DHS Lifts Restrictions On Shipping Oil Products To Northeast

President Barack Obama receives an update on the ongoing response to Hurricane Sandy, in the Situation Room of the White House, Oct. 29 2012. Secretary of Homeland Security Janet Napolitano is in the top-right corner. (Official White House Photo by Pete Souza)
Northeastern states continue to reel under gasoline shortages in the wake of Hurricane Sandy. The Homeland Security Department is hoping to ease the problem by lifting restrictions on shipping petroleum products between U.S. ports.

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.

 

Bio photo of Andrew Schneider

Andrew Schneider

Business Reporter

Andrew Schneider joined KUHF in January 2011, after more than a decade as a print reporter for The Kiplinger Letter...