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SCA Weekly Report | October 21 - 25, 2019

Shipbuilders Council of America

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SCA Weekly Report | October 21 - 25, 2019




Matthew Paxton


Shipbuilders Council of America

Earlier this week, the unveiling of Senator Ted Stevens’ (R-AK) portrait took place in the Old Senate Chamber with friends and family from around the country in attendance.


Senator Stevens was not only a great mentor and friend to me, but he was also a major supporter of the U.S. maritime industry. I encourage you all to read the linked article below, and thank Boysie Bollinger for his contribution towards the portrait.


READ MORE: Senator Ted Stevens Portrait unveiled in Nation’s Capitol


Thank you,





Senate Tees Up Minibus Spending Package; Hopes it Precedes Bigger Deal

The Senate this week voted to advance a minibus package of non-controversial spending bills. The minibus is made up of four spending bills that fund the Agriculture, Commerce, Justice, Science, Interior-Environment, Housing and Urban Development and Transportation departments. Senate Appropriations Chairman Richard Shelby (R-AL) said he would like to start talks in earnest with House Appropriations Chair Nita Lowey (D-NY) on top-line allocations for all 12 spending bills shortly after the Senate passes its four-bill package.


Even if the Senate passes the measure easily, its likely headed nowhere in the House, at least not until the two chambers can agree to top-line spending allocations. Negotiations have been stalled as Lowey and Shelby negotiate because Shelby must also receive sign-off from the White House on the agreement. The House and Senate remain at odds over authority and funding related to the border wall.


Shelby Discusses CR Extension Through March

As conversations on spending bills between the House and Senate stall, Senate Appropriations Chairman Richard Shelby (R-AL) this week suggested that lawmakers were considering how to extend the current Continuing Resolution to “late February or March.” The idea of a long stopgap, running the government roughly halfway through the fiscal year on autopilot, is a reflection of how slow lawmakers have been to start bicameral spending talks on funding levels for the fiscal year that began on October 1st. Lawmakers would miss out on a $22 billion increase for defense funding and a $24.5 billion increase for nondefense discretionary if a stopgap were to run throughout all of fiscal 2020.


RELATED: Politico: Thornberry Makes New Plea for Full Year Pentagon Funding 


Inhofe To Unveil “Skinny NDAA” Next Week

Senate Armed Services Chairman Jim Inhofe (R-OK) announced this week that he will roll out a slimmed-down version of the National Defense Authorization Act (NDAA) next week in case House and Senate negotiators can’t agree on a compromise bill by the end of the year. Inhofe has said that the “skinny” bill would only renew a series of pay and benefits and other Pentagon authorities set to expire at the end of December. House Armed Services Chairman Adam Smith (D-WA) rejected the idea saying, “any bill that does not restrict wall funding would be challenging to bring to the House floor.”


Navy Testifies on Ship Maintenance Before House Armed Services Committee

Navy Acquisition Executive Hondo Geurts and Vice Chief Admiral Moore were grilled by the House Armed Services Committee this week in a hearing on ship and submarine maintenance and other shipbuilding problems. The committee criticized the Navy for neglecting maintenance even as the service is working to grow the Fleet to meet the 355-ship policy. Reps. John Garamendi (D-CA) and Elaine Luria (D-VA) were especially forceful in their questioning and heavily criticized the delays in the Ford-class aircraft carrier program. The questioning spurred a defense from Secretary of the Navy Richard Spencer who defended the Navy’s acquisition process. 




Navy Commander of Submarine Forces Tapped for STRATCOM

Vice Admiral Charles Richard, the Navy’s top officer overseeing submarine forces has been nominated to receive a fourth star and become the new head of U.S. strategic command (STRATCOM). Richard previously served as STRATCOM’s deputy commander as well as the Navy’s director for submarine warfare requirements (N97). During his nomination hearing before the Senate Armed Services Committee this week, Richard discussed the need to put money toward the nuclear triad. In his testimony he said, “there are only so many times that you can take a piece of high-strength steel tubing [and] subject it to the great pressures of submergence.”


Navy Drafting Acquisition Guidance for Additive Manufacturing  

The Navy has been drafting a contracting and acquisition guide for additive manufacturing that it planned to publish last month and implement across the Pentagon. An October 17 DoD IG report summarizes the Pentagon’s efforts to incorporate additive manufacturing for sustaining vehicle and weapon parts. 




CBP Releases Notice for Proposed Modification and Revocation of Letter Rulings relating to the application of the Jones Act

On Wednesday, Customs and Border Protection (CBP) issued a notice for proposed modification and revocation of letter rulings relating to the application of the Jones Act to the transportation of certain merchandise and equipment between points on the outer continental shelf in the U.S. EEZ.  If the comment and review period hold as planned, CBP will finalize the proposed modifications and revocations by December 23 and those changes would become effective roughly 60 days thereafter. Read the notification HERE >


Lord: Pentagon is ‘On the Brink’ of Acquisition Transformation

Pentagon acquisition chief Ellen Lord said her office is set to unveil in December “the most transformational acquisition policy change we’ve seen in decades.” Known as the Adaptive Acquisition Framework, the new policy will be a clean-sheet re-write of lengthy acquisition regulations known as DOD Instruction 5000.02. Lord said the upcoming guidance document, known as 5000 S.A. will be “orders of magnitude smaller” than what is now in place.


