It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
South Korea's government has opened the door to drilling for oil and gas E&P off the country's eastern coastline, launching what could be a strategic new source of energy for Asia's fourth-largest economy.
The prospect off the coast of Pohang could contain up to 14 billion barrels equivalent of oil and gas, according to President Yoon Suk Yeol. This is enough to supply four years of national oil consumption and 29 years of gas demand. It will be explored by American consultancy Act-GEO for Korea's Ministry of Trade, Industry and Energy, with a budget of about $360 million.
The objective of the campaign is to prove out the frontier region's potential by mid-2025. With leasing, permitting and the FEED process, any production could take up to a decade to bring online.
South Korea imports about 90 percent of its carbon-based energy, including 98 percent of its natural gas; it ranks in the top five importing nations for both LNG and crude. New domestic production would allow it to reduce its dependence on foreign suppliers. It would also potentially reduce a key source of demand for globally-sourced LNG, freeing up volumes that could supply other top consumers like the EU and Japan.
While the prospects of the new offshore region are far from certain, Yoon's announcement sent the stock prices of Korean gas companies soaring as investors scrambled to capitalize on the new opportunity. Shares in Korea Gas Corp. rose 30 percent in a day, the maximum allowed by exchange rules. SK Gas briefly jumped by 29 percent, then closed the day at a still-healthy increase of seven percent.
Wärtsilä Solutions to Minimize Emissions of Two New CMA CGM Ferries
Technology group Wärtsilä will supply the engines, fuel gas supply system and thrusters for two new Ropax ferries being built for French operator La Méridionale, a subsidiary of CMA CGM. The vessels, which have been specifically designed to minimise emissions, are to be built at the China Merchants Jinling Shipyard (Weihai) Co., Ltd., and will operate between Marseille and Corsica. The order with Wärtsilä was booked in April 2024.
Ferries are on the front line of the energy transition and are among the first sectors to target net zero-carbon operations. However, ferry operators face increasing pressure from customers who continue to expect a fast and cost-efficient service, which runs to a timetable, and is increasingly sustainable. Ferry operators, such as La Méridionale, are looking to leverage technologies which offer minimal service disruption and to maximise return on investment, all while reducing carbon footprint.
“The design of these two Ropax vessels reflects our commitment to reducing the carbon footprint within our own fleet. These will be among the most energy-efficient, low-emission ships in operation globally, and we value the support from Wärtsilä, whose technology and solutions help make this ambition possible,” says Xavier Leclercq, Vice-President, CMA Ships, CMA CGM.
The company will continue its efforts to reduce the environmental impact by adopting LNG as the primary fuel for the new ships as well as preparing them to operate on alternative fuels such as biogas and synthetic methane, as these become available at scale.
For each ship, Wärtsilä will supply two 12-cylinder, one 10-cylinder and one 8-cylinder Wärtsilä 31DF engines. The two ferries will benefit from Wärtsilä’s groundbreaking NextDF technology, which will be implemented in the Wärtsilä 31DF engines. Whilst operating on LNG, the NextDF version of the Wärtsilä 31DF further reduces methane emissions and nitrogen oxide (NOx) significantly (compared to the already emission-efficient standard Wärtsilä 31DF). The scope of Wärtsilä’s supply for this contract also includes the Wärtsilä LNGPac, a fuel gas supply system for LNG-fuelled ships, as well as Wärtsilä’s thrusters.
“The drive towards net zero emissions is one of the most important challenges facing the industry today,” comments Stefan Nysjö, Vice President of Power Supply, Wärtsilä Marine. “That’s why we are pleased to support our long-standing partners, CMA CGM and China Merchants Jinling Shipyard (Weihai) Co., Ltd., with our integrated solutions – ensuring these ferries are able to benefit from outstanding fuel efficiency, operational reliability and a significant reduction in GHG emissions.”
The 180-metre-long ships will be able to accommodate 1,000 passengers as well as cargo freight. The Wärtsilä equipment for these ferries is scheduled to be delivered in mid- 2025, with the ferries expected to enter service during the first half of 2027, operating between Marseille and Corsica.
The products and services herein described in this press release are not endorsed by The Maritime Executive.
Study: Tanker Sector's Profits Could Fall by a Third Due to Climate Action
In a new report, researchers at University College London and the Kuhne Foundation predict that the tanker and gas carrier segments will see their profits drop by as much as $200 billion over the next 25 years if the global economy achieves the Paris climate targets - even if all newbuild orders end. This amounts to a third of the profits that tanker companies could earn over the same period under a business-as-usual climate action scenario.
The research team set out to look at the ownership structure, asset value and transport capacity of the global tanker fleet, and how well utilized it would be under future climate scenarios. In particular, they sought to determine how much overcapacity there might be if the global economy reduces fossil fuel consumption, and the resulting impact on tanker owners' profits and asset values.
The team found that LNG, LPG and crude tankers may be oversupplied in decades ahead if the global economy cuts fuel consumption enough to meet the Paris Agreement's 1.5 degree Celcius warming trajectory. The cumulative lost profits (compared to a scenario in which the global economy does not decarbonize) could amount to up to $214 billion by 2050, even if there are no more newbuild orders. If more tankers and gas carriers continue to be ordered and built, lost profits could rise to as much as $286 billion by 2050.
"The results are quite chilling for oil and gas tankers," explains Marie Fricaudet, who led the research at UCL. "In a scenario where newbuilding of ships continues until 2030, about 37 percent of their expected profits would fail to materialize."
If demand and day rates drop, the book loss from falling vessel asset values could amount to as much as $108 billion by 2030, or as much as $147 billion if the orderbook continues to grow.
Simultaneously, this decline in tanker activity would cut the cumulative CO2 emissions of the maritime industry by 1.3-2.0 billion tonnes by 2050. This would help keep shipping within the 12 billion tonne carbon budget the industry would need to meet if it wants to achieve a 1.5 degree Celcius trajectory.
