Assessment Teams Searching for Spilled Oil
And Damaged Wildlife Post-Hurricane Isaac
In the wake of Hurricane Isaac, the Coast Guard, EPA and Louisiana Department of Environmental Quality ground crews continue to monitor and assess the damage to waterways and oil, gas and chemical facilities to determine the extent of any pollution impacts from the hurricane.

Several wildlife were found dead or injured near Myrtle Grove, Louisiana, on Sunday, including a deceased, oiled brown pelican, clapper rail and common moorhen, as well as two live, oiled pelicans, the U.S. Coast Guard said. Wildlife found alive were taken to a rehabilitation center in Belle Chaisse, Louisiana. Necropsies will be performed to determine the cause of death. A wildlife recovery team was deployed to Myrtle Grove to look for signs of other impacted animals. Responders will collect oil samples from both the animals and the marsh, and attempt to identify the source.  

“We are conducting overflights, ground assessments, airboat and small boat operations to seek out and recover any impacted wildlife and to find any oil or hazardous materials so we can recover them as quickly as possible to minimize the impact to residents and the environment,” said Lt. Cmdr. Lushan Hannah, incident commander at Coast Guard Sector New Orleans.  

Coast Guard representatives along with state officials and Stolt-Nielsen Ltd. (Rotterdam, Netherlands) representatives are assessing the chemicals stored at the Stolthaven facility in Braithwaite, Louisiana, which was heavily damaged and flooded during the storm. There is no immediate public health concern, and Mississippi River traffic is not affected. A half-mile exclusion zone is in effect around the facility.

Overflights of Lake Pontchartrain revealed no signs of spilled or leaked oil, but there are multiple displaced drums and containers. Teams located oil in the marshes in the vicinity of two inactive oil production facilities near Myrtle Grove, although there was no sign of an active leak, and it is still unclear if the oil originated from these facilities. Assessment teams also discovered oil in Bayou St. Denis and near Port Sulphur. Reports of sheening in Breton Sound are being investigated. 

“We are in constant contact with vessel and facility owners and operators, as well as other waterway management organizations to make sure we learn as quickly as possible of any releases,” Hannah said. “Many of them have taken steps on their own to contain and clean up any pollution.”

On the Lower Mississippi, Coast Guard waterways management teams are assessing and coordinating salvage plans for vessels that grounded along the riverbanks during the storm to ensure strict safety standards are met before any attempt is made to refloat or move the vessels. 

Coast Guard and state officials are asking residents to avoid any contact with chemicals or pollution they come across and to report it to the Sector New Orleans Operations Center at 504-365-2200 or the National Response Center at 800-424-8802.

Caption: Rainfall from Isaac, which was downgraded to a tropical depression last weekend. (Credit: NOAA)

Source: U.S. Coast Guard press releases

Shell Authorized to Proceed with Limited
Drilling Prep Activities in the Chukchi Sea
The Bureau of Safety and Environmental Enforcement (BSEE) has given Shell Oil Co. (Houston, Texas) permission to move forward with certain limited preparatory activities in the Chukchi Sea offshore Alaska.
 
The announcement last Thursday authorized Shell to "move forward with limited activities well short of oil-bearing zones that can be done safely now prior to the certification and arrival of the containment system," BSEE Director James A. Watson said.

Under the approved permit, Shell has permission to begin certain preparatory activities in the Chukchi Sea, including the creation of a mud-line cellar, which ensures that the blowout preventer is adequately protected below the level of the seafloor. Shell is also authorized to drill and set the first two strings of casing into shallow non-oil-bearing zones around 1,400 to 1,500 feet depth.
 
BSEE insisted that safety, environmental protection and emergency response are its highest priority. Shell’s applications for permits to drill into potential oil reservoirs are still under review, and Shell will not be authorized to drill in areas that could contain oil unless and until the required spill containment system is fully certified, inspected and located in the Arctic.

Under Shell’s Chukchi and Beaufort Sea exploration plans and oil spill response plans, which were approved by the Bureau of Ocean Energy Management and BSEE, respectively, Shell is required to receive certification of its containment system, which is designed to capture flowing liquid hydrocarbons in the event of a loss of well control, from the U.S. Coast Guard and have its vessel positioned in the Arctic before any drilling into oil-bearing zones can occur. BSEE engineers recently conducted an initial inspection of Shell’s containment system, but the company has yet to secure the final Coast Guard certification. The oil spill response system involves the Arctic Challenger barge, which has not yet been federally certified.

BSEE inspectors will be present on Shell’s Noble Discoverer to provide continuous oversight and monitoring of all approved activities. BSEE said it has already conducted inspections of the drillship and Shell’s response equipment, although there have been news reports of the vessel having mooring problems.

