New Billboards in New York City Area Blame the Onerous Jones Act for Snarling Traffic

[Muda69]

https://www.cato.org/news-releases/2019/4/2/new-billboards-blame-onerous-jones-act-snarling-traffic-along-eastern

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The Jones Act is a 99-year-old law that restricts shipping between two ports in the United States to vessels that are U.S.-built, U.S.-owned, U.S.-flagged, and U.S.-crewed. Although the law was intended to bolster U.S. shipbuilding capacity and ensure a robust maritime services industry, it has had the opposite effect; in the absence of competition, U.S. shipbuilding has atrophied. About 300 shipyards have closed since 1983, the number of shipyard workers has shrunk from 186,700 in 1981 to 94,000 today, and the number of Jones Act-compliant ships has diminished from 326 in 1982 to 99 today.

As a result, our coastal cities and their populations suffer increasingly costly levels of traffic congestion.

In 2018, Americans lost an average of 97 hours to traffic congestion, costing them nearly $87 billion — an average of $1,348 per driver. The New York metro area in particular experiences egregious traffic jams. Transportation analytics company INRIX lists New York City as one of the top 10 most congested U.S. cities, with drivers spending an estimated 133 hours in traffic per year. However, most heavily trafficked routes, such as I-95, parallel oceans where container transport would be the more efficient passage.

According to new research from Cato’s Herbert A. Stiefel Center for Trade Policy Studies, coastal shipping would be a more cost-effective option for an estimated 25 percent of the trucks operating on surface transportation roads.

“Traffic is increasingly costly to the U.S. economy, and the Jones Act’s restrictions on coastal shipping only make matters worse by incentivizing businesses to move freight on our highways,” said center director Dan Ikenson. “Less than 5 percent of the volume of U.S. domestic freight is transported by water, whereas the comparable figure in Europe is 20 percent. Ending the Jones Act would alleviate the nation’s growing traffic problem and many other problems.”

In addition to swelling traffic, by encouraging more freight to be moved by trucks, the Jones Act results in increased environmental emissions, higher fuel use and costs, and increased prices to consumers.

The billboards are another phase of the Center for Trade Policy Studies’ multifaceted campaign to educate policymakers and the general public on the havoc wrought by the Jones Act. The campaign, in addition to public events and advertising, will publish the work of Cato’s trade experts in four research papers, each tackling a particular aspect of the act. The first, The Jones Act: A Burden America Can No Longer Bear, was released last summer. The next paper will delve deeper into the real costs of the law, expanding on time wasted in traffic congestion, the collateral damage of excessive wear on the country’s infrastructure, and the accumulated health and environmental toll caused by unnecessary carbon emissions and hazardous material spills from trucks and trains.

“Sometimes it’s hard to see all the societal costs associated with bad policy. I’m sure most motorists don’t realize that traffic, pollution, and infrastructure wear and tear are all made worse by the Jones Act,” said Peter Goettler, Cato Institute president and CEO. “We’re trying to spread the word.”

Agreed.  This antiquated federal law needs to go.  

[Muda69]

America should not have to import natural gas.: https://www.nationalreview.com/2019/04/jones-act-should-be-waived-natural-gas-abundance/

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The United States is producing beaucoup natural gas — you knew that. But do you really know how much? The United States is now the world’s largest natural-gas producer by far, with No. 2, Russia, nowhere close. The growth alone in U.S. natural gas is equal to about twice the annual production of Iran, which is the world’s third-largest producer.

So why are people in New England importing natural gas from Russia?

Welcome to the batty world of trade protectionism.

The United States has on the books and enforces an antediluvian piece of legislation known as the Jones Act, signed into law by that great malefactor of his day, Woodrow Wilson. The Jones Act forbids the transportation of goods, commodities, or people between U.S. seaports unless the vessels used are manufactured, registered, flagged, and owned in the United States — and owned and crewed by U.S. citizens or permanent residents. It’s the reason why a cruise ship picking up passengers in Fort Lauderdale can’t disembark them in Key West — and also the reason why we can’t get natural gas from the Gulf Coast to users in the Northeast and in Puerto Rico.

Thanks to our environmentalist friends, we do not have the pipeline capacity to take U.S-produced natural gas from the places where it is processed to the places where the people are. This has some pretty serious consequences: Con Ed has just announced that it cannot get enough gas to serve new customers in the New York City suburbs, which has meant in effect a moratorium on much new residential construction, which obviously can’t happen without utility connections. One workaround has been to put liquified natural gas (LNG) on containers to take it where it is needed.

And that’s where the Jones Act is a problem. The number of tankers equipped to handle U.S.-made LNG that satisfy all of the conditions of the Jones Act is — here, the math gets pretty easy — zero.

There are Americans producing previously undreamt-of amounts of natural gas and eager to sell it. There are other Americans eager to buy it. And in the middle of all that? Russians. Why? Because economic protectionism is moronic, a consistent failure of a policy.

The Jones Act is a sop to a small slice of U.S. shipbuilders and operators — and a gigantic tax on people and companies who transport things and use electricity. It is one of the bone-dumbest laws on the books, pure corporate welfare from a time before penicillin.

There is a very useful concept in political economy: concentrated benefits vs. dispersed costs. The people who benefit from the corporate welfare — whether it’s the Jones Act, farm subsidies, or the U.S. Export-Import Bank — benefit bigly. Everybody else pays, but it’s spread around thin, so people don’t notice it as much — except when there’s an unusual cold snap in New England and those poor dumb frozen Yankees are having to bring in fuel from Siberia.

