HOUSTON, Oct. 3 -- The Shipbuilders Council of America, Arlington, Va., has warned that construction of double-hulled tankers must increase dramatically to avoid a shortage of US-flagged ships.

The 1990 Oil Pollution Act requires single-hulled tank vessels to be phased out of service or converted to double-hulled ships to reduce the risk of oil spills.

SCA said OPA 90 would cause the US to lose up to 28% of its existing tank vessel capacity, including 45% of all large, ocean-going tank barges, by the end of 2004.

It said by that date, US tank vessel demand would exceed supply by 24%, taking into consideration existing construction and orders.

Allen Walker, SCA president, said, "This information should be a wake up call. It confirms what many in the industry have realized for some time -- that the US will face a severe tank vessel capacity shortage beginning in 2005 when the OPA requirements kick in, unless the pace of construction increases dramatically."

Congress has directed the US Coast Guard to review progress in converting to double-hulled tank vessels. The Coast Guard is expected to issue that report soon.

SCA said a tanker shortage could have military and commercial implications. It said, "Virtually 100% of all petroleum products have historically moved into a war zone by waterborne transportation, and US vessels are the backbone of this sealift requirement. US tank vessels are also crucial to meeting America's commercial transportation needs for petroleum products."

The group noted that the Maritime Cabotage Task Force, an industry group, and the National Defense Transportation Association's Sealift Committee both recently warned of a looming US tanker shortage.

The SCA analysis said that in addition to double-hull construction underway, more than 500,000 dwt would be needed by 2005 to meet growing demand for domestic waterborne transportation of petroleum products. It said that equates to about twenty-five 20,000-dwt barges over the next 3 years.

It said, "While there has been an increase in double-hull construction, it falls far short of capacity demands in coming years. Operators waiting until the 11th hour to order ships could find insufficient shipyard capacity to meet demand, a problem that could be more acute as construction in the offshore and dry cargo segments develops."