Pilot: Shipping industry faces massive regulatory change with fuel. Here’s what that means for Hampton Roads

https://pilotonline.com/business/ports-rail/article_ff359592-39d3-11e9-bc4b-b3c229028ad0.html

As is typical, The Pilot frames the story as an opposition between the light of global environmentalism and the darkness of local industry engaged in a dirty business. Basic economics would provide a truer frame.

4 thoughts on “Pilot: Shipping industry faces massive regulatory change with fuel. Here’s what that means for Hampton Roads

  1. Ships can have engines of many different types, from wind-driven sails to atom-driven turbines. Currently, at the intersection of advanced engine engineering and the utility of moving vast cargos over water we find ship engines which burn high-sulfur petroleum. Such engines are — all else being equal — an optimal solution with at least a century’s worth of continual refinement.

    Except for — wait for it — certain externalities which offend the sensibilities of an international political elite that wishes to act on them. An arm of the United Nations has legislatively shifted one or more of the demand curves affecting ship engines so as to enforce a new optimal solution in their design and operation. High-sulfur petroleum is out as a fuel. Industry is obliged to comply.

    Now, one can validly hold any number of opinions on the desirability of the UN’s approach. My bias, for example, is for assuming that natural market forces tend to favor the most efficient exploitation of the laws of physics. But in the framing that basic economics provides, the relevant questions are not nearly as simple as The Pilot story suggests.

    To illustrate: At one period in my life I had occasion to physically crawl inside many marine boilers to measure firebrick for replacement. I can therefore attest that clean boilers are more desirable. But the cleanest-burning boilers by design, including fuel type, were always the ones on Naval warships. And since the fighters are also equipped with life-threatening sonar systems, it is anyone’s guess whether cleaner boilers are ultimately good for the whales.

    Similarly, should less-economical cargo ship engines drive up prices, some lesser number of people will find it convenient to indulge their personal environmentalism, even when it is of the best kind.

    All of which is to say, how you frame a story matters immensely to how readers will understand it.

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  2. “And since the fighters are also equipped with life-threatening sonar systems, it is anyone’s guess whether cleaner boilers are ultimately good for the whales.”

    If the cleaner boilers were on commercial vessels without sonar, of which there are many times as many as our Navy has, then yes. Less carbon dioxide and other pollutants in the ocean waters would keep the acidity levels where marine life has evolved.

    The question is whether shipping is a major pollutant compared to the amount of cargo moved.

    Sort of like comparing trucks and trains.

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  3. “The International Maritime Organization, an arm of the United Nations that oversees international shipping, set the new sulfur limit to 0.5 percent, down from 3.5. It’s not, however, as strict as what ships have to follow when sailing into North America, where limits force them to switch to a 0.1 percent sulfur fuel.”

    I have to admit, it seems unclear what our problem would be. The paragraph seems to say that we are already below the sulfur limits. So what is the big deal?

    Or is that going to be the new standard?

    Another tidbit.

    The article says the cost to the shipping industry would be $12 Billion.

    There are 53,000 commercial vessels in the world.

    That would be about 225,000 per vessel on average. The bigger ships paying more.

    On a container ship, there are about 10,000 containers. Some less and some of the new bigger vessels, double that.

    That is about $22.50 per container. And each container can have hundreds, if not thousands, of consumer products.

    I think we are talking pennies here.

    It seems always that the advocacy numbers are aggregate millions or billions. But when the math is done, the impact is generally small.

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    1. You raise some good points.

      I didn’t elaborate, but combat ship boilers tend to be markedly different from cargo ship boilers. They are vastly smaller, for example, and use a higher grade fuel, because weight and space requirements are more severely constrained within the high performance hull design of a typical fighter. Space for the combat system equipment, berthing and stores means that space for everything else comes at a premium, and you can’t change the hull, not even slightly.

      Thus the naval boiler and the sonar system have an inevitable design connection such that the boiler itself contributes to the ship’s total environmental impact. Or so I had hoped to convey.

      As for the 0.1 percent fuel requirement in North America, I find that puzzling, too. I assume there’s a price difference in the fuels such that ships leaving North America switch to the lower-price fuel on leaving, or just burn the bad stuff on entering until they run out or get caught. The lower sulfur limit internationally might still be useful under those circumstances, but I don’t really know.

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