Smith v. D.R. Horton, Inc : the arbitration agreement was unconscionable

Smith v. D.R. Horton, Inc


Court: South Carolina Supreme Court Docket: 27645

Opinion Date: July 6, 2016


Areas of Law: Arbitration & Mediation, Construction Law, Contracts, Real Estate & Property Law


In August 2005, D.R. Horton, Inc. completed construction of the Smiths' home, and the Smiths closed on the property and received the deed. Thereafter, the Smiths experienced a myriad of problems with the home that resulted in severe water damage to the property. D.R. Horton attempted to repair the alleged construction defects on "numerous occasions" during the next five years, but was ultimately unsuccessful.



In 2010, the Smiths filed a construction defect case against D.R. Horton and seven subcontractors. In response, D.R. Horton filed a motion to compel arbitration. The Smiths opposed the motion, arguing, inter alia, that the arbitration agreement was unconscionable and therefore unenforceable.



The circuit court denied D.R. Horton's motion to compel arbitration, finding that the arbitration agreement was unconscionable. D.R. Horton appealed, but finding no error in the circuit court's decision, the South Carolina Supreme Court affirmed.



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Sheet Metal Workers Int'l Assoc. v. Horning Invs., LLC


Court: U.S. Court of Appeals for the Seventh Circuit Docket: 15-1004

Opinion Date: July 7, 2016


Areas of Law: Construction Law, Labor & Employment Law, Government Contracts


In 2011, Horning won the subcontract for roofing work at the Dayton Veterans Affairs Medical Center. The Davis‐Bacon Act, 40 U.S.C. 3141–43, requires contractors who perform construction for the federal government to pay their workers the “prevailing wage.” Department of Labor regulations at that time set the base rate for a Dayton Sheet Metal Worker at $26.41 per hour; the fringe benefit rate was another $16.82 an hour. 

The workers were properly classified and received the appropriate base rate. All employees who work at Horning for more than 90 days are eligible for insurance; some receive vacation days. After a year, they become eligible for matching contributions to a 401(k) account. Accountants advised Horning about the amount to deposit into its benefits trust to comply with ERISA and Davis‐Bacon. Horning deducted a flat hourly fee from the paycheck of each Medical Center worker, regardless of whether the employee was eligible for any benefits. 

The amount did not correspond to the actual monetary value of the benefits each individual employee received. The Union filed a qui tam action under the False Claims Act, 31 U.S.C. 3729–3733, rather than filing under Davis-Bacon. The Seventh Circuit affirmed judgment in favor of Horning. Under the False Claims Act, the Union had to show that Horning knowingly made false statements (or misleading omissions) that were material to the government’s payment decision. The Union did not proffer enough evidence to permit a reasonable jury to conclude that Horning acted with such knowledge.

Pirates attacked heavy lift ship TEAL at Conakry Anchorage in Guinea

Pirates attacked heavy lift ship TEAL at Conakry Anchorage in Guinea
July 8, 2016 at 12:20 by Mikhail Voytenko


Earlier this week, according to the IMB Piracy Reporting Centre, six robbers in a boat armed with machine guns and knives boarded an anchored heavy lift vessel at Conakry Anchorage in Guinea. Vessel believed to be the Boskalis ship TEAL , according to Heavy Lift heavyliftpfi.com Edition:

03.07.2016: 0450 LT: Posn: 09:23.6N – 013:41.9W, Conakry Anchorage, Guinea.

Six robbers in a boat armed with machine guns and knives boarded an anchored heavy lift vessel. They attacked the duty O/S causing injuries and took the 2/O hostage. They opened fire to threaten the crew members and damaged the accommodation. Under gun threat, they robbed the crew members of their cash and personal belongings before escaping. Master tried to contact the port control, but received no response. The incident was reported to Port Authorities through the local agents. After an hour a security boat came to the location.

Comment: situation with information on piracy attacks remains kind of stupid – IMB stubbornly continues its’ policy of hiding attacked vessels’ details, and shipping community has to find information elsewhere. IMB is not up to its’ responsibility to inform the industry, not that it bothers IMB, of course.

