Column: Isles need Jones Act waiver for oil imports

The fighting between Russia and Ukraine might be thousands of miles away, but that doesn’t mean it isn’t affecting us in Hawaii.

Until this past Thursday, Russia typically supplied a quarter to a third of all oil imported to Hawaii, but then the company that owns Hawaii’s oil refinery announced it would be suspending its purchases of Russian crude and turning to other grades of crude, principally from North and South America, to meet its fuel production requirements.

Premium gas prices in Hawaii already are in excess of $5 a gallon, and now they could surge even higher. Look for prices of almost everything in Hawaii to be affected. This development could be a crippling blow to the state’s economy, which already is struggling to recover from two years of coronavirus lockdowns.

So how did Hawaii become so dependent on Russian oil — and foreign-sourced oil in general?

The reason is simple economics — or, more specifically, the Jones Act.

The federal maritime law requires that all goods carried between U.S. ports be on ships that are U.S. flagged and built, and mostly owned and crewed by Americans. So even though oil from Texas might be cheaper than oil from Russia — or Libya or Argentina or Saudi Arabia — shipping it to Hawaii aboard Jones Act carriers makes it more expensive.

The purported intent of the Jones Act when it was adopted in 1920 was to promote the domestic maritime industry and ensure national security. After more than a century, however, the industry is in a downward spiral, consumers pay exorbitant prices for domestic shipping and one of America’s 50 states, Hawaii, is highly vulnerable to oil supply shocks during times of geopolitical upheaval.

Warnings about Hawaii becoming dependent on foreign sources were sounded as far back as 2014. A report by the Hawaii Refinery Task Force considered the risk to Hawaii’s energy supply if global events resulted in the reduced availability of foreign oil. Not surprisingly, it recommended a Jones Act waiver to allow Hawaii to get petroleum shipments from the mainland at lower cost.

At the time, the Task Force was largely concerned with how changing conditions in Asia could lead to an oil crisis in Hawaii. However, the fact that our current crisis has its origin in Europe only highlights the fact that this is a serious and long-term problem.

Obviously, the Jones Act is sorely in need of an update that would bring it into the 21st century. In the meantime, we must address the ways in which it threatens our safety and contributes to the state’s energy woes.

That is why the Grassroot Institute has written to President Joe Biden, requesting a one-year waiver of the Jones Act for all fuel shipments to Hawaii.

Not only would such a waiver help mitigate the current crisis, it would give us an opportunity to evaluate the effects of a Jones Act exemption on the economy and national security.

America’s conflict with Russia has shown that the Jones Act is costly in more ways than one. It raises prices in our state in general while making us more vulnerable to shifts in the global fuel market.

We need a Jones Act waiver for Hawaii to bring down fuel costs and make us more secure.

Keli‘i Akina is president/CEO of the Grassroot Institute of Hawaii.