The Offshore Energy Podcast
Offshore energy and ocean innovation in the United States is transforming the way we power our nation. Join our hosts Ian Voparil and Jim Bennett as they discuss current events, innovation, technology, and the future of the offshore energy ecosystem.
With decades of combined experience, these two industry veterans bring a unique blend of expertise, humor, and captivating stories from the high seas of offshore energy innovation.
Whether you’re an industry expert or just starting to learn about offshore energy, The Offshore Energy Podcast provides a platform for meaningful conversation and exploration. Tune in to enhance your understanding and stay updated on the latest advancements in this exciting field.
Let’s embark on this journey together!
The Offshore Energy Podcast
Maritime Backbone: The Vessels Powering Offshore Energy
America's maritime dominance has quietly eroded over decades, with our ocean-going commercial fleet shrinking from nearly 3,000 ships in 1960 to just a few hundred today. Meanwhile, China's fleet has exploded to over 9,000 vessels. This stark contrast sets the stage for our fascinating conversation with Aaron Smith, President of the Offshore Marine Service Association (OMSA; offshoremarine.org), who brings us inside the world of vessels powering our offshore energy sector.
Aaron reveals how the offshore vessel industry began with repurposed shrimp boats and mothballed WWII vessels before evolving into purpose-built technological marvels. Today's offshore service vessels are essentially maritime pickup trucks – delivering everything from construction materials to people, fuel, and supplies to offshore installations. The industry seamlessly supports both traditional oil and gas operations and renewable wind energy development, with many vessels capable of switching between sectors with minimal modifications. Beyond energy production, these capabilities directly impact national security. When Chinese vessels cut undersea telecommunications cables, America needs the capacity to respond.
So how do we grow?
Oil and gas and offshore wind need many of the same things to grow - stable financial and development policy allowing long-term investments in ships and workforce, subsea innovation, and collaboration across dual-use communities of the military and the private sector.
The maritime industry offers exceptional career pathways. Without requiring college degrees, committed workers can rise from entry-level positions to six-figure incomes within six years. This upward mobility represents the American dream in action – with many company owners having started as deckhands themselves.
It's all hands on deck, so let's go!
With all that's going on. I wouldn't be surprised if you missed it, but last week the White House released an executive order restoring America's maritime dominance to address national maritime capacity and capability concerns. It's no secret that US ocean-going commercial and military shipbuilding has atrophied over the last 60 years. In 1960, the American ocean-going fleet had almost 3,000 ships of over 1,000 deadweight tons. Today there are just a few hundred. China, in contrast, has over 9,000 ships of the same size. But what about the fleet supporting offshore energy? Jim and I got a chance to speak with Aaron Smith of AMSA to understand how we got here and how we need to grow next on the Offshore Energy Podcast.
Speaker 1:I'm Jim Bennett and I have over 40 years of experience developing energy in the ocean. I'm Ian Vopero and I've spent the last 20 years developing offshore energy projects around the world, and this is the Offshore Energy Podcast.
Speaker 2:Hey Jim, good morning, how are you? Good morning, Ian, how are you? You ready for another podcast?
Speaker 1:Jim, I noticed you stepped right past how you are, so I'll just say it I'm very concerned about our current trade policies, the financial markets and the impacts all of this is having on everyday people like us. But I'm ready to talk about something more fun, and what better way than spending some time with you and talking about offshore energy?
Speaker 2:huh, I think you got a great point. These market things will certainly go up and down and they're of great concern and there are long-term impacts. But when the ship's got to run and the boat got to sail and that's what we're going to talk about- I love it, jim.
Speaker 1:What a transition. The ships got to run, the boats got to sail and today we are really lucky to have Aaron Smith from AMSA joining us to talk about ship sailing and offshore vessels supporting the maritime industries, particularly around energy. Aaron, how are you? Good morning, I'm doing great. How are you? Gents doing sailing an offshore vessel supporting the maritime industries, particularly around energy.
Speaker 3:Aaron, how are you Good?
Speaker 1:morning I'm doing great. How are you gents doing? Jim and I always banter about the weather. So I'm up here in New England it is still winter, even though we are well into April, and, aaron, I noticed that you are a little lighter dressed than I. I hope the weather is nice where you are.
Speaker 3:I am. I'm calling in from New Orleans. Today it is beautiful, it's 71. Just a great day. Sun is shining, looking forward to getting into festival season. We got French Quarter Fest starting this weekend, going into Jazz Fest after that. It's just really hard to get work in at these times.
Speaker 1:Sounds really good. Les et les bons temps roulés, monsieur. All right, the good times roll. Yeah, aaron, it's great to have you. You know, will you do a little personal introduction? Share with our listeners why you're here, why you think, why it's important to talk about offshore energy and offshore vessels in the United States?
