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Cargill, UNIPEC UK to Charter Only Eco-Friendly Ships

Cargill, one of the world’s leading international transporters, and UNIPEC UK Company Ltd, trader of crude oil and oil products, announced today that they will only charter the more efficient vessels operating in the shipping market. This commitment is the first of its kind in the industry to reduce the existing fleet carbon emissions.

The announcement, from Cargill, Huntsman Corporation and UNIPEC UK who combined charter over 350 million tonnes of commodities annually, signifies a milestone for the vessel fuel efficiency ratings system, the Existing Vessel Design Index (EVDI), created by ship vetting specialist RightShip and published on ShippingEfficiency.org – an initiative launched by the Carbon War Room and RightShip to increase information flows around international shipping’s energy efficiency, as an GHG Emissions Rating (A-G rating) benchmarking system. The efficiency ratings system – containing efficiency information on over 60,000 vessels including container ships, tankers, bulk carriers, cargo ships – enables charterers to instantly see a ship’s theoretical greenhouse gas emissions and relative energy efficiency as determined by RightShip’s EVDI rated from A (most efficient) to G (least efficient), compared to ships of similar size and type.

“Cargill has introduced a senior management override on the use of the least energy efficiency vessels. By choosing the more efficient vessel available to us, we are making a strong statement to the market,” commented Jonathan Stoneley, Environment and Compliance Manager, Cargill Ocean Transportation. “We hope this action will demonstrate to ship owners that they can and should do more in terms of efficiency, and that the market will reward them and will also show other charterers the decision support tools available if they want to operate more efficiently. We will work together with customers, as best appropriate, to help them meet their environmental objectives linked to transportation and this rating system.”

Stoneley continued: “Cargill is committed to minimizing our environmental impact throughout our global operations. We do this by developing management systems and policies to ensure best practice environmental compliance and continually improving performance on criteria relevant to our business and operations. We partner with governments, non-governmental organisations, communities, employees and customers to leverage market-based solutions to reduce the environmental footprints of the supply chains in which we participate.”

Peter Boyd, COO of Carbon War Room commented: “This deal represents the first major capital shift on behalf of the charterers towards making greater efficiency a factor in their vessel chartering decisions. Cargill, Huntsman Corporation and UNIPEC UK should be congratulated for being the first to make this commitment. We’d encourage other charterers within the market, to look towards the simple and understandable ways to quantify, measure and track efficiency represented by the efficiency rating system and the A-G benchmark. Those that lead the curve on presenting more eco-efficient vessels will benefit from the choices charterers are making and the charterers themselves will see lowered operating costs through fuel efficiency – a win-win-win decision for the owner, the charterer and the environment.”

Warwick Norman, Chief Executive Officer, RightShip, added: “Cargill, Huntsman Corporation and UNIPEC UK have strong commitments to maximise efficiency on environmental grounds, and we are proud to provide them with the decision support tool they need to implement their environmental leadership position. With the common decision making framework first movers will have significant market advantage over competitors who are using traditional methods to evaluate efficiency.”

“Without this level of information it’s very difficult for charterers to make informed decisions on vessels based on their efficiency – for example, newer ships aren’t always more efficient than older ships. We’ve developed the Existing Vessel Design Index, or EVDI™, to estimate the amount of CO”

World Maritime News – Cargill, UNIPEC UK to Charter Only Eco-Friendly Ships.

CLNG: EIA Gas Export Study Reveals Only Part of Economic Picture (USA)

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The Center for Liquefied Natural Gas (CLNG),  yesterday said that the Energy Information Administration’s (EIA) report on the effects of increased natural gas exports on domestic gas markets is only part of a larger picture of how LNG exports will impact the U.S. economy and does not account for increased economic activity, decreased U.S. trade deficit and increased job creation that it expects will be revealed in a forthcoming macroeconomic study.

In August 2011, the Department of Energy’s Office of Fossil Energy requested that the EIA prepare the report.

The Office of Fossil Energy has also requested a second study from a third party contractor, which will analyze the macroeconomic effects of increased natural gas exports. The third party study is expected to be released later in the first quarter of 2012.

The EIA study is just a part of the overall analysis on the economic effects of natural gas exports,” said Bill Cooper, president of the Center for Liquefied Natural Gas. “The third party report will provide a more complete economic picture by focusing on the broader macroeconomic effects, which we believe will be positive.

The EIA study’s predicted natural gas price increases do not account for increased economic activity, decreased U.S. trade deficit and increased job creation that we expect will be revealed in the forthcoming macroeconomic study on LNG exports. GDP growth, job creation and offsetting the U.S. trade deficit would be beneficial in neutralizing any potential price effects. For example, the LNG industry expects each new export project to create thousands of jobs in the natural gas sector and related industries.

With a 100 year supply of natural gas and more supplies being discovered in new resource areas, the United States is well positioned to meet both the domestic needs of our country and to provide clean burning natural gas to new markets. As the EIA study noted, the vast percentage of exports would be supplied by additional natural gas production. As history has taught us, the natural gas industry overwhelmingly responds to meet new markets, far beyond current-day predictions.

Markets should ultimately decide whether or not the U.S. should engage in natural gas exports in the future, which is consistent with the long-standing policy of the Department of Energy. America’s free trade policy allows for economic growth and job creation by encouraging exports for all kinds of products, including for energy,” said Cooper.

EIA’s report examines four possible export scenarios. These scenarios consider variables of either 6 Bcf/day or 12 Bcf/day of increased natural gas exports, increasing by 1 Bcf/day per year or 3 Bcf/day per year.

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