Ballast Water Treatment

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AHS AQUAHABISTAT

• Ballast Water Treatment
• Chesapeake Bay Program
• Invasive Species Workgroup
• December 10th, 2003

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Executive Summary

• Current shipping practices
• Ballast water containing marine life is dumped
  unchecked
• Serious environmental issue
• Difficult problem to solve
• Large volumes
• Microscopic marine life
• Logistical, economic constraints
• New regulations coming into effect
• AHS ballast treatment technology
• Effective end inexpensive
• Oxygen deprivation method

Source US Coast Guard
Source Washington State Department of Fish and
Wildlife
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The Problem

• Shipping moves over 80 of the worlds
  commodities.
• Ballast water is essential for safe operation,
  balance and stability
• Serious environmental problems occur when ballast
  contains marine life
• Each year over 12 billion tons of ballast water
  are transported globally
• The problem is compounded as most marine species
  have microscopic life cycle stages.

Source US Coast Guard
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The Environmental Impact

• Ballast transports over 10,000 marine species
  each day
• After habitat loss, invasive species
• Greatest threat to endangered species
• Greatest reason for loss of biological diversity
• Irreversible effects

Photos Northeast Midwest Institute
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The AquaHabiStat System

• Concept Oxygen deprivation by simple vacuum
• Nothing added to the water
• Effective for most voyage lengths
• Acts as corrosion inhibitor
• Engineered, prototyped, tested and patented
• Effective with one pass of ballast water on
  intake
• Eliminates costly and confusing procedures

One of the most effective, least expensive and
most environmentally friendly treatment systems
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AHS Design

• Splices into current ballast intake
• May use existing ballast pumps
• AHS tank in the engine room
• Vacuum, centrifugal pumps attached to tank
  separate oxygen from the water
• Piping and pumps move treated water to ballast
  holds
• Marine life consumes remaining oxygen

Entirely Mechanical

• Water regains oxygen during de-ballasting after
  organisms are killed

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Patented AHS Design
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Independent Test Results

• Dissolved oxygen (DO) in treated water decreased
  to levels lt 1 ppm with a vacuum equivalent of
  -14.2 psi
• After 3 days, all nuisance species larval stages
  and other organisms gt 75-80?m eliminated
• Limited ATP testing indicated all biomass gt 20?m
  eliminated in lt 3 days
• Treatment effect was seen down to 10?m
  (zooplankton, phytoplankton)
• Living species in untreated samples

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AHS Benefits

• Financial Savings to Vessel Owner
• Significant savings vs. ballast exchange
• Reduces fuel expenses
• Reduces corrosion of ballast tanks coating
  needs
• Extends the life of ballast pumps vessel itself
• Low cost up front over the life cycle
• Low installation maintenance costs
• No ongoing expensive consumables (chemicals or UV
  bulbs)
• Resources
• Multiple patents worldwide
• US, China, Europe, Australia and others
• Team of naval engineers, manufacturing partners,
  and biologists to design, build, install, test
  and monitor

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AHS Meets the Criteria
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The AHS Team

• Management
• Wilson Browning 30 years of experience in the
  shipping industry
• Chairman Inventor BS, Johns Hopkins
  University MBA, UVA
• Parker Davis 7 years Merrill Lynch Investment
  Banking New York
• CEO BA, Dartmouth College MBA, UVA
• Will Browning 9 years experience shipping
  agency, freight forwarding
• COO BA, Denison University MBA, William and
  Mary
• Advisors
• Robert Ash, PhD Professor of Engineering, Old
  Dominion University
• Claude Thompson Former Chief of Engineering,
  USCG Academy
• Independent Investigators
• Roger Mann, PhD Deputy Director, Virginia
  Institute of Marine Science
• Member of the Virginia Invasive Species
  Council
• Harvey Ko, PhD Applied Physics Lab, Johns
  Hopkins University
• Andrew Gordon, PhD Professor, Former Chairman
  Biology Department, ODU

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AHS Relationships
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AHS Recognition

• Awarded multiple patents worldwide
• Awarded competitive public funding
• National Oceanographic and Atmospheric
  Association (NOAA)
• Virginias Center for Innovative Technology (CIT)
  
