Colonial Pipeline Holding tanks Dorsey Junction Station

Holding tanks are seen in an aerial photograph at Colonial Pipeline's Dorsey Junction Station in Woodbine, Maryland, U.S. May 10, 2021. REUTERS/Drone Base

Maritime Unions Address Jones Act Waiver: ‘Could Have Been Worse’

Mike Schuler
Total Views: 3243
May 13, 2021

We’re hearing from maritime unions and other stakeholders regarding the Jones Act waiver that Department of Homeland Security Secretary Alejandro Mayorkas has issued to help alleviate fuel supply issues along the eastern seaboard in wake of the ransomware attack on the Colonial Pipeline.

Speaking to the waiver, the DHS Secretary released a statement late Wednesday providing insight on his decision, describing the waiver as “temporary and targeted” to a single undisclosed individual company, Valero Energy.

The Jones Act is the 1920 law requiring that goods shipped between U.S. ports be transported on ships that are not only U.S.-flagged, but aslo built, owned, and operated by United States citizens or permanent residents. It serves as the backbone of the nation’s domestic maritime industry and merchant marine.

“In the interest of national defense, I have approved a temporary and targeted waiver request to an individual company,” said Secretary Mayorkas. “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, 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.”

White House Press Secretary Jen Psaki has also addressed the waiver and the federal government’s on-going effort to mitigate impacts from the pipeline’s closure. Although the pipeline’s operator was able to restart pipeline operations on Wednesday evening, it is expected to take some time before supplies return to normal.

“Tonight, as part of that effort, the Secretary of Homeland Security announced that he is issuing a temporary and targeted Jones Act waiver to an individual company. This waiver will enable the transport of additional gas and jet fuel between the Gulf Coast and East Coast ports to ease supply constraints,” according to Psaki’s statement.

In response to the waiver, the Seafarers’ International Union (SIU) issued a statement on Thursday saying:

“The SIU continues to fully support the Jones Act, as we’ve done without exception since our founding in 1938. At the same time, we have never objected to waiving the Jones Act if doing so is a truly necessary response to national emergencies. Any waiver must not come at the expense of American jobs.

“One point that shouldn’t be overlooked as the Jones Act appears in current headlines is that this law has successfully supported America’s national, economic and homeland security for more than a century. It’s an indispensable foundation that helps maintain a pool of well-trained, reliable, U.S.-citizen mariners, as well as a viable shipbuilding capability along with the vessels themselves.

“Finally, the SIU supports a close examination by Congress regarding whether there has been any gaming of the system for crisis arbitrage that enriches foreign-flag interests.”

Meanwhile, a statement from the American Maritime Officers (AMO) said the waiver could have been worse as it could have been more of a blanket waiver.

“American Maritime Officers and all other seagoing unions and maritime industry interests were kept current on the developing crisis in conference calls with the Maritime Administration in the Department of Transportation. In these calls, the participants were told in detail about efforts to determine how many Jones Act tankers and tug-barges were available to deliver the fuels,” the AMO wrote in a “AMO Currents” email sent to its members and supplied to gCaptain.

AMO continued:

“In sum, it could have been worse for the Jones Act and the family friendly jobs it sustains for AMO on the East, Gulf and West Coasts, the Great Lakes, in ports and along inland waterways – and for workers in the U.S. shipbuilding, service and supply industries nationwide.

“The unacceptable alternative would be a blanket Jones Act waiver of indeterminate scope and duration.”

The AMO pointed to the Jones Act waiver issued in response to Hurricane Maria hitting Puerto Rico in 2017 and that “no foreign-flagged shipping companies took advantage of it.” Also, in 2011-2012, 51 separate Jones Act waivers were issued to allow foreign-flagged tankers to move U.S. crude oil from the Strategic Petroleum Reserve to domestic refineries, according to the AMO. A Jones Act waivers was also issued in 2012 in response to Hurricane Sandy.

“The Jones Act survived each time, largely because of its proven value to the U.S. economy and to U.S. national security – and because of its traditionally strong bipartisan support base in Congress,” the AMO writes. It also warned of additional pressure from anti-Jones Act groups, including the Cato Institute, who will “no doubt” be encouraged by these developments.

Mike Roberts, President of the American Maritime Partnership, which advocates for American maritime industries in Washington, issued the following statement.

“Any waiver of U.S. law, including the Jones Act, should be done with precision and demand transparency and accountability of those who seek to benefit from such waiver,” said Roberts. “The Jones Act strengthens our industrial base and readiness, supports U.S. jobs and infrastructure, and protects homeland and national security. It should not be waived unless, and only to the extent that, a waiver would respond to an urgent national security need that cannot reasonably be met with American ships. The American Maritime Partnership does not object to the targeted approach of the Administration, but strenuously encourages all policymakers to hold accountable those who seek to benefit from any waiver to avoid undermining American jobs and consumers.”  

Addressing the nation on Thursday, President Biden said additional waivers are possible if necessary.

“As part of an effort to use every possible means to accelerate fuel deliveries, last night I granted a waiver of the Jones Act to fuel suppliers. This allows non-US flag vessels to transport refined fuel products from the Gulf of Mexico to affected areas, and we’ll grant additional waivers if necessary. These steps are temporary, but they remain in place until full-service is fully restored.”

We’ll provide more on the waiver and whether any additional waivers are issued as we learn more.

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