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Jones Act Draws Critics, Defenders: Battle Lines Are Forming as the Merchant Marine Act Marks its Centennial

The Duluth News Tribune references CEI senior fellow Mario Loyola's writing on the Jones Act:

Mario Loyola, a senior fellow with the Competitive Enterprise Institute, points to the U.S. energy sector as evidence of how the Jones Act has had unintended consequences. He notes that it is cheaper to ship Texas crude oil to Canada via foreign tankers for refining than it is to ship it to domestic refineries in the Northeast. As a result, refineries there have taken to importing oil instead of using domestic product.

"One thing to note about the reforms that we propose and that Sen. Lee has proposed is that they affect a very small part of the Jones Act fleet, which is the ocean-going portion, the one where ships are going from California to Hawaii, from Florida and New York to Puerto Rico and crucially from the Gulf Coast to our refineries in the Northeastern United States," Loyola said.

He said that only about 100 U.S. vessels would be affected by Lee's proposal to lift Jones Act restrictions.

"Meanwhile, on the inland waterways and Great Lakes, we have more than 30,000 tugs and barges that are the main Jones Act fleet, and that's where the law really gets its lobbying power. So, all the special interests defend their perks tooth and nail, and that's why the large part of the inland waterway Jones Act fleet, their lobbyists, will not abide even a small change that would affect the ocean-going fleet, because they think that if they allow any reform, it will end up with a broad repeal," Loyola said.

Upon further questioning, however, Loyola acknowledged his ultimate goal, saying: "I'm in favor of removing the Jones Act entirely. I don't think it helps anyone."

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