Do it for Hawaii: Waive the Jones Act

from Grassroot Institute, March 24, 2022

Maui council member plans to offer JA waiver resolution

Mike Molina says he supports congressional action to grant Hawaii a Jones Act waiver to help it cope with higher prices

"It’s time for the costly Jones Act to be suspended."

So declared Maui County Council member Mike Molina on Tuesday in The Maui News.

In announcing he would be "offering a resolution to the Maui County Council to support this effort," Molina, who represents the Makawao-Haiku-Paia area, explained:

"Since Russia’s invasion of Ukraine, the cost of gas, goods and services have steadily increased and impacted our cost of living. The parent company of Hawaii’s only oil refinery, Par Pacific Holdings of Houston, recently announced they would stop purchasing Russian oil, which makes up 25% of their crude.

"Due to the Jones Act, Hawaii historically has had to buy oil transported on ships that are U.S. built, flagged, owned and crewed by Americans. This has made it very expensive to ship goods to Hawaii.

"I support our congressional delegation asking President [Joe] Biden to grant Hawaii a one-year exemption of the Jones Act to give our federal decision-makers the opportunity to look at reforming this act, created in 1920, to be more in line with 21st century concerns.

"Exempting Hawaii could help stabilize our costs for fuel, building materials for affordable housing, delivery costs for small business and household items like batteries, canned food, toiletries and other goods and services.

"This act has contributed to our increasing cost of living and I say it’s time to reform this law to 'level the playing field' in the form of reduced fuel and shipping costs for Maui County and state residents."

See Molina's statement in The Maui News here.

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Case tells KHON2 viewers why he asked Biden for Jones Act waiver

U.S. Rep. Ed Case of Hawaii says he has asked the president to lift the shipping law for the "duration of the Ukrainian emergency"

KHON2 reporter Ross Shimabuku caught up with U.S. Rep. Ed Case of Hawaii early Wednesday morning and immediately asked what relief, if any, Hawaii residents might expect from "the pain at the pump as gas prices continue rising as the situation in Ukraine continues to intensify."

Shimabuku was especially interested to learn about Case's letter to President Joe Biden seeking a Hawaii Jones Act waiver for fuel imports, and asked Case how such a waiver could help with gas prices.

"Well, before Russia’s invasion of Ukraine, just a month ago now," he said, "we were importing somewhere in the range of 25[%], even 30% of our total fossil fuels from Russia. … And one of the main reasons we did that … is because of the Jones Act, a federal law which restricts the shipping between U.S. ports … to just a very, very small number of ships, and it makes it very, very difficult to get that shipping. In fact, estimates are three to four times the cost of shipping for a shorter distance than to bring oil from overseas."

Case said suspending U.S. imports of Russian fuels was the right thing to do. But when "we have that kind of constraint on our supply, and we [are] forced into other markets, we should be able to access shipping that is not three to four times times more expensive. And that’s what I asked the president to do.

"I said, 'Look, we can argue over the Jones Act and whether it’s good or not for Hawaii. Personally, I don’t think it is for Hawaii. But in this particular situation, I think it’s particularly not good for Hawaii, and so let’s just lift the Jones Act for the duration of the Ukrainian emergency.'”

See the interview here. See also:

>> John Burnett, "Case urges Jones Act waiver, calls out Matson, Pasha," Hawaii Tribune-Herald, March 24, 2022.

>> "Hawaiian legislator calls for Jones Act waiver," WCN editorial, World Cargo News, March 21, 2022.

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Leading Jones Act expert explains why Hawaii needs waiver for fuel

If not for the Jones Act, Hawaii could more easily afford to buy fuels from the U.S. mainland, instead of from international sources 

The conflict between Russia and Ukraine has helped send gasoline prices in Hawaii soaring, fueling calls that Hawaii be granted a Jones Act waiver.

Jones Act expert and Grassroot Scholar Colin Grabow explained to Joe Kent, Grassroot Institute executive vice president, on the March 14 episode of "Hawaii Together," that a Jones Act waiver would enable Hawaii to more easily afford fuels from the U.S. mainland, and thus lessen its dependence on foreign fuel sources — such as Russia, which prior to its conflict with Ukraine had been supplying a quarter to a third of Hawaii oil imports. 

Grabow pointed out that the Jones Act — which limits competition between U.S. ports to only ships that are U.S. flagged and built, and mostly owned and crewed by Americans — is supposed to protect America's national security. But, according to Grabow, who also is a trade policy analyst with the Cato Institute, it hasn’t quite worked out that way — and Hawaii residents are paying the consequences.

“The national security argument plainly doesn’t make sense, as the Jones Act is literally a big reason why Hawaii has found itself dependent on Russian oil and sourcing it from there instead of the U.S. mainland,” said Grabow. “The Jones Act … just makes it more expensive for Americans to do business with each other and trade with each other. So it’s a disincentive to domestic supply chains. How is that good for national security?”

To see the full half-hour interview, go here. A complete transcript is provided.