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INTRODUCTION

A key challenge of the 1990s for the marine industry—and for all who have an interest in marine transportation and protection of the marine environment—is to sustain a level of salvage capability that ensures effective response to marine casualties posing a risk to the environment and to waterborne commerce. The marine and salvage industries and governments must ensure that this capability exists and is sustained over time.

Salvage in the United States in the 1990s is shaped by trends in environmental protection and related local, national, and international legislation, as well as by changes in the marine salvage business over the past 20 years. The traditional role of the salvor has been to save a distressed ship, her cargo, and sometimes the lives of the crew. This role has changed with growing public concern for the environment. Presently, particularly in those casualties involving a ship carrying a potentially polluting cargo, salving the ship and cargo has become secondary to preventing or minimizing environmental damage. In other cases, where an accident occurs in a busy waterway and leads to closure of a port, the economic pressure for continued port operation tends to supersede concern over the value of the ship and cargo. In addition, private demand for salvage services has fallen, due to a declining number of vessel accidents requiring salvage (NRC, 1991; Tecnitas, 1992) and a trend among ship operators to employ nondedicated equipment and personnel to respond to marine casualties.

The shipping world—including shipowners, operators, cargo owners, and underwriters—uses the term "salvage" to describe all services rendered to save property from marine peril. This broad definition encompasses not only actions undertaken to save the vessel or cargo, but also wreck removal, harbor clearance, and deep search and recovery. Salvage includes:

  • Providing firefighting assistance.

  • Refloating a vessel from a stranding.

  • Offloading cargo or water to prevent foundering, or removing sound cargo from impending peril.

  • Shoring, patching, and making any temporary repairs to correct structural, stability, or mechanical problems.

  • Rescue towing of an incapacitated vessel to a safe haven.

  • Preventing pollution.

Such salvage operations are often time-critical in that success depends on timely action by experienced personnel and organizations.

A 1982 National Research Council (NRC) report entitled Marine Salvage in the United States (NRC, 1982) identified trends that redefined the salvage industry in the 1980s. Those trends included increasing vessel size, mounting complexity in cargo



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A Reassessment of the Marine Salvage Posture of the United States 1 INTRODUCTION A key challenge of the 1990s for the marine industry—and for all who have an interest in marine transportation and protection of the marine environment—is to sustain a level of salvage capability that ensures effective response to marine casualties posing a risk to the environment and to waterborne commerce. The marine and salvage industries and governments must ensure that this capability exists and is sustained over time. Salvage in the United States in the 1990s is shaped by trends in environmental protection and related local, national, and international legislation, as well as by changes in the marine salvage business over the past 20 years. The traditional role of the salvor has been to save a distressed ship, her cargo, and sometimes the lives of the crew. This role has changed with growing public concern for the environment. Presently, particularly in those casualties involving a ship carrying a potentially polluting cargo, salving the ship and cargo has become secondary to preventing or minimizing environmental damage. In other cases, where an accident occurs in a busy waterway and leads to closure of a port, the economic pressure for continued port operation tends to supersede concern over the value of the ship and cargo. In addition, private demand for salvage services has fallen, due to a declining number of vessel accidents requiring salvage (NRC, 1991; Tecnitas, 1992) and a trend among ship operators to employ nondedicated equipment and personnel to respond to marine casualties. The shipping world—including shipowners, operators, cargo owners, and underwriters—uses the term "salvage" to describe all services rendered to save property from marine peril. This broad definition encompasses not only actions undertaken to save the vessel or cargo, but also wreck removal, harbor clearance, and deep search and recovery. Salvage includes: Providing firefighting assistance. Refloating a vessel from a stranding. Offloading cargo or water to prevent foundering, or removing sound cargo from impending peril. Shoring, patching, and making any temporary repairs to correct structural, stability, or mechanical problems. Rescue towing of an incapacitated vessel to a safe haven. Preventing pollution. Such salvage operations are often time-critical in that success depends on timely action by experienced personnel and organizations. A 1982 National Research Council (NRC) report entitled Marine Salvage in the United States (NRC, 1982) identified trends that redefined the salvage industry in the 1980s. Those trends included increasing vessel size, mounting complexity in cargo

