The Biden administration is considering a "temporary and targeted" waiver of the Jones Act to allow foreign-flagged vessels to carry petroleum products from the Gulf of Mexico up the Eastern seaboard, meeting supply shortages the Colonial Pipeline shutdown created.The Department of Transportation's Maritime Administration asked shippers to respond to a survey by May 11 to determine the availability of Jones Act-qualified vessels. The Department of Homeland Security would then determine whether to issue any Jones Act waivers to foreign-flagged tankers.
The 1920 law requires all goods shipped between two US ports to be carried on ships that are US-built and US-flagged, with majority US owners and crew.
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Earlier May 11, the Environmental Protection Agency issued a one-week emergency fuel waiver removing vapor pressure requirements for reformulated gasoline sold in Maryland, Pennsylvania, Virginia and Washington.
The action to help supply more gasoline comes in states where some fuel stations already are running out of supply as panic-buying sets in and refined product deliveries drop in the aftermath of the May 7 cyberattack.
ClearView Energy Partners predicted Jones Act waivers could have a more significant effect on markets than EPA waivers, but they "come at greater political cost."
Lawmakers and presidents tend to be leery of undermining Jones Act constituencies, said Kevin Book, managing director of ClearView. Population determines House of Representative districts and Electoral College votes, and densely populated coastal areas also happen to be home to maritime industries, he said.
Colonial, which supplies about 45% of all gasoline and diesel consumed on the East Coast, had to halt all operations May 7 because of a ransomware attack. It aims to have the system substantially back online by the end of the week as it restarts one segment at a time.
The American Waterways Operators, a trade group whose top issue is defending Jones Act enforcement, said it was working with administration and Congress on the availability survey.
"Our data indicates that there is significant vessel capacity available, and we have received no information to indicate that a Jones Act waiver is necessary to address a specific supply situation," AWO CEO Jennifer Carpenter said. "We therefore continue to oppose unwarranted Jones Act waivers."
The Trump administration granted temporary Jones Act waivers in 2017 after Hurricane Irma hit Florida and separately after Hurricane Maria hit Puerto Rico.
