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Local Ship Scrapping Called "Unfeasible"
July 16, 2007

The latest Contra Costa Times story on the Mothball Fleet call local ship scrapping “unfeasible.”

I don’t think “unfeasible” is the appropriate term here. It may be more expensive. But it’s certainly not unfeasible. In fact what is now Sims/Hugo Neu in Richmond was dismantling ships in those very drydocks in the 1970s. I used to go watch them.

Other than the issue of labor costs, Jerrold Htchett of Sims/Hugo Neu says the work could very well be done in Richmond, and it would create a lot of jobs. Hatchett, who actually worked in ship scrapping, says it takes about 30 workers three months to take apart a ship. That’s about 16,000 person hours. Then it takes another 100 or 200 workers to perform all the ancillary tasks of transporting and further cutting up the pieces. This project, alone, could probably erase Richmond’s unemployment rate.

There are lots of things the U.S. Government does that are not the cheapest, from farm subsidies to rebuilding Iraq, ostensibly to fulfill compelling public policy objectives.

Pulling ships up on beaches in south Texas to scrap them is the same thing they do in India, Pakistan and Bangledesh, which has been widely condemned for environmental reasons.

A Pulitzer Prize winning article, “Scrapping Ships, Sacrificing Men” described the horrors of the poorly regulated and dangerous Texas ship scrapping industry:

“Workers, mostly Mexicans, often have to pay kickbacks to get their jobs and are sometimes cheated of their pay. Unable to speak English or read warning signs, they have no one to turn to with complaints. "They look for us first because we don't know the law,’ says Juan Chavez. ‘If the boss or foreman says you have to do something, what can we do?"

Powerful Texas legislators are behind the Brownsville ship scrapping monopoly. Congressman Solomon P. Ortiz is the Chairman of the House Armed Services Readiness Subcommittee. He was instrumental in removing the recent moratorium on moving ships to Texas because of the bottom cleaning problem.

It is certainly feasible to dismantle ships in Richmond in a safe and environmentally responsible way. The only question is whether the U.S. Government will pay for it.

Local ship scrapping unfeasible

· Cost, toxics deter Suisun Bay mothball fleet cleanup in California

By Thomas Peele

CONTRA COSTA TIMES
Contra Costa Times

Article Launched:07/15/2007 03:03:35 AM PDT

With the Bay Area's abundant maritime traditions, major port facilities and former Navy bases, one might think that nearby disposal of obsolete government ships anchored in Suisun Bay would be easy:

Haul them someplace safe in Northern California. Cover them. Cut them into pieces. Recycle the steel, copper and other metals. Bury the asbestos, PCBs and other toxic waste in landfills. Move on to the next decrepit vessel.

So why has the U.S. Maritime Administration towed ships thousands of miles to Texas to dismantle them? There are several reasons:

· There are no active ship-scrapping yards from Seattle to San Diego. Oregon recently beat back attempts to start one there by passing a law requiring the work be done in dry docks.

· California is seen as too costly because of steep labor costs and strict environmental regulations.

· Building a new dry dock facility to dismantle ships is prohibitively expensive.

· Texas, meanwhile, welcomes the work. Companies there outbid competitors, even when 6,000 miles of ocean towing is built into the price.

So as the Maritime Administration and California regulators grapple with how to best dispose of 53 of the 74 Suisun Bay Reserve Fleet ships that have outlived their usefulness, there are no local options.

Environmentalists, ship scrappers and regulators all agree that the vessels, which are shedding toxic paints into the water, must be removed and destroyed. In recent years more than a dozen have been towed out the Golden Gate, south to the Panama Canal and then through the Gulf of Mexico to Texas for dismantling.

But the U.S. Coast Guard insists that before more Maritime Administration ships are hauled to Texas, their hulls must be cleaned of marine growth, such as seaweed and barnacles, that could be spread to areas where it is not native. In turn, state water regulators are requiring protective steps to ensure the hull cleaning doesn't pollute the region's waters with toxic metals.

