, cleaner air, a sound mother earth

Cleaner air• Annex VI implemented

GHG reduction• Currently the biggest challenge

Cleaner seas• Oil pollution• Acidification of oceans• Anti-fouling Systems• Garbage, other pollutions into the sea

Invasive spices – ballast water management

Emission to air?

The Challenges

• The world demands greener shipping

• Emission from shipping is dirty and harmful for the health and the environment

• GHGs emission from shipping is not directly regulated under the Kyoto protocol

• IMO assumed to regulate GHG emission

• Shipping must react

7

CO2 Emissions per Unit Loadby Transport Mode

Source:Ministry of Land, Infrastructure and Transport (Japan): The Survey on Transport Energy 2001/2002 MOL (Japan): Environmental and Social Report 2004

Large Tanker

Large Containership

Railway

Coastal Carrier

Small-size Commercial Truck

Airplane

Standard-size Commercial Truck

100 200 300 400

398

226

49

11

6

3

1

0

Units Relative

Shipping energy efficient

Engine break specific fuel consumption

160

180

200

220

240

260

280

1910 1930 1950 1970 1990 2010

First ocean going diesel ship - MS Selandia

Oil crises 1973

Engine BSFC assumed constant for years 2000-2008

Source: Lloyd’s Register

g per kWhg per kWh

Fuel efficiency in shipping has has improved

Trends – Co2 emission, energy use, global trade

Source: Fearnleys/INTERTANKO

IndexIndex

80

100

120

140

160

180

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

Population

Energy use

Seaborne trade

CO2 emission

There has been strong growth in shipping

World primary oil demand IEA the Reference Scenario

Source: IEA

mbdmbd

0

5

10

15

20

25

1980 2000 2007 2015 2030

N America

Europe

Pacific

E.Euro/Eurasia

Other asia

China

India

Middle East

Africa

L America

Marine bunkers

World primary energy demand IEA the Reference Scenario

Source: IEA

1000 million tonnes oil equivalents1000 million tonnes oil equivalents

0

1

2

3

4

5

1980 2000 2006 2015 2030

Coal +2%

Oil +1%

Gas +1.8%

Nuclear +0.9%

Hydro +1.9%

Biomass +1.4%**

Renewables +1.6%

MARPOL Annex VI

Reducing harmful emission to air from shipping

• Emission regulated by MARPOL Annex VI:• SOx• NOx• un-combusted hydrocarbon• Heavy metals• Soot• Volatile Organic Compounds - VOC

The Annex VI package

All ships above 400GT

Reduction SOx, NOx, + PM

Compliance through fuel specification or

Equivalent Measures accepted

Assumes supply of low sulphur fuel*

Bunker Delivery Note BDN important **

NOx Tier I, large engines built in 1990s

NOx Tier II and Tier III, new engines

* Ships not punished if required fuel not available

**Guidelines to asses compliance if BDN data is challenged by PSC or lab test results

The world is moving away from HFOOil consumption by product - % share

Source: INTERTANKO/BP Review

% share mbd

11%

16%

21%

26%

31%

36%

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

5

21

37

53

69

85

Mdl distil. - % share

Fuel oil - % share

Total - ts

Why not scrubbers?Why not scrubbers?

• Still under testing (3 ship limited scale)

• Large • Expensive• Difficult (impossible?) to install• CO2 emission (buffering effect)• leaves hazardous waste onboard which no-one wants• Tonnes of seawater need to be pumped through the ship and processed

We are involved in transportation – not waste treatment

New measures adopted at MEPC 58: SOx emissions

Emission Control Area (ECA) 1.0% limit

2010 2012 2015 202520202018

Global 3.5% limit

ECA 0.1% limit:

IMO review

Global 0.5% limit

Extension?

