BC Shipping News - May 2012

INSIDE: TUG AND WORKBOAT DESIGN GUIDE

BC SHIPPING NEWS

Volume 2 Issue 4

www.bcshippingnews.com

May 2012

Commercial Marine News for Canada’s West Coast.

Energy policy & trade

Shifting tailwinds propel Canada’s energy trade

Industry insight

Robert G. Allan, P.Eng., Robert Allan Ltd. One part birthright, two parts skill, three parts passion

12-MAY

Greater Victoria Harbour Authority

MAY 2012

$4.95

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New CEO wants to have Victoria Harbour flying high

Plus: Fraser Surrey Docks celebrates 50 years in operation

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74470 80667

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May 2012

Volume 2 Issue 4

Contents

On the cover: 3D model of a Robert Allan Ltd. RAVE tug.

Photo courtesy of Robert Allan Ltd.

Cover Story - P.34

Shifting tailwinds propel Canada’s energy trade

By Darryl Anderson

Photo credit: Ray Dykes, PR Plus

10 Industry insight One part birthright, two parts skill, three parts passion BCSN speaks with the Executive Chairman of Robert Allan Ltd. and learns the ingredients of success.

26

Tugs and workboats Tug and workboat design guide

BCSN and Robert Allan Ltd. worked closely together to develop this reference guide that provides a basic primer to help understand the many types of tugs, workboats and other small commercial craft which ply our waters.

52 Industry growth

New Travelift attracts new customers to Arrow Arrow Marine Services in Richmond now has the distinction of owning the largest marine Travelift in Western Canada. For a company with roots going as far back as 1918, Arrow proves it’s still got room to grow.

D E P A R T M E N T S

F E A T U R E S

Robert G. Allan, P.Eng.

6

News briefs / industry traffic

19

History lesson

21

Ports & terminals I

23

Ports & terminals II

38

International shipping I

42

International shipping II

46

Legal affairs

49

Marine surveyors in B.C.

Letters to the editor and news Ship shape: A man behind the design of ships

By Lisa Glandt

Fraser Surrey Docks celebrates 50 years in operation New CEO wants to have Victoria Harbour flying high

By Ray Dykes Indian port development

By Syd Heal

MEPC 63 and regulating greenhouse gases (GHGs)

By Kaity Arsoniadis-Stein The state of salvage laws in Canada

By W.Gary Wharton An introduction to marine surveying

By J.Timothy Ellis May 2012 BC Shipping News 3

May 2012 Volume 2/Issue 4 Publisher McIvor Communications Inc. President & Editor Jane McIvor

Located at Vancouver Waterfront and Roberts Bank

www.flyingangel.ca

Contributing Writers Robert G. Allan Darryl Anderson Kaity Arsoniadis-Stein Ray Dykes J.Timothy Ellis Brady Erno Lisa Glandt Syd Heal W.Gary Wharton Advertising Mark Collett / MSL Marketing & Sales Phone: 604-351-0211 / Email: mark@bcshippingnews.com Stephen Fountaine Phone: 250-861-9006 / Email: stephen@bcshippingnews.com

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EDITOR’S NOTE

The good news keeps getting better

D

espite the ongoing debate of oil tanker traffic on the West Coast and some continued uncertainty in markets, including spot charter rates, British Columbians have many reasons to be optimistic about the future of our shipping industry.

It seems like not a day has gone by in the last six months where there hasn’t been an announcement related to shipbuilding contracts, Gateway improvements, discussions on potential free trade agreements or private investments into B.C.’s resource base: • Prime Minister Harper has been on multiple trips to Asia to discuss increases in trade relations; • the BC Government recently announced an additional investment of $700 million to Gateway infrastructure improvements — added to $300

million already committed for initiatives like the expansion of facilities at the Port of Prince Rupert and the South Fraser Perimeter Road; • Seaspan was just awarded additional NSPS vessels under the National Shipbuilding Procurement Strategy (NSPS); • the federal government budget provided some incredibly positive news for the industry (including the $5.2 billion for the additional NSPS vessels plus $101 million to upgrade Esquimalt Graving Dock, $165 million towards responsible resource development and a number of proposed changes to Acts that will help spur development and growth); • energy giant Petronas announced their desire to invest $5 billion in natural gas resources.

The list goes on but I’m short on space. The point I’d like to make is... well, nothing really, it’s just a great time to be in the industry. I’ve written this before but can’t help notice that there is an energy in the air and a sense of renewal and vibrancy that hasn’t been seen for many years in shipping sectors on the West Coast.

And, because it’s a very sunny day and spring has finally sprung, for now, I’ll ignore the tanker protests, the low spot charter rates, the continued (albeit getting better) uncertainty of the world’s economy and the growing need for more skilled labour as a huge segment of the workforce moves closer to retirement (a topic we’ll be looking at in the June issue). I’m just happy to focus on the positive for now. BCSN — Jane McIvor

Member of:

International Sailor’s Society Canada

May 2012 BC Shipping News 5

INDUSTRY traffic Neptune Terminals sets new terminal handling record

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eptune Bulk Terminals (Canada) Ltd. has achieved a new terminal best for the amount of product handled in 2011, with a record 12.85 million metric tonnes shipped through the terminal. This overall record was coupled with a new benchmark for the potash system, which recently underwent a $49 million capacity upgrade completed in 2011. This expansion increased annual potash capacity by approximately 30 per cent, to 11.5 million metric tonnes.

“We surpassed our previous handling record by 12 per cent — while undergoing construction — which is a credit to the efforts of our operations, maintenance and construction teams,” says Neptune Terminals President and CEO, Jim Belsheim. “Through strategic investments in our terminal, we have delivered a reliable supply chain for our shareholders and their customers, and these investments are paying off.”

In addition, the potash capacity upgrade, the North Shore Trade Area projects and the coal capacity upgrade announced in 2011 increased Neptune’s ability to handle longer trains, reducing the environmental

Neptune Bulk Terminals on the North Shore.

6 BC Shipping News May 2012

footprint for every tonne of product shipped.

“We’ve been able to successfully increase our handling capacity and also improve our environmental performance.

Respecting the environment and our community is a core value at Neptune.

We are continually striving to operate to the highest standards of environmental excellence,” added Belsheim.

Neptune’s growth resulted in a 20 per cent increase in jobs from 250 to almost 300 by the end of 2011. This number is anticipated to grow to 400 when terminal upgrades are completed.

Further upgrades include the recently announced $63.5 million investment in new equipment to improve the terminal coal capacity, optimize energy efficiency, and enhance environmental performance. This investment included the installation of a new $6.5 million rail-car positioning system for train off-loading, along with a $12 million site power system upgrade to optimize energy efficiency on the site. The railcar positioning system is a mechanical system for moving unit trains on site quietly and with accuracy, and accommodates Neptune’s growing volumes.

NEWS BRIEFS Corvus Energy battery used for first true hybrid system

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ichmond-based Corvus Energy is teaming up with DNV, Wartsila and Eidesvik Offshore on the research project FellowSHIP to install the first true hybrid energy system for the offshore supply vessel, Viking Lady — a threeyear-old LNG-fuelled vessel which was the first merchant ship to use a fuel cell as part of its propulsion.

This new system, using a Corvus Energy battery pack for energy storage, will reduce emissions from the vessel even further. The primary potential benefits of the hybrid energy system for a ship like the Viking Lady are a 20 to 30 per cent reduction in fuel consumption and CO2 emissions through smoother and more efficient operation of the engines and fuel cell. The reductions of

The Viking Lady, owned by Eidesvik Offshore, was the first LNG-fuelled vessel and will have the first true hybrid energy system.

other exhaust components are even higher.

The Corvus Energy battery pack in the Viking Lady will consist of four packs of 17 AT6500 modules, for a total of 68 modules — or about half of a megawatt. The maximum bus voltage is 856V with a maximum current of 1000A. Each pack is rated at 250A and there will be four in parallel. The pack doesn’t need a cooling system due to its extremely low internal resistance.

The batteries’ cathode is nickel manganese cobalt and has about 20 to 25 per cent more power than competing lithium ion versions. The pack is located on the foredeck in a classified EX Zone One area. It is housed in a DNV certified shipping container purpose-built to this international specification.

The new DNV class rules for batterypowered ships have been developed in parallel to this. These are the first class rules developed in order for batteries to be used as part of a vessel’s propulsion energy — both as hybrid solutions and for “pure” battery-driven vessels.

The project is due for completion in 2013.

May 2012 BC Shipping News 7

INDUSTRY traffic ZF Marine propulsion selected for research vessel

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F Marine recently announced that they were selected as a systems supplier to the newly launched R/V Sea Scout.

The Sea Scout, built by All American Marine in Bellingham, WA and owned and operated by C&C Technologies Inc., is believed to be the first catamaran featuring quad propeller propulsion. Sea Scout will be used for various shallow and deep water surveys as well as autonomous underwater vehicle operations.

The catamaran hull design was a departure for this traditionally monohulled vessel operator. Teknicraft Design Ltd. was charged with designing a vessel that could run efficiently at both high and low speeds for extended periods of time. As a result, a unique propulsion system was specified for the

8 BC Shipping News May 2012

The newly launched Sea Scout. vessel, one that would enable the vessel to transit to site more quickly and stay on site longer.

The Sea Scout is equipped with two ZF 3055A transmissions mated to the two specified Caterpillar C32 main engines and two ZF 550V transmissions mated to two smaller Caterpillar C18s.

The four power packages are completed with shafting, shaft brakes (on the C18 systems), bearings, and custom propellers, all supplied by ZF Marine.

All four propulsion systems are controlled by two sets of ZF SmartCommand™ control systems, one set for each of the vessel’s propulsion systems. To minimize transit time to the research site, the power of all four engines is employed, giving the vessel a top service speed of 26 knots.

When the vessel arrives on site, the large engines are shut down, and the vessel runs on the two smaller power packages that employ trolling valves.

The trolling valves, combined with SmartCommand’s AutoTroll™ functionality, enables the crew to set exact vessel speeds — down to individual shaft rotations. Autotroll™ can be used for extended periods of time during survey operations without risk of damage to the transmissions. This feature will be extremely useful in helping perform research activities on board the vessel.

“We’ve been excited to be a part of this unique project, it’s a great demonstration of our ability to partner with builders to help design and supply robust dependable solutions. The teams at Teknicraft and All American worked hand in hand with our in-house naval architects to insure a reliable solution that meets the performance requirements of the owners,” said Keith Sparks, Propulsion Manager, ZF Marine LLC.

letter to the editor Kudos and errors...

Dear Jane, I recently renewed my subscription to BC Shipping News as I enjoy this informative magazine.

I would like to lend my support and concurrence to George Adams’ wellwritten and timely letter. I spent 14 years sailing on deepsea tankers ranging from 12,000 to 225,000 tonnes deadweight with BP, albeit in the 1960s and 1970s. While technology and construction methods have changed, the basics are still there. Unfortunately, the media frequently make their case for oil spills thinking of the whole cargo, plus it is either measured in litres or barrels as the numbers are so much more impressive than the normal measurement of tonnes. In addition to my tanker experience, I spent five years plying this coast with the Canadian Coast Guard, primarily in search and rescue work. I followed this with 17 years working for the Pacific Pilotage Authority as operations manager and, latterly, as general manager. Having said all this, I would expect transits of the coastal waters by tankers to be as safe, if not safer than any other vessel, including cruise ships.

Tanker construction and movements have to be the most scrutinized and regulated of any ships afloat.

This brings me to my second point, and that is Ray Dykes’ article “Just how safe is our coast for supertankers?”.

While I enjoy Ray’s writings I wish he would get his facts straight and research with a little more diligence. What first struck me was the massive error in the caption under the picture of the tanker.

To the best of my knowledge there is no ship afloat, nor is there one on the drawing boards, for a tanker that will carry “up to 2 million tonnes of oil”. I cannot comprehend the dimensions of such a ship!! The largest tanker I have heard of was around 450,000 tonnes deadweight. I think only two were built and they didn’t last very long.

Further on in Ray’s article he mentions PPA CEO Kevin Obermeyer as “leading the 100 pilots responsible for all docking and undocking of vessels

up and down the B.C. Coast”. From this short quote it is obvious to me that Ray does not understand the relationship between the PPA and the BC Coast Pilots Ltd. The PPA is a federal crown corporation and the BC Coast Pilots contract their pilotage services to them.

He also fails to recognize that the pilots don’t just dock and undock the ships — they navigate those ships over the entire B.C. Coast — it is all compulsory pilotage waters. You might want to consider a future article featuring the PPA and/or the BC Coast Pilots.

In the continuation of the article on page 46, Ray says “the pilots work for the BC Coastal Marine Pilots”. The company name is BC Coast Pilots Ltd. It is the PPA that dispatches the pilots, not the BCCP. The PPA also arranges all the transportation and the billing and collection of pilotage dues.

I have to say that Ray wrote a good article but, please, in his next one I hope he gets his facts and titles correct.

Sincerely, David Batchelor [Editor’s note: The error David refers to in the caption for the photo of a tanker in Ray’s article was my fault — it should have read “barrels” as opposed to “tonnes”.

Thanks for catching that, David.]

MLI releases report on oil tanker traffic

T

he Macdonald-Laurier Institute has released Making Oil and Water Mix, a report which looks at the economic consequences of a prohibition on tanker traffic; safety and environmental considerations; and legal aspects.

The report concludes that the proposed ban on oil tanker traffic would cost Canada hundreds of billions in lost revenue and tens of thousands of jobs.

The ban would also force Canada to abandon an extremely safe and efficient way to transport oil — oil that then would have to be shipped by means that would increase cost and greenhouse gas emissions. Finally, the ban would undoubtedly be challenged under international law because it would seem Canada does not have the right to prohibit all passage in the area in question and the ban would prevent the U.S. from supplying oil to some of their Alaska Panhandle communities. By any measure, the costs of the proposed oil tanker ban are extremely high without any corresponding benefit.

The full report can be downloaded at: www.macdonaldlaurier.ca.

May 2012 BC Shipping News 9

INDUSTRY INSIGHT

One part birthright, two parts skill, three parts passion Robert G. Allan, P.Eng. Executive Chairman, Robert Allan Ltd.

T

here are few names in B.C.’s marine industry that are more wellknown or well-respected than that of Allan. The legacy that can be seen in all but a handful of workboats on the B.C. Coast demonstrates a consistent 82-year reputation of ingenuity, innovation and expertise. While being born into a family of expert naval architects might intimidate some, Robert G. Allan can’t believe his luck.

As we find out through our interview though, being born into a legacy is only a part of what makes a talented naval architect. Skill and passion are so evident when Rob discusses the many aspects of design and marine engineering, that it becomes clear that it is the local marine industry who should consider themselves lucky.

BCSN: Could you provide an overview of shipbuilding activities and how they have driven trends in naval architecture?

RA: In historical terms, centres of excellence for shipbuilding have all waxed and waned — and continue to do so — all generally in pursuit of lower labour costs. Britain was the leading shipbuilder for many generations but

10 BC Shipping News May 2012

by the early 1970s that started to fade.

The technical expertise was there, both in terms of design and construction, but the labour costs were simply getting too high. After the Second World War, the Japanese, then the Koreans started building up their expertise, especially in the big ship market. Small vessels are more difficult to transport large distances and don’t trade internationally so they tend to get built closer to where they’re used. Increasingly, that’s changing though.

Steel boats can be patched and repaired but only up to a point and I think that point is getting very close now.

For Canada, we had a very viable industry here in Vancouver, largely to support local industry — forestry, fishing and mining. Following the boom of the Second World War, there was a complete revival of the coastal towing industry throughout the 1960s and into the 1970s that was spurred on by the Ship Construction Assistance Regulations (renamed to the Ship

Construction Subsidy Regulations in 1966, the Shipbuilding Temporary Assistance Program in 1970 and finally the Shipbuilding Industry Assistance Program that lasted until 1986). The subsidy allowed for the B.C. coastal towing industry to completely rebuild itself from the old wooden tugs and barges to new modern steel vessels — it created a whole new, much more efficient industry for the transportation of goods up and down this coast. But what was new and innovative in the 1960s is now pretty old. Steel boats can be patched and repaired but only up to a point and I think that point is getting very close now. The cost of maintenance continues to escalate to where far more is spent on repairs and you get more unpredictable downtime.

That subsidy started off at about 40 per cent but declined over time until it was completely finished by the mid1980s. I can’t speak to what the government’s motivation was in terms of implementing it but we certainly saw the beneficial effects and it created an absolute centre of excellence here, especially when it came to Arctic technology

INDUSTRY INSIGHT which was booming throughout the entire 1970s. I started working with my father in the early 1970s and it was an exciting time — there was the Mackenzie Valley Pipeline proposal and the beginnings of the Beaufort Sea development. We were designing and building vessels in six and seven months with all of the suppliers located here — a tremendous amount of employment was created.

