Birthplace of USS New Jersey Saved by Shale Production
May 29, 2014
Blooomberg
The shale boom and the Jones Act are saving shipbuilding at the 213-year-old Philadelphia Navy Yard.
On a part of the grounds now operated by Aker ASA (AKER), workers apply a coat of gray paint to the deck of a new 800,000-barrel oil tanker in one dock. The hull of another tanker sits in the adjacent berth. Blue sparks fly from welding torches in the warehouse-sized shop where workers assemble sections known as grand blocks. Blue-green sheets of steel that will make up the skeleton of future ships are piled throughout the yard.
“Less than three years ago, you would have seen an empty dock, empty building dock, no grand blocks lying around and practically empty production halls,” Kristian Rokke, the shipyard’s executive chairman, said during an April 25 oil tanker christening ceremony at the shipyard. “Many were starting to say that we might not make it.”
Instead, the company has tripled employment, created a $978 million, four-year order backlog and seen its share price quadruple in the past year. U.S. shipyards are enjoying a surge of demand to build vessels to transport the record amounts of shale oil being drilled in the fields of Texas and North Dakota. Federal law bans most oil exports and the Merchant Marine Act of 1920, known as the Jones Act, restricts shipments within the U.S. to American-built vessels.