Overseas Shipholding Group Awarded Federal Grant to Develop Captured Carbon Terminal at Port Tampa Bay

Rhea-AI Summary

Overseas Shipholding Group, Inc. (OSG) has been awarded a $400,000 grant from the United States Department of Energy to study the development of its proposed Tampa Regional Intermodal Carbon Hub (T-RICH). The hub aims to evaluate the commercial feasibility of creating an intermediate storage hub at Port Tampa Bay for CO2 captured from industrial emitters across Florida. OSG plans to transport the stored CO2 by vessels across the Gulf of Mexico for permanent underground storage. This initiative aligns with the United States' goal to achieve net zero carbon by 2050 and is expected to provide up to 30% of the total carbon emission reduction. The project also aims to create hundreds of new jobs in Florida and improve air quality for residents.

Insights

Environmental Economist

An evaluation of the $400,000 grant awarded to Overseas Shipholding Group, Inc. (OSG) by the DOE underscores the increasing economic interest in carbon capture and storage (CCS) technologies. The grant, aimed at studying the feasibility of a CO2 storage hub, reflects a strategic investment in infrastructure that could bolster the transition towards a low-carbon economy. The proposed Tampa Regional Intermodal Carbon Hub (T-RICH) could serve as a catalyst for job creation and technological advancement within the state of Florida, potentially reducing the state's carbon footprint significantly.

From an economic standpoint, the development of T-RICH may offer a competitive advantage to OSG by positioning it at the forefront of the emerging liquified CO2 transport market. This could lead to new revenue streams and diversification of services, mitigating risks associated with traditional energy transport sectors. However, the long-term success of such initiatives will be contingent upon regulatory support, technological efficacy and market demand for CCS solutions.

Energy Industry Analyst

The announcement by OSG represents a noteworthy development within the energy transportation industry, particularly in the context of the burgeoning market for carbon capture and sequestration. The grant not only signals government endorsement but also suggests potential growth in demand for specialized transportation services for liquified CO2. The initiative to develop T-RICH is indicative of OSG's adaptive strategy in a sector that is increasingly influenced by environmental considerations and climate change policies.

While this is a pioneering step, the scalability and economic viability of such a hub will be crucial. Investors should monitor OSG's ability to execute this project effectively, as it could set a precedent for similar infrastructure across the United States. The implications for stakeholders include potential partnerships, increased operational costs associated with new technology adoption and the need for skilled labor in this niche market.

Sustainability Consultant

The DOE's grant to OSG for the T-RICH project highlights the intersection of sustainability and business strategy. The project aligns with national goals to achieve net-zero carbon emissions by 2050 and illustrates a proactive approach to climate change mitigation. By focusing on an area with high CO2 emissions and no existing pipeline infrastructure, OSG is not only addressing a significant environmental challenge but also pioneering a new market segment.

Stakeholders should consider the environmental benefits alongside the operational challenges of developing the first-of-its-kind storage and transport hub. The project's ability to advance Florida's industrial participation in national climate goals could enhance OSG's reputation and stakeholder trust. However, the environmental impact of the hub's construction and operation, as well as the lifecycle analysis of the captured CO2, will be critical factors in assessing the project's overall sustainability.

TAMPA, Fla.--(BUSINESS WIRE)-- Overseas Shipholding Group, Inc. (the “Company” or “OSG”), a leading provider of energy transportation services, announced today that the Company has been awarded a $400,000 grant from the United States Department of Energy (“DOE”) to study the development of its proposed Tampa Regional Intermodal Carbon Hub (“T-RICH”). The study is intended to evaluate the commercial feasibility of developing an intermediate storage hub at Port Tampa Bay for CO₂ captured from industrial emitters across the State of Florida. T-RICH would receive, store, and process two million metric tons of CO₂ per year, which would be transported by OSG vessels across the Gulf of Mexico for permanent underground storage. This storage and transport hub will be the first of its kind in the nation and could be scaled to meet expanded volumes of captured CO₂.

