Port Bureau News - August 2012

Port Bureau News August 2012

www.txgulf.org

Legal Ease: Taking a Cruise Navy Debuts “The Great Green Fleet”

Followup: Low Sulfur Fuel What if I Can’t Find Any?

Drugs USCG Drug Interdiction Operation MARTILLO & Central America

Spotlight on Colin Scott General Manager, Gulf Coast Terminals—Vopak

The M/V Blanco Pushing Two Barges on the Houston Ship Channel at Night

Port Bureau Staff Bill Diehl Jeannie Angeli David Cooley Al Cusick Cristina Gomez Janette Molina Christine Schlenker Patrick Seeba Josh Whitehead

Board of Directors *Dennis Hansell—Chairman *Steve Stewart—1st Vice Chair *Capt. Bill Hennessey—2nd Vice Chair *John Taylor—Sec./Treas. *Tom Marian—Immediate Past Chair *David Ellis *Charles H. Flournoy *Capt. John G. Peterlin III *Vinny Pilegge *Nolan Richardson *Capt. Richard Russell *Captain Robert Thompson *Len Waterworth *Nathan Wesely April Bailey Jim Black Robert Blades Ken Burnett Mike Drieu Robert Garcia Celeste Harris Jason Hayley Mehdi Hejazi Kevin Hickey Guy W. Hitt Charlie Jenkins Mike Mangan Brad Maxcey Jerry Nagel Bernt Netland Colin Scott Capt. Christos Sotirelis Tim Studdert *Denotes Executive Committee Members

Corrections and Changes to 2012 Membership Guide Company Profiles Harley Marine Services New Address: Harley Marine Gulf, 239 Lakeside Drive, Channelview, TX 77530-4417

Cargoways Logistics Website Correction: www.cargowayslogistics.net

Kinder Morgan New Contacts: David Barrow, Regional Commercial Director, 713-450-7491, David_Barrow@kindermorgan.com John Mahon, Commercial Director, 713-450-7433, John_Mahon@kindermorgan.com 405 Clinton Drive, Building A, Galena Park, TX 77547 Mark Elliott, Vessel Expeditor, 713-450-7462, Mark_Elliott@kindermorgan.com 906 Clinton Drive, Galena Park, TX 77547

Ocean Shipholdings New Contact: Capt. Duane Hockenberry replaces Linda Turnbow

Shrader Engineering New Logo:

Updated Company Information & Services: Shrader Engineering is a technology based engineering firm specializing in electrical, mechanical and information technology systems for maritime, industrial and petrochemical facilities. Our firm has also played a key role in meeting the goals of the Department of Homeland Security in providing security related technology design and integration for law enforcement agencies, seaports, and private industry along the Houston Ship Channel. The firm’s professional engineering expertise includes master planning, planning and design, program management, engineering oversight, designbuild, and construction management services.

Services Include:  Security Design and Integration  Information Transport Systems  TWIC Authentication Technology  Power Distribution Systems  Emergency Power Systems  Grounding Systems  Instrumentation and Controls  Supervisory Control and Data Acquisition (SCADA) Systems  M/E/P for Facilities

Captain’s Corner

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Are all SPorts Treated Fairly?

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I enjoy swimming. I swam growing up in Olean, and I still swim three days a week. So on Sunday evening, I enjoyed sitting down to watch the Olympics. Like most Americans watching the games, I was proud to see Dana Vollmer win the gold for the 100m butterfly and see the US win two silvers and a bronze in the Men’s 4x100m freestyle, woman’s 400m freestyle, and men’s 100m breaststroke. I also found interesting the coverage of an athlete from South Africa, Cameron Van der Burgh, who swam a blistering 58.46 time in the 100m breaststroke.

With his win and world record time, Cameron has made his country proud as their first-ever gold medalist in an individual swimming event, and when the cameras were trained on him, he was a standup young man who showed thought and dedication. In addition to praising his trainers and the people who helped him get to the Olympics, one thing he said jumped out at me; after commentators noted that he was a rare swimmer—one who didn’t come to the US to train—and reminded us of fellow South African Ryk Neethling who noted that “It is good for the sport (in South Africa) but we have some big things that we have to change back home - we don't have any pools - so there is work to be done .” Though the young man trains at a pool in his native Pretoria, I can forgive him his hyperbole, because he’s highlighting that even though you may be the best in the world, you can only stay that way if you work hard—and you have the facilities to succeed.

At the Port Bureau, you’ve heard me talk about what we need to do to ensure we have the facilities to succeed. I’ve gone in front of Congress, met with delegations on both sides of the aisle, and we’ve worked hard to get the message out that our ports are one of our nation’s strongest economic assets. Unfortunately, this is an election year, that means that Texas isn’t going to get seen much at all, and I don’t think that’s fair.

Last month, President Obama announced the We Can’t Wait initiative that will fast-track the federal funding studies and reviews for seven initiatives in five ports: Miami, Jacksonville, SaIn this photo, Cameron’s still probably faster than I am vannah, New York/New Jersey, and Charleston. A Seattle Times article expressed frustration with an article titled: “Obama to West Coast Ports: Drop Dead”. Without seeing any Gulf Coast ports on there either, I understand the frustration, but can’t criticize just the President for his single-mindedness.

Though the economy is heralded as the number one issue this election cycle, neither major party candidate is talking about what the ports can do for jobs and growth. The recent port projects can be seen cynically—pork projects to states like North Carolina and Florida which are leaning and swinging. But at the same time, Governor Romney’s name and the word “Ports” in a google search only turns up a mention of a visit to Gdansk—a Polish port city. One of these two men will lead our country for the next four years, and it worries me that neither is talking (the President did not release any remarks on the port projects when they came out) about what needs to be done in our ports.

Is it fair that our ports don’t get the respect they deserve? I don’t think so. But watching the Olympians compete reminds me that you don’t just appear on the world stage by accident. It takes the hard work of years and dedication to touch our national consciousness. We’re going to keep working hard. In August, I’m going to talk about the RAMP Act and dredging at our Harbor Safety Committee meeting, and one thing I’ll be asking for is the help of my teammates. I want to close by coming back to Cameron and the question about how they could have succeeded if they didn’t have pools to train. Well, how are we going to succeed as a port if we are not properly dredged?

Drugs Deep-Draft Arrivals to the United States

Drugs from the Sea “Our borders are being assailed by a dangerous adversary that is wellresourced, adaptive and experienced at exploiting all avenues of approach… across all transportation domains, to reach the United States and global markets.” Rear Admiral Charles Michel has decades of experience fighting drug trafficking—in addition to his tours as the Commanding Officer of Coast Guard Cutters Resolute and Cape Current, he has headed the Office of Maritime and International Law and is currently the Director, Joint Interagency Task Force South (JIATF-South) for United States Southern Command (USSOUTHCOM). This interagency task force with a USCG Director, CBP Vice Director and deputies from DEA, the Navy, and the Air Force, serves as the catalyst for interagency counter-drug operations and is responsible for detection and monitoring of suspect maritime and air activity in the Caribbean Sea, Gulf of Mexico, and Eastern Pacific.

