Jones Act Loophole Allows Puerto Rico to Finally Access American Natural Gas

Since 2016, American liquified natural gas (LNG) has been exported to at least 40 countries. One place it hasn’t been sent, however, is Puerto Rico. Shipping the fuel in bulk from the US mainland to the Caribbean island has been rendered impossible due to the Jones Act, the 1920 law that restricts domestic waterborne transportation to vessels that are built and registered in the United States.

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The problem for Puerto Rico (as well as New England, and possibly Alaska and Hawaii too) is that none of the world’s more than 600 LNG tankers comply with the protectionist shipping law. As a result, LNG cannot be transported by water from US export terminals to those parts of the US that consume natural gas.

Until now.

Last week, shipping firm Crowley announced that a French-built LNG tanker it recently purchased will begin supplying American natural gas to the US territory. Named American Energy, it is allowed to operate thanks to a Jones Act loophole that permits foreign-built tankers to transport LNG to Puerto Rico (sorry, New England) provided they are American-flagged, crewed, owned, and—this is a big one—constructed before the measure was passed in October 1996. 

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