The Jones Act vs. Affordable Energy


The Jones Act vs. Affordable Energy

Sep 20, 2012 1 min read

Former Jay Van Andel Senior Policy Analyst in Trade Policy

Bryan served as an advocate for free trade through his research at The Heritage Foundation.

The Wall Street Journal recently highlighted another Washington regulation that is holding back the economy. But this one can’t be blamed on President Obama, because it was enacted over 90 years ago.

The protectionist Jones Act requires shippers transporting goods between two points in the United States to use vessels built in the U.S., owned by U.S. companies, and manned by U.S.-based crews—even if there are more affordable transportation options available.

The article cited one expert who said foreign-flagged ships could transport oil for less than one-third the cost of U.S.-flagged ships if not for the Jones Act. This would reduce prices and increase the availability of energy produced in states such as Texas and North Dakota that is destined for consumers in the northeast.

The Jones Act is especially harmful to consumers in places such as Hawaii and Puerto Rico, where rail or truck transportation is not an option. For example, the Puerto Rico Electric Power Authority pays as much as 30 percent more for liquefied natural gas because of restrictions on the use of foreign-flagged ships.

The Jones Act is an example of crony capitalism, where one group benefits from special treatment by the government at the expense of everyone else. If politicians are serious about affordable energy, they should remove government barriers to competition in the shipping industry.

This piece originally appeared in The Daily Signal