Puerto Rico, getting building permits now take only 20 days on average instead of 98 days

Puerto Rico, getting building permits now take only 20 days on average instead of 98 days.  While it’s definitely a big step in the right direction, 20 days is still too long.

Puerto Rico gov’t: Doing business on the island ‘now easier than ever’

Puerto Rico gov’t: Doing business on the island ‘now easier than ever’

By on May 8, 2019

Claims building permits are processed 5 times quicker

SAN JUAN – The Puerto Rico Federal Affairs Administration says that as a result of Gov. Ricardo Rosselló’s permitting reform, enacted April 4, it is now “easier than ever” to do business on the island.

The law consolidates the process to obtain a permit, fire prevention and environmental health certifications, licenses and authorizations into one permit package. Small and midsize businesses “will be able to obtain the Single Permit automatically,” the administration says.

The law also created the Unified Information System, integrating business requirements in the same website, allowing users to apply for both state and municipal permits and licenses.

When the law was enacted last month, a release issued by the administration said that in 2017 the World Bank’s Doing Business Report ranked Puerto Rico 131 out of 190 countries for the difficulty in obtaining a building permit because it “used to take on average 165 days and involved 20 separate processes.” The administration said Tuesday that permit requests are being processed and delivered “much quicker than before” the reforms were enacted.

“Puerto Rico is now, more than ever, an attractive destination to do business. Before we streamlined the permitting process, getting a building permit used to take on average 98 days. This figure now stands at just 20 days as of 2019,” Public Affairs Secretary Anthony Maceira said in a statement Tuesday.

“Puerto Rico is now open for business, and our permitting reform is an important pillar as we rebuild our island after Hurricanes Irma and María. My administration will continue to cut red tape as part of our efforts to turn Puerto Rico into an attractive destination in which to do business,” Rosselló is quoted as saying in the release.

“We are committed to continuing to enact groundbreaking legislation so that Puerto Rico can be a modern jurisdiction in which world-class businesses can…not [only] establish themselves but thrive,” the governor added.

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DMV/DTOP in Puerto Rico shouldn’t take a full day to complete a task!

When you go, you first stand in the Information line to give a paper ticket with your number on it.  Then you watch a screen and/or listen for your number to be called.  One big inadequacy is that there is no estimated time for when your number will be called.  Sometimes you will end up waiting ALL DAY.  If an estimate was given, then you could go to lunch, shopping, or complete other tasks.   The waiting times and the process and procedures are intolerable.

What has been your experience when going to the PR DMV?

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Jamie Dimon, CEO of Chase Bank, speaks the truth about the shared misery of socialism

https://www.wsj.com/articles/jamie-dimons-timely-warning-11555873352

Jamie Dimon’s Timely Warning

A CEO finally speaks up to tell the truth about the shared misery of socialism.

 

Socialism is now woker than a two-for-one Che Guevara T-shirt sale, with Bernie Sanders leading the Democrats’ presidential primary polls and Alexandria Ocasio-Cortez dominating the party’s imagination.

In a rare calling-out of this bogosity, JPMorgan CEO Jamie Dimon warned shareholders this month that “socialism inevitably produces stagnation, corruption and often worse.” He was echoing Winston Churchill’s observation that socialism allows for “the equal sharing of misery.” Why is it only capable of generating misery?

Because under socialism, politics rather than productivity drives employment. Technological innovation is suppressed. Long ago, an Israeli explained to me that under socialism—Israel’s economic system until 1985—you would always hire two workers to do the job of one.

PR NEWCOMER:  Sounds like the Socialist policies of excessive government workers in PR.

Of course, there is a spectrum of socialism. The textbook definition is government ownership of the means of production, as in the communist-run Soviet Union or Cuba, or the state-owned factories of China today. But socialism can also mean “owning” an industry by burying it in regulation (see education, Medicare, the overregulated auto industries and so on).

