Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at intelligent and rational individuals, whose comments are very welcome.

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14 June 2010

The Jones Act Prevents Gulf Oil Clean-Up

As Charles Krauthamer has pointed out, the reason wells are being drilled in the deep water Gulf of Mexico is because environmentalists have exerted such influence upon the federal government that on-shore and shallow-water Gulf drilling has been greatly restricted.  Unfortunately, the U.S. does not have much in the way of deep sea drilling technology, though it has the best shallow-water and on-shore drilling technology in the world.  It turns out that the Europeans have more deep-sea technology.

Many countries have offered to use deep-water technology and other technology to help clean up the oil spill in the Gulf of Mexico due to the BP Horizon platform oil spill.  Canada, Croatia, France, Germany, Ireland, Mexico, the Netherlands, Belgium, Norway, Romania, the Republic of Korea, Spain, Sweden, the United Kingdom, and the United Nations have all offered to help with the oil spill and the clean-up.  The U.S. has not accepted their help.  Why?

The Merchant Marine Act of 1920 regulates maritime commerce in U.S. waters and between U.S. ports.  Section 27, called the Jones Act, requires that all goods transported by water between U.S. ports must be carried in U.S.-flag ships, which were constructed in the U.S.  The ships must be owned by U.S. citizens and crewed by U.S. citizens and U.S. permanent residents.  This act subsidizes a U.S. merchant marine at great cost to U.S. consumers, while providing some strategic value in a possible future war.

The Dutch news site De Standaard says Belgian and Dutch dredgers have the capability to greatly speed up the oil spill clean-up.  The Belgian group DEME says it can clean up the oil in three to four months using specialty vessels and equipment.  The U.S. is estimating a 9-month clean-up.  Only 5 or 6 of the needed specialty clean-up ships are available in the world.  The top companies with these special ships have them built in the Far East, where they cost half what they would cost in the U.S.  They are mostly owned by two Belgian companies, DEME and De Nul and their Dutch competitors.  Thanks to the Jones Act, they cannot be used to speed up the clean-up.

Unless.......  A waiver is given by the Obama administration, as the Jones Act says it can in a time of national emergency or due to a strategic interest.  The Business Insider article says the exemption has not been made simply out of pride.  I suspect it is more involved than that.  Obama does not want to be seen giving jobs to foreigners during our recession and when many Gulf Coast workers are idled by the oil spill itself.  There are also U.S. maritime labor unions he does not want to offend.  So, his policy is to take 9 months to do the clean-up (probably a classic government underestimate), rather than call in the Dutch and Belgians and others with their specialized oil clean-up ships and technology.

But, instead of allowing that the tragedy is in good part due to not allowing shallow-water Gulf oil drilling and the clean-up is being dragged out by the Jones Act, the Obama power thirsters wish to blame everything on BP and a regulatory federal ocean leasing bureau due to a lax regulatory climate claimed to be due to George W. Bush!  The permit to drill was issued after Obama usurped the presidency.  The environmentalists, the Democrats, and BP share the blame for this environmental disaster.

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