Making energy more expensive is bad for everybody — consumers, manufacturers, farmers. (Yes, farmers: It takes a lot of power to run those irrigation pivots.) The Trump administration has made ramping up U.S. energy production a centerpiece of its domestic economic agenda. The president himself has a phobia about trade deficits. That’s the wrong thing to worry about, but if you are worried about it, then it’s worth noting that petroleum imports have been one of the largest contributors to our trade deficits over the years — often the single largest contributor. And we’re hampering the distribution of U.S.-produced natural gas for purely political reasons.

There are some very capable people on Trump’s economic-policy team, and there are also some neo-mercantilist cranks. The president is considering issuing a Jones Act waiver to enable the freer flow of U.S.-produced natural gas. He should do himself and the country a favor and remember that when it comes to energy, more is more.

 

[gonzoron]

5 minutes ago, Muda69 said:

America should not have to import natural gas.: https://www.nationalreview.com/2019/04/jones-act-should-be-waived-natural-gas-abundance/

 

Agree with the statement, but not with the linked article. U.S. Natural Gas pipelines:

[Muda69]

10 hours ago, gonzoron said:

Agree with the statement, but not with the linked article. U.S. Natural Gas pipelines:

I can't view your link at my current location, but based on it's name I take it you don't agree with these statements from the linked article?:

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Thanks to our environmentalist friends, we do not have the pipeline capacity to take U.S-produced natural gas from the places where it is processed to the places where the people are. This has some pretty serious consequences: Con Ed has just announced that it cannot get enough gas to serve new customers in the New York City suburbs, which has meant in effect a moratorium on much new residential construction, which obviously can’t happen without utility connections. One workaround has been to put liquified natural gas (LNG) on containers to take it where it is needed.

 

[Muda69]

The Jones Act is protecting U.S. shipyards to death: https://www.philly.com/opinion/commentary/philly-shipyard-jones-act-20190425.html

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Fresh reports have emerged that the Philly Shipyard, the recipient of multiple government bailouts and largesse, is once again on the brink of shutting down. The shipyard’s looming failure isn’t just an indictment of the corporate welfare that has been shoveled in its direction by politicians, but also a little-known, nearly 100-year-old law called the Jones Act.

Passed in 1920, the Jones Act mandates that vessels transporting goods between two points in the United States meet four conditions: They must be U.S.-registered, at least 75 percent U.S.-owned, at least 75 percent U.S.-crewed, and U.S.-built. The logic behind the law was that restrictions on foreign competition would, among other things, encourage the development of a strong U.S. shipbuilding sector.

It hasn’t worked out that way.

Rather than prospering, U.S. shipyards have been in a decline for decades, and there are only a mere handful that build oceangoing commercial ships. That may seem a head-scratcher to some, given the Jones Act’s U.S.-build requirement, but it makes more sense when one considers that these ships cost up to five times more than equivalent vessels built in foreign shipyards.

The most recent vessel christened at the Philly Shipyard, the Kaimana Hila, is a case in point. Built for transporting goods from the West Coast to Hawaii, the ship offers a cargo capacity of 3,600 TEUs (20-foot equivalent units) for the whopping price tag of $209 million. For comparison, the world’s largest container ship, the 21,413-TEU capacity OOCL Hong Kong, was built in South Korea for $158 million. That’s over six times the cargo capacity at a $51 million discount.

Amazingly, despite the Kaimana Hila’s sky-high price, the Philly Shipyard is actually said to have lost money on the deal to build the ship.

Faced with such high prices, shipping companies have delayed replacing their vessels and instead keep them years — and sometimes even decades — past their typical useful life. Expensive ships make for expensive shipping, contributing to a domestic decline in this form of transport in recent decades despite a growing economy. Indeed, Jones Act shipping can be so expensive that ranchers in Hawaii sometimes opt to place their cattle on airplanes for transport to the West Coast instead of ships.

Declining demand, meanwhile, has made it a struggle for U.S. shipbuilders such as the Philly Shipyard to achieve scale or invest in the technology needed to bring their costs down. They’re caught in a vicious cycle that has left them collectively producing for the commercial ship market in a year what Asian yards might churn out in a week.

But it doesn’t have to be like this.

Instead of coddling the Philly Shipyard, it should be forced to compete. And that needs to begin by reforming or repealing the Jones Act to allow Americans to buy foreign-built ships for use in domestic transport. After all, the auto and aerospace industries are not subject to U.S.-build requirements and yet U.S. firms — spurred to innovate by international competition — are world leaders in both.

The experience of European shipyards may provide a useful lesson. As in the United States, European shipbuilders have found themselves increasingly unable to compete on price with Asian yards for the construction of large cargo ships by competitors. But rather than abandoning shipbuilding they have responded by seeking to move up the value chain and focus on higher-end specialized vessels. Tiny Finland, for example, is renowned for its prowess in building icebreakers, while German yards are some of the world’s best at producing cruise ships.

Why should anyone think that Americans, capable of engineering feats ranging from the iPhone to the Dreamliner to rockets that land themselves, can’t find their own segment in this international market? Protectionism has been tried and protectionism has failed. American shipbuilding can survive and even prosper — so long as the Jones Act isn’t in the way.