RADM Charles Michel

With broad legal authority to conduct detection and monitoring operations, JIATF parses targets into tiers: the highest tier involves the potential smuggling of nationally nominated targets of interest, weapons of mass destruction and certain high-value targets, but immediately below, the organization is tasked with combating transnational threats and organizations including the $85 billion/year cocaine trade.

Where Do the Drugs Come From?

Marijuana from Mexico, Colombia, Jamaica and South Africa; cocaine from Colombia, Peru, and Bolivia; and opium from Mexico, Afghanistan,

A Go-Fast Interdiction by USCG Sailors

Colombia, and Thailand can all come into the United States by water. 4 “The staggering amounts of revenue and profit allow transnational criminal organizations to challenge nations by exacerbating corruption and undermining governance, rule of law, judicial systems, free press, democratic institution building and transparency”, RADM Michel reported to Congress. “Cocaine is one of the most lucrative forms of profit for these organizations and is produced in marketable volumes and quality in three countries in South America: Colombia, Peru, and Bolivia.”

Looking at information released by the US Drug Enforcement Administration, 97% of cocaine seized by US officials comes from Colombia.

Typically, cocaine from South America moves by “Go-Fast”, an open-hulled boat anywhere from 20 to 50 ft. in length with up to four powerful engines which can carry up to 3.5 MT of cocaine—a nearly $100 million value—on a single trip.

Leaving the Colombian coast, these small boats slink up the Western Caribbean coastline of Central America before making landfall in Honduras where over 80% of cocaine entering the United States is transshipped. What effect has this had on the small Central American nation? With an annual homicide rate of 86 per 100,000 inhabitants (only four nations on Earth have homicide rates higher than 40/100,000; the United States rate is 4.8/100,000), Honduras is by far the most dangerous in the world—even taking into account ongoing military actions in the Middle East. The capital city, San Pedro Sula, has a worse rate than Ciudad Juarez, and according to the BBC, evidence suggests that large Mexican drug cartels have moved significant resources into the nation as a result of ongoing counter-drug operations in Mexico.

The Submersible-Super Highway In 2007, a San Diego-based Coast Guard law enforcement team aboard the USS DeWert from Mayport intercepted a semisubmersible submarine 300-miles southwest of the Mexico-Guatemala border after it was spotted by a CBP surveillance aircraft. The four suspected smugglers piloting the semi-submersible scuttled their vessel when they apparently spotted pursuing law enforcement assets. Eleven bales and 60 kilograms of cocaine, totaling 632 pounds, surfaced near the four men. USS De Wert and Coast Guard crews rescued the four men from the water and immediately detained them. “The number one thing that helped us have success in this case was the cooperation we’ve had with other agencies, especially the US Navy”, said ENS

Todd Bagetis, the OIC of the Coast Guard Tactical Law Enforcement team that made the arrest. The craft, estimated to be about 50 feet in length, was similar to others that have been seized carrying multi-ton loads of cocaine.

“It makes you feel good as a military member, and it makes you feel wonderful as a U.S. citizen to know you are making an impact. You get to see the results – getting drugs off the streets,” But unfortunately, catching the semisubmersible vessel before she came ashore represented a troubling shift in tactics and technologies available to traffickers.

USCG Personnel Detain a Submersible and jungles of South America to increase the chance of large successful drug payloads of $250-$400 million in cocaine.

The oldest and most rudimentary design is the self-propelled semi submersible (SPSS). These vessels are designed to travel just beneath the surface of the water, with little more than ventilation and exhaust pipes above the water line, and all exposed surfaces painted blue to decrease visual detection. While older models were often constructed with wooden hulls, modern SPSS vessels generally have fiberglass hulls that are more durable and less susceptible to radar or sonar detection. Other advancements include underwater exhaust piping to cool the exhaust and reduce infrared visibility.

In recent years, several true submarines have been seized in South America. These hand-made submarines are fully-submersible with steel or Kevlarcoated fiberglass hulls, diesel engines, and a generator for electronics such as GPS, satellite phone, radar, and air conditioning. Adjustable ballast tanks allow the 100-ft long vessels to submerge 3065 ft below water for distances up to 2000 miles. The engines used are most efficient at slow speeds, so despite the large fuel tanks, the submarines usually travel at about 7 knots to avoid running out of fuel on long passages.

When authorities attempt to seize a drug-carrying SPSS or submarine, the crew usually tries to scuttle the vessel, sinking the ship and cargo to destroy evidence and be rescued without prose-

While drug submarines were first detected in 1993, current examples of these covert drug-running vessels exude remarkable sophistication.

Drug cartels invest up to $2 million to hand-build submersibles in the swamps

cution. However, this practice led to the US Drug Trafficking 6 Vessel Interdiction Act of 2008 which allows persons to be arrested for operating or traveling on an unregistered submersible or semi -submersible with the intent of evading detection.

The newest form of drug smuggling vessels are so-called narco torpedoes: fully-submersible unmanned cargo containers. Submerged to nearly 100-ft depths and towed by fishing boats, these vessels are difficult to detect. If a towing boat is stopped, the tow line is released and the narco sub releases a disguised buoy equipped with a location transmitter for later retrieval by another fishing boat. This prevents the costly loss of drug cargo that is caused by scuttling manned vessels.

USCG Sailors in Miami Beach, FL offload over 7.5 tons of cocaine worth $180 million from a sunken semisub- A Shift in Tactics: Liquid Cocaine mersible captured off the coast of Honduras The Coast Guard made the first maritime seizure of liquid cocaine in April 2007, when a Coast Guard law enforcement team from San Diego deployed aboard the USS Rodney M. Davis located 3,850 gallons of liquid cocaine in the fish hold of the Ecuadorian-flagged Emperador in the waters of the Eastern Pacific.

Each gallon of the liquid is the equivalent of 1.3 kilograms of processed cocaine. The Coast Guard boarding team detained the 17 crewmembers of the vessel— Costa Rican Coast Guard sailors interdict suspected drug smugglers in support of Opsixteen Ecuadorians, and one Colombieration MARTILLO. The vessel was disabled by a USCG marksman operating from a an. The Coast Guard, in cooperation USN SH-60 Seahawk helicopter assigned to the USS Elrod with the Departments of Justice and State, negotiated 26 bilateral agreements with drug interdiction partner nations in and around the transit zone which allowed Coast Guard law enforcement teams, like the team that boarded the Emperador, to gain jurisdiction over suspected smugglers. The Coast Guard boarding team and crew of the USS Davis transported the vessel to Guayaquil, Ecuador, for further examination by officials from the U.S. Drug Enforcement Administration and Ecuadorian authorities while the majority of the liquid cocaine—3,600 gallons—was turned over to Ecuadorian authorities for destruction. According to Assistant U.S. Attorney Joseph K. Ruddy, who oversees international investigations of drug trafficking, authorities believe the liquid was going to be processed into powder in Mexico before being shipped to the United States.

