It’s not rocket science.
- The National Maritime Symposium: talk is cheap
Last week, Paul "Chip" Jaenichen, Acting U.S. Maritime Administrator said in his online blog, “... We concluded the Maritime Administration's first National Maritime Strategy Symposium, and we're pleased that it included so many leaders who work every day providing for the economic and national security of our nation’s waterways." He added, “The U.S.-Flag commercial fleet, crewed by U.S. merchant mariners, provides safe, reliable, and environmentally-responsible transport of cargo to support economic activity – both domestically and internationally. Maritime trade is a critical part of our country’s economy.” I couldn’t agree more. But, perhaps, that’s where he and I diverge.
We do need a national maritime strategy. And, it was nice that we had a reported attendance of more than 250 people representing shippers, operators, labor, academics, and government agencies, all participating in roundtable discussions, panel sessions and presentations. The mid-January event focused on developing a national maritime strategy. The nation’s Acting Marad Chief also insisted, “The symposium was an important step in the right direction … but only a first step.” We can only hope that it wasn’t the only step. And you can forgive me for being skeptical of an organization that has just awoken from a self-imposed, four year slumber.
- Export for the (right) Reason
These are exciting times for domestic oil & gas producers, refiners, boatbuilders and let’s face it – pretty much anyone who counts themselves as a stakeholder on the domestic waterfront. Stakeholders are enjoying a time when we as a nation boast a trade surplus in terms of refined products and shipbuilding output (up to a certain size and deadweight and in specific niche trades). Domestic energy production has us in a sweet spot that last year recorded the lowest need for imported feedstocks and crude oil in decades. The analysts say it will only get better. Indeed, some oil majors predict that the United States could be all but energy self-sufficient in as little as five years, if we only play our cards correctly.
As energy demand increases overseas concurrent with our newly robust domestic output, the current situation leaves the United States in a very good position. The latest discussion that would allow the export of LNG as well as crude oil to foreign entities is nominally good news. Mind you, little if any of that output would end on U.S. bottoms, but the corresponding reduction in our still massive trade deficit would be a welcome outcome, if the exports come to fruition. Separately, I read a recent news item which tied the recovery of the foreign (registered) crude oil tanker market to the end of the U.S. Export Ban.
The wire story went on to say that the ongoing energy recovery would leave crude-oil tankers behind unless the United States reversed course on its almost four-decade ban on the exports of most unrefined exports. That may well be true. Beyond this, I do favor the export of excess LNG and any other unrefined assets that we find ourselves blessed to possess on this side of the pond. Doing that to help the greater global tanker market is a decidedly bad reason for doing so. Reducing our trade deficit and increasing domestic employment, especially in the maritime and energy sectors, should be among our main concerns as we move forward in a changing global energy climate.
- Simple Steps: Charity begins at home
I wonder how many others who attended this month’s National Maritime Symposium in Washington, or like me, dialed in on the Web, saw the irony of having such an event hosted by the U.S. Maritime Administration. The same organization that bills itself as the nation’s “maritime cheerleader” has only just recently finished awarding nearly USD $1 million to a domestic vessel operator for the purpose of retrofitting new, LNG burning engines into its vessels. It all sounds good until you realize that the funds will likely be used to perform those alterations in an Asian shipyard. What’s wrong with keeping those funds here at home?
At about the same time that U.S. taypayer funded Marad grant money moves offshore, support for the Maritime Security Program (MSP) that provides a $3.5 million annual subsidy for about 60 U.S. flagged – but all foreign built – vessels was also pushed at the Symposium. The Marad-administered program is nominally a good idea. That it funds the operations of foreign built vessels, is not. Over a five year period, the federal government will potentially spend as much as $1 billion on the program.
MSP rules require the Secretary of Transportation to establish a fleet of active, commercially viable, militarily useful, privately-owned vessels to meet national defense and other security requirements. I constantly find myself asking how many ships we could build domestically with those funds, using loan guarantees, grants in exchange for a certain number of years of MSP participation or other creative vehicles. It’s nice to count the 60 ships among our “American” merchant marine. Every one of them would probably be reflagged tomorrow if the funding disappeared.
In a statement released yesterday by the U.S. Department of Transportation and attributed to Transportation Secretary Anthony Foxx, the nation’s newly confirmed transportation chief said, “In his 2014 State of the Union Address, President Obama laid out a bold vision for increasing opportunity for all Americans. The road to better opportunities can take many forms – a bridge that helps parents get home faster, a transit system that connects a community to new jobs, or a port that helps businesses sell to more markets – and we at the Department of Transportation look forward to doing our part to help connect all Americans to the 21st century economy.”
Secretary Foxx’s comments were important in only one respect. That he mentioned U.S. ports at all was a refreshing sea change for this administration. Echoing the words of Acting U.S. Maritime Administrator Paul Jaenichen, when he referred to the National Maritime Symposium, that’s an important first step. To date, all we have are words. We do need a strong merchant marine. There IS room for the Jones Act in the domestic maritime equation and there is plenty else we could be doing in the meantime to further the infrastructure of the domestic waterfront. It’s not rocket science. – MarPro
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Joseph Keefe is the lead commentator of MaritimeProfessional.com. Additionally, he is Editor of both Maritime Professional and MarineNews print magazines. He can be reached at Keefe@marinelink.com or at jkeefe@maritimeprofessional.com. MaritimeProfessional.com is the largest business networking site devoted to the marine industry. Each day thousands of industry professionals around the world log on to network, connect, and communicate.
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