The cost of the Jones Act

The Jones Act is that little bit of US protectionism which says that not US owned, not US crewed and not US union rule recognising ships cannot operate either between US ports or in US waters.

And here we see some of the costs:

Four of the world\’s largest oil companies are creating a strike force to stanch oil spills in the deep waters of the Gulf of Mexico in a billion-dollar bid to regain the confidence of the White House after BP PLC\’s disaster.

Certainly, this isn\’t a silly thing to be doing however:

The companies will evenly split an initial investment of $1 billion in the nonprofit venture, which they are calling the Marine Well Containment Co. But the tab to build the system and have crews on alert for years could run in the billions of dollars.

The containment system will be designed to deal with well blowouts and is expected to be ready within 18 months, Exxon said. The response team should be able to start mobilizing within 24 hours of an oil spill, and be fully in place within weeks, said Sara Ortwein, vice president of engineering for Exxon Mobil Development Co.

It is costly.

But what has this to do with the Jones Act?

Well, y\’see, something much like this already exists, over here in Europe. Indeed, that European system, skimmers, barges, oil tankers able to scoop from the surface and so on, was offered to BP at the start of the Macondo crisis. But it couldn\’t be used because of the Jones Act.

So, now we\’ll have two such systems in place, one for Europe and one for the Gulf. And the expense of the second is clearly down to precisely and exactly the Jones Act.

All of this is to protect the 153 large ships that meet the Jones Act criteria. In just this, this alone, we see a cost of $6.5 million per ship.

About time for a little more free trade, don\’t you think?

6 thoughts on “The cost of the Jones Act”

  1. Interesting to note that the Jones Act was waived by Bush after Katrina but Obama refused to fo the oil spill.

  2. It’s quite a feat of Barackmandias to prove himself an even bigger pill than W, but he’s managed it.

  3. Since when did the USA believe in free trade??

    The USA believes in free and open access for it to other people’s markets – it does notbelieve other people should have free and open access to its markets. And it never has done.

    And yet the pork addicts on Capitol Hill accuse China of protectionism…

    Is it too paranoid to think that BP is being forced to provide what is in effect a stimulus package for Louisiana etc.??

  4. Don’t get carried away guys. I’ve been involved on projects in Russian waters offshore Sakhalin, in Canadian and Australian waters … the list goes on. Most countries are sympathetic to protectionism in one form or another, with the obvious exception.

  5. Don’t get carried away guys. I’ve been involved on projects in Russian waters offshore Sakhalin, in Canadian and Australian waters … the list goes on.

    To bring a foreign vessel to work in Russian waters you must submit an application on a certain date of the year (and that is the only date when you can submit it, once per year) and it must be approved by the President himself. Which is why when I worked on a ship offshore Sakhalin for some unforseen works we had to use a Russian vessel with a crew which no other country would have touched with a barge-pole.

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