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DN V Forum

no 01 2007

IMO chief tackles safety issues in shipping Also inside: > DFDS on regional shipping > Challenging turbulence for super-jumbo > Backing carbon capture and storage technology


contents

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Editorial: The balancing act between business and society

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IMO Secretary General: Raising safety standards

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Jens Lassen: The avoidance strategy

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Niels Smedegaard: Taking DFDS to new heights

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Demanding safety criteria for super-jumbo

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Elisabeth Tørstad on carbon capture and storage: “Speed up, please”

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Improving Chinese energy efficiency

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Transpetro: Doubling the Brazilian pipeline web

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UK’s RPA: Delivering better service to farmers

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Small-scale LNG: Politicians challenge the maritime industry

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DNV’s partnership with the Red Cross: Making a difference in Kenya

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News

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Last word: A wake-up call from Texas City

DFDS: ‘Jumboizing’ short sea shipping

Backing capture and storage technology Dr Pierre Dechamps: Keep the red flag flying

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The balancing act between business and society We can all agree that a sustainable future without economic progress is impossible. One important mechanism to achieve sustainable growth is the development and implementation of international standards. For years standardisation work was centered on product standards. We have many successful examples of industry-developed standards, which have been adopted internationally. For example: how could container shipping have succeeded in contributing to global trade without the development of the standard size container box? We can say that the adoption of international standards introduce a global synchronisation of products. Former Secretary General of the UN, Kofi Annan, spoke at the 2004 annual meeting of the International Standards Organisation, ISO, on the importance of international standards. He said: “International standards are essential for sustainable development. They represent the most important source of technical know-how – especially for developing countries. Standards are of great help to countries which need development and to prepare these countries for global competition.” Kofi Annan points at two fundamental effects from international standards, which both favor sustainable development: They stimulate global trade by removing trade barriers, and they are an important means of transferring technological know-how to developing countries. Today, standards go well beyond product standards, such as the ILO standards, SA 8000, and the Environmental Management System Standard ISO 14001. The

most fundamental standard, however, remains the UN Declaration of Human Rights. This declaration defines the basic rules of any interaction, both for governments, businesses and for civil society. It is also included in the UN Global Compact.

International standards can only bring us forward if we can build trust in the way they are implemented and followed up. By signing the UN Global Compact more than 3,800 governmental bodies, civil society organisations, and businesses have now committed themselves to follow its 10 Principles. Representatives from government, civil society and businesses are also actively engaged in the exciting development of a new set of ISO standards – the ISO 26000 series – on Social Responsibility. It is vital that international standards are perceived as relevant. We also need mechanisms to ensure credibility and trust in the way companies and governments live by them. Independent verification by third-party organisations can be an important means to build trust and confidence between the civil society, business, and governments. DNV is an organisation that performs this balancing act between business and society.

HENRIK O. MADSEN President and Chief Executive Officer

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Raising safety standards Efthimios Mitropoulos is Secretary-General of the International Maritime Organization (IMO). His views on the IMO initiative to develop goal-based standards are clear. “Our ongoing development of goal-based standards will help raise the safety of shipping, with class societies playing their part by establishing detailed technical rules to meet these goals.” TEXT STUART BREWER. PHOTO: SCANPIX Increasingly strict maritime regulations remains a global trend and the complexity of managing and staying in compliance with various standards enforced by different regional authorities and class societies has been a particular challenge. Yet for an industry understandably sceptical of any new regulations, many have been surprised by how quickly owners have supported efforts by the IMO to establish goal-based standards defining high-level goals of safety and pollution prevention. Before addressing the main drivers behind the goal-based standards, the Secretary-General shared his views on the much debated role of the IMO versus the EU(European Union) and national legislators. Adm. Mitropoulos firmly believes that

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shipping has to be regulated internationally, and not regionally or unilaterally. “To enhance safety, security and environmental protection in shipping engaged in international operations, national Governments are responsible for implementing regulations drawn up and adopted by IMO, which is, of course, made up of those same Governments. As an intergovernmental body, IMO’s role is to ensure that global agreement is reached on any new regulations and that any proposal for legislation, which will affect international shipping, is brought to IMO for consideration and action by all, on a consensus basis,” he explained. He continued, “The EU is a body made up of national Governments, all of whom

are member states of IMO in their own right. Their contribution to IMO achieving its objectives has, throughout the organization’s existence, been of enormous value and has been, and still is, appreciated by all. My view is that the concerns and interests of any group of IMO members over any particular issue affecting international shipping are best addressed by raising those concerns at IMO and pursuing optimal solutions through the organization, so that all may benefit.” “At the end of the day,” said Adm. Mitropoulos, “there is no doubt that an international industry like shipping, in which the prime physical assets – the ships themselves – actually move between countries and continents and, therefore, between DNV Forum no 01 2007


Piraeus-born Adm. Mitropoulos is the seventh Secretary-General of the International Maritime Organization.

different legal jurisdictions, simply has to be regulated internationally, and not regionally or unilaterally.” Regarding the ‘policing’ of the industry and the role of the port states, flag states and class societies – is the present structure satisfactory or should some of the roles be redefined? “I think the current system, whereby the primary responsibility for ensuring safe, secure and environmentally-friendly ships lies with flag states and shipowners, is sound, though implementation can always be improved. In this context, we must continue our efforts to harmonize the Port State Control procedures and activities of various regional Port State Control regimes. DNV Forum no 01 2007

Also, our work on goal-based standards for the construction of new ships is expected to have an impact on re-defining the roles of flag state administrations and classification societies over structural rules. And, furthermore, the IMO Audit Scheme should help considerably in this respect, by identifying any inadequacies in national systems, as well as the necessary improvements to be made,” he asserted. What are the main drivers behind the IMO initiative to develop goal-based standards? “The main driver is the general understanding, within maritime administrations and the industry, that, firstly, the roles of IMO and the maritime administrations in

the setting of ship construction standards and in their application should be revisited; and, secondly, that IMO regulations should set goals, objectives and functional requirements for the construction of new ships, while also establishing a procedure to verify that the structural rules of classification societies comply with these,” explained Adm. Mitropoulos. The initiative, which will see IMO moving away from the prescriptive manner so far applied to regulate shipping from the organisation’s perspective, has the potential to substantially improve the situation and should receive support from all parties concerned, according to Adm. Mitropoulos. >

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Does the Secretary-General believe the shipping industry stands to benefit from working together towards an improved framework – the goalbased standards? “Yes, I think it does once the main objective of the initiative, that is the construction of robust ships, is achieved,” said Adm. Mitropoulos and added: “Goal-based standards will establish sound goals to be achieved and administrations, possibly through a mechanism to be put in place under the SOLAS Convention, will have to ensure that classification rules meet the goals. At the same time, the responsibility for the development of detailed technical rules would remain with the classification societies to enable the constant adaptation of structural rules to technological innovations and developments.” What does the Secretary-General think about the introduction of the new Common Rules for tankers and bulkers? It’s been said that the

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What impact does he feel the Common Rules will have on the industry and the quality of the world fleet in the years to come?

also end up with reduced through-life repair and maintenance costs. I can also see benefits for both the shipowners and shipyards from having the same, commonly recognized standards that have been developed and updated, as necessary, using the combined research capabilities and experience of all the IACS members,” commented Adm. Mitropoulos. From the IMO perspective, in the context of the development of goal-based standards, the Common Structural Rules for oil tankers are being used in an ongoing pilot project on the trial application of the goal-based standards. “I look forward to the continuation of a close relationship between the organization and IACS in our endeavours to enhance safety in shipping operations,” he said.

“IACS’s desire to devise rules that will ensure more robust, safer and more environmentally friendly ships is appreciated. When properly applied, the rules should

Regarding the role of class societies, what, in the opinion of the Secretary-General, are the critical issues confronting class today and how does he see its role developing in the future?

Common Rules will help contribute to ‘an even playing field’ without compromising safety – does the Secretary-General agree with this statement? “The International Association of Classification Societies (IACS) Common Structural Rules for bulk carriers and oil tankers have been devised with the aim of eliminating competition among classification societies with regard to structural requirements, while gaining greater transparency to their technical background and reducing costs. From this point of view, I see no reason not to agree with the statement,” said the Secretary-General.

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“CLASSIFICATION SOCIETIES AND OTHER STAKEHOLDERS ALL HAVE AN IMPORTANT ROLE TO PLAY IN COLLECTIVELY IMPLEMENTING, MAINTAINING AND RAISING THE SAFETY OF SHIPPING.”

“First of all,” emphasised Adm. Mitropoulos, “I consider it of great importance that the links between IMO, the classification societies and the segments of the industry the classification societies are associated with, remain strong and that we actively pursue their maintenance and reinforcement. This can be achieved by working together in pursuit of our common goals.” He continued, “I think the issues, which face classification societies historically and

nowadays, are those which face the whole shipping industry – being able to foresee trends and challenges and acting in good time to prevent risks that might endanger safety, security and environmental protection within the domain of shipping, while, at the same time, ensuring full and effective implementation of the global standards adopted by IMO.” The IMO Secretary-General told DNV Forum that “Classification societies should

also follow closely developments at the regional level and, through persuasive, well-documented argumentation, explain its case and prevent initiatives that may bring to an end time-tested practices that have served the industry well.”

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The shipping industry is enjoying strong growth thanks in the main to the surging economies in Asia.

