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 | India plans expansion of cargo facilities at major airports |
September 9, 2010 - AIRPORTS in India handled 1,270,710 tons of international cargo in the 2009-10 fiscal year.
The Airports Authority of India (AAI) is forecasting collective growth at its international and domestic cargo airports of between 10 and 15 per cent in the years until fiscal 2015, taking the 2009-10 results as a base point for comparison.
The authority plans to develop integrated cargo terminals at Port Blair Airport, Srinagar Airport, Surat Airport, Pune Airport, Patna Airport and other small airports, reports India's Economic Times.
The government is implementing various steps to bolster cargo activities, including a plan to expand the New Integrated Cargo terminal (NICT) that became operational in 2008, to cover an area measuring 21,906 square metres with annual capacity of 1.25 lakh tonnes.
Phase III/IV of the New Integrated Cargo terminal in Chennai that is equipped with Elevated transfer Vehicle (ETV) in the export wing and the Automated Storage and Retrieval System (AS & RS) in the Import wing for automated cargo handling operations and usage of space vertically will be expanded.
According to a statement from India's Government Press Information Bureau the following actions have been planned: handling of export cargo by conveyor belts; installation of a scissor lift at the Truck Dock area for handling loose cargo and shipper loaded Unit Load Devices (ULD) for bonded truck operations; and the upgrade of the old NT hub (Net Transaction) for web-based EDI (Electronic data Interexchange) transaction.
At Kolkata Airport, phase one of new integrated cargo terminal is now fully operational with elevated transfer vehicles and automated storage and retrieval systems. Chennai Airport has also prepared its new Integrated Cargo Terminal, which raises its annual cargo handling capacity from 3.5 million tonnes to 5.15 million tonnes. It is estimated that the existing capacity of both airports will be sufficient to meet demand until 2020.
At IGI Airport in Delhi, Dial has entered into a joint venture with Celebi for modernisation of existing integrated brown field cargo and also awarded a concession to Cargo Service Centre for development of a green field cargo operation.
As for Bengaluru International Airport in Devenahalli, where a cargo village has been established for 200 agents and freight forwarders, the vertical storage space will be increased to cater to growing cargo volumes; a mezzanine floor will be added to one of the cargo terminals in future; and cargo transactions will be streamlined through e-trade initiatives and in-house software.
Shipping Gazette
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| Shanghai tops Singapore as world's busiest container port |
September 15, 2010 - AUGUST figures show that Shanghai has surpassed Singapore as the world's busiest container port, reports Paris-based Alphaliner.
"Current trends indicate that Singapore will likely lose its crown as the busiest container port in 2010," said the latest Alphaliner newsletter.
Other observers have long-maintained that Singapore's top box port title contained an artificial element because so much of its cargo is transsshipment, which is counted twice as it arrives on one ship and leaves on another rather than export and export cargo which is only counted once as it enters or departs.
Said Alphaliner: "While Shanghai's monthly volumes have exceeded Singapore's since April, last month's record throughput at Shanghai has brought its year-to-date total above Singapore for the first time."
Shanghai terminals at Waigaoqiao and Yangshan handled 2.63 million TEU in August, a new monthly handling record for the port, bringing Shanghai volume to 19.06 million TEU year to date. And that tops the 19.01 million TEU handled by Singapore during the same period.
Singapore's August volumes came to 2.43 million TEU, four per cent below the 2.52 million TEU lifted in July. Signs of a slowdown can be detected from Singapore figures.
Shipping Gazette
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BDP Oil & Gas Logistics: Receives ISO certification | |
BDP Oil & Gas Logistics is awarded ISO certification to demonstrate its commitment to environmental protection management
September 7, 2010 - BDP Oil & Gas Logistics has been awarded the International Organization for Standardization (ISO) Certification which validates its commitment to the highest standards of environmental management.
BDP Oil & Gas had a goal of achieving the ISO accreditation to demonstrate to its customers and the public the company's commitment to the highest standards of environmental protection.
BDP Oil & Gas Logistics is a subsidiary of BDP International, one of the leading privately held freight logistics and transportation firms in the world. BDP International is a well-known industry leader in the chemical and petrochemical sector. The company has an extensive client list of leading energy companies, such as Shell, Exxon Mobile, DuPont and Dow Chemicals.
