New England governors face push back from maritime groups
(The Center Square) – Maritime groups are criticizing New England governors for urging the Biden administration to lift federal restrictions banning foreign vessels in domestic waters in response to a regional energy crunch.
In a letter to Energy Secretary Jennifer Granholm in July, the chief executives called for a blanket waiver from the Jones Act, which requires cargo shipped between U.S. ports to be transported on American owned and operated ships.
The leaders, who included Connecticut Gov. Ned Lamont, Maine Gov. Janet Mills and Rhode Island Gov. Dan McKee, said the nearly century-old maritime rules are preventing liquified natural gas shipments from reaching the region to help ease a looming shortage of fuel this winter.
“The insecurity of global natural gas markets in 2022 exacerbates the long-standing ramifications of the restriction and undermines reliability,” they wrote in the letter.
But, the effort faces pushback from maritime groups who say a waiver would cost jobs and threaten national security, while doing little to ease the regional energy crisis.
In a letter to the governors, the American Maritime Partnership said that claims the Jones Act is responsible for the spike in energy costs are “flatly wrong,” and blamed recent efforts by Northeast states to shut down pipeline projects, close liquified natural gas terminals and other factors.
“Neither maritime transportation in general nor the Jones Act in particular is the problem, and a waiver of the Jones Act will not reduce energy prices in your states,” wrote Ku’uhaku Park, the group’s president. “Higher energy prices in the region are the culmination of years of policies and commercial decisions that have decreased reliability and increased costs for New England consumers.”
Park said lifting the federal restrictions could impact the estimated 27,000 jobs in New England, which ranks among the top per capita regions for maritime employment.
The governors traveled to Washington, D.C. in September to meet with Granholm and other officials, but the Biden administration has yet to take action on the request.
Congress, too, has shown little interest in the plan, with a Senate committee rejecting a proposal earlier this year to allow the domestic transport of gas on foreign vessels.
Industry groups have long argued that New England lacks pipeline access to refining facilities in other states and has insufficient capacity to transport natural gas, the region’s primary fuel for electricity to meet higher demand during the cold winter months.
In a recent blog post, Sam Norton, CEO of Overseas Shipholding Group, called the push for a waiver from the Jones Act a misguided effort and blamed New England’s reliance on “spot” markets for fuel deliveries in winter to fill supply gaps.
“Had natural gas utilities committed to long-term contracts with U.S. owners, exposure to the uncertainties of international supply could have been avoided,” he wrote. “Outsourcing supply of necessities may seem a good strategy when goods flow easily at cheap prices. Not so much when markets are disrupted.”