Caption: Shell’s Noble Discoverer. (Credit: Shell)

Source: BSEE

Moog Acquires Tritech from Halma
Moog Inc. (East Aurora, New York) acquired Tritech International Ltd. (Aberdeen, Scotland) from Halma plc (Amersham, England) on August 22. The purchase price is approximately £21 million in cash. Tritech had trailing 12-month revenues of $19 million.

This acquisition will be reported as part of the Moog Components Group, which supplies motion and fiber-optic products and solutions to marine, medical, industrial, aerospace and defense applications.

Sales for Tritech are expected to add approximately $2 million to Moog’s sales for the remainder of the company's 2012 fiscal year, ending September 29, and $20 million in sales for fiscal year 2013. This acquisition is expected to be neutral to Moog’s earnings per share for fiscal years 2012 and 2013 due to first year purchase accounting adjustments.

Source: Moog press release

NATO: Maritime Industry Should Continue Anti-Piracy Efforts Despite Decrease in Attacks
Global piracy fell 54 percent during the first half of 2012, including Somali hijackings and attacks, but the shipping industry and military forces should continue their anti-piracy measures, NATO said on Monday, citing a  report published by the International Maritime Bureau (IMB). The work of military forces in the Somali region and self-protective actions taken by commercial shipping contributed to the decline. The report warned, however, of an increase of attacks in the Gulf of Guinea.

Overall, 177 incidents were reported to the IMB Piracy Reporting Centre in the first six months of 2012, compared to 266 incidents for the corresponding period in 2011.

The report showed that 20 vessels were hijacked worldwide, with a total number of 334 crew members taken hostage. There were a further 80 vessels boarded, 25 vessels fired upon and 52 reported attempted attacks. At least four crew members were killed.

The decrease in the overall number is primarily due to the decline in the incidents of Somali piracy activity, dropping from 163 in the first six months of 2011 to 69 in 2012. Somali pirates also hijacked fewer vessels, down from 21 to 13. Nonetheless, Somali piracy continues to remain a serious threat. 

NATO’s Operation Ocean Shield, European Union Naval Force Somalia–Operation Atalanta and Combined Task Force 151 called upon the shipping industry to continue to take anti-piracy measures despite the current downward trend in piracy events.

“Attacks have been minimal during the monsoon season but in the past the end of the monsoon generally heralds an increase in the number of attacks on merchant vessels,” Commodore Bruce Belliveau, NATO’s Deputy Chief of Staff (Operations) at Northwood, England, said. “We have seen a steady downward trend in pirate successes, which is due in part to the vigilance of naval forces. We call upon merchant vessels to do what they can to ensure they continue to make it as difficult as possible for pirates to board and take control of their ships.”

The Best Management Practices version 4 booklet, published August 2011, provides updates for implementing protection measures to deter piracy. It is based on lessons learned from ships’ masters and can be downloaded from the NATO Shipping Centre website at www.shipping.nato.int, which has updated information on pirate attacks.

Caption: Representatives of NATO’s Operation Ocean Shield, European Union Naval Force Somalia–Operation Atalanta and Combined Task Force 151. (Credit: NATO)

LNG Carrier Market Recovering, Import/Export Growth To Come From Asia and Australia Through 2016
Capital expenditure in the global LNG market is expected to grow to $169 billion between 2012 and 2016, according to Douglas-Westwood’s new LNG Market report, which was announced on Tuesday. Asia will be the main driver in import terminal developments and is forecast to invest $31 billion during this period. Following a sharp decline from 2010 through 2011, the LNG carrier market will begin to recover from 2012 onwards with capital expenditure expected to be more than $30 billion.

From 2007 to 2011, much LNG export construction activity was focused on the Middle East, in particular Qatar. The next five years will see a shift in regional focus to Asia and Australasia, where there are a number of terminals planned or under construction. Australia will invest around $60 billion. Papua New Guinea is moving toward its first LNG terminal in 2014. Asia will drive import demand, representing 78 percent of import terminal capital expenditure.

The key drivers of the floating liquefaction sector are the desire to monetize stranded offshore gas fields and the relative high costs of an onshore liquefaction terminal. A modular design allows the floating LNG (FLNG) vessel to be built in lower-cost environments then towed to location. Positioning the liquefaction facility on field reduces the requirements for costly upstream facilities and long pipelines to shore.