No measures against ships that do not receive adequate supply

New measures adopted at MEPC 58: NOx emissions

Current regulation Tier I: existing ships built after 2000, base line

2010 2011 2016

Tier I: ships built 1990s engine>5000 kWh, cylinders = >90 ltrs

Tier II: 15.5% - - 21.8% reduction

ships built on, after 1 Jan 2011

Many preconditions: engine rating, fuel consumption, durability, cost/benefit, availability of efficient upgrading system , upgrading at

the ship’s first renewal survey

Tier II: 80% reduction ships built on, after 1 Jan 2016

Power output > 750 kWIn Emission Control Areas (ECAs) ONLY

Switching to distillates will Switching to distillates will

Cleaner, Simpler and more Efficient ships

Reduce global emissions• SO2 - 60-80%,• PM - 80-90%• NOx -15%• No heavy metals, less soot

Improve conditions for crew and dockworkers

Cause no safety problem in connectionCause no safety problem in connection with with fuel switching fuels entering ECAsfuel switching fuels entering ECAs

Causes less engine breakdowns and Causes less engine breakdowns and potential pollution accidentspotential pollution accidents

Cause far less pollution when spilled Provides opportunity for the development of Provides opportunity for the development of more efficient engines (w. less emission) more efficient engines (w. less emission)

Fit all ships and current engines Fit all ships and current engines Be easy for authorities to control Be easy for authorities to control ChallengeChallenge to produce sufficient clean fuel to produce sufficient clean fuel

GHG emission

Shipping’s tools to reduce GHGs?

• Indices• Design• Operational

• Market instruments • Emission trading Scheme

(ETS), to stimulate entrepreneurship?

• Levy, equal to tax?• Offset charges (ref IOPC)?

• Ship Efficiency Management Plan

No general agreement on how to regulate GHG emission from

shipping

Everybody must reduce emission

CO2 emission does not mean much unless related to the size of the company and the nature of its

operation

Shipping represents only some 3% of GHG emission,

but Emission is made up

a multitude of small contributors

Shipping carries ~ 80% of goods transported and volumes shows an increasing trend

and

The challenge is, therefore, to reduce emission by improving efficiency without unduly affecting

trade

The Stern ReportConclusions:Human-caused alterations to the global climate may result in reductions of global GDP of anywhere from 5 to 20% per year

Current global economic crisis shows how a relatively small reduction of output, such as 1 - 2% of GDP, may already have considerable implications for trade

Climate change may initially have small positive effect, but longer term the effects will be very damaging. The benefits of strong, early action outweigh the costs.

Policy of action to be based on 3 elements: Technology Behavioural change Carbon pricing

Lord Stern of Brentford

Later the situation is believed to be much more serious that outlined in

The Stern Report

Shipping’s tools to reduce GHGs?

• Technology• Design index• Ship Efficiency Management Plan

• Behavioural change• Operational index • Cooperation with charterers• Improving logistics

• Pricing of carbon• Emission trading Scheme

(ETS), to stimulate entrepreneurship?

• Levy• Compensation fund

No general agreement on MBIs

CO2 reduction – Trade increasing

Reference

World Fleet Energy Consumption

World Fleet Energy Consumption

On-shore targetOn-shore target

40 - 80 % increase ifno efficiencymeasures taken

20 - 30 % absolute reduction onshore

Bridgeable gap??

2006 2010 2025

Ship sizes and emission400 GT and above

GT ships CO2 emission from ships

>400 60,000 ~ 90%

>500 45,000 ~ 87%

>2,000 30,000 ~ 80%

>10,000 16,000 ~ 67%

Source: DnV

Fair to the 3rd worldEnergy (oil equivalents) consumption and CO2 emission per capita

(not including hydro or nuclear)

Source: IEA

Oil equivalents/capitaOil equivalents/capita CO2 emission /capitaCO2 emission /capita

0

1

2

3

4

5

6

7In

dia

Afr

ica

Ch

ina

Wo

rld

Fra

nce

Ita

ly

No

rwa

y

FS

U

UK

Md

l Ea

st

Jap

an

OE

CD

S K

ore

a

Ru

ssia US

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

Energy consumption, oilequivalents/capita

Emission per capita

.. the only serious defensible principle is equal emission rights per capita, adjusted for past emissions.

The options to reduce GHG emission

Energy Efficiency Design Index - EEDI

Require a minimum energy efficiency of new ships Stimulates technical developmentSeparates technical and design based measures from operational and commercial measuresCompares the energy efficiency of an individual ship to similar ships which could have taken its cargoWide support in IMO, except some developing countries*Supported by INTERTANKO

To be based on, installed power, specific fuel consumption, correction factors to account for specific design elements, speed, dwt, the contribution from auxiliary machinery EEDI = Fuel consumption / cargo x distance

Sea trial Esther Spirit

* Wants “common but differentiated responsibilities” agreed under UNFCCC and the Kyoto Protocol.

