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Oil, LNG, and LPG Tankers – A
Sustainability, Efficiency and Effective way of transporting petroleum
products?

 

This essay will be a discussion of Oil, LNG, and LPG transportation
covering the history of oil, LNG and LPG transportation including the development
of this type of marine transportation vessel. The current sustainability and
operational requirements of this mode of transportation, including cost to
build, run and maintain, alongside whether it will be the most efficient in the
future. Finally, it will be looking at future development and implications of
this mode of this mode of transport, and possible improvements to its
sustainability, efficiency and effectiveness. All of this will then be finally
discussed and analysed in the conclusion giving a complete overview of the
discussion weighing up all points discussed.

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Section 1.1: Introduction

Oil Tankers, as the name suggests carry raw oil, and its other by-products.
Not only do they carry raw crude oil, but also, the separate refined products,
such as kerosene, petrol, paraffin and gasoline. Thus, the name oil tanker can
be subdivided into two main types: Crude Tankers, and Product Tankers, which
carry just that. According to the ISL, as of July 1st 2016 there are
7152 total Oil Tankers with a CGT (Compensated Gross Tonnage, this is an indicator of the amount of work that is required
to build a given, which is determined according to type and size of a
particular ship. This is calculated using the formula and constants in Figure
1, it is different for Oil, LNG and LPG Tankers) off 100.9 with 571 Tankers in
order books with a CGT of 15.3 – This is 15.2% of the total CGT. 1

Figure 1

LNG/LPG Tankers, on the other hand, are tankers that specialise in
carrying Liquefied Natural Gas (LNG)/ Liquefied Petroleum Gas (LPG) as their
cargo. These tanks require a more delicate and careful handling than Oil
tankers due to the instability of the product they carry. Again, accord to the
ISL, as of July 1st 2016 there are 1817 total Liquified Gas Tankers,
with a total CGT of 51.8, with 310 in order books with an ordered CGT of 15.2 –
this is a staggering 29.4% of the total fleet CGT, which may be an indication
towards the future of petroleum product transportation. With more, larger
ships. 1

See Figure 2   – A table created by the ISL – for a
comparison to other major ship types from this it is clearly seen that more Oil
and Liquified Gas Tankers with larger CGT’s will be made within the coming
years, with both Oil and Liquified Gas ships being in the top 3 for Order Book:
CGT Ratio. 1

 

In this essay, I will be discussing the History of Oil, LNG and LPG
tankers. Dating back to the first time these commodities were transported by
sea. Oil transportation expanded as the oil industry expanded in the early
1850’s, oil was exported to Britain from the British Colony from Burma.  It was originally held in earthenware
containers during its transportation from the wells to the riverbanks, from
which it was poured directly into the boats’ holds for transportation. Other
ships transported barrels of oil, but it’s said the first early tanker was
built on the River Tyne in England in 1863. With the first modern tanker being developed
between 1877 and 1883 by Ludvig and Robert Nobel, Brothers of Alfred Nobel. 2

 

Through research and development, they built the ‘Zoroaster’ as pictured
in Figure 3, this is classed as “The World’s First Successful Oil Tanker”. It
carried 242 tons of kerosene in two separate iron tanks connected by pipes.
This was designed and built in 1878. 3

Figure 3 – Credits: ??????/wikipedia.org

As for LNG/LPG Tankers, the first patent was in 1914 by Godfrey Cabot, this showed
us that liquified gas, waterborne transportation was technically feasible, but
the first demonstration of this was in 1959 by ship ‘Methane Pioneer’. It transported 5km3
of LNG between Lake Charles, Louisiana to the British
Gas facility on Canvey Island in the UK 4

 

Also in this discussion will be the current and recent technical
developments an including increase in the size of the vessel, the volume of
oil/gas they can transport, speed, and efficiency.

Operational requirements are as it says – the requirements a ship
transporting oil/gas needs to operate, this can include crewing, weather
conditions, fuelling, and travel routes.

The current sustainability of this mode of transportation, including the
cost to build, run and maintain, alongside whether it will be the most
efficient in the future. Finally, I shall be looking at future development and
implications of this mode of this mode of transport

 

Section 3: Critical Analysis:

 

Section 3.1: History of Development

The Oil industry and the transportation of Crude Oil and its refined
products by Sea has evolved massively in the past few hundred years. Since
Oil’s first modern commercial exploits in the 1850’s, the need for quick, easy
and efficient transportation of the substance was required, and evolved with
the extraction of oil itself.

