Each December, WorkBoat magazine looks back at the 10 stories that have defined the previous year. In 2016, energy was once again topped the news, but other story lines were plentiful. A roundup from WorkBoat's editors and correspondents follows.
1) Has the U.S. Gulf bottomed out?
Two problems have plagued the workboat industry in the Gulf of Mexico (GOM) in the last few years. One was the booming shale play onshore in the U.S. The second, a consequence of the first, has been low oil and gas prices that made it hard, and often impossible, to make the economics work for workboat owners.
Recently, however, a ray of hope surfaced. Oil prices have been slowly rising from its $26-bbl. low in February, doubling to almost $52 bbl. in October. This upward price movement was helped by a fall in U.S. crude stockpiles. Also supporting oil price increases was optimism that the Organization of the Petroleum Exporting Countries will secure an output cut. However, there are now doubts about OPEC’s ability to implement its planned production cut, which caused prices to fall in late October.
Prices dipped almost 3% on Nov. 2 to $45.49 bbl. on news that crude stockpiles rose by 14.4 million bbls. for the week ended Oct. 28, according to the Energy Information Administration (EIA). Analysts expected a buildup of only 1 million bbls. It was reportedly the biggest ever rise in U.S. crude stockpiles in a week.
Also, in October, the EIA estimated U.S. production in 2017 would be 100,000 bopd higher than in its previous forecast. This will be exacerbated by expected higher production in Russia and lower projected oil consumption globally in 2017. All this equates to a projected 2017 price for WTI of approximately $50 bbl. That price is not high enough to restart the GOM.
John Hess, chief executive of Hess Corporation, said in a talk at the Oil & Money conference in London in October that restarting longer-cycle activity in the deepwater GOM requires oil prices in the $60- to $80-bbl. range. Given this scenario, oil prices that are sufficient to restart GOM deepwater activity seems unlikely in the next couple of years.
This hasn’t gone unnoticed by workboat owners or analysts. “We are in for another tough year for the offshore industry,” IHS Energy-Petrodata marine analyst Richard Sanchez said. “In the U.S.-Gulf, OSV owners have squeezed their operating costs as much as possible, and don’t believe they can shrink their margins any further. Day rates are very low for new charters, with little to no margin for the vessel owners. OSV resale values are also very low, but very few sale prices have been disclosed.”
According to the October issue of IHS Energy’s Offshore Marine Monthly, “reductions in rig activity continue to grind down base demand for offshore supply vessels in the U.S. Gulf of Mexico.” Out of 32 contracted floating drilling rigs, only 22 have been working. There are five jackups under contract, but only three are working, according to Offshore Marine Monthly. Platform rigs, meanwhile, are down to three active units out of 19 under term charter.
The report noted that in September, “the total supply of vessels in the U.S. Gulf swelled by 10 as three AHTSes and seven PSVs returned from jobs abroad.”
According to the IHS report, out of the 410 vessels of all sizes in the GOM, 108 are working on term contract and 84 are employed in the spot market. Most of those 192 vessels are working at significantly reduced day rates.
Tidewater’s U.S. deepwater vessel quarterly revenue was cut in half in the last year. — Bill Pike
2) Subchapter M final rule released
Barge tows transit the Colorado River Locks near Matagorda, Texas, in July 2013. USACE photo.
The Coast Guard-industry joint effort for safer towing vessels and the removal of their uninspected label culminated with the June release of the final Subchapter M rule.
At last count by the Coast Guard, 5,719 previously uninspected vessels officially came under the new regime on July 20 — 3,905 of those in the Coast Guard’s Ninth District and the Western Rivers. But there is still a two-year phase-in until July 20, 2018, to comply with most of the final rule. It will be fully in place by 2022.
Even after years of working together closely on what the final rule would bring, there was still some uncertainty between the industry and Coast Guard over the final version. At an Oct. 4 roundtable American Waterways Operators hosted in New Orleans for operators, a Coast Guard update noted 274 issues and questions that were being resolved.
Topping the list is how the Coast Guard will interpret definitions of “major conversion” and “replacement in kind” for existing vessels. It was an immediate concern for operators who were worried that upgrading existing towing vessels with new, more efficient and cleaner engines could kick them into a category with newbuild boats, when vessels with keels laid after July 20, 2017, will be subject to more stringent requirements.