Mr. Martin Runshaug, Commercial Director of BDP Oil & Gas Logistics, said environmental awareness among BDP Oil & Gas Logistics' clients has never been higher.
"With this new ISO Certification, we can demonstrate that our environmental management systems are world class. Increasingly our clients are not just looking for efficient and cost-effective solutions. They want to know that the impact their businesses have on the environment is managed in a professional and responsible manner."
"BDP is at the forefront of our industry in adopting and promoting good environmental practices. This ISO Certification is recognition of the policies we have in place to care for the environment at all levels of our operations."
"BDP Oil & Gas Logistics continually examines each area of its operations to see how we can reduce the environmental impact we have and introduce systems that protect the natural environment," Mr. Runshuang said.
To obtain ISO certification, the company completed a detailed assessment of each of its activities and the environmental effects, including waste reduction, energy consumption reduction, material consumption and its interaction with regulators, customers and the public.
BPD Oil and Gas Logistics received the ISO Certification in Occupational Health and Safety, Quality and the Environment.
Andrea Marino
Energy Digital
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Japan, India to sign FTA | |
September 9, 2010 - TOKYO - ASIAN economic powers Japan and India broadly agreed on Thursday on a free trade deal that aims to reduce most tariffs between the two nations in a decade, Japanese foreign minister Katsuya Okada said.
The two countries will iron out details before officially signing the pact when Indian Prime Minister Manmohan Singh visits Japan, probably in Oct, Mr Okada told reporters.
'We hope that this agreement will dramatically enhance the economic relationship of our two nations,' he said, adding that the two countries' trade ties had much more room for growth.
The deal comes as Japan continues to seek ways to benefit from robust Asian economies, including rapidly expanding India and China. Japan already has economic partnership agreements with 10 nations and one region - including Singapore, Mexico and the Association of Southeast Asian Nations (ASEAN).
Under the deal with India, Tokyo will cut 90 per cent of its tariffs on Indian products shipped to Japan over the next decade, Mr Okada said.
India will abolish 97 per cent of tariffs on Japanese products during the same period, he said, adding that the deal was likely to cover reduced tariffs for Japanese auto parts, as Japan has long demanded.
AFP
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Report: September volume to grow 16% | |
September 8, 2010 - Import cargo volume at the nation's major retail container ports is expected to rise 16 percent in September over the same month last year, but 2010 has already hit its peak and numbers will decline through the rest of the year, according to the monthly Global Port Tracker report released Tuesday by the National Retail Federation and Hackett Associates.
"Retailers have stocked up early on much of their holiday merchandise in order to avoid some of the supply chain disruptions seen earlier in the year," said Jonathan Gold, NRF vice president for supply chain and customs policy. "Cargo is still coming in, but the key question for sales will be what happens with employment and other factors that affect consumer confidence this fall. Retailers are hoping they've hit the right balance of supply and demand."
The first half of 2010 was estimated at 6.9 million TEUs, up 17 percent from the same period last year. The full year is forecast at 14.5 million TEUs, which would be up 15 percent from the 12.7 million TEUs in 2009, which was the lowest since the 12.5 million TEUs reported in 2003. The 2010 number remains below the 15.2 million TEUs seen in 2008 and the peak of 16.5 million TEUs in 2007.
U.S. ports handled 1.38 million TEUs in July, up 5 percent from June and 25 percent from July 2009. It was the eighth month in a row to show a year-over-year improvement after December broke a 28-month streak of year-over-year declines.
Monthly forecasts through January 2011 are:
· August, 1.35 million TEUs, a 17 percent increase over last year.
· September, 1.32 million TEUs, up 16 percent.
· October, 1.3 million TEUs, up 9 percent.
· November, 1.2 million TEUs, up 11 percent.
· December, 1.11 million TEUs, up 2 percent.
January 2011, 1.06 million TEU, down 2 percent.
"While October is the traditional peak month of the annual shipping season as retailers bring in merchandise for the holiday season, July's figures appear likely to stand as the peak for 2010," Global Port Tracker said. "The shift was mostly due to backlogs built up due to the lack of shipping capacity earlier in the year after ship owners took vessels out of service during the recession."
