Lawmakers want U.S. ships for LNG exports to China

Sen. Wicker and Rep. Garamendi plan to reintroduce a bill to guarantee fixed percentages of all LNG and crude oil travel on U.S.-built, crewed and flagged vessels.

Lawmakers want U.S. ships for LNG exports to China

Sen. Wicker and Rep. Garamendi plan to reintroduce a bill to guarantee fixed percentages of all LNG and crude oil travel on U.S.-built, crewed and flagged vessels.

Lawmakers want U.S. ships for LNG exports to China

Sen. Wicker and Rep. Garamendi plan to reintroduce a bill to guarantee fixed percentages of all LNG and crude oil travel on U.S.-built, crewed and flagged vessels.

 

   Sen. Roger Wicker, R-Miss., and Rep. John Garamendi, D-Calif., urged the Trump administration in a letter Tuesday to ensure U.S.-flag ships with American mariners “play a key role in the export of crude oil and liquefied natural gas (LNG) to China.”
    “Without your personal attention in these trade negotiations, American LNG and crude oil exports will almost certainly be on foreign-flag vessels operated by foreign crews,” they said in the letter to U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross Jr.
    “As such, we urge that any agreement negotiated with China involving increased purchases of American energy require that U.S.-flag vessels employing American mariners play a key role in the export of crude oil and LNG to China,” the letter continued. “Such action by you and the administration will be part of a government-wide effort to recapitalize our merchant marine fleet, strengthen our industrial base and safeguard our national security interests.”
    The letter stated the U.S. is expected to become the world’s third-largest producer of LNG for export by 2020 and crude oil exports are expected to reach 3.64 million barrels per day by 2025, according to the Energy Information Administration.

   The U.S.-flag international fleet has declined nearly 60 percent since 1991 to 80 vessels and those vessels now account for less than 2 percent of America’s ocean-going foreign trade, they said, citing a Government Accountability Office report from November.
    Wicker and Garamendi plan to reintroduce the Energizing American Shipbuilding Act this Congress. The bill would guarantee fixed percentages of all exported LNG and crude oil travel on U.S.-built, crewed and flagged vessels beginning in 2025. It also would require exporters provide training opportunities for American mariners.
    When it was first introduced last Congress, the bill called for a minimum of 2 percent of LNG exported by vessel be transported by a U.S.-built, flagged and crewed ship starting in 2024, increasing every two years until it reached a minimum of 15 percent in 2040. It also called for a minimum of 1 percent of crude oil exported by vessel be transported by such ship beginning in 2023, which increased every three years until it reached a minimum of 10 percent in 2032.
    “The United States should seize every opportunity to bolster our domestic maritime industry,” Wicker said in a statement. “As we pursue stronger trade agreements with China and other nations, I urge the administration to consider supporting the American merchant marine fleet by requiring liquid natural gas and crude oil exports be transported by U.S.-flagged and crewed vessels.”

We are seeing many more pricing requests for Southeast Asia and the Indian subcontinent. Few actually moved their supply chains outside of China because this will take time, especially for larger shippers. However, Taiwan and South Korea are in a unique situation: Some manufacturing had shifted to mainland China in the last decade due to lower costs, but that infrastructure is still in Taiwan and South Korea. Some manufacturing may temporarily shift back there until Southeast Asia infrastructure catches up. 

Average container vessel size on the Asia to North Europe trade actually shrank between May 2018 and May 2019, falling from 14,253 TEUs to 13,808 TEUs, although total container vessel count on the trade rose from 219 to 229, according to BlueWater Reporting’s Capacity Report.

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Lawmakers want U.S. ships for LNG exports to China

Sen. Wicker and Rep. Garamendi plan to reintroduce a bill to guarantee fixed percentages of all LNG and crude oil travel on U.S.-built, crewed and flagged vessels.

Mar 26, 2019 on Dec 27, 2018AmericanShipper.com

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Lawmakers want U.S. ships for LNG exports to China

Sen. Wicker and Rep. Garamendi plan to reintroduce a bill to guarantee fixed percentages of all LNG and crude oil travel on U.S.-built, crewed and flagged vessels.

Mar 26, 2019 on Dec 27, 2018AmericanShipper.com