It took seven years, but in May Congress passed the “highway bill for workboats” that sets a new direction for the management, financing and construction of the nation’s aging inland river infrastructure.
Highly praised by the tug and barge industry and others that use the inland waterways for transportation, the Water Resources Reform and Development Act (WRRDA) was a long overdue step in overhauling water resources policy and establishing inland waterways as a long-term, reliable and cost-effective transportation mode.
Passage of WRRDA is considered the most significant environmental legislation to come out of this session of Congress. The follow-on phases are now unfolding, as various interest groups weigh in on how the law will be implemented, private industry considers how it might get involved and Congress debates how to pay for dozens of navigation, flood and environmental projects the law authorizes.
The U.S. Army Corps of Engineers, which oversees the inland waterways and will implement WRRDA, recently met with stakeholders and is working on a strategy to prioritize its workload. Meanwhile, groups like the Waterways Council, an industry-supported advocacy group, is pushing for a fuel-tax increase on the barge industry that will fund inland projects.
Perhaps the most significant part of WRRDA involves a funding formula change for the costly Olmsted Locks and Dam project on the Ohio River in Illinois. Delays and design changes have pushed the cost of Olmsted to more than $3 billion. The project has been draining funds from the Inland Waterways Trust Fund, with little left to address an $8 billion backlog of other waterways projects.
Normally, construction project funding is split 50-50 between the Trust Fund and federal treasury. WRRDA says in the case of Olmsted, however, the federal treasury would absorb 85% of the costs, while the Trust Fund pays 15%. This would free up money for other modernization projects.
This adjustment will provide $105 million in benefits to other inland projects, according to Mike Toohey, president of the Waterways Council.
Toohey also said that due to the boom in energy products, there will be new impetus to advance the Upper Mississippi River project that includes new locks and environmental restoration, and to modernize the lock at Bayou Sorrel along the Gulf Intracoastal Waterway, which is currently being heavily used in the movement of crude, petrochemicals and chemicals.
To generate additional revenue to the Trust Fund, the barge industry is advocating a six-to-nine-cents increase in the current 20-cents per gallon barge fuel tax, which supports the Fund. This increase was not included in WRRDA, since it is a “tax” issue.
Toohey said waterways supporters in Congress will be looking for a legislative vehicle for this “user fee” when Congress comes back into session on Nov. 12 after the midterm elections. “Three hundred businesses that pay the tax support the increase,” he said, “as do the Chamber of Commerce and agricultural groups. There’s a powerful coalition, and this is why we got WRRDA passed, and it’s why we’re going to enact the tax increase.”
Another aspect of WRRDA is the development of public-private partnerships to help finance and/or manage waterways. This concept has worked well on road projects because they are based on tolls and in ports for dredging projects. But Toohey said partnerships are less certain for waterways, which have multiple beneficiaries, from barges and hydroelectric power companies to public water supplies. In addition, “there is strong opposition to locking fees, and when they have been proposed in the past, Congress has rejected them,” he said. — Pamela Glass
Crude oil production increases due to hydraulic fracking in the Midwest have been a boom to domestic barge companies. Though rail is still the dominant mode of transportation from the Midwest and Canadian oil fields to the East Coast, barges are getting a lot more play between there and the Gulf Coast. In response, barge carriers have been committing more equipment to crude in the Mississippi River corridor.
“Our potential as a global energy leader is rooted in our ability to safely transport our game-changing energy resources safely every time, be it by barge, truck, pipeline or rail,” the American Petroleum Institute (API) said in its latest report on the state of U.S. energy. “While these alternatives provide flexibility for transportation gaps, they must be integrated into a systematic restructuring designed to meet long-term needs.”
Long-term plans for pipelines to haul crude oil to the Gulf Coast are underway, but other transportation modes are needed now until the new pipelines are up and running. “In the absence of sufficient pipeline location and capacity, transportation by rail and barge has increased significantly. Barge shipments from the Midwest to the Gulf Coast are up nearly 90,000 bpd” since 2010, the API report said.
