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SCA Weekly Report | September 30 - October 4, 2019

Shipbuilders Council of America

20 F Street NW, Suite 500

Washington, DC 20001



SCA Weekly Report | October 14 - 18, 2019




This is a reminder to complete and return the CR survey that SCA has distributed. In order to go to Capitol Hill and explain how detrimental a CR would be to the shipyard industry, we need you to provide us with data to back up our message.


Congressional Leaders are discussing the possibility of an additional short term continuing resolution (CR) that would run through the end of December and the White House has proposed a year-long CR with some potential for anomalies, meaning some itemized exceptions, to fund defense programs for the entire fiscal year. 


The survey can be downloaded HERE >


Please return the survey to Paula Zorensky by no later than next Friday, October 25, 2019.




Terry O'Brien


Shipbuilders Council of America

I want to thank everyone that attended the 2019 SCA Fall Membership Meeting last week in Newport News, VA. It was the highest attended fall meeting for SCA. Thanks for taking the time to join us – it was a great event.


A special thanks to Jennifer Boykin and Mitch Waldman from HII. We are grateful to have had the opportunity to tour Newport News Shipbuilding and for the insights you both provided!! Thanks to everyone at HII that made it possible.


Thanks to the effort of the SCA Board and the Partners Committee, much work was accomplished at the meeting: restructuring and approving a new set of bylaws to position ourselves well into the future, and passing the 2020 Budget (maybe our elected representatives in Congress will take notice!). There is much work to be done - we are continuing to work on policy issues from workforce development, to cybersecurity, and more, in order to ensure that the entire shipyard industrial base is protected.


Thank you again for making last week’s meeting so successful, and have a safe weekend.






Congressman Elijah Cummings Passes Away

U.S. Rep. Elijah Cummings of Baltimore, a committee chairman known for his devotion to Baltimore and civil rights and for blunt and passionate speechmaking, died of longstanding health problems early Thursday morning, his office said. He was 68 years old. Cummings, a long-time supporter of the Jones Act, had not participated in a roll call vote since September 11. The Democrat, a key figure in the impeachment inquiry into President Donald Trump as chairman of the House Oversight and Reform Committee, died at Gilchrist Hospice Care at approximately 2:45 A.M., a spokeswoman said. Read more HERE.


House Appropriations Committee Chair Announces Retirement

Congresswoman Nita Lowey (D-NY), Chairwoman of the House Appropriations Committee, announced last week that she will not seek reelection in 2020.  The New York Democrat was the first woman to lead the powerful committee. Lowey was first elected to her suburban New York City district in 1988. She chaired the Democratic Congressional Campaign Committee for the 2002 cycle, the first woman to do so. Lowey’s retirement has set off a race for who will hold the gavel next; Reps. Marcy Kaptur (D-OH) and Rosa DeLauro (D-CT) have already announced their declarations to run for the seat. 




Navy to Publish Solicitation for Unmanned Vehicle Designed for Mine Countermeasures

The Navy this week announced it plans to issue a draft “build-to-print solicitation” to produce an unmanned surface vessel focused on mine countermeasures in the coming months. The Pentagon last year approved the Mine Countermeasure Unmanned Surface Vehicle program. The Navy's initial plans are to equip Textron's Common Unmanned Surface Vehicle with the AQS-20C and AQS-24B mine-hunting sonar systems, according to Capt. Pete Small, the Navy program manager overseeing most of the service's unmanned efforts. MCM USV is one of several solicitations in various stages of development concerning unmanned and autonomous efforts. Other solicitations for unmanned programs being developed or circulated to industry include Medium and Large USVs as well as Medium and Large Unmanned Undersea vehicles.




Acting Homeland Security Secretary Resigns

In a Friday October 11 tweet, the President announced that his acting Department of Homeland Security Secretary Keven McAleenan would be resigning effective immediately. McAleenan's departure comes amid a rolling leadership shake-up at the department. Six other top department officials have resigned or been pushed out since April, including former Secretary Kirstjen Nielsen. McAleenan — who held the role after Nielsen’s departure — oversaw a recent reduction in the number of migrants caught at the southwest border, a measure used to estimate illegal crossings. Still, he faced criticism from Trump allies inside and outside the administration, who argued he was not sufficiently committed to the president’s immigration agenda.


