VANCOUVER, CANADASEPTEMBER 23, 2010

INTERTANKOand

TANKER SAFETYJOSEPH ANGELO

DEPUTY MANAGING DIRECTOR

OVERVIEWOVERVIEW

• INTERTANKO

• International regime for tanker safety

• Tanker statistics

• Risk management

INTERTANKOINTERTANKO

INTERNATIONAL ASSOCIATION OF INDEPENDENT TANKER OWNERS

• Non-profit organization

• Established in 1970

• Voice of the independent tanker owners

INTERTANKO INTERTANKO

MISSION

Provide Leadershipto the Tanker Industry

in serving the World

with the SAFE, ENVIRONMENTALLY

SOUND AND EFFICIENT seaborne transportation of oil, gas

and chemical products

INTERTANKOINTERTANKO

PRIMARY GOAL

Lead the CONTINUOUS IMPROVEMENT

of the Tanker Industry’s Performance

in striving to achieve

the Goals of:

• Zero Fatalities

• Zero Pollution

• Zero Detentions

MEMBERSHIPMEMBERSHIP

MEMBERSHIP is open to independent tanker owners and operators of oil and chemical tankers (i.e. non-oil companies and non-state controlled tanker owners) who meet the membership criteria.

ASSOCIATE MEMBERSHIP is available to any entity with an interest in the shipping of oil and chemicals.

MEMBERSHIPMEMBERSHIP

• 250+ Members

• 3,000+ Tankers

• 260+ Million DWT• Members in 40+ countries

• MORE THAN 75% OF THE INDEPENDENT TANKER FLEET

• 320+ Associate Members

MEMBERSHIPMEMBERSHIP

0

55

110

165

220

275

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

0

500

1,000

1,500

2,000

2,500

3,000

3,500

No. members

m dwt

No. ships

Members/million dwt No. of tankers

SECRETARIATSECRETARIAT

• 24 STAFF MEMBERS IN 4 OFFICES

Oslo (12), London (10), Singapore (1)

USA (1) + Brussels, Manila (consultant)

• STAFF INCLUDES

- Managing Director

- Technical Director

- Director, Regulatory Affairs

- Marine and Chemical Director

- General Counsel

Annual General Meeting

Council

Associate Members Committee

Bunker Sub-Committee

Chemical Tanker Committee

Chemical Tanker Sub-Committee Americas

Human Element in Shipping Committee

Documentary Committee

Environmental Committee

Insurance & Legal Committee

Executive Committee

Safety and Technical Committee

Information Technology (IT) Committee

Offshore Tanker Committee

Short Sea Tanker Group

Vetting Committee

Worldscale Committee

ASIAN REGIONAL PANEL

HELLENIC FORUM

LATIN AMERICAN PANEL

NORTH AMERICAN PANEL

EUROPEAN REFERNCE GROUP

Q-Quest Sub-Committee

Management Committee

Shipowner Issues Sub-Committee

Governance Structure

15 Committees5 Regional Panels

MAIN ENVIRONMENTAL ISSUESMAIN ENVIRONMENTAL ISSUES

• Air emissions

- Green House Gases

- Exhaust Gas emissions (Annex VI & its revisions)

- VOC emissions

• Spill Prevention and Response Planning• Ballast Water management • Biofouling• Antifouling systems• Ship Recycling• Port Reception Facilities (adequacy & affordability) • Waste management (onboard and ashore)• Radiated Noise pollution• Cetacean strikes

INTERNATIONAL REGIMEINTERNATIONAL REGIME

• International shipping is regulated by the International Maritime Organization (IMO), a specialized agency of the United Nations

• IMO’s main objective is to facilitate cooperation among governments on technical and legal matters affecting international shipping to achieve the highest level of international standards for maritime safety, maritime security and protection of the marine environment

• This is accomplished through the development of international conventions, codes, and recommendations.