Operation MARTILLO With record interdiction in the mid-2000s, smugglers and drug traffickers reacted by changing tactics to mitigate their risk. Go-fast load sizes were reduced while the number of boats on the water increased significantly. “Most alarmingly”, reported Commander, JIATF to Congress, “Transnational criminal organizations at sea were moved

from deep water—where technological advantages favored US interdiction forces—to the Central American littorals.” Now, instead of traversing traditional trade lanes which move from deep-draft port to deep-draft port, drug smugglers have begun to use waters close to shore where vessels don't need quite the same structural tolerances and stability to survive as they would in open ocean.

A Long-Range Interceptor is launched off of USCG Bertholf

To manage the increasingly difficult and destabilizing situation where drugs were moving in the close-waters of Central America, US joint forces (in a whole-ofgovernment approach) began working with Central American nations to force smugglers into deeper waters. Titled Operation MARTILLO, the task force created a framework whereby complementary operations worked to reduce the supply of illegal drugs by projecting a law enforcement presence in the six million square mile transit zone of the Caribbean Sea, Gulf of Mexico, and Eastern Pacific Ocean.

Though a slow process, Operation MARTILLO has been heralded as a tremendous success by partner nations. At a late-June summit in Guatemala City, Honduran ambassador to Guatemala Miguel Cabrie noted that “I am convinced that with each day of this mission, regional security is improving. … Drug trafficking is gravely affecting our countries, but the people involved in this mission are taking the steps to improve regional peace, justice, and above all, to reduce the fear of crime in our nations.” In response, Guatemalan Defense Minister Ulises Noe Anzueto Giron noted that “We are very pleased with the result of this first step in the operation… the fight is only beginning.” In the first four months of 2012, Operation MARTILLO reduced air-trafficking of illicit drugs by more than 60% and has resulted in the seizure of over 32 tons of cocaine.

8 Drug Interdiction: Why the Coast Guard is Involved The Coast Guard is the lead federal agency for maritime drug interdiction and shares lead responsibility for air interdiction with the U.S. Customs Service. As such, it is a key player in combating the flow of illegal drugs to the United States. The Coast Guard's mission is to reduce the supply of drugs from the source by denying smugglers the use of air and maritime routes in the Transit Zone, a six million square mile area, including the Caribbean, Gulf of Mexico and Eastern Pacific. In meeting the challenge of patrolling this vast area, the Coast Guard coordinates closely with other federal agencies and countries within the region to disrupt and deter the flow of illegal drugs. In addition to deterrence, Coast Guard drug interdiction accounts for nearly 52% of all U.S. government seizures of cocaine each year. For Fiscal Year 2002 the rate of Coast Guard cocaine seizures alone had an estimated import value of approximately $3.9 billion.

Counter-drug smuggling mission background In 1870, Chinese immigrants became the first known drug smugglers when they began smuggling opium in merchant ship cargoes and baggage. Since then, drug smuggling by maritime routes has grown in size, scope and sophistication as demand skyrocketed. For example, around the turn of the century, when cocaine use was first in vogue, a relatively limited amount of the population was directly affected by the problems of cocaine abuse. But in later years, as the drugs of choice shifted from cocaine to heroin and opium, then later to marijuana and back to cocaine, drug smugglers began utilizing maritime sea and air routes to transport larger shipments of drugs to the U.S. For nearly a century, the maritime drug smuggling business slowly evolved while the Coast Guard focused its attention on the major events of the day, including World War I, Prohibition, World War II, the Korean and Vietnam wars.

During the 1920's Congress tasked the Coast Guard with enforcing the 18th Amendment, necessitating a dramatic increase in resources and funding for the Coast Guard. The massive effort needed to curtail the substantial level of alcohol smuggling required the single largest appropriation for personnel and new ship construction in its history. In addition, the Navy transferred more than 20 WWI-era destroyers and minesweepers for conversion to the Coast Guard's battle with rumrunners, which ended with the 21st Amendment repealing Prohibition. The Coast Guard's unique expertise in countering smuggling operations also came into play during the Vietnam War, when the Navy asked for our expertise to support "Operation Market Time," an intensive multi-year campaign to stop the Communist flow of arms and supplies by sea. The Coast Guard utilized its expertise in stopping smuggling while facilitating legitimate commerce. Our patrol boats and cutters patrolled 1,200 miles of coastline and had to contend with more than 60,000 junks and sampans. The Coast Guard and Navy's success in "Operation Market Time," substantially reduced the amount of at- sea smuggling, forcing the Viet Cong to use the longer and more difficult land route of the infamous Ho Chi Minh Trail.

Shortly after the war in Vietnam ended, the Coast Guard found itself fighting another war--a war that is still going on today with a determined, well-financed opposition. In the early 1970's maritime drug smuggling became a much more significant problem for the Coast Guard and we began making seizures while engaged in other operations, like Search and Rescue and Fisheries Law Enforcement. 1973 saw a dramatic increase in smuggling attempts and the Coast Guard conducted its first Coast Guard-controlled seizure on March 8, 1973, when the USCGC Dauntless boarded a 38-foot sports fisherman, the Big L and arrested its master and crew, with more than a ton of marijuana on board.

Since then, the Coast Guard has seized countless tons of marijuana and cocaine. Since Fiscal Year 1997 to present, the Coast Guard has seized 806,469 pounds of cocaine and 333,285 pounds of marijuana.

GHPB Board of Directors Welcomes Mike Mangan, Houston Fuel Oil Terminal Company The Greater Houston Port Bureau Board of Directors welcomes Mike Mangan of Houston Fuel Oil Terminal Company to the board. Also this month, Kevin Hickey of Targa was selected to fill a vacant slot left by Lloyd Schwing who served with distinction since 2009.

As part of the leadership team at Houston Fuel Oil, Mike has direct experience in finance, including borrowing, lending and hedging activities. He previously served as director of finance for Weingartern Realty Investors, where he was also a member of the Finance Committee, and has held positions with Bank of Tokyo – Mitsubishi, Dresdner Kleinwort Wasserstein and Reliant Resources. Mike earned his bachelors degree from Hofstra University School of Business.

CBP Announces L. David Fluty as New Area Port Director US CBP has announced the selection of L. Dave Fluty as Area Port Director for the Houston/Galveston ports of entry.

Fluty previously served as the Deputy Assistant Commissioner for CBP’s Office of Training and Development and Director of CBP’s Houston Lab in the Office of Information and Technology, responsible for providing CBP and DHS law enforcement officers with technical assistance and scientific services in many areas including weapons of mass destruction, trade enforcement, forensic analysis, and crime scene investigation.

“I am excited to be returning to Houston to lead a group of professionals in carrying out our mission of protecting the nation from terrorists and terrorist weapons,” he said. “I am also looking forward to working with our local partners as well as our industry stakeholders to ensure we continue to facilitate legitimate trade and travel.”

