BC Shipping News - March 2013 by McIvor Communications

INSIDE: DNV’S SHIPPING 2020 FORECAST

BC SHIPPING NEWS

Volume 3 Issue 2

www.bcshippingnews.com

March 2013

Commercial Marine News for Canada’s West Coast.

Industry Insight

Captain Kevin Obermeyer, President & CEO, Pacific Pilotage Authority: A guiding force for safety

Pilotage

Coast pilots cherish their hard-earned reputation for excellence 12-MAR

Passenger Vessels

CP PM# 42161530 MAR 2013

Continuous improvement in the maritime industry

Plus:

Petronas/Progress deal: Just whose ‘net benefit’ is it?

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March 2013

Volume 3 Issue 2

On the cover and below: Captain Roy Stewart brings HS Carmen, an oil tanker, along side Westridge dock for loading. Photo (and below) courtesy of Dave Roels (www.daveroels.com).

Cover Story

Contents

Coast pilots cherish their hard-earned reputation for excellence by Ray Dykes

10 Industry insight A guiding force for safety The importance of pilotage on the West Coast cannont be understated. With that in mind, the Pacific Pilotage Authority’s President & CEO is pleased to report a 99.97 per cent success rate for safe passage.

30 Passenger vessels

Continuous improvement in the maritime industry

Nigel Greenwood writes about the science of continuous improvement — while focused on passenger vessels, it is a subject that is clearly of interest to the entire shipping industry.

Industry growth 48 Engines Wãrtsilã off to a good start on the Island 51

Life-saving equipment

Survitec Group announces impressive new facility

D E P A R T M E N T S

F E A T U R E S

Captain Kevin Obermeyer

6 18

News briefs/industry traffic

Training

Spill response

Shipping forecast

36 39

Letters to the editor and news

History lesson

Watch out! Navigating B.C. waterways — by Lisa Glandt BCMEA Training Centre project gets underway New response vessel adds to WCMRC’s assets What will the world fleet look like in 2020? — by DNV

Vessel traffic

A model for the world — by K.Joseph Spears

Environment

Garbage management — by Julie Gedeon

LNG terminals

Legal affairs

Short sea shipping

Technology

Petronas/Progress: Just whose ‘net benefit’ is it? — by Jaya Prakash Suppliers maritime lien for services — by Thomas S.Hawkins Short sea shipping may offer solutions for port and road congestion LED floodlight technology March 2013 BC Shipping News 3

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March 2013 Volume 3/Issue 2 Publisher McIvor Communications Inc. President & Editor Jane McIvor Contributing Writers DNV Shipping 2020 team Julie Gedeon Nigel S.Greenwood Captain Kevin Obermeyer K.Joseph Spears

Ray Dykes Lisa Glandt Thomas S.Hawkins Jaya Prakash Michael Woolley

Advertising and Subscriptions Jane McIvor Phone: 604-893-8800 / Email: jane@bcshippingnews.com ANNUAL SUBSCRIPTION Canada Three Years $99.95 Cdn* Two Years $69.95 Cdn* One Year $37.50 Cdn* USA One Year $60.00 Cdn Other Countries One Year $75.00 Cdn Single copies Outside of Canada *Canadian rates add 12% HST

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4 BC Shipping News March 2013

The opinions expressed by contributing writers are not necessarily those of the Publisher. No part of this magazine may be reproduced in any form without written permission of the publisher.

Photos by Dave Roels, www.daveroels.com

EDITOR’S NOTE

Lack of balance finally striking a nerve

It has been frustrating to watch environmental groups spout out mis-information...while the maintream media packages it up and presents it back to the public with a menacing tone.

t’s happening. There are more and more people speaking up about the insanity of the current situation in B.C. — i.e., protesters at every street corner who are opposed to development of any kind. The lack of balanced discussion and the public’s realization that environmental groups will not be satisfied until all industry has been driven out of B.C. is finally hitting home. It was invigorating to listen to Andy Smith, President of the BC Maritime Employers Association, at the recent ground-breaking ceremony for their new Waterfront Training Centre. “All of us have to remember that this is our bread and butter,” he said. “We need to stand up and be counted.” Member of:

And the feedback on Michael Davis’ article last month (“Pipeline wars”) has been encouraging. Captain Mike Armstrong from Fraser River Pilots said: “finally, someone has nailed it, out loud...I’ve been feeling what Michael said for some time now. Hopefully, the marine industry will be guided by this and set a better course forward.” I think, for me, the final straw was the news reports of complaints about noisy foghorns in the harbour during the last foggy spell. I was astounded that: 1) there were people who chose to live next to a sea without realizing there would be marine activity; and 2) this actually made the news. It has been frustrating to watch environmental groups spout out mis-

information and misleading statistics while the maintream media packages it up and presents it back to the public with a menacing tone. There has been very little balanced discussion. Yes, we need to protect the environment but does the public realize the efforts that have already gone into researching new technologies and developing better practices? As Andy said, it’s time to stand up and be counted. Maybe it’s not too late to engage the public with a positive message, one that informs, educates and seeks balance rather than flatout rejection of any maritime activity. It’s a big maybe but we need to try. It’s time to speak up. — Jane McIvor

Local traffic...

Thanks to Dave Shirlaw for submitting this photo (taken at Earl’s Cove) of the Hecate Prince and the Forest Transporter. The Hecate Prince is a 70-foot single screw with a breadth of 30 feet and a 14-foot draft. The Forest Transporter is a 90x30-foot RO/ RO landing craft with a six-foot draft. Both vessels are owned and operated by Gemini Marine Services (GMS) and are Transport Canada certified. (Details from GMS.)

International Sailor’s Society Canada

Got a great photo? Send it to jane@bcshippingnews.com to be included in our new feature on ships visiting our local waters. March 2013 BC Shipping News 5

news briefs Washington State Ferries explores LNG

NORTH WEST & CANADA CRUISE ASSOCIATION

Representing eleven major cruise lines operating in the Pacific Northwest, Canada, Alaska and Hawaii. NWCCA member lines are at the forefront of environment, security and safety initiatives. NWCCA provides community and government relations and representation for development of local opportunities.

“As the biggest ferry operator in the U.S., and the third biggest in the world, WSF can really lead the way for its industry. In DNV, we can now clearly see a tipping point when it comes to global interest in LNG-fuelled ships. Knowing that LNG as a fuel helps reduce emissions and costs, our team of researchers, engineers, and business analysts are looking forward to assisting WSF and other companies with managing risks related to their LNG operations,” says Kenneth Vareide, Director of DNV’s maritime operations in North America. “I am pleased to have DNV aboard to assist Washington State Ferries in this important look at liquefied natural gas a possible fuel for the fleet, and look forward to these next steps that WSF will take with DNV,” said Washington State Department of Transportation (WSDOT) Assistant Secretary David Moseley. In terms of next steps, WSF has developed and issued a request for proposals for the retrofit of its six Issaquah Class ferries. The RFP requires the contractor to purchase and install all the required equipment and get all the required approvals to allow the vessel to obtain a certificate of inspection from the U.S. Coast Guard for operation with LNG as a fuel. Proposals are due March 4. Photo source: Washington State Department of Transport

he trend toward LNG as the fuel of choice continues with the announcement from Washington State Ferries (WSF) that they will be exploring options to use liquified natural gas for six Issaquah Class ferries. WSF has received conceptual approval from the U.S. Coast Guard to retrofit the propulsion systems with new engines using LNG. The vessels would be fueled by trucking in LNG from sources in B.C. or the Pacific Northwest. “WSF burns more than 17 million gallons of ultralow sulfur diesel each year — and it’s our fastest growing operating expense. LNG has the potential to significantly reduce emissions and the cost of fuel,” said Washington State Department of Transportation (WSDOT) Assistant Secretary David Moseley. Washington State Ferries has partnered with Det Norske Veritas (DNV) to complete a safety and security plan, risk assessment and operational manual for its LNG conversion project. DNV has extensive experience with LNG-fuelled ships and the infrastructure they demand. Thirty-five of the 37 LNG-fuelled vessels in the world, including the very first in 2000, have been built to DNV’s standards. Of these, 16 are car/passenger ferries. Particularly for short-sea shipping, LNG technology can make a big difference quickly, when it comes to reducing air emissions.

Members:

Carnival Cruise Line Celebrity Cruises Crystal Cruises Disney Cruise Line Holland America Line Norwegian Cruise Line Oceana Cruises Princess Cruises Regent Seven Seas Royal Caribbean International SilverSea Cruises

www.nwcruiseship.com 6 BC Shipping News March 2013

Renderings of LNG tanks on an Issaquah Class ferry.

letters to the editor

EARTH MATTERs A leading environmental and energy services company, Tervita is a key service provider to the marine industry, specializing in: Bilge water & sludge • Waste fuel & oil • Hazardous waste Recycling & disposal of solid waste & garbage Victoria, B.C. (250)-380-0436 24hrs: 1-800-327-7455

tervita.com

Caldwell & Co. Maritime Law

• • • • •

Vessel Transfers & Mortgages Insurance Claims General Litigation Arrest & Seizure of Vessels Shipbuilding Contracts

604-689-8894 / bcaldwell@admiraltylaw.com 401 - 815 Hornby Street, Vancouver, B.C. V6Z 2E6

www.admiraltylaw.com/caldwell/cv.pdf

Brad Caldwell

B.C.’s Largest Database of Used Boats DERBI Thunderbird Marina UN RD

Something to say? Send a letter to jane@bcshippingnews.com. BCSN

he 55th Annual General Meeting and Conference of the Association of Canadian Port Authorities will be held in Nanaimo from August 18 – 21, 2013. “Nanaimo is looking forward to hosting the Canadian Ports industry conference and we have an exciting program and variety of activities arranged for the our delegates,” commented Bernie Dumas, President & CEO of the Nanaimo Port Authority. The theme for this year’s event is partnership within the port industry and there will be an impressive line-up of speakers to touch on such issues as ‘Planning’, ‘Funding’ and ‘Transportation’ Partnership to name a few. The conference will be at the Nanaimo Conference Centre and an evening reception will be held at the Port’s new corporate office near the cruise vessel terminal.

(West Vancouver): 604.921.7457

T S AL

Reed Point Marina (Port Moody): 604.939.0499

Dear Jane, Re: F.I.Hopkinson’s letter, February BCSN It is always nice to hear from past members, and so F.I. Hopkinson’s letter was of special interest. It is true that both the National Association of Marine Surveyors (NAMS) and the International Institute of Marine Surveyors (IIMS) do represent a few surveyors in British Columbia, but neither of these organizations is Canadian, and the undivided purpose of the Association of Maritime Surveyors of BC (AMSBC) is to promote Canadian surveyors in the unique environment of British Columbia. I’ll admit that I was unaware that other surveying organizations are represented by highly qualified surveyors in B.C. — indeed I had thought it was the other way around. Regarding the IIMS, an international umbrella organization for marine surveyors around the world (with whom the AMSBC is affiliated), subscribers to their newsletter, The Record, will have read articles first published in this magazine and written by AMSBC members, and more to come no doubt. Furthermore, we are delighted to host their Distance Learning Education program here in B.C., an important tool for aspiring surveyors. Visit us at www. AMSBC.org to learn more about our role in B.C.’s marine environment. Thank you, Jane, for your contribution to our understanding of marine commerce on the West Coast — the December issue was the best yet. Yours sincerely, J. Tim Ellis, AMSBC IIMS IAMI, Secretary, AMSBC

Nanaimo set to host ports conference in August

Hello Jane: Regarding Michael Davis’ article on pipeline wars in the February edtion of BCSN, I found myself saying, with relief to myself: “finally, someone has nailed it, out loud”. I’ve been feeling what Michael said for some time now. Hopefully, the marine industry will be guided by this and set a better course forward. Captain Mike Armstrong Fraser River Pilots

Westport Marina (Sidney): 250.656.5832

www.thundermarine.com March 2013 BC Shipping News 7

industry traffic Ridley Terminals joins Green Marine Photo credit: Sam Beebe, Ecotrust (www.geolocation.ws)

idley Terminals Inc. has signed on as the first terminal in Prince Rupert to join Green Marine, the largest voluntary environmental program for the maritime industry in North America. The program encourages its participants, ship owners, ports, terminals and shipyards, to undertake concrete actions that go beyond regulatory requirements aimed at improving environmental performance and sustainability. A world-class bulk handling terminal in Prince Rupert, RTI is committed to environmentally sound terminal operating practices. “We are undertaking several actions to ensure the sustainability of our operations,” says Dennis Blake, RTI’s Senior Manager. “For example, we successfully completed an audit of our Environmental Management System (EMS), ISO 14001, in June 2012.” In the program, a company strives for continuous improvement in its environmental performance by seeking ways to reduce the risks associated with all operations. According to Green Marine executive director, David

Aerial view of Ridley Terminals on Ridley Island. Bolduc, joining the environmental program is a step towards this goal: “Ridley Terminals will be able to measure and compare its performance and to share best practices with other participants to further reduce the marine industry environmental footprint as a whole.” The Prince Rupert Port Authority (PRPA), where Ridley Terminals operates, was the first West Coast Green Marine participant in 2010 and led the way to the expansion of the program from coast to coast. “RTI’s membership demonstrates a strong environmental

Nigel S. Greenwood

MA, BSc, Master Mariner, FRIN, MNI Rear-Admiral, RCN (Ret’d)

www.greenwoodmaritime.com nsg@greenwoodmaritime.com / 250-507-8445

8 BC Shipping News March 2013

commitment from Prince Rupert’s marine community,” said Bolduc. PRPA CEO Don Krusel agrees: “At the Prince Rupert Port Authority, we are serious about environmental stewardship and this includes working with Port tenants and users to promote best practices and set an example of environmental leadership.” Already, RTI’s terminal design and materials handling procedures ensure both high performance and a clean operation. “To protect Prince Rupert’s rich coastal environment, we have made every effort to keep coal where it belongs — either on the terminal site or in the ships which carry it to customers”, explains Dennis Blake. Recognizing the growing participation of the West Coast with Green Marine, GreenTech 2013 will be held in Vancouver this year — May 29 to 31 at the Hyatt Regency. As media sponsor of the upcoming conference, BC Shipping News has partnered with Green Marine to publish articles that give just a small taste of the topics and issues to be raised. This month, on page 39, Julie Gedeon describes new research that studies garbage management in the marine industry. In the April issue of BCSN, Green Marine is teaming up with Seaspan Shipyards to provide an overview of the greening of their operations through their modernization process. To find out more details on GreenTech 2013, including the preliminary program, please visit: www.green-marine. org/annual-conference.

news briefs ClassNK registers 25 million gross tons in 2012; sets new records for newbuildings and class transfers

eading classification society ClassNK has announced its official registration figures for 2012, revealing that the Tokyo-based society registered nearly 1,000 vessels totalling more than 25 million gross tons in 2012. The announcement was made in late January following the meeting of the ClassNK Classification Committee, which reviews and certifies all registrations and certifications made to the ClassNK register. Figures released by the Committee reveal that ClassNK newly registered 964 vessels totalling 25.7 million gross tons in 2012, setting new records for both the number of vessels and total gross tonnage registered in a single year. This caps more than a decade of incredible growth by the Society, and marks the 10th straight year that ClassNK has set a new record in terms of total tonnage added to its register.

