Moving Oil by Rail and the Jones Act

I see stories like this one and I’m kind of curious:

This article highlights Philadelphia Energy Solutions, saying they are investing in rail capacity to move domestic crude. Is it actually possible that rail could be cheaper than sending oil by ship, even given Jones act requirements? It seems more likely to me, that rail is being used for landlocked oil transportation, when pipelines aren’t available. The article sounds one sided, but I don’t know the specifics. Any hints?



[QUOTE=rbc;142710] Any hints?[/QUOTE]

Where do you think the “savings” from shipping that oil on FoC ships goes? Whose pocket does it line?

Does Walmart charge more for goods carried from China on a US flag ship?

[QUOTE=Steamer;142714]Where do you think the “savings” from shipping that oil on FoC ships goes? Whose pocket does it line?

Does Walmart charge more for goods carried from China on a US flag ship?[/QUOTE]

Oh, I think I understand the FoC issue and how some companies try to push back on the Jones act to change the labor market. I was just curious to see rail being raised as alternative to ocean shipping. It seems like a nonsense argument to me and, doesn’t really support the anti-jones slant in the article very well. It kind of undermines its credibility. Don’t get me wrong, I’m for the US having it’s own ships. Otherwise we’ll get caught short again, like in WW1 when the US created the United States Shipping Board.

There is just no way railroads can compete with shipping. Railroads are much more energy intensive to run; a train can move a ton about 420 miles on a gallon of fuel while water craft can move a ton over a 1000 miles on a gallon of fuel. Also, railroads own the tracks they run on which requires additional maintenance equipment and personnel and railroads must pay real estate tax on every jurisdiction they run through. While shipping has to pay for port handling, these fees are just in no way more expensive than the costs of running a railroad.

I think you are right that more oil is getting shipped by rail as of late due to landlocked oil transportation, most likely from the Bakken formation. Since the Keystone Pipeline has become a political issue, the desire for added rail capacity on the outskirts of Philly is most likely a way to mitigate mid-continent-to-shore transportation constraints.

Maybe since Philadelphia area refineries are already well connected to the gulf coast by pipelines there is no need to ship gulf crude by sea to the Northeast? Just an idea.

Below is a link to the pipelines in the U.S. which kind of shows how the Bakken formation is not connected to our country’s pipelines while New Orleans (gulf products) have excellent transportation links.

This is exactly the kind of discussion I would normally be thrilled to get involved in but it’s just been had so many times on here, and the result is always the same. Mariners know how important the Jones Act is, big corporations don’t appreciate it’s added costs, the only people a cost reduction would benefit are the CEO’s, the politicians are owned by the CEO’s, the CEO’s and politicians drive public opinion to sway against the Jones Act even though it’s exactly that American Public that the Jones Act is designed to protect. End of story. I wish there was more that could be done to enlighten the American Public to push back against these nonsensical politicians and business interests but the American Public barely even knows anything about ships, never mind the myriad laws that govern them… There’s nothing we can do. Losing battle. All we can do is hope and pray for the few politicians left in Washington who still have some appreciation for how important what we do is, and how important it is that it is Americans, not the damn Chinese or whoever else, that are doing it.

[QUOTE=PaddyWest2012;142732] All we can do is hope and pray for the few politicians left in Washington who still have some appreciation for how important what we do is, and how important it is that it is Americans…[/QUOTE]

I have pretty much given up all hope that there are any politicians left who have any appreciation of anything other than being re-elected so they can wallow in the perks of power and privilege. I don’t believe for one moment that a politician who is willing to even so much as speak out loud about the corruption of our government by “special interests” with very deep pockets could ever be elected. When a campaign can cost thousands of times a politicians’ salary and that money is provided by corporations and people who are not even permitted to vote for him or her then it should be obvious just who is being represented.

We are in a race to the bottom, a race where the finish line will be the United States as a banana republic owned by a handful of multi-billionaires who wield life and death power over a population too frightened to speak out and grateful for work of any kind.

I used to wonder why those who are leading us into this abyss never considered where would they sell their products once the populace was too poor to buy them. Then came China. Our politicians are financing the care and feeding of our economic executioners. The Chinese, or whoever replaces them as the economic powerhouse, will become rich selling trinkets to Americans and those trinkets won’t be carried here by American ships or sailors.

When our own government will not ship American goods and military cargoes on American ships it signifies a degree of rot and corruption that runs so deeply that it may be too late to reverse what history has always shown happens when leadership fails.

I agree with every word you said Steamer. Maybe am I just too young and naive. Maybe I am just too ambitious. Maybe I am just much too stubborn. Call me crazy. Call me a foul mouthed piece of shit; I don’t care. I see the power of the internet. I see how it brought down Egypt and a bunch of other countries. I see how this thing can unite us. Maybe the U.S. and the EU can unite in a way that demands standards, makes FoCs irrelevant, and champions the maritime trade. After all, we are the world’s buying power. Without the US and EU; China, Mexico, and every other dog pile piece of garbage country wouldn’t be worth a god damned thing. It’s a pipe dream for sure. I just haven’t given up fighting.