If the ships were scrapped in the Bay Area, their hulls wouldn't need to be cleaned. It would also eliminate the need to tow the aging vessels -- which carry thousands of tons of old fuel, asbestos and cancer-causing PCBs -- across thousands of miles of open ocean, where more paint could fall into the water.

There would be added environmental safeguards because California would require that the work be done in dry docks where scrap metals and toxics such as asbestos and lead paint could be contained.

"In Texas they beach (the ships) and the paint that comes off goes back in the water," said Ray Lovett, a ship-disposal expert. "California wouldn't allow that."

There are now two proposals to do the ship scrapping in the Bay Area, but both appear to be long shots.

Retired naval officer Gary Whitney wants to use the dry docks at the former Mare Island Naval Shipyard in Vallejo, which he says could easily be made operational. More recently, Richmond Councilman Tom Butt proposed renovating long-abandoned dry docks on that city's waterfront.

But, as Whitney knows, there's a reason no major ship scrapping has occurred in the Bay Area since four Navy frigates were cut up eight years ago at the former Hunters Point Naval Shipyard in San Francisco.

"It's always going to be more expensive to do it here," Whitney said last week, standing near an unused Mare Island dry dock, which sits empty as the former base is redeveloped. "It's tremendously less costly to do it in Texas."

Whenever Whitney, who owns the only certified ship-dismantling company on the West Coast, bids on a scrapping contract, he loses out to competitors in Brownsville, Texas.

Even with nearly 6,000 miles of towing costs factored in, those Gulf Coast companies underbid Whitney because of a roughly $40 per worker-hour cost difference between the two regions. He calculates his hourly per-worker cost at $58 compared with $18 in Texas. He estimates it can take as many as 6,000 worker-hours to dismantle each ship.

The Maritime Administration pays to have the ships destroyed, giving them to the lowest bidder under contracts that often exceed $1 million. The company then sells the scrap metal.

To use Mare Island, Whitney would need a contract with Lennar Corp., Vallejo's master redeveloper of the former Navy base.

A spokesman for the company expressed caution about doing ship-breaking near where it wants to build homes and less environmentally threatening businesses.

"We have yet to see a comprehensive proposal" from Whitney, but if environmental safeguards were in place along with financial safeguards that the work would be completed "we'd consider it," said spokesman Jason Keadjian.

The Mare Island Strait would have to be dredged to get the ships to the work site, adding another major, expensive hurdle.

Richmond is an even less attractive alternative because the dry docks there are antiquated and in serious ill repair, said John Gibbons, a consultant to scrapping companies who lives in Antioch and has business affiliations with Whitney.

Without those dry docks, the next option might be building new ones elsewhere. But, there would not be enough business to recoup startup costs that could exceed $100 million and take years to complete, Lovett said. "Someone would have to be a fool to do it."

Congress is watching the situation closely. "We would want to take a close look" at any proposal to scrap the ships in California, said Danny Weiss, a spokesman for Rep. George Miller, D-Martinez. "What we don't want to do is waste any more time. A lot of time has been already lost. What we want to make sure of is that all the sides are talking."

The Maritime Administration contracts to states such as Texas and Louisiana because they don't require the work to be done in dry docks, which are more expensive to operate.

Moreover, because of the limited availability of dry docks, requiring their use would "reduce the rate of ship removals (and) exacerbate the environmental risk posed by increasing numbers of aging vessels in the fleets," Maritime Administration spokeswoman Shannon Russell said in a written statement.

The Texas scrappers would fight any effort to stop the flow of ships to Brownsville, located near the Mexican border in one of the United States' poorest regions, because of a desperate need for jobs there.

Polly Parks, a spokeswoman for the North American Ship Dismantlement Association, which represents three Brownsville scrappers, insists work done there complies with environmental regulations.

If the ships are going to be dismantled in Texas, Parks said, California regulators should stop worrying about cleaning up the peeling, toxic paint aboard the vessels and move them to Brownsville as quickly as possible.

Delay "just contributes to their structural weakening," Parks said.

But there's another dilemma. Whitney, who is also a marine surveyor who frequently works on the ships in Suisun Bay, said as many as eight of them could fall apart and sink if they are towed at sea.