Australasia was the first region in the world with an approved FLNG liquefaction project: Shell Oil Co.’s (Houston, Texas) 3.6 million metric tonnes per annum Prelude floater, which is expected to be onstream in 2017.  Offshore gas fields and deep subsea trenches that render pipelines impractical, such as the Timor Sea Trench, make this region a key focus area for FLNG project developers. Other FLNG prospects in this region include GDF SUEZ S.A. (Paris, France) and Santos Ltd.’s (Adelaide, Australia) Bonaparte development, PTT Exploration and Production Public Co. Ltd.’s (Bangkok, Thailand) plans to monetize its Cash and Maple fields, and Woodside’s (Perth, Australia) Sunrise project.

The U.S. is set to bring the Sabine Pass project in the Gulf Coast onstream at the end of 2016. It will cost $3.9 billion and have a total export capacity of 8 million metric tonnes per annum. 

Caption: Shell has given the go-ahead to develop its Prelude and Concerto gas fields off the northwest coast of Western Australia using its FLNG technology. (Credit: Shell)

Source: Douglas-Westwood 

JHSV-1 Successfully Completes
US Navy Acceptance Trials
The first-in-class Joint High-Speed Vessel USNS Spearhead (JHSV-1), under construction at Austal USA (Mobile, Alabama), has successfully completed acceptance trials in the Gulf of Mexico, the company announced last Thursday. The U.S. Navy conducted comprehensive tests of the ship’s major systems and equipment to include the propulsion plant, ship handling and auxiliary systems. The ship had high levels of completion, according to the Navy.

These trials are the last major milestone before delivery of the Spearhead to the Navy, most likely in September. USNS Spearhead will soon be followed by Choctaw County (JHSV-2), which will be christened on September 15. Two more JHSVs are under construction at Austal’s Mobile shipyard. 

Austal is currently under contract with the U.S. Navy to build nine 103-meter JHSVs under a 10-ship, $1.6-billion contract and five 127-meter Independence-variant littoral combat ship (LCS)-class vessels, four of which are a part of a 10-ship, $3.5-billion contract.
For the LCS and JHSV programs, Austal, as prime contractor, is teamed with General Dynamics Advanced Information Systems (Fairfax, Virginia). As the ship systems integrator, General Dynamics is responsible for the design, integration and testing of the ship’s electronic systems, including the combat system, networks and seaframe control.

Caption: JHSV-1 during sea trials. (Credit: Austal)

Source: Austal press release

Q&A: Martin McAdam, Aquamarine Power CEO
The recent designation of Scotland’s first marine energy park in Pentland Firth and Orkney waters is designed to boost the U.K. marine renewables industry. Sea Technology spoke with Aquamarine Power’s (Edinburgh, Scotland) CEO Martin McAdam about how government backing can help pioneer companies develop and test emerging wave-power technologies to eventually make them commercially viable on the global market.

What did it take to get the Pentland Firth and Orkney area designated as Scotland's first marine energy park?
The key driver is the government will to make it happen. The original idea of a marine energy park is from the concept of clustering. The idea is if you designate an area for development, then people will be attracted to that area, and you begin to evolve an ecosystem, [which] is everything from companies who want to be in the marine renewable energy business, and that’s going to be people like us who are technology developers. We’re developing our Oyster technology. Then you’re going to have parts of the supply chain like installation, machinery, onshore supply fabrication and so on.

So the whole idea is you designate an area and you put that into a place where there is fantastic marine energy resource, and then you start putting in infrastructure to help companies get established in the area. It’s all about getting an ecosystem to allow a new fledgling industry, the marine energy industry, to begin to evolve.

What does the park mean for the homegrown marine renewables industry in Scotland?
We have a number of marine technology companies, like Aquamarine Power—we are already up and running with our second-generation machine. The marine energy park is a kind of badge of recognition that this industry is now something that needs focus and attention, and it’s working towards getting companies like ourselves get to the next stage of our evolution.

What does it mean for Scottish marine renewables companies in the global market?
The global market is our focus, so one of the big challenges that we have and most development technology companies have is how do we finance the new technologies from their current stage of evolution to a point where they’re commercially viable? The marine energy park idea, along with several other initiatives are designed to bring focus to the industry.

I think that everything that we’re going to be doing has worldwide marketability. There are waves all over the world. We see this very much as a global market. We’re getting a lift from the Scottish and U.K. governments in terms of the industry, and we want attention from the world because the world, literally, is our marketplace.

How does Scotland compare to other marine renewables hotspots in the world?
Scotland has got some really important advantages. First, we have a fantastic resource. We have some of the best wave and tidal resources in the whole world. The northern and western coast is a tremendous wave resource, and we can compare that readily with the west coast of the United States, Chile, South Africa, New Zealand. The important thing is that resource will be there today, it will be there tomorrow, [and] hopefully, it will be there forever. And the cost associated with wave energy is zero.

