Maritime Act of 2020 and pending carbon tax effects

IThere are many marine websites on the net to be visited , and reading them , shows , that there is LNG news many times . Scrubbers are likely installed , because there is pretty much money available , and some owners seem not to care , if they would need to file for some kind of Chapter 11 bankruptcy .

 

2015 : LNG would be 40% cheaper , than Heavy Fuel Oil :

https://shipandbunker.com/news/world/573106-lng-bunkers-approximately-40-cheaper-than-heavy-fuel-oil

 

Recent news :

https://shipandbunker.com/news/world/469552-whats-up-with-the-hsfo-bunker-prices-and-why-are-all-the-scrubber-guys-getting-worried

https://www.marinelink.com/news/crowleys-lngfueled-conro-completes-maiden-461633

http://www.seatrade-maritime.com/news/asia/polaris-shipping-goes-for-open-loop-scrubbers-on-seven-ships.html

https://worldmaritimenews.com/archives/category/news/

 

If available space on ships would be a problem for implementing LNG as main driving fuel , no ships would actually implement that kind of engine .

The main challenge would be , that major ports would offer LNG fuelling . Container Carriers , who will arrive at Rotterdam Harbour at regular intervalls , will be able to refuel .

Ships , who will shuttle between harbours , who do not signal to invest in LNG fuelling possibillities , will have to  install scrubbers .

But my guess is , that ports can not afford to ignore investments into LNG terminals on the medium run , since that would likely decrease traffic .

 

  • Like 1

Share this post


Link to post
Share on other sites

Jan, excellent post as usual but I did say "in a few decades" that covers using up the existing fleet. Why haven't you mentioned your methanol ideas? I think natural gas will be a lot less expensive than oil sands diesel. Will Canada ever get its pipelines built?

  • Upvote 1

Share this post


Link to post
Share on other sites

2 hours ago, ronwagn said:

Greenies would prefer ...   virtue emissions........ they can't get by the fossil thing. 

SSSSSOOOOO FUNNY.... 9_9

  • Like 1

Share this post


Link to post
Share on other sites

On 1/11/2019 at 6:01 PM, Jan van Eck said:

(1)   Yes, the scrubbers do exist, but they are quite expensive  (figure on $2.5 million) and there is very limited real estate on a big freighter to place them.  You have to take the ship out of service to retrofit and install, and that is costly.  Then there is the problem of dealing with the removed sulfur;  yes, it can be dumped overboard to get rid of it, but you already know that that approach is headed for a collision with the Greens. So now the shipowner has to give up real estate, give up earnings by docking his boat for the installation, and has further expenses to store and offload and dispose of the sulfur on an on-going basis.  Nobody wants to do that. 

As for nanotech, you are burning the fuel at the rate of perhaps 24 tons/day.  Your nanotech cannot keep up with that consumption rate.  Hopeless. It needs time to do its work. 

(2)   Any existing vessel is instantly compliant by simply pumping refined diesel into the tanks.  End of issue. 

(3)   Nobody has a competitive advantage if everybody ignores on-board scrubber installation and looks to the fuel suppliers to provide compliant fuels.  Everybody has to buy fuel. 

Jan, 

I have to disagree. Diesel is about USD 200 more expensive per mt than heavy fuel. At 24 tonnes a day that adds up to USD 5800 per day in fuel everyday the vessel is sailing. It would call that a competetive advantage. And diesel is expected to increase due to high demand.

https://shipandbunker.com/prices/emea/nwe/nl-rtm-rotterdam 

The real challenge with scrubbers is that nobody has a real understanding of their maintenance cost. They have only really been "tested" on ferries they sails short trips on schedules which makes planned maintenance easy.

  • Like 1
  • Upvote 1

Share this post


Link to post
Share on other sites

1 minute ago, Rasmus Jorgensen said:

Jan, 

I have to disagree. Diesel is about USD 200 more expensive per mt than heavy fuel. At 24 tonnes a day that adds up to USD 5800 per day in fuel everyday the vessel is sailing. It would call that a competetive advantage. And diesel is expected to increase due to high demand.

https://shipandbunker.com/prices/emea/nwe/nl-rtm-rotterdam 

The real challenge with scrubbers is that nobody has a real understanding of their maintenance cost. They have only really been "tested" on ferries they sails short trips on schedules which makes planned maintenance easy.

