No waivers to the Jones Act

The following was sent to me by one of my readers from gCaptain,  a publication dedicated to Maritime news.

If anyone had the illusion that there would be waivers to the Jones Act issued to allow the installation of Off Shore Wind by foreign vessels, that ship has sailed.

A House Democrat has reintroduced a bill to tighten the loopholes used to skirt the Jones Act and to tighten enforcement of it.  Note that it specifically mentions lifting operations and installation vessels which target Offshore Wind installation by foreign vessels.  As there are no domestic vessels yet available, that puts a huge obstacle in the way of OSW installation.  Captions from the article are below in italics.  When Donald Trump initially was in favor of waiving the Jones Act at the request of the Natural Gas and fossil fuel companies so that they could use foreign ships to haul LNG to Puerto Rico during his administration  and then retreated from that idea, it should have become apparent to anyone not wearing rose colored glasses that the Jones Act is a line in the sand that can’t be crossed.  (Bloomberg link and article below).

Biden is certainly not going to waive the act 12 months before an election while labor is already upset with him for mandating an end to the rail strike.  People need to look at reality, as difficult as that is sometimes.


From the Maritime newsletter at the link above:

The “Close Agency Loopholes to the Jones Act” bill, also known as H.R.5991, includes several provisions to address specific loopholes dating as far back as 1972. It closes loopholes related to oceanographic research vessels, vessel equipment, lifting operations, installation vessels, paid out-not unladen vessels, decommissioning vessels, seabed sampling, and pristine seabed operations. The bill also grants Jones Act operators the right to appeal Customs and Border Protection’s decisions that undermine the Jones Act, and subjects the agency’s enforcement to the Congressional Review Act.

Additionally, the bill requires foreign-flagged vessels operating on the Outer Continental Shelf to publicly notify Customs and Border Protection of their purported Jones Act exemption, and authorizes penalties for non-compliance. It also mandates that offshore energy developers pay a prevailing wage determined by the U.S. Department of Labor under the Davis-Bacon Act. The bill directs the U.S. Coast Guard to fully implement Congressman Garamendi’s 2020 amendment, which ensures that federal laws like the Jones Act apply to offshore renewable energy production in the United States’ Exclusive Economic Zone.

Trump’s Misguided U-Turn on the Jones Act

A waiver for natural-gas shipments would have helped to end a protectionist law long past its prime.
May 2, 2019 at 9:30 AM EDT
By The Editorial Board

The Editorial Board publishes the views of the editors across a range of national and global affairs.

The Jones Act helps … Russia sell gas.

Photographer: Scott Eisen/Bloomberg

President Trump has reportedly just rejected a waiver of the Jones Act — the law that requires the use of vessels built in the U.S. and owned and crewed by Americans to move cargo between U.S. ports — for shipments of liquefied natural gas. That’s bad news, and not just for U.S. producers of LNG.

Recently the White House was said to be leaning in favor of the waiver. This would have speeded the delivery of cheaper and cleaner energy from the U.S. mainland to Puerto Rico, whose decrepit power grid relieson old plants burning oil and coal. It would also have helped consumers in the Northeast tap into the U.S. natural-gas boom by providing a safe alternative to overloaded pipelines, and reduced their use of imported gas from suppliers such as Russia.

Best of all, it could have helped to sink the Jones Act altogether. Ships that comply with this law cost more to build and operate than foreign-flagged counterparts, raising the cost of almost all goods transported between U.S. ports. Those higher costs make it more attractive to buy oil, lumber, rock salt, wheat and other bulk goods from foreign suppliers. They keep more trucks on the road, clogging highways and spewing carbon. For good measure, the law also makes it harder to find specialized vessels for building wind turbines.

The Jones Act was meant to maintain a healthy merchant marine. But since 1960, the number of U.S.-flagged ships has plunged anyway. Hundreds of U.S. shipyards have been shuttered. Meanwhile the tonnage of cargo carried by coastal shipping — far more carbon-efficient than trucks or rail — has declined. The act is no longer working, if it ever did.

The shipping lobby defends it tenaciously and would like to extend it, requiring a mandated portion of U.S. energy exports to be carried on Jones Act ships. (Building Jones Act-qualified natural gas carriers could cost two or three times more than buying them from South Korea.) Energy producers are a formidable lobby, too — but in this case, apparently, not powerful enough. They should keep bending the president’s ear. If Trump changes his mind (again), it would help Americans benefit from cleaner energy, and could put a hole below the Jones Act’s waterline. That would be win-win.

—Editors: James Gibney, Clive Crook.