INTERNATIONAL REGIMEINTERNATIONAL REGIME

• Safety of Life at Sea (SOLAS)• Prevention of Pollution (MARPOL)• Standards for Training and

Watchkeeping (STCW)• Preventing Collisions at Sea (COLREGs)• Loadlines• Oil Pollution Response (OPRC)• Ballast Water Management• Recycling of Ships

SOLAS CONVENTIONSOLAS CONVENTION

• Design and construction

• Subdivision and stability

• Machinery and electrical

• Fire detection and prevention

• Lifesaving

• Radiocommunications

• Safety of navigation

• Safety Management

• Security

MARPOL CONVENTIONMARPOL CONVENTION

Six mandatory Annexes

- Oil- Chemicals- Packaged goods- Sewage- Garbage- Air emissions

MARPOL CONVENTIONMARPOL CONVENTION

Annex 1 - Tanker requirements

• Double hulls

• Damage stability

• Tank size limitations

• Limitations on operational discharges

- From cargo tank area

- From machinery spaces

• Monitoring equipment

• Emergency response planning

Investment in New Tonnage - Move to Double Hulls

• More than USD 500 billion invested since 2000 with the result that ~95% of tanker fleet* double hulled by end 2010* over 10,000 dwt

622

5159

67 68 73 78 84 91 9694

78

4941

33 32 27 22 16 9 4

0

20

40

60

80

100

1991

1997

End 0

2

End 0

3

End 0

4

End 0

5

End 0

6

End 0

7

End 0

8

End 0

9

End 1

0

SH/DB/DS

DH

% dwt share:

Average age tanker fleet above 10,000 dwt

Based on LRFairplayBased on LRFairplay

6

8

10

12

14

1619

70

1973

1976

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

Years

Tanker Incidents and accidental pollution

Number incidentsNumber incidents

Source: INTERTANKO, based on data from LMIU, ITOPF and othersSource: INTERTANKO, based on data from LMIU, ITOPF and others

‘‘0000 ts pollution0000 ts pollution

0

210

420

630

840

1050

78

79

80

81

82

83

84

85

86

87

88

89

90

91

92

93

94

95

96

97

98

99

00

01

02

03

04

05

06

07

08

09

10

0

120

240

360

480

600

Misc/Unknown

Fire/Expl

Hull & Machinery

Grounded

Coll/Contact

Oil pollution

2010 projection based on 110 days

Tanker incidents 2009

Rate is number incidentsdivided by number tankersin the segment

Worst incident 2009 may be collision/fire Formosa Brick collision in the Straits of Singapore Aug 2009 9 fatalities and Elli that broke in to two at the entrance Suez Canal.

Groundings 24%

Fire&explosions, 7%

Hull&Machinery 25%

57 incidents34 engine

related

Misc, 17%

Collision/contact 27%

Collision/contact Grounding Fire/Explosion Hull & machinery Misc/unknown

dwt range Number % Rate

Below 10,000 107 47% 0.014

10-29,999 43 19% 0.025

30-99,999 60 26% 0.020

100,000+ 17 7% 0.010

Total 227 100% 0.016

Decade built Number % Rate

Unknown 6 3%

Built 1970s 32 14% 0.012

Built 1980s 43 19% 0.017

Built 1990s 48 21% 0.015

Built 2000s 98 43% 0.017

Total 227 100% 0.016

Tanker hull & machinery incidents

Number incidentsNumber incidents

Based on data from LMIU, ITOPF + othersBased on data from LMIU, ITOPF + others

0

100

200

300

400

50078 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10

Engine

Hull & Machinery

Split engine and other Hull & Machinery as from 20022010 is a projection based on 110 days

