Posted:
February 8, 2019
By Paul Doell
National President
Word out of Washington early this month was that the White House is considering a Jones Act waiver to accommodate the shipment of liquefied natural gas from the U.S. mainland to Puerto Rico, a 10-year breach requested by the U.S. island territory's government in December 2018.
The official rationale behind this new waiver request from the U.S. territory's Governor is that Puerto Rico may want to shift to LNG as its principal power source, a potential hindered greatly by the island's crumbling infrastructure. The move to natural gas would require an investment of more than $1 billion to convert existing power plants, and to build large-scale LNG import centers. It would also require mainland-based LNG suppliers to refocus a strategy centered on sales to foreign countries.
According to American Maritime Partnership - a Washington-based Jones Act support coalition of which American Maritime Officers Service is a member and which American Maritime Officers supports - the Puerto Rico Electric Power Authority has but one working LNG import and gas conversion plant on the territory's South coast, providing limited service to a nearby power generation station fed by foreign-sourced LNG.
PREPA wants to go with LNG for two existing power plants in San Juan - plants that are not ready to adapt to gas to generate electricity for the homes, businesses and public centers these plants now serve.
Put simply and briefly, existing infrastructure is incapable of providing natural gas to PREPA's major plants.
This inherently impractical Jones Act waiver proposal is likely to draw support on Capitol Hill from the same bipartisan Congressional cluster that thought a one-year exemption for Puerto Rico was a good idea after Hurricane Maria wrought widespread misery and ruin upon the territory in September 2017. But key House Democrats and Republicans have already moved to head off any harmful Hill initiative.
In a letter Feb. 6 to U.S. Homeland Security Secretary Kirstjen Nielsen, the leaders of the House Transportation and Infrastructure Committee said an LNG Jones Act waiver for Puerto Rico would be "unwarranted."
"Administrative waivers of the Jones Act are constrained purposefully to rare cases where such a waiver is 'necessary in the interest of national defense,'" the House letter explained. "Even in those cases where the Secretary of Homeland Security may consider a waiver based on the same national defense pretext, the Secretary is required to consider other information and additional conditions, such as the availability of U.S.-flag vessels. It is our belief that no valid national defense rationale exists to support this waiver request of the Jones Act for Puerto Rico, especially for a 10-year period.
"We can do many things to foster and support the recovery of Puerto Rico and its citizens from the devastation of Hurricane Maria, and our Committee has done so," the letter continued. "However, we believe there is no justification for waiving the Jones Act in this context."
The four Congressmen also noted the Jones Act is and has been "a fundamental pillar of U.S. maritime policy for nearly a century." The Jones Act has fostered "vibrant economic growth and ensured national security," while sustaining "hundreds of thousands of good paying jobs in our domestic maritime trades and shipbuilding industries."
Committee Chairman Peter DeFazio (D-OR), Ranking Member Sam Graves (R-MO), Coast Guard and Maritime Transportation Subcommittee Chairman Sean Patrick Maloney (D-NY) and Subcommittee Ranking Member Bob Gibbs (R-OH) signed this letter.
The lawmakers' timely defense of the Jones Act in this specific case was a solid line drawn clearly, an encouraging advisory from the House panel with immediate jurisdiction that no dangerous precedent will be set with Puerto Rico, whether the issue is LNG shipments from the U.S. mainland, the persistent post-Maria calls for Jones Act waiver or exemption applied to barge and ship dry cargo movement or the ongoing Congressional consideration of the territory's deeply troubled economy.
The danger, of course, is that any inroad against the Jones Act in Puerto Rico would inspire comparable strategies in Hawaii, Alaska and Guam. In time, well-heeled Jones Act critics would target coastal tanker trades, dry bulk cargo shipments on the Great Lakes, and the vast nationwide network of inland waterway and port tug and tow services - Jones Act repeal one debilitating stroke at a time.
The risk for AMO could not be higher - the permanent, staggering loss of jobs across the domestic market sectors and the concurrent loss of job-based employer contributions to AMO Plans, the benefit funds for all deep-sea, Great Lakes and inland waters AMO members and their families.
In a Dec. 28 letter to Secretary Nielsen, American Maritime Partnership made the additional relevant point that the Jones Act fits snugly into President Trump's "Buy American, Hire American" credo and the administration's "America First" policy theme.
"AMP appreciates the desire of Puerto Rico to reduce its energy costs and AMP members are actively engaged to find solutions that are compliant with all laws, including the Jones Act, to achieve that goal," the coalition said. "No one is better positioned than the leading participants in the domestic shipping industry to assess the economics of moving LNG to Puerto Rico."
Our union is in the fight as well - full ahead, with AMP and through our own Capitol Hill contacts. We will keep the AMO membership informed along the way.
