Proceedings Of The Marine

FALL 2015

Proceedings magazine is a communication tool for the Coast Guard's Marine Safety & Security Council. Each quarterly magazine focuses on a specific theme of interest to the marine industry.

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45 Fall 2015 Proceedings www.uscg.mil/proceedings a conventional LNG tanker built and in service, it does not appear that there is an immediate solution for new construc- tion. The new construction dilemma does not necessarily pre- clude reflagging originally U.S.-built LNG carriers and requalifying them for coastwise trade. Nor does it forestall foreign-constructed LNG carriers from refagging under U.S. registry endorsements for the sole purpose of for- eign trade (export) if otherwise qualifed. The precedent was established in the America's Cup Act of 2011, which granted waivers to reissue coastwise endorsements to three previously U.S.-constructed LNG carriers now in a position to refag, should legislative mandates become a reality or However, LNG exporters warn against increased U.S. construc- tion and operational costs on what is otherwise seen as a low-cost and competitive commodity. These can be substantial factors in a tight market, where shipping costs are largely correlated to the distance between liquefaction and regasif- cation depots and compensating for the geographic proximity of regional competition is essential. Made in America Adding to matters is the Merchant Marine Act of 1920. Commonly referred to as the Jones Act, it is the federal statute that regulates coastal dome st ic ma r it i me com merce between U.S. ports and requires goods and passengers be trans- ported by U.S.-made ships, owned by U.S. citizens, and crewed largely by U.S. citizens. This includes unre- stricted coastwise trade between continental U.S. ports, Alaska, Hawaii, and Puerto Rico. 9 In the early 1970s the U.S. govern- ment backed U.S. LNG carrier con- struction through MARAD Title XI loan guaranties. Ultimately, 16 ves- sels were built, although three never saw service in the liquefed natural gas trade. The last U.S.- fagged LNG carrier was delivered in 1980. Subsequently, those LNG carriers have all reflagged and registered under other fags such as the Marshall Islands, Bahamas, Norway, and the Isle of Man, with the last leaving the feet around 2002 (see chart). Today, there are currently no U.S.-fagged LNG carriers, nor are there any planned for construction. Recent proposals, including the draft legislation "Growing American Shipping Act of 2014," would promote liquefed natural gas exports on U.S.-fagged vessels. However, there is growing opposition from international organizations who don't want to see U.S. Jones Act restrictions extended into international trade. Regardless, an alternative legislative provision to study the impact of U.S.-fagged LNG ship- ping, in favor of a direct "Made in America" clause, has been adopted. 10 Considering the fve-year estimate to get U.S.-built LNG Carriers Year Original Name Shipyard Containment System IMO / U.S. O.N. Flag Status (Equasis 12/2014) 1977 LNG AQUARIUS General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390181 / 582506 Indonesia 1977 LNG ARIES General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390193 / 588005 Scrapped 4/2014 1978 LNG GEMINI General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390143 / 595752 Marshall Islands 1978 SOUTHERN Newport News, VA TZ Mk1 System 7391197 / 591902 Scrapped 2/2013 1978 ARZEW Newport News, VA TZ Mk1 System 7391202 / 598727 Scrapped 12/2012 1979 GAMMA Newport News, VA TZ Mk1 System 7391214 / 598730 Norway 1978 LNG CAPRICORN General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390208 / 588006 Marshall Islands 1978 LNG LEO General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390155 / 595753 Marshall Islands 1979 LNG TAURUS General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390167 / 595754 Marshall Islands 1979 LNG VIRGO General Dynamics, Quincy, MA Moss Spherical Tank Systems 7390179 / 595755 Marshall Islands 1979 LNG LIBRA General Dynamics, Quincy, MA Moss Spherical Tank Systems 7413232 / 595756 Marshall Islands 1979 EL PASO SAVANNAH* Avondale, LA Conch System 7390727 / 598731 1979 EL PASO COVE POINT* Avondale, LA Conch System 7390739 / 598729 1979 EL PASO COLUMBIA* Avondale, LA Conch System CG005507 1980 LAKE CHARLES General Dynamics, Quincy, MA Moss Spherical Tank Systems 7619587 / 619531 The Bahamas 1980 LOUISIANA General Dynamics, Quincy, MA Moss Spherical Tank Systems 7619575 / 619532 The Bahamas * Never saw LNG service. Information from MISLE and Equasis databases.

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