DHS Lifts Restrictions On Shipping Oil Products To Northeast

The Jones Act ordinarily requires any traffic between domestic ports to be carried on U.S. flagged vessels. Secretary of Homeland Security Janet Napolitano has issued a blanket waiver on that restriction through November 13.

“It allows foreign vessels to be used to ship primarily Gulf Coast products up to the Northeast.”

Jeff Dietert is research director for Houston investment bank Simmons & Company.

“Typically this occurs on Colonial Pipeline, which is — it costs about 4.5 cents [per gallon of gasoline or diesel], and it takes about 21 days. Waiving the Jones Act will allow product to move at a similar price, but it can move up in five or six days.”

Dietert says blocked roads, power outages, and flooding of local pipeline infrastructure all present more immediate difficulties in getting fuel to storm-damaged areas of New York and New Jersey.


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