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Lawmaker wants US-China trade deal to include LNG shipping requirement

Rep. John Garamendi (right) explaining export proposal on March 25. Photo: John Gallagher/FreightWaves

Any commitment by China to buy more American oil and liquefied natural gas (LNG) as part of a new trade deal between the two countries should require that a small percentage of that cargo be moved on U.S.-built ships, according to a U.S. lawmaker.

John Garamendi, a Democrat from California and a member of the U.S. House Transportation & Infrastructure Committee, said during a panel session in Washington, D.C., on March 25 that such a requirement would not only help revitalize the commercial maritime industry in the United States but would boost the country’s national defense readiness.

“The way things are headed, we will probably offer China more of our natural gas and oil in exchange for something,” Garamendi said. “We don’t know what that is yet, but something I would like is to have that oil and LNG shipped on U.S.-built ships with American mariners. Which is precisely what China, India and now Russia are doing” with their energy exports, he said.

The panel, “Securing maritime commerce: The U.S. strategic outlook,” held at the Brookings Institution, looked at several issues facing the U.S. maritime industry, including the lack of a U.S. presence in the Arctic, how climate change is affecting sea levels and port infrastructure, and a debate on the need for the Jones Act, a law designed to protect U.S. domestic shipping.

Also participating in the discussion were Vice Admiral Daniel Abel of the U.S. Coast Guard, Jennifer Carpenter, executive vice president of the American Waterways Operators, and Lt. General Todd Semonite of the U.S. Army Corps of Engineers.

Garamendi said that a bill he introduced in the U.S. House last year (which was not taken up but that he plans to reintroduce this year) called the “Energizing America’s Shipbuilding Act” would go a long way to revitalize the U.S. shipping industry, which he said is losing out to other countries. A companion bill was also introduced last year in the Senate.

Garamendi’s bill requires a minimum of one percent of crude oil exported by vessel each year to be on U.S. vessels starting in 2023, increasing annually up to a minimum of 10 percent by 2032. Starting in 2024, it requires a minimum of two percent of LNG exported on U.S. vessels, up to a minimum of 15 percent by 2040. The proposal also requires U.S. mariners to be trained to work on oil tankers and LNG vessels.

“We are now becoming a major exporter of a critical national asset, called oil and natural gas,” Garamendi said. “If we marry that national security imperative to our military and shipbuilding, and just take a small percentage of that fuel that’s exported and put it on U.S.-built ships, we can build 50 ships over the next 10 years, with U.S. mariners crewing them.”

John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.