"There is sufficient evidence to suggest that importers anticipated the peak season and bought early, partly as a result of a fear of lack of capacity and containers, but also as a means to avoid the hefty peak season surcharges announced by all the carriers," Hackett Associates founder Ben Hackett said. "We remain cautious about growth over the next 12 months. The good news is that the influx of new capacity will continue to put downward pressure on freight rates."
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Another accident holds up operations at JNPT | |
September 15, 2010 - Another accident at India's largest container port, Jawaharlal Nehru Port Trust (JNPT), has held up ship movement at one of its six berths for the past 10 days and caused huge losses, reported the Mint.
Lahore Express, a ship owned by Hapag-Lloyd, suspended operations on 6 September after two 20ft containers fell on its fuel tank while being hauled out and contaminated other containers.
The accident occurred because the port operator mistook the size of the containers to be 40ft each while lifting them, representatives of shipping lines at JNPT said.
The operator locked the four sides of the containers with a crane, but they fell as the middle part was not locked.
"This ruptured the oil tank and contaminated the remaining containers on the vessel. Though there was no oil spill externally, the master refused to sail (saying) the ship was not seaworthy," said a representative of a foreign shipping line awaiting its berth at the port. He did not want to be named.
N.N. Kumar, deputy chairman of JNPT, called the accident a routine problem. "These kinds of things happen in port operations. The ship will sail out once it is seaworthy," he said, without elaborating.
Another executive said an internal inquiry is being initiated and Lahore Express is likely to sail out on 15 September.
The port would have lost at least US$270,000 in vessel-related charges and $1.5 million in cargo-related charges due to the accident, two maritime consultants with shipping companies said, asking not to be named.
In addition, 10 ships are waiting outside the port for their turn to unload and load cargo.
"Monsoon plays havoc at the port, creating congestion. This (accident) has added to the container backlog. At least 45,595 20ft containers are piled up at the yards," said one of the consultants.
There was a similar accident in March, when a crane smashed into a vessel while moving. "Though inquiries were there, no one was charge-sheeted," the first JNPT executive said.
On 7 August, operations at JNPT and neighbouring Mumbai Port Trust (MPT) were suspended for more than a week after a collision between MSC Chitra, a container ship operated by Mediterranean Shipping Co and Khalijia, a commodity carrier owned by Gulf Rocks Co.
Some containers fell into the shipping channel used by both JNPT and MPT, forcing operations to be suspended and causing losses worth several crores of rupees to both ports.
Cargonews Asia
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Spain Plans Rail Modernization | |
Near $10 billion project to double cargo volume in 10 years
September 15, 2010 - The Spanish government unveiled a $9.75 billion investment plan to modernize the nation's rail freight network and more than double rail cargo traffic by 2020.
Around $3.25 billion will be spent creating a network of logistics terminals and upgrading the rail infrastructure.
An additional $3.65 billion will finance increased electrification of rail tracks to enable freight trains of 2,475 feet in length to travel across the network.
The rail network will be connected to the nation's seaports at a cost of $2.3 billion.
The government also wants to take advantage of new high speed rail networks to carry cargo, including a track from Barcelona to the French border due for completion in 2012.
The aim of the plan is to establish Spain as an international logistics platform and the gateway for Europe's exports and imports, development minister Jose Blanco said.
Rail's share of Spain's cargo traffic has shrunk from 10 percent in 1997 to just over 4 percent in 2010, compared with 22.2 percent in Germany and 15.9 percent in France.
The government wants to boost rail's share to between 8 percent and 10 percent by 2020.
The plan also foresees greater market deregulation to increase competition to state-owned rail operator Renfe, which accounts for three quarters of domestic rail freight tonnage.
France launched an $10.3 billion 10-year investment in late 2009 to modernize rail infrastructure, including the creation of cargo corridors and high speed freight services modeled on the highly successful TGV passenger network.
The Journal of Commerce
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Montreal Dockworkers Said Likely to Ratify Agreement | |
Union president says members sure to accept pact with pay, benefit hikes
September 13, 2010 - Longshore workers at the Port of Montreal reached a tentative agreement with employers Friday. The head of the union says members are sure to ratify it.
