Growing American Shipping Act of 2014

Mr. Speaker, on December 10th, I was proud to bear witness to the passage, under Unanimous Consent, of the House and Senate compromise language for the Coast Guard and Maritime Transportation Reauthorization Act of 2014. S. 2444, the culmination of months of hard work and diligent analysis by Coast Guard Subcommittee Chairman Duncan Hunter, House Transportation and Infrastructure Committee Chairman Bill Shuster, Ranking Member Nick Rahall, Senator Rockefeller, Senator Thune, myself, and our staff, is a beacon of the thoughtful compromise and responsible lawmaking we hope to see more of in the coming years.

Notably, S. 2444 contains a provision to ensure that our commitment to U.S. maritime is maintained as America considers the possible exportation of liquefied natural gas (LNG). Existing law, written before the natural gas boom when America was forecasted to be an LNG importer, authorizes the Secretary of Transportation to develop and implement a program to promote the transportation of imported LNG on U.S.-flag vessels. Under the Deepwater Ports Act, the Secretary is also required to give top priority to the processing of licenses for LNG import facilities that will utilize U.S.-flag vessels. S. 2444 includes language from H.R. 5270, the Growing American Shipping Act, to modernize these laws. LNG exports will now be included in the program to promote the use of U.S.-flag vessels in the carriage of LNG, and the Secretary will be required to give priority processing to export applications for deepwater port terminals that would utilize U.S.-flag vessels.

The U.S. shipbuilding industry and U.S. natural gas market are strategic national assets essential to U.S. national security interests. Shipbuilding is critical to the growth and flow of our economy, and to our ability to control the safety and security of the global supply chain. It is also essential to the United States Navy, which relies on a select few remaining shipyards for the construction of new ships and the repair and refitting of existing ships. Despite this importance, our foreign trade fleet has declined from 1,200 ships in the 1950s to less than 100 today, and despite having pioneered gas tanker technology, America no longer manufactures LNG tanker ships. To transport LNG by sea, the world must rely on China, Japan, and South Korea to build the requisite tankers.

Further decline of the U.S. shipbuilding industrial base will continue to erode competitive bidding among shipyards, both for commercial builds and for Navy shipbuilding needs, thus compromising efforts to reduce the deficit and balance the national budget. It will also result in the further loss of marine engineering expertise, preventing the adoption and utilization of the same cutting edge ship construction technologies used by our foreign competitors. Furthermore, tens of thousands of American jobs, both inside shipyards and throughout the U.S. supply chain, depend on the strength of the maritime industry.

The decline of the shipbuilding industry threatens another strategic national asset in reducing key personnel. The U.S. Merchant Marine is a highly trained, militarily-useful labor force, and American merchant sailors are the foundation of our marine transportation system. Further attrition of the Merchant Marine threatens American security because our nation relies on this secure source of labor for the movement of supplies and military cargo and personnel. The explosive nature of LNG strengthens the need to ensure that the transport of LNG, especially through U.S. ports, is done by U.S. seafarers, and not foreign crews that come with an increased potential for sabotage.

The export of LNG is projected to slowly ramp up over the next two or three years and will then quickly accelerate over the next decade or more. This will allow both time and a stable, long-term market demand, which--if given the correct incentives--could spur the U.S. shipbuilding industry to re-tool its infrastructure and processes to ramp up the production of domestic tankers, paving the way for production of vessels for export of this strategic national asset. It is in the U.S. national interest to utilize the emerging LNG coastwise and export trades to provide reliable, long-term markets for U.S. commercial shipbuilding and for U.S.-flag operators, to expand and increase the U.S. shipbuilding industrial base, and to use LNG export trade to strengthen U.S. strategic interests and alliances with LNG trading partners.

Therefore, it is the purpose of this law to enhance the national security and port safety of the United States by encouraging to the maximum extent practicable the transport of LNG on U.S.-built and -flag vessels. This law aims to maintain the technological ability of the United States shipbuilding industry to build and repair vessels for the Navy and the Coast Guard by maintaining the critical industrial infrastructure and skilled human workforce necessary to build such vessels. Further, this law promotes American job creation by encouraging domestic shipbuilding and the use of U.S. mariners in the transport of American LNG.

This provision of the Coast Guard and Maritime Transportation Act of 2014 is supported by the Maritime Trades Department (AFL-CIO); the Seafarers International Union (AFL-CIO); the Transportation Institute; the Shipbuilders Council; the Navy League of the United States; the American Maritime Officers; the Marine Engineers' Beneficial Association (MEBA); the International Association of Masters, Mates and Pilots (MM&P); the Maritime Institute for Research and Industrial Development (MIRAID); the Marine Firemen's Union, Metal Trades Department (AFL-CIO); the Sailors' Union of the Pacific; the American Maritime Officers Service; and the American Maritime Congress. I thank these organizations for their commitment to national security, a strong maritime industry, and the creation of good American jobs so vital to the economic prosperity and future of this nation.