Jennifer A Dlouhy, Jenny Leonard, and Jennifer Jacobs reporting for Bloomberg
President Donald Trump is seriously considering waiving the requirement that only U.S.-flagged vessels can move natural gas from American ports to Puerto Rico or the Northeast, according to people familiar with the deliberations.
The issue was debated during an Oval Office meeting on Monday, following requests from Puerto Rico and pressure from oil industry leaders to ease the nearly 100-year-old Jones Act requirements, according to three people. Although top administration officials are divided on the issue, Trump is now leaning in favor of some kind of waiver, said two of the people, who asked for anonymity to discuss the private deliberations.
The move — which would be fought by U.S shipbuilding interests and their allies on Capitol Hill — has been promoted as essential to lower the cost of energy in Puerto Rico and ease the flow of American natural gas to the U.S. Northeast, where there aren’t enough pipelines to deliver the product from Pennsylvania.
But even inside the Trump administration, there are fierce defenders of the Jones Act, a 1920 law requiring that vessels moving cargo between two U.S. ports be U.S.-built, -owned and -crewed. The law was originally designed to protect the domestic shipping industry and the country’s maritime might, and supporters argue that it’s just as essential today to ensure ships are made in the U.S. Any move to weaken or waive the requirements threatens the U.S. shipbuilding industry and the jobs tied to it, they argue.
Navarro, Chao
That divide was apparent during Monday’s White House meeting, where Jones Act supporters included Trump trade adviser Peter Navarro and Transportation Secretary Elaine Chao. Larry Kudlow, the director of the National Economic Council, pushed for waiving the Jones Act, three of the people said.
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Even as the White House weighs waivers, a handful of Trump administration officials have pushed to expand the Jones Act’s reach, two of the people said. They are aiming to effectively revive a Customs and Border Protection bid to revoke rulings allowing foreign vessels to transport some equipment to offshore oil rigs. The agency withdrew the formal proposal in 2017, after the oil industry warned it could cripple production in the Gulf of Mexico.
The White House press office did not respond to a request for comment.
Trump faces increasing pressure to relax the shipping requirements. Puerto Rico is seeking a 10-year waiver to allow liquefied natural gas to be delivered to the island on foreign-flagged vessels.
And energy industry leaders have pressed for changes to facilitate natural gas and petroleum product shipments between U.S. states. Among them: billionaire oil man Harold Hamm, the chairman of Continental Resources Inc. and a former Trump energy adviser. In January, Hamm complained at a Houston energy conference that the U.S. has been forced to buy LNG from Russia because there are no Jones Act-compliant tankers to transport liquefied natural gas.