Additions to the NK register in 2012 were driven by newbuilding registrations, coinciding with a peak in newbuilding deliveries worldwide. As the shipbuilding industry has grown since the turn of the century, ClassNK has set a new record for newbuilding registrations every year since 2000, with NK registering a new record of 692 vessels totalling 20.3 million gross tons over the course of 2012. Speaking on the announcement, ClassNK Chairman and President Noboru Ueda stated: “Our achievements in 2012 have set a new standard for both ourselves and the maritime industry, but we firmly believe that these successes are only a reflection of the trust we have earned from ship owners and shipyards around the world.” Perhaps most surprisingly, registrations of vessels transferred to NK from

other class societies amounted to 272 vessels totaling 5.4 million gross tons, more than 28 per cent in terms of ship numbers and 21 per cent of gross tonnage registered by the society in 2012. This too marks a new record for ClassNK, roughly doubling the Society’s previous record of 137 vessels totaling 2.9 million gross tons set just last year in 2011. Addressing the record number of transfers, Mr. Ueda noted: “Our growth in Europe in particular has increased our registration of existing vessels, with transfers of German owners alone accounting for roughly 20 per cent of all existing tonnage registered in 2012.” Mr. Ueda went on to say that “While newbuilding registrations are forecast to fall in the years ahead, we expect to maintain our current record-breaking pace of registrations through this year, and hope to report similar figures in 2013.”

March 2013 BC Shipping News 9

INDUSTRY INSIGHT

A guiding force for safety

Captain Kevin Obermeyer President & CEO, Pacific Pilotage Authority

or Captain Kevin Obermeyer, President & CEO of the Pacific Pilotage Authority (PPA), the importance of pilotage on the West Coast cannot be understated. Despite the intricacies of our coastline and the unpredictable weather, pilotage provides a level of oversight that offers a 99.97 per cent success rate of getting ships to port (and back to open seas) safely. While his days may be filled with industry and public consultations, candidate examinations and regulatory reviews, Captain Obermeyer’s main focus — to ensure safe passage for vessels over 10,000 tonnes — never falls far from view. BCSN: Explain the structure of the Pacific Pilotage Authority (PPA) and its relationship to the pilots, specifically, to BC Coast Pilots Ltd. (BCCP). KO: The PPA is here to enforce the Pilotage Act — basically to administer the safe and efficient marine pilotage operation on the West Coast. Within the Pilotage Act, there are certain objectives to be achieved, such as setting regulations, defining compulsory pilotage areas or deciding which vessels or classes of vessels will be subject to pilotage. While the Act is the foundation of governance, there are the General Pilotage Regulations which are set by Transport Canada and apply to all four pilotage authorities in 10 BC Shipping News March 2013

Photo credit: Dave Roels (www.daveroels.com)

We’re unique in Canada and we may even be unique in the world. It’s rare to find a group of pilots licensed for an entire coastal area.

Canada (ourselves, the Great Lakes, the Laurentian and the Atlantic Pilotage Authorities), and the Pacific Pilotage Regulations and Pacific Pilotage Tariff Regulations, which are specific to this coast. We have a board that is made up of seven people: a Chairman, two members representing industry, two representing pilots and two representing the public. The chair and the two public members are put in place by the government; the pilots choose two and the Chamber of Shipping of British Columbia chooses two. Terms run from one to four years. BC Coast Pilots Ltd. is a private company and all of the coastal pilots are partners of that company. We have a service agreement with them that covers Areas 2, 3, 4 and 5 — basically the coastal region. Area 1 is covered by the Fraser River Pilots who belong to the Canadian Merchant Service Guild and are employees of the PPA. When we negotiate with the Fraser River Pilots, it’s a union contract governed by general labour laws whereas with the BCCP, it’s a service contract governed by the Pilotage Act.

Where the contract pilots are concerned, there are certain conditions that are clearly defined within the Act — for example, they can’t go on strike and we must follow the Final Offer Selection process in negotiations. The contract with the BCCP is usually between four and five years in length — we’re presently on a five-year agreement that will expire December 31, 2016. We do talk to the industry while we’re in negotiations with the pilots. We use a full engagement process to ensure everyone is aware of the status of the negotiations. The full engagement process means that industry gets the opportunity to discuss their needs, issues and concerns prior to the PPA going into negotiations and, as the negotiations progress, the industry is kept apprised of developments. BCSN: How do the PPA’s regulations and operations differ from other areas of Canada or other areas of the world? KO: We’re very different. We’re unique in Canada and we may even be unique in the world. It’s rare to find a group of pilots licensed for an entire coastal area. Most areas will have

INDUSTRY INSIGHT port pilotage or a very limited area of pilotage. Our method, which we’ve done for many years, has pros and cons. One of the pros is that we don’t have to worry about labour deficiencies or idle labour. When a port has a decline in shipping — for example, Prince Rupert six years ago — we just reduce the number of pilots for that area. In Prince Rupert’s case, we went down to zero and would just fly a pilot in when needed. There are three there now. In our industry there are always highs and lows and the beauty of our system is that we can respond quickly to a change and keep delays to a minimum. The downside is that the local knowledge and experience that we need people to possess is a declining market. We look at this on an annual basis and we’re setting plans in place for the future — for example, we’ve increased the maximum amount of time for apprenticeships from 12 months to two years in anticipation of future needs. When we had a really active coastal community of tugs and barges, Coast Guard, DFO and the fishing industry, we had a lot of people to choose from and a lot of people came to the table who really knew this coast. Now, on average, 20 people write the exam a year and three or four will pass. For the last five years, we’ve had a 17 per cent pass rate. The majority of the exam is based on the knowledge of the coast — that’s the problem. We can’t reduce that while we are using this system. If all of the projects on the horizon— the Asia-Pacific Gateway Corridor Initiative, terminal expansions and new pipelines and terminals — actually come to fruition, we will need to start hiring more people. The question is: will all of those projects come to fruition? You need to start recruiting now because it takes six or seven years for a newly licensed pilot to move from a limited-vessel restriction to VLCC-capability. So if you’re looking seven years down the road, we need to start ramping up now. BCSN: What is the process for recruiting new pilots? Whose responsibility is it — the PPA or the BCCP? KO: It’s a joint responsibility — the BCCP are obliged to provide us with

Second row, second from the right...Kevin as a young cadet in South Africa (circa 1979). the pilots but we are the ones responsible for the examination process and finding the apprentices. I need to have enough pilots on the waiting list of eligibility so that when we ramp up, we can start drawing and we are at a stage where we need to do something about increasing that. This year, we’ve got 28 people writing and our fervent hope is to get a 20 per cent pass rate. We’ve been working on getting the pass rate up. We’ve introduced an online study program for general knowledge and we hold seminars and information sessions to explain to candidates what it is they need to study. A candidate may have a lot of experience on the coast but because he doesn’t know what we expect, he’ll have difficulties with the exams. He’ll start giving us radar ranges and courses while what we’re really looking for are visual confirmations with things like clearing lines. A lot of people will rely too much on electronic navigation aids as opposed to simply looking out the window. We do quite a bit of community outreach in both First Nations and fishing communities to explain the criteria for a pilot and to get potential candidates to start thinking about what it takes to be a pilot when they’re in their 20s and just starting out on their careers — for example, they’ll need a minimum of a 500-tonne Master Certificate. When

you start your career, it’s important to keep these requirements in the back of your mind. BCSN: Could you describe the process to become a licensed pilot? KO: First, it’s important to note that we don’t put on a full, local knowledge curriculum. We advise candidates on what we’re looking for during the exam and we give them the tools on where to find the information and then it’s up to them to study. At the moment, we don’t have a curriculum that covers knowledge of the coast — that’s something you can only get through experience. We have a syllabus for the general knowledge part of the exam which is based on the 500-tonne Master Certificate and we’ve put together a distance education course and a twoweek refresher course which are handled through BCIT’s Marine Campus. There are three parts to the exam. The first is a three-hour, general knowledge written exam focused on seamanship, ship handling, chart work, navigation, electronic equipment, meteorology and stability. Next is a three-and-a-half-hour written exam covering local knowledge. You need to get 70 per cent in both of the first two parts before being invited to attend the third part of the exam which is the oral section and which lasts for about four hours. March 2013 BC Shipping News 11

INDUSTRY INSIGHT

A candidate may have a lot of experience on the coast but because he doesn’t know what we expect, he’ll have difficulties...A lot of people will rely too much on electronic navigation aids as opposed to simply looking out the window. two-point ice-breaker questions and then move into the Collision Regulations. If they blow these, the game stops — it’s an automatic fail. We’ll invite them to come back the following year but they’ll need to brush up. The majority of the exam consists of runs, usually six, with each run counting for 50 marks. A run is a verbal delivery of a passage plan from somewhere on the B.C. coast

Photo credit: BC Shipping News

For the oral section, candidates are given blank paper, a set of tide tables, a pencil and eraser, a calculator and the ship’s particulars. There is a panel of examiners made up of a chairman (a Pilot-nominated board member), two other pilots, a PPA Master Mariner and an external examiner who holds a Master Mariner Certificate, usually an ex-TC examiner. We’ll start with some

Kevin joined members of the B.C. shipping community, including Tom Corsie (Port Metro Vancouver), Captain Stephen Brown (Chamber of Shipping of BC), and Fred Denning (BC Coast Pilots Ltd.) to host a delegation of pilots from China for a tour of Vancouver Harbour (onboard the Seaspan Raven). 12 BC Shipping News March 2013

to somewhere else on the B.C. coast. For example we will ask the candidate to take us from Triple Island to Kitimat via the Inside Passage. They will have to describe what they are steering on what they are using for alter course positions as well as every navigational aid en route, any dangers and what they are using to keep clear. All of this has to be from memory. If they run the ship aground, they’ve failed. BCSN: What is the average age of a pilot today? Are there any concerns about a retirement surge? KO: The median age of active pilots currently is in the upper 50s but there are quite a few people coming in that are very young. Recent intakes have been quite young — in their 30s — and that bodes well. A lot of young people are coming from the fishing industry and they are bringing a wealth of local knowledge. There is no mandatory retirement age for pilots. We go by the medical exams which, under the General Pilotage Regulations, must be not more than two years apart. If they are fit for pilotage duties, they keep their licence. The problem we have is planning. The BCCP tries to give us as much notice as possible but there are pilots over 65 and there is always a question of how long they will stay. It would be easier to manage if there was mandatory retirement from a planning perspective. BCSN: How has piloting changed over the last decade or so? KO: Ships are getting bigger — on average, ships are increasing in size by around six per cent per year. If you look at the trend of activity, we’re also losing about one per cent of traffic per year. Looking at the pattern since 1995, you’ll see a series of downward humps with each one lower than the next so there has been an overall steady decline. For the Fraser River, the trend was increasing until 2003, followed by a decline. Now, it seems to be straightening out and you can see the upward trend but we’re not out of the woods yet. I’m hoping that proposals from Fraser Surrey Docks and others to expand will help to increase activity after the doldrums of 2009. BCSN: Let’s focus on the Fraser River for a minute. Do you have any insights

INDUSTRY INSIGHT into plans to dredge to accommodate larger ships? Do you have any thoughts on the province’s plans to rebuild the Massey Tunnel and whether that will allow for larger ships? KO: What the province is doing along with the Port and the terminals is good for business but unless it’s sustainable, you’ll still have an ongoing problem. I imagine that, from the Port’s perspective, dredging is very expensive and there will need to be a return on investment and it will need to be sustainable. At the moment, on the Fraser, we’re limited to ships that are 270 metres in length but we’re doing some trials to move up to 295 metres. That size may well require a re-evaluation of the channel design. Eight years ago, our maximum size was 230 metres on the river so we’ve been going up slowly by doing simulations and making changes to the channel design — for example, part of the rock wall at FSD was removed to accommodate the 270s. BCSN: I’d like to spend some time discussing the pilotage safety record here on the coast. Are you able to provide any information on two recent incidents — the grounding of a container ship near Prince Rupert and the damage done at Westshore Terminals when the Cape Apricot went through the causeway to Berth One? KO: Our safety record stands at a 99.97 per cent success rate. We usually have around five incidents a year but they’ll be minor and rated as Class C incidents. Things can go sideways at the last moment, for example, a tug line can part just at the final stages of

Paying dues and getting dirty...Kevin (on the left) as a young officer in South Africa. March 2013 BC Shipping News 13

Photo credit: BC Shipping News

INDUSTRY INSIGHT

Kevin with Bert Bjorndal, Past President of the BC Coast Pilots Ltd. berthing and you might land a little heavier than intended. That’s considered to be a Class C incident. The two incidents that recently occurred are anomalies — both are considered Class B because of their magnitude which is rare as in the last five years, there have only been two other Class B incidents and no Class A incidents. Other than telling you that the Transportation Safety Board is investigating and will be providing a report, there’s not much more I can add with respect to the Westshore and Prince Rupert incidents. It will take about a year and a half before the final report comes out. BCSN: When an incident happens, what is the liability of pilots? KO: Pilots are protected overall under the Pilotage Act to a maximum fine of $1,000 where gross negligence is an issue. That clause is put there for a purpose and it’s the same throughout the world. If every decision a pilot makes is based on the fact that he could be sued, no one would do the job. That’s the civil aspect, however, there is still the criminal aspect of liability. Like any other citizen, a pilot cannot be protected from criminal liability.

If a pilot does something contrary to the Collision Regulations and someone is injured or dies, there would likely be criminal charges laid and a court case. The same holds true for an incident that results in an oil spill. Under the Migratory Birds Act and the Pollution Act a pilot could be charged criminally. A pilot doesn’t get off scot-free but limiting liability protects him from massive monetary claims. It’s the same worldwide. What a pilot does every day is inherently dangerous. It’s virtually impossible to get through a 25-year career in the conditions in which they operate and not have something happen. Even a minor bump in docking could result in a large insurance claim. BCSN: Can you provide insight into the debate on tanker traffic and safety aspects of those operations? First, does a pilot make any distinction between goods carried onboard? KO: We don’t distinguish between diluted bitumen or crude oil but we do differentiate crude oil tankers from other carriers — we have for many years. There have been rules in place since 1998 that govern crude oil tankers in excess of 40,000 dead weight tonnage. They cover the Second Narrows

...pilots participated in simulations with Enbridge and we absolutely know that a VLCC can be brought in from deepsea to Kitimat without any tugs.

