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The many industries that make up the world of freight have undergone tremendous change over the past several decades. Each week, FreightWaves explores the archives of American Shipper’s nearly 70-year-old collection of shipping and maritime publications to showcase interesting freight stories of long ago.
In this week’s edition, from the April 1981 issue of American Shipper (virtual page 48), FreightWaves Flashback looks back at plans to invest in shipyard infrastructure and employment with the latest OTEC technology.
Shipyard bonanza?
Industry spokesmen say plans to build vessels to be anchored offshore for the generation of electricity by use of ocean water temperature differences could develop into a “good market” for the nation’s shipyards. A $2 billion fund for financing such vessels through Title XI funds already exists. Lockheed and Global Marine reportedly are the only companies with shipbuilding interests among seven offering proposals to the Department of Energy. New Orleans study indicates full-scale production would mean 27,000 jobs, $6.4 billion if Avondale Shipyards got a major contract.
Shipbuilding firms are cautiously eyeing the new technology of ocean thermal energy conversion (OTEC) as a possible market for their work-starved yards.
The technology is still in its infancy, but it got an important boost last year when Congress passed measures committing the country to demonstrate an ocean thermal capacity of 10,000 megawatts by 1999.
Congress also established a $2 billion fund for financing up to five OTEC plants/vessels through Title XI maritime financing and construction differential subsidy (CDS) funds.
And despite the fact that only two companies with shipyard interests — Lockheed and Global Marine — were numbered among the seven firms which submitted proposals at the end of February for pilot plants requested by the federal Department of Energy (DOE), the industry as a whole seems to be interested.
Brand, Hood comments
“I really don’t think it’s at that stage [at which shipyards would be involved],” said Herbert Brand, who is chairman of the Washington-based Transportation Institute (TI), in explaining the scarcity of shipyard proposals.
Edwin M. Hood, president of the Shipbuilders Council of America, says the technology does hold some promise for a future market.
“It could develop into a good market if the pilot plans prove out, and I believe they will,” Hood told American Shipper.
What it could do for Avondale
If OTEC does as well as its optimistic promoters predict, it would mean hefty shipyard contracts. A full-scale plant/vessel, which would generate 300 to 400 megawatts, would be 1,100 feet by 365 feet by 89 feet.
A study done by the mayor’s office in New Orleans, home of Avondale Shipyards Inc., estimates that a full-scale OTEC industry could mean 27,000 new jobs and $6.4 billion being pumped into the economy. That study assumes that a shipyard, in this case Avondale, is building three plants a year for five years.
Estimates for how many jobs the new technology would create by 2000 range from 54,700 to 209,400.
How OTEC would work
The new energy system would generate power by using the warm top and cool bottom layers of tropical seas.
The process uses sun-heated surface water to boil and vaporize ammonia in a closed system. The vapor drives turbines and generates electricity. The vapor is cooled by water drawn from the depths and the process is repeated.
The system can be designed so that electricity is cabled to land or ammonia can be produced and then used for industrial purposes or in fuel cells.
Test vessels
So far, two small ocean thermal vessels have been built and are being tested off the coast of Hawaii. OTEC has particularly attracted the attention of officials in Hawaii and Puerto Rico, islands which depend heavily on imported oil for the generation of electric power. In Puerto Rico alone, $330 million is spent yearly on imported oil.
With OTEC, the expenses would be in the building and maintaining of the plant — there would be no oil costs.
It’s estimated that OTEC could provide between 3% and 22% of the nation’s electric generating capacity by 2000.
DOE refused to release the names of companies submitting proposals, but a Chicago-based trade newsletter, Solar Ocean Energy Liason, reported that several firms, including Lockheed and Global Marine, were expected to do so.
Submitting proposals
According to the publication’s Jan. 19 issue, organizations planning to submit proposals included:
- The Virgin Islands government and Virgin Islands Water & Power Authority, under management of Ebasco Services of New York.
- The commonwealth of the Northern Mariannas, with Science Applications Inc. and Global Marine; the plant would be placed near the Pacific islands.
- The Puerto Rico Electric Power Authority, with assistance from Brown & Root and Westinghouse; the plant would be built off Punta Tuna, Puerto Rico.
- Florida OTEC Consortia, with TRW Inc. as the systems integrator; the plant would be placed off the lower Florida Keys.
- Solaramco, with systems integrator Lockheed; this plant would also be placed in Hawaiian waters.
The DOE will review these and any other proposals submitted in the next three months and six to eight will be selected to receive funds to draw up more extensive plans. After that, DOE will select one or two to be made into pilot plants, if Congress is willing to appropriate the necessary funds.
Maryland Group’s plans
Another group, called the Maryland OTEC Corp. and made up of state and local government officials and representatives of such companies as Bethlehem Steel and Western Electric Co., did not submit a proposal, but is investigating various plans to use private financing and possibly government funds to develop the new technology.
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