Home heating bills are skyrocketing across the country amid already high energy costs, and the North East is expected to be hit hardest this winter.
The region is particularly vulnerable due to ongoing diesel shortages and heavy reliance on heating oil. It also lacks the pipeline infrastructure of other parts of the United States and therefore must import liquid natural gas and other fuels.
But New England executives, energy companies and experts say a 100-year-old law is contributing to the problem and are urging the Biden administration to lift it to ease price pressure on consumers.
Months ago, New England governors suggested the Department of Energy consider suspending the Jones Act, also known as the Merchant Marine Act of 1920, which requires goods shipped between American ports are transported on ships built, owned and operated by Americans.
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Due to federal law, the energy-poor Northeast buys its fuel overseas because it is generally cheaper to do so than buying from energy-rich domestic regions like the Gulf of Mexico. Since Russia’s invasion of Ukraine caused energy prices to spike in Europe, New England states are now in even more competition with Europe for these limited supplies on the global market. .
According to Scott Lincicome, director of general economics at the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute, “this is causing major problems right now.”
Lincicome told FOX Business that U.S.-made ships cost about four to five times more to build than their global counterparts, and that “there are a grand total of zero” liquid natural gas tankers that are compliant. to Jones because it’s so prohibitively expensive. build such a sophisticated ship in the country.
The federal government has issued waivers to the Jones Act in the past during emergencies. Former President Trump waived the Jones Act for Puerto Rico in 2017 to lift restrictions on vessels delivering aid to the island after suffering massive damage from Hurricane Maria.
Department of Homeland Security Secretary Alejandro Mayorkas granted a waiver for a ship to deliver diesel to the island in September in the aftermath of Hurricane Fiona after the ship floated offshore and did not could not enter the port due to the 100 year old law.
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Warnings have already been issued that the northeastern United States could be planning an emergency of its own.
The general manager of Groton Electric Light in Massachusetts sounded the alarm to customers earlier this month that the power grid has been deteriorating for years and if New England experiences “a prolonged cold spell, there is a high probability of power outages” because “this year it’s even worse.”
He encouraged customers to quickly fill fuel oil and propane tanks, make sure backup generators are running, and anyone with wood or pellet stoves to stock up on supplies.
“The governor is up there and the energy companies up there have all been asking for some kind of waiver of the Jones Act because stocks are low and there’s no respite on the horizon,” Lincicome said. . “So everyone is basically praying for a mild winter, which of course is a terrible way to have an energy strategy.”
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With concerns growing in the Northeast as the cold sets in for months and energy markets remain volatile, there are growing calls for the Biden administration to consider waivers sooner rather than later. But President Biden is a strong supporter of the law and the labor lobby that backs it, making the administration particularly hesitant to make an exception unless it is forced to.
“They’re probably not going to issue an emergency waiver,” Lincicome said of the Biden administration. “Unless it’s just an absolute crisis situation, which by then it’s probably too late anyway. »
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