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THE FUTURE OF THE JONES ACT TANK VESSEL FLEET

THE FUTURE OF THE JONES ACT TANK VESSEL FLEET. HENRY S. MARCUS. Research Conducted for Double-Hull Tanker Legislation: An Assessment of the Oil Pollution Act of 1990, Marine Board, 1997. Key Issues. Supply of Tankers & Barges Demand Crude Oil Product Substituted Services

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THE FUTURE OF THE JONES ACT TANK VESSEL FLEET

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  1. THE FUTURE OF THE JONES ACT TANK VESSEL FLEET HENRY S. MARCUS Research Conducted for Double-Hull Tanker Legislation: An Assessment of the Oil Pollution Act of 1990, Marine Board, 1997

  2. Key Issues • Supply of Tankers & Barges • Demand • Crude Oil • Product • Substituted Services • Oil Pollution Act of 1990 • Politics/Public Policy

  3. Supply • Tankers: Crude Oil • 28 Single Hull > 50K DWT (Out of 48) 19 < 25 years • Tankers: Product • 41 Single Hull < 50K DWT (Out of 67) 20 < 25 years • Barges • 1 Single Hull > 50K DWT (Out of 1) 1 < 25 years • 73 Single Hull < 50K DWT (Out of 105) 56 < 25 years

  4. Demand • Crude Oil • Declining Alaskan Production • Export in U.S.-Flag Ships • New Drilling? • Product • U.S. Gulf to U.S. Northeast • Seasonal • Pipelines • Imports • Lightering/Intra-port • Barges

  5. Impact Of Oil Pollution Act of 1990 • Construction of Double Hull Tank Vessels • Operation of Double Hull Tank Vessels • Retirement of Single Hull Tank Vessels: • For > 30,000 GRT: At age 23 In 2000 • For 15 < 30,000 GRT: At age 25 in 2005 • For 5 < 15,000 GRT: At age 25 in 2005

  6. Impacts of OPA 90 • One Extreme • All SH Tank Vessels Replaced with DH when required • Other Extreme • No SH Tank Vessels Replaced Due to Lack of Economic Demand • Higher Probability • Few Additional Crude Oil Tanker Replaced • Crunch Within 5 years • Few (9) Product Tankers Replaced • Substitutes Used • Barges Replaced as Needed

  7. Public Policy Issues/Politics • If All SH Replaced, Huge Cost • If No Additional SH Replaced, Most of Industry Wiped Out (10 years early) • Possible Jones Act Waivers • Future of Jones Act • Replacement of Tankers with Barges • Reduction in Active Seafarers • Role of Domestic Trade in U.S. Merchant Marine Policy

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