The Jones Act distorts energy movements as Mario Loyola, National Review, explains…
”Shipping a barrel of oil from the Gulf Coast to the northeast U.S. on a Jones Act tanker can cost $5 or $6 per barrel, while shipping the same barrel all the way up to Canada costs only about $2 per barrel. With standard American crude oil (WTI) stuck around $40 per barrel, on razor-thin margins or negative margins in an extremely volatile market, adding even $3 to ship a barrel of crude oil to New Jersey instead of Canada is prohibitively expensive.
This is reflected in the pattern of crude oil flows we’ve observed since the start of the shale boom: U.S. oil exports from the Gulf Coast to Canadian refineries are up to nearly 400,000 barrels per day, while barely 60,000 barrels per day get shipped from the Gulf Coast to America’s own refineries on the East Coast.”
And it’s not just oil:
”As a result, Massachusetts alone imports about 40 billion cubic feet of LNG every year, the majority from Trinidad and Tobago, with France and Nigeria also contributing. In 2018, Massachusetts even received a shipment of LNG from Russia, despite the fact that U.S. has sanctions on Russian LNG, and despite the fact that Germany’s willingness to import Russian natural gas has become a major irritant in the German government’s relations with the Trump administration.”
Leave a Reply