A blue wave is helping rock the boat on Jones Act reform

by Keli'i Akina, Ph.D. President / CEO Grassroot Institute of Hawaii

Over the past few months, an enormous amount of attention has been focused at the federal level on trade policy and how to revive America’s severely diminished shipping capacity. Part of that conversation has revolved around the 1920 Jones Act, which the Grassroot Institute of Hawaii has long advocated should be updated.

The Jones Act restricts shipping between U.S. ports to only vessels that are U.S. flagged and built, and mostly owned and crewed by Americans. The result has been a steadily declining U.S. oceangoing fleet, fewer maritime workers, almost non-existent commercial shipbuilding and higher costs for American consumers, especially in places such as Hawaii. In 2020, research commissioned by Grassroot showed that the law costs Hawaii about $1.2 billion a year, or almost $1,800 per family.

For those who think this is only a Democratic or Republican party issue, that couldn’t be further from the truth. Just last month, Grassroot partnered with the Progressive Policy Institute to host a weeklong series of meetings in Hawaii with senior congressional staff members interested in fostering bipartisan conversation about the Jones Act. PPI, based in Washington, D.C., was founded in 1989 by the Democratic Leadership Council.

Democrats favoring Jones Act reform include U.S. Rep. Ritchie Torres of New York, who introduced a bill in early May to exempt oil and other energy products transported to Hawaii, Alaska, Guam and Puerto Rico from the Jones Act.

In addition, Connecticut Gov. Ned Lamont urged during his annual state of the state address in January that Congress “rethink the Jones Act,” especially concerning how it impedes energy supplies.

Connecticut’s Democratic-dominated General Assembly followed through with a resolution “calling on Congress to amend the Jones Act and provide exemptions for Puerto Rico by allowing foreign-flagged ships to transport certain goods, including liquid natural gas.”

Meanwhile, just this week, Hawaii U.S. Rep. Ed Case, a Democrat, voted against a shipping bill that would require equipment and materials purchased or financed by the U.S. Department of Transportation to be carried on U.S.-flagged ships.

Case said he believes the bill "simply strengthens the monopoly position of the Jones Act shippers who are artificially driving up the already high cost of living for Hawaii." Furthermore, he told Aloha State Daily, “there is no way we can provide for all of our domestic shipping needs … off of Jones Act domestic shipping alone.”

Case suggested that the U.S. appeal to allies such as South Korea and Japan to help with our domestic shipping needs.

On the Republican side, U.S. Sen. Mike Lee of Utah re-introduced his Open America’s Waters Act this week, which would repeal the Jones Act and its associated regulations. Republican Rep. Tom McClintock from California introduced a companion bill in the House of Representatives.

Lee said his Open America’s Waters Act aims to "cut this 105-year-old red tape to alleviate the energy crisis, bring prices down for Americans and protect our national security from adversarial nations.”

Lee’s comments should resonate with Hawaii residents, who continue to struggle with the Jones Act’s outsized effect on energy costs. Because there are no Jones Act-compliant ships capable of bringing liquid natural gas to Hawaii, we are unable to take advantage of the cost savings that would come from sourcing it from the mainland.

In addition, Hawaii’s significant dependence on foreign fuel because of the Jones Act leave us vulnerable to supply and price fluctuations in times of political uncertainty, so there’s a national security component to updating or ditching the act as well.

Connecticut's Democratic governor was on to something when he urged Congress to “rethink the Jones Act." I hope our leaders in Washington will continue to put aside their partisan differences and do just that.

E hana kākou! (Let's work together!)