WHY VLCCs?

Progressively larger tankships were introduced because they promised to be more economical than smaller tankers. Also, they promised to be considerably safer.

Economy

The economic conditions that led to the introduction of VLCCS developed soon after World War IL Not only was there tremendous growth in the demand for petroleum products, but also, because of increasingly great distances between major consumer markets and crude oil producing areas, sea transport of oil became a more important factor in the cost of oil products. Simultaneously, major new refining capacity was built in oil-consuming countries, and long-haul transportation increasingly was of the raw material, crude oil, to supply those refineries.

With oil moving over thousands of miles, transport economies of scale are sought whenever possible. That savings are substantial can be seen in a comparison of transportation costs for tankers of various sizes over the same route.

When one large vessel replaces a number of small ones, there is considerable economy in the cost of containing a given quantity of oil-just as one jumbo bottle of soft drink in place of a six-pack of 12-ounce bottles reduces the cost of containers. While the length and breadth and depth of a 200,000ton* tanker is only about twice that of a 20,000-ton tanker, it carries more than 10 times as much oil.

Because the surface area of a larger vessel does not increase in proportion to its volume, and because of the hydrodynamic efficiencies of larger vessels, the size of a ship's engine need not grow in proportion to the ship's size. Consequently, machinery and fuel costs are a smaller proportion of the total cost for a larger tanker.

The size of a ship's crew and the size of its working and living quarters are not determined by the size of the vessel, just as a halfton pick-up truck and a 20-ton tractor-trailer rig both require only one driver and one cab. Therefore, the cost of manning a tanker in relation to the amount of oil carried is less for large tankers.

With almost two billion tons of oil being moved at sea each year (two-thirds of all oil produced in non-Communist countries), transportation costs are tremendous-and potential savings are important to consumer-country economies. As was brought out in a study for the U.S. Senate Interior Committee,** by the year 2000, delivering U.S. crude oil imports in VLCCS instead of 76,000-ton ships (the largest that can now be accommodated fully loaded in any U.S. East Coast port) could save more than $1 billion per year.

'All references to ship tonnage in this paper are to deadweight tons, that is, the total weight of the ship's cargo, fuel and stores, excluding the weight of the ship itself. For tankers, deadweight tons are nearly equivalent to the amount of cargo carried, the weight of other components being minor in comparison.

**Deepwater Ports Policy and Issues, Staff Report, July 1974.

As each new and more efficient class of vessels has been put into service, it has tended to lead to lower freight rates for competing vessels, so that, over the long term, the total transportation bill borne by oil consumers has not risen as much as other elements of total costs.

Fewer Ships, Fewer Accidents

While economics provided a strong incentive for VLCCS, prudent operators, after serious and thorough study of the alternatives, generally were convinced that larger ships would offer much safer transportation than would greater numbers of smaller vessels. With tanker requirements almost doubling every five years in order to meet world oil demand in the period from 1950 to 1970, it was obvious that there would be a critical shortage of skilled officers to man tankers. With fewer ships to man, operators are now more assured of being able to hire experienced, qualified, and therefore, safer personnel.

It was equally obvious that increasing numbers of tankers would contribute to dangerous overcrowding of the world's busiest harbors and restricted waterways, which also must serve all other ships in burgeoning seaborne trade.

Special petroleum terminals have been created to accommodate VLCCS. Europe imports nearly 15 million barrels of crude oil daily, most of it through 31 tanker ports adapted to accommodate VLCCS. Similar facilities have been created in Japan, and there now are many throughout the world. Some of these harbors also serve large ships carrying other cargoes, but with proper port management and controls, and fewer but much larger tankers, special oil ports have been shown to be safer.

Each day, the United States is importing about 4 million barrels of crude oil, as well as refined oil products. Using existing U.S. port facilities, eleven 50,000-ton tankers each day, trading directly into such busy harbors as Philadelphia, Houston and New Orleans, are needed to deliver the imported crude oil. If there were only three new deep-water ports, located offshore and away from other harbor traffic, the same requirement of crude could be satisfied by about two and a half 250,000ton tankers a day.

A recent act of the U.S. Congress authorizes such ports, subject to federal government regulations and state government approvals.

Energy Conservation

In a world suddenly obliged to conserve energy, the VLCC is a more efficient way to transport oil. For each 1,000 tons of cargo delivered in a 250,000-ton tanker over 11,000 miles, only 20 tons of fuel are consumed in propelling the ship. A 50,000-ton vessel requires three times more fuel, and the typical 16,500-ton tanker used immediately after World War II needed five times as much.