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A Reassessment of the Marine Salvage Posture of the United States shipping and handling operations, increased carriage of hazardous cargoes, growing public and political interest in marine pollution, rising liability for spills of oil and other hazardous cargoes, shrinking traditional salvage capability, and development of new technology—including fly-away salvage equipment packages.1 All these trends have continued. In 1992, the Salvage Working Group, an industry organization representing salvors, shipowners, underwriters, and other interested parties, commissioned the Tecnitas Division of Bureau Veritas to study global salvage capacity and current levels of demand for salvage services and to examine how the relationship between demand and resources may change in the years ahead (Tecnitas, 1992). The study concluded that international salvage resources are in serious decline. This decline is primarily due to: A drop in the number of marine casualties over the past decade, the effects of which were masked in the mid-1980s by the Iran-Iraq War. A falling level of remuneration for salvors, to the point where the return is inadequate to support dedicated salvage capability. Fierce competition for salvage work from nondedicated2. resources, aggravated by the search for low-cost salvage services by shipowners, insurers, and protection and indemnity (P&I) clubs. Growing environmental concerns and increased liability for environmental damages have stimulated interest among vessel owners in seeing successful salvage carried out, thereby preventing uncontrolled releases of cargoes of fuel oil, crude oil, or hazardous materials. Environmental concerns also have stimulated greater public interest in salvage operations and have prompted some countries to become more involved in ensuring available salvage capability. Over the past ten years, interest in controlling the public consequences of casualties increasingly has overshadowed private concern for saving hulls and cargoes. However, compensation for salvors' efforts to avert or minimize pollution is only beginning to be integrated into the payment structure. The future need for salvage services is related to the future risk of vessel accidents. Several factors can be expected to affect the future accident rate. On the negative side, low freight rates, brought about by the downturn in the world economy and overtonnaged markets, have put shipowners under financial pressure, which can lead to a lowering of maintenance and crewing standards. Indeed, some owners have succumbed to this pressure. Compounding this problem is the aging of the world fleet, a trend that heightens the need for maintenance. On the positive side, the problems have been recognized by governments and private industry, which have responded with initiatives designed to prevent a reversal of the trend of declining marine transportation system accident rates. The Oil Pollution Act of 1990 (OPA 90, P.L. 101-380) in the United States and Regulations 13F and 13G of MARPOL 73/78 Annex I from the International Maritime Organization (IMO) require the removal of older tank vessels from the world market on a fixed time schedule and major structural changes, such as double hulls, for replacement vessels. These laws also mandate enhanced maintenance and inspection procedures. In addition to legislative efforts, segments of the oil industry, the tanker industry, and the classification societies have taken steps to improve tank vessel quality. This is a 1   Fly-away packages consist of specialized equipment, such as firefighting gear, diving systems, or pumps. This equipment is packaged and designed to be shipped on an airplane from storage locations to required destinations. 2   Nondedicated resources are those used in applications other than marine salvage, but which can be substituted and/or utilized in a marine casualty response.

