incur higher costs to supply the
additional natural gas for export,
these costs are more than offset by
increases in export revenues along
with a wealth transfer from overseas
received in the form of payments for
liquefaction services. The net result
is an increase in U.S. households’
real income and welfare.
“Net benefits to the U.S. economy could be larger if U.S. businesses were to take more of a merchant
role. Based on business models
now being proposed, this study assumes that foreign purchasers take
title to LNG when it is loaded at a
United States port, so that any
profits that could be made by transporting and selling
in importing countries accrue to foreign entities. In the
cases where exports are constrained to maximum per-mitted levels, this business model sacrifices additional
value from LNG exports that could accrue to the
United States,” the study says.
James E. Caponiti, executive director of the
American Maritime Congress, an educational nonprof-
it organization that lobbies on behalf of the U.S.-flag
industry, said the Department of Energy analysis “con-
cludes, under a variety of scenarios, [that] even though
there are winners and losers inside of our economy,
overall — under just about any scenario — it probably
benefits our economy. The cost of energy in the coun-
try might be influenced by exporting, but there are
enough benefits to overcome the downside of higher
energy prices. If there is an export program [for LNG],
and if U.S.-flag ships can be involved in the export, if
there is an export trade, it would be a way to grow our
industry, or to sustain it.”
There is a general consensus among maritime experts
that the U.S. maritime industry, in terms of vessels, is
diminishing — in part because of ship technology that
has allowed for greater productivity with fewer ships.
The U.S. merchant fleet ranks 26th in the world with
about 418 U.S.-flag ships. However, the number does not
include approximately 700 ships flagged in other coun-
tries that are owned by American companies.
The number of U.S.-flag merchant ships — vessels
that carry passenger and cargo between nations and
within the United States — is behind such nations as
Italy, Japan and Russia, whose fleets range from 670 to
1,100, while the Marshall Islands have nearly 1,400
vessels; China, which has more than 2,000; and the
Panamanian merchant fleet, which has more than
6,300 flagged merchant vessels, according to 2010 data
from Australia-based NationMaster.
Historically, the U.S.-flag Merchant Marine fleet and
cadre of skilled mariners have served the nation’s commercial industries in the operation of deep sea merchant
ships, tugboats, towboats, ferries, dredges and excursion
vessels, among other waterborne craft, while also meeting the nation’s defense and security needs worldwide by
transporting essential cargo and supplies to theater.
A forecast of fewer ships, however, does not negate
the need for skilled mariners, said Caponiti.
“You can’t replace the mariners,” he said. “The Mer-
chant Mariners serve the commercial function to operate
a commercial industry, but are also the same people that
drive us into harm’s way when we go to war.”
Tellez is convinced the growing energy sector and
regulatory demands for more environmental efficiency
are spurring across-the-board recapitalization efforts to
meet clean air, emissions and ballast requirements. He
said business is simply busier across all areas of ship-
ping, from tankers and container ships to smaller ves-
sels in the domestic trades, where new ships, tugs,
barges and offshore supply vessels in places like the
Gulf of Mexico are coming online.
Tellez said companies like New Jersey-based TOTE
Inc., and Baltimore-based Crowley Maritime Corp., are
actively operating in the LNG space.
Crowley, through its subsidiary Carib Energy, offers
LNG services that include vessel design and construction, transportation logistics and sales and distribution. Carib Energy is one of the first companies to
receive a small-scale LNG export license from the
Department of Energy to export LNG from the United
States into Free Trade Agreement countries.
“The growth in LNG exploration, extraction and
production in and around the United States is creating
a myriad of opportunities for U.S. companies to provide vessels and supply chain solutions to get gas from
the wellhead to the burner tip,” said Matt Jackson, vice
General Dynamics NASSCO finalized a contract in December to design and
build two liquefied natural gas-powered containerships for TOTE Inc. When
completed, the 764-foot-long containerships are expected to be the largest
ships of any type in the world primarily powered by liquefied natural gas.