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OFFSHORE MARINE SERVICE ASSOCIATION FALL CONFERENCE

Remarks Prepared for

Mark H. Buzby

Maritime Administrator

Offshore Marine Service Association Fall Conference

Wednesday, November 6, 2019

 

Good afternoon. Thank you, Aaron [Smith, President OMSA] for that kind introduction.

 

It’s a pleasure to be with you to discuss the work we’re doing at the Maritime Administration to strengthen the American maritime industry.

 

I also bring the greetings of U.S. Secretary of Transportation Elaine L. Chao. We couldn’t have a better champion of U.S. maritime than Secretary Chao and her leadership comes at a critical time for our industry.

 

Now, I know the topics that are very much on Aaron’s mind and the minds of OMSA members and all Americans who care deeply about the future of the U.S. maritime industry. So, I’ll just make my views crystal clear right up front:

 

I fervently support the Jones Act. It is the fundamental cornerstone of our Nation’s maritime policy, and has been for the past 99 years. As I have testified before Congress on many occasions, without it, our domestic maritime industry afloat and ashore would fold. It is a critical element of our national security.

 

The Jones Act helps maintains America’s shipbuilding capacity, supporting over 125 shipyards and repair facilities. In addition, the Jones Act supports 100 large ocean-going ships, 1,800 offshore vessels, and roughly another 39,000 smaller vessels in our domestic service—all built and repaired by American workers—with a collective 73.8 million tons of cargo capacity. It’s an American jobs machine, resulting in $54.0 Billion in U.S. economic output and supporting the employment of nearly 650,000 Americans.

 

Now, opponents of the Jones Act have been out in force. There have been many op-eds written lately—one by the Wall Street Journal on Monday as a matter of fact—much of them slanted and based on long debunked falsehoods or poorly researched data. So, as I make my rounds speaking to maritime leaders across the country, I am stating my view—loud and clear: the Jones Act is essential for America’s national and economic security, and I’m not going to stand by and allow it to be weakened or repealed: not on my watch.

 

I also want to thank OMSA for your efforts in defending the Jones Act. You’ve done a great job keeping an eye on activities on the Outer Continental Shelf and educating government agencies that enforce the Act. We also deeply appreciate your willingness to work with us to promote the use of offshore service vessels for FEMA disaster recovery efforts.

 

I am also aware of your concerns about how our agency has calculated the number of mariners available for sealift and whether they include some of OMSA’s terrific citizen mariners. We hear you. And we want to get it right. So, we’ve had some discussions to that end earlier today and we’ll keep up that dialogue to resolve the issue.

 

I think we share the view that America’s maritime heritage is essential if we’re to remain strong at home and abroad.

 

Our great Nation was of course founded as a maritime nation. As a young, coastal power, the ability to defend our shores and to trade among the States and internationally were essential to our protection and our growth.

 

But, throughout our history, we’ve allowed our naval and commercial power to wax and wane. When challenges arose, we would rush to rebuild our strength at sea, only to allow it to wither again as threats passed.

 

That’s problematic because, as famed naval strategist Alfred Thayer Mahan observed: “control of the sea, by maritime commerce and naval supremacy together, means predominant influence in the world.”

 

I believe that Mahan’s words remain true: global influence is tied to the strength of both our Navy and the U.S.-flag commercial fleet. It is about protecting this great Nation, our allies and interests; it is also about controlling our trade to grow our economy, to develop our natural resources, as OMSA members do, and to support American jobs.

 

The U.S. Merchant Marine performs a unique mission: military sealift. As you know, my RRF ships, which provide initial surge sealift, are crewed by volunteer, civilian mariners. We could not effectively deploy our forces to defend this Nation without them, including citizen mariners in the offshore energy industry.

 

I have confidence in our Merchant Marine to get the job done. But I have concerns when it comes to the vessels of the RRF, which average more than 44-years old. Congress has recently gotten this issue on its scope and, with the Navy’s recapitalization strategy, we believe we can get the RRF where it needs to be. But the pace is too slow; that does need to be addressed.