Socialists are modern-day Luddites, destroyers of technology to preserve jobs. Article 4 of the current postal-workers’ union (sweetheart) contract states that “any new job or jobs created by technological or mechanization changes shall be offered to present employees capable of being trained to perform the new or changed job.” It’s one reason, even with automation, we still have 500,000 postal workers when the right number is zero. Similarly, Detroit was slow to use robots. It’s only recently that United Auto Workers union contracts did away with job guarantees.

Workers at the Port of Oakland went on strike to protest the use of RFID tags on shipping containers because it would kill lucrative clipboard-toting jobs. Productivity be damned.

And that phantasmagoria, the Green New Deal? It’s a productivity pallbearer, with its federal job guarantees and a new mechanism to support those “unwilling to work.” Where do I sign up for that?

The grand hypocrisy is that these same lazy-thinking Luddites use cutting-edge technology to propagate their myths. We have Bronx bartenders streaming on Instagram asking “Is it OK to still have children?” and a “Hear the Bern” Facebook page claiming you’ll have “freedom of choice” under Medicare for All.

An economic system is about raising the standard of living of its participants. The best way to do that is to lower costs of goods and services so that profits and capital are freed up to be reinvested in future life-enhancing products. Those who succeed in improving our lives deservedly get rich, but then earn the socialist’s scorn that “every billionaire is a policy failure.” C’mon. Technology is our best cost-chopper, but those gung-ho for government gunk the gears of progress.

Productivity drives profits, which drive prosperity, even though to nuevo-millennial socialists “profit” is a bad word. Rising stock prices—the sum of expected future profits—enable companies like Apple to spend more than $10 billion a year on research and development. They enable GlaxoSmithKline and others to fund research on potential cancer vaccines. Sagging stocks resize companies.

Socialism is about maximizing power, not maximizing profits. Government doesn’t make profits, has no incentive to show profits, wouldn’t know a profit if it hit it in the head. Inside government there are no markets or price mechanisms to act as a divining rod finding hidden productivity. Socialism handcuffs Adam Smith’s invisible hand.

Productivity is wealth. Sure, technology and markets might destroy two jobs, but they turn around and create three safer, higher-paying and more fulfilling jobs. To spend beyond a basic level for goods or services because of socialism’s political “make work” imperative destroys wealth.

How dumb. Socialists like Bernie Sanders love to spend money on “free” education and Medicare for All but have no policies to make money in the first place. Their socialist construct of technology-ignoring, job-guaranteeing claptrap seems like the only way not to fund all those freebies.

Technological progress is the only way to raise living standards over the long run. If you hire two workers to do the job of one, you kill the very productivity needed to fund the promised worker’s paradise. Without productivity, societal wealth eventually disappears and socialism spirals into decay and the stagnation and corruption that Mr. Dimon warns us about. Socialism rots from within.

Posted in Puerto Rico > Venezuela > Socialism | Tagged , | Leave a comment

https://www.washingtonexaminer.com/policy/energy/trump-debates-waiving-jones-act-to-ship-natural-gas-to-new-england-and-puerto-rico

Trump debates waiving Jones Act to ship natural gas to New England and Puerto Rico

President Trump is considering granting waivers to bypass the Jones Act, a century-old law law regulating domestic maritime commerce, to ease the transport of natural gas to the Northeast and Puerto Rico.

Enacted in 1920, the Jones Act prohibits tankers from hauling goods and commodities, such as oil or natural gas, between U.S. ports unless the ships are American made, owned, and crewed. The Jones Act was designed to protect American maritime interests and shipbuilders, and the industry has repeatedly fended off attempts in Congress to repeal it, with coastal lawmakers stepping in to save it. Jones Act boosters warn waivers would harm American jobs.

But some oil and gas industry officials argue the law is hampering Trump’s “energy dominance agenda” by effectively prohibiting areas of the country that lack energy resources, and suffer from high prices, from receiving U.S.-produced natural gas.

“Jones Act waivers are a commonsense solution to meet the energy needs of Americans in Northeast and Puerto Rico,” said Dan Eberhart, CEO of the oil services firm Canary and a Trump donor. “There’s no good argument for not granting waivers, except for the protests of special interest, which often win out in swampy D.C.”

