George Bush took a highly unusual and largely unreported measure last Thursday when he suspended the Jones Act to allow foreign-flagged oil tankers to transport oil to U.S. ports. Though the move was aimed at appeasing citizens who raged as gas prices jumped 75 cents in two days, it actually accomplished nothing — kind of like FEMA.
An arcane holdover from the 19th century, the Jones Act is designed to protect U.S. shipping interests from foreign competition. It prevents a foreign-flagged vessel from moving cargo between U.S. ports and requires foreign oil distributors to use U.S.-flagged ships to deliver petroleum products.
The Bush edict declared that foreign distributors that could not find a U.S.-flagged ship to deliver their oil could apply to the U.S. Maritime Administration for assistance in finding one. In the event that no U.S.-flagged ship could be found, MarAd would issue a “letter of non-availability” allowing the distributor to use a foreign-flagged vessel that would be cited for a Jones Act violation, but not fined.
Needless to say, foreign oil companies were confused, since it is U.S. Customs, not MarAd that administers the Jones Act. Further, although the Colonial Pipeline that moves oil from the Gulf to the South and Southeast was damaged by Hurricane Katrina, it was expected to by at 90% capacity by Sunday, eliminating the need for the supposed rush on U.S.-flagged ships.
Finally, besides the fact that no U.S.-flagged tankers were lost in the storm, thereby not creating the nonexistent shortage, Bush issued the order over the Labor Day holiday weekend when MarAd was closed. The pointless order is expires today, meaning that shippers had exactly Thursday afternoon and Friday to apply to MarAd to take advantage of the suspension of the Jones Act.
In the aftermath of Katrina, this is just another hollow, meaningless act of the Bush administration designed deflect attention from its mismanagement of the disaster.