Crowley Maritime, an American transport firm, not too long ago announced that it raised the U.S. flag on a 31-year-old French-built LNG provider to adjust to the Jones Act—a 100-year-old regulation—lastly permitting for U.S. LNG to be shipped from the U.S. mainland to Puerto Rico via a loophole within the protectionist regulation.
A Main Downside With Minor Aid
Over 100 years in the past, Congress handed the Merchant Marine Act of 1920, higher referred to as the Jones Act, requiring all items transported between U.S. ports to be carried on ships which can be inbuilt the US, owned by U.S. residents, crewed by People, and flagged below the US. Whereas assist for the Jones Act was constructed on sustaining a powerful U.S. maritime trade and defending nationwide safety, it has didn’t stay as much as these guarantees.
Because of absurdly strict necessities, the Jones Act will increase the price of transport and ship manufacturing by limiting competitors in home markets and even inspiring collusion. These inflated prices have traditionally made it not possible for Puerto Rico to import LNG from the US. In contrast to the mainland, Puerto Rico cannot import LNG through trucking or rail and should as an alternative import LNG utilizing Jones Act carriers (which, till not too long ago, did not exist).
There’s, nonetheless, a minor workaround. The U.S. Coast Guard Authorization Act of 1996 grants coastwise authorization (which is required for transportation of U.S. LNG to Puerto Rico) to international ships constructed earlier than October 19, 1996, as long as they meet the remaining Jones Act necessities. This technical exception allowed Crowley Maritime’s not too long ago bought American Power, an LNG provider inbuilt France in 1994, to lastly begin supplying LNG to Puerto Rico.
This technicality gives a raindrop of reduction to Puerto Rico, however it does little to deal with the monetary prices of the Jones Act.
Delivery to Foreigners is Nonetheless Cheaper
Whereas Puerto Rico’s financial system is strangled by inflated prices due to the Jones Act, the Dominican Republic is free from its restrictions, and it imports U.S. LNG at a fraction of the associated fee. World markets are far more aggressive and have entry to fashionable, environment friendly LNG carriers. In consequence, transport costs are dramatically cheaper.
In the latest Maritime Administration operating cost report, it was revealed that “U.S.-flag crewing prices had been roughly 5.3 instances greater than foreign-flag vessels in 2010” and a recent post on X by Sen. Mark Kelly (D–Ariz.) reveals that the price of working a U.S. flagged vessel is 4.3 instances greater than international ships—$8.5 million extra.
The Dominican Republic is ready to use extra environment friendly and cheaper international LNG carriers which have had transportation costs as little as $3,500 per day in 2025. Even their most up-to-date estimated working prices of $15,000 per day pale compared to the estimated $64,500 per day in working prices alone for the U.S.-flagged LNG provider.
Puerto Rico can be compelled to pay extra for the product itself on account of the Jones Act. A 2020 contract between the Puerto Rico Electrical Energy Authority (PREPA) and Naturgy (a serious power firm in Puerto Rico) features a provision that states, “If the Jones Act is repealed, or amended such that it doesn’t apply to transport LNG from the US mainland to Puerto Rico, or a waiver of the Jones Act is granted that allows transport from the US mainland to Puerto Rico with out complying with the Jones Act,” would lead to an 8 % unit worth discount.
“American Power” Is not the Reply
Crowley’s new ship is just not a long-term resolution. The vessel is previous, has a smaller than common transport capability, and is simply Jones Act-approved due to a loophole. This isn’t innovation; it is desperation and it reveals to what extent Puerto Rico has to go to obtain comparatively low-cost American power.
Slightly than modernizing our maritime fleet to be aggressive on a worldwide scale, we’re as an alternative shopping for undesirable vessels from different international locations and celebrating them as revolutionary options. In reality, American Power is a reminder that the US residents in Puerto Rico are being exploited due to a century-old regulation that has carried out nothing good for us.
The issue is the Jones Act, and the reply is repealing it.
It is time to cease patching holes in a sinking ship. The Jones Act is a coverage failure that has harmed the individuals of Puerto Rico for over a century. The reality is that Puerto Rico shouldn’t need to depend on authorized loopholes to entry American items. Overseas nations shouldn’t have cheaper entry to American merchandise simply because they don’t seem to be sure by U.S. legal guidelines. Repealing the Jones Act is not radical—it’s a necessity, and it offers quick profit to the People in Puerto Rico.
