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)
Saturday, June 17, 2023
Cold Ocean Depths Could Help Provide Freshwater for the Middle East
States located around the Persian Gulf are seeking alternative sources of potable water and have even considered the possibility of towing icebergs from the Antarctic. The combination of intense summer humidity, a nearby abundant source of a cold sea water, and advanced cooling tower design offers the region the potential to condense massive volumes of potable water from intensely humid air.
Introduction
While the Gulf states desalinate seawater to provide potable water for their populations and recycle used potable water, they still seek alternative cost-competitive sources of potable water. One option would involve carrying potable water inside tanker ships, including water from icebergs at the Antarctic. An alternative option would involve extract potable from humid summer air in the region, using an abundance of cold seawater.
Summer air temperatures in the eastern region of Oman often exceed 90 degrees F with humidity reaching 80 percent. Extracting potable water from the humid air on a massive scale would require the construction of several super-size cooling towers along the coast of Oman. The upper levels of each tower could be heated by concentrated reflected solar thermal energy, sufficient to produce powerful updrafts of air inside each tower. The intensely humid air would flow through an array of large radiators cooled by cold seawater flowing through the cooling passages, using seawater sourced from the Gulf of Oman.
Depth and Temperature
Solar thermal energy warms surface seawater to a depth of around 200-feet. During the northern summer when surface seawater temperature in the Gulf of Oman approaches 86 degrees F, seawater temperature at greater than 2000-feet below surface would remain around 40 degrees F. The Gulf of Oman lies in the northwestern region of the Arabian Sea, which is well in excess of 6,000-feet deep.
The sheer size and depth of the Arabian Sea provides an abundance of cold seawater that could be used productively on coastal land at Oman, depending on permission from the government of Oman. It would be possible to extract seawater from over 2,000-feet of depth and flow the cold seawater through an array of large radiators before returning the seawater to the ocean near the surface.
Water from Air
Water extraction from moist air is common at smaller scales. Fog fences are used in many mountainous locations internationally, to collect water from humid air. Modern dehumidifiers (based on refrigeration technology) are used to extract water from humid air found inside homes and offices, delivering up to 60 gallons of water per day.
While the technology has been proven at small scale, there is scope to explore mega-scale versions of the technology using precedents developed in the power industry and marine transportation sector. The early steam ships carried onboard condensers that were cooled by surface seawater to condense engine exhaust steam back into water that could then be pumped under pressure into the boilers. Large-scale condensing technology is also well-proven in coal-fired power stations.
Cooling Towers
During the 1980s, research at Stellenbosch University near Cape Town, South Africa focused on the development and construction of the largest air-cooled cooling towers for coal-fired thermal power stations. The research of Professor Kroger also focused on the possibility of using concentrated reflected solar thermal energy to heat the upper levels of the super-sized towers, to generate a powerful updraft that would pull air through a circular array of wind turbines around the base of the tower.
Further research would focus on replacing the wind turbines with large radiators that would be cooled by cold seawater. After passing through an outer array of cold radiators that remove humidity from air, the drier air would pass through an inner array of radiators at the same elevation, that are heated indirectly using solar thermal energy. The warmer and drier air would them flow into the solar heated tower. Installing an air turbine at the tower outlet would represent an alternative to a solar heated tower.
Further research would establish the daily volume of potentially potable water that the installation would produce and also determine the cost-competitiveness of mega-scale water-from-air extraction compared to carrying potable water by tanker ship from very distant locations, like the Antarctic region.
Precedents
There are precedents from coastal cities such as Sydney, Australia and Toronto, Canada where cold water from great depth sustains district cooling of buildings during hot summer months. Using cold seawater reduces electrical consumption required to sustain operation of roof-mounted, air-cooled air conditioners in groups of large buildings. While Toronto pulls in cold water from near the bottom of Lake Ontario, Sydney pulls in cold seawater from great depth in the Tasman Sea. There is scope to adapt the proven approach at other coastal locations where cold deep seawater is available near a coastline.
There is over 100 miles of coastline extending southeast from the City of Muscat, Oman that is within close proximity to the region of deep seawater in the Gulf of Oman. While there are several beaches and camping grounds along that coastline, there may be some vacant land where the construction of large towers could be possible. The deep seawater at over 6,000 feet of depth is much closer to the coast of southeast Oman than to the coasts of Pakistan or Iran.
Persian Gulf water temperature would be too warm to operate large-scale water-from-air technology. Over the long term, Gulf states will need to look elsewhere for potable water and might consider future discussions with the government of Oman about operating large-scale water-from-air installations during the summer. It may be possible for potable water from large-scale water-from-air technology to be cost competitive with water imported from far distant locations.
