GROWTH OF THE MARITIME GROWTH OF THE MARITIME INDUSTRY IN THE GULF REGION AND INDUSTRY IN THE GULF REGION AND

THE DEMAND FOR QUALIFIED THE DEMAND FOR QUALIFIED MARITIME PROFESSIONALSMARITIME PROFESSIONALS

AMERICA’S ENERGY COAST LEADERSHIP HEARINGAMERICA’S ENERGY COAST LEADERSHIP HEARINGGALVESTON, TEXAS GALVESTON, TEXAS

MAY 25-26, 2010MAY 25-26, 2010

WILLIAM T. MC MULLEN, PH.D.WILLIAM T. MC MULLEN, PH.D.PROFESSOR OF MARITIME ADMINISTRATION AND OF MARINE SCIENCESPROFESSOR OF MARITIME ADMINISTRATION AND OF MARINE SCIENCES

Head of the Department of Maritime Administration Head of the Department of Maritime Administration Interim Head of the Department of Marine TransportationInterim Head of the Department of Marine Transportation

TEXAS A&M UNIVERSITY AT GALVESTONTEXAS A&M UNIVERSITY AT GALVESTON

THE GENERAL DEVELOPMENT THE GENERAL DEVELOPMENT OF WORLD TRADEOF WORLD TRADE

• BETWEEN 2000 AND 2020, WORLD TRADE WILL BETWEEN 2000 AND 2020, WORLD TRADE WILL DOUBLE.DOUBLE.

• IMPORTANCE OF INCREASED ECONOMIC AND IMPORTANCE OF INCREASED ECONOMIC AND POLITICAL STABILITY WHICH STIMULATES POLITICAL STABILITY WHICH STIMULATES FOREIGN DIRECT INVESTMENT, AND FOREIGN DIRECT INVESTMENT, AND GLOBALIZATION.GLOBALIZATION.

• IMPORTANCE OF THE MIDDLE CLASS IN CREATING IMPORTANCE OF THE MIDDLE CLASS IN CREATING DEMAND FOR GOODS AND SERVICES.DEMAND FOR GOODS AND SERVICES.

• DIFFERENTIAL IMPACT ON AMERICAN COASTS – DIFFERENTIAL IMPACT ON AMERICAN COASTS – CARGO MOVEMENTS ON THE GULF COAST ARE CARGO MOVEMENTS ON THE GULF COAST ARE EXPECTED TO TRIPLEEXPECTED TO TRIPLE

REGIONAL IMPACT OF THE REGIONAL IMPACT OF THE NEW LOCKS OF THE PANAMA NEW LOCKS OF THE PANAMA

CANALCANAL• NEW LOCKS WILL OPEN IN 2014 AND WILL DOUBLE THE NEW LOCKS WILL OPEN IN 2014 AND WILL DOUBLE THE

PRESENT CAPACITY, ALLOWING LARGER AND MORE PRESENT CAPACITY, ALLOWING LARGER AND MORE VESSELSVESSELS

• SMALLEST PRESENT LOCK IS 110’ WIDE, 1,050 FEET LONG SMALLEST PRESENT LOCK IS 110’ WIDE, 1,050 FEET LONG AND 85’ DEEP. NEW LOCKS ARE 180’ WIDE,1400 FEET AND 85’ DEEP. NEW LOCKS ARE 180’ WIDE,1400 FEET LONG AND 60’ DEEP.LONG AND 60’ DEEP.

• BETWEEN 2005 AND 2025 CARGO VOLUME WILL DOUBLE. BETWEEN 2005 AND 2025 CARGO VOLUME WILL DOUBLE. PRESENTLY ABOUT 15% OF THE CONTAINERS FROM ASIA PRESENTLY ABOUT 15% OF THE CONTAINERS FROM ASIA THAT TRANSIT THE CANAL COME TO HOUSTON; THIS WILL THAT TRANSIT THE CANAL COME TO HOUSTON; THIS WILL INCREASE TO 35% WHEN THE FULL IMPACT OF THE LARGER INCREASE TO 35% WHEN THE FULL IMPACT OF THE LARGER LOCKS IS FELT.LOCKS IS FELT.

• COASTWISE DISTRIBUTION OF CARGO BY SHIP/BARGE WILL COASTWISE DISTRIBUTION OF CARGO BY SHIP/BARGE WILL BE ESSENTIALBE ESSENTIAL. . ROAD AND RAIL SYSTEMS WILL BE ROAD AND RAIL SYSTEMS WILL BE INADEQUATE.INADEQUATE.

EXPANDING OIL AND GAS EXPANDING OIL AND GAS INDUSTRIES IN THE GULF OF INDUSTRIES IN THE GULF OF

MEXICOMEXICO• STARTING IN 2000 AND CONTINUING THROUGH STARTING IN 2000 AND CONTINUING THROUGH

ABOUT 2040, THERE WILL BE APPROXIMATELY ABOUT 2040, THERE WILL BE APPROXIMATELY $400 BILLION IN DIRECT INVESTMENT IN DEEP $400 BILLION IN DIRECT INVESTMENT IN DEEP GULF DRILLING OFF THE CONTINENTAL SHELF.GULF DRILLING OFF THE CONTINENTAL SHELF.

• TECHNOLOGY OF RECOVERY HAS OVERTAKEN TECHNOLOGY OF RECOVERY HAS OVERTAKEN THE TECHNOLOGY OF EXPLORATIONTHE TECHNOLOGY OF EXPLORATION

• ECONOMIC MULTIPLIER EFFECT ON THE COASTAL ECONOMIC MULTIPLIER EFFECT ON THE COASTAL ZONE IS 5-7 TIMES THE VALUE OF THE OFFSHORE ZONE IS 5-7 TIMES THE VALUE OF THE OFFSHORE INVESTMENT: TOTAL IMPACT APPROACHES $3 INVESTMENT: TOTAL IMPACT APPROACHES $3 TRILLION. MOST IMPACT WILL BE WEST OF THE TRILLION. MOST IMPACT WILL BE WEST OF THE MISSISSIPPI RIVER.MISSISSIPPI RIVER.

