Republicans Coax Trump to Scrap U.S. Ship Waiver Plan

(Bloomberg) -- President Donald Trump pledged he wouldn't waive requirements that American vessels be used to transport natural gas among U.S. ports, Republicans defending the mandates said after a White House meeting on the issue Wednesday.

The lawmakers from Alaska and the shipbuilding Gulf Coast states of Mississippi and Louisiana said Trump ruled out relaxing mandates under the Jones Act in order to facilitate shipments of liquefied natural gas to Massachusetts and Puerto Rico.

“He's not going to make any changes to the Jones Act,” said Senator John Kennedy, a Republican from Louisiana. “The president's not one to beat around the bush. He was pretty categorical.”

The pledge marks a rapid reversal in White House thinking -- and a victory for U.S. shipbuilding interests and their allies on Capitol Hill. The president was said to be leaning in favor of some kind of waiver after an Oval Office meeting on the issue last week.

“The president gave his word,” said Senator Bill Cassidy, a Republican from Louisiana. “Every senator who walked out of that room felt confident” he would “oppose any changes to the Jones Act and any waivers of the Jones Act,” Cassidy said.

In addition to Kennedy and Cassidy, the lawmakers pressing Trump in Wednesday's meeting included Alaska Republican Senators Lisa Murkowski and Dan Sullivan; Mississippi Republican Senators Roger Wicker and Cindy Hyde-Smith; and the No. 2 Republican in the House, Representative Steve Scalise of Louisiana.

They were leaning in to political arguments, with Kennedy saying it “would be foolish” for Trump to waive requirements in the nearly 100-year-old Jones Act, which requires that goods being transported via water between U.S. ports be on ships constructed in the country and crewed by American workers.

“It's bad policy and it would be bad politics,” Kennedy said in an interview ahead of the meeting. “And in a lot of states it would mean his electoral prospects were as dead as fried chicken.”

Read More: Trump Said to Consider Waiving U.S. Ship Mandate for Natural Gas

Waiver supporters have promoted the exemptions as essential to lower the cost of energy in Puerto Rico and ease the flow of American natural gas to the U.S. Northeast, where there aren't enough pipelines to deliver the product from Pennsylvania.

Billionaire oilman Harold Hamm, the chairman of Continental Resources Inc., and a former Trump energy adviser, complained at a Houston conference earlier this year that without Jones Act-compliant tankers to transport liquefied natural gas, the U.S. has been forced to buy LNG from Russia. The U.S. Domestic Energy Producers Alliance, which Hamm co-founded, favors being able to ship U.S. LNG to U.S. ports, though it has not waded into debates involving Puerto Rico, company spokeswoman Kristin Thomas said April 23.

However, opponents argue the Jones Act provides critical support to the U.S. shipbuilding industry, promoting domestic vessel manufacturing capabilities that are essential to national security and the country's maritime might.

Jones Act supporters argued the move would be out of step with Trump's protectionist policies.

“I don't think the president -- when he is fully briefed -- will want to” waive the Jones Act, Wicker told reporters before the meeting. “If there wasn't already a Jones Act, Donald Trump would be inventing the Jones Act.”

The Trump administration previously considered going the other way. Customs and Border Protection considered revoking rulings allowing foreign vessels to transport some equipment to offshore oil rigs in 2017, under a proposal first launched by the Obama administration. The agency ultimately withdrew the formal proposal after the oil industry warned it could cripple production in the Gulf of Mexico, but some Trump administration officials have urged reviving it.

--With assistance from Jennifer Jacobs and Laura Litvan.

To contact the reporters on this story: Jennifer A. Dlouhy in Washington at jdlouhy1@bloomberg.net;Ari Natter in Washington at anatter5@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Elizabeth Wasserman, Laurie Asséo

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