Bunkers and bunkering - It's nothing to do with your golf swing

Introduction
Everybody who owns or drives a car has experience of bunkering. We all fill up with petrol from time to time. We do so almost without thinking about it. Fortunately, we rarely, if ever, have a problem with the quality of the fuel. And if we spill some petrol, it is not a "pollution incident".

The procedures which take place during bunkering vessels are, or should be, very different from the procedure of putting petrol into your car. Given the problems and liabilities which bunkers and bunkering can lead to, it is essential that the entire bunkering operation, from start to finish, is closely monitored by the receiving vessel. It is also vital that the quality of the (new) bunkers is checked and the bunkers are tested before they are used or mixed with other bunkers already on board.

Apart from nuclear-powered ships, all vessels have to take on bunkers from time to time. Large bulk carriers and container vessels can carry as much as 10,000 MT of fuel oil at any one time. Even the "workhorses" of the bulk trades, the Handymax and Panamax vessels, may have up to 1,000 MT of fuel oil on board after bunkering. Fuel oil is very viscous and persistent.

The problems which (good or bad) bunkers can cause

Bunkers do not need to be "bad", or, more correctly, off-specification, to cause serious claims and liabilities. A spill of bunkers from any vessel is likely to lead to a difficult and expensive clean-up operation and - depending to some extent on where the spill has occurred - to claims for damage to the environment and for losses suffered by individuals or organisations allegedly affected by the spill.

Bunker experts generally consider that overall bunker quality has deteriorated over the years, although the quality also tends to follow the price and vice-versa. However, it is often the case that, because of increased demand for high quality products such as kerosene and jet fuel, the "raw material" left behind after the crude oil has been processed is likely to lead to bunkers of a lower quality being produced. If the bunkers contain additives such as used car oil, this may well add to the problem.

Off-specification bunkers (bad bunkers) can cause many problems. At best, they may result in the main engine not performing effectively or efficiently. This may result in reduced speed and over-consumption of bunkers. In turn, either or both of these is likely to lead to a claim by charterers - a speed and consumption claim.

More importantly, the consumption of bunkers which are off-specification could well cause damage to the main engine. Relatively speaking, the age and condition of the engine is not relevant, although it is perhaps true to say that an engine in first-class condition may have a greater tolerance for bad bunkers than an engine in poor condition. Nevertheless, damage to the main engine caused by bad bunkers is likely to be a serious problem. Your hull insurers are likely to be worried.

Such main engine damage can lead to even more serious problems. If a loss of main engine power occurs at sea, there is likely to be a significant delay to the vessel while the engineers work hard to put right the problem. They may not be able to do so. Salvage assistance, or possibly a straightforward tow, may be needed. Even more seriously, a vessel with little or no main engine power could, particularly in confined waters, result in the vessel grounding or colliding with another vessel or fixed or floating object such as a jetty or dolphin. If this happens, both your hull and your P&I insurers will be very worried people. The potential claims and liabilities arising in such circumstances are very large.

Bunker spills

The International Tanker Owners' Pollution Federation (ITOPF) publishes oil pollution statistics every year. In a speech made at an oil pollution conference in London in May 2019, the managing director of ITOPF said that "about 28 per cent of the oil spills attended on site by ITOPF staff over the past fifteen years have involved bunker fuel spilled from non-tankers. In the last two years, this percentage has risen to about 50 per cent."

It is likely that for bulk carriers, the number/percentage of oil spills caused by casualties of some sort (i.e., grounding or collision) is substantially less than for tankers (which is only 14 per cent anyway) and the number/percentage of spills happening during routine operations is substantially higher.

Most bunker spills will be in the range of between 7 and 700 MT. Some will involve smaller quantities. Unless the vessel concerned is a large vessel, with a large quantity of bunkers on board, and is involved in a major casualty, such as a grounding in which more than one bunker tank is holed, few bunker spills will be more than 700 MT.

