	Introduction

New sources of crude oil from the Bakken region of North Dakota, the Eagle Ford and Permian basins in Texas, and western Canada have induced new routes for shipping crude oil to U.S. and Canadian refineries. While pipelines have traditionally been the preferred method of moving crude overland, especially to or from landlocked locations, they either are not available or have insufficient capacity to move all the crude from these new sources of production. The other has to do with the impact of the Jones Act, a 1920 law that restricts domestic waterborne transport to vessels built in the United States and crewed by U.S. citizens, which may now be affecting U.S. producers' decisions about how to ship crude oil and whether to send it to refineries in the United States or in Canada. New Shipping Routes

The vast majority of U.S. refineries are located along the coast (including the Great Lakes) or an inland waterway. New Barge Safety Regime

Barges are the workhorses in moving Bakken and Texas oil by water. However, the Coast Guard has just begun establishing a safety inspection regime for barges. 108-293 , §415), Congress directed the Coast Guard to establish a barge safety inspection and certification regime similar to that which exists for ships. In the Coast Guard Authorization Act of 2010 ( P.L. That policy remains in the law today:
It is necessary for the national defense and the development of the domestic and foreign commerce of the United States that the United States have a merchant marine (1) sufficient to carry the waterborne domestic commerce and a substantial part of the waterborne export and import foreign commerce of the United States and to provide shipping service essential for maintaining the flow of waterborne domestic and foreign commerce at all times; (2) capable of serving as a naval and military auxiliary in time of war or national emergency; (3) owned and operated as vessels of the United States by citizens of the United States; (4) composed of the best-equipped, safest, and most suitable types of vessels constructed in the United States and manned with a trained and efficient citizen personnel; and (5) supplemented by efficient facilities for building and repairing vessels. Jones Act Shipping Rates

According to oil shippers, the price for moving crude oil from the Gulf Coast to the U.S. Northeast on Jones Act tankers is $5 to $6 per barrel, while moving it to eastern Canada on foreign-flag tankers is $2. For these reasons, tanker should be significantly cheaper than rail for transport of crude oil, even when the water route is much longer. This shipping pattern is not unique to oil. Congress is greatly concerned about the safety of shipping crude oil by rail. Limited capacity exists in U.S. shipyards to build tankers. 4745 ) would rescind $29 million of this amount while the Senate reported bill ( S. 2438 ) provides $7 million for the program. Current Legislation

Several bills now pending in Congress address matters related to waterborne transportation of oil, including many of the safety and commercial issues raised in this report:
The Coast Guard and Maritime Transportation Act of 2014 ( H.R. 4005 , passed by the House April 1, 2014) directs the U.S. Department of Transportation to submit a national maritime strategy that identifies federal regulations that reduce the competitiveness of U.S.-flag vessels in international trade, submit recommendations to make U.S.-flag vessels more competitive and enhance U.S. shipbuilding capability, and identify strategies to increase the use of U.S.-flag vessels to carry imports and exports and domestic commerce.
New sources of crude oil from North Dakota, Texas, and western Canada have induced new routes for shipping crude oil to U.S. and Canadian refineries. While pipelines have traditionally been the preferred method of moving crude overland, they either are not available or have insufficient capacity to move all the crude from these locations. While rail has picked up some of this cargo, barges, and to a lesser extent tankers, also are moving increasing amounts of crude in domestic trade.
The rather sudden shift in transportation patterns raises concerns about the safety and efficiency of oil tankers and barges. The United States now imports less oil than five years ago by oceangoing tankers, while more oil is moving domestically by river and coastal barges. However, the Coast Guard still lacks a safety inspection regime for barges similar to that which has long existed for ships. The possibility of imposing an hours-of-service limit for barge crews as part of this regime is controversial. Congress called for a barge safety inspection regime a decade ago, but the related rulemaking is not complete. The Coast Guard's progress in revamping its Marine Safety Office is a related issue that Congress has examined in the past.
The majority of U.S. refineries are located near navigable waters to take advantage of economical waterborne transport for both import and export. However, for refineries switching from imported to domestic crude oil, the advantage diminishes considerably. This is because the Jones Act, a 1920 law that seeks to protect U.S. shipyards and U.S. merchant sailors in the interest of national defense, restricts domestic waterborne transport to U.S.-built and -crewed vessels. The purchase price of U.S.-built tankers is about four times the price of foreign-built tankers, and U.S. crewing costs are several times those of foreign-flag ships. The small number of U.S.-built tankers makes it difficult for shippers to charter tankers for a short period or even a single voyage, highly desirable in an oil market with shifting supply patterns. The unavailability of U.S.-built tankers may result in more oil moving by costlier, and possibly less safe, rail transport than otherwise would be the case. Some Texas oil is moving to refineries in eastern Canada, bypassing refineries in the northeastern United States, because shipping to Canada on foreign-flag vessels is much cheaper than shipping domestically on Jones Act-eligible ships.
Some of these issues may be addressed in the Coast Guard and Maritime Transportation Act of 2014 (H.R. 4005), which has passed the House, and the Coast Guard Authorization Act for Fiscal Years 2015 and 2016 (S. 2444), introduced in the Senate. The House bill requests federal agency studies and recommendations towards improving the competitiveness of the U.S.-flag industry while the Senate bill contains provisions related to oil spill response.