The rising cost of international shipping has temporarily torpedoed a United Nations mission to prevent a US$20-billion ecological and humanitarian disaster along the Red Sea coast.
UN officials thought the $85 million they had raised from international donors would be enough to salvage the FSO Safer, a disabled, 1970s-era oil tanker carrying 1.1 million barrels of oil, enough to produce a spill four to five times the size of the 1989 Exxon Valdez disaster. But that was before the rising cost of very large crude oil tankers (VLCCs) blew the project budget out of the water.
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“Availability of VLCCs constricted in the past six months, largely due to events related to the war in Ukraine,” UN communications advisor Russell Geekie said in an email last week. “Just as the UN was gearing up for the operation, the costs to both lease and purchase a vessel surged. A suitable VLCC for the operation now costs at least $20 million more than was budgeted in the original plan.”
That’s after the Safer has languished for seven years without maintenance, with a six-member skeleton crew now holding it together “with band-aids and gaffer tape,” an observer familiar with the ship and its condition told The Energy Mix in July. At one point, a desperate UN office in Sana’a, Yemen, resorted to crowdfunding to try to get the money in place.
Now, Geekie said the UN “is working expeditiously with a maritime broker and other partners to find a workable solution and is re-examining the budget to reflect current market conditions.” An observer said the cost of chartering a VLCC has increased five-fold and there is “little interest in leasing a vessel” to the project under current market conditions.
Officials and observers have been warning for months that the Safer’s deteriorating condition makes it a “floating time bomb” at serious risk of breaking up or exploding as the region approached a season of higher winds beginning in October. An oil slick from the ship would foul shorelines in Yemen, Eritrea, Saudi Arabia, and possibly beyond, devastate the “pristine” Red Sea ecosystem, and “wipe out 200,000 jobs in fisheries overnight in Yemen,” said David Gressly, the UN’s resident coordinator/humanitarian coordinator for Yemen.
“If the ship breaks up, it will cost tens of billions of dollars and lives and livelihoods, not to mention the decimation of reefs and mangroves and fishing stocks which will take decades to replenish,” Geekie added.
But the $80 million initially required to avert that multi-billion-dollar disaster took months to raise, forcing the UN to delay the salvage until the riskiest months of the year. The latest cost issues have put the work back on hold.
“All of the technical expertise is in place to undertake the procurement for the complex operation,” Geekie said last week. But “the UN cannot begin the emergency operation until it is certain that a safe VLCC will be in place to take on the oil.”
To date, efforts to line up funding from oil and gas or international shipping companies have come up empty. The fossil industry has been racking up record profits since the beginning of Russia’s war in Ukraine, and the International Chamber of Shipping says the value of world shipping trade exceeded $14 trillion in 2019.
