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Comment by kilotaras | Hacker News Reader

"overseas oil, even after shipping costs, is often cheaper than domestically-produced crude + domestic shipping cost" (emphasis mine).

One reason that domestic shipping cost is so high is that 1920 Jones Act[0] prohibits shipping between US ports with non-US ships. This drastically reduces competition and increases prices. Hawaii are particularly hit by this, with estimate $1800 per year per family in extra cost [1].

[0] https://en.wikipedia.org/wiki/Jones_Act_(sailor_rights) [1] https://www.wsj.com/articles/jonesing-to-give-up-russian-oil...

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>> One of the primary impetuses for the law was the situation that occurred during World War I when the belligerent countries withdrew their merchant fleets from commercial service to aid in the war effort. This left the US with insufficient vessels to conduct normal trade impacting the economy. Later when the U.S. joined the war there were insufficient vessels to transport war supplies, materials, and ultimately soldiers to Europe resulting in the creation of the United States Shipping Board. The U.S. engaged in a massive ship building effort including building concrete ships to make up for the lack of U.S. tonnage. The Jones Act was passed in order to prevent the U.S. from having insufficient maritime capacity in future wars. [1]

1. https://en.wikipedia.org/wiki/Merchant_Marine_Act_of_1920#Na...

I’ve never understood the Jones act argument. If there was really an opportunity here, SOMEONE would have a US-flagged ship running oil up and down the coastline, but existing pipelines and trucking and foreign exports are easier. Can’t speak to Hawaii, maybe that it has 100% import and no natural gas?

> SOMEONE would have a US-flagged ship running oil up and down the coastline

A US flagged ship means following US regulations, too. Can't pay slave wages, can't have an awful safety record, etc. Increases the cost of shipping.

It also has to be US built and US staffed, which brings up the cost a lot.

This is such a fascinating look at how commerce doesn’t just mean “economic commerce.”

We experienced this with supply shocks with COVID as well.

It’s interesting to balance “have the ability to meet our needs logistically” with “don’t create price cartels that cause inefficiency in the market.”

Seems we’d have a vested national security interest in both securing commerce and enabling price competitiveness.

That could be fixed by a tariff on underpriced foreign oil.

Or indeed on goods shipped under flags that do not uphold decent labour standards.

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