By the 1980s, with the international oil crisis, everyone pulled out of the Arctic and you had a decade of stalemate. We were hanging on by our fingernails for some of those years. We survived but many didn’t. All of the local shipyards basically closed shop in the 1980s. The federal government did very little — for example, their last major program for Canadian Coast Guard vessels was in the mid-1980s and then nothing until this recent National Shipbuilding Procurement Strategy (NSPS). That’s had a big impact — if we don’t see a continuum of work, there is no incentive for people to join the industry and no potential for improving efficiencies of process. You can’t invest in facilities and training when you’re focused on basic survival.

It’s been unfortunate to see the industry disappear and I hope the NSPS will be sustained long enough so that we see a revival. The country needs a shipbuilding industry. In addition to government fleet needs, there are the general commerce vessels — ferries, tugs and barge operations, fishing vessels — and if you don’t build at home, your dollars are just pouring out the door.

BCSN: How does Asia’s shipbuilding capability factor into this?

RA: I’ve never thought of the big Asian shipyards as competition for what we can do locally but in the last 10 or 15 years, most owners here in B.C. have been getting even the simplest barges built in China because of the price. Even when you factor in transportation and the 25 per cent import duty, they’re still cheaper — and that’s really sad. It’s irritating to hear people

say that Canadian shipyards aren’t competitive when we had the facilities and the skill sets but didn’t have that constant and continued support from both our national government and provincial agencies like BC Ferries and Marine Atlantic.

If you have a continuum of well-planned work, there is more than enough to keep three or four good-sized shipyards in Canada going continuously.

If you have a continuum of wellplanned work, there is more than enough to keep three or four goodsized shipyards in Canada going continuously. If you look at the needs of BC Ferries, Marine Atlantic, the Canadian Coast Guard, Fisheries and Oceans Canada and the Department of National Defence, and then all of the general commerce vessels, there is a lot of work available. The stumbling block is our high-wage environment.

I’m very pleased to see that the government has made the statement of intent to provide that continued support through the NSPS. It’s still subject to all the vagaries of politics but we have the opportunity now to rebuild the

industry. I hope it’s not too late because we have lost a tremendous amount of talent at the management and journeyman level and the whole industry is getting old — the median age of people in the shipyards today is in the mid-50s.

It’s the responsibility of those of us in that 55 to 65-year age group to make sure that our skills and knowledge are passed on to the next generation. If that gap is too big, we’ll end up having to import all of the knowledge.

BCSN: What about trends in the type of vessel being built today?

RA: When you look at trends, you have to see where the demands are coming from. Our business here is providing custom design services and although we have many designs that are used for the basis of each project, it’s very rare that we do exactly the same design. For example, one of our most popular tug designs is the RAmparts 3200 — we just signed an order for the 100th. There are at least 80 different designs within that 100 that are customtailored to an owner’s requirements. In that context, we see trends — and in some ways we have established some of these trends. For example, we did a lot of unique designs in response to demands for tanker escort tugs — this created a trend if you like. This was in

Robert Allan (Sr.) and Robert F. “Bob” Allan circa 1956.

May 2012 BC Shipping News 11

INDUSTRY INSIGHT

Rob and Dr. Robin Browne, circa 1982, in Japan on the deck of the newly delivered Icebreaker/AHTS Ikaluk, one of two 79-metre, 15000 BHP Arctic Class 4 icebreakers built for Gulf Canada Resources Inc. Rob said: “The design of these vessels was a career milestone for me, and gave me a great appreciation for Japanese shipbuilding processes. There was no vessel in the world even close to the capability of these ships at the time. The design also began at the same time as my father was dying of cancer, so I was faced with simultaneously directing this major project and taking over the administration of the company. It was a very challenging time! Robin and I continue to work together on Arctic projects along with a team of several others who were involved in that era.”

Tools of the trade that Rob’s grandfather used.

12 BC Shipping News May 2012

response to the Oil Pollution Act in the early 1990s and oil tanker escort tug design has been evolving ever since.

In the last five to 10 years, one of the major trends has been in the demand for LNG terminal tugs which are an offshoot of that tanker escort tug design. Five or six years ago, everything was about LNG. We were in a very fortunate position because a lot of the work that we’d done in developing our escort-capable hulls provided superior sea-keeping capabilities and that allowed us to offer escort and offshore-capable designs to the LNG industry. The heat’s gone off that lately — there’s still a lot going on in the Middle East and while it’s still active here and there, it’s nowhere near the boom we saw between 2005 and 2008.

Since then, the trend has all been toward greener machines, much of which is being driven by emissions regulations. A lot of work has been going on for the past three or four years on the whole business of greater fuel efficiencies and less emissions through hybrid technologies. A good example is Foss’ Carolyn Dorothy, the first hybrid tug in the world. It was our design and while we weren’t deeply involved in the hybridization aspects, we still had to make it all fit and float in an existing design (Foss built 12 or 14 vessels of that design, two of which are hybrids). The hybrid package adds to the cost and I believe the Ports of Los Angeles and Long Beach as well as the State of California contributed quite a bit. The vessel has proven its merit — it was a test bed for new technology and it has led to refinement in the system and better understanding of how hybrid technologies work — but at a cost.

To determine return on investment, we created some software here internally and, without exception for any project we’ve looked at, there is no return in anything close to approaching the normal life cycle of the vessel. So you have to base the decision to go with any sort of hybrid technology on altruistic merit rather than on financial merit. What concerns me is that there won’t be a level playing field — for example, if you have a number of ports close together and one puts in a requirement that operators must have zero emissions, making it greener but more expensive, the shipper, when choosing which port to go to, will take his business to the cheapest. Unless all ports agree and cover the entire coast, shippers will just go elsewhere. We’re heading to the right end-result but getting there will be costly.

The focus on the environment influences every vessel type. We’re working on a number of different projects with that focus at the moment. The Carolyn Dorothy is a perfect example of how hybrid technology should work — a typical harbour tug will spend 95 per cent of its time idling, waiting to apply 95 per cent of its power for five per cent of the time.

If you can spend all of that idle time on batteries or a small generator set to provide the simple idling power requirements, and then fire up the big engines just when you need them, you’ll save fuel and running time on the big engines and thus your maintenance costs come way down. That’s

INDUSTRY INSIGHT where we’ve identified the major cost savings — in machinery maintenance.

The cost of the batteries is high but coming down. The more they’re used, the better they will become but cost is a stumbling block right now. We’ve been looking at options that are non-battery hybrids — particularly, driving the boat using a small generator for idling and manoeuvring operations. There are simple ways to do that that are cost effective.

BCSN: What have been the major benchmarks in technological advancements for naval architecture?

RA: We were the first consultant firm in the marine field in Canada to invest seriously in computer-aided design (CAD) technology — that was in about 1983. We were probably a couple of years premature because the software wasn’t really available at that time for ship design but we used an architectural software that was well-defined and it allowed us to learn how to work in the CAD environment. This was at a time when the economy was tight but we actually got work because of the new technology. By the early 1990s, CAD technology really took off to the point now where we now have a whole room dedicated to servers.

The basic CAD drawing capabilities have moved from simple 2D-drafting into a full 3D-modelling environment.

We still work largely in 2D but doing more and more in 3D all the time. Once you’ve got the basic drawing issues resolved, there are some very powerful tools today that can do detailed structural stress analysis through finite element modelling and hull performance prediction by computational fluid dynamics (CFD) — basically a virtual towing tank. You can put a proposed hull form into water, see the flow patterns, the pressure on the hull, the waves that are generated. We’re doing a project in South America and one of the important things there is how quickly can you stop a flotilla of barges in a river with a tug — we can simulate reversing the propeller flow to see where the energy goes and where the wake goes and then

actually model the braking of the flotilla. That’s something you couldn’t even dream of doing 20 years ago.

The technology that’s available today is absolutely amazing but it hasn’t completely replaced the human brain and a pencil and paper...

BCSN: Is there too much reliance on technology for design today?

RA: At the end of the day, naval architecture is a creative engineering process. The technology that’s available today is absolutely amazing but it hasn’t completely replaced the human brain and a pencil and paper, especially at the concept stage. If I’m doing a new design concept, it’s a pencil and paper project — the computer is not an effective sketching tool.

I have a slight fear that with a lot of this exotic software, instead of just doing a simple calculation, someone will do a 3D model and a finite element analysis when all that was needed was a simple beam theory calculation. That “first order thinking” is in danger of being lost through total reliance on the machine. This new generation of young engineers that we’ve been hiring are

incredibly smart — but it’s that ability to reason that is one of the key things we look for in new candidates.

BCSN: Compare the process of vessel design between your grandfather, your father and you.

RA: All three of us spent most of our lives hunched over a drawing board.

The major difference is the amount of time spent on each drawing. My grandfather would do a drawing in light pencil and then go over it in ink. I have archives that go back to the 1930s that include drawings done in ink on linen and they’re absolute works of art.

They’re done with a nib pen and every plank has the wood grain marked on it.

I’d love to have the time to do that now.

In my father’s day and my earlier years, we could no longer afford the time to do the ink work, and the paper technology had improved so we were working on vellum. You could do quite nice drawings with pencil on paper but it never matched the ink quality. And today, everything is produced by the computer…much more accurate but lacking that personal touch!

When I look back at some of the projects my father did in the 1960s — he did dozens of big tugs and complex barges — they’d each be represented by 15 or 20 drawings and a specification

“Two very important people in the growth and success of Robert Allan Ltd. internationally: Mr Johannes Ostensjo of Norway (left) who was the first major European tug owner to invite us to design a new tug for them, and Mr. Ali Gurun (centre) of Sanmar Shipyard in Turkey, who was my very first contact in that country and who has gone on to build more than 85 of our tugs in the past 14 years. The occasion above: the first tug built by Sanmar for Ostensjo…a terrific team!”

May 2012 BC Shipping News 13

INDUSTRY INSIGHT document that might have been one to two centimetres thick. That was enough to get a firm price contract with the shipyard. That’s changed — now you have to write specifications that are eight centimetres thick with dozens and dozens of drawings and details. This influences the process of shipbuilding today.

Not so long ago, we would have handshake agreements with our clients for new designs. I remember getting one purchase order from Claire Johnson at Cates Towing and all it had on it were the words “for one tug design”. It illustrates the level of trust and respect people had for one another. Now, we submit a thick proposal that defines every detail and associated costs and there is a great deal of legalese. Today, the product that my father and grandfather produced would be called a preliminary design even though there was more than enough to define many fine vessels.

Another change I’ve seen is that back then, one person designed the whole boat. There is no way one person could do all of this today. We are much more segregated in our skills and teamwork is key with everyone playing to their strengths. Wherein the senior naval

architect would have done a lot of the drawings himself — those people are now supervising and directing the entire project. That generational change is something that’s ongoing and we’re mentoring not only on technical side but the business side as well.

Today, the product that my father and grandfather produced would be called a preliminary design even though there was more than enough to define many fine vessels.

We’re also finding that classification societies are asking for a great deal more analysis of critical elements.

Everything in the world these days is driven by potential liability so anyone in the chain of design or construction of the vessel tends to have a risk manager. We’ve lost a lot of the trust that used to exist amongst all of the players.

I can remember some projects where we just had this wonderful rapport between the client and the shipyards and everyone was on the same team.

When I started in this industry, it was all family-owned companies and

Rob & Enneke — “my wife of 41 years, who has been an incredible support to me and put up with far too many late dinners over the years! Enneke’s father is Fred Spoke, former manager of the Port of Vancouver (currently 91 years old and doing very well!).

I married her before he was hired!”

14 BC Shipping News May 2012

there was this incredible network of successful component suppliers — Wagner, Kobelt, Paramount Pumps.

The Cates family, the McLaren’s at Allied — it was a bit of a Scot’s mafia — but they were all family businesses and you worked family to family. That’s largely gone now.

BCSN: How have new methods of propulsion and onboard technology changed the process of design?

RA: It’s not a problem for us to incorporate modern technology into design.

They’re just pieces of hardware that have volume and mass and have to find a home. So that’s pretty straight forward. The bigger question is: does the owner want it and are his crew trained to deal with it? More often, the challenge is to avoid adopting the latest technology if it doesn’t suit the application. KISS (keep it short and simple) is still a good principle. For example, we’re designing two major fireboats for the Port of Long Beach — we do a lot of fireboats and they’re really interesting vessels, very complex with a lot of equipment. They have very few operating hours but when they’re needed, they have to be there so ongoing maintenance is critical as is reliability of every system. We’re working with people who don’t want to have to worry whether the machine is going to work properly when they need it so simplicity, ease of maintenance and repair, clear access — those elementary aspects are far more important than having the latest touch screen computer. They want a big red button to push that starts the pump.

There is a lot of technology on the vessel but when it comes to the real fundamentals of the propulsion and the fire pumping system, we keep it as simple as possible.

In general though, even the basic diesel engine is now computer-controlled. Maintenance of a lot of this equipment is now reliant on some outsourced supplier rather than the ship’s engineer — for example, the engine maintenance might be done by the guy from Caterpillar that drives down on Friday mornings. That might be okay

for a harbour tug but if you’re travelling the coast and the computer has a glitch, what do you do? There are a lot of advantages and disadvantages with modern technologies but I do feel it’s important not to get caught up with all the gadgets.

There are a lot of advantages and disadvantages with modern technologies but I do feel it’s important not to get caught up with all the gadgets.

BCSN: I understand RAL does quite a bit of research and development.

RA: Yes, people generally didn’t think of tugboats as a subject worthy of much research but we started doing quite a lot 10 or 15 years ago and it has paid huge dividends for us. We get a lot of business because of what we’ve learned. I have to give credit to the federal government for their R&D tax credit scheme. It’s a very good program and allows us to write-off costs that would otherwise be too expensive.

Today, we do a lot of R&D with finite element analysis software and computational fluid dynamics (CFD) analysis.

Previously, we were largely focused on model testing — especially in relation to escort tug design — and we did some innovative work using the model basin out at UBC which has since been closed.

Our model testing is now done in Europe at three times the cost but we’re able to do quite a lot of research-type work with the CFD capability we have in-house — comparative evaluations of different hull forms or appendages and so forth.

BCSN: Could you provide some insight into how government regulations impact on design, especially noting those that are focused on the environment?

RA: If we weren’t faced with the emissions regulations, I don’t think people would be worrying as much about issues like alternative technologies. I fear the industry overall is focussed entirely on solving problems with technology rather than by a more fundamental design May 2012 BC Shipping News 15

INDUSTRY INSIGHT approach. There are a lot of regulations that force us into designing vessels that are less efficient than they could be.

For example, all of the regulations that come into effect for vessels above 24 metres in length — you go from being a small craft to an ocean-going vessel at 24 metres. Why 24 metres? I haven’t a clue but it means that there is a significant economic incentive to stay below that length. And while the focus is on

the length, there’s nothing to dictate what happens to the beam or draught so we end up with these short, fat boats that are very fuel inefficient. If we were really concerned about fuel efficiencies, we’d have longer and thinner vessels.

Who cares whether a harbour tug is 24 or 27 metres long if it means saving a huge amount of fuel?

The fishing vessel regulations are also full of requirements as are the

About Robert G. Allan, P.Eng, FSNAME, FRINA

R

obert G. Allan is the Executive Chairman of the Board of Robert Allan Ltd., the oldest established Naval Architecture consultancy business in Canada, which in 2010 celebrated 80 years of continuous operation in Vancouver. He is the third generation of his family to own and manage this business. Born and raised in Vancouver, he received an honours degree in Naval Architecture from the University of Glasgow in 1971. After working for two years in the U.K., he returned to Canada to join the family business. Since assuming ownership of Robert Allan Ltd. in 1981, he has led the business into a position of wide-spread international recognition in the design of specialized workboats of all types. He is a Registered Professional Engineer in the Province of British Columbia, a Fellow of the Society of Naval Architects and Marine Engineers, (SNAME) and a Fellow of the Royal Institution of Naval Architects (RINA), London.

He has published numerous papers and articles on the subject of tugboat design and performance, as well as on several other topics. In 2006, he authored two major contributions to the latest edition of the SNAME Textbook, Ship Design and Construction: one chapter on “Small Commercial Workboats”, and one on “Tugs and Towboats”. In 2005, Robert Allan was awarded the Royal Institution of Naval Architects Small Craft Group Medal in London “...for his contribution to the field of workboat design, and in particular for his innovative work in the development of tugboats for all types of operation”; and the Society of Naval Architects and Marine Engineers David W. Taylor Medal “for notable achievement in naval architecture and/or marine engineering”, the only Canadian ever to be so honoured.

Rob is married to Enneke, has three sons — Neil, Scott and Murray — and recently welcomed his first grandson, Nico, to the family. “I have three amazingly talented sons and all are doing exceptionally well in their chosen fields,” said Allan. When asked if any had considered continuing on with the family business, Allan noted that: “If any of them had shown any interest I would have certainly encouraged it but I didn’t want them to feel pressured because I never was. I’m incredibly proud of them and happy that they’re doing what they love to do rather than what I want them to do…I think it helped that we didn’t start off by naming any of them Robert as well.”