14 BC Shipping News March 2013

Movement Restricted Area (MRA) plus Haro Strait and Boundary Pass. The MRA went through a five-year review recently and now it doesn’t refer to crude oil per se — it merely refers to vessels of a particular size and the same rules apply to all. Currently, through the MRA, any vessel with a length overall plus beam greater than 265 metres requires two pilots and can only transit in daylight hours. There are weather restrictions as well, mostly to do with visibility, for example, piloted vessels or vessels carrying over 6,000 tonnes of cargo are restricted to a clear range of visibility through the entire portion of the passage that falls within the MRA as observed from the CN Bridge. Tug requirements changed when the MRA was re-done. We did a full risk assessment of the tug package and, with the help of an internationally renowned expert on tug operations and simulations, we changed the way we work with the tugs. This was, of course, also made possible due to Seaspan and SMIT investing in the port’s future with newer, much more powerful tractor tugs. This new equipment meant that we could look at utilizing the tugs more effectively. The pilots and the tug masters undertook joint training in tethered tug operations and the MRA Rules were changed in 2010. For a vessel with a draft of over 12 metres and a LOA that’s greater than 200 metres, you need one tug tethered on the bow and two tethered on the stern with a minimum bollard pull of 50 on the bow and 100 on the stern. For a vessel with less than eight metres of draft and less than 200 metres in length — say a small chemical tanker from Port Moody — you need one tug tethered on the bow with a bollard pull of 20 and one tethered on the stern with a bollard pull of 30. BCSN: What about the protests over increased expansion at Kinder Morgan or the Enbridge project? KO: I should start by noting that we operate under the concept of full engagement. We’re open and transparent and people have no problem getting information if they come in to ask for it. In the past, it was rare for us to sit down with new project proponents

INDUSTRY INSIGHT and discuss risk or standard operating procedures. Now, with all of the new projects coming up, we spend hours dealing with risk assessments or meeting with proponents directly to discuss both our needs, issues and concerns. It’s a good process — issues are identified early by both parties so there are no surprises but the downside is that we’re a small operation — we haven’t increased our staff and yet we’re doing a lot more. The demands on our time as well as that of the BCCP have increased exponentially. We are consulted frequently on projects — for example, pilots participated in simulations with Enbridge and we absolutely know that a VLCC can be brought in from deepsea to Kitimat without any tugs. The addition of escort tugs on crude oil carriers going through that route into Kitimat is an example of an another level of safety that was proposed by ourselves and the BCCP as a best practice. Similarly there is no regulation that says we have to have escort tugs on crude oil carriers through Haro Strait and Boundary Pass — we did that with the BCCP taking the lead and working jointly with industry and ourselves. Regarding proposed increases in tanker traffic, the PPA Board made a strategic decision a number of years ago to undertake an outreach program. We started in Stewart and worked our way through many communities. Initially, I was surprised, going into these small communities, at how many No Tanker signs were on lawns and that was a good three or four years ago when we started on community outreach. I firmly believe that the community outreach strategy was a good thing to do but we already appeared to be losing the game at that point. We hadn’t realized the pushback we were going to see from environmental groups and others on the whole idea of more oil tankers on the coast. Tankers have been on this coast for years and crude has been shipped out of Vancouver for years but, for whatever reason, the general public seemed to think there was a moratorium in place (there isn’t) and that there were no tankers, so when Enbridge announced its project, there seemed to be an avalanche of response. From my

perspective, we as the industry were caught unawares of what was going on in the background. BCSN: What initiatives are being undertaken now to address concerns about shipping? KO: We’re doing a lot more than we have in the past but it’s hard to catch up when the emotion is already out there. I feel we missed the wave. A number

of industry representatives, including Captain Stephen Brown of the Chamber of Shipping of British Columbia and myself, have gone on the road to talk about marine safety but the one thing everyone wants is an iron-clad guarantee that nothing will happen. While I’m of the opinion that crude oil carriers are extremely safe, I could never give a 100 per cent guarantee. We don’t have

Online...Dave Roels’ Photo Essay Pilots at work: Photographer Dave Roels has spent many days over his career following pilots as they board and provide safe passage for ships. Visit www.bcshippingnews.com/photo to see the results.

Photos by Dave Roels, www.daveroels.com

March 2013 BC Shipping News 15

INDUSTRY INSIGHT a zero incident record on the coast but we’ve put in place many safety measures and mitigations for vessels that carry risky cargo. In the 21 years I have been working on this coast, there has only been one oil pollution issue as a result of an incident while a pilot has had the conduct and if that vessel had been a tanker there would not have been a spill. On the one hand, the media focus on tankers makes us better at our jobs because of the increased public scrutiny but the problem, even though we are doing a better job, is the emotion

that has built up around Enbridge — it’s like a runaway freight train. A lot of my time is spent on media issues that I’ve never had to deal with in the past. Media attention on tankers has increased 100 fold and it’s not always accurate. The problem is, once something is in print, it becomes fact and when you try to put your point forward, it’s too late. There are basically four levels of safety. The first is to ensure the ship is well-equipped — the condition of the ship is paramount and where tankers are concerned, there is a very good vetting

About Captain Kevin Obermeyer

rowing up in Cape Town, South Africa, Kevin started his seafaring career by joining the South African Navy in 1975. In 1978, he joined the SA Marine Corporation as a cadet and was there until 1987 when apartheid sanctions and a lack of jobs prompted a move to the South African Harbour Service. He skippered tractor tugs — first as chief officer and then as acting master on large Voith-Schneider tugs before moving to an office position within the Richards Bay Port Management team.

Kevin came to Canada in late 1991 — while his first stop was Toronto, the opportunity to become Assistant Harbour Master in Prince Rupert drew him to the west. He took over as Harbour Master in Nanaimo in 1995 before joining the Pacific Pilotage Authority in August 1999 as the Director of Marine Operations. He became President and CEO of the PPA in 2006. In addition to a Master Mariner Certificate, Kevin achieved his Bachelor of Commerce degree in 1994. Kevin and wife Jenny have a son (Jason) and a daughter (Kaitlyn) both of whom attend UBC’s Okanagan campus.

Kevin plays host to visiting school children during his time as a training officer with SA Marine Corporation (1985).

16 BC Shipping News March 2013

process in place. The second level concerns the crew and training — tankers appear to have a much better-trained crew and when you think about criminalization of seafarers, it’s no surprise. If there is an issue, someone will go to jail. To that, you add on one or two pilots — that’s the third level. Having an unknown person on the bridge provides for a heightened awareness of operations and puts someone in place who knows the coast well and is an expert ship handler. The fourth level of safety is to have a tug tethered to the ship — a tug of sufficient power to steer the vessel in the unlikely event of a rudder failure, or to hold the ship against the current if there is an engine failure. Most ships on our coast have three levels of safety and most Canadian vessels have two — BC Ferries, for example, has a well-equipped ship and well-trained crew. For crude oil tankers, there are four levels of safety, and while you still can’t guarantee no incidents, it significantly decreases any chance of an incident occurring. Someone asked me what would happen if there’s a tsunami or earthquake…well, you just can’t predict that but we’ve taken as many safety precautions as we can. We have been involved with the Enbridge project — we were consulted and we attended all or the TERMPOL meetings as did the BCCP. We provided a “wish list” of navigational aids, largely to do with coming in through the shorter route in the south. Until the aids are updated in that area we just wouldn’t take ships in that way, we’d take the northern route. For the most part, it’s a well-defined channel. Regarding Kinder Morgan’s proposed expansion and the increased traffic that would come with that, we have no issues. It’s not going to increase overnight and we have a lot of capacity still available to handle any increase. BCSN: What about other types of vessels — cruise or containers? Are there any restrictions? KO: Working jointly with the industry through the Western Marine Community Coalition, guidelines were developed for Seymour Narrows and Johnston Strait. The maximum size of a cruise ship through this area is 294

metres — anything above that requires evaluation on a case by case basis and would be run through simulations well in advance of its transit. The guidelines also apply to freighters and tankers. The maximum tanker size permitted is 185 metres. During one of our community outreach trips , I was in Haida Gwaii and was explaining the restrictions and someone asked why we did that — why not just stop all tankers. Well, if we did that, you wouldn’t have any lights — small communities need diesel transported to them in order to get their electricity; tank vessels can also be small vessels and barges. Container ships are getting bigger as expected and are increasing in size by about six per cent per year. In order to deal with the increased size we developed guidelines regarding tug requirements for these vessels. BCSN: What about the other end of the spectrum, the smaller vessels? I understand you recently published notice of a consultation for changes to regulations, mostly affecting the tug and barge industry. Could you explain the issue there? KO: Historically (since 1972), Canadian certificated officers on vessels under 10,000 tonnes (largely tugs and barges) were exempted from pilotage. Through a regulatory review, it was found that the Pilotage Act didn’t allow for exemptions based on certification so in the interim we had to change the “exemption” to a “waiver” but the waiver system is not ideal — it’s high administration and has a potential for confusion. For example, a tug that’s 300 tonnes goes up the coast and doesn’t need a pilot, but then it picks up a barge that has a registered tonnage of 150 tonnes and now it does. It’s the same people on the bridge. It doesn’t change the safety of what is already out there, it just means we have to start looking at ways to deal with the regulations within the Act. The tug and barge industry is wellmanaged. We’ve never had pilots on them and we don’t have the staff or pilots to start managing that traffic. We’re working with the industry to try to come up with an alternative to deal with this on a permanent basis hence the advertisement in the newspapers.

INDUSTRY INSIGHT

...the marine industry is the lifeblood of this country and yet in the mind of the general public, the fact is missed that so much of what is worn, driven or played with comes by ship to our shores.

BCSN: Over and above the safety aspect of tankers, there are a number of issues that deal with the environmental impact of shipping in general — for example, the Pacific North Coast Integrated Management Area or Marine Protected Areas. How do you manage those issues? KO: Each issue takes a lot of time and effort to ensure that the marine industry has a voice at the table. Within the industry, we’ll share responsibilities to make sure there is representation. For PNCIMA, for example, Stephen Brown and Kaity Arsoniadis-Stein have taken the lead on those discussions. Donna Spalding with the North West and Canada Cruise Association and Gary Paulson from the Port of Prince Rupert were tasked with representing the industry on the Glass Sponge Reef

protected areas and myself and Phill Nelson from the Council for Marine Carriers are representing the marine industry regarding the Scott Island National Wildlife Area. Canada is a trading nation and the marine industry is the lifeblood of this country and yet in the mind of the general public, the fact is missed that so much of what is worn, driven or played with comes by ship to our shores. The bottom line is that without this link with the sea and the marine industry, the standard of living of every Canadian would be vastly different from what we enjoy today. B.C. is the western gateway to Canada and the public needs to understand the benefits of having vibrant ports in their province. BCSN

About the Pacific Pilotage Authority

he Pacific Pilotage Authority is a federal Crown corporation created in 1972 under the Pilotage Act along with the Great Lakes, Laurentian and Atlantic Pilotage Authorities. International vessels of 350 gross tonnes or larger, while travelling in Canadian waters, are legally obliged to use the services of a Canadian marine pilot. The PPA’s principal mandate is to provide safe, reliable and efficient marine pilotage and related services in the coastal waters of British Columbia, including the Fraser River. Their area of jurisdiction extends approximately two nautical miles from every major point of land and stretches from Alaska to Washington State. It is one of the largest pilotage areas in the world. The PPA works within a commercially oriented framework by maintaining financial self-sufficiency through a combination of cost management and tariffs. Coastal pilotage assignments average between 12,000 and 13,000 per year; trips on the Fraser River add an additional 1,000 to the total. The British Columbia Coast Pilots Ltd. consists of 98 licensed marine pilots who contract their services to the PPA. An additional seven pilots — focusing on the Fraser River — are part of the Canadian Merchant Service Guild.

For more information about the Pacific Pilotage Authority, please visit: www.ppa.gc.ca.

March 2013 BC Shipping News 17

HISTORY LESSON

Watch out! Navigating B.C. waterways By Lisa Glandt

Librarian/Archivist, Vancouver Maritime Museum

ritish Columbia’s treacherous waterways have left a history of marine disasters, no matter how experienced a crew is against our rugged coastal geography. One of the most infamous navigation hazards was Ripple Rock, located in Seymour Narrows. Positioned in the channel between Vancouver Island and Maud Island, the rock had two submerged peaks. At its highest point, the rock was within nine feet (three metres) of the low-water mark. The narrow channel was also known for its rushing tide (between 10-15 knots or 12-17 mph) and was fraught with whirlpools. Since 1875, more than 120 vessels had either been damaged or capsized by the rock with more than 100 lives lost.

Ripple Rock, located in Seymour Narrows...Since 1875, more than 120 vessels had either been damaged or capsized by the rock with more than 100 lives lost.

Continuing pressure from the maritime community to remove the hazard gave way to a formal commission in 1931 to investigate how to accomplish the task. A number of methods were attempted and all were unsuccessful until the 1955 plan to drill a tunnel under Ripple Rock and up into the peaks and then blow it up. It took an average crew of 75 men a total of 28 months to complete the tunnel and set the explosives. Dramatic footage from

The Province Newspaper, 1958, provided detailed coverage in anticipation of the planned explosion to remove Ripple Rock and clear a passage for ships. 18 BC Shipping News March 2013

local CBC news shows the explosion as it happened on April 5, 1958 at 9:31 am (you can search the CBC Digital Archives — www.cbc.ca/archives/ — under “Ripple Rock” to view the actual black and white four-minute footage). The successful explosion cleared the peaks, creating a 45-feet (14-metre) clearance at the highest point. It was considered the largest, commercial, non-nuclear explosion to date. Closer to home, the entrance to Vancouver Harbour posed its own inherent risks to mariners. The first narrows channel was aptly named — narrow and shallow on the north side which made for a risky passage when facing the tide. One of the most famous shipwrecks in the narrows occurred on July 25, 1888, when the Beaver slammed into Prospect Point. In 1911, the Mastodon, a 250-foot selfpropelled, steam-powered dredge was brought to Vancouver after completing work on the Alberni canal. The Mastodon and her crew operated 24 hours a day with a crew of 30 men who worked in shifts to operate the dredging equipment, run the engines, man the boats, and monitor the anchors that held the ship in position. Other smaller vessels — tugboats and false-bottom dump scows assisted the Mastodon and transported the newly dug up gravel and sand to dumping grounds at Point

VANCOUVER MARITIME MUSEUM

The Ripple Rock drilling team — it took an average crew of 75 men a total of 28 months to complete the tunnel.

The Mastadon — a 250-foot self-propelled, steam-powered dredge brought in to work on the entrance to Vancouver Harbour.

Atkinson, the Moodyville Deep and for use in the inner harbour during wharf construction. Large boulders that were too big to be removed were buried in the channel so they would not become navigation hazards. Under the watchful eye of Captain Allan Dawe, the dredging continued non-stop until 1925 when a safe depth for the harbour was sufficiently achieved. As his grandson, A. Dawe, noted: “to hear him tell

the story of Vancouver’s harbour, you would infer that he dug the whole thing himself with bare hands.” Lisa Glandt has been the Librarian/Archivist for the Vancouver Maritime Museum since 2007. She started volunteering at the museum in 1999 sharing maritime stories with school children and now she preserves the stories. She can be contacted at archives@vancouvermaritimemuseum.com.

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March 2013 BC Shipping News 19

2/7/2013 1:14:42 PM

Coast pilots cherish their hard-earned reputation for excellence By Ray Dykes

ne of the most coveted jobs in Canada is navigating some rough seas right now. Being a marine pilot is not only professionally demanding, but highly paid on a par some say with airline pilots, making it one of the most difficult professions to crack. The ranks of the B.C. Coast Pilots Ltd. currently stand at 98 “entrepreneurs”, as their President, Captain Fred Denning, likes to call them. Under their care is the biggest pilotage district in the world, stretching over 15,000 nautical miles of pristine and ecologically sensitive coastline, which includes some 30 different ports between the southern Canadian border and Alaska. B.C. Coast Pilots Ltd. is a private company that is celebrating its 40th year of incorporation in 2013. It has a Board of Directors made up of five serving pilots and has roots stretching back to 1929 when the first British Columbia Coast Pilots Association was created. Today’s B.C. Coast Pilots get their work under contract from the federally run Pacific Pilotage Authority. In contrast, the separate Fraser River Pilots, who control British Columbia’s mightiest river from Sand Heads Light at the river mouth to New Westminster, are unionized employees also drawing their assignments from the PPA. For all of B.C.’s marine pilots, it hurts when there are incidents that gain the news media headlines when thousands 20 BC Shipping News March 2013

Photos by Dave Roels, www.daveroels.com

“No matter how minor the incident, it is tough for a pilot to choke back…they do their very best and try to learn from any incident and maintain the highest of standards.”

and thousands of jobs are completed successfully — something like 99.97 per cent incident-free in fact. “We work very hard to maintain our reputation,” says Captain Denning of his contract pilots. “It’s a very challenging but rewarding profession. “Every pilot I have ever met takes responsibility for safety — the safety of the crew, the environment and the terminals. “No matter how minor the incident, it is tough for a pilot to choke back… they do their very best and try to learn from any incident and maintain the highest of standards. “And in every section of transport, there will be incidents, but every incident is not a catastrophe.” Even so, there are times when the unexpected happens. Back on November 20, 2012, the 278-metre container ship Hanjin Geneva ran aground near Prince Rupert apparently while trying to avoid an errant fishing boat. While such accidents are rare, there was apparently a similar grounding in January 2007, and a freighter touched bottom in December 2009 according to news media reports.

