Trump Considering Waiving Jones Act Mandate for Natural Gas, Sources Say

April 24, 2019by Jennifer A. Dlouhy, Jenny Leonard and Jennifer Jacobs
Activists march calling for support of Puerto Rico one year after Hurricane Maria devastated the island on September 23, 2018, in Los Angeles. (Mario Tama/Getty Images/TNS) **FOR USE WITH THIS STORY ONLY**

WASHINGTON — President Donald Trump is seriously considering waiving the requirement that only U.S. flagged vessels can move goods from American ports to Puerto Rico or energy-starved areas of the Northeast, according to people familiar with the deliberations.

The issue was debated during an Oval Office meeting Monday, following requests from Puerto Rico and pressure from oil industry leaders to ease the nearly 100-year-old Jones Act requirements, according to three people. Although top administration officials are divided on the issue, Trump is now leaning in favor of some kind of waiver, said two of the people, who asked for anonymity to discuss the private discussions.

The move — which would be fought by U.S shipbuilding interests and their allies on Capitol Hill — has been promoted as essential to lower the cost of energy in Puerto Rico and ease the flow of American natural gas to the U.S. Northeast, where there aren’t enough pipelines to deliver the product from Pennsylvania.

But even inside the Trump administration, there are fierce defenders of the Jones Act, a 1920 law requiring that vessels moving cargo between two U.S. ports be U.S.-built, -owned and -crewed. The law was originally designed to protect the domestic shipping industry and the country’s maritime might, and supporters argue that it’s just as essential today to ensure ships are made in the U.S. Any move to weaken or waive the requirements threatens the U.S. shipbuilding industry and the jobs tied to it, they argue.

That divide was apparent during Monday’s White House meeting, where Jones Act supporters included Trump trade adviser Peter Navarro and Transportation Secretary Elaine Chao. Larry Kudlow, the director of the National Economic Council, pushed for waiving the Jones Act, three of the people said.

The White House press office did not respond to a request for comment.

Trump faces increasing pressure to relax the shipping requirements. Puerto Rico is seeking a 10-year waiver to allow liquefied natural gas to be delivered to the island on foreign-flagged vessels.

And energy industry leaders have pressed for changes to facilitate natural gas and petroleum product shipments between U.S. states. Among them: billionaire oil man Harold Hamm, the chairman of Continental Resources Inc. and a former Trump energy adviser. In January, Hamm complained at a Houston energy conference that the U.S. has been forced to buy LNG from Russia because there are no Jones Act-compliant tankers to transport liquefied natural gas.

Kristin Thomas, a Continental Resources spokeswoman, said the U.S. Domestic Energy Producers Alliance, which Hamm founded, “is in favor of being able to ship U.S. LNG to U.S. ports,” although the group “has not waded into any issues related to Puerto Rico.”

Oil industry leaders argue that the Jones Act restrictions undermine Trump’s American “energy dominance” agenda, by encouraging imports of foreign oil and gas despite abundant supplies inside the U.S. Russian LNG was delivered to Massachusetts last year to help supply consumers in the Northeast U.S. And inland oil refiners argue requirements to use U.S.-flagged vessels boost the costs of obtaining raw crude, effectively subsidizing foreign competitors.

“The Jones Act is completely contrary to the president’s energy agenda, in large measure because it encourages the importation of energy — diesel from Europe, LNG from Russia — rather than the use of energy made in America and developed and refined by American workers,” said Mike McKenna, a Republican energy strategist. “If you’re in favor of the Jones Act, you’re in favor of damaging consumers and helping very specific interests line their pockets at consumers’ expense.”

Trump has waived the requirements on a limited basis, granting Puerto Rico a temporary reprieve in 2017, after Hurricane Maria ravaged the island. Trump also briefly lifted Jones Act requirements to ensure gasoline, diesel and jet fuel could be moved among U.S. states more quickly after the storm.

Unlike short-term, emergency waivers, longer-term exemptions could pave the way for commercial contracts to supply natural gas.

Puerto Rico’s push for a 10-year waiver drew swift pushback from the bipartisan leaders of the House Transportation and Infrastructure Committee, who in February sent a letter to the Homeland Security Department arguing there was no justification for the move. Jones Act waivers are meant to be rare, limited only to cases where there is a national defense need, and there is “no valid national defense rationale” to waive the requirements for Puerto Rico, they said.

The American Maritime Partnership, which defends the Jones Act, did not have an immediate comment. But a study commissioned and previously released by the group found that the shipping restrictions have no impact on retail prices or the cost of living in Puerto Rico.

———

©2019 Bloomberg News

Visit Bloomberg News at www.bloomberg.com

Distributed by Tribune Content Agency, LLC.

Energy

Resolution Supporting Three Seas Initiative Unanimously Passes House
Foreign Affairs
Resolution Supporting Three Seas Initiative Unanimously Passes House
November 24, 2020
by Sean Trambley

WASHINGTON – Last week, a bipartisan resolution introduced by Reps. Adam Kinzinger, R-Ill., and Marcy Kaptur, D-Ohio, supporting the Three Seas Initiative unanimously passed the U.S. House of Representatives. The Three Seas Initiative is a strategic partnership of twelve Central and Eastern European nations with the... Read More

Commentary | Energy Was On The Ballot This November
Opinions
Commentary | Energy Was On The Ballot This November

Two years ago, Democrats won back control of the U.S. House by nominating largely moderate candidates in swing districts who ignored litmus test issues like the Green New Deal and refused to be defined by extreme economic and energy policies like bans on fracking.  Two years... Read More

Wind Energy Labor Pact Viewed as Sign of What Biden Economy Will Look Like
Economy
Wind Energy Labor Pact Viewed as Sign of What Biden Economy Will Look Like
November 20, 2020
by Dan McCue

Ørsted, the Danish renewable energy group, and the North America's Building Trades Unions have entered into a pact to train an offshore wind construction workforce as the firm eyes construction of a series of wind farm projects up and down the East Coast. The deal comes... Read More

Trump Rushes Action on Environmental Issues That Could Handcuff Biden
Environment
Trump Rushes Action on Environmental Issues That Could Handcuff Biden

WASHINGTON — The Trump administration is rushing to issue permits, finalize major environmental regulations and even sell the rights to drill for oil in Alaskan wilderness before Inauguration Day in a push that could complicate Joe Biden's climate and conservation agenda. The eleventh-hour regulatory race underscores the extent to which federal... Read More

Wyoming Governor Launches Energy Rebound Program to Aid Oil and Gas Industry
State News
Wyoming Governor Launches Energy Rebound Program to Aid Oil and Gas Industry
November 12, 2020
by Sean Trambley

CHEYENNE, Wyo. – Gov. Mark Gordon will use CARES Act funding to assist Wyoming’s economic recovery and boost employment in the oil and gas industry. The Energy Rebound Program will utilize up to $15 million in CARES Act funding to provide business relief targeted towards drilled,... Read More

Democrats Push for Climate Change Bills Similar to Biden’s Proposals
Congress
Democrats Push for Climate Change Bills Similar to Biden’s Proposals
September 25, 2020
by Tom Ramstack

WASHINGTON -- Congressional Democrats used a hearing on climate change Thursday to advocate for pending clean energy bills that would revamp a big swath of federal regulations. Record-setting wildfires in western states and hurricanes along the Gulf Coast are adding to the fervor for aggressive environmental... Read More

News From The Well
scroll top