S E M I N A R THE ECONOMIC IMPLICATIONS OF ENVIRONMENTAL PROTECTION TORONTO, MAY 31 AND JUNE 1, 1971 OCEAN MARINE TRANSPORTATION CRUDE OIL k~D PETROLEUM PRODUCTS R.S. Grout Manager, Marine Division Transporta ti0n Department Imperial Oil Ljroited --. PROTECTION THE EC 1, 19 71 Introduction Earlier escape of of world's the further oil into these tanker under Operational t daJ" Har,; K .. flee t,,· the br discharge. I Ki or have questions on these to them to any attempt Vugraph I - emissions answer (Escape of groundings, to be approximately (Hudson time. that per collisions receives year is much ,·i th the operation this subject Accidental and in limitations respect Oil ~~e into ot.~er 100,000 tons to and the is oil mishaps it the garbage If I will period you be pleased ~o follow 0 Sea) of per and ships. however, the to and sewage discussion While attention from of .r.1atters, and greater lts discuss 1 n t Institute} public briefly develop time disc..,arge The accidental referred ategories Duet disposal ,,·ill I a significance, res i ' . relative air y Clare year is into has at this operational estimated the been the sea due to estimated present type of discharge escape currently of to oil be cont'd ••... almost that on about about 80 1h of 2oi ships 11 rw 111 th O z<'d oi l i n to us the first sea . , it in v ely small s e v e r e an d i mmediate Ship as is the such society case in incidents concern in II - the some, seven period s ame ratio has threat to and accidents have later. (World been the can form a relatively high occurring has about environment. seas for . It is the created are literally , continue p ar ti c ul ar that be only present on the been of concentrated local h uma n a c ti v ities to the occur frequency effects on public interest years. Tonnage of better The to in thus escape to un fortunately accidents all to accidental occurs and mor e in years. for the he vugraph, estimated and recent 1964 is area all The record last it and will, these only prC'v ntion r •fer the generally lo sses years of Vugraph to examine a new phenom e non b ut hundr e ds of on J n pol 1u ion While total a relati arc 'l'h •s lt·d" r wiJJ d by OF OU , '1'0 Shl\ 10 % o f the and "unconlrol 1t be noted r.ibut; CO ll t:h • f:I •c• • ht ESCAPE Let of in proccdurco ACCIDENTAL not (ll•,1..;ll.ircJI• l l do no L fol low c ·r.t operating .hould pt·r · y •,ir. hip h , catcgor which t ,,o, tankers, than a nd this all total 1970 was other Losses) lo ss may be oth e r v essels ratio for s l i gh tl y less ships. Th e r esult a surprise over the tankers over 70% of than is the the same on cont'd .•... 3 either a number While the other ships of ships tanker record I do not as acceptable pollutants, to the stranding, the major crew of the number of people the ship and The growth transportation given escape by ships oil from environmental in entire total III In mately at ten 1400 the 1950 the of million free fleet grew by 6501 to cargos respect to a ship performance were those held and of by by the A relatively for this small to day 10,500 the War II present an community. concerned, and an damage. Fleet demand or World can and in A large local world day and since tanker per oil matter. By 1970 per of and Tanker barrels barrels movement oil susceptible T2 equivalents. forty this to Demand million this passengers, demand involved the regard damage. becomes {Oil than cargo. an entire is better sea, the to community Vugraph at a stricken threat relatively with and a new dimension of Society in b~sis. marine loss suffered tonnage basis. concerns of a total we can mass or owners or been believe collision families has has on an absolute Prior the basis and Growth) for the oil was approxi- tanker fleet oil demand had grown 300%, while the tanker T2 equivalents. stood to By 1980 cont'd •.... 