Larsen, LoBiondo: If Strategic Petroleum Reserve is Tapped, Make Sure Oil is Shipped by U.S. Mariners

WASHINGTON—Rep. Rick Larsen, WA-02, and Rep. Frank LoBiondo, today called on the administration to protect American jobs in the event that the Strategic Petroleum Reserve is tapped to alleviate pressure on oil prices. Larsen, the ranking member of the House Subcommittee on Coast Guard and Maritime Transportation, and LoBiondo, the chairman of that subcommittee, told top administration officials that they should adhere to Jones Act requirements that shipments between U.S. ports be carried on U.S. flagged vessels.

The representatives wrote in response to recent news reports that the administration is considering tapping the Strategic Petroleum Reserve in response to rising gas prices.

The letter, below, was sent to Department of Homeland Security Secretary Janet Napolitano, Department of Transportation Secretary Ray LaHood, and Department of Energy Secretary Steven Chu.

August 30, 2012

Dear Secretaries Napolitano, LaHood and Chu:

We are concerned by news reports that the White House is "dusting off old plans" for a potential release of oil reserves to dampen rising gasoline prices and prevent high energy costs from undermining the success of Iran sanctions.  We hope that the administration is not contemplating the release of oil from the Strategic Petroleum Reserve (SPR) without the adequate notice and consultation of Congress.  We urge you to meet requirements under the Jones Act to transport SPR oil on U.S. flagged ships should you decide to release reserves.

On June 27, the Subcommittee on Coast Guard and Maritime Transportation convened an oversight hearing to review the administration’s 2011 decision to release oil from the SPR, and specifically, to examine the administration’s decision to grant waivers from the U.S. coast wise laws to allow SPR oil to be transported on foreign-flagged tankers between U.S. ports.  This controversial decision to waive the Jones Act was viewed by many members as an unwarranted slight to U.S. carriers and seafarers.  As such, the SPR release drew a bipartisan rebuke from Congress.

During the hearing, the consensus was that these types of waivers should not happen again.  Department of Transportation Deputy Secretary John Porcari openly recognized the important lessons learned during the 2011 drawdown.  He acknowledged that new legislative requirements Congress has imposed will not only ensure better coordination and improved procedures for the planning for future SPR releases, but will also “provide additional opportunities for Jones Act carriers.”

It may make sense to reconsider options to release SPR oil reserves in light of the shutdown of Gulf Coast drilling operations due to Hurricane Irene and rising gas prices.  However, we were very disappointed to first learn of the administration’s renewed interest in this option from a media report, and not directly from the administration, especially considering Mr. Porcari’s stated pledge to work closely with the Congress on such decisions.

At a time when far too many Americans remain unemployed, priority must be given to addressing the needs of our own maritime workers.  Congress has sent a clear signal to the administration that it fully expects any future transport of SPR oil to be carried on U.S. built, owned and crewed vessels.  Should the administration decide to release SPR reserves, we look forward to working with you to uphold the longstanding tenets of the Jones Act to ensure that the transport of this oil results in jobs for U.S. mariners and business for U.S. carriers, just as the law requires.  We appreciate your response and look forward to working with you to ensure that jobs created from any SPR release belong to Americans.

Sincerely,

Representative Rick Larsen
Ranking Member
Subcommittee on Coast Guard and Maritime Transportation

Representative Frank LoBiondo
Chairman
Subcommittee on Coast Guard and Maritime Transportation