Speaker 3:Well, certainly, certainly. I'll start with the least interesting part about this and talk about myself. I spent 10 years on Capitol Hill, working in mostly transportation and energy policy. During that time, I married a girl from New Orleans and for anyone that's doing that, just know you're, if you do that, you will end up in new Orleans. Regardless of where you find a spouse from new Orleans, you'll end up in new Orleans, um, and so I realized that later and then realized, well, shoot, I got to figure out a way to get, to get down there and to, to you know, have make a living. So, fortunately, I was working for a congressman that had announced his retirement and at the same time, there was a freshman congressman named Jeff Landry who had just won election and he needed a transportation expert, an energy expert, and was able to link up with him expert and energy expert, and was able to link up with him and and just let me tell you that that Jeff Landry is a great guy and he was so much fun to work for. So I spent ended up spending 10 years on Capitol Hill.
Speaker 3:The two I worked for Jeff. I passed more bills and amendments than the other eight combined, and most of that was just on his personality and his just wanting to get stuff done. So unfortunately Jeff lost in Congress. But that opened up some other doors for him and he's now our governor down here in Louisiana. But it also introduced me to the offshore service and supply industry industry. And so when Jeff lost, amsa actually was looking to start up a dynamic positioning operator certification body, and so they put me in charge of that and started that organization, grew that organization and then a few years later they needed a president and so came to me and I've been here about 10 years now, so it's been great. It's been great.
Speaker 1:It sounds great and for listeners OMSA, o-m-s-a Aaron, it stands for.
Speaker 3:Yes, it stands for the Offshore Marine Service Association. We are the trade association for the segment of the US maritime industry engaged in offshore energy. So our organization is 52 years old now, not surprisingly, like most things in Louisiana, officially we are 52 years old. Unofficially we date back to the early 60s and we were founded by the families that founded this industry. These were the guys who took when offshore energy developed. It was kind of an afterthought of, well, how do we get everything out there? And so they took repurposed shrimp boats. They took mothballed World War II vessels and it wasn't until the early 60s that we started purpose building vessels for offshore construction. And the families that started that the Labordes, the Cheramis, the Ogerons, the Candys, the Schwest, the Terrios, the Hilarios Don't worry, there will be a spelling test at the end of this they came together and founded AMSA to support their industry and support their beliefs, and so it's been great. It's an amazing industry to work for. It's so exciting, so interesting. For a boat nerd like me, I love it.
Speaker 2:Well, that's great, aaron. We really appreciate you being here. I would like you to expand a little bit, because our podcast is, of course, ocean Energy, and it's certainly oil and gas, but it's also wind. We focus a lot on wind, and when we focus on wind, we have a tendency to focus on it as an independent kind of separate industry, which it is not at all. So if you could explain a little bit more about what the marine industry is, so that we can get into a discussion of how the two interact and how things are going to develop over time.
Speaker 3:Certainly so. I think we're kind of. You know, when people think about maritime, they think about ships that take things from one point to another. You know international shipping. Or they think about the barges they see on the Mississippi River, the Ohio River, the Illinois Waterway. They think about the barges they see on the Mississippi River, the Ohio River, the Illinois Waterway. They think about those. We're different. You have the brown water on the rivers, the blue water in the shipping.
Speaker 3:We are offshore. What we do is we take everything that is used, consumed or is being built offshore or under the water and we take that out there. So you know, you think about. You know, the way most people recognize our industry is if you think back to the pictures of Deepwater Horizon and you think about the rig that is burning and the vessels that are spraying water on it. Those are my member companies and in fact the vessel that rescued all of the workers who were on the Deepwater Horizon that night was the Damon Bankston. And, kind of interestingly, damon Bankston the man signed OMSSA's Articles of Incorporation. So that is what we do. We are the vessels that take everything offshore for, be it wind or be it oil and gas, we are that link between America and our offshore energy.
Speaker 2:Let me touch on that, because Macondo, of course, is an unfortunate example, but it makes your point about vessels that service and are needed offshore for all kinds of activities, but it's not just emergency activities. You're talking about a huge industry that constantly needs service vessels, all kinds of activities that just to keep it going in the normal sense, as opposed to the unusual situation like we had with Macondo.
Speaker 3:It really is and it's. We are out of sight, out of mind. You know we operate over the horizon and usually the ports we operate out of are not places people go. You know, down here in Louisiana the main port is Port Fouchon. You know we now, with wind, we are in more populous areas and so people are starting to see the vessels that our member companies run and so they're getting some more information about it, but it's still it's not known.
Speaker 3:You know you think about what has to go into a project. You know, if you think about you're drilling a deep water well in 8,000 feet of water well, that means you need 8,000 feet of risers to connect the rig to the ocean floor, and the oil isn't at the ocean floor. The oil is an equal distance down below the seabed. That means you need that much drill pipe and then you need water, you need fuel to make that work, you need people to make that work. Those people need food. All of that has to be taken out and then constructed, and that's what our members do with what are now purpose-built vessels that are amazing technological masterpieces. You know these vessels, at sea state, will hold position within a meter and you're talking about a vessel that's 320 feet long and can sit in eight-foot seas without even moving. It's really like I said, I'm a boat nerd and I love talking about this stuff. It's so interesting.
Speaker 1:Aaron, it's great to have you on. I'm a boat nerd and I love talking about this stuff. It's so interesting. Aaron, it's great to have you on because I'm a boat nerd too, as a former oceanographer as well as an offshore energy developer, so I love it. It's very exciting. You mentioned some of the. Give us a little bit more about the size and scale of the industry in the US. What do we have here domestically? How many vessels or the types of vessels, that kind of thing.
