Oil Cos., Transporters Embrace Jones Act Waiver after Irma
The U.S. government’s temporary easing of restrictions on foreign-flagged vessels moving goods between U.S. ports after Hurricane Irma was a rare opening for energy producers and transportation and logistics companies to control their costs when demand for fuel is high following a natural disaster, experts say.
The Jones Act can only be waived if officials consider a waiver to be in the “interest of national defense” and, in some cases, after the U.S. Maritime Administration determines that no qualified U.S.-flagged vessels are available to meet the need, according to Jon Waldron, chair of Blank Rome LLP’s maritime and international trade practice group.
DHS issued this latest limited waiver on the recommendation of the departments of Defense and Energy. The initial Sept. 8 waiver only included New York, Pennsylvania, Texas and Louisiana among the list of origin states, but that list was then expanded to include New Jersey, Delaware, Maryland, New Mexico, Mississippi, Alabama and Arkansas.
Similar short “period of time” waivers to deal with regional shortages of refined products were issued after hurricanes Katrina and Rita in 2005 and Hurricane Sandy in 2012.
“It’s only to be granted for national defense reasons,” Waldron told Law360. “That threshold is extremely hard to meet. I have really have not heard many complaints [from industry]. There is recognition that these are truly catastrophic events, and the waivers have been issued in the past.”
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"Oil Cos., Transporters Embrace Jones Act Waiver after Irma," by Linda Chiem was published in Law360 on September 21, 2017.