Shipbuilding

Energizing American Shipbuilding Act of 2019

  • 1.  Energizing American Shipbuilding Act of 2019

    Posted 07-23-2019 09:50
    H.R. 3829


    On Jul 18, 2019, Rep. John Garamendi (D-CA) introduced H.R. 3829, "To require a certain percentage of natural gas and crude oil exports be transported on United States-built and United States-flag vessels".

    The "Energizing American Shipbuilding Act of 2019" would require an increasing amount of Liquified Natural Gas (LNG) to be transported on LNG tankers built in the United States.  Beginning 7 years after the date of enactment of this legislation 2 percent of the LNG transported from the U.S. each year would have to be transported on these vessels.  The amount would grow to 15% in the calendar 22 years after the date of enactment of this Act.  The bill also details the types of components of the ship that would have to be built in the United States.

    H.R. 3829 would also require a percentage of crude oil exported from the United States to be carried on U.S.-flag tankers built in the United States.  The initial requirement is 6% of crude oil exported by vessel in the 8th year after the date of enactment of this Act.  The requirement would grow to 10% in the 14th year after the date of enactment of this Act.

    The 1947 General Agreement on Tariffs and Trade prohibited counties, including the United States, from enacting new "domestic manufacturing restrictions" – including in the shipbuilding sector.  The Jones Act was exempted as it was written in 1947 from this restriction since it already had been enacted with a U.S. build requirement.  There are concerns that H.R. 3829 violates the 1947 GATT agreement and the potential fallout that could result from that violation.

    To follow the status of this legislation click on this link: HR3829STATUS. To read the text of the legislation, click on this link: HR3829TEXT