This has led to a big increase in crude oil shipments along the Mississippi and other inland waterways. In 2010, crude oil shipments from the Midwest to the Gulf were nonexistent. By the end of 2013, volumes were close to 5 million bbls. per month.
To meet demand, tank barges have been built at a record pace. In 2013, inland tank barge deliveries topped the 300 mark, up from 261 in 2012. Demand was so strong that Trinity Marine Products converted its Caruthersville, Mo., hopper barge construction facility so it could build more 10,000-bbl. tank barges.
The construction binge has continued in 2014. Through September, 266 tank barges were delivered to the inland barge sector, up from 251 over the same period in 2013, according to River Transport News. Ironically, while the number of barge deliveries has increased, capacities have decreased slightly as 10,000-bbl. tank barge orders have overtaken the demand for 30,000-bbl. barges, RTN reported.
Meanwhile, the U.S. Department of Agriculture said earlier this year that the record corn and soybean crops it was expecting would be even larger than first predicted. With more rail capacity being eaten up by crude oil products, commodities such as grain and coal are looking for other modes of transportation. That should help barge grain carriers, even though demand is down.
“We’re seeing a tremendous amount of crude oil and chemicals, fracturing sand, Bakken oil moving by rail,” Mike Toohey, chief executive of the Waterways Council Inc. told WorkBoat in September. “Oil is considered a higher value commodity, so it gets the rail capacity.” — Ken Hocke
As 2014 rolls to a finish, the use of LNG as a marine fuel in the workboat industry is starting to become reality. With plentiful domestic supplies, the anticipation of ongoing low costs and a low-emissions footprint that satisfies more stringent limitations, LNG stands to gain a greater share of the marine fuel market in the future.
As of this fall, there still weren’t any U.S.-flagged commercial marine vessels using LNG fuel, but that’s about to change. New Orleans-based Harvey Gulf International Marine is investing a reported $350 million in the development of a six-vessel fleet of LNG-powered supply vessels and attending fuel supply infrastructure. The first two dual-fuel 302'×64' PSVs have been launched. The first vessel, the Harvey Energy, should be delivered in December. It has been chartered to Shell for work in the Gulf of Mexico. The Harvey Power will follow five or six months later, to be followed by four more sister vessels over the next several years. All six are being built at Gulf Coast Shipyard Group in Gulfport, Miss.
In addition to the LNG boats, Harvey Gulf has broken ground on a $25 million LNG fueling facility in Port Fourchon, La. Wärtsilä, the Helsinki, Finland-based engine manufacturer, is providing the dual-fuel engines and fuel systems for the PSVs and the control system for the fueling facility.
In addition to Harvey Gulf, Crowley Maritime will soon join the LNG club. It has officially begun construction of two LNG-powered ConRo cargo vessels at VT Halter Marine in Pascagoula, Miss. Called the Commitment class, the two ships will carry containers and roll-on/roll-off cargo between Florida and the Caribbean. Wärtsilä is also providing the engines and some of the vessel design.
TOTE Inc. is also building new LNG-powered Jones Act container ships for its Sea Star Line service in the Caribbean. Called the Marlin class, the two vessels are under construction at NASSCO Shipyard in San Diego. Each will have a single, dual-fuel, slow-speed engine from Doosan Engine, under license from MAN Diesel & Turbo. TOTE’s other maritime shipping subsidiary, Totem Ocean Trailer Express, has also announced that it will be converting its Ro/Ro Orca-class ships to LNG fuel. The vessels operate between Tacoma, Wash., and Anchorage, Alaska.
Crowley’s Jensen Maritime Consultants is working with LNG America on the development of LNG bunker barges for the Gulf of Mexico. To date, two classes have been announced: the 3,000-cu.-meter Gemini class and the 1,000-cu.-meter Mercury class. Houston-based LNG America hopes to have its first bunker barges by the end of 2015.
LNG America also announced an agreement with Buffalo Marine Service Inc. to partner on the design of an LNG bunker fuel network in the Gulf. Houston-based Buffalo Marine has over 50 vessels dedicated to bunkering services in the Gulf. LNG America wants to build a network of LNG distribution centers at major U.S. ports and along the inland waterways.
