Damaged ports, Jones Act hinder Puerto Rico aid

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By Naureen S. Malik and Catherine Traywick | Bloomberg News

As Puerto Rico lies prostrate and powerless, 12 tankers are bound for the island, bringing fuel crucial to the emergency generators that provide power to hospitals and water-purification plants.

But between the ships and the thirsty generators are battered ports, ravaged infrastructure and a 1920 law called the Jones Act, which restricts which ships can deliver goods and drives up costs. Merely assessing damage to the electric grid will take days, and then the island still must formally request repair crews, said the chief executive of the New York Power Authority, a mainstay of that relief effort.

Six days after Maria slammed into Puerto Rico as a Category 4 hurricane, the island is grappling with a humanitarian crisis. The entire power distribution system and more than 80 percent of the high-voltage transmission network is damaged. Just 11 of 69 hospitals have fuel or power, and the U.S. Defense Department said it would airlift a medical facility and ambulances.

“It is impossible to overstate the seriousness of the situation,” said Sen. Chuck Schumer, D-N.Y., who Tuesday said the commonwealth needs 200 generators, new power lines and workers. He called on Donald Trump to provide them: “Mr. President, these are American citizens. They desperately need our help.”

Even before the disaster, Puerto Rico was in fiscal straits. The island accumulated a $74 billion debt load after years of borrowing to help fill budget deficits as its economy shrunk and residents left to find work on the U.S. mainland. It filed for a form of bankruptcy protection in May.

Diesel and fuel oil will be key to helping Puerto Rico’s 3.4 million beleaguered residents. Almost half the island’s power is generated by burning petroleum products and more than a third from natural gas, according to the U.S. Energy Information Administration. And emergency generators are running everything from dialysis machines to air conditioning during the year’s hottest season.

Eleven tankers are converging on the island from the U.S. Gulf Coast, Canada and Europe carrying petroleum products, plus one with liquefied natural gas from Trinidad, data compiled by Bloomberg show. The 2.4 million barrels might be enough to last two weeks, according to the Energy Information Administration. But it’s unclear how much of that is gasoline, which isn’t suitable for running plants or large backup generators.

Any long-term sealift must also contend with the Jones Act. The almost century-old law, meant to foster a burgeoning shipping industry, mandates that vessels moving between U.S. ports be built in the country and crewed by Americans. In normal times, critics say, that doubles the cost of shipping. Now it means there might not be enough qualified vessels to meet the crisis.

After hurricanes Harvey and Irma in the past month, the Trump administration temporarily waived the statute to ensure that gasoline could move without delay. The Homeland Security Department declined to issue a similar waiver for Puerto Rico, saying that port capacity is the bigger obstacle.

Seven U.S. House members asked the department in a letter this week to waive the Jones Act for one year, and Sen. John McCain, R-Ariz., asked it to consider a permanent halt.

“Let the ships flow as quickly and as cheaply from wherever they may come from,” Rep. Luis Gutierrez, D-Ill., said on the House floor Tuesday.

After the ships reach shore, the real problems begin. Port operations are hampered by decimated infrastructure. Roads are flooded or covered by debris, including trees and downed power poles.

The Port of San Juan and seven others are open or functioning with restrictions, the Defense Department said Tuesday. While they are able to offload containers, the island’s damaged infrastructure is impeding distribution, according to an email from Tyler Edgar, a spokesman for shipper Tote Maritime.

Puma Energy Holdings Pte is operating three petroleum terminals on the island on generator power, spokeswoman Cynthia Irizarry said by email. The company has been moving fuel by truck since two days after the storm, she said.

Any fuel that moves will help power generators as the island-wide grid awaits repairs.

The Puerto Rico Electric Power Authority is focusing on generators for hospitals and critical infrastructure, said Gil Quiniones, the New York Power Authority’s chief executive officer. He traveled to San Juan on Sept. 22 with Governor Andrew Cuomo, a crew of engineers, police officers and federal officials. They took food, water, cots, generators and other supplies.

The New York agency, a municipal authority like Prepa, is leading the mutual assistance that power companies and utilities provide during hurricanes. The authority has 10 people on the ground; more are waiting to come, with gear including cables, poles and bucket trucks.

First, though, Prepa must finish its damage assessment, which it will be “doing in a matter of days,” Quiniones said. Then, the commonwealth will submit an application to the Federal Emergency Management Agency for aid.

Like the central government, Prepa is also operating in bankruptcy. It is seeking to restructure its more than $8 billion of debt so it can free up cash to modernize its plants.

For now, many Puerto Ricans are finding any way they can to keep the little light they have.

Joey Goodwin, founder of Overthrow New York Boxing in Manhattan, heard about “families in the dark” from a friend, he said Tuesday. He said in an email that he wants to fill his practice ring with flashlights and batteries to be shipped this weekend.

With assistance from Steven T. Dennis Billy House Tony Capaccio Laura Blewitt and Sheela Tobben



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