The Houston/Galveston Seaport is the largest container port on the Gulf Coast and ranked as the 9th busiest port in North America. As Area Director, Fluty is responsible for oversight of CBP operations in the following ports: Port Arthur, Beaumont, Corpus Christi, Freeport, Galveston and Houston.

A USCG MH-65 fires warning shots at a non-compliant vessel

In addition to picking up traffickers, Operation 10 MARTILLO has assisted local police in tracking down cartels operating in Central America. Guatemalan Interior Minister Lopez Bonilla noted at a press conference recently that, “"Unfortunately we are seeing more and more evidence that local...(l)egal, licensed fishermen are being employed by drug organizations to pick up shipments that planes drop in the water," adding that the "next step in our operations will be to uncover the roots of these transport networks."

In 2011, the Coast Guard spent over 1,800 cutter days and 4,416 aircraft hours to remove 11.6% of the 652 metric tons of cocaine traversing the region, according to the Office of the Inspector General. In 2012, the Coast Guard has increased their targeted rate to 16.5% and will make available two 418 foot National Security Cutters to increase interdiction capacity. In addition, the Coast Guard and Navy take additional measure such as expanding the use of helicopter prosecution and night time operations to detect and interdict more go-fast vessels, continuing counter-drug education at the Maritime Law Enforcement Academy, and developing a visible marking device to assist in the recovery of jettisoned contraband allowing for more accurate load size estimates and additional prosecutions.

USCG Officials inspect a The Way Forward captured drug submarine The Coast Guard and other maritime law enforcement partners are key to the nation’s efforts to fight the import of illegal drugs. In early June, Commandant ADM Papp announced that “While the Coast Guard provides a robust counterdrug presence near the border as a final maritime line of defense, we also deploy cutters, aircraft, and law enforcement teams to South and Central America to interdict illicit contraband in bulk before it reaches Mexico where it is often divided into smaller packages for delivery to dealers in the United States.” While announcing that joint forces had already captured more in the first two quarters of 2012 than in all of 2011, the Commandant also drove home the reason that interdiction from the sea is a vital part of our nation’s drug-enforcement strategy: “The 180,000 pounds of cocaine seized (in 2011) equals roughly four times the amount of cocaine seized by one million land-based US law enforcement personnel.

It seems, that, as in matters of commerce, the most cost effective solution for America is on the

DHS’s Response to Innovative Tactics and Techniques: A Closing Summary by RADM Charles Michel Our target set spans the full spectrum of national and international security, presenting a formidable transnational challenge for U.S. and allied nations. We fight a highly mobile, disciplined, and well-funded adversary that threatens democratic governments, terrorizes populations, impedes economic development, and creates regional instability. The mission to counter transnational organized crime and illicit trafficking cannot be viewed in isolation from our efforts to combat terrorism, because the patterns, tactics, and techniques employed by traffickers are the same as the methodologies used by anyone wanting to move illicit people or cargo - including terrorists.

Our operational successes indicate an increasing level of trafficker sophistication and innovation as they rapidly employ readily available cutting edge technologies, change their tactics, and shift seamlessly between modes of communication and methods of conveyance. Our success is dependent upon our collective capability to be more innovative, more adaptive, and more agile than our adversaries. Currently, we are unable to target 74 percent of high confidence events. Of the 26 percent that we are able to target the principle impediment to successful detection and monitoring is the lack of the necessary sensors to generate persistent wide area surveillance and precision geolocation. In spite of our challenges, we continue to be successful for two primary reasons. First, JIATF-South is a dynamic and evolutionary organization, one continuously adapting itself to evolving target sets. Second, the national and international unity of effort found within our command spans geographical and functional boundaries, bringing with it operational efficiencies and critical capabilities.

I close by once again thanking the Congress for its steadfast support of our men and women in uniform, who work every day to keep our nation safe and I look forward to our continued collaboration to counter transnational organized crime and the illicit traffic that supports it.

US Navy Deputs “Great Green Fleet” RIMPAC 2012 Powered by a 50-50 Blend of Biofuel and Traditional Fuels

USNS Henry J. Kaiser (T-AO 187) delivers biofuel mix to the USS Nimitz (SVN-68) during an Underway Replenishment

During the 23rd biennial Rim of the Pacific (RIMPAC) exercises, the US Navy will demonstrate and evaluate clean energy technologies, most notably an expensive biofuel blend that has polarized the political field. RIMPAC is the largest international maritime exercise in the world, this year boasting 25,000 personnel from 22 countries. The US Navy’s representation includes a demonstration of the Great Green Fleet: carriers, destroyers, and aircraft powered by a 50-50 blend of renewable biofuel and traditional petroleum fuel or by nuclear reactors. Green Fleet participants are USS Nimitz and Carrier Air Wing Eleven, USS Princeton, USS Chafee, USS Chung Hoon, and replenishment oiler USNS Henry J Kaiser. Other energy efficiency features demonstrated include solid state (LED) lighting, on-line gas turbine washing, shipboard energy dashboard, fuel and safety-optimized routing plans, and stern flaps to minimize hull resistance.

The marine biodiesel made by Dynamic Fuels is made from reclaimed fats and cooking oils, while the aviation biofuel

by Solazyme is derived from algae. A key requirement for the biofuels used is that they can be added as drop-in fuel with or instead of conventional fuel, meaning no engine modifications are required to burn the biofuel in current engines. According to a statement by Secretary of the Navy, Ray Mabus, “We’re not going to change the engines on our ships or our aircraft. We have to have a fuel that will operate on the fleet we have today, with the aircraft we have today.”

Navy representatives tout two main benefits to using alternative power and energy efficient systems: increased national security by decreasing dependence on foreign oil and future cost savings by decreasing petroleum consumption. A $10 increase in the price of a barrel of oil can translate to a $1.3 billion increase to the Department of Defense’s fuel budget, and the volatility of oil prices can hamper planning efforts. Additionally, a 2006 study by CAN’s Military Advisory Board advised that a 30% decrease in American petroleum consumption would limit the effects of a massive disruption in foreign oil to almost zero and strengthen national security. A group of military veterans and former politicians, including retired Republican Senator John Warner, a firm supporter of energy independence in the military and adviser for the Pew Project on National Security, Energy and Security, released the following statement mid-July: "As long as U.S. and global economic security are dependent on oil produced in volatile regions of the world, our military will be required to continue deployments and dangerous missions to ensure What Do Biofuels Mean for Commercial Shipping? the ... security of vital It is technically possible to replace marine fossil fuels with biofuels for use in ship enenergy resources." gines. However, although market incentives exist in some parts of the world, the introduction of While the Navy’s biofuels is limited to a few applied test projects and local initiatives. With up to 50% of a combiofuel blend costs half mercial vessel’s costs tied up in fuel, and biofuel costs up to five times that of traditional heavy fuel oils, running a ship on biofuel is not currently economically viable for the majority of vessels. per gallon compared to 2009 prices, at around In a detailed study of current fueling practices exploring the possibility of expanded bio$15 per gallon it is still fuel use, the European Maritime Safety Agency recognized several niche markets which could about 4 times the cost of integrate biofuels more easily than the general shipping market including passenger, offshore using only traditional supply, and intracoastal vessels. The Agency also noted that the global aviation sector—with its fuel. In a time of austerifocus on high quality, very standardized fuel, might be a better market for specifically engineered biofuels, while shipping, which generally uses residual fuels and oils with little standardization, would require significantly more market pressure, though if costs could be controlled for biofuels, an up-to 20% biofuel mixture could be introduced with relatively few modifications to existing fleets.

