marine news - september 2010

T H E I N F O R M A T I O N A U T H O R I T Y F O R T H E W O R K B O A T • O F F S H O R E • I N L A N D • C O A S T A L M A R I N E M A R K E T S

MarineNews S E P T E M B E R 2 0 1 0

W W W . M A R I N E L I N K . C O M

On the WaterCaptain RustyReporting from Theresa Woodon the Mighty Mississippi

Tech FilePlastic HullPrototype plastic boat forthe U.S.Navy

Rough Waters

OffshoreIndustry Leaders Assess the Drilling Ban Mess

CONTENTS MarineNews September 2010 • Volume 20 Number 9

TechFile

8 Flexible Plastic HullU.S. Navy alternative to aluminum boats

Blogs

10 Waiting for the Ship to Come InBy Joseph Keefe Hawaii Superferry in the rearview mirror

Insights

12 James Adams, OMSABy Raina ClarkAdams replaces Ken Wells

Boat of the Month

16 CakewalkLargest yacht built in the U.S. ... ever

Raina on the Rivers

24 Meet Captain Rusty By Raina ClarkA Captain and his loyal crew navigate the mighty Mississippi

Offshore

28 Rough Waters AheadBy Susan BuchananOffshore industry leaders assess the damage from the moratorium on drilling

Military Craft

32 Series Built Composite HullsBy Raina ClarkWestport Shipyard enters military market

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PUBLISHERJohn C. O’Malley • [email protected]

Associate Publisher & EditorGreg Trauthwein• [email protected]

Managing EditorRaina Clark • [email protected]

Contributing WritersLawrence R. DeMarcay, III • Frederick B. Goldsmith • Matt Gresham •

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MarineNews On the Cover

Rough Waters OffshoreAs the offshore drillingmoratorium continues,industry leaders discussthe future of an industry.Pictured is Tidewatervessel William CO'Malley, an anchorhandling towing supplyvessel. Photo courtesyTidewater, Inc. Story starts on page 28

Legal Perspectives

18 Indemnity Provisions in ContractsBy Frederick B. Goldsmith

Employment

22 Retaining New HiresBy Eric Helpenstell

34 People & Company News40 Directory41 Products43 Classified48 Ad Index

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This edition of MarineNews is full of insights from large and small players in the Gulf

of Mexico, as well as a special interview with the new interim President and CEO of

the Offshore Marine Service Association (OMSA), James Adams.

We are all searching for the same thing: Answers.

Inside these pages, industry leaders have told us how the drilling moratorium is impacting

them on the ground level, at this moment, and how they believe it will impact them in the

not too distant future. But a common goal of all these leaders is to get more information out

of the administration, and at this point there are far more questions than answers:

• How much longer will the deepwater moratorium continue?

• How long can we expect the Continental Shelf permitting process to remain slow and crippled?

• What will the new post-Deepwater spill regulations look like?

As Adams described in his interview, it is at once paralyzing and chaotic for an industry so tightly run by regulations

to suddenly be without a rulebook.

While the search for answers continues in the offshore arena, I give you the second article in my series on the inland

waterways and my eight-day trip aboard two towboats. I was happy and honored just a few days ago to get a call from

the crew of the Theresa Wood who told me they’d received their copies of the August edition of MarineNews which fea-

tured their daily work life and the issues that face boat operators on the inland waterways. These guys are so full of char-

acter it’s not hard to imagine them starring in a future reality show, something like, say, Mississippi River Cowboys.

Next month I’ll conclude the series with my ride aboard the Thomas E. Erickson down the Illinois River from Pekin,

Ill. to St. Louis, Mo. I’ll look at differences in the Upper Mississippi and Illinois Rivers and compare the experiences

of old-time towboaters with those of mariners who have just stepped aboard. Look for the series via our company’s

online channels, such as Marinelink.com and Maritimeprofessional.com, as well as in the pages of MarineNews.

SUBSCRIBESubscribe to the print or electronic edition of MarineNews at www.marinelink.com/renewsubscr/Renew04/subscribe.html or e-mail Kathleen Hickey at [email protected]

DAILY NEWS via E-MAILTwice every business day we provide breaking news, tailored to your specification, delivered FREE directly to your e-mail. To subscribe visit http://maritimetoday.com/login.aspx

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ADVERTISEMN offers a number of print and electronic advertising packages. To see our editorial calendar and advertising rates, visit www.marinelink.com/AdvRates/Rates.asp

Raina Clark, Managing Editor, [email protected]

Want to hear more from behind the editor’s desk? Visit the MarineNews Notes blog at www.MaritimeProfessional.com.

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EDITOR’S NOTE rainaclark@ marinelink.com

8 MN September 2010

TECH FILE

Stanley Widmer Associates, Inc., of Staples, Minn.,recently completed sea trials on a vessel for the U.S. Navydesigned as an alternative to aluminum boats currentlyused to detonate mines. Aluminum boats often do notwithstand the blast, however the Widmer flexible double-hull boat is designed to reduce G-shocks on the occupantsand be unsinkable. Stanley Widmer, President and DesignEngineer of Stanley Widmer Associates, has been pursu-ing a design for a stronger boat ever since his youth whenhe raced speed boats on Lake Winnebago. He came upwith the concept of a plastic boat in 1960 after the devel-opment of the polyethylene crosslinked material. In 1972he started an engineering company and used it to pur-chase the design. In 2002, Stanley received a patent for hisconcept. Widmer was approved funding from Congress inDecember 2005 and finally receivedan approved contract for $1.2m tostart work in March 2007. In 2009Widmer received another $3m tocontinue the project. The Navy’soriginal idea was to build a remotecontrolled boat to trigger minesplaced in shipping lanes and har-bors, but the concept turned into a

manned patrol boat. The Widmer hull consists of anExxonMobil High Density Cross-Linked Polyethylenematerial rotationally molded in a cast aluminum toolemploying Widmer’s patented “kiss-off ” design. To createthe hull, poly-ethylene pellets are poured into the castingsand heated. During the process, a cross-link action takesplace. After heating, the mold is cooled and the doublehull is removed. The entire process takes about four hours.The temperatures need to be exact or the cross-linkingaction won't occur. Widmer’s pilot boat took its maidenvoyage at Lake Osakis May 12, 2010. During trials, itsfirst run achieved a top speed of 38 miles per hour. Testingincluded rock impacts, beaching, smashing docks, navi-gating 18 inches of water and small arms fire. Widmerreported that the tests were successful and the hull per-

formed well on S turns and panic stops.The vessel is powered by a single 250bhp, 4,300 rpm Steyr MotorsMO256K43 Diesel engine on amonoblock design (head is cast withthe block) with electronic controlledmechanical injectors. Propulsion isprovided by an UltraJet 251 axial flowpump with a 9.8-in. dia. impeller.

Flexible Plastic Hull Prototype

SpecificationsLength . . . . . . . . . . . . . . . . . . . . . . . .22.8 ftBreadth . . . . . . . . . . . . . . . . . . . . . . . .8.4 ftDisplacement, laden . . . . . . . . . . .4,710 lbsPower . . . . . . . . . . . . .1x 184 kW (246 bhp) . . . . . . . . . . . . . . . . . . . . .Steyr MO256K43Transmission . . . . . . .ZF63 with 1.25:1 ratioPropulsion . . . . . . . .1x UltraJet 251 waterjet

www.stanleywidmerassociatesinc.com

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www.marinelink.com MN 9

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Posted on MaritimeProfessional.com

Kauai, Hawaii: Standing on the pier this past week,clutching my $7 bottle of spring water, I scanned the hori-zon over and over again, searching in vain for the arrival ofthe Hawaii Superferry. It never came and it never will. Thereasons for that have been hashed over a hundred times,but given the opportunity to nose around a bit for myselfwhile also fulfilling my obligations here at a “destination”wedding; I revisited the scene of the crime. What I foundout isn’t all that earthshaking, but for me, it did put thefinal nail in the coffin of this saga. You can probably alsokiss Title XI goodbye, while we’re at it.

It has been almost three years since a bunch of gnarlysurfer dudes defeated the Coast Guard in the battle ofNawiliwi Harbor. Protesters on surfboards blocked theharbor entrance and because the Coast Guard was unableto control them, HSF executives then made the wise deci-sion to turn around and head back to Honolulu with a fullload of disappointed passengers. Service was suspendedindefinitely at that point, and ultimately, never recom-menced. A temporary security zone in waters of NawiliwiliHarbor, Kauai and around adjacent jetties came too late,as did a weak law enforcement response to those protests.The courts eventually finished the job and today, the aver-age Hawaiian citizen is all but prevented from travelingfreely between the various islands. But, you knew all that.