The dust had hardly settled at Prince Rupert when the Capesize dry bulker Cape Apricot sliced its way through the causeway leading to Westshore Terminals’ outer deepsea berth at Roberts Bank on December 7, 2012, which has become a day to remember for different reasons. B.C. Coast Pilot members were on board and in charge of both vessels. There were no injuries in either incident; there was no pollution of any real note; and no serious damage to any vessel. Only Westshore’s ruptured causeway trestle remains — now amid a rapid rebuild — as a lingering reminder that something went wrong. Captain Denning says he is unable to comment on either of the two recent incidents, which are both being investigated by the Transportation Safety Board. These are proud men who take their work seriously. And I say men, because to date not one woman has applied to join their numbers. If they did, female mariners would be expected to have typically about 20 years’ experience with a minimum of five years as a captain, just like their male counterparts.

The ranks have been tightened from a recent high of about 108 as, first forestry and then the cruise industry, faltered and demand for coastal pilot services eased. In fact, Captain Denning says he was told that a norm of 150,000 towboat transits a year coast-wide has slipped as low as 50,000 today, but there are signs of an upturn once more. The towboat industry has been the traditional source of supply for pilot ranks. Now though, incoming pilots are more diverse in their backgrounds and, while still include the towboats, also come from BC Ferries, government vessels and the fishing industry. “Local knowledge is still the cornerstone of what is required to be a pilot,” says Captain Denning, “and that’s what takes time.” The ranks are full of seasoned mariners — all experienced ship captains in their own right — whose average age is in the late 50s while the range spreads from 35 to 75. There is no mandatory retirement age any more so it depends on the individual. Each pilot goes through a Transport Canada certified medical at least every two years and that’s on top of a rigorous training process with an apprenticeship lasting anywhere between six and a half months to two years. That includes simulator training and manned model ship-handling courses to reinforce the experience they have already gained before applying. Once through their arduous apprenticeship, the pilots spend the next six full years with Restricted Pilot status. The ship size that the new pilots can handle increases each year until after six years they become fully certified. But, even then the training never ends. There are such challenges as ship familiarity; azipod propulsion (dieselelectric driven propellers mounted on a steerable pod) to understand; tug escort training to master; the intricacies of diesel electric, steam turbine and gas turbine propulsion to ponder; and a host of new technology with which to become familiar. Captain Denning, who started his marine career in towboats in Prince Rupert in 1969, is a fit-looking 60-yearold sea captain today. He is based in

PILOTAGE ...incoming pilots are more diverse in their backgrounds and, while still include the towboats, also come from BC Ferries, government vessels and the fishing industry.

Nanaimo — one of six there — while the rest of the ranks are in Victoria (35), Prince Rupert (3), and Vancouver (54). A computerized rotational dispatch system controlled by the PPA could see Captain Denning pick up an incoming

ship at Brotchie Ledge, three miles south of Victoria. There’s a quick information exchange with the ship’s Master before identifying the vessel to Victoria and its Vessel Traffic Management System to get it on the grid. The pilot will then

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PILOTAGE

The operation is 24/7 and pilots typically spend lots of late nights taking taxis to hotels between assignments or to float planes or fixed wing aircraft to get home...

guide the ship to its destination, sometimes 52 miles at about 14 knots into Roberts Bank or 30 miles more to the English Bay anchorage or the Inner Harbour of Port Metro Vancouver. That’s usually a five-hour job with another hour for berthing. Vancouver Island pilots get most of the incoming vessel assignments and Vancouver pilots usually are dispatched to guide the ships to the open seas. Tug assists and escorts are part of the everyday operation in moving ships on the B.C. coast. These are often ordered by the ship agent and this information is passed on to the pilots through the PPA dispatch office. Any time an assignment requires a ship to be under the control of a pilot for more than eight hours or a distance of 105 miles, a second pilot will be dispatched to that ship to spell him off. Typically, there’s at least three hours’

notice of an assignment, a 12-hour rest period between assignments, depending if the previous job was local or long work, and then their name goes back onto the dispatch board. Typical long-work assignments involve Prince Rupert and other northern harbours. The operation is 24/7 and pilots typically spend lots of late nights taking taxis to hotels between assignments or to float planes or fixed wing aircraft to get home again if they are from out of the Lower Mainland. In times of extreme weather, the Island pilots, like Captain Denning, will use BC Ferries. The whole purpose, says Captain Denning, is to be rested and ready for work again. With the expanding travel demands facing pilots these days, Captain Denning says the BCCP is working with the pilotage authority on the wider use helicopters.

“That will reduce transportation time noticeably,” he adds. Pilots in other districts around the world do use helicopters on assignments now with the pilot winched down onto the vessel deck if the chopper can’t land on the ship. They’ve managed this in winds up to 60 knots in the past. On the B.C. coast, the helicopters land on the deck of ships, but their use is limited to vessels with designated landing pads. Some pilots have taken training in helicopter wire transfers in anticipation of wider chopper use. It’s an adrenalin rush, for sure. The vessels don’t slow below seven or eight knots and most helicopter pilots will say the aircraft stability improves the faster the chopper flies. Captain Denning took his helicopter winch landing training in the early 1990s and doesn’t mind it. Back then, the cost factors of the day made most helicopter use prohibitive and the idea “went nowhere”. “Now things have changed and we are definitely interested in delving into this further,” he adds, with a decision likely this spring.

Photo credit: BC Shipping News

The B.C. shipping community hosted a familiarization trip with a delegation of pilots from China who were drawn here because of the highly regarded reputation of the B.C. Coast Pilots. Shown here with the Chinese delegation (left to right): Captain Robin Stewart (VicePresident, BCCP), Captain Stephen Brown (President, COSBC), Captain Fred Denning (President, BCCP) and Seaspan Raven Captain Don Westmoreland (behind Captain Denning is Tom Corsie, Vice-President, Real Estate, Port Metro Vancouver). 22 BC Shipping News March 2013

PILOTAGE Pilots learn to understand the strengths and weaknesses of each system...experience comes by knowing “when to stop referring to different technology and look out the window.”

And then, there’s the challenge of ever-evolving technology. In a world where the average North American home today probably has a computer more powerful than many nations had several decades ago, it’s inevitable that technology used by large ships is constantly changing. Captain Denning says marine technology has been evolving rapidly since the Second World War and the radar introduced then as the first big change. “We, as a profession, are interested in all technology relevant to what we do,” he adds. “But, while technology can offer many, many different perspectives on such things as night vision and low visibility with information

coming much faster than we can work out manually, we still need to pilot by looking out the window.” Pilots learn to understand the strengths and weaknesses of each system, “there’s some great equipment out there”. Captain Denning says experience comes by knowing “when to stop referring to different technology and look out the window”. He notes that one thing is certain: “All technology will have its failures of some nature and to some degree” and says pilots need to recognize those strengths and failures and the overall accuracy and relevance of the layers of information presented. No wonder it’s an arduous profession.

Ray Dykes is a journalist who has worked his way around the world as a writer/photographer. Ray can be reached at prplus@shaw.ca.

March 2013 BC Shipping News 23

training BCMEA Training Centre project gets underway

he British Columbia Maritime Employers Association (BCMEA) officially got their new Waterfront Training Centre project underway with a ground-breaking ceremony on Friday, February 1. Industry, government and union representatives were on hand for the event which took place on site — 4.7 acres of industrial land on the western end of Mitchell Island in Richmond, B.C. The land will be used to replace the BCMEA’s current training centre operating at Lynnterm East Gate in North Vancouver. “I must recognize the commitment from our Board and ILWU that made this day possible,” said President Andy Smith. “The balance of the two sets of interests that this Centre represents will prove to be a good working model”. Smith was joined on stage by Kerry-Lynne Findlay, MP for Delta-Richmond East; Mary Pollock, BC Minister of Transportation and Infrastructure; John Yap, MLA for Richmond-Steveston and Minister of Advanced Education, Innovation, and Technology; Brad Eshleman, BCMEA Chair; and John Beckett, BCMEA Vice President of Training, Safety and Recruitment. Minister of Labour Lisa Raitt provided a congratulatory message by video from Ottawa. Speaking on behalf of the federal government, Ms. Findlay reiterated the government’s commitment to the Asia-Pacific Gateway Corridor Initiative and the expansion and diversification of Canada’s relationships around the world. “The federal government’s investment of $1.4 billion has been leveraged to $4 billion by the Province, municipalities and industry,” said Ms. Findlay. “Trade is essential to the economic well-being of Canada and, without investments to facilitate the movement of goods, we risk losing our advantage with important trading partners like China, India and other parts of the Far East.”

Brad Eshleman, BCMEA Chair; Mary Pollock, BC Minister of Transportation and Infrastructure; Kerry-Lynne Findlay, MP for Delta-Richmond East; Andy Smith, BCMEA President; and John Beckett, BCMEA Vice-President of Training, Safety and Recruitment. 24 BC Shipping News March 2013

The new BCMEA Waterfront Training Centre will cover 4.7 acres on Mitchell Island, B.C. Minister Pollock’s message from the provincial government highlighted the need for skills training and noted that the new Training Centre was the result of partnerships essential to British Columbia’s economic success. The new Training Centre will cost $10 million to develop and will provide training to “improve awareness and safety as well as quality service to our customers,” said Eshlemen. “To keep Canada and British Columbia competitive, government, unions and employers must continue to collaborate.” The total investment over three years, including land and equipment, amounts to $16 million. The BCMEA trained over 2,700 employees in 2012 with 900 of those being new recruits. The facility will offer some of the 38 different skills ratings and strengthens the value proposition of the BCMEA’s training product through a number of channels. The facility will allow for the training of Lower Mainland and Island deepsea vessel-loading and terminal operations, and will provide a controlled environment to enable training to occur without the dependence on sporadic vessel and equipment availability. This new model will allow for the safe delivery of a diverse set of training programs outside of the production environment thereby minimizing equipment and cargo damage while increasing terminal productivity. Onsite training equipment will include a new Liebherr pedestal crane (similar to those found on many vessels) as well as top-picks (large container handling equipment), a front-end loader, a mobile crane and a bulldozer. In addition, BCMEA’s heavy equipment simulators (front-end loader and bulldozer) will be relocated to the site. Development contracts have now been put out to tender and the Centre is scheduled for completion by September 2013. More photos online at www.bcshippingnews.com/photo

spill response New response vessel added to WCMRC’s assets

estern Canada Marine Response Corporation (WCMRC) launched the newest addition to their fleet — the M.J.Green — at a christening ceremony at the Port Metro Vancouver docks on Wednesday, January 23. The boat, named after Martyn J.Green, first president and general manager of WCMRC, is a 30.63-tonne response vessel capable of skimming 32.8 tonnes per hour with a 10-tonne capacity. The $1.3 million acquisition from Rozema Boat Works was delivered in mid-December and will replace the Burrard Cleaner No. 2 which was built in 1977. “Our mission is to deliver safe and effective oil spill response services within the province of British Columbia,” says Kevin Gardner, current president and general manager of WCMRC. “We ordered the purchase of the M.J.Green in 2010 with an eye to keeping our fleet as modern and effective as possible.” The M.J. (as staff are now calling it) is 13.69 metres in length with a beam of 4.88 metres and a depth of 1.98 metres. It is powered by twin 660 HP Caterpillar diesel engines and has a top speed of 26 knots. The aluminum design can move quickly in adverse conditions and is equipped with a FLIR (forward-looking infrared) camera, which uses thermal imaging to allow the crew to see oil in the dark and can also assist in rescues and overboard emergencies. The FLIR camera also means recover operations can operate 24 hours a day. The integrated skimming system is fitted with an X-Prize grooved disk module from Elastec and is the first vessel of its size to use this technology which captures more oil quicker. Along with the grooved disk module, the vessel carries a LORI brush module. The combination of these two features allows the skimmer to handle a wide range of oil viscositites. The M.J.Green can accommodate three crew members overnight and is the sister vessel to the Eagle Bay, based in Prince Rupert. The M.J.Green is added to WCMRC’s growing list of assets which includes 31 oil spill response vessels, 52 response trailers and 14 support vehicles. In addition to 25 full-time and six part-time staff, WCMRC is able to draw on a pool of

More photos online at www.bcshippingnews.com/photo

WCMRC’s new vessel, the M.J. Green.

Scott Wright (Response Readiness Manager), Linda Laba (Corporate Response Services and Governance), Martyn J.Green (Past President and General Manager) and Kevin Gardner (President and General Manager). 500 available trained responders, including fishermen and marine contractors. It has equipment caches strategically located along the West Coast and office warehouse facilities in Burnaby, Duncan and Prince Rupert.

