Jones Act Waiver Extended Again
Will we ever see foreign vessel operators pushing barges up and down the Mississippi River with foreign-crewed towboats?
Even posing the question may sound incredible to some. After all, the United States doesn’t allow foreign airlines to carry passengers between U.S. airports, nor does it allow foreign trucking companies to truck goods between U.S. cities. Until this year, the U.S. government didn’t allow foreign vessel operators to move cargoes between U.S. ports, either. Previous waivers to this policy were limited to quickly sunsetted immediate responses to natural disasters.
The latest White House extension of the current Jones Act waiver under a national defense clause brings its current length to 240 days, by far the longest such episode since the Jones Act was passed in 1920.
Legacy media outlets not otherwise known for pushing Trmp administration talking points have endlessly repeated that the waivers’ purpose is to “lower energy prices.” Zero hard, verifiable evidence exists for that claim. Even Energy Secretary Chris Wright, who has claimed that the waiver has kept energy prices on the coast “lower than they would otherwise be,” has offered no facts or figures in support. Analyses published by impartial third parties like Rapidan Energy Group have estimated that shipping waivers likely reduce gasoline prices by only a few pennies per gallon, if that.
As America’s Maritime Partnership and other Jones Act defenders have repeatedly pointed out, oil prices are set internationally. U.S. domestic oil and gas prices are not decided by domestic shipping costs, which are a small part.
White House spokesperson Taylor Rogers makes a subtly different claim: “Data shows the waiver has driven a significant increase in domestic deliveries of essential products such as gasoline, diesel and jet fuel,” Rogers said.
Global turmoil and uncertainty create opportunities for oil companies to make enhanced profits, sending oil to where they can make the greatest profit. These massive profit-taking opportunities don’t trickle down to the consumer, but we will soon see them on display when the oil majors make their earnings reports.
By now it should be clear that the real reasons for the waiver extensions go way beyond the defense justifications used to justify it. Longtime Jones Act opponents, who believe they have allies in Washington, are seizing the opportunity to argue for scrapping it altogether, as Michael Bloomberg recently did in an editorial.
Jones Act defenders argue that such a move would destroy the administration’s stated agenda of reviving and restoring U.S. shipbuilding and merchant marine capacity.
