Lightning rod: Single-hulls like the Valdez still in use.
ExxonMobil criticised on single-hull tankers
On the twentieth anniversary of the ExxonValdez disaster in Alaska, ExxonMobil is drawing fire for continuing to use single-hulled tankers to transport crude.
After 79% of the world supertanker fleet has been replaced by craft with two hulls, ExxonMobil remains the biggest Western user of the older designs, though companies in Asia still use them almost exclusively.
But ExxonMobil hired more of the tankers last year than the rest of the 10 biggest companies by market value combined, according to data compiled by Bloomberg.
ExxonMobil has kept using tankers with one hull even as 151 countries have decided two are better than one for preventing oil spills and pledged to ban single-hull vessels by 2015.
UK supermajor BP says it won’t hire them because of the risk of leaking.
On 6 March, a tanker BP hired, the double-hull SKS Satilla, struck the Ensco 74 jack-up 65 miles from Galveston, Texas, which had been lost during Hurricane Ike.
The incident, which caused “multiple punctures” along a 60-metre (197-foot) by 12-metre section of the ship, didn’t leak any oil, Coast Guard spokesman Tim Tilghman said.
“Because of the double hull, there’s no further penetration, other than the outer skin,” Sverre Jacob Mehn, a spokesman for the ship’s manager, Kristian Gerhard Jebsen Skipsrederi, said in an interview from Bergen, Norway.
US refining rivals, including Pennsylvania-based Sunoco, US supermajors Chevron, ConocoPhillips, Kansas-based Koch Industries, and Paris-based Total didn’t hire one such vessel last year, the data show.
ExxonMobil’s use of single-hull ships compared with its nine biggest competitors is based on more than 12,500 ship-rental deals.
The data were provided by shipbrokers, including Simpson, Spence & Young in London, and shipping-information provider Lloyd’s Register-Fairplay in Redhill, England.
It costs about 20% less to hire a single-hull ship.
ExxonMobil saved an estimated $18 million last year using single-hull vessels, based on the number of times it hired such ships multiplied by last year’s rental rates from Drewry Shipping Consultants and average durations compiled by Bloomberg.
The company made a profit of $45.2 billion, or $8.69 a share, last year, the largest in US corporate history.
ExxonMobil’s estimated savings amounted to less than a cent a share last year, according to Bloomberg calculations.
Hull design is only one of “hundreds of variables” ExxonMobil uses in monitoring safety, and cost isn’t one of them, ExxonMobil spokeman Rob Young told Bloomberg.
He declined to comment on the savings question because it would be an “incorrect characterisation” to say its motivation in hiring the vessels was financial. He also declined to comment on whether double-hulls are intrinsically safer than singles.
ExxonMobil had no oil spills last year and “less than one teaspoon per million barrels carried” in 2007, Young said by e- mail. The company’s shipping units “often exceed regulatory standards to enhance the safety, security and reliability of marine transportation,” he said.
In the aftermath of the Valdez disaster, the US government led a global push to outlaw single-hull vessels. Later accidents involving the Erika off France in 1999, which had been hired by Total, and the Prestige off the Spanish coast in 2002, leased by Crown Resources of Switzerland, increased pressure.
The US, under the Oil Pollution Act of 1990, will allow single-hull tankers to sail in its waters either to unload at the Louisiana Offshore Oil Port or at dedicated unloading areas out at sea until 2015.
The International Maritime Organization, the shipping division of the United Nations, will ban single-hull tankers starting next year.
In deciding to restrict single hulls, the US Congress considered design studies provided to the IMO that found spills from double-hull tankers would be “zero in most accidents,” said Robert Gauvin, Washington-based technical adviser at the US Coast Guard.
“We in the market don’t understand why ExxonMobil continues to do this,” said Per Mansson, a shipbroker at Nor Ocean Stockholm.
The proportion of single-hull supertankers has shrunk to 21% from 100% before Valdez, according to Lloyd’s Register-Fairplay, as shipbuilders stopped making them.
A new double-hull supertanker costs about $126 million, while the last mono-hull carrier to change hands, built in 1994, cost $14 million, according to Oslo-based shipbroker Fearnleys.
ExxonMobil last year arranged to hire at least 32 single-hull very large crude carriers, or VLCCs, tankers slightly bigger than the Exxon Valdez, and one smaller vessel, the data show. That amounted to 6.1% of its overall tanker bookings.
Taking into account vessels ExxonMobil owns and ships it has on long-term rentals, its single-hull rentals are “substantially” lower than 6%, said Young, the company spokesman.
By contrast, supermajor Royal Dutch Shell moved 1.8% of cargoes on single-hull tankers last year, the data show.
All of Shell’s long-term rental tankers have double hulls, spokeswoman Catherine Aitken said by e-mail from The Hague. Sometimes it’s forced to use single-hull carriers because there aren’t enough with two available, she said, adding hull design isn’t a “panacea” for safety.
The combined single-hull rentals by ExxonMobil and Shell are dwarfed by carriers in Asia, including state-run Indian Oil Corporation and refiner Thai Oil. IOC hired single-hull tankers 130 times last year out of 188 recorded rentals, the data show. Bangkok-based Thai Oil booked them 55 times out of 60, commercial manager Pongpun Amornvivat said.
Both companies said they use single-hull ships because of the savings.
“As long as they can be used, we will take advantage of lower rentals,” said Basavaraj Ningappa Bankapur, director of refineries at IOC.