As for GoG piracy, new trends are already accentuated – pirates seem to be not interested in oil theft any more, thanks to oil cost dive. But piracy itself, considering decreasing oil incomes in Nigeria, is doomed to grow, because oil is the main source of country’s budget. Main piracy targets are crew kidnapping, crew’s and ship’s valuables, and valuable cargoes, first of all cargoes on container ships.

Voytenko Mikhail

A historic building in downtown Hopkinsville, KY is a total loss after it was destroyed in a massive fire.

Hopkinsville building on fire. Photo courtesy @HopFire_EMS


By WKYT News staff |
Posted: Thu 4:55 AM, Jul 07, 2016

HOPKINSVILLE, Ky. (WKYT) - A historic building in downtown Hopkinsville is a total loss after it was destroyed in a massive fire.

The fire started late Wednesday night at the Peter Postell building on East Sixth Street. Strong storms were moving through the area at the time. Investigators are looking into the possibility that the fire was caused by a lightning strike.

Hopkinsville Fire Department Captain Steve Futrell told WHOP that the building was fully involved when the first crews arrived on scene. It would eventually collapse.

Dozens in the Christian County community gathered and watched in awe as the building, which dates back to the late 1880's, crumbled to the ground.

Most recently, it was home to A1 Furniture, but had sat empty for years.

The fire deparment says no injures were reported.

A worker was hospitalized following an accident at Tesla's Gigafactory in Storey County, Nevada

Tesla investigates accident at Gigafactory

 Benjamin Spillman, bspillman@rgj.com 1:09 p.m. PDT July 8, 2016



A worker was hospitalized following an accident at the Gigafactory in Storey County, Nevada, Tesla confirmed Thursday afternoon.

The worker apparently fell and had to be transported to a hospital. A Tesla spokesperson issued the following statement:

"Today a worker at the Gigafactory accidentally fell and was transported to the closest hospital. The worker is in stable condition and is receiving the best possible care. We are currently investigating the accident."

Tractor trailer on fire and fuel spill on Interstate 880 in the East Bay

Source: ABC 7

‘Severe traffic alert’ in the East Bay due to tractor trailer fire, fuel spill
July 8, 2016 1:29 pm by Emilie Raguso

Traffic through Berkeley is snarled on the highway after a tractor trailer caught fire and spilled fuel on Interstate 880 north of I-580, authorities report.

Circulation in that area — northbound I-880 to eastbound I-80 — is limited, and authorities have advised motorists to use alternate routes, according to 511 Bay Area.

“On Friday, July 8th, at 1:08pm, a Severe Traffic Alert is in effect on the northbound I-880 ramp to eastbound I-80 due to a tractor trailer fire and fuel spill. The on-ramp is closed. Motorists are advised to expect delays and avoid the area. There is no estimated time to reopen the roadway,” according to 511.


Truck fire. Photo: Mordiceius

Berkeleyside readers began asking for information just before 1 p.m. about the “the large amounts of smoke … in what looks like West Berkeley or Emeryville.”

Said another: “There’s a large fire with billowing black smoke in the southwest Berkeley area.”

The smoke was visible from University and Shattuck.

Asked another: “Thick smoke flames visible from BART. What’s the word?”

One reader told Berkeleyside there was a “Semi on fire on off ramp where 580w passes Bay St shops. We heard an explosion afterwards.”

According to preliminary reports to the CHP, the first call came in at 12:53 p.m. about a big rig on the righthand side of the freeway that had flames and smoke coming from the trailer.

Berkeley Fire was one of the agencies that was dispatched, along with the Emeryville Fire Department. (Berkeleyside has asked for information from BFD.)


Authorities are responding to a big rig fire near Berkeley on Friday. Photo: Jef Poskanzer


Click the map for local traffic conditions. Source: Google Maps


The fire was visible from Aquatic Park. Photo: Jinny Pearce

Just before 1 p.m., the CHP closed down multiple lanes in the roadway, as well as ramps in the area, due to leaking fuel and traffic conditions.

There were some reports of debris falling onto I-580, as well as callers reporting drivers who had stopped and were taking pictures.

According to Sigalert, traffic on westbound 580 in the area of Ashby Avenue, Powell Street and I-80 East is moving at 6 mph.

