Page 42: of Marine News Magazine (December 2017)

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SPECIAL REPORT would reorganize amid revenues insuf? cient for maintain- have increased their long positions based on a perceived ing normal operations. The yard had, up until that point future tightening of worldwide supplies.

and by all outward appearance, been sailing along, incred- Both OPEC and non-OPEC exporters agreed one year ibly busy and engaged in more than one series-build con- ago to cut crude output substantially to bolster prices. tract. In September, that all came crashing down in an an- That’s been a partial success and as yearend approaches, nouncement that few saw coming in advance. that same coalition is signaling that they are likely to con-

Lance Lemcool, Horizon Shipbuilding Vice President tinue that policy. Both inland and offshore energy trans- announced the news with a prepared statement that said, portation and support operators hope that this will signal in part, “Last year, Travis R. Short, President of Horizon a rebound in fortunes for both sectors.

Shipbuilding saw an opportunity to repeat a great con- struction performance from 2012 ... Hornblower (HNY

Renewed Attacks on Jones Act

Ferries) offered just this type of opportunity through its

In January, the Customs and Border Patrol (CPB) pro-

NYC Ferry project and Horizon has achieved what most posed changes to reverse then-current practices that allow believed couldn’t be done. Through the unparalleled com- mitment of Horizon’s boat builders, subcontractors and non-US based vessels to transport cargo between US ports.

The proposal ignited a ? erce lobbying effort on both sides suppliers, all of the 2017 ferries have been delivered. How- ever, project revenues were not suf? cient for Horizon to of the equation, one which was (for the time being) won by foreign ? ag interests. That’s because, in May, CPB back- continue normal day to day operations.” pedaled; writing that based on “substantive comments” re-

Horizon now looks to an uncertain future. The an- nouncement comes closely on the heels of what was a ceived “we conclude that the Agency’s notice of proposed modi? cation and revocation of the various ruling letters largely well-perceived execution of an aggressive building relating to the Jones Act should be reconsidered.” That’s contract for Hornblower, as well as several other recent where the matter stands today.

deliveries. Beyond this, the yard was also lauded for the

It would be an understatement to say that, during 2017, development of its proprietary, in-house software program attacks on all aspects of the Jones Act – most recently from that was speci? cally designed to create ef? ciencies and U.S. Senator John McCain, who plumbed new lows in le- economy-of-scale for shipbuilders and other manufactur- veraging a humanitarian crisis in Puerto Rico – have be- ers. All of that, apparently, wasn’t enough to ward off Sep- come more numerous and robust in their application. The tember’s announcement.

latest assault comes in the choppy wake of Hurricane Ma- ria, a powerful storm that walloped the island common-

Energy Exports wealth earlier this year.

According to Reuters reporting of EIA numbers, the Jones Act opponents insist that the Jones Act is solely re-

United States will account for a whopping 80 percent of sponsible for the slow and painful recovery now underway the world’s output growth over the next 10 years. Closer to there and for the general state of Puerto Rico’s insolvent home, U.S. oil production hit a record 9.65 million bpd in economy in the ? rst place. These folks ‘never let a good crisis

November. This is a ‘good news, bad news’ story for U.S. go to waste.’ As this edition went to press, there were no less offshore maritime assets. That’s because whenever the price than four different legislative efforts being thrown around on of crude oil rebounds suf? ciently to give the ailing OSV sec- the Hill to roll back some or all parts of the Jones Act. Suf? ce tor a glimmer of hope, land-based shale producers simply it to say that this year was one of the most active in recent open the tap. On the other hand, not all of that oil can come history when it comes to protecting U.S. cabotage laws.

from the hinterland, and if EIA projections are correct, the

U.S. outer continental shelf will soon play an enhanced role.

Hurricanes, Training Ships,

The decision to open up U.S. crude oil for export has had a dramatic impact on the U.S. trade de? cit, and the

Marad and U.S. Mariners new normal has shaken up traditional supply and demand

In 2017, the most active hurricane season in recent models. Today, domestic output has risen by as much as 15 memory wreaked considerable havoc in this hemisphere. percent since its mid-2016 low. Beyond this, global energy Puerto Rico, Texas and Florida all took substantial hits and markets have been shored up by bullish hedge funds that if anyone previously doubted the value of being able to call

December 2017 42 MN