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SHIPPING 2020 Report from DNV

What will the world fleet look like in 2020?

redicting the future of shipping is a tricky business but Det Norske Veritas has carefully considered the economy, fuel prices and regulatory and stakeholder pressure for greater environmental sustainability to come up with a most likely scenario on what the industry will look like by the end of this decade. The following executive summary from the full DNV report: Shipping 2020, has identified six key findings, highlighting important considerations for ship owners and operators in the period leading up to 2020. In addition to providing this comprehensive look at shipping over the next decade, DNV’s project team (Ole Vidar Nilsen, Tore Longva, Christer Farstad, Magne Berg, Toril Bendisksvoll, Leif Braute, Serge Schwalenstocker and Jannicke Witsø), who are experienced in all aspects of international shipping, including commercial, technical, regulatory, environmental and modelling/ simulation, have provided additional thoughts on technology adaptation beyond a 2020 perspective. The following findings use a scenario-based approach: • Scenario A: “Full steam ahead” — High economic growth, low regulatory and stakeholder pressure. • Scenario B: “Knowing the ropes” — High economic growth and high regulatory and stakeholder pressure. • Scenario C: “Sink of swim” — Low economic growth and high regulatory and stakeholder pressure. • Scenario D: “In the doldrums” — Low economic growth and low regulatory and stakeholder pressure. Finding 1: More than one in 10 newbuildings in the next eight years will be delivered with gasfuelled engines. The number of liquefied natural gas (LNG)-fuelled ships through 2020 depends heavily on fuel prices. With a LNG price 10 per cent above heavy fuel oil (HFO), seven to eight per cent of newbuildings from 2012 to 2020 will be able to run on LNG. If the LNG price goes down to 30 per cent below HFO, 26 BC Shipping News March 2013

Predicting the future of shipping is a tricky business but DNV has carefully considered the economy, fuel prices and regulatory and stakeholder pressure for greater environmental sustainability to come up with a most likely scenario...

the uptake of LNG increases to 13 per cent and, in the extreme case of LNG price 70 per cent below HFO, the LNG share of newbuildings is 30 per cent. In total numbers, 13 per cent is equivalent to approximately 1,000 ships. The global sulphur limit, if effective beginning in 2020, combined with the 20 per cent EEDI reduction requirement, will have a significant impact on the implementation of gas-fuelled engines provided the capacity and fuel supply are there. We could see up to half of the newbuildings being delivered with gasfuelled engines by 2020. Finding 2: In 2020, the demand for marine distillates will be around 200-250 million tonnes annually. The current global demand for marine distillates is approximately 30 million tonnes annually. The 0.1 per cent limit in Emission Control Areas (ECA) will increase the demand to approximately 45-50 million tonnes by 2015. However, the largest increase will be experienced in 2020, with the introduction of the global sulphur limit. This marks a huge increase in the need for distillates, an increase of up to 200-250 million tonnes. In the short term, the use of LNG and scrubbers will have only a limited impact on the need for low sulphur fuel. Even given a large number of scrubbers, the major part of the fleet will run on distillates. DNV estimates that the demand for LNG will be 8-33 million tonnes in 2020, depending on the scenario selected, the equivalent of 400 to 1,700 MMBtu. The consumption of HFO will, according to our simulations, drop from approximately 290 million tonnes in 2019 to only 80-110 million tonnes in 2020, unless the global sulphur limit is delayed, in

which case HFO demand will be over 300 million tonnes annually. Finding 3: Newbuildings in 2020 will emit up to 10 to 35 per cent less CO2 than today’s ships, and the Energy Efficiency Design Index (EEDI) will be a driver for more than half of the reduction. Environmentally efficient designs will gradually improve throughout this decade and a newbuilding contracted in 2020 will, depending on type, emit 10-35 per cent less CO2 than a current ship with an EEDI equal to the IMO reference line. The largest reduction will be experienced with tank, bulk and container vessels. Between one-third and one-half of this reduction will be motivated by cost-efficiency alone and would be implemented regardless of the EEDI requirements. EEDI will be an important driver for the remaining reductions in particular from 2020 forward when Phase 2 of the EEDI is implemented, requiring new ships to be 20 per cent below IMO reference lines. Finding 4: Scrubbers are a significant option after 2020. When the global sulphur limit is enforced in 2020, ships would be required to run on low sulphur fuel or clean the exhaust continuously. This will have a significant impact on the implementation of scrubbers. This technology may potentially be fitted to thousands of ships if there is availability and the capacity to deliver. In Scenario C, with high LNG price and MGO price, the number of scrubbers in 2020 is expected to be nearly 20,000, while in Scenarios B and D, 13-14,000 would be expected.

SHIPPING 2020 The uncertainty of whether the limit will be enforced in 2020 or in 2025 may delay the use of scrubbers, as ship owners would not be expected to take on the additional cost without this being resolved. In Scenario A, the global sulphur limit will not come before 2025 and the number of scrubbers in place in 2020 is very limited. Even though there may be a significant uptake of scrubbers from 2020, in Scenario C with the highest LNG and MGO price, which is favourable for scrubbers, there would only be a modest 50 installations annually up to 2019.

for all ships in U.S. waters, which would force a significant part of the world fleet to implement a treatment system irrespective of BWMC progress. For the two Scenarios A and B, which assume the ballast convention does not enter into force, a significant number of installations of treatment systems is still expected. The main peak is expected in 2017, when the last ships with medium ballast water capacity have to retrofit at the same time as the rest of the fleet has to start retrofitting. After 2019, the retrofitting is expected to be largely completed.

Finding 5: Ballast water treatment systems will be installed on at least half of the world fleet. The Ballast Water Management Convention (BWMC) has not yet entered into force, but the schedule for mandatory treatment of ballast water is fixed independent of when the convention is ratified. In addition, the US has decided to implement a similar scheme

Finding 6: At least 30-40 per cent of newbuildings will be fitted with EGR or SCR by 2016. The Tier III 80 per cent reduction requirement in ECAs is the main challenge for NOx. In Scenarios A and C, approximately 40 per cent of ships built between 2016 and 2020 will have implemented an exhaust gas recirculation (EGR) or selective catalytic reactors

(SCR) system, while in Scenarios B and D, the numbers are approximately 30 per cent and 35 per cent respectively. The difference in fuel prices seems to account for this difference. When the price of LNG is low compared to MGO, NOx requirements are met with LNG fuelled engines. Without a Tier III compliant engine, a ship built after 2016 will not be able to enter the two existing ECAs. The question that remains to be answered is whether a ship owner will opt for a Tier III engine even if the ship is initially not planned for sailing in an ECA, as the second-hand value of the ship might be lower due to the loss of geographic flexibility. The full effect of the regulatory requirements on technology uptake will come after 2020, when the IMO global sulphur limit and Phase 2 of the EEDI are implemented. These are by far the strongest drivers and may lead to fundamental changes in the shipping industry.

Example of simulation run. This figure aims to illustrate the simulated fuel price paths for a given simulation run. Due to the diversity of the fleet and owner characteristics, some ships decide to invest in technology, while others do not. For each scenario Aâ&#x20AC;&#x201C;D, the model generates a large number of simulation runs to adequately represent the uncertainty in fuel prices and technology cost. Source: DNV. March 2013 BC Shipping News 27

SHIPPING 2020

Developing countries, such as Brazil and Indonesia, will become the driving economic forces in the world as China advances in its development path.

Beyond 2020 â&#x20AC;&#x201D; trends and drivers The maritime industry will be faced with ever increasing requirements for safety, security, environmental and efficiency performance beyond 2020. Environmental and efficiency demands will remain front and centre

for technology development, with the IMO global sulphur limit and the EEDI being the strongest drivers. This may lead to fundamental changes in the industry. As the world population and economy grows and the centres for economic

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activity shift, the demand for shipping will increase and we will see a corresponding shift in trade patterns to meet the changes in demand. High-growth economies will drive demand for bulk and tank shipping, as well as, increasingly, containerized goods. Coastal shipping will increase as a consequence of shore-based mega-cities, congestion on land, and a general demand for regional transport of goods and people. Developing countries, such as Brazil and Indonesia, will become the driving economic forces in the world as China advances in its development path. At the same time, there will be a need to develop infrastructure in developing countries in order to facilitate direct calls for larger vessels. The development of North-South trade routes may impact container shipping networks with ports in West Asia or Africa increasing their transhipment quotas. Fuel Fuel will remain expensive beyond 2020 and will drive demand for energy -efficient ships. These will focus Authorization on optimal energy use, and will be designed and operated with alternative fuels such as LNG, power systems and light-weight construction. The demand Jim:________________ for renewable energy will have grown significantly and this in turn will create new markets for the maritime sector, including shipping of biofuels. In Mike:_______________ order to serve offshore power infrastructure development and operation, new specialized ships will be required. RegulationsKen:________________ There are numerous environmental issues emerging on the agenda that are set to become important at 2020. Those Rob:________________ expected to be most significant from a regulatory perspective are black carbon, hull bio-fouling and underwater noise. Black carbon emissions from shipping may turn out to be a significant contributor to global warming and/or polar ice melting. The science is still not clear, but it is an area in which extensive research is ongoing and it has entered the IMO agenda. Hull bio-fouling is recognized as a major transport pathway for alien species of the same order as ballast water. The IMO has developed a voluntary guideline to manage this and it would

28 BC Shipping News March 2013

SHIPPING 2020 not be unexpected if this transformed into regulations over the next 10 to 15 years with potentially significant cost implications. Underwater noise is also raising increased attention in recent years due to its possible impact on ocean-dwelling mammals. While the science remains unclear, regulatory initiatives and public sentiment may be building towards international regulation. Applying noise control measures to ship engines, hulls or propellers would be technically challenging and also, likely, expensive. Implications Considering the issues above and their interaction with each other, it should be apparent that navigating the regulatory landscape to decide on appropriate technical solutions is not an easy task. Addressing SOx, NOx, ballast water and energy efficiency requirements more or less in the same timeframe requires a careful balancing act where care must be taken so that the technology solution to one issue does not unduly constrain choices addressing the others. A fine balancing act will be required, in particular when generally increasing fuel prices, high investment costs, the potential lack of financing and probably soft charter rates are factored in. It is also likely that the realities of climate change will motivate the regulatory landscape to develop more comprehensive and stringent regulations of greenhouse gas emissions beyond 2020 and, as a result, there will be a growing demand for “clean” shipping technologies in order to comply cost-effectively. The EEDI will enter its last phase in 2025 with a 30 per cent emission reduction requirement. The development of new designs will determine if this is the lowest level or if a Phase 4 will be implemented. Climate change and its potential impact on the offshore industry, as well as on ship design and operations, will remain subjects of much debate. A shift in wave patterns, increased wave heights and more severe weather conditions will be observed, resulting in a call for enhanced safety standards. A possible shift toward risk-based regulation will facilitate increased innovation in ship design and the exploitation of novel solutions. Regulatory initiatives on a regional, national and local scale could also have a large impact on the maritime industry. Innovation and adoption of new solutions In DNV Technology Outlook 2020, we highlighted six key areas that offer a significant potential for innovation and that we believe will be at the core of research and development in the next decade: The low energy ship: Multi-functional ship types and/ or technological advances in drag reduction, propulsion and materials are expected to herald new ship concepts. With the significant efforts already being put into the making of more energy efficient ships, as has been observed only during the past one or two years, one should expect the years between now and 2020 to bring further progress. The green-fuelled ship: Stricter environmental regulations that require reduced emission levels of SOx, NOx and particulate matter are pushing the shipping industry towards

further use of cleaner energy sources. Abatement technologies, such as exhaust gas re-circulation, scrubbers and catalytic reduction, can typically meet some of these regulations. LNG and biofuel blends will also be further exploited beyond a 2020 perspective. The electric ship: “The Prius of the Sea” could contain diesel-electric configurations, marine fuel cells, battery packages, solar panels or retractable wind turbines and compact super-conducting motors. These powering systems will require design, operation and control of energy production and conversion in an integrated manner and more complex systems will be manufactured. The digital ship: while e-Navigation is not new to shipping, we can expect that, by 2020, the majority of the fleet will have adopted e-Navigation technologies. Onboard electronic charts will become the unifying platform on the digital ship, integrating and visualizing information from other applications in related areas such as security and navigation risk, port entry, weather routing and similar needs. The Arctic ship: The next decade will see an increase in Arctic ship traffic. This will lead to faster development of Arctic-related technologies, such as ice route optimization software, hull load monitoring systems and, possibly, the introduction of new ice-breaking concepts. The virtual ship: In order to manage the inherent risk in innovative solutions, there will be a further drive towards the use of model-based techniques for assessing novel concepts and technologies with respect to technical and economic performances of ships, from a life-cycle perspective. Whilst all of these solutions offer great promise, the shipping industry is still faced with two main challenges: technology development and diffusion. The shipping industry is at the forefront when it comes to developing solutions for tomorrow’s vessels, vessels that will fulfill current and coming requirements related to energy efficiency and environmental performance. What we have learned through Technology Outlook 2020 and through the work on this Shipping 2020 report is that getting to a stage with several full-scale demonstrator projects is key, as is governmental support of R&D. The best way to convince a traditionally conservative industry is to demonstrate full-scale performance and to present a convincing cost-benefit case based upon similar results. When it comes to diffusion — or technology uptake — it has been a historically slow process and will continue to be so. The most important stakeholder to make decisions with respect to new technology will continue to be the ship owner. The industry will probably continue to produce cost-benefit calculations demonstrating that technology ABC is costbeneficial in a one-, five-, or perhaps 10-year perspective but ship owners will still be reluctant to invest in that particular technology. Why? Again, underlying factors, such as lack of capital, uncertain market outlook and technical risk aversion will continue to make it difficult to predict “optimal solutions” for the ship owner. Thus, what the analysis shows is not necessarily what the industry will do. In the coming years, there will be ample opportunities to select a differentiating strategy to move ahead of competitors. March 2013 BC Shipping News 29

Continuous improvement in the maritime industry By Nigel S. Greenwood

Greenwood Maritime Solutions Ltd.

n the February issue of BCSN, I introduced the Nautical Institute (BC Branch)’s spring conference on Passenger Vessel Safety. The short historical review and comparison with today’s passenger-carrying trends was enough to confirm that this topic has considerable scope. However, the tagline of “What is the industry doing to ensure continuous improvement?” opens a number of avenues to a full discussion of attainment of the objective: safety of the sea-going public. In this article, I will discuss the subject of improvement, to demonstrate that this, in itself, is a topic of wide interest to the readers of BCSN, and to the maritime industry at large. Managerial excellence “Continuous improvement” (sometimes “continual” improvement) has become a science all of its own in the past century. Beginning with the refinement of mass-production and the industrialization of warfare in the 1900s, much energy was spent in trying to optimize output. During wartime, the parallel search for greater efficiency alongside assured effectiveness was given greater rigour through the development of mathematical techniques of operations research. And following the Second World War, the reciprocal exchange of managerial/command-and-control experience between industry and military sought to profit from the best practices of both hierarchical high-order planning (military) and commercial, profit-driven innovation.

30 BC Shipping News March 2013

...the tag-line of “What is the industry doing to ensure continuous improvement?” opens a number of avenues to a full discussion of attainment of the objective: safety of the sea-going public.

Of course, the characterization of distinct managerial styles between military and civilian practice is not a static comparison. The repeated reciprocal exchanges between these domains ensured that there was a steady crosspollination of ideas, not just nationally, but across international boundaries. The search for improvement (in terms of profit, or tactical advantage, and less directly in reliability or safety) took the form of both technical innovation and process change. The former was frequently perceived as the more interesting avenue to a break-through improvement, while the latter was often more incremental. While marine industries naturally gravitate toward technical solutions, there was much to be learned from the other approach in terms of “business process re-engineering” techniques perfected in the 1980s. The adoption (actually, re-importation) of advanced business practices from the Japanese in the 1980s spawned a host of initiatives oriented to enhance efficiency and productivity. “Lean process design”, time-distance-motion (ergonomic) studies, etc., trended toward emphasis on fullsystem knowledge. The more perfect understanding of systems, variability, theory of knowledge and psychology

was seen as the route to maximize efficiency. This approach was exemplified by W.Edwards Deming, who developed “Total Quality Management” as a management mantra and formal process in the early 1980s. In fact, the intent behind his proposal of Plan-Do-CheckAct for business efficiency had much in common with the OODA Loop (“Observe-Orient-Decide-Act) process developed by USAF Colonel John Boyd for getting inside the decision cycle of a thinking (military or commercial) adversary. Similar structures of thought or systems of organizational review have since been formalized in industry standards and progressive incentives for positive change. The most commonly known of these is the International Organization for Standardization (ISO), which has individual schemes for management excellence (ISO 9000), environmental management (ISO 14000) and risk management (ISO 31000), among others. In Canada, a collectivity dedicated to similar aims is the National Quality Institute, recently re-branded as Excellence Canada. Many companies, from small to multinational, have embraced these philosophies and branded schemes in the search for both competitive advantage and due diligence.

