Thursday, June 22, 2000

Texas announces new spill penalties
Texas Land Commissioner David Dewhurst today announced revised penalty guidelines for oil spills in Texas coastal waters. Beginning August 1, spills less than a gallon will draw fines of $250. Larger spills will draw fines up to $500 plus $250 per barrel of oil spilled. Penalties for failure to report a spill will range from $500 to $25,000 per day.

According to Dewhurst, more than 1,200 oil spills were reported in Texas waters last year. "Most of these were accidents," her said,."caused by the absence of established commonsense procedures, adequate training, or due caution. Many companies were responsible for multiple spills, all of which were easily preventable."

The new guidelines are posted on the Land Office web site,, The guidelines were developed by a task force made up of industry representatives, environmental groups, and GLO staff. "A number of oil transporters who are conscientious about handling oil and reporting spills have said privately that the penalties will help level the playing field with operators who have been less than conscientious," Dewhurst said.

The new scheme also includes incentives. Companies with a "Sound Management Practice Program" will receive reduced assessments when spills occur. "This is not about making money for the state," Dewhurst said. "It's about protecting our beaches, bays, wetlands, and aquatic life. After an appropriate interval we'll sit down with the stakeholders and see how we're doing and what else, if anything, needs to be done."

Under Texas law, oil spills in Texas coastal waters must be reported to the General Land Office. Federal law requires reporting maritime spills to the Coast Guard.

The Land Office operates the state's oil spill prevention response program created by the 1991 Oil Spill Prevention and Response Act. The 56-person staff includes 43 response officers and support staff in five field offices along the coast. The program is paid for by a two-cent per barrel fee on out-of-state oil entering Texas.

(If you're concerned by state-level legislation affecting the operation of tankers, you should take part in our Maritime Legislation, Regulation and Policy conference in Washington, D.C.)

EPA continues crackdown on Alaska cruise ships
Today's Anchorage Daily News reports that the federal EPA has been conducting surprise inspections of cruise ship emissions and found that smoke spewing from the stacks of four cruise ships docked in Juneau appeared to be in violation of federal and state air pollution limits.

"Each ship was informed that their smoke was in excess of what is allowed by the state air quality (law) and the federal Clean Air Act," said John Pavitt, Alaska air quality coordinator for the federal Environmental Protection Agency, according to the Daily News.

The paper quotes Pavitt as saying that the results from the June 10-12 inspections will be reviewed by the EPA's Seattle regional office, which will determine whether air pollution violations occurred and whether to issue citations.

Pavitt told the newspaper he would not name the cruise ships, because the data is still being reviewed, but he did say that all four of the ships were owned by companies that were cited by the EPA last February for air quality violations during the summer of 1999.

Pavitt, who conducted the inspections that led to the February citations, said the amount of smoke observed coming from the ships in the recent checks was "very similar" to the levels that were determined to be violations.

Pavitt is one of the agency's specially trained "smoke readers," who must be recertified every six months. They are trained to judge the opacity of air pollution while the ships are in various positions.

The smoke reader determines the opacity by measuring over time the percentage of landscape that can be seen through the smoke with the naked eye. If nothing can be seen, opacity is considered to be 100 percent. If everything is visible, opacity is zero.

Pavitt said he measured the ships' emissions both while they were in port and during movement to or from the dock.

During the same three days of the June inspection, the EPA received complaints from the public saying the ships at the docks in Juneau were creating a lot of smoke, Pavitt said.

(If you're affected by EPA action on emissions from ships, you should take part in our Maritime Legislation, Regulation and Policy conference in Washington, D.C.)

FGH stock offering will raise $69.7 million
Friede Goldman Halter, Inc. has placed an offering, on a firm commitment, underwritten basis, of 8.75 million shares of its common stock at a price of $8.25 per share. The offering will generate $69.7 million in net proceeds to the company. It will be underwritten by RBC Dominion Securities Corporation as lead manager and Jefferies & Company, Inc. as co-manager.

Frontline in $48.5 million private placement
The board of Frontline has approved a private placement of $48.5 million in equity to a limited number of leading international financial institutions. A total of 4 million shares were issued at NOK 104.50 per share.

The transaction was successfully placed by Fearnley Fonds ASA and Alfred Berg. Part of the proceeds from the private placement will be used to finance the equity investment in the two Suezmaxes Frontline recently bought from Euronav. The remaining part of the proceeds will be used to fund further acquisitions in the modern Suezmax and VLCC market.

Chairman John Fredriksen said: "The strengthening of Frontline's equity combined with the strong operating cashflow we are currently enjoying, puts Frontline in an excellent position to continue to be the driving force in the consolidation of the tanker market. The success of Tankers International and Alliance Chartering confirm that we are on the right track.

"We see several interesting investment opportunities in today's market. Opportunities which would strengthen Frontline's market position further and, most importantly, give a good financial return to our shareholders."

Hampton Roads repairers team to pursue Navy business
Today's Virginian-Pilot reports that he two largest private shipyards in South Hampton Roads have agreed to team up to pursue the larger Navy ship overhauls that they have been unable to compete for on their own.

Norshipco and Metro Machine Corp. announced the teaming agreement Wednesday.

The two Norfolk-based firms will remain independent and will still compete against each other for other Navy ship repair jobs not covered by their teaming arrangement, says the paper.

The target of the teaming arrangement is the Navy's plan to begin modernizing its 27 Ticonderoga-class guided missile cruisers beginning in 2003. While it's not yet clear if the Navy will elect to modernize all 27 warships, each job will be extensive, lasting up to a year.

The teaming will help the two yards compete against yards such as Ingalls Shipbuilding of Mississippi and Bath Iron Works of Maine, both of which built the cruisers, and, perhaps, Newport News Shipbuilding.

"This work is going to be large and complex and might be judged beyond the capability of either one of us individually,'' the newspaper quotes Richard Goldbach, Metro Machine's president, as saying. "By combining we increase our chances of that work being done by us.''

The teaming arrangement, says the newspaper, will also allow more effective and efficient use of the two shipyards' big drydocks, Norshipco's Titan and Metro Machine's Old Dominion, which is currently being repaired in Romania and is scheduled to be back in Norfolk by October. The goal is to put cruiser modification work into the Old Dominion, freeing up the Titan to pursue the large amphibious ships and commercial work such as cruise ships and oil tankers.

While many details remain to be worked out, the arrangement calls for Norshipco to serve as the lead contractor with Metro Machine as a subcontractor.

Swedish stealth corvette launched
Vericor Power Systems announced that the first Swedish Navy Visby-class stealth corvette was recently launched powered by four TF50A marine aeroderivative gas turbines in a Combined Diesel Or Gas (CODOG) turbine configuration.
Vericor Power Systems provided the TF50A propulsion packages that are used as the main propulsion system along with two MTU 16V 2000 N90 diesel engines. Honeywell Engines and Systems in Phoenix, Ariz., manufactured the TF50A gas turbines.

The Visby corvette, also known as the YS 2000 series, was designed and built by Kockums AB at the Karlskrona Shipyard in Sweden. Kockums AB currently has a total of six Visby-class corvettes on order. These are the first stealth vessels in series production.

Vericor Power Systems is a joint company of Honeywell, USA and MTU München, Germany. The company is headquartered near Atlanta, Ga. Vericor Power Systems markets, sells and supports gas turbines, packages and complete turnkey solutions for worldwide cogeneration, mechanical drive and marine propulsion applications in the range from 0.5 to 50 megawatts. Visit Vericor Power Systems on the worldwide web at


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