Applicability of the Cargo Preference Act to the Transportation of Alaskan Oil to the Strategic Petroleum Reserve


Shipments of Alaskan oil for the Strategic Petroleum Reserve, made on commercial United States-flag ships as required by the Jones Act, 46 U.S.C. § 883, may be counted by the Department of Energy towards the 50% United States-flag cargo preference share required by the Cargo Preference Act, 46 U.S.C. § 1241(b).

The Cargo Preference Act, 46 U.S.C. § 1241(b), applies to both foreign and domestic cargoes procured by the United States, and is not limited to commerce in which United States-flag vessels face foreign competition. In addition, the Act is an “otherwise applicable Federal procurement statute” that may be waived by the Secretary of Energy under § 804(b) of the Energy Security Act, 10 U.S.C. § 7340(k).

Updated July 9, 2014