UPDATE 3-U.S. waives Jones Act to help get fuel to Northeast

Reuters ^ | November 2, 2012 | By Timothy Gardner and Ayesha Rascoe

[Oldeconomybuyer]

The U.S. government issued a rare waiver on Friday allowing foreign tankers in the Gulf of Mexico to supply the Northeast with fuel after Hurricane Sandy, but the extent of relief was uncertain since some ports in the region still lacked power.

The Department of Homeland Security's waiver of the Jones Act allows foreign-flagged vessels to begin shipping petroleum products, such as gasoline and diesel, from the Gulf of Mexico to Northeastern ports effective immediately. The shipments must leave the Gulf region by Nov. 13 and arrive in the Northeast by a week after.

With power still out at many ports and gasoline stations it was unclear how much fuel was needed immediately and how quickly it could get to customers.

DHS said it had received only one request from a company to waive the law. It did not identify the company.

The Merchant Marine Act of 1920, better known as the Jones Act, was created to support jobs in the maritime industry. It requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crews.

[sbMKE]

Jones act repeal would kill the American shipping industry overnight. All Americans would be driven out by foreign companies with foreign made equipment. Jones Act is bad policy but would cause billions of dOllars of US investment to bE jEopardized if suddenly repealed. If done in a way that is phased and/or mindful of domestic interests, it could help spur some growth in the industry. That said, the effect of Jones Act is complex and has many American livelihoods tied to it. Mine included.

[sbMKE]

Jones Act was created to ensure US shipbuilding capabilities and shipyard health for national security. A United States without shipbuilding capability was(is) vulnerable in time of need of military conflict.

[sbMKE]

The United States does not build cruise ships nor does it build ships for international trade because the foreign yards are significantly more cost effective. US shipyards are not competitive internationally and they only build for the USN and domestic cabotage.

[Alberta's Child]

I understand that. My point was that I don’t see how the Jones Act could have such strong influence on the berthing and routing decisions of a foreign cruise line that can easily meet the legal requirements of the Jones Act on a trip from Seattle to Alaska simply by making a port call in Vancouver on the way.

[SeaHawkFan]

Alsaka cruise ships sailing out of Seattle stop in Victoria for about 5-7 hours just to avoid the Jones Act problems, not that Victoria isn’t a beautiful city.

[Who is John Galt?]

...the effect of Jones Act is complex and has many American livelihoods tied to it...

The Jones Act also inhibits job creation in the US. Several Indian reservations located in coastal areas of Washington State, for example, contain world-class aggregate deposits. Those deposits will probably never be commercially developed, because the Jones Act would make operating costs for transport by barge or ship absolutely non-competitive. Comparable Canadian aggregate sources located just north of the US border can be (and have been) developed, because American ships and crews are not required to transport Canadian aggregate. End result - Canadian aggregate gets shipped all the way to California (and beyond), and the Canadians get the jobs and the income...