Cummings Asks President Obama to Fully Utilize Jones Act Fleet in Event of SPR Release

Aug 20, 2012

FOR IMMEDIATE RELEASE
August 20, 2012


Contact:
Safiya J. Simmons
202-225-4741



WASHINGTON, DC – Today, Congressman Elijah E. Cummings, Senior Member of the Committee on Transportation and Infrastructure, sent a letter to President Obama urging the President to honor existing law regarding the use of Jones Act-qualified vessels should oil be released from the Strategic Petroleum Reserve (SPR).

“The Jones Act supports tens of thousands of domestic maritime and shipbuilding jobs and is critical to maintaining a domestic maritime industry,” Cummings wrote in the letter.  “In the event of another SPR release, all available measures should be taken to ensure full compliance with the requirements of the Jones Act.”

There have been three presidentially directed releases from the SPR since it was first established.  

The full content of Cummings’ letter is below.


August 20, 2012



President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20006

Dear President Obama:

I write today to urge that should a release of oil from the Strategic Petroleum Reserve (SPR) be made, existing law regarding the use of Jones Act-qualified vessels should be followed to ensure that such vessels are used to the full extent of their availability.

Under current law, a vessel cannot carry merchandise between two points in the United States unless the vessel is registered in the United States and has also obtained what is known as the coastwise endorsement demonstrating its compliance with the requirements of Chapter 55 of Title 46, popularly known as the Jones Act.  Specifically, Section 27 of the Merchant Marine Act of 1920 states that “a vessel may not provide any part of the transportation of merchandise by water, or by land and water, between points in the United States to which the coastwise laws apply, either directly or via a foreign port” unless the vessel is built in the United States, crewed by Americans, and owned by Americans (46 U.S.C. 55102; see also 46 U.S.C. part 121).  

The Jones Act is the law of the land, it is the cornerstone of our U.S. maritime capability, and it should be waived only in the rarest of circumstances.  However, in 2011, following a draw down from the SPR, dozens of waivers were issued to allow oil from the SPR to travel on non-Jones Act-qualified vessels.  

On June 27, the Subcommittee on Coast Guard and Maritime Transportation on which I serve held a hearing to examine vessels used to carry oil from the SPR.  The Deputy Secretary of the Department of Transportation (DOT), John Porcari, testified at the hearing.  While Deputy Secretary Porcari provided some information regarding the waiver process, his testimony was not clear regarding the steps that would be taken in the future to maximize the use of the Jones Act fleet should another SPR draw down occur.  

Of particular concern, during the most recent draw down, numerous Jones Act-qualified vessels were interested in transporting oil from the SPR to United States oil refineries but they were not deemed “available” apparently because they could not transport oil in lots of 500,000 barrels.  A Memorandum of Agreement among agencies that are now components of DOT, the Department of Energy, and the Department of Homeland Security is clear that the Maritime Administration may determine that multiple vessels are “suitable” to carry oil lots purchased from the SPR –  thus enabling the Maritime Administration to divide cargoes into multiple vessels to maximize the use of the Jones Act-qualified fleet.  Additionally, Section 172 of P.L. 112-55 currently prohibits the Maritime Administration from making a “nonavailability” determination pertaining to qualified U.S.-flag vessels unless it first provides a list of U.S.-flagged vessels that collectively have the capacity to transport oil from the SPR to U.S. oil refineries, along with a written justification explaining why those vessels are not being used.  

The Jones Act supports tens of thousands of domestic maritime and shipbuilding jobs and is critical to maintaining a domestic maritime industry.  It should never be waived for the convenience of oil refiners or to the benefit of vessels from foreign nations.  In the event of another SPR release, all available measures should be taken to ensure full compliance with the requirements of the Jones Act.

Sincerely,



Elijah E. Cummings
Member of Congress

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