Berkeleyside will update this story if additional information becomes available.

5,000 gallons of diesel additive spilled on I-29 in Iowa after the driver of the fuel truck fell asleep at the wheel and hit the guard rails and support pillars

Hazmat spill causes I-29 to close near Missouri Valley
UPDATED 8:16 AM CDT Jul 08, 2016


MISSOURI VALLEY, Iowa —The Iowa State Patrol closed down Interstate 29 near Missouri Valley due to a hazmat spill around 9 p.m. Thursday.

Troopers said the driver of the truck fell asleep at the wheel and hit the guard rails and support pillars.


The truck was full of 5,000 gallons of diesel additive.

The semi rolled onto the driver's side and medics took the driver to the hospital. Officials have not released the condition of the driver.


The area was closed for about two hours and now at least one lane of the highway is open Friday morning in both directions.

5-alarm fire in Salt Lake City: pallets and buildings are on fire Hazmats may be involved and there have been reports of explosions on scene

5-alarm fire in Salt Lake City shuts down part of I-80
By DJ Bolerjack Friday, July 8th 2016


(KUTV) Salt Lake Fire Crews are responding to a large 5-alarm blaze near 4201 W. 700 South.

According to the Salt Lake City Fire Department, callers are reporting that pallets and buildings are on fire Hazmats may be involved and there have been reports of explosions on scene.

SLC Fire tweeted out saying they had approximately 100 firefighters from multiple agencies on scene, one of those firefighters is reported to have received minor injuries, no other injuries at this time.

The smoke and flames have spread out so much UDOT has closed down both eastbound and westbound lanes for drivers on I-80 between I-215 West and 5600 W. near milepost 115.

John Gleason, with UDOT said they aren't sure how long the I-80 will be closed, and since the closure people have been making bad decisions just for a photo of the blaze.

"There were some concerns with the closure, that we were stopping traffic on the freeway. Anyone who stops on the freeway stay in your cars." Gleason said and added, "There were people stopping on the freeway, getting out of the vehicles to take pictures of the fire. This is absolutely unsafe and not recommended."

Gleason also said there were even a few people turning around on the freeway.

As for those flying today, the Salt Lake International airport has confirmed that this fire is not affecting air traffic.

About 2,000 customers lost power, but officials at Rocky Mountain Power could not confirm whether the blaze was responsible.

SLC Fire has advised that people stay away from the smoke and flames until hazmat substances are known.

1 man killed, another 2 injured in boat crash in Black Lake, New York

1 man killed, another 2 injured in boat crash in Black Lake, New York
Allen Lighthall found dead in Black Lake
UPDATED 8:44 AM EDT Jul 07, 2016


 
1 man killed, another 2 injured in boat crash in Black Lake, New York

MORRISTOWN, N.Y. —State police said a New Hampshire man was killed in a northern New York boating accident that left his son and brother injured.



Troopers said Allen Lighthall, 51, of Milford, was operating a 17-foot powerboat when it hit a rock in Black Lake, causing his son Scott, 13, to be thrown over the bow at about 8 a.m. Wednesday.

They said the father dove in to help his son but both went under. A passing boater rescued the boy, who is in critical, but stable condition at a Syracuse Hospital.

Divers recovered his father's body after nearly two hours of searching. Neither was wearing a life preserver.

Allen Lighthall's brother, Edward Lighthall, 51, of Prospect, New York, was treated for cuts.

Black Lake is in the St. Lawrence County town of Morristown, 116 miles north of Syracuse.

"All three occupants were from out of the area and apparently they were unfamiliar with the area that they were boating in," Dan Basford, Lawrence County Deputy Fire Coordinator said.

Neighbors of Allen Lighthall said she was devoted to his family.

"Always saw him with Scott, always saw him showing Scott how to run the lawnmower," Melissa Briggs said. "Just a really great dad, nice guy."

Police in New York said none of three on the boat were wearing life jackets, and fire officials said if it weren't an immediate response, there may have been three fatalities instead of one.