Conclusions
The Gulf States need competitively-priced potable water for their populations. While desalination has been the main source of water, some Gulf States have considered importing tanker ship loads of potable water from far outside of the region. The combination of abundant cold seawater near Oman, intense summer humidity in the region and mega-scale tower technology offers the possibility of large-scale extraction of water from humid air. While the concept is technically possible, future research would be able to determine its long-term feasibility and the volume of potable water each installation would produce.
The close geographic proximity between Oman and the Gulf States of Abu Dhabi, Dubai and Sharjah allows for short-sea shipping of water, should the Government of Oman allow for construction of mega-scale water-from-air extraction on their territory. In some Middle Eastern regions, the cost of potable water often exceeds the cost of the identical volume of gasoline. The region seems committed to making greater future use of renewable energy, allowing for the combination of solar thermal energy and cold deep seawater to produce potable water for human consumption across the region.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Swedish Researchers Highlight Toxicity of Scrubber Discharge in Ports
Researchers considered data from Copenhagen and Gydnia due to the high proportion of ships with scrubbers (Gdynia file photo)
A new study from Chalmers University of Technology, Sweden, adds to the growing calls for stricter regulations on the discharge from exhaust scrubbers with the researchers writing that when considered as part of the combined emissions of metals and environmental hazards, the risk increases greatly to the marine environment. The content that traditional environmental risk assessment (ERA) of emissions from shipping are based on one source at a time, but when they calculated the contaminant load in the overall emissions in four port environments, discharges from ships’ scrubbers, accounted for more than 90 percent of the contaminants.
“A single ship is responsible for many different types of emissions. These include greywater and blackwater, meaning discharges from showers, toilets, and drains, antifouling paint, and scrubber discharge water. That is why it’s important to look at the cumulative environmental risk in ports,” said Anna Lunde Hermansson who, with colleagues Ida-Maja Hassellöv and Erik Ytreberg, authored the new study that looked at emissions from shipping from a cumulative perspective.
They point to the rapid adoption of scrubbers as a means to meet the increased emission standards in Northern Europe and the Baltic region and the continuing use of heavy fuel oil by many ships. They highlight the concern that the water not only takes up the sulfur from the exhaust gases, leading to acidification of the scrubber water but also other contaminants such as heavy metals and toxic organic compounds before the water is pumped into the sea.
“There is no cleaning step in between – so up to several hundred cubic meters of heavily contaminated water can be pumped out every hour from a single ship. Although new guidelines for ERAs of scrubber discharges are in progress, the ERAs still only assess one source of emissions at a time, which means that the overall assessment of the environmental risk is inadequate,” said Lunde Hermansson.
The researchers looked at four different types of port environments to determine contaminant concentrations from five different sources. Among the data they uses were the ports of Copenhagen and Gdynia due to high volumes of shipping traffic, and a substantial proportion of these ships having scrubbers.
The results of their research showed that the cumulative risk levels in the ports were, respectively, five and thirteen times higher than the limit that defines acceptable risk. The researchers contend that three out of the four port environments were prone to unacceptable risks according to the assessment model used.
They contend that the only port environment that showed an acceptable risk in the researchers’ ERA was the model with the highest water exchange per tidal period, meaning that a high volume of water is exchanged in the port as the tide moves in and out.
More than 90 percent of the environmentally hazardous metals and PAHs (polycyclic aromatic hydrocarbons) came from scrubber discharge water, they contend. They also saw that it was emissions from antifouling paint and scrubber discharge water that accounted for the highest levels of hazardous substances in the marine environment and had the highest contribution to the risk. Antifouling paints they report accounted for the biggest load of copper and zinc.
“The results speak for themselves. Stricter regulation of discharge water from scrubbers is crucial to reduce the deterioration of the marine environment,” said Anna Lunde Hermansson, a doctoral student at the Department of Mechanics and Maritime Sciences at Chalmers.
They highlight that the Swedish Agency for Marine and Water Management and the Swedish Transport Agency have submitted a proposal to the Swedish Government to prohibit the discharge of scrubber water into internal waters within the Swedish archipelago. While calling this a step in the right direction, they would also like to see a stronger ban that extends across larger marine areas.
As the shipping industry rallies to remain compliant and profitable while the pressure to decarbonize ramps up, it is tempting to only think about new vessels. But given the finances, timeframes and technologies involved, the existing fleet will remain part of the conversation and cannot be left behind.