The bottom line? Unless market pressures significantly raise the prices for fuel oils— even low sulfur fuel oils—biofuels remain a cost that few companies will be able to absorb due to the economics involved.

ty, many members of Congress are questioning whether the Navy’s 12 $12 million purchase of biofuel for the RIMPAC demonstration and another $11 million request for continued testing in FY 2013 is worth the cost. Navy Secretary Mabus argues that the buying power of the Navy and US military can drive down the long-run cost of biofuel, so the estimate of a $1.8 billion increase per year for fuel costs quoted by Sen. John McCain is faulty. The US military is the single largest consumer of petroleum in the world, and the Navy alone accounts for about 2% of petroleum consumed by the US. Mabus also emphasized that after the testing phase is completed, the Navy “will only purchase operational quantities of biofuel blends when they are competitive with petroleum, period. We simply cannot Sailors from the USNS Henry J. Kaiser conduct the afford to do it otherwise and will not do it.” Retired Marine Corps Major Navy’s first-ever RIMPAC biofuel transfer before General Anthony Jackson pointed out that traditional fuel comes with the getting underway from Manchester, Washington hefty price of soldiers’ lives: "We have been since 1990 ... involved in armed conflict in the Middle East...The cost in our lack of response to the chokehold both on our national defense and our national economy of oil has been a great deal more expensive than we like to say."

During the Senate Armed Services Committee Navy Oversight hearing in March, Senator John McCain (R-AZ), one of the harshest critics of the Navy’s biofuels spending, compared the Navy’s biofuel spending to the recent bankruptcy of Solyndra, adding, “I don’t believe it’s the job of the Navy to be involved in building and involved in new technologies.” Sen. Jim Inhofe (R-OK) commented that the Department of Defense "should not be wasting time perpetrating President Obama's global warming fantasies or his ongoing war on affordable energy." In a set-back for the Navy’s plans, in July the House voted 326-90 on the $608 billion defense spending bill, and cut $70 million from requests for domestic development of biofuels production. The Senate Armed Services Committee passed a similar provision last month by a single vote, but several members have vowed to change the bill once it reaches the Senate floor for approval. "I'm confident that as we get the story of what the Navy is doing completely out there, as we talk to members of Congress … that we will reach a common ground here in terms of making sure that America moves toward energy independence," Secretary Mabus responded.—C. Schlenker, GHPB

Followup: Low Sulfur Fuel What Do I Do When I Can’t Find Low Sulfur Fuel?

This article, brought to our readers by Chalos & Co, P.C., follows up to the June 2012 Port Bureau News focus on Low Sulfur Fuel Oil and answers the questions “What is the Coast Guard Looking For?” and “What do I do when I can’t find Low Sulfur Fuel?”

On June 27, 2012, the U.S. Environmental Protection Agency (EPA) and the U.S. Coast Guard (USCG) announced signing a memorandum of understanding agreeing to jointly enforce U.S. and international air pollution requirements for vessels operating in U.S. waters. The agreement sets out the terms of the USCG and EPA cooperation for the enforcement of new advanced emissions standards off the coast of North America as required by Annex VI of the International Convention for the Prevention of Pollution from Ships (MARPOL).

Annex VI to MARPOL, implemented in the U.S. under the Act to Prevent Pollution from Ships (APPS), sets out air emissions standards, including fuel sulfur limits. Annex VI requires ships operating in designated geographical areas known as Emission Control Areas (ECA) to meet the most advanced standards for fuel sulfur and other pollutants. Beginning on August 1, 2012, the new standards will come into force in the North American ECA, which includes waters adjacent to the Pacific, Atlantic and Gulf coasts along with the eight main Hawaiian Islands. Any vessel operating within 200 nautical miles of U.S. shores, will be required to burn fuel oil containing a maximum sulfur content of 1.00% m/m (10,000 ppm). The law requires that a vessel burn compliant fuel or use emission controls producing equivalent results when operating within the North American ECA. Violations of the emission standards within the North American ECA may result in criminal and/or civil liability.

The USCG will verify a foreign flagged vessel’s use of a compliant fuel oil or an equivalent control, e.g. an exhaust gascleaning device approved by the vessel’s flag state, during Port State Control Inspections. Accordingly, in order to demonstrate compliance with the Annex VI fuel oil sulfur standard while operating in the North American ECA, a vessel is required to maintain and, if requested, make available to the United States government the following: I.

Bunker delivery notes for vessels 400 gross tonnage and above; II. Fuel oil samples taken at the time of fuel oil delivery; III. Written fuel oil changeover procedures evidencing how and when the fuel oil changeover is done in order to ensure that only compliant fuel oil is burned; IV. The fuel oil changeover logbook demonstrating the volume of compliant fuel oil in each tank and evidencing the date, time and position of the vessel when any fuel oil changeover operation is completed prior to entry into or after exit of a designated ECA. Annex VI to MARPOL anticipates the possibility that despite best efforts, a vessel may be unable to obtain compliant fuel oil prior to entering the North American ECA. Best efforts to secure compliant fuel oil include, but are not limited to, investigating alternate sources of fuel oil before beginning a voyage or en route before entering the North American ECA. If, notwithstanding best efforts, the vessel is unable to stem compliant fuel prior to entering the North American ECA, the vessel must notify the United States and the vessel’s flag administration.

The United States government has the authority to consider all the relevant circumstances including best efforts to obtain compliant fuel in determining the appropriate action, if any, to take for a vessel’s non-compliance. Accordingly, if a vessel operator wants the United States government to consider efforts taken to secure compliant fuel oil prior to entering the ECA, the vessel operator should submit a Fuel Oil NonAvailability Report as soon as the vessel determines that it will be unable to burn compliant fuel oil in the North American ECA, but no later than 96 hours prior to entering the North American

ECA. This report should highlight actions taken to attempt to procure compliant fuel, in- 14 cluding a description of all attempts made to locate alternative sources of compliant fuel oil and the reasons why compliant fuel oil was not available before entering the North American ECA. It should be noted that the United States government does not consider the cost of compliant fuel oil to be a valid reason for claiming non-availability. The Fuel Oil NonAvailability Report must be signed by an authorized representative of the operating company and contain the following affirmation: I certify under penalty of law that the statements and information made herein are, to the best of my knowledge and belief, true and complete. I am aware that there are significant penalties for knowingly submitting false statements and information, including the possibility of fines and imprisonment pursuant to 18 U.S.C. § 1001.

