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It’s Time to Repeal the Jones Act

Russia’s war in Ukraine has crippled Europe’s energy security and sent their markets into a frenzy. Local governments are imposing bans on hot showers to conserve energy. In Spain, energy-intensive companies may be forced to cut production during peak demand hours so as to not strain the grid. 

>>>READ: How to Counter OPEC+

America has begun to experience an energy crisis of its own. After months of falling costs, gas prices are beginning to rise again. New data from the Energy Information Administration (EIA) now finds that consumers could pay as much as 28% more to heat their homes this winter. With record inflation and a recession looming, Americans are increasingly in need of energy relief. To provide that, federal policymakers should repeal the Jones Act.

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More than a century old, the Jones Act requires any goods being shipped between U.S. ports to be carried on an American vessel manned by a majority-American crew. The Jones Act has hurt American competitiveness and increased energy costs. As I argue in National Review

“Even as the U.S. has become the global leader in oil-and-gas production, residents of the Northeast and East Coast still depend on foreign energy because of the Jones Act. Analysts estimate that it costs three times more to ship oil from Texas refineries to the East Coast than it does to ship oil from Canada. Shifting oil supply has significant economic implications, with one study finding that Jones Act requirements cost the U.S. petroleum industry $298 million a year, after adjusting for inflation.”

What’s more, the Jones Act delays vital disaster relief. After Hurricane Fiona hit Puerto Rico earlier this year, a BP tanker carrying diesel fuel to power homes and hospitals had to remain idle off of the coast for days until the Biden administration granted a temporary Jones Act waiver. The administration recently issued another waiver to allow Texas LNG onto the island as Puerto Rico continues to recover from Fiona.

Additionally, the Jones Act has failed to help the one industry it was intended to protect: U.S. shipping.

“Indeed, the average age of commercial U.S. vessels is now nearly three times that of the rest of the world, and in the past four years, 25 of America’s largest 110 shipyards have closed. Why? As of 2010, Jones Act–compliant ships were 2.7 times more expensive to operate than their foreign competitors.”

With immediate fixes for high prices in short supply, policymakers can deliver energy relief by repealing the antiquated Jones Act. Doing so will reduce costs for consumers and allow our economy to flourish. 

Read the full article on National Review.

The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.

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