Elliott Bay Design Group is also getting into the LNG market. In February, the Seattle-based naval architecture and marine engineering firm obtained approval in principle (AIP) from ABS for the design of a 257', 2,000-cu.-meter LNG bunker barge.
Bristol Harbor Group International, Bristol, R.I., also has an ABS AIP, this for a 3,000-cu.-meter bunker barge that would be built by Conrad Shipyard, Morgan City, La. Conrad has also signed an agreement with GTT North America, the U.S. subsidiary of France’s Gaztransport & Technigaz, for the production of LNG membrane tanks for storage, transportation and fuel. GTT membrane tanks are said to increase LNG storage capacity by 40% compared to the alternative “type C” tanks in the same barge footprint.
Ocean Tug & Barge Engineering Corp., Milford, Mass., is working on an LNG ATB for Minyan Marine LLC, Houston. The diesel/gas-electric tug will be powered by four dual-fuel EMD DGB 12-710 variable-speed main generator sets. The LNG fuel tanks will be located on the barge adjacent to the notch and will be connected to the tug’s engine room by a proprietary gas fuel transfer system developed by Argent Marine in Nevada. The tug will be able to operate out of the notch with diesel fuel.
“Ferries and other point-to-point operations make a lot of sense for LNG,” said Sean Caughlan of Glosten Associates in Seattle. “When you’re coming and going from the same places you have control over the bunkering infrastructure, although that doesn’t make it any less complicated, but I think we’re going to see more dedicated, Jones Act, point-to-point operations using LNG.”
— Bruce Buls
For the fourth straight year, weather woes plagued inland operators with not only high and low water as in the past but also massive amounts of ice.
Conditions were especially tough on the Upper Mississippi and Illinois rivers and the Great Lakes. “We set records across the board this year,” said Mark Gill, the Coast Guard’s director of vessel traffic service in Sault Ste. Marie, Mich.
The Coast Guard began breaking ice Dec. 6, 2013, and didn’t finish until May 15 for a total of 160 days, 10,600 hours of work and 950 vessel transit assists. For the 2007–2013 seasons, the Coast Guard averaged 122 days and 3,200 hours of ice breaking and about 400 vessel assists.
“The last residual ice left Lake Superior on Father’s Day weekend,” Gill said, well beyond the normal late-April departure date.
The Great Lakes were 92% ice covered this year, an amount second only to the record 94.7% in 1979 and almost double the long-term average of 51.4%, NOAA statistics show.
The big chill took its toll. Iron ore shipments in spring, for example, were 6.4 million tons, the same as a year earlier, the Lake Carriers Association noted. The total would have been about 600,000 tons higher, but three 1,000' lakers were out of service for a combined 65 days in May to repair damage suffered in the heavy ice that covered the lakes in March and April, LCA said.
The water problems cost operators millions, but no precise industry estimates were available.
“We know there were credible delays that led to higher crew and fuel costs, and increased maintenance requirements, not to mention opportunity costs associated with moving commodities and products to market,” said Ken Eriksen, senior vice president, Informa Economics Inc., Memphis, Tenn. He was at one spot on the Illinois in February where it took all day for one vessel to pass a pool. “The ice was thick and the operators were operating dead slow to avoid damage to the barges and towboat equipment. Some carriers opted to avoid the upper rivers until the conditions improved.”
The American Waterways Operators (AWO) said some companies, particularly the dry bulk barge operators, were severely affected. “If there is a lesson that we can take from this, it would be the importance of adequate funding for ongoing channel dredging and an improved contracting system to send resources where they are needed when difficult conditions arise,” AWO said.
Among the difficult conditions were the high water problems from record rain that closed the Mississippi River at St. Paul, Minn., to navigation for several weeks this summer.
Sediment in the center of the 9' navigation channel created sandbars and sidelined 152 barges and 17 towboats.