Speaker 3:Yeah, so there are a bunch of different purpose-built vessels that are used in our industry. We also are constantly always converting and repurposing modifying vessels to do different things. Modifying vessels to do different things but our basic platform is called an offshore service vessel or an offshore supply vessel Same thing. Internationally they're called platform supply vessels. Look, I always say don't let boat guys name things, we're just going to create a myriad of different and confusing names. Just call them an OSV.
Speaker 3:This is the pickup truck of the industry. It usually has the wheelhouse up front, giving it a wide and long open back deck that you can put, deck cargo on. There will be tanks all under that deck that can bring out liquid mud, can bring out fuel, can bring out water either water for the rig or potable water. So that is the main vessel and there are in the US fleet. Right now there are about 800 OSVs working. That's about a usual size.
Speaker 3:Most of these vessels stay pretty close to home, so they're each built in a market. There's about an equal number in West Africa. North Sea doesn't utilize as many vessels. Their vessels are bigger because of the sea state, but they don't use as many. So there's only about. I'd say there's probably three-fifths of what we have in the Gulf they have in the North Sea. Middle East is the opposite. They use a ton of vessels but they're smaller. So there's about one and a half times what they do in the Middle East. Southeast Asia is kind of the same. Brazil is probably about half the market as we are, and all of those are kind of similar.
Speaker 3:For that osv. Now you also have you have lift boats, which are vessels that will have 100 foot long legs that they use to elevate themselves out of the, out of the water, to provide a stable work platform. You have crew boats, which are smaller osvs but made out of aluminum and go fast, uh, to get crew out and back. That's why they're called crew boat. And then you have anchor, anchor handler, tug supplies, which does exactly like it says it handles anchors and and and tugs stuff and supplies stuff, um. And then you have subsea construction vessels. Uh, those are the vessels that install what's on the seafloor. So it's a they're. Those are each like said, they're kind of purpose-built but they can each be modified to do a different range of activities.
Speaker 2:The US marine industry, the US maritime industry that we're talking about. Is it second to none, is it comparable to other countries around the world, or how do we compare?
Speaker 3:Well, as a spokesman for the maritime, for the US maritime industry, it's the number one. It is. You know, we invented this industry actually, and it's some great histories. There was a gentleman named from, from Rhode Island, named Luther Blount um, who heard about offshore drilling. This was back in the fifties and he had a ferry that he thought would would adapt well to it. So he built one in Rhode Island, um put his station wagon on the back, sailed it down to Louisiana. Um sold four of them, sold that one and three others to a gentleman named Minor Jeremy and then drove the station wagon back up north. And that's how offshore service vessels were invented. And you know, you think about just doing that on spec.
Speaker 3:Entrepreneurship there Can you imagine that right, I've got to bring my own transport with me.
Speaker 1:Let me throw the station wagon in the back and.
Speaker 2:I love the analogy of the OSV being the pickup truck of the industry, and that's basically what it is. It's also a car trailer too, I guess.
Speaker 3:Evidently, In that instance it is you got the right?
Speaker 3:ramps? It sure can be, it is. So you know that was where it invented. We also now, you know, now in the subsea market we have a host of really high test probably in the subsea market we have the newest fleet of vessels and we can get into that about why that is later. You know, we've also pioneered the use of liftboats and we're kind of one of there's a gentleman over in Houma that invented the liftboat. Houma is a town in Louisiana where our industry has a lot of a lot of our members are based in. So it really is we. We founded this industry and we continue to innovate in this industry in really cool ways.
Speaker 1:Aaron, just for readers to note and I know we discussed this when we were chatting earlier uh, there's a great book called the rise of the Cajun Mariner, which you know. If you can find a copy of it, buy it and read it. It's full of great stories, of inspiration and entrepreneurship and, frankly, really interesting stories too.
Speaker 1:you know all kinds of salacious details about how Louisianans in particular and the existing mariners of Louisiana, brought their skills, technology and technique to really start deep water development and the supply vessels supporting deep water development all over the rest of the world testaments of the industry and really it is a true American success story of how these people just figured out how to convert something, how to work something, and grew not only a family business but grew an entire industry.
Speaker 3:And you know, that's. That's the sort of things we we as public policy experts or public I don't want to say I'm a public policy expert, but a public policy participant that we should be leaning into and creating, because they are some great success stories. Where you can go from, you know, I think the first, there's another family, the Little Boards, who also take credit for developing the first OSV. They built that vessel with $100,000. They had nine partners each put up $10,000, and then got $10,000 from the bank to build a vessel that was, I believe, 120 feet long. You know, now we're talking again about vessels that are 300 feet long now cost $120 million, not $100,000, to build. It's a great success story of growing an industry, yeah for sure.
Speaker 2:I'd like to pivot a little bit and start talking about the wind industry and the relationship between the two. Yeah, for sure, and repairs at depth, or anything that you haven't mentioned already.
