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A new, first-of-its kind study shows the impact that American vessels involved in the offshore energy industry and the shipyards that build those vessels have on the U.S. economy.
The study, commissioned by the Offshore Marine Service Association (OMSA), focuses on the spending and employment associated with U.S. flag vessels that carry supplies and workers to offshore energy facilities or are used to work on those facilities. It indicates that those vessels and the shipyards that build those vessels are responsible for about $18 billion in annual spending and more than 100,000 jobs, paying about $4.6 billion in wages. "This study confirms our belief that offshore energy activity, whether it is oil, gas, wind or hydro-power, has critically important national benefits, not only for our coastal areas but for the entire U.S. economy overall. This is perhaps more important now than ever before," said Otto Candies, III, OMSA Chairman and secretary and treasurer of marine transportation company, Otto Candies LLC.
The study, "The Economic Impact of the Shipbuilders and Vessel Operators Servicing the Offshore Exploration, Development, and Production Industry on the U.S. Economy," was conducted by Loren C. Scott & Associates. It is the first known study that looks specifically at the economic impact of what are referred to as the "Jones Act" fleet of offshore vessels, meaning that they are owned by Americans, crewed by Americans and built in America. Currently, the U.S. Government is reviewing its longstanding policy that governs when U.S. vessels must be used instead of foreign vessels in the offshore industry.
The study looks at four key impacts generated by offshore vessel companies and American shipbuilders that construct offshore vessels - new sales for U.S. firms, new household earnings for U.S. residents, new jobs in the U.S., and federal, state and local tax collections in the United States.
The study cites that U.S. businesses experience about $18.1 billion in new sales annually as a result of economic activities within this segment of U.S. shipbuilding and offshore vessel operations. These new businesses help to generate about $4.6 billion in new household earnings annually for U.S. workers. Approximately 103,160 jobs are supported by the economic activity of these segments, with average annual earnings of about $43,992. And it is estimated that the federal government collected nearly $1.4 billion annually in taxes directly and indirectly in 2008, and $770.8 million in state and local government taxes in the same year.
OMSA's study is valuable in many ways, particularly because it looks beyond the vessels and the shipyard benefits to the total economic impact of the industry on the U.S. economy. According to Dr. Scott, "Based on our economic modeling, the research clearly indicates that the benefits aren't limited to the vessel or shipyard companies, but are wide-ranging, involving hundreds of large and small firms that supply everything from the steel that goes into building vessels to the groceries that go on the table onboard the vessels."
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February 4th, 2010, 05:59 AM
U.S. Shipbuilders, Vessel Operators Generate $18B, 100,000 Jobs
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