ECONOMIC ACTIVITY IN THE ECONOMIC ACTIVITY IN THE COASTAL ZONECOASTAL ZONE

• 12 COASTAL COUNTIES IN TEXAS AND 26 COUNTIES 12 COASTAL COUNTIES IN TEXAS AND 26 COUNTIES COMPRISE THE COASTAL ZONE - THE AREA WITHIN ABOUT COMPRISE THE COASTAL ZONE - THE AREA WITHIN ABOUT 100 MILES OF THE COAST. 100 MILES OF THE COAST.

• ONE-THIRD OF THE POPULATION AND ONE-THIRD OF THE ONE-THIRD OF THE POPULATION AND ONE-THIRD OF THE ECONOMIC ACTIVITY OF THE STATE OCCURS IN THE ECONOMIC ACTIVITY OF THE STATE OCCURS IN THE COASTAL ZONE. COASTAL ZONE.

• THE PORT OF HOUSTON GENERATES MORE THAN 785,000 THE PORT OF HOUSTON GENERATES MORE THAN 785,000 JOBS IN THE STATE OF TEXAS AND APPROXIMATELY $117.6 JOBS IN THE STATE OF TEXAS AND APPROXIMATELY $117.6 BILLION OF ECONOMIC ACTIVITY IN TEXAS.BILLION OF ECONOMIC ACTIVITY IN TEXAS.

• THE PORT OF HOUSTON GENERATES ABOUT 9.6% OF THE THE PORT OF HOUSTON GENERATES ABOUT 9.6% OF THE GROSS STATE PRODUCT OF TEXAS WHICH WAS $1.228 GROSS STATE PRODUCT OF TEXAS WHICH WAS $1.228 TRILLION IN 2008.TRILLION IN 2008.

• THE ECONOMY OF THE STATE WILL BENEFIT ENORMOUSLY THE ECONOMY OF THE STATE WILL BENEFIT ENORMOUSLY FROM INCREASED FOREIGN TRADE. THE SIGNIFICANCE OF FROM INCREASED FOREIGN TRADE. THE SIGNIFICANCE OF PORTS WILL INCREASE.PORTS WILL INCREASE.

THE MARITIME LABOR POOLTHE MARITIME LABOR POOL

• THERE IS PRESENTLY A SUBSTANTIAL INTERNATIONAL SHORTAGE OF THERE IS PRESENTLY A SUBSTANTIAL INTERNATIONAL SHORTAGE OF MARITIME PROFESSIONALS AT SEA AND ASHORE. SHORTAGES WILL MARITIME PROFESSIONALS AT SEA AND ASHORE. SHORTAGES WILL INCREASE AS MARITIME-BASED ECONOMIC ACTIVITY EXPANDS. 90% INCREASE AS MARITIME-BASED ECONOMIC ACTIVITY EXPANDS. 90% OF INTERNATIONAL TRADE IS BY SEA. WORLD WIDE SHORTAGE OF OF INTERNATIONAL TRADE IS BY SEA. WORLD WIDE SHORTAGE OF APPROXIMATELY 46,000 OFFICERS.APPROXIMATELY 46,000 OFFICERS.

• INTERNATIONAL AND DOMESTIC TRAINING AND CERTIFICATION INTERNATIONAL AND DOMESTIC TRAINING AND CERTIFICATION REQUIREMENTS ARE INCREASING. THIS INCREASES TRAINING COSTS REQUIREMENTS ARE INCREASING. THIS INCREASES TRAINING COSTS AND COSTS OF RE-CERTIFICATION OF SERVING MARINERS. THIS AND COSTS OF RE-CERTIFICATION OF SERVING MARINERS. THIS CONSTRAINS EXPANSION OF THE LABOR POOL AND ESTABLISHMENT CONSTRAINS EXPANSION OF THE LABOR POOL AND ESTABLISHMENT OF NEW PROGRAMS.OF NEW PROGRAMS.

• TEXAS A&M UNIVERSITY AT GALVESTON, TEXAS SOUTHERN TEXAS A&M UNIVERSITY AT GALVESTON, TEXAS SOUTHERN UNIVERSITY, THE UNIVERSITY OF HOUSTON, SAN JACINTO COLLEGE, UNIVERSITY, THE UNIVERSITY OF HOUSTON, SAN JACINTO COLLEGE, HOUSTON COMMUNITY COLLEGE, AUSTIN AND YATES HIGH SCHOOLS HOUSTON COMMUNITY COLLEGE, AUSTIN AND YATES HIGH SCHOOLS IN HISD, AND HIGH SCHOOLS IN PASADENA AND LA PORTE ARE IN HISD, AND HIGH SCHOOLS IN PASADENA AND LA PORTE ARE JOINTLY ADDRESSING THE NEEDS OF THE REGIONAL LABOR MARKET.JOINTLY ADDRESSING THE NEEDS OF THE REGIONAL LABOR MARKET.

• REGIONAL INLAND WATERS PERSONNEL DEMANDS ARE SUBSTANTIAL REGIONAL INLAND WATERS PERSONNEL DEMANDS ARE SUBSTANTIAL WITH TUGS AND BARGES TIED UP FOR LACK OF CREWSWITH TUGS AND BARGES TIED UP FOR LACK OF CREWS