16 BC Shipping News May 2012

licencing regulations that tie vessels to specific lengths. You end up with fish boats that are short and fat and two decks high and completely unsafe. It’s not just in Canada though. If you look through a magazine from the U.K., you’ll see something that looks like two shoeboxes put together — that can’t be safe but you know it has been designed that way because of the regulations.

Gross tonnage regulations are another example. Buried somewhere in the history of shipping there is a regulation about how much wine a ship could carry and that was the basis of taxation in Phoenicia. It’s not so bad in Canada but the U.S. still has this archaic regulation of gross tonnage measurement where you have to put a whole bunch of completely redundant, inefficient steel into a vessel in order to minimize the internal measured volume because the operating crew’s licences are tied to gross tonnage.

I would prefer to see a regulation that doesn’t tie the requirement for these treatments just to horsepower but rather to horsepower and operating hours.

We’ve come to accept the fact that there are a lot of questionable regulations but now, given the requirements for energy efficiency at all levels, we should be tackling this at the root with good design. We should be designing the most efficient hull form that we can for the application, not for the regulation. I look back at the designs my grandfather did in the 1930s and 1940s for fish boats and motor launches — these lovely long boats with beautiful lines — and those things went along at 10 to 12 knots with a couple of hundred horsepower. Now, we’re building these bathtubs that throw up huge wakes and burn more fuel than needed.

BCSN: What specific challenges do you see coming in with some of the latest regulations, for example Tier III engines?

RA: Tier III regulations that come into effect in 2016 will present

INDUSTRY INSIGHT significant challenges to the workboat industry. The extra emissions-reducing equipment is large and heavy and has to go above the engines, interfering with sightlines. It also has negative impacts on space, stability and safe working areas. I would prefer to see a regulation that doesn’t tie the requirement for these treatments just to horsepower but rather to horsepower and operating hours. Harbour tugs generally have low operating hours — but the best example is a fireboat with typically 500 operating hours per year or less, mostly used for training exercises — and the regulations for exhaust after-treatment gets in the way of that vessel doing its real job. Emissions are tied to operating hours as much as they are to power.

At the end of the day, there’s very little impact on emissions-reduction if a vessel is only operating 500 hours per year.

I’m not saying I don’t agree with the objectives but we shouldn’t lose sight of what the vessels have to do in the process of achieving that environmental standard. Let’s not have unsafe and ridiculously expensive, un-maintainable vessels just to comply with a regulation.

BCSN: Let’s discuss education and training. Can you provide some insight into Canada’s capabilities and a comparison to international institutions? I understand you did your schooling in Scotland. Why there?

RA: When I went to university there was no training in naval architecture in Canada. My choices were the U.S. or the U.K. — Glasgow was my grandfather’s alma mater and it was less expensive so I chose to go there. Today in Canada, Memorial University in Newfoundland is an excellent facility with a good coop program. We’ve hired quite a few graduates from there. UBC has had an on again/off again option in naval architecture through their mechanical engineer department and we have hired several of those graduates as well.

While they are initially more skilled in mechanical engineering than in naval architecture, we’re able to supplement their training quite easily.

I’m optimistic that as part of the NSPS we’re going to see a strengthening

of that program. As part of their value proposition, Seaspan must demonstrate a commitment to support the marine shipbuilding industry and they have plans to support the Engineering Program at UBC to enhance the Naval Architecture Program.

In general, the institutes are doing a good job — my one proviso to that is I don’t think they’re doing enough on the “design” side of things. They teach the fundamentals of the science and they teach the necessary software and the students do go through a design project

About Robert Allan Ltd.

R

obert Allan Ltd. is an independent, privately owned firm of Consulting Naval Architects established in Vancouver. The business was founded in 1930 when Robert Allan commenced private practice as a Consulting Naval Architect after managing a local shipyard. He was responsible for numerous enduring designs produced for the growing British Columbia fishing fleet and for coastal ferry services among others. The firm’s reputation was also enhanced by the design of such notable ocean-going motor yachts as Meander and Fifer.

In 1945, after working as a project manager at Burrard Drydock through the Second World War, Robert F. Allan joined his father in the practice. The growing business was instrumental in the development of specialized tugs and barges for the burgeoning forestry and mining industries along the B.C. Coast. “The first draftsman they hired would have been in the early 1950s. For many years, just about the whole industry was trained in my grandfather’s basement — Derek Cove, Bill Cleaver, Gordon Passmore, Ken Davies, Tom Ward, Peter Woodward and many others,” notes Rob. Incorporated as Robert Allan Ltd. in 1962, the company continued to grow and achieved international recognition for the high standards and performance of many unique and specialized designs. In 1973, Robert G. Allan joined the family tradition, and in 1981, succeeded his father as President, leading the company into a new generation of computer-based design technology, with a variety of distinctive designs for modern high-performance ship-assist and escort tugs, icebreakers, government service vessels, and high speed craft. The company has continued to grow and has established itself as an international leader in commercial small craft design. A staff of highly qualified Professional Engineers, Naval Architects, Marine Engineers, Technologists and Designers handle a wide variety of projects for clients around the world.

In 2008, reflecting the continued growth of the business, the company was restructured to a culture of employee ownership with a core group of senior employees becoming shareholders in the firm. Robert G. Allan moved into the new role of Executive Chairman of the Board and is still actively involved in the day-to-day operations, providing an advisory role to the new owners and a mentoring role to new employees.

Assuming the position of President is Ken Harford, P. Eng., who has been a key figure in the company since 1988, most recently as Vice President, Marine Engineering.

Hans Muhlert, P.Eng., who has been responsible for many Robert Allan Ltd. designs and technical innovations since starting with Robert Allan Ltd. in 1972, has become the Director of Naval Architecture.

For information on Robert Allan Ltd., please visit: www.ral.ca.

May 2012 BC Shipping News 17

INDUSTRY INSIGHT process. The fact that it’s a co-op program is really good as well and graduates come to us with great skills and lots of enthusiasm but if there could be a few short lessons on some of the fundamentals of design — how to lay out a state room, for example — it would really enhance their training.

In terms of comparing Canadian institutes to international ones — we come across students from the U.S. a fair bit through the Society of Naval Architects and Marine Engineers and we watch student design competitions.

Overall, Canadian students do well — ultimately, it really depends on the skills of the professor and their focus.

We currently have some good teachers in the institutions.

We’ve hired quite a number of students that came to work for us through UBC and Memorial’s co-op programs.

They bring all of these new skills and energy and allow us to capitalize on new technologies such as CFD. The combination of new skills combined with the experience here in the office is really paying off.

BCSN: Are you anticipating any challenges with the forecasted bulge of baby boomer retirements?

RA: There is a group of us here who are in the 65-year-old range and our energies are spent on passing along our collective knowledge to this new generation. There will be a bit of a gap once we all decide we’re going to take things a little easier but I think the processes we have in place will make this manageable.

[Ed.note: For questions on future growth of the company, Rob invited Ken Harford, President of Robert Allan Ltd., to join the discussion.]

BCSN: Could you describe the structure that is in place at RAL to deal with continuity and future growth?

Ken Harford: Rob started the process of transferring ownership from his family in 2008 to what we’re now calling the fourth generation of Robert Allan Ltd. There are 10 shareholders right now and we’ve started the process 18 BC Shipping News May 2012

of setting up a mechanism where key employees can acquire ownership over time. The intention is to keep the company completely employee-owned in perpetuity.

The reason we’ve succeeded is because of the people who have been working here who have been every bit as committed as I have been...

As for future growth, we’ve been able to build on the relationships that Rob generated and we’ve been successful in leveraging those — for example, we’re now doing river pusher work in South America, icebreakers in Russia, FSO’s in Asia — and using the skill sets, history and business contacts to expand the scope of business.

All of us within the new ownership group feel very honoured that Rob has trusted us with his family enterprise and we definitely share his objective of keeping the company as a Vancouverbased and owned company.

BCSN: Do you have any advice for someone considering a career in naval architecture?

RA: Love it. It’s not all that different from any other profession — it’s

all-consuming and the demands are significant so you need to love what you’re doing. I would also suggest that you invest the time to understand the operation of the vessel types you’ll be designing and there’s no other way to do that except get involved with the industry and study and read whatever you can. When someone is applying for a job, I always ask what attracted them to the naval architecture field. Some will say that their father was a fisherman and they’ve spent their childhood on a boat and have been fascinated by things like water flow, etc., and then others will say they just thought it looked interesting and couldn’t think of anything else they wanted to do.

If you don’t have any motivation, it’s not likely you’ll see a full career in this business.

BCSN: Anything to add?

RA: I feel incredibly privileged to have been born into this business and to have had the success that we’ve had — it seems like black magic almost.

The reason we’ve succeeded is because of the people who have been working here who have been every bit as committed as I have been — they’ve been hugely influential in our success. I get the credit because I have the name but it really is a shared success. BCSN

“The business of tug design has taken me all around the world and I have met many terrific people…and others, including ships of the desert.”

HISTORY LESSON

Ship shape:

A man behind the design of ships

By Lisa Glandt

Librarian/Archivist, Vancouver Maritime Museum

A

promoted to simple ship repair tasks and boatbuilding.

Francis returned to the sea when Watson’s Shipyard closed and spent the next 10 years on fishing and sealing schooners. During the First World War he served with the United States Merchant Marine as a ship’s carpenter and travelled to ports in the British Isles, France, Portugal and Spain. While on the Dumaru, it caught fire during an electrical storm and the crew was forced to abandon ship. They spent 24 days at sea before landing in the Philippine Islands where locals nursed them back to health. One month later they were rescued by the Coast Guard and taken to Manila. Francis made his way back to Vancouver where he found varied employment — on a ship heading to Australia as ship’s carpenter; at Stone Shipyard in Oakland, California; and in Seattle where he worked in a shipyard repairing and building both the rum runners for smugglers and the Coast Guard rum chasers that pursued them!

Francis then returned to Victoria and devoted all his time to building a double-ended ketch he named The Hobby. He continued to live aboard the boat while taking various shipwright

positions in Seattle and Vancouver.

With a new young family to support, he sold the boat and relocated to Esquimalt where he began building a 36-foot fishing boat where he originated the concept of the cruising stern — a combination of a double-ender stern and a round stern. He also took a position with the Victoria Marine Depot and worked on Navy vessels during the Second World War. Word had spread that Francis was a skilled designer and he was contracted to design the seine boat later named The Isabel Photo credit: Godfrey Stephens

recent reference request found me retrieving a book from our collection titled “A Mariner’s History: Designs and Life Sketch”

by Alexandra Sager and Louise Cole.

Published in 1975, the book recounts the life story of Francis (Frank) Fredette — a Victoria-born boat designer. During his lifetime he produced 100 designs and is recognized by commercial fishermen, pleasure boaters, and naval architects as one of the West Coast’s legendary boat designers.

Francis Edmund Fredette was born in 1894 in Victoria. He was drawn to the harbour — a bustling centre of activity and adventure, filled with ships and their crews telling grand stories of far away ports. As a teenager he built two double-ended rowing skiffs and owned two small sailboats. Hooked on the romance of life at sea, he signed on as cabin boy/cook’s assistant on the sealer Eva Marie at the age of 15. After six months he returned to Victoria where he took on an apprenticeship at the Watson’s Shipyard in James Bay. For two years he worked at the shipyard, starting at the bottom — stoking boilers, cleaning up after shipwrights, and learning to handle tools. After four months he was

Francis Fredette.

May 2012 BC Shipping News 19

VANCOUVER MARITIME MUSEUM

Fredette 34’ gillnetter, design no. 31 (1946).

Humphrey. Francis moved his family to Gabriola Island where he designed and built The Roamer, all done by hand tools as there was no electricity on the island at the time. His wife Irene encouraged him to follow this passion and for a short time Francis turned to designing boats full-time and took some courses in naval architecture. The Fredette household was soon filled with many visitors who hired Francis for his skilled and functional designs.

The Fredette family moved back to Victoria where Francis returned to work at the3/31/12 Victoria Marine Depot.

He remained 1/2 pg h #4_1/2 pg horz 8:56 PM Page 1

with the company until he retired at the age of 65. After retirement, Francis continued to offer his services as a professional boatbuilder, caulker, shipwright and designer for another 20 years. His reputation as a specialist in traditional designs kept him busy during these years and designs for his vessels can be found in boats all over the world. His home in Victoria became a gathering place for friends and boatbuilders alike to talk about boats, boat designs, boat people, tools, supplies and the boatbuilding process. During the course of his career, he drew up plans for booming boats, rowing boats, a replica of a pelagic sealing boat, sailboats, double-ended motor schooners, open cruising sloops, a Vee Bottom open motor boat, and sport cruisers. The use of sail power on fishing boats was one of his design aims as sail gave the fishermen more options and they could stay out longer and in rougher sea conditions.

In 1985, Francis was awarded the City of Victoria’s Honourary Citizens Certificate for his achievements as a ship designer, sealer and sailor. He served as an Honourary Commodore of the annual Classic Boat Festival in Victoria for a number of years and he was a lifetime member of the Thermopylae Club. Francis Fredette passed away in 1986 at the age of 92. He will always be remembered as one of the many talented and passionate people who have helped to shape our local maritime history.

Over a century of service to BC’s marine industry

Phone 604.988.3111 20 BC Shipping News May 2012

www.seaspan.com

PORTS & TERMINALS

Fraser Surrey Docks celebrates 50 years in operation

Multi-purpose deepsea marine terminal on the Fraser River continues to excel at customer service and cargo care.

F

raser Surrey Docks (FSD) is very proud to announce that 2012 marks the 50th year that the terminal has been in operation. FSD has built a reputation for being focused on customer service, safety and handling excellence over numerous types of cargo. That reputation stands true today and is the result of hard work and commitment to FSD’s customers. The safe and professional services provided by FSD are a result of the strong co-operation with their labour force, International Longshore & Warehouse Union (ILWU).

Fraser Surrey Docks is currently the largest multi-purpose terminal on the West Coast of North America, handling commodities such as containers, breakbulk (steel, forest products, heavy equipment and machinery, etc.), project cargos and agri bulk products.

In the early 1960s, the original two-acre site was acquired

by Merchants Cartage but it was never operated as a marine terminal until 1962 when Johnston Terminals and Storage Ltd. acquired the site and named it Fraser Surrey Docks.

Although ownership of the terminal has occasionally transferred over the years, the original site has remained a key part of the modern terminal which now covers 150 acres. In those very early years, the terminal was primarily handling forest products and grain. In fact, there was even a grain elevator along the berth face which proves that things really do come full circle as Fraser Surrey Docks opened a new agri bulk handling and ship loading facility in April 2011.

By the 1970s, the grain elevator along the berth face had been torn down as the focus of the terminal shifted to handling breakbulk cargos such as steel, lumber and machinery.

Throughout FSD’s long history, the terminal has worked hard to become known as the premier steel-handling terminal on the West Coast. Wood chips, sawdust and packaged lumber were also major commodities handled at the terminal during the 1970s. This decade also saw the construction of Berth #4 at the terminal, which continues to be an integral part of the operation today. The key decision to enter the container market was also made during the 1970s with the terminal commissioning two Paceco gantry cranes to service vessels carrying containers from and to overseas markets.

Pacific Rim Stevedoring was created in the 1980s as a subsidiary of FSD in order to provide a full-service facility to customers. This was a key strategic move for the terminal as it allowed for closer co-ordination of vessel unloading operations through the stevedores to coincide with the operation of the handling of cargo on the dock. Pacific Rim Stevedoring continues to efficiently operate today, servicing all the container vessels that call on the terminal and many

Fraser Surrey Docks — circa 1964.

Fraser Surrey Docks in the 70s — Berth #4 is constructed and two Paceco gantry cranes are added. of the breakbulk and project cargo vessels. Over the years, ships have called on Fraser Surrey Docks from every continent on the globe, contributing greatly to the the growth and development of trade activities in the Lower Mainland, B.C. and Canada.

During the 1990s, FSD was acquired by a consortium of Hong Kong investors and the terminal adopted the current name and brand, Fraser Surrey Docks LP. The 1990s also saw many upgrades including the expansion of the container yard and the construction of a new container truck gate as well as the addition of a state-of-the-art container gantry crane which increased FSD’s total gantry crane fleet to three. During this period, FSD also significantly increased its handling of all forest products, including packaged lumber, wood pulp, newsprint and panel boards.

The first decade of the new millennium saw many changes at FSD. The early and mid-portions of the decade witnessed May 2012 BC Shipping News 21

PORTS & TERMINALS a great focus on containers as the economy was booming and many containers were moving through the terminal.

