Offshore Marine Service Association Releases Economic Impact Study

Published Mar 1, 2007 12:01 AM by The Maritime Executive

Harahan, LA: The Offshore Marine Service Association (OMSA) has released a new study focused on the impact on the United States economy of U.S. flag vessels operating in the oil and gas industry offshore. U.S. flag vessels are those owned and crewed by American citizens, built in America, and which fly the American flag. The offshore energy sector is supported by approximately 1,200 U.S. flagged vessels, including offshore supply vessels (OSVs), crewboats, liftboats, tugboat and barges. About 12,000 U.S. citizens work as mariners on these vessels.

The OMSA study underscores the significant contributions of the U.S. flag fleet to the U.S. economy and local communities. Specifically, the study says:

•The fleet of offshore support vessels pays more than $750 million per year in wages to crews.
•The average workboat pays a total of $700,000 to $1 million in total wages per year.
•The men and women who work in the offshore fleet pay more than $40 million in state and Federal income taxes, or approximately $105,000 for the total crew of an average vessel.
•The average vessel pays more than $39,000 per year in local property taxes. These taxes go to support local schools, build roads and fund local governments and law enforcement agencies.
•The average workboat spends roughly $60,000 a year on groceries alone, an indication of the impact the industry has on non-maritime businesses in coastal areas.

“This is the first study of the offshore oil and gas sector that helps to show the positive value that U.S. flag vessels play in the economies of coastal areas. It is important to remember that foreign vessels that operate in the U.S. offshore oil and gas industry hire foreign sailors instead of U.S. citizens, do not pay local state and federal taxes, and generally avoid spending money in local shipyards and with local vendors,” said Ken Wells, President, OMSA. “The only way to ensure that local communities will continue to reap economic benefits from vessels that work offshore is for the Federal government to actively investigate Jones Act violations and vigorously enforce this critically important law,” he continued.

OMSA’s research also indicates that the offshore vessel industry is engaged in a major rebuilding effort that will benefit local communities for years to come. Specifically, the industry has plans to build more than 150 new vessels in the next five years, with an average price tag of $10-to-20 million per vessel. The total cost of this rebuilding effort may be $3 billion. This will result in thousands of jobs at U.S. shipyards for the initial construction and then continuing employment for maintenance and repair over the life of the vessels.

For details or a copy of Maritime & Economic Security in the Offshore Energy Supply Sector, contact Ken Wells, [email protected], or call 504/734-7622.

OMSA represents more than 250 member companies, including 100 firms that own and operate marine service vessels operating offshore. It is the leading association for the U.S. offshore transportation service industry.