Trump Administration Extends Jones Act Waiver for Another 90 Days

Last month, the Trump administration issued a 60-day waiver of the Jones Act in order to make it easier to move petroleum and fertilizer products between U.S. ports. Availability of foreign tanker tonnage in a tight market was an initial limitation, and uptake was low at first, but in recent weeks about 40 foreign-flagged vessels have moved products in U.S. coastwise trade. Now, the administration has notified Congress that it plans to extend the waiver for another 90 days.

"As long as the Iranians are a threat and raising fuel prices, the president would like to keep the waiver in place for as long as is necessary," an advisor to the president told Axios.

From the administration's perspective, a waiver reduces friction in the petroleum market at a time of elevated prices. California has received multiple shipments of gasoline on foreign tonnage, and Alaska has reportedly received about half of its monthly jet fuel allotment on foreign tankers - without reaching for imported supplies. In total, the waiver has been used to move about nine million barrels of petroleum so far, according to the White House.

The prospect of a persistent Jones Act waiver is of great concern to Jones Act shipowners, who have spent billions to purchase U.S.-built tonnage and hire U.S.-citizen mariners. The act is essential to the industry's survival, as foreign operators tend to lean into the use of lower-cost foreign labor markets to minimize the expense of their ships and their crews.

“This extension of an already historically long and ineffective Jones Act waiver is not only an affront to hundreds of thousands of hardworking Americans who put this country first every single day, it sabotages President Trump’s agenda to restore American maritime dominance,” said Jennifer Carpenter, President of the American Maritime Partnership. “Waiving the Jones Act exports American jobs to foreign carriers, allows them to skirt U.S. laws, and exposes the nation to national security threats by opening our maritime borders.”

Initial use of the waiver centered on moving refined products out of the Gulf Coast, but that may be changing. According to Kpler, Phillips 66 chartered a foreign-flagged crude tanker - the Malta-flagged HTM Warrior - to lift U.S. oil from Beaumont and deliver it to Monroe Energy's Trainer oil refinery in Pennsylvania. It appears to be the first such instance since the waiver took effect. Coastwise crude oil moves of this type are less common on Jones Act tonnage, as the sector is geared towards the movement of refined products (excepting inland tank barge operators and tankers that carry Alaskan crude to Washington and California).