Two new Panamax Gantry Cranes were added to expand the FSD container capacity. FSD also negotiated a new long-term agreement with the Port Authority which extended the lease to 2034. The Intermodal Distribution Centre (IDC) became operational in 2005 and provided FSD with ondock direct access to the entire North American intermodal market. The latter part of the 2000s saw a large drop off in container volumes and more of a focus on FSD’s long-standing expertise of steel-handling. FSD also experienced another ownership change, being acquired by Macquarie Infrastructure Partners in 2007. Most recently, the terminal has expanded their services to include the capability to handle agri bulk products. This was achieved by converting one of FSD’s covered

warehouses to an agri bulk storage facility and the construction of a rail belly dump pit, elevator and conveyor system. FSD entered into a partnership with Parrish & Heimbecker (a 100-year old Canadian-owned agricultural company) to construct and market this new agri bulk handling facility.

Looking ahead...Fraser Surrey Docks will continue to play an important role in the handling of container, breakbulk, project and agri bulk cargos...

Looking ahead to the future, Fraser Surrey Docks will continue to play an important role in the handling of container, breakbulk, project and agri bulk cargos in Port Metro Vancouver (PMV).

FSD is in an excellent location and ready for growth, with direct access to major rail and road networks including the

South Fraser Perimeter Road. The terminal is constantly looking at new opportunities and ways to improve their service offerings. FSD’s major goal for the short term is to see the Fraser River dredged deeper to allow larger vessels to transit the river and open up new markets. FSD is working closely with PMV and other stakeholders to make this a reality.

Since inception, FSD has evolved from a two-acre grain handling terminal to a 150-acre multi-purpose terminal with four distinct business segments.

FSD continues to seek new and innovative ways to adapt to their customers’ ever changing needs with the goal of increasing import and export volumes moving through the terminal. FSD is proud to be the largest modern multipurpose marine terminal on the West Coast of North America and will continue to strive for excellence in caring for their customers.

Fraser Surrey Docks today — having grown from its original two acres to 150, it is the largest modern multi-purpose terminal on the West Coast of North America.

22 BC Shipping News May 2012

PORTS & TERMINALS

New CEO wants to have Victoria Harbour flying high

By Ray Dykes

S

The picturesque harbour remains a puzzling patchwork quilt of ownership, something that has frustrated the authority for all of its decade-long existence. Major ownership falls into the hands of Transport Canada, the City of Victoria, the Department of National Defence, Fisheries & Oceans Canada, the BC Provincial Capital Commission, the Province of British Columbia, the GVHA, and private interests.

“The whole reason that Transport Canada is getting out of airports and ports is that it is difficult for the operator to also be the regulator...”

Grad intends to streamline all of that. In fact, the further divestiture of seabed and land properties from Transport Canada is his Number One priority.

“The whole reason that Transport Canada is getting out of airports and ports is that it is difficult for the operator to also be the regulator,” says Grad.

“It is better for them to have separation and through divestiture they acknowledge that local administration tends to

service a harbour better than centrallylocated control.

“We are working with the Federal Government on the unfinished business of divestiture to help them find a way to achieve their own goals.”

Grad points out that Victoria is unique in that it is the only place he is aware of where airport and port divestiture overlap with the seaplanes that flit in and out of the capital city’s harbour Photo credit: Ray Dykes, PR Plus

itting down with an experienced airport builder to discuss the future of the Greater Victoria Harbour Authority, it is inevitable there will be a few airborne analogies. However, after just over nine months as the President & CEO of the Greater Victoria Harbour Authority, Curtis Grad seems to have his feet anchored firmly on the ground.

His past experience in varying roles for about eight different airport startups in countries as diverse as Jordan, Cyprus and Jamaica, plus projects as close to home as Nanaimo Airport just 75 minutes or so up the Trans-Canada Highway to the north of Victoria, are all coming into play in his new role.

“At some point you look back and ask where do we get a balance between career challenge and quality of life?” the 44-year old from Vibank, Sask., asks. In Victoria, he has answered that question for himself and Sally, his wife of 18 years.

Now in its 10th year of operation since the divestiture of four harbour properties from Transport Canada in April 2002, the Greater Victoria Harbour Authority is still a work in progress.

Curtis Grad, President & CEO of the Greater Victoria Harbour Authority.

May 2012 BC Shipping News 23

PORTS & TERMINALS facilities, a leftover from the airport divestiture of the 1990s.

But he doesn’t intend to do it all alone.

Of the 550 divestiture opportunities for Transport Canada, about 50 remain to be completed and other ports and harbours are in the same boat as Victoria, he says.

Grad lists Sydney and the Super-Port in the Strait of Canso in Nova Scotia as two others in a similar position to Victoria, and he sees some value in the ports coming together as they share the same common interests through partial but incomplete divestiture.

“At the end of the day it all comes down to long-term sustainability,” says Grad. “We have compared our notes and issues of common interest and now need to concentrate on how we can work together with a common platform for this unfinished business.”

The GVHA has four divested properties under its control: • The four-berth Ogden Point deepsea terminal • Fisherman’s Wharf • Government Street / Ship Point (including the lower causeway and its

marina fronting the B.C. Legislative buildings and the Fairmont Empress Hotel) • Waterfront from Wharf Street to Johnson Street As past chiefs of the good ship Victoria Harbour have found, four unconnected properties hardly give rise to effective control nor do they stimulate planning with vision.

Undeterred, Grad has listed terminal consolidation as his Number Two priority. Currently, Victoria Harbour has eight terminals of sorts — three at Ogden Point including a heliport.

Recently, the GVHA bid and won the lease and now controls the future of the heritage CPR Steamship Terminal, which once was a bustling ferry facility, and more recently an empty wax museum and offices.

The harbour authority is now renovating the old waterfront building with its distinctive columns and sees a revived facility as the stepping stone to a new Belleville International Terminal serving both the employee-owned Coho ferry to Port Angeles and the high speed, passenger-only Clipper service to

Ogden Point — Victoria’s cruise season is now the busiest in Canada.

24 BC Shipping News May 2012

Seattle, which now move over 700,000 passengers a year between them.

The joint terminal idea is not new, but Grad has dusted it off and, strengthened by the recent CPR Steamship Terminal lease acquisition, the GVHA has started doing something about it.

He sees the CPR Steamship Terminal as a people-friendly funnel into a new international terminal, much like an airport with retail and food opportunities as well as offices.

The joint terminal idea is not new, but Grad has dusted it off and, strengthened by the recent CPR Steamship Terminal lease acquisition, the GVHA has started doing something about it.

“The GVHA will restore this building to its original grandeur,” says Grad. “We will manage and develop the overall concept.

It’s a gorgeous building and once it was the gateway to the harbour in the 1930s.

It was also the heart of the harbour and our goal is to bring it back to that.”

Photo: Courtesy of Greater Victoria Harbour Authority

PORTS & TERMINALS

...Grad will attempt the previously impossible...to bring all parties with a vested harbour interest together [to create] a visionary Master Plan...

For his third priority, Grad will attempt the previously impossible...to bring all parties with a vested harbour interest together so that a visionary Master Plan can be created for the harbour’s future.

Again, previous efforts and numerous studies in this regard have been burdened by frustration and lack of consensus or follow through. Grad seems undeterred and says such a plan is “the missing piece of a complex puzzle.” He sees some interest among other parties and says “we need to speak with a single voice.”

Victoria Harbour is a working harbour despite the massive waterfront residential and hotel development now on coastal foreshore once thought untouchable. The harbour is the home to shipyards, whale watching enterprises, sea plane companies, waterfront condos, hotels, waterfront walkways, and a host of other users.

In fact, that variety is one of the things Grad likes about his job, and something he finds stimulating.

Photo: Courtesy of GVHA

The first phase is the revitalization of the building, which is under way.

The second is bringing the parties together to build the Belleville International Terminal “as a stand-alone, self-sufficient business” including a modern departure concourse.

“The challenge is putting together the right design package and finding the funding for it,” says Grad.

The third phase will propose greater civic use of the Belleville Properties, perhaps in the area of performing arts or a First Nations Museum. By the end of May, Grad says the GVHA will have posted sub-tenant opportunities in the restored old building and he hopes they will be in operation by the end of the year.

The Lower Causeway at Victoria’s Inner Harbour.

“I am dealing with cruise line executives one minute and musicians on the causeway the next.”

A not-for-profit society, the GVHA largely earned its $6.6 million revenues in the 2010-2011 fiscal year through cruise ship passenger and handling revenues — some 51 per cent of the revenues or $3.4 million came from 228 cruise ship calls and more than 441,000 and 109,000 crew coming ashore.

Surprisingly, Victoria is Canada’s busiest cruise port, followed by Port Metro Vancouver, and in 2012 expects 229 cruise calls and 475,000 passengers and crew ashore heading to popular attractions led by Butchart Gardens.

Revenues also come from Fisherman’s Wharf where the old wooden docks were replaced last year with modern, environmentally friendly finger slips as the facility becomes more and more “family friendly” with tourists and locals alike.

Any surplus revenue is plowed back into its facilities and in 2010-2011 some $2.7 million was used for capital spending, something Grad says the authority has done well and which he terms “bringing distressed assets back to life.”

The harbour chief is also keen to develop more non-cruise revenues in the once busy cargo port where handling forestry products, coal and other bulk and breakbulk products used to be its mainstay.

Non-cruise activities these days involve ocean carrier hull cleaning in the main harbour channel (at least six ships in the past six months), yacht transshipment, and visiting pleasure boat calls at its inner harbour marinas.

A log carrying vessel also used Ogden Point’s Pier B dock to make repairs after being damaged by a rogue wave.

Grad has been called a “master strategist” by those who have worked with him around the world in the past. He’s a friendly, helpful type who is used to getting things done. And that seems to be an ideal formula to have the Victoria Harbour Authority soaring at last.

“It’s great to come home and put my energies into a startup company that’s 10 years on and see it evolve into a true harbour authority rather than just a property manager,” he says.

Ray Dykes is a former journalist who has worked his way around the world. He is based in Nanaimo as a writer/photographer.

Ray can be reached at prplus@shaw.ca.

Customs Brokers • Steamship Agents Complete Import & Export Services Quality Service Since 1911 401-1208 Wharf St., Victoria, B.C. V8W 3B9 Tel: 250-384-1653 • Fax: 250-382-3231 E-mail: kingbros@kibro.com

May 2012 BC Shipping News 25

tug and workboat design guide Tug and workboat design guide

T

his design guide is meant to provide a basic primer for the general reader to help understand the many types of tugs, workboats and other small commercial craft which ply our waters and some of their features and capabilities. Working closely with Robert Allan Ltd., we have developed the following compilation. Robert Allan Ltd. has, over its 82 years of business, designed many hundreds of working vessels of all types customized to fit the specific needs of their clients worldwide. The descriptions and samples below are just that — a sample of the myriad vessel types in this category.

Tugboats:

Tugs and barges are the primary means of cargo transportation used on the B.C. Coast, but this is an application rather unique to this area. Worldwide, tugs are most recognized for their work in assisting large ships to and from their berths and for their role as salvage vessels when ships get into trouble. Typically, tugs are categorized according to the type of work they do, and then by the configuration or type of propulsion system used. The following are the most common descriptions used for the latter, as well as a few other commonly used terms in the industry.

Azimuthing Stern Drive (ASD) — a tug with steerable propulsion units located aft in a more or less conventional propeller position.

Bollard pull — the maximum thrust which can be generated by a vessel at zero speed (usually measured by pulling on a “bollard”).

This is the typical measure of tugboat performance.

Kort nozzle — an annular foil-shaped device used to accelerate the flow through a propeller, thus generating more thrust than a comparable open propeller.

RAVE tug — a new concept developed by Robert Allan Ltd. in collaboration with Voith Turbo Schneider Propeller for a tug with two VSP units located fore and aft, rather than in the typical sideby-side tractor configuration.

Reverse tractor — an alternate term (seldom used today) to describe an ASD tug.

Rotor© tug — a patented configuration of tug with three Z-drive units located in a triangular pattern below the hull, typically with two drives forward and one drive aft.

Screw propeller — the “conventional” device used to develop thrust in water, usually driven by a diesel engine. Vessels are often described as single, twin or triple screw, depending on the number of propellers they have.

Tractor — a tug with the drive units (either VSP or Z-drive) located in the bottom of the vessel, approximately one-third of the length from the bow. (This term is often very erroneously used to describe any tug with omni-directional propulsion, including ASD tugs).

Voith-Schneider Propeller (VSP) — a cycloidal propeller, comprised of a rotating circular plate in the bottom of the vessel from which a number of vertical foil-shaped blades project, and each 26 BC Shipping News May 2012

of which changes their angle of attack as the disc rotates, thereby generating thrust in the desired direction.

Z-Drive — a drive system using a screw propeller driven through two right angle gears and which can be rotated through 360 degrees.

Tug types (or functions)

Broadly speaking, tugs are designed to perform one or more very specific functions and are thus categorized accordingly. Of course many tugs also tend to get used to perform more than one of these duties and thus become more “multi-purpose”. As with all things, the more diverse the duties the more compromised the design becomes in terms of its ability to do any one function very well!

Robert Allan Ltd. is the world’s leading designer of tugboats today, accounting for something in the order of 35 to 40 per cent of all tugs built worldwide. They have developed specific families of tug designs to address the diverse needs of their clients, and although these are portrayed as “classes” of existing designs, every vessel is still customized to the specific application and new designs are continuously developed for unique projects.

All photos in the design guide courtesy of Robert Allan Ltd.

Z-drive units in the stern of an ASD tug.

VSP units on a RAVE tug.

tug and workboat design guide Ship-handling (ship-assist)/ harbour towage

This is the classic “Little Toot” tug operation, assisting large ships onto and off of a berth by pushing and pulling as required. Tugs are necessary because most large ships have no control over their own steering when operating at very low speeds, and they are thus very susceptible to the forces of wind and current.

RAmparts The typical ASD tug, often equipped for coastal towing and other duties, represents the most multi-purpose design in the RAL portfolio. The RAmparts 3200 tug “Ocean Pioneer” is one of the latest of 100 of this class of tugs built to date.

Today the vast majority of modern ship-assist tugs are fitted with Z-drive or VSP propulsion. Harbour tugs typically range from 20 to 32 metres in length, and have power ranging from 2,000 to 4,000 kW, although there are exceptions to this depending on the size of port and types of ships handled. Many harbour tugs are simple day boats where the crew is aboard only to do each job.

Cates The class name honours Robert Allan Ltd.’s long-time close relationship with this historic Vancouver towing company and the early compact Z-drive tug designs developed here for B.C.’s Coast.

RAmparts 3200-CL Ocean Pioneer.

Salvage/rescue towing

Charles H. Cates I. Z-Tech An international award-winning ship-assist tug design developed for the Port of Singapore but now in wide use around the world, including throughout the Panama Canal.

Z-Tech™ 7000 Star Admiral.

The era of the dedicated long-range salvage tug is largely gone today — some still do exist and China has recently built some dedicated large salvage tugs. These tugs used to be stationed in notorious shipping lanes in order to (get paid to) assist vessels in distress! These were typically big tugs with specialized winches and pumps, etc. which could be used to pull ships off a beach or prevent them from sinking. The demand for such tugs is thankfully somewhat less today than it was a generation ago but ships still do get in trouble and big tugs are still needed to assist. Many countries are now using dedicated, government-chartered vessels of this type to provide this “Coast Guard” service, but they do not have typical salvage rights. The cost of this safeguard process however is still a challenge for many countries.

Robert Allan Ltd. has designed a major new class of Salvage tug for these applications, designated as the “RASalvor” Class.

RASalvor Class design.

May 2012 BC Shipping News 27

tug and workboat design guide Escort towing Escort tugs are the newest and most challenging of tug designs.

These tugs are designed to provide emergency steering and braking functions to tankers (and occasionally other ships) in sensitive or critical coastal areas. Since the Exxon Valdez incident in 1989, many jurisdictions legislated that tankers within specific waters must be “escorted” by tugboats but, at the time, the ability of tugs to be effective at this mission was not well understood. In the past 15 years, the industry has developed many very powerful and effective escort tugs designs, and the ability to predict their performance capabilities are well-developed amongst at least a few major design firms. Escorting is distinguished from regular shiphandling because, by definition, it takes place at higher speeds, from seven to 10 knots typically. Escort tugs generate the required ship control steering and braking forces in the “indirect towing” mode by combining the hydrodynamic forces generated by their hulls with the propulsive forces of their drive units.

Robert Allan Ltd. has been a world-leader in developing escort tug technology through an extensive internal research program.

Vessel-types designed for high-performance escorting include:

AVT 3600 Class tugs

Apex, Tenax and Phenix — owned by Ostensjo Rederi AS. RAZer 3000 Class tugs

• AVT Class — Escort tugs with Voith Propulsion • ART Class — Escort Tugs in a Rotor tug configuration • RAZer Class — Escort tugs with Z-drive Propulsion • RAstar Class — Escort tugs incorporating a unique hull form designed to maximize indirect steering and braking forces and to provide much-enhanced sea-keeping capability.

ART 85-35 Class Rotor tug Foss’ America and Pacific Star.

RAstar3900 Class Escort tug

3D image of a new ART 85-35 Rotor tug.