Other demand-side factors in the changing energy market - like regionalized production and reduced shipping distances - could further reduce tanker activity. On the other hand, there is also the possibility that more these vessels will keep sailing if they find a way to switch cargoes. Coal-carrying bulkers could readily switch to other dry bulk commodities, the authors noted. Tankers may also be convertible to new liquid fuels, subject to technical limitations, and these adaptations to a new green-fuel landscape might offset the lost profits of a decline in the traditional wet bulk trades.
"Our forecast, even if only indicative, should prompt investors and shipping actors to evaluate their climate risks and redirect investments. The transport sector must play a role in transitioning to a low-carbon society, with capital shifting to sectors aiding this transformation," said Stefanie Sohm of the Kuhn Climate Center.
Friday, June 07, 2024
Wet'suwet'en hereditary chiefs urge banks to snub TC Energy bonds
The Canadian Press
The terminus for the Coastal GasLink natural gas pipeline is seen at the LNG Canada export terminal under construction in Kitimat, B.C., Wednesday, Sept. 28, 2022. THE CANADIAN PRESS/Darryl Dyck
An Indigenous group that opposed the construction of the Coastal GasLink pipeline is urging banks and investors against financing a proposed second phase of the project.
Hereditary chiefs of the Wet'suwet'en First Nation of B.C. have written an open letter to Canada's biggest banks and investors urging them to make a public commitment not to buy any new bonds issued by Calgary-based TC Energy Corp., the company behind Coastal GasLink.
The Coastal GasLink pipeline, which was designed to transport natural gas from Western Canada to the Shell-led LNG Canada export facility currently nearing completion in Kitimat, B.C., was completed last fall.
TC Energy has not yet made a final investment decision on a potential Phase 2 of the project, which could see the construction of six additional compressor stations in order to double the capacity of Coastal GasLink without requiring additional pipeline.
The company confirmed Tuesday it is engaged in discussions to refinance a portion of its existing construction loan through private bond sales, though a spokesperson declined to disclose the size of the bond offering. The company said the proceeding is part of the "normal course" of post-construction project financing.
In the winter of 2020, protesters blockaded freight and passenger rail services across the country to show solidarity with the Wet'suwet'en hereditary chiefs, whose traditional territory is crossed by Coastal GasLink and who opposed the project.
All 20 of the elected Indigenous groups along the 670-km pipeline route supported the Coastal GasLink project, and 17 out of 20 signed agreements with TC Energy to acquire a 10 per cent equity stake in the pipeline.
This report by The Canadian Press was first published June 4, 2024.
TC Energy shareholders approve spinoff, creation of South Bow pipelines business
Amanda Stephenson, The Canadian Press
TC Energy Corp. shareholders have voted in favour of spinning off the company's crude oil pipelines business.
Shareholders at the Calgary-based company's annual meeting Tuesday endorsed the company's plan, announced last July, to split into two separate publicly traded companies.
The plan will see TC Energy look more like a utility company, with a focus on natural gas infrastructure as well as nuclear, pumped hydro energy storage and new low-carbon energy opportunities.
The company's crude oil pipelines, including the critical Keystone pipeline system, will become part of a new liquids pipeline business called South Bow.
South Bow will be headquartered in Calgary with an office in Houston. It will be led by Bevin Wirzba, the current executive vice-president for TC Energy's natural gas and liquids pipelines business.
At Tuesday's annual meeting, TC Energy CEO François Poirier said separating the company's lines of business will allow for faster growth.
"As two separate entities, each company will have the ability to focus on their distinct strategies and opportunity sets, delivering essential energy that the world relies upon," Poirier said.
The spinoff plan is the result of a two-year strategic review by TC Energy, in which the company considered other options including the potential sale of the oil pipelines business.
The company has been under scrutiny by analysts and credit rating services for its significant debt load as well as for cost overruns on the Coastal GasLink pipeline project, which was completed in the fall of 2023.
Spinning off the oil pipelines business, which has long-term committed contracts with oil shippers, will give South Bow the chance to use its robust cash flows to pay down debt and enhance shareholder returns, while TC Energy will become a growth-oriented company focused on natural gas.
TC Energy — which has natural gas transportation infrastructure in Canada, the U.S., and Mexico — is bullish on the future of the commodity, in particular the potential for growth spurred by demand for liquefied natural gas (LNG).
"Make no mistake, natural gas will be central to the world's energy future," Poirier said.
In addition, by offering a pure-play natural gas and low-carbon investment opportunity, TC Energy believes it can attract a wider set of investors than it could before the spinoff.
In a note to clients Tuesday, TD Cowen analyst Linda Ezergailis said the new South Bow is expected to work towards enhancing the value of its pipeline network by increasing capacity on under-utilized portions of the system, as well as increasing pipeline connectivity to additional receipt and delivery points.
She said she believes the new TC Energy will be well-positioned to play a key role in enabling energy transition and reducing global emissions, while ensuring reliability for growing energy demand.
"We view the successful spinoff vote as a significant milestone on executing strategic priorities, including improving leverage metrics," she said.
As part of the spinoff arrangement, TC Energy shareholders will receive, in exchange for each share, a new TC Energy common share along with 0.2 of a South Bow common share.
The spinoff is expected to close in the second half of this year.
This report by The Canadian Press was first published June 4, 2024.
Thursday, June 06, 2024
In desperate need for more Arctic tankers, Novatek sends 200 of its engineers to shipyard
According to newspaper Kommersant, Russia's biggest producer of LNG has decided to move 200 workers from its natural gas field in far northern Gydan Peninsula to the Zvezda Yard outside Vladivostok.
Novatek’s grand pIans for liquified natural gas (LNG) production in the Arctic are crumbling under the weight of international sanctions.
The company appears paralysed in its Arctic LNG 2 project, and the construction of a new fleet of ice-class LNG carriers has almost come to a halt.
The company that is headed by Putin’s companion Leonid Mikhelson has now reportedly decided to move up to 200 of its engineers and workers to the Zvezda Yard. The work force is to help speed up the building of two LNG carriers currently under construction at the yard.