You cannot manage what you cannot measure

The CO2 operational index

An instrument for evaluating quantitatively the effect of operational fuel efficiency measures, such as speed reduction or optimum navigationCharterers great influenceNecessary to evaluate SEMPNot immediately mandatoryNo direct link to design index

Cap-and-trade

The quotas system has already contributed with The quotas system has already contributed with investments in the non-Annex I countries which will reduce of CO2 emission by 1,800 m tonnes (1.2% (1.2% annually) for the period 2008-12annually) for the period 2008-12

Word emission 2004 27,000 m ts, today some Word emission 2004 27,000 m ts, today some 30,000 m ts30,000 m ts

COCO22 has become a commodity and CO has become a commodity and CO22 trading a trading a

multi billion (€50 bn) industrymulti billion (€50 bn) industry

Carbon Point

Cap-and-trade not enough?

•For the period until 2012 so many allowances are For the period until 2012 so many allowances are given that CO2 price will be zero, for the period 2013-given that CO2 price will be zero, for the period 2013-20, tighter, average prize some €35/tn20, tighter, average prize some €35/tn

•According McKinsey $75 per tn is necessary to make According McKinsey $75 per tn is necessary to make a sufficiently number of emission reduction initiative a sufficiently number of emission reduction initiative profitable, $45/tn expected and this will only cause profitable, $45/tn expected and this will only cause half the needed reduction half the needed reduction

•Legal requirements necessary to limit emission from Legal requirements necessary to limit emission from certain sectors, in addition to certain sectors, in addition to

•Public support to emission reducing measuresPublic support to emission reducing measures

Jørgen Randers Professor

Professor at the Norwegian School of Business Asdministation

Aviation ETS scheme

* smallest planes excluded** Reduction target based of average emissions 2004-06

All* flights to/from EU included as of 2012

Reduction 2012 3%, later 5% cut p.a.** Operators must submit plans by 30.03.11 Use of revenues generated by auctioning

allowances decided by EU by members Complemented by technical/

operational CO2 reducing measures Further unilateral and other

agreements on global measures to reduce greenhouse gas emissions from aviation.

On 7 October the Environment Committee of the European Parliament called for shipping to be included in the revision of the European Union's Emissions Trading Scheme (EU-ETS).

Europe basis for shore based ETS - decided aviation ETS - shipping next?

ETS pros and cons

+1. Contributes to reduced CO2 emission by

definition, 2. Links shipping into onshore/aviation ETS3. Market based pricing of carbon 4. Direct purchase of CO2 units from

Administrator reduces opportunity for evasion.

5. With enforcement by port states, implementation can initially be limited to Annex 1 countries (80% of world trade).

6. Equal treatment of international trading vessels > 400 GRT regardless of ownership, flag state, or port of origin.

7. Enables ship operators to invest-or-buy 8. Dynamic- may stimulate

entrepreneurship

-1. Marine ETS still at conceptual stage,

allowance allocation and/or auctioning needs to be defined

2. Will require definition of a ‘CAP’ 3. Fluctuating carbon market price

introduces investment uncertainty for GHG reduction technology.

4. Requires set-up of trading administration and agreement on an effective monitoring, verification and enforcement system.

5. Effective enforcement will require the set up of a data exchange process involving all participating states.

6. Requires strict investment criteria and monitoring of fund expenditure.

7. ‘Critical mass’ of Annex 1 and non-Annex 1 countries must be signatory to be effective

8. Shipping very fragmented compared to current onshore and aviation ETS

Source: OCIMF with some adaption

Little understood by shipping people, some support from shipping (Belgian, Italian, Norwegian, Swedish and UK Shipowners’ Associations)

Reducing global warming

Global warming: Global warming: • A A global problem, to be addressed globally.problem, to be addressed globally.• A A long-run problem, the long-run levels of problem, the long-run levels of atmospheric

concentrations of greenhouse gases more important than the than the level of emissions in any particular year, as with level of emissions in any particular year, as with