A short cruise on a 60-foot boat provided the perfectnautical backdrop as an excuse to be suitably nosey. Ayoung deckhand was the first to speak up. “Nobody want-ed that thing,” I was told firmly. Really? Why? “Well, wehad to keep out the frogs.” Frogs? “Yes, they come over inpeople’s cars.” Wow. You mean like invasive species? “No,frogs.” The Superferry could hit and kill whales, thecrewmember continued. I replied that this was certainly alegitimate complaint, but wasn’t it possible that our boatmight do the same thing as we hurtled through the swellsat 17 KT? “No, we’ve got lookouts.” Oh – well, who is thelookout then? “Me. Would you like another chardonnay?”Yes, please!

With my drink sloshing dangerously like an overfilledbunker tank, I lurched my way up to the conning station

where I hoped to drag something a bit more lucid out ofour helmsman. The boat’s senior officer proved to beexceedingly open and pragmatic. “The superferry wouldhave saved us a ton of money in terms of getting suppliesand spares to the island. The airfreight is expensive and thelocal interisland water freight service is no better.” He thenadvised me that he was all for the Superferry, but they hadgone about it “all wrong.” Really? How so? “Well, theyshould’ve waited for the EIS to be completed.” Fairenough. Did you have to get an EIS completed in order tostart or keep running in these trades? “Well, no.” I glanceddown at his handsome diesel display panels, engines run-ning smoothly in our run back to the dock. Are you run-ning green, low-sulphur diesel? “Well, no. We’re supposedto but we can’t get it right now so they let us operate with-out it.” Oh…

The next morning, and back at my none-too-cheap con-dominium, I took the kids down to the pool for a quickdip before another mandatory wedding event. We met avery nice elderly couple from the mainland who, six orseven years previous, decided to move to Kauai perma-nently. We exchanged pleasantries and I wasted no time inlaunching into my mission. “They never had a chance,”the older gentleman deadpanned. “The protesters — smallin number — were too well organized.” As it turned out,they were apparently well-financed, too. I was told thatlocal, wealthy and longtime residents simply did not wantanyone else on the island. Our new retired friends wereotherwise neutral on the concept. One way or another, sothey claimed, it made no difference to them.

The final local input of the week was also the most illu-minating. A local contractor out of Honolulu insisted thathe loved the ferry, primarily for the quick mobility itallowed him in his business. He also said that what killedit was the front money provided by others, helping theenvironmentalists to sue. Sadly, it was never Lehman’sintention to cater to the tourism trade or compete withestablished freight services.

An excerpt from a blog entry by Joseph Keefe posted onMaritimeProfessional.com

The global maritime industry has a social networking, news and information portal to call its own:MaritimeProfessional.com. Log on and network with thousands of colleagues and potential business partners fromaround the globe, and keep up to date on critical maritime matters via our exclusive, insightful reports — includingsamples from last month found on the ensuing pages — from a global network of bloggers and industry insiders.

Hawaii Superferry

Waiting for the Ship to Come In


MarineNews spoke with James Adams, the newly appointedinterim President and Chief Executive Officer of the OffshoreMarine Service Association (OMSA), about his background,the challenges facing the members he represents and the newobjectives of his organization. By Raina Clark

In August the Offshore Marine Services Association(OMSA) announced the appointment of James Adams asinterim President and Chief Executive Officer. Adams’appointment followed the resignation of Ken Wells, whohas led OMSA since 2004, and recently left the organiza-tion to pursue other opportunities. Otto Candies, III, thechairman of OMSA’s board of directors stated in a release,“We are sorry to see Ken go as he has served our organi-zation and members energetically for six years. We areexcited that Jim Adams has joined us in an interim capac-ity while we conduct a national search for a new CEO tolead OMSA.”

How did Adams come to be involved in the industryand OMSA?

Adams was most recently Vice President of GovernmentAffairs for American Commercial Lines, Inc. (ACL). Buthe began in the industry as a Coast Guard officer. After atour at sea he was assigned to Coast Guard CongressionalAffairs where he served on the Navigation Sub Committeeand worked to keep the regulatory framework up to speedwith the advancing offshore industry. Adams worked withRobert J. Alario, a former OMSA president, to formulatenew statutory guidelines and new tonnage requirementsfor offshore supply vessels.

“My work on the subcommittee led me to OMSA andits membership back in the early 90s,” Adams said. “Fromthere I went to work with American Commercial Linesand their government affairs and regulatory complianceprograms.”

Adams said his job at ACL prepared him for the work heis doing at OMSA today. “Working for ACL I got a mem-ber’s look at how a well-run trade association operates,” hesaid, referring to his involvement with both AmericanWaterways Operators (AWO) and Waterways Council,Inc. (WCI). “AWO and WCI are good reference points forme.” He described those organizations as being “memberdriven,” meaning they have consistent member participa-

tion in meetings and working group forums and membersfeel they have ownership of the association and its policies.Ultimately, he said, members must be satisfied that thedollars they invest are delivering results.

“It was a mutual decision between the [OMSA] boardand myself to help evaluate where the association is andwhere it needs to go,” Adams said. “Clearly the challengesthat confront the association are immediate. The boardneeds to take a deliberate look at where the associationshould be positioned and what skill set is needed to pro-vide that leadership.”

This interim position, Adams said, allows him to helpthe board evaluate those things.

What are OMSA’s priorities & objectives during thistransition?

Adams has a plan for going about this re-evaluation ofOMSA’s positioning. The first step, Adams said, is to talkto board members and as broad a cross section of OMSA’s250 members as possible to understand where they wantthe association to go.

Next, Adams will reach out to policy makers in the

James Adams President & CEO, OMSA

INSIGHTS

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administration and in Congress. Adams said there are twoareas where better communications can improve OMSAmember business interests. One is clarity on the Jones Act.

“There has been a lot of misinformation over the sum-mer,” Adams said. “During the Macondo (Deepwater)spill we saw the Jones Act work effectively to allow bothU.S. flag and foreign flag vessels to work the response.”

The other area needing clarity is further details from thegovernment on what the moratorium means, when it willbe lifted and what regulatory framework will be put intoplace to allow drilling and exploration to resume.

Adams will also strike up dialogue with other stakehold-ers in the broader maritime community and in the oil andgas industry “to understand where we can work togetherto accomplish mutual goals. I want to strengthen our tieswith other maritime interests and with our members’ cus-tomers in the oil and gas industry.”

Finally, Adams will report his recommendations to theboard in the next couple months. In the mean time, hesaid, “the plan is to maintain our current regulatory work

to address changes to the STCW, the Maritime LaborConvention and a number of environmental regulations.I’m fortunate to have a very good staff at OMSA. Effortsto represent our staff in those areas will go forward.”

How are OMSA and its members dealing with thechallenges presented by the drilling moratorium andthe attack on the Jones Act?

“We’re in a very unfamiliar place,” Adams said. “Theuncertainty of the moratorium has created a very difficultbusiness environment.”

“We’re a service industry and we serve a highly regulat-ed industry. Since the Macondo event we’ve seen that reg-ulatory framework shut down. Usually there’s a regulatoryprocess to follow. People need to make business plans. Weare hoping and asking for that clarity.”

When asked what the impact of the moratorium hasbeen so far, Adam said “We’re seeing a market contraction.Obviously, the moratorium will have a direct effect on ourmembers.”

“We’re a secondary party to the drilling permittingprocess,” he explained, but permitting has a direct impacton the contracts available to OMSA members. “It’s idlednumerous vessels in the gulf,” he said, but “the directimpact has been delayed because of work on the Macondoresponse. But those vessels are coming off contracts nowand without deepwater exploration and production andthe deepwater rigs, there will be more vessels available toserve fewer jobs in shallow water.”

Even on the continental shelf, Adams said he’s seen thepermit process slow measurably through the Bureau ofOcean Energy Management, Enforcement andRegulation (BOEMER), which is now tasked with pro-cessing drilling permits in place of the defunct MineralManagement Service (MMS). “There’s not a moratorium[in shallow water], but regulatory clarity is needed.”

In response to attacks on the Jones Act that emergedduring the spill response, Adams said the industry is pre-sented with an opportunity. It is a chance, he said, todemonstrate to the administration and Congress thatJones Act vessels have successfully worked side by sidewith non Jones Act Vessels. Adams said there are manyeconomic and national security reasons to support JonesAct.

INSIGHTS


MN

BOAT OF THE MONTH

On August 8, Derecktor Shipyards launched the 281-ftmotor yacht Cakewalk, the largest yacht (by volume) everbuilt in the U.S. The six-deck, 2,998 gross ton vessel float-ed off Derecktor’s new 4,000 ton dry-dock into the watersof Bridgeport harbor after several years and many thou-sands of skilled labor hours.

Cakewalk was designed by Tim Heywood Designs withNaval Architecture by Azure Naval Architecture. Interiordesign was by Dalton Designs, Inc. Dozens of subcon-tractors from engineering firms to security specialists par-ticipated in the project.

“We certainly could not have done it without them” saidGavin Higgins, Vice President of Business Developmentat Derecktor.