The challenge of how to invest in existing vessels in an uncertain future should not be understated. Depending on their operating pattern, layout and technical capabilities, some technologies will not be relevant. Not all vessels can be easily retrofitted for future fuels, for example, and low carbon options may only be speculatively available in the medium and long term on the routes they operate.
In this challenging and uncertain atmosphere, the industry should turn to solutions that it already understands – and that can create a platform for further development.
As a mature technology with a strong return on investment, scrubbers - with the possibility for a carbon capture and storage (CCS) module to be added - enable owners to future-proof their existing assets against the changes in the market and the evolutions we will all face ahead.
Looking at the short-term, owners who invested in scrubbers for IMO 2020 compliance are already enjoying a competitive advantage. Reports throughout 2022 showed that scrubber-fitted ships earned twice as much as those without, with scrubber CAPEX paid back within a few years.
The business case for retrofitting a scrubber today is positive. With the wide and relatively stable spread between high and low sulfur fuels, they continue to offer favorable economics and payback time has been less than two years for several vessel types.
In addition to their fast return on investment, scrubbers can in foreseeable future tackle CO2 with onboard capture and storage, making them a future-proofed investment for achieving marine decarbonization goals.
All this should give the industry optimism that existing solutions can help support the latest regulations, including CII and EEXI, and prepare for carbon pricing further down the road towards 2030 and 2050.
For owners and operators, the key challenge in the more immediate term is finding an experienced partner that can deliver the right solution in good time, at any location, with reliable lifecycle services support.
Optimizing the retrofit timeline
Scrubber installations are complex undertakings that require a knowledgeable, agile partner with vision across the entire value chain. Minimizing off-hire time is critical. Wärtsilä can match design time with the production of equipment and optimize the timing and location on all retrofit phases from initial study to commissioning to minimize vessel downtime. One example is combining commissioning and installation activities to save total off-hire time.
A first 2D layout drawing provides owners with an understanding of the scope of the installation and enables onboard space to be reserved. A full technical feasibility study can then be undertaken before or after contract signing.
Owners typically make most decisions within the first four weeks after contract signing. This is when the equipment, piping and possible tanks are modeled, and owners may consider their preferences, such as tank locations, to ensure the design process is straightforward.
This phase also includes how best to future-proof the installation, for example, the possibilities of CCS-readiness or hybrid functionality. The work required to allow for a CCS add-on is mainly done on the drawings at this stage, but some modifications can be made to the scrubber body. Space will need to be reserved above the scrubber and the funnel may need raising a few meters, and in some cases, it makes sense to do this as early as possible.
In our experience, best practise is having the shipyard do the detailed design to ensure a smooth and fast process that avoids confusion during installation. Co-operation between the basic and detailed designer is important though, and a good scrubber manufacturer will act as a link between all parties. In some cases, it is personal relationships and prudent communication skills more than the contract that can ensure positive, timely outcomes.
Embracing proven technology that can bridge the gap between current and future environmental regulations will enable the industry to move forward optimistically in 2023. With advanced scrubber solutions and by choosing the right partners, owners can be confident they will achieve compliance and remain competitive when working with a partner that has the knowledge and experience in the retrofit segment.
Su Len Quach is a Naval Architect, M.Sc and the Team Manager for Integration Engineering at Wärtsilä Exhaust Treatment. Having been leading up scrubber projects since 2018, including 3 years as Site Manager at a shipyard in Shanghai, he has been directly involved in successful retrofits to over 30 vessels.
The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.
Climate Activists Block Cruise Ship Zuiderdam at Port of Rotterdam
On Sunday, the cruise ship Zuiderdam was temporarily prevented from leaving port by protesters with NGO organization Extinction Rebellion, who blocked the vessel's departure by obstructing access to the mooring bollards. It is the second time in four years that the group has interfered with Zuiderdam's operations.
About 60 activists from Extinction Rebellion and its scientist-membership affiliate, Scientist Rebellion, accessed Zuiderdam's berth on Sunday at the Rotterdam cruise terminal. For about six hours, they obstructed the mooring bollards with homemade tripods and human lockdowns to prevent the removal of the mooring lines.
The group's demand is no less than a ban on cruise ship calls in Rotterdam in order to halt climate-related and health-related emissions. In justifying this demand, the group noted that there is no scalable zero-CO2 fuel available to supply shipping in the near term, which leaves cessation as the only practical option to achieve zero emissions - despite the extreme economic impact on seafarers, the tourism industry and other stakeholders.
Extinction Rebellion
Rotterdam has the possibility of installing cold-ironing facilities, which would have positive effects on health-related pollutant levels (SOx, NOx and PM) from generator operation. However, a spokesman for XR said that this was not a satisfactory solution, since shore power would draw down on renewable electricity needed for other industries.
