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Lifting the oil export ban will mean bad news for US mariners

Mar 23, 2016 03:41 PM

In retaliation for assisting Israel militarily after it was attacked, in 1973 the oil-producing countries of the Middle East imposed an oil embargo against the United States. Soon afterward, held hostage by our dependence upon foreign oil, our country began to feel the effects. Gasoline prices rose 300 percent in one year. President Nixon’s administration implemented mandatory gas rationing, as supplies became so scarce that one out of every five gas stations in the U.S. had no gas to sell. In response to this oil crisis, Congress passed the Energy Policy and Conservation Act. Designed to protect the nation from unscrupulous oil-producing countries and to improve energy independence, one key aspect of the legislation was a ban on the exportation of U.S. crude oil. 

The ban on shipping domestic oil overseas was widely hailed, the common wisdom being that it would be foolhardy to ship our oil overseas when the U.S. was already short of the petroleum it needed. As it turned out, the ban was not only good for our national energy security but for the economy as well. Hundreds of thousands of U.S. citizens working in oil refineries and shipyards, driving trucks, on commercial vessels and in many other related industries found gainful employment as a result. Because domestically produced crude oil could not be shipped overseas, the Jones Act (Merchant Marine Act of 1920) required that it be carried on American-flag vessels. So, when Alaskan North Slope crude oil began being pumped through the 800-mile pipeline from the oil field near Prudhoe Bay to the marine loading terminal at Valdez in 1977, the result was a shipping boom for U.S.-flag coastwise tankers.

Although I started my seagoing career working on tugs, I took advantage of the increase in tanker jobs after visiting an old friend of mine from the California Maritime Academy. Dave was the second mate on a 969-foot crude oil carrier docked at a refinery in Anacortes, Wash., not too far from where I live. He greeted me when I came aboard and, while having a cup of coffee together in the mess deck, told me how there were over 2 million barrels (84 million gallons) of North Slope crude being pumped through the Trans-Alaska Pipeline System (TAPS) to the Valdez Marine Terminal each day. “Now’s the time to make the switch, Kelly, the coastwise crude oil tanker trade is where the jobs are.” He was right. The following year I found work as a third mate on the bridge of an 890-foot crude oil tanker, running between Alaska and a refinery at Richmond, Calif.

My first trip on that crude oil tanker confirmed what Dave had said: Coastwise shipping was booming. During the work tour, I was impressed by how many U.S.-flag ships we passed on the TAPS run — each one employing American mariners such as myself — and was thankful for the role the crude oil export ban played in creating those jobs. On a bitterly cold and clear day in the Gulf of Alaska, however, I first became aware that the crude oil export ban wasn’t as “leak-proof” as I thought it was. 

On board a Panamax crude oil tanker en route to Valdez, I had been tracking what was obviously a large vessel fine to port bearing down on us. Calling on VHF Channel 16 to make meeting arrangements, I was surprised when a mate with a British accent answered, “Eastern Lion, come in please.” Twenty minutes later I was watching the 1,000-foot fully loaded crude oil tanker pass by on our port side. I found out that Eastern Lion was one of a number of flag-of-convenience (FOC) Liberian-registered tankers running Alaska crude to a refinery at St. Croix, U.S. Virgin Islands, a territory of the United States. Having skirted the provisions of the domestic crude oil ban by exploiting a legal loophole that in 1954 made the Virgin Islands exempt from the Jones Act, by the time the Prudhoe Bay fields hit peak output in the late 1980s close to 10 percent of the North Slope crude pumped was being shipped on foreign bottoms to the refinery at St. Croix. Although the Virgin Islands legal loophole resulted in the loss of hundreds, if not thousands, of American jobs, U.S. government elected officials never did anything to stop it.  

In 1995, with more than enough votes to override a presidential veto if necessary, the Republican majority in Congress voted to remove the restriction on the export of Alaskan North Slope crude. After it was signed into law, no longer did the oil from Alaska have to be shipped to U.S. states and territories. With no requirement that it had to be transported on U.S.-flag vessels, it wasn’t long before FOC tankers with foreign crews were running North Slope crude from Valdez to Korea, Japan and other countries in the Far East, taking away oil that should have gone to our domestic needs and jobs from American workers.

Late in 2015, touting it as a “big win,” the Republican-controlled Congress passed legislation to completely eliminate the crude oil export ban. Now all U.S. crude, not just from Alaska but from anywhere in the country, can be shipped directly overseas on FOC tankers — vessels not held to the high U.S. Coast Guard standards and employing few, if any, U.S. merchant mariners. Two weeks after the crude oil export ban was lifted, an FOC Bahamas-registered tanker with no U.S. citizens in the crew left Corpus Christi, Texas, bound for a refinery in Europe with a load of light Texas crude. The siphoning off of our oil to foreign interests has begun.

Even if we used all the oil we produce here in the U.S., it would not be nearly enough for our domestic needs. That’s why many Americans think it makes no sense to export our crude oil to other countries, when we still have to import approximately 7.7 million barrels (323 million gallons) a day to meet the domestic demand. The majority in Congress has given certain multinational oil corporations, who lobbied heavily to have the ban removed, just what they wanted — but in my opinion sold the rest of us “down the river.” I encourage you to check to see how your representative and senators voted on the ending the ban and take that in consideration on Election Day, Nov. 8, 2016. 

Till next time, I wish you all smooth sailin.’

Kelly Sweeney holds the licenses of master (oceans, any gross tons) and master of towing vessels (oceans), and regularly sails on a wide variety of commercial vessels. He lives on an island near Seattle. You can contact him at captsweeney@professionalmariner.com.

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