Bloomberg News

U.S. Waives Jones Act to Help Responding to Storm Sandy

November 02, 2012

The Obama administration said it waived the requirement that only U.S. flagged ships carry fuel between U.S. ports, an effort aimed at easing shortages in the Northeast caused by superstorm Sandy.

The waiver applies to refined products that are headed from domestic ports to the Northeast, Craig Fugate, administrator of the Federal Emergency Management Agency, told reporters today.

“The administration’s highest priority is ensuring the health and safety of those impacted by Hurricane Sandy and this waiver will remove a potential obstacle to bringing additional fuel to the storm-damaged region,” Homeland Security Secretary Janet Napolitano said today in a statement.

New York Governor Andrew Cuomo said today he spoke with Napolitano about waiving the so-called Jones Act, and also acted on his own to suspend state registration requirements. “The gasoline situation should get better,” Cuomo said at a news conference.

Heating oil for December delivery declined 6.47 cents, or 2.1 percent, to $2.9685 a gallon at 1:08 p.m. on the New York Mercantile Exchange, and touched $2.9584, the lowest intraday level since Aug. 7.

Supplies Needed

The American Maritime Partnership, which includes labor unions and companies such as American Petroleum Tankers LLC, owned by funds managed by the Blackstone Group LP (BX:US), said it isn’t aware of instances where U.S. ships aren’t available to deliver needed supplies to communities trying to recover after Sandy, the largest Atlantic storm in history.

Under the Jones Act, passed by Congress in 1920 as part of a broader maritime law, goods transported between U.S. ports must be carried by ships built in the U.S. and operated by U.S. crews.

Today’s waiver applies to ships bringing refined fuel from the states on the Gulf of Mexico to Northeastern ports, the department’s statement said. There are no U.S. tankers available to transport gasoline during the time covered by the waiver, said Meghan Keck, deputy director of public affairs for the U.S. Transportation Department.

Waiving “the Jones Act will help in resupplying products to ports,” said Frank Verrastro, director of the Energy and National Security Program for the Center for Strategic and International Studies in Washington. “Is it an additional arrow in the quiver? Absolutely.”

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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