Tanker hull & machinery incidents

Number incidentsNumber incidents

Based on data from LMIU, ITOPF + othersBased on data from LMIU, ITOPF + others

Year <10 years 10-24 years >25 years TotalAverage

age

2002 4 3 15 22 17.5

2003 3 3 8 14 18.4

2004 2 2 7 11 18.0

2005 9 5 20 34 17.6

2006 12 3 17 32 14.3

2007 20 3 25 48 13.2

2008 25 10 24 59 15.6

2009 8 13 22 53 16.7

2010* 6 3 5 14 17.5

Total 89 45 143 287 15.6

2010 figures are for 110 days2010 figures are for 110 days

Accidental oil pollution into the seaspills per tonne-miles 1970-2009

Source: INTERTANKO/ITOPF

1000 ts spilt1000 ts spiltper bn tonne milesper bn tonne miles

Record low 2008 and gain - record low 2009

0

12

24

36

48

60

1970 1973 1976 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009

Accidental oil pollution into the sea and tanker trade

Source: INTERTANKO/ITOPF/Fearnleys

10001000ts spiltts spilt

bn bn tonne-milestonne-miles

Record low accidental pollution from tanker in 2008 and in 2009

0

1

1

2

3

4

1970s 1980s 1990s 2000s

0

4

9

13

18

22

1000 ts spilled

m ts transported

- 63% -3% -82%

Incidents attended by ITOPF over the past 5 yearsMost oil spills come from bunkers and other shiptypes than tankers

Number of incidentsNumber of incidents

Source: International Tankers Owners Pollution Fund (ITOPF)Source: International Tankers Owners Pollution Fund (ITOPF)

0

2

4

6

8

10

12

14

16

18

20

2004 2005 2006 2007 2008 2009

Tankers

Non-tankers

Estimated total average annual U.S. Oil Spillage

Based on data from USCGBased on data from USCG

bbls

Storage and consumption include: Non-Tank Vessels (Cargo Ships) (2%), Other vessels (5%), Gas stations and Truck stops, Residential, Aircraft, Inland EPA-Regulated facilities (77%), Coastal facilities (Non-Refining) , Inland unknown, Motor vehicles, Others Transport includes: Inland pipelines (80%), Tanker trucks (10%), Railroads (2%), Tank ships (4%), Tank barges (percentages are percentages for the period 1998-2007 for the particular segment. (Percentages in graph is the tank ships percentage of total spillage for he period).

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

1969-1977 1978-1987 1988-1997 1998-2007

Other Transport

Tank Barges

Tank Ships

Production

Refining

Storage And Consumption

Tank Ships 30%

Tank Ships 15%

Tank Ships 8%

Tank Ships 2%

Pollution from tankers in the US have been strongly reduced both in absolute terms

and as a percentage of total spillage in each period

““WALK THE TALK”WALK THE TALK”

Proactive approach

• Distillate fuels – proposed that IMO require all ships to switch from residual fuels to distillate fuels

• TOTS – developed Tanker Officer Training System to augment existing mandatory requirements

• Targets for GHG emissions – first to propose the IMO set Greenhouse Gas emission targets for shipping

Risk Management

Involves:• Identifying and understanding risks• Mitigating or eliminating risks, where possible• Avoiding unacceptable risks• Balancing risk & reward to arrive at the best

decision for all involved

Goals:• To protect people, the environment and property• To avoid a catastrophic incident• To prevent disruptions to commerce and trade• To improve quality of available tonnage

Risk Management

• IMO provides robust requirements for tanker design, construction, equipment, machinery, tank size, damage stability, operational requirements and crew training

• Opportunities exist for certain navigational matters

IMO Ships Routing

IMO Ships’ Routing Publication

• Traffic separation schemes• Deepwater routes• Areas to be avoided• Other routing measures

– Two way routes (Strait of Juan de Fuca)– Directions of traffic flow– Navigation around the coast

• Mandatory ship reporting• Mandatory routing systems• Mandatory no anchoring areas

Concluding Remarks

• INTERTANKO is a highly respected, responsible association with tanker safety as its highest priority

• IMO comprehensively regulates tanker safety through mandatory requirements

• Statistics clearly show a distinct improvement in tanker safety

• Risk Management analysis is the best way forward to address local/regional issues or concerns

THANKTHANK

YOU!YOU!