“Once we got the river reopened, the trouble spots in Pool 6 and Pool 4 have been open ever since,” said U.S. Army Corps of Engineers spokesman George Stringham in St. Paul. “But we’re telling people that just because we got it open doesn’t mean we’re out of the woods.” The channel is 9' or more but in some spots it’s less than the 300' authorized width, and dredging operations are going on six to seven days a week.
“It’s been rough on the industry this year,” he said. — Dale K. DuPont
In February, the Coast Guard moved a bit closer to replacing its aging and obsolete fleet of 210' and 270' medium endurance cutters when it awarded three $21.95 million fixed-price contracts for its Offshore Patrol Cutter.
From an initial list of eight shipyards, Bollinger Shipyards, Lockport, La.; Eastern Shipbuilding Group, Panama City, Fla.; and General Dynamics/ Bath Iron Works, Bath, Maine, emerged as the OPC finalists after submitting proposals to the Coast Guard prior to January 2013.
The selection of the three shipyards was based on several critical factors: technical, management, past performance and price. Each finalist was given 18 months to submit preliminary and contract design work. The Coast Guard will evaluate each submission and select one shipyard for the final Phase II detailed design and construction work of the OPC.
The process was interrupted on Feb. 25 when two shipyards, Huntington Ingalls Industries, Pascagoula, Miss., and VT Halter Marine, also of Pascagoula, protested the contract awards.
But in June, the original contract awards were upheld and preliminary and contract design work resumed. The winning shipyard will receive an initial contract for 11 cutters. The OPC fleet is eventually expected to total 25 vessels and cost $10.5 billion.
The Coast Guard said that affordability would be the key consideration as the project moves closer to production.
Stephen Berthold, a vice president with Eastern Shipbuilding, acknowledged, “affordability is the main thing.” However it’s unclear if that means the lowest bid for construction or the long-term maintenance costs or both. The cutters will be designed to operate 30 to 40 years.
At over 300', the vessels are projected to be larger than the medium endurance cutters they are replacing. The minimum range is 7,500 nautical miles with 14 days between refueling, which must be doable at sea, if necessary. Missions will include ports, waterways and coastal security, search and rescue, and defense readiness.
The OPCs must be able to launch boats and helicopters in a sea state 5, have sustained speeds of 22-25 knots, accommodate a 120-126 mixed-gender crew with no more than eight crew per room, carry supplies for 45-60 days and operate up to 230 days a year.
The OPCs must also be able to handle 500 migrants for 48 hours or 300 migrants for five days.
Eastern Shipbuilding worked with STX Marine (now Vard Marine) and Northrop Grumman on its OPC design. Though Berthold said the design “will be like no other,” ship designs tend to be evolutionary. Thus, the designs from the three finalists will probably be similar to something that’s been built before.
That’s the case for Bath Iron Works, whose OPC team includes L-3 Communications, New York City, and Navantia S.A., a shipyard in Spain that BIW has collaborated with for more than 30 years, according to BIW’s Matt Wickenheiser. The BIW design submitted to the Coast Guard is based on “Navantia’s proven BAM [Buques de Acción Marítima] design,” Wickenheiser said. “Four of the BAMs are currently in service with the Spanish navy, performing missions similar to that of an OPC.”
Bollinger is partnered with Gibbs & Cox Maritime Solutions, L3 Communications and Damen Shipyard Group.
Bollinger’s Robert Socha wouldn’t disclose the lineage for the Bollinger design other than noting that “Damen shipyard should be your clue.” Bollinger is currently using a Damen design as the basis for the Sentinel-class, Fast Response Cutters being built at its Lockport, La., shipyard.
— Michael Crowley
On Christmas Eve, the U.S. Coast Guard gave the maritime industry a gift that keeps on giving — amendments to the International Convention on Standards of Training, Certification and Watchkeeping (STCW).
The changes are designed to increase safety aboard vessels over 200 gt and/or those that operate outside U.S. near-coastal waters (200 nm offshore), and in near-coastal waters of a foreign country. It does not affect mariners on small vessels during domestic voyages or on the Great Lakes. It does affect mariners on Gulf of Mexico OSVs.
