Crowley Maritime, an American delivery firm, just lately introduced that it raised the U.S. flag on a 31-year-old French-built LNG provider to adjust to the Jones Act—a 100-year-old regulation—lastly permitting for U.S. LNG to be shipped from the U.S. mainland to Puerto Rico by way of a loophole within the protectionist regulation.
A Main Drawback With Minor Aid
Over 100 years in the past, Congress handed the Service provider Marine Act of 1920, higher referred to as the Jones Act, requiring all items transported between U.S. ports to be carried on ships which are inbuilt america, owned by U.S. residents, crewed by Individuals, and flagged below america. Whereas assist for the Jones Act was constructed on sustaining a robust U.S. maritime business and defending nationwide safety, it has didn’t reside as much as these guarantees.
On account of absurdly strict necessities, the Jones Act will increase the price of delivery and ship manufacturing by limiting competitors in home markets and even inspiring collusion. These inflated prices have traditionally made it unattainable for Puerto Rico to import LNG from america. In contrast to the mainland, Puerto Rico cannot import LNG by way of trucking or rail and should as an alternative import LNG utilizing Jones Act carriers (which, till just lately, did not exist).
There’s, nevertheless, a minor workaround. The U.S. Coast Guard Authorization Act of 1996 grants coastwise authorization (which is required for transportation of U.S. LNG to Puerto Rico) to international ships constructed earlier than October 19, 1996, as long as they meet the remaining Jones Act necessities. This technical exception allowed Crowley Maritime’s just lately bought American Vitality, an LNG provider inbuilt France in 1994, to lastly begin supplying LNG to Puerto Rico.
This technicality presents a raindrop of aid to Puerto Rico, however it does little to handle the monetary prices of the Jones Act.
Delivery to Foreigners is Nonetheless Cheaper
Whereas Puerto Rico’s economic system is strangled by inflated prices due to the Jones Act, the Dominican Republic is free from its restrictions, and it imports U.S. LNG at a fraction of the fee. World markets are rather more aggressive and have entry to fashionable, environment friendly LNG carriers. Because of this, delivery costs are dramatically cheaper.
In the newest Maritime Administration working value report, it was revealed that “U.S.-flag crewing prices have been roughly 5.3 occasions greater than foreign-flag vessels in 2010” and a latest publish on X by Sen. Mark Kelly (D–Ariz.) reveals that the price of working a U.S. flagged vessel is 4.3 occasions greater than international ships—$8.5 million extra.
The Dominican Republic is ready to use extra environment friendly and cheaper international LNG carriers which have had transportation costs as little as $3,500 per day in 2025. Even their most up-to-date estimated working prices of $15,000 per day pale compared to the estimated $64,500 per day in working prices alone for the U.S.-flagged LNG provider.
Puerto Rico can also be compelled to pay extra for the product itself on account of the Jones Act. A 2020 contract between the Puerto Rico Electrical Energy Authority (PREPA) and Naturgy (a serious vitality firm in Puerto Rico) features a provision that states, “If the Jones Act is repealed, or amended such that it doesn’t apply to delivery LNG from the US mainland to Puerto Rico, or a waiver of the Jones Act is granted that allows delivery from the US mainland to Puerto Rico with out complying with the Jones Act,” would lead to an 8 % unit worth discount.
“American Vitality” Is not the Reply
Crowley’s new ship will not be a long-term resolution. The vessel is outdated, has a smaller than common delivery capability, and is simply Jones Act-approved due to a loophole. This isn’t innovation; it is desperation and it reveals to what extent Puerto Rico has to go to obtain comparatively low cost American vitality.
Quite than modernizing our maritime fleet to be aggressive on a worldwide scale, we’re as an alternative shopping for undesirable vessels from different international locations and celebrating them as progressive options. In fact, American Vitality is a reminder that america residents in Puerto Rico are being exploited due to a century-old regulation that has carried out nothing good for us.
The issue is the Jones Act, and the reply is repealing it.
It is time to cease patching holes in a sinking ship. The Jones Act is a coverage failure that has harmed the individuals of Puerto Rico for over a century. The reality is that Puerto Rico shouldn’t must depend on authorized loopholes to entry American items. International nations shouldn’t have cheaper entry to American merchandise simply because they don’t seem to be certain by U.S. legal guidelines. Repealing the Jones Act is not radical—it’s a necessity, and it supplies fast profit to the Individuals in Puerto Rico.
