Hawaii congressman seeks Jones Act waiver to expedite defueling of Red Hill
By Pacific Island Times News Staff
Hawai‘i's representative to the U.S. Congress on Tuesday asked the Department of Homeland Security for an advance waiver from the Jones Act and military cargo preference requirements to allow the Department of Defense to expedite the critical defueling of the Red Hill bulk fuel storage facility at Joint Base Pearl Harbor-Hickam.
“As part of the proposed defueling process, over 100 million gallons of bulk fuel now stored in the Red Hill tanks must be removed and distributed to other storage facilities under a plan supervised by the Environmental Protection Agency and Hawai‘i Department of Health,” Rep. Ed Case said in a letter to U.S. Secretary of Homeland Security Alejandro Mayorkas.
Case noted that the current plan will require 10 bulk petroleum tankers to ship the fuel from a pier at Joint Base Pearl Harbor-Hickam to various points, ranging in distance from ten miles away at Kalaeloa to various replacement storage sites thousands of miles overseas.
“A series of highly organized and sequenced events is critical to the plan, which must achieve not only the safe and efficient removal of the fuel but also maintain military operational tempo and readiness in Hawai‘i and beyond," Case said.
He noted that the plan anticipates about 12 consecutive weeks of full utilization of 10 ocean-going petroleum storage tankers, with each tanker contracted in advance on a time-chartered basis.
Case emphasized that tanker contracting and movement must be closely coordinated with the transport of the fuel from Red Hill to the departure pier and loading of the fuel.
Subject to pending plan review and removal processes, fuel removal could commence by late 2023, requiring all tankers to be contracted by mid-2023.
“The failure to contract or deliver any one tanker in the timing and sequence required disrupts the plan and increases risk of interrupting fuel removal and movement to alternative storage on land,” he wrote.
“Under existing law, these tanker movements for the simple transport of fuel 10 miles from Joint Base Pearl Harbor-Hickam to Kalaeloa are subject to Jones Act requirements, and are further subject to government-impelled cargo requirement for overseas movements,” said Case.
Practically, Case said, Jones Act ships are functionally unavailable within the proposed timeframe and prohibitively expensive due to the very limited number of fuel tankers in the Jones Act fleet, which are fully committed elsewhere.
"Additionally, requirements on government-impelled cargo, if and to the extent available for a committed and predictable period, are administratively complicated and similarly prohibitively expensive," the congressman added.
The Jones Act is a century-old federal law that requires cargo between U.S. locations to be transported on ships built and flagged in the U.S.
There are now less than 100 total Jones Act vessels in service, including the Matson and Pasha container ships that enjoy a duopoly on Hawaii’s cargo lifeline from the continental U.S., and even less Jones Act fuel tankers all dedicated to other fuel transport routes, as opposed to plentiful international tanker capacity.
The government-impelled or cargo preference requirements generally require military cargo between a U.S. destination and a non-U.S. destination to be transported on a U.S.-flagged vessel, commonly built and flagged overseas.
Case said current time charter rates are estimated at $40,000 per day for international shipping, $70,000 per day for cargo preference and $100,000 per day for Jones Act.
Assuming each committed charter availability for 10 total tankers at 90 days, Case estimated that the total cost for all service by international shipping would be about $36 million, compared to about $66 million for cargo preference plus Jones Act tankers, assuming just one Jones Act tanker, which may not be the case depending on other domestic destinations for the fuel.
“It is critical to DoD and the people of Hawai‘i that an advance waiver from the Jones Act and government-impelled cargo requirement be issued to provide DoD with the fullest possible range of options to contract internationally available fuel tanker transport on a predictable and cost-effective basis," Case said.
"To allow for the full range of options as to timing and sequencing of defueling, which require contracting to be complete by July 2023, this waiver should be issued now," he added.
The DOD-owned Red Hill bulk fuel storage facility, which has a 200-million gallon capacity, is located just 100 feet over Honolulu's main aquifer.
In November 2021, Red Hill sustained a major leak, polluting the aquifer, sickening residents and dislocating tens of thousands of people from their homes.
The disaster prompted U.S. Secretary of Defense Lloyd Austin to order the expedited defueling, closure and decommissioning of Red Hill. More than $2 billion has been directly appropriated to this critical mission.