Jan. 1, 2017, is the date for full compliance with the new STCW requirements. For those who already have an international STCW endorsement, that experience will be grandfathered in with new training requirements to produce the new STCW endorsement. Those who don’t get the training for the new requirements before the deadline will not be allowed to sail and will have approximately 22 weeks of training ahead of them. (March 24, 2019, is the date that the transition period ends for national endorsements.)
“It won’t get extended,” said Richard Wells, vice president, Offshore Marine Service Association, New Orleans. “The amount of time people have to get the training is shrinking and the number of places to get that training is not expanding nearly fast enough.”
“We’re just trying to educate everyone about what’s required,” said Jon Kjaerulff, director, Freemont Maritime, Seattle. “We haven’t felt the real effects yet. That won’t happen, probably, until about mid-2016.”
As of late October, the Coast Guard was still putting together Navigation and Vessel Inspection Circulars (NVIC) that address questions such as what are the rules concerning U.S.-owned OSVs that work overseas.
“Well, if you have an OSV that’s working in Mexico, you probably have a master and a chief who are American and the rest of the crew probably isn’t,” said Wells.
Some requirements are already in play. All merchant marine credentialed mariners who hold an STCW endorsement were required to have a medical certificate by March 24. The certificate must be renewed every two years for pilots and mariners serving on vessels under STCW scrutiny. The new rule added upwards of 20,000 applications to the National Maritime Center’s already heavy workload. However, NMC’s commanding officer, Capt. Jeff Novotny, told WorkBoat earlier this year that the agency was processing medical certificates in under 15 days.
In addition, the Coast Guard has issued several NVICs that provide guidance on the issuance of STCW endorsements related to proficiency in survival craft and rescue boats, fast rescue boats, ratings forming part of a navigational watch, ratings forming part of an engineering watch and advanced firefighting.
Many of the training classes are one and two days. However, the number of classes needed, depending on the STCW endorsement a mariner is seeking, can be sizable when looking at the number of NVICs already published and still scheduled for release. “Of the courses required [by the Coast Guard], only two have gotten approval and are being taught by schools,” said Wells.
Part of the problem is getting the word out to masters and mates and all those who will be affected by the new requirements.
“The Coast Guard says read the NVICs, but if you’re not on the mailing list, you won’t see them,” said Bob Russo, CEO, Maritime LicenseTraining Co., Atlantic Beach, Fla. “The companies don’t do a good job of getting the word out to their personnel. You need a third party to answer questions, such as the Maritime Education Standards Council.” — K. Hocke
A federal judge’s finding that BP was guilty of gross negligence and willful misconduct in the 2010 Deepwater Horizon disaster marks a significant milestone in the legal battles over responsibility for the largest oil spill in offshore history.
The ruling, described by legal observers as extraordinary, sets the stage for up to $18 billion in penalties under the Clean Water Act (CWA), a prospect some say may nudge BP to settle.
U.S. District Judge Carl Barbier, New Orleans, in a detailed and illustrated 153-page decision issued in early September, apportioned 67% of the fault to BP Exploration & Production Inc., 30% to three Transocean entities, and 3% to Halliburton Energy Service Inc. and Halliburton’s Sperry division.
The judge found Transocean’s and Haliburton’s conduct negligent in the accident that killed 11 people and spewed oil into the Gulf of Mexico for nearly three months.
In his ruling, the judge came down hard on BP describing the process from drilling to disaster. He cited safety, maintenance and chain-of-command issues almost as a cautionary tale for others.
“Deepwater drilling requires a delicate balance between pore pressure, mud weight, and fracture gradient,” he said. “Drilling the Macondo well did not go smoothly. Some called it the ‘well from hell.’ Many of the problems at Macondo stemmed from the fact that the well encountered increasingly fragile sandstone. This contributed to a narrow window between pore pressure and fracture gradient, particularly as the well got deeper. BP was aware of this issue, but did not always manage it properly.”
BP’s “negligent acts that caused the blowout, explosion, and oil spill include: drilling the final 100 feet of the well with little or no margin,” Barbier wrote, noting that that decision and two others “were profit-driven.”