PASSENGER VESSELS Photo credit: ventuari/www.shipspotting.com

Safety at sea is not only about flashy, technological development, although the shifting yardsticks of cutting-edge design constantly challenge set ideas about the subject. famous as the killing ground of many a greatly heralded change initiative. So, what in the end provides sufficient incentive for movement against organizational complacency and uncertain gains? Incentive Clearly, in the business we are most closely examining, the passenger vessel trade, safety of life is the driving incentive. For example, Canadian vessels move over 55 million passengers yearly, with over 23 million in British Columbia. There is much to be proud

of in the safety record to date in this region, but this demands constant vigilance. But how much safety is enough, and how does one assess sufficiency of safety in inherently risky activities in which daring is part of the deliverable …think white-water rafting, or (almost any) ships in icy polar waters. One way of assessing sufficiency of safety practice and preparedness is through assessment of one’s liability in a legal sense. Without straying into the shoals of legal definition, this can be characterized briefly as the degree of confidence that one has in

Photo source: www.ferriesofsydney.com blog

Systems-thinking Whatever the scheme of management excellence used, what they mostly have in common is systemsthinking. This demands that all the component parts and internal interrelationships of the business be examined for improvement opportunities. Given that most enterprises cannot be shut down while this happens, most change has to be accommodated in an incremental fashion (the proverbial “redesign of the aircraft while in flight”). Nonetheless, the cumulative (perhaps compounded) effect of even small changes can occasionally add up to significant improvement. In the maritime business domain we are considering, many different aspects present varied opportunities for change. Of course, scale of the operation, geographic area and environmental effects have to be considered and may not be amenable to change or even to perfect prediction. Each business however can be broken down into a number of sequential components, stages or activity areas. For instance, we might consider a new maritime company having to proceed through: business concept, platform design, construction, outfit, training, manning, marketing, operations, sustainment (logistics, maintenance, scheduling), monitoring, review and self-assessment, and finally, change implementation. In each area and above all of this there must also be some structure of accountability…who is responsible, and what are the mechanisms of oversight to objectively track both statutory compliance and attainment of company-mandated change targets? Each such component of a business might be examined for marginal improvements, each of which must be evaluated in terms of cost-benefit analysis…what advantage is obtained for what known (or predicted) cost/ risk of implementation? This can be a difficult and uncertain process, as the parameters of comparison may only be estimated, or supposed on the best information available from suppliers of new equipment. And new equipment is the easy part; far harder and more difficult to implement is organizational “cultural” change; “institutional inertia” is

Sometimes the need for improvement is more or less obvious… March 2013 BC Shipping News 31

passenger vessels Photo source: Patrick/www.shipspotting.com

demonstrating either absence of negligence or alternatively, as in the case of due diligence with regulatory offences, that one has done everything reasonably possible to foresee and forestall accidents using established risk management principles. Lacking this assurance, the penalties to individuals and corporations resulting from action in criminal, civil, regulatory or admiralty courts could be critically damaging to the enterprise. In some ways, the financial costavoidance incentives are post-facto at best; a train of thought that leads to a consideration of what (legal, financial) consequence is survivable, rather than what pro-active operational changes can materially reduce risk. And yet, a proper legal defence of unforeseen occurrences requires a degree of organizational culture that inculcates continuous risk assessment. Many companies do this formally, through highly evolved Hazard Identification and Risk Assessment (HIRA) methodologies. In all relevant areas of an operation (e.g., technical readiness,

The Herald of Free Enterprise capsizing off Zeebrugge in 1987 led to stricter standards for passenger-ferry stability and control of bow doors. qualifications, manning levels, training, damage control), discrete elements are examined for all possible failure modes. Each instance is assessed for probability and consequence and the result is plotted on a matrix to determine if it falls within the permissible limits of risk acceptance. The more complex risk-assessment methodologies also consider the compounding effects of marginal risks in sequential or related processes.

...there is more to safety management, than mere compliance with existing regulation. Nor is limitation of liability in response to external...financial incentives the epitome of responsible maritime management practice.

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32 BC Shipping News March 2013

Of course, classification societies and insurance companies are experts in this sort of risk assessment based upon loss records. They are considerably aided in this by the accumulated wealth of knowledge and experience which results in recognized industry standards. The development and adoption of IMO standards over the last century, enshrined in participating nations’ regulatory schemes, provides a fundamental basis for assessing “sufficient compliance” with reasonable safety standards. Layered on top of these has been the increasing prevalence and demands for Safety Management Systems (corresponding with the IMO’s ISM Code, or other guidance) in order to establish systematic reviews to facilitate the identification and mitigation of risks. All of these processes require an audit function and oversight based on practical experience. This is why it is critically important that governments and industry cooperate. An example of this is Transport Canada’s “Moving Forward” policy (2007), which looks to performance standards between government and industry and seeks a combined risk management approach. Innovation and best practices Regulation is an evolutionary process, a gradual accretion of standards and requirement. This is generally a codification of increased minimum design or performance criteria and, sadly, often in response to past marine incidents. The capsize of the Herald of Free Enterprise in 1987 was one such example in which subsequent evolution

passenger vessels within a company, such that change becomes employee-driven (i.e., not just by management). One means of achieving this aim is to empower (encourage) all employees to report on safety hazards, or to “SailSafe” represents BC Ferries’ com- go further in proposing change initiabined management and union dedication tives that improve safety while yieldto an internalized safety culture within the ing efficiencies. BC Ferries has such an company. initiative in their “SailSafe” program. This program is credited with creating of regulation corrected previously a shift in culture through a solid collabunrecognized risks. oration between BCF and the BC Ferry But there is more to safety man- and Marine Workers’ Union. All 4,500 agement, than mere compliance with employees are engaged in the ALERT existing regulation. Nor is limitation of (All Learning Events Reported Today) liability in response to external (puni- process; a very high rate of closure on tive or retributive) financial incentives submitted ALERTs maintains credibilthe epitome of responsible maritime ity and collective engagement in the management practice. Increasingly, culture change. successful businesses in the maritime Another aspect of change manageindustry have realized that change ment is learning, both individually and has to be internalized and willingly institutionally. Many large corporaembraced throughout each organizations nowadays have a well-established tion. And this only results from a 1per-10/19/2012 scheme8:30:34 of internal training and encourSCA0019A Ad - BC Shipping News.pdf AM vasive culture of safety consciousness age their employees to seek educational

improvements in advance of specific needs. In some cases, this is captured in “learning plans” that the employee fills in as part of an annual review cycle. Such a commitment to life-long learning is the individual equivalent of “continuous improvement,” a constant exploration of opportunities for the application of (new) skills in novel ways. Institutionally, learning takes place in industry forums and professional gatherings. These serve as a medium for the sharing of best practices as well as benchmarking to industry leaders. Industry bodies, such as the Canadian Ferry Operators Association (CFOA), function as a means for the sector to network and develop common positions on important issues based on corporate knowledge and operational experience. This enables the association to advocate on behalf of these positions in various forums, such as Ministerial offices, Transport Canada and the Canadian Marine Advisory Council (CMAC) meetings. This is also in keeping with

March 2013 BC Shipping News 33

passenger vessels Transport Canadaâ&#x20AC;&#x2122;s Moving Forward policy which seeks input from all stakeholders in a holistic approach. A similar industry collective representing a more diverse swath of the passenger vessel sector in Canada and the U.S. is the Passenger Vessel Association, whose members together convey some 200 million passengers annually. On a wider scale, the Cruise Lines International Association (CLIA), which consolidated in December 2012 from nine separate associations, covers the cruise industry worldwide. Each of these associations places a very high priority on safety, and the sharing of tips on risk assessment and safety management is prominent on their websites. Conclusion This article started with the premise that â&#x20AC;&#x153;improvementâ&#x20AC;? in the maritime industry, whether it be continuous or step-wise (continual), is of great interest to the readers of this magazine. Surely this is the case, given the applicability of the subject across the

34 BC Shipping News March 2013

industry. The range of talents required spans the gamut from technical innovation, through construction to operational management and managerial excellence. Dedicated risk assessment and risk management must be married with commercial imperatives such that the linked processes of risk awareness, avoidance, prevention and reduction result in a profitable and safe business. This is only good management. And nowhere are the incentives for improvement so clear as where safety of human life is at stake, as in the passenger vessel industry. It is also equally clear that one of the most effect means of advancing collective agendas for safety is the sharing of ideas through the networking of engaged professionals. To this end, the BC Branch of the Nautical Institute invites robust attendance at their spring conference, May 9-10 in Victoria, on the subject of Passenger Vessel Safety. This conference will cover all sectors of the industry from small, recreational eco-tourism operators to major cruise

lines in two days of discussions dealing with an entertaining range of expert speakers on both technical and operational topics. For more information, and to register, please see http://www. nibcconference2013.com. One final thought: in this region of unsurpassed beauty and undeniable attraction, the sea welcomes many diverse users. While the risks can be recognized, mitigated or managed, they cannot always be avoided. The very least that this conference will accomplish, we hope, is that in the event of an accident the immediate response will not only be formed along the lines of formal accountabilities and complex overlapping jurisdictions. Rather, success in extreme circumstances will be the result of close personal relationships formed among actively engaged regional professionals. Nigel Greenwood is a retired RearAdmiral of the RCN and a member of the Nautical Institute. He writes and consults on maritime issues from Victoria and at GreenwoodMaritime.com.

March 2013 BC Shipping News 35

A model for the world Environmental navigation: Vessel Traffic Management on Canada’s West Coast By K. Joseph Spears

he world economy is dependent on shipping and the free movement of goods and commodities. Over 90 per cent of world trade is carried by 60,000 commercial vessels. The recent developments with Canada’s potential export of oil sands to IndoPacific markets has highlighted the regulation of shipping issues on Canada’s West Coast. For the last 125 years, west coast shipping has been essentially unnoticed and has flown under the radar in the Canadian and British Columbian psyche. Canada and British Columbia have recently woken up to the fact that we are an ocean nation and shipping is critically important to our economic future in a changing world. We only have to look at proposed increase pipeline capacity to tidewater, increased metallurgical coal exports and potential LNG developments in conjunction with the AsiaPacific Gateway Corridor Initiative to see that all of these projects have a major shipping component. Unlike Norway, we are not a nation of seafarers. This is not a commercial, political or environmental issue but rather a national issue that has many different components, all of which need to be considered equal in importance and relevance. In order to move forward in a changing world, as a nation, Canada needs clear thinking around these important maritime governance issues which have an environmental risk component. We should not be afraid of dialogue and debate. This is too important an issue to undertake on an ad hoc basis. This article will look at the importance of environmental

36 BC Shipping News March 2013

This is not a commercial, political or environmental issue but rather a national issue that has many different components, all of which need to be considered equal in importance and relevance.

navigation by examining Vessel Traffic Management with a particular focus on Canadian West Coast waters. The future regulation of shipping on the West Coast will determine Canada’s access to export markets. The world shipping community recognizes that shipping has an environmental impact given its scope and size. Few industry sectors are as global as shipping. The industry is working hard to minimize its environmental footprint through leading-edge thinking, the development of technologies and best practices on issues such as air emissions, marine-mammal interactions, hydro-acoustical ship-generated noise, ballast water exchange and navigating in certain marine protected areas at specific times in a voluntary and/or regulated manner. Industryled initiatives, such as the Sustainable Shipping Initiative and Green Marine — a leading Canadian non-governmental organization made up of shipping firms and port authorities — have led to many great results through a collaborative approach. One such example is Port Metro Vancouver’s world-leading development of shore power at Canada Place for cruise ships, allowing for a reduction in air emissions. Given the international nature of shipping, there is the requirement for a globally uniform regulatory regime. It often takes serious time and effort

to create consensus with industry and governments on changes to a global industry that can collectively cost billions of dollars. That is one of the strengths of the International Maritime Organization (IMO), arguably one of the most successful arms of the UN. The IMO has the ability to identify a problem, reach a globally acceptable solution, often in a very technical complex area, and then implement an international agreement through flag and coastal states. Shipping knows it needs to evolve and respond to its environmental impact and has been very pro-active on this front. The notion of environmental navigation is actually an old concept that can be traced back to early negotiations leading up to the Law of the Sea Convention. The concept has seen a reawakening in light of the revolution in green and/or sustainable shipping and is thought to be an over-arching concept that brings together public and private sectors to capture all elements of navigation. Environmental navigation creates a working concept which seeks to minimize environmental impact and limit environmental risks and damage. It embraces many elements of the shipping regulatory regime which the Government of Canada has adopted to give effect to the Law of the Sea Convention (ratified by Canada in 2003) and the various legal instruments

vessel traffic

enacted by the IMO and adopted as legislation by both the flag and coastal states. Canada takes a risk-based approach to shipping governance. There is no reason why there cannot be a full and open dialogue on the subject of environmental navigation in Canada. Our economic future depends on this discussion. The problem is complicated because we have very few ship owners in our country and, on the West Coast, most of our export commodities are carried on foreign-flagged vessels. That actual ship owners and/or charterers are not found in the debate makes for a one-sided discussion. The issue is further complicated by the lack of scientific data on ocean issues on Canada’s West Coast and cuts to ongoing ocean research. Canada has been a leader with respect to environmental navigation through Vessel Traffic Management schemes (VTS) since these radical ideas were first proposed. The late Captain Dave Brenner was a driving force in developing this regime. In fact, Canada led the world with respect to the shorebased control of shipping in the 1970s. There has always been a conflict between freedom of navigation, often regulated by the flag state, and regulation by the coastal state and its shore-based controllers. Some of the world’s first vessel traffic schemes were put in place in the approaches to Canso Strait and the Bay of Fundy by the Canadian government in response to the M/V Arrow oil spill in 1970. At that time, control of shipping by the coastal state was considered controversial as it took away the right of freedom of navigation. Over time, VTS has matured as an accepted component of navigation in conjunction with compulsory pilotage explored in an earlier article (BC Shipping News November 2011 issue). This combination has worked very well on Canada’s West Coast and has achieved an impressive safety record. The land-based VTS operated by the Canadian Coast Guard is not unlike air traffic control where vessel controllers provide information and navigational advice but it is not prescriptive. There are no specific routing directions or navigation advice given by shore-based controllers who normally are not certified mariners. There are also radar gaps in coverage on a coastline of 28,000 kilometres with 6,000 islands interspersed throughout these waters. There are a number of policy measures such as “areas to be avoided”, “traffic separation schemes”, and “recommended navigational tracks” for vessels already in place under the Canadian regime. There are also Movement Restriction Areas (MRAs) wherein local safety regulations have been established by legislated authority. This regime is set out under the Canada Shipping Act, 2001 (Part 5-Navigation Services) which sets the Vessel Traffic Service Zones. Prior to beginning a voyage within Canadian waters or entering from seaward, reporting traffic (i.e., most commercial vessels) are required to obtain a VTS clearance before proceeding on its voyage. A clearance is issued by a Marine Communications Officer (MCO) after screening information about identity, condition, cargo and intentions of the vessel. As it proceeds on its voyage, the ship is required to maintain a listening watch on designated marine VHF radio channels and report at specific positions, Calling-In-Points (CIPs). In turn, the vessel is provided with information, advice, and

Some of the world’s first vessel traffic schemes were put in...the Bay of Fundy by the Canadian government in response to the M/V Arrow oil spill in 1970.

sometimes directions pertaining to other marine traffic, as well as navigational safety and weather information by the VTS Centre. There is not complete radar coverage in all of these coastal areas but Automatic Identification System (AIS) provides space-based and radar monitoring for real time positions. AIS transmitters are mandatory in all vessels over 300 tonnes and send a coded signal giving detailed information about the vessel. With some exceptions, every ship 20 metres or more in length is required to participate in the VTS system. Vessels bound for the ports of Prince Rupert and Kitimat will enter an area of responsibility of the Prince Rupert Traffic Zone. The Prince Rupert MCTS Centre operates 12 remote VHF radio sites. The Prince Rupert Zone, the largest VTS Zone in

Right whale density in the Bay of Fundy in relation to the old shipping lanes (top) and the amended shipping lanes (bottom). Source: The Canadian Whale Institute (www.rightwhale.ca). March 2013 BC Shipping News 37

vessel traffic of these are non-reporting vessels. Recently, the Government of Canada has taken steps to consolidate these vessel traffic centres. The Canadian Coast Guard is the lead agency with respect to vessel traffic services that acts to help prevent maritime collision incidents. With an increase in vessel traffic and recognition of the growing importance of environmental factors, vessel traffic systems are capable of taking into account environmental considerations. Recently in the Bay of Fundy, Canada adopted and moved its vessel traffic scheme to avoid interaction with the Atlantic right whales, which is an endangered species. In that area, there

Kerry Lagueux; Bay of Fundy Shipping Lanes.

