Biden Admin Grants Temporary Jones Act Waiver to Company Amid Gas Shortages

Out of service fuel nozzles are covered in plastic on a gas pump at a gas station after a gasoline supply crunch caused by the Colonial Pipeline hack, in Waynesville, North Carolina, on May 11, 2021. (Martin Brossman via Reuters)

The Department of Homeland Security on Wednesday approved a temporary waiver of the Jones Act to a company in an effort to ease fuel supply constraints caused by the shutdown of the Colonial Pipeline.

Secretary of Homeland Security Alejandro Mayorkas said the approval to the unnamed company was made following careful consideration and consultation with other agencies in the federal government. The targeted waiver comes after the Department of Transportation said on Tuesday that it was considering waivers of the Jones Act in response to fuel shortages caused by interruptions in the operation of the Colonial Pipeline that was targeted in a ransomware attack.

The Jones Act, or the Merchant Marine Act of 1920, is a federal law that requires ships carrying goods between U.S. ports to be owned by American companies, built and registered in the United States, and crewed by Americans. The DHS may only grant a waiver to the 101-year law if “proposed shipments are in the interest of national defense and after careful evaluation of the issue,” the department said.

“In the interest of national defense, I have approved a temporary and targeted waiver request to an individual company. This waiver will help provide for the transport of oil products between the Gulf Coast and East Coast ports to ease oil supply constraints as a result of the interruptions in the operations of the Colonial Pipeline," Mayorkas said in a statement.

President Joe Biden had directed a whole of government response in an effort to mitigate the impact of the fuel shortages caused by the cybersecurity attack, with numerous departments having already implemented relief measures as part of the effort. The Environmental Protection Agency on Tuesday issued temporary waivers of certain fuel standards to increase the supply of gasoline in areas impacted by the shutdown. Meanwhile, the Department of Transportation’s Federal Motor Carrier Safety Administration declared an emergency declaration for 17 states and Washington, D.C., to allow flexibility for truckers to transport fuel.

Colonial Pipeline said on Wednesday evening that the restart of its pipeline operations was initiated at approximately 5 p.m. Eastern Time.

“Following this restart, it will take several days for the product delivery supply chain to return to normal. Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period. Colonial will move as much gasoline, diesel, and jet fuel as is safely possible and will continue to do so until markets return to normal,” the company said.

White House Press Secretary Jen Psaki said in a statement on Wednesday evening that the administration will remain in close contact with the company and continue to offer assistance as the company works to safely resume its operations.

“President Biden and the White House will monitor the situation closely in the coming days, and continue to urge Americans to just purchase what they need, and not hoard fuel, as supply is restored,” the statement said.

Earlier on Wednesday, Biden signed an executive order that directs the federal government to “improve its efforts to identify, deter, protect against, detect, and respond to these actions and actors” in the event of a cybersecurity attack. He also directed agencies to work with the private sector to “learn the lessons of this incident, strengthen cybersecurity practices, and deploy technologies that increase resilience against cyberattacks.”

Mimi Nguyen-Ly contributed to this report.