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At the same time, increased sensitivity to safety and the environment have created

DNV Forum no 01 2007

ever-stricter maritime regulations and new class rules. n

Under the leadership of Efthimios Mitropoulos, the IMO is striving to make shipping safer and cleaner through the development of goal-based standards.

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The IMO Secretary-General emphasises the vital role of Class and the need for cooperation between “the IMO, Class and the shipping industry as a whole to enhance safety, security and environmental protection in shipping operations.”

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The avoidance strategy When Jens Lassen was still working for V. Ships, his boss told him his greatest strength lay in his steady handling of crisis situations. But in Lassen’s view that strength is not much to brag about. “The secret is to avoid crisis situations,” says the managing director of Shipowning in the Stolt-Nielsen Transportation Group. TEXT: KAIA MEANS PHOTO: STOLT-NIELSEN

Jens Lassen is responsible for the day-today running of a fleet of 135 ships and barges “in the safest and most cost-efficient way possible,” as he puts it. He has always had a commitment to the safety aspect, – all the way since he started his career in DNV 23 years ago. When he took the job at Stolt-Nielsen two years ago, he immediately introduced his safety commitment. His focus on safety is his answer to avoid crisis situations. Now he is once again working alongside his former DNV colleagues on an extensive three-year safety management project for Stolt-Nielsen, enabled and supported by DNV. He says his stint of six years at DNV was a good start to his career. “I was lucky and allowed to design my own development and familiarisation programme,” he says. Through DNV he gained more than just relevant experience. “I was involved in a large number of projects in a relatively short period of time. Also I got to know a lot of colleagues who are still useful friends and contacts, so I know which doors to knock when I need help,” he says.

DNV Forum no 01 2007

A PASSION FOR SAFETY

Now he has knocked on one of these doors because of his commitment to safety, for which there are many reasons. “I have a personal passion for safety,” he says. “Firstly, I think we owe it to our employees to focus on safety by giving them the training and tools to be able to ensure their own safety. Secondly, our customers want and demand safety. And thirdly, it’s the cheapest and most cost-efficient way of running ships in the long term. Many people think differently. But if you do the total cost equation, that’s what you find out,” he says, continuing: “If you think accident prevention is expensive, you should try an accident.” Thorough safety management meant bringing in DNV: “DNV adds a tremendous amount of value,” he explains. “They possess specialised knowledge which organisations like mine traditionally do not have. Typical questions they can answer are: ‘How do we measure safety?’ DNV has people who have done PhDs in this. They bring measurements and structure to the issue. They also have a lot of experience in

change management and project management, which shipowners do not have, in my experience.” He adds, “Besides, they have industry statistics and industry knowledge which are not readily available to us. And they are an independent third party and can give valuable guidance on issues such as project progress and measurements.” He says that his company, and indeed the entire maritime industry, is moving towards improved safety and social responsibility. But the changes cannot come from the top down. As an example he mentions the Texas City Refinery fire in 2005, when 15 people were killed. “It’s interesting to see the predicament of BP and Lord Browne,” he says. “The board of directors and senior management focused on safety and the environment, but the organisation was still not geared to this. This leads to major failures.” MARITIME REVITALISATION

According to Mr Lassen, there is something to learn from this: “In the shipping business we have a number of nationalities >

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and cultures serving on our ships, and there’s room for improvement in safety standards worldwide. We operate complicated equipment, often in a hostile environment, which, from a management point of view, represents an enormous challenge.” The maritime industry must revitalise itself. Mr Lassen compares it to other industries. “The aviation industry is a young industry from which we have a lot to learn, particularly from its attitude to safety and operational excellence.” He points out that the entire aviation industry is focused on accident prevention: “Their existence is absolutely dependent on safety, and ours should be too.” OPTIMISTIC

However, Mr Lassen is very optimistic about the future of the maritime industry. The shipping business, particularly on the oil production and chemical side, is in a transitional phase that started in the 1990s and is continuously getting stronger. “There is a much greater focus on corporate social responsibility including safety and environmental protection. I think this is overdue. It’s an incredible, interesting and challenging transition, and it’s a privilege to be a part of it,” says Mr Lassen. As for his newfound role as a DNV customer, he is enjoying the experience: “I’ve tried to be a good customer, as far as I’m able, although I am rather demanding.”

JENS LASSEN © Kaia Means

Managing director of Shipowning Stolt-Nielsen Transportation Group.

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“The aviation industry is a a lot to learn, particularly operational excellence.”


young industry from which we have from its attitude to safety and


Taking DFDS to Niels Smedegaard has taken over the control of the biggest ro-ro operator in northern Europe, DFDS, aiming at taking action to make the business even more effective.


new heights TEXT: KAIA MEANS PHOTO: DFDS/KAIA MEANS >


Niels Smedegaard has big shoes to fill, but isn’t timid about initiating change.

Niels Smedegaard, 44, managed to raise a few eyebrows when he took over the top job at DFDS. Coming from the financial side of the airline catering industry into the heart of Danish shipping is a tough act, where respect for a 140-year tradition is mixed with a passionate desire to bring changes to the shipping mentality. “You don’t have to be born in shipping to realise things go in cycles,” says Niels Smedegaard. Since January 1 he has been the managing director and CEO of DFDS (Det Forenede Dampskibs-Selskap) in Copenhagen, a company that has seen enormous growth in the past few years after numerous acquisitions. His predecessor Ole Frie retired after 46 years in the business, helping to build DFDS up to the giant it is today – the biggest ro-ro operator in northern Europe, with many subsidiaries in everything from stevedoring to passenger ferries across the continent. The company made a record operating profit of EUR 151 million in 2006, but the board is seeking even better returns. BIG SHOES TO FILL

Mr Smedegaard has big shoes to fill, but isn’t timid about initiating change. In his first interview after taking over he said, “Just because we are 140-year-old company, we do not have to behave like a 140-yearold person.” Some people were not too happy with that statement. “I have a lot of respect for tradition and core values,” he says to DNV Forum. “You can feel the history around you here. We have some very good values. Still, we can be more innovative. In shipping we don’t have to think ‘There’s only one way, our way.’ We can learn a lot from other industries.” He says his background from various industries, focusing on logistics, is a solid base for his new job. In the airline catering industry, he experienced highs and lows. As CFO of the Gate Gourmet Group, DNV Forum no 01 2007

based in Zurich, Switzerland, he saw the company’s turnover triple in five years. 9/11 CHANGED EVERYTHING

“Everything we touched became a success,” says Mr Smedegaard. He became CEO of e-gatematrix, based in Atlanta, USA Then 9/11 happened. “Things turned upside down overnight. It was goodbye to 12,000 people. It was a long cycle, and it taught us how to organise, to think, to be creative, and to think outside of the box. We looked at solutions in the automotive industry and asked ourselves, ‘How can we apply that here’? We did. And finally we managed to turn things around.” He started his tenure at DFDS three months before Ole Frie retired, and spent the time doing research, getting to know the company and the industry. He delved into the situation – finding for example bottlenecks in terms of capacity and relatively old tonnage in a few areas. “I interviewed people in the company. I also talked to customers, competitors, partners and suppliers.” The result is the ‘Go Forward Plan’ which is in full swing now. As part of the plan, the two independent groups, Tor Line (freight) and DFDS Seaways (passenger) are moving closer together. BREAKING DOWN THE SILOS

“They have been two separate silos. Now we’re breaking down the silos,” says Mr Smedegaard. “There will be more transparency, and a new structure.” “We’ve come through a difficult phase in 2000-2001 and we’ve found our feet

again. We’re going to be active in consolidation – where it makes sense, of course. We’re going to be aggressive – when there’s an opportunity, we would like to be at the table. But things are getting expensive these days if you want to buy a company.” “We’ll look at the options,” he says, and mentions a foray into the Mediterranean as a possibility. “But there are no plans currently,” he says. NO BLACK CLOUDS IN THE HORIZON

“We will continue to be a growing business. I don’t think we can see the same growth as last year. There are no big black clouds in the horizon. Still, we are going to be careful and prudent in what we are doing, in terms of adding tonnage.” The last of six vessels from Flensburg has just been delivered, and four Chinese vessels are due to be delivered from 20082009. “That will take us some of the way.” Mr Smedegaard says this spring will see a new tonnage strategy session. A DFDS team will look at future requirements, asking what the next generation of tonnage will look like. “We’ll have to talk to our customers, and look at industry trends,” he says emphasising that it’s important to look at the whole logistics chain as the company goes forward with structural changes. “We can’t do it in isolation. We need to talk to the surrounding world.” According to Mr Smedegaard, it’s always important to remember, “you don’t necessarily hold the keys to the eternal truth.” >

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Claus Kruse, project manager, and Richard Berg-Larsen, general manager Fleet&Chartering at DFDS are working closely with DNV on the EU-sponsored LOGBASED project.

DFDS ‘Jumboizing’ short sea shipping Short sea shipping giant DFDS has taken action to make its business more effective. TEXT AND PHOTO: KAIA MEANS

Short sea shipping is defined as regional route services by ships under 35,000 dwt with several port calls per week. For short sea shipping to become more effective, the focus is on reduced time in port, and increased cargo volume. Today ro-ro is the most effective type of ship for short sea shipping in northern Europe, but DNV Forum asked Claus Kruse, project manager, and Richard Berg-Larsen, general manager Fleet&Chartering at DFDS what are the future prospects for ro-ro?