Canada, extends from Cape Caution to the Alaskan border and encompasses more than 77,000 square kilometres (30,000 square miles). In the entrance to the Strait of Juan de Fuca, there is a joint U.S./Canada VTS system operated by the U.S. Coast Guard and the Canadian Coast Guard. This takes into account the congested waters and the international boundary between Canada and the United States and it is managed in a holistic fashion and by an underlying international agreement. In this area, with a high concentration of pleasure craft, it is not uncommon to have over 10,000 vessels navigating through these waters during the summer months. Many

38 BC Shipping News March 2013

is a great deal of tanker traffic transiting in and out of the Port of Saint John, New Brunswick. This has minimized whale/vessel strikes considerably and has been considered a great success. Similar steps were taken off Southern California by the U.S. Coast Guard through the development of traffic lanes away from areas known for their whale concentrations. What is clear is that industry, government and other groups working together can minimize environmental impacts. A cornerstone of environmental navigation is the existing vessel traffic systems and regimes that are in compliance with the Law of the Sea Convention and can have a very positive effect in balancing competing rights. There is a balancing of rights between freedom of navigation and protection of the environment. We constantly need to discuss this balance and have a mechanism that allows for the free flow of information. The key here is to have underlying environmental information and baseline data in a usable format to allow for the development of best practices and a risk-based shipping governance regime that is flexible and minimizes environmental impacts and risks. Canada has led the way with respect to vessel traffic services. In this century, known as the maritime century, environmental navigation will continue to respond to new challenges. Environmental navigation on Canada’s West Coast is a model for the world and proposed increased marine shipping activity can be managed to minimize the environmental risk by a combination of VTS, compulsory pilotage, designated vessel traffic lanes and marine spatial planning. Canada has a solid base from which to build. Canada’s economic future depends on getting this balance right in the maritime century. Joe Spears is a Maritime Counsel with Straith Litigation Chambers and is Principal of the Horseshoe Bay Marine Group. He has worked on all of Canada’s oceans in science adn shipping. His grandfather, James Spears, was employed at the Department of Transport Cheducto Head and Camperdown signal and wireless stations at the entrance to Halifax Harbour from 1920-1945. Joe is a frequent commentator on ocean issues. He can be reached at kjs@oceanlawcanada.com.

environment Garbage management

Life-cycle analysis will help with recycling decisions By Julie Gedeon

reen Marine is funding research to help its members determine the most environmentally sustainable ways to deal with onboard ship garbage. “We’re doing a life cycle analysis of ship garbage to give our Green Marine participants a decision-making tool,” says Françoise Quintus, Green Marine’s co-ordinator. “It’s important to fully understand the environmental impact of various options.” The initiative stems from discussions by the garbage management working group. “When Green Marine established its environmental performance indicators for ship-garbage management nearly a year ago, one of the objectives was to increase the amount of recycling done,” says Quintus. “Since then, however, our very proactive working group has been questioning in what circumstances it might be better to incinerate garbage onboard rather than sort and transport it to an onshore facility that, for example, might be some distance away.” Green Marine has retained Ellipsos, a Montreal-based firm specializing in sustainable development with marine industry experience, to do a life-cycle assessment aboard a small group of vessels. “When assessing the life cycle, we not only look at the effects of recycling or disposing of garbage materials, but virtually every aspect of the process — from collection, to transportation, to the end-of-life impacts on the equipment and structures, to the outcome for air, water, land and human health,” says Ellipsos President JeanSébastien Trudel. “Our all-encompassing approach requires a lot of data, but it results in new information that integrates every activity and aspect connected to the garbage-management process.”

“When assessing the life cycle, we not only look at the effects of recycling or disposing of garbage materials, but virtually every aspect of the process...”

If a truck is used to transport garbage to an onshore disposal site, for example, everything associated with that vehicle — from its fuel efficiency to the lifespan of its tires — is factored. If an incinerator is used to burn garbage, its emissions will be evaluated. Working group member Daniel Côté, who is the environmental advisor at

Groupe Desgagnés, has spearheaded the questions regarding best practices for ship-garbage management. “Most vessels are currently equipped with incinerators and, depending on their routes, burn the vast majority of their garbage,” he says. “Wanting to increase the amount of onboard recycling, we need a decision-making tool

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ENVIRONMENT

to determine to what extent we can “The onboard personnel were quite surprised by how much we could increase recycling while maintaining an optimal environmental footprint.” reduce garbage and by the extent to which odours could be elimiGroupe Desgagnés is participating in a Quebec government program nated or minimized...” to increase the amount it recycles. To establish benchmarks, the company garbage and by the extent to which there are not very many shipping comworked with Recyc-Québec to categor- odours could be eliminated or mini- panies that have categorized waste to ize all of the waste generated aboard mized during quite long periods of this extent,” says Quintus. “Ships are the M/V Camilla Desgagnés during a time.” Groupe Desgagnés will share the required to sort and dispose of garbage data with Ellipsos. according to several categories outlined typical journey. “This will be incredibly helpful by MARPOL Annex V, but the regula“The onboard personnel were quite 1/2 pg v #2_Ad Del Comm 2/4/13 9:18 PM Page 1 surprised by how much we could reduce because the data is so detailed and tions allow various materials to be grouped together for disposal.” Algoma Central Corporation and Canada Steamship Lines have also expressed interest in participating in the study as required. Ellipsos will analyze every conceivable impact associated with the handling of garbage from the standpoint of human health, resource depletion, ecosystem quality, and climate change. These four main aspects are further broken done into 13 categories that include human toxicity, respiratory facts, ionizing radiation, ozone layer depletion, photochemical oxidation, aquatic eco-toxicity, global warming, land occupation, non-renewable energy, and mineral extraction. All of Ellipsos’ research is done in accordance with the ISO 14040 standards for conducting a life-cycle analysis and with the ISO 14064 standards for quantifying greenhouse gases to determine climate change impacts. “By following these strict methodologies, there is a global recognition of our findings,” Trudel says. Green Marine and Ellipsos are still determining the parameters for the study. The results will be announced at GreenTech 2013 so that everyone can benefit from the knowledge acquired. To find out more about GreenTech 2013 or to register,, please visit: www.greenmarine.org/annual-conference.

World Class Expertise

Coming up in the April issue of BC Shipping News:

www.seaspan.com 40 BC Shipping News March 2013

Phone 604.988.3111

The GreenTech 2013 series continues with a look at how Seaspan Shipyards are greening their operations through their modernization process.

lng terminals Petronas/Progress deal:

Just whose ‘net benefit’ is it? By Jaya Prakash

or all of year last year, Malaysia was gripped by what had seemed like an unprecedented show of patriotism led by environmental activists — the world hardly knew or even cared about it. Their target of disdain was Australian mining company Lynas, whose sole aim was the creation of jobs so Malaysia could begin reaping another revenue stream and get its economy sizzling, the same scenario state-owned oil company Petronas has been furling out all these years. Yet for all the nobility behind such a just undertaking, the project collapsed even before the ink on the agreement between the company and Malaysian authorities had begun to dry. Opposition was simply too strong. Activists argued that the operation would unleash a torrent of noxious substances which, over the long run, would impair the health of its citizens.

Ever since the Honourable Christian Paradis...did the honours of introducing the words ‘net benefit’ into ordinary lexicon...just what ‘net benefit’ is has hardly ceased to exercise minds.

Any ‘net benefit’, they say, resulting from Lynas being in Malaysia was not in the nation’s interest. It actually belonged to Australia! Ever since the Honourable Christian Paradis, Canadian Minister of Industry, did the honours of introducing the words ‘net benefit’ into ordinary lexicon when initially denying Petronas a takeover of Progress Energy Resources; just what is ‘net benefit’ has hardly ceased to exercise minds. As relative as ‘net benefit’ is, it is also contextual. And nothing actually becomes clear until and when the conditions, regulations and customary

obligations within which the phrase find currency are made available. Yet the intense passion the world saw during the fiercely debated issue of whether to allow Malaysia’s stateowned oil company Petronas into Canada through a purported $6 billion acquisition of Progress Energy Resources Corp. cannot be discounted for what lies beneath the subtext of what that debate stood for, or to put it pointedly: whose ‘net benefit’ the takeover actually symbolized. For Petronas, the Canadian takeover was simple, straight forward and strategically oriented with just a single goal

Image source: Pacific Northwest LNG Project: www.pacificnorthwestlng.com.

With the federal government’s approval of the Petronas bid for Progress Energy Resources in December 2012, the Pacific Northwest LNG Project will result in 3,500 construction jobs and 200 to 300 direct jobs once the facility is operational in 2018. March 2013 BC Shipping News 41

lng terminals If nothing else, the successful takeover of Progress would give Petronas control as the largest holder in the Montney shale gas area of British Columbia and full ownership of the three fields where stakes were purchased...

in mind — to secure and consolidate Malaysia’s dominance in the energy sector and enjoy all the ancillary benefits that come from that dominance. The Progress acquisition was not just about “[securing] substantial long-term strategic resources” in the words of Malaysian maritime academic, Nazery Khalid when speaking to BC Shipping News. It was also part of the oil major’s grand plan of diversifying its revenue base in geopolitically stable regions [so it could] edge gradually towards solidifying its position as an international LNG player. If nothing else, the successful takeover of Progress would give Petronas control as the largest

holder in the Montney shale gas area of British Columbia and full ownership of the three fields where stakes were purchased, a Petronas official was once quoted as saying to the media. Importantly, however, in Khalid’s dictum, the acquisition was for “[merging] the global LNG expertise and market extent of Petronas with Progress’ experience and track record, especially in developing unconventional resources”. And when that comes to pass, Petronas’ avowed aim would be to tap the synergies latent in Progress. There is clearly, as it now seems, no dearth of pointers to why Petronas may seek to diversify its portfolio, especially

BCIT transports.

after the lesson that it learnt from the sorry fate that befell Indonesia some years ago. By not developing its many gas fields — particularly those in Tangguh in West Papua — Jakarta, to its dismay, discovered in 2008 that it could no longer export LNG, help subsidize the energy needs of its poor or even capitalize in picking up the slack meant for Japan because of that nation’s devastating March 2011 earthquake which compelled Tokyo to make a historic, radical switch from nuclear to natural gas. Even with those national and regional imperatives, there is no doubting Petronas’ continued push to fan out across the world. Malaysia, or more precisely, Petronas knows that the nation occupies a very neat, strategic position along the Malacca Straits waterway thus placing it an enviable position at Pengerang in the southern state of Johor to store and transport the gas. Hence, when LNG becomes the energy commodity of choice in the future

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lng terminals — which it decidedly and undoubtedly would, courtesy of today’s environmental groups and environmental consciousness — Malaysia would surely by then have carved a niche for itself in the foreseeable future. That is also not to tamp down the emergence of a LNG spot market which if not for the lack of a global consensus on pricing, could have come around sooner rather than later. Depleting stocks and rising foreign forays Yet amid all that has been cast around, what has really mattered is the ever-depleting reserves of gas in and around Malaysia because of maturing fields. In findings released by the Energy Information Administration, Malaysian gas production has been rising steadily, reaching 2.7 trillion cubic feet (tcf) in 2010, while domestic natural gas consumption has also increased steadily, reaching 1.1 tcf in 2010, thus effectively negating any derived net gains. Most of the exploration is done mainly on the offshore fields in Sarawak and Sabah. But as these fields are maturing, many will be out of commission in no time, industry watchers say. Just how dire the level of natural gas stocks in Malaysia is today, came from a source close to leading Malaysian shipping line MISC, which traditionally transports LNG on the behest of Petronas. “We had 29 LNG tankers. But there is just 27 now. Two of the vessels have been converted,” the source declared, implying, as could otherwise be deduced by the vastly dwindling stocks Petronas currently commands, for export. The inference of depleting stocks became an affirmation when Malaysia’s Star newspaper in a December 2012 edition said that “Petronas [only] had 380 million boe in unconventional gas reserves, a relatively low figure compared with other oil and gas giants”. And the Progress deal, in the words of the paper, was the largest overseas acquisition, perhaps to meet out falling stocks. That said, there unquestionably is little doubt that, where a chance

beckons, Petronas will be there — as demonstrated by its forays into Sudan and other parts of the world. For the interim, Petronas is seemingly planning to install a natural gas transmission pipeline to move natural gas from the production fields to the LNG export facility in Alberta, apart from a public listing in Canada, because as the Malaysian company argued granting access to Progress’s shares would give Canadian investors regulatory oversight of the company. To the unconvinced that may all seem like posturing or grandstanding but as even Canadian Prime Minister

Stephen Harper opined, and reported subsequently by Reuters, the Prime Minister could not be more supportive of the deal as it was a “way to wrest more value for Western Canada’s massive gas reserves” There is no question now of the net benefit the Petronas/Progress deal. No matter the fine print in the Canadian Investment Act, the net benefit belongs to both nations. Jaya Prakash is a Singaporean free lance journalist. He can be reached at prakruby@hotmail.com.

Quick facts on Petronas, Progress Energy Resources Corp. and the Pacific Northwest LNG Project

n December 2012, the federal government approved a $6 billion take-over of Progress Energy Resources Corp. by Petronas, the national oil and gas company of Malaysia.

