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U.S. defense policy bill could make it harder to ship fuel in crises -experts

By Laura Sanicola and Timothy Gardner

Dec 16 (Reuters) - An obscure measure in the defense policy bill passed by the Senate could make it harder for transporters of oil and liquefied natural gas to get waivers to a more-than-century-old shipping law during fuel emergencies, lobbyists and analysts said on Friday.

The changes in the $858 billion annual defense spending bill passed in the Senate late on Thursday came after lawmakers criticized Biden administration officials for waivers issued in September allowing deliveries of diesel to Puerto Rico, a U.S. territory, after Hurricane Fiona cut power for 3.3 million people.

The Jones Act, implemented in 1920, requires goods moved between U.S. ports to be carried by a limited fleet of ships built domestically and staffed by U.S. crew. Waivers have historically been requested to allow for movement of vessels during domestic crises such as extreme weather events.

The annual must-pass National Defense Authorization Act, or NDAA, amends the Jones Act waiver process to require the request be published and made publicly available, establishes a holding period of 48 hours after a waiver request is published, prohibits any ship with goods on waterways from obtaining the waiver, and requires a presidential determination that the waiver is needed for national defense.

ClearView Energy Partners, a nonpartisan research group, said in a note that the changes could add "well more than a week" to shipments of goods to places like Puerto Rico.

A bipartisan majority of senators voted on Thursday to pass the NDAA, which now goes to President Joe Biden to be signed.

Kevin Book, an analyst at ClearView, said the changes could delay responses to any emergency fuel supply situation in the U.S. Northeast.

"Unless there is a national security reason that affects the military's ability to supply itself, virtually nothing else will qualify," said Sean Cota, president and CEO of the National Energy & Fuels Institute.

The Department of Homeland Security did not immediately respond to a request for comment. (Reporting by Laura Sanicola; Editing by Leslie Adler)

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