“Some of the world’s most experienced and skilled spe-cialists put their expertise into this job. You cannot suc-cessfully build a yacht of this size and complexity withouthaving that sort of talent available.”

The yacht will remain at Derecktor for the next fewweeks undergoing final outfitting and sea trials. She isscheduled to make her debut at the Ft. LauderdaleInternational Boat Show in October.

Cakewalk


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RIGHT: The christening of the 281-ft motor yacht Cakewalk.

BELOW: The 281-ft, 2998 gt motor yacht Cakewalk built by Derecktor Shipyards.

Touted as the Largest Yacht Ever Built in the U.S.

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Cakewalk Specifications:Length, o.a. . . . . . . . . . . . . . . . . . . . . . 281 ftLength, w.l. . . . . . . . . . . . . . . . . . . . . . 248 ftBeam . . . . . . . . . . . . . . . . . . . . . . . . . 46.9 ftDraft. . . . . . . . . . . . . . . . . . . . . . . . . . 13.1 ftGross tonnage . . . . . . . . . . . . . . . . . . . 2,995Propulsion . . . . . . . . . MTU - 2x 16V400M71 @ . . . . . . . . . . . 2465BKW (3306 hp) @ 200 rpm Propeller . . 2x 5 Blade Rolls Royce Single PitchSpeed . . . . . . . . . . . . . . . 17 knots / 15 knotsFuel capacity . . . . . . . . . . . . . . . . 97,000 gal Range. . . . . . . . . . . . . . . 5000 nm @15 knots Power generation. . . . . . . 2x MTU 2000 series . . . . . . . . . . . . . . . . . V12 M-40B @ 660 ekW. . . . . . . 2X MTU @60 550 Series @ 350 ekW

Emergency pack. . . . . . . . . . 1x MTU S60 400 . . . . . . . . . . . . . . . . . . . . . . Series @ 275 kWStabilizers . . . . . . . . . 4x Quantam Zero SpeedBowthruster . . . . . . . . . . . . . Jastrom 400 kWWindlasses . . . . . . . . . . . . . . . . . . . . . . SteenInterior designElizabeth Dalton, Dalton Designs,Exterior design . . . . . . . Tim Heywood DesignsNaval architecture . . . . . Azure Naval ArchitectsEngineering design. . . . . . . . . . BMT Nigel Gee . . . . . . . . . . . . . & Associates, Gibbs and Cox

Tenders . . . . . . . . . Riva, Vikal, Intrepid, ZodiacClassification . . . . . . . . . . . . . Lloyd’s RegisterConstruction . . . . . . . . . . . . . . . . . . Steel hull, . . . . . . . . . . . . . . . . Aluminum superstructure

LEGAL PERSPECTIVES

I have previously written inMarineNews about the importance ofhaving properly-worded indemnityclauses in vessel-related agreements andhow a missing “magic” word here orthere can render an indemnity agree-ment unenforceable. Without intend-

ing to overwhelm you, what follows is abackgrounder on these types of clauses.

What is an Indemnity Agreement?An indemnity agreement is a contractual provision in

which one party agrees to answer for any specified orunspecified liability or harm that the other party mightincur. Through an indemnity clause in a contract, partiescan agree to shift the liability for one party’s negligent, orclaimed-to-be-negligent conduct (as well as other speci-fied conduct and claims), to the other party.

Clear & Unequivocal Test(s) for EnforceableIndemnity Agreements

Agreements for the charter or use of a vessel that is “innavigation,” that is, in operation and not removed fromnavigation for major repairs, and operated on U.S. navi-gable waters, such as the Western Rivers or Gulf ofMexico, are legally considered “maritime contracts,” andthus, unless a choice of law clause purports to apply somestate’s or country’s law, the general maritime law of theUnited States will apply to their interpretation.

Since indemnity agreements are a form of risk-shifting,something courts consider unusual and harsh, courtsapplying the general maritime law will only enforce anindemnity agreement if it “clearly and unequivocally”expresses the nature and extent of the obligation. Thus, ifone party is agreeing to be responsible for the conse-quences of another party’s “negligence” or claimed negli-gence, courts applying the general maritime law often donot require the agreement to use the word “negligence,”but they do require fairly specific language as to the scopeof the indemnity agreement.

For instance, in 2004 the U.S. Fifth Circuit Court ofAppeals, which hears appeals from federal trial courts inTexas, Louisiana, and Mississippi, wrote that the follow-ing clause in an indemnity agreement was enforceable,

even though it did not use the word “negligence”: “[Party A] shall be responsible for all ... causes of action

of every kind ... arising in connection herewith ... of ...[Party B’s] invitees on account of bodily injury ... withoutregard to cause.”

Other Fifth Circuit cases, however, have required the useof the word “negligence” for the indemnity obligation tobe enforceable.

State Law on IndemnityWhile most vessel agreements will be governed by the

general maritime law, sometimes even vessel-related agree-ments, in addition to typical shoreside contracts, are gov-erned by state law — for instance if the vessel is not oper-ated on “navigable waters.” So it helps to understand somestate law on indemnity agreements.

Several states, such as Pennsylvania, also apply a “clearand unequivocal” test to see if an indemnity agreement isenforceable. In Perry v. Payne, a 1907 decision, thePennsylvania Supreme Court refused to enforce an indem-nity agreement that had this language as part of an indem-nity clause: “… from all loss, cost or expense … arisingfrom accidents to mechanics or laborers employed in theconstruction of said work, or to persons passing where thework is being constructed.” The court in Perry v. Payneheld:

“… a contract of indemnity against personal injuries,should not be construed to indemnify against the negli-gence of the indemnitee, unless it is so expressed inunequivocal terms. The liability on such indemnity is sohazardous, and the character of the indemnity so unusualand extraordinary, that there can be no presumption thatthe indemnitor intended to assume the responsibility

Indemnity Provisions in Contracts & ChartersBy Frederick B. Goldsmith

Since indemnity agreements are a form of risk-shifting,something courts consider unusual and harsh, courtsapplying the general maritime law will only enforce an

indemnity agreement if it “clearly and unequivocally”expresses the nature and extent of the obligation.



unless the contract puts it beyonddoubt by express stipulation. ...[U]nless expressly stipulated in thecontract, the owner is not to beindemnified against his own negli-gence.”

In 1991, the Pennsylvania SupremeCourt clarified its “clear and unequiv-ocal” standard for enforcing indemni-ty clauses and that year, in the case ofRuzzi v. Butler Petroleum, held: “… ifparties intend to include within thescope of their indemnity agreement aprovision that covers losses due to theindemnitee’s own negligence, theymust do so in clear and unequivocallanguage. No inference from words ofgeneral import can establish suchindemnification.”

Pennsylvania courts applying theirversion of the “clear and unequivocal”test thus refuse to enforce indemnityagreements lacking the word “negli-gence.” Other state courts, eventhough they may also call their testthe “clear and unequivocal” test, varyon whether they will require the word“negligence” to appear in the indem-nity clause before it will be enforced.For instance, Ohio uses the “clear andunequivocal” test, but does notrequire use of the word “negligence.”An indemnity agreement releasingone party from “all liability” was suf-ficient.

As another example of how the lawvaries on this issue from state-to-state,West Virginia courts apply the “clearand definite” test. Its appellate court,the West Virginia Supreme Court ofAppeals, wrote in 1959: “to relieve aparty from his own negligence bycontract, language to that effect mustbe clear and definite.” The WestVirginia Supreme Court of Appealsconsidered the following indemnityclause in a contract:

“Subcontractor shall indemnifyContractor against all claims for dam-ages arising from accidents to personsor property occasioned by theSubcontractor, his agents or employ-ees: and Subcontractor shall defendall suits brought against the

Contractor on account of any suchaccidents and shall reimburseContractor for any expense includingreasonable attorneys’ fees sustained byContractor by reason of such acci-dents.”

Since the clause lacked the word

LEGAL PERSPECTIVES


“negligence,” the court refused to enforce it. While WestVirginia’s highest court has not outright stated this is arequirement for enforceable indemnity agreements, it hasrefused to enforce indemnity agreements lacking the word“negligence,” and it has cited approvingly a NorthCarolina court decision requiring use of the word “negli-gence.”

Texas’ Fair Notice RuleTexas has one of if not the most rigorous standard before

its courts will enforce an indemnity agreement. Its courtshave adopted the “fair notice” rule for indemnity agree-ments, a rule which has two prongs.

The first prong is the “express negligence” or “EthylExpress Negligence” rule, based on the Texas SupremeCourt’s 1987 decision in Ethyl Corp. v. DanielConstruction Co., in which the court held, “parties seek-ing to indemnify the indemnitee from the consequencesof its own negligence must express that intent in specificterms ... within the four corners of the contract.”

