Tanker performance and Annex VI compliance

1. Tanker performance and Annex VI compliance Erik.Ranheim@INTERTANKO.com Manager Research and Projects St. Petersburg 25 November 2008 Vostoc Capital’s The 2nd Annual Fuel trading and Bunkering Conference

2. INTERTANKO • Trade Association for tanker owners • 260 members, 40 countries, 2500 tankers, • 300 Associate Members • ONTERTANK office 25 persons • Representation – IMO, Brussels Washington • Information advisory service • Meeting place • Oslo – London - Washington - Singapore

3. Tanker performance • Safety • Incidents • Pollution • Age • Hull • Emissions/Annex VI

4. Tanker incidents by cause 1978-2006 Number incidents Source: Based on incident reports from Informa

5. Tanker incidents by cause 2006 Source: Based on incident reports from Informa

6. Tanker incidents by size 2006Jan-Nov 236 Source: Based on incident reports from Informa

7. Tanker incidents by age 2006Jan-Nov 236 Source: Based on incident reports from Informa

8. Typical tanker incident • GITTA KOSAN (Isle of Man) • London, Nov 4 -- Following received from Stavanger RCC, timed 0000, UTC: Liquid Petroleum Gas Carrier Gitta Kosan (4086 gt, built 1990), in ballast, drifting due to engine problems about 30 miles south of Stavanger. Salvage tug Kaliningradets about five miles from the casualty. • Gitta Kosan , Class: Bureau Veritas, 4811 Dwt, IMO No: 8817693, P+I Club:Unknown, Contact: TESMA I.O.M. Ltd, Douglas, Isle of Man, phone 44-1624-664095, fax 44-1624-664096, Contact: J. Lauritzen A/S, Copenhagen, Denmark, phone 45--33968000, fax 45--33968001) Source: Based on incident reports from Informa

9. Tanker incidents 2006 • Mainly minor without fatalties, pollution serious damage to property • 40% port (or port entrance) related • 14/236 pollution (mainly very small incidents) • Solar 1, cargo 2000 ts of “industrial fuel”, sunk, the Philippines' “worst-ever” oil spill may have been holed by another vessel while illegally off-loading at sea • HFO 10 time worse than most crude oils

10. Tanker accidents and trade 1000 ts spilt Bn tonne-miles trade Source: ITOPF/Fearnleys

11. Accidental oil pollution from tankers and tanker trade 1000 bn tonne-miles 1000 ts 99.99997% of the oil transported by tankers arrived safely in 1986-2005, when also including operational pollution Source: ITOPF/Fearnleys/INTERTANKO Source: ITOPF/Fearnleys/INTERTANKO

12. Accidental pollution from tankerslargest accidents 1000 ts spilt 4 spills>220,000 ts 6 spills100-144,000 ts 11 spills 50-100,000 ts Source: ITOPF

13. Largest tankers pollution accidents

14. Accidental pollution from tankerslargest accidents and age Number incidents Average age Source: Informa/INTERTANKO

15. Accidental pollution from tankerslargest accidents and age Oil pollution – 1000 ts Average age Source: ITOPF/INTERTANKO

16. Total losses, tankers and bulkers Number Source: Clarkson

17. Tanker phase out SH tankers above 5,000 dwt - m dwt m dwt Source: INTERTANKO

18. Phase out SH tankers 5-29,999 dwt Number Source: INTERTANKO

19. Phase out SH tankers 200,000 dwt + Number ** SH tankers can trade to LOOP and dedicated lightering areas until 2015 Source: INTERTANKO

20. Tanker fleet by hull % Source: INTERTANKO

21. MARPOL Annex VI Air emissions from Ships

22. MARPOL Annex VI Air emissions from Ships Annex VI as from 19 May 2005 • Sulphur cap of 4.5%+ • Sulphur Emission Control Areas – SECAs - Baltic 19 May 2006 – North Sea November 2007, + • Adriatic, US Gulf, Hong Kong area??? • MEPC 53 (July 2005) –Decided Annex VI be revised • Intersessional Meeting (November 13-17 2006)– discussion of key issues and draft proposals • MEPC 56 (July 2007) & MEPC 57 (March 2008) -consider and approve(?) the revised texts • Target date for revision Entry in to Force: 2010

23. MARPOL Annex VI Air emissions from Ships Principles for an INTERTANKO position: • Ensure a solid platform of requirements • Be realistic and feasible • Seek a long term and positive reduction of air emissions from ships • Contribute to a long term and a predictable regulatory regime • provide engine manufacturers with the ability to design new engines that could sensibly meet stricter regulations 100+ refineries to adapt or 50,000 ships?

24. MARPOL ANNEX VI - emissions Requirements for reduced emissions 1 solution: Cleaner fuels (distillates?): • Higher fuel costs but: • Less fuel consumption • Less emissions • Cleaner emissions • Less sludge • No wastes from scrubbers or cleaning • Reduced engine maintenance • Improved safety

25. Marine bunkers • 215 m ts marine bunker per year • 10% to 15% are MDO or MGO, rest • 85-90% blends: between 40/60 or 50/50 distillates/resides, i.e. • total increase in demand of distillate fuels will be not more than some 50% of the total amount of marine fuels used which means: • some 7% in crease in distillate demand if ships change to 100% MDO* (or less as consumption willbe reduced)

26. MARPOL ANNEX VI • Shipping NOT incinerator for refiners • Most important move since ships changed from coal to oil • 1.5% sulphur content is obtainable • Engine manufacturers; technically workable • Reduce human error and safety problems • Corporate responsibility and a precautionary approach to challenges Director Marine Environment division at the IMOcomments to INTERTANKO intiative:

27. Gasoline price at the pump

28. Conclusion Tankers : • Safe • Environmentally friendly • Young • Phasing out according to schedule • Demanding clients • INTERTANKO meets challenges, but No time for complacency Speech available on: http://www.intertanko.com