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International Ballast Technology Investment Fair
September 20-21, 2001 - Chicago Navy Pier

Sponsored by Northeast Midwest Institute Lake Carriers' Association
Funded by the Great Lakes Protection Fund


  1. Overview – What is at stake? What is the Issue?
  2. The Potential for the Ballast Technology Market
  3. Ship Owners' Initiatives
  4. Mixed Message from the Government
  5. How to Talk to the Government – And Get Them to Listen
  6. How to Talk to Investors About Ballast Technologies


The following reports are based on presentations made at the International Ballast Technology Investment Fair in Chicago September 21, 2001.  Opinions and estimates are those of the Presenter's unless otherwise noted.  CQD Journal for the Maritime Environment Industry makes no assertions as to the validity of the statements or opinions and cannot be held responsible for any of the information or claims contained therein.  We make every effort to report as accurately as possible, as presented by the speakers during the session.  For your convenience we have supplied contact persons where possible.


I. The purpose of the Technology Fair?

Allegra Cangelosi, Conference Coordinator –

Rick Harkins, Lake Carriers Association –


Rick Harkins of the Lake Carriers' Association and Allegra Cangelosi of the Northeast-Midwest Institute explained the evolution of the Great Lakes Technology Treatment Trials.  Since its' beginnings in 1996 on the M/V Algonorth, the project has become the largest technology project going on in the world.  The program is designed to analyze sets of commercially available systems for ballast water treatment.  Analytical reports will help enhance the strengths and fix the limitations of the ballast treatment technologies.


Cangelosi noted that the project's goals are to help develop technologies for treating ballast water.  After funding ship-based and barge-based testing platforms, the program will publish the findings of the different tests.


In order to best illustrate accomplishments in ballast treatments, the program also planned to sponsor a Technology Fair.   On September 21st, technology vendors were able to hear from the scientists and sponsors who ran the Trials as well as owners, investors and government specialists.  The International Ballast Technology Fair brought together the efforts of the Great Lakes Technology Treatment Trials as well as other technologies throughout the world.


Plans are underway to keep funding going for the Treatment Trials in the immediate future.  Cangelosi points out new tests will begin on the Tanker Stolt Aspiration by the 2002 Lakes season.


What is at Stake?

David Thomas, Illinois Natural History Survey–


Thomas, Chief of Illinois Natural History Survey initiated the conference to explain to delegates the history of the invasive species problem from a Great Lakes perspective.  As he phrased it the "Quiet Invasion" of exotic species and its influences on ecosystems and industry cannot be understated.  One study estimated that 3,000 alien species are transported into foreign waters daily.


Thomas noted that everyone present was already aware of the reasons for technologies to treat ballast water.  He did point out that people often forget, ballast water is not the only vector of invasive species.  Invasions from bait release, food importation, stocking and tropical fish farms contribute to the aquatic nuisance species problem.

Green crabs are known to be voracious predators, preferring bivalves and  other infaunal organisms, but are also known to prey on other species of  crab. Carcinus maenas inhabit a wide variety of habitats and environmental  conditions, and appear to be responsible for broadscale changes in invertebrate communities, including commercially important species.  In  addition, green crabs may have a myriad of effects in vertebrate and invertebrate populations.  Courtesy of National Marine Invasions Center.


Thomas noted a good place for specific invasive species information is at:

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II – The Potential for the Ballast Technology Market

Frans Tjallingi, Royal Haskoning –


A consultant on environmental aspects of shipping, Frans Tjallingi spoke on the market opportunities for ballast water (BW) treatment. His study, based on an expert group survey, a ship owner survey and Lloyds Register database concludes:


Driving Forces for BW Treatment Market are:

  • Unilateral BW Legislation coming in at least 14 countries
  • IMO Convention – assume standards by 2003 and entry into force by 2008
  • Owners want BW treatment in place of ballast water exchange


Shipping Industry Dynamics and Assumptions:


  • Vessels above 1000 DWT will require BW treatment
  • Vessels over 10 yrs. are not economically feasible to retrofit
  • High income countries will install technologies first

Approximately 12,000 vessels are identified for potential ballast water treatment technologies.