The second prong of Texas’ fair notice rule is the “con-

spicuousness” test, which, as the Texas Supreme Courtheld in its 1993 decision in Dresser Industries, Inc. v. PagePetroleum, Inc., requires that “something must appear onthe face of the [contract] to attract the attention of a rea-sonable person when he looks at it.” The Dresser courtapplied the Uniform Commercial Code’s definition of“conspicuous” to indemnity agreements. Under the UCC,“[a] printed heading in capitals (as: NON-NEGO-TIABLE BILL OF LADING) is conspicuous. Languagein the body of a form is ‘conspicuous’ if it is in larger orother contrasting type or color.”

While courts applying the general maritime law’s “clearand unequivocal” test do not usually also require theclause to be “conspicuous” to be enforceable, the U.S.Fifth Circuit Court of Appeals in its 1990 decision inOrduna S.A. v. Zen-Noh Grain Corp. did require con-spicuousness.

Conclusion: Get HelpI ride street bikes and dirt bikes. As for maintaining

them, I can change the oil and filter and other fluids,replace pipes, repack silencers, and troubleshoot somewiring issues. But I won’t tackle installing new clutchplates or replacing a head. I turn to a mechanic.Indemnity agreements, along with insurance clauses incommercial agreements, are the same way. I wouldn’t rec-ommend trying to draft or negotiate these clauses withoutlegal and insurance broker help. There are just too manynuances, too many arcane legal rules involved, and toomany exceptions to the rules: for instance the Bisso rule inthe tug-tow context, a provision in the U.S. Longshoreand Harbor Workers Compensation Act, and oilfield anti-indemnity acts in a handful of oil producing states. Yourcompany should spend the money and get professionallegal and insurance broker help when drafting or negoti-ating indemnity and insurance clauses. MN

Fred Goldsmith, formerly general counsel of one of the coun-try’s largest tug operators, is licensed in PA, WV, OH, and TX,and practices admiralty & maritime, railroad, personalinjury, motorcycle, insurance coverage, and commercial liti-gation with Pittsburgh-based Goldsmith & Ogrodowski,LLC (www.golawllc.com). You can reach him [email protected] or (877) 404-6529.

LEGAL PERSPECTIVES

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EMPLOYMENT

Academy graduates entering theirfirst job with a maritime employer willleave the position within the first yearalmost 50% of the time. This rate ismany times greater than the nationalaverage for college graduates in theirfirst job after graduation — except forRN’s (47% leave within a year).

Registered Nurses and Maritime Academy graduates oftencite the same reasons for leaving a position within this firstyear. A new hire in the nursing field is cited as costing$30,000 or more to train after graduation in a particularhospitals system and maritime employees can reach intothe hundreds of thousands of dollars to train in corporateSOP and to master the maneuvering of a vessel if fuel isfactored in. Borrowing from the numerous studies in thenursing field and aligning the responses from first yearAcademy graduates that have responded to my inquireswe can look at some possibilities to reverse this trend.

Heavy workloads, staffing shortages, lack of shore-sidesupport / communication, the amount of responsibilityplaced on them initially, and living conditions wereamongst the reasons for a new hire employee to move on.

Currently two routes exist to become a bridge officer on-board a vessel. The first is the academy graduate and thesecond is the hawespipe. Academy graduates chose theacademic route to the wheel house — often without afirm grasp of what life is like at sea. The life at the acade-mies may create an unrealistic expectation in a graduatewhen coming to the marine towing industry. Academiesare typically geared towards large ships sailing ultra mod-ern wheelhouses where trips last a week or two betweenports. Towboats may be at sea for months at a time with-out shore leave and a smaller crew and little privacy orspace. Registered Nurses or RN’s cited the same reasons asmariners for leaving, but when a professional mentoringprogram is in place for RN new graduates that 47% attri-tion rate can be reduced to 23%. This rate has beenreduced to 0% when a more comprehensive approach isimplemented. When one employer instituted a morehands on program with 15 new hire RN’s they wereextremely successful. This employer offered tuition re-imbursement at hire even though SOP was to normally

make this available to employees after six months ofemployment. For the first month and a half new nursesalso had a one-on-one mentor that was available to themexclusively. Not just a “designated person” per shift, but adedicated one-on-one mentor. This mentor visited theUniversity the employer recruited from during their lastphases of instruction becoming familiar with the studentson a first name basis. The mentor is available to the nurseregardless of the shift worked and carried a pager toanswer any questions and to provide support wheneverneeded on or off shift. The familiarity of the mentor fromthe University meetings and classes is paramount to thegraduate feeling comfortable with them and seeking themout for even the most trivial questions. Weekly one hourseminar / discussions with the new hires are also held toshare experiences and address concerns. Incentives are alsooffered to the mentor to help retain the new hire. Thishelps motivate the mentor to go that extra mile and com-pensates them for the extra burden of mentoring andtraining. With this program the attrition rate was reducedto 0% even after two years. For a mentoring program tobe effective in the maritime field though, it must be adapt-ed a little to meet the unique marine environment.

1. Costs of an academy are very high. Like any othertraditional University education tens of thousands of dol-lars are expended, many times in the form of student loansor even credit card debt due monthly. The incentive tojump ship for a higher paying job is there as long as thisdebt hangs over the new graduate. To reimburse thesecosts even over a period of time is incentive for themariner to stay in place.

2. A dedicated mentor would be more difficult toalign as vessels are not static. If a new graduate 2nd mateis aligned with a C/M or Master this would allow the newgraduate access to their mentor. It is not practical forC/M’s and Masters to travel to academies and help teach

Retaining New Hire in the Workboat IndustryFollowing the example of the nursing trade

By Eric Helpenstell

RN’s cited the same reasons as mariners for leaving,but when a professional mentoring program is in place

for RN new graduates that 47% attrition rate can bereduced by half to 23%


prospective students though. What ispractical is to have C/M’s and Mastersof appropriate mentoring characterand disposition take part in job fairsand the actual hiring process andinterviews. This would be the newgraduate’s introduction to their men-tor allowing a personal connectionwhen and if they do come aboard.

3. Familiarization cruisesonboard a prospective vessel for sever-al weeks would go a long way to weedout those that are not good fits bothin personality and capabilities. Evenbefore the process of a formal offer isin place.

4. Thorough vetting of an indi-vidual is key to weeding out incom-patible graduates. Calling formeremployers, listed references, andunlisted former co-workers would goa long way in further reducing thenumber of incompatible employees

The other route an individual maytake into the wheel house is the hawe-spipe. AB to mate programs serve as agreat resource to bring in new offi-cers. AB’s chosen come out of theseprograms with the same credential asan academy graduate. Although theydo not have the academics behindtheir education the shipboard train-ing and experience they already haveleads to a very solid officer including:

1. The advantage of real seatime that will lead to a master’supgrade sooner than the academygraduate.

2. A thorough understanding ofshipboard and company operations asthey already serve aboard that compa-nies vessels.

3. More loyalty as they are longterm employees already. Attritionrates in AB to Mate programs typical-ly hover in the single digits.

4. Realistic expectations of lifeaboard a vessel and with the company

as a whole.5. A common knowledge of

their fellow officers and coworkers.Regardless of the route to the

wheelhouse; attrition is an incrediblyexpensive and inefficient businessproblem that can cost millions. AB tomate programs are a viable and greatway to get quality officers that can behandpicked from current employees.There is still the problem of needthough. Due to timing at trainingschools it may take up to 15 monthsto get a candidate selected, in a pro-gram, trained and credentialedthrough NMC. With that lag the ABto Mate programs do little to solve animmediate need for an officer. If ABto Mate program slots were increasedbased on speculation this could createa pool of officers ready to step upwhen the need arises. The need forofficers is there constantly; withemployers paying the bill one way oranother. Either through training new

hires over and over, or to train currentemployees from AB to Mate a costanalysis should be done and beweighed with the human factorsmentioned to keep quality employeeswithin the company. One fact is alsotrue — the problem is going to getworse before it gets better. BabyBoomers are retiring more often. Inthe next five years the number ofopenings in the wheelhouse is goingto increase, and without a clear cutplan to fill these slots the problemwill be compounded as the supply ofgraduates cannot keep up with thedemand inevitable to come. MN

Eric Helpenstell works spill response forCrowley Marine Services and is BranchDirector for the Enbridge Spill,Marshall Michigan and serves as anincident manager for O'Briens ResponseManagement. Email: [email protected]

EMPLOYMENT

“What kind of pelicans are those?” I asked CaptainRusty Joyner on my third day aboard the Theresa Wood.Pointed north, the boat waited inside the gates of Lock 14for the water to lift her to the level of the next stretch ofthe Upper Mississippi. I’d taken all the photos I could ofthis particular lock and stood watching big pelicans sweepby on giant wings, tilting their heads and eyeing me asthey passed. The Captain, a native of Kentucky and 32-year towboating veteran, had been standing in front of thepilothouse controls gazing up river. He turned his wholebody to look out the aft windows and paused in thoughtbefore coming to a conclusion. “White,” he said andturned back again to contemplate the view up river.

