• 4 minutes Trump has changed into a World Leader
  • 7 minutes China's Economy and Subsequent Energy Demand To Decelerate Sharply Through 2024
  • 8 minutes Indonesia Stands Up to China. Will Japan Help?
  • 10 minutes US Shale: Technology
  • 13 minutes Which emissions are worse?: Cows vs. Keystone Pipeline
  • 17 minutes Shale Oil Fiasco
  • 3 hours Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 12 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 2 hours Phase One trade deal, for China it is all about technology war
  • 5 hours Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded
  • 9 hours Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 11 hours Might be Time for NG Producers to Find New Career
  • 12 hours Prototype Haliade X 12MW turbine starts operating in Rotterdam
  • 1 day Beijing Must Face Reality That Taiwan is Independent
  • 10 hours Wind Turbine Blades Not Recyclable
  • 7 hours Swedes Think Climate Policy Worst Waste of Taxpayers' Money in 2019
  • 10 hours Denmark gets 47% of its electricity from wind in 2019
Alt Text

China’s Cheap Electric Vehicles Could Disrupt Global Markets

China’s legion of electric vehicle…

Alt Text

The Single Biggest Factor In Oil This Week

China has been the key…

Alt Text

Is This The End For Big Oil Dividends?

Big oil has been living…

Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Oil Industry Faces $1 Trillion Challenge

When the International Maritime Organization announced it would introduce a new, lower, sulfur emission ceiling for bunkering fuel, many in the energy industry worried that demand for high-sulfur fuel oil would suffer a blow from which it would not be able to recover. But then scrubbers—equipment that strips sulfur from bunkering fuel—were floated as a relatively easy to deploy alternative to switching to low-sulfur fuel. Now, however, scrubbers’ future is questionable.

S&P Global Platts reported recently that at a maritime industry event, the MARE Forum in Houston, scrubbers had garnered significant attention, and this attention had not been particularly positive.

A little over 1,500 vessels have been fitted with sulfur scrubbers as of October this year, according to the senior vice president of engineering and technology at the American Bureau of Shipping. By January 2020, when the new emission rules come into effect, the number of scrubbers both installed and ordered would reach 2,278, S&P Global Platts has calculated. And all these vessels will be producing sulfur acid-rich wastewater from the scrubbers and will need high-sulfur fuel.

One port, Singapore, has already banned the discharge of wastewater from vessels fitted with sulfur scrubbers. Chances are it won’t remain the only one. But there’s more. Singapore’s Port Authority also introduced a requirement that all vessels calling at the port should use 0.5-percent sulfur fuel. Again, Singapore is by far not the only port setting new fuel requirements for vessels in compliance with the IMO rules.

So, these 1,500 (and counting) vessels that already sport scrubbers or are to get one in the next year, will not just have to find a way to dispose of their wastewater without violating port regulations, but they will also need that high-sulfur fuel that the scrubbers scrub, and that will be less available after the 2020 rules kick in as most ports are preparing to offer the new, compliant fuel. In other words, scrubber-fitted vessels are facing a complex situation: not enough high-sulfur fuel and unfriendly port authorities banning the discharge of wastewater from these scrubbers. Related: The U.S. Oil Industry’s Dirty Little Secret

But they could just load on low-sulfur fuel, right? They sure could, but that would kind of make the investment in a scrubber meaningless. According to the chief executive of the Chamber of Shipping of America, Cathy Metcalf, the payoff period for a scrubber ranges between half a year and three and a half years. But if the vessel owners are forced to pay for costlier low-sulfur bunkering, then this period would likely extend.

As if that’s not enough problems already, some of the delegates at the MARE Forum warned that the scrubbers did not, in fact, reduce a vessel’s overall emissions because of the additional energy needed to scrub the sulfur from the fuel. When stricter environmental rules are enforced in the near future, this will also affect the benefits of opting for scrubbers instead of low-sulfur fuel.

The head of S&P Global Platts Analytics, Chris Midgley, said in September that the new rules will have an impact worth US$1 trillion on the energy industry over a period of five years as well as reverberations across many other industries. Vessel owners might want to think well before opting for scrubbers lest they end up costing them more, rather than less than switching to a more expensive fuel.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage




Leave a comment
  • Oilmike on December 17 2018 said:
    Looks to me like the companies selling these scrubbers to the shipping industry have made out like bandits.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play