The The costs of reducing the level of emissions will be much lower if of reducing the level of emissions will be much lower if it is done efficiently, i.e. comprehensiveness, covering all sources it is done efficiently, i.e. comprehensiveness, covering all sources of emissions, countries and ways of reducing atmospheric carbon of emissions, countries and ways of reducing atmospheric carbon concentrations. Then two conditions should be met:concentrations. Then two conditions should be met:1.1. we need a we need a global agreement, and a global agreement will and a global agreement will

require require equitable burden sharing. . 2.2. The The shadow price of carbon should be approximately the

same in all uses, in all countries, and at all datesin all uses, in all countries, and at all dates3.3. A system of taxes on carbon (that would operate like the A system of taxes on carbon (that would operate like the

VAT), would be a better approach than the "Cap and Trade" VAT), would be a better approach than the "Cap and Trade" system of carbon trading system of carbon trading

Joseph Stiglitz Nobel prize economics

Professor at Columbia University (United States) Formerly Chief Economist at the World Bank

Reducing global warming

On the "Cap and Trade" system, was On the "Cap and Trade" system, was easy to implement for major sources of emissions, but harder to implement for the multitude of small sources. It is also giving rise to distortions and transactions It is also giving rise to distortions and transactions costs. A key issue is how to allocate emission rights, which are a costs. A key issue is how to allocate emission rights, which are a valuable asset, worth perhaps valuable asset, worth perhaps $2 trillion annually (or 5% of global GDP). This issue has become a major stumbling block in reaching This issue has become a major stumbling block in reaching a global agreement, and the attempt to avoid taking on full a global agreement, and the attempt to avoid taking on full implications of this issue is one of the reasons for distortionary implications of this issue is one of the reasons for distortionary policies (or for carbon in different uses being priced differently).policies (or for carbon in different uses being priced differently).

Joseph Stiglitz Nobel prize economics

Professor at Columbia University (United States) Formerly Chief Economist at the World Bank

GHG Compensation Fund pros and cons

+1. Contributes to reduce emission as fund is

to be used to buy emission reduction credits, and to stimulate the development of and the use of emission reduction technology

2. Equal treatment of international trading vessels > 400 GRT regardless of ownership or flag state

3. Conceptually simple to implement4. Provides ship owner some certainty over

costs5. Use of bunker delivery note as evidence of

payment facilitates enforcement.6. Accuracy of the bunker oil consumption

baseline will improve as global compliance is achieved.

7. Data can be used for Annex VI supply/demand studies.

8. Introduces an ‘invest-or-pay’ concept

-1. May not reflect the price of carbon.2. Requires monitoring and adjustment of levy

to achieve desired outcome. 3. ‘Critical mass’ of major bunker supply

countries must be signatory for effective implementation.

4. Issues of principle, governance and administration need to be resolved.

5. For reductions in GHG emissions to be achieved, strict investment criteria and monitoring of fund expenditure are required.

6. Setting the contribution level to the fund is subject to political pressures.

7. The complexity of the bunker supply chain makes collection of funds by the Administrator unlikely to be 100% effective.

8. Once introduced, a levy is unlikely ever to be removed even if the CO2 reduction target is achieved – regarded as tax

9. No current precedence

Source: OCIMF with some adaption

Supported by BIMCO, INTERCARGO, JSA, MAS, HKSOA, UGS and INERTANKO under certain preconditions

...a tax is “a sum of money demanded by a government for its support or for ...a tax is “a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc”, specific facilities or services, levied upon incomes, property, sales, etc”,

Gasoline price at the pump

0.00

0.30

0.60

0.90

1.20

1.50

USA Japan Germany UK

Long haul freightratesMarketing*

Oil price

Tax

Cost elements making up the gasoline price:

* Refining/marketing and profit. Based on Dec 08/Jan 09 figures from IEA and the Baltic Exchange

Dollar per litreDollar per litre

LevyLevy

Contributing to the adaptation of Contributing to the adaptation of developing countries and to investmentdeveloping countries and to investment

to reduce CO2 emissionto reduce CO2 emission (Compatibility of CBDR principle and(Compatibility of CBDR principle and

uniform application of rules )uniform application of rules ) 　　

Contributing to the adaptation of Contributing to the adaptation of developing countries and to investmentdeveloping countries and to investment

to reduce CO2 emissionto reduce CO2 emission (Compatibility of CBDR principle and(Compatibility of CBDR principle and

uniform application of rules )uniform application of rules ) 　　

