Bill would let LNG ships into Jones Act trade

   It’s been a long time since wind and commercial shipping had much to do with each other, but the U.S. fleet looks to get some additional ships as a result of a provision contained in the America’s Cup Act of 2011, a bill that sailed through Congress last week–approved by the House in a 387-2 vote and by the Senate through unanimous consent.
   The main purpose of the bill was to exempt vessels competing in and supporting the race from the Jones Act, which generally prevents foreign built, registered or crewed ships from moving people along the coasts of the U.S. So, for example, the bills passed last week say vessels supporting the race will be allowed to “position competing vessels and may transport individuals and equipment and supplies utilized for the staging, operations, or broadcast of the competition from and around the ports in the United States.”
   Companies planning to cash in on the race–say carrying spectators–need not worry as the law does not exempt boats that carry more than 25 people or ferries or boats that carry merchandise coastwise.
   The bill comes just in time. The next America’s Cup race is not to be held in San Francisco until September 2013, but a whole series of preliminary matches are being held around the world and began this summer. This coming weekend, the next race in the so called “America’s Cup World Series” will be held in San Diego, with competitors sailing smaller versions of the 72 foot wing sail catamarans that will compete in two years in San Francisco Bay.
   A provision tacked onto the bill that has nothing to do with the race will allow three ships–the LNG Gemini, LNG Leo and LNG Virgo–to enter the coastwise domestic trade.
   These ships were three of eight gas carriers built by General Dynamics in its Quincy, Mass. shipyard in 1978 and 1979.
   For decades they operated as U.S.-flag ships, employing American mariners, moving natural gas from Indonesia to Japan–a rare instance of American seafarers crewing ships in a cross trade. A General Dynamics subsidiary, American Overseas Marine, retained ownership of the ships, but chartered them to BGT. In recent years the ships were reflagged in the Marshall Islands and traded globally, operated by the German firm Pronav.
    Normally ships that are flagged out are not allowed to enter the Jones Act trades, even if they were built in the U.S. and transfer to the U.S. registry and employ U.S. seafarers.
   The Allentown Morning Call newspaper said that Sen. Pat Toomey R-Pa. threatened to hold up the America’s Cup bill unless Congress granted a waiver to allow the ships to transport gas in the domestic trade.
    If last week’s bill is signed by President Obama, the three LNG carriers will be allowed to enter the coastal trade, creating more than 30 jobs on each ship.
    Robert Hamilton, a spokesman for General Dynamics, says the ships only need minor modifications and will be able to operate for another decade. He said negotiations to find an operator are still underway.
    The ships would be used to transport ethane from a terminal on the Delaware River to chemical plants on the Gulf Coast which would convert it into ethylene, a feedstock that is used to make all sorts of chemicals and plastics.
   Thomas Golembeski, a spokesman for Sunoco Logistics Partners (which is partly owned by Sunoco) said his company is planning to build a pipeline with a partnership between two other companies–MarkWest Energy Partners and The Energy & Minerals Group. The project will deliver ethane that has been removed from natural gas and natural gas liquids being extracted from the Marcellus Shale in formation in Western Pennsylvania, West Virginia, or Eastern Ohio.
   One of the two congressmen voting against the bill was Cedric Richmond, D-La., who has been working to help keep the Avondale Shipyard open and to help it secure commercial work.
   Richmond was one of the speakers at a “Save our Shipyard” rally last month organized by workers trying to keep the New Orleans shipyard open. Another speaker at the same rally was Percy Pyne IV, one of the backers of American Feeder Lines, a company that wants to operate container ships between U.S. coastal ports and build them in the U.S.