I should have seen that one coming. I shook my headand smiled, watching two of the generic pelicans bob onthe water inside the lock walls, passing unconcernedthrough the gates along with the boat, like white bathtubtoys. For the first few days, when I sat too quietly on thepilothouse’s small couch, downloading my thoughts fromthe day into my laptop, Captain Rusty would turn andwave to a boat off in the distance. When I looked out tosee who he was waving at, there was nothing there. Hewould turn back to his controls with a little smile, not say-ing a word. He did this half a dozen times before I wasable to stop my head from turning every time he waved.Even then, I would wait half a minute, then sneak a look

A Day in the Life of a Towboater:

Part II: Captain RustyStory & Photos by Raina Clark

Last month MN began the story of Raina’s eight day trip on the Mississippi and Illinois Rivers on the towboatsTheresa Wood and Thomas E. Erickson. This month she describes a Captain who has earned crew loyalty and

talks about the uniqueness of the Upper Mississippi, one of the highest paying rivers for Captains and Pilots.

The Captain uses search lights at night to keep tabs on hazards up ahead while the Theresa Wood waits to the side of the channelfor the M/V Aubrey B. Harwell Jr. to pass.

& the UpperMississippi



out the window just to be sure therereally wasn’t anything there. Hecaught me at that a couple times too.

Being able to laugh at yourself, andletting others laugh at you too, is keyto surviving in a towboater’s worldCaptain Rusty said. I supplied a lot oflaughs over the five days I was aboard.The crew doesn’t miss a chance togive someone a hard time aboutsomething. Not even the Captain isimmune. Besides requesting bakedchicken and salads from the galley,Captain Rusty walks the length of thetow and back a dozen or more timeseach day to balance the sedentary jobof piloting a towboat. After just a fewlaps down the gunwales of the barges,staring at the monotonous view oforange steel walls rising above yourhead on either side, you quickly losecount of how many times you’vecome and gone. Captain Rusty usedto track his laps with piles of pebbleson the cover of a barge closest to thecrew locker area at the head of theboat, where the deckhands often hangout. “I figured out that the crew wassneaking pebbles into my pile,” hesaid, laughing. “Now I keep my pileat the head of the tow.”

Chief Engineer, Mike Shaffer wasserving as relief engineer while I wasaboard the Theresa Wood. He hasalso spent his life on towboats andnow has a son who is a Captain forCrounse Corporation.

“This Captain is a real by the bookguy,” he told me, explaining thatCaptain Rusty keeps a tight ship andexpects each of the crew to pull theirweight. “The boat wouldn’t workwithout every one of these guys doingtheir job well.” There’s no room foranyone to slack off with the crewreductions boats have had to dealwith, Mike said. Companies have

done away with the assistant engineerposition and cut the crew down tofive deckhands.

While Captain Rusty expects a lotfrom his crew, he works hard to builda team that works well together and

to create a comfortable working andliving environment.

“I’ve got guys ready for promotion,”he said. “But they don’t want to leavethe boat. They put a lot of work intothis boat and they’re proud of it. And

I’m proud of them.”During the Captain’s morning shift, a deckhand is

tasked with cleaning the pilothouse. Captain Rusty oftenpitches in, washing down windows or whatever else needsto be done. He described to me the improvements thecrew had already made to the interior of the boat and theprojects that were still on the list. “This is our home,” hesaid and to his way of thinking, the more the crew takesownership of their home-away-from-home, the happierthey will be.

A deckhand or cook coming into the towboat industryfor the first time is assigned a job on whatever boat isshort-handed. Most look forward to finding a crew theywork well with and hopefully being assigned as a regular,giving them more predictable work cycles and a chance tobe with the same people over time. For the most part, thecrew is hand-picked by the Captain so they know theyhave to be good at their jobs to be invited on as a regularand to stay that way.

A few days into my trip we were waiting in a bend in theriver for our turn to go through another set of locks. TheCaptain had the Theresa Wood tucked to the side of thenavigational channel with the bow of the tow pointed intothe lush summer trees. I stood on the uppermost decklooking across the flat river waters, trying to make out thevessel we were waiting on. With an hour or so to wait Iwent back inside the pilothouse where I found theCaptain sitting in his chair speaking with Don Collins, adeckhand on his first trip aboard the Theresa Wood. Overthe past weeks, Captain Rusty had been impressed byDon’s work ethic and ability to get along with the rest of

the crew. “Don here just agreed to come on regular,” Captain

Rusty said with a big smile. There were congratulationsand handshakes all around.

On my last day, I woke to the sound of the boat horn.We were preparing to pass through one of the narrowestbridge openings on the Upper Mississippi, the ClintonRailroad Bridge swing span between Clinton, Ia. and Ill.Pleasure craft zoomed along trying to beat the boatthrough the navigational channel which is only the widthof the swing span. Pilot Tim Richards eased the towthrough the 177-foot swing span like he was threading aneedle. He had to go through at an angle because thebridge is built at a bend in the river just before a sand spitthat juts out into the water. Almost within the length ofthe vessel, we also had to pass under an auto bridge.

“This is the highest paying 15-barge river because ofthese bridges,” Tim said when I made it up to the pilot-house to watch and hold my breath. Pay rates for pilotsand captains differ depending on what river or section ofriver they’re plying. The Upper Mississippi features morenavigational obstacles in the way of locks and railway andauto bridges than about any other stretch of river. Later onin the day we approached the Sabula Railroad Bridge con-necting Sabula, Ia. and Savannah, Ill. As we went up riverwe passed a tow vessel that had come to a stop to pumpwater out of one of its barges. It had rubbed against thebridge on the way down. Coming down the river pilotshave to contend with higher speeds, making obstacles andcurrents even more dangerous.

The work of the mates and deckhands is also differenton the Upper Mississippi than on other, less eventfulstretches of the inland waterways. Senior Mate Todd

Chief Engineer Mike Shaffer serving as relief engineer aboardthe Theresa Wood

Pilot Tim Richards aboard the Theresa Wood



Richardson said he prefers working this part of the riverbecause the frequent lock work breaks up the monotonythat comes with living and working on a boat 24/7 for amonth at a time. Every few hours the crew is out on thetow, talking the Pilot or Captain into the lock, breakinglines, moving the tow through the gates, making linesagain and maybe chatting with the lock staff. On thelower Mississippi, Todd said, there are many more slowhours dedicated to cleaning and polishing.

Along with unique navigational challenges, the UpperMississippi hosts its own style of home-made craft built inthe romantic image of Tom Sawyer and Huck Finn.

“They have signs on them that say ‘New Orleans orBust,’” Captain Rusty told me. Todd, who was standingnearby during this particular conversation, described oneof the build-it-yourself craft he’d seen along this portion ofthe river. “It looked like an outhouse with outboards,” hetold me. Then he turned to Captain Rusty with a straightface. “They were all set,” he said. “They even had Furunoon it,” and he pointed his finger into the air and twirled itaround. “Yeah, I bet they did,” Captain Rusty said, givingTodd the chuckle he was looking for.

I waited in the crew’s lounge for the last hour or sobefore we reached Lock 10 in Gutenberg, Wis., where Iwould disembark and drive across Illinois to meet theThomas E. Erickson on the Illinois River. As we passed byCassville, Wis. the boat’s horn sounded again. Toddopened the door from the lounge to the first deck and

pointed out the home of Marquette Transportationfounder Ray A. Eckstein on the bank of the river. Heexplained that all Marquette boats sound off every timethey pass Eckstein’s brown brick house. Shortly after that,Captain Rusty’s morning shift in the pilothouse endedand he stopped into the lounge to say goodbye. Despite allhis hard work building the dream crew, he said the realityis: “This is the way it goes with towboating. Just as soonas you get used to having someone around, they’re gone.”

MN

Crewmembers from left to right: Senior Mate Todd Richardson,Lead Man Brad Gale, Senior Deckhand Don Collins


Drilling Ban Roundtable

Rough Waters Offshore By Susan Buchanan

Marine and equipment companies serving oil rigs say adeep-water drilling moratorium that's lasted four monthsin the Gulf of Mexico because of safety concerns has hurttheir customers and coastal economies. Twenty-four rigshave been idled since May and two of them are in theprocess of moving to other countries. Meanwhile, the fed-eral government has granted only a handful of permits forshallow-water drilling in the past four months.

Uncertainty about how long the ban will extend hascomplicated the business of servicing rigs, marine compa-nies say. After BP's April rig explosion, the U.S. Dept. ofInterior in May imposed a deepwater drilling moratoriumthat was later overturned by the courts, and then re-imposed in July. Thousands of jobs on deep rigs are injeopardy, as are the contracts of firms dealing with oil rigs.A rig is typically assisted by two supply boats, charginghefty day rates. And rigs require an array of services — liketransportation, welding and diving — which are usuallysupplied by Gulf Coast companies.

