ShipCrunch

Shipping, meet global gas politics

Stability-loving shipping may bite off more volatility than it can chew, with gas.

By Ryan Skinner (email)

Norwegians love gas. I mean, they really, really love gas. Norway invested around 6 billion euro to develop its Snøhvit field in the Barents Sea, and another 8+ billion euro for Troll. Feel that love.

But, that wasn't enough. Norwegians also trekked over to America to help the Yanks extract gas from shale. As a result, America, which was going all soft on Putin to get cheap Russian gas, will probably be a net gas exporter in ten years.

The phenomenon of shale gas extraction has led more than one energy expert to exclaim "this will change the geopolitics of natural gas."

Into this turmoil comes shipping, which - according to a recent Lloyd's List poll - believes gas to be the biggest game-changer looking ten years ahead.

My enemy is my friend: Coopetition and "The Five"

Environmental efforts need not stumble over organizational barriers company-to-company

By Ryan Skinner (email)

A meeting early this week brought to light a new, informal grouping of companies that I'd never before heard of. They call themselves "The Five", or "Working Group 5". According to my source, the members are Thorvald Klaveness Group, the Grieg Group, Hoegh Autoliners, Wilh. Wilhelmsen and BW Gas. These five have been co-operating since early last year on environmental initiatives.

Environmental inititatives include a best practice survey, an open exchange of opinions and knowledge, best available technology studies and identification of areas where the potential of improvement is greatest. Imagine Copenhagen Consensus for shipping. Klaveness specializes on exhaust gas scrubbers, Wilhelmsen on ballast water and so on.

Why has no one heard of this? Norwegian shipowners may be leery of discussing co-operation after three big Norwegian shipowners (Stolt-Nielsen, Odfjell and Jo Tankers) were nailed by the SEC for price collusion a few years back. Or maybe it's because they don't see their work as earth-shattering enough to bring up.

The environment, many would say, is not fair grounds for competition. These companies should rather compete on commercial performance, efficiency and business acumen. But, then again, how many times have I heard shipping's big leaders describe their environmental profile as a competitive advantage?

Any effort that drives improved environmental performance can't be bad, I say. Let's just hope those co-operating on the environment aren't mixing up their notes.

A grin too wide - Was justice served in Norway?

Retroactive laws are unjust and should be stricken, but why all the big smiles?

By Ryan Skinner (email)

"Whew! This year we'll have enough dough to put salt in our soup, eh, Andreas?" 

"Norwegian shipping lines win back-tax case" was the headline in the Financial Times Friday. Four years of legal battles between Norway's shipowners and its government ended 3.6 billion dollars in the shipowners' favor. Yet the shipowners did themselves few favors by breaking out the fat grins after the verdict.

If I was the Norwegian Shipowners' Association's PR advisor (note: I'm not), I would have strongly advised them to appear just as sober and aggrieved at news of the victory, as they had been previously. They want the point here to be: "The government has tried to get away with a terrible abuse of power. This has now been redressed. During these hard times, this will benefit society."

Instead, under headlines pronouncing the shipowners' victory and multi-billion dollar reward, they smile like they won the lottery. For the 90 per cent of readers who go no further into the story, it looks like the fat cats have pulled another coup over Norway's clumsy socialist government.

The Norwegian supreme court justices who decided this case no doubt concerned themselves only with interpreting the law. But that the back-tax was imposed during high times, when it seemed as if shipowners were amassing tremendous wealth, and is now repealed during a recession, must have had an impact. No matter how you cut this cake, the flavor is politics.

The next time that Norway's shipowners' fate is in the grip of the public will, these shipowners may rue those smiles.

NOTE: It would surprise me very little if Norway's left-leaning press corps skewed the coverage to the shipowners' disadvantage ("quick, they're smiling, take a picture!"), but the shipowners themselves made it too easy for them.

"Sturla, release the pigeons." 

