Cummings urges Obama to support Jones Act in SPR draw down

AUGUST 21, 2012—Hoping to avoid a reenactment of last year’s fiasco by the Administration, U.S. Congressman Elijah E. Cummings (D-MD), Senior Member of the Committee on Transportation and Infrastructure, sent a letter to President Obama urging him to honor existing law regarding the use of Jones Act-qualified vessels if oil should be released from the U.S. Strategic Petroleum Reserve (SPR).

“The Jones Act supports tens of thousands of domestic maritime and shipbuilding jobs and is critical to maintaining a domestic maritime industry,” Cummings wrote in his letter to the President.  “In the event of another SPR release, all available measures should be taken to ensure full compliance with the requirements of the Jones Act.”

In his letter to the President, Congressman Cummings called the Jones Act “the law of the land, it is the cornerstone of our U.S. maritime capability.” Cummings pointed out that the “Jones Act should be waived only in the rarest of circumstances.  However, in 2011, following a draw down from the SPR, dozens of waivers were issued to allow oil from the SPR to travel on non-Jones Act-qualified vessels.”

The waivers appeared to have more to do with the convenience of oil refiners then the availability of Jones Act-qualified tanker tonnage.

Cummings was clearly not satisfied with testimony given by John Porcari, Deputy Secretary of Transportation, at a Subcommittee on Coast Guard and Maritime Transportation hearing on June 27 in which the Deputy Secretary provided some information regarding the waiver process, but was not clear regarding the steps that would be taken in the future to maximize the use of the Jones Act fleet should another SPR draw down occur.

“Of particular concern,” wrote Cummings in his letter to the President, “during the most recent draw down, numerous Jones Act-qualified vessels were interested in transporting oil from the SPR to United States oil refineries but they were not deemed “available” apparently because they could not transport oil in lots of 500,000 barrels.  A Memorandum of Agreement among agencies that are now components of DOT, the Department of Energy, and the Department of Homeland Security is clear that the Maritime Administration may determine that multiple vessels are ‘suitable’ to carry oil lots purchased from the SPR –  thus enabling the Maritime Administration to divide cargoes into multiple vessels to maximize the use of the Jones Act-qualified fleet. Additionally, Section 172 of P.L. 112-55 currently prohibits the Maritime Administration from making a “nonavailability” determination pertaining to qualified U.S.-flag vessels unless it first provides a list of U.S.-flagged vessels that collectively have the capacity to transport oil from the SPR to U.S. oil refineries, along with a written justification explaining why those vessels are not being used.”