Regulatory changes this summer have also rocked theboat for firms servicing oil rigs. The new Bureau of OceanEnergy Management, Regulation, and Enforcement —variously known as BOEM and BOEMRE — is one ofthree entities that were created from the former MineralsManagement Service. In late June, Michael Bromwich, aformer Justice Dept. inspector general, took charge of theBOEM.

Marine Companies Want a Quick Moratorium End Gulf Coast marine companies hope the deepwater ban,

which is set to expire on Nov. 30, will be lifted soon. Buteven then, tightened regulations will make it tough forrigs to operate, executives of five Gulf marine and equip-ment companies interviewed by MarineNews said. Firmssupplying rigs are battening down the hatches and adjust-ing their sails for turbulent weather ahead.

Otto Candies, LLCPaul Candies, president and CEO of Otto Candies,

LLC, in Des Allemands, La said “if this moratorium isn'tlifted soon, the Gulf of Mexico will become the Dead Seapretty quickly.” Otto Candies is a marine transportationand offshore services company.

Candies said “we received a new vessel three weeks ago,and it doesn't have a job, which is the first time that's hap-pened to us since the 1980s. For another vessel we own,the customer is asking 'can you bring it back into shoreand take the crew off?' That's not something we can easi-ly do.” Candies continued, saying “BOEM has slowedissuing drilling permits on the Gulf shelf, so our shelfwork is delayed.” The shelf refers to the Continental Shelfin Gulf of Mexico water depths of less than 500 feet.

He said “we aren't getting the direction we need fromthe federal government about when the ban might be lift-ed. Washington is dragging its feet. And even when they

Dean Taylor, president of Tidewater, Inc. William A. "Beau" Bisso, IV, President &CEO, Bisso Marine Co.

Mike Callais, CEO of Abdon Callais

do lift the ban, many of our oil-and-gas company customers could leavethe Gulf because of tighter govern-ment restrictions.” The business cli-mate will remain particularly difficultfor small and mid-sized operationsboth on and offshore, he said.

Laborde Marine Management, LLCCliffe F. Laborde, managing mem-

ber at Laborde Marine Management,LLC, in Morgan City, La., said “thedrilling moratorium has cast an omi-nous pall over all GOM marine oper-ations. Our business covers two seg-ments — crewboats and supply boats.After the spill, most available localcrewboats were chartered immediate-ly by BP and others responding to thespill.” His company owns fifteen,high-end, 165-foot to 175-foot crew-boats, mainly servicing the shelf mar-ket. “The spill-recovery effort is near-

ly finished now, so crewboats will befreed up for charter as soon as BP isdone with them,” Laborde said. Butit's unclear how much crewboatcapacity will be available when thespill cleanup ceases.

Laborde Marine in Morgan City,La., is a $150 million company serv-icing the drilling industry in deep andshallow water. Laborde has spent over$90 million in the past two years

building three state-of-the art, 280-foot class platform supply vessels,designed mainly for deepwaterdrilling. “We have five supply boats— two for the shelf and three fordeep water," Laborde said. "Two ofour large platform supply vessels havebeen working for BP, servicing therelief wells. The third large PSV is idlebecause of the drilling moratorium.Prior to the moratorium, our utiliza-



tion rate for the three large PSVs was close to 100%.”“We're obviously concerned about the impact of the

continuing moratorium and the slow pace of awardingdrilling permits for the shallow-water shelf programs,”Laborde said. If the moratorium lasts another three orfour months, his company will be affected more signifi-cantly. "And we'll be adversely affected even if it's lifted byNov. 30 as the Obama Administration has discussed.”

If the ban continues, drilling operators will move assetsand employees from the Gulf of Mexico to West Africaand Brazil, Laborde predicted. "It costs millions of dollarsto mobilize a rig operation to another country. So oncethey leave, they aren't coming back anytime soon. Theban, if it continues, will undoubtedly put downward pres-sure on the day rates of commercial rigs and vessels serv-icing them worldwide.”

Abdon Callais OffshoreBill Foret, president of Abdon Callais Offshore in

Golden Meadow, La., said the drilling moratorium hasaffected the company's business only minimally. “We con-tinue to find business and have taken specialty jobs withour diversified fleet of high-capacity, shallow-draft ves-sels,” he said. “Several of our vessels are being utilized inthe spill-recovery efforts as command centers, skimmingoperations, and many other aspects of spill cleanup andcontainment efforts. With the BOEMRE slowly issuingpermits since the Deep Water Horizon incident fordrilling in waters of less than 500 feet, we had to look else-where for ways to work our equipment.” Abdon Callaiscarries offshore workers and above- and below-deck cargoto offshore installations. “We are taking delivery of threenew-build vessels from August 2010 to December 2010,but we're placing any future new-build plans on hold,”Foret said. “If the moratorium is prolonged, we'll have totake a look at our existing activities, equipment andemployees.” At peer companies, some firms lost manymillions of dollars per vessel this summer and had numer-ous layoffs, Foret said.

Foret said Abdon Callais has invested a lot of time,money and effort in training employees and doesn't wantto lose anyone. “It takes more than five years to train acaptain to meet Coast Guard and our specific company’srequirements,” he said. “If we had to lay off someonewho's well trained, chances are they'd find a job elsewherein the country and wouldn't be available to work for us orthis industry if the market were to rebound.”

Mike Callais, CEO of Abdon Callais, said “we're con-cerned about new unjustified and unwarranted federalregulations that will be put in place after the drilling ban

ends.” Tighter regulations could send offshore drilling rigsto other countries and then, he predicted, “it will costmore to buy oil, gasoline and natural gas in the future.”

Callais and Foret said oil company CEOs are beingrequired to sign papers accepting liability for any futureproblems or accidents with their offshore rigs. “Executivesare already signing these documents to get on with busi-ness,” Foret said. “And the government's $75-million-lia-bility cap on offshore drillers is being raised. Only thegiant operators, like BP, Shell and Exxon, can afford themuch-higher premiums and liability coverages, into thebillions of dollars, if something happens to their rigs. Theindependent operators will virtually go out of business.”

Callais said revised drilling regulations will make theU.S. more dependent on foreign oil, affecting nationalsecurity. He said, “we're also concerned about the ObamaAdministration linking new offshore-rig regulations to itscap-and-trade plan. Cap and trade, if passed by theSenate, is another factor that could raise energy costsnationally and cost American families their jobs.”

The Waxman-Markey cap-and-trade bill, which clearedthe U.S. House last summer, called for strict limits ongreenhouse gas emissions. Emission limits are unpopularwith many businesses, however, and the proposal has lan-guished in the Senate.

Tidewater, Inc.Dean Taylor, president of Tidewater, Inc., said “so far the

drilling moratorium hasn't had much of a negative impacton our company. The Gulf of Mexico is a relatively smallpart of our portfolio and accounts for about nine percentof our business.” With a presence in about 60 countries,the New Orleans-based company provides water-vesselsupport for the petroleum industry in offshore areas ofWest Africa, Brazil, Mexico, Southeast Asia, Australia andthe Middle East. The Gulf of Mexico is among its smallerareas of activity. ”If it continues for awhile, the drillingmoratorium in the Gulf may eventually affect us morethan it has to date,” Taylor said. “We're of course hopingit will be lifted, but are not optimistic. We're not seeinganything now that would signal a change in policy.”

“Greater federal regulation of the offshore drilling indus-try following the spill will increase the cost of doing busi-ness in the Gulf" for oil companies and others, he said."When the ban is lifted, new federal regulations will sloweverything down,” compared with the pre-spill pace.“Small oil-drilling companies could leave the Gulf as itbecomes more expensive to operate there.” Tidewater'searnings in the three months ended June 30 neared $40million, off 13% from the previous three months because


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of weaker, worldwide market condi-tions for offshore supply-vessel opera-tors. Four Tidewater vessels wereinvolved in Deepwater Horizon recov-ery efforts. The company's workboatDamon B. Bankston rescued 115 crewmembers from BP's flaming platformin late April.

Bisso Marine Co., Inc.W. A. "Beau" Bisso, IV, president

and CEO of Bisso Marine Co., Inc.,said “the drilling moratorium has hada negative impact on our company,and has created immeasurable prob-lems for maritime and energy opera-tions in the Gulf of Mexico.” With450 employees, Bisso Marine servicesthe marine and energy industries withconstruction, pipelay, salvage, heavylift and diving services. Headquarteredin Houston — with an office in NewOrleans, where the firm began in1890 — Bisso conducts most of itsbusiness on the U.S Gulf coast. Smallsegments of its activities are in SouthAmerica and Asia.

