After Biden banned Russian oil imports this week following Putin’s invasion of Ukraine, lawmakers are asking the president to scrap the Jones Act, a century-old law that critics say is protectionist because it requires all oil and cargo shipped between U.S. ports be on American-built vessels with an American crew.
Rep. Ed Case, D-Hawaii, cites the Jones Act as the reason his state must import nearly 100% of its crude oil from overseas, explaining that it costs three times as much to ship oil between the continent US and Hawaii than is the case for shipping oil from Asia to Hawaii, even though the distance between the mainland and Hawaii is much shorter.
“The best replacement for Russian oil imports to Hawai’i is domestic supply, and the transportation of that supply 2,500 miles to our remote island state is subject to the Jones Act requiring such transportation to occur exclusively on a very limited number of national vessels.”, Rep Case wrote in a letter to Biden on Tuesday.
“As a result, the costs of such transportation, even if initially available domestically, would be many times higher than transportation on the plethora of non-US-flagged specialty vessels.”
While Hawaii’s location in the Pacific Ocean makes it particularly vulnerable to the Jones Act, other lawmakers around the country have also called for reforms.
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Rep. Scott Perry, R-Penn, said he would introduce legislation to create exemptions for vessels carrying liquefied natural gas so that American cities and states can end their dependence on foreign LNG.
Sen. Mike Lee, R-Utah, a longtime critic of the Jones Act, introduced a bill last year that would repeal the law and allow foreign vessels to transport goods between U.S. ports, telling the time that “restricting trade between American ports is a huge loss to American consumers and producers.”
The Jones Act can be temporarily waived during natural disasters and other crises. For example, President Trump waived the law in the aftermath of Hurricane Maria so Puerto Rico could get much-needed humanitarian supplies.
“It’s telling that this so-called national security law should always be lifted in times of national emergency,” Scott Lincicome, an economist at the libertarian Cato Institute, told Fox Business on Wednesday. “It just doesn’t make much sense.”
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The Jones Act was created in 1920 with the goal of maintaining a robust American maritime industry, both for commerce and national defense. But about a century later, only 96 Jones Act-qualified ships exist in the United States, according to the Department of Transportation.
“The Jones Act has been around for about 100 years and has really presided over the slow decay of the US shipbuilding industry,” Lincicome said. “We have an industry that is simply not competitive, and not just against subsidized Chinese shipbuilders, but basically all shipbuilders in the world. It now costs about four to five times to make a ship in the United States. United than abroad.”
Shipping industry executives and military officials have voiced support for the Jones Act for decades, calling it vital to national security.
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White House press secretary Jen Psaki declined to comment on Tuesday whether Biden plans to waive the Jones Act following the Russian oil import ban, but the president has been a strong supporter of the law.
“The executive action I’m taking also reiterates my strong support for the Jones Act and for American ships, you know, and our ports, especially those that are important to America’s clean energy future and development. offshore renewables,” Biden said last year as he signed an order on bolstering U.S. manufacturing.