“There are things still in flux with Subchapter M,” said Scott Kuhaneck, towing vessel program manager in the Coast Guard’s Office of Commercial Vessel Compliance, as the questions came pouring in. But repowering will not be a problem for operators, because under longstanding policy most of those will not rise to the level of major conversions, Kuhaneck said.
Those determinations will be made on a case-by-case basis by the Coast Guard Marine Safety Center. Upgrading engines for better fuel efficiency, environmental compliance, and alternative fuel use are not normally considered major conversions, according to the Coast Guard.
That position is based on the 35-year-old Navigation and Vessel Inspection Circular 10-81, which set out guidelines for classifying major conversions, well before Subchapter M. In its introduction, NVIC 10-81 lays out the rationale that now applies to towing vessels as well. Those regulators in 1981 recognized that “it is costly and impractical to require existing vessels to be modified each time a safety standard is updated,” the NVIC said.
“However, when a major conversion or modification of an existing vessel is planned, there is a definite intent to extend the service life of the vessel,” the policy stated. “When this is the case, it is appropriate to bring the entire vessel into compliance with the latest safety standards where reasonable and practicable.”
“Repowering may be deemed a major conversion if the intent is to extend the economic life of the vessel. Other re-engining modifications may not be deemed a major conversion if the economic savings of the conversion would be realized during the vessel's normal life,” the policy stated.
There is also precedent for considering dual-fuel and liquefied natural gas conversions exempt from major conversions. That was the case when steam-powered vessels were converted to diesel for fuel efficiency.
A major selling point of the new rule — and a practical matter to the already overextended Coast Guard — is Subchapter M’s flexible options for handling inspections. Operators can request Coast Guard inspections, use approved in-house safety management programs and surveys, or engage approved third-party inspection consultants.
The Coast Guard and third-party organizations — classification societies, consultants and others who will handle surveys and safety management — are discussing what will be expected of them.— Kirk Moore
3) U.S. offshore wind energy begins
The Deepwater Wind project at Block Island nears completion in August 2016. Deepwater Wind photo.
Delayed by politics and the steep decline in competing energy prices, offshore wind energy in U.S. waters finally got going in 2016.
A year after installing foundations from Gulf Island Fabrication, Houma, La., Deepwater Wind LLC erected five 6-MW GE Haliade turbines at its Block Island, R.I., site starting Aug. 4.
“The U.S. offshore industry has started. First turbine installation complete at 8:30 a.m.,” Deepwater CEO Jeff Grybowski announced on Twitter, after the 433'×128' jackup vessel Brave Tern lifted the last rotor blades into position. At 589' the turbines are among the tallest in the world.
The jackup vessel was operated by Fred. Olsen Windcarrier AS of Oslo, Norway, one of the European operators with offshore wind turbine experience being tapped by Deepwater and other aspiring U.S. developers.
But down on the water was the first U.S.-built crew transfer vessel — the Atlantic Pioneer, christened April 22 by Atlantic Wind Transfers of North Kingston, R.I., and built by Blount Boats at its Warren, R.I., yard.
The $4 million, 70'6"×24'×4' aluminum catamaran entered service in May, carrying workers and up to 15 tons of equipment. A pair of MAN D2862 LE466 engines, each producing 1,400 hp at 2,100 rpm, drive the CTV at speeds up to 30 knots. The 2,800 combined horsepower has another purpose — driving the bow of the Atlantic Pioneer hard against the base of turbine towers, ensuring adhesion of the boat’s massive bow bumper while technicians safely climb a podium stair to the towers.
“The boat is basically built around the technicians,” said Charles Donadio, president of Atlantic Wind Transfers. The cabin was built as a separate structure, isolated from the hull’s vibration, with shock mitigating suspension seats for the crew and technicians. Blount built the vessel under license from South Boats IOW, a United Kingdom-based designer and builder of CTVs for the British and European offshore wind industry. Based on the company’s 21-meter design, it is midsized as CTVs go.
Other wind developers and equipment suppliers took note of the Blount design. Fishermen’s Energy LLC, which has plans for a five-turbine project similar to Deepwater Wind’s off Atlantic City, N.J., has been in discussions with Tuckahoe, N.J., boatbuilder Yank Marine about designing a vessel for their crews.
Across the Atlantic, British and Norwegian shipyards are eyeing the U.S. market in search of U.S. partners, the way Blount and South Boats collaborated on the first U.S.-flagged CTV. Aluminum Marine Consultants Ltd. is another company like South Boats located on the Isle of Wight in the English Channel.