For Trump, who has not decided what to do, the debate over the Jones Act presents a conflict between his instinct to loosen restrictions on infrastructure and energy development and his promise to support American jobs and traditional U.S. industries.

The problem with the current situation is twofold, according to supporters of waivers for natural gas.

There is a shortage of pipelines from gas-rich Pennsylvania to the Northeast, partly because of opposition to fossil fuel infrastructure in New York. Puerto Rico cannot be reached by pipeline.

A workaround to this problem could be using ships along U.S. coasts to transport liquefied natural gas, or LNG — the chilled, liquid form to which gas must be converted for shipment across seas — to the Northeast and Puerto Rico.

But there are no Jones Act-compliant tankers that can transport liquefied natural gas, so U.S. companies must turn to importing higher-priced LNG from overseas.

In an extreme situation often cited by industry and the Trump administration, the New England area during a cold snap in January 2018 was forced to import natural gas from Russia at the Everett LNG terminal near Boston.

“The Jones Act is economic protectionism, pure and simple,” said Tom Pyle, president of the free-market American Energy Alliance and Trump’s former Energy Department transition team leader. “A waiver for LNG vessels would enable the citizens of New England to work around New York Gov. [Andrew] Cuomo’s pipeline embargo with domestic natural gas instead of shipments of Russian LNG.”

The Puerto Rican government has requested the Trump administration grant a 10-year waiver to allow foreign-flagged ships to deliver natural gas to the U.S. territory, in order to help combat high energy prices after Hurricane Maria destroyed the country’s electric grid.

Bipartisan leaders of the House Transportation and Infrastructure Committee have called on the Department of Homeland Security to deny Puerto Rico’s request, because waivers are intended to be given for national security reasons, not economic ones.

Billionaire oil executive Harold Hamm, the chairman of Continental Resources Inc. and a former Trump energy adviser, is among those pushing the White House to grant Jones Act waivers for the Northeast, according to industry sources.

Charlie Riedl, the executive director of the Center for Liquified Natural Gas, is also calling for a waiver.

“Both Puerto Rico and the Northeast need our LNG to help relieve demand for power and heat while they wait for pipelines and infrastructure to be built,” Riedl told the Washington Examiner. “It’s absurd to let this situation continue and punishes the Americans who need it the most.”

A waiver, supporters say, would enable the shipment of natural gas from Gulf Coast export facilities to Northeast receiving terminals, such as the Everett LNG terminal near Boston.

Carol Churchill, a spokeswoman for Exelon, the company that runs the Everett terminal, told the Washington Examiner that Exelon currently sources its LNG from Trinidad because of the Jones Act limitations. She did not say whether Exelon supports a Jones Act waiver, but, she added, “we are exploring all options for ensuring our facilities continue to provide New England energy consumers with reliable electric and natural gas service.”

Other oil and gas industry trade groups, meanwhile, are not explicitly endorsing the need for a Jones Act waiver.

Reid Porter, a spokesman for the American Petroleum Institute, said the Trump administration should focus first on streamlining approvals of new pipelines, which the president sought to do with a recent executive order intended to limit states’ power to block projects.

“While API supports the administration’s goal of providing clean, affordable and reliable natural gas to New England, the real issue is the lack of pipeline infrastructure to bring this abundant source of energy to all Americans,” Porter told the Washington Examiner.

Don Santa, the president and CEO of the Interstate Natural Gas Association of America, expressed a similar sentiment, saying that LNG delivered by tanker is only a “short-term solution.”

Darrell Conner, a registered lobbyist with the American Maritime Partnership, said U.S. shipping companies have not been incentivized to build and operate a Jones Act-compliant ship for LNG because the market has not demanded it.

“The market has not required the need for such a ship,” Conner said. “Shipping companies haven’t found interest in those tankers, whether for Puerto Rico, the Northeast, or anywhere.”

