The additional funds will provide for pay raises and other cost increases, the exercise of an option to buy a leased training aid used in the Academy's upgraded diesel engine curriculum, increased maintenance and operating requirements, and the Academy's modernization effort. In 1980 the modernization program will be concentrated on the renovation of Fulton Hall and the completion of a project to improve barracks fire protection features.

A sum of $6,785,000 is requested for the six State marine schools. The requested amount is $1,415,000 greater than the level appropriated for 1979. This increase covers increased allowances due to reduced attrition, training ship maintenance cost increases, and a reduction in the backlog of major repairs, and initial funding for a 3-year schoolship improvement program. The increase in grants to the State marine schools, which was authorized last year, has been funded for both 1979 and 1980; $1,957,000 is requested for supplementary training courses, including an increase of $53,000 over the amount appropriated last year. The additional funds will enable the Maritime Administration to increase course offerings to industry required by an increased demand for diesel training at the Maritime Academy.

The appropriations authorizations requested for 1980 operating expenses total $35,598,000. This includes $6,377,000 for Reserve Fleet expenses and $29,221,000 for expenses related to the administration of several programs which contribute to the development and use of waterborne transportation systems and to general administration.

The $6,377,000 requested for Reserve Fleet expenses reflects an increase of $932,000 over the 1979 appropriation. The Ready Reserve Fleet program, which was begun in 1977, will be further expanded in 1980. This joint Navy-Maritime Administration program prepares and maintains selected ships in an advanced state of readiness to permit full activation within 5 to 10 days of notification. It is estimated that 6 ships will be added to the Ready Reserve Fleet in 1980, bringing the total to 20.

The $29,221,000 requested for other operating expenses includes an increase of $149,000 over the amount appropriated for 1979. Additional resources are requested for pay raise and other cost increases and the study of foreign maritime aids. These cost increases are largely offset by a reduction in personnel relating to the transfer of 21 positions of the equal opportunity contract compliance function to the Department of Labor and the elimination of 38 positions consistent with the President's objective of reducing Federal employment.

That concludes my statement, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Blackwell.

On the first page of your statement, you talk about the deepdraft fleet increasing from 578 ships to 584. Are those the domestic Jones Act ships, as well as the foreign?

Mr. BLACKWELL. That is the entire U.S. fleet that can operate in deep water. That is foreign trade fleet, our intercoastal fleet, and the fleets that operate on the Great Lakes.

The CHAIRMAN. How about the fleets working in foreign commerce?

Mr. BLACKWELL. That is a smaller number. The 745 ships are the entire fleet, Mr. Chairman, and the 578 ships are the oceangoing component of that fleet. The differentiation there is that one includes the lakes, and one does not.

The CHAIRMAN. Of the 578, what are foreign commerce ships and not mandated Jones Act ships?

Mr. BLACKWELL. I think that fleet is roughly split in two, with about the same number employed in the domestic trade. Those would mostly be tankers, of course, and the remainder being in the foreign commerce of the United States.

The CHAIRMAN. About 270 ships, then?

Mr. BLACKWELL. That is about right.

The CHAIRMAN. On page 2, "In the same period, the U.S. share of our foreign trade liner cargo has climbed from slightly over 20 percent to about 30 percent.'

What part of that 30 percent is military cargoes?

Mr. BLACKWELL. I really do not know the precise percentage. I would not think the military cargoes are significant.

As a matter of fact, the military cargo moving in liners, both subsidized and nonsubsidized, has, in fact, decreased rather substantially over the last 10 years. So that record is not achieved as a result of carrying military cargo. That is basically an increase in commercial cargo.

The CHAIRMAN. Last year you informed us that the Maritime Administration had a new system under development in order to provide data on the carriage of all Government-generated cargoes. Mr. BLACKWELL. Yes, sir.

The CHAIRMAN. Will you give us a status on that report?

Mr. BLACKWELL. Yes, we have obtained significant information from the foreign sales agencies, as well as from the Export-Import Bank, and are beginning to program that information into computers. We are also interested in putting into computers information that would be obtained from the Department of Agriculture, AID, the Department of Defense, and other agencies that are responsible for moving cargo.

We are getting basic material, we are getting the contract data for the cargo, who is shipping it, where it is moving to, the bills of lading, the freight rates, and just about every critical piece of information we need. That information is now going into the system, and hopefully, in a very short time, it will be on line, and be quite useful to us.

The CHAIRMAN. Would you give us the breakdown from 1970 to 1978 of the military cargoes, and mandated cargoes versus the other cargoes?

Mr. BLACKWELL. I will. I do not have that with me. I will be pleased to supply it with the record.

[The following was received for the record:]

Carriage of Preference Cargoes (Liner)

Table I shows U.S. oceanborne foreign trade liner cargoes for the period 1970 to 1977, broken down by total long tons carried and the U.S.-flag market share expressed in long tons and as a percentage of total liner carryings. These statistics include government-sponsored cargoes except for Department of Defense shipments.