“The World’s First Successful Oil Tanker” was built in 1878. It carried
242 tons of kerosene in two separate iron tanks connected by pipes. This was an
impressive design at the time, the ship had a number of extra watertight
compartments in the hull for extra buoyancy for carrying this precious cargo.
The primary route for this ship was from Sweden to the Caspian. 3

 

Subsequently, with the success of this
ship, the Nobel Company expanded their fleet and designed multi hold ships in
1883. Each hold was further split into port and starboard holds, this minimised
problems which were caused by the free surface effect of oil sloshing about,
which is the past had caused some ships to capsize.

In the 1880s with the increase of the Asian Oil
trade, an importer named Marcus Samuel, founder of the Shell Transport and
Trading Company, now known as just Shell. Wanted to move oil through the Suez
Canal, but after previous attempts were rejected by the Suez Canal Company,
they queried specifications of a tanker it would allow through the canal, and
Marcus ordered 3 ships to these specifications. With the first of these ships
passing through the Suez Canal in 1892. 5

This
ship later was chartered by the Royal Australian Navy, and parts in operations
against German Occupied Colonies in the Pacific. It was later sunk off Egypt by
a U-boat Torpedo in 1916. 6

 

Up until 1956 tankers were mainly designed to pass through the Suez
Canal, but after the Suez Crisis in the same year, size was less of a priority
as tankers had to circumnavigate the canal around the Cape of Good Hope, and
while doing this, Tanker owners realised that bigger tankers were the key to
efficiency.

 

Nowadays there are many different size classes of tankers, measured in
dwt – Deadweight Tonnage – This is defined as the amount of cargo, fuel, water and
stores a vessel can carry when fully loaded. See Table 1 for a comparison table
and Figure 5 for a visual comparison

Tanker Name:

Tanker Size / DWT

Coastal Tanker

10,000 –  60,000

Panamax

60,000 –  80,000

Aframax

80,000 –  120,000

Suezmax

120,000 –  200,000

VLCC

200,000 –  315,000

ULCC

320,000 –  550,000

 

Panamax is the maximum size of a tanker that can pass through the Panama Canal. Aframax is a
type of tanker ships which are mainly used in the Mediterranean, China Sea and
the Black Sea. Suezmax is the maximum size of a tanker that can pass through
the Suez Canal, VLCC stands for Very Large Crude Carrier, and ULCC, is Ultra
Large Crude Carrier.

Figure 5 – Tanker ship size – Image credits:
hofstra.edu

As for the history of LNG
transportation see Table 2 below. LNG is one of the safest modes of shipping
cargo. So far there has been no shipboard fatalities over the timespan of LNG shipping. No
major losses of cargo and only one minor onboard fire (this was caused by
lightning striking the vessel, cargo remained intact – act of God). As for the
two recorded grounding incidents’ resulting in major hull breaches, no cargo
was lost, which the last incident in 1980. Because of this insurance for LNG
tankers is 25% than Oil Tankers. 4

Year

Event

1912

First LNG
plant built in West Virginia

1914

Godfrey Cabot
patents a barge to carry liquid gas, shows waterborne transportation
technically feasible

1959

“Methane
Pioneer”, carried 5km3 of LNG between Lake Charles and the UK
demonstrating the feasibility of waterborne transportation

1964

“Methane
Princes” & “Methane Progress”, 27.4 km3, become first
commercial LNG vessels, operating between Algeria and the UK

1969

Gas Transport
membrane system vessels Polar Alaska & Arctic Tokyo, 71.5km3,
begin service from Alaska to Tokyo

1971

Kvaerner
develops 88km3 “moss spherical containment system”

Figure 6 – Credit:
http://www.liquefiedgascarrier.com/Liquefied-Natural-Gas-Carriers.html

1975

100 km3
size exceeded with the delivery of French built “Ben Franklin” – Volume:
120km3

1993

“Polar Eagle” and “Arctic Sun”, 83.5km3, with
“IHI prismatic containment system” begin service from Alaska to Tokyo
Figure 7 – Credit:
http://www.lngworldshipping.com/

 

Section 3.2: Operational Requirements

 

Oil Tankers, LNG, and LPG Tankers, and extraordinarily difficult to run,
and are expensive too. But despite the large initial, and high daily running
costs, transporting the Oil by sea, only adds an additional $0.02/gallon to the
cost, which is very very low and cheap all things considered.