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“Nobody is building ro-ros on speculation anymore. It’s only being built for contract work,” says Mr Berg-Larsen. He notes that deep sea ro-ro’s are becoming rare. Grimaldi is one of the few shipowners to have recently ordered new deep sea ro-ro vessels, apart from car ships, as the ships are heavy, expensive to run and don’t utilise the space to the maximum. Mr Kruse says the future lies in ‘the scale of economics’ – increasing volume. ‘Jumboizing’ ships is a key concept, but

the ports need to be able to handle the more demanding ships. Newer and fewer ships can replace three older ships, due to greater space and greater speed. “Our Flensburg ships are 1,000 lanemeter bigger than the ships they replaced,” says Mr Berg-Larsen. “They’re all sailing full today.” Freight transport volume in DFDS is increasing by 3-5% a year. The big problem today is a shortage of truck drivers. DNV Forum no 01 2007


When Baltic drivers’ wages start nearing the western European level, it may affect the way shipping in the Baltic is done today. It will no longer be feasible for customers to pay for driver accompaniment for 30 hours on a ro-pax ship. SOME BASIC RULES

No matter what type of ship will be the mainstay of regional shipping, there are some basic rules.

“There is always a danger in specialising too much,” says Mr Berg-Larsen. “If a ship is too specialized you’ll have trouble selling it later on.” On the other hand, a ship can easy be designed to be too flexible. “Then it becomes multi-useless,” says Mr Kruse. “You can design a ship that is so fantastic that it doesn’t make any money.” Mr Kruse and Mr Berg-Larsen appreciate the input from research projects like LOGBASED – logistics based design.

However, few shipowners have enough funds and time for independent research and development. INNOVATIVE ENVIRONMENT

“We’re participating in an innovative environment,” says Mr Kruse. “It also gives us a network.” “DNV has the capacity and the people to go in and do thorough work in research and development for us,” says Mr Berg-Larsen.

What is LOGBASED? The LOGBASED project is an acronym for ‘logistics based design’ – involving a new methodology and a toolbox of new analysis tools, developed in part by DNV’s research department, to support and manage a more effective fleet renewal process. TEXT: KAIA MEANS PHOTO: DFDS LOGBASED puts shipping business development, accelerated fleet renewal and flexible ship designs in a larger commercial context, saving time and resources. The multi million EURO research project is partially funded by the EC, with partners including DFDS, DNV, Wilson, Fresti, Flensburg Schifbau Gesellschaft, Navantia, Foreship and three universities in UK and Greece. The three-year project comes to an end this year. DFDS has worked closely with DNV Research & Innovation on two specific

shipping business development cases, involving the planning of possible new Tor Line routes in the Baltic and between Spain, England and Ireland. The LOGBASED approach, a new methodology for effective fleet renewal work enables designers to play with different scenarios and quick prototypes that measure the performance of the entire transport system, including but not limited to ship performance. It takes into account expectations from shipowners, customers and other stakeholders. For example,

while analysing the income of the ship, analysts can easily add or subtract a deck to a ship, immediately seeing how that will affect the profitability of the whole transport system. Also, the lead time to market for good business ideas has been reduced substantially.

! LOGBASED LOGBASED puts shipping business development, accelerated fleet renewal and flexible ship designs in a larger commercial context, saving time and resources.

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Challenging turbulence Turbulence arises from all aircraft, but the world’s largest passenger aircraft – the new Airbus A380 doubledecker super-jumbo – poses new challenges for the aviation industry. TEXT: EVA HALVORSEN PHOTO: BOEING 777-236/STEVE MORRIS/AIRTEAMIMAGES.COM


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“One way to mitigate wake vortex encounter risk is by ensuring that the wake is sufficiently decayed so that unacceptable effects are prevented,” says Paul Wilson, Head of Eurocontrol’s Airport and Environmental Division.


Demanding safety criteria for super-jumbo Turbulence arising from the new Airbus A380 exceeds all other aircraft. That is why new safety criteria had to be defined before this aircraft enters service. TEXT: EVA HALVORSEN PHOTO: NINA EIRIN RANGØY All aircraft generate turbulence as they lift. The strength of this turbulence is proportional to many factors, including the aircraft’s weight, and may cause trouble for other aircraft entering the disturbed airspace. As the A380 is about 40% heavier than other common large aircraft flying today, new safety criteria had to be defined. By any standards, the Airbus A380 is a big aircraft. For example, it is 40% heavier than a Boeing 747-400 and capable of carrying many more passengers. However, its greater size means that it may create stronger turbulence than existing aircraft, and this turbulence can cause loss of control or even structural damage to aircraft entering the disturbed air if the risks are not properly controlled. “If a smaller aircraft encounters such disturbed air – or vortex wake – in ‘exactly the wrong way’ then severe acceleration or even structural damage can occur,” explains Paul Wilson, Head of the Airport and Environmental Division of Brussels-based EUROCONTROL. He has formerly been an air traffic controller at Heathrow Airport for 18 years and general manager of the Stansted Control Tower for six years. One way to mitigate wake vortex encounter risk is by ensuring that the wake is sufficiently decayed so that unacceptable effects are not encountered by following aircraft. “The primary means of control are separation criteria between aircraft that are sufficient to allow the vortices to decay in strength,” explains Mr Wilson. DNV Forum no 01 2007

In 2003, an international team of wake vortex and operational experts was established, drawn from US and European aviation organisations, including Airbus. The objective was to derive and agree on a revised set of separation criteria for the A380 prior to this aircraft entering passenger service. Mr Wilson participated in this project from the beginning. “In addition to the technical work of establishing the vortex separation criteria for the A380, it was essential that a full safety assessment report was produced to support this work,” he says. FRESH PAIR OF EYES

To enhance the quality of the safety assessment, it was decided by the steering group that this should be undertaken by an external body who would act as a fresh pair of eyes and ensure that every possible hazard was identified and dealt with. “This was groundbreaking work. It had never been accomplished before, and due to its complex nature it turned out to be more time-consuming than first thought,” Mr Wilson continues. After the initial work, in devising the technical process to establish the required separations, was complete, it was time to enlist the support of a safety team to construct and complete the safety assessment on behalf of the steering group. For this task DNV was selected, led by Dr Tim Fowler from the company’s London transport team.

Finally, in September 2006, after full agreement was achieved in the multi-stakeholder team, the safety case was completed. Then the safety requirements were presented to the International Civil Aviation Organization (ICAO) in November. FULLY SUPPORTED CONCLUSION

“DNV was an essential part of our team that brought this project to a successful result,” says Mr Wilson. In terms of vortex wake separation criteria between aircraft, the aviation industry divides aircraft into three broad weight categories, known as Heavy, Medium and Light. According to the new vortex wake separation criteria, aircraft in these categories should be separated by a minimum of 6, 8 and 10 nautical miles respectively when landing behind an A380 (the current criteria are 4, 5 and 6 nautical miles respectively for aircraft landing behind conventional Heavy aircraft). These figures are important parameters for the future safety and capacity of airport operations. GREAT IMPACT

“The successful results and lessons learnt from this project will have a huge impact on the aviation industry in a 4-5 year time frame. Significant improvements can be made to aircraft operation as a result of this work,” concludes Mr Wilson.

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Elisabeth Tørstad, DNV’s director of Operation Cleaner Energy and Utilities, is trying to mitigate climate change. “I love skiing, and I would appreciate the world climate remaining able to offer skiing opportunities in the future too,” she says.


Carbon capture and storage:

“Speed up, please” “The need to deal with the climate change threat quickly does not allow us the luxury of waiting until all the aspects have been looked at and agreed upon. It’s time to put global warming in the basement,” says Elisabeth Tørstad, DNV’s Cleaner Energy director. TEXT: OLE MAGNUS GRØNLI PHOTO: NINA EIRIN RANGØY

The world has to make important, longterm decisions on an uncertain basis, and our common challenge is: how do we make intelligent choices and how do we manage the associated risks? DNV has a long history of working in the energy and environmental sector, and is now increasing its focus on sustainable energy and CO2 capture and storage. This focus area is a good match for the challenges posed by the recent EU summit’s commitment to a 20% cut in greenhouse gas emissions by 2020. Elisabeth Tørstad is the first to admit that the 20% target for CO2 emission reduction is a huge challenge. Says Ms Tørstad: “A number of policies and the industrial implementation of these DNV Forum no 01 2007

need to be put in place in order to meet this target. Most of these suffer from a lack of maturity in terms of technology, economy, infrastructure or common acceptance criteria.” She is convinced that the key in this context is to obtain a common, transparent decision-making basis in terms of acceptance criteria and qualification methods – all the way from policy making to industry implementation. A sustainable energy portfolio includes the use of fossil fuels, and reducing emissions from power plants using fossil fuels through carbon capture and storage is a vital tool for meeting the target. But carbon capture and storage also pose challenges.

STOCKPILING FOR 100 OR 1,000 YEARS?

