'Relief on paper, not relief in reality:' Soon-to-expire Jones Act waiver too short to make a difference for Guam

Admin
20 hours ago
3 min read

By Mar-Vic Cagurangan

U.S. Rep. Ed Case is seeking a new extension of the Jones Act waiver, which is set to expire on Aug. 15, citing continued global shipping disruptions, constrained fuel supply chains and spiking energy costs due to unabated conflict between the U.S. and Iran.

“The waiver should be extended now rather than on the current expiration because contracts for the acquisition and shipping of fossil fuel products to U.S. ports are signed well in advance of shipping and delivery," the lawmaker from Hawaii said in a letter to President Trump.

While supporting Case's proposed extension, Guam Sen. William Parkinson said the territory "does not appear to have received any meaningful benefit" from the current Jones Act suspension.

"It was too short for suppliers to restructure contracts, charter vessels and move U.S. fuel across the Pacific," Parkinson said. "

'Temporary waivers are not the real solution. Guam and the territories should be permanently exempt from the Jones Act."

Trump initially issued a 60-day waiver of the Jones Act on March 15, allowing foreign-flagged vessels to transport certain types of cargo between U.S. ports under specific conditions. After expiring on May 17, the waiver was extended for another 90 days.

"A waiver that expires before the fuel can reach Guam is relief on paper, not relief in reality," Parkinson said. "We need an extended waiver or a permanent waiver that our utilities and local businesses can plan around and count on."

An industry insider said the current waiver did not bring any additional shipping traffic to Guam, nor did it ease local energy prices given that the island sources most of its fuel from Asia.

"For any impact to be realized, there should be a permanent waiver and a revamp to how fuel flows to the island," the source told the Pacific Island Times.

Economists warn of shrinking global oil reserves and spiraling prices if the Strait of Hormuz, the world's most vital artery for tanker traffic, remains

disrupted.

Parkinson said the territory would need every possible supply option if the Guam Power Authority could no longer import power plant fuel from Asia.

"We may have to turn to the Gulf of Mexico," he said. "The Jones Act should not block Guam from accessing American fuel in an emergency."

Also known as the Merchant Marine Act of 1920, the Jones Act regulates maritime commerce in U.S. waters and between U.S. ports, restricting the transportation of goods to U.S.-flagged vessels that are built domestically and manned by U.S. crew.

"The Jones Act is one of the clearest economic disadvantages of Guam’s political status. It raises costs, limits competition and weakens our energy security," Parkinson said.

In Washington, Case argued that the 1920 maritime law severely limits shipping options despite the widespread availability of shipping in the international markets.

For U.S. jurisdictions separated from the U.S. mainland, the restrictions result in costly shipping.

Case said the current waiver operates nationally to mitigate the effects of market disruption on energy availability and pricing.

However, he warned that failure to clarify the waiver's time frame would seriously disrupt shipping options and prices with wide-ranging effects.

Case maintained that the waiver is especially needed in Hawai‘i and other noncontiguous jurisdictions, which are largely reliant on external fossil fuel-based products for energy, agriculture, transportation and other key needs.

Case also highlighted to the president the extensive military presence in Hawai‘i, which is largely dependent on the same sources of energy, fuel and other fossil fuel products as the civilian population.

“The military in Hawai‘i also depends on this same fuel network. Hawai‘i is the Indo-Pacific home to every service: the Army, Navy, Marines, Air Force and Space Force, along with a significant presence of our nation’s intelligence community," Case said.

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