How Union Pacific Inspectors Missed Broken Bolts That Caused A Fiery Oil Train Derailment in Mosier, Oregon

The Federal Railroad Administration shared this photo of broken and rusty lag bolts in its preliminary report on the oil train derailment in Mosier. A series of these broken bolts is considered the most likely cause of a 16-car derailment on June 3.

by Tony Schick and Conrad Wilson OPB/EarthFix | July 6, 2016 3:30 p.m. | Updated: July 7, 2016 1:38 p.m. | Mosier, Oregon Federal Railroad Administration

On April 27, Steve Holm and three other inspectors drove right over a set of broken railroad bolts that later would cause a massive oil train explosion.

Holm rode shotgun as Union Pacific Railroad’s specially equipped pickup rolled along at 10 mph over its tracks through the Columbia River Gorge National Scenic Area.

He stared out the front windshield at the steel rails, the wood ties beneath and the plates and bolts that held them together.

Had Holm seen anything he suspected was out of alignment he would have stopped, hopped down from the truck and walked for a closer look. But he didn’t.

“It was a normal inspection,” said Holm, a track inspector with the Oregon Department of Transportation. “There was nothing outstanding that stood out in my mind about it.”

ODOT has concluded that several of the lag bolts fastening the rail lines to the ties had probably been sheared and rusted over for some time. Holm says he just missed them.

Union Pacific said it followed federal laws, meaning in the five weeks that followed Holm’s track survey, its own inspectors would’ve passed over those bolts at least 10 more times.

On the afternoon of June 3, those bolts failed under the weight of a train hauling 94 cars of crude oil from the Bakken region of North Dakota. The rails spread apart. The train left the tracks. Oil spilled. Flames erupted.

“When I got up there and I saw what had happened, I was very surprised,” Holm said.

Simple steps could have prevented the fiery derailment. Had inspectors from Union Pacific Railroad or government regulators walked the stretch of track in the weeks or months prior, they might have spotted the broken bolts.

But no one did.
 
Those unseen, broken bolts in Mosier, Oregon, expose a significant flaw in the current system for railroad inspections. Yet, federal and state regulators, as well as the railroads, all say current rules are adequate. Minimum federal requirements allow railroads considerable leeway for how they inspect their own track, while government checks are few and far between. As Mosier showed, the system can allow potentially dangerous defects to go unaddressed for months.

“The fact is, it doesn’t pick up all the defects,” said Fred Millar, an independent consultant in hazardous materials transport who has been critical of a proposal for the country’s largest oil-by-rail terminal in Vancouver.

“Now, should that give you any pause about whether the inspections system, the inspection regime, is itself designed to be really rigorous and really work or not?” Millar said.

The Federal Railroad Administration, the country’s rail safety regulator, blamed Union Pacific for the derailment. The agency is considering enforcement action against the railroad.

“When it comes down to it, it’s Union Pacific’s failure to maintain its track led to this incident,” FRA Administrator Sarah Feinberg told OPB’s All Things Considered in June.

Union Pacific is to blame. But it isn’t alone.


This Union Pacific illustration shows how the broken lag bolts can cause a derailment. Without the bolts fastening the rail to the tie, the rail can shift and widen the gauge of the track, sending the train off the rails.

Union Pacific

In its initial report on Mosier, the FRA said broken lag bolts are more effectively caught if inspections are done by walking on the tracks instead of driving. Regulators and safety experts say walking curved sections of track is a good safety measure and sometimes railroad policy.

But the FRA doesn’t require it. And Union Pacific didn’t do it.

The railroad’s inspections, done by vehicle as recently as four days before the derailment, identified no such flaws.

Before the derailment, the FRA’s own inspectors hadn’t laid eyes on the tracks in Mosier or reviewed the railroad’s inspection records for its tracks through the Columbia River Gorge since early this year. After the derailment, the Oregon Department of Transportation was so concerned its inspector missed the defects that it requested a halt on oil train traffic — a request federal officials have indicated they’re not likely to grant.

Union Pacific surpassed the bare minimums for inspection frequencies in the gorge.

“We were adhering — meeting or exceeding — the FRA standards for inspections prior to the derailment,” Union Pacific spokesman Justin Jacobs said.


Jason Rea, chief engineer for the western region of Union Pacific Railroad, holds a lag screw, at least one of which is blamed for shearing off and causing the June 3 oil train derailment in Mosier.

