Wednesday, September 22, 2004


What the Exxon Valdez Wrought...

You remember the horrendous accident in Alaska on March 24, 1989, the Exxon Valdez grounded on Bligh Reef, and spilled nearly 11 million gallons of oil into the biologically rich waters of Prince William Sound.

Double-hulled tankers were required after the Exxon Valdez oil spill. The United States Congress passed The Oil Pollution Act of 1990 requiring double-hull tankers now, but allowing the transportation companies until 2015 to replace existing tankers. {A double-hulled tanker is a large tanker ship used for transporting liquids(usually petroleum).The ship has two hulls to prevent the liquid cargo from spilling; if the outer hull is breached, the inner hull keeps the transported substance in place.}

In The Daily Reckoning on Sept. 21, 2004, which I receive free each day as an email, I was shocked by the following article which I have excerpted and you can read in its entirety on their website.

By Sven Lorenz

"...thanks to a little-noticed change in regulations. In December 2003, the International Maritime Organization, an arm of the United Nations, agreed to eliminate single-hull tankers by 2010 and to accelerate the timetable to phase out certain single-hull vessels by May 2005.

"The following is hardly known by the public...but this agreement means that 13% of the world's tanker fleet will have to be scrapped by April 2005. By 2010, a staggering 40% of the world's oil tanker fleet needs to be replaced." (As a result of double hull tanker requirements).

What this means is that 13% of sea-born oil deliveries will cease next April! 80% of all oil consumption is delivered by sea! We could be real close to an oil demand shock that will make $50 per barrel look low and it won't be the fault of the oil companies.

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