Kevin Mackay, CEO, Teekay Tankers. Image Credit: Teekay Tankers
Despite a number of concerns over the use of scrubbers, Teekay Tankers Ltd. [NYSE:TNK] says it would still consider putting the tech on its ships - providing it wasn't paying for it.
"I think fundamentally, we don't believe in taking on additional debt or issuing equity to find the capital to for us to invest in scrubbers based on a forward bet of the spread on fuel oil prices. We don't think for us that's a prudent use of funds," CEO Kevin Mackay said during the owner's latest earnings call.
"If there is a way to fund the scrubber where Teekay Tankers isn't paying for it, we may look at those opportunities as a means to test out the technology and see it, but certainly at this point, we don't feel that it's something that we would put our capital behind."
Kevin Mackay, CEO, Teekay Tankers
Transferring sulfur pollution from the air into the ocean isn't in our view something that is viable long-term for the industry
As scrubbers will allow vessels to continue burning otherwise noncompliant HSFO after the January 1, 2020 global 0.50% sulfur cap on marine fuel comes into force, a growing number of owners see the tech as a way to reduce their post-2020 bunker costs. The premium for compliant low-sulfur fuels is currently predicted to be between $100/mt and $400/mt.
But in addition to concerns of the availability and quality of HSFO, Teekay also joins those with concern over the environmental credentials of scrubbers, particularly when it comes to open-loop scrubbing.
"Transferring sulfur pollution from the air into the ocean isn't in our view something that is viable long-term for the industry," said Mackay.
For the record, those advocating for the use of scrubbers have said repeatedly argued that the practice has no negative environmental impact.
Still, major scrubber manufacturer Alfa Laval recently saw it fit to announce it is now preparing all its open-loop deliveries for easy upgrading to a hybrid system so customers have "room to adapt if tougher laws appear."
* Earnings call transcript provided in part by Seeking Alpha