The Maritime Employers Association at the Port of Montreal reached the agreement under federal mediation with Canada's largest union Canadian Union of Public Employees.
The roughly 900 longshoremen locked out for five days in July will vote on the agreement on Sept. 23, and "they will accept it, for sure," Daniel Tremblay, president of CUPE Local 375, said in an interview Monday.
The agreement runs retroactively from January 2009 until Dec. 31, 2012.
It gives the longshore workers pay increases of 1.5 percent for the retroactive year, 2 percent for 2010 and 2011 and 2.5 percent for 2012, Tremblay said.
The number of longshore workers will be reduced by 50 through retirement this year as a means of meeting the essential concern of the MEA that costs of providing job security for workers had been too high. In another cost reduction, the guaranteed hours of work for 55 employees have been reduced to 36 hours a week from 40.
The practice of paying workers to remain on standby for late or early-hours' loading and unloading of ships will remain unchanged, with these exceptions, Tremblay said.
The agreement says that two years from now there may be a further decrease in guaranteed hours paid for some workers, to 32 hours for new union members.
The MEA also agreed to help the union with its pension fund deficit. Employer spokesman Steve Flanagan has told the media that the agreement is "based on profitability at the port."
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US, China agree to ease shipping constraints | |
September 13, 2010 - Chinese maritime officials have agreed to work more closely with the United States to handle issues that could slow American efforts to boost exports, but poor U.S. port facilities must also be improved, an official said Friday.
The two sides agreed to open a dialogue about differences in regulations and other issues affecting maritime shipping, which accounts for more than 90 percent of all U.S. trade, U.S. Federal Maritime Commission Chairman Richard A. Lidinsky said.
Differences over administrative and regulatory requirements and charges were among the issues Lidinsky said he raised with his hosts.
While he was encouraged by those meetings, he said recent advances at Asian ports, some of the world's largest and most modern, were daunting.
He said aging U.S. facilities must be upgraded to meet President Barack Obama's goal of doubling American exports in the next five years.
"The infrastructure we see out here to support world trade is absolutely amazing," Lidinsky said. "You can sit in the U.S. and talk about it. But seeing it brings home the effort we have to bring to balance the supply chain. For our country, it's a vital goal to meet."
Ship owners lost a combined $20 billion in 2009, their worst year ever, and might have lost more if they had not withdrawn about 600 container vessels from service, in effect driving rates higher. In the meantime, container makers, mostly located in China, cut back sharply on output as trade slumped in 2008 and are hard pressed now to keep up with demand.
The massive reductions and other moves by ocean shippers raised complaints, leading the Federal Maritime Commission and European authorities to investigate.
Under a 1916 U.S. law, shippers are allowed "antitrust immunity" to collaborate in setting rates but not in controlling capacity. The law was meant to enable shippers to keep fees high enough to entice European carriers to increase services to the U.S. Ending that immunity is among reforms proposed in Congress.
The Europeans ended similar policies of their own two years ago. But the reform has a ways to go before it will be enacted in the U.S., Lidinsky said.
"It's a long shot to get it through in this session," he said.
The Associated Press
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Greece gripped by new wave of protests | |
September 14, 2010 - ATHENS, Greece -- Truck owners parked hundreds of vehicles along major highways on Monday (September 13th) to protest government plans to open their sector to greater competition. The action caused long queues at gas stations across the country, as motorists feared they may face another fuel shortage similar to the one in July, when a similar protest was held. Back then, the government intervened, requiring fuel truckers to end the protest. Since that remains in force, drivers cannot actually declare a strike. Their union said they will hold daily protests instead.
Meanwhile, state railway workers launch a 24-hour strike Tuesday against planned salary and staff cuts in their sector. Prime Minister George Papandreou said on Monday he sympathises with the protestors. "Of course we don't want violence and we need ... to keep this dialogue going so that people feel that we're working together to solve this problem," Papandreou told a conference in Oslo hosted by the IMF and the International Labour Organisation. .