“Aluminum welding was here 50 years prior, probably because we built flying boats here in the 1920s,” said AMC commercial director Rob Stewart. The industry trend is toward bigger turbines and bigger boats, and they anticipate similar needs in the U.S. industry as offshore leases develop in federal waters.
“We started with 15-meter (49') boats and now we’re going to 26 meter (85') boats,” Stewart said. That new class is powered up to 2,800 hp, a requirement not only for commuting to the job sites, but also for pulling up to the turbine towers for disembarking and picking up crews and cargo.
The Atlantic Pioneer. Blount Boats photo.
In October the federal Bureau of Ocean Energy Management announced its final proposal to lease almost 80,000 acres in the New York Bight south of Long Island, close to busy traffic lanes into the port. Meanwhile DONG Energy, based in Denmark and a major player in the northern European wind industry, showed its growing interest in the U.S. market by acquiring leasing rights to large offshore tracts near Massachusetts and New Jersey. — Kirk Moore
4) New York City to launch new ferry service
A rendering of the Incat Crowther-designed ferries being built for New York’s Citywide Ferry Service.
In about six months New York City will launch its new Citywide Ferry Service, one of the most ambitious public water transit ventures ever. It is a huge bet by the administration of New York Mayor Bill de Blasio — and one that could have big payoffs to the city’s industry partners.
The first in a planned fleet of 19 Incat Crowther-designed 85'4"×26'3" catamarans will be delivered in spring 2017 by Horizon Shipbuilding Inc., Bayou La Batre, Ala., and Metal Shark, Jeanerette, La., marking the Gulf Coast shipyards’ first big foray into the ferry sector.
Powering the vessels will be Moteurs Baudouin M26.3 diesels. The contract marks a major coup for the French-built diesel manufacturer and its distributor, Motor-Services Hugo Stamp Inc., Fort Lauderdale, Fla., in the U.S. commercial marine market.
To operate the system, city officials chose San Francisco-based Hornblower Cruises & Events, a longtime operator of tour and charter vessels in New York that formed a new subsidiary, HNY Ferry Fleet LLC. Its job is to make the system work, with a subsidized fare of $2.75 one-way, on par with the city subway system.
All of those choices were controversial, especially given that other longtime local ferry operators like New York Water Taxi and NY Waterway were unsuccessful in their bids.
“Usually, when purchasing a series of vessels of this scale, the first one is delivered about a year after the contract is signed, and subsequent boats come every six months,” wrote Tom Fox, a founder of New York Water Taxi and prominent industry figure, wrote in a skeptical commentary for Crain’s New York Business. “Will the product be a chimera? Or if the boats do materialize, will the city end up with a fleet with production problems, a short lifespan and high operating and maintenance costs?”
Hornblower, Horizon and Metal Shark say they knew what they were getting into. Proposals from about a dozen shipyards were considered and “most of the yards could meet the schedule,” said Cameron Clark, vice president and general manager of Hornblower’s New York operations.
Clark said they were impressed with the boatyards’ track records for fast turnaround, and willingness to “rethink how you build boats.” One aspect of that is Horizon Shipyard’s proprietary Gordhead software that allows customers, builders and designers to view construction progress and communicate in real time. Incat Crowther too has its Gulf Coast team on the ground to work with the yards.
In New York, Hornblower’s operations will be based at the old Brooklyn Navy Yard, under plans developed between the company and the city’s Economic Development Corporation. The homeport will have a team of in-house technicians trained by Moteurs Baudouin to maintain the new engines.
Meanwhile the harbor’s private commuter ferry operators are stepping up their game.
NY Waterway commissioned the Betsy Ross, the second 109'×31'×6' aluminum catamaran built by Yank Marine, Tuckahoe, N.J., to carry up to 400 passengers. Along with its sistership Molly Pitcher, the two vessels represent a $10 million investment, and marked the 30th anniversary since NY Waterway founder Arthur E. Imperatore started the business with a single boat crossing the Hudson River.
That investment has paid off, with ridership at the sisterships’ terminal at Belford, N.J., up 18% since September 2015, the company said.
Not to be outdone, competitor Seastreak LLC engaged Incat Crowther and Gulf Craft LLC, Franklin, La., to build a 600-passenger high-speed catamaran ferry. The 147' design is a step up from Seastreak’s current stable of Incat Crowther designs, the largest of which carry up to 505 passengers.
