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  • Writer's pictureThe San Juan Daily Star

U.S. lawmakers questioned irregular approval of recent Jones Act waivers for Puerto Rico

By The Star Staff

Democrats and Republicans from the U.S. House of Representatives want to know why I.S. Department of Homeland Security Secretary Alejandro Mayorkas waived the Jones Act twice to allow the delivery of fuel to Puerto Rico on foreign-flagged vessels after the cargo was already at sea.

The Department issued the first Jones Act waive on September 28 to allow British Petroleum Products North America transport diesel fuel on a foreign-flagged tanker from Texas. The ship anchored in Guayanilla port but had been barred from delivering its cargo because of the Jones Act, a law that requires the use of U.S.-flagged vessels for cargo delivery between two U.S. points.

The second waiver, which was issued October 16, allowed Naturgy, which operates a power plant and LNG terminal on the island, to transship LNG from the Dominican Republic. The LNG cargo originated in the U.S. and was originally shipped to the Dominican Republic on a foreign vessel. The cargo was for EcoEléctrica, which was running out of natural gas.

House Transportation and Infrastructure Committee Chairman Peter DeFazio and committee Republicans and Democrats expressed concern about the waivers authorized by Mayorkas’ decision. Maritime Administration Secretary Ann Phillips had described the waivers as “novel and problematic” because they were requested after the cargo had already left the U.S.

“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 lawmakers said in a letter to the Mayorkas and Department of Transportation Secretary Pete Buttigieg. “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.”

A letter sent by Phillips to W. Richmond Beevers at the U.S. Customs and Border Protection in response to the urgent request submitted on October 15 by Naturgy and AES for a U.S.-flag market availability survey required of MARAD as part of the Jones Act waiver process, shows that the procedure was done hastily.

The letter, published at the Department of Transportation Maritime website, noted that the Naturgy waiver was to allow the foreign-flagged METHANE PRINCESS to transport 30,000 cubic meters of liquified natural gas (LNG) from the Dominican Republic to San Juan.

“Although the voyage between the Dominican Republic and Puerto Rico does not involve transportation between coastwise points, our understanding is that this fuel was originally transported on October 1, 2022 from Calcasieu Pass, Louisiana by a non-coastwise-qualified vessel to the Dominican Republic, where it has been stored since October 6, 2022. Based on our understanding of relevant CBP administrative rulings, the storage of the fuel in the Dominican Republic has not broken the continuity of the voyage from Louisiana for Jones Act purposes, so that the relevant voyage to consider is from Louisiana to Puerto Rico,” Phillips said.

“MARAD cannot conduct a retroactive market survey of vessel availability for the waiver request under 46 U.S.C. § 501(b) because the relevant transportation commenced October 1, 2022. However, given the applicant’s statement that LNG is needed in Puerto Rico under current conditions, CBP requested a two-hour market survey closing at 5:00 p.m. October 15, 2022, to determine whether there are any coastwise-qualified vessels that can deliver 30,000 cubic meters (or any other quantity) of LNG to the EcoEléctrica LNG terminal in Penuelas, Puerto Rico, by October 16, 2022,” Phillips said.

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