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Jones Act waiver approved for a week to ensure fuel supply

By on September 8, 2017

SAN JUAN – In recognition of the severity of hurricanes Harvey and Irma, Department of Homeland (DHS) Security Acting Secretary Elaine Duke approved a waiver of the federal Jones Act.

The waiver, the agency says, will ensure that over the next week, “all options are available to distribute fuel to states and territories impacted by Hurricanes Harvey and Irma, both historic storms.”

The waiver will be in effect for seven days after signature and is “specifically tailored” to transportation of refined products in hurricane-affected areas.

“This is a precautionary measure to ensure we have enough fuel to support lifesaving efforts, respond to the storm, and restore critical services and critical infrastructure operations in the wake of this potentially devastating storm,” Duke says in the statement.

President Donald Trump, accompanied by, from left, center table, acting Homeland Security Secretary Elaine Duke, Texas Gov. Greg Abbott and first lady Melania Trump, participates in a briefing on Harvey relief efforts, Tuesday, Aug. 29, 2017, in Corpus Christi, Texas. (AP Photo/Evan Vucci)

“Hurricane Harvey significantly disrupted the distribution of fuel across the Southeastern states, and those states will soon experience one of the largest mass evacuations in American history while at the same time we’ll see historic movements through those states of restoration and response crews, followed by goods and commodities back into the devastated areas,” she added.

The Jones Act prohibits the transportation of cargo between points in the U.S., either directly or via a foreign port, or for any part of the transportation, in any vessel other than a vessel that has a coastwise endorsement (e.g., a vessel that is built in the United States and owned U.S. citizens). The last Jones Act waiver was issued in December 2012, for petroleum products to be delivered for relief assistance in the aftermath of Hurricane Sandy.

In Puerto Rico, there have been calls to exempt the island from the Jones Act within the context of the economic crisis. In 2012, the Federal Reserve Bank of New York said the Jones Act had an impact on the high cost of shipping to Puerto Rico and on the price of goods. There are currently three major shipping companies operating on the island.

“It costs an estimated $3,063 to ship a 20-foot container of household and commercial goods from the East Coast of the United States to Puerto Rico; the same shipment costs $1,504 to nearby Santo Domingo [Dominican Republic] and $1,687 to Kingston [Jamaica]—destinations that are not subject to Jones Act restrictions,” reads a 2012 New York Federal Reserve study.

However, attempts to exempt the island have failed. U.S. Rep. Gary Palmer had proposed a measure to exempt the island from the Jones Act as part of the Puerto Rico Oversight, Management and Economic Stability Act that never made it into the law.

Recently, Arizona’s Republican Sen. John McCain introduced legislation to repeal the Jones Act. It was the second time in more than a year that McCain had introduced a Senate bill to amend or repeal the act. He has been trying for years to do so, contending it would reduce the price of goods.

Sen. McCain introduces legislation to repeal Jones Act

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