Feds Urged to Use U.S. Tonnage in SPR Moves

press release
Monday, February 27, 2012

With Rising Gas Prices Fueling SPR Speculation, American Vessel Operators Urge Feds to Work With Industry To Prepare For Future Drawdowns. Foreign Ships Given Preference During Last Summer’s Drawdown.
 
In a letter to the Departments of Homeland Security (DHS), Energy (DOE) and Transportation (DOT), the American Maritime Partnership (AMP), a broad-based coalition representing U.S.-flag vessel operators and allied interests, today offered its resources to help implement new Congressional requirements that should increase the use of U.S.-flag vessels in future Strategic Petroleum Reserve (SPR) drawdowns. 
 
Several circumstances could lead to another SPR drawdown soon, including an Iranian blockade of the Strait of Hormuz and rising U.S. gas prices.  There are dozens of American vessels with millions of barrels of capacity available to transport oil, according to AMP. 
 
“AMP was troubled by the decisions during the last SPR drawdown to issue waivers for foreign-flag vessels, employing foreign workers to transport oil from the SPR despite the fact U.S.-flag vessels were available to assist,” said AMP.  “AMP recognizes that there may be circumstances where waivers of the Jones Act are necessary, but we want to work with the Departments to maximize the use of available American vessels, employing American workers, in the transportation of SPR oil should another drawdown occur.”
 
The Jones Act is a longstanding U.S. maritime law that mandates the use of vessels that are American-crewed, -built, and -owned to move cargo between two U.S. ports.  The law is critical for American economic, national, and homeland security, which is why it has enjoyed the support of the U.S. Navy, many Members of Congress of both parties, and every President in modern history including President Obama.
 
Release of oil from the SPR in 2011 resulted in nearly 50 waivers of the Jones Act, allowing the transportation of the oil on foreign vessels when U.S.-flag vessels were available to assist.  New Congressional law now requires DHS and DOT to comply with certain requirements to maximize the use of U.S.-flag vessels for the transportation of oil from future SPR drawdowns before Jones Act waivers are approved.
 
Specifically, the new law states that no waivers may be granted until DHS “takes adequate measures to ensure the use of United States flag vessels” and no waivers may be granted unless DOT has determined whether U.S.-flag vessels are capable of assisting an SPR move. DOT is now required to provide DHS with written justification for not using U.S.-flag vessels during an SPR drawdown. 
 
To ensure that the federal government has adequate measures in place to utilize U.S.-flag vessels, the departments are statutorily required to consult with representatives of the U.S.-flag maritime industry.  AMP believes that such consultations with industry should begin immediately.
 
American Maritime Partnership ("AMP") 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, ply our waters 24/7, and this commerce sustains nearly 500,000 jobs, $29 billion in labor compensation, and more than $100 billion in annual economic output according to a study by PricewaterhouseCoopers for the Transportation Institute. So efficient are these vessels that they carry a quarter of the nation‘s cargo for only 2 percent of the national freight bill, and being American owned, built and crewed helps make America more secure.
 

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