At last month’s Connecticut Maritime Association conference in Stamford, Connecticut, I met up with DNV Americas’ COO, Elisabeth Torstad, as well as President, DNV Maritime, Oil & Gas, Tor Svensen, and North America Director of Operations for Maritime and Oil and Gas, Kenneth Vareide.
Interview conducted 20 March 2012
RA: Thank you all for the opportunity to talk with you today. CMA is a busy event and I’m sure all of you are being pulled in a hundred different directions.
We published an article recently about an LNG-powered platform supply vessel called the Viking Lady that was experimenting with Fuel Cells, and I know that DNV was heavily involved in this project, what can you tell me about it?
T. Svensen: It was an experiment to see if it is possible to use fuel cells in a commercial vessel. The Viking Lady is already an LNG-powered PSV, so natural gas is available, as one of the fuels that can power fuel cells.
RA: How do they work exactly?
T. Svensen: It’s a direct conversion to electricity through a process using special metals. Actually, fuel cells have an efficiency of about 75 to 80 percent compared to a reciprocating engine, which works at maybe 50 percent.
The nice thing is that fuel cells can run on different fuels. If you run on hydrogen, you have zero emissions. If you run on natural gas, you have maybe 50% reduction in CO2 emissions. Both of those are huge advantages.
RA: One of the things they mentioned in the EEDI meeting this afternoon was using fuel cell technology on board ships to supplement power plants at sea.
T. Svensen: Yes, that’s exactly right. If you’re in port, you’ll just run on the fuel cell and you’ll have all the power you need while in port. In the case of the Viking Lady, you’ll have part, or perhaps all, of the auxiliary load supplied by the fuel cell. The fuel cell on Viking Lady was not more than 300KW, so it was not big fuel cell, although it was physically large.
Part of the tests on board the Viking Lady were to see if a fuel cell could fit into the operational profile of the ship. Then, we wanted to test the interface into the electrical system and see how it would work given the ship’s motion and the marine environment.
RA: From a risk management standpoint, what are some of the issues that you saw with this system?
T. Svensen: The fuel cell had no risk management issues beyond those of other propulsion or power systems. With LNG, of course, there are issues with regard to double barriers for safety that are well established already. Frankly, we were surprised how well everything worked.
Now, Fuel cells need to be developed much further for commercial application, but they look promising. They are very good for a providing a stable power output at an optimum efficiency point, perhaps 80-85 percent of maximum power.
RA: Who is developing them?
T. Svensen: MTU – Rolls Royce developed the fuel cell for the Viking Lady.
RA: Are they the only ones working on this right now?
T. Svensen: No, there are other manufacturers as well. Unfortunately there are not enough manufacturers or development for fuel cells today. I would like to see much more development because we need to bring them down in size so that we get more output for their volume, ie. power density needs to increase.
That is one of the biggest challenges.
RA: The Viking Lady has a few other unique features designed into her, such as a deck-forward design. Can you explain the rationale behind this feature and perhaps any others?
T. Svensen: Yes, she looks a bit like a cargo ship. They decided on that design in order to give better operability and handling. I talked to the master of that ship and he said that on a traditional, deck aft PSV, you have a forward and aft position while working, however for the Viking Lady, everything is forward which enables the master to keep focused on what is happening on deck, and what is directly in front of the vessel at all times. It’s a safety issue.
The other is the comfort factor.
Having the bridge and accommodation areas aft makes a huge difference when working in the North Sea. Crews mention that they sleep better on this sort of vessel because they are not thrown around in their bunks as much.
RA: Have you seen a lot of interest in this vessel design from other companies operating in the North Sea?
T. Svensen: Most ship owners are fairly traditional and have not yet bought into this design.
An additional benefit is that with the pilothouse-aft design, the conduit run for the power systems is much shorter as the accommodations, the bridge systems, and the engine room are all arranged vertically. It’s a simpler design, and thus less costly to build.
Also, with the aft superstructure, less buoyancy is required in the bow, and thus a finer entry can be designed to improve hull efficiency.
T. Svensen: I think the main hurdle is to get used to handling cargo on the bow, where there are more ship motions than on the stern.
RA: Besides affecting their bottom line, how do we get these companies on board with these new concepts?
T. Svensen: I think the main idea is the use of LNG as a plentiful and environmentally friendly fuel. The secondary idea is to explore the layout and actual design. As I said, opinions are divided and design is always a tradeoff. You choose some features that you like, and you compromise on other things. I continue to think that owners and designers will always explore new options for safety and efficient operations
RA: Elisabeth, tell me a bit about DNV Americas, what’s the strategy for DNV over the next year?
E. Torstad: We have been in the Americas for over 100 years and have a strong organization. DNV Americas covers several different areas, not just maritime. Today, we are growing in pipeline safety, oil and gas, especially offshore, renewable energy and electrical power transmission as well as maritime. We are very strong in healthcare side and the certification of management systems to quality, environmental and other international standards. Then, our laboratories for fuel testing, pipeline safety and forensic investigations, as well as a research and innovation unit, round out the broad scope of our activities in the Americas. Within maritime, which is a very strong area for us in the Americas, though, we are seen as a very capable and highly competent organization. So we have several strong legs to stand on.