“The administration should put the commercial players in the room, have a conversation and if there is a real market to develop, the market will develop,” Conner added. “You don’t need government intervention to create that marketplace.”

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Properties damaged by María to be demolished, funded by FEMA with $400 million

https://www.elnuevodia.com/english/english/nota/propertiesdamagedbymariatobedemolished-2489883

Properties damaged by María to be demolished

FEMA will invest $400 million to demolish structures listed as a risk to public safety

Wednesday, April 24, 2019 – 11:07 AM

Una estructura destruida por el huracán María. (GFR Media) (semisquare-x3)
Una estructura destruida por el huracán María. (GFR Media)

Yesterday, Omar Marrero, director of the Central Recovery, Reconstruction and Resiliency Office (COR3), announced that following the approval of an office in Congress and the Federal Emergency Management Agency (FEMA), they will start demolishing 16,000 structures severely damaged by Hurricane María.

FEMA is expected to invest $400 million for the demolition of private damaged structures. The project will be developed by the Infrastructure Financing Administration (AFI, Spanish acronym), which in order to advance the process will invest $5.7 million in selecting a company to handle demolitions, debris removal, and the required environmental studies.

“AFI will lead this initiative to demolish properties that were damaged by Hurricane María and could represent a danger,” said Marrero.

According to Marrero, demolitions will help with reconstruction projects, since there will be more vacant lots for those projects.

Eduardo Rivera Cruz, AFI executive director, said that they have already identified 16,000 properties based on mayors´ recommendations. None of the officials mentioned what criteria were followed to select the structures, whose eligibility is still in the hands of FEMA.

The federal government will finance 90 percent of this project. Since it represents a $400 million investment, the initiative needs the approval of the Congressional Office of Legislative Affairs, Marrero said.

Marrero acknowledged that these demolitions should have done earlier, during the recovery process and not 18 months after the hurricane. He admitted that this initiative, like many other reconstruction efforts, has suffered delays.

“The process is not under our control. It is a FEMA Category B project. We are just starting,” Marrero added.

On the other hand, he indicated that FEMA agreed to extend until May 17 the deadline for houses of worship to request public assistance for hurricane-related damages.

Marrero said that, so far, 31 churches were eligible for reimbursement; five are under review and another 60 are under evaluation since the claims were submitted last week.

Changes in FEMA 

During the press conference, Marrero also announced changes in FEMA in Puerto Rico. Mike Byrne, who has been leading recovery efforts on the island since October 2017, will be replaced by Jonathan Hoyes, who works on public assistance projects at FEMA in Washington D.C.

Hoyes will be the third federal official to direct FEMA’s operations in Puerto Rico after Hurricane María.

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Puerto Rico Has Just Passed Its Own Green New Deal – for solar power

https://www.forbes.com/sites/jamesellsmoor/2019/03/25/puerto-rico-has-just-passed-its-own-green-new-deal/amp

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Puerto Rico Has Just Passed Its Own Green New Deal

 

 

Puerto Rico has passed a bill to radically transform the island’s economy with renewable energy as the central pillar. The territory’s legislature today approved Senate Bill 1121 (PS 1121), the Puerto Rico Energy Public Policy Act, which will set the island on a path to 100% renewable energy by 2050. The bill pushes the island to become a leader in clean energy technology that can better withstand future hurricanes and improve quality of life for Puerto Ricans

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Renewable energy has the potential to revolutionize the economy of Puerto Rico.

Renewable energy has the potential to revolutionize the economy of Puerto Rico.

Getty

Receiving widespread political support, PS 1121 passed with bi-partisan support with 21 votes to 4 in the Puerto Rican Senate. The bill now waits to be signed into law by Governor Ricardo Rosselló in the coming weeks, who has already expressed his strong support for 100% renewable energy as part of his post-Hurricane María recovery vision and plan. Currently standing at just 2% of all electricity generation, renewable energy offers a cheaper alternative in Puerto Rico that can improve resilience to future natural disasters.