Speaker 3:Well one. You know when I think about especially from the vessel side, I don't split offshore wind from oil and gas. They are the same to me. And you have vessels that go back and forth will actually go back and forth without any modification. You have other vessels that will go back and forth without any modification. You have other vessels that will go back and forth with the installation of a piece of equipment called a walk-to-work gangway. These vessels will slide up next to a wind turbine or a monopile and will transfer techs over to that wind turbine and they'll do so through a gangway that is motion articulated, so it provides a stable working platform, and those will be installed on a vessel or taken off of a vessel in a few days' time and that's all that will be necessary to transition a vessel from oil and gas to offshore wind.
Speaker 3:Other times there won't be any modifications. You know, if you're putting armoring mats over a cable, it's the same as putting armoring mats over a pipeline. It's the same thing. So a lot of this. I don't split the two industries. They are from a marine perspective. They are really the same industry in most respects. Now, of course there's some very specialized vessels, but that's the 10% on either side. The healthy part of that bell curve, the vessels are the same a great point.
Speaker 2:I do want to talk about how the technology is very in a lot of instances, is very much the same, and the synergy between what we call is the offshore oil and gas industry and the wind industry is great. But it's the service industry that you're talking about is also critical, and you mentioned HOMA. That's a great example, not in terms of service industry, but HOMA is where the platforms, or the foundations, if you will, for the first offshore wind farm off of Rhode Island of all places were built. They were built in HOMA and barged up around to Rhode Island, and it's a great example of where the offshore industry in oil and gas strengthens the ability of the US economy to support offshore wind as well. So let's talk a little bit more about the relationship between offshore wind and the maritime industry. What do you see as the immediate future and the longer-term future for it?
Speaker 3:You know what we have now is you really have that electricity supply is certainly growing faster and is actually leading our, our energy needs much more than than oil or natural gas is we really have a electricitydriven economy in many ways and know that requires electricity and more and more that is being developed from, you know, renewable sources, be it on land or be it on water. So for that reason you know we need electricity demand just as much, if not more, as we need liquid fuel demand. And so I think, for that reason, I think we will see a growth of an offshore wind industry. And when you have really seen, you know that the technology on the turbines themselves and the generators themselves and then on the grid, you know they are just getting more and more efficient. And I think for that reason you continue to see a development of an offshore wind industry alongside and again, I don't reinforce that with the concept that it's not just electricity or liquid fuels.
Speaker 2:Virtually all demand for energy is outstripping the existing supplies on all fronts, and it's not something that can be kind of an either or let's do this or let's do that. We're going to have to develop all strategy, all possibilities, and that's going to put demands on all kinds of phases as well as, of course, marine service activities.
Speaker 1:And Aaron I would just jump in and I want to make sure too that I understand if they're in your organization but all of the other critical infrastructure that we need, both for kind of offshore energy generation but also telecommunications movement of power. You know there's a lot of cabling vessels that do a lot of different kinds of cables, including telecommunications, and I think one of the things that we've seen are the opportunities to run transmission cables, potentially offshore, between major load centers in the United States and generation and load. Those all have the opportunity to be quite active here in the near future too, because we need to solve this challenge of energy demand solve this challenge of energy demand.
Speaker 3:So you know, we have really the offshore market. Is the subsea market? To me? Yeah, and that's what happens, you know, when I'm on the Hill to give these members of Congress and congressional staffers some perspective I talk about, you know, if you put a modern floating oil and gas platform above the cap, you will have that field that will extend out past Dulles Airport and past on the other side, past BWI Airport, you know, extending all the way through Baltimore, north of Baltimore, and that will be one oil and gas platform. All of that has to be connected via pipelines and you don't think about this also has to be connected not only via pipelines but via cables, because all it won't just be one. You know one place in north Baltimore connected to the capital. It will be a dozen wells up there, all of which have to be connected and all of which have to be powered. So you have to lay umbilicals all the way out there along with that pipeline. Then you have to have the compressors, you have to have, of course, the wellheads. All of that has to be installed and you're talking about something that's in, you know, 10,000 feet of water, and that is where, you know, kind of.
Speaker 3:We have seen in the united states since about 2010, a just a massive build in the subsea construction market, where these vessels have been developed. That, now, you know, started with modification again. Our industry is always great at repurposing a vessel. They were first first putting, you know, 50-ton cranes on it. Now you have vessels that have 250-ton cranes, and these cranes are amazing.
Speaker 3:They will, you know, if you think about it, you're trying to install something in a very precise location, that's, you know, let's say, 8,000 foot below the sea. Again, well, seas go up and down, and so that crane has to pay that line out and then pick it up so that, as the vessel goes up and down, that equipment it's trying to install doesn't also go up and down, and so these cranes do that. When the merchandise gets picked up off the deck of the vessel, if you think about it, it picks up that vessel is going to rock back and forth. Well, these cranes will have automatic anti-healing technology, so they will automatically sense that something's been picked up and will transfer ballast to keep that vessel stable. It is some amazing technology and it doesn't only, like you said, doesn't only have energy technology, but it also has the how the. You know if you remember the Chinese spy balloon that was shot down a few years ago.
Speaker 1:Yeah, two years ago.
