Russian Oil Imports Banned, Hawaii Rep Seeks Jones Act Waiver
(BIVN) – Hawaiian officials are heeding a new federal ban on Russian oil and gas imports.
On Tuesday, President Biden signed an executive order banning the import of Russian petroleum, liquefied natural gas and coal into the United States, which the White House called “an important action with broad bipartisan support that will deprive more President Putin of the economy”. resources it uses to continue its useless war of choice.
The ban is likely to disproportionately affect Hawaiʻi, officials say. US Congressman Ed Case noted that Russian oil accounted for “between a quarter and a third of Hawaii’s (virtually all foreign) crude oil imports in recent years”.
President Biden’s order prompted this response from Hawaii County Mayor Mitch Roth, who said:
“We urge members of our community to be careful with their fuel and energy consumption, as imports of Russian oil are now banned due to rising tensions in Europe. While we stand in solidarity with Ukraine and of the United States government’s decision to impose tough sanctions on Russia in defense of democracy, we must also remember that we are a chain of isolated islands that this decision will have a significant impact on. Governor and other team members, we have been advised that the sanctions should not have an immediate drastic impact on our cost of living; however, we are beginning to feel it.
As a community working to emerge from this pandemic, every penny counts, and we are committed to doing everything we can to keep fuel and energy costs bearable for our island residents. That said, we will need your help to ensure that we use as little fuel as possible to keep expenses such as energy, food and other associated costs to a minimum. By being aware, we can expand our sourcing on the island as the global market adapts to the economic impacts that sanctions are sure to bring. We are confident that solutions will be found to address this issue and appreciate the community’s cooperation and engagement in the meantime. Every effort, big or small, is valued and necessary for the future of our economic vitality.
Congressman Case has previously called on the President to waive the federal Jones Act to “facilitate the available and affordable shipment of U.S. petroleum from U.S. ports to Hawaiʻi” and introduced a bill in the U.S. House to implement the waiver.
Excerpt from Case’s letter to President Biden:
Dear Mr. President:
On behalf of the people of Hawaii, who will be disproportionately affected by the halting of Russian imports of oil and other fossil fuels, I respectfully request that your administration order a targeted waiver of the Jones Act allowing shipment of these products to the State of Hawaii. i from other domestic locations on non-Jones Act vessels.
First, I join the vast majority of Hawaiians in supporting your decision to ban imports of Russian oil and other fossil fuels. This is a necessary and inevitable action if we are to implement the full range of sanctions available against Russia for its unprovoked and unjustified war against Ukraine. To support our mutual efforts, yesterday I joined congressional colleagues in introducing our bipartisan Russian Energy Import Ban Act to ban the import of crude oil, petroleum, petroleum products, liquefied natural gas and of Russian coal.
In Hawaiʻi, with widespread support, Par Hawaiʻi, our state’s only oil refiner, has already suspended all future purchases and imports of Russian oil. We understand that this must be done, and further understand that we must and will share with the rest of the country the consequences of a national ban.
However, without action, the people of Hawaii will have to bear consequences far out of proportion to those of most other Americans. Indeed, the best substitute for Russian oil imports to Hawai’i is domestic supply, and the transportation of that supply 2,500 miles to our remote island state is subject to the Jones Law requiring such transportation to occur. exclusively on a very limited number of domestic ships. As a result, the costs of such transportation, even if initially available domestically, would be many times higher than transportation on the plethora of non-US-flagged specialty vessels. These costs would be passed on to price increases that are already among the highest in our nation and would directly affect our Hawai’i-based national defense, our economy and our communities.
Specifically, while Russian oil accounts for about 3% of U.S. foreign crude oil imports, it has accounted for between a quarter and a third of Hawaii’s crude oil imports (virtually all foreign) in recent years. The Jones Act is a major contributing factor to Hawaii’s dependence on foreign oil in general and Russian oil in particular. By some accounts, shipping oil from the mainland United States to Hawaiʻi, a much shorter distance than from foreign sources, costs nearly three
times more than shipping from Asia. That’s why in 2019, Hawai’i imported 100% of its crude oil from foreign sources, with 57% from Libya and an additional 34% from Russia. Over the past three years, Hawai’i has imported an average of 30% of its oil directly from Russia.
It is clear that shipping required by the Jones Act results in a huge cost increase over non-Jones Act shipping. The Jones Act thus forced Hawai’i into the international oil market despite the otherwise availability of domestic supply, and thus exposed far more Hawai’i to the consequences of international supply disruptions of any kind.
But in the specific case of petroleum products, this consequence is further amplified by the unavailability of bulk fuel shippers under the Jones Act. There are a very limited number of Jones Act compliant tankers equipped and capable of transporting the volume of oil historically imported into the State of Hawai’i, and the current fleet cannot handle the increased demand for shipping from sources national energy companies to Hawai’i. As of March 2018, there were only 99 ocean-going vessels in the Jones Act-compliant fleet. Of the 57 tankers in the fleet, 11 carry crude oil from Alaska to West Coast refineries and, rarely, Hawai’i, 44 are mid-size tankers that primarily transport refined products along the Atlantic Seaboard and 2 carry chemicals or asphalt.
The bottom line is that, thanks to a combination of factors unique to Hawaii, in the absence of action, Hawaiians will be asked to bear a far greater burden of any Russian oil ban than anywhere else in the country. Your administration has the authority to counter some of the adverse effects caused by a ban on Russian energy imports through a limited and targeted waiver of the Jones Act for domestic supplies in Hawaii.
In 1950, after the start of the Korean War, Congress authorized waivers of the Jones Act’s national security requirements for ships. These derogations have been granted on several occasions in the past. Notably, the federal government granted waivers to expedite oil shipments from the Strategic Petroleum Reserve during the international conflict during the Persian Gulf War and again for the 2011 Libyan conflict. It also did so in response to natural disasters such as hurricanes Harvey, Irma and Maria in 2017.
Similarly, Hawaii’s dependence on foreign oil, especially oil from countries that compete directly with the United States or are controlled by unstable regimes, poses a threat to Hawaii’s security and for America’s greater strategic positioning in the Indo-Pacific. . We cannot jeopardize Hawaii’s energy dependence on foreign actors in the current geopolitical climate, and we must not impose a disproportionate burden on the State of Hawaii when we have the necessary tools available to us to mitigate these unique consequences as we implement this national embargo.
For the people of Hawaii, I deeply appreciate your administration’s expedited review of this request. We support your actions to implement the full weight of this import ban, and I am fully available to assist you in your efforts to meet Hawaii’s special needs.
Case of Congressman Ed