The workers will be moved from Novatek’s major natural gas field at Utrenneye in the Gydan Peninsula. At the Zvezda Yard, they are believed to engage mostly in electric installation works and test and commissioning, Kommersant reports.
Russian industry is currently experiencing a rapidly growing work force deficit triggered by the departure of men to the frontline and the Kremlin’s introduction of war economy.
The additional 200 workers at Zvezda could cover a labor shortage at the yard.
Novatek might also have decided to move the workers away from Gydan following the standstill at the Arctic LNG 2. The project that is built to be able to produce almost 20 million tons of LNG per year is today paralysed by sanctions.
The first of Novatek’s projected three Arctic LNG 2 production units in August 2023 arrived in Utrenneye, Gydan Peninsula. Photo: Belokamenka51 at VK
Sources affiliated with the plans argue that the 200 workers from Novatek will allow Zvezda to complete one tanker before the end of 2024 and another in 2025.
When in operation, the two carriers are believed to enable Novatek to ship up to 2 million tons of LNG per year to the market.
It remains a open question what will happen with the additional 13 tankers projected built by Zvezda. Novatek also ordered six tankers from Hanwha Ocean, the South Korean yard formerly known as Daewoo Shipbuilding & Marine Engineering.
The Sergei Vitte is one of the Arc7 LNG carriers under construction at Zvezda Yard. Photo: sskzvezda.ru
Wednesday, May 29, 2024
First LNG Tugboat with Hybrid System Goes Into Operation in Singapore
A new technological highlight has been in regular operation in the port of Singapore since mid-May 2024: JMS Sunshine, the world's first LNG tug powered by a hybrid system with mtu gas engines from Rolls-Royce. Seatrium Limited, a leading engineering solutions provider to the global offshore and marine industry is the designer, builder and operator of the new 29-metre, 65-tonne bollard pull tug. The Port of Singapore has committed to the Maritime R&D Roadmap 2030 with the aim of making it environmentally friendly and reducing energy consumption.
Rolls-Royce has supplied two 16-cylinder mtu Series 4000M55RN gas engines and the gas regulating unit (GRU) for the harbour tug. Chiam Toon Chong, Technical Superintendent, Seatrium Marine Services, acknowledged: “The handling of mtu engines is straight-forward, and user-friendly. Additionally, spare part availability and service support is excellent for the operation of tugs.”
"We are proud that we were able to contribute to Seatrium's innovative project with our gas engines. The workboat market is one of our strategic business areas. The mtu engines were selected because they meet the demanding requirements of harbour tug operations - in terms of reliability, ease of operation, dynamic engine behaviour and low emissions," said Chew Xiang Yu, Head of Rolls-Royce Power Systems' civil marine business in Asia.
The mtu gas engines are already well below the limit values of current emission guidelines (such as IMO III) without exhaust gas aftertreatment. The particulate mass is below the detection limit and they emit only small quantities of nitrogen oxides.
The hybrid system is particularly suitable for the load profile of the harbour tug: it enables very precise manoeuvring and a strong bollard pull when the full power is used. To achieve maximum thrust, the total power of the two azimuth stern thrusters is 4000 kilowatts. This is achieved by adding to the 1492 kilowatts each supplied by the mtu gas engines and 500 kilowatts of electric motor power on each shaft. The tug is equipped with a battery capacity of 904 kilowatt hours. The battery power is used to absorb peak loads, for example during acceleration, to manoeuvre purely electrically in port and to supply the ship on board with electricity.
11 ships worldwide sailing with mtu gas engines Rolls-Royce's Power Systems division has already received orders for mtu gas engines as propulsion systems and on-board gensets for a total of eleven ships worldwide. These include ferries, tugs and government vessels. Two catamarans belonging to the Doeksen shipping company have been operating reliably with mtu gas engines on the North Sea in the Wadden Sea nature reserve since 2021. The Richmond ferry has been operating a commuter service on the Lake Constance drinking water reservoir in southern Germany since 2023. Operators and passengers are delighted: the engines are particularly quiet, produce no vibrations, no unpleasant odours and no black smoke.
The products and services herein described in this press release are not endorsed by The Maritime Executive.
Monday, May 27, 2024
Eight Ports in the British Isles Get Electric Ship Charging Stations
Port of Heysham is one of eight seaports that will receive the upgrades (Peel Ports file image)
The UK’s second largest port operator, Peel Ports Group, has announced plans to establish the first green shipping corridor between the UK and Ireland. This is part of a artnership between the port operator and the marine tech company NatPower Marine. The collaboration will see NatPower Marine develop the UK’s first commercial electric charging network to support electric propulsion and cold ironing (shore power).
The charging infrastructure will require an estimated investment of $127 million and will be delivered across all eight UK and Ireland ports operated by Peel Ports Group. The masterplan of the infrastructure also includes electric car, van and truck chargers for commercial electric vehicles passing through the ports.
This investment in the UK is part of a $3.8 billion global charging network, planed by NatPower Marine for 120 port locations worldwide by 2030.
“NatPower Marine is investing to deploy the largest global network of charging ports to help resolve the ‘chicken and egg conundrum’ facing this industry: shipping lines cannot electrify vessels if port charging infrastructure is not available, and ports are unable to raise capital for charging infrastructure without certainty of demand from shipping lines,” said Stefano Sommadossi, CEO NatPower Marine.
With over 3,000 vessels crossing the Irish Sea every year, emitting 230,000 tons of CO2 and 20,000 tons of nitrous oxide, this partnership may drastically reduce emissions.
The first Irish Sea routes identified in the project proposals include Belfast-Heysham and Dublin-Birkenhead. The small Port of Heysham in Lancashire is on track to become the UK’s first net zero port, according to Peel Ports, and the charging infrastructure will support this goal. Currently, the port is leading in reduction of carbon emissions of its landside plant, equipment and vehicles by up to 90 percent. The port claims that all its vehicles, plant equipment, forklift trucks and ancillary equipment are now operating on either electricity or biofuels.