Trump to Nominate Dan Brouillette as Energy Secretary

In a tweet over the weekend, President Trump announced that he will nominate Deputy Secretary of Energy Dan Brouillette to replace Rick Perry in the agency’s top job. Perry has told the president he plans to exit the job by the end of the year. Brouillette has been at DOE since August 2017 and previously served as a lobbyist for Ford. 





Offshore Wind to Become $1 Trillion Industry, IEA Says

Offshore wind could become a cornerstone of the world’s power supply as steep cost reductions and improved technology unleash the potential of the green energy source, said the International Energy Agency (IEA). Based on current and proposed policies, capacity is set to increase 15-fold over the next two decades, turning it into a $1-trillion business, according to the IEA.


New York Finalizes Nation’s Largest Offshore Wind Contracts to Date

New York has finalized contracts for two offshore wind projects that will generate a combined 1,700 megawatts of renewable energy for the state. New York Governor Andrew M. Cuomo announced this week the New York State Energy Research and Development Authority has finalized contracts with Equinor Wind US LLC for its 816 megawatt Empire Wind Project and Sunrise Wind LLC for its 880 megawatt Sunrise Wind Project. The wind farms will help Governor Cuomo achieve his “Green New Deal” goal of having 9,000 megawatts of offshore wind off New York by 2035.




DeFazio Responds to Yet Another Attack on the Jones Act by the Trump Administration

The House Committee on Transportation & Infrastructure – 23 October 2019

The Chair of the House Committee on Transportation and Infrastructure Peter DeFazio (D-OR) responded to the Customs and Border Patrol (CBP) announcement of a “Customs Bulletin Notice” that will modify and revoke certain rulings that affect the application of the Jones Act to offshore oil and gas production. “While I applaud the U.S. Customs and Border Protection for concluding their decade long process, I have very serious concerns about new determinations on the application of the Jones Act to the offshore oil and gas industry,” said DeFazio. “To be clear, any Administrative action or determination that serves to weaken the Jones Act is unacceptable. As I continue to work through the “Customs Bulletin Notice” to understand the full scope of its effect on the Jones Act, I urge CBP to reconsider any ruling that undermines the American shipping industry.”


Why Is an Energy Powerhouse Importing Russian LNG?

Cato – Colin Grabow – 23 October 2019

In the coming days a Spanish-flagged ship, the Catalunya Spirit, will deliver a shipment of Russia-originated liquefied natural gas (LNG) to Puerto Rico. Bizarrely, the United States—a leading exporter of LNG—is nonetheless importing it from a geopolitical rival. And this isn’t a first. Last year a supply of Russian LNG arrived in Boston amidst a spike in demand to fight off the winter cold. The gross inefficiencies wrought by the Jones Act would be laughable were they not so serious.


Jones Act Reduces Water Trade Between US States

Hawaii Free Press – 20 October 2019

While other countries also place limitations on international vessels, the U.S. is ranked as having the most restrictive maritime transport industry among all OECD countries. Critics argue that the Jones Act is a form of protectionism that impedes domestic trade and increases prices. The Act has been politically controversial, especially during recent hurricanes when the U.S. has temporarily waived these restrictions. The need for these waivers raises questions about whether the Jones Act has successfully maintained a domestic fleet capable of assisting in times.




Northstar Marine adds Two OSVs to its Fleet

Northstar Marine has added two offshore supply vessels to its fleet. Both vessels can accommodate a wide variety of services. The Commander carries deck cargo of up to 1,300 tons and the Independence carries up to 400 tons. Both vessels are equipped with DP-2 dynamic positioning systems for precise station-keeping in high winds and strong seas. This capability is critical to many scientific, construction and salvage projects.


Marine Insurers Call for Action to Address Containership Fires

The International Union of Marine Insurance says it’s time to take action to address an alarming number of containership fires occurring in 2019. So far this year, the containership industry has seen a number of fires. IUMI is now calling for additional support from flag administrations and other stakeholders to bring this issue to IMO’s agenda in 2020.


Elliott Bay to Design Hybrid-electric Ferry for Washington State

Elliott Bay Design Group has announced that it has been chosen to provide functional design for the new hybrid-electric Olympic-class ferries for Washington State Ferries (WSF). The ferries will operate on all-battery power during crossings or can revert to a hybrid, diesel-electric propulsion. Battery recharging will typically occur dockside at the terminals during offloading/loading procedures. The first vessel is expected to be the largest newbuild battery-powered ferry in North America. 



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