Bipartisan act aimed at revitalising US shipbuilding

Malcolm Latarche
Malcolm Latarche
ShipInsight

29 July 2019


Legislation aimed at revitalising the US shipbuilding sector has been reintroduced by Democrat Congressman John Garamendi and Republican Senator Roger Wicker as the Energizing American Shipbuilding Act.

This bipartisan legislation seeks to recapitalise America’s strategic domestic shipbuilding and maritime industries by requiring that increasing percentages of LNG and crude oil exports be transported on US-built, flagged, and crewed vessels.

The bill would require that vessels built in the United States transport 15% of total seaborne LNG exports by 2041 and 10% of total seaborne crude oil exports by 2033. If enacted, the bill is expected to spur the construction of dozens of ships, supporting thousands of good-paying jobs in American shipyards, as well as the domestic vessel component manufacturing and maritime industries. According to an estimate from the Shipbuilders Council of America, the bill would result in the construction of more than 40 ships: approximately 28 LNG carriers by 2041 and 12 oil tankers by 2033.

“Rising US exports of America’s strategic LNG and crude oil present a unique opportunity to create new middle-class jobs by strengthening our nation’s crucial domestic shipbuilding, advanced manufacturing, and maritime industries—which are key to national security and our ability to project American military power abroad,” said Congressman Garamendi (D-CA). “Our bipartisan bill counters other export countries’ similar requirements, including the Russian-flagged vessel requirement for arctic oil and natural gas exports announced by the Kremlin in December 2018. American shipyards and mariners are ready for the job, and our bill ensures they are no longer expected to compete against heavily subsidized foreign shipyards in Korea, China, and elsewhere.”

“Maintaining a strong domestic maritime industry is essential for our national defense,” said Senator Roger Wicker (R-MS). “This legislation would strengthen our shipbuilding industry, support American maritime jobs, and ensure the United States has enough American-flagged, crewed, and built ships to transport its growing oil and natural gas exports in times of conflict. Our geopolitical rivals have invested heavily in their shipbuilding capacity, and the U.S. should keep pace.”

The act has the support of a high number of organisations engaged in shipbuilding and equipment supplies and of ship operating and crew organisation.

“With the Energizing American Shipbuilding Act, American energy will be transported on American-owned, American-crewed, and American-built ships and the shipbuilding industry will have increased investment in new, state-of-the-art LNG and crude carriers to rival that of China, Russia, India, and other nations that are focusing billions of dollars in shipbuilding capacity,” said Shipbuilders Council of America President Matthew Paxton. “The passage of this crucial bill will not only ensure the dozens of new ships with hundreds of thousands of tons of capacity will be built here in the US but will also invigorate the shipyard industrial base, which spans to every state in the nation. We thank Senator Wicker and Congressman Garamendi for championing this critical legislation and for standing steadfastly behind the hardworking men and women of the American shipyard industry.”

“The Alliance for American Manufacturing welcomes the introduction of the Energizing American Shipbuilding Act. This bipartisan legislation will strengthen our national security while also creating good-paying shipbuilding jobs as well as additional jobs throughout the industrial supply chain,” said Scott Paul, president of the Alliance for American Manufacturing. “The recent growth in US energy exports offers a unique opportunity to foster a robust and resilient shipbuilding industry to meet our maritime commerce and security needs while also providing a boost to our economy. We encourage Congress to pass this commonsense legislation.”

“The American Shipbuilding Suppliers Association is in full support of the Energizing American Shipbuilding Act and we thank Congressman Garamendi, Senator Wicker and all the other supporters of this important legislation,” said Laura Haas, CEO of the American Shipbuilding Suppliers Association. “It is actions like this that will ensure the continued prosperity of our shipbuilding industry and industrial supplier base which is vital to our success as a nation.”

According to the Energy Information Administration, seaborne American crude oil and natural gas exports will continue to increase, with the United States projected to become a net crude oil exporter and the top LNG exporting nation in the coming years. Earlier this year, Congressman Garamendi and Senator Wicker sent a letter urging the Trump Administration to support the American maritime industry by ensuring that any deal for the People’s Republic of China to commit to purchase US natural gas guarantee transport business for US-built, flagged, and crewed vessels.