US may waive Jones Act law to ship oil

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WASHINGTON (Reuters) - If Hurricane Rita disrupts U.S. petroleum supplies, the Bush administration may again waive a restrictive shipping law so foreign vessels can transport crude oil and gasoline between U.S. ports, a government source said on Friday.

 

After last month's Hurricane Katrina, the administration temporarily suspended the Jones Act, which mandates that only U.S.-owned ships carry passengers and cargo between U.S. ports.

 

That waiver has expired, except for moving loaned crude oil from the government's Strategic Petroleum Reserve to refineries that lost supply due to Katrina.

 

Waiving the law again is an option for the administration if Rita causes similar supply disruptions, but no decision has been made yet whether to do so, according to a government source knowledgeable about the matter.

 

"It's one of the tools the administration has at its disposal," he said. "It's open-ended for deliveries from the Strategic Petroleum Reserve in response to Hurricane Katrina."

 

That decision will made after an assessment of pipelines and refineries once the Rita passes. The storm is forecast to hit the Texas-Louisiana border late Friday or early Saturday with a storm surge of up to 22 feet and as much as 15 inches of rain.

 

On Thursday, oil tanker traffic to the Port of Houston via the Houston Ship Channel was halted. The channel, which connects the port with the Gulf of Mexico, normally has traffic of about 700 ships daily.

 

 

 

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