WASHINGTON, DC – The American Maritime Partnership (AMP) – the voice of the domestic maritime industry – today released a statement correcting testimony provided to the Senate Energy and Natural Resources Committee during the March 19 hearing on U.S. crude oil export policy.
“There simply is no connection between the issue of exporting U.S. crude oil and the Jones Act. The Jones Act is a critical element of U.S. national security, which relies upon American vessels and mariners on all U.S. waters. The attempt of the American Fuel and Petroleum Manufacturers to tie the integrity of the Jones Act to the crude oil export debate is motivated by the quest to increase their profit margins. For that singular purpose, they would diminish the safety and security of our nation’s domestic maritime transportation system and jeopardize the 500,000 American jobs that support this system,” said Tom Allegretti, Chairman of AMP.
“It would be prudent for AFPM to listen to U.S. Coast Guard Commandant ADM. Paul Zukunft who forewarned that any changes in the Jones Act will ‘put our entire U.S. fleet in jeopardy’ and be ‘a real consequence [to national security] if we have foreign flagged vessels doing coastal trade.’”
The American maritime industry – underpinned by the Jones Act – operates more than 40,000 American vessels, which are built in American shipyards and crewed by American mariners. The maritime industry sustains nearly 500,000 American family wage jobs and contributes an estimated $100 billion to the U.S. economy annually.
Senate Energy and Natural Resources Chairman Senator Lisa Murkowski (R-Alaska) echoed the critical role the Jones Act plays in her home state of Alaska, saying in a 2014 press release, “For many Alaskan communities not accessible via road, our waterways are our highways, and the hardworking men and women of the state’s maritime industry provide a crucial transportation link that delivers essential fuel and supplies. With more than 5400 miles of navigable waterways, it is no surprise that the state ranks third in the nation in maritime jobs per capita. The U.S. maritime industry, supported by the Jones Act, provides vital services necessary for Alaska’s economy and quality of life.”
The Jones Act has wide bipartisan support in Congress, as from well as every president in modern day history. Its most recent congressional endorsement was passed late last year as part of the National Defense Authorization Act – originating in both the House and Senate Armed Services Committee bills.
Fact Check on Misstatements About the Jones Act Regarding the Oil Export Ban:
CHARGE: The Jones Act is impeding crude oil exports and must be addressed along with any action on the U.S. crude oil export ban.
FACT: The crude oil export debate and the Jones Act are not connected in any way. In order to protect record profits and vested financial interests, U.S. refiners consistently have signaled a willingness to sacrifice America’s national security.
- According to NASDAQ: “Refiners are jumping on the opportunity to increase profits…” https://www.nasdaq.com/article/gas-prices-dont-reflect-record-levels-of-us-refinery-output-cm373817#ixzz3Ax5eqEPO
- According to the Wall Street Journal: “Downstream operations, which refine oil into gasoline and other products, become more profitable when the oil they use is cheaper. Prices of refined products such as gasoline typically don’t fall as quickly as those for crude. ‘The combination of a glut of U.S. oil and natural gas and a ban on exporting most oil already gave U.S. refineries lower costs,’ says Bernstein Research analyst Oswald Clint.” https://online.wsj.com/articles/lower-oil-price-could-help-refiners-1413287279
- According to OilPrice.com: “This surge in supply also has lowered costs for refinery operators, simply because domestic crude is less expensive than imported oil.” https://oilprice.com/Latest-Energy-News/World-News/Gas-Prices-Dont-Reflect-Record-Levels-Of-U.S.-Refinery-Output.html
CHARGE: Shipping by Jones Act vessels is three times more expensive than foreign vessels.
FACT: Notwithstanding the inaccuracy of this statistic, foreign-flag ships are not subject to U.S. taxation, U.S. immigration, U.S. safety and other U.S. laws. Contrasting U.S.-flag Jones Act vessels and foreign-flag vessels is an “apples to oranges” comparison. Foreign-flag vessels operating in the domestic trades would be subject to the same laws as U.S.-flag vessels, drastically affecting any perceived cost savings.
- Government Accountability Office (GAO) recently debunked this charge: “Foreign carriers operating in the U.S. coastwise trade could be required to comply with other U.S. laws and regulations which could increase foreign carriers’ costs and may affect the rates they could charge.” https://www.gao.gov/assets/660/653046.pdf
CHARGE: The Jones Act increases energy prices.
FACT: According to the Department of Energy’s Energy Information Administration (EIA), taxes and refining make up more than 21 percent of the price of a gallon of gas, while in markets where ocean-going transportation plays a key role in distribution, the average transport costs are less than one penny per gallon of gasoline.
- According to BLOOMBERG: “Outside of pipelines, [maritime] is the best way to transport oil if you’re a coastal refiner.” https://www.bloomberg.com/news/2014-05-28/birthplace-of-uss-new-jersey-saved-by-shale-production-freight.html
- According to the Oil Price Information Service (OPIS): “Apart from the national security argument, some tanker analysts said that the high demand for Jones Act tankers is also supported by better economics and practicality when compared with pipelines.” https://www.cnss.com.cn/html/2014/updates_0516/150508.html
American Maritime Partnership is the voice of the U.S. domestic maritime industry, a pillar of our nation‘s economic, national, and homeland security. More than 40,000 American vessels built in American shipyards, crewed by American mariners, and owned by American companies, operate in our waters 24/7. For more information, please visit www.americanmaritimepartnership.com.