AWO’s Carpenter says administration’s Jones Act waiver won’t lower gas prices

The decision by the Trump administration to extend an existing waiver of the Jones Act, which it said would reduce US gasoline prices, is not working, according to Jennifer Carpenter, President and CEO American Waterways Operators (AWO).

The Jones Act, the Merchant Marine Act of 1920, requires that cargoes transported between US ports must be transported on vessels built in the United States, crewed by US mariners, and owned by US citizens. The Jones Act provides the United States with mariners, vessels, and shipbuilding to assure a US domestic maritime self-sufficiency that can also be mobilized in a wartime emergency.

In 2019, PricewaterhouseCoopers produced: “Contribution of the Jones Act Shipping Industry to the US Economy” which concluded that: “In addition to the 95,470 direct jobs in the industry, the Jones Act shipping industry supported another 552,750 indirect and induced jobs in other sectors of the economy, or about 5.8 jobs for each direct job in the Jones Act shipping industry.”

Carpenter Says Jones Act Waivers Not Reducing Gasoline Prices

In a video interview with AJOT, Carpenter said that, contrary to assertions by opponents of the Jones Act and supporters of Jones Act waivers, there is no evidence of gasoline price reductions when transporting petroleum products on foreign flag vessels: “We are developing evidence in real time that the next time somebody says, ‘Boy, the Jones Act is driving gas prices,’ we're going to be able to point to and say, ‘No, it doesn't.’ As we have been saying, gas prices are overwhelmingly driven by the price of crude oil. The impact of domestic transportation overall, much less transportation on Jones Act vessels, … is less than a tenth of a cent a gallon. So, this just pales in comparison even to federal taxes.”

Making Money for the Oil Companies?

Carpenter said the true impact of the Jones Act waiver is to allow oil companies to make a profit without any benefit to the American consumer: “I think we need to be sober and clear eyed and recognize that there are folks, including some in the administration who don't like the Jones Act. There are many, many who like the Jones Act very much and understand its centrality, its foundational role … in the President's maritime dominance agenda. But there are other folks who just don't like it. And there are folks outside the administration who are making money off this. You know, just yesterday a major oil company did its quarterly … call with investors and they were bragging about how as a result of this Jones act waiver … they were able to move … crude that normally moves by rail in compliance with US law, I might add, … on a foreign flag vessel that is not subject to all those same legal obligations as an American vessel or even an American rail carrier. So, … let's not forget that there are folks out there who see an opportunity to make a buck on this, and … they've got some sympathetic ears within the administration.”

She said beneficiaries from the Jones Act waivers include: “We have seen oil companies, oil traders, I would say, who see this waiver as an opportunity to make some money, and they are doing that. We have seen foreign governments who, by the way, are not coming to our assistance in reopening the Strait of Hormuz, but are happy to have their vessels, you know, moving cargo between US ports under this waiver.”

Carpenter said that if there is a legitimate shortage of US vessels to transport oil or other essential products then there is a process for granting legitimate waivers: “And again, if a shortage develops that a US vessel can't meet, then there is a targeted waiver process that can be used.”

Abolishing the Jones ACT?

Carpenter was asked whether she thought the Trump administration waivers could be imposed on a permanent basis so as to essentially abolish the Jones Act.

She responded as follows: “I think that making the waivers permanent would be a disaster for Homeland Security, for our economy. And I do not see that happening. I think that the extension of this waiver has really galvanized concern that we need to stop this ASAP, that it is problematic. Now, I will tell you because I want everybody in our industry to be very clear eyed about this… We should understand that there are people out there who would like to see the Jones act go away permanently …That cannot be done without an Act of Congress. And I do not see that happening because there is strong support for that (the Jones Act) …Everybody is … energized and engaged and working this issue hard, and they should be. Everybody should be treating this as a Mayday situation, not panicking, not freaking out, but really seizing this opportunity.”

Jones Act Supporters Will Be Heard in November

Finally, Carpenter said the Trump administration’s decision to extend the Jones Act waiver is not only galvanizing maritime labor, shipbuilders, tug and barge operators to build a broader US maritime coalition, but the threat to jobs has also motivated the Jones Act workers and employers to make sure that they are heard by House and Senate candidates running for office in the mid-term elections this November.

Carpenter describes AWO’s membership as coming from “America's tugboat, towboat and barge industry … Folks who own and operate towing vessels and barges throughout our inlet river system on all three coasts, on the Great Lakes, provide essential ship docking and other harbor services in ports and harbors around the country.” Carpenter is also President and CEO of the American Maritime Partnership (AMP). She says the American Maritime Partnership “is a coalition that really brings together all of the entities throughout the US domestic maritime industry in support of one goal, and that is the Jones Act … vessel owners, maritime labor, shipyards, pro defense organizations ... AWO has a handful of priorities. The Jones Act is at the top of the list; AMP is where we focus solely on the Jones Act.”