• Virginia Economic Development Partnership (VEDP)
• Received Outstanding award from the National
  Association of Management and Technical
  Assistance Centers 2002 awards
• First and only ballast water treatment technology
  admitted as an Associate Member to INTERTANKO
  (International Association Tanker Owners)
• Finalist in the INTERTANKO Environmental
  Challenge
• Unsolicited press in Tanker Operator magazine and
  the Virginia Pilot news
• Chosen speaker and panelist at numerous
  international conferences

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Other Technologies

• Other treatment technologies include
• Filtration
• Heat
• Ultra-violet light irradiation
• Ozone
• Chemical Biocides
• Combinations of the above
• Alternative methods to treatment
• Ballast water exchange
• Onshore treatment

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System Pricing A Practical Solution

• System costs are based on size of the vessel and
  available parts, such as pumps and piping
• These issues are common to all systems
• Less than 1 of the cost of the vessel
• Vs. the double-hull tanker concern (15 of the
  cost of the vessel)
• The life cycle cost of AHS is minimal relative to
  other systems
• Initial outlay only
• No replacement parts (filters or UV bulbs) 2X
  cost of AHS
• No consumables (chemicals) 10X cost of AHS
• Capital outlays can be mitigated via financing,
  leases or licenses

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Regulations Not If, But When and How

• International Maritime Organization (IMO)
  presented rules in July 2003
• Anticipated approval in February of 2004
• National Aquatic Invasive Species Act (NAISA)
• Introduced in Congress in March 2003
• US Coast Guard published a proposed rulemaking
  for mandatory ballast water management in July
  2003
• Final Rule in Spring 2004
• Effective in the absence of NAISA
• Washington State and California have enacted
  ballast water regulations
• California currently effective
• Washington State effective after July 2004
• Includes financial penalties for non-compliance

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Commercial Vessel Market Overview

• Regulations will affect existing vessels and new
  builds
• gt 45,000 existing commercial vessels
• gt 1,000 new large vessels built annually
• Each treatment system will likely cost over
  250,000
• Not including life cycle costs

Source Royal Haskoning, September 2001
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Regulations for Armed Forces Vessels

• The National Defense Authorization Act of 1996
  directed the Department of Defense (DoD) to
  develop Uniform National Discharge Standards
  (UNDS) for Armed Forces vessels
• The EPA and the DoD are developing the UNDS in
  three phases
• Phase I (completed May 1999)
• Determined which vessels and which discharges
  would require standards
• Concluded that untreated ballast water discharge
  poses risks of non-indigenous species
  introduction
• Ballast water was included in list of discharges
  to require Marine Pollution Control Devices
  (MPCDs) for applicable vessels (including all
  MSC vessels)
• Phase II (initiated in summer 2003)
• Will promulgate standards for discharge standards
  based on feasibility and environmental impact
  analysis
• Phase III
• Will promulgate regulations for the design,
  construction, installation, and use of MPCDs on
  board vessels of the Armed Forces to meet Phase
  II standards

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Advocacy
It is clear that ballast water management has
moved from a vague concept to specific guidelines
and now to mandatory requirements in rapid
succession. Dennis Bryant, October 14,
2003 Former Chief Legal Officer, US Coast Guard
Current Washington representative to BIMCO ship
owners association

• Multiple stakeholders are advocating mandatory
  ballast treatment

• United Nations
• Over 130 Countries
• Shipping Federation of Canada
• US Coast Guard
• EPA
• US Fish Wildlife
• NOAA
• US General Accounting Office

• Pew Oceans Commission
• Smithsonian Institute
• Great Lakes Association
• States of Virginia, California, Washington,
  Oregon, Pennsylvania, Hawaii

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Current Regulatory Situation

• Confusing regulatory environment with numerous
  parties involved
• International Maritime Organization
• US federal government
• US Coast Guard
• Individual states and regions
• Vessel owners do not want to get involved in
  regulatory debate
• Leaves environmentalists, academicians and
  regulators to hash it out
• Only ballast water exchange laws in effect
• Vessel owners would rather treat ballast water
  than exchange it
• Ballast exchange is unsafe, expensive and puts
  wear and tear on vessels
• Prevention technologies are available, but none
  approved

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Specific Issues Regarding Regulations

• IMO Treaty allows compliance period of over 6
  years
• Coast Guard Rulemaking
• Creating biological standards and technology
  testing protocols are not standard procedures for
  the Coast Guard
• Mandated by Congress since 1996
• Technology approval is on a vessel by vessel
  basis
• NAISA
• Has not passed
• Democratic bill in a Republican administration
• Only applicable to voyages originating gt 200
  miles offshore
• Over 60 of voyages arriving at US ports are
  within 200 miles
• Includes numerous issues of resistance and debate
• Control of species already introduced
• Research appropriations
• No common means for approving technologies at
  state or federal levels

