Coalition: U.S.-Flag Tonnage Ready to Transport SPR Oil


AMP Urges Adherence to New Rules Governing Jones Act Waivers


April 2012


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In a letter to the Departments of Homeland Security (DHS), Energy (DOE) and Transportation (DOT), the American Maritime Partnership (AMP), a broad-based coalition representing U.S.-flag vessel operators, maritime unions (including the SIU) and allied interests, in late February offered its resources to help implement new Congressional requirements that should increase the use of U.S.-flag vessels in future Strategic Petroleum Reserve (SPR) drawdowns.


Several circumstances could lead to another SPR drawdown soon, according to the coalition, including an Iranian blockade of the Strait of Hormuz and rising U.S. gas prices. There are dozens of American vessels with millions of barrels of capacity available to transport oil, according to AMP.


“AMP was troubled by the decisions during the last SPR drawdown to issue waivers for foreign-flag vessels, employing foreign workers to transport oil from the SPR despite the fact U.S.-flag vessels were available to assist,” the AMP letter said. “AMP recognizes that there may be circumstances where waivers of the Jones Act are necessary, but we want to work with the Departments to maximize the use of available American vessels, employing American workers, in the transportation of SPR oil should another drawdown occur.”


The coalition consists of more than 400 American companies, associations, labor organizations, shipyards, defense groups and others.


The Jones Act is a longstanding U.S. maritime law that mandates the use of vessels that are crewed, built, owned and flagged American to move cargo between two U.S. ports. The law is critical for American economic, national, and homeland security, which is why it has enjoyed the support of the U.S. Navy, many members of Congress of both parties, and every president in modern history including President Obama, the coalition pointed out.


Release of oil from the SPR in 2011 resulted in nearly 50 waivers of the Jones Act, allowing the transportation of the oil on foreign vessels when U.S.-flag vessels were available to assist. New Congressional law now requires the DHS and DOT to comply with certain requirements to maximize the use of U.S.-flag vessels for the transportation of oil from future SPR drawdowns before Jones Act waivers are approved.


Specifically, the new law states that no waivers may be granted until the DHS “takes adequate measures to ensure the use of United States-flag vessels” and no waivers may be granted unless the DOT has determined whether U.S.-flag vessels are capable of assisting an SPR move. The DOT is now required to provide the DHS with written justification for not using U.S.-flag vessels during an SPR drawdown.


To ensure that the federal government has adequate measures in place to utilize U.S.-flag vessels, the departments are statutorily required to consult with representatives of the U.S.-flag maritime industry. AMP believes that such consultations with industry should begin immediately, the letter stated.


Meanwhile, the Maritime Trades Department (MTD), AFL-CIO recently published a story comparing new attacks on the Jones Act with the erroneous ones that surfaced after the Deepwater Horizon disaster.


“Now, just as then, [Jones Act opponents] are disseminating information that, at best, is highly skewered,” the department reported. “The MTD and its allies in the labor movement and shipping industry have been working overtime to educate the American public and the new members of Congress about the issues involved. The important thing to remember is that there are procedures in place to grant waivers if they are needed. There is, almost everyone in the industry believes, no reason to do so when U.S.-flag vessels are available.”


In a mid-March New York Times article about gas prices, some industry experts said that waiving the nation’s freight cabotage law likely would have, at most, a nominal effect on prices at the pump.


The paper quoted MTD Executive Secretary-Treasurer Daniel Duncan as saying, “In a time of high unemployment in the United States, ignoring the Jones Act, which has been central to American national security and protects American jobs, makes no sense.”



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