Since the re-escalation of the war with Iran, energy prices have zoomed higher again, straining families’ finances. The national average for gasoline is back over $4 a gallon and diesel has blown past $5. Brent crude, the price of roughly three-quarters of global oil, is over $90, and touched $100 during the last week. It’s a repeat of the war’s start.
Back then, the Trump administration faced a genuine supply shock and a lethargic Congress, so it reached for policy levers entirely in its own control, including not enforcing foolish rules. Those suspensions worked, raising an important question: if these emergency measures cut costs in wartime, why not have them in peacetime too?
First there’s the Jones Act, part of a 1920 law requiring that cargo moving between American ports travel on ships that are American-built, -owned, -flagged, and -crewed. The problem is that almost nothing in a globalized shipping industry qualifies, and that creates an artificial shortage, which drives up prices.
The compliant ocean-going fleet has withered from 193 vessels to 92, and the ones left are expensive precisely because the law shields them from competition. The result is a country that can drill more oil than anyone on earth and still struggle to move it from Texas to New Jersey.
On March 17, the administration waived the requirement for energy commodities and fertilizer inputs. Since then, 149 vessels joined the fleet of ships carrying cargo between American ports, making 180 voyages that included carrying roughly 13 million barrels of gasoline, plus another 13 million of crude oil.
In the waiver's first 70 days, more gasoline and jet fuel moved from the Gulf Coast to the West Coast than in all of 2020 through 2025 combined. Puerto Rico bought American propane, which it normally cannot, because no liquefied propane tanker in existence complies with the Jones Act. Jet fuel crossed from one American coast to the other for the first time in nearly two decades.
All the while, the Jones Act fleet stayed fully booked. Every one of those voyages was additional commerce between American sellers and American buyers that federal law ordinarily forbids. And of 149 vessels, exactly one flew a Chinese flag, which ought to embarrass the people warning that Beijing would seize our coastal trade.
Similarly, the Environmental Protection Agency waived the summer restriction on E15, a blend of gasoline containing 15 percent ethanol. Refineries should have the flexibility to use as much or as little ethanol as they want, provided the final product won’t harm a vehicle’s engine. If ethanol is cheaper than petroleum derivatives, refiners will blend it in. If not, then they won’t. Either way, the consumer gets the lowest price.
Not every wartime measure deserves permanence. Draining 100 million barrels from the Strategic Petroleum Reserve may have been defensible as a wartime act, but it’ll eventually need to be refilled, and refilling it means buying oil back at whatever the market charges later.
Suspending the federal gas tax without corresponding spending cuts would be worse. It does not increase energy supplies but simply moves the cost from the pump to the Highway Trust Fund—or from today's driver to tomorrow's taxpayer, with interest. Borrowing to subsidize consumption is what gave us 40-year-high inflation.
America needs deregulation, not gimmicks, which brings us to August 16, when the Jones Act waivers expire. Some House Republicans have unwisely asked the President to let it lapse. Meanwhile, the Energy Secretary rightly noted that the waiver is enormously helpful, and the National Economic Council Director called it incredibly effective. Sen. Mike Lee (R-Utah) and Rep. Tom McClintock (R-Calif.) have bills to repeal the law outright.
Republicans spent 2024 promising to end the affordability crisis. Repealing the Jones Act and the Renewable Fuel Standard would lower costs for fuel, fertilizer, and groceries, while requiring no spending, and the Jones Act repeal has already been field-tested for months.
The only arguments against repealing these costly regulations come from lobbyists representing small but powerful industries that have grown comfortable being paid above market rates by law. These regulatory reforms have paid dividends in wartime, and they will do so in peacetime too, if only lawmakers get on board.
E.J. Antoni, Ph.D., is chief economist at the Heritage Foundation and a senior fellow at Unleash Prosperity.
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