Change buried in defense bill could make it harder to ship fuel in emergencies

A tanker offloads at a fuel storage facility on the Chelsea Creek, Friday, March 4, 2022, in Boston. (AP Photo/Michael Dwyer) Michael Dwyer/AP

Change buried in defense bill could make it harder to ship fuel in emergencies

Breanne Deppisch

December 18, 03:00 AM December 18, 03:01 AM

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A measure included in the $858 billion annual defense spending bill cleared by the Senate on Thursday night could make it harder to ship fuel during national emergencies due to changes made to a century-old law known as the Jones Act.

The Jones Act is a 1920s-era law requiring that any cargo shipped between domestic ports be transported on a U.S.-built, U.S.-registered ship flying the U.S. flag and manned by a majority-U.S. crew.


The proposed changes prohibit any vessel already on the water from obtaining waivers from the Jones Act. They also establish a 48-hour waiting period for ships to receive waivers and require them to get a determination that the waiver is needed for purposes of national security from federal agencies and the president.

If approved by the House, the changes could add up to a month for oil and liquefied natural gas to be shipped to the United States, even in the case of a national emergency, said Sean Cota, the president and CEO of the New England Fuel Institute, or NEFI.

The timeline threatens to exacerbate a looming fuel supply crisis in the Northeast this winter.

“This change has eliminated the ability for the administration in any administration to react in an emergency,” Cota said. “This is the equivalent to requiring that a firetruck that’s already on the road [and] driving by a house that’s on fire go back to the firehouse, unload, request permission to go and put out the fire, and wait two days, minimum, before it can go back to put out the fire.”

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Though it is aimed at ensuring a minimum strength for the domestic shipping industry, the law inflates shipping costs and limits the availability of cargo ships, making it vastly more expensive for domestic shipping firms to transport fuel across the country.

The Maritime Administration estimates that it currently costs 2.7 times as much to ship goods on U.S.-flagged vessels.

But the current changes could make it even more restrictive, especially in the Northeast.

The changes also come at a time when the Northeast is grappling with a distillate fuel supply shortage, threatening home heating in the region.

As of last month, U.S. distillate levels were at their lowest since 1951, according to data from the U.S. Energy Information Administration, causing prices of the commodity to skyrocket and forcing some wholesalers to ration goods. Some households have not been able to fill up their full heating tanks before winter, citing the high prices.

The Northeast relies heavily on heating oil, which serves as the primary source of heating for 18% of households.

In addition, New England has been dubbed an “energy island” due to its dearth of pipelines, which has left it largely disconnected from the rest of North America and therefore leaves it deeply reliant on shipped LNG for supplies.

In 2016, then-New York Gov. Andrew Cuomo used a string of administrative actions to block the Constitution Pipeline, a gas pipeline project that would have brought supplies from Pennsylvania to New England, citing concerns about water quality and carbon dioxide emissions.

Reuters reported last month that the White House was weighing a plan to increase inventories in the Northeast Home Heating Oil Reserve, an effort to respond to the supply crunch in the region.

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