GAO says replacement of US single-hull tankers unlikely

The US General Accounting Office said Friday that, as US shipping companies take single-hull tankers out of service over the next 14 or so years, as required by law, few double-hull ships will be built to replace them. Most US shipping firms say they will simply take their vessels out of service ahead of deadlines while taking a 'wait and see' approach to making replacements in the future.


The US General Accounting Office said Friday that, as US shipping companies take single-hull tankers out of service over the next 14 or so years, as required by law, few double-hull ships will be built to replace them. Most US shipping firms say they will simply take their vessels out of service ahead of deadlines while taking a 'wait and see' approach to making replacements in the future.

GAO, a congressional watchdog agency, analyzed the impact of the 1990 Oil Pollution Act, which requires that the use of single-hull oil tankers be phased out during 1995-2014. After Jan. 1, 2015, only double-hull vessels may be used.

The legislation was designed to lessen the risk of oil spills. If a double-hull ship were damaged in an accident, the inner hull carrying the oil likely would remain intact.

GAO says, as of October 1999, there were 144 US-built single-hull vessels larger than 5,000 gross tons still certified to carry oil. It said some ship owners have extended their phase-out deadlines by carrying less oil in the vessels, since deadlines are based in part on capacity, with larger vessels being phased out first. Vessel owners no longer can obtain extensions.

The report said 17 vessels extended their original phase-out deadlines by reducing their tonnages, and 5 of those have since been retired from use in US waters.

GAO said, "The 22 domestic shipping companies we contacted that own single-hull oil vessels said they have only limited plans to replaced or convert these vessels. Most said they would simply take their vessels out of service [ahead of] their phase-out deadlines and would take a 'wait and see' approach to making replacements in the future.

"The industry currently has more vessels than needed to meet the current shipping demand, and vessel owners said the rates they receive for shipping oil products are currently not high enough to justify investing in replacements for the future."

GAO said that, considering double-hull capacity and the limited number of planned double-hull replacements, the phase-out of single-hull vessels will cut total carrying capacity by about 1.9 million gross tons by the end of 2005, assuming no major changes in industry replacement plans.

"Decisions by ship owners to make only limited replacements will probably have little effect on the ability to meet demand over the next few years, because the available supply of US-built vessels is still expected to be greater than demand for their services. Beyond the next few years, however, the potential effect of limited replacements is less certain.

"Shipping company officials, along with oil company officials we contacted, said that if enough US- built vessels could not be found to move oil between US ports, their most likely alternatives would be to import oil products from foreign ports using non-US ships or to make greater use of domestic pipelines,� said GAO.

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