All ships have CO2 emissions, but Extinction Rebellion singles out cruise ship emissions because they are recreational. "We [will] no longer allow Pacific states to sink into the sea because holidaymakers lie in the pool and meanwhile want to travel from city to city," one group member said at a 2019 protest.
The group also opposes other, larger sources of recreational emissions, including tourist air travel and private jet flights.
More than 900 Norwegian offshore oil and gas workers plan to go on strike if an agreement on a labor contract is not reached by the end of this month, union Industri Energi announced Monday.
The strike action covers 12 drilling rigs and 16 different businesses on the Norwegian continental shelf. It is limited to drilling personnel only and will not affect current production, but could have an impact on project timelines for future E&P.
The deadline is set for June 29, the day after a state-backed mediation sit-down in Oslo. If there is no agreement at the meeting, the workers will go on strike on the night of the 29th.
The drilling contract agreement for offshore floaters, jackups and fixed platforms covers 4,000 members of the Industri Energi union. The 900 who will go out on strike are mostly employed on mobile units, including West Elara, Askeladden, Noble Integrator, Deepsea Nordcap, Scarabeo 8, Transocean Spitsbergen, Noble Lloyd Noble and COSL Promoter.
"The rig industry is going well and we must have a wage settlement that ensures that this industry is competitive in the battle for labor," says Frode Alfheim, who leads the negotiations for Industri Energi.
The talks on June 28 are part of a broader set of negotiations between the Norwegian Shipowners' Association and three different labor unions, suggesting that there is room for the strike action to spread if negotiations are not successful.
Last July, a labor dispute involving the offshore managers' union Lederne nearly derailed up to half of Norway's gas production, just as the nation's oil firms were ramping up output to meet urgent European demand. Norway's government stepped in to halt the strike and order the union back to work, citing the extreme impact that the shutdown would have on the energy market.
Ports Work to Recover as ILWU Says Ratification Process Will Begin
California ports welcomed the new of the tentative longshore contract agreement
Ports and terminals along the U.S. West Coast are working to catch up and clear out any backlogs that developed due to the labor shortage of the past days now that the Pacific Maritime Association and International Longshore and Warehouse Union reported a tentative agreement after 13 months of negotiations. News of the agreement was welcomed widely within the port and shipping communities while the union noted that the ratification process would take a few months to complete.
“While the final decision is up to our members, we feel our time at the bargaining table was well spent and that the agreement represents the hard work of our rank and file and the sacrifices they made during the pandemic,” said ILWU President Willie Adams in a statement.
Both the ILWU and the PMA are declining to make any official comments on the terms of the agreement other than it is for six years. “We will not be sharing details of the tentative agreement publicly until we have completed the ratification process,” said Adams.
People familiar with the negotiations told The Wall Street Journal that the new contract calls for increasing longshore workers' pay by a third over the six years of the contract and would be retroactive to the expiration of the prior contract on July 1, 2022. They are reporting that basic pay would be increased by 10 percent in the first year from last year’s $46.23 per hour to just over $50 per hour. In addition, there will be a total of $70 million for a one-time “hero bonus” to be split among the workers in recognition of their efforts to keep the supply chain moving during the pandemic. No details are being reported on the more contentious issues such as automation.
There was universal relief that the agreement had been reached with many organizations issuing statements welcoming the news. President Joe Biden congratulated both sides and thanked Acting Labor Secretary Julie Su for her role in bringing the negotiations to an agreement. The White House privately hopes her visible role will help complete what has turned into a contentious confirmation process for the secretary.
“This is great news for the West Coast ports and the supply chain all across America. The contract agreement will have a hugely beneficial impact to the U.S. economy, which depends on our ports and the trade they facilitate,” said the Port of Long Beach. Gene Seroka, Executive Director of the Port of Los Angeles highlighted that the agreement “brings the stability and confidence that customers have been seeking.”
The ILWU noted that the ratification procedures start with a contract caucus that convenes delegates from the union’s 29 locals up and down the West Coast. These delegates will carefully review the tentative agreement and make a recommendation to the rank and file who will then vote on the tentative agreement.
“We urge the parties to quickly ratify the tentative agreement to bring certainty back to the West Coast ports,” said Matthew Shay, President and CEO of the National Retail Federation. He added in, “It is essential to begin the negotiation process early for the next labor contract and avoid a future lapse in continuity.”