Speaker 3:It was. The wreckage was found by found in retrieve by one of my member companies, because my member companies have made themselves into subsea experts. Yeah, you know, that's the sort of technology Taken another way. A few years ago, there was one of our fighter jets slid off an aircraft carrier on the other side of the globe and it was retrieved by a Chinese subsea construction vessel. That's not good. We shouldn't have China ever touching our fighter jets. I don't want that. And so by building up this domestic offshore energy fleet, we also are building our national security.
Speaker 1:And skill sets to do this all effectively around the world. Not only are these really amazing operations, but so much of the technology is also being used to do them safely to people, to assets, to the environment. I sat in that space in the oil and gas business and the technology to make people safe, like walk to work, is really high tech. Imagine balancing between two different positions on a rolling sea. But it's done because it's more convenient and it's safer for people. That mindset really runs through the energy business and is very strong in the offshore energy business, because that's, frankly, the worst thing to happen if you were to hurt someone or the environment right.
Speaker 3:Yes, I have a mentor that always talks about you know that you can, and I'll say his name because he deserves to be recognized. Suman Mugasetti is one of the best safety minds in the entire world in my mind, and he will talk about that. You can talk about all sorts of different risk profiles offshore, but it really comes down to four levels. If you have something elevated in the air, that's a risk. If you have something on a deck, that's a little bit less of a risk, but that's your baseline. If you have something in the water column, that's more than on the deck, more than in the air. But if you have something below the seafloor and by that he means hydrocarbons that's your top risk. And really, if you put those four risk buckets, everything falls into one of those four and that's where you need to spend your time. And so those walk-to-work systems. That falls into that first in-the-air risk profile, and so you really have to take care of that. And so those systems well, first, offshore vessels use what's called dynamic positioning, and dynamic positioning is to dumb it way, way down, is a very complex autopilot.
Speaker 3:What it does is it will take references from satellites and then we'll take references from local references, by bouncing a microwave or a laser off of something nearby, or the seafloor or something that's in the water column like a ROV, and then we'll combine that information with wind sensors.
Speaker 3:We'll combine that information and we'll put that into an algorithm and then assume also what the current that's affecting that vessel is. We'll wrap that all up and give that information to the vessels thrusters to so that vessel will follow a predetermined track. We'll follow something, will follow like a pipeline, all automatically, or will hold position next to a windmill and in fact this technology is so advanced that the ends of those gangways, those ends of those walk-to-work gangways, are providing data back to that dynamic positioning system, so that this system is actually it's learning the ocean system and knows that as the vessel goes up and down, it knows how to adjust so that gangway stays perfectly level and safe. It is a really cool technology that it's not only a cool technology but these operators that operate it are really. They are, you know, those are the jobs we should be incentivizing.
Speaker 2:And I think we are going to see a lot more in terms of technological innovation in the days to come. You've touched on offshore security and, with regard to technology, some of the offshore security issues and, as a result, defense applications this is real Big phrase in the news of course these days is dominance. So my question is with the keeping up with the technological developments and keeping the market and keeping the industry developing, is the marine industry in a position to stay dominant to meet the challenges that we're looking at over the course of the next couple of decades?
Speaker 3:Where I look the most right now is cable security. You know, we saw around the turn of the year there was a cable in Europe that was cut by a Chinese vessel, took out a large set of telecommunication assets. Actually, just at the end of last month it was announced that China has a new cable cutting device that they can put on vessels. Cable cutting device that they can put on vessels uh, this thing can work in up to 13 000 feet of water. You know 13 000. Think about, like, if you're on a plane and you take off, um, and then there's the ding that says that you can start to use your laptops or whatever that's, when you're 10 000 feet above the, above the ground. So think about that, that's 10 000 feet. Look down, look how small everything is on the ground. Then now you're talking about 13 000 feet below the sea. This thing can cut cables at that depth. Now, and you know cables are armored. They are steel armored. So this thing is cutting with a diamond tip blade that is spinning at, I believe, 14 or 1600 RPM.
Speaker 3:We need to ensure that we and I mean we, as the United States has to have the capability to lay another cable or repair that cable that is cut. You know, because you know what we've seen. And you know, because you know what we've seen, and you know, ian, you started this program talking about the economic turmoil and you know, overnight there was another set of tariffs raised by China. We need to have the domestic capabilities within our maritime space to respond to that and you know, in that aspect we are lacking. We really are lacking and we need to have some improvements. And Washington needs to give the US maritime industry the conditions that we can compete and can build to that market.
Speaker 1:And Aaron, it seems like it's a great opportunity for the defense sector, which has some of the capabilities that we're talking about, for sure, and the commercial sector to really combine on ways that the commercial sector can be value add when needed, when called upon. So there is the right kind of subsurface tooling, subsurface detection equipment, intervention equipment available. You know, what we need is the ability to deploy this quickly with any vessel of opportunity, of a certain parameter right, and a certain security clearance. That's what's going to make this effective, because the whole oceans of the world are now this geopolitical stage. You didn't mention it, but but I know, you know everyone is also familiar with the attacks on the nordstrom pipelines as well too, so you know that this is clearly going on. And to say that, uh, you know a vessel was dragging anchor for five or six miles and didn't realize they were dragging answer seems incredulous, right, right.
Speaker 3:Yes.
