Tuesday, May 17, 2011

OPEC May 2011 MOMR

At the middle of the month OPEC release their Monthly Oil Market Report, a document of over 80 pages. The MOMR reviews the global economies and discusses the oil outlook.

For 2011, OPEC projects a 1.4mb/d demand increase over 2010, which is now somewhat lower than the 2.1mb/d they projected earlier. That means oil demand grew from the 84.57mb/d in 2009 to 86.67mb/d in 2010 and is projected to increase to 88.08mb/d for the year 2011.

The principal drivers of this demand growth are the emerging economies. Total demand in the developed world, North America, Western Europe and OECD Pacific (Total OECD) is projected to increase by only 0.19mb/d from 2009 to 2011. 87.23% of global oil demand growth comes from outside the OECD. In a couple of years the "total other regions" will consume more oil than the "total OECD".

The interesting development, for the marine market, is contained in the forecasted y-o-y growth in product demand. For 2011 the trend in declining residual fuels continues unabated at -6%, gasoline and diesel demand lead the refined product growth at 21% and 41% respectively.

Tuesday, May 10, 2011

Bilge Water Discharges

Canadian Inland Water regulations authorize the treatment of oily bilge water through approved equipment overboard with the ship making way. The required effluent quality must be better than 5 parts per million (ppm) of oil in the discharge water, while the ship is moving.

The regulations class oil and oily water as a pollutants that mustn't be discharged from a ship. Therefore, since the regulations authorize the treatment of oily bilge water, the effluent that falls within the regulated discharge requirements becomes then a discharge free of oil under the oil pollution prevention regulations.

How oil-free is then the 5ppm bilge water discharge from a ship? Are compliant bilge water discharges a pollution threat for the Great Lakes - Seaway system?

1 liter is a cube with sides of 100mm each, or equal to 1 Million cu.mm; therefore 1 cu.mm of oil in 1 liter of bilge water is 1ppm; 5ppm is one cube with sides of 1.7mm in 1 liter of bilge water. Which means that the upper limit for compliant bilge water discharges is a small drop of oil in 1 liter of bilge water. This quantity of oil is evenly dispersed in the effluent, in very fine droplets, too fine to coalesce into larger oil droplets to form visible pollution.

So not only do the regulations require fairly clean water, but in addition the ship has also to "make way".

Here is a quick calculation on "typical" worst case discharges from Canadian Lakers. One of the most common bilge separator sizes installed is a 16GPM system, which processes bilge water at about 3,600 liters per hour equal to 3.6 liters per second. A ship making way at 2 knots, the ship does 2 nautical miles per hour, equal to about 3.6km/hr or about 1 meter per second. Therefore, in the worst case under the regulations this ship discharges 1 liter bilge water per second containing an oil drop of 1.7mm over a distance of 1 meter traveled. Since the actual oil content must be below the 5ppm limit and the ship's speed is typically above the 2KN mentioned, therefore a smaller "drop of oil" gets stretched further than the 1 meter mentioned.

I am quite comfortable stating that compliant bilge water discharges are not a pollution threat for the inland waters. Bilge water discharges are not point sources like refinery effluents or run-off from roadways and parking lots, or any other oil pollution from land based sources.