With the
size and scale of Oil Tankers, some being taller than buildings if vertical
(Figure 8), they require the utmost care during voyage. Many an unprecedented
disaster has occurred from human error at the helm. Researchers from the
Maritime University of Constanta claim that “About 75-96% of marine casualties are caused, at least
in part, by some form of human error. Studies have shown that human error
contributes to: 84-88% of tanker accidents, 79% of towing vessel groundings,
89-96% of collisions, 75% of allisions. 75% of fires and explosions.” 7

 

This is where a
debate about human vs automation comes into play. The requirements/ performance
of the ship’s crew, pilots, dock workers, and others all impact the running of
the ship. How these people operate and function in person, and on the day,
relies on training, alertness, and extra traits. Taught skills in a trained
human can easily outperform a programmed machine, this, for example, can
include interpreting a radar. But when it comes to data manipulation,
recollection, and recall, a machine programmed specifically to do this on a
ship will be far better than a person any day. But because of the way automated
software is designed, it can lead to a downfall or failure. Software of this
type is generally designed to have little human interaction, for example, it
might not display on a ships computer system critical information that might be
relevant in the case of external decision making by the pilots, leading to a failure
or accident that way.

 

As for human
performance, many factors impact that negatively too. The environment affects
performance, not only weather, and physical climate, but the working
environment too. Be it lighting, noise, and or temperature – the human body
performs best in a fairly restricted ideal temperature range. This output
performance will degrade with temperatures that lie outside of that range, be
it below – too cold – or above – too hot. Furthermore, the body may fail
altogether in extreme temperatures. The more uncomfortable the pilot is, the
less likely they will perform well in a difficult situation.

 

The Maritime University of Constanta say a high sea state,
and large ship vibration can seriously affection movement, and dexterity, as
well as cause stress and fatigue. They all say that “Tight economic conditions
can increase the probability of risk-taking (e.g., making schedule at all
costs).” 7

 

It’s clearly
seen and known human errors are often blamed on “inattention” or “mistakes” on
the part of the pilot, though as discussed more often than not they are
suggestive of deeper and more complicated issues surrounding the Tanker
Shipping Environment. “Human errors are generally caused by technologies and
environments which are incompatible in some way with optimal human
performance.” 7

 

Section 3.3: Current Sustainability

 

Currently, sustainability with Oil, LNG and LPG tankers is to do with,
cost to run, availability of fuel, efficiency and speed. But also,
sustainability of Oil, and the environment, if for example, we run of oil in 50
years as the threat looms, we won’t have a need for these oil tankers – They
will become obsolete.

 

An expensive
tanker that is slow and carries little oil is not a sustainable tanker. This is
why the future is leading to larger tankers. Though the possibility for
refining the Oil directly on the ship still remains which would work as a cost
cutting measure. See Figure 10 below, a scan from “Methodology of Day-To-Day
Ship Costs Assessment” By Milojka Pocuca, D. Se. – University of Ljubljana,
Faculty of Maritime Studies and Transport, it shows the premise of what makes a
ship cost viable to run. With Bloomberg claiming they cost over $100,000 a day
to run. 8

Figure 10 – Credit: Scan from “Methodology of
Day-To-Day Ship Costs Assessment” By Milojka Pocuca, D. Se. – University of
Ljubljana, Faculty of Maritime Studies and Transport

There is also a possible social impact, which can relate to
sustainability, if a company or drilling operation greatly affects a group of
people, or the environment leading to a large social impact then it’s very
possible that people may boycott using that specific company. This means that
their costs increase massively, leading to a possibility of it being
unsustainable cost wise to transport their oil by tanker – thus they would
resort to using cheaper methods of transportation such as pipelines.

 

The change is current pressures on the oil industry – due to climate
change – has pushed towards greener fuel sources, such as LNG/LPG, this is – as
seen in Figure 2 – is why there is a massive increase in the production of LNG
tankers with an order book CGT of 29.3% of the total fleet size’s CGT. The push
towards LNG is aided by the greater safety of LNG.