28 BC Shipping News May 2012

Svitzer Kilroom — 39 metres, 116 tonnes bollard pull.

tug and workboat design guide Log towing The classic B.C. towing scene‌a little tug with a long raft of logs dragging behind. These tugs spend many hours at full power but very low speed and are typically quite small.

Coastal towing

In B.C., the majority of tugs are designed for towing barges between coastal ports. These tugs must be able to handle more weather than a harbour tug and also don’t need the same degree of fendering. They have larger crews and hence more crew facilities. In general, these tugs will have conventional propulsion with single or twin screws and a towing winch aft. Since the late 1960s almost every tug built in B.C. has also been fitted with Kort nozzles for better performance. Tugs towing oil barges must be twin screw.

Robert Allan Ltd. offers the TRAder Class of tugs for this service.

Many of the tugs designed by RAL in the 1960s and 1970s are still the backbone of the West Coast fleet today.

Harmac Fir (a second-generation Robert Allan design).

Ocean towing

There are relatively few large tugs today designed exclusively for this service but many were common in the 1960s and 1970s.

Tows are typically large barges with expensive cargoes such as offshore drilling platforms. These tugs are single or more frequently twin screw; have large fuel capacity and quite large crews; and must be capable of coping with extreme ocean conditions. Today, much of this work is done by large offshore supply vessels.

Irving Birch.

Hamilton Baillie.

Jervis Crown.

May 2012 BC Shipping News 29

tug and workboat design guide Terminal support

Anchor-handling

Robert Allan Ltd. offers the RAstar Class and the larger RAmpage Class designs for these applications.

RAmpage Class tugs, such as the RAmpage 5500 Seaways 20, are specifically designed for this operation, although some smaller tugs have also been so equipped such as the recent AVT tug Spinola.

This is a relatively new category of tug used to provide ship-handling and other services at either offshore oil terminals or at LNG terminals situated in more exposed locales. Because they work in typically rougher waters, they tend to be larger and more powerful than normal ship-handling tugs and will frequently also have fire-fighting and anchor-handling capabilities. Some may also have some deck or bulk fuel or water cargo capacity.

RAstar 3800 Class

Bourbon Yack.

Some tugs are designed to deploy, relocate or retrieve the large anchors used in offshore drilling applications. Although typically this operation is done by larger AHTS (Anchor-Handling Tug/Supply vessels), tugs are very useful for working with smaller anchors.

This operation requires a large roller at deck level aft, an open stern and a powerful winch, as well as typically wooden sheathing to protect the steel deck from the impact of anchors coming aboard.

RAmpage 5500 Class

Seaways 20.

AVT 3800 Class tug

RAmpage 4500 Class

AOS Power.

30 BC Shipping News May 2012

Spinola.

tug and workboat design guide Fire-fighting

In most ports in the world, the tug fleets are equipped with firefighting capability to provide a “first response” capability as tugs are nearly always in the vicinity. In some cases, the “tug” function takes a back seat to the fire-fighting capabilities of the boat, as was the case for a recent project for Kuwait.

Almost any tug can be equipped for fire-fighting although due to the size and cost of the equipment involved, typically this is left to larger sizes of tugs such as the local Seaspan Raven.

RAstar2800 Class

Yarding

Yarding tugs are typically smaller tugs used to move barges around and assemble barge tows for large coastal towing or for river towing operations. In the latter case these are usually built in a “pusher” configuration.

Training

In common with many other industries worldwide, the cadre of well-trained tug operators is getting older. In addition the technologies involved in modern tugs have long since surpassed the days of hanging onto the big spoked wheel with salt spray in your teeth! Robert Allan Ltd. designed the ultra-compact BRAtt training tug in order to provide a platform that would bridge the gap between simulator training and the full-size tug so that Masters-in-training would get a “real-life” experience driving Z-drive tugs without tying up the resources of a multi-million dollar working tug (and its full crew) while learning the skills necessary to handle such a vessel safely. RAL worked closely with local model-maker/trainer Ron Burchett on this project.

BRAtt training tug

Seaspan Raven — Fi-Fi 1 capability — 2400m^3/hr pumping capacity.

Line-handling

Line-handling tugs are specialized tugs, typically quite small, whose function is to take the lines of incoming ships and move them into positions from which they can be secured. They frequently are distinguished by a pipe “cage” which prevents the ship’s lines from getting entangled in their masts or exhaust pipes.

RAscal Class

The Rascal 2000 Class Elyah.

The BRAtt. May 2012 BC Shipping News 31

tug and workboat design guide Various workboats

Other types of workboats are generally purpose-designed and can take many and diverse configurations depending upon the application and the owners objectives. The following are but a few of the many types seen on this coast and internationally.

Patrol boats Typically these are high-speed patrol craft intended for local police, Coast Guard or harbour patrol functions. These can be monohulls such as the Port Vancouver vessel Takaya or catamarans such as those used by the RCMP.

Fireboats

Designed as emergency response vessels for major port cities around the world, these vessels are primarily configured as fireboats but frequently serve as Command and Control centres or indeed as primary response vessels for local emergency actions such as pollution response and search and rescue. These vessels have a diverse array of configurations and fire-fighting performance and are generally custom-designed to the specific risks encountered in each port as well as to its unique operating environment.

Robert Allan Ltd. has emerged as the world’s leading designer of fireboats in the past decade with many unique vessels to its credit throughout North America, Asia and the Middle East. Examples are included below.

Port of Los Angeles

Takaya — Port Metro Vancouver.

Crewboats

Crewboats are designed for either coastal transportation or, more typically, for crew transfer at oil field and offshore support duties.

The majority of designs feature large cargo decks and are available in either aluminium or steel construction depending on speed and duty requirements.

Zamil 40 — a RAlly 3500 class crewboat working in Saudi Arabia.

32 BC Shipping News May 2012

Warner L. Lawrence — a VSP powered fireboat.

New York City

Firefighter 2 and Three Forty-Three — two 42-metre,11,500 cu.m/hr, 18-knot fireboats for FDNY.

tug and workboat design guide Survey and research vessels These include vessels equipped for scientific research and survey of many types, which can be large or small, and are used for a wide range of applications including hydrographic survey, fisheries research, seismic survey and oceanographic research. Vessels are noted for their capabilities in continuous and extended operations in a full range of environments. Frequently, they include features to significantly reduce onboard and radiated noise.

Search and rescue

This term is usually reserved for vessels dedicated to search and rescue (SAR) missions. Such vessels are typically owned by National Coast Guards and therefore also fulfill various other patrol and enforcement duties. These can be as small as a six-metre RHIB or an offshore cutter of 70 metres or more in length. Larger vessels also typically have fast rescue craft aboard which can be launched by various means including davits or stern ramps.

Robert Allan Ltd. has recently designed several major research vessels, including three small fisheries research vessels for the Canadian Coast Guard (nearing completion in Quebec); the OFSV Fishery Research vessels, which will be amongst the first to be built under the new Canadian NSPS shipbuilding program; and the 92-metre CSIRO Oceanographic Research vessel for the Australian Government currently being built in Singapore.

CCGS Type 500 SAR Cutter Gordon Reid.

Icebreakers

CSIRO Oceanographic Research vessel.

Vessels designated as “icebreakers” typically have that as their primary mission and are thus used to keep navigation channels open and to assist other vessels beset in ice. However, increasingly, very powerful “icebreakers” have other primary missions such as oil field support, supply and anchor-handling. Many other vessels can simply be “ice-strengthened” to enable them to work occasionally in ice-infested waters.

Robert Allan Ltd. has designed many icebreaking vessels for service in Canada and more recently in such diverse areas as Sakhalin (Russia) and the Caspian Sea.

Inshore Fisheries Research/Patrol Vessels for DFO, Canada.

Svitzer Aniva — one of four TundRA 3400 Class icebreaking escort tugs for support of the LNG terminal at Sakhalin, Russia.

May 2012 BC Shipping News 33

energy policy & trade

Shifting tailwinds propel Canada’s energy trade

By Darryl Anderson Managing Director, Wave Point Consulting

T

hree important political initiatives occurred in the first quarter of 2012: Prime Minister Stephen Harper led trade missions to Asia, the Province of British Columbia released their Liquefied Natural Gas strategy and the Province of Alberta announced that they were seeking an expert on Canada-Asia energy trade.

B.C.’s shipping community can be forgiven for not knowing whether this recent bevy of policy initiatives represents genuine political statesmanship on important international trade files or more accurately reflects the folk wisdom that bad news comes in threes. To help answer this question this article will explore the shifting tailwinds that are propelling Canada’s maritime trade prospects in coal, natural gas, oil and renewable energy.

Canada’s current energy production & trade Canada is endowed with abundant energy resources sufficient to meet both domestic and export requirements. Statistics Canada’s Energy Supply and Demand reports that in 2010, Canada exported 55 per cent of its coal, 61 per cent of its natural gas, 63 per cent of its crude oil, and 20 per cent

34 BC Shipping News May 2012

of refined petroleum products. Energy exports were valued at $94 billion — 23 per cent of our country’s total merchandise export value, or six per cent of Canada’s GDP. Historically, pipelines, railways and transmission lines have been used to transport the vast majority of our exports to the United States, the world’s largest energy market.

The strongest driver of change is the geographic location of energy consumption.

With only one primary energy export market, readers could be asking whether there are any tailwinds at all behind Canada’s maritime sector since international shipping plays a comparatively modest role in terms of energy exports. The answer is yes, because the international trade in energy products is not remaining static.

The strongest driver of change is the geographic location of energy consumption. The International Energy Agency reports in their 2011 ‘World Energy Outlook’ that countries outside of the Organization for Economic Cooperation and Development (OECD)

membership are increasingly determining the dynamics of energy markets.

Non-OEDC countries will account for 90 per cent of the population growth, 70 per cent of the increase in economic output and 90 per cent of energy demand growth by 2035. By 2035, China will have consolidated its position as the world’s largest energy consumer: it will consume nearly 70 per cent more energy than the United States, the second-largest consumer. The rates of growth in energy consumption in India and Indonesia are even faster than in China.

The 2011 report The Prospects for Transpacific Energy Trade notes that the importance of energy trade to the AsiaPacific economies is demonstrated by the fact that coal imports account for 15 per cent of total coal use, natural gas imports are fairly significant, accounting for 37 per cent of total natural gas use, while 94 per cent of the region’s oil needs are met by imports. Aggregating across all three fuels (coal, natural gas, oil), 41 per cent of fossil fuel needs of the Asian economies are met from imports.

We will now review whether the winds of change that have begun to

energy policy & trade blow are being felt on British Columbia’s shores by looking at the coal, natural gas, oil and wood pellet sectors.

Coal The International Energy Agency reports that coal won the energy race in the first decade of the 21st century. It has met almost half of the increase in global energy demand. China’s emergence as a net coal importer in 2009 led to rising prices and new investments in exporting countries. The BP Energy Outlook 2030 predicts that China’s rapid growth in coal consumption ends after 2020. However, China will still account for 67 per cent of global coal growth through to 2030. It will remain the largest coal consumer, increasing its share of global consumption from 48 to 53 per cent. India will account for 33 per cent of global coal growth, and its share of global coal consumption climbs from today’s eight per cent to 14 per cent by 2030. Since both China and India face

challenges in their growing import requirements, this will drive further expansion and integration of the global coal trade in the Pacific.

The B.C. government forecasted total output of the B.C. coal industry in 2011 at over 28 M tonnes of product coal, or about 50 per cent of the Canadian total.

In 2011, Canada produced 55.99 M tonnes of coal and exported 49 per cent of our total production. Coal used for metallurgical processes accounted for 86 per cent of our export total with 14 per cent of coal products exported being thermal and used in a generating capacity. In British Columbia, there are five mines in southeast B.C. and four in northeast B.C. that produce mainly metallurgical coal, while the single mine on Vancouver Island produces

thermal coal. The B.C. government forecasted total output of the B.C. coal industry in 2011 at over 28 M tonnes of product coal, or about 50 per cent of the Canadian total. There are numerous mine expansion projects underway and British Columbia’s coal export terminals at Port Metro Vancouver and the Port of Prince Rupert have also been expanding to meet increased export demands.

For Port Metro Vancouver there have been two coal export expansion projects. In 2000, Westshore Terminals coal mix was 90 per cent metallurgical and 10 per cent for energy use. By 2010 it had shifted significantly to 70 per cent metallurgical and 30 per cent thermal. Total volume in 2000 was 22.5 Mt and 24.7 Mt in 2010. The shift in volume of thermal coal started to rise in 2008 just before China became a net coal importer in 2009. In 2011 the leading export destinations for coal

May 2012 BC Shipping News 35

energy policy & trade shipments were Korea, Japan, Europe, China, South America and Taiwan. In response to increasing coal export demand, Westshore Terminals initiated a $100 million upgrade in 2007 with completion targeted for 2012. This includes equipment upgrades, new twin dumpers, three train indexers, enhanced transfer stations and improvements to stacker reclaimers. In 2011 Neptune Bulk Terminals announced they were investing $63.5 million in new equipment to improve the terminal’s handling capacity primarily benefiting the export metallurgical coal shipped for Tech.

At the Port of Prince Rupert, Ridley Terminals Inc. (RTI) has historically served coal mines in northern British Columbia, Alberta and Saskatchewan.

The markets of Japan, China and South Korea account for 90 per cent of RTI’s export shipments. In 2010 RTI entered into a service agreement to receive product from the Southeast region of British Columbia. In early 2011 RTI completed additional commercial negotiations to receive coal destined for export markets from customers in the U.S. However, most notably from an energy trade perspective, in October 2011 RTI signed an agreement with

CoalSpur to secure a 14-year port allocation for up to 8.5 Mt per annum of coal from the Vistas Coal Project (Canada’s largest thermal coal export) mine near Hinton, Alberta. In response to increasing export demand RTI started their Modifications Project in 2011.

It is a $180 to $200 million capital plan to increase the expected total marine terminal throughput capacity to 24 to 25 million tonnes by the end of 2014.

By that time, thermal coal exports from the RTI could rival Westshore’s 30 per cent of export volume.

Natural Gas The International Energy Agency’s 2011 ‘World Energy Outlook’ reports that both the supply and demand side point to a bright future — even a golden age — for natural gas; this view is shared by the BP Energy Outlook 2030. BP reports that non-OEDC counties will account for 80 per cent of global gas demand growth and China will account for 23 per cent of this increased gas demand.

BP also reports that Liquefied Natural Gas (LNG) will represent a growing share of gas supply. Global LNG supply is projected to grow over four per cent per year to 2030, more than twice as fast as total global gas production. LNG will contribute 25 per cent of global

supply growth between 2010 and 2030, compared to 19 per cent for the period between 1990 and 2010.

In 2011 researchers from the Energy Studies Institute, National University of Singapore observed that at the present time North and South America are effectively “gas islands” isolated from the rest of the world, with few significant transpacific or transatlantic gas flows. However, these researchers concluded that recent developments in both gas demand and supply have led to a scenario where significant growth in LNG export from North America to Asia has become a distinct possibility.

The international trade tailwinds are perhaps blowing strongest on B.C.’s North Coast. The Ports of Kitimat and Prince Rupert appear to be at the epicenter of an emerging $18 billion LNG export industry. In Prince Rupert, BG Group PLC announced that the port was short listed for an LNG plant. Two projects — Kitimat LNG project and the Douglas Channel LNG/BC LNG Export Co-operative received the necessary National Energy Board (NEB) export permit approvals in October 2011 and February 2012 respectively. Petrinas/ Progress Energy and Royal Dutch Shell are all advancing LNG export projects.

A $100 million upgrade means Westshore Terminals is ready to meet the growing demand for coal exports.

36 BC Shipping News May 2012

Photo credit: Ray Dykes, PR Plus

energy policy & trade In October 2011, Royal Dutch Shell purchased the marine dock facilities and the former Methanex plant in Kitimat and is presently used to import hydrocarbons by tanker from Cenovus Energy Corp.

...February 2012 may go down in the history books as the point in time when tailwinds began to strengthen on Canada’s transpacific oil trade.

A key commercial decision for Canadian oil producers is between exporting oil south into the U.S. and west to Asia. The BP Statistical Review of World Energy, June 2011 observed that currently, Canada is almost entirely reliant on the U.S. market for selling its oil, with exports to the U.S. accounting for close to 98 per cent of overall exports. Many energy experts have noted that exporting oil to Asia would provide Canada with the benefits of diversification and reduce reliance on a single market for oil.

There are also purely economic reasons favouring export of oil from Canada to Asia. The Singapore Energy Institute noted that that under present market conditions, the cost of transporting oil to China, Japan, South Korea and Chinese Taipei (via pipeline and tanker) are lower than the costs of transporting oil to the U.S. (via pipeline).

From a B.C. shipping perspective, February 2012 may go down in the history books as the point in time when tailwinds began to strengthen on Canada’s transpacific oil trade.

Cenovus Energy Inc. sold its first oil cargo directly to China. The oilsands company sold 250,000 barrels of heavy oil from its Pelican Lake operation to an undisclosed Chinese customer.

