Coastal energy impact mitigation in the Gulf: The past reviewed and alternatives for the future

Abstract

With the future of the Coastal Energy Impact Program (CEIP) in question and with oil and gas leasing and drilling activities in the Gulf of Mexico expected to increase, the question arises as to how energy impacts are to be mitigated. It is concluded that CEIP has helped to mitigate coastal energy impacts. If it is left unfunded, an alternative would be to provide Outer Continental Shelf (OCS) royalties to states to be used for impact prevention and mitigation.     

OCS development: A community's acceptance of risk

Abstract

Port O'Connor, Texas, a small unincorporated community on the Gulf Coast, was studied to assess the residents’ attitudes toward the potential growth related to Outer Continental Shelf (OCS) development. In contrast to attitudes of residents in many East Coast communities, residents of Port O'Connor do not feel threatened by OCS‐related growth. Rather, the risks they perceive result from increased tourism. They are well familiar with the social costs of tourism. They are less familiar with the social risks involved in increased OCS activities.

In terms of coastal zone management policy, this study highlights the importance of attending to the concerns of local residents for their social structure and way of life. The social risks imposed by increased OCS activity must be considered important factors in plans for OCS development.     

国际航运业船舶负债经营的融资租赁决策

与飞机、汽车等运输工具的融资租赁相比较，国际航运船舶的融资租赁是资金市场上最近出现的现象。该文通过实例论述了船舶融资租赁决策的方法；讨论了船舶融资租赁与贷款购建相比较所具有的优点与存在的弱点。本文的计算分析表明，船舶融资租赁与船舶贷款购建同样是根据航运企业的财务状况可供选择的一种融资方式，我国航运界对船舶的融资租赁不应存在疑问。     

The pros and cons of leasing in ship financing

Ship leasing is as old as shipping itself. As a financing device it is an alternative to equity financing through ship mortgages. Ship financing methodologies are in themselves highly sophisticated, and within that domain, the principal varieties of leases, namely, the operating lease and the finance lease are both fairly complex mechanisms in terms of their respective uses. Ships are assets; as such ship leasing falls under asset financing and is subject to the fundamental rules of equipment leasing. But ship leasing also has its own distinctive characteristics not only in relation to the unique features of the shipping industry and ship financing, but also, the legal regime within which ship leasing operates. There are variations in the legal regime which in turn impact on economic considerations. Thus, there are pros and cons involved in ship leasing, and they depend on a number of variables. This article is an attempt to critically examine these pros and cons from the relative perspectives of theory-based economists on the one hand, and law and accounting practitioners on the other. To that end, a two-fold literature review of the subject area is presented. The article concludes that economists identify ship leasing with a positive tax advantage and an enhanced financial disposition of the lessee. In contrast, the views of practitioners are complex and inconsistent. It is evident that the literature focuses on the legal arrangements involved in these transactions. These legal arrangements stem from the inherent risks associated with ships and shipping operations and have led to some disadvantages with respect to ship leasing.     

Evaluating seaport policy alternatives: a simulation study of terminal leasing policy and system performance

The competitive characteristics of the North American seaport industry have, in theory, been causally linked to excess investment and low terminal throughput productivity. This paper empirically examines the link between seaport authority container terminal leasing policy and throughput productivity. Recent advances in inventory theory applied to service industries suggest the pooling of demand uncertainty can yield lower costs without sacrificing customer service. This concept is applied to a container seaport using simulation. The effort compares key output measures from a realistic base case model of the seaport to those generated by an alternative terminal leasing policy. It is shown that the pooling of demand in a common-user seaport reduces total vessel time in port by 17.1% with no reduction in TEU throughput. Throughput productivity is improved for the highest capacity terminals, while lower capacity terminals are made available for additional users or alternative uses.     