As of the end of the day on Thursday, the Marine Exchange of Southern California however was saying the situation in the ports remained fluid. During the day on Thursday, they said two vessels in port had rescheduled their departures with the CMA CGM Laperouse delaying 14 hours due to labor. Four other containerships in port had previously delayed their scheduled departure times. Two other delayed vessels however departed on Thursday. Three inbound vessels also reported delays but Captain Kip Louttit, Executive Director of the Marine Exchange of Southern California, was hopeful that there would no longer be a need for special reporting and that port operations would quickly return to normal.
Tentative Labor Agreement for U.S. West Coast Ports
ILWU won a new 6-year contract agreement (Port of Los Angeles photo)
The Pacific Maritime Association and the International Longshore and Warehouse Union announced late on Wednesday, June 14, that a tentative agreement has been reached a year after the prior labor contract expired and after weeks of sporadic labor shortages that were causing disruptions and delays at the U.S. West Coast ports. The tentative agreement, which was reached with the assistance of Acting U.S. Secretary of Labor Julie Su, brings to close 13 months of negotiations providing for a new six-year contract that covers all 29 West Coast ports.
The association representing the employers and the union released a brief statement saying they were pleased to have an agreement so that they can “turn our full attention back to the operation” of the ports. They did not announce the terms of the agreement noting that it still requires ratification by both sides.
The White House sent Acting Secretary Su to San Francisco on Monday, June 12 to meet with both the union and employers’ association. They highlighted her experience having previously been Secretary of the California Labor and Workforce Development Agency from 2019 to 2021 and having previously dealt with both sides of the current negotiations. The Labor Department released a brief statement with Su thanking both sides for their hard work and perseverance saying it “demonstrates once again that collective bargaining – though sometimes difficult – works.”
Reports said that the talks had broken down at the beginning of June as they approached the final issue of wage increases. Su helped to bring both sides back to the negotiations with reports late on Monday that they had agreed to a cooling-off period to stop the labor shortages. The PMA was accusing the union of withholding the dispatching of daily workers.
While the ports of Los Angeles and Long Beach during their monthly updates at the beginning of the week insisted they were open and volume moving, there were growing reports of delays. The Port of Seattle had been forced to suspend container operations last weekend while the Port of Oakland, California had earlier in June also been forced to close and some terminals in both San Pedro Bay ports had periodically suspended operations or closed their trucking gates.
The Marine Exchange of Southern California reported on Wednesday that four vessels rescheduled arrivals with agents for two attributing it to labor issues. Eight vessels in port they said had also reported schedule delays, but four other vessels departed on June 14. Other reports indicated that dwell times were increasing at the West Coast ports.
The Executive Director of the Port of Los Angeles, Gene Seroka, Tweeted a message hailing the agreement which he had repeatedly said was urgent to shippers and managing port volume. He noted the agreement provides “stability and confidence,” while noting the challenge would now be to attract volumes back to the West Coast after shippers and carriers diverted containers to the U.S. Gulf Coast or East Coast ports.
Earlier in the week, Seroka noted the port was operating at only 70 percent of capacity with volumes down approximately 20 percent in May versus the year earlier. While highlighting that volume had increased for three months in a row at the Port of Los Angeles, he estimated as much as 15 percent of the port’s volume had been diverted to other ports due to the uncertainty during the 13 months of negotiations.
The agreement comes at an important time as the U.S. economy appears to be rebounding and retailers were indicating their plans to begin to again increase imports to build inventories after months of slowed activity. Retailers are preparing for the busy selling seasons in the third and fourth quarters of the year.
It also provides greater stability to the transpacific trade which is also facing the prospects of an ILWU strike in Canada at the end of June which would impact the key ports of Vancouver and Prince Rupert. The Canadian ports in addition to handling a significant part of Canada’s trade also move containers for U.S. manufacturers, especially in the Midwest. Members of the ILWU of Canada in a nearly unanimous vote authorized a possible strike which could start as early as June 24 if they can not reach an agreement on their contract which expired on March 31.
Port of LA Calls Disruptions “Minimal” as Labor Secretary Enters Talks
Port of Los Angeles looks for strong volumes in the second half of 2023 (Port of Los Angeles)
The Port of Los Angeles sought to downplay reports of disruptions in its monthly update saying operations are mostly normal and while experiencing sporadic labor shortages that the impact was “minimal” so far. They also highlighted that the Biden administration has quietly increased its efforts, speaking with both sides of the current contract negotiations, seeking to ensure the talks are moving forward with reports of a possible "cooling-off" period.
Speaking to the media, Gene Seroka, Executive Director of the Port of Los Angeles said, “We have been able to function close to normal since June 1,” while also admitting during the briefing that the port is currently operated at about 70 percent of full capacity. With volumes down due to the economy, Seroka points to the number of vessels on dock, dwell time for containers at the port, and the number of boxes at the terminals “ready to go,” saying that all three indicators remain largely stable. He called much of the rhetoric an expression of “frustration” from both sides that the talks have taken 13 months.
