Wednesday, June 16, 2010

Cabotage and the GOM

If there is one thing that merchant mariners will agree on it is that the Jones Act has helped preserve careers for tens of thousands of professional mariners on board ships flagged in the United States. This cabotage law has maintained generations of mariners while supporting the few remaining commercial ship yards in America.

A piece of legislation written into the Merchant Marine Act of 1920, it stipulates that any cargo carried between one U.S. port and another, including Hawaii, Alaska and Puerto Rico, must be carried on board a vessel constructed and registered in the United States and crewed my American Merchant seaman. The companies, ships, tug boats, training institutions and skilled mariners needed to fulfill domestic commerce are often touted by proponents of the act as a valuable component for national security in time of conflict and crisis.

Often controversial, as any protectionist law with a union bias is, many of the legislation's loudest opponents are American shipping corporations who flag their fleets over seas. Other critics include smaller companies that might like to flag ships in the U.S. but could not afford to build them domestically and foreign shipping companies who would like a piece of the coastal tanker trade. And of course lets not forget the consumers of Hawaii and Puerto Rico who pay exorbitant prices at the grocery store for goods which could be carried for cheaper on a ship flagged in Monrovia with a crew of Indonesians than a Lykes or Matson Lines container ship.

Lately there has been a lot of talk about the Jone's Act affecting the pace of the clean up in the Gulf of Mexico. It has been asserted in some media outlets that the Jones Act may be to blame for the reluctance to employ foreign skimmers in the cleanup. While substantial resources have been offered from other maritime nations the use of these large oil spill response vessels has been much less than the situation seems to warrant frustrating many people including myself.

Today the National Incident Commander and former Commandant of the Coast Guard, Adm. Thad Allen issued the following statement: “While we have not seen any need to waive the Jones Act as part of this historic response, we continue to prepare for all possible scenarios,” said Admiral Allen. “Should any waivers be needed, we are prepared to process them as quickly as possible to allow vital spill response activities being undertaken by foreign-flagged vessels to continue without delay.”

When I first read about this new vilification of the Jones Act it seemed almost comical. To say that the Jones Act is preventing a quicker cleanup of a mess left by the offshore oil and gas industry, one of the biggest loop holes there is to the Jones Act, seemed ridiculous. All of the Transocean Drill Ships trying to stem the flow of oil ARE foreign flagged vessels so why would skimmers present a problem? (Formerly a company based in the US but now relocated to Switzerland, Transocean registers their vessels in the Marshal Islands, a nation in which I happen to be an STCW licensed officer)

Besides the entire oil and gas exploratory drill fleet the gulf is also home to several tankers that do nothing but lighter oil from bigger Ultra Large Crude Oil Tankers and take it to American refineries. This doesn't even require a loophole since the origin of the oil is from overseas. Still, it's a foreign flagged ship operating exclusively within the EEZ.

Additionally last September Customs and Border Protection declined to issue a revised ruling which could have positively affected hundreds of the now idle offshore support vessels in the Gulf of Mexico. The ruling, if it had been passed, would have prohibited foreign vessels operating in support roles in the gulf not involving the direct transport of goods from shore. American registered Seismic, repair and installation vessels would have seen an unprecedented demand for work. Not having enough boats available was one of the arguments against the revision.

With all of this going on it seems laughable that the Jones Act could substantially impede the clean up beyond the issuance of a waiver which Admiral Allen is ready to grant if deemed necessary. While utilizing whatever means necessary to deal with this disaster is fine with me it's the pace with which were using foreign assets that is troubling.

After hurricane Katrina I spent two months working as a third mate on a relief vessel operated by the Maritime Administration. During that time I saw dysfunction at every level of government. The entire system from the Parishes to the State to the Fed were failing to adequately address the severity of the situation.

Jones Act waivers were granted to several ships, the most conspicuous of which were two Carnival Cruise liners docked downtown and meant to house local emergency responders. Throughout the two months the word on the street was that neither ship was used at over 10 percent capacity and that as soon as the New Orleans Police found out that the swimming pools and 24 hour buffet weren't going to be open they boogied to better quarters, in mostly stolen cars.

That was a case where a Jones Act waiver was obviously unnecessary and unwise and maybe a little too good to be true for Carnival. As far as the Gulf of Mexico not having a fleet of Dutch skimmers enroute is a sign of dysfunction in this response. There may all ready be 15 foregin vessels involved but 150 might work a little better. Unfortunately for the poor folks down south last night's decisiveness is looking more and more like it's too little two months too late.

1 comment:

  1. Beyond being "protectionism" of the sort economists frown upon, the Jones act is an extension of lessons drawn from history regarding the treatment of mariners, recognition that the interests of owners and crew are often at variance with one another.

    Policy is a substitute for individual judgment, often frustrating because even as policy works to avoid situations arising from poor thinking skills it also can inhibit individual initiative.

    Here's a story that should not have taken place in the 21st century, illustrating what happens when too much trust is placed in the good judgment of individuals, when faith in personal decision making is substituted for collective wisdom. Be sure to read the extended narrative in this Australian Transport Safety Bureau report on a ship left adrift with its crew thanks to a tragicomedy of errors at all levels spanning from the flag state through shipbuilder all the way down to the 3rd Engineer:

    Regulations are annoying but necessary in this world of imperfect people and conflicting objectives. I don't think the scenario described by the ATSB could ever, ever happen on an American flagged vessel.