Last week we brought you the news that President Trump is considering a waiver to the 1920 Jones Act for LNG to be shipped from port to port in the U.S., even if the ships used are foreign flagged (see Trump Considers Waiving Jones Act to Allow Domestic LNG Shipments). We like the idea because it means we may be able to move more of our Marcellus/Utica gas to New England without using pipelines.
Yesterday we brought you an opposing viewpoint, from MDN friend Garland Thompson (see An Opposing View on Waiving the Jones Act for US LNG Shipments).
Looks like it’s all academic now. Trump isn’t going to issue the waiver.
Louisiana’s two U.S. Senators (both Republicans) went to the White House yesterday to whine to President Trump, asking him to not issue a waiver. News media is reporting that Trump agreed with them and assured them he won’t issue the waiver.
Louisiana is home to shipyards where ships are built, and many jobs are dependent on them. We can’t blame the Senators for trying, except what benefits them and their state ends up hurting the Marcellus/Utica and all of New England. Somehow the scales of justice are out of balance.
In yesterday’s counter-argument to waiving the Jones Act for LNG shipments, Garland Thompson asserted that those supporting a waiver are not even in the oil and gas industry, but are “shipping interests” who want to use “underpaid foreign seafarers sailing vessels built in shipyards supported by foreign-government subsidies, built by workers paid vastly lower wages than Americans would accept.” In other words, if Trump waives the Jones Act for LNG, he will have to do it for other industries too. An LNG waiver would be the camel’s nose under the tent flap.
Here’s the news that Trump has dumped the idea of issuing a waiver to the Jones Act:
A pair of Republican Louisiana senators said Wednesday they received assurances from President Trump that he would not grant waivers to bypass the Jones Act, a century-old law regulating domestic maritime commerce, to ease the transport of natural gas to the Northeast and Puerto Rico.
The office of Sen. Bill Cassidy said he and other members of Congress met with Trump earlier Wednesday at the White House “to advocate on behalf Louisiana shipbuilders and maritime workers,” and secured “a commitment from the president to not go forward with the proposed waivers.”
“We cannot let the United States become dependent on foreign countries to transport energy and critical products within the United States,” Cassidy said. “The Jones Act is essential to preserve our domestic shipping industry and protect our national and economic security.”
Sen. John Kennedy, also of Louisiana, released a similar statement, saying “after talking to President Trump, I am confident that he realizes how important the Jones Act is to Louisiana’s maritime industry and that no changes will be made.”
A third participant in the meeting, Sen. Dan Sullivan, R-Alaska, confirmed Trump’s pledge to not give Jones Act waivers.
“President Trump seemed receptive to not putting forward Jones Act waivers for natural gas,” Michael Soukup, a Sullivan spokesperson, told the Washington Examiner.
Enacted in 1920, the Jones Act prohibits tankers from hauling goods and commodities, such as oil or natural gas, between U.S. ports unless the ships are American-made, -owned, and -crewed.
The Jones Act was designed to protect American maritime interests and shipbuilders, and the industry has repeatedly fended off attempts in Congress to repeal it, with coastal lawmakers from states such as Louisiana stepping in to save it. Jones Act boosters warn waivers would harm American jobs.
But the White House had been considering granting Jones Act waivers to deliver liquefied natural gas to the Northeast and Puerto Rico, which suffer from high energy prices and are unable to obtain U.S.-produced natural gas. Some oil and gas industry officials argue the Jones Act is hampering Trump’s “energy dominance agenda” by effectively prohibiting areas of the country that lack energy resources, and suffer from high prices, from receiving U.S.-produced natural gas.
A waiver would enable the shipment of natural gas from Gulf Coast export facilities to Northeast receiving terminals, such as the Everett LNG terminal near Boston.
The Puerto Rican government has requested the Trump administration grant a 10-year waiver to allow foreign-flagged ships to deliver natural gas to the U.S. territory in order to help combat high energy prices after Hurricane Maria destroyed the country’s electric grid.
There are no Jones Act-compliant tankers that can transport liquefied natural gas, so U.S. companies must turn to importing higher-priced LNG from overseas.*
We understand the arguments for not using waivers. In this case, we believe the greater good would be to issue them. We hope Trump reconsiders.
*Washington (DC) Examiner (May 1, 2019) – Trump tells Louisiana senators he won’t waive Jones Act to ship natural gas
This post appeared first on Marcellus Drilling News