Table II shows the U.S.-flag liner market shares from 1970 to 1977 broken down by commercial, DOD and other preference cargoes. The breakdown is expressed in long tons and percentages of the total U.S.-flag market share.

(1)

(2)

(3)

Includes Department of Defense cargoes.
Reported by MSC in measurement tons, converted to long tons
using a 2 to 1 ratio.

Data reported to MarAd by shipper agencies. The number of
agencies submitting reports had increased from 4 in 1970
to over 60 in 1977.

Table III shows, for the period 1972 to 1977, the percent of
total liner freight revenues earned by U.S.-flag operators
from Exim-Bank (PR 17) carryings. Exim-Bank data is reported
only on a freight revenue basis.

The CHAIRMAN. We just want to see how much of our cargo is going on a voluntary basis.

Mr. BLACKWELL. I understand. I will be very happy to supply it for the record, Mr. Chairman.

The CHAIRMAN. Mr. Donnelly?

Mr. DONNELLY. Mr. Blackwell, as I understand it, the Administration is requesting $101 million in the CDS program, is that correct?

Mr. BLACKWELL. That is right, sir.

Mr. DONNELLY. So that would be $56 million less than was appropriated in fiscal year 1979?

Mr. BLACKWELL. That is right.

Mr. DONNELLY. $54 million less than 1978; $94 million that was appropriated for fiscal year 1976. How do you justify this request for fiscal year 1980, in terms of the President's stated words, the Administration's position to improve the ability of our merchant marine to win a fair share of cargo?

Mr. BLACKWELL. The request for shipping, and the applications for subsidy are based on private sector determinations by American shipowners, or ship operators, and there simply is no significant demand, given the state of the current U.S. shipping market for ships, additional to the ones that we have mentioned.

In the contracts that we have with our major subsidized operators, we have replacement obligations under which over periods of years those operators are required to replace vessels. We are reasonably sure that the Waterman application for a LASH ship is firm, because they have a legal commitment to the Government to replace that vessel. But those are the only obligations coming up in that timeframe, and we have no indication from our consultations with the industry that there is going to be a demand for any ships, other than the ones that I have mentioned there, sir.

Mr. DONNELLY. How does the LNG program fit into the CDS in the future?

Mr. BLACKWELL. Well, I think it looks rather bleak, to tell you the truth.

Mr. DONNELLY. Am I correct in my understanding that the Maritime Administration requested two LNG carriers, to the administration?

Mr. BLACKWELL. In this budget?

Mr. DONNELLY. Yes.

Mr. BLACKWELL. Yes, we did. We requested some funds for the two ships for the Pacific lighting project.

Mr. DONNELLY. And that was stricken?

Mr. BLACKWELL. That is a proposed movement of liquid natural gas from Indonesia to the west coast.

The CHAIRMAN. Would the gentleman yield?

Mr. DONNELLY. Yes.

The CHAIRMAN. How much did you have in the proposal for those two vessels, and what percent would it have been for each ship? Mr. BLACKWELL. I do not have the precise recollection now, Congressman Murphy. I think the CDS rate we thought we would have to pay would be 30 percent, and I think that request was for about 100 something million dollars. We were turned down by OMB on that request, and I cannot say that their position, Congressman Donnelly, was unreasonable.

We had requested funds for that project before, and used them for other purposes. There is a very significant delay in the regulatory process regarding the siting of that facility, the receiving facility, in the State of California. We do not know when that issue will be resolved, and I cannot object very strenuously to the OMB's deletion of that item.

Mr. DONNELLY. If in fact the situation is resolved, Mr. Blackwell, what provisions does your agency, or is this budget supposed to make

Mr. BLACKWELL. If the DOE approvals are in place in an appropriate time, and if the State of California resolves the siting issue, and we get to the issue of transportation, and we do not have money, as we would not have money in this current budget, it would have been my intention to request the supplemental appropriation for those two ships.

We have only done that once before, and the Congress was not only very generous, but very expeditious in providing us with the

money.

Mr. DONNELLY. Are you stating for the record, Mr. Blackwell, that you will make that recommendation?

Mr. BLACKWELL. No, I am not. I am leaving shortly, and I said if I were there, I would make the recommendation. I do not know what the new Maritime Administrator will do.

Mr. DONNELLY. So there is no assurance that there will be submission?

Mr. BLACKWELL. There is no assurance, but the people at the Office of Management and Budget are aware of the fact that the Maritime Administration is inclined to make that request, Congressman.

Mr. DONNELLY. I am sure, as you understand, I represent a shipbuilding area, which has, up until this point, been almost totally relying on building of LNG tankers.

If the position of the administration is a strong maritime administration, strong maritime fleet, I stand in a situation where within the next 2 years we could have one of our major shipyards in this nation completely out of work.