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.

Issue link:

Contents of this Issue


Page 46 of 94

44 Proceedings Fall 2015 Thus far, the American Energy Renaissance has seen remarkable growth, with encouraging forecasts. Whether spurred by foreign investment or geopolitical pressure, the scramble to export low-cost U.S. liquefed natural gas (LNG) is underway, and a renewed initiative could shift the dynamic on how it is transported downstream in the hopes of similarly buoying U.S. shipping. However, the absence of a qualifed U.S.-fagged feet remains a challenge for the seaborne domestic and international LNG trade. Market Shift The American energy crisis of the 1970s prompted LNG import terminal construction, and producers such as Trini- dad and Tobago accounted for a majority of American imports as recently as 2013. 1 Today's outlook is much differ- ent. As a result of the current domestic shale gas boom and increased domestic natural gas supply, legacy importers are eyeing export potential and have sought approval to build liquefaction facilities to convert domestic gas to its liquid form for transport on ships. Fortunately, the United States is no stranger to the liquefed natural gas export market. The frst transoceanic LNG cargo was shipped from Lake Charles, Louisiana, to the United Kingdom in 1959 on a converted World War II cargo ship. 2 The frst purpose-built LNG export terminal in the United States was commissioned in the late 1960s on the Kenai Peninsula in Nikiski, Alaska. At the time it was the larg- est plant in the world and the frst to serve the Asia-Pacifc market, primarily Japan. Following a shuttering in 2011, the plant was brought out of mothballs in 2013 and rejoined the export market with a potential to meet future market demand in the contiguous United States and Hawaii. 3 The Maritime Sector In October of 2014, Coast Guard Commandant Admiral Paul Zukunft noted: "One development that I'm paying close attention to is the American Energy Renaissance. Just a year ago … who would have guessed that the United States would be ahead of Saudi Arabia and Russia for oil production today? The United States now produces 14 percent of the world's hydrocarbon liquids — oil, condensate, and natural gas liquids — and we pro- duce 20 percent of the world's natural gas. According to estimates, we're producing roughly 2 million bar- rels of oil a day more than we were a year ago." 4 Mr. Mark Tabbutt of the American Maritime Partnership, a coalition that represents all segments of the domestic marine industry, expressed these sentiments to the U.S. House Sub- committee on Coast Guard and Maritime Transportation: "We have inland shipyards in this country that are building and launching, on average, almost a new barge every single day of the year. New tugs and towing vessels are also being built to handle that increased demand." 5 He went on to explain that the largest sector of our domestic marine transportation industry supports the movement of crude oil, refned petroleum products, and other chemi- cals. He noted that this sector has seen dramatic growth as a result of the shale oil revolution, with new vessel con- struction orders being taken at a record pace and new vessel order bookings at American shipyards flling fast. 6 By contrast, U.S. tonnage engaged in international trade has declined. Data from the U.S. Maritime Administration (MARAD) shows that the 1955 U.S. international feet was comprised of 1,072 merchant ships, which amounted to approximately 25 percent of world tonnage (approximately 13 million deadweight tons). By 2014, MARAD reports a total of 191 U.S. merchant ships, representing approximately 2 percent of the current global maritime shipping tonnage (approximately 9 million deadweight tons). 7 This comes at a time when the oceangoing U.S. merchant feet, a key compo- nent in civilian commerce and American military readiness, faces a disparity in operating and labor costs when com- pared with perceived cost-competitive foreign alternatives. 8 Shifting the Rudder? Charting LNG export on U.S.-fagged LNG carriers. by lcdr corydon F. hEArd iv Prevention Department Head U.S. Coast Guard Marine Safety Unit Texas City Liquefed Gas Production, Transportation, and Use

Articles in this issue

Links on this page

Archives of this issue

view archives of Proceedings Of The Marine - FALL 2015