Market Opportunities Available-

2001- 2003
marginal R&D market

2003 – 2008
Retrofit – 3384 vessels -high income countries and "forward thinking" owners

New Buildings – 2270 vessels

Potential market = US $1.8 billion

2008 – 2013
Retrofit – vessels under 10 yrs – 12075 vessels

All new buildings – 5270 vessels.

Potential Market = US$3.5 – $5.4 billion


Tjallangi notes that many market uncertainties and constraints exist that would affect his predictions.  An IMO ballast water convention may not be signed by 2003 or standards may not be in place.  Enforcement of ballast water regulations may be uncertain.  Technologies better than ballast water exchange must be in place and the systems must meet technical capacities of a sea going environment.

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III - Ship Owners Initiatives – Treatment Technology Case Studies

Bulk Carriers, Tankers, Parcel Tankers, Container Ships and Passenger Ships.  These are the types of vessels that owners reported are currently installing or investigating ballast water treatment technologies. Grouped by category, presentation briefs are as follows:



David Stocks , Fleet Technology Ltd,

Georges Robichon, FEDNAV International Ltd,


Treatment Techs (2): 1) Copper Ion system & 2) Chlorination.

Stocks and Robichon outlined the initiative funded by FEDNAV aboard the 35,000 DWT Bulk Carrier Federal Yukon.  Fleet Technology has partnered in installing two treatment systems, a Copper Ion system and a chemical treatment system using hypochlorite.  The copper ion system is designed into the ballasting operation at a potential flow rate of 1400 tons BW/hr.  The chemicals are to be tested using a decanting tank aboard the vessel.


Robichon noted that FEDNAV met with authorities around the Great Lakes Region in order to assure them that ship owners are working towards BW solutions.  Authorities and the public had misconceptions about the quantities of ballast that owners carried. He pointed out that owners desire to maximize cargo and thus have strong economic incentives to minimize ballast as much as possible.


Most importantly, he noted that there is another incorrect perception among some experts about the time frame for ballast technology.  He insists that, based on laws already in place in the state of Michigan and elsewhere, the time frame to establish BW technologies is very short.  Recent Michigan legislation says ship owners must establish BW management practices by March 2002.


"Governments must have realistic and responsive time frames," Robichon said.  He recognized the problem with the lack of BW testing standards, but hoped that authorities "let standards evolve as the technologies evolve."


Stocks noted that his cost calculations expect an increase in daily charter rates of about 3.7%.  Costs based on changes in freight rate take into account the overall costs to operate the ship.



Bob Levine , Polar Tankers, Inc. –

Bill Hurley, The Glosten Associates, Inc –


Treatment Techs – still to be determined.

Levine and Hurley discussed the work performed to date to determine a viable treatment technology to operate aboard tankers using the 125,000 DWT tanker Polar Endeavor as a model.  They explained tanker vessels have a very high ballast capacity, and may hold up to 60,000 tons of BW during rough weather conditions.  Flow rates are high as well, estimated at an average 2,800 m3/hr for two pumps. Ballasting or deballasting takes about 20 hours.


Levine explained that operational factors in addition to high BW quantities include rough sea operating conditions and very little space available for treatment equipment.  The Polar Endeavor operates in wave conditions of 2.5 to 4 meters about 27% of its time.


Levine has looked at a number of treatment technologies and has yet to decide on what to use on tankers.  He points out the potential safety hazard of UV bulbs is below their comfort level.  He found filtration too expensive but believes treatment with biodegradable compounds is a potentially effective method.


Hurley performed a number of extensive BW treatment cost studies for tanker vessels as well as containerships.  He suggested a comparison of treatment technologies should be based on whether or not the technology will be used on similar services.


If comparing along similar services (i.e. tankers to tankers), Hurley suggested one should use the change in required freight rate that each technology would affect.  If comparing technologies among dissimilar types of services (i.e. tankers vs. containerships) he suggested one use a change in the percentage of operating costs.


Matt Little of the Northeast Midwest Institute read off a notice from BP Amoco.  They claim to be experimenting with ozone as a possible treatment for their tankers at a total cost of $3.4 million.