The Southeast Europe News
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| Shipper Groups Merge to Push Heavier Trucks | |
Backers of House, Senate bills that would lift truck weight limit join forces
September 14, 2010 - Two shipper and trucking groups are merging to marshal their efforts to raise heavy truck weight limits to 97,000 pounds through legislative action on Capitol Hill.
Americans for Safe & Efficient Transportation is joining the Coalition for Transportation Productivity, delivering about 40 new members to the CTP.
With ASET in its fold, the CTP will have more than 160 shippers and allied associations as members, including manufacturers such as Archer Daniels Midland, Kraft Foods, Georgia Pacific, Owens Corning and American Gypsum.
ASET and the CTP will combine management, with CTP's John Runyan remaining as executive director. ASET's long-time executive director Jake Jacoby will leave the organization to join the Truck Renting & Leasing Association as vice president.
Both groups support the Safe and Efficient Transportation Act, which would thaw a freeze on heavy truck size and weight limits Congress enacted in 1991.
"Our united effort, combined with strong bipartisan support in the House and Senate, positions SETA to finally move forward in the next Congress," said Walter Bay, Chairman of ASET and President and CEO of Tandem Transport.
SETA, introduced in both the House and Senate, would allow states to raise the weight limit to 97,000 pounds for trucks with six axles rather than five.
But the bill faces a steep uphill haul. Highway safety advocates oppose lifting the 80,000-pound weight limit for tractor-trailers, fearing it would lead to more crashes.
Concerned about the cost of potential road damage and safety issues, some local governments also oppose allowing heavier or longer trucks on highways.
The National Association of Counties passed a resolution opposing any attempt to lift truck weight or length limits at its annual conference in August.
"NaCo strongly opposes any legislation that seeks to increase truck size or weight beyond the capacity of our current road systems," NaCo President Glen Whitley said.
Past efforts to raise truck weight limits have failed, but manufacturers, retailers and truckers are renewing their bid, claiming bigger trucks can be "greener" trucks.
The CTP claims raising the weight limit by 17,000 pounds would allow shippers to reduce the number of trucks needed to ship goods by filling trailers more efficiently.
Bigger but fewer trucks would also consume less fuel and produce fewer emissions, the CTP says, and would result in fewer miles traveled for each ton shipped.
The Journal of Commerce
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| ECHA Invites Companies to Get Ready and Notify in Time |
September 15, 2010 - The EU Regulation on Classification, Labelling and Packaging (CLP) places new legal obligations on chemical companies operating in the EU market. By 1 December 2010, they are required to classify and label their hazardous substances according to the CLP rules.
Industry has to notify the classification and labelling of substances placed on the market to a central database, called the Classification & Labelling Inventory. The database is established and maintained by ECHA. The first deadline for notification is3 January 2011. Key information from this Classification and Labelling Inventory will also be made publicly available on ECHA's website. Confidential business information will not be disclosed to the public.
The European Chemicals Agency estimates that the number of CLP notifications will be in the millions and advises companies preparing for CLP to notify in time. ECHA and national helpdesks in all countries of the European Economic Area are ready to support industry and especially SMEs to comply with their new obligations.
The notification is free of charge and the different IT submission tools are in place. The3 January 2011notification deadline applies to all substances that are placed on the market on1 December 2010, regardless of their volume.
Under the CLP Regulation, hazard information will be made available on the labels of substances and mixtures. Pictograms, signal words, hazard statements and precautionary statements will allow manufacturers, importers, downstream users and distributors to easily share information on the hazards of substances and mixtures.
This EU Regulation on Classification, Labelling and Packaging will help to ensure a high level of protection of human health and the environment from the hazards of chemicals used at home and at work. The CLP Regulation is based on the United Nations Globally Harmonized System of Classification and Labelling (UN GHS). The worldwide standardisation will facilitate trade between the EU and non EU countries by enabling exporters to use the same description of hazards in their home country and the country they export to.
Chemie Germany
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| LA-Long Beach August Imports Surge 23.9 Percent |
Southern California ports show peak still cresting with advance from July
Septemeber 15, 2010 - Combined imports into the ports of Los Angeles and Long Beach grew 23.9 percent in August over the same month a year ago, and the ports defied analyst forecasts of a slowdown by reporting their strongest volume of the year, according to port figures released this week.