Energy Secretary To Resign by Year End

Secretary of Energy Rick Perry plans to leave his position at the end of the year, President Trump confirmed to reporters Thursday in Fort Worth, Texas. Trump said that Perry's resignation didn't come as a surprise and that he has considered leaving for six months because "he's got some very big plans." Perry, 69, is one of Trump's original Cabinet members and recently has emerged as a central figure in the impeachment inquiry of Trump. While Perry's name is making headlines now because of the Ukraine scandal, he had a long political career before becoming energy secretary. For just over 14 years, he was governor of Texas, the longest-serving governor of the state. He was elected lieutenant governor in 1998 and succeeded George W. Bush when he resigned to become president. Perry twice ran for president and on the campaign trail vowed to eliminate the agency he would come to lead — although, he famously forgot the name of the Department of Energy during a 2011 debate. 




New NSA Cyber Directorate Will Focus First on the Defense Industrial Base

NSA Director Lt. Gen. Paul Nakasone said the agency's new Cybersecurity Directorate will initially focus on protecting the U.S. defense industrial base and weapons systems from foreign digital threats. "We must better protect our nation’s advantage in the defense sector from intellectual property theft," Nakasone, who is also head of U.S. Cyber Command, said today in a speech at FireEye's Cyber Defense Summit in Washington, D.C.,. The effort means the directorate, which opened for business last week, will be "working closely" with industry and the firms that provide their cybersecurity, he said. The country's defense industrial base has been rocked by a series of high-profile breaches in recent years. The attacks by China and others have prompted DoD to launch an array of efforts to secure its sprawling supply chain and led at least the Navy to conduct a thorough self-examination of its digital defenses.





Interior Clarifies OCS Renewable Energy Regulatory Role

Earlier this week, the Department of the Interior announced steps to ensure workplace safety on outer continental shelf renewable energy facilities. The new policy clarifies that DOI will act as the principal federal agency for the regulation and enforcement of safety and health requirements for OCS renewable energy facilities. DOI will continue to collaborate with the Occupational Safety and Health Administration and the Coast Guard to share relevant safety and training information and promote safety on the OCS.


DOE Approves LNG Exports from Louisiana Project

The U.S. Department of Energy issued an order this week to Venture Global Plaquemines LNG approving exports of domestically produced LNG from its Plaquemines LNG project. The project will be located on the Mississippi River in Plaquemines Parish, LA, approximately 20 miles from the Port of New Orleans. Under the order, Plaquemines LNG will have authority to export up to 3.4 billion cubic feet per day of LNG from the proposed project. Plaquemines LNG is authorized to export this LNG by oceangoing vessel to any country with which the U.S. does not have a free trade agreement requiring national treatment for trade in natural gas, and with which trade is not prohibited by U.S. law or policy.


VT Halter Launches LNG ATB Barge

In November 2017, New Orleans-based Q-LNG Transport awarded a contract to VT Halter Marine to build a first-of-its-kind liquid natural gas articulated tug/barge unit. Last week, the 4,000-cubic ATB barge Q-LNG 4000, was launched from the docks of VT Halter. The new ATB is scheduled for delivery in the first quarter next year and will work under a 15-year contract for Shell, delivering LNG fuel to various ports in Florida and the Caribbean.




Reuters: Satellite Images Reveal China’s Aircraft Carrier ‘Factory’

A report out by Reuters this week contains high-resolution satellite images that show the construction of China’s first full-sized aircraft carrier is progressing steadily alongside expansive infrastructure work that analysts say suggests the ship will be the first of several large vessels produced at the site. According to experts from CSIS, the latest images appeared to confirm the earlier photos, which suggested the latest Chinese-built carrier would be somewhat smaller the 100,000-tonne “supercarriers” operated by the U.S. but larger than France’s 42,500-tonne Charles de Gaulle. Read the full story HERE




The Jones Act turns 100

WorkBoat – David Krapf – 7 October 2019

WorkBoat published an article on the 100th anniversary of the Jones Act covering both sides of the argument. SCA President Matthew Paxton was quoted saying, “People who understand the law, understand its value. If you didn’t have the Jones Act, you’d have to invent it — to police our waterways, to police our coastline.” At the end of his article, the reporter, David Krapf, made a note encouraging readers to email him at dkrapf@divcom.com with any thoughts on the 100-year-old Jones Act. We encourage you to reach out with positive examples of the Jones Act at work from your respective companies and associations. 