The port repeated its calls for the urgency to have an agreement in the labor talks to maintain what it sees as a building recovery from the low point in volumes in February 2023. Seroka confirmed the other reports that Acting Labor Secretary Julie Su flew to San Francisco and has met with both the Pacific Maritime Association and the International Longshore Workers Union and remains in the city to collaborate with both sides of the negotiations. Seroka called the labor negotiations “a top priority for the Biden Administration.” Unconfirmed reports in the media are saying that two sides agreed to a cooling-off period proposed by Su while the PMA and ILWU have also overcome some sticking points in the talks.
While port officials are seeking to downplay the disruptions, the Marine Exchange of Southern California issued an update late on Tuesday saying that 11 ships have now delayed their arrival times with agents telling them it is due to labor shortages. The delays are ranging between a few hours to one or two days.
“Even with improving volume, our terminals are a long way from working at full capacity,” Seroka however admitted during the media briefing. May’s volume was down nearly 20 percent on imports, exports, and empties moved versus a year ago and about six percent below the port’s five-year rolling average. Similarly, for the first five months of 2023, the Port of Los Angeles is 15 percent behind the five-year average. Despite that, they highlighted volumes are up 60 percent since the low in February this year.
“We’re starting to see more vessels headed across the Pacific to Los Angeles, an encouraging sign for the second half of the year,” Seroka highlights. Saying that if the labor contract is finalized and the economy continues to build in the U.S., he expects “a strong back half of the year.”
The Port of Los Angeles is forecasting even with the current uncertainties that June will see between 700,000 and 750,000 TEU which would be down from the 779,140 TEU handled in May.
Among the positive signs he 58 vessels en route to Los Angeles, up from 47 and 46 one and two months ago, and indications that retailers are beginning to increase inventories. However, the Port of Los Angeles estimates 15 percent of its volume shifted east to other ports in the past year due to labor uncertainties and notes it will take months to attract shippers and carriers to build back volumes to the port.
Canadian ILWU Authorizes Potential West Coast Port Strike
Dock workers authorized a potential strike that would hit the container ports of Vancouver and Prince Rupert (Vancouver file photo)
In a nearly unanimous vote, the members of the International Longshore and Warehouse Union of Canada gave their leaders a mandate to call a strike if necessary in their ongoing contract negotiations. The potential of a strike that would impact Canada’s West Coast ports including Vancouver and Prince Rupert raised the further prospects of disruptions not only to the flow of commerce in Canada but also to the U.S. as disruptions are building in the U.S. West Coast ports.
The ILWU concluded two days of voting held on June 9 and 10 reporting yesterday to members that 99.24 percent have voted in favor of supporting a potential strike if necessary against the member companies of the BC Maritime Employers Association (BCMEA). The union represents more than 7,000 dock workers at Canada’s West Coast terminals operated by the 49 member companies of BCMEA.
Officials pointed out that talks are continuing between the two sides during a 21-day cooling off period imposed under Canadian labor law. Both sides have agreed not to take any actions before June 21 and then the union would be required to make a 72-hour advance notice of any planned action. The earliest a strike could happen is June 24.
It is the latest step in the dispute that began even before the contract expired on March 31. Talks had been expected to start in January but were delayed till February. Weeks later, even before the expiration, the ILWU filed for federal government mediation saying there was no progress. The mediation ran from March 28 to May 30 and is followed by the mandated cooling-off period.
“We want to avoid another disruption that risks fueling inflation and higher prices for consumers and businesses so soon after the devastation inflicted by the COVID-19 pandemic, heat domes, and catastrophic flooding,” said Bridgitte Anderson, President and CEO of the Greater Vancouver Board of Trade. The non-profit group which represents Canadian businesses warns a disruption in port operations would severely impact manufacturing, retail, agriculture, critical minerals, automotive dealers, and energy industries across the country.
The group highlights that a sixth of Canada’s international trade, approximately US$260 billion, moves through the ports of Vancouver and Prince Rupert annually. The two ports are the primary container terminals for Canada in its trade with Asia moving everything from electronics to apparel as well as exports. Vancouver handles approximately 4 million TEU annually while Prince Rupert has an annual capacity of 1.35 million TEU.