Neita Cecil/The Dalles Chronicle

Union Pacific said twice a week it had an inspector look for defects while traveling in a truck that is equipped to operate on railroad tracks. The railroad’s policy before Mosier included no walking inspections of curves or spot checks for these so-called hi-rail inspections.

Union Pacific also used special equipment four times per year to test for internal flaws and problems with track geometry that visual inspections cannot detect. Some experts have said a proper inspection should have caught a series of broken lag bolts regardless of whether they were walking or driving.

Once every 18 months Union Pacific used a device called a Gage Restraint Measurement System to measure rail strength. The railroad and other safety experts have said that test likely would have caught the broken bolts that caused the Mosier derailment. The FRA has no requirement for those inspections, which means railroads are under no obligation to run them more frequently in the hopes of catching these defects.

Union Pacific voluntarily increased inspections after the derailment.

Across the Columbia River on the Washington side of the gorge, BNSF Railway inspects its track every day, spokesman Gus Melonas said. Its policy mandates walking inspections of curves a minimum of once per year.

Like Union Pacific, it runs automated inspections of track geometry four times per year. It tests track strength and movement at least once per year.


After the oil train derailment in Mosier, Union Pacific published this table showing its previous inspection regime and its increased level of inspections for the near future.

Union Pacific

“Walking inspections fluctuate. Tonnage, wear, age of rail, weather (numerous conditions) all dictate frequency,” Melonas said in an email. “Inspectors are over the track daily and may call for a detailed look on occasion.”

The FRA encourages — and expects — railroads to exceed its requirements to ensure track safety. The federal agency’s compliance manual for track and rail infrastructure states that its track safety standards “are minimum safety requirements and are not appropriate for track maintenance purposes.”

“Look, railroads can always and they should go above and beyond our minimum maintenance requirements and our minimum inspections requirements,” Feinberg said. “But the reality is we have to move dangerous products in this country all the time.”

Despite this latest oil train explosion, FRA data show overall derailments are on the decline and have been for years. However, the costliest derailments, with damages exceeding $1 million, are not.

The railroad industry says more than 99 percent of hazardous material shipments reach their destination safely. That slim failure rate has included more than two dozen crude by rail incidents in recent years.

Bad track has caused the majority of them. Experts say the weight and movement of oil trains puts a new burden on the nation’s rail infrastructure.

Meanwhile, railroads have little oversight from the government when it comes to inspections and track maintenance.

The FRA has fewer than 100 track inspectors for 140,000 miles of track across the country. Ten FRA track inspectors in the Northwest region are responsible for eight states, including Alaska.

In state government, Oregon has three track inspectors. Washington has two. Together the two states have more than 5,000 miles of track.

The FRA guidelines for track infrastructure take up more than 180 pages, but they still leave many decisions to railroads on how they conduct inspections.

For instance, there is no maximum speed at which inspections should be done, leaving it to the “sole discretion of the inspector, based on track conditions and inspection requirements.” Current rules allow one person to inspect two tracks at once. The FRA has requirements for railroad track inspectors, but the agency itself does not certify them. That’s left to the railroads.

Through their union, railroad track inspectors have complained of having large territories, too little track time and pressure to complete inspections quickly.

“They are self-regulated to a degree. The regulations that are in place — they’re the bare minimum,” said Mike Elliott, a Seattle train engineer and former union safety official. In 2015, Elliott won a court case against BSNF Railway after the railroad fired him for flagging safety issues.

“They have a lot of leeway,” Elliott said of railroads. “And they have favorable laws on their side.”

8 injured after bus carrying special needs passengers rollover and crashes onto a utility pole in Wisconsin

 



“A pretty scary deal:” 8 hurt when bus carrying adults with special needs crashed outside Fort Atkinson
Posted 8:11 am, July 8, 2016, by Madeline Anderson, Updated at 03:32pm, July 8, 2016

JEFFERSON COUNTY, WI -- Eight people were hurt when a bus for adults with special needs crashed outside Fort Atkinson on Friday morning, July 8th.

It happened around 7:15 a.m. along Highway 106 in the Town of Hebron in Jefferson County.