“The proposals presented as part of this partnership are potentially game-changing, and fully support our ambitions to become a net-zero port operator by 2040,” said Claudio Veritiero, CEO of Peel Ports Group.
In the past two years, the UK government has significantly invested in green shipping corridors, an initiative the UK led as part of the Clydebank Declaration during COP 26 in November 2021. Last month, the UK government launched the fifth round of Clean Maritime Demonstration Competition (CMDC 5), with funding of over $900,000 available for start-ups looking to establish green shipping routes to and from the UK.
Putting Methanol Through its "Paces," With a Focus on Safety
With more than 90% of global GDP now covered by a net zero target, the growing consensus to tackle climate change is matched only by a deepening understanding of the immensity of the challenge. For the shipping industry, there’s a real urgency to reverse the 20% emissions growth of the last decade and begin the essential but expensive task of decarbonizing the global fleet, 98.8% of which, according to a 2023 report from UNCTAD, still runs on fossil fuels.
The first challenge is to overcome the huge inertia of an aging fleet, with an average ship age of 22.2 years. With over half the global fleet older than 15 years, many ships are either too old to retrofit or too young to scrap. Over time, the replacement cycle will change the fleet’s emissions profile, as shipowners place orders for newbuilds that can run on cleaner fuels such as LNG, ammonia and methanol.
The clock is now ticking to accelerate that pace of change, particularly as the IMO’s enhanced GHG strategy for 2030 includes stricter targets to cut the carbon intensity of international shipping by 40%. Shipowners must act soon to transition their fleets because without clear investment signals the availability of candidate fuels will lag demand, creating further hesitancy and potentially derailing the transition.
Any new fuel, however, must be put through its PACES to meet the industry’s expectations on Performance, Availability, Cost, Emissions and Safety. Here, methanol has a head start because in terms of performance it’s already a proven fuel, with methanol storage available in over 100 ports around the world. Its key advantage is that it’s an easy substitute for diesel because it is a liquid fuel under ambient conditions making it easy to transport, store and bunker using familiar procedures. The cost of converting diesel engines to methanol dual-fuel vessels and installing the land-based infrastructure is significantly lower than other alternative fuels that require pressurization or cryogenics.
Fossil-based methanol (known as grey or brown methanol, depending on whether derived from gas or coal) burns cleaner and delivers a tank-to-wake CO2 reduction of about 7% compared to diesel but performs worse on a well-to-wake basis. However, blue or green methanol (made from renewable biomass or via an electrolysis process), while expensive and still only available in limited quantities, are chemically identical to conventional methanol, which means there are no future compatibility issues or further engine investment required by shipping companies, allowing a seamless, gradual transition to meet future well-to-wake emissions rules.
A safe transition
As a low flashpoint fuel, methanol does impose additional safety considerations in some instances e.g., during bunkering operation, which is the primary reason ABS decided to publish the first Technical Advisory on methanol bunkering providing guidance on the technical and operational challenges that must be overcome.
The main methods of methanol bunkering are truck tanker-to-ship, barge/ ship-to-ship and land storage tank-to-ship. For smaller vessels that may run on methanol fuel cells, it’s possible to provide the fuel in portable tanks.
Because of the low flashpoint and toxic properties, hoses and connections must be approved for methanol use and inspected periodically in compliance with the latest version of MSC.1-Circ. 1621. The fittings and connections should be cleaned, tight fitted, quick release and a self-sealing type. Seals are to be in good condition, pressure-tested and hoses are to be recertified according to the above IMO circular. Any mobile facilities such as tank trucks, rail cars and portable tanks should conform to meet ISO and other standards for handling methanol fuel.
For port operations, it’s important to verify compatibility, transfer rate, vapor return arrangements, communications, Emergency Shut Down (ESD), and emergency procedures. The responsibilities and procedures are to be agreed upon and confirmed in writing prior to starting bunkering – a checklist is a good way to confirm compatibility and capture this information and ABS Technical Advisory includes sample checklists to help with this work.
It’s important the receiving and supply barge if applicable are safely moored and adequately fendered, with all due attention to tidal and weather conditions not to mention surges from passing ships. Hoses should have sufficient slack to allow for any expected relative motion and the manifold arrangements, spill containment systems, and hose connections for the supply source and the receiving ship should be confirmed including emergency release (hose breakaway) arrangements.
Spark aware
Because of the low flash point, it’s important to be particularly careful about potential sources of ignition. Road truck/ISO tanks and ship should be earthed with a bonding wire to protect from static electricity. Materials should be non-sparking, the risks of electrical arcing addressed, and careful consideration needs to be given to make sure both the supply source and receiving ship don’t introduce any source of ignition into any hazardous area.
Vapor return needs to be carefully managed to ensure systems are compatible and have sufficient space, given that the estimated volume of vapor is 1: 1.4 times more than the cargo space volume it replaces. And both the supply source and receiving ship need to have inerting and purging capabilities. It’s obviously vital to have firefighting and emergency procedures in place.
Safety is rooted in good communication. There needs to be compatible communications between the supply source and the ship so both parties can monitor the bunkering operation, and, if necessary, initiate an emergency shutdown.
A ship-to-shore link is to be provided to enable automatic and manual ESD of bunkering operations. The ESD should be capable of activation from both the bunker receiving ship and the bunker supplier, and the signal should simultaneously activate the ESD on both sides of the transfer operation with no release of liquid or vapor during this procedure. An ESD might be activated for a wide range of reasons, including an overflow in receiving tank, high tank pressure, a leak, vapor or fire detection, loss of ventilation in double wall piping, excessive ship movement, abnormal pressures in the transfer system or power failure.
At the manifold connection a manually operated stop valve and a remotely operated shutdown valve are to be provided. This remote valve is to be of the fail-close type, which closes on loss of actuating power, and be capable of manual closure and to have indication of the valve position. There are multiple industry standards and regulations that apply to emergency shutdown and related safety systems, and these are listed in our Advisory, along with additional ABS recommendations. These include that systems are designed to accommodate surge pressures and that manual operation of the ESD system is possible by a single control on the bridge, safe control station and at least two strategic positions around the bunker manifold area.