 

Extraction and exportation of oil in a sustainable manner also relies on
sustainable
community development. This is exporting of fuels and revenues from energy poor
communities. If they over-extracted their oil, that country would be signified
worse off for its future developments, when it transits from an LEDC to an MEDC.
It’s possible that the resource depletion will mean that the country never
exits the LEDC state. The economic dependency of a project has been known to
have affected communities at project closure. This can be due to employment
strategy and expectation from management. 9

 

Conclusion

 

In conclusion, its seen that
there is still a future of Oil, LNG, and LPG transportation via tankers. The
history of tankers has rapidly developed after thoughts of efficiencies and
costs came into the equation after the closure of the Suez Canal. It is also
clearly seen that there is a lot of demand for tankers in the future is a large
number in the order books – Oil with 571 Tankers in order books with a
CGT of 15.3, and LNG with 310 in order books with an ordered CGT of 15.2.

What is seen though is that the
size of the order of LNG compared to the current fleet, is considerably higher
than the same ratio in the Oil tanker fleet. This is indicative of currently
socio-political factors involving the environment. This includes significant
rises in the global temperature and water level – climate changes – Alongside
the destruction and pollution of many ecosystems.

The fact that Oil spills are not
only costly but cause a detrimental effect on the ecosystem they directly
impact is another paramount to decline in the renewal of Oil tankers for the
global fleet. This is a very serious concern when compared to LNG
which is one of the safest modes of shipping cargo. So far there has been no shipboard fatalities over
the timespan of LNG shipping. No major losses of cargo and only one minor onboard.
With only two recorded grounding incidents’ resulting in major hull breaches,
no cargo was lost, which the last incident in 1980. This is drastically safer
than the transport of Oil, which is why it is favoured in the industry.

This is also heightened as seen
by the uncertain future for the quantity of oil remaining, again due to this
country have been looking towards alternative energy sources, and again one of
the main ones is Natural Gas.

In the future, I believe that Oil and their tankers
needs to be phased out in favour of the safer, cheaper, cleaner, sustainable,
and arguably more ground-breaking fuel source and its subsequent transportation
type. I believe that the improvements that need to be made is the increase in
the size of LNG tankers, this is to further reduce the added cost per gallon
that shipping adds. Furthermore, it might be beneficial to find a more
efficient way to store the oil on board IHI prismatic containment has a larger
volume than the moss spherical containment system.

References

1

ISL, “Shipping Statistics And Market Review,”
Online. Available:
https://shop.isl.org/media/products/Web-Comment_SSMR_60-9-10.pdf. Accessed
8 December 2017.

2

M. Vassilioi, Historical Dictionary of the Petroleum
Industry, Lanham: Scarecrow Press, 2009.

3

R. Tolf, The Russian Rockefellers: The Saga of the Nobel
Family and the Russian Oil Industry, Hoover Press, 1976.

4

B. Kurt, “Marine Transportation of LNG,” 24
March 2004. Online. Available: http://www.cargos-paquebots.net/Revue%20de%20presse/DWP_–_Marine_Transportation_of_LNG.pdf.
Accessed 8 December 2017.

5

Royal Dutch Shell Group, “Our Beginnings,”
Shell, Online. Available:
http://www.shell.com/about-us/who-we-are/our-beginnings.html). Accessed 8
December 2017.

6

R. Gilbert, Australia’s Navy: Past, Present, &
Future, Brookvale: Child & Henry, 1986.

7

L.-C. Stan, N. Buzbuchi and F. Memet, “Human Errors
and Oil Pollution From Tankers,” 2008. Online. Available: http://web.deu.edu.tr/maritime/imla2008/Papers/6.pdf.
Accessed 8 December 2017.

8

M. Pocuca, “Methodology Of Day-to-Day Ship Costs
Assessment,” 20 June 2006. Online. Available: http://www.fpz.unizg.hr/traffic/index.php/PROMTT/article/download/704/558.
Accessed 8 December 2017.

9

Barclays Bank PLC, “Environmental and Social Risk
Briefing Oil & Gas,” Barclays, 2015. Online. Available:
https://www.home.barclays/content/dam/barclayspublic/docs/Citizenship/oil-and-gas-guidance-note.pdf.
Accessed 8 December 2017.

 

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