Everyone on the bus was hurt -- including the driver.

Rick McEndre was relieved he was able to leave Fort Memorial Hospital Friday with some good news. His fiancee owns a group home in Whitewater for people who are developmentally disabled. Their client was one of eight people on the bus that crashed along Highway 106 Friday.

"She had dislocated fingers, a pretty bad cut and some glass in her elbow -- but they were able to take care of that," McEndre said. "Hopefully the other people on the bus are OK because it`s a pretty scary deal."

Officials with the Jefferson County Sheriff's Office say the bus was traveling westbound when it crossed the center line and went into a ditch -- striking a utility pole.

The bus is owned by Lavigne Bus Company -- a transportation service in Fort Atkinson for people with disabilities.

Flight for Life and Med Flight transported other victims to various hospitals in the area.

Tamara Mueller spoke with FOX6 News from Mercy Hospital in Janesville -- where her 21-year-old daughter was receiving treatment for a head wound.

"I really didn`t know anything. So all I wanted was to get the information so that we could come and see her. I just tried to keep positive," Mueller said.

Loved ones of those on board the bus said it was difficult to understand what exactly went wrong. Everyone on the bus except the driver has cognitive or physical disabilities. Many cannot communicate and use wheelchairs.

"That`s the scariest part. That`s what goes through our mind. We don`t know how long it took for anybody to get there and respond. I`m guessing most of the people that were on the bus aren`t really able to help other people too much," McEndre said.

Officials with Lavigne Bus Company declined to comment on this incident.

The bus was headed to a place called "Opportunities" in Fort Atkinson. It is a day center and work program for people with disabilities.

Monitor FOX6 News and FOX6Now.com for updates on developing story.




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Sheriff's officials said a small bus owned by La Vigne Bus Co., of Fort Atkinson, overturned and struck a utility pole along Highway 106 near Fort Atkinson Friday morning.




Updated 1 hr 29 mins ago
FORT ATKINSON, Wis. -- All eight people on a small transport bus that rolled over on a Jefferson County highway have been taken to hospitals.

Sheriff's officials said a small bus owned by La Vigne Bus Co., of Fort Atkinson, overturned and struck a utility pole along Highway 106 near Fort Atkinson Friday morning, injuring all on board.

Officials say four medical helicopters transported the injured to area hospitals. WITI-TV reports the passengers are special needs individuals who were being taken to Opportunities, a community rehabilitation program in Fort Atkinson.

Water treatment chemical release prompts evacuation at 99 High Street in Boston, Mass.

 

UPDATED 1:26 PM EDT Jul 08, 2016
 
Stanley Forman/WCVB


BOSTON —Three people were taken to a hospital to be checked out after a chemical release that led to the evacuation of a building in Boston.

According to the Boston Fire Department, the building at 99 High Street was evacuated due to the release of chemicals at some water treatment equipment on the 18th floor. The spill was first reported at 11:40 a.m., the department said.

One facility worker was exposed in the mechanical room. Two other employees from the building were taken to the hospital to be evaluated.

A built-in ventilation system in the 32-story building cleared some of the chemicals, the fire department tweeted, but did cause a smell on several floors.

The evacuation is precautionary while technicians check air quality throughout the building.

Driver injured after his truck carrying asphalt hit the guardrail and rolled over on U.S. 412 Near Westport, OK

Driver Rescued From Truck Crash On U.S. 412 Near Westport 
Posted: Jul 08, 2016 9:50 AM EST Updated: Jul 08, 2016 1:05 PM EST
By: NewsOn6.com

PAWNEE COUNTY, Oklahoma -

A Kansas man was hurt when his semi crashed on Highway 412 near the Westport exit Friday morning.

The OHP talked to a witness who said a truck carrying asphalt hit the guardrail and rolled over at about 7:20 a.m.

The OHP identified the driver as Darrell Marshall, 48, of Towanda, Kansas. Troopers said he was trapped for two and a half hours. He was taken to a Tulsa hospital in serious condition, according to the OHP.

The crash took place at a construction area where Oklahoma Department of Transportation crews have been building a retaining wall for the rocky bluff.

Eastbound traffic on Highway 412 was closed for about four hours.