The human factor
Crew training and certification are essential for safe methanol bunkering, with the minimum requirements outlined in the IGF Code and the Interim Guidelines for the Safety of Ships Using Methyl/Ethyl Alcohol as Fuel or the Seafarers’ Training, Certification and Watchkeeping (STCW) Code for IBC Code Vessels. Formal training should include basic handling, including scenarios for leakage, spillage and fire. Personnel should understand methanol’s properties, its operational risks and hazards, fire prevention and firefighting protocols, and importantly, clearly understand their roles and responsibilities, particularly in the event of an emergency. Only those with the proper training should be allowed into the designated safety zone for the bunkering operation, which is an ignition-free area with clearly defined boundaries, typically set by a risk assessment and determined by regulations.
For shipowners considering the fuel mix of their fleet, methanol passes the PACES test. It’s a proven fuel, with existing bunkering infrastructure in some ports and more being built. Making sure this bridging fuel is handled safely, particularly during bunkering, is going to be key to the ongoing displacement of fossil fuels in the global fleet. This Technical Advisory should help with this effort as the maritime industry steams towards IMO2030 and beyond.
Quaim Choudhury is Senior Managing Principal Engineer at ABS.
MOL to Expand Wind-Assisted Propulsion After Validation on First Vessel
Shofu Maru was the first vessel fitted with MOL's rigid sail and validation results were released (MOL)
Mitsui O.S.K. Lines (MOL) is moving forward expanding its use of wind-assisted propulsion as part of its overall decarbonization efforts. They have test results after approximately 18 months of operation of the first vessel fitting with their rigid sail and now report they are also considering other technologies. In addition to new constructions, they are also pursuing their first retrofit of the Wind Challenger rigid sail to a bulker.
The move to expand the use of wild-assisted propulsion comes as the technology continues to draw strong interest from shipowners and operators. The International Windship Association recently said that there are a total of 37 vessels with wind-propulsion installed and in service. This represents a doubling over the past 12 months with a total of 22 installations and wind-ready ships delivered. With the emergence of the EU Fit for 55 effort and the IMO set to adopt its GHG strategies mapped out in 2023, the association expects wind propulsion installations will continue to grow.
MOL says it has accumulated extensive operational technology to pursue wind propulsion technology. The group plans to launch 25 vessels equipped with the Wind Challenger by 2030, increasing to 80 by 2035. MOL is scheduled to deploy its second vessel, a 64,000 dwt bulker, with the Wind Challenger in June and today reported a total of six additional newbuilding bulk carriers, 42,000 dwt and 58,000 dwt, and one multipurpose vessel.
The Wind Challenger is a rigid sail made of fiberglass with a width of about 50 feet and a maximum height of about 175 feet. Its sections are nested so that it can retract to a fraction of its operating height to reduce air draft. The mounting point is forward, on the bow, and well clear of the cargo hatches. MOL working with Oshima Shipbuilding has been perfecting the design and preparing it for commercialization since 2018.
MOL will retrofit the sail for the first time in 2025 to an in-service bulker (MOL)
MOL reports three bulkers have been ordered from Oshima Shipbuilding Co. with preparations underway for three additional contracts. The first three bulkers, due in the second half of 2026 and the first half of 2027, will each be fitted with the Wind Challenger rigid sail and it is considering also adding up to three wind rotors per vessel manufactured by Anemoi Marine Technologies on some of these vessels. MOL expects the combined use of both technologies to reduce fuel and GHG emissions by an average of about 15-28 percent per year. The other three bulkers, so far, are planned to have just the Wind Challenger. MOL previously also agreed to install two Norse rotors on a 200,000 dwt bulker operated for Vale with that installation expected to be completed this year.
MOL Drybulk has also decided to install two Ventfoils, a foldable and autonomous unit for wind-assisted ship propulsion, manufactured by EconoWind. The technology will be installed on one of its new multipurpose vessels (17,500 dwt) slated for delivery in 2025 and operation under a time charter.
Next year, MOL also plans the first retrofit of a Wind Challenger to an in-service bulker. The first of its third-generation bulkers, the Kurotakisan Maru III (89,999 dwt), which entered service in December 2021 and carries coal for J-Power will add the rigid sail. The retrofitting of the Wind Challenger aboard this second vessel is expected to reduce greenhouse gas (GHG) emissions by about five percent on a Japan-Australia voyage and about eight percent on a Japan-North America West Coast voyage, compared to a conventional vessel of the same type.
Recently, MOL also released data from its first vessel using the Wind Challenger, the Shofu Maru (100,000 dwt), which entered service in October 2022. The vessel has completed seven round-trip voyages to Japan mainly from Australia, Indonesia, and North America operating as a dedicated coal carrier for Tohoku Electric.
Daily fuel consumption over the 18 months since the vessel entered service was reduced by up to 17 percent. On average the fuel saving has been between five and eight percent per voyage. MOL notes that the data was calculated using a method verified by Lloyd’s Register of Shipping and that the fuel saving during operation depends largely on wind conditions. The Wind Challenger does not produce thrust when the vessel encounters a headwind.
China’s footprint in the African energy sector continues to expand, with Mozambique last week approving oil exploration and production contracts for CNOOC (China National Offshore Oil Corporation) subsidiaries, covering five blocks. CNOOC signed the concession contracts with Mozambique’s Ministry of Energy and the state-owned national hydrocarbons company (ENH).
The blocks span an area of 11,000 square miles, with exploration water depths starting from 500 to 2,500 meters. All the blocks are located in the Angoche and Save Sediment Basin offshore Nampula province.
According to the terms of the contracts, the first stage of the exploration period for the blocks will be four years. Five wholly owned subsidiaries of CNOOC Limited will act as the operators in the exploration and development phases, with independent operator rights and interests in the blocks. ENH will own the remaining non-operator interests.