That leaves local disposal as the best option, he said, but it would be difficult to recoup the cost of starting a company to dismantle such a small number of vessels.

That, he said, means a longer-term business plan is needed that would require the Maritime Administration to commit more ships to a California operation.

Gibbons, the scrapping consultant, said it would be difficult to take business away from Texas. "I won't say the environmental concerns there are less, but they are more manageable. And there is a community there that is highly supportive of the industry."

Reach Thomas Peele at tpeele@cctimes.com or 925-977-8463.

Comments

The Story “Local ship scrapping unfeasible” made me think of a simple solution to the Coast Guards concerns. My Idea comes from having a Koi Pond and the control of parasites. If you raise the salt concentration of the fresh water to 3% it kills the parasites without harming the fish. I would think if they use “Farm Pond” type plastic to isolate the bottom of the ships and then raise the concentration of salt to a much higher level than 3% it would kill what ever lives on the bottom of the ships. I’ll leave the salt percentage needed to the experts.

The used salt solution could be pumped where-ever. I suspect even if all of the concentration of salt solution, dead plants & animals went in to the Bay on an outgoing tide it would have little long term impact. When the plastic is removed the amount of salt and dead plants that might remain would be insignificant in the big picture.

If there are concerns about picking up something on the bottom of the ships hulls while in transit the process could be repeated in Texas or wherever.

· Posted by: Richard Lueck

· 7/15/2007 7:27 AM

5568.1 Report as Violation

There are lots of things the U.S. Government does that are not the cheapest, from farm subsidies to rebuilding Iraq, ostensibly to fulfill compelling public policy objectives.

Pulling ships up on beaches in south Texas to scrap them is the same thing they do in India, Pakistan and Bangledesh, which has been widely condemned for environmental reasons.

A Pulitzer Prize winning article, “Scrapping Ships, Sacrificing Men” described the horrors of the poorly regulated and dangerous Texas ship scrapping industry:

It is certainly feasible to dismantle ships in Richmond in a safe and environmentally responsible way. The only question is whether the U.S. Government will pay for it.

· Posted by: Tom Butt, Richmond City Councilman

· 7/15/2007 8:52 AM

5568.2 Report as Violation

I doubt that the "environmental costs" are being quantified and considered. If so, the Texas solution would be a no brainer. If not, the local solution, particularly the Mare Island option, may well be the answer. That is, how much is it worth in dollars to avoid the risk of the potential environmental impact of leaving the fleet in place versus moving them to Texas (or somewhere else) versus dismantling them locally? Local labor rates in Texas and San Fransisco, while easier to quantify, will likely be deemed as insignificant in comparison to environmental costs.

· Posted by: Robert Cole

· 7/15/2007 12:46 PM

5568.3 Report as Violation

Seems to me that the revenue generated from the sale of the scrap metal should offset any and all costs. If any one has any doubt, they have not sufficiently studied the overseas’ scrap steel markets.

· Posted by: T-Bone

Richmond may renovate its dry docks

· Councilman wants to revive World War II-era shipyards to recycle Mothball Fleet, add jobsBy John Geluardi

CONTRA COSTA TIMES
Contra Costa Times

Article Launched:07/10/2007 03:04:01 AM PDTA Richmond City Council member has been generating interest in a plan he says will revitalize the city's World War II-era dry docks, create jobs and solve a knotty environmental problem.

Councilman Tom Butt wants to renovate some or all of the five dry-dock basins at Richmond's historic Shipyard No. 3 and ready them to dismantle many of the 53 obsolete government ships that have been contaminating Suisun Bay with tons of toxic material.

A new shipbreaking industry would generate much-needed city revenue and provide hundreds of low-skill jobs for residents, Butt said last week as he walked through Shipyard No. 3's long-abandoned concrete worker galleries.

"All you have to do is put new water-tight doors at the mouth of the basins and install some water pumps and you have a functioning dry dock," Butt said. "This isn't rocket science. In fact, it's the exact opposite."