“On the one hand, we have technological questions related to such storage. What kind of requirements are we to stipulate for the storage utilities? How much leakage can be allowed, if any, and what is the definition of long-term or permanent storage; is it 100 years or 1,000 years?” she asks. “On the other hand, we have questions related to ownership and responsibility. Who is the owner of the problem and the solutions, and who will provide guarantees that no leakage will take place?” While pointing at the range of uncertainties, she underlines that we must avoid ending up as a lame duck because of all the unanswered questions. In order to implement carbon capture and storage at >

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the pace needed to enable a significant impact from 2030 and onwards, policymakers need to support research and full large-scale testing and to provide sufficient long-term investment incentives. “DNV’s aim in this picture is to put uncertainties and the risk factors at stake in perspective and establish a common understanding and trust between the parties involved,” says Ms Tørstad. Understanding and managing risk is a prerequisite for being able to make decisions and, when several parties are involved, the decision basis and risk picture need to be transparent and well understood by all stakeholders. “We aim at enabling involved parties to make the right decisions, and at moving decisions forward, thus shortening the time span from policy making to industry implementation,” she says. 40 CLEAN PEOPLE

Together with her team of 40 ‘clean engineers and consultants’, she is employed in several exciting projects with international clients – within the whole CO2 value chain of capture, transportation and storage. DNV is currently establishing acceptance criteria and standards for CO2 capture and

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storage, both in Europe and the USA. Her team is also working with Gassnova, the Norwegian centre for gas power technology, developing good practice for evaluating different technical solutions for capturing CO2. It has been questioned why gas-fired power plants are not already equipped with capture devices, as this technology is known and established. The reason for this is a combination of political priorities, technology and economy. Most of the few CO2 capture plants in operation today are significantly smaller than the ones planned in Norway, and none are directly comparable on a technical level. In addition to this, the technology must offer high energy efficiency in order to minimise the energy used on the capture process. “Today’s technology can only to a certain extent be used in capturing CO2 from medium or large size gas-fired or coal-fired power plants,” explains Ms Tørstad. Geological storage of CO2 is recognised as one of the best solutions for limiting the climate change problem. Norway has been using the reservoirs in the North Sea for storing CO2 for many years. “In my opinion this kind of storage has the potential to be safe and good,” she says.

WORLDWIDE ATTENTION

The Americans are also investigating geological storage options. Established in 2003, WESTCARB (West Coast Regional Carbon Sequestration Partnership) is one of seven research partnerships exploring regional carbon sequestration opportunities and conducting pilot-scale validation tests. “DNV is developing new verification systematics for these onshore projects,” explains Ms Tørstad. Subsea storage, however, has its advantages because possible leakage will not cause global heating, since CO2 will dissolve in water. On the other hand, CO2 release on a large scale would have a negative impact on the maritime environment. There are different views on subsea storage, but Norway and Great Britain are in favour of using the North Sea basin for storage, while other countries are aiming at storage in onshore geological structures and man-made constructions. “Regardless of which solution the different nations choose, we have not much time to lose,” she concludes.

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Backing capture and storage technology A new survey of over 500 key energy decision makers from across Europe has found a strong appetite for the development of CO2 capture and storage technologies in Europe as a way of reducing emissions of carbon dioxide. TEXT: EVA HALVORSEN The survey was directed at the energy industry, researchers, governments, environmental groups and parliamentarians and respondents from 28 European nations. Comments Elisabeth Tørstad: “There is a strong support for the development and implementation of technologies for the capture of CO2 from power plants and its storage in geological reservoirs. The technology is now being seen as necessary if Europe is to meet the demanding CO2 reduction targets that are in the process of being adopted. The perceived advantages of CO2 capture and storage are that it can be implemented over the next few decades and has the potential to significantly reduce CO2 emissions rapidly in most countries. The key concerns expressed in the survey are the relatively high cost at present of CO2 capture and the effect of investment in this technology upon development of renewable sources of energy.â€?

Risk perceptions of CO2 capture and storage The environmental and health and safety risks of CO2 capture and storage were regarded by the majority of respondents as being moderate or minimal. For most risks, 60 to 80% thought that there would be no risks or that the risks would be minimal, 15 to 30% thought that the risks would be moderate, whilst 2 to just over 10% thought that they would be very serious. Another risk which concerned 44% of the sample was that investment in CO2 capture and storage might have negative impacts upon development of other low-carbon energy technologies such as renewable energies. 51%, however, did not think that there would be negative impacts or thought that impacts might even be positive. A similar response was observed with respect to the possible impacts of CO2 capture and storage upon development of a more decentralised power generation system.

MAIN FINDINGS OF THE SURVEY:

Incentives for CO2 capture and storage Half of the respondents thought that incentives for CO2 capture and storage should be set either at the same level as those for renewables (39%) or at a higher level (11%). By contrast, a third of the respondents consider that incentives for CO2 capture and storage should be lower than those for renewables. A further 12% felt that incentives for CO2 capture and storage were not needed at all.

Need for CO2 capture and storage Three quarters thought that widespread use of CO2 capture and storage was definitely or probably necessary to achieve deep reductions in CO2 emissions between now and 2050 in their own country. Only one in eight considered that CO2 capture and storage was probably or definitely not necessary to achieve deep reductions in CO2 emissions by 2050. DNV Forum no 01 2007

By far the most popular incentive mechanism is support for research, development and demonstration (over 90% in favour), followed by an early commitment to extend the EU Emissions Trading Scheme with tighter emission caps (77% in favour, 8% against). Environmental organisations least enthusiastic Environmental organisations are the most sceptical about the role of CO2 capture and storage and have a more negative perception of the potential risks than other stakeholders. The energy industry most enthusiastic The energy industry is most enthusiastic about the role of CO2 capture and storage, including a low perception of the risks and generally not sharing the concerns regarding the adverse impacts of CO2 capture and storage upon investment in renewable energies. Norway, the Netherlands and UK lead the way Strongest support for CCS was identified in Norway, Netherlands and UK. Not far behind are Belgium, Germany, France, Italy and Spain. The survey was carried out as part of the ACCEPT programme, funded by the Research Directorate of the European Commission. The survey was coordinated by DNV.

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Keep the red flag flying “We must scale up the technology for CO2 capture and storage and make it more costefficient. This is a top priority for the European Commission,” says Dr Pierre Dechamps of the European Commission. TEXT AND PHOTO: OLE MAGNUS GRØNLI Dr Dechamps of the European Commission’s research department is happy about the European Council’s recent historic decision regarding the necessary cuts in greenhouse gas emissions. At the same time, he thinks it is important to keep the red flag flying. “A reduction of 20% CO2 by 2020 is not enough if we stop at that level. We need to cut emissions by 50–75% by the middle of the century if significant results are to be achieved,” he says. “This is an important step and a leap forward from the Kyoto Protocol, where the aim was an 8% reduction for the EU compared to the 1990 level. In other words, this is not enough, but it is the way to go. We have established the goal; the next question is how to get there.” Just as important as the EU commitment

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to a concrete reduction is the fact that CO2 capture and storage (CCS) is now a top priority for the Commission. “Europe is showing the way, and hopefully countries such as the USA, Australia and the developing countries will follow suit,” says Dr Dechamps, who admits that this will be very difficult. CONSENSUS CHANGE

Until a few years ago, there was a broad consensus that general energy efficiency and a gradual shift from fossil fuel towards more sustainable energy were sufficient to halt increased CO2 emissions. “But we were all wrong,” says Dr Dechamps. “Fossil fuel is still the dominant energy source, and is likely to remain the main source of global energy supply for the foreseeable future. Renewable energy

is still expensive compared to fossil fuels, or should we say fossil fuels are too cheap?” The current scientific consensus is that man-made CO2 emissions have increased the concentration of greenhouse gases in the atmosphere and are contributing to global climate change. “The research community is currently developing transition technology that will enable us to use fossil fuel without creating the emissions. The aim is first and foremost to reduce CO2 emissions from power plants, which are today responsible for one third of these emissions,” says Dr Dechamps. “Furthermore, the most important issue at hand is to eliminate emissions from coalfired plants, which produce more CO2 than gas-fired plants.” This does not mean that capturing CO2 from gas-fired plants is not important, but DNV Forum no 01 2007


coal is the real problem in terms of the overall carbon quantities locked in the geology. “At the same time, only 3% of the total emissions from a gas-fired power plant consist of CO2, compared to 10% CO2 from burning coal, making CO2 capture from gas more difficult,” Dr Dechamps explains. SENSE OF URGENCY

The focus on the CO2 emissions problem in recent years has resulted in technology that enables us to capture CO2. However, the scale of CO2 capture is still on a pilot level. Today capture is carried out in only a few plants that produce from one to 10 MW. By comparison, big coal plants produce 1,000 MW.

DNV Forum no 01 2007

The challenge is to scale up the technology and make it more cost-efficient. Then we must deploy it everywhere as quickly as possible, keeping in mind that it takes from three to seven years to build a fullscale plant. “We need to realise that if we do not deploy the technology on a large scale and soon enough, we are in trouble. In order to achieve this, it is important that we continue to focus on research, legal and regulatory frameworks and incentive systems,” says Dr Dechamps. INCENTIVES DISABLED

There is a broad range of issues to be discussed, including the relationship with the waste and water directives, storage safety, liability and a whole set of new legislative issues. Then there is the question of stan-

dardisation and monitoring schemes. Today, the new technology is not part of the EU trading scheme or the Kyoto Protocol. The technology is simply not recognised, thus disabling important economic incentives. “In this respect, DNV and similar companies will play an important role in establishing certification and quality assurance schemes,” says Dr Dechamps. “In addition, there will be local health and safety aspects to consider. In the long run, the liability will lie with the state. In order to transfer the ownership of the CO2 storage site to the state, there will be a strong demand on certification companies to ensure that storage is carried out properly.”