The bill’s impact is wide-ranging. PS 1121 establishes a 100% renewable energy portfolio standard (RPS) by 2050, bans coal plants starting in 2028, provides for automatic interconnection to the grid of customer-sited solar energy systems below 25 kilowatts, and reduces the utility approval time to 90 days for commercial and industrial solar projects. It also creates a 5-year window of full compensation for consumers’ solar energy production and streamlined permitting for utility-scale projects.

The changes are intended to create a more resilient island built upon state of the art technology that transcends the diesel and coal-fired centralized generation electricity model, towards a clean, more decentralized energy system with local, renewable resources at its center. PS 1121 also aims to empower prosumers –  customers that both produce and consume energy – with stronger policies on net metering and interconnection of solar, storage and microgrid projects.

Additionally, the PS 1121 bill establishes that solar energy users will have access to net energy metering within one month of a system’s installation, clarifies that the existing net energy metering policy shall be in place for no less than five years, and that new solar consumers will be grandfathered and protected from future policy changes for the next 20 years. The bill also exempts solar electric storage equipment from sales taxes and grants the Puerto Rico Energy Bureau more fiscal autonomy and powers to perform performance-based metrics, among many other innovations.

Homes damaged by Hurricane Maria are seen in an aerial photograph taken over El Negro, Yabucoa, Puerto Rico. One year after Hurricane Maria slammed ashore in Puerto Rico, decimating the island’s power grid, ripping the roofs off houses and causing the deaths of almost 3,000 people.

Homes damaged by Hurricane Maria are seen in an aerial photograph taken over El Negro, Yabucoa, Puerto Rico. One year after Hurricane Maria slammed ashore in Puerto Rico, decimating the island’s power grid, ripping the roofs off houses and causing the deaths of almost 3,000 people.

© 2018 Bloomberg Finance LP

“This bill is a huge step in building a sustainable future for Puerto Rico”, said Senator Eduardo Bhatia, a leading proponent of PS 1121, “now we can move forward in developing an economy built on strong foundations that will provide more opportunities for future generations. By embracing renewable energy, our islands can reduce the reliance on fossil fuels, benefitting both the natural environment and our economy.”

Key Provisions of PS 1121:

  • 100% renewable energy by 2050 and 40% by 2025.
  • Banning coal plants starting in 2028.
  • 90-day interconnection for solar net-metered systems 25kW to 5MW.
  • Automatic interconnection & 30-day net-metering for solar under 25kW.
  • A requirement for utilities to purchase solar renewable energy credits (SRECs) for renewable portfolio standard (RPS) compliance.
  • Maintains “true net metering” for the next 5 years, with 20 year grandfathering for new clients.
  • Requires streamlined permitting of utility-scale ground-mounted solar projects for the next 5 years, with 20 year grandfathering for new clients.
  • Eliminates the ability of the utility to deny interconnection because of “full feeder”, or “right of way” issues.
  • Eliminates 5-year recertification requirement for net metered systems, with no need for people to go to the utility to get recertified every 5 years as is currently the case.
  • Systems installed under post-Maria Executive Order remain legally interconnected.
  • Bans all solar production taxes and clarifies that Sales & Use Tax Exemption applies to energy storage and leased systems.
  • Implements a 30% energy efficiency requirement.

Despite being one of the poorest parts of the United States, Puerto Rico is home to one of the highest costs for electricity in the country – islanders pay over double the rates paid by their relatives in Florida. This is largely due to the high cost of shipping in fossil fuels to run the highly polluting diesel generators. It also means the island has a highly centralized grid system that leaves it vulnerable to outages in storms. On average, households went 84 days without electricity after Hurricane María, but in the most isolated regions some waited almost a whole year to be reconnected. The bill aims to reduce prices and reduce the risk of such an outage happening again.