Containerized imports in Los Angeles were up 23.3 percent compared to August 2009 and neighboring Long Beach saw imports increase 24.5 percent over the same month last year.
Both ports signaled the import growth momentum was not slowing down: Los Angeles in August recorded its highest volume of imports for 2010, with imports 8 percent higher than in July. Long Beach's imports in August were 6 percent higher than in July 2010.
Industry analysts had predicted the peak shipping season had already crested in July, saying retailers shipped early this year and would rein in restocking without stronger improvement in the broader U.S. economy. Since the Southern California ports handle almost 40 percent of U.S. imports, it appears July will not be the peak month for U.S. imports, however.
The strong volume figures from Los Angeles and Long Beach follow a U.S. Commerce Department report this week that showed retail sales increased 0.4 percent, the second straight monthly gain and the strongest month-to-month increase in five months. Excluding weak auto sales, which were weak, consumer spending increased 0.6 percent, or twice what economist had predicted, on better back-to-school sales.
Journal of Commerce
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| US demand for pharmaceutical packaging to grow 5.5% pa through 2014 | |
September 14, 2010 - Demand for pharmaceutical packaging in the US (including Puerto Rico) will increase 5.5 percent annually to US$18.4 bln in 2014. Recently upgraded regulations and standards that address such issues as barrier protection, infection control, patient drug compliance, drug dispensing errors, and drug diversion and counterfeiting will underlie growth. An increased focus on these issues will boost demand for high value added containers and accessories, including enhanced barrier plastic bottles, calendar and wallet blister packaging, prefillable syringes and inhalers, track and trace and authentication labels, and unit dose pouches.
Demand for primary pharmaceutical containers will increase 5.3% pa through 2014. The fastest growth is anticipated for prefillable syringes and vials, which will expand applications as advances in biotechnology lead to new therapies that must be injected. In spite of below average growth, plastic bottles will remain the most widely used package for oral drugs distributed in bulk and prescription dose volumes to retail and mail order pharmacies. Plastic bottles will also continue to dominate applications in OTC medicines sold in tablet and capsule quantities over 50.
Pharmaceutical blister packaging will sustain favorable growth based on its adaptability to unit dose formats with expanded label content, high visibility, and built-in track and trace features. The market for pharmaceutical pouches will expand at a fast pace, spurred by increasing applications in the unit dose packaging of transdermal patches, powders for reconstitution, and topical creams and ointments.
Prefillable inhalers will command strong growth opportunities as the number of chronic asthma, allergy and migraine patients treated with inhalation drugs rises. Ongoing improvements in aesthetic and barrier properties will keep tubes a leading primary container for topical medication.
Among pharmaceutical packaging accessories, demand for closures will grow 5.5% pa through 2014. Vial stoppers, syringe tips and plastic flip top vial closures will register the fastest growth as injectable bioengineered drugs broaden emergency care and chronic disease indications. Twist and turn child resistant caps will remain the top closures for oral and liquid drug containers, but will lose growth momentum as blister packs and pouches penetrate unit dose applications.
Plastic dispensing closures will fare much better among drug makers based on ease of use and convenience in the delivery of liquid medicines and lotions. Due to marketing and security benefits, paperboard boxes will lead sales of secondary pharmaceutical containers. Demand for prescription vials will increase slowly as ethical medicines are adapted to prescription dose bottles and blister packs for direct dispensing. Due to trends toward smaller-sized pharmaceutical shipments, shipping cartons will post faster growth opportunities among drug makers than corrugated shipping boxes.
Demand value recorded by pharmaceutical labels will advance rapidly as drug makers change to higher value-added types to meet pedigree regulations for combating drug counterfeiting. Demand for other packaging accessories, including shrink wrap and bands, tamper evident seals, desiccants and packaging materials, will expand with increases in pharmaceutical shipments.
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| Beijing, Seoul clinch box deal |
September 10, 2010 - CHINA and South Korea have agreed to permit loaded semi-trailers to be shipped between them, which will speed trade in time-sensitive freight.
The agreement should cut overall transport time by 3.5 hours and reduce costs by $50 per container, China's government-run Xinhua news agency reported.
