GAO Releases Report on Modifying the Jones Act as Applied to Puerto Rico

This week, the U.S. Government Accountability Office (GAO) released a report on the potential effects of modifying the Jones Act shipping law as applied to U.S. mainland trade with Puerto Rico. The report concluded that the effects would be highly uncertain and involve various policy tradeoffs, with the potential for harm to the U.S. merchant marine fleet that the Act was designed to protect.  The GAO’s report also noted that officials at the Puerto Rico Electric Power Authority have voiced concerns about the availability of eligible LNG tankers and indicated that “the cost to build and operate a new LNG tanker under Jones Act requirements could result in high shipping costs that offset the savings from purchasing natural gas from the United States.” 

A Caribbean Business article describes the report’s conclusions as providing a “mixed picture” and reports that Resident Commissioner Pedro Pierluisi (D-Puerto Rico) will introduce legislation to address the negative impacts on Puerto Rico identified in the report. Resident Commissioner Pierluisi’s bill would relax the requirements of the Jones Act to facilitate the shipment of natural gas and other fuels from the U.S. mainland to Puerto Rico.