Speaker 2:Well, this pretty effectively identifies needs, problems and opportunities, if you will, but what's holding us back? What does Washington need to do in order to help us meet the demands that we're facing for these various situations?
Speaker 3:When I go up to DC, I have, in a lot of respects, a very simple ask. Everyone goes up asking for money, the maritime industry. We're not asking for money on this aspect. We'll take some of your issue given. We don't need money in this respect. What we need is for we need the law to be enforced as written.
Speaker 3:You know everyone, everyone has heard about the Jones Act. But you know, looking, really the Jones Act is is is unique in that it has a preamble to it that states its purpose. You don't see this a lot in the federal code and it says that we have to have a US merchant marine that carries a significant portion of commerce and is ready to act in times of conflict. That's what we're talking about right now. But and then you have to look at what, what the Jones Act covers. The Jones Act covers when merchandise is transported from one point in the United States to another point in the United States. But what has happened since, really, the late 70s is, you know, bureaucrats within and no, I'm not, i'm'm not using that with any tone in my voice there. Jim, I know you have spent years in federal service.
Speaker 1:I spent, again, I spent 10 years working on Capitol Hill. We all have bureaucratic ways, but we're not all bureaucrats.
Speaker 3:sometimes Exactly, exactly so. But we have allowed. You know, that's the statute, that's the law. If you are transporting something from one point in the United States to another point in the United States, you need a US-built, us-crewed, us-owned vessel. That's the law. Laws are made by elected officials, but what we've had since 78 is a situation where you have lawyers within the Customs and Border Protection Agency that have said well, I don't think this law applies to this situation, and they will give someone the permission to use a foreign flag vessel to move merchandise between one point and another point in the United States, and they will do so in a private letter. It's just a letter that is issued to one person and it's supposed to be for that singular transaction. But after Al Gore invented the internet, they put these letters up online so you could see them. Well, what you had was you had someone that would come in and say, well, I see this letter and I'm doing something. That's sort of the same. So since you approve that, can you approve this?
Speaker 3:And we've moved one degree, one degree, one degree, one degree off to the point where, in pipeway, in cableway, we don't have US vessels, we only have foreign vessels that have a monopoly over these markets and have pushed out the US from being able to build. We can certainly build, you know, these are not like I said. We have built complex vessels. We built subsea construction vessels. We have. We can build anything we want, but we have to be able to have the certainty to make money doing so. And look, it's not even just my members knowing the law, the banks know the law just as well as we do. And if you were to go into a bank right now and say, hey, give me some money, I want to build a cable-a vessel, I'm going to say no, customs and border protection rulings prevent you from doing so, prevent you from competing with foreign vessels, so no, we're not going to lend you money to build that vessel.
Speaker 1:Aaron, I do want to ask a question, because sometimes we propose to do stuff offshore where there is limited availability of the vessels with the capabilities to do that. And I think of one very specific example that I was involved in which required a very heavy hook height lift of a certain facility that we didn't have a domestic vessel that was capable of doing that lift. So to have an opportunity to do derogations to the Jones Act, you know, in a formal letter for a particular activity may be required sometimes, but I think what we want to get to is the place where we start to build more and more capabilities in our domestic fleet so that we can do those. So where do we find this balance between needs of today and opportunities for tomorrow?
Speaker 3:Certainly so you know. Again I go back to well, why are those vessels not available in the US? And for a segment of those, a small, very small segment, like the vessels, you know, some of the vessels, you're talking about a drill ship, a modu, even really the heaviest of heavy lift vessels we'll. You know, look, I'm, I'm, mr jones, act, I'm, I'm, everything is us.
Speaker 3:But even those vessels, it's very hard, almost impossible, to make a, a business case for that doesn't involve some sort of pixie dust or something like that, or massive government-backed pixie dust. Um, you know. So those, let's set those aside. But that is five percent of the market. You know, maybe 10 percent of the market. On the other 90 percent, I think we look at the question again of why is there not those vessels in the US fleet? And to me that usually comes down to because you have foreign actors that are acting in US sovereign territory but playing by a different set of rules. And if you make everyone play by the same set of rules, then you'll have US that can build to those markets just like everyone else does.
Speaker 2:Does this tie in with the American Offshore Workers Fairness Act and can you tell us a little bit about what that is and how that's playing out?
Speaker 3:Yes, it does. So if we go back when offshore energy was first starting to be, you know, really getting going in the late 70s Congress, the uh, what's called the outer continental shelf lands act, or oxla I've heard um and yes. And oxla says this these resources belong to the american public. You know, you get an offshore lease. You don't get an offshore ownership. You are leasing this property from the United States. Therefore the United States, the citizens thereof, should have the first crack, the right of first refusal of employment in the exploitation of these resources. And so Oxlis says if you are working offshore, you should be an American citizen or a permanent resident, right.