Bisso said the deepwater moratori-um “has punished everyone whomakes a living in the Gulf by creatingenormous uncertainty.” He added “it'simpossible to plan for somethingwhen you have no idea about whatchanges are coming and when theywill come. Playing it by ear is no wayto run a business.”

Bisso said “as with airplane crashes,rare events like the DeepwaterHorizon accident occur offshore.” Hesaid as horrible as the rig explosionwas, entire industries shouldn't sufferbecause of an isolated event. TheObama Administration, he said, haspenalized innocent, offshore U.S.companies that were not involved inthe accident. An unintended conse-quence of the moratorium will bemore damage to an already-batteredGulf Coast economy, he said.

(Continued on page 39)


MARKETS: GOVERNMENT VESSELS

Westport Shipyard of Westport,Wash. recently launched its GlobalResponse Cutter (GRC-43) proto-type, constructed of a compositematerial the company believes to bethe future of boat building. Thelaunching of the 143-ft vessel alsomarks the yard’s return to commercialboat building. Westport Shipyardbegan in 1964, building commercialfishing vessels for the Northwest fleetand the occasional pleasure boat. Inthe early 90s Westport built the high-speed ferries for the Catalina service,but shortly afterward the company

segued over to serving the yachtingindustry exclusively. Philip Purcell,vice president of Westport Shipyard,said his company went into pleasurecrafts because the market was veryfragmented and undisciplined. Theyard saw an opportunity to offer anoff-the-shelf solution.

When Westport began buildingcomposite yachts, Purcell explained,“Everyone said we were out of ourminds. But we built over 50 112-ftyachts, 32 130-ft yachts and seven164-ft yachts. We have over a hun-dred [composite] boats around the

world.”Westport’s design strategy consists

of identifying what configurationswork best, engineering a vessel once,building it repeatedly and tweaking itslightly as user feedback comes in.“Our objective was to build a series-built boat, a predictable product for apredictable price and in a predictabletime frame.”

Seeing that the government andmilitary market was now plagued byover-time and over-budget vesseldeliveries, just as the yachting markethad been, Westport believed govern-

Series Built Composite

The composite hull ofthe Global ResponseCutter (GRC-43) underconstruction atWestport Shipyard.

The completed cutter.

ment customers would also benefitfrom the series-built approach andthe composite hull. With the GRC-43, Purcell said Westport created a“predictable boat” for U.S. agenciessuch as the Navy, Coast Guard,Special Operations, HomelandSecurity and foreign military.

Purcell also noted how governmentagencies are also grappling with budg-et cuts and the high maintenance andlife-cycle costs of their boats. “Lifecycle costs are killing our governmentand other governments because it’s soexpensive to maintain boats over somany years,” Purcell said.

Using the composite constructionthat Westport has demonstrated foryears in the yachting industry, Purcellsaid his yard can provide the solution.The benefits of the composite materi-al, he said, include a superior weightto strength ratio, distinct thermaladvantages and non-corrosive proper-ties. This reduces costs associatedwith hull coatings and fuel andincreases operational time.

“The strength and tolerances ofcomposite are just tremendous,”Purcell said. “It’s stronger and lighterthan aluminum and steel.”

“We used the aviation industry asour model,” Purcell pointed to theacceptance of composite constructionin air craft. He said an off-the-shelfcomposite solution has been offered

as the Boeing 787 and welcomed bythe airlines. “The objective there is abetter aircraft at a more predictablecost. You don’t change the fuselage,you don’t change the wings,” he said,you build a mold based on a provendesign and produce a series of crafts.

The composite material is not yetmain stream in the boatbuilding

world. While Purcell believes com-posite is the future of boat building,he understands the technique startswith a bigger price tag. “There’s ahuge investment upfront to build thetooling (molding) before you buildthe boat. With aluminum and steelyou just buy the metal and cut it asneeded.” MN


MARKETS: GOVERNMENT VESSELS


Greene Named SuperintendentUSMMA

Rear Admiral Philip H. Greene, Jr.will become the new Superintendentof the U.S. Merchant MarineAcademy in Kings Point, N.Y.Admiral Greene holds a MerchantMarine Master’s license and is a 1978Academy graduate. Rear AdmiralGreene was most recently theDirector of the Navy IrregularWarfare Office. In addition, Greeneholds advanced degrees from theNaval Postgraduate School and theNational Defense University.

Garrido Named President T&T Bisso

T&T Bisso appointed MauricioGarrido as president. Garrido joinedT&T Bisso in 2008 as general man-ager of the Americas and Europe. Healso serves as vice president of Salvageand Emergency Response and asdirector of Latin American BusinessDevelopment for Bisso Marine.Previously, Garrido worked for TitanMaritime as managing director –Americas.

ACL Names Braman Senior VPAmerican Commercial Lines Inc.

(ACL) appointed William A.Braman, II as Senior Vice Presidentand Chief Operating Officer,Transportation Services. Bramanjoined ACL in February 2009 as VicePresident and General Manager,

Transportation Services. Prior to join-ing ACL, Braman held the position ofDivision Manager for CSXTransportation (CSXT).

Passing of Naval Architect John Gilbert

John (Jack) William Gilbert, PE,U.S. Navy Lieutenant, USNR, NavalArchitect and Marine Engineer andPresident of John W. GilbertAssociates, Inc., Hingham, Mass.,died at the age of 80 on July 26,2010. He founded John W. GilbertAssociates, Inc., in 1964, which has along and successful business in shipdesign, overseeing the construction ofover 400 vessels ranging from fishing,research, passenger vessels and vehicleferries, excursion ships, tugboats, fire-boats, river towboats and other com-mercial vessels. He pioneered originalresearch from his model tests anddeveloped computer programs andsimulations for his design and stabili-ty of vessels.

Caldwell Named Bay ShipbuildingCompany VP & GM

Marinette Marine Corporation(MMC) named Gene Caldwell as thenew Vice President and GeneralManager of Bay ShipbuildingCompany, a member of theFincantieri Marine Group (FMG).Prior to joining FMG, Caldwell helda senior management position withSignal International, LLC.

New Crowley VPs, Evans & OteroCrowley announced the promotion

of Eric Evans and Tony Otero each tothe role of vice president, finance &planning, supporting several differentbusiness groups. Evans will supportCrowley's technical services, petrole-um services, Alaska petroleum distri-bution and marine contract servicesbusiness groups. Evans started hiscareer as an accountant at Crowleyand served as accounting manager in1991 in Saudi Arabia duringCrowley's oil spill response effortafter Desert Storm. Otero will sup-port Crowley's liner and logisticsbusiness units. Otero started hiscareer as a senior accountant atCrowley in 1998 .

Global Diving Names FergusonOffshore Business Manager

Global Diving & Salvage, Inc.named John Ferguson, BusinessDevelopment Manager, to theirOffshore Support Division.Ferguson’s background includes busi-ness development both international-ly and in the Gulf of Mexico forHallin Marine; ROV Sr. Supervisorfor Oceaneering in the U.S. GOM,Mexico and the Caspian Sea; andROV Superintendent forThales/Fugro. He is the developerand chairman of the Injured WarriorsCampaign to raise money and aware-ness for injured veterans.

Garrido Braman Gilbert Caldwell

PEOPLE & COMPANY NEWS

Otero Evans

Telemar Hires Morton Telemar USA, LLC has hired Paul

Morton to its U.S. sales team.Morton has worked for over 30 yearsin the marine and offshore industryin the Gulf Coast. His last 18 yearswere with a major worldwide SOLASnavigation electronics firm. Morton isresponsible for parts, consumables,shipboard communication & naviga-tion electronics.

Ingram Barge Acquires 92 BargesIngram Barge Company announced

the acquisition of 92 barges, includ-ing 17 tank barges with 10,000 barrelcapacity, 62 jumbo covered hopperbarges with fiber lift covers and 13jumbo open hopper barges from anaffiliate of Ospraie SpecialOpportunities Fund. All of theacquired barges were built between2004 and 2008.

Kirby Marine Adds Twelve Boatsto its Fleet

Already the operator of the largestfleet of inland tank barges on U.S.inland waters, Kirby MarineTransportation has recently addedtwelve more push boats to its fleet.The twelfth in a series of sister vesselswas delivered from Raymond andAssociates of Bayou LaBatre, Ala. inlate July 2010. All twelve of the 1,700hp boats are 76 by 35-ft in length.Each boat is powered by a pair of Tier

II compliant Cummins K38-Mdiesels rated for 850 hp each at 1,800rpm. The engines turn 76 by 56-inchfive-blade props through Twin DiscTD MT540 gears with relatively largeratios of 7:1.

Marine Highway Corridors &Projects Identified

On August 11, U.S. TransportationSecretary Ray LaHood identified 18marine corridors, eight projects, andsix initiatives for further developmentas part of the America’s MarineHighway Program. In addition, theMaritime Administration made avail-able $7m for which these projects cancompete through a Notice ofFunding Availability.