Soren Ibsen , Stolt-Nielsen Transportation Group Ltd –


Treatment Techs – Cyclonic separator with UV

Ibsen announced a recent decision to install the OptiMar system aboard their 12,000 DWT parcel tanker Stolt Aspiration.  The vessel operates an average BW flow rate of 250 m3/hr and a maximum of 500 m3/hr.


Ibsen said Stolt-Nielsen based their decision on a number of factors, the primary concern being that of safety for crew and the environment.  Ease of operation and low cost were important factors as well.


Stolt-Nielsen was awarded a US $125,000 grant from the Lake Carriers Association and the Great Lakes Protection Fund to test the system aboard the M/T Stolt Aspiration.



Bill Hurley, The Glosten Associates, Inc –


In addition to performing work on Tankers, Bill Hurley of the Glosten Assoc. calculated cost estimates for Matson Lines and their Containership the RJ Pfeiffer.  The RJ Pfeiffer is a 2000 TEU Containership with a moderate ballast pump rate of 350 m3/hr. 


Hurley said Matson is currently installing a cyclonic separator with UV in the RJ Pfeiffer.


Matt Little read a statement from Princess Cruise Lines.  They have a cyclonic separator with UV operating on one of the vessels, with additional installations planned.

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IV – Policy and Regulations

Maurya Falkner, California State Lands Commission –

Michael Gardiner, U.S. Coast Guard 9th District –


Attendees received somewhat of a mixed message regarding policy and regulations for ballast water treatment.  States such as California have enacted strict regulations mandating BW management and demanding ship owners come up with treatment technologies very soon. 


Unfortunately for ship owners, the USCG and IMO have yet to decide on standards for ballast water treatment.  Such standards are critical to determine to what level BW must be treated before it is discharged.  Hence, the shipping industry is being told they must treat their ballast water but the governing bodies cannot decide on standards to help them choose the appropriate technology.







Maurya Falkner, California State Lands Commission discussed the California Ballast Water Control and Management Program.  This law effective 1/1/2000 mandates that all ships must perform BW management, BW reporting and have a BW Plan in place.  The law also emphasizes R&D as well as public outreach and education regarding the BW problem.  The program is paid for via fees to ships of $400 per voyage.


According to Falkner, compliance has been very good since the program began, 92% of vessels are reporting BW management.  Violations have occurred mostly by passenger vessels, who cannot comply with a mandatory BW exchange beyond 200 nautical miles from the CA coast.  The vessels in violation do not go out 200 nm, typically operating along the coast.


Falkner believes the State of California will not address the lack of BW standards until 2003 at the earliest.  In the meantime, Owners will have to be dependent upon IMO and the USCG.



In 1996, Congress passed legislation mandating the USCG to devise regulations to deal with the invasive species in ballast water.  Michael Gardiner, a Commander in the USCG 9th district, described the USCG's BW management program.  BW exchange and reporting is mandatory for vessels entering the Great Lakes region but voluntary in the remainder of the U.S.

This parasitic barnacle (Loxothylacus panopaei) is an example of a marine parasitic castrator.  The barnacle, native to the Gulf of Mexico and eastern Florida, is an invader to the Chesapeake Bay and infects multiple species of xanthid  crabs.  Courtesy of  National Marine Invasions Center.


Regarding the lack of BW standards, Gardiner said the USCG is working on solutions.  Workshops to gather expert opinions on standards have been conducted.  In May 2001, comments were solicited in the Federal Register on potential BW standards.  He did not give listeners a definitive date when they could expect something from the USCG.


In addition to BW standards, Gardiner said the USCG is working as a third party to verify BW technology vendor claims.  He believes they are trying to make onboard testing easier, by making it easier for owners to commit resources.

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V – Getting Treatment Technology to Marketplace &/or How to Talk to the Government


Marketing Ballast Water Technologies

Marcia Rouke, Mohawk Research Corp. –

Reed Staheli, Foley & Lardner –


Marcia Rourke and Reed Staheli gave out advice to BW technology vendors regarding getting a product to market and the Patent process respectively.  Rourke gave a detailed outline of the innovation process and Staheli showed vendors why they better get a patent.


Some of the points Rourke outlined were:

  • Intellectual property is a powerful tool for marketplace development.  It can be cut up and rented out for profit via patents and trademarks.
  • Vendors should seriously consider partnerships as they move from innovation to product development to the market.
  • It is very hard for innovators to let go of their product and know when to allow other specialized experts take over to get the product on the market.


