Salvors Explore, Navigate Potential Risks Of Alternative Fuels
As the world speeds towards decarbonization, it is opening up a future filled with new risks that must be understood and navigated—even if they can’t yet be measured or quantified.
That was the theme of an October 19 meeting sponsored by the American Salvage Association in Galveston, Texas, designed to help salvors understand the risks of responding to a marine event in which alternative fuels could be released.
The meeting, which was recorded, took place on the campus of Texas A&M University and was hosted by the Teichman Group, one of the world’s largest salvors that operates globally. Jim Elliott, chief operation officer of the Teichman Group, who introduced the speakers, noted that it is also the 50th anniversary of the Clean Water Act. A high-powered roster of presenters gave a series of information- packed presentations.
Regulatory Drivers
Rafael Riva, vice president of commercial operations in the Americas for Lloyd’s Register, began his presentation by noting that vessel designers, and class societies, don’t design ships to be salvaged, but for safe operation.
He reviewed the drivers behind the push to alternative fuels: the United National Climate Change Conference, commonly called COP26, and regulations both already promulgated and being further developed by the European Union and International Maritime Organization. Globally, maritime sources are responsible for about 2 percent of total carbon emissions.
The IMO’s Greenhouse Gas Strategy has set ambitious goals for reducing vessel emissions. It’s the first effort aimed at zero emissions from a global sector without distinguishing between developed and developing countries. The goals aim at a 40 percent emissions improvement by 2030 (compared to a 2000 baseline), 70 percent improvement by 2050, at least 50 percent reduction by 2050 and zero emissions by the end of the century.
Fuel Risk Profiles
Riva said two very large crude carriers (VLCCs) are currently under construction that will use ammonia as a fuel; they will launch in 2025. The first methanol-powered ferry has been operating in Europe for five years.
Riva listed some conditions and risks of the alternative and low-flashpoint fuels that are being considered: ammonia, hydrogen, bio-diesel, methanol and bio-methanol. Ammonia is both highly toxic and highly corrosive, and there is no experience with its use as a fuel. Methanol is non-cryogenic, with heavier-than-air vapors, and is extremely hydrophilic. Liquid hydrogen is more likely to leak, has the smallest molecule, causes brittleness of materials, has a low self-ignition point and has a wide flammable range. It cannot co-exist with air; when it interacts with air, it creates “snow.” Lloyds is compiling what Riva called a “heat map” of risks to divers and salvors responding to an incident involving alternative fuels.
LNG Bunkering Regulation
Next up was Lt. Comdr. William Hickey, detachment chief for the Coast Guard’s Liquefied Gas Carrier National Center of Expertise (LGC NCOE), who gave a regulatory perspective. He noted that the roles and services of the LGV NCOE include expertise in low-flashpoint fuels, LNG bunkering, LNG carriers and LNG facilities. Its second mission is training and certification. At a recent workshop in Jacksonville, Fla., LGC NCOE personnel qualified the first generation of low-flashpoint fuel examiners.
Worldwide, there are 352 LNG-fueled vessels in operation, along with one hydrogen-fueled ferry, and 516 on order, Hickey said. He ran through the regulations that govern U.S. LNG bunkering operations and barges. Currently the Coast Guard approves bunker barge designs on a case-by-case basis, based on Design Basis Letters.
There are currently four LNG bunkering facilities in the U.S., including two in Jacksonville, one in Port Fourchon, La., and one in Seattle, Wash. The facilities are permitted by the Federal Energy Regulatory Commission. Mobile LNG bunkering facilities provide an interim solution for ports that don’t yet have permanent LNG bunkering installations.
There are three U.S.-flagged LNG bunker barges, with two more under construction in Sturgeon Bay, Wis.
Insurance Coverage
Next, Gina Venezia, general counsel of Standard Club Management, spoke on how the marine insurance industry is exploring and assessing the risks of alternative fuels—and how to cover them. The Standard Club is a protection and indemnity (P&I) club, an association of shipowners and operators who get together to cover risks for members. The industry is constantly evolving to take account of new risks. The 13 members of the International Group of P&I Clubs provide 90 percent of the world’s oceangoing coverage—and 95 percent of tanker-trade coverage.
Venezia said insurers focus on being supportive, not dictatorial. “We don’t tell operators which technologies they should or should not use,” she said. To be covered, ships must be registered and compliant with the regulations of flag states.
On June 17, 2021, the IMO adopted amendments to MARPOL Annex VI at MEPC 76, introducing regulations 23 and 25, the Efficiency Existing Ship Index (EEXI); and regulation 28, the requirement to reduce operational carbon intensity through the Carbon Intensity Indicator (CII).
Vessels covered by EEXI must demonstrate compliance by their next survey— annual, intermediate or renewal—for the International Air Pollution Prevention Certificate (IAPPC), or the initial survey before the ship enters service for the International Energy Efficiency Certificate (IEEC) to be issued, whichever is the first, on or after January 1, 2023. Entry into force will be November 1, 2022.
While there are as yet no fines or penalties attached to non-compliance, Venezia said, she expects fines to follow. Current rules governing spill responses already refer to oil and gas “or any other substance,” which would cover alternative fuels. One question marine insurers are closely studying: how will alternative fuels affect a vessel’s hull? Another issue: what happens when contaminated bunker fuel causes engine problems, as reportedly happened recently with a Gulf Coast bunker facility?
Membership organizations like the Baltic and International Maritime Council are working with members to develop contract clauses covering compliance.
Venezia concluded by noting that it is too early for any claims trends involving alternative fuels to be studied.
Vessel Design
Dan Wesp, senior principal engineer with the American Bureau of Shipping, spoke on the many issues involving vessel design for alternative-fueled vessels—and whatever lessons can be learned from the 50 years of experience ABS has with guiding design of LNG cargo vessels. Wesp noted that the IGF Code currently addresses only methane, but “opens the door” to other alternative fuels.
Those issues have to do with the integration of LNG fuel system, routing of LNG piping systems, the location of LNG fuel tanks, the need for dedicated bunkering facilities and crew training. LNG takes up 1.8 times the volume per unit of energy output of conventional fuels, and methanol takes 2.5 times the volume, so tank sizes must be increased. Tank designers must consider “sloshing effects,” which may require reinforcements, and boil-off gas management. Double-walled pipes may be required for some fuels. Separate ventilation systems for hazardous areas might be necessary—along with tailored definitions of “hazardous area” for the different fuel systems.
Salvor’s Perspective
Elliott gave a wide-ranging presentation on risks that salvors have to be aware of. Elliott said some operators are reluctant to activate a vessel response plan when an incident happens, but he urged them not to wait to make that phone call. “We won’t charge you from the phone call,” he joked, but said early notice helps the salvor prepare for all risks.
He noted that in March, the cargo ship Felicity Ace, carrying 4,000 electric vehicles to America, sank off the Azores after a shipboard fire that lasted 13 days. The burning lithium on board is thought to have made extinguishing efforts much worse.
Elliott ended with a quotation from Capt. Edward Smith, insisting that modern shipbuilding practices had made his vessel “unsinkable.” Smith was captain of the Titanic on its ill-fated voyage.