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Improving Chinese energy efficiency The Energy Research Institute of the National Development and Reform Commission in China is collaborating with DNV to improve energy efficiency in Chinese industry. TEXT: CATHY ZHANG PHOTO: SCANPIX

The Energy Research Institute of the National Development and Reform Commission (NDRC) is a national research organisation conducting comprehensive studies on China’s energy issues. Mr Dai Yande is Deputy Director-General of the Energy Research Institute (ERI). According to him, China’s energy demand has changed dramatically over the past five years. “The growth in China’s energy consumption in the last five years is more than the energy consumption growth during the 20 years prior to this. In 2006, the consumption reached 2,460 million tonnes of coal equivalent, 14 years before the predicted date, which was 2020. China’s energy consumption is growing faster than anyone expected,” Mr Dai explains. MANUFACTURING BASE OF THE WORLD

One aspect is that urbanisation and expansion of infrastructure is speeding up. Another is that China is becoming the ’manufacturing base of the world’, exporting large quantities of goods worldwide. “A large proportion of the goods manufactured are sold overseas. While these products may not be categorised as high energy-consuming products, their carried energy is considerable,” says Mr Dai. The rapid growth in energy consumption is a huge challenge, and the key question is: how do you to balance energy

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needs with a sustainable development? “The problem can be solved from two angles,” says Mr Dai. “Firstly, from the supply-side we should develop high efficiency, clean, low-carbon or non-carbon renewable energy sources, so that the economy is less dependent on fossil energy. Secondly, from the consumer-side we should increase energy efficiency.” CHINA IS MOVING TO CONTRIBUTE NOW

In 2006, the Chinese government set restrictive indicators along with growth targets: in the five years leading up to 2010, energy consumption per unit GDP (Gross Domestic Product) is to be reduced by 20% compared to 2005, and pollutants are to be reduced by 10%. “This is a sign that the Chinese government’s understanding of development has changed. Reducing energy consumption by 20% in five years is not only crucial to China’s sustainable economic growth, but also important for environmental protection reasons,” says Mr Dai. According to the Tokyo Protocol, China as a developing country is not required to reduce its greenhouse gas emissions until 2012. However, the decision by the Chinese government to reduce energy consumption will contribute greatly to reducing global emissions.

As a response, the Chinese National Development and Reform Commission, a governmental institution, kicked off its ‘Initiative of Energy conservation by Thousand Business Enterprises’. It covers nine high-energy consumption industry sectors; steel, non-ferrous metal, coal, electricity, petroleum & petrochemical, chemical, construction, textile, and pulp&paper. “Energy conversion and energy efficiency are two of the key energy management areas,” says Mr Dai. Currently, Chinese business lacks adequate management skills to achieve energy efficiency. Specifically, there is a lack of advanced energy accounting methods and energy management professionals. “As a result, our cooperation with DNV on energy management system and auditing standards will have a great impact,” claims Mr Dai. In December 2006, the Energy Research Institute signed a framework agreement with DNV on development of an international energy management system standard and the application of audit methods in China. According to the agreement, the two parties will draw on best-practice energy auditing methods and energy management systems. Together, they will develop measurement and verification systems that are applicable to China’s energy consumption status. DNV will also develop a manDNV Forum no 01 2007


DNV’s energy efficiency project was presented when Norwegian's Prime Minister Jens Stoltenberg (middle) visited China recently. Here he is at the coal-fired Huaneng power plant in Beijing, together with its director Wang Zhaobin (right) and a interpreter. Huaneng is Beijing's largest power plant supplying 30% of the energy the city needs.

! Facts about the ERI The Energy Research Institute (ERI) of the National Development and Reform Commission:

agement system as well as a training standard and a certification scheme for qualified personnel. International energy management certification will be promoted through pilot projects. THREE ANGLED SOLUTION

“The goal of reducing business energy consumption by 20% should be approached from three angles,” says Mr Dai. “Firstly, management professionals should be developed; secondly, energy management system and accounting methods should be DNV Forum no 01 2007

improved; and thirdly, standards must be set and a mechanism must be built in the long run to encourage voluntary energy conservation efforts among business enterprises.” He is optimistic about the agreement with DNV. “This is a collaboration between two strong partners, and it will have a great impact on China’s efforts to achieve energy efficiency, build international energy auditing methods, and improve energy management skills,” concludes Mr Dai.

n

A national research organisation that conducts comprehensive studies on China’s energy issues.

n

Comprises five research centres which focus on the key research areas of energy economy, energy efficiency, energy and the environment, and renewable energy development.

n

Supports government agencies in macro-policy making, providing scientific foundations and consultancy services for the nation’s energy-related policy-making, strategy development, planning, legislation, and standard development.

n

Has entered into research partnerships with major international energy research institutes.

MR. DAI YANDE

Deputy Director-General of the Energy Research Institute (ERI).

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Responsible pipeline development Brazil´s 20,000 km of pipelines is expected to increase in the future due to the demand and size of the country. Through the ‘Family Agriculture in Pipeline Rights-of-Way’ project, Transpetro help local communities to plant community vegetable gardens alongside pipelines. TEXT: SVEIN INGE LEIRGULEN PHOTO: TRANSPETRO

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Doubling the Brazilian pipeline web Transpetro’s natural gas director, Marcelo Rennó, has a daunting assignment in the coming three years: he must more than double Brazil’s network of onshore gas pipelines. This tremendous effort requires him to focus on finding the best technology and making risks as manageable as possible, while ensuring that Transpetro is a good corporate citizen in relation to the local public.

Transpetro is responsible for the management, operation and maintenance of 10,000 kilometres of pipeline in Brazil. During the next three years, Transpetro will add an additional 4,000 new km reserved for gas products. This will more than double the existing 3,000 km currently reserved for Transpetro to operate. Including the liquid pipelines, Transpetro will be responsible for more than 15,000 km of pipeline in 2010. A significant number of kilometres will also be built to transport ethanol, the alternative fuel powering most of Brazil’s automotive industry. The total Brazilian network will be about 20,000 km.

Marcelo Rennó

Natural gas director of Transpetro – Petrobras Transportes S.A.

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CENTRALISED CONTROL

CAPACITY AND INTEGRITY CHALLENGES

To Mr Rennó, controlling the risk throughout the distribution chain is the chief concern; “Transpetro is working hard to minimise the risk of leakage to zero. Therefore, we can’t look into the future without improving the quality of the materials, safety levels, construction aspects, inspections, inspection tools, leakage control systems and maintenance, as well as adding to the software and system automation,” he says. 2000 stands out as a bad year for pipeline transportation in Brazil, as the country experienced two major leaks. Mr Rennó remembers it well. “Since then, we have also invested USD 1 billion in an integrity system to discover potential leaks and benchmark the transportation,” he points out. “All operations are today managed from the national control centre in Rio. From here, we oversee the safety and ‘the big picture’ of all the operations simultaneously. Also, we can perform simulations of changes before they go live. At this centre, we also share all the integrity analyses and activities between the oil and gas transportations. This is very important to us,” he emphasises.

“Our biggest challenge towards 2010 will be to install the pipelines in chronological order and on time. We have a generous development budget, but a bottleneck may arise because there is an enormous number of oil and gas developments around the world, so supplier capacity is limited. This concerns all facets of our mission, from vessels to pipeline production,” says Mr Rennó. Another challenge is the onshore pipeline construction. According to Mr Rennó, offshore pipeline technology has progressed rapidly over the past 30 years. “However, as regards onshore developments, progress has suffered. The onshore pipeline business must be improved with new equipment, new construction methods, and safer, faster methods of expediting construction work. I am glad that the industry has started to face these challenges,” he says. LIQUEFIED GAS ON THE RISE

“Today, Brazil is not able to import liquefied natural gas (LNG). But in the near future this will become a reality, and there will be two import plants, one in the Rio DNV Forum no 01 2007


Transpetro will be responsible for more than 15,000 kilometres of pipeline in 2010. Controlling the risk throughout the distribution chain is the company’s chief concern

area and one near Fortaleza. With these installations, Brazil can import 20 million m3 per day. So in 2010, when we have the extended natural gas network, we will be able to link LNG and the imported gas from Bolivia with domestic gas from the south-east and north-east regions of Brazil,” he explains. Despite his optimism, Marcelo Rennó is already anticipating the potential safety issues: “LNG has the best track record and history for accidents. It is one of the safest industries in the world. It is very important to know how to perform risk assessments of these operations, and of course we will carry out risk analyses involving environmental and safety aspects. The industry is very conservative about safety. We need to talk, show and prove that everything we are going to install has had a risk assessment with methodology performed on it, and that we safeguard and install the plant in accordance with international stan-

dards. We will arrange public hearings and all the necessary steps for safeguarding the operation.” SOCIALLY RESPONSIBLE PIPELINES

Last year, Petrobras and Transpetro won an acclaimed award for its ‘Family Agriculture in Pipeline Rights-of-Way’ project. This is an innovative initiative to plant community vegetable gardens alongside pipelines; it has already started in the municipalities of Nova Iguacu and Duque de Caxias in the state of Rio de Janeiro. “It is very important for us as a transportation company to have good relations with the local community where the pipelines are built. This is why we established this self-sustainable project to generate income. It also promotes the rational and monitored use of land along the pipelines by means of planned and safe occupation. In this manner, the areas alongside the pipelines are protected by

the local communities, which now actually become our partners in monitoring the area while simultaneously preventing undesirable, unorganised and irregular occupation,” says Mr Rennó. The pilot project will soon involve 100 low-income families and includes agricultural training, which is essential, especially considering that some of the participants have never worked on the land before. Transpetro also supplies individual protective equipment, such as boots, gloves, hats, raincoats, trousers and long-sleeved shirts. “This project will become a model for other pipeline areas in Brazil. We see it as a very important effort, not least because we have a venue in which to communicate with the local communities. Their involvement is vital for the expansion of new pipeline areas. On the other hand, we prove that our concern for social welfare involves not only words and promises but also actions,” concludes Mr Rennó.

