SCA Weekly Report | October 3-7, 2022

Shipbuilders Council of America

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Washington, DC 20001

www.shipbuildersusa.org

SCA Weekly Report | October 3-7, 2022

ANNOUNCEMENTS

**Please note that there will not be a SCA Weekly Report next Friday due to the 2022 SCA Fall Membership Meeting**

Add Your Voice in Support of AOWFA

The American Offshore Worker Fairness Act (AOFWA) would require foreign vessels to utilize either U.S. mariners or citizens of the vessel’s home country while operating in offshore energy activities in U.S. waters.

This would change the current practice where foreign vessels utilize crew members from low-wage countries at day rates no American would or should accept. This unfair practice gives foreign vessels a competitive advantage over U.S. vessels and takes jobs away from American mariners.

Closing this loophole will greatly assist American mariners and U.S. companies participating in both the offshore oil and gas and offshore wind industries. The legislation further reduces the cost disparity between U.S.-flagged and foreign-flagged vessels by:

1. Requiring foreign mariners working in the U.S. offshore energy markets secure a Transportation Worker Identification Credential (TWIC). Current regulations allow such mariners the option to secure a TWIC while U.S. mariners are required to secure and hold a valid TWIC.
2. Limiting the number of visas that can be issued for each foreign vessel operating in U.S. waters and takes steps to ensure that these visas are connected to the mariner’s work on that vessel.
3. Requiring each foreign vessel in U.S. offshore energy markets to prove their ownership structure annually.
4. Requiring the U.S. Coast Guard to annually inspect foreign-flagged vessels operating in U.S. offshore energy markets to ensure compliance with these changes.

CLICK HERE to send a letter of support for AOWFA to your Congressional Delegation

EXECUTIVE BRANCH NEWS

DOD Reprograms $700M As Fuel Costs Rise

Congress has granted the Defense Department authority to reprogram $700 million to pay for increases in the cost of fuel, according to a new Pentagon budget document.

The funds, which are being made available from DOD's foreign currency fluctuations account, will be transferred to the Defense Logistics Agency. “The Defense Logistics Agency has experienced cash losses caused by significant increases in prices for refined fuel products above the Standard Fuel Price budgeted for these products,” the reprogramming document states. Congress approved a separate fuel reprogramming earlier this year for $969 million.

NAVY NEWS

CRS Report: Navy Force Structure and Shipbuilding Plans: Background and Issues for Congress (October 3, 2022)

Report: US Marines Warn Against Navy’s FY24 Decommission Plans

Briefings obtained by Defense News suggest that the Marine Corps is pushing back against Navy’s FY24 plans to decommission four Whidbey Island-class amphibious dock landing ships (LSDs): Rushmore, Harpers Ferry, Carter Hall and Pearl Harbor, each of which will be between 26 to 33 years old. Congress has previously denied a similar request this year for four different LSDs. 

The gap between the Navy and the Marine Corps over amphibious warfare mirrors a similar debate taking place between the Pentagon and Congress: How much should the military spend on precision missiles and sensors needed for a potential high-end fight with China, and how much money should go toward presence and deterrence efforts that could avoid that fight altogether?

But the Navy, facing a tight budget and large bills to restore these amphibious ships, would rather cut its losses and reinvest the money into creating a larger and more sophisticated inventory of weapons to win a potential fight against China.

According to a FY24 Navy budget memo obtained by Defense News, “these legacy ships are in poor material condition due to their age and require significant resources to continue to maintain and operate them. Shifting resources to other capabilities better supports the amphibious fleet, and provides more operational capability to the Navy and Marine Corps in support of the National Defense Strategy.”

The Navy doesn’t have cost estimates for the second batch of ships eyed for FY24 decommissioning. It never planned to perform maintenance on these ships, according to the second document, instead simply assuming it would be able to decommission them early.

“The substantial cost to retain these ships outweighs the potential warfighting contributions of these platforms over their limited remaining service life,” the document stated.

If the Navy executed its current plans, its class of 12 amphibious dock landing ships would likely be gone by FY25. Two are decommissioned already; four were requested to be decommissioned early in FY23; four could be requested to be decommissioned early in FY24; and the Navy would likely eye FY25 for an early decommissioning of the two remaining ships.