Mitigation/Adaptation projectMitigation/Adaptation project

R&D for highly efficient shipsR&D for highly efficient ships

International International GHG FundGHG Fund

IMO-TCIMO-TC

ContributionsContributions( per unit fuel)( per unit fuel)

GHG Fund proposed by Denmark

MBIs - INTERTANKO PRINCIPLES

1. Effective in contributing to the reduction of total GHG- funds collected be used to buy credits in accordance with JI & CDM.- stimulate leading energy efficiency technologies- stimulate innovation and R&D- encourage terms and conditions to improve logistics

2. Environmentally sustainable without negative impact on global trade and growth and should:- be cost effective- be able to limit distortion of competition - give credit for actions already taken which have already resulted in GHG reductions

3. Comprehensive, efficient, transparent and credible enforcement & monitoring- ship specific and based on actual fuel burned- governed by IMO- binding and equally applicable to all ships- practical, transparent, fraud-free and easy to administer- able to demonstrate compliance through proper monitoring

- certainty & predictability of the scheme

Other initiatives to reduce GHG emission

Ship Efficiency Management Plan SEMP

• SEMP for each ship in operation• SEMP to contain:

Best practices to save energy Voyage optimization Propulsion Resistance Management

Programme Other technical/operational measures

Voluntary Operational Index (for each voyage & over a period of time/voyages)

• When IMO SEMP guidelines completed, INTERTANKO will based on this work out SEMP for tankers by pooling information

Industry initiatives

Ship efficiency management plan• OCIMF “Energy Efficiency

and Fuel Management” – an appendix to TMSA 2*

• OCIMF opens for consideration of c/p clauses to optimise the voyage and other operations to save energy during transportation

*TMSA Tanker Management Self Assessment

Best Practices

Participation from a wide range of

tankers

INTERTANKOMembership3,100 tankers

Applicability/effectiveness

Depend on fleet characteristics

Dynamic continuous improvement

Various, individual measures Monitoring, assessmentAdjustment/corrective action

INTERTANKO a forum for sharing information and experience

Advice, input:*Class*Charterers*Yards*Other owners*Others

Accidental oil pollution into the sea

Tanker Incidents and accidental pollution

Number incidentsNumber incidents

0

210

420

630

840

1050

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

0

120

240

360

480

600

Misc

Security

Fire/Expl

Hull & Machinery

Grounded

Coll/Contact

Oil pollution

2009 is a projection based on 68 days

’’000 ts pollution000 ts pollution

Source: INTERTANKO, based on data from LMIU, ITOPF + othersSource: INTERTANKO, based on data from LMIU, ITOPF + others

Tanker Incidents and accidental pollution

Number incidentsNumber incidents

Source: INTERTANKO, based on data from LMIU, + othersSource: INTERTANKO, based on data from LMIU, + others

0

210

420

630

840

10507

87

9

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

0

60

120

180

240

300

360

00 01 02 03 04 05

06 07 08

Coll/Contact Fire/Expl

Hull & Machinery Security

Grounded Misc

Incidents attended by ITOPF over the past 5 years

NumberNumber

Source: ITOPFSource: ITOPF

2

89147 1317121014

0

3

6

9

12

15

18

2004 2005 2006 2007 2008

Tankers: 40 Non tanker: 66

Incidents attended by ITOPF over the past 5 years

NumberNumber

Source: ITOPFSource: ITOPF

2

89147 1317121014

0

3

6

9

12

15

18

2004 2005 2006 2007 2008

Tankers: 40 Non tanker: 66

Accidental oil spills from tankers 1978-2008

’’000 ts pollution000 ts pollution

Source: ITOPF + othersSource: ITOPF + others

0

10

20

30

40

50

60

707

0

72

74

76

78

80

82

84

86

88

90

92

94

96

98

00

02

04

06

08

Year Tanker Ts spill1991 ABT Summer 260,0001991 Haven 144,0001991 Kirki 17,7001992 Agean Sea 74,0001992 Katina P 72,0001993 Braer 85,0001997 Nakhodka 14,0001996 Sea Empress 72,0001999 Erika 20,0002002 Prestige 63,0002003 Tasman Spirit 30,0002004 Al Samidoon 9,0002005 DBL 152 9,4652006 Bright Artemise 4,5002007 Hebei Spirit 10,5002008 Tintomara 1,400