! Transpetro snapshot Transpetro, a fully-owned subsidiary of Brazil’s national oil and gas company Petrobras, is responsible for the transportation of gas, oil and derivatives through pipeline networks, a tanker fleet, marine terminals and distribution bases located in Brazil. Maritime transportation Transpetro has a fleet of 50 tankers and is currently undertaking an ambitious project to construct 42 new vessels. Terminals Petrobras has 24 maritime terminals and 20 onshore terminals managed by Transpetro.

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These terminals receive and store imported oil from ships and pipelines. Pipelines Transpetro is fully responsible for the operation and maintenance of 10,000 km of pipelines, of which 7,000 km contain liquid and 3,000 km transport gas.

Natural gas processing Transpetro operates the largest natural gas processing plant in Brazil (Cabiunas Terminal) and this processes all the gas coming from Campos basin, which is the largest oil and gas production field in Brazil.

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Delivering better service to farmers With GBP 2 billion in payments annually to 120,000 farmers and traders in the UK running through the Rural Payment Agency (RPA), the Agency relies on an efficient and secure IT infrastructure and electronic business applications. The introduction of the Single Farm Payment Scheme in 2005 added new challenges to the development of the IT system. RPA Security Officer Ian Pittock has particularly found the transformation to be full of bumps and pitfalls. TEXT: OLE MAGNUS GRØNLI PHOTO: GETTY IMAGES/OLE MAGNUS GRØNLI The RPA is the main body handling the different EU schemes for providing payments to English farmers and traders, and also handles the UK-wide schemes. In addition the RPA carries out claim compliance inspections, livestock tracking and handling of milk quota allocations, and deals with rural development and other environmental issues. “A few years back we started a Change Programme to make the Agency more efficient,” says Ian Pittock. At that time they had more than 80 different payment schemes. These schemes were backed up by an equal number of systems and subsystems, some of which were old and cumbersome. “Our plan was to make a core digital system with a common workflow handling the different claims,” he says, continuing: “System integrator Accenture was engaged to lead us through this process. In the middle of the process, the EU decided (quite surprisingly and almost over night) to implement one common system – the Single Farm Payment Scheme (SPS); this was the biggest change in the Common Agricultural Policy for 30 years.”

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In many ways the SPS was great news. Previously, farmers had to file different claims for such things as growing wheat, beetroot starch or if they were raising cows, pigs or sheep. Under the new single payment scheme, the subsidies were based on the size of the farmer’s land. However the SPS created a set of new challenges related to the ongoing IT Change Programme, and the RPA soon ran into trouble. The Agency was heavily criticised, and the UK Parliament’s Environment, Food and Rural Affairs Committee published an interim report raising several concerns about the RPA’s ability to meet the deadline for making payments to farmers under the SPS. As a consequence, the former CEO had to leave the RPA.

ence had little exposure to the unique rigours of working within public sector constraints and specifically those arising from the EU. Therefore, there was a divergence between the specified business requirements, delivery of these and the needs driven by Civil Service and EU regulatory policies. Basically, the programme lost touch with what was needed as an effective delivery system that also met regulatory requirements,” says Ian Pittock. However, expert consultants from DNVacquired Echelon were hired to develop an information security assurance process in order to implement both UK and EU Paying Agency security requirements, according to which the RPA is now subject to external audits from a number of sources.

WHAT WERE THE MAIN REASONS FOR THE PROBLEMS AND LATE PAYMENTS?

WHAT WERE SOME OF THE SECURITY ISSUES AT HAND?

“Many of the problems encountered were based on the fact that the whole of the Change Programme relied heavily upon experience imported from industry. Whilst this is fine in theory, this industry experi-

“One of Prime Minister Tony Blair’s focus areas has been to transform public sector services and to ‘deal with the public electronically’. Traditionally the RPA used selfcontained systems that did not communiDNV Forum no 01 2007


Š Getty Images


“A few years back we started a Change Programme to make the Agency more efficient,” says Rural Payment Agency (RPA) security officer Ian Pittock.

cate outside the organisation. Now there was a demand to open up the systems and have them talk to systems in other organisations, including to introduce e-commerce via the Internet. The SPS was new, and what were most important were its data protection and information assurance aspects,” says Ian Pittock. He also mentions one of many pitfalls they have encountered. “Certain data is limited to a few entrusted persons. On implementing the access control, we discovered a security breach when sensitive data were not automatically deleted from the user’s cache on his or her local PC.” Generally speaking, there has been a lack of understanding of the security issues

within some areas of the Agency, according to Mr Pittock. “For instance, there was a suggestion that access to real customer data be allowed from a third world country for testing purposes, based on using the Internet as an access channel. This was refused as a big security issue was identified since this could have led to organised crime trading sensitive details, such as bank account information, through having either intercepted data in transit or through placement of employees in the third country facility. There is a confidence factor involved and we have to convince the public that information about them is safe and that data will stay secure. “In this respect the DNV team has

played an important role in providing close support, including business continuity consultancy and penetration testing services,” says Mr Pittock. “Unfortunately difficulties in implementing the SPS, cost overruns and schedule issues relating to the Accenture delivery have impeded the launch of the Internet-based service. The SPS system is Internet ready with a digital certificate process built in if we choose to use it. However, due to the problems related to the payment processes which are resulting in late payments, we will concentrate on these issues before taking the next step towards the Internet and e-commerce,” concludes Ian Pittock.

! facts about the Rural Payments Agency (RPA) n

An Executive Agency of the UK Department of Environment, Food and Rural Affairs (DEFRA).

n

Key services are the provision of rural payments, allocation of import/export licences and milk quota licences and

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carrying out of claim compliance inspections and livestock tracking.

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Delivers payments to farmers and traders in excess of GBP 2 billion per annum.

n

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Has undertaken a Change Programme to implement the new Single Farm Payment Scheme (SPS) via a new electronic business system.

Certified by the EU to make payments under the Common Agricultural Policy (CAP).

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Small-scale LNG – a new trend Is LNG fuel part of the solution for controlling and minimising emissions to the atmosphere? Operating on the west coast of Norway, the LNG-fuelled Fanafjord has significantly lower emissions than ordinary vessels.TEXT AND PHOTO: MAGNE RĂ˜E

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Š Scanpix

Politicians challenge the maritime industry The LNG alternative may be an important contribution to reaching ambitious targets for reducing emissions to the atmosphere from human activities.


Norwegian Minister of Transport and Communications Liv Signe Navarsete.

There are important environmental benefits to be gained from replacing oil fuel with gas: the emissions of CO2, NOx, SOX as well as particulate matters are significantly reduced. Historically, LNG has almost exclusively been used by big power plants and, to some extent, supplied to gas grids for domestic consumption in densely populated areas. We are now seeing an emerging market for the small-scale distribution of LNG in different parts of the world to new categories of consumers. One such example is the LNG-fuelled Fanafjord ferry operating on the west coast of Norway. This development is capturing the attention and interest of high-ranking politicians around the world, including Norwegian politicians, of course. Says Norwegian Minister of Transport and Communications Liv Signe Navarsete: “I’m pleased that the Norwegian shipping industry accepted the challenge to reduce their NOx and SOx emissions to virtually zero. The Ministry has specified new environmental requirements for ferry connections in Norway – especially for

those with a high volume and high frequency of departures. What we have done is to specify that new ferries must have zero NOx and SOx-emissions and then leave it up to the industry to find the technical solutions for complying with this.” The Fanafjord is one example of such solutions. In the bigger picture, Ms Navarsete is also quite satisfied that the five new LNGpropelled ferries of a similar size and design to the MF Bergensfjord, which she was the godmother of recently, reduce CO2 emissions by 20% compared to similar traditional diesel-fuelled ferries. In the global struggle to reduce CO2 emissions, this will assist Norway as a nation in reducing its emissions. “When considering new solutions, we closely examine the performance date, capacity, safety and effects on the environment. We welcome international agreements on carbon emission reductions, especially with regard to their environmental effects, and hope that Norway’s valuable experience and know-how can be exported to other nations,” she says.

Norwegian Minister of Transport and Communications Liv S. Navarsete is pleased that five new LNG-propelled ferries of a similar design to the MF Bergensfjord, of which she was the godmother, reduce CO2 emissions by 20% compared to similar traditional diesel-fuelled ferries.