4 economists barrels foresee per more than a doubling day) and double to it over the vu9raph was (eighty million tanker tonnage will T2 equivalents. this rapid a progressive (Growth In 1950 575 feet long in the growth increase in tanker in tanker size afloat was a 30,000 on a draft of to a 326,000 DWT ship, had increased 1135 growth a number of forces. through economies portation savings contribute Important side therefore the risks waterways are lessened, benefits at the arrested to construct, feet in of constructed today. size scale. that traffic 30,000 in fold of 81 feet. a reaction to cost was resultant trans- energy costs. congestion and in competent restricted sea- of tankers had been D~·IT, industry would already one for DWT the ten and stra4dings development every is The stab.ilizing of t~an on a draft to man and handle for more as are demands 19 50 level tankers by motivation collision If size eight feet. tanker of are By 1970 35 long The initial reduction going manpower. Size) tanker tanker The rapid Tanker largest maximum size lanes demand same period. IV - ship, with oil estimated 22,000 Coincident requirements is in large high-density crude carrier have traffic being 5 By 1980 industry would 100% in If the all units; less tonners sea with only ships but with always I believe action just been this by one not little tanker and without represents vessel, belief is it that significantly by offshore greater number of harbours. control of deep agreement to be covered be required. smaller handled congested 4,800 was tenner risk ships, fleet. require associates, continue country, the support case. from sea shipping basis and Unilateral others, is effective. While is one on an international will of would 250,000 pollution in - an increase increase a substantially handled mix, we would than larger size world's demand industry today's units the one threat The regulation has the with 600 new upits and port than in tonncrs, admittedly fewer terminals, smaller ships if pollution total more of my, and my marine the 3,500 30,000 While is stayed however, by 250,000 a greater we had require number we built more if or it may be a widely no regulation of ocean held belief shipping, that such there is not the case. cont'd •••.. All worl h .n 'l ' y th (i i ) (iii) (A) n ,1 rn, n• 1. ft CiTil for sh i p wn r a spill h1. •' ~ t : i ,\li. l : h~ I .t h: w .1 n • 1u : . l; t: n ,1 m n l L r nv nt' w th r i_h from wat rs. Currently und r i l. :, ,\:, by Vtmb r l :, 1 \l ~· -·t 'l'h .. h , T n to existing n vh ' f 1· '-' th V l'\ ,' 1 .\ I OOO I O' 0 • h 1iv i ., · :, n. i 1 t d. ui r :......n,1 h;. \ , t1. 11 d l · n t n s rn tion l O. .. \ b h · • l ·,l i l ity L size t 1n 1 th \ i r in int t L,m. 1 ;; in national l l\\ ·n·nti. n m ttt t: 1y l of c r owner supported fund to suppl under Liability the Civil t n t · n, wh 1 ·h by pollution officers, ti I\ l l ut · n f Publi lanes, ,. nl Li governments shipping l\\ ' l \ll\ , •h 1 ·h :mi the or revisions . ' nti dr The l l\,\ l n in Shipown (B) i. I\ l ) in :;.; wer of \\' I\ :· l .rn Lu ,tnd . ·n, ti t wo n w pollution ships' t . l th p r v n in 1969, t\ •• :.~ \ 1 At l 1\ll,\t 1 int s f l 1\, .. h \ ~ th t Ci) of n tt i ( Int Vu r :lJ2h \ h nv n h i1 \ ' l\tl 1· l bi l ity · u . l · nh n t . n t n t •d • • • • 7 In addition vast majority for of to international shipowners seaworthiness have by one of societies, such American Bureau as Lloyd's their the This requirement. All ocean-going tankers require his ship highest classification the recognized classification Due to damage due to international or is a general charter the the insurance parties shipowner of maintain a specified and society. the oil classification Shipping that the certified of Esso ior in ships recognized Register of Shipping. and chartering conventions need spills for financial protection and because conventions can from ratification be a rather of lengthy process, / the major have oil companies established Vugraph (Financial 1969 Vqluntary Pollution) was protection to ten million world's a plan announced CRISTAL (Contract the world plans. to This national Currently a plan, the Liability of is major supplemental Regarding an $100 over tonnage year TOVALOP (Tanker proyides governments tanker as Concerning established. this in insurance referred Agreement commercial owners Protection) dollars. Early world tanker two voluntary VI In Owners and Interim for per 80% of entered oil to for Oil financial GRT up to the in companies free TOVALOP. of the TOVALOP, named Supplement to Tanker cont'd •• 8 Liability for Oil Pollution) 1 of thirty ·a tot million dollars nd the public governments This which will will fund persistent oils is These be necessary by pa.yments 80% of the over covered under when and if the Civil governments bodies, the major oil organization named the Oil Forum. group is (Inter-Governmental action with international the oil agency respect companies' Liability escape I