The company runs daily commuter service to Manhattan and seasonal connections to Martha’s Vineyard and Nantucket off Massachusetts. The planned boat is needed to “provide an operational advantage in a very competitive market,” Incat Crowther said in announcing the contract. — K. Moore
5) USMMA investigates sexual harassment
The 2016 graduating class of Kings Pointers stand during their graduation ceremony at the U.S. Merchant Marine Academy in Kings Point, NY, June 18. U.S. Army photo.
In June, the U.S. Merchant Marine Academy (USMMA) and the Maritime Administration said they were reviewing a proposal from the industry to address long-simmering concerns over sexual harassment and hazing of academy midshipmen during their now-suspended Sea Year assignments.
More than 90 industry representatives showed up for a “call to action” meeting June 24 at U.S. Department of Transportation headquarters in Washington, D.C. The session was convened for the maritime industry to present a proposal that improves the quality of life onboard vessels, and provides a working and training environment that is both safe and respectful for the midshipmen,” according to a joint statement issued through the academy.
The traditional Sea Year, which sends sophomores and juniors to sea for around 300 days, was suspended — with an announcement made during the academy’s June 16 graduation weekend at the Kings Point, N.Y., campus — amid concern that not enough was being done about recurring reports of harassment. USMMA officials cited concerns over “safety and mutual respect” for midshipmen serving on U.S.-flagged merchant vessels.
The academy and Marad said no specific cases triggered the decision. Marad Administrator Paul “Chip” Jaenichen said in June that there have been “isolated incidents,” adding “it’s the harassment, it’s the hazing, it’s the coercion, it’s the retaliation,” that some midshipmen experience from crews.
Surveys in recent years portray concern at the academy about its own culture and what midshipmen experience on vessels. A 2014-2015 survey identified four major concerns, including “inadequate sexual assault prevention training for midshipmen embarking on Sea Year,” and “insufficient engagement between the academy and the maritime industry on sexual harassment and sexual assault issues.”
The survey notes that shipping companies involved with Sea Year are required to have zero-tolerance policies for sexual harassment, and midshipmen are able to report incidents either through company procedure or to academy officials. “Sea Year is and will remain a core element of the academy’s academic program,” USMMA officials said in announcing the suspension in June. “There is a need to ensure the safety and mutual respect for all midshipmen on vessels during Sea Year.”
In October, the USMMA Alumni Association and Foundation created a task force and commissioned a study to address sexual misconduct at the academy. The task force will “review best practices on preventing and responding to sexual assault and harassment and provide recommendations on addressing sexual misconduct on USMMA’s campus and during the Sea Year core curricula training.”
The task force is chaired by Capt. Eileen Roberson, U.S. Navy (Ret.), and includes three additional women and three men. Five members — including 1980 graduate Roberson — are USMMA alumni.
“Task Force members represent diverse parts of the maritime industry and come from different maritime schools. We all care deeply about this issue and are united in our commitment to finding effective ways to ensure positive and lasting change,” Capt. Roberson said.
The group has retained Self Solutions, a veteran-owned business, to conduct research into sexual misconduct at the academy. The final report on its findings will be made public. “We stand ready to support the U.S. Merchant Marine Academy in developing a facts-based plan for eliminating sexual misconduct and ensuring that current and future midshipmen are effectively trained in a safe environment,” Roberson said. “Self Solutions is the right company for the job given their extensive experience analyzing behaviors on ships and academy campuses.”
Also in October, Sen. Kirsten Gillibrand, D-N.Y., proposed a plan designed to end the “scourge” of sexual assault and harassment of midshipmen at USMMA. Gillibrand wants to provide midshipmen with more resources and support to report abuse and harassment, and better train staff at the academy to respond to and prevent sexual assault. The plan also called for the Department of Transportation inspector general to be trained and empowered to investigate reports of abuse.
“The price of an education and job training at sea cannot be sexual assault and harassment,” Gillibrand said in a statement. “The U.S. Merchant Marine Academy is the premier school for midshipmen to start careers supporting the military and on commercial carriers at sea — to become the best mariners in the world — so to have more than six out of 10 female midshipmen and more than one out of 10 male midshipmen say they were sexually harassed in a year is completely unacceptable. To have 17 percent of female midshipmen sexually assaulted is outrageous.”