Largest spills in each year: 2004 - 2008

Accidental oil pollution into the sea and tanker trade

Source: INTERTANKO/ITOPF/Fearnleys

10001000ts spiltts spilt

bn bn tonne-milestonne-miles

0.0

0.7

1.4

2.1

2.8

3.5

1970s 1980s 1990s PR00s

0

21

42

63

84

105

1000 ts spilt

'0000 bntonne-miles

- 63% -6% -85%

Tanker accidental pollution 1974 – 2008by cause

Based on data from ITOPFBased on data from ITOPF

6%

6%

1%

25%

54%

8%

Collisions

Groundings

Hull Failures

Fire & Explosions

Other/Unknown

Operational

Tanker hull & machinery incidents

Number incidentsNumber incidents

Based on data from LMIU, ITOPF + othersBased on data from LMIU, ITOPF + others

0

100

200

300

400

500

78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

Engine

Hull & Machinery

Split engine and other Hull & Machinery

Engine incidents

Number incidentsNumber incidents

Based on data from LMIU, ITOPF + othersBased on data from LMIU, ITOPF + others

0

10

20

30

40

50

60

2002 2003 2004 2005 2006 2007 2008 2009

Engine

Other Hull & Machinery

2009 is a projection based on 135 days

Tanker engine incidents

Number incidentsNumber incidents

Based on data from LMIU, ITOPF + othersBased on data from LMIU, ITOPF + others

Year <10 years 10-24 years >25 years Total Average age

2002 4 15 3 22 17.5

2003 3 8 3 14 18.4

2004 2 7 3 12 18.8

2005 9 20 5 34 17.6

2006 12 17 3 32 14.3

2007 20 25 3 48 13.2

2008 25 24 10 59 15.6

2009* 7 10   1 18 12.8

Total 82 126 30 238 15.5

*135 days

Or have necessary measure been implemented to ensure that catastrophes do not repeat themselves?

Lack of good incident data prevent us from doing accurate analysis.

Let’s look at some indications

Will history repeat itself?

Will history repeat itself?Hull failure (?) (?)Tanker Year Spill ts LocationKirki 1991 17,280 Pacific, West Australia Lost bow Lost bowWorld Horizon 1991 850 Off South Africa Lost bowWorld Horizon 1991 850 Off South Africa Lost bowKatina P 1992 74,000 off MozambiqueTochal 1994 200 NW of Cape Town Lost bow Lost bow Thanassis A 1994 20,000 700 km off Hong KongNakhodka 1997 17,500 JapanErika 1999 20,000 Off Britanny Prestige 2002 63,000 Spain

New regulations/precautions:• Enhanced Special Periodical Survey Programme - adopted by the 18th session of the IMO Assembly in November 1993 • DH requirements• Common Structural Rules (initiated by INTERTANKO)• Stricter vetting, age discrimination after ERIKA

Recorded hull failures/incidents:2002 7 (Prestige) + 2 minor spills 2006 3 1 2,000 ts spill2003 6 1 minor spill 2007 9 1 minor spill2004 4 1 minor spill 2008 3 zero spills2005 3 1 minor spill 1Q09 1 zero spills

Segregated Ballast Tank Coated Areas260,000 ton VLCCHULL TYPE Square Meterspre-Marpol 25,000Marpol 80,000Double Hull 225,000

Will history repeat itself?Collision/Grounding/ContactTanker Year Spill ts LocationBT Nautilus 19901990 1,000 New York (contact reef bottom) - HFO 1,000 New York (contact reef bottom) - HFOAthos I 2004 850 Delaware River ( (contact object btm)contact object btm)Al SamidoonAl Samidoon 20042004 9,000 9,000 Suez Canal (HFO) (HFO)Grigoroussa I 2006 3,000 Suez Canal (HFO) (HFO)Bright Artemis 2006 4,500 East Indian Ocean (contact/rescue)Hebei Spirit 2007 11,000 Off Korea (rammed by crane)SKS Satilla DH 20092009 zero Outside Galveston (Outside Galveston (ctct object btm)ctct object btm)

New regulations• INTERTANKO US Port and Terminal Safety Study 1996/2002• INTERTANKO Terminal Vetting Database• DH requirements

Traffic separation schemes and other ship routeing systems have now been established in most of the major congested, shipping areas of the world, and the number of collisions and groundings has often been dramatically reduced.