Renewable energy companies have greeted the news with enthusiasm. President of the Solar & Energy Storage Association of Puerto Rico (SESA-PR) P.J. Wilson said, “Policymakers have listened to the solar and storage industry leaders’ input. PS 1121 eliminates many of the barriers that have frustrated solar deployment for years and creates a strong vision for ramping up clean energy, but implementing the law will require strong continued industry collaboration before the utility’s regulator and other agencies.” SESA-PR is next month organizing the Solar Power Puerto Rico conference, which will be a rallying point for industry leaders to discuss next steps after PS 1121.

In July 2018, Julio Rosario installs a solar energy system at a home in Adjuntas, Puerto Rico. The nonprofit environmental group Casa Pueblo has installed solar systems at two hardware stores, one barber shop and several corner stores that activists hope will serve as a power oasis where people can charge their phones and store medications during a storm if needed.

In July 2018, Julio Rosario installs a solar energy system at a home in Adjuntas, Puerto Rico. The nonprofit environmental group Casa Pueblo has installed solar systems at two hardware stores, one barber shop and several corner stores that activists hope will serve as a power oasis where people can charge their phones and store medications during a storm if needed.

ASSOCIATED PRESS

Residential solar company Sunrun is a SESA-PR member that supported the bill. CEO Lynn Jurich said, “Today is a win for all Puerto Ricans. Leaders like Governor Rosselló have embraced clean energy technology like home solar and batteries ever since the deadly hurricanes in 2017 devastated the island and its entire electricity grid. This critical legislation will create local jobs, grow the economy, and enable even more Puerto Ricans to have access to clean, resilient, reliable energy for their homes.”

Puerto Rico now faces the challenge of implementing the ambitious goal to reach 100% renewable energy, the most pressing of which are changes for the island’s utility. The Puerto Rico Electric Power Authority (PREPA) had issued a draft proposal to break the grid into eight “mini-grids” powered with renewable energy and battery storage. The plans had largely ignored domestic solar and were rejected by regulators who called for a greater role of distributed generation. PREPA is $9 billion in debt and proposals to dismantle and privatize the utility have been a controversial debate on the island.

Puerto Rico is on the road to recovery with a new program that will provide a more stable and secure future for the island. Renewable energy is a pathway to both environmental and economic security that could avoid the worst of future hurricanes that are expected to become stronger and more frequent due to climate change. Puerto Rico’s own Green New Deal is providing a hopeful future for the island .

For more information on sustainable development follow James’ newsletter Island Innovation by clicking here. Be sure to follow @jellsmoor on Twitter and Facebook for updates.

Posted in Puerto Rico necessary improvements, utilities for getting established | Tagged , , , , , , , , , , | Leave a comment

New Reports Detail the Jones Act’s Cost to Puerto Rico

 

https://www.cato.org/blog/new-reports-detail-jones-acts-cost-puerto-rico

New Reports Detail the Jones Act’s Cost to Puerto Rico

Last year the American Maritime Partnership released a report claiming that the Jones Act, a protectionist law which requires domestic water transport to be performed by vessels that are U.S.-made, crewed, owned, and flagged, imposes no cost on consumers in Puerto Rico. Riddled with apples-to-oranges comparisons and an opaque methodology—the no cost assertion was in large part based on a cost comparison of a mere 13 items sold by Walmart at its stores in Jacksonville, Florida and San Juan, Puerto Rico—the report was deeply flawed.

Just how flawed became more apparent last week when several Puerto Rico-based business groups released two analyses examining the Jones Act’s economic impact on the territory.

The first analysis, prepared by Puerto Rico-based Advantage Business Consulting, focused on the food and beverages sector where it found a Jones Act cost of $367 million. The methodology used is transparent. After surveying food industry companies in the territory about their transportation costs, the report’s authors found Jones Act vessels to have shipping prices 2.5 greater than non-Jones Act shipping from foreign ports ($3,027 versus $1,206) after adjusting for container size and distance. Total maritime transportation costs, meanwhile, were found to be 12 percent of the value of imports. By multiplying 60 percent (the percentage differential between $3,027 and $1,206) by the 12 percent figure, the report’s authors were able to derive a de facto Jones Act tax of 7.2 percent (.60 * .12).