working coordinates to marine matters .. of oil at my formal I would between in 1970 like an Marine with IMCO Organization), a international and drafts received delegation ratified. legal closely I am pleased conclude are International which Government not convention communication Consultative forum has of of course, established currently Marine Before accidental will, Companies conventions. the Canadian movement and international companies owners plan. more effective industry, Nations this spills. from cargo worlds plans the oil United to national Cargo Owners Fund convention To provide This free two voluntary and the proposed protection up to from damage due to oil be supported and currently provide proposed to state strong that support from IMCO• remarks to review on the briefly cont'd ••••• 9 some of to the safer activities undertaken navigation near masters, is available At the Esso Grenoble, pilots a tanker all facility, in scale of ocean of the students have systems are these evaluatiops Esso, we believe be greatly approach the and the the function of currently Esso Holland. ment and government being masters at This the ship recognition for of a need avoida~ce With tankers. ship navigation of the the can systems new hardware. training , p:ans attendance course by example ~y a modern Grenoble and mates Oil conducted simulator a good firs~ being is _supported is handl~ng and Esso of with the ar.d in collision introd~ction developed facility activity process school Grenoble. three along a big at research to training by Imperial on three by the As a supplement are course whole for authorit~es~ training operated ?rench This The masters time, the school classroom . other in officers. given evaluation improved to are present under to ships completed At the respect a lake and pilotage tankers two ocean-going Limited navigating addition the at navigation shipowners discussions, models established and other to with of tankers. In 1967, Alps, by Esso the of effective in at Dutch 1971 Del=t, go·.rern- jointindus~~y/ coopera~ion. cont'd ••••• 10 OPERATIONAL ESCAPE OF OIL TO SEA wish I for oil escape into discharge. need now to the This on the ballast. turn to sea from discharge empty leg of the second ships: results is and water i.e. voyage carried in reason operational primarily a tanker The ballast major from to take some of the on water the ships' 0 cargo tanks from oil arrival the residue at oily the adopted separation loading Vugraph oil "Load with it only cargo is necessary voyage is a small and with loaded proper to volume the ago, on top settling of slops of them, was conunonly is at of high concentration which arrive balance tank discharge procedure, years possible discharge operational This With Upon and planned this seven contaminated to handling On Top". The high and tanks. these careful industry slops and the oil the ballast are retained hence the term On Top"~ VII procedure of oil water. on board in reduced. procedures port becomes it ballast greatly as concentration "Load the be to port With by the referred clean loading during however therefore and clingage ballast. washings can the into - (Operational If the it is the oil Escape) industry estimated that sea today would had the be not introduced operational this discharge approximately cont'd ••••• 11 4,300,000 With tons. tanker fleet actual operational 950,000 "Load following the tons. Of this contribute changes in present world's tanker the operational VII - the it of is oil today tankers 200,000 employing practices sea With of that the the at tons. estimated into world's procedure, estimated operating (Corrective There (A) total, the the the would no total be 2,000,000 by 1980. Overlay be On Top" is about fleet, escape 80% of "Load discharge On Top" tons approximately are, Measures) however, corrective measures that can taken. The universal adoption On Top" might reduce 200,000 tons. low as devices is on b~ard estimated 715 million will be by tanker this these would This to meet to the International Prevention of the Pollution I briefly The drawbacks to to this this control required and level of of Convention the Seas convention approach to and standards of to "Load figure an investment lower the amendments referred be require of ton sensing probably dollars. required 2,000,000 Better would operators as it of discharge the 1969 on the by Oil. previously. the