Shippers of fresh produce, glass and electronics will be the main beneficiaries. Starting next year, trailers will be driven directly to customers after arrival at port, without the need for another prime mover for boxes.
Ports expected to be involved include Qingdao, Rizhao, Yantai, Wei Hai, Longyan and Shidao in China and the South Korean ports of Incheon, Pyongtaek and Kunsan.
The deal could be expanded to include ports in Liaoning province on the Bohai Sea, which separates China from South Korea.
Ports-online
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Principles of safety policy under review after oil spill N | |
September 9, 2010 -- The Deepwater Horizon semisubmersible explosion and subsequent Gulf of Mexico oil spill have prompted a worldwide review of industry practices and regulatory structures.
Principles of regulation are being examined while oil companies, consultants, and lawmakers work toward improved management and regulations for potentially hazardous offshore activities.
The effectiveness of US regulations that require very specific, minimum safety standards is being questioned. Some observers say minimum standards allow companies to hide behind the letter of the law instead of working to protect workers and the environment through self-regulation.
Det Norske Veritas suggests the US government reduce its reliance on specific deepwater safety regulations and instead focus on performance-based regulations that require companies to implement risk-management plans for specific projects.
Performance-based regulations allow companies to determine the best way to achieve safety targets, said DNV, an independent risk management foundation that released a position paper Sept. 3 after the Norwegian Oil Industry Association requested a comparison of US and Norwegian offshore regulations.
"The operator needs to take full responsibility for risk management," said Peter Bjerager, DNV Energy North America senior vice-president and director of operations. DNV's position paper is entitled "An effective US offshore safety regime."
Separately, the Energy Policy Research Foundation Inc. in Washington, DC, said the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling might be inclined to suggest very prescriptive provisions on how offshore operations should be conducted to prevent accidents.
"While such an approach is politically appealing, it may not lead to a higher level of safety," EPRINC said in a June memorandum. "Offshore exploration technology is advancing at a rapid pace. Alternative regulatory regimes, such as safety cases, should be given careful review."
Governments in the UK and elsewhere use a safety-case system in which each project receives individual review.
"The US historically has resisted the safety-case system, but that may be changing," EPRINC Pres. Lucian Pugliaresi told OGJ. He said regulations that reward a strong safety culture are likely to yield better long-term results than specific regulations, which are quickly outdated by technological advances.
Regulation structures vary
In its study, DNV noted US and Norwegian regulations differ, saying the US has "prescriptive regulations" that specify minimum actions required for compliance while Norway's regulations are performance-based, allowing companies to determine best approaches case by case.
Prescriptive regulations set the lowest acceptable safety level, leaving regulatory agencies with the greatest sense of responsibility to confirm compliance, DNV said. Performance-based regulations provide for continuous technological advances by placing responsibility with the owner or operator.
"In Norway, it is the overall responsibility of the operator to ensure safe and prudent operation of the entire petroleum activities in line with the regulations. In the US, this responsibility is shared between the operator and the authorities through prescriptive requirements and authority approvals," DNV said.
Norwegian regulations are mainly risk-based while US regulations do not require participants in offshore drilling activities to systematically identify and mitigate risk, the position paper said. Also, Norway separates the authority for resource management and health, safety, and environment management, while the same authority traditionally has handled both in the US.
Elisabeth Torstad, chief operating officer of DNV Americas and sub-Saharan Africa, said DNV recommends a risk-management approach as the basis for a revised US regulatory regime to improve the safety of offshore exploration and production.
"It will also meet the public expectations for assessment of all risks, as well as accommodate further development in safety and environmental protection," Torstad said. She believes risk-management tactics could reduce the risk of major accidents tenfold.
DNV contends that an efficient regime must possess the following characteristics:
· Performance-based supplemented by prescriptive regulation.
· Consideration of technology, organization, and people.
· Clear roles and responsibilities.
· Enforced identification, reduction, and control of risks.
· Shared performance monitoring.
· Practical and economically feasibile.
· Balance between risk, control, and operations.
DNV said the most effective model is based on a performance-based regulation requiring safety cases and supplemented by prescriptive regulation for selected areas. American Petroleum Institute standards and class societies such as DNV Offshore Codes could contribute to government prescriptive regulations.
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