There are no LNG tankers that meet the proposed, and now deleted, guidelines. A U.S. shipyard last built an LNG tanker in 1980. (Source: Shutterstock)
The Office of the U.S. Trade Representative (USTR) announced June 9 that it would not implement an ambitious plan that resulted in heavy criticism from the LNG industry.
“USTR has determined to propose eliminating the term providing for suspension of export licenses … in order to allay concerns about the provision’s impact on the U.S. LNG sector,” the office said in a statement.
The Center for LNG (CLNG), an industry advocacy group, called the move “a step in the right direction.”
“This update provides more certainty for project developers to continue to expand the many benefits of U.S. LNG exports, and we look forward to working with the administration to further grow the role U.S. LNG plays in the global energy system,” said Charlie Riedl, executive director of the group, in a statement.
In April, the Office of the Trade Representative released a proposed rule requiring 1% of U.S. LNG cargoes to be sent on U.S.-owned and crewed vessels by 2028. The next year, the tankers would have needed to be U.S. made, owned and crewed. By 2047, the percentage would have risen to 15%.
Violations of the proposed rules could have resulted in the suspension of trade licenses for LNG exporters.
There are no LNG tankers that meet the proposed, and now deleted, guidelines. A U.S. shipyard last built an LNG tanker in 1980. The tanker was scrapped in 2021, according to a report from Maritime Executive.
One new law was left in place. The U.S. is proposing a rule that requires ship operators to report the amount of LNG carried on foreign-made tankers. The new regulations are now in a comment period that closes July 7.
When the rules were proposed in April, the White House said the aim was to spur a surge in U.S. shipbuilding in one of the most technically challenging sectors of the market. The growth of LNG has caused a production bottleneck at the shipyards in Korea and China where the majority of ships are assembled today. The waiting time for a new LNG tanker in China can be four or more years.
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