More than 100 ships, many at Gulf Coast ports, have been affected, and the first lawsuit has been filed.
Investigators are working to find out what is behind an epidemic of contaminated bunker fuel being loaded on ships in the U.S. Gulf and ports in other countries.
The International Bunker Industry Association (IBIA), based in London, said last week, “On the very serious issues with contaminated fuel faced by shipowners in the U.S. Gulf, there has been no meaningful resolution. Anecdotally it would appear that, to date, more than 100 vessels have been affected.”
It added that “the industry continues to face serious issues and there is a range of opinions regarding: the root cause(s) of the problem; the parties who should be held accountable; recommended action for each of the key participants in the supply chain; and potential changes to current operational procedures and standards.”
The issue has been going on for some time. IBIA said, “A significant number of ships have experienced serious operational problems — chiefly sticking/seizing fuel pumps and in some cases filter blockages — after lifting bunker fuels from the U.S. Gulf region since late March and during April/May. Most cases have reportedly been caused by intermediate fuel oils (IFOs) bunkered in the Houston area, though there are indications that similar problems have been caused by fuels bunkered in Panama.”
On July 27, Meadway Shipping and Trading Singapore filed a lawsuit in U.S. District Court in Maryland after a ship it had sub-chartered loaded bunker fuel in Balboa, Panama, and developed engine problems.
The complaint, filed by Meadway against sub-charter Integrity Bulk ApS, says the fuel was tested in a laboratory and found higher than normal phenol content.
“Phenols have acidic content and can damage lubrication surfaces. Phenols also reduce the stability of the fuel. Presence of phenols also indicates the possible use of shale oil as cutter stock. Shale oil reduces the ignition and combustion properties of the fuel,” the complaint said.
Other contaminants also reportedly were found in the fuel.
Meadway said it has suffered damages exceeding $2.1 million, including as much as $500,000 from damage to the vessel, engine and system. It asked the court to issue writs of maritime attachment and garnishment against freight payments shippers make to Integrity under what is known as Supplemental Rule B for Certain Admiralty and Maritime Claims.
“This is the start of a lot of litigation about bad bunkers,” predicted Stephen Simms of Simms Showers in Baltimore, Meadway’s attorney. He believes the Meadway’s complaint “is the first bad bunker suit filed. I understand there are many working their way through the claims process.”
He said there seems to have been contaminated bunker fuel loaded at several places in the U.S. Gulf Coast, Panama and Singapore.
In late July, Reuters reported that the Singapore-based marine fuel testing company Maritec Pte Ltd. had reported six samples of fuel sold in Singapore had “resulted in severe sludging at centrifuges, clogged pipelines, overwhelmed fuel filters” and that “test results of the Singapore samples seems to point to both ‘Estonian-type oil shale’ and ‘U.S.-type fracked shale oil.’”
VeriFuel, the fuel-testing division of the classification society Bureau Veritas, said there have been problems similar to those seen in Houston in Aruba.
Meadway chartered the handy-size bulk carrier ASL Luna from its owner, ABO Shoten Ltd. of Onomichi, Japan, then sub-chartered the ship to Integrity Bulk, which is based in Denmark.
Meadway said in its lawsuit that as part of the sub-charter, Integrity was “responsible for fueling the vessel with fuel which did not harm the vessel, including its engines or systems.”
Sometime after loading fuel in Panama, six fuel-injection pumps of the main engine fuel seized.
Integrity returned the ship to Meadway. Meadway had to purchase back the fuel even though it was unsuitable and pay hire to the owners while the fuel was being tested and while the ship was idle.
Meanwhile, the ASL Luna is now in Port Arthur, Texas, where Simms says the company will have its fuel removed. That procedure alone is estimated to cost at least $300,000
While the Meadway suit said testing indicated the possible use of shale oil as cutter stock, IBIA London said, “There is a range of opinions regarding: the root cause(s) of the problem” and that “presently there is no consensus and not all stakeholders are willing to publicly share their findings and views. It’s a controversial topic and there is plenty of heated debate.
“It’s not clear that all of the reported cases share the same root cause and not all testing companies and experts are offering the same view as to the root cause. However, the issues associated with problem fuels have manifested in the form of sticking and seizures of fuel-injection systems components (mainly pumps), blocked fuel filters or both. In some cases these issues have been so severe as to cause a loss of main engine power,” IBIA said.
Verifuel said in a note last month that “only when an identical component is found in significant concentrations of fuels which have caused similar problems to numerous ships, (compared to when the same component is not found in fuels having not caused any problems), will the industry have a direct indicator of a harmful, cause-and-effect component.”
Simms said finding the root cause of the bad bunkers is analogous to the problems faced by epidemiologists. Just as the physician John Snow was able to trace the “Golden Square” outbreak of cholera in London back in 1854 to a public water pump by mapping clusters of the sick and dead, he said testing companies are now trying to work back through bunker fuel supply chains to find a common source for the bad fuel problems on various ships.
“The bunkers that ASL Luna received apparently were part of this larger problem,” he said.
Simms is concerned that fuel quality could become an even bigger issue as 2020 approaches, when the International Maritime Organization is requiring shipping companies to use fuel with sharply lower levels of sulfur — 0.5 percent versus 3.5 percent — or treat emissions from their engine exhaust to remove sulfur oxide.
Most large ships burn residual fuel with high levels of sulfur. As refineries ramp up production of lower sulfur fuel, “there will be the need to take the residual fuel and then, for a lack of a better word, cut it with acceptable compounds to reduce the sulfur content to the 0.5 percent limit,” said Sims, who predicted “the more blending there is, the more problems there’s going to be with fuel.”
At the same time, he noted new ships are more reliant on technology to run their fuel-treatment systems and less reliant on engineering officers because it is difficult to get officers that are highly qualified to run ship systems that are so much more complicated.
“It’s a perfect storm,” he said.
Determining whether fuel is contaminated is a difficult challenge. Sims said the regular tests to make sure fuel meets the international standard ISO 8217 did not pick up the contaminants that are suspected to have caused the problem on the ASL Luna.
IBIA said, however, it seems likely that the problem fuels from the U.S. Gulf contravene clauses in the ISO 8217 specification and a regulation in Annex VI of the International Maritime Organization’s antipollution treaty, MARPOL, “which broadly state that fuels shall not contain any material in a concentration that adversely affects the performance of machinery.”
But IBIA said this is not straightforward and requires nonstandard, forensic levels of testing, “which is time-consuming and processing the results can take weeks, especially when there is a spike in demand for such testing.”
IBIA is working to form a fuel-testing working group “to address the current issue and the potential solutions, including the development of a globally consistent method and protocol.”
An epidemic of bad fuel
