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SCA Weekly Report | September 19-23, 2022

Shipbuilders Council of America

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SCA Weekly Report | September 19-23, 2022







Registration for the 2022 SCA Fall Membership Meeting is still open. The meeting will be held at the Warwick Rittenhouse Square in Philadelphia, PA on October 12-13, 2022. Register Here.




The exhibition hall encourages greater interaction between SCA shipyard and partner members, offering the opportunity for members to demonstrate their product or services directly to potential customers.


If you are interested in exhibiting at this event, please review the Exhibitor Packet HERE.




Meeting the New IRA 2022 Apprenticeship Rules May Have Become More Difficult

Politico recently reported that the Department of Labor will publish final regulations on Monday overturning the Trump Administration’s Industry-Recognized Apprenticeship Program (IRAP) that allowed employers to establish their own apprenticeship standards. Instead, government-regulated Registered Apprenticeships will be the standard. Supporters of IRAP say it gave employers the flexibility to determine which skills they needed workers to have. Opponents say IRAP lacked key features like certain quality standards and worker protections. The rules reportedly direct the DOL to work with existing IRAPs and their facilitators to become Registered Apprenticeship program sponsors or intermediaries. 


Note that this development could have a significant effect on the ability of clean energy projects to meet the apprenticeship standards required to qualify for the full 5X energy tax credits. 




Schumer: Senate Will Move NDAA in October

Senate Majority Leader Chuck Schumer (D-NY) said this week that the Senate will be meeting in October to debate the fiscal year 2023 defense authorization bill. “We will be meeting October,” he said during a press conference, adding that the defense authorization bill “will be part of what we do.”


The Senate is expected to convene the week of October 10th to consider the legislation.


Seven Lawmakers Call for 1-Year Jones Act Waiver for Puerto Rico

On Thursday, seven members of Congress, led by Rep. Nydia Velasquez, wrote to DHS Secretary Mayorkas asking him to “provide a one year comprehensive waiver of the Jones Act requirements for Puerto Rico.” The list of signatories includes House Natural Resources Committee Chairman Raul Grijalva. These are largely members with large Puerto Rican populations in their district. A copy of the letter is can be found HERE.


SCA, in coordination with the American Maritime Partnership (AMP), delivered a letter in response, stating that there is no justification for a waiver, and pulled data from the situation reports about the carriage of cargoes to the island. A copy of the AMP letter can be found HERE




Fleet Forces: Ship Repair Delays Increased in 2022 Due to Labor, Material Challenges

More ship maintenance availabilities are running long this year due largely to labor challenges and material issues, the fleet maintenance officer for U.S. Fleet Forces Command said Tuesday.


This comes despite a pair of Navy-run efforts to tackle barriers to on-time maintenance. Rear Adm. Bill Greene said the service currently has 41 surface ships in a major maintenance period, with more than 100 additional in planning.


“For surface ships, we expect to finish 36% on time in [fiscal 2022], there’s just a few days left in the year. And this is versus 44% for last year. So we are going in the wrong direction with regard to on-time delivery,” the admiral said at the American Society of Naval Engineers’ annual Fleet Maintenance and Modernization Symposium.


However, he said, the ships coming out of maintenance late have lost fewer days of operational time. “The cumulative days of maintenance delay, which we also track, have consistently gone down,” Greene said. “In FY20, an 18% reduction, and in ‘21, an 8% reduction. So we are, in a way to say, less late on those late deliveries.”


Greene cited record attrition and said the shipyards are well behind in their hiring plans.


At the Navy’s four public naval shipyards, the workforce is about 1,000 people short, a trend that will continue into FY23.


Although Greene couldn’t provide exact data on private repair yards, which perform maintenance on surface ships, he did say he’s been told all the companies are facing the same shortages: specially skilled trade workers, engineers and IT technicians.


He called this a “national crisis,” saying that car-builders and other manufacturers across the country can’t find enough people to fill these jobs and keep up with workload.


And the Navy is trying to help industry by providing a stable, predictable workload. Naval Sea Systems Command has started issuing some contract bundles for multiple ship availabilities to help companies better plan their resources, and Greene said that could happen more.


RELATED: Chinese Fleet Expansion Pushing U.S. Navy to Catch Up on Maintenance


Next-Generation Attack Subs Will Be Designed With Maintenance In Mind

With its Virginia class of attack submarines suffering from maintenance woes and low operational availability, the U.S. Navy is working to ensure its next attack submarine is easier to sustain, according to the program executive officer for attack submarines.


The Navy has 50 attack submarines, but 18 of those are in maintenance and not available to operational commanders, according to Rear Adm. Jon Rucker.


“That’s too high a number,” he said Sept. 21 at the American Society of Naval Engineers’ annual Fleet Maintenance and Modernization Symposium here. He noted submarine maintenance has faced challenges in planning availabilities, executing the work and keeping sufficient parts and material on hand for the repair periods.