In addition, he said, “If the negative pressure test had been correctly interpreted, the blowout, explosion, fire, and oil spill would have been averted.”
The judge in a trial phase set for January still must determine the amount of oil spilled and the fine. The government says the total was more than four million bbls. CWA penalties of $1,100 bbl. are almost quadrupled to $4,300 when the spill results from gross negligence.
The total cumulative pre-tax charge for the incident to date is $43 billion, and BP has set aside $3.5 billion for CWA penalties based on its conclusion “that it did not act with gross negligence or engage in willful misconduct.”
“BP strongly disagrees with the court’s gross negligence ruling,” Brian Gilvary, BP’s chief financial officer, said during the company’s Oct. 29 earnings call. “The law is clear that proving gross negligence is a very high bar, and BP believes that the court’s findings were not warranted by the evidence presented at trial. BP will appeal this decision and in the meantime, has filed a post-trial motion with the District Court asking the court to amend its findings or order a new trial.”
The gross negligence finding is “pretty damn unusual. It’s a pretty high bar. You have to prove intent,” said Michael T. Moore, maritime lawyer at Moore & Co., Miami. “Accidents happen and negligence occurs. But are you grossly negligent? That’s one step away from criminal.” The ruling will be hard to overturn, “because it’s the judge’s sound discretion,” he said.
“There’s no question that Judge Barbier has laid the foundation for justifying a very, very substantial penalty against BP,” said John Costonis, a professor at the Louisiana State University Law Center. “If you’re an oil company how excited are you going to be about doing deepwater drilling? They must certainly be thinking how they’re going to do business and how to structure their insurance arrangements.” — D.K. DuPont
Through much of 2014, the U.S. offshore service vessel market was remarkably calm, even if the debate over its condition was not. By the end of the year, however, things were beginning to change.
Early in the year, investment banks called for major oil companies to cut capex and limit risk, especially in exploration programs in high-risk offshore areas. At the same time, many international analysts were more bullish, noting an offshore drilling market with utilization rates at a five-year high and significant growth potential in the offshore maintenance, modifications and operations services sectors.
For most of 2014, the market was largely sustained by four factors: contractual deepwater obligations to drill and develop that could not be terminated; continuing requirements to maintain, service and refurbish the extensive, existing infrastructure in the Gulf of Mexico; the increasing likelihood of a repeal of export bans and the prospect of expanding international markets for U.S. oil and gas; and the possibility of a return to exploration and development offshore Alaska.
Early in the year, a Research and Markets OSV report concluded that the OSV market is expected to reach $91.2 billion worldwide by 2018 with an anticipated annualized growth rate of 5.7% from 2013 to 2018. The U.S. Gulf, with its thriving economies and rapidly expanding manufacturing base, is expected to experience the highest revenue growth during the next five years, the report said. These factors combined to buoy the market through most of the year.
However, onshore, a game changer emerged — increasing production from the U.S. shale boom. By the end of the third quarter, U.S. oil and gas production had risen to a level not seen since the mid-1980s. At the same time, warnings of a global economic slowdown and decreasing demand in the Far East began to drive oil prices down.
By mid-October, the picture had turned a bit bleaker and projections of a slowing OSV market began to increase based on falling oil prices and demand, and on mid-year forecasts of drops in offshore drilling demand and day rates. For example, drilling contractor Seadrill announced that it expected day rates for new-generation drillships to fall to $425,000-$475,000 by year-end, from a peak of about $650,000 in 2013.
But as disappointing as fourth-quarter reports are likely to be, 2014 was fairly steady for the OSV market, even with the year-end downturn. Next year, however, may be different. — Bill Pike
2014 saw significant developments in the over-budget and much-delayed Olmsted Locks and Dam project on the Ohio River in Illinois. These include advances in construction and compromises in Washington on a new financing formula that will ensure completion of Olmsted while funding other lock replacement projects.
Olmsted was first authorized by Congress in 1988 at a cost of $775 million. After years of delays, the cost has now ballooned to $3.1 billion, and it won’t be operational until at least 2019.