A new front in long war over Jones Act and Puerto Rico
By Paul Doell
National President
Word out of Washington early this month was that the White House is considering a Jones Act waiver to accommodate the shipment of liquefied natural gas from the U.S. mainland to Puerto Rico, a 10-year breach requested by the U.S. island territory's government in December 2018.
The official rationale behind this new waiver request from the U.S. territory's Governor is that Puerto Rico may want to shift to LNG as its principal power source, a potential hindered greatly by the island's crumbling infrastructure. The move to natural gas would require an investment of more than $1 billion to convert existing power plants, and to build large-scale LNG import centers. It would also require mainland-based LNG suppliers to refocus a strategy centered on sales to foreign countries.
According to American Maritime Partnership - a Washington-based Jones Act support coalition of which American Maritime Officers Service is a member and which American Maritime Officers supports - the Puerto Rico Electric Power Authority has but one working LNG import and gas conversion plant on the territory's South coast, providing limited service to a nearby power generation station fed by foreign-sourced LNG.
PREPA wants to go with LNG for two existing power plants in San Juan - plants that are not ready to adapt to gas to generate electricity for the homes, businesses and public centers these plants now serve.
Put simply and briefly, existing infrastructure is incapable of providing natural gas to PREPA's major plants.
This inherently impractical Jones Act waiver proposal is likely to draw support on Capitol Hill from the same bipartisan Congressional cluster that thought a one-year exemption for Puerto Rico was a good idea after Hurricane Maria wrought widespread misery and ruin upon the territory in September 2017. But key House Democrats and Republicans have already moved to head off any harmful Hill initiative.
In a letter Feb. 6 to U.S. Homeland Security Secretary Kirstjen Nielsen, the leaders of the House Transportation and Infrastructure Committee said an LNG Jones Act waiver for Puerto Rico would be "unwarranted."
"Administrative waivers of the Jones Act are constrained purposefully to rare cases where such a waiver is 'necessary in the interest of national defense,'" the House letter explained. "Even in those cases where the Secretary of Homeland Security may consider a waiver based on the same national defense pretext, the Secretary is required to consider other information and additional conditions, such as the availability of U.S.-flag vessels. It is our belief that no valid national defense rationale exists to support this waiver request of the Jones Act for Puerto Rico, especially for a 10-year period.
"We can do many things to foster and support the recovery of Puerto Rico and its citizens from the devastation of Hurricane Maria, and our Committee has done so," the letter continued. "However, we believe there is no justification for waiving the Jones Act in this context."
The four Congressmen also noted the Jones Act is and has been "a fundamental pillar of U.S. maritime policy for nearly a century." The Jones Act has fostered "vibrant economic growth and ensured national security," while sustaining "hundreds of thousands of good paying jobs in our domestic maritime trades and shipbuilding industries."
Committee Chairman Peter DeFazio (D-OR), Ranking Member Sam Graves (R-MO), Coast Guard and Maritime Transportation Subcommittee Chairman Sean Patrick Maloney (D-NY) and Subcommittee Ranking Member Bob Gibbs (R-OH) signed this letter.
The lawmakers' timely defense of the Jones Act in this specific case was a solid line drawn clearly, an encouraging advisory from the House panel with immediate jurisdiction that no dangerous precedent will be set with Puerto Rico, whether the issue is LNG shipments from the U.S. mainland, the persistent post-Maria calls for Jones Act waiver or exemption applied to barge and ship dry cargo movement or the ongoing Congressional consideration of the territory's deeply troubled economy.
The danger, of course, is that any inroad against the Jones Act in Puerto Rico would inspire comparable strategies in Hawaii, Alaska and Guam. In time, well-heeled Jones Act critics would target coastal tanker trades, dry bulk cargo shipments on the Great Lakes, and the vast nationwide network of inland waterway and port tug and tow services - Jones Act repeal one debilitating stroke at a time.
The risk for AMO could not be higher - the permanent, staggering loss of jobs across the domestic market sectors and the concurrent loss of job-based employer contributions to AMO Plans, the benefit funds for all deep-sea, Great Lakes and inland waters AMO members and their families.
In a Dec. 28 letter to Secretary Nielsen, American Maritime Partnership made the additional relevant point that the Jones Act fits snugly into President Trump's "Buy American, Hire American" credo and the administration's "America First" policy theme.
"AMP appreciates the desire of Puerto Rico to reduce its energy costs and AMP members are actively engaged to find solutions that are compliant with all laws, including the Jones Act, to achieve that goal," the coalition said. "No one is better positioned than the leading participants in the domestic shipping industry to assess the economics of moving LNG to Puerto Rico."
Our union is in the fight as well - full ahead, with AMP and through our own Capitol Hill contacts. We will keep the AMO membership informed along the way.