The USA has a comparative advantage in NG which can be shipped as LNG. South Korea has a comparative advantage in building LNG Ships. Looks pretty sensible.
However, the USA clearly needs to increase its capabilities in building other ships including Naval. It would be unfortunate if that focus was lost chasing such a specialized niche.
Personally, I am uncertain if in a fracturing global trade world whether LNG is a longterm opportunity. Nuclear and Coal are a lot easier to stockpile.
I was somewhat confused by this article. Energy dominance is generally expressed in terms of control over supply, not transport, because that's usually the key area of strategic control. For the US, attempting to control every element of the LNG supply chain seems both infeasible and unwise even if possible. To your point, nothing about this article indicates that building LNG carriers is such a critical tech that the US has to have independent control over it.
"For the US, attempting to control every element of the LNG supply chain seems both infeasible and unwise even if possible." I agree. We can produce it, but we don't control the full supply chain, as I currently understand it. In my view, the rhetoric around "Energy Dominance" including using it for geopolitical influence, comes off as if there are no external factors to consider. But that is not so.
I think that's primarily because it's a term for political marketing. Politicians don't exactly like to convey nuance, and the Trump administration in particular wouldn't know nuance if it hit them in the face, so I'm not surprised that they convey a very simplified view of markets.
I think that LNG vessel control is more important for imports than exports. In any case, US ownership is more important than the vessel's origin unless there is a shortage of shipyard capacity.
Congress can provide economic incentives for US ownership, including buying ships for the US Mercant marine. I emphasize incentives for US ownership and flagging, not tariffs and other protective measures that ultimately backfire.
The only reason there are US LNG exports is because there is a buyer in another country. Having a lot of exports of anything can itself be seen as an interdepedence.
Yes, there is a dependence on Korean ships, but the ships spend little time in Korea, so they won't ever all get destroyed at once. If Korea raises shipping rates on the ships, then that welcomes competition and Korea no longer has a monopoly on LNG ships.
One big question pops up: Why aren't we TRYING to improve our shipping with our own money? US investors have far more cash than Korea, but we aren't even bothering to incentivize them. Instead we're trying to get more Korean money and Korean management. MKGA.
A smaller Aha: "Greek shipping magnate" was a standard phrase in the days of Onassis. I didn't realize they were still a big deal!
There is not a single reason for the issues with US Shipbuilding, but Scott Lincicome has an interesting article in the WSJ: https://www.wsj.com/opinion/protectionism-kills-u-s-merchant-shipping-tariffs-international-trade-manufacturing-4b39afa0 which discusses some the issues. He claims The Jones act and other protectionism have help make us non-competitive. A tanker built in the US cost 4 times as much as overseas. This is not the only problem, but repealing the Jone Act would be a good start.
The USA has a comparative advantage in NG which can be shipped as LNG. South Korea has a comparative advantage in building LNG Ships. Looks pretty sensible.
However, the USA clearly needs to increase its capabilities in building other ships including Naval. It would be unfortunate if that focus was lost chasing such a specialized niche.
Personally, I am uncertain if in a fracturing global trade world whether LNG is a longterm opportunity. Nuclear and Coal are a lot easier to stockpile.
I was somewhat confused by this article. Energy dominance is generally expressed in terms of control over supply, not transport, because that's usually the key area of strategic control. For the US, attempting to control every element of the LNG supply chain seems both infeasible and unwise even if possible. To your point, nothing about this article indicates that building LNG carriers is such a critical tech that the US has to have independent control over it.
"For the US, attempting to control every element of the LNG supply chain seems both infeasible and unwise even if possible." I agree. We can produce it, but we don't control the full supply chain, as I currently understand it. In my view, the rhetoric around "Energy Dominance" including using it for geopolitical influence, comes off as if there are no external factors to consider. But that is not so.
I think that's primarily because it's a term for political marketing. Politicians don't exactly like to convey nuance, and the Trump administration in particular wouldn't know nuance if it hit them in the face, so I'm not surprised that they convey a very simplified view of markets.
I think that LNG vessel control is more important for imports than exports. In any case, US ownership is more important than the vessel's origin unless there is a shortage of shipyard capacity.
Congress can provide economic incentives for US ownership, including buying ships for the US Mercant marine. I emphasize incentives for US ownership and flagging, not tariffs and other protective measures that ultimately backfire.
I thought it might make sense to incentivize ship purchase
The only reason there are US LNG exports is because there is a buyer in another country. Having a lot of exports of anything can itself be seen as an interdepedence.
Yes, there is a dependence on Korean ships, but the ships spend little time in Korea, so they won't ever all get destroyed at once. If Korea raises shipping rates on the ships, then that welcomes competition and Korea no longer has a monopoly on LNG ships.
An excellent example of how the world benefits when formerly poor countries become rich. When will other laggards wake up!
One big question pops up: Why aren't we TRYING to improve our shipping with our own money? US investors have far more cash than Korea, but we aren't even bothering to incentivize them. Instead we're trying to get more Korean money and Korean management. MKGA.
A smaller Aha: "Greek shipping magnate" was a standard phrase in the days of Onassis. I didn't realize they were still a big deal!
There is not a single reason for the issues with US Shipbuilding, but Scott Lincicome has an interesting article in the WSJ: https://www.wsj.com/opinion/protectionism-kills-u-s-merchant-shipping-tariffs-international-trade-manufacturing-4b39afa0 which discusses some the issues. He claims The Jones act and other protectionism have help make us non-competitive. A tanker built in the US cost 4 times as much as overseas. This is not the only problem, but repealing the Jone Act would be a good start.
Is this another example of globalization-motivated outsourcing that is coming back to haunt…?