Evaluating seaport policy alternatives: a simulation study of terminal leasing policy and system performance

The competitive characteristics of the North American seaport industry have, in theory, been causally linked to excess investment and low terminal throughput productivity. This paper empirically examines the link between seaport authority container terminal leasing policy and throughput productivity. Recent advances in inventory theory applied to service industries suggest the pooling of demand uncertainty can yield lower costs without sacrificing customer service. This concept is applied to a container seaport using simulation. The effort compares key output measures from a realistic base case model of the seaport to those generated by an alternative terminal leasing policy. It is shown that the pooling of demand in a common-user seaport reduces total vessel time in port by 17.1% with no reduction in TEU throughput. Throughput productivity is improved for the highest capacity terminals, while lower capacity terminals are made available for additional users or alternative uses.     

Cost Scenarios for Coastal Water Pollution in a Small Island Nation: A Case Study from the Cook Islands

This article presents scenarios of watershed pollution costs in Rarotonga, the largest of the Cook Islands in the South Pacific. The valuation method applied here estimates the market costs that would be avoided in the absence of watershed pollution. The study finds gross annual watershed pollution costs in Rarotonga between NZ$3.2 to NZ$17.7, with a best estimate of NZ$7.4, million. The best estimate results in household costs of NZ$2,900 per year and equates to 3.12% of gross domestic product. A wide error margin is placed around these estimates due to uncertain and incomplete datasets, a common situation for small island nations. They are presented as “cost scenarios” rather than definitive results. The article explores the practical, theoretical, and policy issues surrounding the valuation of water resources in the context of small island nations. It is argued that rough estimates of opportunity costs, limited to market goods and services, can supply governments with sufficient information to assess the relative importance of watershed pollution.     

The environmental costs and economic implications of container shipping on the Northern Sea Route

The Northern Sea Route (NSR) has tremendous potential for ocean shipping between Europe and Asia due to the savings from shorter transit time and distance. However, the Arctic area is environmentally vulnerable and thus there is a trade-off between NSR’s impacts on environment vs. its economic benefits, especially when compared with the traditional route, such as through the Suez Canal Route (SCR). This study estimates the market shares of different transport modes and alternative shipping routes for the container transport market between Europe and Asia, and the resulting environmental costs. Our result suggests that NSR can be a viable option under the status quo. However, its environmental costs tend to be higher than SCR due to small ship size and low load factor in the present, thus the development of NSR would lead to worse environment outcomes. If these issues can be resolved, NSR can benefit from lower operational and environmental costs, which will lead to higher market share and social welfare. Otherwise, increased use of NSR may lead to higher total environment costs than the status quo.     

中国船舶融资租赁业蝶变史

与国外船舶融资租赁业相比,中国船舶融资租赁业属于典型的后来者。但随着世界金融危机的持续蔓延,以及船市的持续低迷,世界船舶融资开始出现“西退东进”趋势,中国船舶融资租赁业也因此迎来一波发展高潮,而上海自贸区的成立,更是给了国内航运和造船更多的猜想和期待。那么,中国船舶融资租赁业迅速崛起的背后,经历了怎样一段艰难曲折的发展历程？未来的发力点在哪里？     

Optimal portfolio choice for ship leasing investments

ABSTRACT

We develop an advanced portfolio analysis method to determine the optimal ship mix for a portfolio. A typical business model of a ship leasing firm is to acquire ships for charter income. However, transportation assets (such as ships and aircraft) are different from financial assets (e.g. stocks and bonds) as they are tangible and have a limited useful life. Thus, methodologies for financial portfolios cannot be simply extended to portfolios of transportation assets. Recently, ship leasing represents a non-traditional source of ship finance. A ship leasing firm can manage a certain number of ships across different ship types. Based on portfolio theory and industry-related evidence, we construct an optimal ship portfolio consisting of a manageable combination of carefully chosen ships. The expected return of the asset combination is examined with respect to various ship types and sizes. We quantify the freight risk for different categories of ships in different sectors to investigate the characteristics of ship portfolios. The estimation of such freight risk is of considerable interest to academics and practitioners alike, because determining the behaviour of freight risk has important implications for investment decisions regarding ships. Our portfolio method should strongly support the decision-making process involved in leasing ships.     