The second most important thing in Scotland is a long-term commitment from the government in terms of encouraging this industry to evolve. There are several organizations in the United Kingdom focused on how to start up businesses. One is the Technology Strategy Board, and they provide government grants for research and development. We also have the Carbon Trust taking those new ideas once they’re through the research and development phase and getting them into prototype development. Aquamarine Power has benefitted from both. [The] very supportive Scottish government will provide funding for small companies like ourselves, which will directly assist us to bring in additional funds. For instance, if we have a project, they would grant fund up to 50 percent. They would also provide equity to our business, provided that it matched with equity from external investors.

The whole Scottish government has a commitment, and that commitment comes directly from the first minister of Scotland, Alex Salmond, who is personally interested in ensuring the creation of the new industry here in Scotland. So all of that coming together, the long-term incentives in the marketplace are there, there are people working on infrastructure in areas of Scotland with a great resource, and we’ve all been working on our supply chain.

Aquamarine Power has announced it will use its Oyster technology to compete for Scotland's £10 million Saltire Prize. What effect do you think this competition, in combination with the marine park, will have on industry?
If you look at history at various other prizes, one of the ones that impressed me most was the Orteig Prize put in place by a French hotel owner to encourage transatlantic airplane flights. Charles Lindbergh won that prize in 1926, at that time $25,000. Nine teams competed, and they invested more than $500,000 in competing for the prize. So if you put up the prize and you achieve interest in a new industry 20 times the value of the prize, that’s a very substantial investment.

And it’s not about winning the prize. No company will build a business plan around a prize. But the prize says, hey, there’s a new industry here, do you want to be part of us? And those who are first in a new industry will also dominate that industry. What led on from Charles Lindbergh’s achievement was a massive airline industry as a result of the innovations from the Orteig Prize. So that to me is the measure I would like to see coming from this.

Creating economies of scale is key for making wave energy take off. The technology has to be up to speed and so does investment. What's your take on where tech and funding are at right now as the industry evolves?
No one has a technology that’s commercially ready today. I think Aquamarine Power, in particular, we have a lot of experience in the ocean. We’ve been working hard on testing the machinery. We’ve been taking it through various trials at the European Marine Energy Centre in Orkney. The result of all that is a huge volume of learning. The other people involved in these technologies, I see them going through a similar path.

So you build a prototype machine—we’ve built a full-scale Oyster machine, which we’re testing—and what you realize is all the things you need to learn more about. We’re talking about a full-scale commercial deployment in the next three years, and beyond that getting it to a point of commercial development. This industry is still at its fledgling stage. We have proven that these machines can generate electricity from the oceans, and now we need to prove that they can do it reliably, and then we need to prove that they can do it commercially.

I would like to think that we could do a precommercial project in 2015, and then start doing commercial projects from 2017 onwards. So that’s the kind of time frame we’re talking about, the next five years. Every time you do it, you learn more and reduce your costs, so we’re increasing the reliability of the machine and reducing the cost as we go through this process. We want to be at a point which makes this technology attractive to project investors, and we want this thing to be adopted on a global scale by utility companies.

How can the private sector be motivated to invest more in the marine renewables industry?
I think we’re slowly coming out of financial crisis. We’ve seen the shut down of a lot of investment across the board. We need to see a world beginning to get confident again in terms of economic growth and prosperity.

The Scottish government [has] a very visible and vocal long-term commitment to the development of this industry, and I think that in its own right is one of the things that is needed and is now in place.

The world has a huge demand for energy, and that is going to continue to grow. What we have been able to demonstrate is that we provide a long-term, completely transparent fixed price for energy generated from renewables. I think that more people will get that over time, and that will help a lot in getting additional private investment.

What’s your wish list for private investment in the next five years to get to commercial viability?
I think we’ve got to divide the investment into two parts. The first phase of investment is associated with investors who are willing to invest in this business to help us complete the development of the technology. Those are more strategic investors who are already playing a role in either the energy sector or the marine sector. So very large companies like Siemens and Rolls-Royce have already acquired technologies which they will integrate into their portfolio. And we begin to see more very large companies that are in the energy space take up positions in the marine energy world. The first type of investor has skills beyond just money, like potentially oil and gas companies.

The second level of investor is willing to invest in projects. Once the technology has gotten to a certain stage of reliability, then it’s about roll out, deployment, installation and operation. We actually have a bit of a queue of investors who are willing to put into that space. Good projects in the renewable energy space are always going to be attractive. We’ve seen people involved in other areas like coal or wind saying, OK, when the technology is ready to be deployed, we’re willing to make investments.

Caption: Aquamarine Power's Oyster 800 wave-energy machine in operation. (Credit: Aquamarine Power)