Exporting LNG: Are U.S. Mariners Included?

The United States will soon be in the business of exporting liquid natural gas.  This LNG will be exported on foreign flagged and foreign-crewed tankers, therein making a significant profit for foreign owned companies. U.S. tankers and U.S. crews will not be part of this process absent direct involvement from the Obama Administration. The Administration has indicated that it may support U.S. flag fleet participation but more must be done to ensure that U.S. vessels and crews are employed.

During a recent hearing before the House Transportation and Infrastructure Coast Guard and Maritime Infrastructure, Deputy Secretary Porcari told Chairman Hunter and Ranking Member Garamendi that future jobs for U.S. mariners will be found in the energy sector.  He did not give the members a plan on how mariners will be used and instead stated that “we need to get there”.  The lack of details was troubling to many in the audience as the Administration did not use U.S. vessels and crews during the recent release of the Strategic Petroleum Reserve and there is no indication of how the Administration will do so to move future energy shipments.

Employing U.S. mariners to transport LNG and other energy products is not a new idea.  Former Maritime Administrator Sean Connaughton, a Bush era political appointee, approved several offshore LNG facility siting applications. His approval was contingent upon the applicant's employing U.S. mariners aboard vessels used to service the facilities. Administrator Connaughton called the employment practice a “sound public policy” and commended the companies for complying with the U.S. crewing arrangements.

Sadly, the Obama Administration has not adopted the same clear standard.  The Department of Energy Office of Fossil Energy recently received a comment requesting that the Department condition its approval of an LNG export application to the use of U.S. mariners.  DOE declined to do so stating that the request had “far-reaching consequences,” “inadequate support,” and lacked an analysis of “the consistency of such a requirement with trade policy and law.”

Congress provided specific direction to the executive branch about the use of U.S. LNG tankers in 2006.  Section 304 of the Coast Guard and Maritime Transportation Act of 2006 tasks the Secretary of Transportation with “develop(ing) and implement(ing) a program to promote the transportation of liquid natural gas to the United States on United States flag vessels.”  Then Maritime Administrator Connaughton used this authority to put U.S. crews on LNG import vessels and the Obama Administration could use the same authority for exportation.

The placement of U.S. crews aboard LNG export vessels will involve multiple agencies and departments. These entities include the Maritime Administration, the Coast Guard, the Federal Energy Regulatory Commission, and the Department of Energy.  Each of these entities has its own policies and procedures. Their procedures will all need to be updated if the overarching Administration's policy, as stated by Deputy Secretary Porcari, is to place U.S. mariners aboard vessels transporting U.S. energy products.

A comprehensive plan to utilize U.S. mariners and vessels must be finalized in the next couple of months. The Administration is currently reviewing over 20 applications for LNG export facilities and the crewing and vessel requirements must be in place before the applications are approved.  Applicants will strenuously object to any extra requirements that are placed upon them after formal approval is given. The Administration was criticized for not requiring U.S. crews and mariners before approving SPR contracts several years ago.  Hopefully, the Administration has learned that it must definitively act before the ink is dry. 

K. Denise Rucker Krepp is a homeland security, transportation, and energy expert who began her career as an active duty Coast Guard officer in 1998. After September 11th, Ms. Krepp was part of the team that created the Transportation Security Administration and the U.S. Department of Homeland Security.