Waterways Symposium & WCIAnnual Meeting

Online registration is open for theSeventh Annual WaterwaysSymposium and WCI AnnualMeeting, sponsored by WaterwaysCouncil, Inc., Informa Economicsand The Waterways Journal. TheSymposium will take place October5-6, 2010 and will be preceded byWCI’s Annual Meeting on October4, 2010, at the Saint Paul Hotel inSaint Paul, Minn. Symposium topicswill include World Economic Trends,the Panama Canal, theTransportation Forecast forCommodities, Operations &

Maintenance of CriticalInfrastructure, Asian Carp, theMissouri River, the Navigation &Ecosystem Sustainability Program(NESP), the latest from Capitol Hill,the Inland Waterways CapitalDevelopment Plan and Telling theMaritime Story. Visit the WaterwaysCouncil, Inc. website(www.waterwayscouncil.org) to regis-ter.

American Salvage Association10th Anniversary

The American Salvage Association(ASA) is celebrating the 10th year ofits founding with a variety of specialevents to commemorate the occasion,including a lunch at its fall member-ship meeting on November 1 atMITAGS in Linthicum, Md.

ASA and members’ accomplish-ments over the last decade includehelping to evacuate people and debrisafter the World Trade Center attackon 9-11; coming together duringHurricane Katrina to help the CoastGuard reopen the Mississippi Riverand complete salvage and wreckremoval operations offshore andinland; responding to hundreds ofmarine casualties in the aftermath ofHurricanes Rita and Ike; mobilizingto earthquake stricken Port Au Princeto help clear the harbor and assist inthe restoration of port operations.


Morton KIRBY Marine Adds 12 BoatsPhoto by Jeff L. Yates courtesy of Cummins Marine.

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Bisso said “in my opinion, the deep-water moratorium is also a proxymoratorium on shallow-water opera-tions. The recent restructuring andrebranding of the MMS into the newBOEM has virtually halted the per-mitting process for all offshore activi-ties, forcing American companies toeither cut back, shut down or go over-seas to find enough work to stayviable.”

As for the suddenness of the mora-torium, Bisso said “companies can’tjust hit a pause button. Only the gov-ernment has that luxury. Companiesneed to produce something to makemoney,” unlike the government,which can raise taxes, he said.

On another note, he said “we don’tget a bail out,” referring to invest-ment banks, banks and auto compa-nies propped up by the governmentrecently.

Stormy Outlook for Firms Serving Rigs

Laborde said “bottom line, I'm veryconcerned about the moratorium. Itwas an inappropriate, ill-advised andpolitically motivated response to anunprecedented accident in an indus-try that had a sterling record for safeoperations.”

Bisso agreed with those sentiments,and said he worries whether his com-pany — one of the oldest U.S. marinefirms — will be here for his childrento run. He is a fifth-generation leaderof Bisso Marine. Bisso said he fearsthat over the long run, U.S. compa-nies will lose more business in theGulf to foreign firms. “As the currentexodus from the Gulf by Americanscontinues, who will fill the vacuumhere?” he asked. “If the governmentwere to waive or repeal the Jones Act,as Arizona Senator John McCain hascalled for, foreign companies wouldmove into our industry, thus killingold American family businesses like

mine.” The Jones Act, dating to1920, requires that goods shippedbetween waterborne U.S. ports becarried by vessels built in the U.S. andowned and operated by Americans.But the U.S. marine industry is con-cerned over the growing presence offoreign-flagged and foreign-mannedvessels in the Gulf, particularly sinceHurricane Katrina.

Meanwhile, “as the moratoriumcontinues, less business is being con-ducted along our coast, layoffs areincreasing, and sales of everything

from groceries, cars to real estate areshrinking,” Foret said. “We're experi-encing a terrible, trickle-down effectin our communities.”

The moratorium on deepwaterexploration and development willcost the Gulf plenty, experts predict.In a recent study, Joseph Mason, aLouisiana State University financeprofessor, estimated that the Gulfstates could lose 8,000 jobs, $87 mil-lion in wages and $2.1 billion in out-put during the moratorium's first sixmonths. MN

(Continued from page 31)

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Marine MarketplacePROFESSIONALS

BARGES FOR RENT



The listings above are an editorial service provided for the convenience of our readers.If you are an advertiser and would like to update or modify any of the above information, please contact: [email protected]

ADVERTISER INDEX

Page# Advertiser Website Phone# Page# Advertiser Website Phone#

17 ABS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.eagle.org (281) 877-5861

29 ACT 2 TECHNOLOGIES. . . . . . . . . . . . . . . . . . . . . . . . www.act2tech.org (954) 791-1812

33 AHEAD SANITATION . . . . . . . . . . . . . . . . . . . . . . . . www.aheadtank.com (337) 237-5011

31 ALL AMERICAN MARINE . . . . . . . . . . . . . www.allamericanmarine.com (360) 647-7602

17 ALUMINUM & STAINLESS, INC. . . . . . www.aluminumandstainless.com (800) 252-9074

13,40 AMERICAN PUBLIC UNIVERSITY . . . . . . . . . . . www.studyatAPU.com (877) 777-9081

19 ARGOSY BOAT COMPANY. . . . . . . . . . . . . . . . . . www.argosyboat.com (636) 236-8872

37 BREAX BAY CRAFT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Please call us at (337) 229-4246

3 CHEVRON. . . . . . . . . . . . . . . . . . . . . . . . www.chevronlubricants.com Please visit our website

35 ClearSpan Fabric Structures. . . . . . . . . . . . . . . . . . www.ClearSpan.com (866) 643-1010

25 ComRent International, LLC. . . . . . . . . . . . . . . . . . . . www.ComRent.com (888) 881-7118

23 DONJON MARINE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.donjon.com (908) 964-8812

35 FLOSCAN. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.floscan.com (206) 524-6625

29 FORENSIC ANALYSIS . . . . . . . . . . . . . . . . . . . www.ForensicMarine.com (919) 714-7566

21 GREAT AMERICAN INSURANCE. . . . . www.GreatAmericanOcean.com (212) 510-0135

37 HARCO MANUFACTURING CO. . . . . . www.harcomanufacturing.com (800) 394-7571

27 HO BOSTROM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.hobostrom.com (262) 542-0222

C2 HORNBECK OFFSHORE . . . . . . . . . . . . . . www.hornbeckoffshore.com (985) 727-2000

20 JK FABRICATION . . . . . . . . . . . . . . . . . . . . . . . . . . www.jkfabrication.com (206) 297-7400

21 KONGSBERG MARITIME . . . . . . . www.km.kongsberg.com/cameras 44 1224 226500

14,40 MARITIME PROFESSIONAL TRAINING . . . . . . . . . . . www.mptusa.com (954) 525-1014

41 MARITIME PROTECTIVE SERVICES, INC. . . . . . . . . . www.mpsint.com (561) 330-2020

5 MARINE TRAVELIFT, INC.. . . . . . . . . . . . . . . . . . www.marinetravelift.com (920) 743-6202

39 MARINERS HOUSE. . . . . . . . . . . . . . . . . . . . . . . www.marinershouse.org (617) 227-3979

31 McDonough Marine Service . . . . . . . . . . www.McDonoughmarine.com (504) 780-8100

35 MIRACLE MARINE, INC. . . . . . . . . . . . . . . . . . . . . . . . . . Please call us at (573) 210-8000

13 MOOSE BOATS . . . . . . . . . . . . . . . . . . . . . . . . . . . www.mooseboats.com (866) -Go Moose

C3 OceanTechExpo. . . . . . . . . . . . . . . . . . . . . . . . www.oceantechexpo.com (561) 732-4368

C4 R.W. FERNSTRUM & C0. INC.. . . . . . . . . . . . . . . . . . www.fernstrum.com (906) 863-5553

33,41 RESOLVE MARITIME ACADEMY . . . . . . . . . www.resolveacademy.com (954) 463-9195

37 ROBERTS ELECTRIC . . . . . . . . . . . . . . . . . www.hydraulicbargains.com (312) 829-1365

1 SCANIA USA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.scaniausa.com (210) 403-0007

15 SeaArk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.seaark.com (870) 367-9755

33 SKOOKUM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.skookumco.com (503) 651-3175

38 SNAME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.sname.org (561) 732-4368

35 SUNY MARITIME COLLEGE . . . . . . . . . . . . . . . . www.sunymaritime.edu (718) 409-7341

9 TIDEWATER INC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.tdw.com (504) 568-1010

37 Tutor-Saliba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Please call us at (818) 362-8391

15 USMMA GMATS . . . . . . . . . . . . . . . . . . . . . . . . . . http://gmats.usmma.edu (516) 726-6100

11 WATERMAN SUPPLY. . . . . . . . . . . . . . . . . . . . www.watermansupply.com (310) 522-9698

7 WING INFLATABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . www.wing.com (707) 826-2887

marine news - september 2010

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