Lawmaker Defends ‘Essential’ U.S. Shipping Law

Total Views: 1
July 31, 2013

Tankers dedicated to the domestic trade move Alaskan crude to West Coast refineries day and night. Photo courtesy American Maritime Partnership

By Rep. Duncan Hunter

The maritime industry has been a pillar of the economy for as long as shipping vessels have delivered goods and commodities to American shores. In no small part, the Jones Act has been the engine driving this success for nearly a century, requiring that any ship carrying cargo between two ports in the U.S. be American-built, owned and crewed.

Regrettably, not everyone views the Jones Act this way.

For reasons that are due to either a lack of understanding or appreciation for the U.S. maritime industry, the Jones Act is being misidentified once again as an impediment to job creation and even lower product costs.

Joe Petrowski, CEO of Gulf Oil, took the latest shot in what’s become a recurring barrage of attacks against the act, suggesting that repealing the law would reduce gasoline prices by as much as 30 cents a gallon.

In other words, using foreign carriers to replace U.S. ships would result in lower gas prices, according to Mr. Petrowski.

That presumption is nothing more than wishful thinking. There are many reasonable and relevant proposals to lower gas prices for American families and secure greater energy independence, but repealing the Jones Act is not one of them.

To refute the claim that the act contributes to higher gas prices, it’s necessary to emphasize that the cost for moving a gallon of gasoline on a U.S. ship is less than one penny-per-gallon, on average.

At present, nearly 90 percent of the cost of gasoline is driven by three things: the price of crude oil, refining and taxes. The remaining 10 percent is attributed to marketing, distribution and retailing, leaving room, however big or small, for profit.

Overall, the maritime cost is marginal and rarely considered a factor in gasoline prices. It is also a general rule that when the price of crude oil increases, as it has recently, so does the price of gasoline.

The reality is that the Jones Act, despite claims to the contrary, has little to do with price fluctuations at the pump.

Calls for its repeal have long been based on misleading presumptions and incomplete information, much of it originating from industries in direct competition with the U.S. maritime industry.

As if smelling blood in the water, these competing interests perpetually make the case for replacing U.S. workers and vessels with foreign companies and ships to facilitate trade within our borders—an unprecedented dynamic that would put foreign actors in direct control of domestic commerce.

The Jones Act, for all its value in protecting American jobs and sustaining U.S. maritime capability and strength, delivers benefits in other arenas too, including national security.

From supplementing global defense sealift capability to revitalizing elements of a waning industrial base, the U.S. maritime industry is a security and economic asset kept strong and healthy by the Jones Act.

America’s economic future depends on a strong maritime industry as much as it depends on domestic energy production and the success of other notable industries that are inextricably linked to its success.

As unfortunate as attempts to undermine the U.S. maritime industry may be, there must be no mistaking the relevance and capability of vessels built in American shipyards and operated by American workers.

The Jones Act has been a faithful defender of U.S. maritime capability for more than a century.

No different than the last 100 years, the Jones Act is essential to America’s national security and economic future.

—Rep. Duncan Hunter is chairman of the House Subcommittee on Coast Guard and Maritime Transportation.

This editorial originally appeared on CNBC and is republished here with permission.


Back to Main