Obama Jones Act waiver attacked
A group representing domestic shipping companies is attacking the Obama administration's decision to allow any tanker to carry oil released from the Strategic Petroleum Reserve (SPR).
Energy Secretary Steven Chu on Thursday announced the United States would release 30 million barrels of oil from the SPR. Another 30 million barrels are being released by other members of the International Energy Agency, and the hope is the releases will offset the disruption in the oil supply caused by unrest in the Middle East.
The American Maritime Partnership issued a statement the same day, saying it was 'dumbfounded by President Obama's decision to disregard the American maritime industry, which has sufficient capacity to complete this work. At a time when a record number of Americans are unemployed, it is disappointing that the administration has chosen to prioritize foreign workers when our nation's workers are perfectly able and willing to do the job.'
The notice of sale issued by Energy's SPR project management office said the Department of Homeland Security has issued a blanket waiver of the Jones Act for the marine delivery of crude oil purchased in the sale.
The notice of sale said the minimum delivery lot sizes for oil purchased from the SPR are 350,000 barrels for vessels and 40,000 barrels for barges, but noted purchasers must also comply with minimum-tender provisions from the pipelines where they load.
The Strategic Petroleum Reserve has been used sparingly since it was established in 1976 in response to oil shocks from Persian Gulf producers. It is at a historic high with 727 million barrels, according to the Energy Department.
The Air Transport Association, representing major U.S. airlines, and the American Trucking Associations endorsed the administration’s decision to help reduce oil prices.
The airline and motor carrier industries have been severely impacted by high fuel prices in recent years, especially when spikes occur quickly and they cannot implement fuel surcharges in time to recover some of that cost from customers.
Every $1 drop in the annual price of a barrel of oil translates to $415 million in reduced jet fuel expenditures for U.S. airlines, the Air Transport Association said.
Both transportation associations renewed their call to develop other conventional and alternative sources of energy to reduce dependence on foreign oil supplies. The American Trucking Association said domestic supplies should be increased by allowing more offshore oil drilling.