Many such spills are the result of carelessness or negligence, either on the part of those supplying the bunkers, or those on board the vessel receiving them. Even a technical problem, such as the failure of an alarm to go off, may well be the result of human error. More often, our experience is that one or more of the following are present:

     Ø  failure to agree a loading rate with the bunker barge or shore loading facility;  

     Ø  failure on the part of the bunker barge or shore facility to stick to the agreed loading rate;

    Ø  failure on the part of the vessel's crew to check that the bunkers are being loaded at the agreed rate and if they are not, failure to request the loading barge to slow down;

    Ø  failure to monitor the tank(s) into which the bunkers are being loaded; 

    Ø  failure to respond to an alarm indicating that the tank is nearly full.

    Out of all of these, Gard's experience is that most bunker spills result from an overflow of bunkers. The cause is usually one or both of the last two failures. A former deck officer once suggested that the best way of avoiding bunker spills would to be connect all the bunker tank airvents and overflow pipes to the chief engineer's cabin!

Example
A small tanker was discharging mineral oil at a berth upriver in London. Owners' safety officer was on board to assist with a vetting inspection by one of the major oil companies. During discharge from four of the vessel's tanks, the high level alarms went off. The master and chief officer were taking part in the vetting inspection and the second officer was on duty. He assumed that the alarms had been activated in the course of the vetting inspection - perhaps to show to the inspectors from the oil company that they worked properly - and took no action. In fact, they had been activated in exactly the intended way - to warn that cargo was close to overflowing from a cargo tank. A couple of minutes later, the cargo overflowed from one of the tanks. Fortunately, the crew then responded very quickly and took all the required steps to stop discharge and clean up the spill. As a result, only a very small quantity - estimated at 100 litres - went over the side. Later investigation showed that the device showing the position of the cargo valves (i.e., open or closed) was not working on almost all valves. Both the chief officer and the second officer wrongly thought that a particular valve was closed, when in fact it was open. Neither of them checked the position of the valve before starting discharge. The quantity spilled was very small. It was not spilled into the water, but on to "Thames mud", which becomes visible at times as a result of the large rise and fall of the river. Despite this, the Port of London Authority (PLA) investigated the incident, with a view to possible criminal prosecution. Ultimately, they decided not to prosecute. Instead, they issued the master with a letter of warning, which will be taken into account in a future similar incident. The potential maximum fine in such cases is GBP 250,000 in the Magistrates Court or an unlimited fine in the Crown Court.

The time and cost involved in cleaning-up spills of heavy fuel oil is usually considerable. The oil is thick and does not evaporate or disperse. Manual cleaning is often the only option. Disposal of the oil which has been collected is also a problem and can be just as difficult and expensive as the clean-up operation. If the spill has occurred in or close to an area where other ships or private boats are moored, their hulls may be oiled and require cleaning. Even more importantly, if the spill affects, or is alleged to have affected, mariculture, often fish-farming, the claims can be very significant. The local and sometimes the national, media may well take an interest in the incident. Even worse, local or national politicians may either take an interest themselves, or find themselves called upon to do so by their voters, whose pleasure boats have been oiled, or whose beach has been closed while the clean-up is carried out.

Even a small quantity of fuel oil can, if spilt, result in very large liabilities. Perhaps the best - or worst - example concerns a non-tanker - a woodchip carrier, which spilled approximately 17.5 MT of heavy fuel oil in a port in Southern California. The spill occurred during loading and was caused by the vessel making contact with a dolphin on the jetty. A bunker tank was holed and heavy fuel oil was spilt. For the first five days, the clean-up cost, per day, was approximately USD 1 million. After five days, it was possible to reduce the cost per day to about USD 500,000. By the end of 1999, the Club in question had paid approximately USD 14.3 million, mainly in respect of clean-up costs and third party claims. They were estimating a further USD 10.7 million to cover the claim for alleged natural resource damage and further legal and expert's costs. A round sum of USD 25 million!

