Editorial: America, Don’t Be Misled On Jones Act

Oil companies have a well-thumbed playbook. Every time a weather event or international incident spooks the oil markets, they bring up the Jones Act to scare the American public. They rely on the American public’s “muscle memory” of times in the past when we were much more dependent on foreign oil and gas imports than we now are. They, or the libertarian think tanks that serve them, dutifully serve up “backgrounder” pieces on the Jones Act that mislead by omission.

Here are some facts often left out of those pieces. Thanks to fracking, America is now the world’s leading oil and gas exporter. We are much more self-sufficient in oil and gas than our allies. The only reason we still import some oil from the Persian Gulf is that some U.S. refineries are tuned to process the heavy sour crude from overseas instead of the light sweet crude produced from Permian Basin and Eagle Ford shales. That has nothing to do with Iran or the Middle East.

Nothing in the Jones Act prevents foreign-flag vessels from bringing oil, in any amount needed, into any American port — regardless of waivers. It only limits commercial vessel movements from one American port to another to U.S.-built, U.S.-flagged vessels. This is nothing unusual. All maritime nations (105 at last count) have similar laws, called cabotage laws. Adam Smith, the father of free market economics, heartily endorsed them. So much for bogus free trade objections.

Domestically, most U.S. oil and gas moves by pipeline, truck or rail. Only about 6 percent moves by coastwise tanker. Allowing foreign shippers to take part of this traffic won’t have any noticeable effect on pump prices, according to experts.

Trump and this Congress have been strong supporters of rebuilding American shipbuilding and the U.S. merchant marine. The SHIPS for America Act, still under development in Congress, is a key part of this effort. Many of its features have been anticipated in White House executive orders and the administration’s Maritime Action Plan.

But, unfortunately, this waiver does nothing for shipbuilding or the American merchant marine.