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B-95832 1 (1977-04-05)

handle is hein.gao/gaobadrtz0001 and id is 1 raw text is: ii F 'OMTRCLL R C NE AL O0 TE UNireD ATES 8-95832 R-FE TO: CED7-338 APR 5 1977 The Honorable John M. Murphy, Chairman Committee on Merchant Marine and Fisheries House of Representatives Dear Mr. Chairman: We would like to take this opportunity to comment on H.R. 1037, a bill which would amend section 901 of the Merchant Marine Act, 1936, as amended (46 U.S.C. 1241), by adding a new subsection to require that specified per- centages of United States oil imports be carried on United States flag vessels. Inasmuch as the proposed legislation involves a matter of policy for determination by the Congress, we make no recommendations with respect to its enactment. However, we offer the following comments for your consideration. The bill would require the Secretary of Commerce to take such steps as are necessary to assure that 20 percent of the gross tonnage of all oil transported in bulk on ocean vessels for import into the United States, whether direct from production sites or indirectly via intermedi- ate points is transported on privately-owned, United States flag vessels, to the extent such vessels are availa- ble at fair and reasonable rates. The percentage would be increased to 25 percent after June 30, 1978, and to 30 percent after June 30, 1980, subject to the Secretary of Commerce's determinations that enough privately-owned, United States flag vessels were available to carry the additional tonnage. Our current audit work at the Maritime Administration indicates that these goals may not be realistic or related to any defined American merchant marine fleet requirement. The Assistant Secretary of Commerce for Maritime Affairs recently stated that current information indicated that, without affecting Maritime Administration and Navy ship- building programs, it appeared very unlikely that suffi- cient United States tanker capacity could be generated by 1980 to carry more than 7 to 12 percent of U.S. oil imports.

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