Texas Oil Regulator Says Customs And Border Protection Proposal Would Harm Industry

Could Homeland Security slow down the oil industry?

A Texas oil and gas regulator thinks so. He says a proposal from Customs and Border Protection (CBP) could get in the way of offshore drilling.

CBP wants to rethink how it interprets part of a law called the “Jones Act.” It basically requires ships conducting business along the coast to be American ships, meaning American-made.

For decades, the government has allowed certain ships to be exempt from the law, but a proposal from CBP issued in the last few days of the Obama Administration would crack down on the leniency. More ships in the gulf would have to be U.S. ships.

Texas Railroad Commissioner Ryan Sitton says that would be a big cost for oil companies that use cheaper foreign ships, a cost they couldn’t immediately absorb.

“So you’re gonna cut off some of the markets because they can’t afford to transport the product,” he says, adding that there just aren’t enough American ships in the gulf to keep the oil business humming.

“And even if you went and ordered them all today, we’re talking years to get them all built and manufactured.”

Sitton wants the proposal withdrawn, as does the energy industry. But ship builders love it. They describe it as an America-first policy that would support American jobs.

Which puts the Trump Administration in a tricky spot. They have until mid-May to decide whether to prioritize energy development or American manufacturing, big Trump talking points that are seemingly at odds in this situation.

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