Colin Grabow
For years, the Jones Act has effectively cut off Puerto Rico’s access to mainland propane. The reason is simple: there are no Jones Act-compliant oceangoing LPG (liquefied petroleum gas) tankers capable of transporting it. The only possible uncertainty was whether Puerto Rico wanted American propane in the first place. Thanks to the March 2026 Jones Act waiver, that’s now settled.
Since the waiver took effect, Puerto Rico has imported roughly 809,000 barrels of mainland propane. That’s 4,792 percent more—nearly 49 times—the average annual volume shipped from the mainland during 2004–2025. Put another way, it’s more than twice the amount of mainland propane shipped to Puerto Rico during the previous twenty-two years combined.
The chart below tells the story. Every annual bar from 2004 through 2025 is dwarfed by the approximate four-month waiver period alone.
The waiver is revealing demand that the Jones Act has long suppressed. Economists often use observed behavior to infer preferences, and the actions of Puerto Rico’s propane buyers have delivered an unmistakable verdict. The moment mainland propane became legally available, they overwhelmingly switched from foreign imports to domestic supplies. It’s highly suggestive that the US mainland is Puerto Rico’s most cost-effective source.
The mainland was the obvious source all along
This isn’t a surprise. The United States is the world’s largest propane exporter, shipping a record 1.81 million barrels per day in 2025—roughly 660 million barrels—to countries as far away as China, Japan, and South Korea.
Puerto Rico, meanwhile, has spent recent years importing propane from Equatorial Guinea, Nigeria, Chile, and others while being largely unable to purchase it from the world’s largest producer—the country it is part of—located only a fraction of the distance away.
A market that can profitably ship propane halfway around the world while bypassing a nearby American customer has all the hallmarks of a Jones Act-induced distortion rather than a preference. That almost certainly exacts an economic toll on Puerto Rico by forcing buyers to rely on costlier, more distant suppliers. It also likely imposes environmental costs by requiring propane to travel much greater distances.
The market’s response to the waiver provides strong evidence that those costs were real. As late as February 2026, foreign propane dominated Puerto Rico’s imports, but April and May saw mainland propane all but displace foreign supplies. The speed and scale of that shift strongly suggest that mainland propane offers a significant commercial advantage.
The brief delay between the waiver announcement and the April shift—the first Puerto Rico-bound cargo was loaded on April 20—simply reflects the time required to charter a waiver-eligible vessel. Once that became possible, the transition to mainland supplies was both rapid and nearly complete.
Why wasn’t this happening already?
That Puerto Rico had not previously purchased bulk quantities of American propane was due to the complete lack of Jones Act-compliant oceangoing LPG tankers serving this trade. And that’s unlikely to change anytime soon.
The economics of building and operating such a vessel are daunting. Jones Act-compliant ships cost several times more to build and operate than comparable foreign vessels. Any domestic LPG carrier would therefore have to recover dramatically higher capital and operating costs through freight rates, potentially erasing much of the economic advantage of buying mainland propane.
Furthermore, it’s not even clear that sufficient demand exists to keep such a vessel fully employed. Because Jones Act ships are incapable of competing internationally, they must earn their keep almost entirely within the protected domestic market. Whether the existing propane trade could support a dedicated Jones Act LPG tanker is unknown, but the fact that none has ever been built despite decades of protection is instructive.
The waiver will end, but the problem won’t
Puerto Rico’s current ability to purchase American propane is temporary. Even if the administration extends the waiver—as is reportedly under consideration—it will eventually expire. Without legislative action, Puerto Rico will once again be effectively cut off from bulk supplies of American propane.
The case for Congress making changes permanent rests on two straightforward observations. First, the Jones Act’s cost is no longer hypothetical. Puerto Rico’s buyers switched to mainland propane almost immediately once they were legally permitted to do so. That is powerful evidence that the previous restriction imposed a real economic burden.
Second, there is remarkably little to justify restoring the restriction. The Jones Act is intended to preserve an American merchant marine capable of serving domestic commerce. Yet in the case of oceangoing propane transportation, there is no American industry to preserve. No Jones Act-compliant LPG tanker serves this trade (nor those of Hawaii and New England), and there is no sign that this will change. In this market, the Jones Act delivers the costs of protectionism without producing the industry it is supposed to sustain.
The current waiver has offered a rare glimpse of what a less restricted domestic shipping market looks like. More importantly, it has turned informed speculation about the Jones Act’s costs into empirical evidence. Congress should not ignore what has been revealed.