Yes, diesel is much, much more expensive that HFO or IFO 180.  The ship owners will go to light diesel because they do not have to change one little thing.  All they have to do is lighter the diesel into the tanks and pay for it.  When you go talk with these guys, you hear that they are unwilling to spend any money on the existing fleet and demand that the oil suppliers come up with the solution.  They are NOT going to start treating purchased fuels on board, it is not going to happen.  

The problem with scrubbers is that it is inevitable that some ports or countries are going to forbid open-loop designs, where seawater is used as the rinsing agent.  If you go to closed-loop then that is a charge of around $2.5 million, the ship is out of service for the installation  (not easy), and there is limited real-estate to work with on board.  Also at the same time those older ships have to have ballast-water treatment systems in place, another big expense, and again with the same real-estate problems.  Right now you can port the vessel and offload the ballast water into a lighter barge and have it taken away for treatment and disposal. But that gets expensive. 

You can do anything and everything with a newbuild. For the existing fleet, those owners will go to diesel, and while anyone who converts to something else gains an advantage while the ship is still economically useful, because there are and will be so few of those ships, they will not impact the charter pricing of the fleet.  All the other guys, using diesel, will face the same costings, and will price accordingly.  OK, the guys that spent a ton of cash up-front will make a nice profit, that will be ONLY on those few ships!  

I predict that scrubbers will be shunned, and the pressure will be on the refineries to create an acceptable fuel. 

  • Like 1
  • Upvote 1

Share this post


Link to post
Share on other sites

1 minute ago, Jan van Eck said:

 OK, the guys that spent a ton of cash up-front will make a nice profit, that will be ONLY on those few ships!  

I predict that scrubbers will be shunned, and the pressure will be on the refineries to create an acceptable fuel. 

The guys that spends the upfront money also have political clout and will lobby that IMO 2020 are enforced. 

Agree that the longterm consequence will be that refineries will need to create an acceptable fuel. But there will be an interim where the scrubbers and other tech will make some owners money

  • Like 1
  • Upvote 1

Share this post


Link to post
Share on other sites

Just now, Rasmus Jorgensen said:

The guys that spends the upfront money also have political clout and will lobby that IMO 2020 are enforced. 

Agree that the longterm consequence will be that refineries will need to create an acceptable fuel. But there will be an interim where the scrubbers and other tech will make some owners money

Rasmus, there is not enough capacity in that industry to start outfitting a lot of boats. It simply cannot be done.  And the owners are not going to start installing scrubbers and also ballast water treatment, that cannot be done.  So, bottom line, the fuel suppliers are going to have to come up with sulfur-free bunker, either 380 or 180, or both.  In the meantime, "IF" IMO 2020 goes into action and is not delayed, "THEN" the industry will be buying diesel  (or, to be totally accurate, the marine equivalent, called "marine gasoil"  [MGO]. 

  • Like 1

Share this post


Link to post
Share on other sites

3 hours ago, ronwagn said:

Jan, excellent post as usual but I did say "in a few decades" that covers using up the existing fleet. Why haven't you mentioned your methanol ideas? I think natural gas will be a lot less expensive than oil sands diesel. Will Canada ever get its pipelines built?

Methanol is a chicken-and-egg situation.  Nobody is going to do the switchover until the fuel industry has large supplies of methanol available.  Remember that methanol packs less energy per cubic measure, so you either have a reduced range or you have to top off the tanks each time you port.  There is a logistics issue with methanol.   

Nat gas will always be the low-cost fuel.  But conversion of the existing fleet is not doable, due to the required location of natgas tanks in the back.  

Canada will never get its pipelines built.  Canada is no longer the can-do country, it has disintegrated into interminable squabbling and lawsuits.  Forget about it.  the best the Canadians can do is use oil-by-rail.