Will history repeat itself?

Place of refuge Tanker Year Spill ts LocationErika 1999 20,000 Off Britanny Prestige 2002 63,000 SpainCastor* 2000 zero Western Mediterranean Sea.

New initiatives• IMO Resolution A.949(23) after after INTERTANKO initiative• EU directive• Under discussion in the US

*The ABS said the conclusions have implications for how ships are inspected and wider implications for how the new generation of double-hulled tankers should be built and maintained. At the least, the ABS said, rules should be amended regarding how and when ships are inspected and what surveyors should look for.

Will history repeat itself?

Human failure On March 24, 1989, the tanker Exxon Valdez, en route from Valdez, Alaska to Los Angeles, California, ran aground on Bligh Reef in Prince William Sound, Alaska spilling 35,000 tonnes of Prudhoe Bay crude oil. Failure of navigation, deviation from separation zones (got permission to use inbound lane), inexperienced and tired officer on the Bridge, Captain who was in his cabin had been drinking alcohol.

People do not work in a vacuum and the company culture, training, systems, procedures and technology have to take into account that mistakes will be made.

INTERTANKO Human Element Committee• Guidance booklet on Seafarers’ Hours of work and Rest - 2008• Best Practice - Cadet Berths • Tanker Officers Training Standards (TOTS)Tanker Officers Training Standards (TOTS).

Will history repeat itself?

Fire and explosions Tanker Year Spill ts LocationKhark 5* 1989 80,000 185 km off MoroccoABT summer ** 1991 260,000 coast of Angola. Most important tanker safety measure:Inert Gas Stems IGS

• Inerting double hull spaces in emergency situations

* Explosion following ballast tank leak**Explosion due to leak from cargo tanks

Kashmir due Jebel Ali after collision

Will history repeat itself?

PilotageTanker Year Spill ts LocationAegean Sea* 1992 74,000 La Coruna harbor, SpainSea Empress** 1996 72,000 entrance to Milford Haven, Wales.

New initiatives• INTERTANKO/BIMCO/ICS International Best Practices for Maritime Pilotage

* Grounded following loss of steering in bad weather**Pilot misjudged tide (similar to Torrey Canyon 18 March 1967)

Other challenges

• Chemical Pollution– Tin-based antifouling caused:

• Shell fish sex-changes, male to female• Thinning of oyster shells, collapse of oyster fisheries• Hormone changes in higher sea mammals

• Anti-fouling Systems (AFS) Convention– Entered into force 17 September 2008– Tin-based systems banned– Mechanism to ban other biocides in the future

• INTERTANKO– Move towards biocide-free systems– Comparison of silicon systems

Anti-fouling

• Biological Pollution– Invasive species issue– Organisms on ‘niche’ areas of the hull– Air emissions issue?

• Biofouling Management– IMO Voluntary Guidelines under development

• INTERTANKO– Good practice

• Reduce invasive species• Improve vessel performance – reduce air emissions

– Support management guidelines– Ports must allow hull management operations

Biofouling

Ballast Water Management

• Biological Pollution– Invasive species

• IMO Ballast Water Convention– Question over entry into force– Will the technology work?– Regional rules

• INTERTANKO– Share information on experience with new technology– Management plans as standard practice for over 5 years– Understand and Implement the IMO guidelines– Ensure compliance by sharing information on regional and national

regulations

Environmental challenges

Even in a bad market

High standards – a precondition for good risk management

Ms Littlefield (IUMI president) said there were strong

signs that the safety culture at sea was taking root. But she warned Ship operators are being buffeted from all sides in the growing economic crisis. But to cut corners on maintenance or training can only have one result in the long term: more casualties, higher claims on insurers, and higher premium and deductible levels for shipowners.

IUMI, in its first snapshot of 2008

Cypriot oil tanker "Haven" burning in the Gulf of Genoa

The sea get sick, but it never dies

Healing is a matter of time,

But also of opportunity

Greek proverbs

Thank you