Speaking during signing of the contracts, Mozambican Minister of Energy Carlos Zacarias said that the CNOOC deal represents a huge success in fulfilling the government’s five-year program 2020-2024 in the mineral resources and power sector.
According to Mozambique’s energy sector regulator, the National Petroleum Institute (INP), CNOOC will carry out an intensive exploration work program, including acquisition of 1000 miles of 3D seismic data and drilling of a minimum of four deep-water research wells in the designated offshore regions.
In 2021, the government launched the sixth bidding process for concession of areas for hydrocarbons exploration and production, which has so far received positive response from energy multinationals. Some of these companies include TotalEnergies, ExxonMobil, ENI, and now the addition of CNOOC.
According to exploration data of these firms, Mozambique is tipped to become a major exporter of LNG, especially after the discovery of over 180 trillion cubic feet of natural gas reserves in the Rovuma basin, further north of the Angoche site. The first LNG shipment destined for Europe departed Rovuma Basin in November 2022. This was a successful attempt by Mozambique to monetize its vast hydrocarbon reserves.
Unfortunately, a rising wave of insecurity in Mozambique’s Cabo Delgado province could deter the ongoing energy projects in the region. Almost three years ago, TotalEnergies was forced to suspend operations on a multi-billion LNG project at the Afungi site in northern Mozambique. At the time, Islamic insurgents escalated attacks in the nearby town of Palma, where many sub-contractors for the Afungi site were based.
Thursday, May 23, 2024
Endangered Lizard Threatens Oil and Gas Development in the Permian Basin
The U.S. Fish and Wildlife Service listed the dunes sagebrush lizard as endangered, threatening oil and gas development in the Permian Basin.
The oil and gas industry argues they've made conservation efforts and the lizard's habitat is minimal in the basin.
Environmentalists see the listing as a win but worry about delayed protection and future development restrictions.
A rare lizard that lives in Texas and New Mexico has become the latest potential threat to oil and gas production growth in the Permian.
The dunes sagebrush lizard was granted endangered status by the U.S. Fish and Wildlife Service last week, prompting an outcry from the industry, which warned the change in the lizard's status would be detrimental to its activity in the most prolific shale play in the country.
According to the Fish and Wildlife Service, the dunes sagebrush lizard occurs in about 4% of the lands that comprise the Permian Basin. The service also acknowledged that many oil and gas operators are already taking part in voluntary conservation efforts to preserve the species' habitat. Yet now, these appear to have been deemed insufficient, prompting a sharp response from the industry.
"We are extremely disappointed in the U.S. Fish and Wildlife Service (Service) decision to again list the Dunes Sagebrush Lizard as Endangered in the Permian Basin," the president of the Permian Basin Petroleum Association told energy analyst and consultant David Blackmon for a story published in Forbes.
"In spite of the successful conservation efforts on the ground for over a decade and that less than two years ago approving a conservation plan for the Lizard that all parties agreed would conserve habitat," he added.
The president of the U.S. Oil and Gas Association was even blunter, telling Blackmon that "Anti-energy activists have been desperate to shut down drilling in the Permian Basin for years," despite voluntary efforts and investments on the part of oil and gas operators in the area to save the rare species.
"Texas oil and gas operators spent tens of millions of dollars in voluntary conservation efforts to protect the dunes sagebrush lizard. Environmental groups meanwhile added nothing to the conservation efforts but petitions and lawsuits," Tim Stewart said.
At first glance, the reaction of the oil and gas industry may seem excessive in the context of how little of the Permian the dunes sagebrush lizard actually inhabits. But this perception may be wrong, with the Fish and Wildlife Service noting that oil and gas activity is the prime suspect for the species' "functional extinction" across almost half of its habitat.
There is also a recent example of how environmentalists can interfere with the energy industry's activities: the suspension of new liquefied natural gas export terminals that President Biden signed earlier this year was the direct result of activist pressure.
"Even if there were no further expansion of the oil and gas or sand mining industry, the existing footprint of these operations will continue to negatively affect the dunes sagebrush lizard into the future," the Fish and Wildlife Service said in its announcement and it is little wonder that the industry took this as ominous.
Even more ominously for oil and gas operators, the USFWS may yet add to its decision a designation of critical habitat for the dunes sagebrush lizard. That would be a move that, Blackmon warns, "could become extremely limiting to any future development of the massive oil and natural gas resources known to exist beneath the region."
While the energy industry fumes at the decision, environmentalists were understandably happy. "The dunes sagebrush lizard spent far too long languishing in a Pandora's box of political and administrative back and forth even as its population was in free-fall towards extinction," a regional director for Defenders of Wildlife said, as quoted by the AP.
"I'm relieved the precious dunes sagebrush lizard is finally on the path to protection," Michael Robinson, senior conservation advocate at the Center for Biological Diversity, said, as quoted by Forbes. "I'm saddened and disgusted, however, that the Service allowed the lizard's habitat to be destroyed for decades."
What follows next would become clear in two months. One thing is for sure, however. Activists will likely become bolder like they did after the LNG approval suspension. They have now focused their efforts on making sure the Federal Energy Regulatory Commission enforces new air pollution rules approved by the EPA earlier this year.
According to these rules, the maximum level of fine particulate matter in the air is now 9 micrograms per cubic meter, down from 12 micrograms previously—and FERC already tapped one LNG producer as its first target. Venture Global was recently served with a request to provide proof its particulate matter emissions were below 9 micrograms per cubic meter.
"FERC is going to have to take this issue seriously and is going to have to analyze whether these projects are in the public interest given this new reality," a Sierra Club attorney told the Financial Times.
"We plan to hold FERC's feet to the fire to ensure that it follows through and satisfies its legal obligations," Tom Gosselin also said.
One question that might be worth asking is when conservationists would become this vocal about the fate of bats and birds of prey that are being killed by onshore wind turbines and the whale deaths linked to offshore wind development.
By Irina Slav for Oilprice.com
Dunes sagebrush lizard now an endangered species
Adrian Hedden, Carlsbad Current-Argus Thu, May 23, 2024
A lizard native to southeast New Mexico’s Permian Basin was afforded the highest level of federal protections aimed at preventing its extinction, triggering concerns that landowners and industries in the area could see added restrictions on access to the land.
