A leading member of the House Coast Guard and Marine Transportation Subcommittee has written the White House reminding it that “the Jones Act is the law of the land.”
Rep. Elijah Cummings (D-MD) issued the letter in the wake of talks that the Obama Administration may draw oil from the Strategic Petroleum Reserve (SPR) for use by U.S. refineries as happened last year. During the 2011 drawdown, dozens of foreign-flag vessels with foreign crews obtained waivers to move the cargo while capable and available U.S.-flag vessels remained tied to the docks.
The Jones Act is the nation’s preeminent cabotage law. As Cummings noted, “The Jones Act supports tens of thousands of domestic maritime and shipbuilding jobs and is critical to maintaining a domestic maritime industry.”
Since that SPR drawdown, many segments of the U.S. maritime industry have been highly critical of the waivers approved by the U.S. government. The MTD and others have questioned the methodology used to justify those waivers. This matter was the subject of a June 27th congressional hearing.
Alluding to that hearing in his letter, Cummings stated that testimony provided by the deputy transportation secretary “was not clear regarding the steps that would be taken in the future to maximize the use of the Jones Act fleet should another SPR drawdown occur.
”Of particular concern, during the most recent drawdown, numerous Jones Act-qualified vessels were interested in transporting oil from the SPR to United States oil refineries but they were not deemed ‘available’ apparently because they could not transport oil in lots of 500,000 barrels. A Memorandum of Agreement among agencies that are now components of the Department of Transportation, the Department of Energy, and the Department of Homeland Security is clear that the Maritime Administration may determine that multiple vessels are ‘suitable’ to carry oil lots purchased from the SPR – thus enabling the Maritime Administration to divide cargoes into multiple vessels to maximize the use of the Jones Act-qualified fleet.”
Cummings then pointed out that federal law “currently prohibits the Maritime Administration from making a ‘nonavailability’ determination pertaining to qualified U.S.-flag vessels unless it first provides a list of U.S.-flagged vessels that collectively have the capacity to transport oil from the SPR to U.S. oil refineries, along with a written justification explaining why those vessels are not being used.”
According to Maryland congressman, the Jones Act “is the cornerstone of our U.S. maritime capability. It should never be waived for the convenience of oil refiners or to the benefit of vessels from foreign nations. In the event of another SPR release, all available measures should be taken to ensure full compliance with the requirements of the Jones Act.”