Hurricane Sandy moves over the eastern US.
Hurricane Sandy moves over the eastern US.

BY MICHAEL HANSEN – The Secretary of the U.S. Department Homeland Security, Janet Napolitano, issued a Jones Act waiver this morning to allow foreign-flag clean products tankers carry refined petroleum products from domestic coastwise ports to the North East which is suffering from shortages of motor gasoline and diesel fuel due to Hurricane Sandy.  The waiver expires on November 13.

The Jones Act Waiver was requested by New York Governor Andrew Cuomo (D) as two major oil refineries in the North East remain shutdown and the lines at gas stations in the affected areas including New York City reportedly stretched up to 2 miles.

Reuters reported “Benchmark New York Harbor gasoline futures dropped 5 cents, or 2 percent, on news of the waivers, which could allow shippers to divert cargoes that are en route to Europe or Latin America to the depleted Northeast market.”

The primary Jones Act lobby organization – The American Maritime Partnership (AMP), formerly the Maritime Cabotage Task Force – issued an openletter to President Barak Obama stating that they will not oppose temporary waivers in this instance.   The AMP is normally a fierce opponent of Jones Act waivers that are typically issued for the carriage of crude oil from the U.S. Strategic Petroleum Reserve (SPR) on the U.S. Gulf Coast to refineries in the North East.  Presumably in this instance the AMP decided it was politically best not to be seen opposing the waiver as so many people are suffering.

The need for a Jones Act waiver and the quick relief it will provide to the hard-hit people in the North East in the wake of Hurricane Sandy clearly demonstrates the drawbacks of the Jones Act as public policy and how it’s complete protection of the domestic U.S. maritime industry inhibits commerce and harms the consumer.

The shortages in the North East remind us that the situation of the noncontiguous jurisdictions – Alaska, Guam, Hawaii and Puerto Rico – is far more dependent on the Jones Act shipping industry. Their geographic separation from the contiguous U.S. that precludes the use of other forms of transportation – railroad, road truck, pipeline and inland barge – that are readily available to the 48 contiguous states.

We can begin to relive the precarious dependence of the noncontiguous jurisdictions on the Jones Act industry by exempting the noncontiguous trades from the U.S. build requirement of the Jones Act for large self propelled ships as the Hawaii Shippers’ Council has proposed.

Michael Hansen is the President of the Hawaii Shippers’ Council, a business league organization incorporated in 1997 to represent cargo interests – known as “shippers” – who tender their goods for shipment with the ocean carriers operating in the Hawaii trade. 

SEE MORE ON THE WEB

Bloomberg

http://www.bloomberg.com/news/2012-11-02/u-s-waives-jones-act-to-help-responding-to-storm-sandy.html

U.S. Waives Jones Act to Help Responding to Storm Sandy

http://www.reuters.com/article/2012/11/02/storm-sandy-oil-waivers-idUSL1E8M24QW20121102

UPDATE 2-U.S. waives Jones Act to help get fuel to Northeast

GCaptain

http://gcaptain.com/secy-napolitano-issues-jones/

Sec’y Napolitano Issues Jones Act Waiver to Help Alleviate Fuel Crisis in US Northeast

GCaptain

http://gcaptain.com/american-maritime-partnership-will-not-oppose-jones-act-waivers-for-sandy/

American Maritime Partnership Will Not Oppose Jones Act Waivers In Wake of Sandy

Journal of Commerce

http://www.joc.com/port-news/us-ports/us-allows-foreign-tankers-ship-gas-sandy-hit-ny-nj_20121102.html

US Allows Foreign Tankers to Ship Gas to Sandy-Hit NY-NJ

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