Speaker 3:But in the late 70s it was also understood that there was development and the idea was again to pick on Norway. A Norwegian vessel with a Norwegian crew could come into US waters. So a US vessel witha US crew could go into Norwegian waters. But when the law was implemented, coast Guard apparently didn't get that memo and what they did was they bifurcated the crew nationality and the vessel nationality. So now you have a Norwegian flagged vessel that has a crew that comes from Estonia, ukraine, the Philippines, india. And not only are those crew imported to US waters, waters, their wages, their wage levels are imported as well. So we routinely find deckhands working on foreign vessels that are making $30 a day in the United States. You know, put this on land, put you know, go to the West Texas oil fields around Odessa. You know, we would never allow a Ukrainian making $100 a day to displace someone from the, you know, the Permian Basin. You know, put this in a. And you know, in my home state of Colorado, put this into a Colorado wind farm. We would never allow someone from the Philippines making $30 a day to displace a Coloradan working in those assets. But that's what we allow 13 miles from our coast.
Speaker 3:So the American Offshore Worker Fairness Act says if a foreign vessel is working in US waters, its crew has to match its nationality. So if it's a Norwegian vessel, it's a Norwegian crew or has to be an American crew, and that way that vessel is playing on the same playing field as our vessels are. And so then you have that parity, and if you have that parity, you have that competition, that parity, and if you have that parity, you have that competition. You can then compete and you will see the US market grow, just like it did in the subsea market.
Speaker 3:You know I've referenced a few times that really the subsea construction market started in 2010 in the United States. Well, that was because CBP changed its enforcement of a very minor set of its, of those rulings it had given, which allowed for US vessels to to work, and you know there a lot. At the time, a lot of foreign companies said you know, we will never build, the US will never build subsea construction markets. Some companies you know maybe some people on this call used to work for said that those same companies now put out press releases when they hire a US subsea construction vessel. So we could do the same, an issue that is of direct detriment to the.
Speaker 3:American worker.
Speaker 2:And we definitely need to be looking at that. Speaking of which, I have a great interest in the development of the workforce and in various arenas, not the least of which, of course, is offshore energy, but in talking about marine services, how does that workforce get developed and where does that? Where does that come from, and are we going to be able to meet the needs of the future?
Speaker 3:You know it is. I love this question, jim, because I love, as much as I love talking boat nerd stuff, I love talking about mariners because these are the jobs that we should be providing in the United States. We should be incentivizing this work. You know this is we take pride in our industry that we can take someone out of high school in our industry, that we can take someone out of high school and within six years, if they put in the time and they do the right things and and they, they apply themselves and take the right courses, they're going to be making six figures in six years. No, no college required. Um, and you know right now, uh, what's called a, uh, an able-bodied semen, uh, kind of, uh, not an entry level, but you know you're one or two steps up from entry level. Those guys are making $375 a day right now. You know you get up and then you work your way from an AB up to a captain. Big boat captains right now are making $1,000 a day and you know that is the jobs we should be encouraging in this industry. Again, no college required.
Speaker 3:You can go to a maritime academy. We have five of them in the united states. They are great work. I work a lot with texas a&m maritime academy. It's one of the best schools you'll ever see, one of the best returns on an education dollar. You know that, that you can. When you go to a Maritime Academy. You walk across the stage with a diploma and you walk across the stage with a Coast Guard third mates license, which lets you start making a job that's, you know, above six figures in the current marketplace. That's a great thing, you know. You think about these other college degrees that don't provide necessarily that immediate pathway to financial success. So I love talking about maritime stories.
Speaker 1:They're really great and it's really great. So much upward mobility. This is the American dream. Right is in the maritime sector too, and you mentioned certifications and from what I recall of a lot of mariners, they're always collecting certifications. They're getting skilled at all different kinds of skills, besides being awfully practical whenever we deal you know kind of work with mariners on different offshore projects or challenges. Tell me some interesting stories around that space, because I'm sure you have them, aaron.
Speaker 3:Oh, yes, so the US maritime industry in most respects uses what's called the Haas pipe system and the Haas pipe this goes back to. The Haas pipe is where the anchor chain goes through the hull of the vessel and what used to happen is a stowaway would climb up the anchor chain through the Haas pipe, stow themselves away on board, then ask for a job once the vessel had left port and they basically had to be given work and then you could work your way up. Uh, so that is an intrinsically while it's a british term, it is an intrinsically american concept where you start at the bottom. You start as an OS, an ordinary seaman, and you work your way up to the wheelhouse. I have board members actually that started. I have multiple board members that started as deckhands and work their way up to the wheelhouse and then bought their own company and are now own their own vessels.
Speaker 3:So really, that is what you know. That is the American dream. You know, that is that motherhood and apple pie type situation. And you're right, every mariner I know carries around a three ring binder with it and it's, you know. Here's my advanced firefighting certificate. That's a week long course. Here is my celestial navigation. That's another week, long course. You know, here is another. Whatever course, none of those alone make themselves a mariner, but that binder collectively makes themselves a mariner, and that's. You know, that's an interesting and unique educational system and it doesn't fit well into DC buckets.
Speaker 2:Yeah, I see, I definitely see your point, although I got to note the three ring binder is getting rarer and rarer Old school.
Speaker 1:Now it's got to be on your iPhone with digital certificates.
Speaker 3:Yeah, yeah, but but that would require the Coast Guard to modernize its licenses. Here we go.