The United States government will consider this information in deciding what action, if any, it will take when the ship enters the North American ECA using non-compliant fuel oil. The United States government is currently in the process of implementing an electronic system to receive Fuel Oil Non-Availability Reports. In the interim, operators may submit Fuel Oil Non-Availability Reports to the following e-mail address: marine-eca@epa.gov.

In summation, beginning on August 1, 2012, all vessels operating within 200 miles of the United States’ coastline will be required to use a fuel oil containing a maximum sulfur content of 1.00% m/m (10,000 ppm). In the event a vessel cannot procure compliant fuel oil, it must immediately alert the United States and its flag administration and plan to submit a FuelOil Non-Availability Report to the United States government no later than 96 hours before entering the North American ECA. Chalos & Co. is a globally recognized law firm representing foreign and domestic corporations, insurers, brokers, thirdparty claims administrators, shipowners, charterers, protection and indemnity associations, energy companies, oil and gas exploration, refiners and transportation companies, manufacturers, shipyards, importers/exporters, stevedores and a broad array of other individuals, professional firms and associations. For more information regarding the new fuel oil requirements for vessels operating within the North American ECA and what specific information should be included in a Fuel Oil Non-Availability Report, please do not hesitate to write at info@chaloslaw.com.

Blame Canada?

The FMC Votes “NO” - Sort Of

The Federal Maritime Commission (FMC) released a report July 27 that has been simultaneously hailed as proof for reform of the Harbor Maintenance Tax (HMT) and criticized as overly negative of Canadian ports and as failing to “advance meaningful discussion” according to Commissioner Michael Khouri. In an unusually partisan vote, the federal body responsible for fostering fair and reliable ocean transportation split party lines, with Democratic Commissioners Brennan, Cordero, and Chairman Lidinsky for the report and Republicans Dye and Khouri against it.

The report looked at the following potential reasons container ships might be diverted to Canadian ports (using Port of Prince Rupert as a case study) instead of western US ports, such as Seattle and LA/Long Beach: · Natural competitive factors like freight rates, · Transit times, · Port diversification, · Rail rates, and · Artificial factors such as liability, oversight, security, and the HMT. While some officials and publications interpreted the report as derisive against Canada and released their statements two days before the report was released, the final document praises competition between the countries’ ports and explicitly states that “carriers shipping cargo through Canadian and Mexican ports violate no U.S. law, treaty, agreement, or FMC regulation.” While Robin Silvester, president and CEO of the Vancouver port authority, interpreted the report as insinuating that Canadian ports provide inadequate security, the report actually states that “it appears that the [liability] regimes are generally similar” between the US, Mexico and Canada, and that in the inspection process “there do not appear to be any significant advantages related to U.S. bound cargo moving through Canadian ports.” The report also states that the biggest difference between the US and Canada’s security—the US “10+2” inspection program—likely will be adopted by Canada soon.

Based on 76 responses to FMC’s Notice of Inquiry, more than half of respondents cited their reasons for choosing Port of Prince Rupert as its geographic location as the closest North American port to North Asia (including North China, Japan, and Korea) and the perceived cargo transit time to the Midwest US, also known as speed-to-market. The report found that while transit times to Prince Rupert are indeed faster than to western US ports, the total transit time to Chicago or Memphis is almost the same whether the cargo enters from Canada or from the US. Also, responding importers noted that other destination points, such as Pennsylvania, California, or Texas, or cargo sourced from Southeast Asia, would not be routed through Prince Rupert. A strike against using Prince Rupert is the limited weekly service frequency compared to large western US ports: for example, weekly sailings from Shanghai include two ships for Prince Rupert versus 23 per week for LA/Long Beach and 14 for Seattle-Tacoma. About half of respondents stated another reason for using Prince Rupert was the lower cost, and 15% of the total specifically mentioned the added cost of paying HMT. However, an equal number of respondents said that HMT had no effect on their decision.

Based on the report, the FMC recommended that Congress consider several alternatives or revisions to the current HMT and Harbor Maintenance Trust Fund (HMTF). Included for consideration is the proposed legislation Realize America's Maritime Promise Act (RAMP, misidentified as “Revitalize” in the report) supported by the Greater Houston Port Bureau, and a subsequent version submitted by large west coast ports called the Harbor Maintenance Tax Reform Act of 2012. The RAMP Act states that all revenue collected and put into HMTF shall be used to maintain our nation’s waterways, while the Harbor Maintenance Tax Reform Act adds to the RAMP legislation that funds can also be used for maritime-related infrastructure.

Other suggestions include a flat fee per container entering the US, whether via water, rail, or road, and adding enforcement provisions to the the Moving Ahead for Progress in the 21st Century Act, signed into law on July 6, 2012, that recommends the HTMF be fully utilized for maintaining waterways.—C. Schlenker, GHPB

Legal Ease: Taking a Cruise Eugene Mattioni, Esq. - Mattioni Ltd Most of the time when you take a cruise it will be a novel and enjoyable experience. This short discussion will focus on the occasion when the experience is more like a version of the movie The Poseidon Adventure and everything seems to go wrong. It being the 100 year anniversary of the Titanic, the more recent catastrophe of the Costa Concordia, and the fire aboard the Carnival Splendor stripping the ship of its power demonstrate that anyone who is a passenger on a cruise ship could have a Poseidon experience.

A modern cruise ship can have as many as 4,000 passengers and a crew of an additional 1,500 persons. It is a floating hotel. It can be longer than three football fields and higher than a 10 story building. As a passenger you can be injured in an accident, be the victim of a crime or suffer a serious illness at sea or in a foreign port of call. As a passenger you can be in a life threatening maritime emergency when you will have but a short time to abandon ship in one of the cruise ship’s lifeboats. The Costa Concordia has raised some troubling questions as to the overall stability of a modern cruise ship.

An important first step for understanding your rights is to carefully read the ticket. The ticket is a legally binding maritime contract, and it is governed by United States maritime law. The ticket will set out the terms and conditions incident to travel on a cruise ship including your responsibilities as a passenger. A passenger assumes the known risks incident to the travel. By way of example, the availability of medical care may be limited, and a cruise ship may be susceptible to severe weather systems.

A passenger warrants that he is physically fit to travel and must notify the cruise line of any physical disability or medical condition that may require special assistance during the voyage. He also agrees during the course of the voyage to follow the directions of the ship’s Master

6 and his authorized agents. He 18 acknowledges that shore excursions and tours and many services provided aboard the vessel such as shops, spas, beauty salon, fitness centers including a sick bay and medical facility are operated by independent contractors, and the cruise line neither supervises nor controls their actions. The independence of these services is arguable and in many instances subject to significant supervision, oversight and control by the cruise ship operator and ship’s Master.