The dunes sagebrush lizard was listed as endangered under the federal Endangered Species Act, per a decision issued May 17 by the U.S. Fish and Wildlife Service. An endangered listing means the agency believed extinction of the species was imminent, and requires the federal government establish and recovery plan and potential “critical habitat” where the lizard would be recovered.
This could restrict some uses of the land, namely oil and gas drilling and farming and ranching, and the move drew fears that the economic drivers of the region could be stymied for environmental conservation.
Emily Wirth, executive director of the Center for Excellence (CEHMM) said voluntary conservation practices intended to protect the lizard were underway by industry since 2008. She said candidate conservation agreements (CCAs) facilitated by CEHMM saw 3.1 million acres in New Mexico enrolled in the agreements, including 90 oil and gas companies.
Via CEHMM, enrollees moved 650 oil wells out of lizard habitat, Wirth said, aside from other wells operators moved on their own.
The dunes sagebrush lizard is a small, light brown phrynosomatid lizard (family Phrynosomatidae, genus Sceloporus). Shinnery oaks provide food, shade and a breeding ground for the Dunes sagebrush Lizard.
She said it was “disappointing” that these efforts did not prevent a listing which Wirth worried could negatively impact land access.
“I think it’s very disappointing given the conservation efforts that have been ongoing since 2008,” she said. “The biggest thing we can do for the lizard is avoidance of habitat. “The industry has proactively been doing that on their own. It’s really disappointing the conservation efforts were not taken into account.”
With said landowners and operators can still enroll in CEHMM’s contracts ahead of the listing taking effect about 30 days after the announcement, and those enrolled will face no additional restrictions.
She pointed to a previous listing of the lizard in 2012, which was overturned, Wirth said, due to the ongoing conservation efforts taken by industry.
“Nothing has changed. To me, it doesn’t really make sense for the current listing in New Mexico specifically,” Wirth said. “We’re keeping industry on the ground working in the face of a listing. They have protections. Our agreements are the perfect balance by allowing conservation and economic development on the land.”
The decision to list the lizard came after a 90-day public comment period, and a “rigorous review” of the scientific and commercial information, read the U.S. Fish and Wildlife Service announcement. The agency said critical habitat was expected to be designated, but not at the time of the listing decision.
The lizard is found only in the shinnery oak and sand dune ecosystems in southeast New Mexico and West Texas, occurring in about 4% of the 86,000 square miles that make up the Permian Basin, read the agency’s report. Key threats to the species were oil and gas development, mining and climate change, the report read.
The Fish and Wildlife Service said about 85% of the lizard’s range are covered by voluntary enrollments in programs like CEHMM’s, noting horizontal drilling techniques can often target underground oil reserves without locating wells within lizard habitat.
Amy Lueders, southwest regional director with the Services said the federal government expected to continue working with industry and landowners to conserve the species and restore its population.
“The Endangered Species Act is an important tool in preventing the extinction of imperiled species like the dunes sagebrush lizard,” she said. “The Service will continue working collaboratively with Tribes, industry, stakeholders, and private landowners while ensuring protections for the lizard and its habitat.”
Listing the dunes sagebrush lizard as endangered was celebrated by conservation groups, arguing stronger efforts were needed to prevent extinction. Michael Robinson with the Center for Biological Diversity in Silver City said the listing decision was delayed for decades but would help save the lizard.
“After four decades of the government sitting on its hands, these lizards are finally protected from oil spills and giant machines scooping up sand,” Robinson said. “Designating critical habitat will close any loopholes that might still allow the destruction of the beautiful oak-dotted dunes where these animals live.”
The listing was opposed by oil and gas industry leaders in New Mexico. In comments submitted Oct. 2, 2023 the Independent Petroleum Association of New Mexico (IPANM) argued oil and gas was produced “responsibly” in dunes sagebrush lizard habitat, pointing to the CCAs the trade group’s member companies already participated in.
IPANM was joined by national fossil fuel groups the American Petroleum Institute and Western Energy Alliance in submitting comments against the listing when it was proposed last year.
IPANM Executive Director Jim Winchester wrote that the Fish and Wildlife Service should withdraw the listing decision as he said it would increase costs for operators, delay projects and create regulatory uncertainty for company’s operating in New Mexico.
“An endangered listing will have a significant impact on the IPANM members business planning and operations by increasing operational costs, delaying project timeframes, and limiting or precluding operations in certain areas, he wrote.
“In particular, the proposed rule makes arbitrary conclusions based on use of inaccurate habitat mapping, and significantly outdated forecasts on energy development based upon development practices no longer employed in west Texas and eastern New Mexico.”
Texas lizard added to endangered species list over the oil and gas industry’s objections
The dunes sagebrush lizard lives in the same West Texas land that supports the state’s biggest oil and gas fields, and industry leaders say the new designation will hurt drilling and production.
The dunes sagebrush lizard, which lives in the oil-rich Permian Basin, has been listed as endangered after a decades-long effort. Credit: Ryan Hagerty/USFWS
\ ODESSA — The dunes sagebrush lizard burrows its coarse, spiny body to cool down and sometimes conserve heat way deep beneath the sand dunes in the Mescalero-Monahans ecosystem 30 miles west of this West Texas city.
But the 2.5-inch-long lizard’s home — sandy mounds studded with low-lying shinnery oak trees — is being disrupted as the oil and gas industry expands, posing a grave threat to its survival, federal regulators and scientists said.
After four decades of warnings by biologists about the existential threat that oil and gas exploration and development poses on the reptile’s habitat, the U.S. Fish and Wildlife Service declared the rare lizard endangered last week.
Industry representatives have for years fought against the designation saying it would scare off companies interested in drilling inside the nation’s most lucrative oil and natural gas basin.
The listing requires oil and gas companies to avoid operating in areas the lizard inhabits, but the Fish and Wildlife Service has yet to determine where those areas are because it is still gathering information, according to Beth Ullenberg, a spokesperson for the Service.