This is the worst-case scenario - the P&I man's nightmare. Most bunker spills do not cost anything like this amount, but they are difficult and expensive to deal with. If you spill a little petrol when you are filling up your car, it is nobody's problem but yours, since you have to pay for the petrol you have lost. You do not have to clean it up. Nor do you have to pay compensation to the garage owner for "damaging" his property. Nor do you have to deal with claims from third parties - for example, people living near to the garage who may claim that they have been affected by the smell of the petrol which has been spilt. Nor are you likely to face civil and criminal proceedings, with every chance of being deemed to be guilty, which brings with it the potential for large fines and even imprisonment. In the example mentioned, criminal prosecution did not happen. However, Gard has had many cases, in various countries, where the master, usually together with the ship owner, is criminally prosecuted. Regrettably, this trend is continuing. Remember that criminal prosecution and any liability arising as a result is not covered by P&I insurance. The legal costs involved and any liability incurred may well remain with the person or company in question.

All these problems can and often do arise in a bunker spill.

Even if there is no initial bunker spill, it is very likely that, if the vessel has suffered a casualty of some kind, the first "request" (i.e., instruction) from the authorities will be: "remove the bunkers". The nature of the casualty and the quantity and location of the bunkers are often ignored. The focus - sometimes to the exclusion of almost everything else - is on the potential pollution which the bunkers could cause.

This may be good for the environment. It is certainly good business for the salvors. However, someone has to pay for it and it is likely that a ship owner will look for his P&I Club to do so, on the basis that the removal of the bunkers is mainly a measure to avoid or minimize pollution.

Over the last 20 years or so, there has been worldwide growth of environmental awareness and concern about the damage which we are all, in some way, said to be doing to the environment. These days, the publicity given by the media to an oil spill of any significance is extensive and almost always unfavorable to the ship owner, or indeed, almost anyone involved in the operation of the ship. Remember the very negative publicity which Total, the charterers of the ERIKA, received.

International conventions

With the exception of the US, a large proportion of the world's coastal states have ratified one or both of the Civil Liability Conventions (CLCs) and the International Convention on the Establishment of an International Fund for Compensation for Oil Pollution Damage (Fund Convention). These conventions essentially deal with compensation for loss and damage caused by oil pollution from tankers and are widely recognized and accepted.

The text of a new convention, specifically covering bunker spills, was agreed in March 2001 at an IMO Diplomatic Conference in London. It is unlikely to come into force for at least a couple of years, but the intention is for this latest Convention to fill the gaps left by the earlier CLCs, which effectively date back to 1969 and 1992.¹

Neither the CLC 1969, nor the Protocols to the CLC of 1992, will apply to a spill of bunkers from a non-tanker, such as a bulk carrier. However, in general terms, if the bunker barge supplying the oil could be classed as a "tanker" and the spill occurred from the bunker barge, the CLC in one of its two forms would probably apply.

The fact that many countries are now focusing more closely on bunker spills can be seen from the new compulsory insurance requirements which have come into force in Australia.

As from 6th April 2001, all ships larger than 400 GT which are visiting an Australian port and are carrying oil as cargo or bunkers must have a "relevant insurance certificate". This rule does not cover oil tankers which are already required to have such insurance under the 1992 CLC. Clearly, therefore, the rule is aimed at non-tankers and by implication, at bunker pollution. Amongst other things, the "relevant insurance certificate" must state the amount of insurance cover, or other financial security, which "must be no less than the limit of any liability applicable under relevant international law". The good news is that, in most cases, the requirements should be met by carrying on board the original P&I Club certificate of entry, or a certified copy. The certificate must be produced on request.

Other problems with "good" bunkers

As can be seen from the above, bunkers do not have to be "bad" to cause serious problems. Apart from the pollution aspect, even on-specification bunkers can cause problems and damage, as can be seen from the example described below.

A purpose-built car carrier, laden with cargo for Japan and entered with Gard, was bunkering heavy fuel oil in the Far East just before Christmas 2016. The vessel was receiving bunkers into the No. 1 port and starboard bunker tanks. Because an inlet valve had been left open, bunkers leaked into the No. 4 centre heavy fuel oil tank. This tank was nearly full. Not surprisingly, it filled up and the excess oil overflowed up the ventilation pipe. Unfortunately, this pipe had a small hole, later found to have been caused by corrosion, through which fuel oil leaked out. Where did it go? Approximately 3 MT leaked out on to a car deck in No. 2 hold. Some of this ran down through lashing openings on to a further three car decks. As if this was not bad enough, a further, fortunately small, quantity of fuel oil leaked from a previously repaired part of the ventilation pipe from No. 4 centre F.O. tank. The cargo was BMW cars! Some 41 cars were badly damaged. A further 209 were slightly damaged. The estimated liability on the Club is USD 250,000. In addition, some areas of the vessel were heavily oiled and had to be cleaned. The time and expense involved in cleaning the vessel is unlikely to be covered by the P&I insurance. It is owners' responsibility to properly clean and prepare the vessel for loading and carrying cargo.

