Russian oil imports cut off; will our D.C. delegates rise to the occasion?

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Two women looking on Glass Beach Kauai with refinery behind
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By Keli’i Akina

It has been a whirlwind week at the Grassroot Institute of Hawaii. But I’m not complaining. 

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International upheaval in Europe has brought significant attention to the Jones Act, which has long been a factor in Hawaii’s high cost of living because of its severe restrictions on shipping between U.S. ports. 

Now, with the outbreak of war between Russia and Ukraine, the 101-year-old federal maritime law is even being recognized as a danger to Hawaii’s energy security.

Keli’i Akina

Institute research associate Jonathan Helton wrote about this early last week in his article “Hawaii needs Jones Act waiver for oil imports,” and I wrote about it again in my “President’s Corner” column a week ago, “Jones Act threatens Hawaii energy security.”

The problem is that typically, Hawaii gets between one-fifth and one-third of its crude oil from Russia. This is because the Jones Act makes it too expensive to buy oil from U.S. sources. 

As I said last week, maybe we should never have been so reliant on Russian oil imports to begin with. But that was a choice based on the high cost of U.S. oil, thanks to the Jones Act.

The best way forward, I said, is to obtain a permanent Jones Act exemption for our state that would let Hawaii buy oil from U.S. sources at lower costs.

On Monday, The Wall Street Journal — with a national circulation of almost 3 million — picked up our warnings and editorialized about it. The secondary headline of the editorial read: “Hawaii imports Moscow crude, and the Jones Act is one bad reason why.” Related national coverage soon appeared in the Washington ExaminerTIMEUSA Today and Forbes

Here in Hawaii, reporters reached out to us from local, national and international media. 

Then on Thursday, Par Pacific Holdings, owner of Hawaii’s only remaining oil refinery, announced it would be suspending its purchases of Russian crude oil, to be replaced by shipments from sources in North and South America. 

Oil tankers at the Russian petroleum port in Vladivostok.

That announcement reinforced our belief that Hawaii requires quick, decisive action on the Jones Act to prevent energy and gasoline prices locally from soaring to sky-high levels.

Shortly afterward, I sent a letter on behalf of the Grassroot Institute to President Joe Biden, asking him to grant Hawaii a one-year exemption from the Jones Act for fuel imports, to give the state greater flexibility in its oil purchases.

As I explained in our news release about the request, the immediate purpose of the waiver would be to alleviate Hawaii’s fuel crisis. But such an exemption also would allow policymakers to review the potential effects of long-term updating of the Jones Act. A one-year waiver would prove a useful experiment.

Yesterday, the Honolulu Star Advertiser reported on the institute’s waiver request, and that  U.S. Rep. Ed Case also will be asking the U.S. Department of Transportation for a waiver that would improve Hawaii’s access to domestic oil. 

My fingers are crossed that the rest of Hawaii’s delegation will grasp the seriousness of our situation and support Case in his actions.

To be clear: A limited Jones Act waiver would not necessarily cause a significant drop in Hawaii’s high gas and energy prices. The Ukraine crisis is affecting energy supplies and prices around the world. 

However, a waiver would be an important first step toward addressing the fact that the Jones Act has made our state dependent on foreign oil and vulnerable to crises like the current conflict with Russia.

I am proud of the role that the Grassroot Institute has played in informing policymakers, the media and the public about the need for a Jones Act waiver for Hawaii. 

Like you, I am concerned about the impact higher energy prices might have on each of us individually and on our economy as a whole, which is still struggling to recover after two years of crippling coronavirus lockdowns.

I hope that President Biden hears and responds to our request for a limited Jones Act waiver. In any case, I remain committed to addressing once and for all our state’s energy supply vulnerabilities.

If anything, this crisis has highlighted how critical it is that we update the Jones Act for the 21st century.
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Keli’i Akina is president and CEO of the Grassroot Institute of Hawaii.

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