METHODOLOGY FOR DETERMINING DIFFERENTIAL TANKER RATES FOR SPR (STRATEGIC PETROLEUM RESERVE) OIL MOVEMENT IN AND ENERGY EMERGENCY: FINAL REPORT

Jones Act ships must be used to move crude and petroleum products between US ports. However, if no suitable Jones Act tankers or barges are available, shippers may apply, on a case-by-case basis, for a waiver to use substantially cheaper foreign capacity instead. Case-by-case determination of these waivers creates a potential problem for an emergency drawdown of the Strategic Petroleum Reserve (SPR): potential buyers of crude would have to submit bids while facing considerable uncertainty about their ultimate costs of transporting the SPR oil. This report examines an alternative to the case-by-case waiver process, which we call a "composite waiver procedure." The composite waiver procedure has two elements: a general waiver of the Jones Act requirement for moving SPR crude; and a rebate, equal to the price differential between foreign ships and Jones Act ships, to be paid to any buyer of SPR crude who uses US bottoms for transport. The composite waiver is designed to reduce the uncertainty surrounding transportation costs in the crude bidding process, and to keep Jones Act tankers prcie competitive so these vessels are not eliminated from use during an SPR emergency drawdown.

• Corporate Authors:

  Charles River Associates, Incorporated

  200 Clarendon Street, John Hancock Tower
  Boston, MA  United States  02116
• Publication Date: 1988-9

Media Info

• Pagination: 60 p.

Subject/Index Terms

• TRT Terms: Foreign automobiles; Oil tankers
• Uncontrolled Terms: Restrictions
• Old TRIS Terms: Foreign vehicles; Waiving
• Subject Areas: Administration and Management; Highways; Law; Marine Transportation;

Filing Info

• Accession Number: 00487937
• Record Type: Publication
• Source Agency: National Technical Information Service
• Report/Paper Numbers: DOE/IE/10481-T1, CRA-200.11
• Files: TRIS
• Created Date: Sep 30 1989 12:00AM