Page 8: of Maritime Reporter Magazine (February 2014)

Last week, Paul “Chip” Jaenichen,

Acting U.S. Maritime Administrator said in his online blog, “... We concluded the Maritime Administration’s fi rst Na- tional Maritime Strategy Symposium, and we’re pleased that it included so many leaders who work every day pro- viding for the economic and national security of our nation’s waterways.” He added, “The U.S.-Flag commercial fl eet, crewed by U.S. merchant mariners, pro- vides 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 strate- gy. And, it was nice that we had a report- ed 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 develop- ing a national maritime strategy. The na- tion’s Acting Marad Chief also insisted, “The symposium was an important step in the right direction … but only a fi rst 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-im- posed, four-year slumber.

Export for the (Right) Reason

These are exciting times for domestic oil and gas producers, refi ners, boat- builders 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 refi ned products and shipbuild- ing output (up to a certain size and dead- weight and in specifi c 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-suffi cient in as little as fi ve years, if we only play our cards correctly.

As energy demand increases over- seas 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 out- put would end on U.S. bottoms, but the corresponding reduction in our still mas- sive trade defi cit 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 Unit- ed States reversed course on its almost four-decade ban on the exports of most unrefi ned exports. That may well be true.

Beyond this, I do favor the export of ex- cess LNG and any other unrefi ned assets that we fi nd 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. Re- ducing our trade defi cit 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 cli- mate.

Simple Steps: Charity Begins at Home

I wonder how many others who at- tended 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 na- tion’s “maritime cheerleader” has only just recently fi nished awarding nearly

USD $1 million to a domestic vessel op- erator for the purpose of retrofi tting 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. tay- payer funded Marad grant money moves offshore, support for the Maritime Secu- rity Program (MSP) that provides a $3.5 million annual subsidy for about 60 U.S. fl agged – but all foreign built – vessels was also pushed at the Symposium. The

Marad-administered program is nomi- nally a good idea. That it funds the op- erations of foreign built vessels, is not.

Over a fi ve-year period, the federal gov- ernment will potentially spend as much as $1 billion on the program.

MSP rules require the Secretary of

Transportation to establish a fl eet of active, commercially viable, militarily useful, privately-owned vessels to meet national defense and other security re- quirements. I constantly fi nd 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 par- ticipation or other creative vehicles. It’s nice to count the 60 ships among our “American” merchant marine. Every one of them would probably be refl agged tomorrow if the funding disappeared.

It’s not Rocket Science

In a statement released yesterday by the U.S. Department of Transportation and attributed to Transportation Secre- tary Anthony Foxx, the nation’s newly confi rmed transportation chief said, “In his 2014 State of the Union Address,

President Obama laid out a bold vision for increasing opportunity for all Ameri- cans. The road to better opportunities can take many forms – a bridge that helps parents get home faster, a transit sys- tem that connects a community to new jobs, or a port that helps businesses sell to more markets – and we at the Depart- ment of Transportation look forward to doing our part to help connect all Ameri- cans 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 re- freshing sea change for this administra- tion. Echoing the words of Acting U.S.

Maritime Administrator Paul Jaenichen, when he referred to the National Mari- time Symposium, that’s an important fi rst 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.

Posted by Joseph Keefe on

MaritimeProfessional.com 8 Maritime Reporter & Engineering News • FEBRUARY 2014

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When you leave the page and head to the screen, Maritime Reporter’s family of online offerings provides the most digital and online news portals for news & insight. Here are select stories from last month on MaritimeProfessional.com

A National Maritime Strategy

It’s Not Rocket Science

BY JOSEPH KEEFE

MR #2 (1-9).indd 8 2/5/2014 11:00:37 AM