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A Reassessment of the Marine Salvage Posture of the United States worldwide effort, but in the United States the liability regime and the resulting financial risk involved in using substandard vessels have led to a redoubling of efforts to improve marine safety. U.S. initiatives have, to date, been directed at the tanker industry. Passenger and dry cargo ships, however, are at equal risk, and carry significant quantities of fuel oil and, at times, potentially polluting hazardous cargoes. All vessels carry crew, and the protection of life at sea is of primary importance. Vessel construction and operational procedures in these domains have yet to undergo the type of rigorous review that the tanker industry has undergone. THE IMPORTANCE OF SALVAGE IN PREVENTING MARINE POLLUTION Oil spills from vessels in distress can result in severe economic and environmental damage. Vessels that incur structural damage, are involved in collisions, or are stranded pose a risk of pollution due to loss of cargo or fuel oil. The discharge of potentially polluting cargoes such as oil, chemicals, and even otherwise nonhazardous materials, such as edible oils and other nutrients, can have adverse effects on the marine environment. These effects may vary widely from incident to incident. The nature of the substance spilled, the location of the accident, and weather conditions at the time are among the most important factors in determining the seriousness of the event (Engelhardt, 1994). Among potentially polluting cargoes lost in shipping accidents, oil and its products are by far the most common. Over the past 20 years, extensive research has been directed at understanding the effects of oil spills and factors that govern the environmental consequences of a given incident (NRC, 1985). Certain refined products, such as diesel oil and gasoline, generally are more toxic than crude oils, on a volume-for-volume basis, in that they contain a higher concentration of lighter aromatic hydrocarbons. The aromatic components of oil pose the greatest potential of acute toxicity to both plants and animals and cause a variety of sublethal effects, including impairment of reproduction, physiological stress, and reduced growth rates. However, light products generally evaporate, dissolve, and otherwise disperse much more readily in the environment than do heavier oils, which have greater smothering potential and are more difficult to clean up. A wide variety of chemical products other than oil are spilled every year in U.S. waters. Sulfuric acid and ammonia generally top the list because they are shipped in high volumes. Spills of these substances have been associated with major fish kills in localized areas. Less common, but more toxic and more persistent substances have caused prolonged restrictions on fishing and even lengthy closures of important waterways to ship traffic. Occasionally, spills of seemingly innocuous products, such as fertilizers, have upset the delicate nutrient balance in enclosed estuaries and bays, resulting in severe short-term damage. Historically, spill response has not been very effective. Only 10 to 15 percent of oil typically is recovered following a spill (Office of Technology Assessment [OTA], 1990). Hazardous chemicals pose a particularly difficult challenge. The Chemical Manufacturers Association (CMA) recently concluded that the capability to respond to a chemical spill of any significant magnitude in the sea does not exist anywhere in the United States (CMA, 1992). Salvage operations help prevent pollution by providing assistance to a damaged or stressed vessel. For example, salvors may be able to transfer cargo or fuel from a damaged vessel to a sound one (a procedure known as lightering), thereby reducing the threat of a spill from an unstable vessel, tow a damaged vessel to a safe harbor for repairs, or perhaps repair on site. The Exxon Valdez accident3 is a case in point. 3   All instances of salvage in U.S. waters that were reported to the committee are listed in Appendix E.

