Methyl Tertiary-Butyl Ether (MTBE):Conditions Affecting the ...
Methyl Tertiary-Butyl Ether (MTBE):Conditions Affecting the ...
Methyl Tertiary-Butyl Ether (MTBE):Conditions Affecting the ...
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<strong>the</strong> distance involved. 71<br />
Although total shipping costs for imported <strong>MTBE</strong> from <strong>the</strong> Arabian Gulf generally exceed<br />
total shipping costs for domestic <strong>MTBE</strong> because distances are significantly greater, U.S. shippers<br />
generally pay higher freight rates on a per ton-mile 72 basis than foreign shippers (table 3-13 and<br />
figure 3-2). U.S. producers must use U.S.-flag Jones Act vessels for cargo shipped between<br />
U.S. ports. U.S. industry representatives stated that <strong>the</strong>y believe <strong>the</strong> Jones Act makes it less<br />
profitable for <strong>the</strong>m to compete in <strong>the</strong> west coast market (<strong>the</strong> destination for most imported Arabian<br />
Gulf <strong>MTBE</strong>). 73<br />
Table 3-13<br />
Clean marine transportation, spot charter rates, 1996-98<br />
1996 1997 1998<br />
Total cost Rate Total cost Rate Total cost Rate<br />
Per ton Per ton-mile Per ton Per ton-mile Per ton Per ton-mile<br />
Type of voyage:<br />
Domestic (Jones Act):<br />
U.S. gulf-U.S. east coast $11.36 $0.0059 $10.23 $0.0054 $9.73 $0.0051<br />
U.S. gulf-California (LA)<br />
Foreign:<br />
24.75 0.0052 24.12 0.0051 21.92 0.0046<br />
Europe-U.S. east coast 13.63 0.0040 14.97 0.0044 10.78 0.0032<br />
Caribbean-U.S. east coast 9.32 0.0050 10.51 0.0057 6.40 0.0035<br />
Singapore-California 19.13 0.0020 16.31 0.0020 16.10 0.0020<br />
Arabian Gulf-California 29.48 1<br />
0.0026 27.03 1<br />
0.0023 24.57 0.0024<br />
1 Estimated by <strong>the</strong> Commission using industry information.<br />
Source: Compiled by <strong>the</strong> Commission from information provided by U.S.-based shippers.<br />
71 As of February 1999, <strong>the</strong> freight costs for shipping <strong>MTBE</strong> from <strong>the</strong> U.S. gulf coast to<br />
<strong>the</strong> east coast and to <strong>the</strong> west coast amounted to approximately 3.5 cents per gallon and<br />
7.5 cents per gallon, respectively. As it is difficult to cover transportation costs to <strong>the</strong> west<br />
coast through <strong>the</strong> market price, <strong>the</strong>re is substantially less product shipped from <strong>the</strong> gulf coast<br />
to <strong>the</strong> west coast. USITC fieldwork in <strong>the</strong> United States.<br />
72 A ton-mile is a unit of measure reflecting <strong>the</strong> movement of 1 ton of freight 1 mile. The<br />
freight cost per ton-mile is <strong>the</strong> cost to move 1 ton this distance.<br />
73 USITC fieldwork in <strong>the</strong> United States.<br />
3-21