On January 13 2015, Senator John McCain (R-AZ) filed an amendment to repeal the Jones Act.
According to McCain’s statement, the amendment, attached to the Keystone Pipe Bill, calls for a “a full repeal of The Jones Act, an antiquated law that has for too long hindered free trade, made U.S. industry less competitive and raised prices for American consumers.”
The statement added that “[a]ccording to the Congressional Research Service, it costs $6 per barrel to move crude from the Gulf Coast to the Northeast United States on a Jones Act tanker, while a foreign-flag tanker can take that same crude to a refinery in Canada for $2 per barrel — taking money directly out of the pockets of American consumers. I hope my colleagues will join in this important effort to repeal this archaic legislation to spur job creation and promote free trade.”
The reasoning behind the amendment has been strongly rejected by the maritime industry as a whole. Great Lakes Maritime Task Force (GLMTF), for example, said in a news article, “The task force believes there is no reason to let foreign-built shipping vessels carry cargo between U.S. ports, and if they do, about 60,000 jobs in the Great Lakes would be at stake . . . Do we really want to take the risk that terrorists could be among crew members on foreign-flag vessels moving cargo down the Cuyahoga River in Cleveland or the Saginaw River in Michigan? The vessels built by the Fraser Shipyards in the Great Lakes travel more than 600 miles on one gallon of fuel per ton of cargo…a 1,000-ton cargo moved by a laker produces 90% less carbon dioxide compared to a truck, and 70% less than the same cargo moved by rail.”
Also opposed, Tony Munoz, publisher and Editor in Chief of Maritime Executive expressed:
The American people have been led to believe that Keystone will create thousands of jobs and pump billions into the economy. The fact is the estimated two-year construction project will create only 3,900 new jobs and require only 35 permanent employees to run it thereafter… McCain always starts his attacks on the Jones Act by calling it an antiquated law that makes the U.S. less competitive and raises prices for American consumers and raises prices for American consumers.
The consumer that McCain is talking about is the corporate citizen better known to most of us as the oil industry. The last refinery opened in the U.S. in 1976, and since then the number of refineries has steadily declined. In fact, 25 percent of U.S. capacity is handled by only eleven refineries with Shell’s Baytown complex in Texas being the largest. Repealing the Jones Act is really about reducing crude transport costs in the U.S. and not about what the new iron Grandma wants to buy.
The Jones Act has sustained countless jobs in the years since it was enacted; however, repealing the law has been a goal for McCain for some time. The Senator, now in the role of Chairman of the Senate Armed Services Committee, is in a prime position to influence the U.S. national security policy. The amendment could be voted on as early as this week.
President Obama, however, as already said that he will veto the Keystone legislation if it makes it to his desk. The bill would then need a two-thirds majority in both houses to override the President’s decision.
Chairman of the American Maritime Partnership, Tom Allegretti, responded vehemently, “The McCain amendment would gut the nation’s shipbuilding capacity, outsource our U.S. Naval shipbuilding to foreign builders, and cost hundreds of thousands of family-wage jobs across this country . . . The shipbuilding requirement, which Senator McCain seeks to eliminate, is in place to ensure that the United States maintains the industrial capacity to build its own ships, to protect and defend the American homeland.”
At The Young Firm, we believe it is imperative to protect the Jones Act in its entirety. The rights of seamen across the country depend on this important piece of legislation, as does the United States domestic trade and security.