The Navy also announced in its FY23 budget request it wants to buy one last San Antonio-class amphibious transport dock and then pause or end the class. That means the service would buy just three amphibious transport docks to replace all the amphibious dock landing ships.

This would leave the Navy-Marine team five amphibious transport docks short of its minimum requirement, as outlined in a recent amphibious warship requirement study.

OFFSHORE WIND NEWS

U.S. Companies Partner to Explore Gulf of Mexico Offshore Wind Potential

Entergy Louisiana, Entergy New Orleans, and Diamond Offshore Wind have signed a Memorandum of Understanding (MoU) regarding the evaluation and potential early development of offshore wind in the Gulf of Mexico. The MoU provides a legal framework for Entergy and Diamond Offshore Wind to work toward the potential development of offshore wind demonstration projects located in Louisiana state waters.

Under the agreement, the partners will focus, in the near term, on the evaluation of grid interconnection to determine the optimal size and locations of future offshore wind development. “Clean and affordable power is a driver of economic growth, resulting in increased investments and good paying, green jobs in our communities”, said Deanna Rodriguez, Entergy New Orleans President and CEO.

Earlier this year, Louisiana Governor John Bel Edwards introduced the Louisiana Climate Action Plan, the first for the state, which offered a series of recommendations that could lead Louisiana to achieve net-zero greenhouse gas emissions by 2050.

IN THE NEWS

White House Reportedly Considering Lifting the Oil Exports Ban

White House officials have asked the US Energy Department to analyze the possible impacts of a ban on exports of gasoline, diesel, and other refined petroleum products, an indication that the controversial idea is gaining traction in some parts of the Biden administration. The request follows a tense meeting between top administration officials and oil industry executives and comes amid growing concern that high gasoline prices pose a political threat to Democrats in the November elections, according to people familiar with the discussions.

An export ban would mark the most radical step yet by the Biden administration to tackle gasoline prices that surged over the summer and have risen again recently, just four weeks before midterm elections that will decide whether Democrats maintain control of the House and Senate. Oil producers and energy analysts have criticized the idea, saying it could backfire by ultimately raising costs even more for US consumers, while disrupting markets and cutting off European allies in their time of need.

Administration officials have grown increasingly frustrated with what they see as a lack of action by industry in response to repeated warnings about low fuel inventories. Energy Department officials have been meeting with leaders from the West Coast, East Coast and Midwest to examine regional concerns.

Hackers Maintained Deep Access Inside Military Organization's Network, U.S. Officials Reveal

U.S. cybersecurity, law enforcement, and intelligence officials revealed on Tuesday that sophisticated hackers infiltrated a likely U.S. military contractor and maintained “persistent, long-term” access to their system.

The National Security Agency, the Cybersecurity and Infrastructure Security Agency and the FBI released a detailed, joint advisory containing the notification, explaining that in November 2021 CISA responded to a report of malicious activity on an anonymous “Defense Industrial Base (DIB) Sector organization’s enterprise network.” CISA uncovered a likely compromise, and said that some of the intruders had “long-term access to the environment.” After breaking in, officials said, hackers leveraged an open-source toolkit known as Impacket to “programmatically” construct and manipulate network protocols.

Impacket is a collection of Python libraries that “plug into applications like vulnerability scanners, allowing them to work with Windows network protocols,” Katie Nickels, director of threat intelligence at Red Canary, said via email. Hackers favor Impacket because it helps them retrieve credentials, issue commands and deliver malware onto systems, she said.

All American Marine Awarded Contract for Alaska Tour Vessel

All American Marine (AAM) has been awarded a contract to build a high-speed, long-range, eco-tour vessel for Phillips Cruises and Tours. The vessel will operate in Whittier, Alaska, upon completion. The vessel will be built in AAM’s facility on Bellingham Bay and is scheduled for delivery by May 1, 2024. The new passenger vessel will add to the Phillips Cruises fleet of boats that operate in Prince William Sound on daily sightseeing tours.

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