While the majority of the container volume is destined for Canadian businesses, estimates highlight that between 10 and 15 percent of the overall volume is being shipped to the U.S. via rail links primarily into the Midwest. They warn that the U.S. auto industry as well as manufacturers would also be impacted by a job action in the two Canadian ports. With growing disruption in the U.S. ports, and especially neighboring Seattle, the Canadian ports could serve as an alternative if shippers further seek to diver volumes away from the U.S.
Bunge and Viterra sign merger agreement to create global agribusiness giant
Amanda Stephenson, The Canadian Press Jun 13, 2023
A US$8.2-billion merger between U.S. company Bunge Ltd. and Viterra Ltd. will create a global agricultural giant in an industry that has already seen a significant amount of consolidation in recent years.
The deal was announced Tuesday by the Missouri-based Bunge — which is the world's largest oilseeds processing company, operating 300 facilities in more than 40 countries worldwide — and Viterra, which is owned by Swiss commodities giant Glencore, as well as the Canada Pension Plan Investment Board and B.C. Investment Management Corp.
Under the terms of the agreement, Viterra's shareholders will receive 65.6 million Bunge shares, valued at a total of about US$6.2 billion, and about US$2.0 billion in cash. Bunge will also assume US$9.8 billion of Viterra debt.
Viterra shareholders will own 30 per cent of the combined company on a fully diluted basis when the deal closes and about 33 per cent after completion of a planned US$2-billion share repurchase plan by Bunge.
Viterra, formerly the iconic Saskatchewan Wheat Pool, is a grain-handling business that has more than 80 facilities across the country and exports into more than 70 countries.
According to the companies, the merger will bring together Bunge and Viterra’s complementary asset footprints, augmenting Bunge's grain and softseed handling capacity and helping to connect the world's largest agricultural regions with consumers around the globe.
“The combination of Bunge and Viterra significantly accelerates Bunge’s strategy, building on our fundamental purpose to connect farmers to consumers to deliver essential food, feed and fuel to the world," said Greg Heckman, Bunge CEO, in a news release.
The merger will offer farmers greater market access for their products, the companies added.
"This further enables us to offer innovative solutions and open additional pathways for our customers," said Viterra CEO David Mattiske.
However, the merger is also part of an ongoing wave of consolidation in the agriculture sector in recent years. Among notable mergers have been German company Bayer's 2018 US$66-billion blockbuster deal to acquire Monsanto, as well as the 2018 merger between Agrium Inc. and PotashCorp of Saskatchewan, which created Nutrien Inc., the largest potash producer in the world today.
Viterra itself was acquired by Glencore in 2012 for $6.1 billion. Glencore later sold a 40 per cent stake in the company to CPP Investments and a nearly 10 per cent stake to B.C. Investment Management in 2016.
On Tuesday, the federal Competition Bureau confirmed it will be reviewing the proposed Viterra-Bunge merger in accordance with the federal Competition Act.
"The Bureau has a mandate to review mergers to determine whether they are likely to result in a substantial lessening or prevention of competition," said spokesman Jayme Albert in an email.
"Should we determine that the proposed transaction is likely to harm competition, we will take appropriate action."
One potential sticking point for regulators could be the fact that Bunge already owns a 25 per cent stake in G3 Global Grain Group, which was once the Canadian Wheat Board. G3 operates grain elevators in many of the same regions as Viterra.
Shannon Sereda, director of government relations, policy and markets for the Alberta Wheat Commission, said her organization is monitoring the proposed deal.
"Our mandate is to support competitive markets for our farmers, so as more details emerge, we'll of course be looking to study the impacts of the merger," she said in an interview.
"But it's very early days."
CPP Investments said Tuesday it expects to receive about a 12 per cent stake in the combined company and US$800 million in cash in exchange for its interest in Viterra.
The merger is expected to close in the middle of 2024, subject to customary closing conditions, including regulatory approvals and approval by Bunge shareholders.
The combined company will be led by Heckman and Bunge chief financial officer John Neppl, while Viterra chief executive David Mattiske will become co-chief operating officer.
The board of the combined company is expected to include eight Bunge nominated directors and four nominated by Viterra shareholders after the deal is completed.
Telus pauses fibre optic network rollout across Alberta, blaming Ottawa's Huawei ban
Sammy Hudes, The Canadian Press
Telus Corp. is blaming Ottawa's ban on China’s Huawei Technologies Inc. for pausing its fibre optic network build in the city of St. Albert and elsewhere in Alberta, raising questions over the sanction's spillover effects on connectivity in smaller communities.
The delay leaves many neighbourhoods in the city of about 70,000 without access to Telus' PureFibre home internet network. The Vancouver-based company originally announced the $100-million project in 2019 to connect more than 90 per cent of St. Albert homes and businesses to its fibre optic network by the end of 2020.