Bunker shortages

Engineers reading this article will know the difficulties involved in accurately measuring and perhaps more importantly, agreeing with the bunker supplier, the quantity of bunkers supplied. Inevitably, with a bulk liquid, there will be some minor measurement variations. Equally, however, there are examples where the difference between the bunker supplier's figures and the vessel's figures are substantial. It always seems to be the case that the supplier's figures are higher than the vessel's figures.

In a case mentioned in a recent warning issued by DNV and Intertanko, a vessel bunkered diesel and fuel oil. The responsible engineer on board the vessel recorded substantial shortages for both products. In the case of the diesel, the bunker barge's figure was 119.69 cbm , whereas the vessel's figure was 93.0 cbm, a shortage of 26.69 cbm. At the request of the vessel, the bunker barge resumed pumping diesel. Problems were also noted in relation to the fuel oil. The flow from the barge to the vessel was very slow. When the engineer commented on this, the crew of the bunker barge were seen to adjust a valve on board the barge, which resulted in the flow speeding up. Even so, on completion of bunkering, the vessel still recorded shortages of some 3 MT in relation to the fuel oil and some 19 MT in relation to the diesel.

"Bad" bunkers

We have seen how perfectly good (i.e., within specification) bunkers can cause serious problems and liabilities. Bad bunkers - bunkers which are off-specification - can cause equally difficult and expensive problems and liabilities.

Gard News issue No. 156 contains an article dealing with procedures for bunkering.² It includes comments and suggestions in relation to sampling and testing the bunkers received, as well as practical advice, especially regarding the sampling and testing of bunkers before use. A little prevention at an early stage can avoid the need for a lot of (expensive) cure at a later date!

Speed and consumption claims

Unfortunately for ship owners and charterers and their insurers, proper sampling and testing is not always carried out. As a result, fuel which is off-specification in some way may well be supplied to the vessel. This does not mean that serious problems will automatically follow. The vessel's engine may be capable of using the fuel, albeit with a reduced power output and/or a greater consumption of fuel to produce the same power. Such circumstances are, however, likely to lead to a claim by charterers either because the vessel has burned a larger quantity of bunkers than she should have, or because she has taken longer to complete the voyage (because of the reduced power output). Often, the claim is a combination of the two aspects - what is called a speed and consumption claim.

Claims for delay

A speed and consumption claim by itself is not necessarily particularly difficult or expensive, but a long delay in the voyage will mean a delay in the delivery of the cargo. Often, this may not matter. Sometimes, however, it may be extremely important to both the seller and the buyer, especially if the price of the cargo has gone up or down during the period of delay. In such circumstances, the party who may have lost money because of the delay may well bring a claim against the vessel. Depending on the cargo and the variation(s) in price, the amount may be large. Further, the cargo itself may have suffered damage. Many fruit and vegetable cargoes have a limited shelf life and the conditions under which they are carried are calculated as precisely as they can be for the expected length of the voyage. A delay of only a few days can upset these calculations. The result can often be a claim for damage to the cargo, often the entire cargo if the vessel is carrying foodstuffs with a limited shelf life.

Conclusion
Being human, all of us will make mistakes from time to time. Fortunately, these mistakes rarely have important consequences, but from time to time, a person involved in the bunkering operation, or in the preparation and use of the bunkers on board the vessel, will make a mistake which results in a spill of bunkers, or in damage to the main engine or other machinery on board.

Clearly, it is impossible to do away with human error completely. One must accept that accidents will happen from time to time - that is what P&I insurance is for. However, by properly following well prepared and clearly explained procedures, the problems and incidents mentioned above can be avoided.