“Overseas Shipholding Group has an extensive track record of adopting industry leading new technologies and developing innovative solutions in energy transportation,” said Sam Norton, President and CEO. “Transporting liquified CO₂ is a natural next step in an exciting emerging market, consistent with OSG’s expertise with liquid cargoes,” explained Norton. “The development of a hub storage terminal at Port Tampa Bay will provide a comprehensive solution to allow Florida’s industrial facilities to be part of the nation’s response to the impacts of climate change and to which Florida is vulnerable.”

“OSG is a longtime strategic partner and provider of maritime transportation services at Port Tampa Bay,” noted Paul Anderson, Port Tampa Bay President and CEO. “This grant will make an important contribution as we work with OSG in exploring the development of a carbon distribution hub.”

“Florida's total CO₂ emissions from power generation and industrial facilities is among the largest in all states in the country. But Florida has no pipeline system capable of transporting captured CO₂,” said Mr. Norton. “OSG’s proposed hub site at Port Tampa Bay would aggregate and store CO₂ captured from emitters for loading onto specialized liquified CO₂ vessels to be operated by the Company. These vessels would then deliver their cargoes to the northern Gulf of Mexico, which has the largest confirmed capacity for safe, deep, permanent underground sequestration of captured CO₂. “

The DOE is encouraging the development of carbon capture and storage systems as part of the United States’ goal to reduce CO₂ emissions to achieve net zero carbon by 2050. Carbon capture and storage systems are expected to provide up to 30% of that total carbon emission reduction. Creating this supply chain will connect Florida to the fast-maturing CO₂ industry, will help improve air quality for all Florida residents, and would provide hundreds of new jobs involving innovative technology and infrastructure in Florida to support carbon capture, storage, and transport systems that OSG is promoting.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts should be considered forward-looking statements. Words such as “will”, “plans”, “should”, “expect”, “would” and similar expressions are intended to identify forward-looking statements but should not be considered as the only means by which these statements may be made. Such forward-looking statements represent the Company’s reasonable expectations with respect to future events or circumstances and are subject to various risks, uncertainties, and assumptions. Undue reliance should not be placed on any forward-looking statements and consideration should be given to factors including, but not limited to, those risks discussed in the Company’s filings with the Securities Exchange Commission. The Company assumes no obligation to update any forward-looking statements except as may be required by law. Forward-looking statements in this press release and written and oral forward-looking statements attributable to the Company or its representatives after the date of this press release are qualified in their entirety by the cautionary statement contained in this paragraph and in other reports hereafter filed by the Company with the SEC.

About Overseas Shipholding Group, Inc

Overseas Shipholding Group, Inc. (NYSE: OSG) is a publicly traded company providing liquid bulk transportation services in the U.S. Flag markets. OSG’s U.S. Flag fleet consists of Suezmax crude oil tankers doing business in Alaska, conventional and lightering ATBs, shuttle and conventional MR tankers, and non-Jones Act MR tankers that participate in the U.S. Tanker Security Program.

Headquartered in Tampa, Florida, OSG is committed to setting high standards of excellence for its quality, safety, and environmental programs and is recognized as one of the world’s most customer-focused marine transportation companies. More information is available at www.osg.com.

View source version on businesswire.com: https://www.businesswire.com/news/home/20231221706201/en/

Investor Relations & Media Contact:

Susan Allan, Overseas Shipholding Group, Inc.

(813) 209-0620

sallan@osg.com

Source: Overseas Shipholding Group, Inc.

FAQ

What is the grant awarded to Overseas Shipholding Group, Inc. for?

The company has been awarded a $400,000 grant from the United States Department of Energy to study the development of its proposed Tampa Regional Intermodal Carbon Hub (T-RICH).

What is the purpose of the Tampa Regional Intermodal Carbon Hub (T-RICH) at Port Tampa Bay?

The hub aims to evaluate the commercial feasibility of creating an intermediate storage hub for CO2 captured from industrial emitters across Florida and transport it by vessels across the Gulf of Mexico for permanent underground storage.

How does Overseas Shipholding Group plan to contribute to the reduction of carbon emissions?

The company's initiative aligns with the United States' goal to achieve net zero carbon by 2050 and is expected to provide up to 30% of the total carbon emission reduction.

What are the potential benefits of the project for Florida?

The project aims to create hundreds of new jobs in Florida and improve air quality for residents by connecting the state to the fast-maturing CO2 industry.