 

By any measure, the United States Navy is unmatched – number 1 in the world. But that’s only half of Admiral Mahan’s sea power equation. The other half is that commercial fleet. And it is not where it needs to be.

 

In fact, of the more than 40,000 large, ocean-going merchant ships of all nations currently sailing internationally, only 82 are U.S.-flag ships. That puts us at number 22 in the world.

 

Fewer U.S.-flag ships mean fewer mariner jobs, and fewer trained mariners for sealift. Plain and simple, we need more ships, and we need more mariners to sail them.

 

Taken together, the MSP stipend to enrolled vessels and our cargo preference laws help out. And, of course, preserving the Jones Act is central to any U.S. maritime strategy. Thankfully, we’re seeing several developments on which domestic operators can capitalize.

 

As this group knows well, developments in the energy sector can also be a boon for Jones Act shipping—but only if we protect the Jones Act.

 

We know that offshore oil and gas development supports thousands of good jobs here on the Gulf. In addition, natural gas as a domestic fuel source is helping to spark shipbuilding here on the Gulf coast and on the Great Lakes. Natural gas as a maritime fuel is creating new opportunities; I know of several projects that are just about ready to go forward. There is growing demand for domestic bunkering and carriage of LNG.

 

And then there is the wind energy industry that is about to burst onto the scene along the U.S. East coast bringing with it a likely surge in Jones Act support vessels.

 

But our global competitors see opportunities in these developments as well. And they’d love to get in on it. That is why defending the domestic trading ships in the Jones Act remains critical. As we’re developing new energy resources for America, we should ensure that American mariners and other workers reap the benefits.

 

America’s Marine Highways are another area of progress and innovative ideas. With a growing population and our roads and rail at capacity, short sea shipping makes a lot of sense and is another way that we can boost the industry and mariner jobs. We recently announced several new Marine Highway designations that are now eligible for federal funding. And we’re putting our federal dollars to work on other areas of maritime infrastructure, too.

 

We recently made a new commitment to shoreside infrastructure with a Port Infrastructure Development Program that should deliver nearly $300 million of new grant funding to help strengthen, modernize, and improve our country’s maritime systems and gateway ports. We hope to announce those grants in December.

 

We also moved out the door nearly $20 million in grants to support capital improvements at 28 U.S. small shipyards as a part of the small shipyard grant program.[1] That’s an investment in the more than 400,000 Americans whose jobs are supported by our small shipyards.

 

And no issue is more central to the future of this industry than its future workforce. The attention we’re paying to maritime education—from Kings Point and our state academies, to the local community college that are training welders, shipwrights, and deck crewmen, to the maritime high schools that are sparking a young person’s love for the sea—is critical for a strong America today and well into the future.

 

I am tremendously proud that we’re making much needed new infrastructure investments at the 76-year old U.S Merchant Marine Academy, and investing in replacement training vessels for our state maritime academies, the most visible evidence of which is the National Security Multi-Mission Vessel, or NSMV.

 

The NSMV is big news and a long time coming. We’ve been working on replacing our aging state academy ships for more than a decade. We now have two ships fully funded. Our construction manager, TOTE Service, Inc is closing in on selecting a shipyard. And it looks like Congress just might fund a third vessel. That would mean nearly a billion dollars in three new, U.S.-built, Jones Act-compliant ships that can serve our state academies well into the future to help prepare our next generation of deck officers and engineers. And we’ll keep pressing to replace all of these aging training ships.

 

I can’t help but think that these investments by the Administration and by Congress are a bipartisan endorsement of the importance of a strong merchant marine. It also illustrates that our advocacy for this industry pays dividends. The work pays off, which is why we’re keeping at it.

 

So, it is an exciting time in the industry, with lots of potential. You can trust that I – and all my shipmates at that Maritime Administration – are leaning into the challenges to help to grow the U.S. maritime industry and to protect the Nation to the best of our abilities. Thank you.

 

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Updated: Tuesday, November 12, 2019