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US waives Jones Act in preparations for Irma

08 Sep 2017 19:48 (+01:00 GMT)
US waives Jones Act in preparations for Irma

Washington, 8 September (Argus) — President Donald Trump's administration has waived restrictions under the Jones Act to increase fuel shipments into Florida, where port closures in advance of Hurricane Irma are expected to exacerbate gasoline shortages.

The US waived the shipping restrictions yesterday. Irma is expected to make landfall in southern Florida on 10 September as a Category 4 storm. Tropical-storm-force winds are forecast to reach the state by tomorrow, prompting port closures and evacuations from coastal areas that could be inundated by storm surges and rain.

Florida relies heavily on imported shipments of gasoline and other fuels because it does not have local refineries or pipelines that can bring refined products into the state. Florida police have been escorting tanker trucks to expedite deliveries to gas stations that are struggling to keep up with demand from evacuating residents and others filling up their tanks ahead of the storm.

Governor Rick Scott (R) has warned that impending port closures will prevent gasoline resupply until the storm passes. The port of Tampa is closing at 8pm ET. Port Everglades, along with the ports of Jacksonville and Savannah, are closing at midnight ET.

The Jones Act waiver will allow fuel from the US Gulf and other domestic ports to be shipped into Florida on foreign-flagged ships. Those deliveries would otherwise be prohibited under the Jones Act, which requires shipments between US ports to occur on US-flagged, US-built and US-crewed ships. Federal Energy Management Agency director Brock Long said Trump issued the waiver yesterday to help bring more fuel into Florida.

"We are bringing as much supply of refined fuel as possible," Trump's homeland security adviser Tom Bossert said at a White House briefing today. "And we have waived a particular statute that allows for foreign-flagged vessels to help in that effort."

The White House has not provided details on the waiver.

Weather conditions will dictate how much more fuel can be imported before the hurricane makes landfall, Bossert said, but added that he did not think there would be "too much more that we can get in."

Irma's disruptions in Florida come as refiners and product stocks are still recovering from Hurricane Harvey, which made landfall two weeks ago in Texas. The storm shut down and reduced throughputs at refineries in Texas and Louisiana and forced major pipelines serving the midcontinent and eastern US to suspend operations for lack of product.

Phillips 66 requested a Jones Act waiver in the days after Harvey to supply crude to its 250,000 b/d Alliance refinery in Louisiana. The category 4 storm disrupted ports and pipelines, making it difficult for refiners to access crude supplies. US Customs and Border Protection began processing the waiver request, but Phillips 66 withdrew it before the agency made a decision.

"We now have Jones Act tonnage sufficient to meet the Alliance Refinery's supply needs," Phillips 66 said.

The Trump administration has been waiving other federal laws to ease hurricane-related fuel shortages. The US Transportation Department on 31 August suspended hours-of-service limits on truckers hauling fuel in 26 states. The US Environmental Protection Agency has waived low-volatility gasoline requirements in 38 states. Energy analysts expect more such actions are likely.

"The state and federal government is going to move heaven and Earth to make sure energy disruptions are as short as possible," Columbia University Center on Global Energy Policy fellow Bob McNally said.