Jones Act Waiver Circumvents The Law
The explanation offered by Secretary of Homeland Security Alejandro Mayorkas as to why he granted an “unprecedented” Jones Act waiver has failed to quell industry criticism.
In his September 28 statement justifying his decision to grant a waiver to a BP tanker that had already diverted to Puerto Rico from Houston, Mayorkas wrote, “In response to urgent and immediate needs of the Puerto Rican people in the aftermath of Hurricane Fiona, I have approved a temporary and targeted Jones Act waiver to ensure that the people of Puerto Rico have sufficient diesel to run generators needed for electricity and the functioning of critical facilities as they recover from Hurricane Fiona. The decision to approve the waiver was made in consultation with the departments of transportation, energy, and defense to assess the justification for the waiver request and based on input from the governor of Puerto Rico and others on the ground supporting recovery efforts.”
We don’t know who those “others” could have been, other than Puerto Rico’s governor, since the island’s resident commissioner and top port director both testified that fuel supplies were adequate on the island. If there were any “urgent and immediate needs,” they had nothing to do with ocean shipping, but a great deal to do with ground distribution problems.
To grant a Jones Act waiver, the law requires that a survey be done of U.S. vessels that might be available to meet the need. No such vessel availability survey of the sort required by Section 501, the law that regulates Jones Act waivers, was ever conducted.
According to America’s Maritime Partnership, “DHS has rewarded a foreign operator who has been widely criticized, both in Washington, D.C., and in Puerto Rico, for its behavior. This foreign operator [BP] took the nearly unprecedented step of applying for the waiver after the vessel was underway, negating the possibility of a legitimate U.S. vessel availability survey. No previous waiver under those circumstances has ever been granted and, until this week, no retroactive vessel availability survey has ever been conducted.” AMP called the waiver a “terrible precedent.”
The damage goes beyond one incident. The DHS has effectively signaled that it’s open season on the Jones Act. Oil companies and foreign operators are sure to take notice.