Although they've stopped short of endorsing the unstudied idea, the proposal has intrigued environmental groups and federal, state and local government agencies, including the U.S. Maritime Administration, which oversees the Suisun Bay Reserve Fleet; the U.S. Coast Guard; the San Francisco Bay Area Water Quality Board; the San Francisco Bay Conservation and Development Commission; and the city of Richmond.

Shipyard No. 3 is part of the Rosie the Riveter/World War II Home Front National Historical Park because of its role in building Liberty and Victory ships during the war. Since then, the once-bustling basins have fallen into disrepair and have been used mostly as boat storage docks.

But the basins, which are large enough to accommodate most of the ships slated to be dismantled, are fundamentally intact and can be made functional again at a relatively low cost, Butt said. Another possible advantage is the shipyard's proximity to Sims Metal, the largest metal salvaging company on the West Coast.

U.S. Maritime Administrator Sean Connaughton has received more than 50 e-mails, many from Butt's constituents, supporting the plan, said Connaughton's special assistant, Chris Moore.

"The administrator said that something like this could be a good solution," Moore said Friday. "But he wants to see how the idea develops before supporting it."

On Thursday, Connaughton lifted his moratorium on towing the ships from Suisun Bay to Brownsville, Texas, where a few ships a year had been sent for scrapping. The program was put on hold in February because of problems related to a federal requirement that the hulls be cleaned of all living organisms before the 5,000-mile trip through the Pacific Ocean, Panama Canal and Gulf of Mexico.

Last year, when the hull of a World War II-era Victory ship was cleaned in Richmond, the process knocked loose sheets of decayed metal, paint and hull coatings more than a third of an inch thick. The toxic scrapings were left in the water, according to the contractor that performed the work.

The Maritime Administration is touting a new procedure to capture hull scrapings in sheeting, but state officials have not yet reviewed the procedure for effectiveness.

Baykeeper, a San Francisco Bay watchdog group, is concerned about revitalizing the Richmond dry docks because of potential worker health hazards, the disposal of large amounts of toxic materials and the possibility of airborne pollution, said Baykeeper executive director Deb Self.

"We are very interested in looking at a proposal to break the ships down locally," Self said. "But the Richmond community has already been exposed to so much toxic pollution that the U.S. Maritime Administration could spare no expense in protecting the Bay and the Richmond community."

Bruce Wolf, executive director of the Water Quality Board, said a Richmond dismantling operation could solve a lot of problems.

"The plan sounds good. The challenge is how soon it could be implemented and where the funding would come from," Wolf said. "But it sounds like one of those common-sense solutions that would work, especially when not dismantling the ships in Texas could save the Maritime Administration about a million dollars per ship."

It cost $4.9 million to prepare the latest five Suisun Bay reserve ships for the "dead tow" to Texas. The Wawbash, a World War II tanker, cost $1.4 million.

But a local operation wouldn't necessarily realize a savings, according to Gary Whitney, a marine surveyor who has bid to scrap several ships on the West Coast but has never been successful.

"We've come within a few hundred thousand dollars a couple of times, but never closer. They underbid us," he said.

The reason, Whitney said, is labor. Even with towing factored in, it costs Texas scrappers less to destroy a ship than it would to do the work in California. Whitney has estimated the man-hour costs under prevailing wages in California at $58, and $18 in Texas. It generally takes somewhere between 3,000 to 6,000 man-hours to dismantle a vessel, he said.

"Our costs are always more expensive," he said.

Whitney, who is a proponent of using the former Navy dry docks at Mare Island in Vallejo for ship scrapping, said he looked at the Richmond dry docks a decade ago and found them too far decayed to be useful.

Still, there is a historical symmetry to dismantling the ships in Richmond, Butt said.

"In so many ways this harkens back to our history," Butt said. "During the war, they brought hundreds of sharecroppers out here who learned how to build ships in just a matter of weeks. There's no reason we couldn't do that again."

Times staff writer Thomas Peele contributed to this report. Contact John Geluardi at 510-262-2787 or at jgeluardi@cctimes.com