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A Reassessment of the Marine Salvage Posture of the United States Salvors successfully removed more than 1.02 million of the 1.26 million barrels of North Slope crude oil that were aboard. Salvors also readied the damaged vessel to be towed to a repair yard and supervised the successful operation. There are a number of other recent examples of successful salvage actions where potential pollution of the environment was avoided or minimized: In 1993, a collision involving the tank barges Ocean 255 and BT 155 and the freighter Balsa resulted in the loss of about 6,000 barrels of refined product. The response effort was successfully carried out by the companies involved, their spill contractors, and the U.S. Coast Guard strike team. Two hundred thousand barrels of product were offloaded to other vessels without further pollution. In 1992, the tankers Radwan and Argo Hebe collided in the Straits of Malacca, and fires broke out on both vessels. The Radwan was carrying 178,000 barrels of gasoline, the Argo Hebe 2 million barrels of crude oil. The USS Beaufort, a U.S. Navy fleet tug, which happened to be a few miles away, witnessed the collision. Within 30 minutes, the Beaufort was alongside the tankers, and Navy salvors suppressed both fires and rescued 20 sailors. (It is unlikely that the Radwan would have survived without such prompt assistance.) No pollution occurred. In 1991, the Kirki lost its bow off the West Australian coast. The Kirki was carrying 525,000 barrels of oil. Salvors transferred all the cargo to another tanker and towed the Kirki to Singapore, averting any significant oil pollution. In 1990, fire broke out in the engine room of the Mega Borg, which was 60 miles offshore from Galveston, Texas, close to important marine habitats. A promptly launched professional salvage effort extinguished the blaze over several days. The 120,000 barrels of oil that were lost were consumed almost entirely by the fire; the remaining 857,000 barrels were saved. The National Oceanic and Atmospheric Administration (NOAA) reported that no significant ecological damage resulted from the spill. In 1989, the tanker Phillips Oklahoma collided with another vessel and burned off the eastern coast of England. The tanker was carrying close to 357,000 barrels of crude oil; over 5,000 barrels spilled following the collision. Due to timely salvage assistance, the fire was extinguished, and all remaining cargo was transferred to another vessel. In 1989, the tanker Pacificos incurred serious structural damage off the South African coast while carrying over 1.67 million barrels of oil. The casualty was towed to the Mozambique Channel. Despite an initial loss of over 50,000 barrels, all remaining cargo was transferred to another tanker without further pollution. The extent to which salvage can prevent or minimize pollution depends on the availability of salvage resources. Recognizing this dependency, some nations now provide such resources. For example, the governments of Spain and South Africa have retained salvage tugs to assist in response to ships in distress along their coasts. In France, a joint venture between the government and private salvors provides protection for the English Channel and the Atlantic and Mediterranean coastlines of France and Corsica. Since 1979, the retained salvage tugs have responded to more than 430 distress alerts and have carried out nearly 80 salvage operations. Regrettably, the French government has reduced the number of subsidized vessels on alert status. The objective of these government-initiated partnerships is to ensure that the capability is in place to respond rapidly and effectively to all marine emergencies, especially those with the potential to pollute the environment. The United States has not made a similar commitment but does enter into contractual arrangements with commercial salvors to maintain salvage readiness to meet the Navy's needs (see Appendix F).

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A Reassessment of the Marine Salvage Posture of the United States THE IMPORTANCE OF SALVAGE IN MAINTAINING PORTS AND WATERWAYS Following a collision, stranding, or sinking or an oil spill, a port or channel may be partially or completely closed, sometimes for days or even weeks. The costs of such closure, including lost business and maritime traffic disruption, can run to many millions of dollars. The collision and subsequent sinking of the sulfur barge Duval 2 in the Houston Ship Channel in 1992 is a case in point. The barge was split almost in two and effectively blocked the channel to all traffic for 24 hours. Limited one-way traffic resumed after the barge was pushed to one side of the channel; two-way traffic was not restored for almost two weeks. Some 200 ships were delayed, causing operational disruptions to local refineries and other industries. The added operational expenses per vessel, for each day delayed, averaged $20,000 (American Waterways Operators, personal communication, April 1993). Salvors assist in minimizing or even preventing the closure of ports and waterways by rapidly repairing or removing vessels that block passage, or by minimizing the amount of oil spilled from damaged vessels and thus the duration and extent of cleanup operations. In the Duval 2 incident, salvage was prolonged because resources were slow in arriving. Salvage equipment had to be dispatched from New Orleans, and passage to the job site was delayed by fog. A foreign-flag heavy lift barge was available in the Houston area, but requests for its use were not made. The closure of ports and waterways is a particular problem in the Gulf of Mexico region, due to the narrow channels that must be negotiated to reach or depart from key ports and heavy traffic in those channels. The problem of port closure due to vessel incidents, however, is not limited to Gulf ports. For example, in 1990, the oil tanker BT Nautilus grounded in the Kill van Kull Channel of New York Harbor, spilling over 6,200 barrels of heavy oil and causing partial closure of the busy waterway for several days.