Beginning in 2015 and continuing over the next several years, the U.S. Jones Act container ship fleet will welcome a number of new LNG or LNG-ready vessels that will transform our industry into one of the most fuel efficient and environmentally advanced in the world. Construction or conversion of LNG or LNG-ready container ships or conro vessels is already underway for a number of Jones Act trades, including Puerto Rico and Alaska, with other new orders on the way for Hawaii.
Next year, the world’s first LNG-powered container ship will enter the Puerto Rico market. Just as U.S. carriers led the way in the development of containerization in the 20th century, U.S. Jones Act carriers are positioned to establish the nation as a leader in LNG marine operations in the 21st century.
With the emergence of LNG container ships in the U.S. domestic trades, it is logical that the infrastructure necessary to support LNG-powered vessels will develop substantially over the next five years. While there is no shortage of natural gas in the U.S., what is currently unavailable is cost-effective, shoreside liquefaction infrastructure necessary to convert it to LNG and get it onboard the ships. In addition, there are other pieces to the LNG logistics puzzle that have yet to be realized.
In many regards, U.S. carriers have initiated a “build it and they will come” approach. The investments we are making in LNG or LNG-ready vessels are substantial; it is estimated that there is currently $3 billion in orders for LNG or LNG-ready newbuilds at North American shipyards. The confidence of our industry in this undertaking is based largely on the soundness and wisdom of the long-term objective. Everyone appreciates a fuel that reduces carbon and nitrogen emissions and is so readily available. It is important not only to the carriers making the investments, but also to our customers and our communities. The current Jones Act fleet renewal boom will not only modernize the U.S. fleet, it will also propel the industry into a new LNG-based maritime era.
Matt Cox, President and CEO, Matson