中国船舶融资租赁生态链

国内船舶融资租赁业在经过了狂飙突进后正逐渐回归理性,如何使租赁业惠及各相关利益方,则要看国内突破制约力度和各企业创新的速度。＂这几年国内船舶融资租赁业迅猛发展,船舶订单也在反弹,可国内仍有不少船厂和船东愁眉不展,因为他们感觉这一切既在身边,却又距离他们很遥远。＂前不久在上海举办的一个航运金融论坛上一位参会人士的一句话,折射出了国内船舶融资租赁业在快速发展中遭遇的一些深层次问题。     

融资租赁船舶所有权登记

从国际船舶融资的角度看,缺少船舶融资租赁权登记规定的船舶登记制度,是不利于跨国船舶融资租赁的。我国《船舶登记条例》中有关光船租赁权登记制度的基本精神和具体做法可为船舶融资租赁权登记制度提供有益借鉴。但仍存在一些不足,笔者试着从这方面提出若干建议。     

Ships' capital costs: The approaches of economists, naval architects and business managers

This paper deals with methods for estimating building costs of ships. It starts by answering the basic questions of who needs cost estimates and why. It goes on to explain the appropriate approaches to cost estimating employed by economists, business managers, naval architects and shipyard cost estimators. It also outlines the many non-design factors (such as business and political environments) that may affect costs or prices. Certain general conclusions are reached including recognition of the need for improved cost estimating procedures, uniform accounting systems and (above all) a willingness to share cost data.     

Investment strategies in market uncertainty

The nature of the global economy is one of dynamic change. Shipping is a service industry with its demand related to changes in international trade levels and patterns. As a consequence shipping is subject to sometimes unpredictable swings in demand so that the operator is required to make strategic planning decisions while navigating through boom or bust environments. While boom economies generate rising freight rates which are welcomed and encourage investment, ship operators may also have to face falling freight demand and declining freight rates that may have significant impact on profitability, often falling to uneconomic levels for extended periods. In such a period of uncertainty and declining profitability management will make operational decisions to reduce costs. However, shipping lines operate in a market environment so any decisions made to rationalize the trade may have significant long-term competitive implications. For example, traditional micro economic theory might suggest that the prudent strategy to adopt would be to close down the operation and reopen when the market conditions improve. In a world of certainty or when costs of taking this action are zero, this would be a valid strategy. However, because of fear of competitors taking up a line's market share if the shipping company exits, even temporarily, this strategy cannot be valued simply in terms of shut-down and start-up costs. A further consideration is the fact that standard capital budgeting techniques, such as Net Present Value (NPV), cannot incorporate the flexibility to respond to new information and strategic responses explicitly into their investment analysis. This paper will demonstrate the use of Real Option Analysis (ROA) to provide guidelines for decisions about closing operations in adverse market conditions.     

Investment strategies in market uncertainty

The nature of the global economy is one of dynamic change. Shipping is a service industry with its demand related to changes in international trade levels and patterns. As a consequence shipping is subject to sometimes unpredictable swings in demand so that the operator is required to make strategic planning decisions while navigating through boom or bust environments. While boom economies generate rising freight rates which are welcomed and encourage investment, ship operators may also have to face falling freight demand and declining freight rates that may have significant impact on profitability, often falling to uneconomic levels for extended periods. In such a period of uncertainty and declining profitability management will make operational decisions to reduce costs. However, shipping lines operate in a market environment so any decisions made to rationalize the trade may have significant long-term competitive implications. For example, traditional micro economic theory might suggest that the prudent strategy to adopt would be to close down the operation and reopen when the market conditions improve. In a world of certainty or when costs of taking this action are zero, this would be a valid strategy. However, because of fear of competitors taking up a line's market share if the shipping company exits, even temporarily, this strategy cannot be valued simply in terms of shut-down and start-up costs. A further consideration is the fact that standard capital budgeting techniques, such as Net Present Value (NPV), cannot incorporate the flexibility to respond to new information and strategic responses explicitly into their investment analysis. This paper will demonstrate the use of Real Option Analysis (ROA) to provide guidelines for decisions about closing operations in adverse market conditions.     

