Feds issue ‘targeted’ Jones Act waiver for ship bringing fuel to Puerto Rico

Keli‘i Akina, Grassroot Institute of Hawaii president, welcomes the waiver but said it should be broadened to all ships and extended for a full year

News Release from Grassroot Institute, Sept 28, 2022

HONOLULU, Sept. 28, 2022 >> Hurricane-devastated Puerto Rico will receive a temporary waiver from the 1920 federal maritime law known as the Jones Act, according to U.S. Homeland Security Secretary Alejandro Mayorkas.

“In response to urgent and immediate needs of the Puerto Rican people in the aftermath of Hurricane Fiona, I have approved a temporary and targeted Jones Act waiver to ensure that the people of Puerto Rico have sufficient diesel to run generators needed for electricity and the functioning critical facilities as they recover from Hurricane Fiona,” Mayorkas stated earlier today.[1]

The waiver will apply to the GH Parks, a Marshall Islands-flagged tanker carrying 300,000 barrels of diesel fuel from Texas. The GH Parks requested the waiver on Sunday and had been waiting off Puerto Rico’s southern coast for a response.[2]

Keli’i Akina, president and CEO of the Grassroot Institute, which yesterday petitioned President Joe Biden for a more general waiver,[3] welcomed the announcement, but said Mayorkas’ order should be broadened and extended.

“We are glad to hear that the Biden administration will allow critical fuel supplies on the GH Parks to reach the residents of Puerto Rico,” Akina said, “but the waiver should be broadened to apply to all ships and extended for at least a full year to be sufficiently effective.”

Akina said the limited waiver “recognizes that the Jones Act imposes significant economic costs on the island’s residents, especially during times of crisis, such as now with Hurricane Fiona and back in 2017 when the territory was slammed by Hurricane Maria.”

He said ideally, the exemption should be permanent, to eliminate potentially harmful delays in future relief efforts — as well as to just help improve the quality of life for Puerto Ricans under normal circumstances.

In his letter to the president yesterday, Akina said, “The people of Puerto Rico will need every spare dollar as they get back on their feet, and a one-year Jones Act waiver would help mitigate the high costs of rebuilding,”[4]

Mayorkas’ decision to exempt the GH Parks from the Jones Act follows a week of media and political outrage over the Biden administration’s reluctance to waive the 102-year-old law, which restricts shipments between U.S. ports to only ships that are U.S. built and flagged, and mostly owned and crewed by Americans.

The editorial boards of The Boston Globe, The Washington Post, The Wall Street Journal and the Washington Examiner all called for reform,[5] as did many members of Congress, including U.S. Sen. Marco Rubio and U.S. Rep. Nydia Velázquez.[6]

Earlier this week, Puerto Rico Gov. Pedro Pierluisi wrote Biden a letter asking that the GH Parks be allowed to dock. Pierluisi stated that “A shortage of diesel and other fuel products will have an impact on our ability to provide essential services to citizens in Puerto Rico, thus affecting public health, security and continuity of government functions.”[7]

Hawaii’s congressional delegation has not been silent on this matter, either.

“I’m in contact with the White House, and I’m hopeful that they’ll have this [waiver situation] resolved very, very shortly,” Hawaii’s own U.S. Sen. Brian Schatz told media outlet Latino Rebels earlier today.[8]

Akina repeated that he welcomes Mayorkas’ “temporary and targeted” waiver for the GH Parks.

“The Department of Homeland Security made a good call in granting this waiver,” Akina said. “Let’s hope members of Congress look to reform the Jones Act in more meaningful ways in the coming months, to ameliorate the suffering in Puerto Rico and the high costs the law imposes on other coastal areas.”

___________
[1] “Statement by Secretary Mayorkas on the Approval of a Jones Act Waiver for Puerto Rico,” U.S. Department of Homeland Security, Sept. 28, 2022.

[2] David Begnaud and Emily Mae Czachor, “Puerto Rico governor calls on U.S. to allow ships carrying vital diesel fuel to dock at hurricane-ravaged island,” CBS News, Sept. 26, 2022.

[3] Keli’i Akina, “Letter to President Biden: Grant Jones Act waiver to Puerto Rico,” Grassroot Institute of Hawaii, Sept. 27, 2022.

[4] Ibid.

[5] “Kill the Jones Act,” The Boston Globe, Sept. 24, 2022; “Puerto Rico’s membership in the U.S. should come with free shipping,” The Washington Post, Sept. 26, 2022; “The Jones Act Strands Hurricane Aid in Puerto Rico,” The Wall Street Journal, Sept. 27, 2022; “Save Puerto Rico and repeal the Jones Act now,” Washington Examiner, Sept. 27, 2022.

[6 Tweet from Sen. Marco Rubio, Sept. 26, 2022; Letter from U.S. Rep Nydia Velásquez, Alexandria Ocasio-Cortez, et al., Sept. 22, 2022.

