Valero and Second Firm Obtain Jones Act Waivers

(Bloomberg) -- The Biden administration has issued a second waiver of U.S. shipping requirements as it seeks to get more fuel to the East Coast in the wake of the Colonial Pipeline shutdown that caused tanks and filling stations to run dry.

The waiver, announced late Thursday night, gives an unnamed company a limited exemption from the 101-year-old Jones Act, which requires that goods transported between American ports be carried on domestically built and crewed ships. The Homeland Security Department did not provide any details about the recipient of the new waiver or how long it would be valid.

“This decision was made after careful consideration and consultation with interagency partners across the federal government as part of the whole-of-government response President Biden directed to address the impacts of the Colonial Pipeline shutdown,” the agency said in a statement.

A previous waiver was provided to Valero Energy Corp., according to two people familiar with the matter.

President Joe Biden said earlier Thursday he was moving “to use every possible means to accelerate fuel deliveries,” and that could include more exemptions. “We’ll grant additional waivers if necessary,” he said during midday remarks at the White House.

The waivers are designed to address fuel shortages spurred by the cyberattack on Colonial Pipeline Co., which shut down a major artery for gasoline, diesel and jet fuel along the U.S. East Coast. Even with shipments having resumed Wednesday evening, it could take time for the network to return to normal.

Waiving the Jones Act allows foreign-flagged tankers to fill the supply gap. A typical tanker could carry about 300,000 barrels (12.6 million gallons) of fuel from the Gulf Coast to New York Harbor in about six to seven days.

Valero didn’t comment on its waiver, but the refiner released a statement saying it’s “working with the government to help supply fuel for those areas impacted by the pipeline outage.”

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