[QUOTE=TrainMan;142804] I see the power of the internet. [/QUOTE]

So do those whose power and fortunes are threatened by it. Have you ever wondered why the internet is so tightly controlled in China and other authoritarian regimes? So they can stop ordinary like us people from exchanging ideas that are considered dangerous to the status quo.

Look up Russian blogger laws. The Russians saw first hand the power of the internet and have been working, just as ours has, to control it as much as possible. The NSA isn’t bugging you because they are concerned some ISIS or Al Queada terrorist is going to call you to ask for donations. The concept of “net neutrality” isn’t just about who delivers your video stream, it’s about preventing the government from being able to make one phone call and isolating you from the rest of the world … just in case.

The military isn’t pouring billions into urban warfare training because they are worried about having to fight Arabs in Philadelphia, they are scared shitless of unemployed angry disenfranchised Americans doing what Soviet slaves did in Eastern Europe in the revolutions of 1989. That scares the crap out of the same people who got rich by selling American industry down the toilet and are fighting tooth and nail to eliminate the last vestiges of legislation that was intended to protect American workers and industry.

Look at our own history, we do not and never have supported democracy in any nation. We support the industrialists who supply us with oil and raw materials. We don’t need raw materials anymore because sold most of the industries to convert them to goods. We don’t produce wealth by creating value anymore. We offload containers full of trinkets from FoC ships instead. Which war have we fought since 1945 to allow the population of any nation to decide for itself how they will be governed? Name one? The only democracy in the Middle East after WW2 was Iran and we overturned that one because democracy there was a threat to the profits of American and British oil executives. Have you heard an American politician stand up in Congress and protest the Saudi slave trade?

My position isn’t part of some whackjob conspiracy thing or membership or support of some equally whackjob political group, it is purely a reading of history and an observation of what is being done to us today. Gutting the Jones Act is just chipping away at another stone in the foundation that has supported this country and its people for so long.


And about that power of the Internet, study up on net neutrality and kill switches.


If our government wanted to assure the American people have a voice it would never allow, much less promote, any law or policy that reduced our privacy or could ever reduce our ability to express our views and observations.

If the rights and freedoms of the people were important to the elected elite they would pass laws to ensure that no one, no corporation, no political entity could ever restrict our freedom of movement or communications and protect the privacy of those movements and communications. Exactly the opposite has been forced on us for the past few decades under the fiction of “security.”

The internet kill switch is not really that surprising to me. As far as I understand it, the internet rides mostly on AT&T equipment over a distributed mesh in the United State with international connections at a few overseas cable landing points. Since AT&T is pretty much in bed with the U.S., all that needs to be done is shut down a handful of nodes and the internet is offline. There really isn’t much to it.

As far as the conspiracy in the U.S., I get what you are saying. I think the U.S. had a lot to do with setting up autocratic regimes in the Middle East for the oil that’s there. I read extensively about the U.S. involvement in the Allende/Pinochet situation. Che: yeah he was gunned down by us too. But so what. Once upon a time Pittsburghers had to drive with their headlights on at noon on an otherwise sunny day. People started to complain because it wasn’t just Pittsburgh that had a problem with dirty air, many parts of our nation were filthy and even toxic. Nowadays we have mountains of EPA paperwork and regs to navigate. While it’s a major pain to deal with at times, I think it’s better because it makes our home, our country more livable. And while we can argue how /why/ what has happened with the environmental movement, the point I am trying to make is that it started with grass roots people just bitching about the mess. Our cars are safer, there’s OSHA, STCW, UL… Children’s toys back in the 1800s at times caused death to children. Children used to deal with death and dismemberment in factories. Every hear of phossy jaw? It’s really nasty. All that is gone thanks to the masses clamoring for reform.

Grass roots movements can and do acquire traction.

The Merchant Marine Act of 1920 (P.L. 66-261), also known as the Jones Act, is a United States federal statute that provides for the promotion and maintenance of the American merchant marine.Among other purposes, the law regulates maritime commerce in U.S. waters and between U.S. ports. Section 27 of the Jones Act, deals with cabotage (i.e., coastal shipping) and requires that all goods transported by water between U.S. ports be carried on U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens and U.S. permanent residents.The Act was introduced by Senator Wesley Jones.

Laws similar to the Jones Act date to the early days of the nation. In the First Congress, on September 1, 1789, Congress enacted Chapter XI, “An Act for Registering and Clearing Vessels, Regulating the Coasting Trade, and for other purposes,” which limited domestic trades to American ships meeting certain requirements.

The Merchant Marine Act of 1920 has been revised a number of times, the most recent revision in 2006 included recodification in the U.S. Code.