The world’s smallest LNG carrier The DNV-classed LNG/C Pioneer Knutsen – the world’s smallest LNG carrier – has a cargo capacity of a mere 1,100 m3 in two 550 m3 tanks. The vessel is some 69 metres long and has a deadweight of only 640 tons; tailor-made to fit the needs of the charterer Gasnor when it comes to small-scale local distribution of LNG along the Norwegian west coast. “Maybe the vessel is a bit over-specified, but it gives almost extreme manoeuvrability that not many vessels can match,” says Jarle Østenstad of Knutsen OAS Shipping in Haugesund, Norway – the vessel’s owner. “Safety and reliability are of fundamental importance to our company in general, and for this trade in particular,” he adds. The Pioneer Knutsen made more than 100 cargo voyages and had some 300 port calls in 2006 and never needed a tug. Being independent of tug assistance is, of course, of great importance when frequent port calls are to be made. “Many of the terminals the vessel visits are unmanned, so our crew literally jump

ashore with a rope and fix the vessel in the proper position before discharging the LNG to the customer. As there is no backup LNG distribution system, we and Gasnor rely heavily on the performance of the vessel and crew. Our experience with the vessel has been very good to date,” Mr Østenstad says, concluding: “The Norwegian government is now introducing a NOx charge for coastal shipping in Norway and a vessel like our little LNG carrier will of course emit very little NOx. We see that as an incentive for coastal shipping to continue to focus on LNG fuel.” LNG being discharged from the Pioneer Knutsen to a truck for further distribution.

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Making a difference in Kenya


Masai women in Kenya now have direct access to clean water thanks to DNV’s partnership with the Red Cross.


Clean water to 5,500 in Kenya Masai women in two villages in the Kajiado district used to walk 10-15 km every day to fetch water that was not even necessarily safe. The population now have access to clean drinking water from drilled wells. TEXT AND PHOTO: EVA HALVORSEN

The Kajiado district, a two hours drive south of Nairobi, is prone to drought. The water problems lead to conflicts when thousands of Masai nomads are forced to move to new areas in search of water for themselves and their livestock. This is a vulnerable population that DNV has chosen to support through a Red Cross project. DNV’s project manager Marte Ness recently visited Kajiado to learn more about the projects and to evaluate a possible second phase. IMPRESSED

“I was impressed with what I saw, and was overwhelmed by the welcome ceremony

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and gratitude shown by the villagers,” she reported after the visit. In the Kumpa village water is pumped up from a 70-metre deep well and stored in a large tank. From the tank, water is distributed to a communal water tap and to the local school four kilometres away through a pipe, as well as to a water basin for the livestock. “Water is critical to these people,” she explains. “They are totally dependent on their livestock, and when water is scarce the cattle gets water before the children. This shows how desperate the situation has been.”

PROUD PUPILS

She also visited the local school, and was pleasantly surprised by the high level of knowledge of its pupils. Speaking very well English they had science when they suddenly received visitors from Norway. “They were so proud of their new water tank; they all came out of the class room and posed for the photographer,” Ms Ness says. In the second project in the village of Sajiloni, a 90-metre deep rehabilitated well provides access to clean drinking water. It also enables the people to grow vegetables for themselves and for sale to finance the future operation of the diesel pump. DNV Forum no 01 2007


The children at the Kumpa school are very proud of their new water tank. When the visitors from Norway arrived they all came out of the class room and posed for the photographer.


AFRAID OF THE LEOPARDS

“A welcome ceremony had been prepared here as well, but we were unfortunately delayed and the villagers didn’t dare to stay longer due to the danger of the leopards at sunset. The few left when we arrived showed, however, great thankfulness for our support,” Marte Ness explains. The team also visited a third village close to the Tanzanian border. She has now suggested that DNV continues its support in a second phase in this village. The village was pointed out by the Kajiado branch of Kenya Red Cross. While in Kenya, Marte Ness and the rest of the team also visited the Kenya Red Cross in Nairobi, meeting its secretary-general Abbas Gullet: “The water aspect is a major issue for us and partnerships are the key to success. We want to further develop our expertise in this field and we work closely with the government to get a good overview of the situation in order to be able to prioritise our resources where they are most needed,” he said.

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The DNV sponsored water storage tank opens up the possibility for a new and better life for the Masai people in Kajiado.

ABBAS GULLET

“Partnerships with business are the key to success,” says secretary-general of the Kenya Red Cross, Abbas Gullet.

ANDREAS KOESTLER

“I’m impressed with what they’ve achieved,” says Andreas Koestler, water expert in the Norwegian Red Cross. He has supervised the DNV supported projects in Kenya and he congratulates the Kenya Red Cross’ Kajiado branch, which has carried out the practical work.

DNV Forum no 01 2007


DNV will now support a third water project close to the Tanzanian border.

Living our values DNV’s partnership with the Red Cross aims to create pride and enthusiasm among employees worldwide and is expected to increase motivation and involvement. It is also expected to promote understanding of the humanitarian situation in the geographical areas where DNV operates. As part of its Corporate Social Responsibility efforts, DNV in 2004 entered a three-year partnership with the Red Cross, following an online vote among DNV’s employees. Employees all over the world were asked which humanitarian organisation would be their preferred partner and the Red Cross was chosen by the vast majority. As well as gaining financial support to defined projects, the Red Cross benefits from DNV’s expertise in core areas such as risk management and contingency planning. Pleased with the first three years, DNV’s CEO Henrik O. Madsen in January 2007 signed an agreement for three new years.

DNV Forum no 01 2007

FOCUS ON WATER

When world leaders gathered at the Millennium Summit in 2000, they agreed upon integrated goals with time-limited targets for reducing poverty and improving the environment. 1.2 billion people do not have access to clean drinking water and proper sanitary conditions, and 1.6 million die every year because of this. The UN Millenium Development Goal for Water is to “halve, by 2015, the proportion of people without sustainable access to safe drinking water”. DNV wanted to be a part of this global agenda, and quickly realised that it could make a significant contribution within the water area.

MARTE NESS “DNV takes its social responsibilities seriously, and one way to live our values is to support humanitarian work in countries where we operate,” says DNV’s project manager Marte Ness.

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> > news COSCO’s sustainability credentials confirmed

Corporate agreement signed with Vietnam Register

COSCO has released its first verified Annual Sustainable Development Report under the United Nations' Global Compact initiative. “I made a promise on implementation of Global Compact to UN Secretary General Kofi Annan. After two years of efforts, COSCO established its Global Compact Social Responsibilities Management System and issued the sustainable development report,” said COSCO President Capt Wei Jiafu. As the first Chinese enterprise to implement the Global Compact principles, COSCO is also the first state-owned company that compiled such a report in line with requirements of the Global Reporting Initiative. COSCO is the first enterprise in Asia that applied the DNV verification protocol for sustainability reporting.

“The release of the report means that COSCO can be listed among the topgrade enterprises in the world,” said President Capt Wei Jiafu.

Italian bank shows social responsibility commitment DNV has verified the Social Report 2005 of Banca Popolare Etica in Italy. “The DNV service ‘Verification of sustainability report’ helped the bank to consolidate the growing concern for Corporate Responsibility (CR) issues. CR is used in the bank as a governance tool,” says DNV’s Massimo Berlin. The Social Report 2005 focuses on transparency, social responsibility and the environment. The bank promotes initiatives aimed at social, human and sustainable development and was established to meet the needs of those savers who want to manage their savings in a socially responsible way. The report shows the activities performed and that these are coherent with the bank’s mission.

“Corporate Responsibility is used in the bank as a governance tool,” says DNV’s Massimo Berlin.

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The agreement was signed by Tor Svensen, COO DNV Maritime and Nguyen Van Ban, General Director of Vietnam Register.

DNV and Vietnam Register have signed a corporate agreement to strengthen their positions in the growing Vietnam market. The agreement outlines a cooperation in training and work sharing for single and dual classed vessels within newbuildings, ships-in-operation and certification of materials and components for the shipping industry in Vietnam. DNV is now the leading foreign class society in Vietnam, with over 70% of the current newbuilding orders.

First Brunello di Montalcino wines certified For the first time a Brunello di Montalcino wine is certified.

DNV has certified the special characteristics of three Tenuta Il Poggione wines. For the first time a Brunello di Montalcino wine can boast of this pro-duct certification. DNV has certified Brunello di Montalcino DOCG, Brunello di Montalcino Riserva DOCG, and Rosso di Montalcino DOC – all wines produced by Tenuta Il Poggione in Tuscany, Italy. The special characteristics of these wines are defined in the technical product specification issued by DNV. For example, Il Poggione Brunello di Montalcino and Brunello di Montalcino Riserva are aged in wooden barrels and refined in bottles for longer than the period established by DOCG (controlled and guaranteed designation of origin) regulations.

DNV Forum no 01 2007


news

ISO 9001 for Korea’s biggest car manufacturer

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Maersk Training Centre wins DNV award Maersk Training Centre has won the DNV SeaSkill award for excellent performance. DNV has developed DNV SeaSkill – a four-step certification system for the professional verification of training and benchmarking of performance. The Denmark-based centre attains a high standard of performance in all the functions of a training centre. The A.P. Moller-Maersk Group has created its own training centre which is well known for its high quality performance and content.

“It is an honour to set a standard for the industry,” said Claus Bihl, manging director at Maersk Training Centre (middle), DNV’s Odd Torset (left) and Henrik Bach (right).

Hyundai chose DNV.

Hyundai Motor Company Ltd. is certified to the Quality Management System standard ISO 9001. Three of Hyundai’s factories, Ulsan1, Ulsan2 and Asan, as well as the headquarters and research centre were certified to the ISO 9001 standard. DNV’s Duk Keun Oh says, “Risk Based Certification and risk based assessment (RBA), as well as our ability to offer the service International Quality Rating System (IQRS), made Hyundai choose DNV.”