The impacts of strait and canal blockages on the transportation costs of the Chinese fleet in the shipping network

ABSTRACT

Straits and canals have always served as key nodes in shipping networks. The blockage of a strait or canal will lead to ship deviations and increased transportation costs. To measure this impact on the Chinese fleet, our study develops a mathematical model that is based on a programming formulation. Each strait or canal is assumed to be blocked in turn, and the increased transportation costs for the Chinese fleet in different scenarios are calculated and compared using the proposed programming formulation in order to measure the impact of the blocked strait or canal on the Chinese fleet. Larger increases in transportation costs have greater impacts on the fleet. The results show that a blockage of the Strait of Hormuz would have the greatest impact of all straits and canals; it would cause the Chinese fleet to lose a portion of its import and export market, and such a blockage cannot be addressed through ship deviations. Based upon increased transportation costs, the four straits or canals that would have the greatest impact if blocked are the Mandeb Strait, the Suez Canal, the Sunda Strait and the English Channel.     

Passenger railway reform in the last 20 years - European experience reconsidered

It is about 20 years since the rail reform process in Europe began with the separation of infrastructure from operations in Sweden. This paper reviews the entire process, examining the objectives of reform, the different models adopted, and the key elements of separation of infrastructure from operations, competition both through open access and franchising and regulation and infrastructure charging. It is concluded that separation of infrastructure from operations involves costs, but is the most effective way of achieving within mode competition. Where operations do not greatly overlap and open access passenger and freight are unimportant, leasing infrastructure to passenger franchisees may be effective, but the model of vertical integration as separate subsidiaries within a holding company structure makes it difficult to ensure a level playing field for new entrants and is only effective where the vertically integrated operator remains dominant.     

融资租赁船舶安全监管的探讨

通过对融资租赁船舶安全工作现状的分析,就提高船舶所有人安全意识,提升事故风险的防范水平,丰富对此类船舶的安全与防污染管理提出了建议。     

Evaluating the long term impacts of transport policy: The case of passenger rail privatisation

Britain's national rail system was ‘privatised’ as a result of the 1993 Railways Act, with most of the organisational and ownership changes implemented by 1997. This paper examines the long term impacts of these changes. A key issue when examining long term changes is that of the counterfactual – what would have happened if the changes had not occurred? A simple econometric model of the demand for passenger rail services was developed and used in conjunction with extrapolative methods for key variables such as fares and train km to determine demand-side counterfactuals. Extrapolative methods were also used to determine counterfactual infrastructure and train operation costs. Although our results are sensitive to the assumptions we have made concerning the counterfactual they suggest a number of impacts. Since privatisation, rail demand has grown strongly but our analysis indicates that transitional disruptions suppressed demand by around 9% over a prolonged period (1992/3 to 2005/6), whilst the Hatfield accident reduced demand by about 5%, albeit over a shorter period (2000/1 to 2006/7). A welfare analysis suggests that although consumers seem to have gained as a result of privatisation, for most years this has been offset by increases in costs. An exception is provided by the two years immediately before the Hatfield accident. Overall the loss in welfare since the reforms were introduced far exceeds the net receipts from the sale of rail businesses. Thus although the reforms have had advantages in terms of lower fares and better service levels than otherwise would have been the case, this appears to have been offset by increased infrastructure and train operations costs. The source of these high costs remains an area of speculation but appear to be related to aspects of both market and regulatory failure.     

OCS development: A new law and a new beginning

Abstract

This article reviews the conflicts that led to the establishment of a special Congressional Committee on offshore oil and gas exploration, development, and production and the attempted resolution of various issues by that Committee and the Congress in the 1978 Amendments to the Outer Continental Shelf Lands Act of 1953. A short review is provided of the history of Outer Continental Shelf (OCS) development, of the conflict between the federal government and other interested entities and persons, and of the Congressional mechanism to respond to these conflicts. A more detailed analysis is provided of the most significant OCS issues. The article describes the various risks and benefits of offshore activity and the various benefits and risks of proposed changes in the law concerning such development. A review of the Congressional mechanism to assess these risks and benefits and balance them is included in a discussion of the various issues and legislated solutions. Finally, the article notes the need for continuing oversight and review of the benefits and risks and how effective the 1978 Amendments are in balancing them.