According to Staheli a patent is "a tool to partner those with an innovation with those with the resources to develop the innovation."  He said the patent won't make an innovation succeed but commercialization might.


The point of a patent is to protect its owner by creating a right to exclude in the making, using, or selling of the product.  The patent gives a window of opportunity to market the product and give the inventor an advantage in the marketplace.



How to Talk to the Government

Liz Walker, Alcade & Fay –


With technical presentations going on all day, Walker chose to lighten her presentation by recognizing some of the problems industry has in getting government people to listen.  She said there is a big difference between the world of government and the world of the entrepreneur.  It is difficult to get a business message across to the government.


Walker noted that the government is not in the business of commercializing products.  A new industry must educate the government on commercialization needs.  The critical issue is communication with the government.


Walker made suggestions on how to communicate with the government:

  1. Step Up & Step Forward – vendors must make government regulators recognize the BW treatment is a new industry.  If vendors do not step forward, government will move regulations in their own direction which may be contradictory to the industry.
  2. Empower investment and allow the technological community to find answers.
  3. An Industry group is the best way to affect government.

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VI – Financial and Business Resources. Tips From Investors

The sessions of the day wrapped up with three experts on linking Investors with Inventors.


Redmond Clark, Metalforming Controls –

Clark discussed strategies for getting a business plan funded.  He said the first priority of vendors must be to put together a complete and responsive business plan.  Some rules he suggests in obtaining capital are:

  1. Speak the Investor's language.  The audience is non-technical and driven by profit.
  2. Know what investors want such as: a well defined opportunity, a reasonable plan to get returns, identification of a team capable of succeeding and in-depth knowledge of the marketplace.
  3. Explain how you will cover and plan for risks.
  4. Clearly define the market and in what segment you will be selling to.
  5. Describe your services clearly.
  6. Address the danger of dealing in a regulatory market and justify how you will react when the regulations change.
  7. Know your competition.
  8. In financial planning use conservative growth and cost data and evaluate the down size risks as well.


Clark also said that technology vendors should DEMAND regulatory agencies provide them with seed funding since they have not provided them with BW standards.



George Lipper, National Association Seed and Venture Capital –


George Lipper discussed the relationship between invention and entrepreneurship.  He told the audience "it is not the invention that attracts venture capital, it is the opportunity to create wealth."


He also spoke about the difficulties currently experienced in the corporate venture capital industry.  Compared to last year, corporate venture capital is down 90%.


Although these are difficult times, Lipper said there are still good venture capital firms out there looking for good investments.



Thomas Churchwell – Arch Development Corp. –


In the closing presentation of the day, Chruchwell re-emphasized the comments of the previous speakers.  He said terminology is very important and the ballast water technology vendors must know what stage of capital investment their industry is in.


According to Churchwell, the BW tech. industry is likely in a pre-seed funding stage.  Pre-Seed businesses are in a formative stage, management teams are new, and the regulatory pathways are not well defined.  He said there are very few venture capital firms that deal in the pre-seed stage.


Business owners need to be sure that they can accept the role that the venture capitalists will demand.  Churchwell explained venture capitalists are non-sympathetic, their money is intolerant of failure to meet goals, and they feel they have the right and obligation to be very involved in the running of any company they invest in.


One suggestion that Churchwell made to vendors is to actively pursue strategic partners.  These are typically big companies that like to take a minority stakehold.  The biggest danger to entrepreneurs when dealing with strategic partners is keeping them from owning the technology.


Other good sources of funding include Angel investors.  These investors do not typically contribute to the management team, but they do provide a wealth of contacts with other investors and bankers.


Churchwell added some of his own pragmatic business critiques towards regulators.  He said regulators must take into account the fact that funding is critical in getting technologies into the marketplace.  Governments cannot change regulations every two years otherwise there will not be investors to fund technologies.  He felt that it is the obligation of the regulatory community to give TIME and MONEY to new industries struggling to create technologies such as the ballast water technology industry.

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Legal Disclaimers and Policy Statements

This page last updated by Miller Associates: Thursday, June 05, 2003

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