Rucker said PEO Attack Submarines is revisiting the maintenance plan for these Virginia SSNs in the hopes of improving sustainment and that the Navy must take a better approach while designing the SSN(X) next-generation attack submarine to ensure high operational availability and easier sustainment throughout the lifecycle.


Navy Pilot Program to Plug Ships Into Shore-Based Infrastructure in San Diego

The US Navy has entered into a unique agreement with the Port of San Diego that will allow its ships to plug into and pull power from shore-based infrastructure, an arrangement that the Navy says will “provide millions of dollars for further electrification efforts” for both the local military base and the city.


The agreement makes use of an energy credit program, called the “Low Carbon Fuel Standard (LCFS) market” run by the state of California, in which organizations that use large amounts of fossil fuels must either increase their use of “plant-based carbon” or purchase credits to continue using fossil fuels.


For the Navy’s purposes, the service will generate credits with the state’s program by powering its ships while in port using California’s infrastructure, rather than generating power internally onboard the ship. The state will then sell the credits to other entities and use a portion of the funds to finance various energy and utility improvement projects at Naval Base San Diego.


In addition to the project investment for both the military base and the city, the agreement, which was signed on Tuesday in San Diego’s Cesar Chavez Park, aligns with the Biden administration’s executive orders directing all federal agencies to take steps to reduce their carbon emissions.




White House Announces New Goals for Floating Offshore Wind

The White House this week announced a new multi-agency floating offshore wind initiative. Called the Floating Offshore Wind Shot, it will see the administration advance lease areas in deep waters in order to deploy 15 GW of floating offshore wind capacity by 2035. This builds on President Biden’s goal of deploying 30 gigawatts (GW) of offshore wind by 2030, which will be largely met using fixed-bottom offshore wind technology. Additionally, the Floating Offshore Wind Shot includes a goal of reducing the cost of floating offshore wind energy by more than 70%, to $45 per megawatt-hour by 2035.


A White House fact sheet says that achieving this cost target will require focused research, development, and demonstration to catalyze continued cost reductions, with a focus on manufacturing, engineering, and continued increases of offshore wind turbine capacity. Agencies will also continue collaborating to develop the robust domestic supply chain and transmission infrastructure needed to accelerate floating, as well as fixed-bottom, offshore wind.


The fact sheet notes that conventional offshore wind turbines can be secured directly to the sea floor in shallow waters near the East Coast and the Gulf of Mexico. However, deep-water areas that require floating platforms are home to two-thirds of America’s offshore wind energy potential, including along the West Coast and in the Gulf of Maine.




MARAD Administrator Phillips Announces Cargo Preference Compliance Initiatives

MARAD Administrator Ann Phillips last week testified before the Subcommittee on Coast Guard and Maritime Transportation, announcing two initiatives intended to support federal compliance with cargo preference requirements.


Cargo Preference is the general term used to describe the U.S. laws, regulations and policies that require the use of U.S.-flag vessels in the movement of cargo that is owned, procured, furnished, or financed by the U.S. Government. It also includes cargo that is being shipped under an agreement of the U.S. Government, or as part of a Government program. Cargo preference is not only important for national security and defense, but also critical for sustaining and growing American shipping capacity.


Administrator Phillips announced that MARAD will issue a Request for Information to solicit input from all stakeholders on cargo preference requirements. She also announced that MARAD will resume publishing comprehensive federal cargo preference data. Publication of the data is intended to increase interagency efficiency and to provide transparency regarding the movement of government-impelled cargo on both U.S.-flagged and foreign-flagged vessels.


U.S. Plans to Hold Cook Inlet Drilling Auction in December

The Biden administration on Wednesday revealed plans to hold an auction of oil and gas drilling rights for up to 1 million acres in the Cook Inlet off the coast of Alaska in December. The sale is among the concessions to the oil and gas sector included in U.S. President Joe Biden's new climate change law, the Inflation Reduction Act (IRA).


Biden paused drilling auctions on federal lands and waters shortly after taking office as part of an agenda to fight climate change. But Senator Joe Manchin, a Democrat who represents the coal-producing state of West Virginia, demanded protections on federal leasing in exchange for his support for the IRA.


According to documents, the Bureau of Ocean Energy Management will publicly announce bids received on Dec. 30, the day before the legislation's deadline to hold the sale. BOEM will offer up to 224 blocks, the agency said, in water depths from 33 to 260 feet. It is considering removing 17 blocks that overlap with beluga whale and sea otter habitats.


Earlier this year and before passage of the IRA, the administration scrapped a planned Cook Inlet sale, citing a lack of industry interest in the area.


St. Johns Ship Building Begins Construction on Jones Act Crew Transfer Vessels for Offshore Wind Market

Jones Act shipbuilder, St. Johns Ship Building, has started construction on the first vessel in a series of crew transfer vessels for Rhode Island-based Atlantic Wind Transfers (AWT). AWT placed the order back in August for six Jones Act-compliant, 24-meter aluminum catamarans that will service domestic offshore wind projects during construction, operations, and maintenance phases.




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