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Prevention vs. Control

• Prevention
• Ballast water compliance standards
• Ballast water exchange alternatives
• Treatment technology approval protocols
• AHS is currently unaware of any opposition to
  prevention regulations
• Control
• Early detection and monitoring
• Rapid response to new invasions
• Funding for academic research on current
  invasions
• Intentional introductions (aquaculture, food
  industry)
• Control provision opposition land rights
  activists, endangered species activists,
  appropriations authorities

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Issues on Control of Species Already Introduced

• Control is an issue, but much more complex than
  prevention
• Extremely expensive
• Eradication of species without affecting
  indigenous species
• Construction of physical barriers
• Funding for research and rapid response
• Numerous jurisdiction issues
• Some introduced species are endangered species
  themselves
• Many invasive species are now on private property
• State land rights vs. federal authority
• Aquaculture industry

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Interests of Ship Owners

• Any technique must not hamper free global trade
  and must therefore be accepted by all port
  authorities through certification according to
  international standards.
• A ship owner must be free to choose from a range
  of techniques
• Any technique must meet the set of basic criteria
  already identified by IMO
• Safe
• Cost effective
• Biologically effective
• Environmentally friendly
• Practical for shipping
• Other criteria
• Low time needed for operation
• Ease of monitoring and reporting through
  automation and controls
• Chemical free
• Ability to bypass the system if necessary
• Cost and pricing dynamics of ballast treatment
  systems will be driven by
• Vessel characteristics (type, ballasting flow
  rate, age, flag state)

Source Royal Haskoning
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Regulatory Challenges for Treatment Technologies

• Coast Guard has authority to develop technology
  approval process
• No approval process developed
• Current criteria as effective as ballast
  exchange
• The Coast Guard has suggested exchange is 20-90
  effective
• No protocol exists to test technologies vs.
  exchange
• No technologies have been approved
• As a result, the market has not spoken
• No leap of faith for practical technologies
• Taking years to develop exhaustive protocols to
  test all outcomes
• No incentive exists for ship owners to
  participate in technology development

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Financial Challenges for Treatment Technologies

• Vessel owners reluctant to purchase technologies
  until required
• Investors reluctant to invest until technologies
  are commercial
• Government funding is paltry
• NOAA for prevention technology development budget
  was 350,000 for 2003
• NOAA budget for species control is over 20
  million

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Key Components for Any New Regulations

• Biological effectiveness need a place to start
  (the standard)
• Economic effectiveness
• Objective eradicate the most harmful organisms
  at the lowest cost
• Those that grow into harmful species
  zooplankton, phytoplankton
• The cost of killing bacteria
• Ballast water is one of thousands of ways
  bacteria is carried
• Typically must use chemicals
• Expensive, not practical for shipping, difficult
  to administer
• Otherwise environmentally unfriendly
• Curtailing discharge side effects
• Chemical discharge
• Changes in water itself (e.g. lower pH creates
  acidic water)
• Geographic applicability US arrivals from
  domestic and international ports

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Recommendations

• Draft New Federal Bill and Keep it Simple
• Prevention only
• No provisions for control of species already
  introduced
• No appropriations
• Applicable to both international and domestic
  voyages
• Applicable to vessels with large amounts of
  ballast
• Biological standard
• 95 kill rate effectiveness or 50 micron maximum
  size
• Do not include bacteria - yet
• Allow ballast exchange in lieu of technology for
  limited period of time (2 years)

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Technology Approval Recommendations

• Technologies should be approved
• On an experimental basis based on promising
  initial prototype results
• For a limited period of time (5 years) to
  demonstrate effectiveness
• Technology type approval, not ship approval
• Ship owner must still present approval
  verification to authorities
• Reduces burden on regulators to approve vessels
  individually
• Allows sale to multiple vessels
• Financial incentive for ship owners to
  participate in development
• No direct funding needed waive exchange
  requirements for tests
• The International Chamber of Shipping has claimed
  that each exchange may cost a large vessel up to
  20,000 per exchange

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AHSAQUAHABISTAT
223 East City Hall Ave. Suite 200 Norfolk, VA
23510 [phone] www.AquaHabiStat.com