Rent seeking Jones Act distorts market for shipping oil between ports in the US

Fuel Fix:
Midstream giant Kinder Morgan said Monday it will add four new tankers to its Jones Act-eligible fleet in a $568 million deal with Philly Tankers LLC.

The ships are slated to be delivered between late 2016 and 2017. The first two tankers scheduled for delivery are already under long-term contract with an unnamed oil company, and Kinder Morgan said it expects to have contracts for the second two ships inked by early 2016.

The Jones Act requires waterborne cargo shipped between domestic ports to be delivered on ships built in the U.S., owned by U.S. citizens and crewed by U.S. citizens. The limitations have helped to support an industry of maritime shippers dedicated to moving goods along U.S. coasts.

Kinder Morgan entered the Jones Act shipping business with a $960 million deal for five ships in January 2014. The company mostly ships petroleum products, and operates its ships by contracting them out to other companies in long-term deals.
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At a time when tankers can be bought for significantly less money, This ancient act is driving up the price of energy in the US.  I do not blame Kinder Morgan.  I blame the rent seeking unions who do not want to compete in the market place.

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