Last month's Alaskan oil spill, the worst such disaster in national history, highlights the tough choices facing the US tanker industry as it upgrades an aging fleet and finds ways to prevent similar accidents. The average age of an oil tanker in the domestic fleet is 15 years old, versus 12 years for the international fleet, tanker analysts say. Except for nine foreign tankers, the law allows only US-flagged vessels to transport Alaskan crude oil.
The tanker Exxon Valdez, which ran aground March 24 in Alaska's Prince William Sound, is two years old.
Despite the cause of the Valdez spill, the accident has focused a spotlight on the entire US oil tanker industry.
While tanker safety also depends on proper maintenance, old vessels are less efficient and less likely to be equipped with the latest devices to prevent spills, said marine engineer Evan Drazinakis at Shiptech International Inc.
In the short term, the world's oil tankers are likely to age further before new vessels can join the fleet, as the industry is just emerging from a 10-year slump, analysts say.
Since 1987, rising world demand for oil and shrinking tanker tonnage have boosted prices for secondhand ships. A used oil tanker - depending on size and age - now sells for $15 million to $25 million, up from $5 million to $10 million in 1986, says Odd Hassel, an Oslo-based tanker consultant. A new tanker costs at least $70 million, he adds.
While new orders are also on the rise, tanker owners are plagued by inadequate return on their investments, said Michael Walker, a tanker analyst with Legg Mason Wood Walker in Baltimore.
To justify building new tankers, the daily rate has to rise above $4 per deadweight ton, Mr. Walker says. The current rate is under $3, up from recent low of about 75 cents.