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Interview: Congressman says Jones Act waiver unjustified, changes impractical

The Trump administration had no justification for issuing a 10-day Jones Act waiver late last month, but new restrictions on future waivers may be impractical, a leading Congressional supporter of the 100-year-old maritime law told the Platts Capitol Crude podcast.

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"We live in a political world," US Representative John Garamendi, Democrat-California, said on the podcast, which aired Monday. "The Jones Act is quite clear about the factors that lead to a waiver. It's very basic. Will an administration from time to time stray away from the black letter of the law? Of course, it's going to happen."

Garamendi, the top Democrat on the House subcommittee on Coast Guard and Marine Transportation, said that the administration of President Donald Trump gave no justification for the waiver and likely had none since there was an excess of US-flagged ships available to deliver crude oil and other goods to the hurricane-ravaged island.



The Jones Act waiver for Puerto Rico, which expired on October 8, covered all goods from US ports to Puerto Rico. The Jones Act, a nearly 100-year-old law, requires vessels transporting goods between US ports to be US-flagged, US-built and majority US-owned.

The Trump administration faced intense political pressure to waive the Jones Act for Puerto Rico and despite a brief Department of Defense statement that the waiver was in the "interest of national defense,' administration officials said the waiver was proactive and likely not necessary.

Critics of the Jones Act, including Senator John McCain, Republican-Arizona, have launched efforts to repeal and weaken it, which Garamendi said would continue to be a risk going forward. At the same time, he added that one of the most frequent arguments against the law, that it was a protectionist trade practice, was actually valid.

"Of course it's protectionist," Garamendi said. "Let's be very clear about it ... it is protecting our national security, it's protecting a vital national area of commerce, moving oil, grain and coal."

During the podcast interview, Garamendi floated the idea of requiring some US crude oil and LNG exports to be shipped on US-flagged vessels, a requirement which he said would lead to tens of thousands of new US-built vessels over the next two decades. The requirement would be similar to a similar US law which required crude shipped from Alaska's North Slope to be on US-flagged ships, he said.

--Brian Scheid, brian.scheid@spglobal.com

--Meghan Gordon, meghan.gordon@spglobal.com

--Edited by Derek Sands, derek.sands@spglobal.com