Last week we brought you the news that President Trump is considering a waiver to the 1920 Jones Act for LNG to be shipped from port to port in the U.S., even if the ships used are foreign flagged (see Trump Considers Waiving Jones Act to Allow Domestic LNG Shipments). We like the idea because it means we may be able to move more of our Marcellus/Utica gas to New England without using pipelines. However, MDN friend Garland Thompson, a talented reporter and magazine writer, has a different take on the Jones Act and potential waivers to it.
Garland, who lives in Philly, has written for the Career Communications Group of publications, including US Black Engineer & Information Technology, Hispanic Engineer & IT, and their siblings Woman of Color and Science Spectrum, for many years. He’s covered the shale revolution for those publications since 2008–before MDN began writing about it!
Garland sent MDN the following comments about the Jones Act and granted us permission to publish them:
I covered the Panama Canal expansion extensively, for Hispanic Engineer magazine, WYPR-88.1 FM in Baltimore, and Hart Energy’s Midstream Business magazine, so I have a different perspective on the Jones Act.
New England had been receiving seaborne gas shipments from Trinidad, which has a lot of offshore gas. But when I visited Panama to attend the official 2016 opening of the Expansion Project for business, I interviewed Canal Authority staffers who explained that their project was planned to stay competitive after the Suez Canal’s recently completed expansion. They had not anticipated all the new business the Panama Canal would attract from American shippers moving energy supplies to the Pacific Rim.
Today, however, it’s not only Americans who ship gas tankers through the Expanded Canal. Peru ships LNG through the Canal to Spain–cuts 7,800 miles and 10 days off their trip. Even more interestingly, however, Trinidad now ships LNG to the Pacific through the Canal, too–more than 1 million tons per annum to the West Coast of Mexico, and also to Chile.
The United State ships LNG to Mexico’s West Coast, too, more than 3 million tons a year, and also ships gas to Chile, via the Canal.
A recent Canal Authority news release says 6,000 ships have transited the new, expanded Agua Clara Locks on the northern, Caribbean side, and the Cocoli Locks on the Pacific side, since June 2016 when the Expansion Project locks opened for business. The Authority reports further that 27 percent of those transits are by vessels carrying LPG, with another 10 percent LNG. That percentage balance will likely change shortly, as Cheniere Energy’s Corpus Christi terminal ramps up its shipments, and Freeport Energy in Texas and the two new terminals being developed in Louisiana get going in about a year.
The problem for New England is that Mexico and Chile are bidding up the price of LNG the Northerners once had all to themselves. That’s why they had to accept LNG shipments from Russia’s state-owned gas company, methane produced on the Arctic Yamal Peninsula by a Russian company under sanction by the Trump administration and frowned upon by American environmentalists as well.
The Boston Globe, horrified at this development, printed biting criticism of the state government leaders who permitted that buy, to the consternation of all hands.
Now the New Englanders want the Trump administration to do something domestic shipping interests have long sought: eviscerate the Jones Act, which was passed in 1920 to ensure the American Merchant Marine survived in era of increased competition from underpaid foreign seafarers sailing vessels built in shipyards supported by foreign-government subsidies, built by workers paid vastly lower wages than American would accept.
Never mind how many American workers’ jobs–in shipyards and aboard U.S. merchant vessels–would be endangered by such as surrender. And all so New England can keep on receiving necessary shipments of natural gas for heating and electric-power production, without having to face up to the consequences of their unreasonable opposition to completion of transmission lines that could bring cheaper Pennsylvania gas from closer by than the Texas and Louisiana Gulf Coast, where the biggest active U.S. LNG ports are being built.
That Marcellus Shale gas would get to New England in a much more reliable pipe transmission system that is orders of magnitude safer and less polluting than liquefying gas produced in the Siberian Arctic, then loading it onto heavy-fuel-oil-burning tankers that pump hundreds of tons of pollution into the atmosphere hauling that gas thousands of miles across the Arctic Ocean, then more thousand of miles across the Atlantic to Boston.
But New England’s leaders just don’t care, so long as they can keep up the pretense of satisfying the demands of megaphone-wielding protest groups pushing a Utopian dream of killing the shale energy revolution so their favorite wind and solar energy projects will become the preferred alternative. Bless their pointy heads.
The Trump administration should be smart enough to see through that scam. New England has just demonstrated that it can’t really do without natural gas. So let its leaders ‘fess up, and stop blocking the pipelines that can bring the region really needs, at rates that mirror the affordability seen in the rest of the nation, permitting New England’s electric power producers, in turn, to end the burning of coal and fuel oil to produce the power that keeps New England’s lights on, keeps New England’s computer monitors glowing, and yes, keeps New Englanders’ smart-phones charged. Face up, and stop selling bogus rhetoric.
We’re in full agreement with Garland that pipelines are the ultimate solution for New England–no question about it. We’re just looking for a short-term Band Aid that can get our gas there sooner than another 2 to 3 to 4 years it will take to get new pipeline(s) built. Hence our favorable view of waiving the Jones Act. However, Garland makes some compelling arguments against changing the Jones Act, you have to admit.
This post appeared first on Marcellus Drilling News.