problem are as follows: cont'd ••••• 12 (i) The required separator devices have serious limitations. ment in fieJdis practices the would of at followed loading ports The to in case investment estimated of the much of It in is our oil escape handling This is the Venezeulan also the available and water. eastern Great not and Canada's and is estimated, Caribbean require- procedure Lakes pro- we in coastal operations. reduced ballast performance is ballast ports. most where operational this of operational shore loading originate. marine operating time of the of at follow adequate reducing all cedure Imperial rigid separation installation facilities ments industry. monitoring voyages proper means be the subject difficult. On short Another equip- continuing and requires available Improved the by Esso and sensing currently The procedure for (B) this research is (iii) control, and of (ii) ship-board discharge, it tons. The 25,000 not handling in to from shore shore be one the discharge tanker but facility. facilities billion, would from The to 600 could stem the dirty required accomplish million be this is dollars. cont'd ••••. 13 The major is that could reservation it meet objection (C ) · with tends to with local localize the approach, b e t o p rovide this approach discharge jurisdictional and problems and by far the segregate~ ballast for n ew ta nke r s constructed shipyards are fully commitments into for e cas t requ i red after booked and 1975 this and segregated ball as t systems, ly n e ed to and opera ti ng reasons. other operations and would for the this result, The pre-1976 newbuilding on other would be 2 billio fleet would into the sea. not fac i lities means If it is estimated 1976. Even vessels will tanks for to 8,000 of at oil from tons sea 19 7 6 , to per unless year shore investachieve n , 700 million be prov ided with drydocking The additional s after additional total The slop amount provi ded . ballast rely cargo to b e disposed were ment segregated would have facilities c lean world with 1974 tonnage such on all Free Of the after would systems 1976. periodical costly, 1976. tanker 1980 most through 41 % wi l l · be delivered these to s. A third that respect dollars. with an d wo uld have to to mi n imi ze d ischarge of oil these ship s met the revised 1969 cont'd ••••• ... standards their (D) through annual The total then be It 128,000 to to be the "Load of shorter cases ashore may be the In the example of tanker where and an annual This would remaining discharge For this I have 25% of for For in the the voyages 6,000 example the approximately 156,000 and point effective discharge example, system of oil on some may be most treatment chosen 1980 it are procedures of long effective. of ballast voyages would be followed total tons tons 1969 per result. standards. The assumed would facilities be to put would year. annual and would are ballast The shore tons 75% haul loadings all that long 150,000 tanker where a~sumed is new revised treatment. about this solution. discharge meet be on short ashore best would three up to operational movements, On Top" the practical On Top" loadings "Load approach discussed level. the for this tons. year. most the an acceptable 120,000 a combination·of I have of reducing voyages In be that prove means per procedure, be about ancapc tonn systems On 'l'op" rgu would operational separate will th , "Load disch may well 14 the discharge investment would be required cont'd ••••• 15 would 400 million be Clearly to the into world's the indust of Such of revised oil in a study the a possible serious More research the sea has been shorter and its the "Lo a d On Top" r ed uc t i o n in tons (100,000 through 1980) term, i 969 international thei r target sea is is threat required effect on the commissioned by the oil ry. In the situation environment. fate ecology. the dollars. widest ratification standards and in wi ll use of b y t a nke r s , in t he shor t est attainment tons in conventional acc omplish oper a tio n a l dis charge of the 1971 , 200,000 possible procedures the universal the of greatest oil into the time . SUMMA RY Vugra p h V~II - (Oi l Indu st r y Ac ti o ns ) To conclude the actions the other effects the other procedure and testing of taken over major oil the escape With respect major for oil owned of I would the l ike last companies of oil to improved seven to years the sensing in sununary by Esso disc ha r ges, introduc e d th e "Load ships and and the sea. operational chartered review r e duc e a n d combat into companies and to in control 1964 . d evices Esso and On Top" Research has been cont'd •• lb and continues to be carried Other of reducir:.g methods discussed in some detai_, To reduce the resulting a tanker oil by Esso officer training masters will at Delft, at and establishing Improved 1957. a.re ·.;.:-.c.er cevelopment ~o s ?ple~ent ~~::.e. a ~ig necessar-J establishec. million ratification :..eac. by in a-:: Gre:-.o::>!e, and the public, basis Gre:-.ob:..e ?rese~-:. I o:: Esso a c;roup s~~? the s.:.::.