Gillibrand cited numbers from the 2014-15 survey in which 63% of women and 11% of men at the academy said they had been sexually harassed. The same survey found that harassment and assault were seldom formally reported because respondents felt uncomfortable or feared retribution.
Gillibrand said she would introduce the reform plan as Senate legislation. — Ashley Herriman, K. Moore and David Krapf
6) Inland waterways traffic cools off
For the inland waterways, 2016 has been unusual: a down cycle has emerged in almost all commodities transported by barge. There are many reasons behind this. Among them is a worldwide economic slowdown, especially in China; environmental regulations and competition from natural gas that has produced a big decline in the use of coal; a sharp decline in oil prices that has rippled through the barge business; a strong dollar that makes exports more expensive; and weakening of South American currencies that make certain grain imports cheaper than U.S.-sourced grain, thus reducing demand for inland barge movements.
“Nearly every sector of our business is facing very difficult market conditions, and it is not clear yet where the bottom of the trough is,” Tom Allegretti, president and CEO of the American Waterways Operators, said at an industry conference in March. “We all know that this is a cyclical business, but what’s particularly challenging today is that all the major commodity groups — petroleum, coal, agricultural products — are in a down cycle.”
The downturn in the coal market has added supply to the covered hopper barge fleet. David Krapf photo.
In addition, the industry has had to deal with other challenges in 2016. It must comply with Subchapter M, the new federal towboat inspection rule, secure stable federal funding to modernize the nation’s antiquated locks and dams, and pass a law that ends a patchwork of overlapping and contradictory state and federal regulations that govern the discharge of ballast water that is costly to the industry.
On top of this, presidential and congressional elections injected a sense of uncertainty and worry into the economy that put barge operators on edge.
“As the election approaches, everything in Washington, D.C., is viewed through a highly political lens, and it becomes even more difficult than usual for policymakers to focus on the people’s business,” Allegretti added.
But the biggest problem for the inland barge industry has been the global slowdown that has weakened the export market for many U.S. goods. A big factor is China’s declining growth rate. China has been a huge consumer of U.S. exports that move on U.S. waterways. Slowdowns in European and developing countries have also hurt U.S. commodity exports.
“Everything is down simultaneously, except grain, which seems to be making a comeback as the export market comes back to us,” Ken Eriksen, senior vice president of transportation at Informa Economics, told WorkBoat in June. “And barge rates are still flatlined. Usually we have one segment that is doing well, but everything is down. We have not hit bottom yet.” The worst market has been coal, which has suffered a deep drop. As a result, some companies have converted open barges used for coal to covered barges for grain. This has hurt demand and expanded supply in the covered hopper market. Eriksen said he expects the coal downturn to be long term due to competition from natural gas and stricter federal emissions rules.
One bright spot is corn. Corn will continue to help the dry cargo barge market, and the Panama Canal expansion could increase barge movements on the U.S. waterways.
The liquid tank barge market is suffering as well, except for chemical movements. Several tank barge operators have been hurt by a combination of weak oil prices and pipeline projects coming online, which lessen the demand to move crude by inland barge. A surge in North American production over the past few years, due mostly to increased shale oil production, encouraged many companies, including Kirby Corp. and American Commercial Lines to expand their tank barge fleets. Houston-based Kirby’s net earnings in the third quarter were $32 million, or 59 cents per share, compared with $56.8 million, or $1.04 per share, for the 2015 third quarter. Kirby’s barge utilization was in the low-to-mid 80% range, down from the high-80% to low-90% range during the second quarter.
“The relatively sharp drop in utilization that we first experienced in July continued through most of the third quarter,” David Grzebinski, Kirby’s president and CEO, told analysts during Kirby’s October conference call with analysts. In response to the lower utilization, Kirby reduced its average towboat count by approximately 6% in the third quarter. “For the industry overall, weak utilization increases the likelihood that we will see a more rapid number of retirements and a decline in new equipment construction across the industry. This will facilitate an overall rebalancing in the market.” Grzebinski sees improvement in the market next year. “While the exact timing of recoveries in our markets is still unclear, we do believe the inland market will come into supply and demand balance some time in 2017” and pricing will improve. — Pamela Glass and D. Krapf
7) Congress debates icebreaker program
With the Coast Guard’s only heavy polar icebreaker aging rapidly, legislators started putting serious cash into spending proposals for a new vessel and some suggested leasing a private vessel as a stopgap measure. But how much actual progress will be made toward new or slightly used equipment is anyone’s guess as polar region activity grows while U.S. resources limp along.