Snack company in Mexico goes for food safety Barcel, the second largest snack company in Latin America, uses DNV Mexico for training and certification towards the Food Safety Management System standard ISO 22000. Barcel is one of the first companies in Mexico to be certified to this standard. In preparation for the certification process, 29 employees from different plants participated at the training. Barcel's Lerma plant food safety responsible Lucia Enciso says: “The training has been demanding, but it has given us knowledge of what it means to develop audits with a clear and deep risk-based vision.”

DNV Forum no 01 2007

Material and corrosion research centre in Ohio DNV and the recognised technology leader in corrosion and materials CC Technologies – a subsidiary of DNV – have established the Ohio material and corrosion research center in Columbus, Ohio, USA. The center will develop new technology and methodologies related to the enormous challenges the US economy is facing due to material corrosion. A cooperation agreement with Ohio State University will strengthen the research activities and its access to personnel. Narasi Sridhar is the manager of the new centre. He is a recognised expert in the corrosion research and development community in North America.

Manager, Narasi Sridhar, comes from the Southwest Research Institute in San Antonio, Texas.

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> > news DNV and CCS establish Technological Institute A joint venture agreement to establish the CCS & DNV Technological Institute is signed between China Classification Society (CCS) and DNV. The Institute, to be established in Shanghai, will provide laboratory and research services to the shipping and offshore industry in China, focusing on coating and corrosion. Other areas of cooperation will include laboratory facilities relating to materials, welding, fuel and lub oil analysis.

The joint venture agreement was signed by Mr Li Kejun, President of CCS, and Mr Henrik O. Madsen, President and CEO of DNV.

Wetterhus new managing director for DNVPS Tore Morten Wetterhus is the new managing director for Singaporebased DNV Petroleum Services. He comes from the position as head of the Components and Systems department at the DNV Maritime business area. Tore Morten Wetterhus has the capability to take the company to the next level of excellence, according to COO of DNV Maritime Tor Svensen.

Tore Morten Wetterhus.

Knowledge management at Sellafield

DNV has completed a study on technological innovations for safer and more environmentally sound oil exploration in the resource rich, but vulnerable, northern parts of Norway. In addition potential technological challenges are identified. The report was carried out on behalf of the Norwegian Society of Chartered Technical and Scientific Professionals. The report discusses technologies related to drilling and well operations, oil and gas production, emissions to the air, seismology and mapping in the predrilling phase, petroleum related shipping, and spill reduction due to mishaps.

“In taking oil and gas exploration into the Arctic area, the industry is in need of consistent guidance and support to achieve sustainable field developments,” says DNV’s Kim Mørk, director of Arctic Technology and Operations within DNV Energy.

46

© British Nuclear Group

DNV report on exploration technology in cold climates

British Nuclear Group’s Sellafield plant.

DNV-CIBIT is supporting British Nuclear Group at Sellafield to implement its planned knowledge management programme. DNV’s role is to help shape the knowledge management strategy and to train and coach the Sellafield KM team to undertake a range of KM practices. The focus thereby will be on tools for knowledge management strategy building, embedding learning before, during and after in key activities, and enhancing the accessibility and organisation of the organisational memory, including its individual experts, knowledge networks and information resources. In addition DNV will assist the development of knowledge networks in key areas, as well as with the design of a knowledge management governance structure.

DNV Forum no 01 2007


news

Blowing in the wind German wind turbine manufacturer REpower Systems AG has entrusted DNV with the manufacturing survey of its wind turbine blades in both Denmark and Spain. REpower is expecting to manufacture over 1,000 individual blades this year at its subcontractor’s, LM’s, manufacturing facilities in Denmark and Spain, with possible expansion into India and China in 2008. The contract decision with DNV coincides with REpower’s first ever US delivery contract, with the turbines to be manufactured in Germany and the blades to be manufactured in Spain.

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A case for DNV: Future manned space missions “DNV has wide competence on safety issues from a range of industries, and now our core competence is in demand also in the space industry,” explains DNV’s Narve Mjøs. He is responsible for DNV’s space activities.

The European Space Agency (ESA) has asked DNV to assist with the establishment of ground segment safety requirements for future manned space missions. Building on its well-established design certification services, DNV is now experiencing increased demand also for verification services in the wind energy business.

DNV has previously been involved with several other projects for ESA, and this project builds on DNV’s wide competence on safety. The establishment of ground segment safety requirements for future manned space missions will be carried out on behalf of the European Space Research and Technology Centre – ESTEC – and covers requirements related to hardware, software, systems and operations.

Toyota’s Jim Press named Executive of the year DNV presented the prestigious Automotive Industry Executive of the Year Award to Jim Press, the President of Toyota Motor North America, during the annual Society of Automotive Engineers (SAE) World Congress.

New lightweight concept increases ship capacity A new lightweight sandwich composite concept may reduce the weight of a RoPax superstructure by as much as 60%. This opens up for increased loading capacity, and thus increased profits for operators. DNV, together with Stena, FiReCo and Brødrene Aa, has found that the introduction of a lightweight composite superstructure module for a RoPax design case leads to a 60% decrease in weight for that module compared to a traditional steel design. Stena is currently considering the new concept with great interest.

DNV Forum no 01 2007

It is the first time in the award’s 43 years history that a Toyota executive received the honour, sponsored by the Automotive Industry Action Group. The Nominating Committee, composed of automotive industry media, various industry analysts and automotive supplier CEOs, recognised Jim Press’ outstanding leadership – bringing Toyota in the forefront of North American Automakers.

“The most important qualities of a good leader is to respect people, have constant focus on improvements and long-term relationship with customers, co-workers and suppliers. For me customer satisfaction includes both our clients and the people I work with,” says Jim Press, the President of Toyota Motor North America.

47


!

last word

A wake-up call from Texas City Two years ago, the US refining industry suffered its worst accident in 20 years at Texas City, causing 15 fatalities and injuring 170 persons. In relation to this, two major investigations recently produced a number of valuable recommendations to the refining industry. However, DNV is not fully convinced and suggests all oil and gas industries should go beyond these reports in order to achieve a major improvement in business and safety performance. The Baker Report in January 2007 looked at the safety management systems and culture inside BP’s US refineries, and in March the US Chemical Safety Board reported on the accident itself. Both assessments generated numerous valuable recommendations. The Texas City accident should act as a wake-up call to the refining industry, as it demonstrates that major assets are insufficiently protected by current safety processes and investment strategies. The good news is that trends in personal injuries in the refining industry have been very good, with a major improvement since the early 1990s. However, the trend in major refinery accident damage has been poor to mixed, with many serious incidents and increased losses over the past five years. Very few of the root causes of the Texas City accident were unique, and many have been seen several times before in major accidents. Also, several other incidents with lesser impacts could have escalated to the same severity in other locations had the circumstances only been a little different. So not only the downstream and process industries can learn key lessons from this accident; other industries should be looking at the opportunities stated in the reports to improve performance and safety. For the upstream industry, for example, there is much to learn from a careful review of these two reports, and a more general examination of whether its personnel and assets are sufficiently protected against large process accidents. GO BEYOND RECOMMENDATIONS

Despite the two reports, DNV believes that these did not fully recognise hard-won les-

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sons learned from other accidents and thus are not, on their own, the holistic approach necessary to achieve the next major stepchange improvement in process safety. In addition to implementing a broad riskbased programme, DNV suggest companies to focus on: n Leadership: Should increase their top management’s commitment to, and awareness and leadership of, process safety to match that achieved today for personnel safety. n Risk management: Should have more focus on process safety issues through tools such as risk assessment and risk registers. n Barriers and controls: Should systematically identify key barriers and controls – both hardware and administrative systems and establish control accountability. n Processes: Should have in place evergreen management processes to control both hardware and procedures. n Leading indicators: Should have suitable and easily understood process safety metrics (leading indicators) that are regularly reviewed by management in order to monitor and benchmark risks. n Verify effectiveness: Should initiate a fuller use of accident investigation to verify a control’s effectiveness. n Closing: Should establish solid action prioritisation, follow-up and close-out tracking systems.

uptime, the assets also deliver improved business performance. It is fortunate that the need for such improvement arrives at a time when industry has adequate resources due to the high oil price, thus having the opportunity to secure the assets and invest for the future. The lessons are clear, and there is no longer any reason for the industry to delay action.

Iain Light Senior Vice President DNV Energy

With this in place, gains of 2–3 times the current process safety performance should be achievable, so the measures are very cost effective. By increasing reliability and

DNV Forum no 01 2007


DNV worldwide

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DNV IS A GLOBAL PROVIDER OF SERVICES FOR MANAGING RISK. ESTABLISHED IN 1864, DNV IS AN INDEPENDENT FOUNDATION WITH THE OBJECTIVE OF SAFEGUARDING LIFE, PROPERTY AND THE ENVIRONMENT. DNV COMPRISES 300 OFFICES IN 100 COUNTRIES, WITH 7,000 EMPLOYEES.

www.dnv.com


DNV Forum corporate magazine

PUBLISHED BY DNV Corporate Communications NO-1322 Høvik, Norway Tel: +47 67 57 99 00 Fax: +47 67 57 91 60 EDITOR Eva Halvorsen Tel: +47 67 57 97 19 eva.halvorsen@dnv.com DESIGN Coor Graphic Communications graphic.services@dnv.com PRINT GAN Grafisk, Oslo COVER PHOTO © Scanpix/ATP

© Det Norske Veritas 2007

30,000/ 05-2006 0703-016

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