This is the first time Cenovus shipped oil directly to a Chinese buyer (noting that the company’s crude has reached this overseas market before thanks to intermediaries). It now plans to strike more export deals with Asian buyers.

Kinder Morgan CEO, Mr. Ian Anderson,

speaking at the recent Chamber of Shipping British Columbia Annual General Meeting, noted that “Cenovus was able to do this transaction because it struck firm shipping contracts to use their Trans Mountain Pipeline” which reaches the B.C. Coast at Port Metro Vancouver. The growth prospects for further Canadian transpacific oil trade will largely be determined by the current National Energy Board/Canadian Environmental Review Process of the Enbridge Gateway proposal at the Port of Kitimat and by any further capital investment decisions by Kinder Morgan to expand their Trans Mountain pipeline and Westridge Marine Terminal at Port Metro Vancouver.

Renewable Energy B.C. wood pellet production and exports have grown rapidly. The current major market for B.C. pellet exports is the European Union, where environmental initiatives aimed at reducing CO2 emissions from coal-fired power plants are expected to generate substantial market growth over the next 10 years. B.C. pellets are currently transported by rail to the Fibreco terminal in North Vancouver where they are loaded on vessels bound for European and Asian markets. Fibreco began handling wood pellet exports in 2005 and since January 2011 has handled all of the pellet exports from Port Metro Vancouver.

In 2011 Fibreco was working to expand their storage capacity for pellets from 27,000 tonnes to 45,000 tonnes. This would enable them to load a full vessel from storage; currently they load from storage and co-ordinate the arrival of 200 railcars on a direct hit for loading to vessel. Fibreco estimates total capacity following completion of the expansion will be one million tonnes of woodchips plus two million tonnes of pellets per year. Due to difficulties in shipping through Ridley Terminals in Prince Rupert, Fibreco’s pellet traffic grew to approximately 900,000 tonnes in 2011 out of a total of 1.25 million tonnes of B.C. exports. To address the needs for increased pellet production,

Pinnacle Renewable Energy Group proposed a major new $30 million pellet export marine facility in Prince Rupert in September 2011.

Time will truly tell whether the recent Canadian political initiatives are belated efforts trying to catch up with shifting economic drivers...

Conclusion Presently transpacific trade is relatively modest in terms of global coal trade, accounting for 4.6 per cent overall. Transpacific oil and natural gas trades are particularly limited in their scale, respectively accounting for only 1.2 per cent of global oil trade and 0.3 per cent of global natural gas trade in 2010 according to the BP Statistical Review of World Energy, June 2011.

Aggregating across all three fuels, transpacific energy trade accounts for 1.4 per cent of global energy trade, more than two-thirds of which is from North America to Asia. Nevertheless this brief summary demonstrates that the winds of change in international energy trade have reached B.C.’s shores.

Time will truly tell whether the recent Canadian political initiatives are belated efforts trying to catch up with shifting economic drivers and how they will accelerate the prospects of our transpacific energy trade. B.C.’s port community and Canada’s energy producers can also play a role by providing support and leadership for international trade policies such as a Canada-Japan Free Trade Agreement and Canada’s belated efforts to join the Transpacific Partnership Negotiations since improved market access and infrastructure investments are both required for global competitiveness.

Darryl Anderson is a Victoria-based maritime and transportation consultant. He maintains an active independent research practice focusing exclusively on maritime transportation and policy issues. Darryl can be reached at wavepoint@shaw.ca.

May 2012 BC Shipping News 37

INTERNATIONAL SHIPPING

Indian port development

By Syd Heal Modern India is rated as one of the emerging economic giants of the 21st century. As the world’s largest democracy, its power is being felt as it buys up a considerable part of the west’s industrial base. This includes everything from large mining investments to better ensure its raw materials needs to well-known brand name motor cars.

I

n a world where, despite periodic setbacks like wars and recessions, the race is on to divide up the world’s riches, not through military conquest anymore, but through a variety of financial and economic strategies including having, in the case of India, a large and ever increasing middle class that is taking to modern technology like ducks to water. An example of this is the acquisition by Arcelor-Mittal, the world’s largest steel producer acquiring a large iron ore development on Canada’s Baffin Island. While the company’s head office is in Luxembourg it has strong roots in India through the Mittal part of its combination.

It seems that not too much is publicly known in the West about Indian shipping and its port needs except in the professional shipping press and even then it is probably less than one might think, perhaps because so much of it is engaged in trades specific to the needs of India’s own industrial base as is occurring also in China. One aspect of Indian industrial expansion about which relatively little is known outside India itself concerns the expansion of port capacity by turning one-time fishing villages and low grade coastal lands into major ports handling huge

38 BC Shipping News May 2012

quantities of coal, iron ore and oil products among many other raw materials.

During early 1945, I was at Vizagapatam (officially known today as Vishakhapatnam), living for a few weeks in a navy compound near a shipyard. This was part of the first stage in a port development completed in the mid-1930s using large-scale civil engineering, dredging and land reclamation works to build a modern port from scratch on land that had once been disease-ridden swampland bisected by a river of small economic value. Before development, the river entered the sea passing through a natural gorge between two massive coastal hills. All this was dredged out to create an entrance to an area behind the coastal hills that was formed by dredging and back filling to create gigantic basins handling large bulkers and accommodating shoreside installations to create what is now rated as India’s fourth largest port.

It was here at Vizag that Hindustan Shipyard was established on reclaimed land built up with dredged soil by the first modern Indian ship owner, Scindia Steam Navigation Company, that itself was founded in 1919.

Hindustan Shipyard was established

as one leg of nascent Indian ambitions to have its own shipbuilding industry constructing the larger steel ships of the day for its own ship owners, using Indian steel and labour to the greatest extent possible. It was a slow business after the outbreak of war as machine tools and modern shipyard equipment could only be purchased in the U.K. and the United States and Indian shipbuilding was not a part of any Allied plan to further wartime shipbuilding outside of the U.K., the U.S., Canada and Australia.

It seems that not too much is publicly known in the West about Indian shipping and its port needs...

When I was there in 1945, work was well-advanced on a large freighter hull, the first of a group of six ordered by the parent company. She was the Jalausha and her completion in 1948 was not caused by Indian inefficiency, but more likely because the equipment supply industries in the West, and particularly the British, were swamped by massive post-war shipbuilding programs.

Almost certainly the ships were built as far as the Indian shipyard could go and

INTERNATIONAL SHIPPING held in a state of lay-up pending arrival of imported machinery and equipment.

After this painfully slow start the five sisters followed through 1949. In the hot season, work started at about six in the evening and went on through the night, so trying to sleep with rivetting hammers thumping away until breakfast the following day was a very disturbing undertaking. Vizag is on India’s Coromandel or East Coast fronting onto the Bay of Bengal and while coastal lighthouses were doused during the war, there was no blackout so in addition to the noise, the light from shipyard arc lamps filled our billets.

Following independence in 1947, India adopted a socialist political regime. It became very much a client state of the Soviet Union and for some time there were worries in the West that it might turn to communism. In theory there were many reasons why socialist policies might help the huge lower castes of the poor and deprived within India until it became apparent that a thriving, business-oriented economy was a better way to create a tax base that could produce funds to help the poor and at the same time foster the prosperity needed to encourage and sustain a burgeoning middle class. Government attitudes started to be rethought and it became apparent that the extensive railway system needed modernization and a reliable highway system was a necessity. The railways had been left in good shape by the British even though conversion to diesel was looming up, but the highway system mainly existed around the major cities with very limited linkage between major centres. India’s need mushroomed very fast and without investment and modernization both would be a drag on the Indian economy.

One of the biggest bottlenecks was created by the inadequacy of ports, which had resulted in congestion where they existed and virtually no development in huge swaths of territory where ports were lacking or deficient.

Very soon after this new thinking took hold, a program of port

modernization got under way with, in some instances, private capital being allowed to take on new port development. In 1947 India claimed the four ports of Karachi, Bombay, Madras and Calcutta as its main ports, with secondary ports handling ocean shipping at Mangalore, Cochin, Vizag and Chittagong. Karachi and Chittagong became part of Pakistan at partition in 1947. Today, India claims a dozen major ports, a similar number of important intermediary ports and a vast range of minor ports, many of which have been or will be improved as part of the national program for port development.

Mumbai (Bombay), Chennai (Madras), Kolkota (Calcutta) and its outport Haldia still rank along with Vizag as the top four. Jawaharlal Nehru Container Port, a new world-scale container shipping centre has come about to relieve the pressure on Mumbai to which it is virtually an adjunct. The other major

ports are on the Northwest Coast at Kandla, a new river port nearest to the Pakistan border. On the Malabar, or West Coast south of Mumbai, are Panaji and Marmugao within the boundaries of the former Portuguese colony of Goa, Mangalore and Cochin. On the southeastern tip of India is Tuticorin and between Vizag and Haldia is the new port of Paradip.

Today, India claims a dozen major ports, a similar number of important intermediary ports and a vast range of minor ports, many of which have been or will be improved...

Another group of some 14 rank as intermediate ports and almost all are new names among the list of world ports. Working from west to east,

India’s major and intermediate sea ports.

May 2012 BC Shipping News 39

INTERNATIONAL SHIPPING they are Okha, Bhavnagar, Porbundar and Veraval, all within the general Gujarat area. On the West Coast are Surat, Ratnagiri, Karwar, Cozikhode (Calicut) and Alapuzha (Aleppey). On the East Coast working south to north are, Nagapattanam, Karaikal, Machillipatnam, Kakinada (Coconada) and Gangavaram. Many of these names are strange because, as with the bigger ports, a process of Indianization of names has been adopted and historic older names are in brackets. Calicut for instance goes back to the first arrival of the Portuguese in India in the early 1400s.

Open roadstead ports got new breakwaters and modern berths; warehouses and cargo handling systems have been constructed although containerization seems to be lagging or non-existent at many of the country’s ports. A reason contributing to much of this may be because India produces most of its

40 BC Shipping News May 2012

population’s consumer goods domestically with distribution internally via rail and highway. When I was there in the 1940s much distribution on the coasts was by small sailing craft which handled building products, small consignments of sacked grains and rice and basic commodities. Today that traffic is increasingly handled by a fleet of substantial modern European-style coasters which are being continually built at several yards in India.

The two ports that I came to know very well in the 1940s were Vizagapatam and Coconada (now renamed Kakinada).

Vizag is India’s fourth largest port today and a view of it using Google Earth reveals a big port with many berths working large bulk carriers among other commodities. Coal and iron ore play a very large part in the trade of the port which serves a nearby steel industry.

Most of the docks have been built since my visit there by digging into the former

swamplands area to take them further inland. A new outer harbour for smaller vessels has also been built where before there were just beaches that were subject to heavy surf conditions.

A very short distance south, there is another new port, the former fishing village of Gangavaram. It was opened as recently as 2009 to accommodate up to 200,000-tonne bulkers and, like Vizag, it has extensive bulk handling facilities with adjacent inland storage areas and a berth for container ships.

Whereas Vizag port is owned by the Indian Government, Gangavaram, like most of the new ports, is a private venture that competes with Vizag in serving the steel industry. Interestingly, the ownership is made up of the government of the state of Andhra Pradesh, Vizag Steel and New York investment bankers E.M. Warburg Pinkus in a now typical government-private partnership.

INTERNATIONAL SHIPPING One aspect that is notable about the Indian coastal trades is the extent to which bulkers, commonly up to 90,000 tonnes, are really big coasters as they do the job of moving high tonnages of the mineral traffic requirements of heavy industry from one Indian port to another. The national railway system, while good at handling a huge passenger load as well as much freight, simply cannot manage the nation’s needs in heavy bulk cargoes without a lot of new investment. While many of the Indian flag carriers trade their bulkers offshore for commodities the country does not produce, many more of the bulker fleet probably seldom leave the Indian coast. It makes sense when the geography created by the Indian peninsula is taken into account. It has resulted in the planned location of a high proportion of the country’s new heavy industries being located where there is easy access to a nearby seaport. Gangavaram is a perfect example with Vizag Steel now examining the idea of a long distance conveyor from port to mill, as an alternative to the less efficient railway.

River. The city was a fairly extended population centre but in those days it had only light locally focused industry. Today it is described as the country’s biggest manufacturing centre for fertilizer and aluminum with deepsea wharves and a large minerals handling facility situated on land reclaimed from the sea to accommodate sizeable bulk carriers and chemical tankers.

There is a downside to all this wonderful progress in outfitting the Indian nation with these new and improved facilities. The Indian Maritime Administration is in a state of crisis being critically short of trained manpower to fill the many jobs that have opened up and it starts with administrators from the top down. Typically this includes marine surveyors in their various categories and too often those that do exist are undertrained and inexperienced. The demand for navigators and marine engineers is enormous as not

only are they needed for Indian-flagged ships but large numbers are employed by foreign owners such as Seaspan Corporation which maintains its own manning office in Mumbai. Since time immemorial well-trained seagoing personnel have been the source for coming ashore and filling key posts with their obvious attractions for living at home in all sorts of jobs including surveying, pilotage, stevedoring and many other categories, but it now seems that in just about every category the shortage of trained manpower is critical to the point of creating a crisis. One such is that India is not able to fully live up to its obligations under international conventions and clearly it has to get past all this to support the demands of its growing economy.

Syd Heal, a veteran of the marine industries and a prolific writer and publisher of marine books, can be contacted at: richbook@shaw.ca.

While many of the Indian flag carriers trade their bulkers offshore...many more of the bulker fleet probably seldom leave the Indian coast.

Kakinada provided another surprise when I recently viewed it on Google Earth. In 1945 it was, like Vizag and the port of Tuticorin to the south, a Combined Operations base and part of South East Asia Command’s preparations for the retaking of Burma, Malaysia and the East Indies. Its beaches faced onto broad and sweeping Coringa Bay and were ideal for amphibious exercises where we practiced landings while the small port, such as it was, was mainly concerned with Indian coastal sailing craft. For this purpose a modern go-down and wharf had been built alongside the river bank of one of the shallow mouths of the Godavari

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INTERNATIONAL SHIPPING

MEPC 63 and regulating GHGs:

Where are the manufacturers of ships’ engines in this debate?

By Kaity Arsoniadis-Stein LLB, LLM President & Secretary-General International Ship-Owners Alliance of Canada

“The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.” — Winston Churchill International Maritime Organization Marine Environment Protection Committee (MEPC) 63nd session London, England February 27 to March 2, 2012 MEPC 63 was chaired for the first time by Secretary-General Koji Sekimizu, the seventh elected Secretary-General of the International Maritime Organization (IMO). Koji Sekimizu succeeded Efthimios Mitropoulos of Greece who headed the IMO for two four-year terms after succeeding Canada’s William O’Neil in January 2004. Secretary-General Sekimizu studied marine engineering and architecture and joined the Ministry of Transport of Japan in 1977. His work at the IMO began in 1980 when he was part of the Japanese delegation, and in 1989, he joined the IMO Secretariat.

The Secretary-General’s opening address urged the MEPC to begin the impact assessment study of market based measures for the reduction of greenhouse gases (GHGs) and finalize it by 42 BC Shipping News May 2012

2013 in order to decide on a specific Market Based Measure (MBM).

Referencing the December 2011 Durban Conference, the SecretaryGeneral stressed the importance of creating a “clear road map” to establish a market based measure by 2015. He emphasized that: “This would demonstrate that IMO is fully in line with the historic agreement reached at the Durban Conference to identify the path towards the future, global legal framework on the mitigation of climate change that will cover all nations of the world.”

...it is evident that by not regulating oil refineries directly, the unanimous agreement reached by the IMO on air emissions failed completely.

This article will provide a brief update post-MEPC 63 with respect to progress made on MBMs while analyzing the various complex obstacles that plague the debate, leading one to wonder whether regulators globally have targeted the correct entity with respect to the colossal problem.

Recalling the monumental task the IMO had with respect to reducing

ship emissions —whereby strict, robust standards were implemented for the use of cleaner fuels — and noting that today these robust standards are meaningless without the voluntary cooperation of the oil refineries to provide the market with the needed clean fuels, it is evident that by not regulating oil refineries directly, the unanimous agreement reached by the IMO on air emissions failed completely. To rely strictly on “demand” from ship owners to drive the necessary change is a false strategy. In Canada, with respect to the concentration of lead in gasoline, Environment Canada implemented specific, targeted regulations on gasoline produced, imported or sold and achieved a 99 per cent success rate.

Simple, uncomplicated and logical.

Similarly with GHGs, again we see the same pressures are imposed on the ship owners to drive the necessary changes in the shipbuilding/manufacturing of ships’ engines. Perhaps the pressure from the owners will make some changes but not the big ones demanded by the environment and our societies today. Specific regulations need to be aimed directly at shipyards and the manufacturers of ships’ engines, as is done by contrast and with successful

INTERNATIONAL SHIPPING results with the car manufacturing industry. The argument that the shipping industry will put pressure on the shipbuilders to effectuate the change was the same tired argument that was used with respect to the use of clean fuels and now we await voluntary action by the oil refiners while facing the reality of non-compliance with regulation.

