Colonial Pipeline shutdown: Are Jones Act waivers on the cards?

Written by Nick Blenkey
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The shutdown of the Colonial Pipeline after a ransomware cyberattack has seen panic buying of gas — and MARAD taking the first steps to consider the possibility of a limited Jones Act waiver.

The pipeline carries refined gasoline and jet fuel from Texas up the U.S. East Coast to New York. Some habitual Jones Act critics, have seized on the idea that moving gasoline from the Gulf to East Coast ports on foreign flag tankers would prove an expedient temporary fix.

Today, the U.S. Departmnet of Transportation said that the Biden-Harris sdministration is continually assessing the impact of the ongoing Colonial Pipeline incident on fuel supplies for the East Coast and is monitoring reported shortages in parts of the Southeast. This ongoing effort includes evaluating resources the federal government can mobilize to mitigate potential impacts.

As part of this process, the U.S. Department of Transportation (USDOT) says it has started the work needed to enable consideration of a temporary and targeted waiver of the Jones Act.

Today, USDOT’s Maritime Administration (MARAD) initiated a survey of Jones Act-qualified vessels to begin the process of evaluating what assets are available in the Jones Act fleet to carry petroleum products within the Gulf, and from the Gulf up the Eastern Seaboard. This step is being taken to determine whether there is sufficient capacity on Jones Act-qualified vessels to carry the product and to determine if a waiver is warranted. Responses have been requested today.

The Maritime Administration’s role in the Jones Act waiver process is to determine the availability of Jones Act vessels to carry the products for which a waiver is sought. Authority to receive requests for and to approve waivers to the Jones Act belongs to the Department of Homeland Security.

In addition, USDOT’s Federal Railroad Administration (FRA) is canvassing rail operators to determine their capacity to help transport fuel from ports inland and if there are additional steps FRA could do to help them increase capacity to do this. They are also engaging industry to identify trends indicating capacity pressures.

USDOT’s Pipeline and Hazardous Materials Safety Administration (PHMSA) assisted Colonial Pipeline’s efforts to get Line 4 up and running yesterday on a manual basis and is continuing to support efforts to ensure safe movement of fuels manually, while concurrent efforts to restore the system’s operation continues.

“This situation continues to develop and the Department of Transportation remains committed to assisting wherever it is needed,” said the DOT statement.

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