Progress Energy is a Canadian company foccused on exploration, development and production of natural gas resources in northeast B.C. and northwest Alberta. It is the largest holder of natural gas rights in the Montney area, including 700,000 acres in North Montney. Petronas (Petroliam Nasional Berhard) is one of the world’s leading LNG companies. It is fully involved in every aspect of the LNG business, from liquefaction and shipping to re-gasification and trading. Petronas was incorporated in August 1974 and has grown to include over 103 wholly owned subsidiaries, 19 partly owned outfits and 57 associated companies. Petronas established its first LNG plant in 1983 and currently operates one of the largest LNG facilities in Bintulu, Sarawak, which consists of three plants with a combined capacity of 24 million tonnes per annum. Petronas has one of the largest LNG carrier fleets in the world, operated through MISC Berhard, the leading international shipping line of Malaysia. MISC has a divrsified fleet of over 115 vessels including 27 LNG carriers. Globally, there have been more than 80,000 LNG voyages worldwide (more than 128 million miles) to date without a major incident at sea or in port. The Pacific Northwest LNG Project is a proposed Liquefied Natural Gas export facility on Lelu Island within the District of Port Edward on land administered by the Port of Prince Rupert. The facility will see a $9-$11 billion investment that will result in 3,500 construction jobs and 200-300 direct jobs. Following a government regulatory review process, expected to take two years, initial construction would begin in late 2014 with the delivery of LNG starting in late 2018. In January 2013, TransCanada Corp. was chosen by Progress to build the 750-kilometre pipeline from the Montney area to the facility on Lelu Island. It is expected to have the capacity of two billion cubic feet a day with the ability to expand to 3.6 billion. Pipeline construction will create 2,500 jobs over a threeyear period. March 2013 BC Shipping News 43

Supplier’s maritime lien for services provided to ship under construction is denied By Thomas S. Hawkins

A Vancouver Lawyer with Bernard & Partners

n 2010, Canadian Maritime Law was changed by the enactment of Section 139 of the Marine Liability Act. That Section created a maritime lien where none existed previously. Prior to this enactment, unpaid Canadian suppliers of necessaries had, at best, only a statutory right in rem against the ship over which they rendered service. In contrast, in the United States, unpaid suppliers of necessaries to ships enjoy a maritime lien. The holder of a maritime lien enjoys many advantages. A supplier who is considered a maritime lien claimant will typically outrank other creditors including bank mortgagees and his right in rem is not defeated by the sale of the ship. The difficulty arose in Canada when the Courts were dealing with conflict-of-laws issues involving a ship under arrest that had to be sold to satisfy claimants including mortgagees.

44 BC Shipping News March 2013

The Canadian Courts recognized the American necessaries suppliers as maritime lien claimants, giving them a priority above mortgagees...whereas the Canadian suppliers, under Canadian law, were given no such priority.

The Canadian Courts recognized the American necessaries suppliers as maritime lien claimants, giving them a priority above mortgagees and other claimants, whereas the Canadian suppliers, under Canadian law, were given no such priority. Section 139 now gives Canadian suppliers a maritime lien. A recent 2012 decision of the Federal Court in Comfact Corporation v. The Ship Identified as “Hull 717” 2012 FC, 1161, considered whether the Plaintiff, Comfact, a company providing welding services to a shipbuilder, Davie Yard Inc., enjoyed a maritime lien pursuant

to Section 139 of the Act over a ship under construction. Facts In 2009, Davie Yard, as builder, entered into a subcontract with the Plaintiff, Comfact, to provide skilled welding services on the Defendant Ship “Hull 717” under construction. The ship was being built in Canada for the benefit of a Norwegian corporation. The Export Development Bank was recorded as the first Mortgagee in order to secure an account current. Pursuant to Quebec Superior Court orders, Davie Yard’s assets were sold to a consortium of companies. Thereafter, Comfact, which admittedly had no claim against the owner of “Hull 717”, or anyone other than Davie Yard, filed an action in rem only against the Defendant Ship “Hull 717”. The Export Development Bank, recorded as the first Mortgagee, appeared in order to defeat the Plaintiff’s claim as a person clearly interested in the ship. The Decision Section 139 of the Marine Liability Act provides that a person carrying on business in Canada has a maritime lien against a foreign vessel for claims that arise: • In respect of goods, materials or services supplied for its operation or maintenance including stevedoring and lighterage; or,

legal affairs Photo source: Wikipedia

• Out of contract relating to the repair or equipping of the foreign vessel. The Court noted that Section 22(2) (n) of the Federal Courts Act confirms the Court’s jurisdiction in respect to claims arising out of a contract relating to the construction, repair or equipping of a ship. “Construction” is missing from Section 139 of the Marine Liability Act. Comfact argued that this absence is merely parsimonious (or stingy) language. The bank’s position was that the absence of the word “construction” is fatal to Comfact’s claim on the basis that Parliament obviously intended to exclude shipbuilders, and their suppliers/subcontractors from the ambit of Section 139 of the Act. The Court considered closely the insertion of the word “construction” in Section 22(2)(n) of the Federal Courts Act dealing with jurisdiction and its exclusion in Section 139(2)(b) of the Marine Liability Act. After reviewing cases dealing with the construction of the wording of statutes, the Court noted that there is a presumption that the legislator included in the statute the elements which he meant to include. The Court also referred to authority stating that when a provision mentions one or more items but is silent with respect to other items, that are comparable, it is presumed that the silence is deliberate. The Court again referenced the Federal Courts Act and noted that, in 1971, the language was changed to “construction, repair or equipping of a ship”, in respect to the Court’s admiralty jurisdiction. Ultimately, the Court concluded by saying: “I cannot accept that the failure to mention “building” or “construction” in Section 139(2)(b) of the Marine Liability Act was a slip. Parliament could not have intended to grant a maritime lien to those engaged in the construction of a ship, such as the Plaintiff in this case.” The Court’s conclusion meant that the welding subcontractor, Comfact, providing services to the shipyard, was not entitled to a maritime lien over “Hull 717”. This eliminated any opportunity for Comfact’s claim to rank higher in priority than the bank’s first mortgage. There is no doubt that the policy shift in Canada, leading to the enactment of Section 139 of the Marine Liability

Davie Yard Inc. first filed for protection in 2010. Act in 2010 that created a maritime lien for Canadian necessaries suppliers, has significantly increased the ability of those suppliers to recover on their claims given their ranking above mortgagees. However, the Federal Court in this case reviewed the specific wording, particularly the inclusion and exclusion in various provisions of the word “construction”

and concluded that it was the clear intention of Parliament that shipbuilders and their subcontractors would not benefit from Section 139. Tom Hawkins is a partner with Bernard & Partners in Vancouver and practices in the area of Maritime Law, Marine Insurance and Bodily Injury. Tom can be reached at Hawkins@bernardpartners. com.

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Short sea shipping may offer solutions for port and road congestion

46 BC Shipping News March 2013

“While one barge uses more fuel than one truck, the obvious benefit of using one barge versus 100 trucks was immediately identifiable. Not only is less fuel used overall, air quality would see a huge improvement...”

The argument for a short sea shipping route up the Fraser River is not a new idea — indeed, the 2005 study concluded that, while more detailed work was required in a number of areas, the data and information gathered and provided was encouraging and could present a new business and logistical opportunity for Greater Vancouver. The arguments laid out in that report — from improved air quality to an easing of both road and port congestion — provided a good starting point for this new study. Woolley and his team, using opensourced material and statistics, started with a scenario of moving 100 containers and noted the immediate environmental impact of taking 100 trucks off the road. “While one barge uses more fuel than one truck, the obvious benefit

of using one barge versus 100 trucks was immediately identifiable. Not only is less fuel used overall, air quality would see a huge improvement,” said Woolley. In the past, trucking was seen as a cheaper and more flexible way to move containers. “Short sea shipping does not have the flexibility of truck movements and is limited to the river but with the growth of big box stores, like Walmart, delivering large quantities of non-time-sensitive goods by barge closer to distribution centres could eliminate the need for increasing numbers of trucks waiting at the port gates.” For short sea shipping to be a more attractive option to trucking, Woolley’s study identified a tipping point of a 50 to 80-kilometre speed for trucks with fuel below the $1 mark. The additional

Graph courtesy of Michael Woolley

hen considering options for the future movement of goods in the Lower Mainland, issues such as fuel costs, port (and road) congestion, volume of goods, air quality and social costs are all taken into account in a new study released by BCIT’s SITE Centre for Applied Research: The Fraser River Short Sea Shipping Study. Lead investigator, Michael Woolley, outlined the results of the study which compared the cost of local, containerized cargo movement by truck and by short sea shipping to and from Deltaport. In addition to providing comparisons to experiences in China (the Yangtze River), Europe (the Rhine River) and the Great Lakes (the H20 Highway), the study’s main goal was to answer the question: is short sea shipping a feasible alternative for the Lower Mainland of British Columbia. The short answer is yes. Taking a typical volume, such as that seen in June, 2012, and using a number of assumptions — for example, 100teu barges to start and working toward a potential for 400-teu barges, the study considered Mission as the ultimate destination that could easily accommodate a facility for short sea shipping. “Mission has access to rail, the highway and the U.S. border,” said Woolley, “as well as plenty of land that could be considered usable.” Woolley went on to explain that this study builds on the pre-feasibility report, Greater Vancouver Short Sea Container Shipping Study, that was presented to port stakeholders in 2005. “That report identified 15 locations along the Fraser River as potential landing points. We settled on Mission as the ideal location to investigate as it is the furthest point up the Fraser that one could reasonably go without incurring the excessive additional expense of dredging large portions of the SSS lane.” Woolley was quick to note that, for this scenario to be viable, collaboration between government and industry would be required but that the end result would be of benefit to both.

An argument in favour of a short sea shipping route up the Fraser River....The optimistic scenario above puts the average truck speed at 70 km/h and average barge speed at 6.5 knots (or 12 km/h); the pessimistic scenario shows an average truck speed of 40 km/h and average barge speed at 4.3 knots (eight km/h).

short sea shipping issue of port wait times was factored in and now, given an average speed of 30 kilometres per hour, $1.35 per litre and wait times as much as two to four hours, Woolley estimates that we have hit the benchmark which puts short sea shipping firmly in the realm of possibility. “Assuming a viable facility is available, we’re already at the point where short sea shipping makes more sense than trucking. And when you factor in the costs of road maintenance and the anticipated growth of container shipping, the argument to develop short sea shipping routes up the Fraser River becomes even more compelling.” While the report identifies challenges — tides, dredging, river flow and freshet to name a few — Woolley is convinced the benefits of short sea shipping outweigh the challenges that would need to be overcome. Navigation, including bridge clearances and channel redesigns, long-term government commitment and investment, facility infrastructure and a negative reaction from local neighbourhoods were all cited as issues that would require solutions before any project could move forward in earnest. However, the benefits of short sea shipping and the potential to facilitate growth of the Port Metro Vancouver area of operation are so attractive that Woolley feels the viability of such a project would be worth further investigation. “Given the potential three to six per cent annual growth forecast for container volumes over the next decade, the option for a short sea shipping facility further up the Fraser River would give Port Metro Vancouver more space and greater flexibility for their current developments,” said Woolley. “The movement of non-time-sensitive goods away from Deltaport would free up capacity and would provide trucks who continue to visit the Port less congestion and easier movement on the roads.” Woolley also identified benefits such as: • Potential collaboration and partnerships with Fraser River First Nations groups for labour, land use and environmental stewardship. • Carbon tax offsets and credits for governments who reduce air emissions. • Less traffic through Lower Mainland residential neighbourhoods. • A potential boom in shipbuilding as more barges are needed to accommodate growth. Woolley also noted that innovations to the container industry and short sea shipping, such as collapsible containers to facilitate the storage and movement of empties, automatic handling, on-board cranes on barges and fuel efficient developments would make the short sea shipping option more and more alluring for industry. “Eventually, a system similar to the Rhine River, where there are multiple stops for pick up and drop off, could be realized here,” said Woolley. Woolley indicated that next steps for the study, in addition to presenting to industry and government stakeholders, could include more in-depth investigation of issues identified — for example, greater consultation with labour unions, shipping companies and local communities would be required for a complete picture of the likelihood of a short sea shipping route and facility to Mission.

This study was undertaken as part of a project for BCIT’s SITE Centre for Applied Research. BCIT conducts applied research to enhance the learner experience and advance the state-of-practice. The program supports employer success and economic development by focusing applied research activities in areas that engage faculty and students to solve business and industry problems to increase competitive strength. For more information, visit: www.bcit.ca/appliedresearch/. BCSN

With a potential three to six per cent annual growth forecast for container volumes over the next decade, the option for a short sea shipping facility further up the Fraser River could potentially answer Port Metro Vancouver’s need for more space.

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March 2013 BC Shipping News 47

engines Wärtsilä off to a good start on the Island

ärtsilä is making its presence known on Vancouver Island in a big way. In addition to opening up a new shop in Victoria, the marine industry’s leading solutions and services provider donated a Wärtsilä 26 medium speed diesel engine to the Industrial Marine Training and Applied Research Center (IMTARC) at Camosun College. New workshop Wärtsilä opened their new shop on Vancouver Island in late January. The workshop (1759 Sean Heights in Saanichton) covers 500 square metres and has been built according to latest workshop standards with two 10-tonne cranes. It is fully equipped to perform overhauls and repairs on engines as well as propulsion equipment. Wärtsilä Canada (http://www.wartsila.com/en_ CA/Home) now operates in Vancouver (Richmond), Victoria, Montreal, Halifax (Dartmouth) and St. John’s with Vancouver being the head office and centre of excellence for reconditioning

Left to right: Rumi Mistry (Director, Service Unit Canada); Frank Donnelly (Managing Director, Wãrtsilã North America) and Mark Keneford (Managing Director, Wãrtsilã Canada Inc.)

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48 BC Shipping News March 2013

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services for the America’s region. Each location is capable of handling all Wärtsilä OEM engine workshop services as well as engine repairs and overhaul services for other manafucturers’ equipment including MAN, B&W and Pielstick. New engine for training program The Wärtsilä 26 diesel engine was presented to IMTARC represetatives on January 22 and will be one of the main training tools for the new marine training programs that will inspire the next generation of Marine Engineers. The donated equipment, a six-cylinder in-line Wärtsilä 26 diesel engine, represents the latest in engine technology advances. In combining fuel economy and low emission levels with high fuel versatility, the Wärtsilä 26 engine offers environmentally sustainable operations with low operating costs. The six-cylinder engine has a 1950 kW output at 900 rpm, a 260-mm diameter cylinder bore, and a 320-mm piston stroke. The design of the engine facilitates direct access to the vital parts for easy maintenance. Simplified maintenance

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Wärtsilä’s new workshop on Vancouver Island.

The Wärtsilä 26 medium speed diesel engine. procedures are also enhanced by the minimal number of parts achieved by combining functionalities within the same component, hydraulic tensioning of the studs for the cylinder head, connecting rod and main bearings, automatic lubricating of the oil filter, and easy removal of the cylinder head. Wärtsilä is dedicated to investing significantly to support all aspects of the marine industry, and to offering up-to-date training support to committed students who intend to dedicate their careers to the marine engineering sector. “The engine donation project outcome is a coordination of efforts by many people within Wärtsilä, and demonstrates our commitment to investing in Marine Educational Institutions. We at Wärtsilä Canada are pleased to do everything possible to support higher education and to build a

strong partnership with marine institutions that will serve excellence. We are honored that generations of students will be able to get hands-on experience with a modern engine, and one which is predominant in the marine market. Our future maritime leaders need to keep pace with the latest in marine industry technology, and this donation will help them do just that” stated Mark Keneford, Managing Director, Wärtsilä Canada. “Canadian colleges have added another role to their broad community-oriented portfolio — that of being regional access centres for technology expertise and practitioner innovation,” says Dr. Tom Roemer, Camosun College’s Vice President of Strategic Development. “Camosun has stood up to this new challenge and is a respected provincial leader both in skills training and in applied research. Marine, aerospace and resource industry training and technology (MARCenTTS) is our focus. We are equally proud and appreciative that worldwide industry leaders like Wärtsilä Corporation are so supportive and joining a strong consortium towards the creation of Camosun’s new Centre for Trades Education and Innovation.”

March 2013 BC Shipping News 49

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