]7[ Syra Ortiz-Blanes and Alex Roarty, “In letter to Biden, Puerto Rico governor requests Jones Act waiver to ease fuel shortage,” Miami Herald, Sept. 27, 2022.

]8[ Carlos Edill Berríos Polanco, “Puerto Rico, US Leaders Seek Jones Act Waiver For Puerto Rico After Fiona,” Latino Rebels, Sept. 28, 2022.

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Grassroot Institute of Hawaii requests Jones Act waiver for Puerto Rico

The U.S. territory is again facing a humanitarian crisis after being hit by Hurricane Fiona, but the 1920 federal law is hindering outside assistance

News Release from Grassroot Institute, Sept 27, 2022

HONOLULU, Sept. 27, 2022 >> The Grassroot Institute of Hawaii today asked that President Joe Biden use his authority to give Puerto Rico a one-year waiver from the Jones Act to assist in recovery efforts after Hurricane Fiona.]1[

The latest hurricane to hit the U.S. territory smashed into the island on Sept. 18, flooding vast parts of the island, killing 21 residents and leaving almost 1 million people without electricity. The disaster threatens to stunt the island’s growth for years to come, especially since Puerto Rico has not fully recovered after Hurricane Maria’s devastation in 2017.]2[

Keli‘i Akina, president and CEO of the Institute, said, “A one-year waiver from the 102-year-old maritime law is a humanitarian necessity, important to relieving suffering and helping the 3 million people of Puerto Rico rebuild and recover.” 

Akina noted that the Jones Act is often heralded as a bulwark for the U.S. maritime industry and critical to U.S. national security. But its effectiveness at achieving these goals is in serious dispute. 

“If U.S. security really does depend on a privately owned fleet, there must be a more equitable way to pay for such a policy,” Akina said. “Asking the residents of Puerto Rico, Hawaii, Alaska, Guam and other areas dependent on ocean shipping to pay for a law that ostensibly benefits the entire country is simply unfair.

“But more than being unfair,” he continued, “the Jones Act hinders the U.S. military’s ability to provide disaster assistance. Both the U.S. Army Corps of Engineers and Puerto Rico’s National Guard have mobilized in Puerto Rico, and their ability to effectively respond with supplies from the mainland will be limited by high Jones Act shipping costs.”

Current law allows the Secretary of Defense to waive the Jones Act in order to “address an immediate adverse effect on military operations,” and the president could direct U.S.Secretary of Defense Lloyd Austin to do just that.]3[ 
The Institute joins an ever-growing group of media outlets, advocacy organizations and members of Congress and local governments who have been calling for Jones Act relief for Puerto Rico.

Last week, a group of eight congressional Democratic lawmakers called on Secretary of Homeland Security Alejandro Mayorkas to grant Puerto Rico a one-year waiver from the law.]4[ 

“The island was already suffering financial difficulties when Hurricane Fiona delivered another crippling blow,” the group wrote.

The New York City Council also weighed in, writing to Biden, House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer that, “A waiver for Puerto Rico during this time will allow a faster and cheaper supply of essentials to reach the islands.”]5[

In the past few days, the editorial boards of The Boston Globe, The Washington Post, The Wall Street Journal, and the Washington Examiner have also criticized the Jones Act. 

“Once again, Puerto Ricans are paying the price for an antiquated shipping law that makes food and other goods more expensive on the island,” The Boston Globe said. “The law is inexcusable in ordinary times — and downright scandalous now, when the island is reeling from yet another natural disaster.”]6[

Said The Washington Post: “The Jones Act has not stopped the long-term decline of U.S. shipbuilding or the rise of Asian and European competitors that now dominate global sealift capacity. But by limiting Puerto Rico’s choices, it has driven up the island’s import costs.”]7[
In today's Wall Street Journal, the editors noted that, "Puerto Rico is the home of Fort Buchanan, the U.S. Army’s 'Sentinel of the Caribbean,' so perhaps there’s an argument that it harms national defense if the island is in chaos."]8[

The Washington Examiner wrote: “In normal times, the Jones Act causes consumers to pay needlessly high prices. In times of crisis, it can have tragic consequences, which is what is happening in Puerto Rico right now.”]9[

These latest calls for a Jones Act waiver for Puerto Rico come on the heels of the federal government being asked to grant Jones Act relief to the six states of New England. The governors of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont asked in July for a Jones Act waiver so their states could be sure of obtaining enough liquid natural gas during the coming winter.]10[

Currently there are no Jones Act-compliant LNG tankers in the U.S. fleet to transport LNG to other parts of the country from its source on the Gulf Coast, and even if a U.S. shipyard could build one, it would likely cost up to $500 more than the world price — and certainly not be ready by this winter.]11[

Earlier this year, Akina wrote the president requesting a Jones Act waiver for Hawaii, which had just been cut off from fuel imports from Russia as part of America’s response to that country’s invasion of Ukraine.

