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CARBON TAX ON BUNKER FUEL
IMO is looking at a global levy (tax) on marine fuels. Do you think this is

a really good idea
an unfortunate necessity
a bad idea
a really bad idea

Marine Log

June 23, 2008

OSG America and Tesoro commit to clean fuel for newbuilds

OSG America, L.P. (NYSE: OSP) has signed an agreement with Tesoro Maritime Company to obtain and comply with ABS environmental safety notations on four Handysize product tankers leased to Tesoro.

The vessels, part of OSG America's series of 12 newbuild product tankers constructed by Aker Philadelphia, are the first in the U.S. to receive the designation, which requires that the main engine burn fuel oil with 3% or less sulfur content, well below the current requirement of 4.5%.

The fuel will be supplied by Tesoro, an independent refiner and marketer of petroleum products that operates seven refineries primarily on the West Coast.

"Across our refining system, we have made investments to produce cleaner burning fuels for our customers," said Everett Lewis, Executive Vice President and Chief Operating Officer for Tesoro Corporation. "We are pleased to provide our transportation partner, OSG America, clean burning fuel for the leased tankers we use to move our crude oils and products."

"OSG America is committed to lessening the environmental footprint of our vessels and our impact on the land, sea and air," said Jonathan P. Whitworth, President and CEO of OSG America. "We are pleased to partner with our long-time customer Tesoro to equip our newbuild product tankers to burn cleaner, more efficient fuel, ultimately reducing our air emissions."

The ABS environmental safety notation requires vessels to be compliant with all International Maritime Organization (IMO), International Convention for the Prevention of Pollution from Ships (MARPOL), and all U.S. and ABS requirements related to environmental operations, equipment and documentation.

The first newbuild tanker to be delivered under time charter to Tesoro with the environmental safety notation will be the Overseas Boston, scheduled to deliver in the first quarter of 2009. Tesoro has time chartered three additional newbuilds from OSG America that will deliver through 2010. The vessels will trade on the West Coast of the United States

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