By Jarrett Renshaw and Arathy Somasekhar
WASHINGTON/HOUSTON, Aug 4 (Reuters) – The White House is expected to extend a waiver of the century-old Jones Act in the coming days to try and hold down gasoline prices, sources said, as President Donald Trump escalates his attacks on Exxon Mobil and Chevron for making “too much money.”
The Jones Act requires cargo moving between U.S. ports to be carried on ships built in the U.S., owned by U.S. companies and crewed by American workers, and the waiver aims to lower gas prices by increasing shipping flexibility and reducing transport bottlenecks.
The oil industry had expected an extension by the end of July. But administration officials have continued meeting with maritime industry representatives and lawmakers over potential changes to narrow the scope of the waiver while preserving flexibility to move critical fuel supplies, according to three people familiar with the discussions who requested anonymity because they are not authorized to speak publicly.
The current waiver is set to expire on August 16 and has already become the longest suspension of the Jones Act rules in the program’s history. The exemption has been used nearly 200 times over 4-1/2 months through the end of July, according to U.S. government data.
Trump is running out of easy options to lower gasoline prices — currently averaging over $4 a gallon in the U.S. — ahead of the midterm elections in November. The administration has already leaned on measures including increased oil supply efforts and regulatory flexibility, while Trump on Monday escalated rhetorical pressure on Exxon and Chevron by saying they should return money to consumers at the pump.
Exxon and Chevron did not respond to requests for comment.
U.S. Energy Secretary Chris Wright told reporters in Brownsville, Texas, on Tuesday that the waiver had resulted in lower energy prices in California and on the East Coast and that another extension is likely. He said fuel prices should come down in the coming weeks.
“President Trump believes in markets and he believes in capitalism. But he’ll use every tool he has, including the bully pulpit, to try to encourage and put pressure to lower energy prices for Americans,” Wright said at a press conference when asked about Trump’s comments on Exxon and Chevron.
Bob McNally, president of Rapidan Energy Group, said the most effective option for any U.S. president would be to press Saudi Arabia to increase oil production — an option not feasible because exports remain constrained by disruptions around the Strait of Hormuz amid the Iran conflict.
Other potential measures, including a windfall profits tax, gasoline price controls or legal action against oil companies, are either politically unrealistic, economically risky or unlikely to meaningfully reduce prices, McNally said.
McNally said the Jones Act waiver increases the availability of tankers to move fuel but would probably reduce gasoline prices by only pennies per gallon.
WAIVER CRITICS PUSH FOR LIMITS
Critics of the extension are pushing for geographic limits and tighter scrutiny on each shipment.
White House trade adviser Peter Navarro, Office of Management and Budget Director Russell Vought and the White House Energy Dominance Council, among others, have been involved in discussions over the waiver extension, the people said.
No final decision has been made and details are subject to change, the sources said.
Key Republican lawmakers, including House Speaker Mike Johnson and House Majority Leader Steve Scalise, have pressed the administration to limit the exemption, warning that broad use of waivers could weaken the domestic fleet and undermine the Jones Act’s national security goals.
A White House official said the administration was continuing to monitor how the waiver was being used and that discussions were ongoing. Any further announcements would come directly from the president or the administration, the official said.
Maritime groups have been escalating their campaign against extending the Jones Act waiver, with the American Maritime Partnership restarting advertising on CNBC and Fox News and AMP and the American Waterways Operators running digital ads.
AMP President Jennifer Carpenter said the waiver has benefited foreign operators and energy companies more than consumers.
“The waiver has shifted routine domestic commerce to foreign operators, including entities linked to China and Russia, while undermining the U.S. maritime industrial base,” Carpenter said.
(Reporting by Jarrett Renshaw and Arathy Somasekhar; additional reporting by Sheila Dang in Houston and Curtis Williams in Brownsville, Texas; Editing by Nathan Crooks and Deepa Babington)
Comments