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US Greenlights Fuel Transport By Foreign Ships

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US Greenlights Fuel Transport By Foreign Ships

The U.S. Department of Homeland Security (DHS) has waived the Jones Act to allow a foreign shipping company to move domestic fuel supplies to help shore up fuel supplies on the U.S. East Coast.

"In the interest of national defense, I have approved a temporary and targeted waiver request to an individual company," DHS Secretary Alejandro Mayorkas said in a statement late Wednesday.

"This waiver will help provide for the transport of oil products between the Gulf Coast and East Coast ports to ease oil supply constraints as a result of the interruptions in the operations of the Colonial Pipeline. The decision to approve the waiver was made after careful consideration and consultation with interagency partners across the federal government. The Departments of Transportation [DOT], Energy and Defense were consulted in order to assess the justification for the waiver request and ensure the approval of the waiver is in the interest of national defense," Mayorkas said. 

U.S. Jones Act vessels as of March 2021. Source: U.S. Maritime Administration

The Jones Act requires that all domestic shipments between U.S. ports be carried on U.S.-flagged vessels that are built, owned and crewed by American shipyards, owners and mariners, respectively.

The decision to issue the waiver was based on an assessment of available U.S. tankers made by DOT's Maritime Administration, as well as a review by DHS of requests made by foreign companies that can show there is insufficient capacity on Jones Act-qualified vessels to carry fuel to the affected region.

"The Jones Act is vital to maintaining the strength of the American shipbuilding and maritime industries by requiring all maritime cargo transport between U.S. ports to occur on U.S.-flagged vessels," DHS further noted. "When U.S.-flagged vessels are not available to meet national defense requirements, the Department of Homeland Security may grant a waiver to the Jones Act only if the proposed shipments are in the interest of national defense and after careful evaluation of the issue."

Issuing waivers that sidestep U.S. ships is always controversial, however, even in emergency situations that affect U.S. domestic supply chains.

In a statement Wednesday morning, Mike Roberts, the president of the American Maritime Partnership (AMP), which lobbies in support of companies that own Jones Act-qualified vessels, emphasized that AMP "does not object to a targeted approach to issuing waivers when there is a legitimate need and when such action does not reward those who would utilize foreign vessels to game the system at the expense of American jobs and national security." 

AMP was not immediately available to comment on the DHS waiver.

Click for more FreightWaves articles by John Gallagher.

Image Sourced from Pixabay

 

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