We focus on technology and quality in the Americas, which also differentiates us throughout the world. We have a strong edge within offshore and we bring a lot of competence here from other places in the world. Houston is also a hub for development of our other global business units.
RA: How are you able to bring in that talent? Why do people want to work for DNV?
E. Torstad: Because we focus on competence and technology and we do things such as engage in projects like the Viking Lady, the Quantum, Triality and other concept ships on the shipping side, and we similar innovative design projects on the oil and gas sectors. Also, we value innovation and creativity – the desire to challenge the norm and we invest in both the technical and managerial competence of our people.
To us, though, competence alone is only valuable if we share it with industry and government – and we do in the delivery of our services and by taking positions on key issues. For example, we had a position paper for an effective offshore regulatory regime for the U.S. in July 2010, less than 3 months after the Macondo blowout.
RA: How do you communicate these points to the industry?
E. Torstad: We communicate in several different ways. gCaptain is certainly one avenue for us to communicate and we appreciate your interest in all of our innovative projects, such as the Viking Lady, the X-Stream pipeline and concept ships, LNG fuel for propulsion and offshore solar farms. Secondly, we have an open and active internal and external communication policy and we are available to the trade and general media to offer our own analysis or share our insights.
Third, we have a number of publications, such as Forum, our corporate magazine, and industry specific publications, such as the Updates for Offshore, Tankers, Container Ships, Cruise Ships, LNG, Wind Energy, etc., which are distributed to our customers, government agencies, and are also available on our website.
Fourth, we take time to listen to our customers and, when it is appropriate, we can point out how some of our innovation products or services may help them.
We do hold press conferences, but many trade and general media journalists now subscribe to the press releases we post on our web site. Also, we are active in various industry conferences and provide speakers when we feel we have something to add or a unique view.
We also have a very strong tradition for developing new ways of working and new standards or recommended practices together with industry where we invite companies and governmental institutions in to work together with us. So we both work in the background on our own, as well as in strong partnerships with industry and government
RA: Tell me a bit about the work that DNV is doing within the arctic?
E. Torstad: We have been working within the arctic since the early days when Norwegian, Finnish, and Russian bases were established. This includes everything from ship design, dealing with ice, ice loads, ice management, ice breaking, working in cold/harsh conditions, as well as working with the noise and vibrations emissions into the arctic. For shipping, we have been very active in the technical aspects as well as the working environment.
As you know, the arctic is not a homogeneous area of ice and harsh weather, but a very diverse range of different environments.
We are currently taking on a large project for the Norwegian and Russian governments called the Barents 2020. Originally, this project involved figuring out the best way of regulating the arctic for the common needs of both Norway and Russia. We started out by mapping the Norwegian and Russian regulatory regimes for the arctic and identified the commonalities and gaps. Those gaps were then individually assessed and standards developed to maintain the same level of safety and reliability that we have in the North Sea for offshore oil and gas operations.
The work is still ongoing in terms of working with the industry to develop those standards and cover those gaps.
As this project has progressed, both Norway and Russia recognized that this work has international applications and it has now been expanded to an international project. The next part of that work is actually bringing in US and Canadian authorities, who have shown a lot of interest in our work.
RA: How are the US and Canadian authorities coming along when it comes to managing the offshore arctic E&P landscape? During the Deepwater Horizon disaster, there appeared to be a bit of a knowledge gap between the MMS and the US Coast Guard, where do you see things now?
E. Torstad: I think that’s closing in now. Having Admiral Watson as the new Director for BSEE was a very good appointment and there have been several other steps taken which have supported more coordinated regulatory efforts across government agencies.
What we see, while working with government agencies, is that they are dealing with increasingly complex regulatory regimes and more demanding public expectations.
You can judge the overall regulatory system by the actual implementation level, however, there are a lot of good thought processes and work processes looking at improving both the regulatory programs and implementation. I also think I can say that there have been some major steps while working with some of the offshore safety committees. Some of the permanent committees that have been put into place have been doing a lot of great work.
RA: Is DNV involved with the Marine Well Containment Company?
E. Torstad: Yes, we provide services to them and we have been verifying and certifying the equipment and systems.
RA: How did DNV develop it’s expertise in the subsea world? Was this developed organically or via acquisition?
E. Torstad: Our subsea competence has been developed together with the oil companies over time since the first subsea development project. We’ve done a lot of joint industry projects and launched a lot of research and innovation projects, but I don’t think we’ve made any specific subsea acquisitions. It’s all been organic.
T. Svensen: When the offshore industry in the North Sea moved into deep water, or it needed to go beyond the normal areas from a fixed platform, they really had to find new solutions. It started basically in the late 80s, when the oil companies, the research communities, and DNV, were heavily involved in some big projects prototyping new technology such as flexible risers, anchoring systems, etc., which lead to floating production and subsea installations. It’s gradually moved through various stages. Today, you see a trend that it’s moving more and more from the sea surface to the seabed.
