Jones Act waivers and oil transport

Earlier this year, President Obama decided to withdraw 30 million bbls. of crude oil from the U.S. Strategic Petroleum Reserve (SPR). This did not sit well with many workboat operators in the Gulf of Mexico. The release was not the problem. How the cargoes were going to be carried became the issue when the administration approved Jones Act waivers to foreign oil transport operators when U.S. carriers were available. (The Jones Act mandates that cargo moving between U.S. ports be carried by U.S.-owned, -operated and -crewed vessels, unless a waiver is issued.)

The Obama administration backed off the blanket waivers, but the waivers were being approved, nonetheless, according to many in the industry. The administration reversed an earlier decision to provide automatic waivers for these shipments but still allowed waivers upon request, rather than forbidding all use of foreign vessels, the American Waterways Operators charged.

“They waived the Jones Act, then the blanket waiver was repealed the next day,” said Offshore Marine Service Association president and CEO Jim Adams.

Normally, only when no domestic carriers are available are foreign vessels allowed to move domestic cargoes.

This week Homeland Security Appropriations Subcommittee chairman Sen. Mary Landrieu, D-La., sent a bipartisan letter to President Obama to protest waivers, she and the other signees claim, that have been issued by the administration to foreign carriers over domestic carriers.

“The administration’s current policy provides jobs to foreign seafarers while American seafarers stand by ready to help. In waiving the Jones Act, the Maritime Administration apparently has determined that no American ships are ‘available.’ We would appreciate your assistance in understanding why U.S. vessels that are in the full-time commercial business of transporting oil, are far more experienced in coastline movements of oil than any foreign-flag operators, exceed the barrel capacity as defined by the DOE, are owned, controlled and operated by Americans, are not considered ‘available,’ ” the letter said.

U.S. Sen. David Vitter, R-La., and U.S. Reps. Charles Boustany, R-La., Elijah Cummings, D-Md., Peter King, R-N.Y., Candice Miller, R-Mich., Bennie Thompson, D-Miss., and Pete Visclosky, D-Ind., also signed the letter.

“We strongly urge the administration to end the practice of waiving the Jones Act for SPR oil distribution and handing American jobs to foreign shipping companies,” the letter said. “The rash of recent waivers, exacerbated by a lack of transparency in the decision-making process, represents a stain on the administration’s determined effort to create jobs and improve the economy here at home, and it should therefore be rectified immediately.”

Todd Hornbeck, chairman. president and CEO of Hornbeck Offshore Services said that with the waivers and the slow pace with which drilling permits are being approved, the offshore transportation industry is losing valuable mariners. He warned attendees at the July OMSA meeting that oil and gas industry employees are not financially able to wait forever to go back to work. “We’re losing a tremendous amount of mariners out of this business,” he said.

 

About the author

Ken Hocke

Ken Hocke has been the senior editor of WorkBoat since 1999. He was the associate editor of WorkBoat from 1997 to 1999. Prior to that, he was the editor of the Daily Shipping Guide, a transportation daily in New Orleans. He has written for other publications including The Times-Picayune. He graduated from Louisiana State University with an arts and sciences degree, with a concentration in English, in 1978.

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