US grants second Jones Act waiver after Colonial Pipeline cyberattack

Citgo and Valero Energy have obtained waivers in a bid to ease fuel shortages

(WASHINGTON) — The Biden administration granted oil refiner Citgo Petroleum a Jones Act waiver allowing it to move fuel between U.S. ports on a foreign-flagged vessel, two sources told Reuters on Friday, making it the second company to secure one in the wake of a cyberattack against the Colonial Pipeline network.

The waivers are intended to help ease distribution of fuel after Colonial’s major pipeline serving the East Coast was forced shut down, triggering shortages of gasoline, diesel and jet fuel.

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The Department of Homeland Security had announced the second waiver on Friday but did not name the recipient.

Citgo is planing to use Jones Act waiver to ship approximately 200,000 barrels of jet fuel, gasoline and ultra low sulfur diesel from Lake Charles, La., to Linden, New Jersey, on a foreign-flagged vessel, the two sources said.

Citgo declined to comment.

Valero Energy had received the initial waiver, Reuters reported, and also was moving fuel from Lake Charles to the East Coast. The Jones Act requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crews.

Colonial began to slowly restart the nation’s largest fuel pipeline network on Wednesday after the May 7 ransomware attack.

After the first waiver was granted, Mike Roberts, president of the American Maritime Partnership (AMP) issued the following statement:

“Any waiver of U.S. law, including the Jones Act, should be done with precision and demand transparency and accountability of those who seek to benefit from such waiver. The Jones Act strengthens our industrial base and readiness, supports U.S. jobs and infrastructure, and protects homeland and national security. It should not be waived unless, and only to the extent that, a waiver would respond to an urgent national security need that cannot reasonably be met with American ships. The American Maritime Partnership does not object to the targeted approach of the administration, but strenuously encourages all policymakers to hold accountable those who seek to benefit from any waiver to avoid undermining American jobs and consumers.”

On May 14, Jennifer Carpenter, president and CEO of the American Waterways Operators (AWO), issued the following statement:

“As the statutory foundation of the domestic maritime industry, the Jones Act is critical to America’s economic, national and homeland security, which is why it continues to earn strong bipartisan support. The Jones Act should therefore not be waived unless such a waiver is strictly and precisely applied to address a clear national security vulnerability that cannot be addressed with American vessels. To the extent that any such targeted waivers are issued, AWO urges the administration and Congress to apply the relevant provisions of the FY 21 National Defense Authorization Act to ensure transparency and accountability for those seeking to benefit from such waivers.”

Categories: Maritime News