Support for the Jones Act

WorkBoat – Shane Clark – 10 October 2019

I have been working on ships for almost 19 years and hold a USCG ETO (electro technical officer) endorsement. Most of my career has been spent on pipeLay and heavy lift type vessels. Since 2008, I have noticed considerable difficulties for U.S. workers to find jobs in the Gulf of Mexico even though I constantly see job ads on LinkedIn. But most requests are for crew already holding B-1 OCS visas (granted to non-U.S. citizens that work on foreign-owned or -operated vessels located in the Outer Continental Shelf). There seems to be no limit to how many jobs in the offshore construction industry that are being lost, because they are being awarded to foreign companies with almost entirely foreign crews because it is cheaper. I support the Jones Act and hope that it can be strengthened to bring back the offshore jobs to U.S. mariners.


Puerto Rico Needs More Than Debt Restructuring

Bloomberg – 15 October 2019

Arriving in the midst of hurricane season, Puerto Rico’s new debt restructuring plan is a small ray of sunshine. But even if the proposal prevails in court — a big “if” — the territory’s prospects aren’t bright. The federal oversight board aims to squeeze $35 billion in debt and other liabilities to $12 billion, and to reduce more than $50 billion in unfunded pension liabilities by means of benefit cuts and other measures. The overall approach is right. But the bankruptcy court must approve the plan, and litigation by holdout creditors is all but certain.

Lawmakers should support employment by extending the earned income tax credit to the island’s workers; encouraging the island’s government to make it easier to start and operate businesses; and exempting Puerto Rico from the Jones Act, the law that forces the use of U.S.-built, -owned and -crewed ships for mainland commerce. Underlining the absurdity of that last impediment, Puerto Rico will take delivery this month of liquefied natural gas from Siberia — because the U.S. has no Jones Act-qualified LNG carriers.


How the Jones Act Harms America

Hoover Institution – David Henderson – 7 October 2019

What law contributes to the congestion that we see on major U.S. highways, especially on both coasts? What law not only raises the cost of shipping goods within the United States but also creates extra carbon dioxide? The answer to these questions is the Jones Act. The law, whose official title is the Merchant Marine Act of 1920, is named after Wesley Jones, the Republican Senator from Washington who introduced the law that year. It does for cargo what the Passenger Vessel Services Act does to passengers. Specifically, it imposes a four-part test for cargo to be shipped by water between two U.S. ports. The ships must be (1) U.S.-owned, (2) crewed by Americans, (3) registered in the United States, and (4) built in the United States.




Vigor Acquisition and Merger Completed

Global investment firm The Carlyle Group and private equity firm Stellex Capital Management announced yesterday it had completed the acquisition and merger of shipbuilder Vigor Industrial and MHI. The merger creates a bicoastal company involved in ship repair services and commercial and defense-related fabrication services. Key customers include the Navy, Coast Guard, Military Sealift Command, Boeing, cruise lines, fishing fleets, barges and ferry services, and other key commercial and defense customers.


Overturned Golden Ray to be cut up in place in St. Simons Sound

Officials overseeing the salvage of the overturned Golden Ray in Brunswick, Georgia have opted to dismantle the vessel in place in lieu of refloating it due to environmental concerns. The new plan will inevitably ensure the timeline for removing the vessel will be measured in months, if not longer. The Unified Command says experts engaged in the response have determined that it is not possible to safely right and refloat the vessel in a fully intact condition.


Port of Seattle Teams with WeWork to Launch Maritime Startup Accelerator

The Port of Seattle has teamed up with coworking firm WeWork to launch Washington State’s first maritime startup accelerator to help budding maritime companies innovate and grow. The accelerator aims to advance three key strategies, including helping maritime companies innovate and grow, establishing Washington as a global leader in maritime innovation, and increasing the sustainability of maritime businesses in both Seattle and beyond. Funded by the Port of Seattle and a grant from the Washington State Department of Commerce, the maritime accelerator, officially named Maritime Blue Innovation Accelerator, will be housed and supported by WeWork Labs in Seattle.



If you have any questions, please do not hesitate to contact Paula Zorensky on the SCA staff.