Hartford Business Journal

10 HARTFORDBUSINESS.COM | FEBRUARY 10, 2025 A tank ship designed for transporting liquefied natural gas (LNG). State officials are looking at ways to obtain a waiver from the federal Jones Act, to allow foreign ships importing LNG to use U.S. ports. ADOBE STOCK 'Existential Threat' CT officials seek exemption from archaic federal law to help lower energy prices, support manufacturing growth LNG domestically is about three-and- a-half times what it costs to import that from overseas," Knight said. "And the real problem is: even if it made economic sense, there simply are no LNG tankers that exist on the planet that meet Jones Act requirements." The landscape According to the U.S. Energy Information Administration, liquified natural gas (LNG) is natural gas that gets cooled to a liquid state (-260° Fahrenheit) so it can be stored or transported across distances where pipelines don't exist or lack capacity. The volume of natural gas as a liquid is about 600 times smaller than its volume in a gaseous state, according to EIA, making it much more efficient to store or transport. Most LNG is transported by tanker ships across oceans and other large waterways; after delivery, it's converted back to a gaseous state for use by consumers. LNG makes up only a tiny fraction — 1%, or 15.24 billion cubic feet — of the natural gas imported by the U.S. each year, according to EIA data. Most natural gas is imported via pipeline from Canada. In 2023, the Everett LNG regasifi- cation terminal near Boston received the vast majority (87%) of U.S. LNG imports, all by carriers from Trinidad and Tobago and Jamaica, EIA said. Connecticut is still reliant on natural gas — it provides about 65% of the state's energy, according to the EIA. The vast majority of it, according to the state Department of Energy and Environmental Protection, comes through a network of regional pipelines: the Algonquin Gas Transmission line (starts in New Jersey); Iroquois Gas Transmission System (starts at the Canadian border); and Tennessee Gas Transmission (starts in the Gulf Coast). State Department of Economic and Community Development Commissioner Daniel O'Keefe is among those who say the Jones Act is one of the reasons for Connecticut's high energy costs. HBJ PHOTO | STEVE LASCHEVER By Andrew Larson alarson@hartfordbusiness.com D aniel O'Keefe, commissioner of the Department of Economic and Community Development, is so concerned about New England's high energy rates that he considers them "an existential threat to our continuing economic progression." One of the culprits amplifying the state's energy costs, O'Keefe and others say, is the Jones Act, a century-old federal law that blocks foreign-flagged ships from moving goods between U.S. ports. The Jones Act has long been criticized for the significant costs it imposes on the U.S. economy, but recently came to the forefront as one of the factors driving up New England's energy costs. Experts believe the Jones Act, which was originally created to protect the U.S. shipping industry, increases the costs of foreign-im- ported liquified natural gas (LNG) by 10% to 30%, O'Keefe said. During Gov. Ned Lamont's State of the State Address on Jan. 8, he highlighted the need for Connecticut to import more natural gas. Also, he said LNG delivered by foreign ships is too expensive, and releases too much pollution. Lamont was referring to the round- about trips foreign vessels make to comply with the Jones Act, which prohibits non-U.S. ships from deliv- ering LNG to U.S. ports. "Hey Congress, rethink the Jones Act," Lamont said during his speech. The Jones Act applies to all cargo shipped between U.S. ports. "Whether you're talking about bananas or coal, or oil and gas, if you're transporting any cargo from one U.S. port to another U.S. port, like from New Haven to New York, that ship has to be built in the U.S.," said attorney Peter Knight, a partner at law firm Robinson+Cole. "It has to have a U.S. crew. It has to be owned by a U.S. entity, and it has to be regis- tered under the U.S. flag." For example, a vessel shipping products from the Gulf of Mexico to New England would have to travel to a port in a foreign country, such as Canada, and then to New England in a U.S.-flagged ship manned by an American crew. That wastes time and money. According to the Yankee Institute, a conservative think tank, the Jones Act has effectively eliminated mari- time as an option for shipping goods to or from Connecticut. The effects of the Jones Act are even more detrimental to the energy industry because there are no U.S. vessels large enough to carry the massive tankers in which LNG is transported, Knight explained. "Even if there were Jones Act-com- pliant ships available, the cost to ship

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