After Biden this week banned Russian oil imports over Putin’s invasion of Ukraine, lawmakers are asking the president to abandon the Jones Act, a centuries-old law that critics deride as protectionist because it requires all oil and cargo transported between US ports must be turned on American-built ships with American crews.
Rep. Ed Case, D-Hawaii, cites the Jones Act as the reason his state must import nearly 100% of its crude oil from overseas, stating that it costs three times as much to ship oil between the US mainland and Hawaii it is possible to ship oil from Asia to Hawaii, although the distance between the mainland and Hawaii is much shorter.
“The best substitute for Russian oil imports into Hawaii is domestic supply, and the hauling of that shipment 2,500 miles to our remote island nation is governed by the Jones Act, which dictates that such hauling be done exclusively on a very limited number of domestic vessels,” Rep. Case wrote in a letter to Biden on Tuesday.
“As a result, the cost of such shipping, even if initially available domestically, would be many times greater than shipping on a variety of specialized non-US flag vessels.”
While Hawaii’s location in the Pacific Ocean makes it particularly vulnerable to the Jones Act, other lawmakers across the country have also called for reforms.
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Rep. Scott Perry, R-Penn, said he would introduce a bill create exceptions for ships carrying liquefied natural gas so American cities and states can end their reliance on foreign LNG.
Sen. Mike Lee, R-Utah, a longtime critic of the Jones Act, introduced a bill last year that would repeal the law and allow foreign ships to carry cargo between US ports, saying at the time that “the trade between US ports will be a huge loss to American consumers and producers.”
The Jones Act can be temporarily suspended in the event of natural disasters and other crises. For example, after Hurricane Maria, President Trump waived the law to allow Puerto Rico to receive much-needed humanitarian supplies.
“It is telling that this supposed national security law must always be overturned in a time of national emergency,” Scott Lincicome, an economist at the libertarian Cato Institute, told Fox Business on Wednesday. “It just doesn’t make much sense.”
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The Jones Act was introduced in 1920 with the goal of maintaining a robust US shipping industry for both trade and national defense. But only about a century later 96 Jones Act Qualified According to the Department of Transportation, there are ships in the United States.
“The Jones Act has been around for about 100 years and really fueled the slow decline of the US shipbuilding industry,” Lincicome said. “We have an industry that simply cannot compete, not only against subsidized Chinese shipbuilders, but against basically all global shipbuilders. It now costs about four to five times as much to build a ship in the United States as it does abroad.”
For decades, maritime industry and military leaders have expressed support for the Jones Act, calling it vital to national security.
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White House Press Secretary Jen Psaki declined to say Tuesday whether Biden is considering waiving the Jones Act after Russia’s oil import ban, but the president has been a vocal supporter of the law.
“The executive action I’m taking also reaffirms my strong support for the Jones Act and American ships, you know, and our ports, especially those that are important to America’s clean energy future and offshore renewable energy development,” Biden said last year when he signed an order to boost American manufacturing.