Hawaii had been importing up to a third of its oil each year from Russia because the Jones Act makes it more expensive to buy oil from U.S. sources. Without access to Russian imports, Hawaii faced significantly higher fuel costs from having to use Jones Act ships, even though U.S. oil might have cost less.]12[

U.S. Rep. Ed Case of Hawaii also asked for a Jones Act waiver,]13[ and in May, so did the Maui County Council.]14[ Unfortunately, the Biden administration did not issue one.

Akina said the latest calls for Jones Act reform confirm that the Grassroot Institute, Case and the Maui County Council were on the right track. 

Just a month ago, on his ThinkTech Hawaii program “Hawaii Together,” Akina interviewed Luis Ponce of Boricuas Unidos en la Diaspora, who explained why the Jones Act poses a permanent danger to the people of Puerto Rico.

“We don’t have the proper tools, the proper vessels or the proper legislation to actually keep Puerto Rico stocked, keep Puerto Rico safe during an emergency, like with ]Hurricane[ Maria or an even greater natural disaster, which everybody’s expecting,” Ponce said.]15[

Akina said that a Jones Act waiver for Puerto Rico would be an important recognition at the highest levels of government of the harms the 1920 law imposes on all U.S. communities, especially noncontiguous states and territories such as Puerto Rico and Hawaii that do not have access to other forms of transport, such as trucks and trains.

“As the dire situation in Puerto Rico demonstrates once again, the Jones Act is an impediment to economic prosperity in good times and an actual humanitarian threat during times of crisis,” Akina wrote in his Sept. 27 letter to Biden.

“I sincerely hope you will ignore the small but powerful Jones Act constituency and grant waivers for the greater good of Puerto Rico and all Americans who are being harmed by this anachronistic law.”

For more information or to arrange an interview with Akina, please contact Mark Coleman at 808-386-9047 or info@grassrootinstitute.org.  
________________

]1[ Letter to President Joe Biden from Keli'i Akina of the Grassroot Institute of Hawaii, Sept. 27. 2022, copied to U.S. Secretary of Defense Lloyd Austin and Hawaii's congressional delegates: U.S. Sens. Brian Schatz and Mazie Hirono and U.S. Reps. Ed Case and Kai Kahele.

]2[ Joseph Wilkinson, “21 Deaths in Puerto Rico Associated with Hurricane Fiona,” New York Daily News, Sept. 24, 2022; Jaclyn Diaz, “5 numbers that show Hurricane Fiona's devastating impact on Puerto Rico,” NPR, Sept. 23, 2022.

]3[ “46 U.S. Code § 501 — Waiver of navigation and vessel-inspection laws,” Legal Information Institute, accessed Sept. 27, 2022. 

]4[ Letter from U.S. Rep Nydia Velásquez, Alexandria Ocasio-Cortez, et al., Sept. 22, 2022.  

]5[ “In the Aftermath of Hurricane Fiona, New York City Council Calls for Jones Act Waiver in Puerto Rico,” New York City Council, Sept. 26, 2022. 

]6[ “Kill the Jones Act,” The Boston Globe, Sept. 24, 2022.

]7[ "Puerto Rico’s membership in the U.S. should come with free shipping,” The Washington Post, Sept. 26, 2022.

]8[ "The Jones Act Strands Hurricane Aid in Puerto Rico," The Wall Street Journal, Sept. 27, 2022.

]9[  “Save Puerto Rico and repeal the Jones Act now,” Washington Examiner, Sept. 27, 2022.

]10[ Letter from Govs. Charles Baker, Ned Lamont, Janet Mills, Christopher Sununu, Daniel McKee and Philip Scott, July 27, 2022. 

]11[ Colin Grabow, “New England Governors Seek Jones Act Relief as Spike in Winter Heating Bills Looms,” Cato Institute, Aug. 26, 2022.  

]12[ “Text of Grassroot Institute request to President Biden for Jones Act waiver for fuel imports,” Grassroot Institute of Hawaii, March 3, 2022.

]13[ “Case Asks President To Waive Jones Act To Facilitate Available and Affordable Shipping Of US Oil From US Ports To Hawaii To Replace Banned Russian Oil Imports,” Press release from U.S. Rep. Ed Case, March 8, 2022.

]14[ Michael Tsai, “Maui County Council asks for Jones Act waiver,” Spectrum News Hawaii, April 1, 2022.

]15[ “How the Jones Act affects Puerto Rico; ‘the uncanny parallels’ with Hawaii,” Grassroot Institute of Hawaii, Aug. 31, 2022.

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The Grassroot Institute of Hawaii is a nonpartisan, nonprofit research and educational institute devoted to promoting individual liberty, economic freedom and accountable government. Its goal is to improve the quality of life in Hawaii by lowering the cost of living and expanding opportunities for all.