Should the energy industry encroach on the lizard’s habitat, they could incur fines up to $50,000 and prison time, depending on the violation. However, Ullenberg said the agency would work with companies to avoid penalties.
In a statement, the Fish and Wildlife Service said oil and gas operators can use horizontal drilling to reach oil and gas deposits without disrupting the lizard’s habitat.
The lizard only lives in about 4% of the 86,000-square-mile Permian Basin, which spans across Texas and New Mexico, according to the Fish and Wildlife Service. In Texas, the lizard has been found in Andrews, Crane, Gaines, Ward and Winkler counties.
Lee Fitzgerald, a professor at Texas A&M University who has studied the lizard since 1994, said that drilling a single oil well does not impact the lizard’s survival, but the fragmentation of its habitat by the oil and gas industry’s infrastructure — including the roads leading to drill sites — isolates the reptiles and prevents them from finding mates beyond those already living close by.
Fitzgerald compared the oil and gas infrastructure to urban sprawl.
“If you build one house, it's not a problem,” he said. “But you build 1,000 houses, and every one of them has a driveway, and every one of them has a street, connecting it to more houses then you get urban sprawl. And if you do that in the shinnery oak sand dunes then the lizards disappear.”
There are few remaining lizards and they are hard to find, making it difficult to count them accurately. According to a 2023 analysis by the Fish and Wildlife Service, the lizards are “functionally extinct” across 47% of its range.
Fitzgerald said the population estimates of the lizard don’t matter.
“The lizard is just one piece of the puzzle that is disappearing,” he said. “It's out there, it's alive. We should be proud of it, that we have it, and it's so special. So, it's more about the non-monetary values of the lizard as it is part of the big picture of biodiversity.” Listing could cause disruption in oil production
The decision to categorize the lizard as a species in danger of extinction was unwelcome news for oil and gas industry leaders, who said federal regulators provided insufficient guidance for operators to evaluate how to decide where to build service roads and where to drill. Members of the industry also said they’re skeptical of the science supporting the designation.
“I think that the lizard is not in danger of extinction,” said Ben Shepperd, president of the Permian Basin Petroleum Association.
The ramifications of the listing won’t be immediate, but it could have lasting impacts on the future of oil and gas extraction, Shepperd said, adding that it could affect a company’s ability to drill without running afoul of federal requirements under the Endangered Species Act.
“Not overnight, but over the coming months, we believe that that's going to lead to a decrease in drilling. We believe it's going to lead to … job losses,” Shepperd said.
In a joint statement with the Texas Oil and Gas Association, delivered to the federal agency last year, energy industry leaders argued that oil and gas companies were already taking measures to prevent further disturbing the lizard’s habitat: a 200-meter buffer between their operations and the lizard’s home, minimizing their presence in the area and using existing service roads as opposed to building more.
Industry representatives also said that oil and gas companies had been participating in voluntary conservation agreements, a program in which companies and private landowners pledge to protect the lizard’s habitat. Environmentalists have criticized the agreements because there is no enforcement or penalties if companies do not comply — or a way to determine whether the plans are effective.
State and nationwide oil and gas associations have not ruled out litigation, Shepperd said.
Scott Lauermann, a spokesperson for the American Petroleum Institute, said the decision could delay the permits that companies need for every phase of oil and gas exploration and extraction.
Such permits could authorize companies to build the infrastructure necessary to pump oil like oil rigs and service roads. Federal officials encouraged companies to consult the agency early in their planning. The lizard wars
Ten generations of lizards have lived and died while a battle ensued between environmental groups, the oil and gas industry and the federal government over their protection.
Fish and Wildlife first identified the dunes sagebrush lizard as needing protection in 1982. Since then, it has been removed and added multiple times from the candidate list for endangered species, but the proposals fell through because the Fish and Wildlife Service said it could not afford to evaluate whether the lizard should have been placed on the list, said Michael Robinson, a senior conservation advocate at the Center for Biological Diversity. The Center has petitioned and sued the Fish and Wildlife Service several times over almost two decades regarding the lizard.
In 2002, the center delivered a scientific petition to the Fish and Wildlife Service, asking the agency to add the lizard to the endangered species list. The Service did not act, citing a lack of resources, Robinson said.
The Service proposed adding the lizard to the endangered species list again in 2010 but withdrew the proposal 18 months later.
Instead, then-Texas Comptroller Susan Combs assembled voluntary conservation agreements — a pledge by landowners and operators to avoid activities like removing shinnery oak trees and building roads — to convince the federal government to avoid listing the lizard as endangered, a decision that drew praise from the oil and gas industry and rebuke from environmentalists and wildlife conservation groups.
State and federal officials argued the move would be enough to protect the lizard. More than 200 ranchers and oil and gas companies between Texas and New Mexico, federal officials said.
Shepperd said that among them were Chevron, ExxonMobil and Occidental Petroleum.
Robinson argued that the agreements shielded the oil and gas industry from making modest changes to their daily operations.
“It’s a sad case of a federal agency that has been captured by the industries they’re supposed to hold to account,” Robinson said.
In 2018, the Center for Biological Diversity petitioned again for the lizard’s protection. In 2022, the Center sued the Fish and Wildlife Service again, a lawsuit that resulted in a settlement agreement, which led to another proposal to add the lizard to the endangered species list.
Ullenberg, the Fish and Wildlife Service spokesperson, said that petition prompted the agency to conduct a review of the species and ultimately add it to the endangered list last week.
Robinson said it's an important first step.
“At least the government’s attention will be focused on the project of [recovering] the species, and that’s no small thing,” he said.
Disclosure: Ben Shepperd, Exxon Mobil Corporation, Permian Basin Petroleum Association and Texas A&M University have been financial supporters of The Texas Tribune, a nonprofit, nonpartisan news organization that is funded in part by donations from members, foundations and corporate sponsors. Financial supporters play no role in the Tribune's journalism. Find a complete list of them here.
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