Image: Architect of the Capitol
The bipartisan leaders of two key House panels have written Secretary of Homeland Security Alejandro Mayorkas expressing their concern over his approvals of latest Jones Act waivers.
The letter, which concludes with some powerful questions, was signed by House Committee on Transportation and Infrastructure Chair Peter DeFazio (D-Ore.) and Ranking Member Sam Graves (R-Mo.) and by Subcommittee on Coast Guard and Maritime Transportation Chair Salud Carbajal (D-Calif.), and Ranking Member Bob Gibbs (R-Ohio)
“We write to express our concerns and disappointment with your recent decision to grant Jones Act waivers for the delivery of fuel to Puerto Rico including to allow the delivery of diesel that was sourced from the mainland United States by British Petroleum Products North America (BPPNA) to Puerto Rico on a foreign vessel on September 28, 2022,” the representatives stated. “We concur with the Maritime Administration (MARAD) that consideration of a waiver while a vessel is already underway is ‘novel and problematic’ and would like to better understand the reasoning for your decision to issue a waiver for a company that appeared to be gaming the Jones Act waiver process.”
The letter questions how DHS disregarded waiver necessities: “Moreover, the question of availability was not intended to be answered in retrospect; the statute is intended to be a prospective evaluation to give U.S.-flag ships the first opportunity to move the goods, without the need to waive the law. We do not understand how the Department of Homeland Security (DHS), either independently or acting through MARAD, made a retroactive determination that no U.S.-flag vessels could have performed the move for which the waiver was granted—and did so on the day the waiver was granted.”
The representatives conclude by requesting written solutions to those questions:
- MARAD decided vessels might have been obtainable to load diesel from Texas City, Texas to Guayanilla, San Juan, and/or Yabocoa, Puerto Rico on September 15, 2022.5 How was it attainable for DHS to situation a waiver when the statute solely permits waivers “following a determination by [MARAD] … of the non-availability of qualified United States flag capacity”?
- What was the authorized justification for performing a retroactive vessel availability evaluation and willpower, notably when the statute clearly states that in making availability determinations that MARAD “shall … identify any actions that could be taken to enable qualified United States flag capacity to meet national defense requirements” ?
- In the times instantly previous to the issuance of the waiver, federal businesses had been reporting that there have been ample gas provides obtainable on the island, with distribution inland being the predominant situation. Why was there a discrepancy between the company stories and your “assessment” that gas was wanted on the island that was referenced in your assertion approving the waiver? Please present that evaluation.
- We are involved that this waiver was sought to make the most of the susceptible individuals of Puerto Rico. Some have described this waiver for example of catastrophe arbitrage, the place overseas operators make windfall income by requesting a waiver with out passing on the financial savings to the patron, when usually the vessels delivering American cargoes to American ports would want to observe American legal guidelines, resembling tax and labor legal guidelines.8 Has DHS thought of the chance that this waiver was requested for catastrophe arbitrage functions?
- Why was the issuance of this waiver obligatory and within the curiosity of nationwide protection?
You can learn the complete letter beneath. Interestingly, it accommodates a link to Maritime Administrator Ann Phillips’ response to what she calls a “novel and problematic” waiver request in regard to the LNG cargo for which Mayorkas subsequently accepted a waiver.