The Coast Guard has only two icebreakers: the 399'×83'6"×28' Polar Star, built in 1976, and the 420'×82'×29' medium-duty Healy, launched in 1997. The heavy-duty Polar Sea, built in 1978, was put on inactive status in October 2011 after engine failure and is a source of spare parts to keep sister Polar Star running. By contrast, Russia has 41 icebreakers with 11 more planned.
“The Coast Guard requires at least two heavy icebreakers to recapitalize the existing fleet and meet current mission demands,” a spokesman said. “Later this year we will make a formal decision on reactivating Polar Sea or extending the service life of Polar Star until new assets are delivered.”
The heavy-duty Polar Sea was put on inactive status in 2011 after engine failure and is a source of spare parts to keep sister Polar Star running. USCG photo.
A Coast Guard condition assessment suggests that reactivating Polar Sea would be “a lengthy, costly and risky approach to sustaining current heavy icebreaker capability,” the spokesman said. “Work could take twice as long as reactivating Polar Star at multiple times the cost.” A final decision will be made once an alternatives analysis with cost estimates is complete by year’s end.
A new heavy icebreaker could cost $900 million to $1.1 billion. The Polar Star returned to service in 2013 after a three-year $90 million overhaul, and its life expectancy is another four to seven years. A recent study by the Government Accountability Office said there would be a three- to six-year gap in heavy icebreaking capability before a new icebreaker is operational.
The Senate has included $1 billion in the defense bill for a new heavy icebreaker.
Meanwhile, the Coast Guard and members of a House committee differed on ways to temporarily augment the fleet. Before the House Subcommittee on Coast Guard and Maritime Transportation in July, Rep. Don Young, R-Alaska, pressed Coast Guard Vice Commandant Adm. Charles Michel on why the service wouldn’t consider using a privately owned icebreaker, which had provided services to Royal Dutch Shell before the oil giant halted its Arctic drilling operations. That vessel is reportedly the Aiviq, a 361'×80'×23' ice-class anchor handling/tug supply vessel owned by Edison Chouest Offshore, Cut Off, La.
“Our commandant actually personally visited that vessel. We are of the opinion that that vessel is not suitable for military service without substantial refit,” Michel told Young.
“You’ve always hated the idea of not owning the ship,” Young retorted. “That’s what I call a bullshit answer … military service? I’m talking about moving ice.”
Committee Chairman Rep. Duncan Hunter, R-Calif., also asked if a non-military vessel could do an icebreaker’s job. “We have very specific requirements for our vessels,” Michel said. Their missions go beyond just breaking ice to “the assertion of national sovereignty.”
Then in September, Hunter asked House leadership for funding for the Coast Guard to lease or perhaps acquire a vessel. “In the case of the Aiviq, for instance, a bareboat charter would cost $22 million per year. A full charter would cost $33 million per year. And the purchase price is approximately $150 million — a great value to the Coast Guard without presenting any limitations associated with a lease,” his letter said.
The Aiviq was towing Shell’s drilling rig Kulluk before the rig ran aground in Alaska in late 2012. Both Young and Hunter have received campaign contributions from principals of Edison Chouest, Federal Election Commission records show. “Hunter’s been supporting the idea of leasing vessels to bridge the icebreaker gap for longer than it’s been reported, and the Aiviq is the only medium-grade vessel in America that’s capable of meeting several Coast Guard missions — a fact the Coast Guard now concedes,” a Hunter spokesman said.
Hunter also received a response from Michel to his letter about the Coast Guard’s views on leasing an icebreaker, saying that market research on the Aiviq determined the vessel could “under certain legal and operational conditions, execute at least some of the Coast Guard’s 11 missions.” But it’s unclear whether it could fulfill Coast Guard icebreaker requirements because it hasn’t undergone thorough testing in ice trials and isn’t configured to conduct all of the icebreakers’ missions, Michel said.
The Coast Guard is now asking shipbuilders how it might speed up its icebreakers program, and obtain the first new polar vessel by late 2023.
A request for information (RFI) issued Oct. 25 requests “feedback on the notional Heavy Polar Icebreaker acquisition approach and schedule,” the Coast Guard’s early plan toward an eventual fleet of three heavy and three medium icebreakers.
