Case Asks President To Waive Jones Act To Facilitate Available and Affordable Shipping Of US Oil From US Ports To Hawaii To Replace Banned Russian Oil Imports
He Says Hawaii Should Not Be Treated Differently From Rest of Country In Impacts Of Nationwide Ban
News Release from Office of Rep Ed Case, Washington, DC, March 8, 2022
(Washington, DC) – U.S. Congressman Ed Case (HI-01) today urged President Biden to exercise existing authority to grant a waiver from the federal Jones Act to permit international shipping to ship oil and other petroleum products from mainland U.S. ports to Hawai’i to allow for full replacement from domestic supply of the some one-third of total Hawaii oil imports from Russia and banned today by Presidential order.
Case also introduced a bill in the U.S. House of Representatives today to mandate such a waiver.
The Jones Act is a century-old federal law that requires all shipping between U.S. ports to be provided by U.S.-built and flagged vessels. With now less than 100 total Jones Act vessels in the country today (including the container ships of Hawai’i providers Matson and Pasha), with all Jones Act tankers dedicated to other purposes, and with the cost of shipping crude oil from the mainland to Hawai’i on any available Jones Act capacity being substantially higher than non-Jones Act international shipping of crude oil from overseas to Hawai’i, Hawai’i has been driven to depend virtually 100% on foreign oil for its gas and other fossil fuel-based energy needs. The ban on Russian imports, which has accounted for between one quarter and one-third of all Hawai’i oil imports in recent years, forces Hawai’i to seek other sources for its energy needs, and domestic oil is the clearest alternative but for the adequacy and cost of Jones Act shipping.
“I join the vast majority of the people of Hawai’i in support of your decision to ban imports of Russian oil and other fossil fuel products”, Case wrote President Biden. “This is a necessary and unavoidable action if we are to implement the full range of available sanctions against Russia for its unprovoked and unjustified war on Ukraine. In support of our mutual efforts, yesterday I joined colleagues in Congress in co-introducing our bipartisan Ban Russian Energy Imports Act to prohibit the importation of Russian crude oil, petroleum, petroleum products, liquified natural gas and coal.
“In Hawai’i, with widespread support, Par Hawai’i, our state’s only oil refiner, has already suspended any future purchase and importation of Russian oil. We understand that this must be done, and further understand that we must and will share with the rest of the country the consequences of a nationwide ban.
“However, without action, the people of Hawaiʻi will be asked to bear consequences far out of proportion to those of most other Americans.
“This is because the best replacement for Russian oil imports to Hawai’i is domestic supply, and the transport of that supply 2,500 miles to our remote island state is subject to the Jones Act requiring any such transport to occur exclusively on a very limited number of domestic vessels.
“As a result, the costs of such shipping, even if it were available domestically to start with, would be higher by a number of multiples than transport on the plethora of non-U.S. flagged specialty vessels. These costs would be passed on in price increases that are already among the highest in our country and would directly affect our national defense headquartered in Hawai’i, our economy, and our communities.
“The bottom line is that through a combination of factors unique to Hawai’i, absent action the people of Hawai’i will be asked to bear a far greater burden of any Russian oil ban than anywhere else in the country. Your Administration holds the necessary authority to counteract some of the adverse effects caused by a ban on Russian energy imports through a limited, targeted waiver of the Jones Act for domestic supply shipping to Hawai’i.”
Under the Jones Act, the executive branch is authorized to provide for limited Jones Act waivers The last time a waiver order was executed was in 2017, when President Trump temporarily waived the Jones Act to allow for disaster relief efforts to be shipped to Puerto Rico in the wake of Hurricane Maria.
“We cannot stake Hawaii’s energy dependence on foreign actors in the current geopolitical climate, and we should not force a disproportionate burden on the State of Hawaiʻi when we have the necessary tools at our disposal to mitigate these unique consequences as we implement this nationwide embargo,” Case wrote President Biden.
Case also wrote Matt Cox, the President and Chief Executive Officer of Matson, Inc., and George W. Pasha, IV, Chairman, President and Chief Executive Officer of The Pasha Group, whose companies together dominate the Jones Act shipping trade from West Coast sources to Hawai’i for the vast majority of Hawai’i needs, asking them both to support his waiver request to the President and his bill.
“I hope and believe that you will fully understand and appreciate the gravity of the moment for our country and world and especially the severe disproportionate impact that the national import ban we have just commenced will likely have on Hawai’i especially absent such a Jones Act waiver,” Case wrote Cox and Pasha.
“I ask for your affirmative full support of my letter to the President and my bill at your earliest opportunity. If you decline to provide that support, I ask for your specific reasons, including your full description of how specifically the up to one third of Hawaii’s total oil needs provided by Russia using non-Jones Act shipping before the ban will be replaced by domestic oil transported on Jones Act ships without the severe cost premium which drove Hawai’i to import foreign oil to start with.”
“This is a critical time to set aside the endless debate over the pros and cons of the Jones Act both nationally and as applied specifically and, in my view, unfairly to our remote island state,” said Case. “It is crystal clear that in this specific crisis the effects of the Jones Act on Hawai’i are especially severe and we should be able to agree that of all times this is one in which the Jones Act should be waived for the duration of our necessary ban on Russian oil.”
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