Sunday, May 23, 2021

Time To Scrap The Jones Act

In response to the Ransomware attack on the Colonial Pipline, which delivers about 45% of the fuel for the Eastern Seaboard, President Biden's Administration said it would allow Two Exemptions from the 101-year old Act, which Restricts Waterborne Commerce between U.S. Ports to Ships that are Built, Crewed, and owned Americans.Citgo Petroleum Corp. and Valero Energy Corp, now have Permision to use Foreign Vessels to Transport Oil Products between the Gulf Coast and the Easy Coast.

Hurricanes forced previous Presidents to suspend the Law to ensure deliveries of Food, Fuel, and other Goods. This time, Biden should face reality and Bury the Act under the waves.

The Jones Act Harms the very People it purports to Help. Because Oceangoing Jones Act Compliant Ships are more Expensive, and there aren't many of them, the Law leads to Higher Prices for Goods, more CongestedRoadways and Pipelines, and additional Pollution from greater reliance on Carbon-intensive Transportation.

As a direct results of this Law, Refineries on both Coasts can find it Cheaper to Import Foreign Oil than to use Domestic sources. Refineries on the Gulf Coast choose to send their products to latin America instead of the East Coast. The U.S. is a Natural Gas Powerhouse, but it has No Jones Act Compliant Liquefied Natural Gas Carriers, which would Cost Two to Three times as much as equivalent Ships from South Korea. Sp Puerto Rico and hawaii source their LNG from Overseas. Northeast Ports look to Trinidad and Tobago, and U.S. Natural Gas goes Abroad.

The Act is even Undermining the Biden Administration's Green Energy Plans. Offshore Wind Projects need Jones Act-Compliant Turbine-Installation Vessels. Right now, the U.S. has One under Construction and due to launch in 2023 at a cost of $500 Million. Hitting the Administration's Goal of 30 Gigawatts of Offshore Wind Energy production by 2030will require more Vessels, which the Law will only make more Expensive.

It would be one thing if the Jones Act met its stated Goal, of Sustaining a Robust Merchant Fleet.But the number of Jones Act eligible U.S. Vessels in 2019 was 99, vs. 193 in 2000. From 1960 to 2014, even as U.S. output more than Quadrupled, the tonnage of donnage of Domestic contiguousCoastal Shipping dropped by 44%. The U.S.'s few remaining commercial Shipyards are Expensive and Superannuated. Indeed, some companies that shamelessly Defend their Jones Act Monopolies send their Ships to China for Repairs, which is Cheaper even with the 50% Tariff they Pay the U.S. Government for the Privilege.

The Jones Act survives because it supports the narrow interests of a handful of Shipping Companies and Maritime Unions, which pump out a reliable stream of Campaign Cash to Congressional Shipbuilding Caucus. Never mind the cost to All Americans, especially those in Alaska, Hawaii, and Puerto Rico, who depend heavily on Maritime Commerce.

There are Better ways to build up Coastal Commerce and the Maritime Industry, from Investing in Neglected Port Infrasturcture and Public Shipyards, to Changing the Tax treatment of U.S. flagged Ships.

A Question for the White House: If this Law is so Successful and so vital, why does it so often need to be Waived in Cases of Emergency?

In the 1980's, I ws asked to Automated the Mariners Nautical Guide, using New Hardware and my Developed Software, to Worldwide Ports. The Gude was a Book of indivual Ports that was Purchased and always needed Updates. The Project was Funded by the Shipping Industry and West Point, until the Industry took a Major Hit, and the Project was stopped.

NYC Wins When Everyone Can Vote! Michael H. Drucker

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