Posted:
September 10, 2014
The following article is based on a fact sheet released by the American Maritime Partnership, a coalition of which American Maritime Officers Service is a member and which American Maritime Officers supports.
WASHINGTON - The rhetoric surrounding America's domestic maritime industry has recently heated up, and a group called the American Fuel and Petrochemical Manufacturers, which represents the oil refining industry, has indicted that they would be pushing for changes to the Jones Act.
Supported by the Jones Act - which ensures vessels operating in our domestic waterways are U.S.-built, U.S.-crewed and U.S.-owned - the U.S. domestic American maritime industry is flourishing.
The American Maritime Partnership (AMP) noted the most modern vessels in the world are being built in record numbers in U.S. shipyards all around the country, the industry is responding to the changing energy market caused by the shale oil revolution, and is growing and employing American workers as a result.
The Jones Act "enjoys rock solid support from both lawmakers and the Administration. Leaders from both sides of the aisle are showing their strong support for this law critical to America's national and economic security," AMP stated.
The American Maritime Partnership recently responded to separate fact from fiction and correct the misinformation recently published about the Jones Act and America's surging domestic energy production.
FICTION: Shipping by Jones Act vessels is three times more expensive than foreign vessels.
FACT CHECK: This is an apples to oranges comparison. U.S.-flag ships operating in domestic trades are subject to all U.S. laws. Foreign-flag ships operate in international trades and are subject to the lax laws of flag of convenience countries like Liberia and Panama. The suggestion that a foreign-flag ship could operate in the domestic trade without being subject to U.S. laws is a farce; it is highly unlikely Congress or the Executive Branch will permit foreign ships to operate in wholly domestic commerce without being subject to U.S. taxation, U.S. immigration, and a host of other U.S. laws. The Government Accountability Office (GAO) has repeatedly debunked this myth:
•"Foreign carriers operating in the U.S. coastwise trade could be required to comply with other U.S. laws and regulations which could increase foreign carriers' costs and may affect the rates they could charge."
FICTION: American maritime is one of the most expensive ways to move petroleum products around the country.
FACT CHECK: The nation's domestic energy production boom has caused costs of transport by rail and pipeline to skyrocket, while transport by maritime has remained not only competitive, but often times more economical.
•Bakken crude rail transport costs: $9/bbl to Cushing [OK]; $11-12/bbl to Eastern Canada; $12/bbl to St. James [LA]; $17/bbl to U.S. East Coast; $9/bbl to U.S. West Coast. U.S. Gulf Coast to U.S. East Coast by U.S. flagged-vessels -- $5-$6/bbl, comparable with U.S. pipeline rates (at $4/bbl).
•"We've seen dramatic increases in tank car rates over the last 18 months due to the unprecedented demand for the cars."
•"Apart from the national security argument, some tanker analysts said that the high demand for Jones Act tankers is also supported by better economics and practicality when compared with pipelines."
FICTION: The Jones Act is making it harder for refiners to make a profit as they struggle to keep up with surging domestic energy production.
FACT CHECK: Refineries are experiencing record profits by refining cheap domestic crude and selling the gasoline, jet, diesel, and other refined products overseas at better margins.
•"This surge in supply also has lowered costs for refinery operators, simply because domestic crude is less expensive than imported oil. At the same time, Gulf Coast refineries have expanded over the past few years and can increase their volume, keeping prices even lower."
•"Refiners are jumping on the opportunity to increase profits"
FICTION: U.S. shipyards are unable to keep up with the demand for new vessels to transport American energy.
FACT CHECK: Over the past year, U.S. shipyards have entered into hundreds of contracts for new vessels, including the construction of state of the art tankers and barges to help America meet the growing demand from the nation's surge in domestic energy production. Last year, the construction of inland tank barges reached an all-time high with 336 new vessels delivered, totaling more than 8.2 million barrels of capacity, and some 19 large tankers and articulated-tank barges with another combined 6.5 million barrels of capacity.
•"U.S. shipyards are the busiest in almost two decades as surging domestic energy production increases cargoes for the merchant fleet, according to the Department of Transportation."
•"Outside of pipelines, [maritime] is the best way to transport oil if you're a coastal refiner."