“In the proposed high-level acquisition approach, government-funded industry studies would be conducted to mature designs, reduce program risk, and receive industry feedback on ways to make the polar icebreaker affordable while providing the capability to the fleet as quickly as possible,” the RFI states. Those studies will be followed by a single contract for design and construction of the heavy icebreaker class. — Dale K. DuPont
8) River cruise revival continues
The U.S. rivers and waterways cruising renaissance that began in earnest in 2012 has shown little sign of slowing down. This year has been especially busy with new passenger vessels, refurbished older boats, extended seasons and announcements of more vessels to come.
The market is being propelled in part by the unsettled political climate abroad and in part by those looking for cruises to new destinations on something other than a megaship with thousands of passengers. Blount Small Ship Adventures, for example, gets people who say, “I didn’t know you could take a boat from the East Coast to Chicago,” said Nancy Blount, president of the Warren, R.I., cruise line that operates the 184' 83-passenger Grande Caribe and Grande Mariner. One of their cruises is a 16-day trip from Rhode Island to the Windy City via bays, rivers, canals and four of the five Great Lakes.
The initial riverboat rivalry featured American Cruise Lines (ACL) and the American Queen Steamboat Co. offering regular overnight journeys.
The latest entrant is French America Line’s Louisiane, which set sail in October from New Orleans. Fresh from a multimillion-dollar makeover, the former 203'8", 150-passenger Columbia Queen will cruise the Mississippi, Ohio, Tennessee, Cumberland and Red rivers and the Gulf Intracoastal Waterway.
In May, ACL’s 266' 185-passenger America began its inaugural season in New Orleans, giving the Guilford, Conn., company two vessels on the Mississippi and two on the Columbia/Snake rivers — one of the country’s hottest cruise markets. In July, the line launched the 170-passenger American Constellation, which will offer a variety of East Coast itineraries starting in the spring of 2017 and give the line a fleet of nine ships.
American Queen Steamboat's American Queen on the Mississippi River in New Orleans. David Krapf photo.
American Queen in late August bought a 280' casino boat it will convert into a 166-passenger all-suite vessel to be named American Duchess. The boat’s expected to set sail in June on the inland rivers.
“We’re starved for more capacity,” Ted Sykes, president and COO of the Memphis, Tenn.-based line told WorkBoat. The company now operates the American Queen on the Mississippi and the American Empress in the Pacific Northwest. As for another possible addition, he said, “This one will not satisfy the demand.”
“Over the last four years the overnight riverboating market has really exploded,” said Matt Dow, assistant marine operations manager of the New Orleans Steamboat Co., which plans to convert an idled casino boat into a dinner and sightseeing vessel. The former 185'×56' diesel electric-powered sternwheeler will join the New Orleans company’s Natchez on the Mississippi River later next year after renovations. Does Dow see more than day cruises in his future? “We’re not looking into anything serious for overnight right now,” he said.
Still waiting to get back in the game is the Delta Queen, which the National Trust for Historic Preservation put on its 2016 list of America’s 11 Most Endangered Historic Places. The 1926 paddlewheeler, currently docked in Houma, La., needs a congressional exemption from current fire hazard restrictions. The legislation is critical for securing an estimated $5 million in financing for restoration and renovation. — D.K. DuPont
9) LNG use moves forward
Liquefied natural gas set major milestones in the U.S. maritime industry in 2016, both as an up and coming marine fuel, and an expanding commodity driving new exports out of Gulf Coast ports.
Early in the year Harvey Gulf International Marine put into service the first U.S. dual-fuel LNG powered vessel, the 310'×64'×25'6", 5,200-dwt OSV Harvey Energy. The occasion was notable too for the vessel’s initial fill-up. Harvey Gulf opened the first commercial marine LNG fueling terminal at its Port Fourchon, La., operations base. The Harvey Energy and sistership Harvey Power, named the 2015 Boat of the Year by WorkBoat magazine, are the first in a class of six dual-fuel OSVs.
Easier maintenance, cleaner engines and boats, and long intervals between overhauls all figured in to Harvey Gulf’s decision to make a decisive commitment to the new fuel, said Chad Verret, the company’s executive vice president in charge of Alaska and LNG operations.
The 310'x64' OSV Harvey Energy, the first U.S. dual-fuel LNG vessel, takes on an LNG bunker at its Port Fourchon, La., terminal. Harvey Gulf International Marine photo.