Governments must recognize that the shipping industry relies heavily on ancillary sectors and the failure to regulate the appropriate entity, — i.e., the oil refiners to provide clean fuels and the manufacturers of ships’ engines to provide efficient clean ship engines or alternate propulsion systems — is a significant impediment to the sustainability of the industry.

A further impact assessment study The MBMs proposals currently under review range from contribution schemes for all CO2 emissions from international shipping, collected by fuel oil suppliers and transferred to a global fund; to an emission trading system (ETS); to proposals based on the ship’s actual efficiency. There are also proposals for rebate mechanisms and other ways to accommodate the difference in socio-economic capability between developing and developed states.

An MBM will place a price on GHG

...some MBMs will result in distortion of competition and may adversely affect world trade and therefore would be detrimental to the world economy. emissions for international maritime transport. In finding an appropriate MBM, it will be important to ensure that other modes of transport do not displace shipping as this will increase the overall GHG emissions to the detriment of the environment.

Furthermore, some MBMs will result in distortion of competition and may adversely affect world trade and therefore would be detrimental to the world economy. To say that this is not an

overwhelming task with a resolution on the horizon would raise serious credibility issues.

With the Secretary-General’s direction, the MEPC decided, by consensus, to undertake a more in-depth Impact Assessment of the MBM proposals further to the Expert Group Feasibility Study and Impact Assessment. It was decided that the New Assessment should set out possible socio-economic impacts, both positive and negative, on developing countries, least-developed countries and Small Island developing states and remotely located developing countries with large trading distances.

This development came forth due to the criticism received by the IMO that it is not taking into account the United Nations Framework Convention on Climate Change (UNFCCC) principle of CBDR (common but differentiated responsibilities).

The new impact assessment A key obstacle in the GHG MBM debate is the fact that two key United Nations institutions apply conflicting core principles. The UNFCCC is based on the core norm of CBDR and the IMO’s core principle of no favourable treatment of ships, irrespective of flag state. The UNFCCC firmly recognizes the differences in the contributions of developed and developing countries in addressing global environmental issues and therefore UNFCCC differentiates between the obligations of its member countries. By contrast, in order to uphold the application of globally applied regulations, the IMO’s core principle is non-discriminatory regulation (no favourable treatment of ships irrespective of flag state), as it must apply all regulations equally, as per Article 1 of the Convention of the IMO. It was agreed that the Impact Assessment should review the “effectiveness and distribution” of the impacts of implementing the different proposals of a MBM and should identify for each proposal the following: • The reduction potential on GHGs from international shipping;

• the impact on world trade and the shipping industry; • whether the specific MBM will create incentives for further technological developments within the shipping industry; and, • the reduction potential for the maritime sector in general with priority to the maritime sectors in developing states.

The goal is to have the Assessment address potential positive and negative impacts up to 2050 with detailed analyses for 2020 and 2030, in addition to including impacts and costs for the global community.

Legal aspects of the key proposals With respect to an International Fund for Greenhouse Gas Emissions (GHG Fund), the issue of hypothecation is a stumbling block for several States.

For example, the U.K. Government has a policy of not hypothecating tax revenue as it is considered an inefficient means of determining public expenditure priorities which should be considered holistically rather than by creating artificial links between certain spending programmes and specific revenue streams. More importantly, the U.K. believes it is inappropriate for global legislation to determine national public expenditure allocations for which national governments are responsible and accountable to their national parliaments.

As the IMO continues its rigorous and challenging work on MBMs, the threat of unilateral action continues by the European Union to integrate marine transport into the European Emissions Trading System (ETS).

But such threats may be perceived as empty given a number of legal considerations that cannot be ignored. The same arguments below which outline ETS issues for the EU, can also apply on the global scale.

Firstly, any EU environmental policy regulating air emissions from ships has to comply with International Law, specifically, the United Nations Convention on the Law of the Sea May 2012 BC Shipping News 43

INTERNATIONAL SHIPPING 1982 (UNCLOS) to which the EU is a signatory. Article 92 of UNCLOS states that ships “shall sail under the flag of one State only and …shall be subject to its exclusive jurisdiction.”

According to customary international law, only Flag States (those of which vessels possess the nationality and whose flag the vessel is entitled to fly) have authority to enforce regulations applicable to vessels on the high seas. Whilst under Article 218 a Port State may take legal action for a discharge violation, whilst Article 25.2 allows Coastal States to refuse the admission of a vessel into their internal waters if the vessel does not comply with entry conditions, Article 227 states that “States shall not discriminate in form or in fact against vessels of any other state and Article 228 states that for discharges on the high seas, Flag States can intervene and suspend proceedings. This could limit the EU’s jurisdiction to charge taxes or implement emissions standards outside EU waters. In terms of administration difficulties with respect to calculating emissions within a State’s sovereign jurisdiction, the jurisprudence of jurisdiction as applicable to internal waters, territorial waters, contiguous zones and Exclusive Economic Zones must be analyzed. Furthermore, there is the issue of violating the right to innocent passage through territorial waters. Article 24 of UNCLOS reads: “The Coastal State shall not hamper the innocent passage of foreign ships through the territorial sea…impose requirements on foreign ships which have the practical effect of denying or impairing the right of innocent passage; or discriminate in form or in fact against the ships of any State…”

This sacrosanct principle of International Law, the right of innocent passage, is one of the key principles under the International Law of the Sea. The passage of ships is considered to be innocent when it is not prejudicial to the peace, order or security of the Coastal State. And finally, Article 26 of UNCLOS states “no charge may be levied upon foreign ships by reason only of their passage through territorial sea… charges may be levied …as payment only for specific services rendered to the ship.”

A new trillion dollar industry The basis of an ETS is that “the polluter pays”. However, a deeper analysis of the revenue stream quickly reveals that the targeted “polluter who pays”, i.e., the company, does not actually absorb these extra costs — instead, the costs are passed along to their customers, who pass them on to the consumer, who at the end of the line actually equates to the taxpayer. As commented by Martin Livermore in the Wall Street Journal, “Not only does the taxpayer carry the cost of any cap and trade system, but their money also provides profit for a whole new industry: the new (unregulated) carbon trading sector, the middlemen who make the system work and a whole pile of money.”

In addition to the substantial administrative costs, you would most probably see the emergence of financial institutions and futures trading houses, and the real possibility of 44 BC Shipping News May 2012

Cartoon from The Financial Times (Letters section), April 28, 2007. speculative trading with no benefit to the environment and disastrous results for shipping and international trade.

ETS requires a meticulous control system to ensure that it is not abused and given that shipping is a mobile industry with various jurisdictional connections, it may be much more difficult to control than shore-based ETS where abuses are numerous and reductions in GHG emissions, questionable.

Unlike normal tradable commodities, carbon dioxide emissions can only be estimated rather than quantified exactly and only international agreements and national laws give permits a price. The result is that the system is open to misuse since all the parties: seller, middleman, buyer, have an incentive to manipulate the estimates. Another major problem with cap and trade is its lack of predictability. Prices vary considerably. The European Trading Scheme has seen the price of carbon start at about 12.50 Euro with prices peaking above 30 Euro. Such fluctuations may encourage businesses to increase energy efficiency, but do not provide certainty for long-term investment decisions to permanently reduce carbon emissions.

Furthermore, there are a number of skeptics that view the introduction of an unprecedented global carbon tax and emission trading schemes as an attempt to distract populations while creating a trillion dollar carbon industry, which will contribute little to the reduction of CO2 emissions in the atmosphere. They argue that our genuine human concern for the planet with respect to climate change is used as a political tool to manipulate populations and increase the power of a global government and the coffers of the World Bank.

Laissez-faire: The “do nothing” option With the various proposals on the table I wonder why the “do nothing” proposal has not been tabled? Perhaps the highprofile complexity of this debate would render this option politically gauche. But the reality is that the marketplace

INTERNATIONAL SHIPPING will drive environmental improvements in the shipping industry. With fuel prices above $700 per tonne (up about $500 per tonne in six years), and fuel accounting for about 70 per cent of a ship’s operational costs, reducing fuel consumption is the most profitable initiative a ship owner can take.

Regardless of what happens at IMO with respect to GHGs, the incentive to improve fuel efficiency is already in place and improving fuel efficiency directly relates to improving the carbon footprint of the industry. Furthermore, owners who invest in improving the efficiency of their fleets will have a competitive advantage as it will be the more fuel efficient ships that charterers will select. Today’s controversy over the application of an Energy Efficiency Design Index for existing ships will dissipate because in the long-term every ship will have an EEDI and this will be a significant factor in the vetting process.

Publication

organized globally and therefore are conveniently shielded.

The debate will continue at the next session, MEPC 64, October 1-5, 2012.

The intent is to present a status report of the impact assessment during MEPC 64 while the final results of the assessment will be presented at MEPC 65.

Ms. Kaity Arsoniadis-Stein LLB, LLM, President and Secretary-General, International Ship-Owners Alliance of Canada (ISAC) since 2006, is also a Director

of the International Maritime Centre, Vice President and Director of the Vancouver Maritime Arbitrator’s Association and Trustee of the Insurance Dispute Resolution Services of B.C. Kaity obtained her LLB degree in English Law and her Masters of Laws degree (with honours) in Maritime Law from King’s College, London University and was called to the Bar in B.C. in 1998.

Kaity can be reached at kaity@kaitystein. com. For more information on ISAC, please visit: www.isacinc.ca.

Endurable Designs designs@ral.ca

BC Shipping News

...the incentive to improve fuel efficien-

Issue May cy is already in place and improving fuel

efficiency directly relates to improving Size the carbon footprint of the industry.

Island (half page vertical) The unfortunate situation is that our industry is not at the forefront of Deadline technology.

Once again, the ship owner April 16, 2012 is the consumer who is reliant on the manufacturers that provide them with the ships they use. If technology in this Features area were advanced, we would not be Ship Design / Marine Engineering, Industry reliant on fossil fuels, fuel costs would Insight (Robert Allan, not amount to 70 per cent of operations President, Robert and this GHG debate,Allan which is tantaLtd.) mount to a Pandora’s box, would not exist. Clearly, technology in this sector has failed the industry completely... and no one is accountable. Instead, we find ourselves struggling with the IMO to find a global solution on an issue that has become highly political on the international stage. The truth is because we are organized globally by the IMO, we have become an easy industry to target. The oil refineries and the shipbuilders, by contrast, are not May 2012 BC Shipping News 45

legal affairs

The state of salvage law in Canada

By W. Gary Wharton

A Vancouver lawyer with Bernard & Partners

T

he month of March witnessed an unusual visitor to British Columbia waters. Patrol aircraft on routine surveillance spotted a 54-metre Japanese fishing vessel drifting off the Southern Coast of Haida Gwaii and determined that the vessel was unmanned. Investigation determined that the vessel, which belonged to a fishing company in Hakodate, Japan, had broken loose as a result of the March 2011 tsunami which devastated the coast of Japan. The vessel subsequently drifted across the expanse of the north Pacific Ocean, arriving in our waters.

In the past, such an event would find various salvage companies and other maritime interests racing to the scene to effect salvage on the vessel with the hope of financial reward. Such was the state of affairs during the heyday of maritime salvage from the time of the First World War through to the 1950s.

To gain an appreciation of the men and machines who undertook such efforts, one might read Farley Mowat’s books on the start-up and operations of Foundation Maritime out of the Port of Halifax, The Grey Seas Under and The 46 BC Shipping News May 2012

Serpent’s Coil. The second novel, The Serpent’s Coil, chronicles the adventure of a salvage tug, Foundation Lillian, in her attempts to salvage a Liberty ship in extreme conditions in the North Atlantic. Foundation Lillian survives to this day, residing in the Port of Vancouver under the name Audrey Gail, ex-Haida Chieftain.

...the Canadian and U.S. governments are monitoring the drift of the vessel secretly hoping, I wager, that it drifts into the other fellow’s waters.

The valiant Japanese fishing boat, which has transited the North Pacific on her own, has attracted no such interest. The owners of the vessel have been quoted that “She is not needed anymore.” At the time of writing, the Canadian and U.S. governments are monitoring the drift of the vessel secretly hoping, I wager, that it drifts into the other fellow’s waters.

While there are a number of reasons why the art and business of salvage has decreased in recent decades, including

the decreased frequency of maritime casualties, Canadian law has not assisted in promoting the incentive which drives a salvage enterprise.

Notwithstanding that a vessel finds itself in extreme circumstances, those who might take possession of that vessel do not become the owners, as the property interest in the vessel continues to reside with the original owners or their underwriters. Persons who assist such vessels in distress are entitled to compensation and a lien for such compensation rights, if the would-be salvagers fulfill three basic requirements. Firstly, the efforts must be voluntary. Those who are driven by duty or some other requirement at law cannot fulfill this fundamental requirement in order to claim salvage.

Secondly, the vessel or property to be salvaged must be in real danger at the time the salvage services are rendered.

Finally, the salvors must effect a positive result, a principle incorporated into the most common form of salvage agreement (the Lloyd’s Open Form) as the concept of “no cure-no pay.”

Assuming that the salvor fulfills the requirements for a salvage award, the

legal affairs • • • •

in salving the vessel, other property and life; the time used and expenses and losses incurred by the salvors; the risk of liability and other risks run by the salvors or their equipment; the promptness of the services rendered; the availability and use of vessels or other equipment intended for salvage operations;

...a salvor may be entitled to additional “special compensation” of between 30 and 100 per cent of its out of pocket expenses and the fair rate of its equipment and labour costs...

• the state of readiness and efficiency of the salvor’s equipment and the value thereof.

In addition, under the Convention, a salvor may be entitled to additional “special compensation” of between 30 and 100 per cent of its out of pocket expenses and the fair rate of its equipment and labour costs if the salvor’s efforts minimized threats to the environment caused by the vessel or its cargo.

While the Courts note these factors, often with admiration for the bravery and efforts of the salvage crews, Canadian cases have not been overly

generous to salvors, likely driving those with salvage capabilities to seek a contract for services rendered at set rates as opposed to salvage awards.

Two key cases in Canada demonstrate the Courts’ views on salvage awards: the 1979 Federal Court of Appeal decision in Iron Mac Towing v. North Arm Highlander involved the salvage of the tug North Arm Highlander and the barge North Arm Express (in tow proceeding from Vancouver to Prince Rupert) with a cargo of fuel oil and gasoline in bulk and some other general cargo. The tug and barge came to distress below Seymour Narrows. The tug lost power, snagging the tow line on the bottom. As a result, the tug and barge came together in the prevailing tide.

The master of the tug called to the tug Iron Mac II in Menzies Bay for assistance. After some difficulty and the assistance of an additional tug, Iron Mac II extricated North Arm Highlander and her barge, moving both to safety in Menzies Bay. The Federal Court of Appeal upheld the trial judge’s determination on an appropriate salvage award at $1,200 — approximately double the tug’s normal day rate for services. The Court noted the lack of real danger, other than the normal operational risks in a tug-and-tow operation and, while not finding the “double day rate” assessment to be a principle, supported the ultimate finding.

Photo credit: Department of National Defence

Court hearing the salvage case, or the arbitrator, should the salvage be conducted under the Lloyd’s Open Form, is required to set the amount of the salvage award based on the circumstances of the particular salvage.

As the Court said in the 1860 case of the Cuba: “The amount of salvage reward due is not to be determined by any rule; it is a matter of discretion, and probably in this, or in any other case, no two tribunals would agree.”

The factors which can be considered by a Court in determining the amount of a salvage award are relatively openended; however, a general statement can be found in cases such as the 1948 decision in Florence No. II, where Mr. Justice Smith stated: “The factors which go into the making of a salvage award are well-known and wellestablished, but may be bear repetition here. They are: first, the degree of the danger to the property salved, its value, the effect of the services rendered, and whether other services were available; next, the risks run by the salvors, the length and severity of their efforts, the enterprise and skill displayed, the value and efficiency of the vessel they have used, and the risk to which they have been exposed here. The amount of the award depends on the degree in which all, many, or few of these factors are present.”

The International Convention on Salvage, 1989, signed in London on April 28, 1989, has been brought into force in Canada by section 142(1) of the Canada Shipping Act, 2001, S.C. 2001, c. 26. The Convention in large codifies the common law in respect of salvage awards and provides the following criteria for setting a salvage award at Article 13: • the salved value of the vessel and other property; • the skill and efforts of the salvors in preventing or minimizing damage to the environment; • the measure of success obtained by the salvor; • the nature and degree of the danger; • the skill and efforts of the salvors

Japanese fishing vessel currently adrift off the West Coast.

May 2012 BC Shipping News 47

legal affairs The second case of note is the 1997 Federal Court of Canada Trial Division decision of Panache IV. The facts involved the sinking of the sailing vessel Panache IV under circumstances which were of some concern to the vessel’s underwriters. The vessel sank in approximately 800 feet of water near Turn Point on Stuart Island, a location which would have had the vessel lost for all time, save for the efforts of the underwriters’ representative, Mr. Paul Mendham, who undertook a salvage effort to locate and raise the vessel to determine whether the loss was intentional.