The Inland Waterways Trust Fund, which draws revenues from a diesel fuel tax paid by barge operators, covers half of the cost of Olmsted, and the rest comes from taxpayers through the general treasury. However, Olmsted’s cost-overruns are draining the Trust Fund, with little left for 24 other priority inland projects. Many have been stopped or slowed as a result.
Working with the Army Corps of Engineers and the barge industry, Congress came up with a compromise that would change Olmsted’s 50-50 funding formula in a way that would continue federal support for the project’s completion, while also freeing up funds for the backlogged projects.
The Water Resources Reform and Development Act, passed by Congress in May, shifts most of the funding burden to taxpayers, who will now pay for 85% of the project’s costs. The barge industry will pay 15%.
“This is an excellent compromise,” said Mike Toohey, president of the Waterways Council Inc., an industry-backed group.
The Olmsted project sits at the busiest hub of inland waterways shipping, 17 miles upstream from the confluence of the Ohio and Mississippi rivers. The project will replace Locks 52 and 53, built in 1928 and 1929. About 91 million tons of cargo a year move through the locks, according to the Corps.
The project is about half way complete. Construction has finished on two chambers that will replace the two crumbling locks and work is well underway on the 2,600' dam. “Things are progressing nicely,” said Mike Braden, division chief for the Olmsted Locks and Dam construction project. Six of the milestone shells have been set on or ahead of schedule this year, with two remaining, and the first of five tainter gates, which will control water flow, was erected in October. The first of 12 navigable pass monoliths was set in place in November.
Much of the delays are blamed on a new “in the wet” technique that was used on the project. It involves assembling massive shells of concrete on land and then lowering them into place on the flowing river, connecting them like pieces of Lego toys. Traditionally, a temporary cofferdam is built in the middle of the river to divert water and create a dry work area. But engineers on Olmsted said this would be too dangerous on the tricky Ohio River.
Toohey said Olmsted’s delays have nearly bankrupted the Trust Fund and caused major disruptions to the modernization of the rest of the inland system. He said if reforms weren’t made, there would be only one other project completed between now and 2040. — P. Glass
The publication date for the Subchapter M final rule is March 2015, but don’t be surprised if the release of the much-delayed towing vessel inspection regulations is pushed back again.
The marine industry has been quiet about the rule lately, with most simply just tired of hearing about it. “I’ve noticed people were having Subchapter M fatigue so I have backed off a bit so as not to be counter productive,” said Kevin Gilheany, a retired U.S. Coast Guard senior marine inspector and owner of Maritime Compliance International LLC in New Orleans.
The fatigue should wear off in March if the final rule is released as scheduled.
A big decision companies must make with Subchapter M is whether to choose the Coast Guard compliance option or the third-party Towing Safety Management System (TSMS) option.
“That’s the big question,” said Gilheany. “Use a third-party option or use the Coast Guard and what is the best choice for the compliance option. Many just don’t know.”
Subchapter M applies to towing vessels over 26' or ones that tow barges loaded with oil or carrying other dangerous cargoes. It was first required in 2004, but the notice of proposed rulemaking was not sent to the Department of Homeland Security until 2009 and wasn’t published until August 2011. The final rule will affect an estimated 6,000 vessels and cost operators an estimated $14 million to $18 million annually over a 10-year phase-in period.
The numerous delays have given companies plenty of time to prepare. This includes making sure what equipment and other changes will be required on each vessel based on the 17 “sub-applicabilities” contained in the rule, Gilheany said.
The American Waterways Operators has been frustrated over how long the process has taken. Late last year, AWO pressed Congress to get the towing vessel inspection final rule published before Coast Guard commandant Adm. Robert J. Papp Jr.’s four-year term was over on May 30, 2014. It didn’t work out.
AWO President Thomas A. Allegretti said that rule offered a “historic opportunity to take safety in our industry to a new level,” much like the Oil Pollution Act of 1990 (OPA ’90) did for tankers.
Gilheany said that when the final rule is finally released, that’s when you will see companies “kick it in high gear.” — David Krapf