Oil remains cheap for now, but the long-term reasoning that LNG is the wave of the future has brought other major new vessels into service.
In January TOTE Maritime gassed up its new 764', 3,100-TEU containership Isla Bella for the first time, using bunkering trucks at its Jacksonville, Fla., terminal. LNG will fuel the Isla Bella and sistership Perla del Caribe on their route to San Juan, Puerto Rico.
Like Harvey Gulf, TOTE’s plan is for a permanent fixed LNG bunkering station in San Juan and another at Tacoma, Wash., for its Pacific Northwest operations. The other major Puerto Rico line, Crowley Maritime, likewise has a pair of LNG combination container-ro/ro ships scheduled for delivery from VT Halter Marine in 2017. With LNG marine power comes more need for bunkering options. In September Harvey Gulf said it had approval from the Coast Guard and American Bureau of Shipping for a design to build an LNG articulated tug-barge capable of carrying 4,000 cubic meters of fuel.
With a 128'×42'×19', 5,100-hp tug and a 324'×64'×32'6" barge, the ATB will be capable of ship-to-ship fueling and shoreside resupply.
With the first U.S. LNG bunkering barge under construction at Conrad Industries, the shipyard and The Shearer Group looked to the Coast Guard to approve plans for a new inland waterways towboat powered by a Wärtsilä dual-fuel propulsion system.
On the rivers, “the infrastructure for supplying fuel (LNG) to towboats will happen. We just need several parties to get together to make it happen,” said designer Ed Shearer of The Shearer Group.
LNG can lower shipping rates and save operators 15 cents per ton over diesel power for the same amount of cargo, said John Hatley, Wärtsilä’s vice president ship power.
“It’s the cleanest fuel after [engine] combustion that we have, and we have 200-years-plus of gas that’s going to be available” in U.S. reserves, he said.
Exports of that methane resource are growing, with Gulf of Mexico ports ramping up to supply Japan and other Asian buyers with shipments through the newly widened Panama Canal. With Cheniere Energy Inc., the first exporter of U.S. shale gas opening a second terminal on the Sabine Pass River on the border between Texas and Louisiana in Cameron Parish, La., other companies are looking to expand port operations in the area. — K. Moore
10) El Faro’s voyage data recorder recovered
The August recovery of El Faro’s voyage data recorder (VDR) hopefully will shed light on the ill-fated containership’s final hours.
The VDR has yielded 26 hours of information including bridge audio, navigational data and onboard radar images before TOTE Maritime's 40-year-old steamship sank en route to San Juan, Puerto Rico during Hurricane Joaquin on Oct. 1, 2015, killing all 33 aboard.
The El Faro voyage data recorder capsule on top of El Faro’s navigation bridge. Photo courtesy NTSB.
The recording that began early on Sept. 30 after the 790'×95' El Faro left Jacksonville, Fla., captures the master and crew discussing flooding, the vessel’s list and loss of propulsion. It ends about 10 minutes after the master sounded the abandon ship alarm northeast of Crooked Island, Bahamas, the National Transportation Safety Board (NTSB) said.
The VDR was the last of the key components to be found, and the board released a transcript of the audio in December.
VDR information will be included in the Coast Guard Marine Board of Investigation’s (MBI) third and final hearing on the El Faro sometime this winter, a spokesman said. “The MBI is currently still in the fact gathering portion of this investigation and will only move toward analysis after the third hearing is complete.”
At a hearing in May, a former captain told the Coast Guard that El Faro and sistership El Morro could be slower to recover from rolls when heavily loaded, a characteristic that led its officers to add more margin of safety when calculating the effects of loading.
When the ships rolled, they came back with “a very slow return,” said Capt. Jack Hearn, who served on TOTE’s Sea Star Line and charted a course to avoid Hurricane Sandy in October 2012. “You could feel the ship as it leaned over.” The board also heard how El Faro Capt. Michael Davidson had planned his course to pass west and south of Joaquin’s forecasted path. But the storm took its swing toward the El Faro’s path as the vessel suffered a major casualty to its main propulsion.
El Faro was already scheduled for replacement on TOTE’s Puerto Rico route by the newly delivered 764' LNG-powered containership Isla Bella.
TOTE also is involved in litigation involving El Faro, and as of October the company said it had reached financial settlements with 23 of the families involved “through a respectful and equitable mediation process.” — D.K. DuPont
