Ship Recycling - Marad & Mare Island: Miracle or Mirage?

The West Coast, domestic ship disposal solution that Marad, California and environmental activists have been waiting for might be just around the corner. With the hard part seemingly over, it remains to be seen whether Marad’s chosen contractor can deliver.

This month’s U.S. DOT announcement of contracts awarded to Allied Defense Recycling (ADR) to clean and recycle two Reserve Fleet ships seemingly heralds the break that U.S. Maritime Administration officials have long pined for on the U.S. West Coast. According to the November press release, two ships are scheduled to be towed from Suisun Bay to the former Mare Island Naval Shipyard facility for recycling in December. Local politicians praise the awards as the ideal solution to the problem of environmentally-correct disposal of the old, decaying hulls. Beyond this, the costly removal of marine growth from the hulls and subsequent towing of the vessels through the Panama Canal to Texas will also be obviated. As of Wednesday morning, only a few pieces of the puzzle remained to be solved.

 

Ghost Ships: Marad’s Nightmare

The aging, mothballed fleet of so-called “Ghost Ships” has been a thorn in Marad’s side for many years, with the matter coming to a particularly hot boil during the tenure of Sean Connaughton as Marad Chief. During that time, numerous vessels were disposed of from both the Hampton Roads and Beaumont fleets, but the state of California [and a Coast Guard policy that addressed invasive species adhered to the vessel’s hulls] stymied any Marad efforts to move the ships from Suisun Bay, once and for all. The local policy of not allowing the vessels to be moved until the “toxic” paint had been removed left Marad with few, if any options, on the West Coast.

Marad, over the years, has taken a lot of heat for what they haven’t done with regard to the three Ghost Ship fleets. Leaving aside, for a moment, the headaches of trying to get anything accomplished in a state like California, the Maritime Administration has actually moved more than 130 ships out of its National Defense Reserve Fleet sites since 2001. Marad is also on record as stating that California’s obstructionist policy left the Golden State on the sidelines for a prolonged period of time as vessels from Texas and Virginia were rapidly sent out to recycling destinations. Don’t forget that California is also the place where they hope to enforce an invasive species standard for active vessels trading with ballast that cannot be measured using existing technology. That the newest proposed solution has gotten this far is therefore a remarkable accomplishment in and of itself.

More recently, a dozen ships had been scrubbed of invasive species at another local shipyard – at the reported whopping cost of $500,000 to $900,000 per hull – prior to being towed to Texas, more than 5,000 miles distant. The Mare Island solution, just 10 miles from the Suisun Bay fleet, not only provides local work for California labor, but also eliminates the costly step of scamping the hulls for invasive species. You have to wonder why no one has thought of it before. Actually, they have. And for that reason alone, it is worth taking a step back before breaking open the champagne.

The Mare Island Concept Takes Shape:

According to MarPro sources, Marad pre-qualified ADR as far back as 2005, but a protest made to the GAO quashed the whole thing. Then, in July of 2008, the Basel Action Network (BAN), an organization focused on ‘confronting the global environmental injustice and economic inefficiency of toxic trade,’ reported on the possibility that the Mare Island site would come to fruition. Actually, the idea is a lot older than that.

Contrary to public reports that suggest that ADR is the only qualified company that has coveted the Mare Island site, at least one other experienced recycler has, in the past, dipped their toes in the water here. Nevertheless, and fast forward (more than two years later) to October of 2010: Marad issued a notice of “Justification and Approval” for other than full and open competition under the commercial item test program. In general terms, the notice solicits Allied Defense Recycling to recycle and dispose of two vessels now situated in the Suisun Bay NRDF. According to the document, “A competitive announcement, with the time to obtain a quote for cleaning, evaluation, selection and award, would jeopardize the opening of the ADR facility….Under its dredging permit, ADR must complete the dredging by December 31, 2010.” The disclosure also admits, “…failure to meet the dredging date could result in the demise of the Bay area recycling facility before it opens.” No kidding.

The dollar value of the contract for the disposal services, for reasons unknown, was redacted. Today, and in order for the facility to open as planned, dredging – which reportedly has not commenced – needs to be completed, in addition to a number of other preparatory tasks. And yet, on November 9th, Marad issued a press release (MARAD 19-10) announcing the award of a $3.1 Million Contract to a so far untested “Bay Area Ship Recycler.”

“This is further evidence of our commitment to clean up Suisun Bay,” said Maritime Administrator David Matsuda. “The Mare Island recycling facility will bolster our efforts to remove obsolete ships and reduce environmental risks to the Bay.” Also according to Marad, “Allied Defense Recycling, using the former Mare Island Naval Shipyard, will recycle the ships avoiding the lengthy tow to ship recyclers in other areas.” Or, so one would hope.

 

SITREP: November 2010

On Tuesday, Marad spokeswoman Cheron Wicker confirmed that ADR was indeed working under a December 31st deadline to get the dredging complete. Separately, and also on Tuesday, ADR Managing Director Jay Anast was reached for comment. He told MarPro, “The dredging approvals are in place and we are waiting for the dredging equipment – which is enroute – to arrive on site.” He added that the process was on schedule, and barring any unforeseen problems or delays, the dredging would be complete by the end of the year. Following that, he expected to take delivery of the first vessel by the end of January.

Speaking to MarPro from overseas, Anast remained confident that ADR could accomplish the required tasks at the Mare Island shipyard by the 31 December deadline. He added, “Getting all of the approvals and permitting was the biggest challenge. We believe that the hard part is behind us.” He characterized the near unanimous local support from the various planning commissions and boards as “especially gratifying.” He put the cost of starting up the new, Mare Island ship disposal service at more than $6 million.

Critics of the ADR plan at Mare Island cite Marad’s secretive approval for “other than full and open competition” and pointed to the unproven track record of ADR in the ship disposal business. But Anast answered those concerns by insisting, “This is a startup company, but the principals have deep ship recycling experience – as many as 30 hulls in the past – and similar qualifications in hazardous material remediation.” Anast went on to point out the reduced carbon footprint of the local ADR plan which would eliminate the need to burn 500,000 gallons of fuel to get the hulls to Texas. U.S. taxpayers, he said, would receive relief of up to $3 million reduction in the cost of disposing of each hull.

It all sounds good. And, from the ADR side of the ledger, it gets even better. Assuming they can competently scrap the first two hulls, the startup firm would presumably then be the sole-source provider on the West Coast and be in position to take on the remaining 45 hulls still in the fleet. ADR Managing Director Jay Anast says that the hard part is behind him, but it is clear (at least to this writer) that the nascent project is not yet out of the woods. That said, he has gotten this far in what is widely regarded as perhaps the most onerous regulatory and political environment known to man.

I honestly have no idea whether ADR’s Mare Island facility will come up to speed and eventually serve as the environmentally-friendly, job-creating, West Coast ship disposal machine that Marad, California and ADR hope that it will be. It would, at the end of the day, be nice to see those ships begin to disappear in a more regular fashion from Suisun Bay. And, the clock is ticking. It remains to be whether this latest effort represents the “Miracle at Mare Island” or perhaps, “Marad’s Mirage.” Stay tuned. – MR

Joseph Keefe is the lead commentator of MaritimeProfessional.com. You can also read his work in MarineNews and The Maritime Reporter magazines. He can be reached at jkeefe@maritimeprofessional.com or at Keefe@marinelink.com. MaritimeProfessional.com is the largest business networking site devoted to the marine industry. Each day thousands of industry professionals around the world log on to network, connect, and communicate.

Source: Global Maritime Analysis with Joseph Keefe. Nov 17, 2010

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