New England’s high heating costs exacerbated by federal government

Heating bills are rising across the country amid already high electricity prices, with the North East set to take the brunt of the brunt this winter.

The region is particularly vulnerable due to the lack of diesel and its high reliance on domestic heating oil. It also lacks pipeline routes to other parts of the US and therefore has to rely on liquefied natural gas and other oil imports.

But New England leaders, energy companies and experts say the 100-year-old law is causing problems, and are urging the Biden administration to raise it to ease price pressures on consumers.

A woman shoveling ice in New England

A woman shovels ice during a storm in Concord, New Hampshire, on February 4, 2022. (JOSEPH PREZIOSO/AFP via Getty Images/Getty Images)

Months ago, New England governors said that the Department of Energy should consider suspending the Jones Act, also known as the Merchant Marine Act of 1920, which requires that goods shipped between US ports be carried on ships built and operated by Americans.

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Because of federal law, the Northeast, which lacks energy, buys oil from abroad because it is cheaper to do so than to buy from energy-rich areas like the Gulf of Mexico. Since Russia’s invasion of Ukraine caused electricity prices to rise in Europe, New England states are now competing with Europe for scarce services in the global market.

According to Scott Lincicome, director of economics at the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies, “This is causing serious problems right now.”

A woman is looking out the window in preparation for winter

A farming family on the edge of the White Mountain National Forest begins preparing for the coming winter, October 5, 2022, in rural Chatham, New Hampshire. (Andrew Lichtenstein/Corbis via Getty Images/Getty Images)

Lincicome told FOX Business that American-made ships cost four to five times more to build than their international counterparts, and there are “zero” natural gas tankers that agree with Jones because they are much cheaper. to build such luxury ships at home.

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The federal government has authorized the Jones Act in the past during emergencies. Former President Trump rescinded the Jones Act in Puerto Rico in 2017 to lift restrictions on aid ships to the island after severe damage from Hurricane Maria.

Homeland Security Secretary Alejandro Mayorkas gave permission for the ship to deliver diesel to the island in September following Hurricane Fiona after the ship floated ashore unable to dock due to a 100-year-old law.

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Warnings have already been issued that the northeastern US could face severe weather conditions.

The general manager of Groton Electric Light in Massachusetts sounded the alarm to customers at the beginning of this month that the electric grid has been damaged for many years and if New England experiences “longer cold weather, there is a big chance of blackouts” because “this year. It is very bad. “

He urged customers to fill up their heating oil tanks with propane as soon as possible, make sure backup generators are running, and that anyone with wood or stoves should stock up.

Men are chopping firewood in preparation for winter

Lumberjack Robert Marble, left, distributes ashes with Roger Richmond, his assistant, November 19, 2022, in Charlotte, Vermont. Due to rising heating oil prices, many homes are heating with wood this winter. (Robert Nickelsberg/Getty Images/Getty Images)

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“The governor is there and the power companies up there have all been clamoring for the Jones Act to be repealed because things are tight and there’s no relief around,” Lincicome said. “So everyone is praying for winter, which is a very dangerous way to get energy.”

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As concerns grow in the Northeast as the cold snap sets in for months and energy markets remain volatile, calls are growing for the Biden administration to consider immediate withdrawal. But President Biden is a strong supporter of the law and the coalition that supports it, making the administration suspicious unless forced to do so.

“They’re probably not going to give any emergency access,” Lincicome said of the Biden administration. “Unless there’s a real problem, by which time, it’s probably too late.”

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