Fire Safety Issues Main Reason for Ship Detentions

        

     

Image Courtesy: ClassNK


Fire safety-related deficiencies are still the main reason ships are detained, according to the report on Port State Control (PSC) for 2015 issued by Japanese classification society ClassNK.


Moreover, international safety management (ISM), emergency systems and lifesaving appliances remain major items where many detainable deficiencies are found, ClassNK said.


ClassNK’s annual report also provides analyses on PSC detentions by flag state, port state, ship type, ship size, and ship’s age as well as a summary of major amendments made to international conventions such as the SOLAS Convention.


These amendments have further widened the scope of PSC inspections, a trend that will undoubtedly continue as the rules applied to ships increase and diversify, ClasssNK said.


PSC inspections are carried out to ensure that vessels departing the port meet international standards and help in eliminating substandard ships that are in operation.


These inspections oversee not only the physical structures and components of a ship, but also examine operations related to safety management systems and labor conditions.

IMO ballast water management : dozens of equipment manufacturers are in various stages of applying for type approval from the U.S. Coast Guard for their water balast systems

                                                  Discharging Ballast Water

                                    Ballast Water Pumps
 

Ballast Water Systems Near U.S. Type Approval
  File image courtesy Marine Vectors

By MarEx 2016-07-07 20:20:05

As the ratification of IMO ballast water management regulations inches ever closer, dozens of equipment manufacturers are in various stages of applying for type approval from the U.S. Coast Guard for their systems. The United States has outlined a more stringent set of testing guidelines than those promulgated by IMO, meaning that owners of vessels transiting U.S. waters will eventually need systems meeting the domestic standard.

Manufacturer Optimarin announced Thursday that it has completed all required testing, including land-based, shipboard and lab tests. No system has yet gained formal USCG type approval, but the firm claims to be the first provider of a UV-based technology fully tested and evaluated to the agency’s standards, and it expects official recognition soon. “The conclusion of the USCG approval testing marks an important evolutionary step for our business,” said CEO Tore Andersen. “Our customers can now be assured that our system meets the most stringent regulatory standards in the world, giving them peace of mind for all global fleet operations now, and into the future."

Competitor Alfa Laval has also announced successful completion of Coast Guard-specified testing, and it expects to submit a final application soon.

The stakes are high for manufacturers, as the number of vessels affected by the regulation is expected to be in the range of 30,000 to 50,000 worldwide within five years – and with each system costing millions, the total market size could be in the range of $15 billion. The systems are expected to last the life of the vessel, so owners are moving carefully to ensure that the option they purchase is compliant in all the markets in which their ships could operate.

Canadian firm Trojan Technologies was among the first to initiate an application for USCG type approval, and its Trojan Marinex division is moving ahead with testing at USCG-approved facilities. Trojan is a specialist in UV treatment, with decades of shoreside installation experience. The firm recently told Water Canada that it would encourage the U.S. Coast Guard to change its stringent testing methodology and to allow the evaluation of treated species' reproductive viability – rather than the rate of mortality following treatment – as a means of satisfying the standard for small organisms. The Canadian government concurs with Marinex, and has encouraged the USCG to "maximize compatibility between the implementation of U.S. requirements and the Convention."

So far the Coast Guard has resisted this call, breaking with the IMO's testing methodology and making it harder for some firms to achieve certification. In December, Captain J.W. Mauger of the agency's Marine Safety Center informed Trojan Marinex and three other manufacturers that "the design dosage of UV-irradiation in your system causes damage which prevents cell replication, but does not otherwise kill the target organisms during treatment . . . We are aware of other ballast water treatment systems, including one which uses UV-irradiation, which are undergoing evaluation using the required tests [for mortality]. As such, we find that the required tests [based on mortality rates] are applicable."

Recent research by John Cullen, a professor in the Department of Oceanography at Dalhousie University, suggests that testing of reproductive viability may be a better way to evaluate a system's capability. “When we began our research, the MPN method for counting viable cells in natural phytoplankton communities had a bad reputation, primarily because it was thought that many, if not most species of phytoplankton could not be cultured and thus would not be counted using the MPN method,” he told Water Canada. “But after we carefully reviewed the scientific literature on MPN over the past 60-plus years, we realized that the method was much less prone to error than previously thought.”