  • Great Response! 1

Share this post


Link to post
Share on other sites

(edited)

11 hours ago, Jan van Eck said:

Rasmus, there is not enough capacity in that industry to start outfitting a lot of boats. It simply cannot be done.  And the owners are not going to start installing scrubbers and also ballast water treatment, that cannot be done.  So, bottom line, the fuel suppliers are going to have to come up with sulfur-free bunker, either 380 or 180, or both.  In the meantime, "IF" IMO 2020 goes into action and is not delayed, "THEN" the industry will be buying diesel  (or, to be totally accurate, the marine equivalent, called "marine gasoil"  [MGO]. 

Agree 100 %. with a few exceptions the shipping industry has been drained for cash, the past couple of the years, so there aren't many Owners that has the credit rating to fix the problem onboard the vessel. The ones that do will make money.

only disagreement is that I think IMO 2020 will be enforced. 

Edited by Rasmus Jorgensen
  • Like 2

Share this post


Link to post
Share on other sites

30 minutes ago, Jan van Eck said:

Yes, diesel is much, much more expensive that HFO or IFO 180.  The ship owners will go to light diesel because they do not have to change one little thing.  All they have to do is lighter the diesel into the tanks and pay for it. When you go talk with these guys, you hear that they are unwilling to spend any money on the existing fleet and demand that the oil suppliers come up with the solution.  They are NOT going to start treating purchased fuels on board, it is not going to happen.  

Jan , do you really talk to those people ? Where are these people located ? What are their ranks ?

 

Of course , the whole situation could lead to that small enterprises , that after being educated / having been apprentice , and had chosen , to start their own small business , will vanish from the market , because the ones , who are longer in the market , and stuffed with long time accumulated wealth , will simply educate each year newborns , who possibly will start their own enterprises once in future .

 

Since work does not pay , people might see some horizon in shipping , with charter rates from ten to three-hundred thousand US-Dollars , a day , possible .

 

And then , some $5'000 more for fuel is at hard competition at a 10'000 charter rate a large amount of money , which could probably be compensated with lower crew wages , as seen in the civil air traffic .

  • Like 1

Share this post


Link to post
Share on other sites

The change in pollution rules for tankers is the biggest win globally for greenies, ever. Not much news coverage though. Little out of Trump. Is the deep state collapsing?

On 1/12/2019 at 1:05 PM, ronwagn said:

Greenies would prefer electric ships run by a combination of sails, kites, solar, and virtue emissions. Natural gas is a fossil fuel that is cheaper and cleaner but they can't get by the fossil thing. 

I don't know If I am a greenie but think nat gas killing coal plants is great. Nat gas or more refined petroleum products replacing sulfur laden bunker fuels is great. In the long run I would hope renewables kill off market share of FF only because of the pollution they produce. After all we don't really want to ignore killing pollution, do we?

The idea that people who want clean air don't appreciate gas for their car or nat gas for their stove is silly, but humans should always strive for a better solution. Why fight progress and transition.

 

 

 

 

 

 

  • Like 1

Share this post


Link to post
Share on other sites

I am perfectly happy with the natural gas and renewables replacing coal. I think natural gas is practically free energy and it is far more abundant than people know. Solar and wind have a lot of potential but I will wait to see what they can really do over time. I really don't think they are that much cleaner factoring in their lifetime and overall costs including disposal. They also have a lot of aesthetic pollution IMHO. 

  • Like 1
  • Upvote 1

Share this post


Link to post
Share on other sites

On 1/12/2019 at 7:05 PM, ronwagn said:

Greenies would prefer electric ships run by a combination of sails, kites, solar, and virtue emissions. Natural gas is a fossil fuel that is cheaper and cleaner but they can't get by the fossil thing. 

Ronwagn,

Do you mean to say Elon is not already on it ?

  • Like 1
  • Upvote 1

Share this post


Link to post
Share on other sites

On 1/12/2019 at 10:45 PM, Jan van Eck said:

Rasmus, there is not enough capacity in that industry to start outfitting a lot of boats. It simply cannot be done.  And the owners are not going to start installing scrubbers and also ballast water treatment, that cannot be done.  So, bottom line, the fuel suppliers are going to have to come up with sulfur-free bunker, either 380 or 180, or both.  In the meantime, "IF" IMO 2020 goes into action and is not delayed, "THEN" the industry will be buying diesel  (or, to be totally accurate, the marine equivalent, called "marine gasoil"  [MGO]. 