Speaker 1:Aaron, it's been great to have you join us today. You know it's a really exciting industry for me personally as an oceanographer, and I hope it's really interesting for our audience too, because the service industry is the one that makes offshore energy go, no matter which side of energy you're on. We need that service industry to thrive here in the United States. It's fantastic. Thank you for all of the great stories too. You're reminding me a lot about my time down on the bayous Jim. Are there any key points that you'd like to capture from our discussion?
Speaker 2:Yeah, the discussion was enlightening for me in that it pointed to a continuing and expanding demand for marine services, and that's not only because of the expanding market but also because of technological developments. And then pile on top of that maybe some legal corrections that are in the best interest of the American worker. So I think it's a critical factor for offshore, not only for oil and gas, but also for the wind industry as it moves forward. So I really appreciate the comments you've made. It's been very enlightening.
Speaker 1:We do this last drop in the oceans section, which is just a moment or two to mention anything else going on in your world related to offshore energy that you'd like to mention but that we're not going to dive into in this episode. You're our guest. Would you like to take the first drop?
Speaker 3:Well, just first, thank you all for the opportunity. This has been a great conversation. I really appreciate y'all's time and I hope the listeners enjoy it as much as I, as much as I have done giving it. But for for my last drop, you know what I would say is is number one. If you like these mariner stories, if you want to learn more about them, check out our YouTube channel, which you can find at offshoremarineorg, or check out our Instagram handle, which is Offshore America.
Speaker 3:We have a bunch of the stories where we've highlighted some of these men and women that are working in these positions and them telling their stories, and it's just some fascinating, great stories of American workers. So we'd encourage everyone to check that out. Also, if you happen to be in DC mid-May, may 13th every year AMSA brings up about a thousand pounds of crawfish to Capitol Hill and we have a crawfish boil on Capitol Hill for members of Congress and congressional staff. If you're interested with making connections with our industry and our industry runs on connections come on up. We'd love to have you. If you're going to be in Virginia Beach end of April for conference there, you know we again, our industry is built upon connections, so we know how to throw a party. So if you're in, if you're in Virginia beach end of April, come on by the AMSA AMSA happy hour there. It's always a good time. Those are my last drops.
Speaker 2:My last drop is a little not not on on track with this. It's unrelated to the discussion well, not totally unrelated but I think there's a very interesting thing going on in terms of news cycles right now. We've had a lot of stuff going on, of course, since January 20th, and the big item in the news cycles right now is the tariffs. I think you're going to see a shift from that, because we've been a few months in and we're going to start having the budget discussions hit home and you've started to hear of this. But there's a lot of districts that are red districts and they're going to start putting pressure on the administration, and I think this certainly is a factor in the offshore wind industry, but in a bunch of other industries as well, and I think people should be looking for this shift and this discussion that'll be coming up soon.
Speaker 1:I've got two quick last drops and of course one of the things is related to the new administration. Obviously, many of you are aware that a number of LNG export permits and other LNG project permits have moved forward in the last couple of weeks, and so we expect that industry to start growing even further in the United States. There are a couple of key projects that are now approaching final investment decision and we'll see them likely move forward after that decision is taken. And a shout out to all my friends back at Shell for a sub-sea tieback to Appomattox. They just started production from Dover, which is a sub-sea tieback into there. That is increasing production and it's great to see the announcement of First Oil. So great job everybody at Shell.
Speaker 3:I did see that, Ian, and congrats to them as well. Yes, I saw that this week and you mentioned those LNG exports. Hope to see more of them via offshore ports. There was a young, enterprising, incredibly brilliant and incredibly handsome congressional staffer who changed the Deepwater Ports Act by adding the words or export to the statute and that allowed for those offshore LNG export terminals to go forward.
Speaker 1:Now, aaron, I won't ask you the snappers, but I have a feeling I know who you're talking about. Well, well done, well placed. Sir, aaron, great to have you. Thank you for joining us. Thanks for the great, thoughtful conversation, Aaron. Great to have you. Thank you for joining us.
Speaker 2:Thanks for the great thoughtful conversation. I'd just like to extend thanks, of course, to all of the listeners and would want to ask again, as we always do, if you have any topics that you think we ought to be covering. Please let us know. We'll be happy to do so and we look forward to our next episode, which I don't believe we've determined what the subject is going to be.
Speaker 1:We're still trying to align schedules, jim. I know Sorry.
Speaker 2:Listeners we'll get to it as fast as we can. We'll get there, we'll let everybody know and, Jim, you know I was thinking too.
Speaker 1:Another good opportunity for us maybe is product placement right, so we might be able to generate some more support from some really key product placement, like they do in the movies. And I was thinking right now, you know, speaking about energy and offshore energy and international trade. Maybe we could get a sponsorship from Pepto-Bismol. Pepto-bismol take away an acid stomach to survive the challenges of the next 90 days. What do you think, jim? Sound good.
Speaker 2:I'm going to have to give that some thought, oh, okay.
Speaker 1:Well said, well said, mr Politician Bureaucrat, great to see you guys. Thanks for coming.
Speaker 2:I was thinking you were going to go with Coca-Cola, but you're much more inventive. That's good too.
Speaker 1:That's good too. That's good too. All right, listeners, great to talk to you. Talk to you soon on the next Offshore Energy Podcast. Thank you.