The Great American Energy Boom is having a major ripple effect on the
shipbuilding industry, which thanks to a 1920s maritime law, is busier
than it has been in decades. Some ten supertankers are currently under construction at U.S.
shipyards, with orders for another 15 in the pipeline.
That may not seem
like a huge number, but considering there are only about 75 such
tankers plying American ports now, it represents a genuine boat-building
boom. “We haven’t seen something like this since the 1970s,” Matthew
Paxton, president of the Shipbuilders Council of America said to
FoxNews.com. “The movement of more oil has built up a real commercial
shipbuilding renaissance.”
The renaissance comes despite an economy that continues to struggle.
It's because of a specific sector of the U.S. economy that is also
booming: natural gas production. The fuel must be transported, even
within the country, either by rail, pipeline or ship. And if it is by
ship, the ship must be American-made and American-manned, according to
the 1920s Merchant Marine Act, also known as the Jones Act.
Paxton said that it is projected that up to 3.3 million barrels will
be shipped out daily from the Gulf Coast by 2020, destined for ports
along the east and west coasts, causing huge demand for tanker ships.
“It could be higher as more and more tankers are built,” he said.
With record amounts of gas and oil being extracted from shale by the
process of fracking, the U.S. has seen an energy boom in recent years
that has proponents calling it the Saudi Arabia of natural gas. Much of
the fuel is being exported, but most is staying here, being distributed
around the nation for domestic use.
The Aker Philadelphia Shipyard recently announced that it invested a
total of $115 million to construct four tanks and plans to build eight
in total. “The shale revolution is creating industrial opportunities throughout
the United States and specifically here in Philadelphia,” Kristian
Rokke, President & CEO of AKPS, said in a recent statement. “This
strategic opportunity allows us to capitalize on the increased demand
for Jones Act tankers in a way that will transform APSI in the years
ahead.”
Constructing one tanker, which could be more than 600 feet long and
nearly 200 feet wide, can cost upwards of $100 million. Once they are up
and running, the ships more than earn their keep. Transport companies
pay up to $100,000 per day over a five-year contract to lease them.
Currently, the shipping industry contributes $36 billion to the economy. “We need another shipyard or two,” said Bob Flynn, president of
shipbroker MJLF & Associates in Stamford, Conn., at the recent
TradeWinds Jones Act Shipping Forum in New York.
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