June 17, 2022 4:50PM # Jones Act Waiver Could Save Drivers Billions at the Pump By [Colin Grabow](https://www.cato.org/people/colin-grabow) --- SHARE Faced with soaring gasoline prices President Biden sent a [letter](https://www.scribd.com/document/578463720/Phillips-66-Letter#from_embed) to energy firm executives this week requesting “concrete ideas that would address the immediate inventory, price, and refining capacity issues in the coming months—*including transportation measures* \[emphasis added\] to get refined product to market.” ExxonMobil swiftly [responded ](https://corporate.exxonmobil.com/News/Newsroom/News-releases/2022/0615_ExxonMobil-statement-regarding-President-Biden-Letter-to-Oil-Industry)that the administration could take two actions in the short term to boost energy supplies: adjustments of fuel specifications and waivers of the [Jones Act](https://www.cato.org/project-jones-act-reform), which restricts domestic shipping of fuels and other products to American-made/owned/crewed ships and—as Cato scholars frequently note—increases gas prices. Just how much of an increase is the subject of some debate, but a new J.P. Morgan [calculation](https://financialpost.com/pmn/business-pmn/east-coast-gas-would-only-drop-a-dime-if-jones-act-lifted-says-jpmorgan) shows it would be significant. In particular, the firm’s analysts find that suspending the Jones Act to allow the domestic shipment of petroleum on [less expensive](https://www.ft.com/content/b1ea86dc-ade6-11e7-aab9-abaa44b1e130) foreign ships could save drivers on the East Coast 10 cents per gallon. While some apparently think this is a meager sum, they ignore two big things: - As my colleague Scott Lincicome [noted](https://www.cato.org/commentary/why-you-should-almost-never-wait-line) recently (and as the current TV news incessantly reminds us), Americans care a lot—a *lot —*about gas prices and are willing to drive miles out of their way to save a few cents at the pump. We also tend to obsess over small movements in gas prices, especially when they cross salient (though admittedly arbitrary) thresholds like, say, $5 per gallon. Thus, as purely an emotional (and political) matter, saving “[only](https://www.bloomberg.com/news/articles/2022-06-17/jones-act-lift-would-save-eastern-drivers-a-dime-jpmorgan-says)” 10 cents per gallon would surely affect millions of inflation-weary U.S. drivers. - Second, these savings quickly add up—especially when one considers just how much gasoline the East Coast consumes. According to the Energy Information Administration, consumption of gas last year in [PADD 1](https://www.eia.gov/todayinenergy/detail.php?id=4890)—essentially the East Coast—was roughly [117 million](https://www.eia.gov/dnav/pet/PET_SUM_MKT_DCU_R10_M.htm) gallons per day, or nearly 43 billion gallons per year (total U.S. consumption in 2021 was almost [135 billion](https://www.eia.gov/tools/faqs/faq.php?id=23&t=10) gallons). Thus, reducing the price of each gallon of gas by 10 cents would save American drivers over **$4 billion dollars per year**. That sum represents not only a little weekly relief for individual families and workers during a painful inflationary period, but also collectively *big* savings for the U.S. economy—savings that would be redirected toward other, more productive endeavors (such as spending at other American businesses that are struggling in today’s uncertain economy). Washington power‐​brokers thus have a powerful tool to provide real relief at the pump—relief that’s also costless for everyone *except* the special interests that are currently enriched by Jones Act protectionism. We’re about to find out what scares politicians more: shipping lobbyists or irate drivers. ##### Related Tags [Affordability](https://www.cato.org/affordability), [Trade Policy](https://www.cato.org/trade-policy), [Project on Jones Act Reform](https://www.cato.org/project-jones-act-reform) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).