Jan van Eck,

Do you see all this a big driver for Brent price in 2019 ?

  • Upvote 1

Share this post


Link to post
Share on other sites

6 hours ago, Auson said:

Ronwagn,

Do you mean to say Elon is not already on it ?

Not that I know of. 

Share this post


Link to post
Share on other sites

(edited)

On 1/12/2019 at 11:17 AM, Karl V said:

IThere are many marine websites on the net to be visited , and reading them , shows , that there is LNG news many times . Scrubbers are likely installed , because there is pretty much money available , and some owners seem not to care , if they would need to file for some kind of Chapter 11 bankruptcy .

 

2015 : LNG would be 40% cheaper , than Heavy Fuel Oil :

https://shipandbunker.com/news/world/573106-lng-bunkers-approximately-40-cheaper-than-heavy-fuel-oil

 

Recent news :

https://shipandbunker.com/news/world/469552-whats-up-with-the-hsfo-bunker-prices-and-why-are-all-the-scrubber-guys-getting-worried

https://www.marinelink.com/news/crowleys-lngfueled-conro-completes-maiden-461633

http://www.seatrade-maritime.com/news/asia/polaris-shipping-goes-for-open-loop-scrubbers-on-seven-ships.html

https://worldmaritimenews.com/archives/category/news/

 

If available space on ships would be a problem for implementing LNG as main driving fuel , no ships would actually implement that kind of engine .

The main challenge would be , that major ports would offer LNG fuelling . Container Carriers , who will arrive at Rotterdam Harbour at regular intervalls , will be able to refuel .

Ships , who will shuttle between harbours , who do not signal to invest in LNG fuelling possibillities , will have to  install scrubbers .

But my guess is , that ports can not afford to ignore investments into LNG terminals on the medium run , since that would likely decrease traffic .

 

It is easy to find a lot more references on LNG ships. Of course, as Jan pointed out, it will take a few decades to replace the existing fleet. In fact, most new builds are still diesel. Some are dual fuel and can use diesel or LNG. 

Here are more references on LNG ships:

https://www.marineinsight.com/tech/10-noteworthy-lng-fueled-vessels/

 https://www.joc.com/maritime-news/no-avoiding-move-develop-lng-powered-ships-ship-manager-says_20151028.html

https://www.aogr.com/web-exclusives/exclusive-story/lng-emerging-as-fuel-of-choice-for-vessels-ferries

http://www.ngvglobal.com/ A site specializing in LNG progress. 

W7-1_top_img_2013.jpg

Edited by ronwagn
added reference
  • Upvote 1

Share this post


Link to post
Share on other sites

(edited)

On 1/17/2019 at 12:10 PM, Auson said:

Jan van Eck,

Do you see all this a big driver for Brent price in 2019 ?

No. "Price" or the posted price of a specific grade of fuel, is not set by supply, demand, or consumption.  It is set by "traders," who buy and sell futures contracts on a commodity exchange.  Traders are driven by two factors:  greed and fear.  Physical conditions of a market are not the drivers.  Traders' actions are the drivers. 

I appreciate that that does not make sense  (that is, does not appear intuitively logical).  Lots of things don't make sense.  However, that is what it is. 

Edited by Jan van Eck
scrivener error
  • Like 1

Share this post


Link to post
Share on other sites

5 hours ago, Jan van Eck said:

No. "Price" or the posted price of a specific grade of fuel, is not set by supply, demand, or consumption.  It is set by "traders," who buy and sell futures contracts on a commodity exchange.  Traders are driven by two factors:  greed and fear.  Physical conditions of a market are not the drivers.  Traders' actions are the drivers. 

I appreciate that that does not make sense  (that is, does not appear intuitively logical).  Lots of things don't make sense.  However, that is what it is. 

Where does retail price, demand, and availability fit in? A better product needs marketing but once it catches on Katie bar the door. 

Share this post


Link to post
Share on other sites
Sign in to follow this  
Followers 0