When this 7.2 percent tax was applied to the $4.154 billion estimated to be imported from the U.S. mainland in FY 2018 ($4.615 billion in food and beverages were imported while survey data indicates 90 percent of this originated from the U.S. mainland), the result was a cost of nearly $300 million. Again, this is just for food and beverages.

The report points out, however, that other factors no doubt push this $300 million figure still higher.  One such factor is the need to first transport the goods to a port for shipment to Puerto Rico. While as recently as 1996 there were ten mainland ports from which goods could be transported to Puerto Rico, that number has since shrunk to a mere four. Furthermore, survey data indicates that just a single port—Jacksonville, Florida—accounts for 88 percent of containers sent to the territory.

In other words, to ship goods to Puerto Rico likely first means sending them to Jacksonville, which can mean significant added expense in a country as vast as the United States. The cost of transporting a 40-foot container from California to Jacksonville, the report noted, is $7,000.

Another factor cited is a “cascade effect” from markups in the distribution chain being higher than would otherwise be the case owing to the artificially high cost of transportation. In addition, the increased cost of inputs used by producers in Puerto Rico, such as farmers who must use fertilizers imported from the mainland, means a higher cost for final goods. According to Advantage Business Consulting the incorporation of these factors results in a total Jones Act cost to the food and beverage sector of $367 million.

The second analysis, meanwhile, took a more comprehensive look at the Jones Act’s impact on Puerto Rico. Produced by John Dunham and Associates, it used a model of international shipping costs for 260 different commodities and compared it against six different estimates of Jones Act shipping cost differentials. After controlling for distance and terminal handling charges the analysis estimated these differentials to range from 89 percent to roughly 30 percent.

Using the firm’s recommended model, the analysis finds the Jones Act raises the price of shipping cargo to Puerto Rico by $568.9 million and that prices are $1.1 billion higher than would be the case without the Jones Act. This, in turn, is estimated to mean 13,250 fewer jobs. Were they to exist, such jobs would mean $337.3 million more in wages and over $1.5 billion in increased economic activity. Tax revenue would be $106.4 million higher without the Jones Act.

Such costs are significant in almost any context. For a territory with a lower per capita GDP than every U.S. state, high unemployment, and still reeling from the impact of Hurricane Maria, they are even more so.

It should be stressed that these reports are but the latest evidence of the harm wrought by the Jones Act on Puerto Rico. Indeed, what was already known prior to their release constitutes quite an indictment. For example:

  • Earlier this decade three Jones Act carriers pled guilty to price collusion in the Puerto Rico trade, with $46.2 million in fines handed out and six executives sent to prison. Since this episode one of the guilty carriers announced its withdrawal from the market, further reducing competition.
  • 2012 report issued by the Federal Reserve Bank of New York found that shipping a twenty-foot container of household and commercial goods from the East Coast to Puerto Rico—a Jones Act voyage—was estimated to cost $3,063 versus $1,504 to the nearby Dominican Republic and $1,687 to Jamaica.
  • 2013 GAO report pointed out that feed shipped to Puerto Rico from New Jersey by Jones Act carriers “costs more per ton than shipping from Saint John, Canada, by a foreign carrier—even though Saint John is 500 miles further away.” The same report also cited the example of jet fuel being imported from Venezuela rather than the Gulf Coast due to concerns about Jones Act vessel availability and costs.
  • Puerto Rico’s government has applied for a ten-year waiver from the Jones Act because the law prevents the U.S. territory from importing U.S. LNG due a lack of Jones Act eligible ships capable of transporting it. As a result, Puerto Rico largely meets its LNG needs via more expensive imports from Trinidad and Tobago.

That the Jones Act imposes costs on Puerto Rico is beyond dispute. Rather, the only real question is how much this cost is. Given these latest studies, it appears significant indeed. The time has come to scrap this law and spare Puerto Rico—along with the rest of the United States—from its continued ravages.

Posted in Puerto Rico economic crisis, Puerto Rico necessary improvements | Tagged , , , , | Leave a comment
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