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UPDATE 1-Nine companies using waiver to ship fuel to NY area
November 13, 2012 / 10:35 PM / 5 years ago

UPDATE 1-Nine companies using waiver to ship fuel to NY area

* Jones Act waiver expires Nov. 13, ships must unload by Nov. 20

* Waiver attracts 9 companies, 10 shipments

* No word from DHS on potential extension of waiver

WASHINGTON, Nov 13 (Reuters) - Nine companies plan to use a rare waiver that expires Tuesday allowing foreign-flagged ships to take oil products and additives from the Gulf of Mexico to the Northeast to help relief efforts after Superstorm Sandy, the government said.

The Department of Homeland Security issued a blanket waiver early this month of the 1920 Jones Act to help get fuel to the region. The waiver allows foreign-flagged ships to load oil products from the Gulf of Mexico until Nov. 13 and deliver them to ports in the Northeast by Nov. 20.

The DHS has not yet said whether the waiver will be extended.

Nine companies had planned to use the waiver as of Tuesday to move 10 cargos of oil products like gasoline, heating oil and diesel, the Department of Transportation’s Maritime Administration, or MARAD said. The number of companies rose by four since last Friday. The bureau did not name the companies. There could be more shipments taking advantage of the waiver as companies do not have to tell the government they intend to ship oil to the Northeast until 24 hours after loading in the Gulf of Mexico.

Oil traders could profit by nearly $2 million on each exempt cargo of gasoline they are able to ship from Houston to New York, according to Reuters’ calculations.

The journey from the Gulf Coast to New York Harbor can take about a week, and some shippers are concerned about repercussions if they are not able to deliver by the deadline.

The Jones Act, part of the 1920 Merchant Marine Act, was created to support domestic jobs in the shipping industry. It requires goods moved between U.S. ports to be carried by ships built domestically and staffed by U.S. crews.

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