U.S. Imposes Costly Arctic Drilling Rules, Despite Lobbying from Oil Companies

Despite Industry Pleas, Obama Imposes Costly Arctic Drilling Rules

July 8, 2016 by BloombergBy Jennifer A. Dlouhy

(Bloomberg) — Energy companies that hunt for crude in icy Arctic waters will have to stash extra equipment nearby and take other potentially costly steps meant to prevent oil spills in the fragile, remote region under regulations the Obama administration imposed Thursday.

The first-ever Arctic-specific rules for offshore drilling will govern any new oil exploration in the area as melting ice makes it easier for energy companies to plumb once-frozen waters at the top of the globe. Industry leaders, who lobbied against the regulations when they were proposed in 2015, said the mandates will discourage development in U.S. Arctic waters estimated to contain 24 billion barrels of oil.

“We believe there to be billions of barrels of oil there, and we are an economy that is going to need oil for decades to come,” Erik Milito, a group director at the American Petroleum Institute, said before the rules were released. For oil companies considering where to target exploration dollars, “it’s going to come down to whether or not investment in this region, which should be promoted, makes sense given the other opportunities that exist around the world,” he said.

Persistently low oil prices, regulatory uncertainty, and the already high costs of prospecting in the harsh climate of the Arctic region have spurred energy companies to relinquish more than a million acres’ worth of drilling rights.

Operational Challenges

Environmentalists say Arctic-specific drilling standards are essential for working in the remote, punishing environment, where thick ice covers the water most of the year, and the nearest Coast Guard station is more than 1,000 miles (1,600 kilometers) away.

“The unique Arctic environment raises substantial operational challenges,” said Abigail Ross Hopper, director of the Interior Department’s Bureau of Ocean Energy Management. “These new regulations are carefully tailored to ensure that any future exploration activities will be conducted in a way that respects and protects this incredible ecosystem and the Alaska Native subsistence activities that depend on its preservation.”

$2 Billion

The Interior Department estimates the measure will cost as much as $2 billion over the next 10 years, with the bulk of that coming from a new requirement that energy companies have a backup rig nearby to bore a relief well in case of an emergency, at rental rates that can reach a million dollars a day. Those compliance costs could shrink if oil companies agree to pool resources and collaborate on emergency response, following a model that has been used in the Gulf of Mexico since the 2010 Deepwater Horizon disaster.

The rule, which applies to exploratory drilling operations from floating vessels in U.S. Arctic waters, codifies steps Royal Dutch Shell Plc took during its ill-fated oil drilling campaign last year, including by requiring companies to stop work before ice is expected to encroach on the area. Companies also must have the capability to predict and respond to weather conditions, including icebergs. And they are required to have specialized equipment on hand designed to trap oil spewing from an out-of-control well.

Arctic Council

The move dovetails with a joint pledge by President Barack Obama and Canadian Prime Minister Justin Trudeau to ensure commercial activities in the Arctic only occur when the highest environmental standards are met. The U.S. also has pressed for safeguards during its two-year chairmanship of the eight-member Arctic Council, which coordinates environmental and maritime policies for the region.

Environmentalists who argue there is no proven way to clean up oil spills in slushy waters or trapped under ice had pushed for even stronger protections.

“It continues to be true that companies are not ready to operate in the Arctic — there is no proven response — but these rules are a step in the right direction,” said Michael LeVine, Pacific senior counsel for the conservation group Oceana.

The Obama administration is tentatively planning to sell oil and gas leases in the Beaufort and Chukchi seas beginning in 2020, while environmentalists are lobbying the White House to foreclose future drilling in the area altogether. Oil companies and lawmakers from Alaska, meanwhile, are trying to persuade the administration to retain the proposed Arctic auctions when it finalizes a five-year plan governing what new offshore drilling rights will be up for grabs from 2017 to 2022.

Randall Luthi, head of the National Ocean Industries Association, said the release of the Arctic rule “provides a thread of hope for Alaska residents and U.S. consumers that an Arctic oil and gas program will move forward.”

© 2016 Bloomberg L.P