HR3167-119

What This Bill Does

The Noncontiguous Energy Relief and Access Act creates an energy-products exemption from the coastwise merchandise rule. It defines covered noncontiguous trade as trade between the contiguous 48 states and Alaska, Hawaii, Guam, or Puerto Rico, and trade among those noncontiguous places. Energy products include equipment, equipment components, or energy sources needed for electricity generation, storage, transmission, and distribution. Energy sources include liquefied natural gas, other electricity-generation sources, and petroleum products, while equipment includes power generators, storage units, wind turbines, solar panels, hydroelectric plants, and other electricity-system components. The bill then says the coastwise restriction in subsection 55102(b) does not apply to transportation of energy products in covered noncontiguous trade on a vessel. In practical terms, energy cargoes for noncontiguous states and territories could move on vessels not otherwise satisfying the Jones Act coastwise merchandise rule.

Who Benefits and How

Electric utilities in Alaska, Hawaii, Guam, and Puerto Rico benefit from more vessel options for fuel and grid equipment. Electricity consumers in noncontiguous communities may benefit if shipping constraints and energy costs fall. LNG suppliers and petroleum product shippers benefit from expanded vessel flexibility into noncontiguous markets. Renewable energy equipment importers benefit because wind turbines, solar panels, storage units, and hydroelectric components are covered energy products.

Who Bears the Burden and How

U.S.-flag coastwise vessel operators face reduced exclusive cargo protection for covered energy products. Jones Act maritime workers may face competitive pressure if energy cargoes shift to non-Jones-Act vessels. CBP maritime enforcement staff must distinguish covered noncontiguous energy cargoes from ordinary merchandise. Domestic shipbuilding advocates bear policy losses from a new carveout to coastwise shipping rules.

Key Provisions

• Provides definitions for covered noncontiguous trade involving Alaska, Hawaii, Guam, Puerto Rico, and the contiguous 48 states.
• Provides an energy-products definition covering electricity-generation, storage, transmission, and distribution equipment and energy sources.
• Provides coverage for LNG, petroleum products, power generators, storage units, wind turbines, solar panels, and hydroelectric plants.
• Provides an exemption for transportation of covered energy products in noncontiguous trade from the coastwise merchandise restriction.