During a council meeting last month, St. Albert's director of information technology Joanne Graham told councillors that Telus informed the city on April 28 it had paused its PureFibre build "in all communities in Alberta with the exception of communities where they had a contract or a partnership with the municipality."
In addition to factors such as high inflation and interest rates, Graham said Telus "very predominantly" cited the fallout of the federal government's ban on Huawei technology.
"They have had to dismantle the Huawei infrastructure on all of their antennas and so primarily we're seeing pressures on the capital that they had available for all the builds across Alberta," she said.
The federal government announced in May 2022 it was banning Huawei from involvement in Canada's 5G wireless network, along with ZTE, another Chinese state-backed telecommunications firm, though it had been mulling the move since 2019.
Canadian companies were given until June 2024 to remove or terminate 5G equipment from Huawei and ZTE, along with a deadline of December 2027 to get rid of existing 4G equipment provided by the Chinese companies.
In 2020, Telus announced it would be working with Sweden's Ericsson and Finland's Nokia as suppliers for its 5G network, ditching previous plans to rely on Huawei equipment for the rollout. Prior to that switch, Telus had warned the deployment of its 5G network could be delayed and be more expensive than anticipated if Ottawa went through with a ban on Huawei equipment.
Telus, which at the time used Huawei radio equipment in non-core portions of its 3G and 4G wireless networks, said in 2019 it did not believe Huawei posed a major risk to national security.
St. Albert councillor Mike Killick said the delay in the PureFibre rollout is felt by local residents, particularly those in older neighbourhoods that have yet to be retrofitted, as he highlighted the faster internet speeds and increased reliability that the technology is meant to provide.
"Some people on one side of the street can get the service and on the other side of the street they can't," said Killick, whose motion at council, which passed, called on Mayor Cathy Heron to write a letter to Telus requesting the company honour its original commitment.
"I certainly hear from all kinds of residents that are looking for this kind of service and are frustrated that there's a pause on expanding for their neighbourhoods."
In a statement, Telus said it is committed to keeping St. Albert residents, businesses and customers updated on the progress of its PureFibre rollout once it resumes. The company did not answer questions regarding when that would be, as well as the effect of the Huawei ban and where else in Alberta it has paused its fibre network build.
"Telus has completed more than two thirds of our PureFibre build in St. Albert, bringing our most advanced broadband Internet technology to the community," said spokeswoman Brandi Merker.
"We understand how important connectivity is for the City of St. Albert and we are investing more than $7.2 million now through 2027 in network infrastructure, operations and spectrum to support vital network connectivity in the community."
Innovation, Science And Economic Development Canada did not respond to a request for comment by deadline.
Canada's Huawei ban is in line with many of its allies. The U.S., U.K. and Australia have similarly blocked the Chinese company from participating in their 5G rollouts over security concerns, while last week the Financial Times reported the European Union is considering a ban on its members using Huawei equipment.
Telus should have been better prepared for the effect of Canada's Huawei ban, said Gregory Taylor, an associate professor with University of Calgary’s communications, media and film department.
Taylor said the Canadian government "really dragged their feet" on imposing the ban compared to other countries, "largely to help accommodate the infrastructure that was being built" by companies such as Telus.
"It's an impact that they should have seen coming since 2017 when the U.S. decides that they're going to ban Huawei in their infrastructure," he said.
"It was fairly clear that Canada was going to eventually follow suit. So this expense, yes, it is a substantial expense for the infrastructure providers in Canada, but it's one that they've had ample time to see coming."
But Taylor called the blame being placed on the Huawei ban now a "red herring," suggesting that Telus is looking for ways to limit its spending given a decrease in profit reported in its latest quarter compared to last year.
"I think this is an excuse being put forth by Telus but I don't think it really holds up to much scrutiny at all because Canada was the last of the Five Eyes countries to put in the Huawei ban," said Taylor.
He also criticized the state of competition by telecommunications providers in Alberta in light of the merger of Rogers Communications Inc. and Shaw Communications Inc. earlier this year.
"Rogers is right now kind of restructuring, trying to figure out how they're going to work this with bringing Shaw into the Rogers fold and I think that Telus recognizes that for this moment, they don't face the same competition that they did," he said.
Whatever the reason, Killick said it's imperative that the delay doesn't increase disparities in internet connectivity, both within the town and compared with the level of service available in major cities across the country.
"We know it takes time, obviously, to build it out," the local councillor said. "But we just hope that we can find a way to continue to encourage Telus to do that and provide service across St. Albert to all residents."
This report by The Canadian Press was first published June 13, 2023.
Extinction Rebellion
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