It is of utmost importance that a passenger understands that the ticket contains important limitations on the rights of a passenger to assert claims against the cruise line, the vessel, their agents and employees, and others, including forum selection, arbitration, limitation of liability and waiver of the right to a jury trial for certain claims.

If a passenger is injured, the passenger must show that the cruise line deviated from the standard of care. A cruise line owes its passengers a duty to exercise ordinary and reasonable care under the circumstances of the act or omission causing the injury resulting in the harm. What is reasonable under the circumstances does take into account that the circumstances surrounding maritime travel are different than those encountered in daily life. The act or omission may involve more danger to the passenger which will determine how high a degree of care is reasonable in each case.

Passengers are not skilled mariners; however, mariners are expected to be experts in their knowledge of their ships, the sea and its perils. A cruise line may arguably only be found negligent in regard to an alleged defective or dangerous condition on board the ship when it has actual or constructive notice of the defect or danger. A cruise line has no duty to warn a passenger of an open and obvious danger.

A cruise line is also responsible for exercising reasonable care to protect passengers from harm committed by other passengers. Passengers have a duty to exercise

reasonable care for their own safety, and the comparative fault doctrine applies in passenger cases. Thus contributory negligence will reduce recoverable damages. If liability is established, a passenger can recover virtually the same damages as a landbased victim of a civil wrong, including lost wages, medical expenses and pain and suffering. A passenger’s claim is subject to the admiralty and maritime jurisdiction of our federal courts.

The adequacy of health care on a cruise ship varies with the cruise line and the size of the ship. Most cruise ships will have a doctor, possibly a physician assistant and one or more nurses. It is not unusual that these persons will not have the level of training as an American trained, licensed and certified medical professional.

You can be a victim of medical malpractice on a cruise ship. If the medical professional is found to be an independent contractor thus not an agent or employee of the cruise line, it may be very difficult to obtain jurisdiction over that medical person and compensation for the injury. This could be a very contentious aspect of liability of the cruise ship operator. The provision for 24/7 adequate medical facilities and care is an inducement for many elderly persons to enjoy cruising. If the cruise ship’s medical facilities are incapable of dealing with the passenger’s illness, there is a duty of reasonable care to secure medical help. This duty is usually fulfilled by a requirement that the Master must put in and divert to the nearest port or arrange for prompt medical evacuation. These situations generally involve a life-threatening injury and or illness where prompt emergency medical care is an absolute necessity for survival. Helicopter evacuation of a passenger is not an unusual circumstance where emergency medical care is required.

Cruise lines have placed limitations in their contracts as to where and when they can be sued. These provisions require passengers to provide written notice of injury generally within six months of the injury. Furthermore, cruise lines place a one year limitation on an injured passenger’s right to sue. Failure to give notice and bring a timely action will result in total bar of the claim no matter that the injury is serious and the claim is meritorious. They also insert venue provisions in the contract limiting the place where the suit can be brought. Most cruise lines designate Miami, Florida as the only location where they can be sued. The significance of the notice, limitations and venue provisions cannot be stressed enough since you could lose your right to compensation.

The law of country of the ship’s registration, the laws of the United States, law of the country and port-of-call the ship is visiting, and international treaties may apply to cruise ship accidents and incidents. An overriding consideration is the uniform application of the general maritime law no matter what the cruise line or country of registration. The applicable law and standards should be similar or the same.

In 2010 Congress passed the Cruise Vessel Security and Safety Act, which mandates reporting of kidnappings, sexual assaults and other crimes. It requires vessels to be equipped with cabin peepholes and video surveillance systems, among other security measures. A ship is also required to have at all times a licensed physician or registered nurse with three years of postgraduate or post registration clinical practice in general and emergency medicine and hold board certification in emergency medicine, family practice or internal medicine.

Although these requirements are in the context of treating sexual assault victims, the net effect is to provide qualified medical personnel aboard a cruise ship. Sexual assaults and physical assaults were the leading crimes on cruise ships.

Practical considerations about taking a cruise include: be prepared, use a travel agent that specializes in cruise ship travel, purchase trip insurance, consider additional insurance for overseas health coverage including medical evacuations, do not travel alone – a traveling companion is a must and can be your advocate if seriously injured and or seriously ill – you may have to make noise to get promptly evacuated, do not travel if you are acutely ill, and carefully read the cruise ship brochure and the ticket contract. Be impeccable about cleanliness, use sanitizers and keep washing your hands. Pay attention and participate in safety drills. Try out your life jacket and know where your muster (gathering) and lifeboat station is located and how to get there by different routes. Getting off the ship safely can be a major challenge.

The cruise line ticket can be like reading a short novel but in general the law will enforce the terms of the ticket.— Eugene Mattioni, Esq. - Mattioni Ltd Printed with the kind assistance of the Maritime Exchange of the Delaware River and Bay

Port Watch

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Tom Marian—Buffalo Marine Service

No Gold Medal for June’s Numbers

The first half of 2012 has yielded one trend – odd months are up and even months are down! Thus, the 6th month of the year - marking the end of two quarters of “seasawing” vessel arrivals - was down. On the blue water side of the equation, Texas ports were down 6% for the month. This significant drop was enough to cause the year-to-date arrival numbers to fall below 2011’s for the first time this year. While it was only ½ of 1 percent off the previous year this certainly does not bode well for the back half of the year. It seems 2012 may be on the ebb just as 2011 experienced. Fortunately, the Houston Ship Channel/Intercoastal Canal brown water numbers on a year-to-date basis are up nearly 5% despite a 5.5% monthly drop.

On a port-by-port basis everyone but Sabine was down from May to June. The lone exception put up its best arrival numbers for 2012 registering an impressive 22%. Yet, that was not enough to overcome its year to date deficit as Sabine remains 1% below 2011’s arrivals. Texas City and Freeport were this month’s laggards with 11% and 10.5% monthly declines; however, Texas City remains 4% above last year’s arrival activity – a stark contrast to Freeport’s 14% yearto-date decline. Meanwhile, the ports that bracket Texas City – Houston and Galveston – were both off 9% for the month. That is where the similarity ends as Galveston’s year-to-date arrival numbers are 19% off of 2011.

Houston, on the other hand, still managed to eke out a 2.3% year-to-date gain. The port of Corpus Christi rounded out the mid-size ports with a 8% monthly drop causing it to slip further behind last year’s running total by 4%.

The vessel type breakdown for the Port of Houston essentially matched its overall performance with only one category – car carriers - tallying positive numbers by one additional arrival. It is noteworthy that the number of car carriers is up 29% for the year – a sign that regional consumption remains positive. Container vessels were flat for the month and remain off by 1% for the year. Nonetheless, that may still reflect guarded optimism given larger number of containers being handled throughout the Port. Bulk and general cargo arrivals fell by 19% and 3% respectively but on a year-to-date basis general cargo still outperformed the first half of 2011 by 9%. This was a marked contrast to bulk’s underperformance of 10%. Tankers and LPG carriers saw nearly identical negative monthly of numbers in the 4% range. That being said, LPG is still up 13% for the first-half of this year. Conversely, tankers remain on the wane for the year with 17.5% fewer arrivals. Even chemical tankers could not continue its monthly run of records as nearly 25% fewer of these vessels called upon the Port. Remarkably, this category remains 92% above last year.