K. Vareide: More and more processing facilities, and of course, Statoil’s strong and aggressive presence in the North Sea, led to the deployment of new subsea technologies. The world’s biggest subsea companies and manufacturers are Norwegian-based. So, as this cluster of companies and skill sets developed in Norway, so did DNV.
E. Torstad: I’d like to also mention that DNV has large laboratories which have helped us stay at the forefront of technology. We’ve been able to work with setting the functionality requirements of subsea technology and then testing it In addition, DNV KEMA has the world’s largest high voltage testing laboratory and our office in Columbus, Ohio, has extensive corrosion testing and analysis capabilities.
RA: Floating LNG… Is DNV working with Shell on Prelude?
E. Torstad: Absolutely.
RA: It’s a pretty amazing project.
T. Svensen: The Shell FLNG is first one, however there will be more to come in the future. It provides lots of flexibility and advantages, but of course, it’s a huge undertaking, a tremendous development.
E. Torstad: It’s fascinating… You were asking earlier about oil spills, and I’d like to comment on that because it’s more than just containment, which is an important part in our view. One of the keys is our use of models to analyze oil spills and predict the effects, We have a leading position in how to do this, including the use of satellite imagery. For example, one of the things we can do is to actually look at possible consequences of say a blowout situation, such as what might the spill ratio may be, where will the spill flow, how large will the flow be and what species may be affected. The whole consequence modeling of an oil spill is one of our strong suits.
You can’t just say you need to avoid oil spills, you need to know what to do if you have one.
RA: And I would assume that DNV works with the geoscientists to figure out ratios of condensate or gas to oil within these spills as part of your modeling process?
E. Torstad: Yes, of course. One of the important inputs is assessing the properties of a specific well to obtain the data to model how much the blowout ratio could be and then we can do the modeling. .
RA: The Northern Sea Route… Last year it was a fairly popular route to take for gas carriers serving the Yamal Peninsula. What is DNV doing to support companies like Sovcomflot and others who operate along that route?
K. Vareide: I think last year the number of ships transiting that area was maybe 35. It is picking up though, and right now it’s in the pilot phase to become a regular route.
I think the industry is taking the right steps to learn more about operating in that area. One of the shipowners who has been operating up there recently said that you really need to have an efficient logistics chain to take that route. You will save quite a few days along that passage, but you need specifically built ships capable of sailing efficiently from Europe to Shanghai.
RA: Do you need ships to go all the way to Shanghai, or do you build transshipment areas at each end of the route?
K. Vareide: Exactly. If you’re going to make this very effective, that’s probably what you’ll need to do.
E. Torstad: Yes, there are different logistics solutions for a variety of investment scenarios,
T. Svensen: You also have to consider shipment between Asia and Europe in the zero-ice season. Those ships may not need to be ice-strengthened when standard commercial ships can run on this route. Then, you have the other part of shipping where you have to go in to where the raw materials are coming from, whether it be from Yamal, or wherever, and those ships will need to be ice classed, specialty ships. Those ships, however, will not be as efficient while sailing in other regions. You don’t design an oil tanker to break ice and then go across the Atlantic to deliver the cargo. That’s totally inefficient.
Icebreaking, or ice-strengthened vessels will just go to Murmansk for example, offload their cargo, then a normal Suezmax will pick it up. This is very different from this Northern Sea Route, which is simply an alternative to going through the Suez Canal, or around Africa.
RA: Considering the diverse business areas, and industries, that DNV works within, I was wondering if there was any sort of collaboration going on between your company and the Carbon War Room.
T. Svensen: I don’t think that they are very serious in the things that they do, to be quite straightforward. They are using published data and publishing efficiency figures, but they don’t take consider the technical aspects for someone who may use their data. That is my main criticism. They don’t go into the necessary depth and, as a consequence, they create unnecessary tension.
We are very engaged though, and have been doing a lot of very serious studies of abatement potential for shipping. In fact, we have worked with Lloyd’s Register to generate a serious study and report to the IMO about the effects of introducing the new EEDI regulations. The IMO does have a scientific approach, unlike some of the NGO’s, which do not take technical aspects or how things operate on ships, into account.
On the issue of addressing CO2 abatement and bringing down energy consumption on ships, DNV’s approach has been to drive energy efficiency much harder in order to reduce the CO2 footprint. That results in real reductions in emissions. Then, in our view, the next step is to talk about creating new schemes for the industry to reduce its overall footprint further, whether it be carbon trading, or another approach..
Our studies show that the potential for CO2 reduction in the shipping industry varies from close to 30 percent using today’s technology, to upwards of 50 percent if we bring in some of the emerging technologies that I think will be available within the next 10 to 20 years.
E. Torstad: I think I’d like to point to another difference as well. We differ significantly from an NGO in the fact we are in business, and we are doing business with customers to address a multitude of different risks that they are facing. We agree in the direction, we have a policy and a strategy and we want to drive emissions down and achieve a more sustainable industry.
We think that’s the right direction to go, but we are also working with all the other aspects of doing business in this industry. A key point is that our knowledge, capabilities and overall involvement are much greater than what an NGO can do because they are not involved in the totality.