AMP: Separating Jones Act facts from rhetorical fiction
The following article is based on a fact sheet released by the American Maritime Partnership, a coalition of which American Maritime Officers Service is a member and which American Maritime Officers supports.
WASHINGTON - The rhetoric surrounding America's domestic maritime industry has recently heated up, and a group called the American Fuel and Petrochemical Manufacturers, which represents the oil refining industry, has indicted that they would be pushing for changes to the Jones Act.
Supported by the Jones Act - which ensures vessels operating in our domestic waterways are U.S.-built, U.S.-crewed and U.S.-owned - the U.S. domestic American maritime industry is flourishing.
The American Maritime Partnership (AMP) noted the most modern vessels in the world are being built in record numbers in U.S. shipyards all around the country, the industry is responding to the changing energy market caused by the shale oil revolution, and is growing and employing American workers as a result.
The Jones Act "enjoys rock solid support from both lawmakers and the Administration. Leaders from both sides of the aisle are showing their strong support for this law critical to America's national and economic security," AMP stated.
The American Maritime Partnership recently responded to separate fact from fiction and correct the misinformation recently published about the Jones Act and America's surging domestic energy production.
FICTION: Shipping by Jones Act vessels is three times more expensive than foreign vessels.
FACT CHECK: This is an apples to oranges comparison. U.S.-flag ships operating in domestic trades are subject to all U.S. laws. Foreign-flag ships operate in international trades and are subject to the lax laws of flag of convenience countries like Liberia and Panama. The suggestion that a foreign-flag ship could operate in the domestic trade without being subject to U.S. laws is a farce; it is highly unlikely Congress or the Executive Branch will permit foreign ships to operate in wholly domestic commerce without being subject to U.S. taxation, U.S. immigration, and a host of other U.S. laws. The Government Accountability Office (GAO) has repeatedly debunked this myth:
•"Foreign carriers operating in the U.S. coastwise trade could be required to comply with other U.S. laws and regulations which could increase foreign carriers' costs and may affect the rates they could charge."
FICTION: American maritime is one of the most expensive ways to move petroleum products around the country.
FACT CHECK: The nation's domestic energy production boom has caused costs of transport by rail and pipeline to skyrocket, while transport by maritime has remained not only competitive, but often times more economical.
•Bakken crude rail transport costs: $9/bbl to Cushing [OK]; $11-12/bbl to Eastern Canada; $12/bbl to St. James [LA]; $17/bbl to U.S. East Coast; $9/bbl to U.S. West Coast. U.S. Gulf Coast to U.S. East Coast by U.S. flagged-vessels -- $5-$6/bbl, comparable with U.S. pipeline rates (at $4/bbl).
•"We've seen dramatic increases in tank car rates over the last 18 months due to the unprecedented demand for the cars."
•"Apart from the national security argument, some tanker analysts said that the high demand for Jones Act tankers is also supported by better economics and practicality when compared with pipelines."
FICTION: The Jones Act is making it harder for refiners to make a profit as they struggle to keep up with surging domestic energy production.
FACT CHECK: Refineries are experiencing record profits by refining cheap domestic crude and selling the gasoline, jet, diesel, and other refined products overseas at better margins.
•"This surge in supply also has lowered costs for refinery operators, simply because domestic crude is less expensive than imported oil. At the same time, Gulf Coast refineries have expanded over the past few years and can increase their volume, keeping prices even lower."
•"Refiners are jumping on the opportunity to increase profits"
FICTION: U.S. shipyards are unable to keep up with the demand for new vessels to transport American energy.
FACT CHECK: Over the past year, U.S. shipyards have entered into hundreds of contracts for new vessels, including the construction of state of the art tankers and barges to help America meet the growing demand from the nation's surge in domestic energy production. Last year, the construction of inland tank barges reached an all-time high with 336 new vessels delivered, totaling more than 8.2 million barrels of capacity, and some 19 large tankers and articulated-tank barges with another combined 6.5 million barrels of capacity.
•"U.S. shipyards are the busiest in almost two decades as surging domestic energy production increases cargoes for the merchant fleet, according to the Department of Transportation."
•"Outside of pipelines, [maritime] is the best way to transport oil if you're a coastal refiner."