~~ator course in 1971. To assist plar.s :::.e oi~ ir.ciu.sLry ir .. :969 ?07;...:..oP -::.at conventions 1g70 the Oil group actively in and accelera~e the Companies improved international prc7~c.e protec~ior. dollars effecti·e major oil Interr.ational engaged ?rotection ::i4a:-.cia: of progressive, maritime is at as o:: ':a:-..i:ez:-accidents ~ooL ~"e and eva_'.!a~e take CRISTAL, two insurance to thirty u..~cer sbl-d7. a.r:osys-:.e::s the To provide voluntary are Zsso provided Holland governments :e~,e:. o:: d~sC.:"large, schoo: equipment a.~d --;..~eindustry. ti:e ::re~'.!e::cy spills, navigation navigational and test the o~~ by ~sso today on a and in togeth.er one s:ip, t::e to 1971 up one incident. drafting and :nternational co:-panies formed in ~{a..::ine Porum. with IXCO in This formulating standards. cont'd •• 17 Marine being conducted with governments modern society. in field but the by Esso outlined to "in meet of marine we can I progress today. RSG/Pf May 26, 1971 on a broad house", the front has and industry environmental needs to the transportation and will has with The challenges I believe considerable research meet already oil are and of industry substantial Indeed, them. been is made, as I have OCEAN MARINE TRANSPORTATION CRUDE OIL AND PETROLEUM PRODUCTS ENVIRONMENTALPROTECTION ESCAPE OF OIL INTO THE SEA (A) ACCIDENTAL (B) OPERATION14, - CONTROLLED TANKERS 100,000 I (C ) TOTAL ESTIMATED AMOUNT PER YEAR - TONS 200,000 UNCONTROLLED TANKERS 75 0,000 TOTAL 95 0,000 1 ,0 50,000 TOTAL WORLDSHIP LOSSES ALL TANKERS % OF % OF ·~· OTHER VESSELS % OF % OF TO. AGE NO. NO. TONNAGE 1964 0.18 0 .11 0.54 0.42 1965 0.32 0.25 0.68 0.54 1966 0.41 0.37 0.67 0.57 1967 0.43 0.29 0.66 0.49 1968 0.44 0.26 0.61 0.40 1969 0.42 0.45 0.55 0.36 1970 0.47 0.28 0.54 0.34 0.39 0.30 0.61 0.44 AVERAGE 1964/1970 SOURCE: LLOYD'S REGISTER OF SHIPPING VESSELS OVER 500 GRT FREE WORLDOIL DEMAND AND TANKER FLEET DEMAND MMB/CD TANKER FLEET T2 EQUIVALENT 1950 10 1400 1960 20 3800 1970 40 10500 80 22000 1980 ESTIMATED GROWTHIN TANKER SIZE DWT 1950 30,000 MAXIMUMSIZE TANKER LENGTH ~ 575 35 900 so 1960 ll0,000 1966 200,000 1050 63 1970 326,000 l135 81 ON ORDER 477,000 1245 92 OCEANSHIPPING .INTERNATIONALREGULATIONSAND STANDARDS INTERNATIONALCONVENTIONS RATIFIED SAFETY OF LIFE AT SEA (SOLAS) LOADLINE PREVENTIONOF THE POLLUTION OF THE SEAS BY OIL ADOPTED BY CONVENTION CIVIL LIABILITY (FOR OIL SPILLS) PUBLIC LAW UNDER . CONSIDERATION MANDATORY ROUTINGS IN'I'EHNl\TIONl\LCERTIFICATES OF COMPETENCE{SHIPS OFFICERS) SIZE OF CARGOTANKS CARGOOWNERFUND (SUPPLEMENTTO CIVIL LIABILITY) (B) CLASSIFICATION SOCIETIES e.g. LLOYDS, ABS ATTEST TO SEAWORTHINESSOF SHIPS FINANCIAL PROTECTION FROM DAMAGEFROM OIL SPILLS VOLUNTARYPLANS PUT INTO EFFECT BY SHIPOWNERS AND MAJOR OIL COMPANIES TOVALOP PROVIDED BY SHIPOWNER COVERAGE: C- R I S T A L $100 PER GRT UP TO $10,000,000 PER INCIDENT PROVIDED BY CARGO OWNER COVERAGE UP TO A TOTAL OF $30,000,000 PER INCIDENT TOVALOP AND OTHER LEGAL LIABILITIES DEDUCTED Vll OPERATIONAL ESCAPE OF OIL INTO SEA ANNUAL TONS CURRENT SITUATION TODAY, WITHOUT '-'LOAD ON TOP" ESTIMATED ACTUAL TODAY ESTIMATED BY 1980 WITH NO CHANGES 4,300,000 950,000 2,000,000 VI!.1. SUMMARY OIL INDUSTRY ACTIONS RE ESCAPE OF OIL FRO 1 SHIPS OPERATIONALDISCHARGE "L THE DON T IBA E ER St Y. LB. TANKERNA I ATI BY ES l 67. SAFE NAVIGATION EVALUATI N OF C LLISI STE 1 - ES r SIMULATORTRAINING, DELFT, H LLAND. ESS I FINANCIAL PROTECTION TOVALOPUP TO $10,000,000. MARINE RESEARCH PROGRAMS ,l 1971. ESTABLISHED 1969. CRISTAL UP TO A TOTAL OF $30,000,000. OIL COMPANIES INTERNATIONAL MARINE FORUM (OCIMF) l ESTABLISHED 1971 ESTABLISHED 1970 TO ADVISE AND ASSIST RE INTERNATIONAL CONVENTIONSAND REGULATIONS. WITHIN ESSO WITH INDUSTRY WITH GOVERNMENTS