Emissions reductions in shipping: Where tomorrow's projects are

Is there a better place to see the future of shipping than Norway's maritime R&D funding plans?

By Ryan Skinner (email)

In an article two weeks ago, I talked with a leading newbuilding consultant at Wilhelmsen who believed that those shipyards who will survive this downturn will focus on R&D investments. Whether it is Norway, France, Finland, US, Korean or Chinese yards, much of this R&D funding will come from the government. So what are these countries prioritizing? The answer may be as good an indicator as any of the future of shipping.

Oslo Marine Innovation: Two new business ideas

DNV hosts Oslo Maritime Network, energy reduction workshop & newbiz incubator

By Ryan Skinner (email)

This past Friday, Oslo Maritime Network invited members and friends to a workshop hosted by DNV to discuss energy efficiency in ships, and a couple presentations from new marine business ideas.

Shipping's zero emissions imbroglio

By Ryan Skinner (email)

Yesterday's ZERO conference a very small step on the path to shipping's zero emissions future.

Perhaps it was the low turnout. Perhaps it was the ho-hum opening. But ZERO '09 convinced nobody of the future of zero emissions for shipping.

Coming to such a seminar, one can't help assessing whether zero emissions is a valid goal for shipping. At a customer seminar for a major marine engine producer last year, I heard the organizers scoff at such a goal. Their scorn for idealism reflected none too well on their green aspirations, in general, but they may have a point. Why waste time and money on starry-eyed idealism, if smaller-scale, realistic improvements suffer?

Wilh. Wilhelmsen, for one, has endorsed zero emissions as a goal, with its zero emissions concept ship, Orcelle. Per Brinchmann of Wilhelmsen was on hand at the ZERO seminar to share the status of Orcelle and the outlook for zero emissions shipping. Neither were very promising.

Norwegian shipping policy: Curious contradiction with the Economist

By Ryan Skinner (email)

Who's wrong - me or the Economist? One hesitates to contradict the Economist, but...

Last week, I wrote a short piece describing how Norway's most recent election might impact the country's policies towards the shipping industry. Two of my key points were that domestic politics have little impact on industry policy (as it follows EU policy more or less slavishly) and that the new government would not allow oil exploration of Lofoten (as one coalition party made this a rallying cry).

Now the Economist, in its 50-word summary of the election, more or less contradicts me on both points. With the re-election of the standing government, it says, Norway will seek membership in the EU, and open up for oil exploration in Lofoten.

I have all the respect in the world for the Economist. It's the only magazine I personally subscribe to. And the magazine may very well be right, and I may be dead wrong.

On the other hand, I find their conclusions puzzling. Of the three parties that won another five years in power, exploring for energy resources in Lofoten is anathema to one, and EU membership is anathema to the other. Granted, the third party (which probably wants both things) is the biggest, but it's hard for me to believe they can push the cause in the coalition they've created.

So who's right? Only time will tell.

Kapitalister 1, Sosialister 0

Norwegian morality play demonstrates state ineptness in boardrooms.

By Ryan Skinner (email)

For those who missed it: This past Easter in Norway a tussle erupted between one of the country's leading industrialists/robber barons, Kjell Inge Røkke, and the socialist/labour government.

Only one year previous, the two got in bed together when the government invested in Røkke-run Aker Solutions. Røkke had made clear to Jens Stoltenberg and other huns of the labour party that their investment would secure Norwegian industry, and protect it from ruthless foreign investors. Stoltenberg and his government did as they were told, hastily and ineptly buying into the house of Aker.

DnB Nor: A national duty (to lose money)?

By Ryan Skinner (email)

A story carried by DN yesterday has raised a common storm in today's cash-tight times. One of Norway's two shipping bank goliaths, DnB Nor, wouldn't take any more business from a Norwegian shipowner - Eastern Bulk, in this case. The Norwegian Shipowners' Association's boss, Sturla Henriksen, apparently voiced broader frustration among his members the next day when he blasted the bank's tight-fistedness in the same paper.