Undeterred by several unsuccessful attempts, Mr. Mendham persevered and Panache IV was ultimately raised and taken to a place of safety in Sidney, B.C. with a total salvage cost of $307,854.44. On raising the vessel, it was determined that several hoses had been cut, establishing with certainty

48 BC Shipping News May 2012

that the vessel had indeed been scuttled for the insurance proceeds.

Given the climate for salvage awards in Canada, this writer would be extremely surprised to see the fate of this brave Japanese vessel determined by commercial salvage.

While the insurance issue was determined, the issue of the distribution of the residual value of Panache IV came before the Court in order to determine whether the mortgage holder or the insurer/salvor should have the sale proceeds of $30,100.

After determining that the underwriter was indeed acting in a voluntary manner, that the other elements of a common law salvage claim were present, and finding that the salvage

effort was meritorious and “an example of a determined effort leading to a good result”, the Court awarded $12,000 for the salvage effort, leaving the balance to the mortgagee who had contributed nothing to the recovery.

These decisions have a chilling effect on those who would have otherwise set out on a speculative venture to assist a distressed vessel.

Given the climate for salvage awards in Canada, this writer would be extremely surprised to see the fate of this brave Japanese vessel determined by commercial salvage. The securing and disposition of the vessel will likely fall to the government which finds itself at the end of the vessel’s long journey.

W.Gary Wharton is a maritime lawyer and partner with Bernard & Partners in Vancouver, B.C. and can be reached at wharton@bernardpartners.com.

marine surveyors

Marine surveyors in British Columbia An introduction to marine surveying

By J.Timothy Ellis,

Association of Marine Surveyors of British Columbia Marine surveying is generally considered to be inspecting, measuring and weighing — little words but each one the portal to an impressive array of services provided by what is really a very small number of marine surveyors.

T

he remit of the marine surveyor, as described by the International Institute of Marine Surveyors, is: “The service provided to maritime and transport organizations in general and the production of guidance reports for all other bodies connected with maritime operations or maritime trade”.

This definition becomes more apparent when counted in terms of the people, tonnage and value within a surveyor’s area of responsibility. Marine surveyors have not in the past been great selfpromoters, instead being preoccupied with the demands of self-employment and happy to remain discretely behind the scenes but always cognizant of their role. In addition, they are also being paid not to discuss their clients or the results of their surveys.

National interest I would not hesitate to say that marine surveyors are intrinsically tied to the national self-interest of Canada through their work with insurers, risk managers and controllers, commodities brokers, shipping agents, and as a critical interface between regulators and safety afloat — for both commercial and pleasure craft. In common with pilots, supercargoes, and the inspection

companies, the work of a marine surveyor is not well understood.

The work of the surveyor Marine surveyors do not just engage with the Ocean Going Vessels (OGVs) for drafting purposes. Rather, the surveyor might be checking scrap steel cargoes with a geiger counter for radioactivity; swinging the ship’s standard compass; checking a hatch-coaming gasket torn open by a ship-unloader with ultrasound technology; or investigating a near miss between two vessels. The surveyor might be hanging over the gunwhales of a small boat measuring salinity; testing the channel depth for a deeply laden vessel; measuring opacity during material handling; or, he might just be observing the behaviour of the crew for a distant owner and his audit teams. One phrase: “the collection of evidence in advance of a claim” is one that covers much of the marine surveyor’s duties.

Why and for whom?

There are at least three main purposes for employing a surveyor: as a warrant in a commercial transaction; as the recorder and correspondent of an event for a client; and as certifiers — in other words, to certify that something is fit-for-purpose.

The personality of the surveyor The attributes of marine surveyors are: their discretion, knowledge and expertise; their ability to remain calm and productive whilst under intense pressure; and particularly their ability to put into concise, clear language exactly what they observe (complex scenes of collision and alision require highly developed communications skills) and all the other, more mundane work that the surveyor encounters. In other words, the surveyor is the physical presence of the client — not necessarily acting on behalf of or speaking for the client, but observing and reporting. Good reporting and reticence are much prized and the occasional day in court as an expert witness is a distinct possibility.

Very little of what occurs behind office doors of admiralty lawyers, maritime arbitrators, insurers and others who have a stake in an incident takes place without a marine survey report at hand.

This is not to say that marine surveyors are unsung heroes but rather that public applause and publicity are anathema to their clients and for them too.

Some folk do not meet the surveyors pictured above, their surveyors wear other hats, they are the surveyors that May 2012 BC Shipping News 49

marine surveyors insurers demand attend for a condition and valuation survey aboard a pleasure yacht, the one that drives out to Abbotsford to view a container of frozen seafood crushed in a traffic accident, the underwater specialist, and a long list of others.

years. An ethics and discipline committee, composed of our most experienced members, handles client complaints and lapses — ready to act, but rarely called upon! The complaints we field are usually about surveyors who are not members.

Who are surveyors?

Marine surveyors come from many disciplines: Masters, mates and engineers from the world’s fleets, boatbuilders, delivery skippers, tugboat pilots, barge masters, shipping industry workers, engineers and naval architects, and some through study and apprenticeship of other disciplines. In British Columbia, the majority of marine surveyors are represented by the Association of Marine Surveyors of British Columbia (AMSBC).

AMSBC emergency response Under the aegis of the AMSBC, a diverse roster of marine surveyors are also quickly accessible to respond to catastrophic events and emergencies, singly, or as a group — much as what happened after Hurricanes Andrew (Caribbean) and Katrina (New Orleans).

Surveying in British Columbia British Columbia is home to some highly specialized surveyors whose experience is in demand worldwide in spheres such as ocean and coastal towing, be it flat log booms or barges. Towing was practically invented in B.C., and nowhere else is it still as all-pervasive as it is here, though today, much of the larger tonnage is from Washington State destined for Alaska. There may be more barge traffic by volume on the Mississippi and no one can dispute the intricacies of Huck’s big Muddy however there are no Salish Sea swells or waves on the Big Muddy, the current only flows one way, and when the wind blows, cautious captains push their tows firmly into the muddy bank and hold them there until the moment has passed. Anyone who knows Cape Mudge in B.C. cannot deny the ferocity of the outflow winds, nor the capricious tides, currents, and eddies that rule there. Much of our coastline has similar hazards waiting for the unwary. Surveyors may inspect the tows, develop routings, and see the log and engineered timber again when loading and being lashed aboard OGVs sailing for far-flung markets.

Another area of expertise is in Canada’s life-blood — natural resources. All of the much-mooted plans for rail links,

The AMSBC The AMSBC has been at the core of marine surveying in B.C. since the 1960s and has been an active voice on behalf of their constituency ever since. We are proud to welcome our first female member — Sarah White of Specialty Yachts on Granville Island — whose membership has just been accepted by the Association.

The Association’s priorities are the public, clients and members. One purpose of the AMSBC is to protect that which is most important to each and every surveyor: their reputation. The client must be able to trust the surveyor’s word, independence and commitment. The AMSBC hosts diploma-level distance learning programmes that lead to a diploma in marine surveying disciplines. We require applicants to prove themselves to their peers, sit a written exam, and survive a vote by the membership before they can use the Association’s Seal — the value of the seal cannot be overestimated. Membership has to be maintained through continuous professional development and is assessed every two Photos credit: JTM Ellis

At the request of the charter, cargo owner and the receiver, the surveyor attended two vessels, both Handy-sized geared bulkers, discharging white cement by crane-grab into river barges on the Mississippi River. The vessels were part of several million tonnes of finished cement and the constituents of cement delivered in hriver barges from New Orleans to Chicago. The cranes are MANITOWOC 4600 series swinging 150-foot booms, with a sealed-lip bucket capacity of approximately 12 yards, loading into standard, closed, hopper barges of about 1,350 Mt capacity at a nine-foot draught. A typical discharge takes three days (five for a Panamax vessel).

More photos and experiences of a marine surveyor online at www.bcshippingnews.com 50 BC Shipping News May 2012

marine surveyors pipelines and mines all end in the hold of a ship. Contract settlements are often against the surveyor’s draft surveys. Imagine, every kilo of coal or ore, log, plank, litre of oil, metre of gas, is influenced by the marine surveyor. It is not just in the arena of weights and measurements that the surveyor’s influence is felt, it is also in the ship itself that must comply with class, P&I Club, flag, federal, provincial and local rules, much of which is tested by the surveyor for owners and operators. And one cannot ignore the impact of the surveyor upon commercial traffic such as crew boats and tugs, terminals, docks and piers, cranes, barges — all of which must be maintained to class and which serve as punctuation marks in the processing and passage of goods from their source to their destinations. Seiners, long-liners, prawn haulers, mother ships and other harvesters need stability surveys and safety inspections, and there is a continuous and urgent need for surveying for damage, loss, salvage and mitigation. All the crew boats, taxis and pleasure boats from Crescent Beach to Prince Rupert require timely surveys to assess value, condition and fit-for-purpose — what a list! — and by no means a complete one.

AMSBC members travel throughout B.C. and worldwide for their clients. It is a mark of their clients’ confidence and trust in their experience and knowledge that makes marine surveying possibly one of the most interesting and least understood jobs.

BC Shipping News will visit the work of marine surveyors in the December issue with detailed commentary about individual surveys and accompanied by profiles of some of the practitioners themselves. I trust this introduction to marine surveying has whet your appetite in the meantime but for additional information, I encourage you to visit the AMSBC website (www.amsbc.org).

J Timothy Ellis has worked as a Marine Surveyor continuously since 1977 after a stint as a management trainee with a British shipping company in London, Vienna and Hong Kong. From February 1977 to October 1987 he worked in a practice in Taiwan and then moved with wife Esther to the U.K. for a sailing sabbatical. From there, Ellis moved to B.C. in 1993, touching ground long enough to know they wanted to stay but spent the

years between 2000 and 2005 in New Orleans providing independent marine consultancy services for an American trading house before being blown out on the winds of Hurricane Katrina. Tim is the secretary of the Association of Marine Surveyors of British Columbia and an advocate for his profession. Tim and Esther live in Burnaby and are avid sailors, slow-runners, and supporters of beautiful B.C.

May 2012 BC Shipping News 51

INDUSTRY GROWTH

New Travelift attracts new customers to Arrow

A

rrow Marine Services on Mitchell Island in Richmond now has the distinction of owning the largest marine Travelift in Western Canada. The 330-tonne Travelift was put into operation in January and, with its ability to accommodate vessels of up to 45 metres in length, opens up a new segment of the marine industry for Arrow Marine Services. For a company with roots as far back as 1918, Arrow is a good example of a company that is continually investing in ways to attract and grow into new markets.

While Arrow Marine Services started in 1999 with the purchase of the 220-tonne marine Travelift, the Arrow family of businesses has a long history in the marine industry with the present and past ownership of such companies as Crescent Custom Yachts, CCY Marine, Crescent Beach Marina, and its flagship vessel The Hotei which 52 BC Shipping News May 2012

is currently undergoing a major refit.

Their first marine crane was located on Granville Island in the 1940s.

Arrow Marine Services was set up as a subsidiary of Arrow Transportation Systems — one of Canada’s largest bulk commodity haulers and reload operators — at a time when there was a big difference in the value between Canadian and U.S. currencies. The advantage of the weak Canadian currency meant many vessels from Alaska and Washington came to B.C. for service. As the currency gap narrowed, less and less American work came to Canada. Over the past two decades, AMS has persevered through a decline in the Canadian fishing industry and the BC coastal lumber industry, both of which impacted on the amount of shipyard work available.

Over the past year, Arrow has seen projects ranging from bottom paint to total refit projects and has seen

a fair amount of work out of Public Works Canada and the Department of Fisheries and Oceans for steel pontoon breakwaters. One of the more interesting projects was a 130-foot by 25-foot concrete breakwater for the Lund Harbour Authority. The structure weighed in at 560 tonnes.

“Arrow’s success lies in its diversity,” said Vice-President Brian Charles. “It offers services to the fishing industry, the tug and towboat industry and the barge industry and each of these industries has its seasonal or economic fluctuations so Arrow is able to keep its yard busy as things change.”

Along with the Travelift and docking services, Arrow offers paint and sandblasting services, welding, mechanical and electrical repairs, and CSI Inspection readiness. They also build docks and custom float structures which include steel and concrete construction. At any given time you can find a variety of commercial vessels such as tugboats, fish boats, rescue boats, charter boats or barges on their dry land facility.

Charles noted that the decision to purchase the new 330-tonne marine Travelift was directly influenced

by Vancouver Shipyard’s winning bid for the federal government’s NSPS contract. “There is going to be a trickle-down effect that will benefit smaller yards such Arrow Marine,” said Charles. “With the new federal contract some of the larger shipyards will not be able to service all of their previous customers and Arrow is looking at filling that void by offering shipyard services to larger vessels than in the past.”

In fact, the new Travelift has helped Arrow attract new customers already.

The exclusive, patented sling equalizing system of the new Travelift results in much safer handling of vessels over traditional methods and the design offers better speed, safety and efficiency for a more diverse variety of boats. The 330-tonne Travelift has three sets of winches and slings which lift the vessel.

The system puts less strain on the vessel’s hull due to its winch mechanism.

INDUSTRY GROWTH often be found in a recession. “The new lift offers many new opportunities so Arrow will be pursuing new markets and will be able to actively bid on more special projects. We have lots of room for expansion in our dry land facilities and the timing for growth is excellent right now.”

BCSN

The early days of Arrow, circa 1948.

In addition to anticipating more work because of the NSPS contract, the new Travelift also provides a growth opportunity for Arrow’s “neighbour”, Platinum Marine as they are able to accommodate larger yachts. Platinum Marine is owned by Tim Charles, grandson of Jack Charles, and nephew of Brian Charles. While being a separate entity from Arrow Marine Services, they continually work together on many projects and share many of the same resources.

In terms of future growth for Arrow, Charles notes that it is tied to economic recovery and the opportunities that can

May 2012 BC Shipping News 53

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Vancouver Maritime Arbitrators Association invites you to ICMA XVIII — Vancouver 2012

The Vancouver Maritime Arbitrators Association (VMAA), is delighted to invite you to the International Congress of Maritime Arbitrators, ICMA XVIII, to be held at the Pan Pacific Hotel, Vancouver, British Columbia, May 13 to 18, 2012.

The maritime industry continues to lead the world in international alternate dispute resolution through arbitration.

Since 1972 ICMA has provided a forum for arbitrators, national maritime arbitration associations, marine insurers, ship owners, charterers, cargo interests and the legal community from around the world to come together to exchange views and developments. After 21 years, ICMA returns to Vancouver in 2012.

The VMAA invites you to join the ICMA Forum at www. icma2012.com to post topic suggestions. Suggestions to cover a full range of issues including piracy, charter party agreements and the many facets of maritime arbitration.

To register or learn more, please visit: www.icma2012.com.

ADVERTISERS ABS Americas......................................................................... 15 ATP Instone............................................................................ 41 Bernard & Partners................................................................... 9 Canadian K9............................................................................. 4 Capilano Maritime Design Ltd.................................................... 8 Chamber of Shipping of British Columbia................................... 8 CMC Electronics..................................................................... 53 Fraser Surrey Docks................................................................BC International Sailors’ Society Canada....................................... 53 Jastram Technologies Ltd........................................................ 48 King Bros. Limited................................................................... 25 Maritime Security Challenges 2012 Conference...................... IBC Mercy Ships.............................................................................. 5 Mission to Seafarers................................................................. 4 Nanaimo Port Authority............................................................. 7 Parrish & Heimbecker, Limited................................................. 54 Robert Allan Ltd...................................................................... 45 Seaspan Marine Corp.............................................................. 20 Sika Canada............................................................................ 40 Sperry Marine/Northrop Grumman.......................................... 51 Tactical Marine Solutions Ltd..................................................... 6 Transport Canada.................................................................... 35 Vancouver Maritime Arbitrators Association ICMA.................... 54 Vancouver Maritime Museum................................................. IFC Wärtsilä.................................................................................. 54 54 BC Shipping News May 2012

MARITIME SECURITY CHALLENGES 2012 OCTOBER 1-3, 2012

l

VICTORIA, B.C. CANADA

Presenting topical maritime security issues in a stimulating global environment.

Security issues in the Gulf of Guinea The illegal movement of people & illicit cargoes at sea

Photo by: Corporal (Cpl) Brandon O’Connell, MARPAC Imaging Services, Esquimalt Š 2011 DND-MDN Canada

Developments in aircraft carriers

Decision making during a crisis situation Maritime applications of unmanned and autonomous vehicles Shipbuilding and future naval requirements

Find out more about conference speakers and the MSC 2012 programme.

Register now for special Early Bird Rate.

www.mscconference.com Presented by Royal Roads University

In co-operation with Maritime Forces Pacific of the Royal Canadian Navy