It appears that the energy landscape still dominants the State and regional demand is fueling consumption increases.

There are some indications that things may be tapering off as Texas City – a petro-chemical-centric port – posted its lowest arrival numbers for the year while Houston’s tanker numbers have yet to gain any real traction over last year. Even the port of Sabine – another refinery-dominated port – lags as compared to last year. On the other hand, chemicals continue to robustly course through the Port of Houston indicating exports are still strong at least for these materials. There is one rather odd outlier – Brownsville. A relatively sleepy port that typically sees 15 vessel arrivals a month. It is up a respectable 30% for the year. The most likely explanation is the shale gas bonanza that has fueled marine transportation in the southwest Texas corridor. Those bright spots aside, the economic machine that drives maritime commerce may be showing signs of weakness that could lead to another disappointing second half of the year. Accordingly, no gold medal shall be granted for these numbers but maybe – just maybe – the odd year will return with a vengeance and the marine machine will continue to chug through an uncertain election year.—T. Marian, Buffalo Marine Service

Spotlight on Colin Scott General Manager, Gulf Coast Terminals—Vopak “The biggest thing to get used to in America? … well apart from the hot Houston summers, I'd say Texas-Sized food portions. I do have to remind myself that it’s perfectly acceptable—and with some meals, quite necessary—to take food away when you’re done eating.” Not a native Texan, Colin Scott has had his share of assignments away from his native Scotland: Houston, Durban, South Africa, and Essex, England. “Though really, after living in England for thirty years, and raising my children there, England is home.” Colin paused to reflect before summasing: “I have to say, that may be the most embarrassing admission a Scotsman can make.”

Born in Dundee, Scotland, just sixty miles north of Edinburgh, Colin excelled in math and chemistry in school and so took the next logical step and studied Chemical Process Engineering at University in Edinburgh. After four years, he graduated with honors and moved to Essex, just East of London, to begin work for a British tank terminal operator.

After a year in the company’s engineering department, he spent six years in various operational roles from operations supervisor to superintendent to ops controller for fuel and chemical storage sites. “Why operations? The job was very interesting; you got to be outdoors working with teams of people and you were quickly involved in front-line management, which I very much enjoyed.” After good feedback from customers, he was unexpectedly transferred to a sales position and spent six years in gradually expanding positions and responsibility.

“On the face of it, the role seemed a fairly simple task; renting storage space for liquids. However, I soon realized that what you’re supposed to be selling is the company’s complete service offering, which is a much more interesting package: a safetyconscious company, with good product stewardship, and a customer-centric cost focus.”

Moving back to general management for a period, he had line responsibility for three tank terminals, when the company was acquired by Van Ommeren, a Dutch company, which later merged with Pakhoed to become Vopak in 1999. After the merger, Colin served as the General Manager for four terminals in the United Kingdom before an opportunity arose to take a position in Durban, South Africa in 2002.

Packing up his wife Amanda and their two children, the Scotts moved to South Africa. “It’s a strange feeling really, to inherit someone’s job, car, house, dogs, and everything else… It’s a situation where after a short hand-over you literally step into their life.” Colin reminisced: “You start on an incredibly steep learning curve when you take an ex-pat assignment: it’s not only the job that you have to consider, but you immerse yourself in a totally new culture, geography, social environment, local politics, etc.”

Colin thrived in the environment and began working not only on improving terminal operations, but addressing other issues which threatened his employees.

When Colin arrived in South Africa, in addition to his work expanding capacity and driving revenue growth, he spearheaded a program that offered free HIV/AIDS screening to employees—and worked with Vopak to ensure that the company paid for the treatment of employees who tested positive for the affliction that is ravaging so many nations south of the Sahara.

“It not only made sense from a moral perspective, but from a business one as well,” Colin said. “And I’m proud and happy to say that many employees who were diagnosed with this disease nearly ten years ago, are still being treated and still doing an excellent job for the company.”

22

Returning to the UK for a position as Managing Director in 2005, Colin also took on the role as Division Director for Operations & Safety for the company’s CEMEA Division (Chemicals Europe, Middle East & Africa) for several years. In 2011, Vopak offered an assignment to Houston to oversee and expand the company’s Gulf Coast businesses at the Deer Park and Galena Park terminals.

“I have to say, the positive experience of working overseas and the opportunity to work at Vopak's largest chemical storage facility at Deer Park were the main reasons for taking on this new ex-pat assignment.” Leaving their now-grown children in the UK, Colin and Amanda moved to Texas in 2011 and have immersed themselves in the American experience.

“Different? Well, I think it’s a relatively smooth transition, coming to the States from the UK. … I will say that since you drive on the wrong side of the road, one of the first things I did was find a big American car. Not only is it functional in Houston, but it’s something you’d never really do in the UK. The streets aren’t big enough and you couldn't afford the Gasoline prices!” In his role as General Manager of Vopak’s Gulf Coast Terminals, he is responsible for expanding Vopak’s footprint in the Houston petrochemical market—one of the most strategically and commercially important in the world. “I really love safetyconscious, team-focused, and implementation driven projects. I know that we’re going to be successful here by pulling together as a team and working closely with our partners.”

Scott lives in Bellaire and is thoroughly enjoying his time in Texas. In his free time, he is an avid sportsman and enjoys being outdoors; in addition to his requisite Scottish predilection for golf, he has previously run the London Marathon in less than three hours, and he enjoys watching the local American sports including baseball and American football. “I look forward to being here for another few years,” Colin remarks, “just long enough hopefully to see a significant increase in the size of Vopak's footprint within the Port of Houston.”

With a history spanning almost four centuries, Vopak is the world’s largest provider of conditioned storage facilities for bulk liquids. Whether it involves liquid or gaseous chemicals, oil products, petrochemicals, biofuels, vegetable oils or Liquefied Natural Gas (LNG) Vopak offers complete storage and transshipment solutions at 84 terminals in 31 countries, covering and connecting the world’s major shipping lanes.

Vopak offers more storage capacity than any other independent tank terminal operator in the world.

Upcoming Events: 10 August

Lone Star Harbor Safety Committee 1000—1200—USCG MSU Texas City

18 August

2012 Annual Maritime Dinner (SOLD OUT) 1730—2200—The Houstonian Hotel

13 September Commerce Club Luncheon ASAC Michael Anderson, FBI

4 October

Greater Houston Coffee Association Annual Luncheon

5 November

GHPB Captain’s Cup Golf Tournament

8 November

Houston Ship Channel Security District Annual Luncheon

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