Manufacture This

The blog of the Alliance for American Manufacturing

This bipartisan measure would steer some LNG exports toward American-made vessels.

It was a great showing of bipartisanship last Tuesday, May 22 when Rep. John Garamendi (D-CA), Ranking Member of the Subcommittee on the Coast Guard and Maritime Transportation, announced the introduction in the House of Representatives of H.R. 5893, the Energizing American Shipbuilding Act of 2018.

The legislation is a bipartisan, bicameral effort to require a certain percentage of liquefied natural gas (LNG) and crude oil exports be transported on U.S.-built and U.S.-flagged vessels. The bill seeks to solve a critical national security problem, reduce costs for our Navy shipbuilding program, build 50 new U.S. tankers -- while creating thousands of manufacturing and maritime jobs by 2040. The bill is being introduced in the Senate by Roger Wicker (R-MS).

Rep. John Garamendi (D-CA), ranking member of the House Subcommittee on the Coast Guard and Maritime and Transportation, joined Sen. Wicker and Chairman Duncan Hunter (R-CA) to unveil the bill at a Capitol Hill press conference.

"This would result in the domestic construction of over 50 vessels, which would expand and enhance our industrial base, create thousands of jobs . . . and develop the shipbuilding capabilities vital for our national security," said Rep. Garamendi.

The United States is expected to be the world’s third largest producer of LNG for export, which would require roughly 100 carriers. Also, crude oil exports could reach 3.64 million barrels per day by 2025, which would require 180-380 oil tankers. Congress should leverage increases in LNG and crude oil exports that will bring new industries and American jobs to our shores by passing this bill.

We’ve long said that maintaining a healthy manufacturing industry is key to U.S. national security, and the shipbuilding industry is no exception. The Department of Defense depends on our U.S.-flag fleet and its mariners for 95 percent of national sealift needs in times of war or emergency. Despite the need for a healthy U.S. ship fleet, the number of privately owned U.S.-flag vessels engaged in foreign trade declined from 249 in the 1980s to just 78 as of October 2016. This comes as a result of manufacturing jobs in shipyards and throughout the shipbuilding supply being offshored at a rapid rate.

A robust shipbuilding industry is also beneficial to our economy. There are currently 117 active shipyards in the U.S. across 26 states, and 200 shipyards engaged in repairs or capable of building new ships. These shipyards, along with the rest of the maritime industry, support tens of thousands of American jobs. In 2011, the total economic activity associated with the shipbuilding industry supported 402,000 jobs, $7.9 billion in labor income, and $36 billion in GDP. Additionally, each job in the shipbuilding and repair sector supports 2.7 jobs nationally.

The Energizing American Shipbuilding Act would require that by 2040, 15 percent of exported American LNG travels on U.S.-built and –flagged vessels and that by 2032, 10 percent of exported crude oil travels on U.S.-built and –flagged vessels. It would also require that a significant portion of the iron, steel, and manufactured components be U.S.-sourced and U.S.-constructed, creating good U.S. manufacturing and mariner jobs. And, in addition, it would require that exporters create training opportunities for American mariners aboard export vessels so they can earn the credentialing required to take on these jobs.

You know who likes this bill? The Alliance for American Manufacturing, that's who. 

“(AAM) lauds the introduction of The Energizing American Shipbuilding Act. This bipartisan legislation will strengthen our national security and create good jobs by requiring that a rising percentage of our oceangoing LNG and crude oil exports are shipped on U.S.-built vessels operated by U.S. mariners," said AAM's Riley Ohlson. A healthy industrial base is key to our economic and national security. The recent growth in U.S. exports of LNG and crude oil present an opportunity to leverage these developments to foster a robust and resilient shipbuilding industry at the ready to meet our maritime commerce and security needs. At the same time, this bill will support and create good jobs at shipyards across the country and throughout the supply chain.”